So That Happened: Union Wins/Strikes Nationwide, Who's the Next China?
Editor’s note: Welcome to So That Happened, our editors’ takes on things going on in the manufacturing world that deserve some extra attention. This will appear regularly in the Member’s Only section of the site.
Happy 200!
IndustryWeek has a long history of saluting U.S. manufacturing companies that have achieved the lofty age of 100. So, it gives us great pleasure to double down on the applause for Munson Machinery Co. of Utica, New York.
Munson celebrates 200 years in 2023, a milestone anniversary it achieved partly due to a philosophy of never getting complacent. “While some long-lived companies fear change, we at Munson embrace it,” said Munson President Charlie Divine in a press announcement. “We are enormously thankful for the ingenuity, work ethic and skill of our predecessors and of current personnel who brought us to this milestone.”
The company launched two centuries ago by manufacturing grain milling machines, flour bolters, grinding supplies and water-power equipment. Today, its catalog includes mixing, blending and size-reduction equipment. Cheers to the next 100 (or 200) years.
Ladies and Gentlemen, Start Your… CMMs?
Digital reality solutions company Hexagon enters into a 10-year agreement to be the official metrology hardware and software provider for Hendrick Motorsports. The partnership will also include Hexagon’s presenting sponsorship of an advanced Quality Control Lab at the 14-time NASCAR Cup Series champions’ campus in Concord, North Carolina.
“A relentless focus on quality, accuracy and attention to the finest details is what wins races and championships in NASCAR,” said Jeff Andrews, president and general manager of Hendrick Motorsports. “Hexagon’s precision products provide us peace of mind as we enter race weekends on the cusp of some remarkable milestones. With this landmark decade-long commitment, we look forward to celebrating many exciting achievements together in the future.”
Hexagon will add new robotic inspection capabilities, new coordinate measuring machines (CMMs) and portable laser scanners. The deployment of the latest solutions from Hexagon’s Manufacturing Intelligence division has the goal of increasing performance through greater inspection capacity, automating measurement and eliminating bottlenecks.
“Partnering to provide technologies that will help Hendrick Motorsports continue to make race- winning performance innovations is an exciting opportunity and further strengthens the long-time relationship we have maintained,” said Scott Grumbles, commercial operations manager of Hexagon. “In providing metrology solutions that offer more flexibility, capacity and accuracy, the goal is to ensure Hendrick Motorsports has the tools it needs to confidently push the limits of performance and keep crossing the finish line first.”
Is China the New China?
Between the COVID crisis, rising labor costs, energy concerns and geopolitical tensions, many manufacturers are looking for alternatives to China for their next outsourcing projects. That’s been leading to a chorus of “Who’s the next China?” questions from pundits.
Admittedly, this is not a new question. Smart people and publications have been asking where the next China is going to be since China began its manufacturing assent more than 20 years ago. However, the frequency of such stories picked up during the COVID-sparked supply chain crisis and as high-profile companies made big changes to their sourcing strategies, such as Apple choosing India, not China, for iPhone production increases.
Early this month, The Wall Street Journal highlighted India’s gains with an article titled “China Finally Has a Rival as the World’s Factory Floor.”
“Only India has a labor force and an internal market comparable in size to China’s; India’s population may be the world’s largest, according to the United Nations. Western governments see democratic India as a natural partner, and the Indian government has pushed to make the business environment more friendly than in the past,” WSJ reporters Philip Wen, Vibhuti Agarwal and Greg Ip write.
At about the same time, NPR’s Marketwatch had a story discussing the rapid growth of Mexico’s tech and manufacturing sectors, suggesting that our neighbor to the South may eventually become New China. That radio program quoted David Fishman, CEO of the recruiting firm Sparrow Co., about Mexico’s growing popularity for businesses following the supply chain disruptions of 2021 and 2022.
“Companies woke up,” he said. “Not just the big multinationals, but the smaller ones, the $50 million to $100 million companies. Everybody was going to Mexico.”
So, is the next China Mexico? India? Does Vietnam or Malaysia have a shot? Recent data point to one clear candidate – China.
In February, the country announced a decisive victory over COVID and told companies worldwide that its factories were open for business. Last month, Chinese manufacturing output jumped 5.6%, up from 3.9% in March. April was the 12th consecutive month for Chinese manufacturing sector growth.
While higher than manufacturing growth in most other regions, that 5.6% gain was lower than the 10.9% increase predicted by analysts polled by Reuters.
Unions Make Hay in Georgia, Ohio
It’s been a busy week for union activity. Workers at a Blue Bird bus factory in Fort Valley, Georgia, voted 697 to 435 to join the United Steelworkers union. A major rallying point for the USW is that Blue Bird is in line for a substantial share of $500 million in federal funding from the 2022 EPA Clean School Bus Rebate Program, which prioritizes replacing diesel-powered buses with zero and low-emission buses. Companies that accept big federal investments such as these should be prepared to give workers a seat at the negotiating table, said USW District 9 Director Dan Flippo in a statement.
And in Holland, Ohio, a town just outside Toledo, 500 UAW workers at automotive supplier Clarios went on strike May 8 after contract negotiations over several months broke down. Formerly Johnson Controls’ Power Solutions business, Clarios was sold in 2019 to Brookfield Business Partners, a publicly traded private equity company headquartered in Bermuda. Clarios supplies low-voltage batteries for Ford and General Motors vehicles.
Union membership rejected by 98% the company’s most recent offer of a 3% wage increase. One of the main sticking points—mandatory 12-hour shifts that do not include overtime—brings to mind advice from automotive attorney Robert Chiaravalli. He predicted that suppliers are in for a tougher time with the UAW than OEMs in part because the labor shortage hit suppliers harder, causing them to push the limits with their existing employees. (Late breaking: on Thursday, 160 UAW workers at Ford supplier Constellium Automotive went on strike, citing safety and unfair discipline issues as their reasons.)
Meanwhile, the give and take is intensifying. On Monday, Clarios received a temporary injunction in Lucas (Ohio) County Court limiting picketers to five per gate, “even banning livestock after a member drove their horse to the picket line,” according to a UAW press release. Here’s hoping the horse got overtime hay and regular breaks in the nearest pasture.
