American Manufacturing — A Telltale Sign of Spring

When you live in Chicago, like I do, you find yourself this time of year often looking for those telltale signs of spring.  And while it’s not been a particularly horrific winter this year, believe me, it’s always nice to see a sign – any sign – that warmer, longer and brighter days lie ahead.

That’s why I was bouncing off walls this week over the news that a fellow Illinois-based manufacturer, Navistar, is doing something to fundamentally change one of its product lines, a change that could in turn fundamentally alter the entire pricing structure for manufacturers, wholesalers, retailers and assorted shippers all across the U.S.

Navistar, the former International Harvester, which continues to manufacture so many of the vehicles upon which this country’s industry rides, is launching a new line of natural gas-operated trucks, including a new line of 18-wheelers.  At the same time the company is announcing a partnership with Pilot-Flying J Travel Centers to re-jigger most of that retailing giant’s fueling stations in the continental U.S. to accommodate Navistar’s new vehicles.

Given the fact that for many manufacturers, the cost of payroll is the only fixed cost that consistently tops the cost of transportation, this is great news.  And couple that with the fact that the volatility of the price of fuel remains one of manufacturing’s greatest areas of concern – not to mention one of our biggest liabilities as we try to compete with the cheap labor in places like China and India – and what had once been great news suddenly starts looking like incredible news.

Not only that, but when you take Navistar’s annoucement with what President Obama said last week during his State of the Union address – that the U.S. was below 50% in its dependence on foreign oil for the first time since 2005 – and you can see why I was bouncing off walls.

Yes, natural gas comes at a price.  And yes, natural gas is a commodity.  And yes, natural gas is subject to the same sort of market factors as any in-demand fuel would be. 

But natural gas is clean.  Natural gas is domestic.  And above all, natural gas is plentiful.  In fact, reports are that if we were to continue to tap only our current fields of domestically generated natural gas, this country has enough natural gas on reserve right here, right now, to last us well into the next century. 

For someone who’s trying to keep his prices as low as possible and to try to continue to offer the kind of quality I do at a competitive price, it feels like a giant load just might be getting lifted off my shoulder.

Like I said, it has not been a horrific winter.  And the economy is this country does indeed appear to be heading in the right direction. 

But when you’ve lived in Chicago for as long as I have – and when you’ve lived and breathed U.S. manufacturing and global competition for as many years as I – one thing you learn.  This time of year it’s best to stop worring about the cold and to start looking for any sign you can that, indeed, warmer, longer and brighter days lie ahead.

 

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