We've been seeing more evidence that North American manufacturers are benefiting from a reshoring trend.

What's driving reshoring? The biggest factor is that the cost premium of making things in North America is disappearing -- or at least shrinking significantly.

Manufacturers here have become experts at operating lean. Over in China, the cost of labor has risen quickly. The result is that manufacturers are North America are now more cost-competitive with their counterparts in China.

When costs are in the same ballpark, then other factors may give an edge to manufacturers in North America -- among others, the size of the domestic market, and the ability to keep supply chains shorter.

In the past year, we've all seen the impact of things like flooding in Thailand and the earthquake in Japan on global supply chains.

The North American manufacturers that I talk to are aware of these big-picture trends. But how many are actually pursuing a strategy to take advantage of the situation?

One that's taking a stab is Crescent Industries Inc., an employee-owned custom injection molder and toolmaker in New Freedom, Pa.

Last week the company put out a news release titled "Reasons to Consider ReShoring of Your Injection Molding & Mold Building."

The company, which also has a blog filled with custom molding tools and tips, lists reasons why OEMs should consider reshoring their work.

Most of the anecdotal evidence hints that North American custom molders like Crescent are picking up business thanks to reshoring. Many of the projects are smaller jobs -- using a baseball analogy, molders are hitting a lot of singles.

Perhaps with a bigger push, we'll start to see some home runs.

This is the first I've heard of this problem, so maybe it's an isolated case. But a Winnipeg, Manitoba, thermoformer, profile extruder and rotational molder says some of his potential customers in the United States are telling him they'd rather buy from an American supplier.

The story comes from the Winnipeg Free Press, and quotes Craig McIntosh, president and CEO of Acrylon Plastics Inc.

"It's the first time in the 15 to 20 years I have been doing this stuff that I have felt this," McIntosh told the newspaper at a trade summit organized by the Manitoba office of the Canadian Manufacturers and Exporters. "It used to be we were greeted as friends."

To battle the problem, McIntosh says he's looking for an opportunity to buy a supplier in the United States.

"With a U.S. address, we can be seen creating American jobs and that will overcome some of the fears," he said.

Most of the stories that I see related to jobs and trade are focused on China, not Canada (or Mexico). So I wonder, are other Canadian processors and suppliers feeling this sort of pressure from potential U.S. customers?

It's rare to get a look inside Foxconn International, so I was excited to see John Biggs of TechCrunch.com is writing about his visit to the company's Foxconn City factory in Shenzhen, China.

Biggs is writing a series of posts titled "The Future of Foxconn," the Taiwan-based injection molder and contract manufacturer that makes computers and electronics at 26 plants around the world.

Foxconn City has 400,000 employees, according to Biggs. To put that number into perspective, that's more than the number of people who live in Cleveland, Ohio, or Miami, Fla.

Part one of the series addresses the high-profile problem the plant had last year with 14 workers committing suicide. Today the plant has nets to prevent workers from jumping to their deaths.

Part two takes a look inside the factory, with some eye-popping details about what it takes just to feed the workforce every day.

Biggs has an ambitious goal for the project -- not just to write about the company, but to write about Foxconn's place in manufacturing history. Here's a taste:

To state the obvious, the world isn't fair. Factories like Foxconn City shouldn't exist. There should be no reason employees should stand for 10 hours a day, six days a week, to manufacture an iPad. But, in fairness, Foxconn sees its own place in the world changing as we speak. I'll address these changes my final piece, but it is clear that the company doesn't expect to be in the manufacturing business forever nor does it expect its employees to always stay on the line. The truth is that the sunset of the human worker is upon us and as Foxconn and other factories begin replacing their employees with robots, the societal changes that will take place could be striking.

I'm already looking forward to the rest of the series.

Here's some good news for U.S. manufacturers -- a new report from Boston Consulting Group titled "Made in America, Again: Why Manufacturing will Return to the U.S."

According to the report, which was released Aug. 25, the return of manufacturing to the United States will accelerate as companies take into account the full costs of outsourcing to China and the strategic advantages of making products closer to consumers in North America.

The report (PDF), expands on earlier research which predicted that over the next five years, factors including 15-20 percent annual increases in Chinese wages and a strengthening yuan will nearly erase China's manufacturing cost advantage vs. low-cost U.S. states for goods imported into North America.

Even as Chinese factories become more productive, thanks to automation and improved technology, rising factory wages will make it tough to compete with higher U.S. labor productivity, the report says.

"Greater automation would undercut the primary advantage of outsourcing to China, which is access to cheap labor," said Harold L. Sirkin, a BCG senior partner and lead author of the study. "Once companies carefully look at all the costs, many will find they'll be better off making their products closer to customers in the U.S."

The report cites a number of specific examples, including one directly from the plastics industry: Coleman Co. is moving production of its 16-quart wheeled plastic coolers from China to Wichita, Kan., "owing to rising Chinese manufacturing and shipping costs."

Won't other low-wage nations like Vietnam and Mexico pick up work from China? Yes, they will, according to the report, but they will not be able to absorb all the higher-end manufacturing that otherwise would go to China, because they lack adequate infrastructure, skilled workers, scale, and domestic supply networks.

China will remain a major manufacturing power. The difference is that it will no longer be the force it is today for supplying customers in North America, the report says.

"Foreign companies will want to maintain their Chinese manufacturing operations to serve the Chinese market and the rest of Asia," said Douglas Hohner, another BCG partner who focuses on manufacturing.

"But in terms of supplying North America, China will no longer be the default option," he said.

Manufacturing is alive and well in North America -- more on that later. But I always get a kick out of companies that serve odd or unusual niche markets.

How about bowling balls, CDs and chopsticks, for example?

Those great examples come today courtesy of a link sent by a Plastics Blog reader to "10 American Industries Still Hanging On," from Minyanville.com.

A few of the products have plastics connections -- polycarbonate CDs and DVDs, for example:

The physical is dead, long live the download. That's what entertainment observers have been saying since the turn of the century and they're not wrong. Last year CD sales fell by 20% from 2009, marking the fourth year in a row of increasingly brutal decline. But despite this, Sony DADC this spring announced a $72 million expansion of its existing Terre Haute, Indiana, manufacturing plant, in which it makes compact discs, Blu-ray equipment, video games and other electronics, while employing some 1,312 people (the planned expansion will add another 100 jobs).

Why? Well, partly, it's just consolidation. With the closing of its Pittman, New Jersey compact disc plant, Sony DADC is merely shifting operations east (and shedding 200 jobs - the Pittman plant employed 300 people).

And partly, it's a question of demographics. You, future-embracing consumer that you are, may be eager to embrace the world of on-demand downloads or dodgy torrents, but Aunt Gertrude in Duluth is going to be hanging on to those newfangled CDs until the day she dies. And there are a heck of a lot of Aunt Gertrudes out there, with a good decade or so left in them.

These aren't examples of booming industries -- there's global competition for pencils, socks, ironing boards, sneakers, pianos, sparklers and electrical relays (the other examples cited in the article).

The reader who sent me the link said she thought the article was very interesting, but also a bit sad.

Still, there are plenty of North American manufacturing success stories. Think of that the next time you break out the Georgia-made chopsticks at your favorite Chinese restaurant.

Itasca, Ill.-based office products maker Fellowes Inc. is tangled in a trade dispute with a former partner in China that is getting attention from the U.S. State and Commerce departments.

According to reports by Paul Merrion at our sister newspaper Crain's Chicago Business, part of the dispute is over the ownership of nearly 1,000 tools used to injection mold components for the company's office shredders.

Merrion's explained in an earlier story that Fellowes started making inexpensive shredders in China in 1998, with production handled by two firms owned by a family named Zhou.

In 2006 Fellowes formed a 50-50 venture with Jiangsu Shinri Machinery Co. Ltd., identifed as being part of a large holding company owned by the Zhou family. By 2009, the JV had about $150 million in sales and 1,600 employees.

Then there was a dispute between the partners, and by November 2010 production shut down. Ownership of the tooling is still being decided by the court, and Fellowes had to build new tooling in order to continue production.

The latest: U.S. Commerce Secretary Gary Locke wrote a letter to U.S. Sen. Richard Durbin, D-Ill., letting him know that the department is involved in the case.

The letter, according to Merrion's latest story, says that Locke wrote that "We have made the Chinese authorities aware of the impact this case could have on the investment climate of China, and Jiangsu Province in particular, and the importance the U.S. government places on ensuring fair, open and speedy resolutions of this and other commercial disputes."

This sort of dispute definitely plays into the hands of U.S. molders and toolmakers. Some will try to scare OEMs into avoiding offshore manufacturing.

So don't be surprised if you start getting emailed links to this story.

Here's a scenario that gives molders (and OEMs) an ulcer: A toy molder shipped out a tool out to be reconditioned, and someone ended up trying to sell it.

Cast-a-Way Toys LLC of Shawnee, Kan., wrote about the experience on its blog, and Action Figure Insider picked up the report -- where it was spotted by Plastics News senior reporter Frank Esposito.

"On April 19th moulds and tooling owned by Cast-a-Way Toys was offered for sale from unauthorized agents in China and Singapore," the company's David Lee wrote. "Cast-a-Way Toys was miraculously made aware of this attempt by two separate, highly trusted and, successful toy companies here in the United States.

"When questioned about the attempted sale, the management company, whom Cast-a-Way Toys had previously authorized to move their moulds, admitted to this attempted sale. The reasoning was for the recuperation of costs of mould conditioning and cost associated with production."

Now Cast-a-Way is concerned that someone may have molded toys with the tools while they were out of the company's control. So the company is using the blog to let toy makers and molders know that any attempted sale is not authorized.

I don't know the legal details behind the dispute, but it's interesting that this company is using soclal media tools to alert others to the problem.

Jon Huntsman Jr. appears to be edging closer to a run at the Republican nomination for president. Soon the question will shift from "will he run?" to "can he win?"

Jonathan Martin and Alexander Burns of Politico.com have a story today about Huntsman's supporters forming a political action committee to help him hit the ground running, should he decide to throw his hat into the ring.

Of course Huntsman has a job right now -- U.S. Ambassador to China -- and the current occupant at the White House might not be thrilled to have one of his "employees" taking part in an active effort to take his job. But according to Politco, so far the Obama administration has just joked about Huntsman's plans.

(Some political web sites today are reporting that Huntsman may be preparing to resign from the U.S. Ambassador's job).

Can Huntsman win the nomination? Maybe not -- and the problem isn't his plastics industry background. His weakness might be that he's viewed by Republican primary and caucus voters as being too moderate -- although that could be strength in the general election, if Huntsman manages to win the nomination.

Politico points out that Huntsman won "exactly zero votes" in a recent presidential straw poll taken in New Hampshire

Read more: http://www.politico.com/news/stories/0111/48454.html#ixzz1Cd4BP1MGPolitico.com

Former Obama administration environmental adviser Van Jones will stir up the plastics industry with this speech recorded at the TedxGreatPacificGarbagePatch conference, held in Los Angeles in November.

His talk, "The economic injustice of plastic," links the ideas of social justice and the environment.

In his view, having an economy where throwaway plastic products are available leads to a society that also considers poor children "disposable."

Plastics have "horrific" impacts on the planet -- and also on people, Jones says.

Recycling makes consumers feel better about themselves, but he claims plastic isn't actually recycled -- it's burned, he says, in developing countries.

Some of this may seem ridiculous to an audience of plastics industry readers. But that does not mean it will be ignored.

Already, the Discovery Channel's Treehugger.com blog has linked to and posted the video.

The Richmond, Ind., Palladium-Item kicked off a series on employment issues Sunday with an interesting story, "Disappearing act: Exodus of area jobs began long before recession hit."

The story caught my eye because of the string of companies mentioned right at the top with plastics operations: Cinram, Engineered Plastic Components, and Spartech Plastics.

Correspondent Pam Tharp described firms on the list as being among the "area employers that sent jobs overseas or shuttered local plants since 2006."

The story notes that eastern Indiana and western Ohio -- the Palladium-Item's circulation area -- lost quite a few manufacturing jobs to low-cost countries in the past decade.

But the story isn't all doom-and-gloom. Surviving manufacturing companies are leaner and better able to manage through tough times. Opportunities still exist for better trained, higher skilled workers. And some manufacturers say today they're winning work that a few years ago would have automatically been awarded to suppliers in China or Mexico.

The story is worth a look ... and there's already an active debate about manufacturing issues taking place in the "reader reactions" section of the site.

The Sunday morning talk shows were buzzing yesterday with news that Jon Huntsman Jr. may be interested in the Republican nomination for the White House in 2012.

The discussion got its start from Newsweek magazine, which posted a lengthy feature, "The Manchurian Candidate," on Saturday.

Huntsman is currently U.S. Ambassador to China -- hence the "Manchurian candidate" reference. President Obama picked Huntsman for the slot, a move that political insiders said may have been aimed in part as removing a strong potential rival from the 2012 race.

But Huntsman isn't out of the picture. Newsweek asked if he would rule out a 2012 run, and Huntsman declined to comment. Here's what he did have to say about his presidential ambitions:

You know, I'm really focused on what we're doing in our current position. ... But we won't do this forever, and I think we may have one final run left in our bones.

As Steve Toloken, Plastics News' Asia bureau chief, wrote in 2009, Huntsman is a familiar face to the U.S. plastics industry. He's a member of the family that owns part of The Woodlands, Texas-based chemical and plastics supplier Huntsman Corp. He also served as a top executive at Huntsman Corp., where his brother Peter is CEO and his father Jon Sr. -- the company founder -- is chairman.

On the political side of his resume, Huntsman has been U.S. ambassador to Singapore, deputy U.S. trade representative responsible for Asia and governor of Utah.

Toloken caught up with Huntsman last year at a news conference in Shenzhen -- check this link for his story, plus a link to an audio clip of Huntsman responding to a question about a U.S. manufacturer that planned to withdraw its research and development work from Shenzhen over IP concerns.

Meanwhile, here's an update on a plastics executive who is, indeed, on his way to Washington. Larry Bivins, who covers Washington for the Appleton, Wis., Post-Crescent, wrote a feature on Ron Johnson, the new GOP senator from Wisconsin.

Johnson will be sworn in on Wednesday. The story points out that with Johnson going to Washington, his younger brother Barry will take over management of Pacur LLC, Johnson's Oshkosh, Wis.-based sheet extrusion company.

After my post yesterday about the bag ban debate in California, Plastics News staff reporter Mike Verespej pointed out another column on the topic worth sharing with blog readers.

Kevin Kelly, president of the California Film Extruders and Converters Association, wrote an opinion piece for the San Jose Mercury News headlined "Banning plastic bags will kill California jobs, won't help the environment."

It's a strong column, which you'd expect from Kelly, a former BusinessWeek reporter, and now CEO of Emerald Packaging Inc., a family-owned firm in Union City, Calif., that makes printed plastic produce bags.

Kelly says the immediate impact of a bag ban would be the loss of jobs:

Today, plastic bag manufacturing employs thousands of Californians, including the 175 workers at my factory in Union City. These good-paying manufacturing jobs -- many of my workers make more than $20 an hour with health and dental benefits -- are at risk if this bill becomes law. Several thousand more of our residents working for suppliers to the industry could also be on the way to unemployment, and their families to public assistance.

Not to worry, says Assemblywoman Julia Brownley, D-Woodland Hills. She insists that there won't be job losses because companies that produce plastic bags will "retool" to make reusable bags.

What a joke. The type of reusable bag that Brownley wants can be competitively made only in China because of labor cost. Today, China and other low-wage Asian countries make virtually 100 percent of the reusable bags in the United States. If Brownley has a secret business plan for allowing domestic companies to compete with low-wage Chinese firms that face almost no regulation and are underwritten by the government, she should detail it. Until then, simply flipping the switch to produce reusable bags is not a realistic option.

The truth is Brownley has made her peace with sacrificing jobs during the worst labor market since the Great Depression in exchange for a supposed environmental benefit. The tragedy is that benefit won't materialize.

Kelly makes some good, common-sense points about why banning T-shirt bags would not result in the reduction in bag use -- despite what proponents of the ban are predicting.

Kelly asserts that, for hygenic reasons, meat, fish and produce would need to be wrapped separately in plastic bags. On top of that, reusable bags must be washed periodically, requiring water, energy and polluting soaps.

In addition, consumers who currently use "single-use" bags to line their garbage cans and to pick up pet waste would have to start buying those bags, he says.

Check the link for more of Kelly's thoughts on the issue.

After decades of R&D -- but little commercial progress -- the world seems to be on the cusp of a green car revolution.

And the market that's moving the fastest just might be China.

Yang Jian, managing editor of Automotive News China, wrote a good column on the topic yesterday, "China Inc. moves full speed to embrace EVs"

"Even for a person like me who covers China's auto industry on a daily basis, I can't help feeling amazed at how fast the government is moving to encourage development of 'green' cars," Yang wrote.

"Late last year, the Chinese government was still unsure which powertrain technology to support to help domestic automakers leapfrog the international competition.

"But this year, it chose to subsidise plug-in hybrids and 'pure' EVs, then quickly mobilised all its resources to prepare the country for the age of the electric vehicles."

Now China has created pilot subsidy programs for plug-in hybrids and electric vehicles. The city of Shenzhen -- a leading auto center -- has kicked in its own subsidies. And China's central government has directed China's two electric utilities, three largest oil companies and major electrical equipment makers to build EV charging stations across the country.

"The Beijing government is running - not walking - to keep pace with the auto industry," Yang wrote.

China's advantage appears to be central government control, which appears to be fully supporting investment in EVs.

But keep in mind, U.S. companies have some obvious competitive advantages that should help them stay ahead of Chinese automakers and suppliers.

Reports that China will overtake the United States as the largest manufacturing nation in the world are getting a lot of attention this week.

And why not? The U.S. took the No. 1 spot from Great Britain in the 1890s, and has held the top position ever since, according to this story from the Financial Times.

110 years sounds like quite a streak, but the FT story points out that prior to Great Britain taking the crown in the 1850s, China had probably held the title for 1,500 years!

"If you have a country with four times the population of the U.S. and a tenth of the wages, it is fairly obvious they will pull ahead at some time in productive capabilities," economist Hal Sirkin told the Daily Mail.

Put into that perspective, the U.S. loss doesn't seem as significant.

Still, it's no surprise that the data from IHS Global Insight is getting attention.

There are plenty of experts lamenting the weakness in the U.S. manufacturing sector, and the fact that it's China taking the crown will feed the complaints that China doesn't play fair on the global stage.

On the subject of boosting U.S. manufacturing, Andrew Liveris, chairman and CEO of Dow Chemical Co., has a column in USA Today headlined "How U.S. can launch a manufacturing renaissance."

Liveris calls for:

• New infrastructure that leverages private investment in plant and equipment, and modernizes our nation's communication networks, electric grids and air, sea and land transportation systems.
• R&D that's cutting edge.
• Education that leads the world, especially in science, technology, engineering and mathematics.
• A "pro-trade" policy that creates a "level playing field" with limited tariffs and barriers to entry.
• An alternative energy strategy that will secure the abundant energy that industry needs to stay competitive.
• Regulatory reform, "especially as concerns the environment. Regulation is necessary, but smart regulation isn't always practiced. All too often, we see rules that bog down product innovation or that lack a solid scientific basis."
• A tax policy that supports manufacturing.
• Tort reform.

"America needs an integrated and strategic approach that will incentivize manufacturers to create the jobs of the future," Liveris wrote.

Is there comedy gold in plastics molding and extrusion, and "backshoring" plastics processing from China?

Absolutely. Just check the clip below from Comedy Central's "The Daily Show."

Jon Stewart's show does a great job creating tongue-in-cheek news reports that mimic the style of "real" news programs, but with ridiculous questions -- often asked in deadpan style, sometimes with the interviewee not quite getting the joke.

But that wasn't the case Thursday, when the program visited a Fagerdala World Foams plant in Marysville, Mich., for a story on Wham-O Inc. moving work back to the United States from China.

Check out the clip below to see "Daily Show" correspondent Aasif Mandvi ask Wham-O CEO Kyle Aguilar, "So you are telling me that we Americans now have to make our own cheap plastic crap? You are turning America into the Third World."

I love the scene were Mandvi tries to lick the foam profiles coming out of the company's extrusion line.

Enjoy!

Did Chinese plastics machinery major Haitian International Holdings Ltd. turn down an offer to buy a stake in an overseas competitor? That's the story from the Xinhua News Agency, which reported the item in a feature story about the tough choices that Chinese companies face with mergers and acquisitions.

Xinhua quotes Haitian CEO Zhang Jingzhang, saying the company had turned down an overseas competitors' invitation for "business restructuring" last year.

"We can afford the price it asked for, but we cannot digest the company," Zhang told Xinhua. "We can even afford to buying two such companies, but we can't send out a proper management team. We are just inexperienced in handling any overseas acquisition."

A number of overseas competitors in the machinery market might have approached Haitian in the past year or two. Haitian didn't produce great financial results in the first half of 2009, although it did post a profit.

A new ad campaign that highlights the quality of Chinese-made products is sure to irritate some North American manufacturers.

The ads, featuring the tagline "Made in China. Made with the world," have recently starting airing on cable channel CNN. The spots were funded by a group of Chinese trade associations.

The ads stress how Chinese manufacturers work hand-in-hand with foreign companies to make a variety of products -- the ad shows a pair of running shoes, an MP3 player, and other items, all with prominent "Made in China" labels.

Zhang Yujing, executive vice president of the China Chamber of Commerce of Import and Export of Machinery and Electronic Products, told China's People's Daily that the Chinese trade groups want to build an image for products made in China.

Others speculate that the ads could also be aimed at defusing rising trade tension, and as an attempt to rehabilitate the reputation of products made in China, following scandals over the safety of Chinese-made toys, pet food, drywall and other products.

The ad agency is the Chinese arm of New York-based DDB.

Thanks to the Alliance for American Manufacturing's manufacturethis.org for pointing out this item.

Advertising Age, a sister publication to Plastics News, recently honored Danish building block maker Lego A/S by naming the firm one of five finalists for its 2009 Marketer of the Year award.

Ad Age readers voted for the winner, carmaker Hyundai, which got 40 percent of the votes.

Still, it's noteworthy that Lego made the final cut, and won 10 percent of the votes. In addition to the winner, Lego was up against Wal-Mart (which got 30 percent); McDonald's (14 percent) and Amazon (7 percent).

Here's part of what the Ad Age judges liked about Lego:

Deep into a video-game era, Lego should have long ago seen its empire of bricks reduced to heaps of multicolored plastic rubble, and apocalypse did almost come to Legoland. In 2004, losses totaled nearly $300 million, as the Danish company was caught between a past where children's playtime was all about using imagination and a present of "Rock Band," games, movies and TV shows that don't allow for stretching the imagination. Yet, in a relatively short time Lego has bounced back. Going against the grain of a toy industry in decline, Lego saw sales spike 18% last year and, in the first half of 2009, sales were up 23%.

Success has come along multiple fronts. First, Lego slashed the amount of time it takes to develop new toys and, more importantly, the toys it already makes, to gel well with contemporary culture, linked then to popular movies such as "Star Wars" and "Indiana Jones." That means Lego's owners had to overcome a long-held resistance to creating movie-themed sets that often had violent accoutrement such as guns and knives. Now, by some estimates, licenses make up more than half of sales.

Ad Age also featured these comments from readers who voted for Lego:

By Rodney33, FRISCO, Texas:
Lego is the only product on the list that is not favored by prevailing economic and technological trends. It has also shown the most adaptability and the most market-leading use of communication technology. Of all the brands listed as finalist, Lego is the most attuned to where marketing is now and where it's headed over the next 10 years. Its platforms are on mobile, viral video, digital games, social networking, experience, shopper marketing and CRM. Video games, which were not only counter to their business model but their biggest threat, have become a franchise growth engine.

By mtalbott, Dallas:
I have to vote Lego -- for continuing to provide a top-quality product in line with their brand, staying relevant and using new technologies to create new customer experiences in a kids' toy market that's moving away from brands with a "low-tech" heritage. This is a company that inspires others to a higher standard. Who can vote for a company that continues to drive quality down to get to a cheaper price?

In a sidebar to today's story about Hyundai, Ad Age also noted that "Lego never outsourced manufacturing to China. That means it avoided the lead-based-paint scare of 2007, which hurt many rivals."

Lego did pursue an outsourcing strategy for a while (but not in China), although last year the company reversed course and said it was ending a 2-year agreement with Flextronics International Ltd. to mold its products.

The strategy seems to be paying off. Congratulations to Lego for its marketing -- and manufacturing -- efforts.

Those pranksters at The Onion are poking fun of recent news stories that the newspaper is for sale. Today the satirical humor publication's Web page is reporting that it has been sold to Yu Wan Mei Amalgamated Salvage Fisheries and Polymer Injection Corp.

Not only did The Onion staffers go through the trouble to create a Web page for the pretend new owners, they also wrote a funny story about the popularity of Yu Wan Mei products in the United States.

"For years I have enjoyed quality plastic containers made by Yu Wan Mei's excellent polymer injection facilities," said Ben John Son, a worker. "But until now, its fragrant fish by-products have not been available for purchase here in Midwestern America. Lucky for me, revolutionary new mass-production capabilities have allowed Yu Wan Mei to expand its sales territory to include Utah, where I reside!"

Reminds me of the half-dozen emails I get from Chinese toolmakers every morning.

Mohamed Al-Mady, CEO of Saudi Basic Industries Corp. of Riyadh, Saudi Arabia, the world's largest chemical company, gave a live interview to CNBC's Erin Burnett yesterday. The interview covers Al-Mady's thoughts on the global recession, plus a few comments about the plastics sector.

Asked whether there's any hope for a recovery soon, Al-Mady says: "We are beginning to see some glimpse of hope. I think the light at the end of the tunnel is visible right now because of depleted inventory and because of the things we have done in our industry ... reducing capacity worldwide."

He adds that Sabic has seen good signs of recovery in China and the United States, although he couches that a bit, noting that "everything is relative."

Sabic has seen some improvement in prices, but he adds that it remains to be seen whether increases will stick, he said.

Although Al-Mady was recently quoted elsewhere saying Sabic had badly timed its purchase of GE Plastics (paying $11.6 billion in 2007), he continues to emphasize that the company is taking a positive long-term view of the business.

"We are bullish on plastic for the future. Plastic will always be with us," Al-Mady said.

It's going to be interesting to see just how many North American plastics executives venture to New Delhi next week to participate in the subcontinent's huge, triennial plastics fest known as Plastindia. Two factors may serve to keep some people close to home -- the global economic crisis and the recent, high-profile terrorist attacks in Mumbai. But, those challenges notwithstanding, India remains one of the world's largest, most promising plastics markets.

One thing is for sure: Those who do go to the six-day exhibition will have no shortage of activities from which to choose, starting with a pre-show rotomolding conference. The Association of Rotational Molders International recently rebranded its division in the region as the Society of Asian Rotomoulders (StAR), and the group will meet Feb. 1-3 at the Hotel Park Plaza Noida. The India-China Plastics Summit also takes place on Tuesday, Feb. 3.

Plastindia 2009 runs from Feb. 4-9.

On Feb. 5, the Society of the Plastics Industry Inc. is co-organizing the India-U.S. Plastics Trade Summit. The show organizers Plastindia Foundation also are putting on an internatiional business and technology conference on Feb. 6-7, and then the environment takes center stage on Feb. 7 with the Asian Plastic Recycling & Waste Management Conference.

The Plastindia Foundation has even turned to YouTube to promote the event, with a fast-paced, 50-second video clip. So, if you are headed to New Delhi, rest up because you'll have a hectic schedule. If you can't make it this time, stay tuned in to our (newly redesigned) PlasticsNews.com, as we will have two reporters there to gather and deliver the week’s most important news to you.

If you're working for a U.S. plastics company and you're looking for a retail outlet for one of your made-in-America products, check out American Aisle, a new retailer in Round Lake Beach, Ill. The Lake County Journals Web site has a feature about the store today.

The store sells only products that are 100 percent U.S.-made. "We actually sent some products back because we found they were only partially made here," store owner Nitai Pandya told the reporter. It currently has more than 1,000 products from about 25 manufacturers, but they'd like to have four times as many products.

Plastic products include housewares and hygiene items (toothbrushes, etc.), some of them made with recycled plastic.

The owners, Pandya and Bogumila Kenig-Bujnarowski, are both immigrants -- Pandya came from India five years ago, Kenig-Bujnarowski from Poland 15 years ago.

Isn't it interesting how immigrants can be the greatest boosters for America?

While the Big 3 automakers are in Washington this week begging for a bailout, their counterparts across the Pacific in China are quietly doing the same thing, according to this New York Times story.

The story notes that auto sales in China have been chugging along for six years with incredible 20+ percent annual growth rates, but they've been flat or down slightly this fall as a result of the global economic meltdown.

The story notes that "The Chinese auto industry faces several threats simultaneously. Weakening economic growth, falling real estate prices and a yearlong plunge in the stock market have made consumers leery of spending money. Fuel prices in China are still high despite the recent decline in world oil prices. And Chinese auto exports, mostly to developing countries in Eastern Europe, Southeast Asia, Africa and Latin America, are starting to crumble."

But the last line of the story is the real kicker. It's from an executive at state-owned Changfeng Motor, who makes the case that potential government support of U.S. manufacturing puts China at a disadvantage.

"If G.M., Ford and Chrysler get a lot of support from their government, it's not fair," said Gordon Chen, the international business manager of Changfeng Motor, which has displayed cars at the last two Detroit auto shows in preparation for entering the American market in 2011 or 2012.

Wow. That's amazing on so many levels. Welcome to the global economy, folks.

Bob Simpson, a former executive at Milacron Inc. and Siegel-Robert Automotive Inc., shared his thoughts about U.S. manufacturing with IndustryWeek in a Q&A interview posted on the magazine's Web site today.

Simpson was interviewed prior to the November election. Here's what he had to say about what he's hoping for from Washington:

If you take a look at U.S. manufacturing, it's a world of vanishing boundaries. While we talk about the [weakening of the] U.S. dollar, in some ways it's helped us export more of our equipment. It allows us to introduce more technology out there. When we talk with people from China, Japan, India, Russia and various European countries here [at IMTS], they all want the technology that we have in the United States. Every one of them. So we're hoping that with whatever new administration that we have that we can help the U.S. manufacturing base become a global leader with the type of equipment and technology that we have here.

He also had these comments on the future of U.S. manufacturing:

My kids are 24, 22 and 20, and whatever I can do to help make their future brighter, that's what I want to do. It's encouraging to see the projects that people are working on, and why they're working on it, whether it be in the aerospace industry or medical equipment or automotive. People are asking us things like: "How do I make myself or my business more profitable? How do I gain access to India or China or somewhere else overseas? How do I improve this manufactured part?" We hope the technology and the know-how and the testimonials of other companies will encourage people to consider their options, and U.S. manufacturing again catches fire.

Simpson is president of the Association for Manufacturing Technology, a trade group that sponsors IMTS, the International Manufacturing Technology Show.

Erie, Pa., is one of those "towns built around plastics," like Evansville, Ind., and Leominster, Mass. Right now, the local plastics industry in Erie is suffering, and the Erie Times-News has a well researched story on the topic today.

OK, I don't like "The Graduate" introduction. Please, let's stop using that cliché!

But after that, the story does a good job folding in statistics and and expert opinions on what's been going on in plastics in northwestern Pennsylvania.

The news angle for the story is the bankruptcy and pending sale of Erie Plastics Corp. The company has lost nearly 400 workers, and is down to about 200. On Sept. 22, the union there voted to take wage concessions. But, as the story notes, the job losses at Erie Plastics are "just the tip of the iceberg."

At the beginning of 2001, about 5,428 Erie County residents worked in the plastics industry. By the first quarter of this year, that number had plunged nearly 43 percent to 3,083.

And those numbers don’t take into account a layoff of 192 people that Erie Plastics announced in March.

What's going on? The story quotes several experts. Kurt Duska, owner and president of Engineered Plastics in Lake City, Pa., blamed global competition.

“There is no question about it,” he said. “I talked about this in 2001 when I came back from China. I stood up in a room (of shop and plastics company owners) and said, ‘Probably 40 percent of you won’t be here in seven to 10 years,’ and it’s come true,” Duska said.

He said that although his company is growing, "I would never recommend to someone today to get into injection molding," adding, “It would be almost impossible to do a startup and make it.”

Jeff Mengel of Plante & Moran PLLC and Hoop Roche of Erie Plastics both blamed overcapacity. Mengel estimated that U.S. injection molders are running at about 50 percent capacity.

The story's not all gloom-and-doom. It notes that some local companies are doing well and even expanding, and that rising wages in China and high transportation costs could bring work back to Erie.

Overall, though, this isn't a story that's going to encourage young people to consider careers in plastics. Unfortunately, that's the current state of the industry, and not just in Erie. We really need a bit of improvement in the economic outlook to make things better.

We've heard a number of anecdotal stories about manufacturers bringing work back to the United States from China, but it's rare to get a story with actual details. I found this one today in The Milwaukee Journal-Sentinel, and it's worth reading.

The story is about how Kewaskum, Wis.-based Regal Ware Inc. has brought nearly all of its production back to America, and now it will begin to ship some U.S.-made products to stores in China and Taiwan. The story stresses that the volume of work returning to American is not huge -- "The initial move to offshore sourcing involved private-label products marketed by another company that had not previously been made in Wisconsin," the story says. "The volume of product made in China has been a small part of the company’s total sales. "

There's no plastics angle here, but one reason I'm sharing this story is because I expect that some readers won't notice that (or care). They'll forward the news anyway. It's a victory for American manufacturing, and every little victory is meaningful. At some point, someone will likely cite it as an example of plastics processing work coming back to the USA. (Especially since Newell Rubbermaid Inc. is mentioned near the bottom of the story. But note that Newell Rubbermaid is not the company bringing work back to America. It's Regal Ware.)

So let's be clear: this is not a case of plastics work coming back to the United States, and it's not a sign that Newell Rubbermaid has seen the error of its ways and is going to stop outsourcing.

We remain interested in any true stories about plastics work coming back to the USA. If you know any, I encourage you to share them in the comments box.

Sometimes these posts write themselves.

In my news searches today, I found a story on how Vancouver, British Columbia-based Mountain Equipment Co-op is having trouble keeping enough stainless steel water bottles in stock because of concern about bisphenol A in polycarbonate bottles.

That item popped up right next to a story on how the U.S. Consumer Product Safety Commission is recalling some metal water bottles made by Downeast Concepts Inc. in Yarmouth, Maine, because of lead paint contamination.

Consumers must be wondering, where can we turn for a safe water bottle? Are there any manufacturers we can trust?

Just in time for Easter, the Associated Press has a report on toxic lead levels in plastic Easter eggs.

The report was the result of testing on toys done by Jeffrey Weidenhamer, a chemistry professor at Ashland University, who has his students test Easter items each spring. According to the report, 13 of the 45 items they purchased had paint made with lead.

At Ashland, the biggest lead hazards were found in Easter egg spinning tops, plastic Easter eggs that typically are filled at home with treats, bunny hair clips and chick-style sipper cups -- all exceeding the government paint standard of 0.06 percent lead content.

Weidenhamer said the toys with lead-based paint would pose only a small risk, if the paint doesn't chip and the item is discarded before it deteriorates.

Still, this is a persistent problem for the plastics industry -- particularly for processors in China, since many of the products are made there.

Who in the world thinks it's a good idea to use lead-based paint on a children's toy? There's no excuse -- it has to stop.

It looks like 2007 may be remembered as the year that the mainstream media discovered China -- specifically, issues about manufacturing and safety in China.

The concept dawned on me when I read this story from Editor & Publisher, a journal that covers the newspaper industry. The story highlights the leading candidates for the annual Pulitizer Prizes, the top award for newspaper journalists.

The headline sums up the biggest news stories of last year in just a few words: "Handicapping The Pulitzers: Walter Reed? Virginia Tech? China? And Likely Some Surprises."

Here's what the story has to say about the news story candidates that have a Chinese connection:

Several New York Times projects have received nods and are likely contenders in the national, investigative or explanatory categories. Walt Bogdanich and Jane Hooker are Goldsmith Prize and Selden Ring finalists for "A Toxic Pipeline," their report on diethylene glycol, a toxin imported from China for use in anti-freeze that is found to be suspected of killing hundreds around the Globe. ...

Also re:China was Shai Oster of The Wall Street Journal's reporting on China's Three Gorges Dam construction, a Polk award winner that could see success as a Pulitzer foreign news winner, explanatory contender or investigative honoree. Oster looked at the impact of the project on local environmental issues.

Another China angle came from the Chicago Tribune, with its revelations about injuries and death resulting from unregulated products imported from China, ranging from dangerous cribs to lead-tainted toys. That series already has won a Polk Award and gotten Selden Ring finalist consideration, as well as sparking a nationwide review of the problem.

In a related story, the Salt Lake Tribune has been given a Shorenstein finalist spot for its coverage of the dangers in Chinese factories of carcinogens used in making many of the recalled products.

In many ways, those few paragraphs seem to sum up pretty well the prevailing attitude that Americans have toward China. It's a land of toxins and danger. Our homes may be full of made-in-China products, but we look at them suspiciously.

It's no wonder that J-M Manufacturing Co. Inc.'s Walter Wang is worried about how the media portrays China.

Pulitzer Prizes have a history of focusing public -- and legislative -- attention on issues, so don't be surprised if Washington takes a close look at Chinese manufacturing and safety issues in coming months.

Don't think so? Keep in mind that last year, the Los Angeles Times won a Pulitzer for its "Altered Oceans" series, and suddenly the marine debris issue gained huge prominence in California, prompting plastic bag bans all over the country.

There's been a flurry of news about plastic bag bans this week, including news that China will ban some bags (I imagine that will be a very difficult law to enforce), and Australia may do the same.

On top of that, today the New York City Council voted not to ban bags, but to require many retailers to recycle them. (Check out the flurry of comments at that link, a couple of dozen in just a few hours!)

The New York Times weighs in on the issue here, with a quick opinion piece encouraging readers not to use plastic bags at all:

Plastic bags now represent an estimated three percent of the waste stream — and that percentage is rising. It can, however, be reduced through effective recycling.

Some municipalities already have such programs, but none is as sweeping as the measure passed today by the New York City Council. It would require plastic bag recycling for stores of at least 5,000 square feet or stores belonging to chains with more than five locations in the city.

Considering the size of the New York market, where about one billion plastic bags are used every year, the mandate is enormous. The law could go into effect by early summer.

What will become of these bags? They can find new life pressed into durable composite lumber, like that used in decks and boardwalks. Or they could be made into more plastic bags, and presumably re-recycled indefinitely.

Better still, the new law might just encourage people to forego the plastic and carry their own reusable bag for shopping and chores.

After all, from an environmental perspective, the best answer to the ubiquitous question “Paper or plastic?” is “Neither.”

The Associated Press has a fairly good laundry list of bag bans, taxes and other laws around the globe, although this seems to be a list that changes almost daily.

How is the plastics industry reacting? In the United States, the big news is that the Progressive Bag Alliance has been replaced by the Progressive Bag Affiliates, part of the American Chemistry Council, which will take on a larger role in dealing with bag issues.

The Hong Kong company that made the toxic toy beads that caused a second wave of fear over made-in-China toys made a public apology today, according to this story from the International Herald Tribune.

Researches say a glue used in the beads breaks down into GHB, a "date rape" drug.

"Our apologies to all the children who ate the beads by accident and their parents, and overseas consumers," JSSY, the manufacturer, said in a statement. "We apologize for all the negative effect caused by this incident to China manufacturers. We apologize for the negative effect on 'Made in China.' "

Liao Chu-yuan, the chairman and owner of JSSY, said that the company had worried about the possibility that children might choke by swallowing the beads, but had not considered the possibility that the chemicals in the beads might be poisonous.

"We really didn't look into the FDA part, the food part," Liao said in a telephone interview, referring to the U.S. Food and Drug Administration. He said that when JSSY checked FDA regulations after problems with the beads surfaced this autumn, the company quickly found that the chemical was banned in anything that people might consume.

The beads were sold under the names Aqua Dots and Bindeez. According to the story, Liao said JSSY used a glue in the beads "that cost only half as much as the glue ingredient that the Australian distributor of the beads, Moose Enterprise, thought was being used. But he insisted that the choice of the inexpensive but hazardous ingredient, which is also needed to soften the plastic beads, had not been made for cost reasons."

The main factory for the beads is a white, three-story building with a slogan on the front, "With the right mentality, you can go far." The factory stands in a gritty neighborhood on the northeastern outskirts of Shenzhen, just north of Hong Kong; two smaller factories nearby package the beads.

A half-dozen suppliers to the main factory were outside the gate on a recent morning, complaining that they had not been paid for months.

Liao acknowledged Thursday that he had been late in paying suppliers. He said that he had been slow in sending invoices to Moose this autumn and that Moose suddenly stopped paying him at all when the recall was announced.

No doubt JSSY and Moose Enterprises are both going to end up in court, with each other and with the families of children who became ill. While JSSY seems to hold primary responsiblity for this safety disaster, it still surprises me that no one at Moose Enterprises noticed the formula change. Don't global OEMs inspect their suppliers anymore? Or send products to labs to be tested?

Consider this tale a word of warning to suppliers and OEMs: if you cut corners, you're courting disaster.

Mattel Inc. hasn't always made most of its toys in China and Mexico. Until 2002, the company had a big injection molding plant in Murray, Ky., which was the company's last U.S. manufacturing plant. Do you think it would be interesting to ask the former workers there what they think about the quality problems that Mattel has experienced lately with its Chinese-made toys?

The Paducah, Ky., Sun thought so, and it has a story today quoting two former managers and a long-time product engineer on the subject of safety. You don't have to read between the lines of this story to see how they feel -- they say the company always preached safety when it made products in Kentucky, but now it appears that Mattel has grown lax.

Don Futrell, who worked at the Murray plant for 28 years -- 10 as a product engineer -- said safety [in Murray] was paramount. "Every batch of coating that we put on a toy had to be tested and basically put into a holding area and not released until a series of test results showed levels of various heavy metals weren't exceeded," he said.

Futrell said the recalls are a bitter pill for former Murray workers, who have tried to move on with their lives.

"I think most people in this area kind of look it as a slap because you lose a plant, and now you have all these massive recalls," he said.

The story of how Mattel ran into quality and safety problems would make a good business book. And a good place to begin the story would be with these guys: the managers, engineers and workers who made Mattel toys in the United States before the company decided to outsource most of its manufacturing.

Rather than just sharing yet another story about allegations of quality control issues in Chinese-made products, I think I'll share a story from a different perspective -- the perspective of a Chinese manufacturer.

This story from the Chicago Tribune is interesting, because it's built around the point of view of of a Shenzhen executive, as well as U.S. buyers and government officials.

It's striking how the factory owner's complaints sound so similar to the complaints we've heard from North American factory owners. Here's a taste:

Sitting in a windowless conference room surrounded by the remote-control toy Ferraris and Mercedes he sells the world over, factory owner Kuma Gu summed up what it's like to manufacture products for American consumers these days.

"A lot of Chinese companies have a saying," he said between drags on a cigarette. "Do you want to kill yourself? Then do business with Wal-Mart."

Gu and others go on to complain about high resin costs, rising labor costs, and market pressures that have led to safety problems.

There's also an interesting interview with Jiang Ling, Dongguan's vice mayor for economic development, who made it clear that the government is taking the recent spate of quality problems seriously.

"If the quality and credibility of our products is bad, that will ruin our city," Jiang said. "In the past, we paid much more attention to quantity. Now we have to pay more attention to quality."

All the Plastics News readers who think Chinese goods should be taxed, banned or regulated might want to consider moving to Palm Bay, Fla., where Mayor John Mazziotti has introduced an ordinance that would prohibit the city from buying made-in-China products.

"We are losing jobs left and right to them," Mazziotti told Florida Today. Concern about quality and safety of Chinese-made products prompted the move.

The proposed ordinance reads that the city will take the action because Chinese products hurt the American economy, and because "there is a complete lack of environmental, health and safety standards in product manufacturing in China."

The ordinance would prevent the city from buying any items costing more than $50 that are manufactured or assembled in China or that contain more than 50 percent components from China. Exceptions are for emergency purchases, if the item is not available otherwise or if the cost is more than 150 percent higher.

Are there still made-in-America alternatives for most products that cities buy? Palm Bay will soon find out.

Winston Wang, son of the founder of Formosa Plastics Group, could be the next president of Taiwan, according to this story from the China Post.

The story likens Wang to Ross Perot. The comparison is interesting -- both are business executives who are political outsiders. Wang, like Perot, could play a spoiler role by mounting a third-party run for the presidency.

But Wang has some personal baggage -- his father, Wang Yung-ching, basically banished Winston to the United States after a scandal over a love affair in the mid-1990s. I don't know enough about politics in Taiwan to say whether the scandal makes his campaign a non-starter. But the China Post story deals with the scandal very casually -- "The cause for the alienation was Winston's extramarital affair with his former student Annie Lu" -- and perhaps voters in Taiwan are willing to look past personal indiscretions to elect a leader who can fix a failing economy.

Notice the similarities to the U.S. political climate?

Practically all the people in Taiwan have been fed up with the escalating political turmoil, resulting from the all but cut-throat strife between the ruling party, which is a minority in the Legislative Yuan, and the opposition.

Things are getting worse in Taiwan, with the stagnant economy seeing no light at the end of the tunnel. Unemployment has remained intolerably high. People have lost hope for the future. Many have committed suicide.

Worsening relations between both sides of the Taiwan Strait have hit the economy hard. Taiwan has no way to get out of its current -- and long -- economic doldrums.

All Winston Wang wants is to get into the saddle and get Taiwan's economy back to its former robust self.

"We have to increase our economic efficiency," Winston told the press yesterday. The current administration and the one that may follow can't do that, unless he himself heads it.

Wang believes improvement in cross-straits relations with China are essential to improving Taiwan's economy, a point that makes sense, but is sure to evoke strong feelings. Whether or not he wins, it would be interesting to have a president in Taiwan with plastics industry ties (including affliates in the United States that are major players in plastic resin, pipe and film).

A couple of plastics-related stories in the Centerville, Iowa, Iowegian are interesting and noteworthy today, and have me wondering what exactly is going on in the beautiful Hawkeye State.

First, there's a story about a deal that hasn't happened yet, but which we've been following, on Lee Container Corp.'s proposal to buy a former Rubbermaid Home Products Inc. blow molding plant in Centerville. Kris Koestner, a city council member, is worried that if the deal goes through, Centerville will lose a substantial amount of property tax revenue.

The current valuation for the property is $6.4 million. Koestner fears that with the tentative sale of the former factory for approximately $2.5 million, the valuation will plummet - and in turn so will the city’s tax revenue from the property.

Lee Container Corporation is proposing to expand new Midwestern manufacturing in Centerville to serve existing and new customers for blow molded plastic containers.

Koestner was highly critical of the way the sale took place, saying the Des Moines real estate agency representing the property and Newell-Rubbermaid officials excluded local economic development officials from the negotiations. He said he understood other industries were looking at Centerville that would have been more beneficial for the community, but local officials weren’t given the time to develop incentive packages.

OK, let's say that Lee doesn't buy the plant. I wonder what that would mean to the local economy.

Next, there's an amazing story about another new factory coming to town -- but in this case, fortunately, it's just a hoax.

Albia and Monroe County economic development officials aren’t sure who sent out a news release about a new industry coming to town, but they are pretty positive it’s a hoax. At least they are hoping that a Chinese clothespin factory won’t be moving in a plant that will serve as a halfway house for “convicted sex offenders and others who have committed violent crimes.”

The news release says the plant will employ 54, who will live in dormitory-style housing, "complete with a cafeteria and pub, which will serve beer and wine but no hard liquor."

The Iowegian notes that the name of the company allegedly coming to town, Linhai Hongyi Arts & Crafts Factory, is not made up -- the real company is based in Baishuiyang, Zhejiang, China, and makes plastic and wooden pegs.

Let's hope they don't hear about that vacant Rubbermaid plant...

Here's an interesting Associated Press story about how many plastic milk crates get stolen each year -- both for college kids' dorm furniture and to be recycled. Some of the numbers related to the plastics recycling angle look spurious, so I suggest taking them with a grain of salt.

The story says U.S. dairies lose about $80 million annually to milk crate theft, and that one company in California has hired a private detective to track down lost crates. The story's sources blame the problem on recyclers in China.

"We saw them disappearing into this black hole," said Rachel Kaldor, executive director of the Dairy Institute, a trade group in Sacramento. "We just don't know who's stealing these crates off the loading docks."

Here's the first part that doesn't make sense. The story says consumers pay as much as $10 for crates at places like the Container Store. Yet the dairies think most of the crates end up at recyclers who pay only pennies per pound.

"If it were just college kids taking them, the dormitories would be overflowing with milk cases," said Stephen Schaffer, general manager of Alta Dena Dairy near Los Angeles.

That doesn't seem right. If you could sell a crate for $10, why would you sell it for a buck or two to a recycler?

The California dairy industry is so convinced that recyclers are the problem that it lobbied the state legislature to pass a law that allows dairies to sue recyclers accused of accepting stolen crates. Yet, so far, no cases have been filed.

After the law went into effect last January, the Dairy Institute hired private investigator Chuck Wall to educate recyclers about documenting purchases and to conduct sting operations against suspected offenders.

Wall said he helped recover 24,000 pounds of ground-up plastic from crates belonging to dairies, bakeries and beverage companies at one recycler -- but the story says that's "at least a quarter-million dollars of plastics." That's either a typo or a gross exaggeration. I think 24,000 pounds of HDPE regrind is worth, at most $18,000 -- probably much, much less.

Anyway, if you know someone who has stolen milk crate furniture in their apartment, you can turn them in to the Alta Dena Dairy's "milk crate abuse" hotline, at (800) 457-6688. Operators are standing by...

Every once in a while, I see stories on the Web about U.S companies that still make some product that I had assumed had moved to China (or some other lower-cost location) years ago. That happened again this weekend, with this story from the Gwinnett, Ga., Daily Post.

The story is about Okabashi Brands Inc.'s injection molding plant in Buford, Ga., which molds plastic slip-on shoes.

The Buford factory is one of the few places in the United States where shoes are still being manufactured. “We get a sense of pride out of making our own products,” said Kelly Schmidt, who is vice president of sales for Oka B.

With all of its machines, the factory can produce a total of 15,000 shoes a day during its peak manufacturing periods. Fall production of the Oka B shoes will pick up in mid-July.

Each season, sales of the Oka B brand, which was introduced two years ago, have continued to grow. “Everyone just loves the shoes,” Schmidt said.

The appeal of the shoes is a combination of two factors. “They’re comfortable and they’re cute,” said Naomi Wakatake, the chief designer for Oka B.

According to the story, the shoes are molded from PVC. Keeping up with the latest styles and colors is essential: "The company’s employees get inspiration for new colors and styles from customer feedback and by keeping a close eye on the fashion world. “We look at the runways, then do a reality check,” Schmidt said.

The newspaper's Web version of the story includes a nice photo of workers on the production line, putting finishing details on the company's thongs. I enjoy visiting factories like this, but for now I'll just appreciate their version of the plant tour.

China Law Blog, a Web site by Seattle law firm Harris & Moure PLLC, frequently has posts that are relevant to manufacturers who do business in China.

Robert Grace, Plastics News' editor and associate publisher, is a big fan of the blog, and he pointed out that some recent topics on the site include "How to protect your company from bad China product" (always a concern, and especially noteworthy now with the pet food recall debacle), and "China manufacturing: Take 10% and call me in the morning," about how moving some work to China does not make sense.

Blogger Dan Harris writes:

I know this stuff sounds rather basic, but I have had a number of clients who end up surprised at the low or minimal cost savings to be realized by manufacturing in China, particularly after adding in the transportation costs, the increased legal and administrative fees that come from doing business internationally, and then accounting for the increased risks of quality and other problems.

It's also worth checking out Harris' take on the feud between Groupe Danone SA and its Chinese supplier, Wahaha. This is a story that has received little coverage in the United States, but is making big headlines in China.

Harris agrees with some analysts who I've seen quoted elsewhere, that this dispute is going to influence the future of business for all "foreigners" in China. So if you're interested in that market, you should get up to speed.

A county commissioner in Alabama wants to revoke a tax break that was granted to a local GE Plastics plant in the early 1980s because the business is being sold to Saudi Basic Industries Corp.

This story from the Montgomery Advertiser explains Lowndes County Commissioner Robert Harris' plan to revoke a property tax break for GE Plastics' Burkville plant.

Harris, who called Lowndes the second-poorest county in Alabama, doesn't care for a foreign government owning the major employer in the county.

"We are looking at the contract itself," he said of the ongoing tax break for the plant. "We don't know clearly yet if we can do anything."

SABIC is a state-owned company that produces basic chemicals, intermediates, specialty products, polymers, fertilizers and metals.

It recently announced it will purchase the GE Plastics division for $11.6 billion, and part of the deal will include the Burkville plant.

If the county's legal team decides the commission can change or revoke the tax break, Harris thinks that will happen quickly.

"I am sure we would not have any other choice but to look at that," he said.

This is just about the craziest idea I've heard. If Toyota (a "foreign" company) wanted to build a plant in Lowndes County, would the commission give it a tax break? Of course it would.

The really surprising thing to me is how this bias is cropping up in towns where GE Plastics has a long history as a responsible corporate citizen. Remember that back in March, the Berkshire, Mass., Eagle ran a very stern editorial that called a proposed GE Plastics sale to Sabic "the worst case scenario for the sale of the company." That column went on to make a link between Sabic and terrorism.

I think this anti-Saudi bias is going to continue to surface. It will be very interesting to see how Sabic, and GE Plastics, deal with the issue. Perhaps we're already seeing part of the strategy. At Chinaplas last week, one observer pointed out that none of the executives at Sabic's booth were wearing traditional robes -- they were all dressed in western-style business suits. Was Sabic trying to send a subtle message?

Some of the top headlines on Wall Street this week actually were generated in China, and it was interesting to see the coverage from this side of the world.

One of the biggest was the news that Jianyin Investment Co. Ltd., China's new state-owned investment company, was going to take a $3 billion stake in Blackstone Group, a New York-based private equity company.

Blackstone owns hundreds of billions in investments, including a handful in the plastics business: Klockner Pentaplast GmbH & Co., Celanese AG and Graham Packaging Co. LP.

Seeing first-hand just a small fraction of the amount of economic growth and investment in China, I'm less surprised that the state has this kind of money to make into a company like Blackstone. Some of the coverage I've seen about Blackstone's IPO makes me wonder why anyone would invest in such a scheme. But when you have as much money as the West is pumping into China right now, you can't invest it all in McDonald's franchises and T-bills.

You have to bet big.

I took a walk around the entire Chinaplas show floor this afternoon, because I had not visited a few halls yet (I didn't realize one was in a tent outside... it was quite warm and humid out there).

Here are some of my impressions, after seeing many of the smaller Asia-based exhibitors:

1) A lot of the tooling and equipment that I saw was quite impressive. I wonder, are they five or 10 years behind "state-of-the-art"? And how quickly are they catching up?

2) There were a lot of people looking at the equipment ...and lots of "sold" signs on machines.

3) I saw guys at a few booths diligently working on machines that were sitting idle. That's not unheard of at other trade shows, obviously. But it seemed like there was more than usual today.

4) Perhaps most striking, I was surprised to see machines operating without the precautions that I see at NPE and K. OK, I'm an adult and I know not to stick my hand in the working printing and thermoforming machines. (Or to walk up on a 2- or 3-story high blown film tower). Still, seeing situations like that made me stop and stare for a moment.

Ken Fassett, global sales manager for RJG Inc., will come home to Traverse City, Mich., with a little something special from the Chinaplas trade show.

He'll come home with five stitches and a couple of bottles of antibiotics.

The story started on Monday, the first day of the show here in Guangzhou. Ken was cutting some plastic rings in RJG's booth, in order to attach exhibitor badges to some lanyards.

"I'm better with a molding machine than with a pocket knife," Fassett joked. RJG provides a variety of services to injection molders, including training and systems integration. Anyway, he sliced his left ring finger pretty badly.

"I was really afraid that I would have to go to a hospital," which would have meant missing a big chunk of the first day of the trade show. One of his colleagues suggested going to an on-site clinic on the trade fair grounds.

The little clinic actually stitched up the wound on the spot, and also gave him some pain killers, antibiotics, and an IV (after he passed out).

Unlike some U.S. hospitals, the doctor didn't ask first if Ken had health insurance. The care was quite a bargain by Western standards.

"The whole thing cost me 236 RMB," or less than $25. That included all the medications.

Fassett called his doctor back in Traverse City on Monday night, described the care he had received and explained what medications he was taking. The doctor told him everything sounded good.

Fassett ended up with a heavily bandaged finger that was throbbing pretty bad when I saw him on Tuesday afternoon.

Oh, plus one more thing.

"Now I have one more story from the road," Fassett said. At least it has a happy ending.

Is Chinaplas growing too fast to go back to Beijing? That's what Stanley Chu, chairman of show organizer Adsale Exhibition Services Ltd. of Hong Kong suggested in a news conference this afternoon.

Traditionally, Chinaplas is held in Shanghai in even-numbered years, and it alternates between Guangzhou and Beijing in odd-numbered years. But Chu said Chinaplas has grown too big for Beijing's exhibition hall. This year's show is 102,000 square meters (up from 77,000 square meters in 2005).

"Chinaplas is growing too fast, and Beijing's exhibition hall is growing too slowly," Chu said. "We can't ask our exhibitors to cut their space in half" in order to go back to Beijing.

Officially, Adsale has not decided where to book the 2009 show. It's a little hard to believe that Beijing can quickly gear up for the summer Olympic games, but won't be able to accommodate Chinaplas.

Also, keep in mind that Adsale doesn't have a monopoly on the Shanghai location. Applas will be held from Nov. 29 to Dec. 2 this year in Shanghai, just a few months before the next Chinaplas. It's a much smaller show... but can this market sustain two big shows in the same city so close together?

I suppose if any market can, it would be Shanghai.

Here are a few more tidbits from Chu's news conference:

The Chinese [processing] companies are thirsting for overseas technology. They know that they can no longer rely on low-cost products.

And he spoke about his goal for the trade show:

The first step is to become the No. 2 [show] in the world. Now we are No. 3. So we are going after NPE.

I'm in Guangzhou this week for Asia's largest plastics trade show, Chinaplas. This is my first trip to China, and several people have asked for my impressions.

Here's a rough lis, without any regard for importance:

The show is huge, and very international. There are 1,578 exhibitors, and about 1,000 are from outside China. Adsale, the organizer, did not announce attendance figures yet today, but should have some numbers ready in a few hours. The show seemed pretty busy.

Exhibiting companies seemed to have a lot of news, as many are growing here to serve the expanding market.

Traffic is unbelievable. I've been teaching my youngest daughter to drive the past few months, and I never get to the point with her where I cover my eyes and hope for the best. That happened twice today. I don't know how we missed that pedestrian...

I've heard a variety of strategies for serving the Chinese market, and right now it seems like everything is working OK. It will be interesting to see, if there's a downturn, which strategies really work the best.

I'm looking forward to the second day of the show. All day today, people were interested in whether the GE Plastics sale to Sabic had been finalized. But it wasn't announced until after the show closed. Tomorrow, I think there will be plenty of buzz about the news. Interestingly, Sabic is exhibiting at Chinaplas, but GE Plastics -- which my colleague tells me usually has a huge presence at the show -- isn't here.

I'll be blogging from Antec 2007 and Plastics Encounter in Cincinnati for the next few days. One of the highlights today was the speech by incoming Society of Plastics Engineers President Vicki Flaris, who spoke about the vision and direction of SPE.

One of her main points was how globalization is changing the plastics industry, and how the changes are affecting SPE:

The plastics industry is truly global. Manufacturing and research are migrating to China and India. It is expected that by 2020, the Asian region will be the leading producer of polymers. New developments for polymers will occur at an extremely fast pace in cross-disciplinary fields such as biochemistry, electronics and communications. International corporations are expected to spend most of their R&D money in China, the U.S., and India, in that order.

New centers of materials R&D are emerging in Singapore, China, South Korea and Taiwan, owing to major government funding. In 2000, 500,000 engineering degrees were awarded in China out of 1 million engineering degrees awarded globally in materials science and engineering.

SPE's motto for 2007-08 is "No borders," because, she said, "There are no geographical borders for polymer research, there are no borders for where extra polymer capacity is added, and there are no borders where the information can, and will, flow."

This trend isn't new, but it's interesting to step back and get someone else's perspective on how globalization is changing plastics, and to see how SPE is reacting. I think they're on the right track.

Washington Post columnist Steven Pearlstein wrote an interesting piece last week that makes you think about U.S. trade with China, and whether free trade always makes sense.

The focus is on Intel Corp.'s plans to build a $2.5 billion chip fabrication plant in Dalian, China. Nothing surprising about that, right? After all, a lot of manufacturing is moving to China, the result of cheaper labor costs and the opportunity to serve a growing market in Asia. But it's not that simple.

It would be one thing if the Chinese had developed the capacity to make advanced microchips on the basis of their own investment and ingenuity. But it is quite another when the technology for the chips and chip production has been created by American researchers and American companies, and transferred wholesale to a developing country that makes no secret of its intention to use that knowledge and experience to improve its own industry.

By what reasoning is this a net plus for an American economy that is supposed to prosper in this globalized world on the basis of its high-tech know-how? Can you really say that, in such a high-value-added industry, the lower cost of imported computer chips will offset the foregone economic output -- jobs and profits -- that Intel's move entails?

As it turns out, the reason it will be cheaper for Intel to make those chips in China has little to do with lower-cost labor. That's because chip factories aren't particularly labor intensive. In fact, a study by the Semiconductor Industry Association found that 90 percent of Asia's cost advantage over U.S. production is attributable to government subsidies and tax breaks. In the case of Intel's new plant, I'm reliably told that those subsidies amount to about $500 million. That's a sum well beyond anything available to Intel in the United States. And it hardly fits into any common-sense notion of free trade or fair and open competition.

Pearlstein chalks it up to strategic trade, a move by one country to subsidize a portion of its economy because the short-term cost will be worthwhile over the long term. Other examples of strategic trade include keeping the value of currency artificially low in order to stimulate exports.

The U.S. uses strategic trade too -- we've got agricultural subsidies, for example, and large chunks of our economy are reserved for U.S.-based defense contractors. But Pearlstein argues that U.S. citizens are catching on to the fact that what passes for free trade these days isn't necessarily free, and some sectors of the U.S. economy are suffering.

Contrary to what you hear from editorial writers and other free-trade ideologues, it is not "protectionist" for the United States to impose countervailing duties on imports from a country that subsidizes exports and keeps its currency pegged to the dollar.

It's not "anti-business" to toss out a tax code that encourages multinational corporations to invest overseas and replace it with one that gives tax preferences to companies that create high-value-added jobs in the United States.

And it is not "class warfare" to raise taxes on those who have benefited from globalization to pay for health care, wage insurance and retraining of workers who have lost their jobs as a result of globalization.

There is a reason that, when it comes to trade and globalization, more Americans believe Lou Dobbs than Hank Paulson and Ben Bernanke -- and it's not because they've been bamboozled. The reason is that Americans perceive, correctly, that in recent years liberalized trade has not delivered as promised, that education alone is not the answer, and that neither party has come up with economic policies as tough and effective as China's.

Trade issues are being debated in Washington right now. This column covers an interesting slice of the debate. I'm curious about how plastics industry readers see the debate, and whether their point of view differs depending on whether they view their company as a U.S. or a global firm.

A reader has suggested asking for feedback from blog readers about their experiences doing business in China. Done right, outsourcing manufacturing offshore creates some real potential for cost savings. But we've also heard anecdotally about how the "savings" sometimes can be erased by higher costs for telecommunications, travel, lead-time delays, quality issues, reworks and shipping expenses.

Have any companies moved business overseas and found that the decision cost them money? Do you have firsthand experience?

The reader who suggested this item knows second-hand about an OEM that "lost tens of thousands of dollars every time a team had to visit China to straighten out problems. It would take weeks to ship first runs, communicate errors and changes and then get more part samples. Ultimately there would be one or more visits per project. Vendors changing designs, substituting parts, and changing specs were common. Not to mention how these vendors would then mold parts for local sale."

The amazing part of the story is that the OEM was approving projects without taking any of these extra costs into account. This particular company, a well known plastics processor, did not have sophisticated MRP (material requirements planning) rules for new products, and never really audited the real costs of moving production offshore.

I look forward to reading about your own experiences in our "comments" section.

It looks like the big changes that toy company Lego A/S has made in the last few years are working out -- big time.

The company announced Feb. 21 that its 2006 net profit rose to 1.43 billion Danish kroner ($251.7 million), up from 505 million kroner in 2005.

Lego, which is based in Billund, Denmark, lost money in 2004, and toy industry analysts wondered about the company's ability to attract the attention of today's video game generation.

The company decided to outsource most of its injection molding work to Flextronics International Ltd., which shifted manufacturing to lower-cost plants. Lego slashed employment at operations in Billund; Willisau, Switzerland, and Enfield, Conn.

"The year 2006 was a particularly satisfactory year. It shows that Lego products are full of life, and that our strategy of concentrating on our core business is correct," Lego Managing Director Jørgen Vig Knudstorp told reporters. He added in the news release: "Despite the announcement in 2006 of the outsourcing of most of the production, the employees delivered a great and impressive effort, even though the pressure on the employees has without doubt been very heavy."

The turnaround at Lego is notable, and the prescription for success -- outsourcing captive molding work to custom molders -- is one that other OEMs might emulate.