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  • How to get manufacturing back in the US

    Posted by TM Lutas on December 19th, 2011 (All posts by )

    A innovation/manufacturing article focused on high tech batteries had an interesting section on A123:

    When Yet-Ming Chiang cofounded A123 Systems in 2001 on the basis of his MIT research on battery materials, there was no advanced-battery manufacturing in the United States.

    So Chiang and his colleagues at A123 built a manufacturing plant in Changzhou, China (see “An Electrifying Startup,” May/June 2008). The move was meant not to outsource production, says Chiang, but to acquire the needed manufacturing know-how. Subsequently, A123 bought a South Korean manufacturer as a way to begin developing the expertise it needed to make the flat cells required for electric-car batteries. When A123 decided it needed to be closer to its potential automotive customers in Detroit, it cloned the Korean plant in Livonia, Michigan, and the Chinese factory a few miles away in Romulus, aided by a $249 million grant from the federal government. As a result of this strategy, A123 was able to become a major manufacturer in a remarkably short time, building the Livonia plant in just over a year and the Romulus plant in nine months.

    Methods used by “catch up” countries to do technology and expertise transfer from the US are not one way processes. We can do it in the other direction, and in the case of A123 we already have. What will matter in the future will be legal regime and placing manufacturing close to consumption.

     

    5 Responses to “How to get manufacturing back in the US”

    1. Joseph Fouche Says:

      Paging Samuel Slater

    2. David Foster Says:

      Interesting article, but I note that all the companies used as examples are in the battery and solar fields, ie are directly or indirectly subsidized. There are plenty of manufacturing companies that could have been discussed that operate in more of a true free-market environment.

    3. Robert Schwartz Says:

      When the last lawyer is strangled with the entrails of the last environmentalist.

    4. David Foster Says:

      My post Faux Manufacturing Nostalgia addressed some of the factors that have negatively impacted manufacturing in the US.

    5. TM Lutas Says:

      David Foster – This is just a small observation, that there is no magic formula that prevents americans from rebuilding manufacturing if they’re willing to pay the price to do so. If you let things go too far, the price does tend to go up.