Revitalizing U.S. manufacturing
President Obama’s call in his State of the Union address to capitalize on “the strongest two-year period of manufacturing growth since the 1990s” by encouraging businesses to bring work back to the United States can be accelerated with energy efficiency innovation.
While Obama urged Congress to take a series of tax steps to encourage businesses to bring jobs back to the United States, RMI has strong evidence that industry can take cost-saving efficiency steps without waiting for policy-makers. Doing so can quantifiably improve U.S. manufacturing’s competitive advantage right now.
Stories about the death of U.S. manufacturing are a recurring theme since the “Japanese invasion” of electronics and autos in the early 1980s, and the sector hemorrhaged 5.5 million jobs over the past decade. But U.S. manufacturing is far from dead, in fact providing a rare bright spot in today’s economy.
Manufacturing employment has grown each of the last two years, driven by a rebounding auto sector, and now employs 11.7 million people. A number of trends are coinciding to make U.S. manufacturing increasingly competitive globally. Wages and benefits are growing rapidly in China — as Obama noted in his speech — at the same time that U.S. manufacturing wages are falling. The risks of operating a supply chain that stretches halfway around the world are growing: rising transportation costs, the threat of import duties, less product flexibility, slower time to market, intellectual property theft, and product safety/reputation risks are growing concerns when moving manufacturing offshore. All of these factors are translating into making U.S. manufacturing more appealing.
Efficiency and whole-system design can help industry accelerate these growing advantages. Analysis from Reinventing Fire, RMI’s blueprint to running a 158 percent bigger 2050 U.S. economy powered by efficiency and renewables reveals that the industrial sector can achieve 84 percent greater production using 9 to 13 percent less energy, and save $0.5 trillion net.
For example, with RMI’s help, Texas Instruments (TI) built a new, million-square-foot semiconductor fabrication plant in Richardson, Texas. This facility, opened in 2009, was the first LEED Gold rated semiconductor facility, and its innovative design saved $4 million in annual energy operating cost and 35 percent of its water use compared with TI’s previous chip fab built just four miles away. Building this facility added up to less than 1 percent of the construction budget.