General Electric Appliance Park
The General Electric facility in Louisville, Ky., showed that for large manufacturers, repatriating jobs to the U.S. could benefit not just their public image but also the bottom line. GE learned it can encourage innovation and cut costs when its engineers, marketing staff, and line workers can come together in one room, rather than communicate across the globe. When GE revived production of its water heaters in Kentucky, it reduced the cost of materials by 25 percent and improved quality. Now, GE is investing $800 million in Appliance Park and hopes to create 1,000 jobs. “I don’t do that because I run a charity,” GE CEO Jeffrey Immelt has said. “I do that because I think we can do it here and make more money.”
Toy company K’NEX Brands thought it could improve quality and get its products to market faster if it shifted production from subcontractors in China to its factory in Hatfield, Pa. The challenge, familiar to all manufacturers that consider in-sourcing, is that the move came with higher labor costs. K’NEX’s answer was especially ingenious: It redesigned toys in ways that reduced those costs and transferred some responsibility for assembly to its most avid consumers—children. For instance, Chinese workers used to insert metal pins by hand into K’NEX roller-coaster tracks to hold the toy together. Now, the tracks are designed so kids can snap them together themselves.
Edison Welding Institute
Manufacturers face numerous hurdles in the United States: securing the right suppliers, accessing the equipment to test their designs, and finding engineering solutions for their products, to name a few. The Edison Welding Institute, a nonprofit offshoot of Ohio State University, offers an innovative answer to those challenges. To give American firms a competitive edge, members of EWI have access to in-house engineers, scientists, technicians, project managers, and an extensive suite of services to help resolve problems. In addition, EWI provides test laboratories and access to the latest manufacturing technology. In one of many examples, EWI set up a supercomputer Web portal where companies can test their welding designs, offering manufacturers a sophisticated option they may not be able to afford on their own.
Dow Chemical is moving as aggressively as any American manufacturer to seize the opportunities created by the boom in domestic natural-gas production. It is investing more than $4 billion in its chemical facilities across the Gulf Coast, including new plants in Freeport, Texas, and expanded operations in Louisiana. Domestic deposits of natural gas provide raw materials and a cheap energy source for manufacturers. Dow’s multibillion-dollar building spree provides some of the best evidence yet that America’s energy boom could fuel a manufacturing revival.