Posts filed under 'Productivity'
October 15th, 2008
What is the future of manufacturing in the United States throughout the rest of this decade and into the next? To hear some manufacturers tell it, a more accurate way of phrasing that question might be, “Is there a future for U.S. manufacturing?” Based on the responses to the “Future of Manufacturing” survey undertaken by IndustryWeek and consulting firm Crowe Horwath, manufacturers of all sizes, in all industry verticals, face mounting challenges on several fronts: The ability to attract and keep skilled labor. Intense, and some would say unfair, competition from low-cost countries. Rising healthcare costs that show no sign of slowdown. Environmental compliance and other regulatory demands.
See the rest of the story here….
http://www.industryweek.com/ReadArticle.aspx?ArticleID=17524
October 15th, 2008
A good story that proves small and mid-sized manufacturers can compete with larger multinational companies by focusing on specialized products and continuing to be innovative and flexible….see it here….
http://www.industryweek.com/ReadArticle.aspx?ArticleID=17517
September 30th, 2008
Here’s a good article about car and parts manufacturers in the U.S….
http://www.chicagofed.org/publications/fedletter/cfloctober2008_255a.pdf
September 22nd, 2008
A good story that seems to contradict some of the other stuff we read….
Most of the economic headlines this summer have been grim — rising unemployment, federal takeovers of major banking institutions, stagnant home prices, and rising gasoline and food costs.
But if you can afford to look past what’s happening now and look at what’s being built in the Rock River Valley, the area’s manufacturing economy is poised for a rebound, Janyce Fadden, president of the Rockford Area Economic Development Group, told a crowd of about 125 at the organization’s quarterly breakfast Friday.
Fadden pointed to five major projects this year, including the Danfoss Drives and Woodward Governor expansions that together will cost about $85 million, that will bring jobs or ensure jobs are staying in the Rockford region.
For decades, Rockford’s historically strong manufacturing sector has been receding as companies have been forced to look at moving jobs to lower-cost countries such as India and China.
But the weak U.S. dollar and rapidly rising fuel costs have dramatically reduced the gap between U.S. manufacturing and the world.
“Price advantages around the world are changing, being minimized, creating the need for foreign companies to have U.S. locations, but also for the high-tech product created here to be used in other countries to they can maintain their productivity rates,” Fadden said.
Friday’s group also heard the results of a Global Economic Survey that was compiled by Northern Illinois University’s Regional Development Institute. Rebecca Steffenson, senior research associate, said the results showed there continues to be tremendous opportunity for local companies looking to sell overseas.
Steffenson said what companies were looking for from the RAEDC was more trade missions, more information on how to make contacts with overseas customers.
Two years ago the RAEDC led a trade mission to Sweden, hoping to help local companies build a rapport with one of the most technologically savvy economies in the world. The seeds from that mission bore some fruit this week, when Rockford’s Leading Edge Hydraulics signed an agreement with Jimec AB, a Swedish automation company. The two are forming a company to ship Leading Edge’s products to European clients.
The new company, Leading Edge Hydraulics AB, will begin shipping products to the European operations of companies such as John Deere, Hitachi, Caterpillar and Haldex.
Assistant Business Editor Alex Gary may be reached at agary@rrstar.com or at 815-987-1339.
Local manufacturing’s big ‘wins’
Five major manufacturing projects announced and launched this year:Acument Global Technologies chose Rockford for its Camcar Aerospace production center and headquarters. Acument hopes to grow revenues to $70 million annually within three years.Danfoss Drives broke ground on a $32 million expansion of its Loves Park plant. The extra space will double the company’s payroll to 500.A newly formed company, Rockford Automated Machining, won a contract to make brake drums in Rockford. The work was being done in China. The contract will create 40 jobs.
Woodward Governor is expanding and remodeling its landmark Loves Park plant for $50 million. The project won’t add more jobs, but it does ensure the company will keep the 1,500 now working in Loves Park and Rockton here.
Eclipse Combustion Inc. celebrated its 100th anniversary. The family-owned operation also completed a renovation of its Rockford operations interiors.
September 21st, 2008
So what’s the story about corporate taxes? Are they too high or too low? Compared to what? How about compared to our our international competitors? So I did a little investigation from internet sources and here’s what I found:
A corporation will pay anywhere from 25% to 39% income tax depending on their taxable income. For example, if the income is $50-75,000 then the rate is 25%; if income is between $100-335,000, then the rate is 39% and drops to 35% if income is $18 million or more.
Then there is state taxes on corporations and in Illinois it’s a flat rate of 7.3%.
So for example, a small-medium manufacturer in the Rockford region making between $110-335,000 net income will pay 39% plus 7.3% or 46.3% of it’s income.
Don’t forget the Federal FICA rate on payrolls of 15.3% and State Unemployment Insurance of 3.4% of payroll. This amounts to 18.7% taxes on your payroll in our region.
Of course, many corporations own their own buildings and property and guess what, they pay taxes on that as well, I won’t even hazard a guess on that one….
I won’t include sales taxes that individuals pay for goods they purchase; in Europe they call this VAT.
So for our example, the corporation pays 46.3% tax on its income and 18.7% tax on it’s payroll.
I looked at the data from Wikipedia and here are a few examples of countries that are competitors to us:
China: Corporate: 25%; Payroll: 0%
India: Corporate: 30-40%; Payroll: 0%
Germany: 29.8% (ave.); 0% Payroll
Mexico: Corporate: 29%: Payroll: 0%
Ireland: Corporate: 12.5%; Payroll: 16.75%
UK: Corporate: 21-28%; Payroll: 23.8% (National Insurance).
As Wikipedia advises, these are guidelines, but it does make you think: should we raise taxes on corporations?
September 19th, 2008
Here’s a link to the latest monthly report on manufacturing from the Federal Reserve of Chcago….
http://www.chicagofed.org/economic_research_and_data/files/cfmmi_july2008.pdf
I heard William Strauss from the Federal Reserve in Chicago give Boone County a review of the economy. The meeting was open to the public and there must have been 50-60 people in attendance. Although he covered various economic data and topics, he made a number of points about manufacturing:
1. Manufacturing output is slightly below similar period of 2007.
2. Manufacturing Output is at record levels. Output may be down on those producers of consumer goods, but is up for those making equipment for industry. Example cited was the large $10 million CAT truck. CAT is also expanding their facilities for these vehicles and their backlog goes into year 2012!
3. Although Lite vehicle and lite truck sales are falling 11% and 19%, car sales are falling only 3%
4. Between Detroit Big 3 auto and the New Domestics (Honda, Toyota, etc) production in the U.S> from 1980 to now is about the same.
5. Buy America: Ford Mustang has a 70% U.S. content, Toyota Sienna has a 85% U.S. content.
6. While the Big 3 production and sales are declining over the past 28 years, U.S. made sales of Honda, Toyota, Nissan and the others is growing.
7. Productivity is key and recently it has been averaging twice the historical rate.
In all, what I heard didn’t make me want to jump out of the nearest high rise building.
September 19th, 2008
So what’s the story about corporate taxes? Are they too high or too low? Compared to what? How about compared to our our international competitors? So I did a little investigation from internet sources and here’s what I found:
A corporation will pay anywhere from 25% to 39% income tax depending on their taxable income. For example, if the income is $50-75,000 then the rate is 25%; if income is between $100-335,000, then the rate is 39% and drops to 35% if income is $18 million or more.
Then there is state taxes on corporations and in Illinois it’s a flat rate of 7.3%.
So for example, a small-medium manufacturer in the Rockford region making between $110-335,000 net income will pay 39% plus 7.3% or 46.3% of it’s income.
Don’t forget the Federal FICA rate on payrolls of 15.3% and State Unemployment Insurance of 3.4% of payroll. This amounts to 18.7% taxes on your payroll in our region.
Of course, many corporations own their own buildings and property and guess what, they pay taxes on that as well, I won’t even hazard a guess on that one….
I won’t include sales taxes that individuals pay for goods they purchase; in Europe they call this VAT.
So for our example, the corporation pays 46.3% tax on its income and 18.7% tax on it’s payroll.
I looked at the data from Wikipedia and here are a few examples of countries that are competitors to us:
China: Corporate: 25%; Payroll: 0%
India: Corporate: 30-40%; Payroll: 0%
Germany: 29.8% (ave.); 0% Payroll
Mexico: Corporate: 29%: Payroll: 0%
Ireland: Corporate: 12.5%; Payroll: 16.75%
UK: Corporate: 21-28%; Payroll: 23.8% (National Insurance).
As Wikipedia advises, these are guidelines, but it does make you think: should we raise taxes on corporations?
September 18th, 2008
This morning, I heard William Strauss from the Federal Reserve in Chicago give Boone County a review of the economy. The meeting was open to the public and there must have been 50-60 people in attendance. Although he covered various economic data@font-face { font-family: Batang; } @font-face { font-family: Batang; } @font-face { font-family: Calibri; } @font-face { font-family: @Batang; } @page Section1 {size: 8.5in 11.0in; margin: 1.0in 1.0in 1.0in 1.0in; } P.MsoNormal { FONT-SIZE: 11pt; MARGIN: 0in 0in 0pt; FONT-FAMILY: “Calibri”,”sans-serif” } LI.MsoNormal { FONT-SIZE: 11pt; MARGIN: 0in 0in 0pt; FONT-FAMILY: “Calibri”,”sans-serif” } DIV.MsoNormal { FONT-SIZE: 11pt; MARGIN: 0in 0in 0pt; FONT-FAMILY: “Calibri”,”sans-serif” } A:link { COLOR: blue; TEXT-DECORATION: underline; mso-style-priority: 99 } SPAN.MsoHyperlink { COLOR: blue; TEXT-DECORATION: underline; mso-style-priority: 99 } A:visited { COLOR: purple; TEXT-DECORATION: underline; mso-style-priority: 99 } SPAN.MsoHyperlinkFollowed { COLOR: purple; TEXT-DECORATION: underline; mso-style-priority: 99 } SPAN.EmailStyle17 { COLOR: windowtext; FONT-FAMILY: “Calibri”,”sans-serif”; mso-style-type: personal-compose } .MsoChpDefault { mso-style-type: export-only } DIV.Section1 { page: Section1 } and topics, he made a number of points about manufacturing:
1. Manufacturing output is slightly below similar period of 2007.
2. Manufacturing Output is at record levels. Output may be down on those producers of consumer goods, but is up for those making equipment for industry. Example cited was the large $10 million CAT truck. CAT is also expanding their facilities for these vehicles and their backlog goes into year 2012!
3. Although Lite vehicle and lite truck sales are falling 11% and 19%, car sales are falling only 3%
4. Between Detroit Big 3 auto and the New Domestics (Honda, Toyota, etc) production in the U.S> from 1980 to now is about the same.
5. Buy America: Ford Mustang has a 70% U.S. content, Toyota Sienna has a 85% U.S. content.
6. While the Big 3 production and sales are declining over the past 28 years, U.S. made sales of Honda, Toyota, Nissan and the others is growing.
7. Productivity is key and recently it has been averaging twice the historical rate.
In all, what I heard didn’t make me want to jump out of the nearest high rise building.
September 18th, 2008
This morning, I heard William Strauss from the Federal Reserve in Chicago give Boone County a review of the economy. The meeting was open to the public and there must have been 50-60 people in attendance. Although he covered various economic data and topics, he made a number of points about manufacturing:
1. Manufacturing output is slightly below similar period of 2007.
2. Manufacturing Output is at record levels. Output may be down on those producers of consumer goods, but is up for those making equipment for industry. Example cited was the large $10 million CAT truck. CAT is also expanding their facilities for these vehicles and their backlog goes into year 2012!
3. Although Lite vehicle and lite truck sales are falling 11% and 19%, car sales are falling only 3%
4. Between Detroit Big 3 auto and the New Domestics (Honda, Toyota, etc) production in the U.S> from 1980 to now is about the same.
5. Buy America: Ford Mustang has a 70% U.S. content, Toyota Sienna has a 85% U.S. content.
6. While the Big 3 production and sales are declining over the past 28 years, U.S. made sales of Honda, Toyota, Nissan and the others is growing.
7. Productivity is key and recently it has been averaging twice the historical rate.
In all, what I heard didn’t make me want to jump out of the nearest high rise building.
September 18th, 2008
Leading Edge Hydraulics has reached a business deal to establish a new company that will be based in Sweden.
The new company will be called Leading Edge Hydraulics AB and will be based in Lidköping, Sweden. It will service Leading Edge’s customer base in Europe, providing equipment for companies like John Deere, Hitachi, Caterpillar and Haldex.
The newly formed company is expected to create new jobs for both companies. “This is very exciting for us because it is our first step into making a foreign direct investment. We’ve been exporting for several years and our customers have been asking us to fully service their needs globally,” said Leading Edge Hydraulics Vice President and Chief Technology Officer Russ Dennis.
The new company will start shipping product early next year. Dennis said, “We’re looking very much forward to be able to create this new joint venture in Sweden, to be able to serve European markets and we’ll see where it goes from beyond there as well.”
But this deal has been a couple years in the making, since Rockford leaders took part in Stockholm’s Entrepreneur’s Day (E-Day) in 2006. That’s when Mayor Larry Morrissey networked with Lidköping’s Mayor. Morrissey said, “That’s a great start but ultimately, I think this is a message to other Rockford businesses that those opportunities are here.”
The Rockford delegation in Sweden include Winnebago County Board Chair Scott Christiansen and representatives from the Rockford Area Economic Development Council.
Now Mayor Morrissey’s on board a plane to china to meet with businesses and government officials in several cities in China. Janyce Fadden, Rockford Area Economic Development Council President, said the Mayor will meet with the “Civil Aviation Authority of China and that meeting is to talk about opening up our airport as a potential landing place for Chinese aircraft.”
This is the first big news to come from the Rockford delegation’s trip to Sweden and China.
See the WREX story here…
http://www.wrex.com/Global/story.asp?S=9026429&nav=menu1352_2
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