Editor’s note: Welcome to So That Happened, our editors’ takes on things going on in the manufacturing world that deserve some extra attention. This will appear regularly in the Member’s Only section of the site.
Manufacturing HQs on the Move
Last week food manufacturer Kellogg Co. announced that it would split into three independent companies. While two of the businesses—cereal and plant-based foods—will continue to have headquarters in Battle Creek, Michigan, the snacks business—which represents about 80% of the company’s 2021 net sales—will locate it global headquarters in Chicago, while maintaining “dual campuses in Battle Creek and Chicago.”
At about the same time, specialty materials producer Allegheny Technologies Inc. reported in an SEC filing that it would change its name to ATI Inc. Oh, and by the way, Dallas, rather than Pittsburgh, would be its new headquarters location.
These aren’t the only two manufacturing companies that have announced plans in 2022 to shift their headquarters—they’re not even the only two to announce it in June. It appears that the “work from anywhere” philosophy that emerged during COVID-19 may have made its way to the utmost reaches of manufacturing in 2022, as headquarters locations are shifting faster than you can blink.
It started slowly, with Exxon Mobil Corp. sharing in January that it would shift its global headquarters from Irving, Texas, otherwise known as suburban Dallas, to Houston (where it has a massive, 10,000-employee campus that has long dwarfed the 250-peron Irving facility). In May Boeing Co. followed suit: The aerospace company announced that it, too, was packing up its headquarters and moving. However, Boeing is heading east, from Chicago to Arlington, Virginia, where it already has a campus.
Then came June, and the pace picked up considerably. In addition to the Kellogg and ATI reports, defense contractor Raytheon Technologies said this month that, like with Boeing, Arlington would become its world headquarters. Waltham, Massachusetts, has been home. And then there’s Caterpillar. Five months after Exxon Mobil said it would exit the Dallas suburb, Caterpillar announced Irving, Texas, would become its new global headquarters location. Deerfield, Illinois, has been the construction equipment maker’s headquarters since 2017 and before then, Peoria, Illinois.
If you are keeping score, that’s six manufacturing HQ moves announced in six months—four in June—and there may be others that have flown under the radar. The reasons the companies have given for the moves provide no universal takeaway, although most have assured the towns they are leaving that a significant presence will remain.
It’s Not Just a Job, It’s a GOOD Job
Just to make sure there wasn’t a misunderstanding about the quality of the jobs that the Department of Labor wants to provide, it announced a program called the “Good Jobs Principles.”
On June 21, Secretary of Labor Marty Walsh explained what exactly qualifies as a job. It includes good pay and benefits, job security and career advancement, collective bargaining rights and favorable working conditions. The principles also prioritize diversity, equity and inclusion with a special emphasis on providing accessibility for those from underserved communities.
“To stay competitive, America needs a workforce that is strong, skilled, empowered and inclusive,” said Secretary of Labor Marty Walsh. “As our economy rebuilds, workers are empowered to seek better opportunities, and employers are seeking skilled talent and the right tools to attract and retain that talent.”
Partial funding for this effort will be under the Bipartisan Infrastructure Law, with federal agencies incentivizing equity and good jobs drawing from more than $50 billion of competitive grant funding.
Manufacturing Knows What AR and VR Are Good for
A company recently sent me an email about training technology for vehicle operators. I naturally assumed we were talking about some sort of augmented reality or virtual reality (AR/VR) tech and asked which hardware they used (Oculus, Vive and Google Glass are some of the usual suspects).
It turns out they don’t use AR/VR, rather they use technology that would have looked right at home in PC gaming dens, Dave & Busters locations or just about any arcade—joystick-and-monitor setups that range from desktop configurations to huge, adult-sized seats with panoramic monitors that simulate a vehicle cockpit.
The system is based on older technology and by design limited to a narrow set of applications so I passed on the story, but what struck me was the assumption I’d made that the system must be based on AR/VR because why wouldn’t it be? And what a statement that is for how far the manufacturing world has come along in adopting this tech.
I stated in a recent column that I thought the idea of the metaverse was ridiculous largely due to the lack of widespread AR/VR adoption among the consumer audience, this in my opinion being the necessary precursor for any kind of persistent virtual space that would become an indelible part of our real-life world.
However, largely as predicted by more sober analysts and commentators when the VR craze was climbing the hype peak, AR and VR found their niche within the business world. I am wholly unsurprised when I run into a manufacturer using AR/VR for training and knowledge retention.
If you’re training someone how to operate a machine, why not do it with a pair of goggles and handheld controllers? Just how many people can you fit into one room and train simultaneously with this method? If you’re showing someone how to repair a machine, why not have them wear a pair of AR goggles and record the session while it happens for later playback?
So, the manufacturing industry ought to give itself a pat on the back for being the one to finally figure out how AR/VR ought to be used and just how much good it can do.
Russian Report Card Redux
Four months into the war in Ukraine, which U.S. manufacturers have persisted in doing business in Russia? There are still more than a few, and some are the same names that received a “F” grade in the April 20 “So That Happened” column: Tenneco, the Illinois-based auto components manufacturer; Titan, the Illinois-based tiremaker; and Paccar, the Washington-based truck maker.
Yale University’s Chief Executive Leadership Institute assigns the grades, enlisting experts with relevant experience in Russia and Ukraine. “Defying demands for exit or reduction of activities” merits an F. “Companies postponing future planned investment” yet “continuing substantive business” garner a D. And those companies that have exited Russia down to the last dustpan and door lock—no operations, no sales, no licenses or joint ventures or offices of any kind—receive an A.
According to its May 2022 SEC filings, Titan continues to own 64% of Russian tire maker Voltyre Prom, and that ownership amounts to 6%-to-7% of its earnings. Paccar, on its website, still lists a sales office in Russia. And Tenneco as of May had two plants still operating in Russia, which amount to less than 1% of its sales but complicated its recent acquisition by private equity firm Apollo Global Management.
Manufacturers new to the “A” list include Air Products, Ametek, Amsted Rail, HP Inc., Emerson Electric and Owens-Corning (the construction materials maker in April had an F grade but has since divested its Russian operations.)
Winnebago’s Going Electric
If you thought electric driving was just for cars, think again. On June 16, Winnebago Industries Inc. announced that its e-RV, the first all-electric zero emission motorhome concept from a major RV manufacturing, completed a 1,300-mile road trip.
The e-RV, introduced in January is touted at a “fully functional, all-electric concept vehicle that redefines efficiency, comfort and functionality.”
“Winnebago Industries has a rich history and tradition of innovation, and we see electrification as a continually evolving chapter of that legacy. We are proud to be a leader in exploring the possibilities of this technology in the outdoor markets we serve,” said Winnebago Industries CEO Michael Happe.
Some stats from the road trip include:
- Total miles driven: 1,380
- Total drive time: 26 hours
- Average driving speed: 53 MPH
- Average charge time at DC fast chargers: 1 hour, 2 minutes
- Total charging cost: $275.00
- 60% cost savings over a gas-powered road trip
- Average miles per kWh: 1.58 mi/kWh