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Wal-Mart, UTA pursue manufacturing renaissance

🕐 4 min read

The seeds for a U.S. manufacturing renaissance are being sewn in east Fort Worth, where researchers are pioneering automated technologies that could restore stateside products production.

“It goes beyond research and into manufacturing and cutting manufacturing costs,” said Aditya Das, senior research scientist with the University of Texas at Arlington’s Research Institute.

As one of seven recipients of Walmart Foundation grant money awarded last year, UTARI is using its $229,214 to develop flexible assembly lines.

Theoretically, aircraft hatch doors could be constructed in the morning, golf clubs in the evening and micro-medical devices overnight.

Using the same equipment for multiple products in multiple sizes could cut manufacturing costs and strengthen what Wal-Mart officials call a “reshoring” of U.S jobs sent overseas years ago.

“The manufacturing base is extremely important to the economic future of the United States,” said Joe Quinn, senior director of issue management and strategic outreach for Wal-Mart corporate affairs.

Addressing a roomful of researchers on June 3 at UTARI’s U.S. Manufacturing Symposium along Jack Newell Boulevard in east Fort Worth, Quinn applauded Das and his team for pursuing technology that stands to invigorate stateside manufacturing.

“You are on the front lines of work that matters a great deal,” Quinn said. “What you are doing here matters.”

A year after UTARI received the Wal-Mart grant, the state Legislature recently approved $2 million in funding to bring UTARI research to market.

“We are about discovery, development and commercialization,” said Dr. Mickey McCabe, executive director of UTARI, emphasizing that research is more pursuing theory; what the institute does is work with companies to commercialize their products.

That vision dovetails with Wal-Mart’s plan to strengthen U.S. manufacturing. To that end, the company plans to purchase $250 billion in U.S. products by 2023 to encourage the creation of U.S. jobs and grow manufacturing.

Among suppliers benefiting from the retail giant’s investment are Korona Candles, expected to generate 170 jobs in Virginia after moving its overseas production back to the U.S., and GE, creating 150 jobs to produce U.S.-made energy-efficient light bulbs sold exclusively at U.S.-based Wal-Mart stores.

The retail firm casts a big shadow and hopes that its 140 million customers and 4,000 U.S. stores can play a role in restoring U.S. manufacturing to levels not seen since the industry peaked at 19.5 million jobs in the late 1970s. Manufacturing nationwide suffered a decade earlier when employers began moving jobs overseas to save costs.

In Texas, Walmart employs 156,000 at more than 560 Wal-Mart and Sam’s Club stores. Texas suppliers have benefited by gaining $57.3 billion in Wal-Mart business in 2014 alone, according to the company.

How many jobs have returned from overseas is unknown, but Quinn said that communities big and small stand to prosper if the trend continues.

“I was on the phone last week with the Texas governor’s office, and I talked with him not just about jobs for Houston or Dallas or Fort Worth or San Antonio, but also we are helping Sweetwater and Dublin, Virginia with jobs going into smaller communities. It’s time to get back to what American does best,” Quinn said.

Texas factory activity down in April

Texas factory activity declined in April, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.

The production index—a key measure of state manufacturing conditions—posted its second consecutive negative reading at –4.7.

Positive readings in the survey generally indicate expansion of factory activity, while readings below zero generally indicate contraction.

Other measures of current manufacturing activity reflected continued contraction in April. The new orders and shipments indexes edged up but remained in negative territory. The capacity utilization index pushed further negative to its lowest reading since August 2009.

Perceptions of broader economic conditions remained quite pessimistic for a fourth month in a row, according to the report. The general business activity index stayed negative but ticked up to –16 in April. The company outlook index moved down to –7.8.

Measures of future business conditions weakened in April. The index of future general business activity fell into negative territory. The future company outlook stayed positive but declined and remains well below the levels seen throughout 2014. Indexes of future manufacturing activity also moved down but remained in solid positive territory.

Texas produces more than 11 percent of total manufactured goods in the United States, ranking second behind California in factory production.

But much of that production is tied to the oil and gas industry, which has declined along with oil prices. According to one respondent to the Federal Reserve’s survey: “Our business is closely tied to oil prices, which we expect to fall as storage capacity limits are reached and shale production peaks, probably in July.”

The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. – Robert Francis

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