The Dreamliner outsourcing fiasco

This article sums up the main problem with Boeing’s Dreamliner. The aggressive strategy of outsourcing as much of 70% of the parts for the new jet created all sorts of problems during the production process.

This was obvious even before the recent battery problems that have caused the FAA to ground the jet. The delivery delays were significant as Boeing couldn’t meet delivery deadlines to the airlines.

It’s one thing to outsource production for toothbrushes. It’s quite another for a sophisticated jet where a slight problem with one part can affect the safety of hundreds of people.


GM invests in North American factories

On the heels of unveiling the new Corvette Stingray at the Detroit Auto Show, GM has announced that it will invest $1.5 billion in North America factories in 2013 according to Mark Reuss.

GM hasn’t been as hot as Chrysler, but the company has had some hits, like the new Cadillac ATS. Hopefully these new investments pay off.


Manufacturing and union jobs

Here’s an interesting article that frames the growth in manufacturing activity in the context of union jobs.

Last July was a good month for factory workers in Anderson, Ind., where a Honda parts supplier announced plans to build a new plant and create up to 325 jobs. But it was a grim month in the Cleveland suburbs, where an industrial plastics firm told the state of Ohio it was closing a plant and laying off 150 people.

Nearly all of the Ohio workers belonged to a labor union. Workers at the Indiana plant don’t. Their fates fit a post-recession pattern: American factories are hiring again, but they’re not hiring union members.

U.S. manufacturers have added a half-million new workers since the end of 2009, making the sector one of the few bright spots in an otherwise weak recovery. And yet there were 4 percent fewer union factory workers in 2012 than there were in 2010, according to federal survey data. On balance, all of the job gains in manufacturing have been non-union.

The trend underscores a central conundrum in the “manufacturing renaissance” that President Obama loves to tout as an economic accomplishment: The new manufacturing jobs are different from the ones that delivered millions of American workers a ticket to the middle class over the past half-century.

There’s definitely a trend to avoid union shops on the part of manufacturers. Frankly, many unions overstepped their mission with ridiculous work rules, and many resources were used to protect the few workers who abused the system.

Now, in tougher economic times and high unemployment, the leverage is just gone for many unions.


Great news from Apple regarding US manufacturing

This is big news, and frankly it’s nice to see a company like Apple put its excess billions to use here in the United States.

Apple CEO Tim Cook says the company will produce one of its existing lines of Mac computers in the United States next year.

Cook made the comments in part of an interview taped for NBC’s “Rock Center,” but aired Thursday morning on “Today” and posted on the network’s website.

In a separate interview with Bloomberg Businessweek, he said that the company will spend $100 million in 2013 to move production of the line to the U.S. from China.

“This doesn’t mean that Apple will do it ourselves, but we’ll be working with people and we’ll be investing our money,” Cook told Bloomberg.

Here’s more context about why so much manufacturing has been done in China.

Cook said in his interview with NBC that companies like Apple chose to produce their products in places like China, not because of the lower costs associated with it, but because the manufacturing skills required just aren’t present in the U.S. anymore.

He added that the consumer electronics world has never really had a big production presence in the U.S. As a result, it’s really more about starting production in the U.S. than bringing it back.

There has been a trend in bringing some manufacturing back from China to the US. But this is big as it relates to technology manufacturing from a tech giant like Apple. Of course Apple has had to deal with Foxconn problems, so that may be driving this, along with the huge PR push Apple will get. But this move could help spur a new tech manufacturing hub, that would be great for the US and for Apple as well.


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