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president's letter By Nick Brown, SMA President As I write this, General Motors’ union employees are on strike, asking GM to assure them that new models will be built in the U.S. instead of abroad. This turned out to be the biggest issue in this year’s labor negotiations, bigger even than the unfunded retiree pension liability. And we’ve all heard our neighbors’ comments about American manufacturing, such as “Manufacturing in America is dead” ;
or So how is the outsourcing trend and globalization of manufacturing going to impact building materials and stucco? Maybe not as much as your doomsday neighbor might think. We’ve got one big thing going for us – weight. Building materials are produced in many small factories all over the world, because they need to be close to the sources of raw materials and point of use. Otherwise, shipping costs can quickly exceed the value of the products and justify construction of another plant closer to the market. So, even if our Chinese competitors can make stucco, tile, and other building products at half our cost, the cost to transport the goods to the U.S. in most cases will protect our markets from foreign imports. This is not to say that imports will play no role in our industry. Certainly basic materials such as cement, pigments, and lath have been successfully imported into the U.S. construction industry. And it is amazing how global our supply bases have become, with stucco manufacturers routinely sourcing polymers, sacks, and rheology modifiers from outside the U.S. Our customer base is increasingly international, as well. But we should all be thankful that our products are heavy for the small protection from foreign producers that it gives us. The other benefit of being in building products, rather than say auto manufacturing or hi-tech manufacturing, is that building products plants tend to be produced close to their markets. So we can live in desirable places, such as the West Coast, rather than in the middle of the cornfields, where many other industries build their production facilities. Building materials and stucco is a good niche that should allow us all a better standard of living than other manufacturing industries. Because of the small protection that the weight of our product affords us, and the proximity to population's centers, we’re in an industry that offers great quality of life. While our industry is very competitive, litigious, and demanding, at least we can take solace in the fact that we have it better than most other U.S. manufacturers. |
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