Skip navigation
2016

Port authorities and their private-sector partners plan to spend $155 billion on port improvements over the next five years to accommodate growing traffic, according to the U.S. Maritime Administration. At the same time, community groups and local activists counter that unchecked seaport expansion has damaged coastal ecosystems and brings a threat of dangerously high emissions levels from trucks, trains and ships entering the ports. A new report from the Environmental Protection Agency supports that view, calling for port authorities to take steps to curb diesel engine emissions.

 

In the “National Port Strategy Assessment: Reducing Air Pollution and Greenhouse Gases at U.S. Ports,” the EPA explains that “diesel engines are the modern-day workhorse of the American economy.” However, the report also notes that although diesel engines “can be reliable and efficient, older diesel engines can emit significant amounts of air pollution which impact human health and the planet.”

 

In particular, emissions from diesel engines, especially PM2.5, NOx and air toxics such as benzene and formaldehyde, can contribute to significant health problems—including premature mortality, increased hospital admissions for heart and lung disease, and increased respiratory symptoms—for children, the elderly, outdoor workers and other sensitive populations, according to the report. What’s more, port-related diesel emissions, such as CO2 and black carbon, also contribute to climate change. Research increasingly documents the effects that climate change is having—and will increasingly have—on air and water quality, weather patterns, sea levels, human health, ecosystems, agricultural crop yield and critical infrastructure, EPA explains in the report.

 

Consequently, port authorities should act to reduce the harmful effects of diesel-engine emissions on port communities by replacing old equipment and improving cargo-handling operations, according to the report. For example, ports can replace older drayage trucks used to haul cargo to and from port terminals with newer, cleaner diesel trucks, which could reduce particulate-matter emissions by as much as 62 percent in the next five years, according to the new research. In addition to replacing trucks with newer diesel and hybrid models, the EPA report recommends several other tactics for ports to reduce emissions, including replacing train locomotive engines with newer models, using electric equipment to handle containers on the docks, improving operations to reduce the number of trucks idling as they wait for cargo, and requiring ships to plug in to shore power at berth.

 

Christopher Grundler, director of the EPA’s Office of Transportation and Air Quality, said in a statement that researchers found “many opportunities to reduce harmful pollution at ports that we know will work.” He called the results great news for the 39 million Americans who live near port hubs.

 

The good news is that some port authorities have already begun moving in this cleaner direction. An article in Saporta Report, for example, notes that the Georgia Ports Authority has spent $17.5 million since 2012 to replace diesel-powered cranes with electric cranes. So far in Georgia, 45 cranes have been transitioned from diesel to electric power, or purchased with the capacity to be converted to electric power, according to the ports authority.

 

Although the ports of Los Angeles and Long Beach are the single largest fixed source of air pollution in Southern California, they too are taking action. For instance, Eric Garcetti, mayor of Los Angeles, has appointed an advisory panel tasked with reducing air pollution from the Port of Los Angeles by expanding the use of zero-emissions technology. The 10-member Sustainable Freight Advisory Board, made up of representatives from industry, environmental groups, labor and air quality agencies, will advise the city-owned port on how to work with manufacturers to develop and deploy cleaner trucks, trains, ships and cargo-handling equipment.

 

What are your thoughts on air pollution around ports? Are port authorities making enough improvements?

The Aluminum Association is asking for a deeper investigation by the U.S. International Trade Commission into Chinese policies to save what’s left of the domestic industry, association executives say. In short, they ask for a “meaningful dialogue” with Chinese authorities in a move to end incentives and subsidies that they say fuel a global glut and squeeze U.S. producers out of the market.

 

Heidi Brock, president and CEO of the Aluminum Association, and Garney Scott, chairman of the Aluminum Association and president & CEO of Scepter, will testify at the U.S. International Trade Commission (USITC) public hearing today on the Investigation on the Competitive Conditions Affecting the U.S. Aluminum Industry. Executives from China’s metals industry association and aluminum fabricators will testify at the hearing as well.

 

“We are gratified that the Commission has begun the process of investigating the complex issues driving overcapacity and overproduction in the aluminum sector in China,” Brock will say, according to her prepared remarks, PRNewswire reports. “We remain committed to a healthy and growing global aluminum industry where all producers play by the same set of rules on a level playing field.”

 

The Aluminum Association represents aluminum companies and their suppliers throughout the value chain—from primary production to value-added products, and to recycling. The U.S. domestic aluminum industry contributes $75 billion in direct annual economic impact and employs 161,000 workers, according to the association. Although overall industry jobs grew three percent between 2013 and 2016, jobs in the alumina refining and aluminum smelting sector declined by more than half. This contributed to a loss of more than 7,000 jobs in that sector in just three years, Brock says. The contraction is attributed to aluminum overproduction in China.

 

“While overcapacity is most acutely impacting the upstream market today, it could just as easily impact our growing downstream market tomorrow,” Brock wrote in her written testimony. “That’s why the entire aluminum value chain we represent is committed to getting this right.”

 

In the past, China was the main market for its own aluminum production. However, Brock explains, Chinese manufacturers have continued to increase production even as demand in China slowed—turning to global markets to absorb the excess supply. Much of this expansion is being driven by misguided government policies such as artificial incentives, subsidies and provincial or local government employment programs, and has led to questionable trade practices, including metal misclassification and trans-shipment, she continues. The effect has been to depress global markets, making it challenging for many producers to operate and remain profitable, Brock says.

 

“The real issue, and what has changed over the last several years, is that a significant—in in fact, dominant—share of the global supply of aluminum is advantaged by Chinese government policies, from which the rest of the world’s industry does not and cannot benefit,” Scott wrote in his prepared remarks. “As an industry, we are united in our concern over the oversupply of Chinese aluminum.”

 

Interestingly, earlier this month, an article in the Wall Street Journal cited U.S aluminum executives who contend that some $2 billion worth of Chinese metal products had been stockpiled in Mexico as part of a scheme to re-export to the U.S., which imposes heavy duties on Chinese products. A total of one million tons of aluminum products were previously spotted by a pilot commissioned by a U.S. aluminum executive to fly over a factory in Mexico.

 

The China Non-ferrous Metals Fabrication Industrial Association wrote in its newspaper that it was impossible to identify the amount stockpiled from a plane. It further wrote that U.S. duty of 15 percent made it impossible for Chinese producers to export primary aluminum to the country.

 

What are your thoughts on excess aluminum and its impact on the value chain?

October 7 marks the fifth annual Manufacturing Day, when thousands of manufacturers will host students, teachers, parents, job seekers and community leaders at open houses, plant tours and educational sessions to showcase modern manufacturing technology and the jobs that are now available. It’s a chance for students to see the diverse career options that are innovative, impactful and, most likely, not what they expected.

 

Exposing students, their parents and even teachers to Manufacturing Day is seen as one way to begin to address the growing skills gap, which has a significant impact on manufacturers. According to research by Deloitte and The Manufacturing Institute, 82 percent of executives responding to a skills gap survey said they believe the gap will impact their ability to meet customer demand. More than three-quarters (78 percent) of the executives said they believe it will impact their company’s ability to implement new technologies and increase productivity. Large numbers of the executives also said the lack of skilled workers hurts the ability to provide effective customer service (cited by 69 percent of the participants) and decreases the ability to innovate and develop new products (cited by 62 percent of the respondents).

 

“As the old idiom goes, ‘Seeing is believing,’ and that’s the guiding principle behind Manufacturing Day,” says Jennifer McNelly, executive director at The Manufacturing Institute. “It was created in response to a dire need in America: The industry today faces a major shortage of skilled workers. An estimated two million manufacturing jobs will go unfilled over the next decade due to companies’ inability to find talent with the required skills. Several leading industry organizations determined five years ago the best way to combat this malady and reverse negative misperceptions people may have about manufacturing jobs and careers is to literally show ‘up close and personal’ the exciting kind of work that takes place in plants across the U.S.”

 

Participation in Manufacturing Day grows every year. In 2015, there were more than 2,600 live events, attended by more than 225,000 students and 55,000 parents, educators, job seekers and others.

 

What’s more impressive, are the results of a new Deloitte perception survey, developed in collaboration with The Manufacturing Institute and distributed to the manufacturing hosts so they could poll attendees. The results show that Manufacturing Day is positively impacting attendees’ perception of the manufacturing industry and its career options.

 

For example:

  • 81 percent of student respondents said they are more convinced manufacturing provides careers that are both interesting and rewarding,
  • 71 percent of student respondents said they are more likely to tell friends, family, parents or colleagues about manufacturing,
  • 93 percent of educators said they are more convinced manufacturing provides careers that are interesting and rewarding, and
  • 90 percent of educators indicated they are more likely to encourage students to pursue a career in manufacturing.

 

“These findings significantly reinforce the value of Manufacturing Day,” says Michelle Drew Rodriguez, manufacturing leader, Center for Industry Insights, at Deloitte. “For those truly exposed to modern day manufacturing, perceptions do change and, based on that, we will move the needle to better fill the skills gap that challenges so many companies today.”

 

Although Manufacturing Day is October 7th, events do not necessarily need to be held on that date. So far, there are 2,072 MFG DAY events planned in 2016. More information about events may be found here:

http://www.mfgday.com/events

 

What are your thoughts on Manufacturing Day and the responses from past attendees?

Automakers and tech companies alike have been testing self-driving cars on public roads for years, with a human in the driver’s seat in case of emergency. The results suggest that self-driving cars could be on the market in a few years, especially considering several automakers’ recent investments and acquisitions.

 

A few weeks ago, Uber began not only testing self-driving vehicles in Pittsburgh, but also picking up passengers with safety-driver equipped autonomous vehicles. Pittsburgh, by the way, is the only U.S. city in which riders may be picked up by an autonomous vehicle. Such programs are already underway in Singapore.

 

Uber also recently announced a $300 million partnership with Swedish automaker Volvo to help each other develop self-driving technology. Ford has announced it would put driverless cars on the road for ride sharing by 2021, and ride-hailing firm Lyft has said a majority of its vehicles will also be driverless the same year.

 

Federal officials have struggled with how to promote the technology's promised safety benefits—that self-driving cars can react faster than people, and can’t be impaired or distracted like humans—but at the same time making sure they are ready for widespread use. Indeed, self-driving cars have the potential to save thousands of lives lost on the nation’s roads each year and to change the lives of the elderly and the disabled, President Barack Obama wrote in an op-ed published this week by the Pittsburgh Post-Gazette.

 

“Safer, more accessible driving. Less congested, less polluted roads. That’s what harnessing technology for good can look like,” Obama wrote. However, he also noted that “We have to get it right. Americans deserve to know they’ll be safe today even as we develop and deploy the technologies of tomorrow.”

 

Toward that goal, the U.S. Department of Transportation this week released long-awaited guidelines for the testing and deployment of self-driving vehicles, giving manufacturers and researchers some direction for the future while not exactly spelling out the federal government’s exact responsibilities. At a news conference, U.S. Transportation Secretary Anthony Foxx described the 116-page policy document as “the most comprehensive national automated vehicle policy that the world has ever seen.” However, he added that the policy is a “living document” and leaves room for “more growth and changes” in the future.

 

“One of reasons we take great pains not to be so prescriptive” is because the technology is “dynamic” and changing fast, Foxx said, so the government needs to be “flexible."

 

Notably, the document outlines a “15-point safety assessment” letter that manufacturers and researchers will be asked to submit to the NHTSA explaining how the vehicle and its technology address issues such as vehicle cybersecurity and system safety. Eventually, this may become a mandatory report.

 

According to the document, federal regulations must be followed when the car is being driven by the software. Conversely, when humans are driving, “state laws apply,” Foxx said. He further explained that states will be responsible for determining liability rules for driverless vehicles, establishing a plan to limit potential driver distraction and determine which party needs to have motor vehicle insurance —the manufacturer, the owner, the operator or the passenger.

 

The news, and its inherent flexibility, most likely comes as good news to automakers who fear a patchwork of state laws will slow or complicate deployment of self-driving cars. Michigan legislature, for example, is considering bills that would allow the testing of self-driving cars without brakes or pedals on state roads. New York, on the other hand, has a longstanding law that requires drivers keep one hand on the wheel at all times, which undermines the rationale for self-driving technology.

 

What are your thoughts on federal guidelines for self-driving vehicles? Will it make it easier for companies, their partners and suppliers to produce such vehicles?

 

The use of autonomous ships would offer cost savings because with no ocean-going crew, there would be no crew costs. Furthermore, without the infrastructure needed to support a human crew—such as air conditioning, heating, sanitation and crew quarters—there would be more room for cargo. Some estimates claim that such ships would be five percent lighter and use 12 percent to 15 percent less fuel. Not everyone, however, believes such ships are viable.

 

Earlier this year, the Rolls-Royce led Advanced Autonomous Waterborne Applications Initiative (AAWA) presented its first findings at a conference, where speakers expressed high hopes for vessel automation in commercial service—and predicted it will arrive soon.

 

“Autonomous shipping is the future of the maritime industry,” Mikael Makinen, president of Rolls-Royce’s marine division, said. “As disruptive as the smart phone, the smart ship will revolutionize the landscape of ship design and operations.”

 

Speaking at the Autonomous Ship Technology Symposium this summer, Oskar Levander, Rolls-Royce, vice president of innovation, Marine, said, “This is happening—it’s not if, it’s when,”

 

“The technologies needed to make remote and autonomous ships a reality exist,” Levander said. “The AAWA project is testing sensor arrays in a range of operating and climatic conditions in Finland, and has created a simulated autonomous ship control system which allows the behavior of the complete communication system to be explored. We will see a remote controlled ship in commercial use by the end of the decade.”

 

Not everyone shares that view, or believes such an approach is pragmatic. For example, Captain Samrat Ghosh and Trudi Hogg of the Australian Maritime College at the University of Tasmania have published a paper in the Australian Journal of Maritime & Ocean Affairs explaining that belief in the reliability of fully autonomous vessels is unrealistic.

 

On the one hand, research in the design and development of fully autonomous and unmanned merchant vessels could reduce human error and provide financial savings through crew salaries and the omission of crew accommodation, they write. Then again, these vessels will require high-quality and reliable communication systems between the unmanned ship and shore, where they will be monitored. That, Ghosh and Hogg write, is the problem.

 

“It is proclaimed that the incidence of human error will be significantly decreased on the unmanned merchant ship,” Ghosh and Hogg write. “However, the onboard technology requires calibration and maintenance by humans and the vessel requires constant monitoring from a shore control room, where operators will be interpreting, absorbing and acting on information sent from the ship. Human error risks are not eliminated and the unmanned vessel will face new challenges for safe operation and monitoring, as shore operators seek to obtain awareness of the vessel and its surrounds.”

 

Even though the technical concepts for unmanned vessel operation are well established, studies on human interaction with the systems are not as prevalent, Ghosh says in a Maritime Executive article. The maritime and seafaring industry require further evidence of the validation of the technology before the long-term effects of fully automated vessels can be measured, he says.

 

At the very least, new skills will be required, and old skills may be lost over time, Ghosh says. The shore crew required to operate unmanned ships will need a new level of aptitude to manage and analyze data, which is an attractive opportunity for some but also raises concerns about training and certification, he says. What’s more, an experienced Master remains a requirement to helm the vessel from ashore, but as specialized shore crew age, it may prove difficult to replace experienced mariners if there are less crew gaining first-hand experience of actually working at sea, Ghosh says.

 

What are your thoughts on unmanned ships at sea? Would such an endeavor simply replace an on-board crew with a shore-bound crew? It also will be interesting to see what the actual cost of an autonomous ship is, considering the level of high-tech equipment that would be necessary.

Ford Motor Co. Chief Executive Officer Mark Fields said on Wednesday that all of the company’s small-car production will be leaving U.S. plants and heading to lower-cost Mexico. That comes as no surprise, given that earlier this year, the company announced it’s building a $1.6-billion assembly plant in San Luis Potosi, Mexico, and plans to begin small car production there in 2018.

 

“We will have migrated all of our small-car production to Mexico and out of the United States,” over the next two to three years, Fields told Wall Street analysts at an investor conference hosted by the automaker.

 

During contract talks in 2015, Ford confirmed that it would move Focus and C-Max production out of its Wayne, Michigan, plant in 2018. That plant instead will produce new vehicles under a contract signed last year with the United Auto Workers union, the LA Times reports. Some analysts believe those vehicles will probably be larger, more profitable vehicles such as the Ford Ranger pickup and a new Bronco SUV.

 

The industry has known for decades that it is a challenge for domestic automakers to make a profit on small cars, which likewise, have small profit margins. It makes sense then, for automakers to shift small car production to Mexico. Fields at Ford has previously noted that the company’s labor costs in Mexico are roughly 40 percent less than they are at U.S. plants, which are all unionized.

 

Ford isn’t alone in that production shift either. Indeed, last fall, AutoForecast Solutions estimated that GM, Ford and Fiat Chrysler will collectively produce 45 percent of their small cars for the North American market in Mexico by 2020, up from 18 percent in 2014. Researchers at IHS Automotive projected the Mexican percentage of U.S. companies’ small car production to reach 42 percent in 2020.

 

What was unexpected about the announcement, however, is that as an ABC News story reports, presidential candidate Donald Trump jumped right in yesterday, calling Ford’s plan to relocate a small car assembly plant to Mexico “disgraceful.” Maybe, on reflection, that shouldn’t be a surprise either since—for whatever reason—Trump has targeted Ford before.

 

“Ford has announced … that they’re moving their small car production facilities to Mexico,” Trump said. “To think that Ford is moving its small car division is a disgrace. It’s disgraceful. It’s disgraceful that our politicians allow them get away with it. It really is.”

 

In an interview on Fox News, Trump went further, saying that Ford plans to “fire all their employees in the U.S. and move to Mexico.” He added that Ford would have to pay a 35 percent tax on any car that comes back to the U.S. if he becomes president. “And you know what’s gonna happen, they’re never going to leave.”

 

Ford CEO Fields wasted no time in replying that Donald Trump is completely wrong when he says that Ford plans to move its U.S. operations to Mexico, or even shift future investment outside the country. Asked in a CNN interview if Ford would cut any U.S. jobs as part of its plans to build a new plant in Mexico, Fields responded; “Absolutely not. Zero. Not one job will be lost. Most of our investment is here in the U.S. And that’s the way it will continue to be.”

 

During the interview, Fields also said, “It’s really unfortunate when politics get in the way of the facts.”

 

What are your thoughts on shifting small car production to Mexico? Is it even possible anymore for automakers to remain competitive if they do not shift small car production to Mexico and, instead, focus U.S. production on larger vehicles with higher profit margins?

Across the total U.S. labor force, women earn more than half of the associate’s, bachelor’s and master’s degrees in the U.S. Once in the workforce, they are advancing in their careers, holding managerial and professional positions. However, although women make up slightly less than half of the labor force, they only make up a little over 25 percent of the manufacturing workforce.

 

To help promote the role of women in manufacturing, The Manufacturing Institute created a STEP (Science, Technology, Engineering and Production) Ahead initiative to encourage women to pursue manufacturing as a career by showcasing the interesting and rewarding careers that the industry has to offer. The initiative, launched in 2012, celebrates women in the manufacturing industry who are making a difference through advocacy, mentorship, engagement, promotion and leadership, The Manufacturing Institute explains.

 

The STEP Ahead Awards highlight the achievements of women at all levels of manufacturing—from the factory floor to the C-suite. As the Institute explains, the awards put a spotlight on the widespread impact women have on shaping the industry, whether they are running the company, designing the next big product or testing innovations on the shop floor. They also further encourage women to mentor and support the next generation of female talent pursuing manufacturing careers.

 

The Manufacturing Institute has announced that the 2017 STEP Ahead Award nominations are now open. Nominations, which close October 7, 2016, help raise awareness, support the industry and help grow the future workforce. This year, the STEP Ahead theme will focus on impact—how, what the Institute calls the STEP army of 500+ women, make a difference in their companies and communities.

 

In 2017, the Institute will honor 100 women and 30 Emerging Leaders, a category introduced to honor women under the age of 30 who have achieved unique accomplishments at the start of their careers. Nominees will be selected by The Manufacturing Institute STEP Awards Review Committee based on specific contributions or technical achievements the nominee has made for her company, past experiences that have shaped her and her accomplishments in manufacturing, unique talents/abilities that distinguish her from her peers, and commitment to her community. The 2017 STEP Ahead Awards conference will take place April 19-21, and the Awards Dinner will take place April 20 in Washington, D.C.

 

Information about nominating a leading woman from your company for this national honor can be found here:

https://mi.onlineapplications.net/applications/register.asp

 

The Manufacturing Institute, in partnership with Alcoa Foundation, has also created what it calls a “STEP Forward” networking series for women in manufacturing. These meetings are held with manufacturers to discuss current strategies and develop new concepts for advancing and retaining female talent. Women hear from industry leaders, connect with peers and learn best practices they can take back to their company.

 

Another aspect of the STEP Ahead initiative is the STEP Ahead pledge, which the Institute says encourages women in manufacturing to promote the importance of a diverse workforce in the manufacturing industry and commit to encouraging women to pursue manufacturing careers and help them succeed through a variety of actions, including advocating for the manufacturing industry; mentoring young women/girls; developing or joining an affinity group to generate ideas and share best practices; being an ambassador for manufacturing education; or promoting personal development.

 

What do you think of the STEP Ahead initiative? Are there any women you will nominate for the STEP Ahead award?

When automotive companies began building factories in Mexico more than 20 years ago, the main appeal was a large, and inexpensive labor force. Today, however, due to rapid and continued market growth, those companies are finding that hiring and maintaining a growing labor force is a challenge.

 

Automotive manufacturing in Mexico is booming. The country is the seventh largest car manufacturer in the world—and the second largest automotive exporter to the U.S. Some estimates note that by 2020, one in four cars in the U.S. will have been manufactured in Mexico, because U.S. auto production continues to shift there.

 

For instance, Ford, Toyota, BMW AG and several other auto makers have committed to spend a combined $15.8 billion to build new assembly plants or expand existing factories in Mexico. That, by the way, is in addition to the plants already in operation and billions more being spent by auto-parts suppliers to match demand.

 

As competition for employees—both to find and retain them—grows, one of the consequences is that labor costs likewise increase. Indeed, training and retention programs are becoming common, as are stay-on bonuses—particularly for employees with valued skill sets.

 

“We have a huge supply gap in Mexico that needs to be resolved,” says Stephan Keese, a Chicago-based partner at consulting firm Roland Berger, which works with manufacturers in Mexico, in a recent Wall Street Journal article. “We’ve only seen the tip of the iceberg of this shortage. Labor rates going up will be unavoidable.”

 

At some plants, wages have already risen by double-digit percentages in recent years. In Juárez’s export-focused factories, called maquiladoras, employee turnover hit an average rate of 10 percent in June, which is a level not seen since the first wave of foreign-owned companies moved to Mexico under the North American Free Trade Agreement, according to manufacturers association Amac-Index Juárez, the WSJ article reports.

 

The struggle to find workers is most pronounced in Mexico’s industrial strongholds—cities such as Juárez in the north of Mexico—and in the central, heartland states of Guanajuato, Aguascalientes and San Luis Potosí. In Guanajuato, manufacturers including Honda and Mazda bus workers from as many as two hours way, labor recruiters say, the article notes.

 

In Juárez, home to nearly 300 factories, large banners around the city advertise openings, new shift work and benefits. To avoid bumping pay, employers increasingly offer perks such as English classes, use of soccer fields and $200 referral bonuses (about a month’s pay) for those who recommend new hires, the WSJ article explains. Local officials estimate the city’s manufacturing sector has nearly 15,000 unfilled jobs.

 

Just as has happened in the U.S., Mexico’s state and federal governments are working to address the labor shortage by promoting engineering programs at public universities, expanding enrollment at technical schools and creating new training programs tailored to meet factory demands. One $37 million state-funded facility is even on the grounds of Audi’s plant near Puebla, and was built as an incentive to win the company’s business in 2014.

 

“We obviously have to redouble our efforts to develop human capital,” Ildefonso Guajardo, Mexico’s secretary of the economy, says in the WSJ article. “In the long run, cheap labor isn’t a sustainable advantage.”

 

BMW management also is addressing the challenge. Lourdes Quijas, BMW human-resources director in San Luis Potosí, Mexico, where the company is spending $1 billion to build its first Mexican plant, says in the article that the challenge of finding skilled workers has grown considerably in recent years as other companies continue to expand their operations in Mexico. In response, BMW has opened its own vocational center to train factory machinists, electricians and other skilled tradespeople.

 

What are your thoughts about the growing labor shortage for automotive production in Mexico? Will it influence companies’ decisions to build plants and expand operations there?