MARSHFIELDNEWSHERALD.COM WEDNESDAY, MAY 8, 2024 3A have a majority of sales outside the Unit- ed States, in a way that conforms with the regulations of each country where they operate. But they genuinely be- lieved they had no special responsibility to the United States or its national secu- rity, Holstein said. That philosophy now under as- he said. The pandemic revealed that global just-in-time supply chains reliable. Natural disasters and geopolitical have shown the systems are not always functional or se- cure.
Moreover, the world has become more unstable. invasion of Uk- raine and war in Gaza have dis- rupted global trade, and rising tension in China about its economy and, particu- larly, its relationship with Taiwan, have raised the specter of severe upheaval. Critically important products are at risk. overwhelming control of the manufacturing of antibiotics, elec- tric vehicle batteries and many electron- ics is troubling for the United States. CEOs are in a historic jam at the Holstein said.
ones who led us down this path of globaliza- tion are waking up and discovering the underlying philosophy has some trou- On April 3, the strongest earthquake Taiwan in 25 years to hit rattled in the supply of semi- conductor microchips, essential for ev- erything from home electronics to mili- tary weapons. Taiwan accounts for more than of the microchip supplies worldwide, and of the advanced chips used in smartphones and high- performance computing. When the tremors began, Taiwan Semiconductor Manufacturing Compa- ny halted production and evacuated per- sonnel from plants. The company later said its buildings damaged, but just those initial reports raised concerns with technology companies. The Tai- wanese is the largest chip- maker for customers like Apple, Qual- comm and Sony.
The deadly quake, estimated at a magnitude of 7.4, collapsed buildings and left others leaning precariously. Within hours, aftershocks rolled across the island. Had it struck elsewhere or more forcefully, the global impact on supply chains could have been felt for months. Taiwan is located in the Ring of Fire, an area considerably prone to earthquakes and tsunamis. The quake underscored the urgent need for the U.S.
to reshore microchip manufacturing, said Peter Guinto, vice president of government for Resi- linc, a Milpitas, supply-chain ser- vices company. know where the next epi- center will be, but if in a place where semiconductor manufacturing is promi- nent, it could potentially be very damag- ing for the supply Guinto said. Buckets, bikes, and dishwashers come home At Waupaca Foundry, in central Wis- consin, a tractor bucket has come to symbolize the appeal of reshoring. Wisconsin ranks among states in the number of foundries. Waupaca Foundry is North largest sup- plier of iron castings for products such as engines, brake rotors, and factory ma- chines.
It melts 9,500 tons of metal a day and has from reshored work across various industries. One of the customers is Amerequip, a manufacturer of landscap- ing and agriculture equipment based in Kiel, a small northeast Wisconsin city once known for having a wooden shoes factory. In 2020, Amerequip sought help from Waupaca in fabricating a backhoe buck- et for a John Deere compact tractor. It had to be rugged and visually appealing to consumers, and Amerequip did not want it to use hard-to-obtain bucket teeth from China. The two companies completed the task in 18 months.
Their cast-iron buck- et, now made in Wisconsin and Indiana, was the American Foundry 2022 Casting of the Year. It inspire one of the judges noted. U.S. foundries have from companies seeking reliable sources of metal-cast products, many also driven by high overseas shipping costs and worries about U.S.-China relations. been a net positive for us the last several said Alex Lawton, CEO of Lawton Standard, a 145-year-old found- ry in De Pere.
every part where someone has tried to save money on overseas, seen several parts come Yet some foundry operators remain wary of customers that left them for Chi- na years ago and now want to come back. Those customers would leave again, they fear, if the winds changed. tell them we would require a seven- year commitment to keeping their work in the States, and for a portion of those people, that pretty much ended the con- said Taylor Pearson, presi- dent of Washburn Iron Works in north- ern Wisconsin. not a Band-Aid to the mess put themselves Reshoring has been accompanied by other trends such as factory automation and the growth of foreign-owned com- panies. Expansions have come from companies like Milwaukee Tool, which is owned by Hong Kong-based Techtronic Industries, and GE Appliances, which is part of China-based Haier Group.
Milwaukee Tool said in May 2022 it would add 1,000 jobs over three years in southeast Wisconsin. The hiring would be part of a $206 million investment in power-tool technologies used in the skilled trades. of up to on foreign-made washing machines, imposed in 2018 and which expired in early 2023, boosted U.S. appliance making as GE and Korean manufacturers Samsung and LG opened or expanded plants in Kentucky, South Carolina and Tennessee. State tax cred- its provided a further assist.
Proximity also was important for Guardian Bikes, which pulled its produc- tion out of China a rarity given that bicycles are nearly all made in Asia. The Austin, Texas, company says now focused on assembling products at a highly automated plant it opened in 2022 in Seymour, Indiana. The quo in bikes is bro- said Guardian co-founder and CEO Brian Riley. pandemic exposed to the average consumer what experts al- ready know a China-dependent sup- ply chain is fragile and sales have surpassed $33 million since it made a pitch for funding on the television show Shark Tank in 2017. when billionaire Mark Cu- ban, an Indiana native, became one of its investors.
Reshoring has complemented manu- facturing in some of legacy industries. In 2018, Komatsu Mining closed a fac- tory in China and brought the work to Milwaukee, where mining machines have been made for more than a century, and where the company already had a manufacturing presence. Komatsu builds some of the largest mobile land machines. Its biggest mining shovel weighs nearly 4 million pounds and has a bucket the size of a two-car garage. In front of the compa- mining equipment headquarters in Harbor District, a 60-foot-tall electric mining shovel and truck on display.
The Chinese plant the company closed made gears and components for mining shovels used for excavating iron ore, copper, and other commodities. felt it was more important to be doing that work said Komatsu Surface Mining President John Koetz. Most of mining trucks are made in Peoria, Illinois. But the company reshored some production of trucks, used for mining, construction and quar- ry work, from Japan to Chattanooga, Tennessee, where the work was previ- ously done. Much of reshoring involves small businesses While major manufacturers grab the most attention, much of the reshoring movement has been with smaller busi- nesses.
As a student at University of Wiscon- sin-La Crosse, Danica Lause knitted hats by hand. One of them, by mistake, had a hole in the back that turned out to be useful for popping out a ponytail. It be- came the inspiration for her company, Peekaboos Ponytail Hats. After college, Lause worked for a chemical company and traveled much of the week. She made hats in her east side Milwaukee apartment on weekends and knitted some on to California.
As sales grew, Lause needed a manu- facturer. But help available to mass produce hand-knitted hats in the U.S., and there yet a machine capable of handling the Peeka- boos design. Lause tried using knitters in South America and Europe, but it work out. She found people to make the hats in China, and that lasted about three years. The quality, however, was inconsis- tent.
Hats would vary in size, and some good enough to ship to custom- ers. Lause said she be certain the knitters in China received a fair wage and were treated well by the contractor she used. That made her uncomfortable. would send me photos and videos, but it never really felt she said. Lause sought to gain more control over production.
reason I got into this was I liked making things, and if I was going to put something out into the world, I wanted to know that integrity was behind she said. Lause was told again and again that the process was too to automate. Instead of giving up, she and an engineer from a knitting-machine company in New Jersey spent nearly two years searching for a solution. The one-ton 3-D knitting machine and software they de- veloped cost $80,000 and could handle the patented ponytail feature as if it was knitted by hand. Now, Lause, a self-described ering has three of the ma- chines in a Germantown shop where she and a handful of employees produce the hats sold on the website.
felt like the luckiest girl for being able to have this in my four walls, to make this product at the level of integrity I wanted and she said. For Wisconsin housewares company, a mix of sources works Other, larger companies, have found a hybrid model of reshoring works for them bringing some products home, leaving some abroad. Around 20 years ago, Metal Ware the Wisconsin-based maker of the legendary Nesco Roaster and other household goods, closed its factory in Al- goma and moved the work to China. Many companies across the state and nation went down a similar path. With low-cost labor and subsidized indus- tries, China seemed unstoppable in its quest to become the factory of the world.
Manufacturers in the U.S. were at a huge disadvantage, Metal Ware owner Wes Drumm told the Milwaukee Journal Sen- tinel in 2003. For cost reasons, the Nesco Roaster continues to be made in China. However, century-old Metal Ware has returned other manufacturing to northeast Wis- consin. probably the main company around here reshored.
It feels ex- tremely good because I grew up in this community went away for years, and when I came back, everything had said CEO Rick Carey. The question now is to what degree consumers are willing to pay for made- in-America goods. The Boy Scouts of America dropped Metal Ware as the manufacturer of its camping cookware kit and instead sent the work to China. Metal Ware made the kit for many years and said it never had a complaint. was absolutely Carey said.
the Boy Scouts of America assign the value to an American- made product, how can we expect any consumer China is still the factory of the world. But this is an opening. With all the reshoring taking place with U.S. companies large and small, China is still considered the factory of the world a title not likely to relin- quish. And some U.S.
companies are still moving work there, or at the least, pulling it back. However, U.S. new investment in Chi- Manufacturing Continued from Page 2A See MANUFACTURING, Page 4A Danica Lause wears one of the hats she designed. Through automation and innovation, Lause has successfully moved all of her Peekaboos Ponytail Hats production from China to Germantown. Her hats are designed with holes for ponytails.
MARK JOURNAL SENTINEL A large electric mining shovel highlights the entryway at Komatsu during the opening ceremony for its new $285 million campus in Harbor District on East Avenue in Milwaukee. MIKE DE JOURNAL SENTINEL CEOs are in a historic jam at the moment. The ones who led us down this path of globalization are waking up and discovering the underlying philosophy has some William J. Holstein former editor-in-chief of Chief Executive and Directorship magazines.
