By Lloyd Graff

Thanks to reader Roger Meyers for sending me an informative article from Forward ONLINE about manufacturing coming back to the United States.

One of the companies prominently mentioned in the piece is Wham-O Corporation, maker of Frisbees and Hula Hoops. Wham-O’s products are not exotic, but they take up a lot of container space per dollar value. With container costs from China up to $4500 from as low as $3000 at the bottom of the recession, Wham-O has rejected offshoring. Their products are not labor-intensive to produce, primarily using injection molding presses. They are cheap, light and bulky. A container of Frisbees may hold only $5000 worth of product, so a 50 percent increase in container costs is a substantial piece of the overall cost, according to Kyle Aguilar, President of Wham-O.

We heard a similar story from Mitch Liss of Edsal Manufacturing of Chicago, a prominent maker of metal shelving for Home Depot, Lowe’s, and Grainger. Shelving is bulky and awkward with low labor costs versus material and freight. Liss says his cost for products sold to the big box retailers is significantly lower in America than importing them from his Chinese plant.

When you figure the cost of inventory on the boat, corruption, intellectual property theft, bad carbon footprint publicity, quality glitches and port headaches, you can see why manufacturing products in North America is beginning to come back like a Frisbee in the wind.

Question: If the Chinese can’t be competitive on Frisbees have they peaked as an exporter?

By Lloyd Graff

Miles Free - Directory of Industry Research and Technology for the Precision Machined Products Association

LG: I am with Miles Free of the PMPA, and we are talking about the unleaded world of materials. Is lead to steel as trans fat is to food?
MF: It seems to be; although I don’t know what benefit trans fat gives to food. We can certainly document the energy savings that lead gives to steel for machining, let alone brass and aluminum. The state religion seems to be “lead is bad.”

Where did this come from?
It comes from the European Union’s belief in the precautionary principle on lead. It’s kind of disturbing. The EU says when an activity raises threat to human health or the environment, precautionary measures should be taken even if some of the cause and effect relationships are not fully established scientifically. To me this is really a state of faith that any suspicion of any threat to the environment really trumps the lack of scientific evidence that the threat really exists. They’ve turned the burden of proof upside down and said, “Prove absolutely that your product is harmless.”

It sounds like global warming.
Very much so.

So what is the underlying scientific hunch about  lead?
I don’t know in terms of what its proposed mechanism for environmental or personal harm is in machined parts. Lead was a real problem from tail pipe emissions, but that lead was reduced 96 percent with unleaded gas. Lead got its face on a reward poster that it’s a bad actor. I don’t know how many children in Europe are expected to ingest screw machine parts. I don’t know how many cars have to end up in an acid bog to raise the net level of lead. I don’t get it.

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By Paul Eisenstein

Race to 100 MPG

The disastrous blow-out of BP’s well in the Gulf of Mexico is expected to have a devastating, long-term impact on everything from marine life to the region’s tourist industry. If there’s an upside to the murk of spilled crude it’s the way the catastrophe is putting a renewed spotlight on the nation’s dependence on petroleum, whether imported or domestic.

“We are concentrated on a single source of energy,” says Eric Cahill, an energy researcher and now the senior director of the Auto X-Prize, but whether you believe in global warming, worry about the cost of importing crude or simply fear the potential for more disasters like the BP spill, there is increasing pressure to find alternatives to that primary energy source. Nowhere is that more visible than in the auto industry, where the strain on the global oil supply is already apparent.

In the U.S., the Corporate Average Fuel Economy, or CAFE, standard was recently raised 30 percent, and is set to reach 35.5 miles per gallon by 2016. Skeptics contend that increase could add significantly to the cost of the typical automobile, perhaps as much as $9,000, according to a new report by the National Research Council, the research arm of the National Academy of Science.

But not everyone buys that argument. And that includes the organizers of what is now known as the Progressive Auto X-Prize. Formally unveiled at the 2008 New York Auto Show, it’s a follow-up to the original Ansari X-Prize that helped spur the first private sub-orbital spaceflight in 2004. But its roots go even deeper, says Cahill, back to the early days of aviation, when the Orteig Prize helped spur Charles Lindbergh to make the first successful solo crossing of the Atlantic Ocean.

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