I’ve been surprised, I admit it. The last six months or so have not been great for manufacturing. As it has with nearly every other industry, the novel coronavirus has taken a big chomp out of manufacturing business-as-usual and not released its grip significantly. Lack of work continues to lead to layoffs or terminations. Supply chain disruptions continue to interrupt production for many even if the demand is there. Keeping a workplace safe has become a complicated exercise.
And yet. Despite COVID-19, a steady trickle of significant manufacturing expansion plans in the United States has been announced in recent months. And by significant, I mean really big. To steal some beautiful alliteration from a colleague: In the context of calamity, I’d expect contraction, but here we are with a good bit of the opposite— significant expansion. That’s what surprises me.
Here are a few details on the expansions I’m talking about:
• At the tail end of June, Navistar International Corp. broke ground (virtually) on what the truck manufacturer says will be a 900,000-square-foot plant in San Antonio, capable of producing Class 6-8 commercial vehicles. It will, of course, be outfitted with the latest and greatest manufacturing advancements, such as cloud analytics, lean manufacturing and digital factory principles. Potential jobs: 600.
• About two weeks later, packaging manufacturer Canpack Group, with headquarters in Krakow, Poland, announced that it had acquired property in Pennsylvania to build an aluminum beverage can plant as well as a North American Center of Excellence. The size of this enterprise, according to the Pennsylvania governor’s office, is a robust 908,000 square feet.
• Then came Tesla, which announced during its second-quarter earnings call for 2020 that it would construct its next Gigafactory near Austin, Texas. In fact, said CEO Elon Musk on July 22, some initial work was already underway at the 2,000-acre site, which will produce the company’s Cybertruck and semi, as well as the Model 3 and Model Y for the eastern half of North America. The new site will generate more than $1 billion in capital investment, according to the Texas governor. It’s not entirely clear to me how big the factory will be, but with that type of investment, it will be sizeable. Moreover, the site will be an “ecological paradise,” Musk says.
• And, finally, in late July, Nikola Corp. held an official ground-breaking ceremony in Coolidge, Ariz., on a 1-millionsquare-foot manufacturing facility. The site will produce zero-emissions Class 8 trucks, the manufacturer said, incorporating the latest technologies while ensuring “the smallest environmental footprint possible.” Additionally, Nikola says the Arizona facility will eventually generate more than 1,800 full-time positions and approximately $600 million in new capital expenditures.
Yes, these are only four examples, but they are four significant investments. And yes, they don’t diminish the manufacturing job loss—some of it permanent—that is associated with the pandemic. And indeed, these investments have been in the works since well before anyone heard of COVID-19.
But still. See them for what they are: investments in U.S. manufacturing’s future, and to my mind, shared at a time when we could all use some good news. I’m excited to see new technologies we frequently write about implemented in greenfield facilities that can exploit all their promise. I applaud the announcements that include recognition and consideration for the environment. And I suspect we’ve learned some lessons from the pandemic that will be incorporated into these major manufacturing investments.
I recognize that the fruits of these announcements are largely several years down the road, but I am embracing the news today.
As I said earlier, I’ve been surprised, but it’s a pleasant surprise.
