By Brian Gallagher
Manufacturing is making a comeback in the United States with an increasing number of companies investing in domestic manufacturing facilities. Lower labor costs, lower energy costs due to natural gas, increased automation and productivity, and a desire to consolidate production and research facilities have contributed to this trend.
Much of the country’s manufacturing growth and expansion is seen in the Southeast. Here, industrial manufacturing is thriving. For example, GE is building natural gas turbines here in Greenville to ship around the world. Mitsubishi Electric also recently built a $230 million transformer manufacturing facility in Memphis, Tenn., which created hundreds of new jobs. Southern states are particularly appealing to manufacturers because they are “right to work” states, reducing the possibility of workers unionizing. Other reasons that companies are choosing the South include favorable business climates, incentives, lower cost of living, quality of life and access to major markets.
The state of South Carolina has experienced a manufacturing boom in the past two years. The state’s manufacturing infrastructure is a major draw for companies. Industry leaders such as BMW, Boeing, Michelin North America and ZF Transmissions call South Carolina home and have invested more than $7 billion in new projects in the state. The largest manufacturing employer in South Carolina, Michelin North America, recently announced significant investments in Anderson County. This $100 million project will generate 100 new jobs by 2014.
Furthermore, the Upstate area benefits from having a significant base of manufacturers. These manufacturers are now more competitive due to lower energy costs, advanced manufacturing trends and increased efficiency and productivity. As large manufacturers develop and expand production in the area, their suppliers are subsequently relocating to the region. For example, according to BMW’s website, “about 40 BMW suppliers are now located in South Carolina within a few hours’ drive of the Spartanburg County plant, creating more than 10,000 jobs and dramatically multiplying the economic impact of the plant to the region.” In addition, this investment creates a ripple effect for companies that directly and indirectly support manufacturers.
Upstate manufacturing is also trending toward more exports. In 2012, South Carolina ranked 17th in the U.S. for exports, with distribution to 198 countries. The total topped $25.3 billion, an increase of 2.23 percent from 2011, according to the South Carolina Department of Commerce. Commerce also states that South Carolina’s top export industries last year were vehicles, machinery, rubber, electrical machinery, plastics, optics and medical equipment, paper and paperboard, organic chemicals, wood pulp and cotton yarn and fabric – many of which have a manufacturing presence in the Upstate. Optical and medical equipment saw the largest percentage increase, growing 19 percent, followed by rubber products and plastics.
The export industry is expected to continue to expand in the Upstate with the new South Carolina Inland Port, which anticipates receiving its first cargo in October 2013. The inland port will help local manufacturers move more products to the Charleston port by transferring shipping containers directly between the truck or train and the ship, therefore increasing the ability to export goods at a lower transportation cost. The port also has potential to spur future economic development in the area surrounding the site.
Despite the fact that the manufacturing industry in the U.S. is prospering, one challenge many domestic companies face is a shortage of qualified workers. When companies offshored, the U.S. lost a generation of the highly skilled technicians needed in factories. Additionally, younger students don’t realize the potential in the manufacturing industry. Without a bank of skilled workers to replace those that are retiring, there is a disparity in available talent.
by Brian Gallagher
The Upstate is adapting and innovating in order to meet this need. The new Greenville Technical College Enterprise Campus will help train and prepare the next generation of workers for the highly skilled advanced manufacturing jobs of the future. These employees will fulfill the needs of the existing manufacturers as they expand, as well as help to bring new companies to the area. Trained workers are an imperative part of the manufacturing infrastructure and will help ensure the continued manufacturing success of our region.
As we continue to become more competitive, this manufacturing resurgence will result in increased capital investment, a rise in exports, more job opportunities and an increase in gross domestic product. “Made in South Carolina” holds a tremendous amount of promise for us all.
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[/ezcol_1third] [ezcol_2third_end id=”” class=”” style=””]Brian Gallagher is director of marketing for O’Neal Inc., a Greenville-based integrated engineering and construction firm that specializes in designing and constructing manufacturing, process chemical, and pharmaceutical facilities.[/ezcol_2third_end]
