The latest Tierra Grande includes my article (“China’s Crisis, America’s Hope?”) describing how the crisis in China could represent an opportunity for American manufacturing. In the time since I submitted the article, much has been published about the surprising growth in U.S. manufacturing.
We need to celebrate the success of Victoria, Texas, in competing globally and winning the business of Caterpillar Inc. The heavy equipment manufacturer chose Victoria over other global locations to construct a $200 million state-of-the-art facility for assembling excavators to be sold in the United States. The state of Texas can learn three important lessons from Victoria’s example.
Texas is globally competitive. For far too long, Americans have carried an inferiority complex about manufacturing in this country. Yes, many mid- and low-skilled positions were lost to cheap Asian labor between 1983 and 2002 — a total of 3.3 million according to the U.S. Bureau of the Census. However, high-skilled manufacturing added 1.2 million jobs in that time.
Now that the cost advantage in China, the “world’s factory,” is rapidly disappearing, it is time for the world’s most productive manufacturing employees (Americans) to seize the opportunity and win back business. Victoria’s experience gives us a model for how Texas can compete and win back manufacturing business for the Lone Star State.
Build it, and they will come. Logistics! Logistics! Logistics! Dale Fowler, president of the Victoria Economic Development Corporation, said that logistics played an important role in Caterpillar’s decision to locate in Victoria.
In the press release announcing the new facility, Gary Stampanato, the vice president responsible for excavators, commented that, “Based on our comprehensive review of possible locations, Victoria’s proximity to our supply base, access to ports and other transportation, as well as the positive business climate in Texas made this the ideal site for this project.” Victoria didn’t just promise to build the necessary logistical infrastructure. It was already built.
It is time for the Texas commercial real estate industry and local governments to work together to build an infrastructure that is more advanced than the infrastructure in China. If Texas can create a supply chain that is more efficient than our Asian competitors, then manufacturers will find it easy to relocate high value manufacturing jobs to this state.
(Skilled) Help Wanted. To attract high value manufacturing jobs to Texas, we need to have highly skilled workers. Young Texans making career decisions need to be shown modern day images of clean, advanced manufacturing facilities with challenging work.
The days of dark, dirty, menial factory labor are a thing of the past. The factories we want in Texas require math, science and computer degrees. Take note of these quotes from the March 26, 2012, Texas Manufacturing Outlook Survey published by the Federal Reserve Bank of Dallas.
We are not seeing enough people applying for our open positions, and most are not qualified. We have talked to others in our industry; they too are not seeing enough qualified applicants to fill open positions.
We have maintained jobs for more people than we needed over the past couple of years because we didn’t want to lose good, trained employees. [Editorial comment: Job Security!]
We have had openings for skilled workers (toolmakers, robotics technicians, etc.) for over a year and cannot fill the positions.
Finding qualified employees with good work habits (come to work every day on time, for example) is the biggest problem we face on a day-to-day basis.
While we see strong growth and ample sources of potential employees, we are investing in technology to equip our plant for the increased volume while keeping our labor force steady. [Editorial comment: But it will take additional highly skilled employees to build, install and maintain the new technology.]
There are many other examples of companies relocating manufacturing jobs from overseas to high technology facilities in the United States. Every week I read of another company making that decision.
Texas is blessed with a great geographic location and tremendous potential for logistics by land, air and sea, not to mention a boundless supply of inexpensive natural gas. There is no reason we cannot create a manufacturing industry that is the envy of the world. “V” for victory! “V” for Victoria!
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