Manufacturing Monday: German firm opens up in US, Volt not 100% American, and drug inspections



Greetings folks, and welcome to another episode of Manufacturing Monday!  Well it seems another European firm has opened up a factory here in the good ol' US of A.  Meanwhile, Chevy's turning to foreign sources for lithium batteries for it's upcoming Volt.  Finally, we take a look at a push to investigate foreign pharmaceutical labs.


MAN likes Cleveland!


It's always good news when a new manufacturing plant opens up here in the States.  While it would be nice if our own companies started setting up more fabrication firms here, I won't look a gift horse in the mouth when a foreign outfit sets up shop here.  Yes, you could make the argument that ultimately the profits go overseas, no quarrel there from me.  But for many folks, in hard hit communities were a plant closes down, a job is a job.  This country needs to build up it's manufacturing base, if it is to compete in the 21st Century.  So I'm pleased that MAN Ferrostaal Inc has opened up a factory in Cleveland.


A little-known U.S. subsidiary of a German industrial giant is refocusing its North American mission.

And that's good news for Cleveland.

MAN Ferrostaal Inc., which for decades has operated as a steel trading company, has moved its U.S. headquarters to the area. But not to pursue that business.

The first objective of MAN Ferrostaal's new U.S. focus will be the construction of large solar thermal power plants at a cost of more than $1 billion each.

The projects would be built in the sun-drenched American Southwest. The parts, as well as the engineering, could easily originate in Cleveland, the company says.

The second objective is to break into the just-in-time, sequenced subassembly market for auto makers.

Parent company MAN Ferrostaal AG, of Essen, Germany, operates a $20 billion subassembly business at 12 such plants in Europe, putting together everything from drive trains to windshields to dashboards and entire cockpits at plants adjacent to the car maker's final assembly lines. Clients include European subsidiaries of Ford and GM.


- excerpt from "German company sees manufacturing promise in industrial Cleveland",, 2008

The outfit is looking set up solar power systems, and industrial cities like Cleveland, or Chicago or Detroit have the suppliers on hand.  MAN is looking to purchase a company in the region that deals in what it needs for the fabrication of thermal or solar power.  This brings up a good topic, the supply side of industrial activity.  No...I don't mean supply side economics, but the logistics and support infrastructure that comes with industry.  A manufacturing base often consists of a prime economic activity center, like a large plant making a product, and then that is ringed by suppliers who either deal in shipping it to the client from outside the area or build the supplies needed which are then shipped.  These suppliers in tern become secondary economic activity centers which in turn need supply.

Cities like Cleveland still have that latter part.  Unfortunately many cities that were once industrial hubs have seen that base almost disappear.  And not just firms, but workers with knowledge of the trades needed to maintain such an activity center.  These pockets of industry should be encouraged in any way possible.  In Korea and China, they have Special Economic Zones (by the way, for the former, I am not alluding to that infamous North Korean project it has with companies like Hyundai or Samsung) where tax breaks and subsidies help business owners.  Of course, unfortunately, many of these areas are basically modern day sweat shops.  But here, in the US, hell, I'll even take North America (looking at you Canada!), we can do something better.  Anyway, congrats on MAN for setting up shop here, let's hope Cleveland and other cities start to see more industrial jobs come.


Volt battery may come from Asia

Last week, Chevy gave it's official release party for their upcoming electric hybrid, the Volt.  For the uninitiated, the car is supposed to be GM's big jump into alternative fuel sedan autos.  In reality, it's playing catch up with the Toyota Prius, which had been on the market for over 2 years.  Production is starting to take shape, but now, as the Houston Chronicle is reporting, the auto company is facing a major hiccup. 

The situation centers around the issue of the availability of batteries.  GM is having a hard time acquiring a stable supply domestically, and is claiming that it has been forced to seek suppliers in Asia.  Now there may be some validity to their claims.  Japanese companies have been on the forefront of the type of battery that would most likely go into the Volt.  If not the batteries themselves being the issue, then it's the components that would go into the lithium batteries. 

Wagoner said U.S. battery-making capability trails development in Asia, where government policy has long supported the technology. He said it was likely that "at least initially" the subcomponents for the batteries will come from other parts of the world.

"It's a game that we are behind in," he said. "It doesn't mean it's a game that we lost. If we choose to go at it as a country, we are really going to have to pick up the pace."

Spokesman Robert Peterson said GM has not decided which company will produce the Volt batteries. Boston-based A123 Systems in partnership with auto supplier Continental is in the running. Peterson said A123 had much of its manufacturing capacity based in Asia.

LG Chem, the South Korean chemical company, is the other finalist. The company has a wholly owned subsidiary in Troy, Mich., he said. The Volt is expected to be assembled at a GM car plant outside Detroit.

Wagoner unveiled a production version of the Volt earlier this month. Its goal is to be able to go 40 miles on a single charge from a home electric outlet. The Volt battery, which uses lithium ion technology, is complex and expensive. So far lithium has been mostly used in batteries for laptops and PDAs. Toyota is working on similar technology for future vehicles. Lithium ion technology is seen by many analysts as a potential breakthrough to getting large numbers of high-mileage cars on U.S. roads.

- excerpt from "Volt may not be 100% American", Houston Chronicle, 2008l

Once again, this is another sign of proof that we should be fostering domestic industries.  We could be making lithium batteries.  These things are used in everything from mobile phones to now automobiles!  Just think, all those batteries you see at those mobile phone stores, those could have been made by American workers.  There is an opportunity here to help support start ups in this industry, Asia and Europe are doing this, yet where are we on this?


Congress wants US to inspect foreign pharma

We've all read the news stories about the tainted blood thinner, heparin, from China.  How about the lead in toys?  The list goes on and on, and so finally some action may be coming.  Given how, like virtually every other product, pharmaceuticals can now trace their ingredients from places like China, there is an understandable fear that what goes into our pills may not be all that good.

Amazingly enough, the Federal Drug Administration (FDA) is not required to inspect foreign drug labs or plants!  Personally, I find this shocking, no shocking is not the right word....fucking ridiculous...yes that's it!  You want us to embrace globalization, that things would be "cheaper" for us if we accepted the fact that my Tylenol or prescription medicine very well could have come from a Chinese plant that may also be making household detergent or something?  Alright, maybe I'm off base here, there's no proof that Tylenol is being made in China, nor that the ingredients going into our meds comes from the same place that Chinese detergent is made.  But how do we know?  No one, not one pharmaceutical company or even the damn FDA informs the public as to where it gets it's medicine!   Tell me, when was the last time you saw an infomercial or mass media campaign showing us were our pills come from?  And no, "How It's Made" on the Science Channel does not count!

Apparently, New Jersey Representative, Frank Pallone, shares my concern.  Here's what he said in an article put out by Natural News:

"What worries me is that without congressional intervention, this could happen again," said U.S. Representative Frank Pallone of New Jersey.

As Natural News points out, there is now a plan being put forth.  It won't be cheap, but then again, is there really a price to high to insure our safety?  Not surprisingly, this whole thing is being spearheaded by the Democrats in the Congress.

Democrats have proposed a law that would require the FDA to inspect foreign drug plants once every two years. According to Janet Woodcock, head of the FDA's Center for Drug Evaluation and Research, it would cost $225 million each year to pay for this rate of inspections.

Under the proposed law, this money would be raised by fees leveled on all drug companies producing drugs for sale in the United States that are not manufactured in that country.

Republicans have opposed this funding model, saying that inspections should be paid for with taxes paid by the public rather than fees imposed on corporations.

Woodcock agreed that the FDA needs congressional measures to ensure the safety of the foreign drug supply, but said that focusing on inspection is the wrong approach. Instead, she said, the law "should be more closely targeted and prioritized according to risk" to avoid wasting resources on unnecessary inspections.

- excerpt from "U.S. Lawmakers Push FDA to Inspect More Foreign Drug Manufacturing Factories", Nature News, 2008.

Also under the title of "not surprised", you can guess who has been opposing this.  Republicans are citing that the public should pay with more taxes.  Oh the irony in that statement, you can just savor that for a moment.  We already fund the FDA, and I have no problem in having tax dollars go to inspecting foreign drug plants.  But I think it's also equally fair to ask that these drug companies, who demand that we trust them in making our pills or blood thinner components in places like China, be made to pay for inspections.  I think if they had some skin in the game, they'd be a little bit more motivated to make sure things were clean.



I was thinking today

What is instead of bailing out Wall Street they gave all the money to US manufacturing, tied to hiring US workers and became the largest VC bank in the world.

I think the most corrupt executives should be required to work among the other blue collar workers hired.

I did see that complaint on India but considering the mass exodus of big Pharma to China as well as India I strongly suspect that has more to do with the competition between China and India than the FDA's concern for bad drugs and manufacturing processes.

I guess India wasn't so nice about some patents from some of the big pharma industry as well recently...damn them, something about the public good or something...

now magically their manufacturing isn't up to snuff...
and China's is? Brazil is?

Oh Robert

That ain't ever gonna happen! I take that back, I've seen something like that in Japanese auto and industrial firms, but a US one?!?

My dream

is the government starts acting in the national interest. Pipe smokin' I know.