In-Sourcing Reasons Click For Master Lock

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When President Obama visits a Master Lock factory in Milwaukee Wednesday, he's hoping to highlight the manufacturing initiatives in his new budget proposal. U.S. factories are on a mini hiring spree, adding 50,000 jobs last month alone. Some companies, like Master Lock, are even moving work back to the U.S. that had been done overseas.


This is MORNING EDITION, from NPR News. I'm Renee Montagne.


And I'm Steve Inskeep. Few things dismay Americans quite like the disappearance of manufacturing jobs. We equate those jobs with American strength, and with the American middle class. So it's not surprising that President Obama would promote the return of some of those jobs from overseas.

Today, the president visits a Wisconsin factory run by Master Lock, a company that moved jobs back home. American factories are hiring - adding 50,000 jobs last month alone. But analysts say there are limits to the number of jobs manufacturers can provide, as NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: Last month, President Obama hosted a White House gathering of manufacturers who make products ranging from furniture to candles to elevators. What they all had in common was that after doing business overseas, they decided to locate factories here in the United States.


PRESIDENT BARACK OBAMA: You've heard of outsourcing. Well, these companies are in-sourcing.

HORSLEY: There are a number of forces driving those decisions: rising labor costs in China, rising fuel costs for shipping goods across the Pacific, and rising productivity here at home.

Mr. Obama says when Master Lock studied that combination, something clicked. So instead of expanding in China or Mexico, the company's been hiring at its hometown factory in Milwaukee.


OBAMA: In fact, Master Lock is now exporting their products from the United States to China and Europe. And today, for the first time in 15 years...


OBAMA: Today, for the first time in 15 years, Master Lock's Milwaukee complex is running at full capacity.

HORSLEY: That's good news in Wisconsin, where manufacturing took a hard hit during the recession but has since staged a partial comeback. Unemployment in Wisconsin is now 7.1 percent, more than a full point below the national average.

RICHARD VALLEJO: I mean, there's a lot of jobs out there. I mean, Wisconsin's a good manufacturing area. So if you can demonstrate you have the skills, you'll get a job.


HORSLEY: Ricardo Vallejo is learning how to program computer-controlled machine tools at the Milwaukee Area Technical College. A classmate makes some minor adjustments to the program after discovering a cut was off by 2/1,000ths of an inch.

CHRIS HAASE: The machine accuracy is up to 1/10,000th of an inch. So we typically hold tolerances somewhere between 5/10,000ths of an inch and maybe a few thousandths of an inch.

HORSLEY: Pretty precise work?

HAASE: Pretty precise. A thickness of a human hair is probably about 3/1000ths, so somewhere in that range.

HORSLEY: Instructor Chris Haase says students who learn to program this kind of precision equipment can expect to earn 18 to $20 an hour from their first day on the job - but they have to know what they're doing. Unskilled factory work, the kind that simply requires pushing a button? That's not likely to make a comeback.

HAASE: Another thing's happened is, they used to run one machine at a time. Now, they've got them running a whole cell of machines that makes an entire product.

HORSLEY: That means the workers are more valuable, justifying higher wages. But it also means factories need fewer of them.

Even with the gains of the last two years, factories still employ only about 8 percent of America's workers, down from 15 percent in 1990. Mr. Obama wants to encourage more factory hiring with tax incentives and other government help.


OBAMA: I don't want America to be a nation that's primarily known for financial speculation, and racking up debt buying stuff from other nations. I want us to be known for making and selling products all over the world stamped with three, proud words: Made in America. And we can make that happen.


HORSLEY: But one of the president's own, former advisers suggests Mr. Obama may be suffering from an excess of factory nostalgia. Christina Romer, who led the president's Council of Economic Advisers during Mr. Obama's first year and a half in office, says since factory jobs are no longer a gateway for unskilled workers to the middle class, they may not deserve special treatment from the government.

CHRISTINA ROMER: I don't think any of us know sort of what the future of the American economy is. I think we have to be careful not to hold onto - sort of this idea that it was good in the past; it must be, you know, what's going to be good in the future.

HORSLEY: But Mr. Obama is not alone. His Republican rivals also put a premium on manufacturing, especially as they compete for votes in the swing states of the industrial Midwest.

Scott Horsley, NPR News, Milwaukee.

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