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USMCA made law, GM cuts, new plants: the week's top manufacturing stories

Posted by IndustryNet on Friday, November 30, 2018

100000307_manufacturing_worker_with_laptop_skillsgapThis past week has seen a flurry of ups and downs for U.S. manufacturing, with some positive announcements by BMW and Samsung overshadowed by a massive cost-cutting plan unveiled by GM.

We’ll take a look at the GM announcement, as well as other major manufacturing headlines this week, including some major new operations breaking ground.

USMCA signed into law

Just this morning, President Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto signed the U.S. Mexico Canada agreement (USMCA) as the three leaders converged in Argentina for a summit.

The new trade deal is the result of sixteen months of heated negotiations between the three nations and is geared to replace the 23-year-old North American Free Trade Agreement (NAFTA) in the year 2020.

The signing of USMCA is a monumental occasion that will shape the nation’s industrial sector for years to come. The National Association of Manufacturers said in a press release this morning:

“The signing of the USMCA is a landmark milestone for American manufacturing workers. Manufacturers called for a trilateral agreement, and this moves us one step closer to restoring certainty to the North American market, the biggest market for U.S. exports in the world. By securing the relationship with our North American allies, we are also better positioned to demonstrate a strong and united front against China’s unfair trade practices and end the harm they inflict on manufacturers in America.

“Manufacturers need certainty now, not later. With 2 million American jobs dependent on exports to Canada and Mexico, Congress should move expeditiously to review the USMCA before the end of this year. We look forward to working with the administration and Congress to ensure the USMCA is implemented and enforced in a way that empowers manufacturers in America to continue investing in our people and our communities.”

You can read more about USMCA’s potential impact on American manufacturing in our article: Goodbye NAFTA, hello USMCA; what the new trade deal means for U.S. manufacturing

Transformation, not tariffs, cause of GM cuts?

Critics of the USTR’s ongoing tariff and trade policies have pointed to the new duties as reason for GM’s announcement to shutter four U.S. plants and lay off 14,000.

However, GM did not reference the tariffs in their announcement November 20th, characterizing the cuts as a measure to transform its product development to focus more on autonomous vehicles; optimize its product portfolio by investing in “efficient vehicles architectures” e.g., next-gen electric vehicles; and increase capacity utilization by easing operations in response to market conditions.

In other words, GM is looking to shift investment to the future, focusing on self-driving technology and electric vehicles.engine_worker

Nowhere in GM’s statement does it refer specifically to tariff issues as the reason for the cuts, although tariffs are directly related to increased prices for steel and aluminum, which has put a dent in earnings for GM and other automakers. But unlike companies like Harley Davidson and Alcoa, which publicly cited that tariffs are hurting business, GM remained mostly mum about tariffs and its bottom line.

GM also noted in its statement that the company has invested heavily in its U.S. operations over the past four years, citing a $6.6 billion investment and the creation or maintenance of 17,000 jobs.

Manufacturing still trending up

Despite ongoing concerns over tariffs, manufacturing activity in the U.S. continues on an upward trend. The nation’s manufacturing sector has added nearly 300,000 jobs in the past year, while industrial output has increased for a fifth straight month, according to the latest Commerce Department data.

On that note, here are some of the major new operations announced this week

BMW betting big in South Carolina

BMW announced this week that it may establish a second U.S. plant to supply transmissions and engines to its existing North American plants. This comes as the company continues to expand its Spartanburg, South Carolina plant – the largest BMW manufacturing facility in the world, employing 10,000.

Currently, BMW is importing engines and transmissions from Europe to supply its North American operations, and import tariffs makes that process more expensive. However, BMW has had the new plant in mind for several years now and is not directly related to tariffs.

Samsung sets sights on Michigan

Samsung’s battery-making division announced plans to expand its plant in Auburn Hills, Michigan. The company plans to invest $60 million dollars in the site and add 400 jobs to the facility by the year 2024. This expanded operation will be Samsung’s first high-volume auto battery facility, according to the Michigan Economic Development Corp.

Related: A closer look at Michigan’s manufacturing outlook

Turkish metal fab company makes its mark in Louisiana

The city of Slidell, Louisiana announced this week that they’re currently working with a Turkish metal fabrication company called ASMT, which plans to establish a plant in a facility previously occupied by defense contractor Textron Systems. City officials say the plant will initially employ 10-15 people and will manufacture metal components for electrical equipment.

New plant saves Philly a seat

Another vacant property, this one in Pennsylvania, will have new life now that USSC Group has established a new operation at a previously idled site in Exton, PA. The new plant will manufacture seating and fire suppression products that it supplies to a variety of vehicles, including military and first responder vehicles.

workerThe company provides seating to nationwide transit companies, including the Southeastern Pennsylvania Transportation Authority and the Port Authority of New York and New Jersey.

USSC was recently bestowed the honor of ranking 16th in Philly’s Top 100 Fastest Growing Companies published by the Philadelphia Inquirer as reported by Mass Transit Mag. This latest announcement will no doubt move USSC up the list, with the new facility creating 250 new manufacturing jobs for the Philadelphia suburb.

Manufacturing “Man Camps” in Texas

A new facility in Breckenridge, Texas has started up production and plans to bring at least 120 jobs to the town. New Vision Manufacturing set up shop two months ago to manufacture pre-fabricated housing to supply the oil fields in nearby Permian Basin, otherwise known as “Man Camps.” The facility also plans to produce HUD homes down the line.

A number of drilling sites, especially those in Texas and North Dakota have seen housing shortages during the fracking boom. Although the oil industry cooled for a few years as prices tanked, the sector is now on an upward course, with oil prices climbing back up.

This could mean more facilities like New Vision that supply the oil industry breaking ground in these regions.

Related: Texas manufacturing job growth picks up speed

Plant manager Andy Nauret says the plant wants to hire five workers per week and ultimately would like to have 120 new workers at the plant within the next sixty days

Precision tool company nails new plant in Massachusetts

Massachusetts-based Harvey Performance Company announced plans to establish a new manufacturing facility in the town of Gorham, MA. Harvey, which makes precision tools, plans to build the new 76,000-square foot plant on a 13-acre property, once part of a race track.

The company has not yet announced the number of jobs they expect to create with the new operation. IndustryNet recently reported on rapid sales and employment growth in the nation’s precision machining sector, and Harvey’s announcement adds to the good news for the industry.

Read more: U.S. precision machining gains momentum

 

 

 

 

 

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