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Census Bureau Releases Industry Series Report on Semiconductors and Related Device Manufacturing

July 29, 2014 Comments off

Census Bureau Releases Industry Series Report on Semiconductors and Related Device Manufacturing
Source: U.S. Census Bureau

The U.S. Census Bureau today released additional figures from the 2012 Economic Census Industry Series reports for the manufacturing sector of the economy. This release includes new statistics for semiconductor and related device manufacturing (NAICS 334413).

Highlights include:

  • The semiconductor and related device manufacturing industry employed 90,244 people in 2012, down 38.3 percent from 146,152 employed in 2007.
  • The total value of industry shipments in the semiconductor and related device manufacturing industry was $72.2 billion in 2012.
  • The cost of gold and other precious metals used as a material in this industry more than doubled from $149.3 million in 2007 to $372.0 million in 2012, an increase of 149.1 percent.

Highlights of value of product shipment data

  • The total value of product shipments in the semiconductor and related device manufacturing industry was $70.7 billion in 2012.
  • Memory increased 24.4 percent from $6.0 billion in 2007 to $7.5 billion in 2012.
  • Transistors decreased 42.2 percent from $938.0 million in 2007 to $542.0 million in 2012.
  • Microprocessors made up 58.6 percent ($41.4 billion) of the total value of product shipments from semiconductors and related devices ($70.7 billion) in 2012.
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Census Bureau’s 2012 Economic Census Shows U.S. Household Appliance Manufacturing is Down from 2007

July 16, 2014 Comments off

Census Bureau’s 2012 Economic Census Shows U.S. Household Appliance Manufacturing is Down from 2007
Source: U.S. Census Bureau

Value of shipments for the nation’s 95 household cooking appliance manufacturing establishments totaled $4.3 billion in 2012, according to the latest 2012 Economic Census statistics released today by the U.S. Census Bureau. This value is down 10.8 percent from $4.9 billion in 2007.

The household cooking appliance manufacturing industry employed 10,324 people in 2012, down 34.0 percent from 15,638 in 2007. Average payroll per employee increased 23.0 percent from $30,199 in 2007 to $37,143 in 2012. The average number of employees per establishment in this industry decreased 20.1 percent, from 136 in 2007 to 109 in 2012.

Other highlights for the household cooking appliance manufacturing industry (NAICS 335221) include:

  • Total value of product shipments decreased 6.7 percent from $4.7 billion in 2007 to $4.4 billion in 2012.
  • Electric household ranges, ovens and surface cooking units comprised 57.2 percent ($2.5 billion) of the total value of product shipments in 2012, while 26.3 percent of units ($1.1 billion) were fueled by gas.

3D opportunity: Additive manufacturing paths to performance, innovation, and growth

July 7, 2014 Comments off

3D opportunity: Additive manufacturing paths to performance, innovation, and growth
Source: Deloitte

Additive manufacturing technology can break existing performance trade-offs by reducing the capital needed to achieve scale and scope economies. Understanding how this can be done requires a review of how scale and scope economies shape certain product manufacturing and distribution decisions.

Additive manufacturing (AM) has exploded into public consciousness over the past several years. More popularly known as “3D printing,” AM is an umbrella term for a group of technologies that creates physical products through the addition of materials (typically layer by layer) rather than by subtraction (e.g., through machining or other types of processing).

The Energy Boom and Manufacturing in the United States

June 30, 2014 Comments off

The Energy Boom and Manufacturing in the United States
Source: Federal Reserve Board

This paper examines the response of U.S. manufacturers to changes in competitiveness brought about by movements in the price of natural gas. I estimate the response of various measures of manufacturing activity using panel regression methods across roughly 80 industries that allow each industry’s response to vary with its energy intensity. These estimates suggest that the fall in the price of natural gas since 2006 is associated with a 2 to 3 percent increase in activity for the entire manufacturing sector, with much larger effects of 30 percent or more for the most energy intensive industries.

FDA issues guidance to support the responsible development of nanotechnology products

June 24, 2014 Comments off

FDA issues guidance to support the responsible development of nanotechnology products
Source: U.S. Food and Drug Administration

Today, three final guidances and one draft guidance were issued by the U.S. Food and Drug Administration providing greater regulatory clarity for industry on the use of nanotechnology in FDA-regulated products.

One final guidance addresses the agency’s overall approach for all products that it regulates, while the two additional final guidances and the new draft guidance provide specific guidance for the areas of foods, cosmetics and food for animals, respectively.

Nanotechnology is an emerging technology that allows scientists to create, explore and manipulate materials on a scale measured in nanometers—particles so small that they cannot be seen with a regular microscope. The technology has a broad range of potential applications, such as improving the packaging of food and altering the look and feel of cosmetics.

The three final guidance documents reflect the FDA’s current thinking on these issues after taking into account public comment received on the corresponding draft guidance documents previously issued (draft agency guidance in 2011; and draft cosmetics and foods guidances in 2012).

The FDA does not make a categorical judgment that nanotechnology is inherently safe or harmful, and will continue to consider the specific characteristics of individual products. All four guidance documents encourage manufacturers to consult with the agency before taking their products to market. Consultations with the FDA early in the product development process help to facilitate a mutual understanding about specific scientific and regulatory issues relevant to the nanotechnology product, and help address questions related to safety, effectiveness, public health impact and/or regulatory status of the product.

Sequestration and the Future of the Air Force Aircraft Industrial Base

June 9, 2014 Comments off

Sequestration and the Future of the Air Force Aircraft Industrial Base
Source: Center for Strategic & International Studies

Since the “Last Supper” in 1993 and the resulting industrial base consolidation, there has been alarm regarding the long-term health of the industrial base supporting the U.S. Air Force and the broader aerospace market. Whereas the Department of Defense (DoD) once benefitted from a robust universe of suppliers, that base has shrunken to just a few large prime vendors providing increasingly exquisite systems. Just recently, in response to questioning by Senator Angus King (I-ME), Deputy Secretary of Defense Robert Work identified the aerospace industry as “the area of the industrial base under the greatest threat.”

Without signs of relief from budget caps beyond 2015, concern for the long-term health of the aerospace industrial base only continues to grow. How healthy is the Air Force aircraft industrial base, and what are the future acquisition programs poised to shape the industrial base for the next 20 years?

Report to the Board of Directors of General Motors Company Regarding Ignition Switch Recalls (“Valukas Report”)

June 6, 2014 Comments off

Report to the Board of Directors of General Motors Company Regarding Ignition Switch Recalls (“Valukas Report”)
Source: Jenner & Block (via Detroit News)

As a whole, from beginning to end, the story of the Cobalt is one of numerous failures leading to tragic results for many. As discussed below, many individuals have substantial responsibility for the delay in recalling the Cobalt. These individuals, as well as the GM committees and groups that had responsibility for the Cobalt, failed to remand action in the face of mounting injuries and fatalities, to make themselves or others accountable, and to marshal the information and expertise at their disposal to solve a problem that brought harm to GM’s customers. This report traces the history of the ignition switch, from GM’s design and production of the ignition switch to its belated recall in 2014, ultimately proposing recommendations to help avoid such a tragedy from ever occurring again.

Accenture 2014 Manufacturing Skills and Training Study

June 4, 2014 Comments off

Accenture 2014 Manufacturing Skills and Training Study
Source: Accenture

A new Accenture manufacturing and skills study, completed in collaboration with The Manufacturing Institute, looks at the skills shortage in the US manufacturing industry and what actions manufacturing companies can take to address this impediment to growth.

Our study includes survey responses from more than 300 executives from a diverse range of US manufacturing companies. It confirms that the current period is favorable for the US manufacturing industry, which has exhibited steady growth in recent years. The study shows that more than 50 percent of companies surveyed plan to increase US-based production by at least 5 percent in the next five years.

Skills Shortage Threatens Future Earnings and Growth Prospects of U.S. Manufacturers, According to a New Report from Accenture and The Manufacturing Institute

May 16, 2014 Comments off

Skills Shortage Threatens Future Earnings and Growth Prospects of U.S. Manufacturers, According to a New Report from Accenture and The Manufacturing Institute
Source: Accenture and the Manufacturing Institute

U.S. manufacturers may be losing up to 11 percent annually* of their earnings as a result of increased production costs stemming from a shortage of skilled workers, according to a new study from Accenture and The Manufacturing Institute.

The scale of the issue is illustrated in the study, “Out of Inventory: Skills Shortage Threatens Growth for U.S. Manufacturing,” in which 39 percent of the 300 U.S. manufacturing executives surveyed described the shortage of qualified, skilled applicants as “severe,” and 60 percent said it has been difficult to hire the skilled people they need. In addition, more than 50 percent of respondents said they plan to increase their production by at least five percent in the next five years.

Furthermore, as the report notes, when manufacturers are unable to fill roles, overtime, downtime and cycle times increase; more materials are lost to scrap; and quality suffers. More than 70 percent of the respondents reported at least a five percent increase in overtime costs, and 32 percent reported an increase of 10 percent or more. As manufacturers used overtime to maintain base production levels, 61 percent said their downtime increased by at least five percent, as they lacked enough people to run and maintain the equipment. Cycle times also increased at least five percent at 66 percent of the respondents’ companies.

CRS — Chemical Facility Security: Issues and Options for the 113th Congress (updated)

May 1, 2014 Comments off

Chemical Facility Security: Issues and Options for the 113th Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The Department of Homeland Security (DHS) has statutory authority to regulate chemical facilities for security purposes. The 113th Congress extended this authority through October 4, 2014. Congressional policymakers have debated the scope and details of reauthorization and continue to consider establishing an authority with longer duration. Some Members of Congress support an extension, either short- or long-term, of the existing authority. Other Members call for revision and more extensive codification of chemical facility security regulatory provisions. Questions regarding the current law’s effectiveness in reducing chemical facility risk and the sufficiency of federal chemical facility security efforts exacerbate the tension between continuing current policies and changing the statutory authority.

China’s Hunger for U.S. Planes and Cars: Assessing the Risks

April 8, 2014 Comments off

China’s Hunger for U.S. Planes and Cars: Assessing the Risks (PDF)
Source: U.S.-China Economic and Security Review Commission

The U.S. trade deficit with China continues to grow but at a slower rate. A key reason for this is the boom in U.S. automotive and aerospace shipments to China. As China becomes more affluent and urbanized, ordinary Chinese are driving more cars and traveling more by frequently by air. China’s future demand, however, could be affected by pollution, traffic bottlenecks, and other factors. U.S. companies must also contend with China’s industrial policy, which tilts the playing field toward domestic industry. In the long run, technology transfer and off-shoring could erode U.S. competitiveness and take business away from U.S. plants.

Subcommittee exposes Caterpillar offshore profit shifting

April 2, 2014 Comments off

Subcommittee exposes Caterpillar offshore profit shifting
Source: U.S. Senate Permanent Subcommittee on Investigations

Caterpillar Inc., an American manufacturing icon, used a wholly owned Swiss affiliate to shift $8 billion in profits from the United States to Switzerland to take advantage of a special 4 to 6 percent corporate tax rate it negotiated with the Swiss government and defer or avoid paying $2.4 billion in U.S. taxes to date, a new report from Sen. Carl Levin, the chairman of the U.S. Senate Permanent Subcommittee on Investigations shows.

“Caterpillar is an American success story that produces phenomenal industrial machines, but it is also a member of the corporate profit-shifting club that has shifted billions of dollars in profits offshore to avoid paying U.S. taxes,” Levin said. “Caterpillar paid over $55 million for a Swiss tax strategy that has so far enabled it to avoid paying $2.4 billion in U.S. taxes. That tax strategy depends on the company making the case that its parts business is run out of Switzerland instead of the U.S. so it can justify sending 85 percent or more of the parts profits to Geneva. Well, I’m not buying that story.”

Productivity and Costs by Industry: Manufacturing Industries, 2012

March 28, 2014 Comments off

Productivity and Costs by Industry: Manufacturing Industries, 2012
Source: Bureau of Labor Statistics

Labor productivity — defined as output per hour — rose in 54 percent of the detailed manufacturing industries covered in 2012, the U.S. Bureau of Labor Statistics reported today. This was down from 68 percent in 2011. Unit labor costs, which reflect the total labor costs required to produce a unit of output, declined in 39 percent of the industries in 2012 compared to 49 percent in 2011. More than half of industries with productivity increases posted declines in unit labor costs.

Output and hours rose in more industries in 2012 than in the previous year. (See table 1.) Output rose in 2012 in 40 of 57 NAICS 4-digit manufacturing industries for which data were available, up from 37 industries in 2011. Hours increased in even more industries, 41 compared to 32 in 2011. Hours rose in more industries in 2012 than in any year since 1997.

New From the GAO

March 27, 2014 Comments off

New GAO Reports
Source: Government Accountability Office

1. Canceled DOD Programs: DOD Needs to Better Use Available Guidance and Manage Reusable Assets. GAO-14-77, March 27.
http://www.gao.gov/products/GAO-14-77
Highlights – http://www.gao.gov/assets/670/662018.pdf

2. Native American Housing: Additional Actions Needed to Better Support Tribal Efforts. GAO-14-255, March 27.
http://www.gao.gov/products/GAO-14-255
Highlights – http://www.gao.gov/assets/670/662064.pdf

3. Major Automated Information Systems: Selected Defense Programs Need to Implement Key Acquisition Practices. GAO-14-309, March 27.
http://www.gao.gov/products/GAO-14-309
Highlights – http://www.gao.gov/assets/670/662046.pdf

4. Manufacturing Extension Partnership: Most Federal Spending Directly Supports Work with Manufacturers, but Distribution Could Be Improved. GAO-14-317, March 27.
http://www.gao.gov/products/GAO-14-317
Highlights – http://www.gao.gov/assets/670/662014.pdf

5. Defense Infrastructure: DOD’s 2013 Facilities Corrosion Study Addressed Reporting Elements. GAO-14-337R, March 27.
http://www.gao.gov/products/GAO-14-337R

6. Patient-Centered Outcomes Research Institute: Review of the Audit of the Financial Statements for 2013 and 2012. GAO-14-415R, March 27.
http://www.gao.gov/products/GAO-14-415R

Chinese Engagement in Africa: Drivers, Reactions, and Implications for U.S. Policy

March 17, 2014 Comments off

Chinese Engagement in Africa: Drivers, Reactions, and Implications for U.S. Policy
Source: RAND Corporation

Most analyses of Chinese engagement in Africa focus either on what China gets out of these partnerships or the impacts that China’s aid and investment have had on African countries. This analysis approaches Sino-African relations as a vibrant, two-way dynamic in which both sides adjust to policy initiatives and popular perceptions emanating from the other. The authors focus on (1) Chinese and African objectives in the political and economic spheres and how they work to achieve them, (2) African perceptions of Chinese engagement, (3) how China has adjusted its policies to accommodate often-hostile African responses, and (4) whether the United States and China are competing for influence, access, and resources in Africa and how they might cooperate in the region.

The authors find that Chinese engagement in the region is primarily concerned with natural resource extraction, infrastructure development, and manufacturing, in contrast to the United States’ focus on higher-technology trade and services as well as aid policies aimed at promoting democracy, good governance, and human development. African governments generally welcome engagement with China, as it brings them political legitimacy and contributes to their economic development. Some segments of African society criticize Chinese enterprises for their poor labor conditions, unsustainable environmental practices, and job displacement, but China has been modifying its approach to the continent to address these concerns. China and the United States are not strategic rivals in Africa, but greater American commercial engagement in African markets could generate competition that would both benefit African countries and advance U.S. interests.

Measuring Manufacturing: How the Computer and Semiconductor Industries Affect the Numbers and Perceptions

March 13, 2014 Comments off

Measuring Manufacturing: How the Computer and Semiconductor Industries Affect the Numbers and Perceptions
Source: Upjohn Institute for Employment Research

Growth in U.S. manufacturing’s real value-added has exceeded that of aggregate GDP, except during recessions, leading many to conclude that the sector is healthy and that the 30 percent decline in manufacturing employment since 2000 is largely the consequence of automation. The robust growth in real manufacturing GDP, however, is driven by one industry segment: computers and electronic products. In most of manufacturing, real GDP growth has been weak or negative and productivity growth modest. The extraordinary real GDP growth in computer-related industries reflects prices for computers and semiconductors that, when adjusted for product quality improvements, are falling rapidly. Productivity growth in these industries, in turn, largely reflects product and process improvements from research and development, not automation. Although computer-related industries have driven growth in the manufacturing sector, production has shifted to Asia, and the U.S. trade deficit in these products has soared since the 1990s. The outsized effect computer-related industries have on manufacturing statistics also may distort economic relationships in the data and result in perverse research findings. Statistical agencies should take steps to assure that the influence that computer-related industries have on manufacturing-sector statistics is transparent to data users.

McKinsey Quarterly: Shaping the future of manufacturing

March 11, 2014 Comments off

McKinsey Quarterly: Shaping the future of manufacturing
Source: McKinsey & Company

Examines the future of manufacturing, how senior executives should spread best practices, why leadership-development programs fail, taking data analytics to the next level, and Starbucks’ Indian expansion.

CRS — U.S. Manufacturing in International Perspective

February 26, 2014 Comments off

U.S. Manufacturing in International Perspective (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The health of the U.S. manufacturing sector has long been of great concern to Congress. The decline in manufacturing employment since the start of the 21st century has stimulated particular congressional interest. The Obama Administration has undertaken a variety of related initiatives, and Members have introduced hundreds of bills intended to support domestic manufacturing activity in various ways. The proponents of such measures frequently contend that the United States is by various measures falling behind other countries in manufacturing, and they argue that this relative decline can be mitigated or reversed by government policy.

This report is designed to inform the debate over the health of U.S. manufacturing through a series of charts and tables that depict the position of the United States relative to other countries according to various metrics. Understanding which trends in manufacturing reflect factors that may be unique to the United States and which are related to broader changes in technology or consumer preferences may be helpful in formulating policies intended to aid firms or workers engaged in manufacturing activity. This report does not describe or discuss specific policy options.

Management Practices, Relational Contracts, and the Decline of General Motors

February 20, 2014 Comments off

Management Practices, Relational Contracts, and the Decline of General Motors
Source: Harvard Business School Working Paper

General Motors was once regarded as one of the best managed and most successful firms in the world, but between 1980 and 2009 its share of the U.S. market fell from 62.6% to 19.8%, and in 2009 the firm went bankrupt. In this paper we argue that the conventional explanation for this decline-namely high legacy labor and health care costs-is seriously incomplete, and that GM’s share collapsed for many of the same reasons that many of the other highly successful American firms of the 50s, 60s, and 70s were forced from the market, including a failure to understand the nature of the competition they faced and an inability to respond effectively once they did. We focus particularly on the problems GM encountered in developing the relational contracts essential to modern design and manufacturing. We discuss a number of possible causes for these difficulties: including GM’s historical practice of treating both its suppliers and its blue collar workforce as homogeneous, interchangeable entities, and its view that expertise could be partitioned so that there was minimal overlap of knowledge amongst functions or levels in the organizational hierarchy and decisions could be made using well-defined financial criteria. We suggest that this dynamic may have important implications for our understanding of the role of management in the modern, knowledge-based firm, and for the potential revival of manufacturing in the United States.

CRS — The Specialty Metal Clause: Oversight Issues and Options for Congress

February 11, 2014 Comments off

The Specialty Metal Clause: Oversight Issues and Options for Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

This report examines the specialty metal clause, potential oversight issues, and options for Congress. The specialty metal clause in the Defense Federal Acquisition Regulation Supplement (DFARS) prohibits the Department of Defense (DOD) from acquiring end units or components for aircraft, missile and space systems, ships, tank and automotive items, weapon systems, or ammunition unless these items have been manufactured with specialty metals that have been melted or produced in the United States. Thousands of products used for defense, aerospace, automotive, and renewable energy technologies rely on specialty metals for which there are often few, if any, substitutes. Specialty metals covered by this provision include certain types of cobalt, nickel, steel, titanium and titanium alloys, zirconium, and zirconium base alloys.

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