Skip to content

America is now more appealing to manufacturers than Germany

By Catholic Online (NEWS CONSORTIUM)
6/3/2014 (3 years ago)
Catholic Online (www.catholic.org)

High cost of energy and environmental policies are hurting Germany's economy

Many workers in the United States may agonize over growing job losses thanks to low-cost workers in India or China. For many in Germany, the U.S. may take that role thanks to the low cost of energy.

German manufacturing firms are finding America an increasingly appealing place to open factories, because of the low price of business.

German manufacturing firms are finding America an increasingly appealing place to open factories, because of the low price of business.

Highlights

By Catholic Online (NEWS CONSORTIUM)
Catholic Online (www.catholic.org)
6/3/2014 (3 years ago)

Published in Business & Economics

Keywords: News, Europe, Germany


LOS ANGELES, CA (Catholic Online) - The U.S. is the new global standard for low-cost manufacturing says Peter Huntsman, chief executive of Wacker Chemie, a company which produces a wide range of products including ingredients for chewing gum and polysilicon crystals used in solar cells.

Join the fight against world hunger.

Huntsman is rapidly closing plants in Europe, spending hundreds of millions of dollars to expand his company in the U.S., where it is estimated that a modern petrochemical plant is $125 million cheaper to run per year.

Supplying power to Wacker's main factory in Burghausen has helped push his company's power bill up 70% to nearly half a billion Euros in the last five years.

In Louisiana, it is a different story, and chemical makers are paying 22% less for power than they did seven years ago.

Part of this problem is Germany's decision to shift towards green energy, which as a direct result, causes their companies to pay some of the highest power prices in the world. According to the European Union's statistics agency Eurostat, a German company pays about $0.21 per kilowatt-hour. In contrast, the U.S. Energy Information Administration reports that industrial electricity prices in Louisiana are just $0.055 per kilowatt-hour, and still falling.

"It's not a question of whether other countries are competitive or not," said Huntsman. "They're not."

Low average labor costs are another powerful reason America has become an attractive choice for manufacturers again. Worker productivity is far higher in the U.S. and when the cost of shipping goods from Asia is taken into account, average labor costs remain low.

This reversal is rapid, as just three years ago politicians in Washington were discussing how to copy Germany's success.

The energy policies of German Chancellor Angela Merkel are a large part of the reversal. Policies, which were designed to boost the amount of renewable energy sources in Germany, stop climate change through regulations and cut dependence on foreign gas and oil.

These policies have hurt German industry, as half of the country's industrial companies believe their global competitiveness is threatened by these new policies. Nearly a quarter of these companies are shifting production abroad or are considering doing so, and the U.S. is a prime destination.

---


'Help give every student and teacher Free resources for a world-class moral Catholic education'


Copyright 2017 - Distributed by THE CALIFORNIA NETWORK

Pope Francis Prayer Intentions for JUNE 2017
National Leaders.
That national leaders may firmly commit themselves to ending the arms trade, which victimizes so many innocent people.


Comments


More Business & Economics

The end of the farm as we know it has arrived - here's how we're about to change the way we grow food Watch

Image of Farming, with its backbreaking labor and myriad of challenges, is about to become an anachronism. Vertical farming will replace the traditional farm within the next few decades.

Farming as we know it is about to disappear. The entire disappearance may take generations to happen, and there will always be a few farms ... continue reading


'Budgets are moral documents'

Image of

The highly relevant quote, "Budgets are moral documents," has been arguably attributed to Rev. Martin Luther King, Jr. But if he didn't ... continue reading


Why Google, YouTube, Facebook and others need to be broken up -- or regulated Watch

Image of Monopolies are back, and they're taking over everything.

Is to time to break up the monopolies? As Google, Facebook and others grow larger, calls for their breakup are emerging. There is an urgent ... continue reading


Tesla Model 3 may fall short of forecasts, but it will still change the world Watch

Image of The Tesla Model 3 is the Model T Ford of electric cars.

The Tesla Model 3 is a game changer for the auto industry. It is a reasonably priced, well-designed electric car that looks good. It has ... continue reading


Pope Francis' nightmare? World's richest 8 men own as much as 3.6 billion people Watch

Image of The richest one percent own what the world's poorest have COMBINED.

During an interview with Dutch newspaper Straatinieuws, Pope Francis explained: "I would like a world without the poor. We must fight for ... continue reading


Never Miss any Updates!

Stay up to date with the latest news, information, and special offers.

Catholic Online Logo

Copyright 2017 Catholic Online. All materials contained on this site, whether written, audible or visual are the exclusive property of Catholic Online and are protected under U.S. and International copyright laws, © Copyright 2017 Catholic Online. Any unauthorized use, without prior written consent of Catholic Online is strictly forbidden and prohibited.