Made in the USA: Expansions, onshoring boom to the economy

Home Inside FCNews Made in the USA: Expansions, onshoring boom to the economy

Volume 27/Number 26; April 28/May 5, 2014

By Ken Ryan

Climbing out of a deep recession, the U.S. has seen its manufacturing growth outpace that of other advanced nations, with some 500,000 jobs created in the past three years. It marks the first time in more than a decade that the number of factory jobs has gone up instead of down.

Job creation in America is a byproduct of a new economic reality: China is losing its cost advantage. The Boston Consulting Group wrote in a research paper that in 2001 the average hourly wage in China was $0.58; by 2015, it will be $6. Combine that with the high productivity of American manufacturers and low energy costs, and the cost gap will close for most categories of goods to just 7% by 2015, the firm said.

The flooring industry is contributing mightily to this manufacturing growth. Engineered Floors, for example, is in the process of investing nearly $500 million on new facilities over the next five years that, when completed, will make it one of the largest job creators in the Southeast.

“It certainly is a good thing to create jobs, and we are pleased to do that, but the most important thing to remember is our company successfully built a business model and executed it,” said James Lesslie, assistant to the chairman of Engineered Floors. “If you execute, you create profits, which in turn can create jobs, and that is what we are doing.”

By the end of 2014, Engineered Floors will have created 2,000 jobs in less than four years. “That is quite an accomplishment,” Lesslie noted.

Engineered Floors is not the only one. Since it began onshore production of Mannington and Amtico LVT products in 2013, Mannington has seen a 30% increase in jobs at its plants in Madison and Conyers, Ga., with more than 200 additional jobs to be added by the end of 2014.

Mannington is creating new jobs through both capacity building and innovation, building infrastructure for the industry’s first LVT reclamation and recycling program.

The industry’s largest players, Mohawk and Shaw, are also creating jobs by the day. Mohawk continues to expand its 20,000-employee U.S. workforce. For instance, the company’s recent $180 million investment into its Summerville PET facility created 500 new jobs in northwest Georgia. “This is just one example of how Mohawk continues to invest in the American economy,” said David Duncan, senior vice president of marketing and sales operations. “Through Mohawk’s commitment to the safety, well-being and professional development of its employees, the company is working toward the creation of a thriving economy and a skilled workforce.”

Shaw Industries continues to invest, spending more than $300 million in plant operations that generated approximately 600 new U.S. jobs in the past year. Those job gains cut across a variety of product types, including carpet, carpet tile, hardwood and LVT.

It’s not just northwest Georgia where jobs are being created. It’s happening in Lancaster, Pa., too, as Armstrong’s $41 million LVT production line will create more than 60 new positions.

Dal-Tile recently announced plans to build a glazed porcelain and ColorBody tile manufacturing plant and distribution center in Dickson, Tenn. The 1.4-million-square-foot plant is scheduled to open in late 2015 and will be the company’s 11th manufacturing facility in North America. The Dickson plant will add approximately 150 million square feet to its annual capacity and bring hundreds of U.S.–based jobs.

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