Manufacturing in the United States is booming, but it’s not booming in the Rustbelt anymore. A CEO once told me that it’s as economical to manufacture in the Southeast United States as it is in China and, judging by the manufacturers moving to the Southeast from both the northern tier and from abroad, other CEOs agree.
Yesterday, as I write this in late March, I had a chance to tour the Milwaukee Tool reciprocating saw and hole saw blade factory in Greenwood, Mississippi. Milwaukee’s Greenwood plant is housed in two buildings, totaling 390,000-sq.ft. and employs 690. The facility opened in 2001 with 87 employees. Milwaukee execs noted that they have plenty of room for expansion and plan to do so.
“They have changed the lives of over 600 Mississippians,” Mississippi Gov. Phil Bryant exclaimed to assembled public officials and press. Bryant would not miss an opportunity to brag about job growth, but he was exactly right. In his remarks, Bryant praised both the state legislature and the Mississippi Development Authority for providing funds and tax relief for manufacturing jobs. He noted that Continental Tire built a gigantic manufacturing facility in Clinton, Miss., Yokohama built its largest tire plant in North America in West Point, Mississippi, Nissan and Toyota build a half million automobiles in the state, and 70% of the warships for the United States Navy are made in Pascagoula.
The shipyard referenced by the governor is Ingalls Shipbuilding in Pascagoula, founded in 1938, and now part of Huntington Ingalls Industries. It calls itself “a leading producer,” although not the leading producer of ships for the U.S. Navy. It employs 12,500 and with plans to hire 1,500 more, the firm says it is the largest private employer in Mississippi. “We make things,” Bryant said. “Manufacturing is the king.”
Mississippi isn’t alone. Mercedes-Benz Vans USA has broken ground on a $500 million plant expansion in Charleston to build Sprinter and Metris mid-size commercial vans. The factory, technically in Ladson, South Carolina, at the site of an existing Mercedes assembly operation, should be producing vehicles by the end of this decade. The plant will be more than 1 million square feet and will employ more than 1,000.
In nearby North Charleston, Boeing South Carolina is home to the company’s second 787 Dreamliner final assembly and delivery facility. Boeing’s competitor Airbus in 2015 inaugurated operations at its first ever U.S. manufacturing facility. The plant, which assembles the family of A319s, A320s and A321s, employs more than 250 Airbus manufacturing employees on the first U.S.-made Airbus aircraft. Airbus had announced plans for the $600 million U.S. manufacturing facility in 2012.
In addition to Nissan, Toyota and Mercedes, BMW also manufactures SUVs and crossovers in South Carolina.
All this manufacturing requires steel, and Nucor has steel mills in Blytheville, Arkansas, on President’s Island in Memphis, Tennessee, in Jackson, Mississippi, plus three in Alabama in Decatur, Tuscaloosa and Birmingham. Big River Steel has a mill in Osceola, Arkansas, Gerdau, a South American company, has a mill in Jackson, Tennessee, and Steel Dynamics has one in Columbus, Mississippi.
Why is this happening?
“One of the biggest reasons is the right to work status of the states in this region,” William “Lee” Thuston, a 30-year veteran in Southeastern economic development, told writer Adrienne Selko in Penton’s IndustryWeek. “Other factors include, lower or no income taxes, affordable cost of living and an overall attractive place to raise families, thanks to the climate and lifestyle. And there is an intangible factor as well . . . What I’ve been told by some of my clients is that they get a feeling that it’s easy to get along with the people here. But more importantly they can trust people here.”
So if anybody says that we can’t build things in the United States anymore, tell him that he’s looking in the wrong places.