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As trade wars rage, Emerson plots new U.S. expansion

As trade wars rage, Emerson plots new U.S. expansion

March 10, 2019: Reuters.com (full link below)

As trade wars rage, Emerson plots new U.S. expansion

Emerson now plans to build at least three new U.S. plants and is already expanding existing domestic operations. Farr saw a new era of U.S. protectionism coming before Trump’s election – and started planning accordingly, he said in an interview with Reuters at the company’s sprawling headquarters near St. Louis, Missouri. “For the first time now, I’m looking for best-cost U.S. locations” to build factories, he said.

Trump’s election, Farr said, accelerated a political shift against free trade policy that is now transforming many U.S. firms’ domestic investment strategy. Protectionist policies — especially toward China — are now a rare point on which many Democrats and Trump agree, relegating formerly bold Republican free traders to the sidelines.

Emerson has committed $250 million for new U.S. facilities through 2021, part of a larger domestic investment in existing operations, including a new headquarters and a factory renovation at its Wisconsin garbage-disposal business. Emerson spent $407 million on U.S. capital projects last year, a 38 percent jump from the year before, and plans to spend $425 million this year.

Those investments have added 2,500 employees, Farr said. Emerson declined to say how many jobs the new factories would create.

In 2009, the chief executive of Emerson Electric Co. bluntly told investors at a Chicago conference what many of his counterparts at other manufacturing firms would only say privately.

“I’m not going to hire anybody in the United States. I’m moving,” David Farr said as he blasted U.S. taxes and regulations and called it an easy decision to expand in India and China.

Farr’s flash of candor was emblematic of an era of free trade, globalization and offshoring of U.S. jobs – one that has now come under attack in the trade wars launched by U.S. President Donald Trump.

A decade later, Farr has made a stunning reversal.

Emerson, a diversified manufacturer with $17.4 billion in sales last year, provides dozens of industries with thousands of products, from tools and large industrial valves to refrigeration, lighting and climate control systems. Its best-known consumer brand may be the “InSinkErator” garbage disposal.

Farr’s new take on U.S. investment reflects a broader questioning of overseas expansions, especially in China, for both political and operational reasons. A survey of top managers at 500 U.S. companies conducted in December by investment bank UBS AG found that 31 percent have moved or are moving production facilities to avoid tariffs. Fifty-eight percent said they expect tariffs to “have a positive impact on domestic investment.”

It remains unclear, however, whether and how much the trade policy upheaval will benefit U.S. workers. Many firms fleeing China to avoid U.S. tariffs are not moving to the United States, often choosing locations in Southeast Asia. Those that are expanding U.S. operations are trying to maximize automation to minimize labor costs, and some U.S. industries - such as consumers of steel - have said they plan to cut jobs because tariffs have raised their costs.

The renewed domestic focus by Emerson, a major employer of high-skilled workers, nonetheless stands out as a victory for Trump’s protectionism. Emerson has been a poster child for globalization, and its CEO is among the nation’s most influential manufacturing executives. Farr just completed a two-year term as chairman of the National Association of Manufacturers, the sector’s main lobbying organization.

Emerson once had an overwhelming U.S. and European focus. But that changed as it joined the stampede of manufacturers moving to emerging markets. When Farr became CEO in 2000, 8 percent of Emerson’s sales were in Asia. Last year, that hit 22 percent, and Emerson now has 26,000 employees in the region, slightly more than in the U.S. and Canada. Most of the company’s 215 factories sprinkled around the globe are now outside the U.S.

https://www.reuters.com/article/us-trade-emerson/as-trade-wars-rage-emerson-plots-new-us-expansion-idUSKCN1QP0IQ

 

Your river news: courtesy of:

Inland Rivers, Ports & Terminals, Inc.
One Confluence Way
East Alton, Illinois 62024

Phone 618-468-3010
Email admin@irpt.net

March 10, 2019: Reuters.com (full link below)

As trade wars rage, Emerson plots new U.S. expansion

Emerson now plans to build at least three new U.S. plants and is already expanding existing domestic operations. Farr saw a new era of U.S. protectionism coming before Trump’s election – and started planning accordingly, he said in an interview with Reuters at the company’s sprawling headquarters near St. Louis, Missouri. “For the first time now, I’m looking for best-cost U.S. locations” to build factories, he said.

Trump’s election, Farr said, accelerated a political shift against free trade policy that is now transforming many U.S. firms’ domestic investment strategy. Protectionist policies — especially toward China — are now a rare point on which many Democrats and Trump agree, relegating formerly bold Republican free traders to the sidelines.

Emerson has committed $250 million for new U.S. facilities through 2021, part of a larger domestic investment in existing operations, including a new headquarters and a factory renovation at its Wisconsin garbage-disposal business. Emerson spent $407 million on U.S. capital projects last year, a 38 percent jump from the year before, and plans to spend $425 million this year.

Those investments have added 2,500 employees, Farr said. Emerson declined to say how many jobs the new factories would create.

In 2009, the chief executive of Emerson Electric Co. bluntly told investors at a Chicago conference what many of his counterparts at other manufacturing firms would only say privately.

“I’m not going to hire anybody in the United States. I’m moving,” David Farr said as he blasted U.S. taxes and regulations and called it an easy decision to expand in India and China.

Farr’s flash of candor was emblematic of an era of free trade, globalization and offshoring of U.S. jobs – one that has now come under attack in the trade wars launched by U.S. President Donald Trump.

A decade later, Farr has made a stunning reversal.

Emerson, a diversified manufacturer with $17.4 billion in sales last year, provides dozens of industries with thousands of products, from tools and large industrial valves to refrigeration, lighting and climate control systems. Its best-known consumer brand may be the “InSinkErator” garbage disposal.

Farr’s new take on U.S. investment reflects a broader questioning of overseas expansions, especially in China, for both political and operational reasons. A survey of top managers at 500 U.S. companies conducted in December by investment bank UBS AG found that 31 percent have moved or are moving production facilities to avoid tariffs. Fifty-eight percent said they expect tariffs to “have a positive impact on domestic investment.”

It remains unclear, however, whether and how much the trade policy upheaval will benefit U.S. workers. Many firms fleeing China to avoid U.S. tariffs are not moving to the United States, often choosing locations in Southeast Asia. Those that are expanding U.S. operations are trying to maximize automation to minimize labor costs, and some U.S. industries - such as consumers of steel - have said they plan to cut jobs because tariffs have raised their costs.

The renewed domestic focus by Emerson, a major employer of high-skilled workers, nonetheless stands out as a victory for Trump’s protectionism. Emerson has been a poster child for globalization, and its CEO is among the nation’s most influential manufacturing executives. Farr just completed a two-year term as chairman of the National Association of Manufacturers, the sector’s main lobbying organization.

Emerson once had an overwhelming U.S. and European focus. But that changed as it joined the stampede of manufacturers moving to emerging markets. When Farr became CEO in 2000, 8 percent of Emerson’s sales were in Asia. Last year, that hit 22 percent, and Emerson now has 26,000 employees in the region, slightly more than in the U.S. and Canada. Most of the company’s 215 factories sprinkled around the globe are now outside the U.S.

https://www.reuters.com/article/us-trade-emerson/as-trade-wars-rage-emerson-plots-new-us-expansion-idUSKCN1QP0IQ

 

Your river news: courtesy of:

Inland Rivers, Ports & Terminals, Inc.
One Confluence Way
East Alton, Illinois 62024

Phone 618-468-3010
Email admin@irpt.net