How clean tech will bring manufacturing jobs back to U.S.
A lot of clean-tech companies are opening factories in the U.S. Why? Weight--and the shipping costs associated with it--for one thing.
The clean-technology revolution will likely make a lot of people in Silicon Valley rich, but it's also going to help bring back some of the factory jobs that have disappeared.
Why? Weight, for one thing, explains Kevin Surace, CEO of Serious Materials, which recently landed $50 million in funding to build factories for its eco-friendly drywall.
Although labor is cheaper in China, shipping costs are going up, primarily because of fossil fuels.
"You could spend $2 to $3 a panel just to ship it (drywall), and that's just to get it to the dock. You'd then have to spend another $3 to $4 to ship it by rail," he said. "You can't do that if you plan to sell it for $10 to $20 a board."
As a result, Serious Materials will open its first factory, which will be capable of churning out 400,000 square feet of drywall a year, in the United States. It will likely also build its next two factories in the States as well, regionally spaced out to serve different markets.
Shipping materials from China also "blows the whole point about zero carbon dioxide," he added. "You're on the wrong side of the energy curve."
State governments are also offering substantial incentives--free rent in industrial parks, tax holidays, loans, grants--to woo these companies. "States do not want to be left out of the next industrial revolution," Surace said.
Some of the most aggressive states include New York, California, and New Mexico.
The heartening part of all of this is that Surace isn't alone. Bruce Jamerson, CEO of Mascoma, which wants to make cellulosic ethanol, has said the same thing. Mascoma is building plants in Michigan, New York, and Tennessee because that's where the wood chips and vegetable matter are. Several analysts have said shipping is one of the big barriers for Chinese solar-panel makers.
Granted, it's not like these companies are staying in the States because the CEO woke up one day to a Bob Seger song playing on the radio and started getting misty-eyed over the disappearance of the industrial heartland. They are being encouraged to stay stateside in part because of subsidies.
But other factors--like shipping costs, the low prices of their products, and the proximity to local markets--could conspire to get the manufacturing arm of the country moving again.