I was talking with a client recently who was happy to relate how his company was doing. The firm makes brass and steel fluid handling hardware sold at big box retailers and through industrial distributors worldwide.
The company had six plants, three in the U.S. and three in China, but has closed one in China and is in the process of closing a second. The cost advantages of making product in China have eroded. The strength of the Yuan currency, quality challenges, supply chain interruptions, and the human cost of running people back and forth has caused them to pull manufacturing back to the U.S.
The one plant that they are continuing in China does casting work, which still makes sense because the environmental hurdles for such work in America are too bothersome and expensive to deal with.
The American plant my client runs produces about $100 million worth of product, much of it run on machines like Davenports and Acmes. He employs 150 people. He says it would take 1500 workers in China to turn out a comparable amount of turned products.
I know most people were sickened by the debt ceiling brouhaha in Washington, but I was mesmerized by it. The corralling of the budget deficit issues in America is worthy of the drama. Cutting government spending and deciding whose ox will be gored will be the big political issue of the next few years, and it is worth fighting about. I laughed and then grimaced at the rise of the Tea Party and its over-the-top rhetoric, but now I salute them. The Tea Partiers moved the country and showed what a determined minority can accomplish if it stays on message and adheres to discipline. The Washington establishment blinked over the weekend and real change happened.
We recently watched the “Arab Spring” begin to unfold, portending significant change in the Arab world. What just took place in D.C. may be the small beginning of Americans taking control of Government Gone Wild.
Another hopeful development coming out of Washington is a shift in the policy regarding immigrant entrepreneurs and immigrant “brains.”
The ugly anti-immigrant bias, which rippled though the Bush Administration after September 11 and continued into Obama’s Organized Labor homage, is now changing. According to an August 2 article in the Wall Street Journal Alejandro Mayorkas, Director of U.S. Citizenship and Immigration Services for the Department of Homeland Security, is implementing several new initiatives to bring in foreign entrepreneurs, particularly in the high-tech sector.
In recent years, software entrepreneurs in particular have obtained their education here and then been forced to take their business startups elsewhere because they could not get a Green Card. Hopefully visas will now be easier to come by.
There is also a new initiative to allow foreign investors to get visas if they invest $500,000 in a new business that employs at least 10 people. At the time that Canada initiated a similar program in the late 1990’s people in Hong Kong were scared about their future under Beijing rule. A tremendous rush of money came into Vancouver, and Canada is still reaping the dividends of that opening. Look at the Canadian dollar versus the American currency now.
For the first time in a while I’m starting to feel optimistic that a broken government can be mended by the will of the people.
Question: Do you think America is moving in the right direction?
Alejandro Mayorkas, Director of U.S. Citizenship and ImmigrationServices for the Department of Homeland Security