A recent Wall Street Journal article pointed out the strength of U.S. manufacturing when it comes to--get ready for the technical jargon--“big stuff.” By that the Journal reporter meant mining equipment and heavy machinery.
Economist Chris Kuehl pointed out this fact in a recent edition of Fabrinonics, an e-newsletter from the Fabricators & Manufacturers Association Intl. Both Kuehl and the Journal article brought up the benefits of “clusters,” a group of like companies in highly collaborative supply chains. Taiwan has it for semiconductors. We’ve got it for extremely heavy equipment, like mining trucks.
The demand for mining equipment has skyrocketed in recent years. In fact, a large mining equipment supplier, Joy Global--our July cover story--has been experiencing record growth.
Peter Gilewicz, managing director of Parker Bay Co., a mining industry research firm, told the Journal reporter that the global demand for large mining trucks, those that carry 200 tons or more, may reach 2,000 this year, up from 1,591 in 2011. Almost 90 percent of these monster machines are built in the U.S.
Note that he said several thousand trucks, not millions. Earlier this year, at The FABRICATOR’s Leadership Summit, Jim Hawkins, director of Caterpillar’s machine design center, said that the main reason Cat continues to push for domestic production isn’t emotional. It’s for a sound business reason. Caterpillar has plants all over the world, of course, but the volumes for its largest machines aren’t sufficient to justify plants in every local market; the capital investment required to make these machines is just too great.
A large casting may be machined in a vertical turning lathe, boring mill, or another monster machine that’s several stories high. It doesn’t make sense to buy one for every local market, even one as strong as China’s. Similar thinking goes for some of the large welding robot installations, with complicated fixturing and massive workpiece positioning tables.
(As a side note, for more information about The FABRICATOR’s Leadership Summit in February 2013, click here.)
With everyone touting the virtues of near-shoring and reshoring, these clusters of heavy equipment makers may be a good example of what manufacturing works well stateside. Studying these clusters that are already here would be a good exercise.
Companies like Caterpillar and Joy Global remain in the U.S. because of the infrastructure we have in place (existing factories and equipment) as well as the talent base. If that infrastructure crumbles, there’s nothing stopping those companies from moving somewhere else.