Texas Wins Again

The Wall Street Journal reported success for Victoria, Texas this week. Caterpillar Inc., the world’s largest manufacturer of construction equipment announced plans to build a new facility in Victoria, TX. Net gain for Texas, 500 jobs. The good news is, the US is experiencing a major shift in manufacturing. What was moved overseas, is now coming back home.

Capacity from a plant in Japan and one in Illinois will be reduced to compensate for the move. Victoria has a strategic advantage to win even more manufacturing with its central location within the US, access to a major port, Houston, and the relatively low overall cost of production. Towns throughout the South are experiencing similar interest from manufacturing concerns. The dirty not-so-secret is that companies prefer to locate in areas without heavy unionization. Of the plants closing, many are unionized and some have extended, painful union stand-offs. In this economy, how can a union boss ask for wage hikes or require hours when many companies are fighting to stay in business?

Today most unions are aligned with one of two larger umbrella organizations: the AFL-CIO and the Change to Win Federation, which split from the AFL-CIO in 2005. Both advocate policies and legislation on behalf of workers in the United States and Canada, and take an active role in politics.

Union membership is at its lowest level since 1932. Perhaps the workers know how to take care of themselves better than their Union bosses….

Other winners in the “Let’s Flee the Union Bosses” race: Mississippi, North Carolina, and South Dakota. North Carolina had been a heavily Unionized state, but 10 years of pure agony has finally been enough to see the light. In the late 90s, the double whammy of¬†textile¬†and furniture manufacturing moving overseas wiped out manufacturing in NC. Entire towns and even regions have been wiped out. So the leeches who “helped” the workers had to move along. And with some time, North Carolina has been reborn.

This is a prime time for Manufacturing concerns to consolidate operations in lower cost, more efficient areas.