Industrial Insight

manufacturing

November 27, 2012
Leave a Comment

http://www.fool.com/investing/general/2012/11/20/the-manufacturing-boom-you-wont-notice.aspx

The Manufacturing Boom You Won’t Notice

By Morgan House
November 20, 2012

Our analysis concludes that, within five years, the total cost of production for many products will be only about 10 to 15 percent less in Chinese coastal cities than in some parts of the U.S. where factories are likely to be built. Factor in shipping, inventory costs and other considerations, and — for many goods destined for the North American market — the cost gap between sourcing in China and manufacturing in the U.S. will be minimal. … When all cost are taken into account, certain U.S. states, such as South Carolina, Alabama, and Tennessee, will turn out to be among the least expensive production sites in the industrialized world.

This is all great news for American manufacturing, and it will very likely usher in a manufacturing boom.

But here’s what it probably isn’t: good news for manufacturing employment.

While the real production value of manufactured goods has doubled since the 1970s, manufacturing employment has declined by more than 5 million jobs.

The reason is productivity. It simply doesn’t take as many bodies to manufacture a given level of goods today as it did in the past. Automation and robots today do what people did three decades ago. My favorite example of this is the story of a U.S. Steel (NYSE: X ) plant in Gary, Ind. In 1950 the plant produced 6 million tons of steel with 30,000 workers. In 2010 it produced 7.5 million tons with 5,000 workers.

Advertisements

Posted in Uncategorized

the problem is debt…

November 20, 2012
Leave a Comment

http://www.hussmanfunds.com/wmc/wmc121119.htm

November 19, 2012 Little Dutch Boy

John P. Hussman, Ph.D.

In the Mary Mapes Dodge book titled Hans Brinker, there is a fictional story within the story of a little Dutch boy who, on his way to school, notices a hole in the dyke. Having nothing else to fix the leak, he plugs the hole with his finger and stays there through the night until workers come to repair it. We are now into the fourth year of efforts to print trillions of little Dutch boys out of dollars and euros in order to stop a tide from crashing through a fundamentally damaged dyke. All of this has bought time, but no workers have arrived, and no real repairs have been done.

The holes seem only loosely related: non-performing mortgages, widespread unemployment, massive U.S. budget deficits, a “fiscal cliff” sideshow, inadequate European bank capital, European currency strains, a surge of non-performing loans in China, and unexpected economic softness in Asia and global trade more generally. All of this gives the impression that these problems can simply be addressed one-by-one. The truth is that they are all intimately related to a single central issue, which is the utter unwillingness of politicians around the globe to accept and proceed with the inevitable restructuring of bad debt, and their preference to defend the bondholders of a fundamentally rotted financial system.


Posted in Uncategorized

shale gas a bubble??

November 19, 2012
Leave a Comment

Shale Gas Will Be the Next Bubble to Pop: An Interview With Arthur Berman

By Oilprice.com Nov 16, 2012 11:06 am

Read more: http://www.minyanville.com/sectors/energy/articles/Shale-Gas-Will-Be-the-Next/11/16/2012/id/45914#ixzz2CgUQiLQ3

Read more: http://www.minyanville.com/sectors/energy/articles/Shale-Gas-Will-Be-the-Next/11/16/2012/id/45914#ixzz2CgUEsy5j

Shale Gas Will Be the Next Bubble to Pop: An Interview With Arthur Berman
By Oilprice.com Nov 16, 2012 11:06 am

Read more: http://www.minyanville.com/sectors/energy/articles/Shale-Gas-Will-Be-the-Next/11/16/2012/id/45914#ixzz2CgUQiLQ3

Now these people have shifted their focus and are putting cash into shale. There are two important things going on here, one is that the capital isn’t going to last forever, especially since shale gas is a commercial failure. Shale gas has lost hundreds of billions of dollars and investors will not keep on pumping money into something that doesn’t generate a return.

The second thing that nobody thinks very much about is the decline rates shale reservoirs experience. Well, I’ve looked at this. The decline rates are incredibly high. In the Eagleford shale, which is supposed to be the mother of all shale oil plays, the annual decline rate is higher than 42%.
They’re going to have to drill hundreds, almost 1000 wells in the Eagleford shale, every year, to keep production flat. Just for one play, we’re talking about $10 or $12 billion a year just to replace supply.

Read more: http://www.minyanville.com/sectors/energy/articles/Shale-Gas-Will-Be-the-Next/11/16/2012/id/45914#ixzz2CgUEsy5j

Now these people have shifted their focus and are putting cash into shale. There are two important things going on here, one is that the capital isn’t going to last forever, especially since shale gas is a commercial failure. Shale gas has lost hundreds of billions of dollars and investors will not keep on pumping money into something that doesn’t generate a return.

The second thing that nobody thinks very much about is the decline rates shale reservoirs experience. Well, I’ve looked at this. The decline rates are incredibly high. In the Eagleford shale, which is supposed to be the mother of all shale oil plays, the annual decline rate is higher than 42%.
They’re going to have to drill hundreds, almost 1000 wells in the Eagleford shale, every year, to keep production flat. Just for one play, we’re talking about $10 or $12 billion a year just to replace supply.

Read more: http://www.minyanville.com/sectors/energy/articles/Shale-Gas-Will-Be-the-Next/11/16/2012/id/45914#ixzz2CgUEsy5j

Now these people have shifted their focus and are putting cash into shale. There are two important things going on here, one is that the capital isn’t going to last forever, especially since shale gas is a commercial failure. Shale gas has lost hundreds of billions of dollars and investors will not keep on pumping money into something that doesn’t generate a return.

The second thing that nobody thinks very much about is the decline rates shale reservoirs experience. Well, I’ve looked at this. The decline rates are incredibly high. In the Eagleford shale, which is supposed to be the mother of all shale oil plays, the annual decline rate is higher than 42%.
They’re going to have to drill hundreds, almost 1000 wells in the Eagleford shale, every year, to keep production flat. Just for one play, we’re talking about $10 or $12 billion a year just to replace supply.

Read more: http://www.minyanville.com/sectors/energy/articles/Shale-Gas-Will-Be-the-Next/11/16/2012/id/45914#ixzz2CgUEsy5j


Posted in Uncategorized

the skills we need…

November 19, 2012
Leave a Comment

http://www.nytimes.com/2012/11/18/opinion/sunday/Friedman-You-Got-the-Skills.html?_r=0

Op-Ed Columnist

If You’ve Got the Skills, She’s Got the Job

By THOMAS L. FRIEDMAN
Published: November 17, 2012

“About 2009,” she explained, “when the economy was collapsing and there was a lot of unemployment, we were working with a company that got a contract to armor Humvees,” so her 55-person company “had to hire a lot of people. I was in the market looking for 10 welders. I had lots and lots of applicants, but they did not have enough skill to meet the standard for armoring Humvees. Many years ago, people learned to weld in a high school shop class or in a family business or farm, and they came up through the ranks and capped out at a certain skill level. They did not know the science behind welding,” so could not meet the new standards of the U.S. military and aerospace industry.

“They could make beautiful welds,” she said, “but they did not understand metallurgy, modern cleaning and brushing techniques” and how different metals and gases, pressures and temperatures had to be combined. Moreover, in small manufacturing businesses like hers, explained Tapani, “unlike a Chinese firm that does high-volume, low-tech jobs, we do a lot of low-volume, high-tech jobs, and each one has its own design drawings. So a welder has to be able to read and understand five different design drawings in a single day.”


Posted in Uncategorized

rise of the machines…

November 12, 2012
Leave a Comment

http://www.aei-ideas.org/2012/11/rise-of-the-machines-does-automation-explain-recent-jobless-recoveries/

Monday, November 12, 2012


Pethokoukis

Rise of the machines: Does automation explain recent jobless recoveries?

The past three economic recoveries have been “jobless” ones. Job growth has lagged far behind GDP growth.In “Jobless recoveries and the disappearance of routine occupations,” economists Henry Siu and Nir Jaimovich point out that since the end of the Great Recession in June 2009, U.S. real GDP per capita has grown by 3.6% but per capita employment has fallen by 1.8%. Popular explanations include lack of demand and policy uncertainty. But Siu and Jaimovich offer another explanations. They argue that jobless recoveries “can be traced to a lack of recovery in a subset of occupations; those that focus on “routine” or repetitive tasks that are increasingly being performed by machines.”


Posted in Uncategorized

recession?

November 9, 2012
Leave a Comment

http://politicalcalculations.blogspot.com/

Political Calculations
November 9, 2012

The Reformed Broker’s Joshua Brown comments (HT: Abnormal Returns):

Do you see the percentages on the left side of the chart? 20% is the line in the sand. We’ve never hit that level and NOT had a recession. In 2006 we got close (18%?) but that particular Great Recession would be a year and half in the making. Note that we’re back at that 20% line again. And I can’t think of anything that keeps the leading indicators from going through it to the upside – the Fiscal Cliff stuff could only speed its ascent.

One thing we should note is that the data in the chart only covers the period through August 2012 – this is a delayed reaction to a developing situation. The probability of recession in the U.S. suddenly surged to the 20% level from the 2% level recorded a month earlier.


Posted in Uncategorized

About author

I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.

Search

Navigation

Categories:

Links:

Archives:

Feeds