SUBSCRIBE

Breaking News on Industrial Baking & Snacks

Pack Expo 2016

Packaging industry cautious on Trump’s US manufacturing promise

Douglas Yu

By Douglas Yu+

09-Nov-2016
Last updated on 10-Nov-2016 at 09:29 GMT2016-11-10T09:29:38Z

Wexxar manager says loss of US manufacturing jobs driven by automation, not trade agreements, as Trump suggests ©iStock/andykatz
Wexxar manager says loss of US manufacturing jobs driven by automation, not trade agreements, as Trump suggests ©iStock/andykatz

Automation and increased profitability may make US President-elect Donald Trump's promise to bring manufacturing jobs back to the US empty, say some food packaging and processing industry leaders at Pack Expo in Chicago.

Trump has cited the Economic Policy Institute on his campaign website, saying that “America has lost nearly one-third of its manufacturing jobs since NAFTA and 50,000 factories since China joined the World Trade Organization.”

Bureau of Economic Analysis data also shows that manufacturers contributed $2.17 trillion to the US economy in 2015. Meanwhile, Deloitte and the Manufacturing Institute predicts over the next decade, nearly 3.5 million manufacturing jobs will likely be needed, yet two million of them are expected to go unfilled due to a skills gap.

Increase in automation cost manufacturing jobs

In light of the presidential election results, many suppliers at Pack Expo said the situation for the US resembles that of the UK right after the Brexit vote earlier this year – too early to see the impact.

But for some companies, such as Wexxar, Trump’s impact on their sales is close to zero.

Wexxar is a Vancouver-based company that has been manufacturing case sealing and tray forming machinery since 1977, and a larger portion of its clients are from the bakery and snack industry, including Cargill and Kirkland Signature. Wexxar is now owned by the US company Pro Mach.

“I don’t believe Trump will bring manufacturing jobs back to the US,” one of the general managers at Wexxar, who asked not to be identified said. “And I don’t believe that the US has lost that many manufacturing jobs; the number actually doubled since 1980.”

The Wexxar employee is originally from Hong Kong, and is now a Canadian citizen. He has a background in manufacturing engineering.

 

“The number of manufacturing jobs has decreased mainly because of automation,” he said. “On the average, each equipment we sell to the US market can replace seven employees. I don’t think the US wants to use low-cost labors to compete with automation, because it’s actually more expensive compared to automation machinery.”

Will Americans move to Canada for manufacturing opportunities?

Moving to Canada, once a joke during the election, has been taken seriously by many Americans as the Canadian immigration site has reportedly crashed due to the sheer number of people looking to leave the country in the wake of the Trump’s victory.

When asked if the possibility of Americans’ migration to Canada might put Canada’s manufacturing jobs at risk, the Wexxar employee said, “the answer is no.”

“What Canada needs is some US experts in engineering and artificial intelligence. The more we use these experts, the more efficient our automation will become, and fewer jobs will be,” he said.

Currently, Wexxar employs about 150 people at its Canada headquarter, and less than half of them work in the factory, according to the company.

“You might assume those working in the factory are simply laborers, but many of them are required to learn robotic programming. They are kind of half white collars, half blue collars, and they get paid very well. We pay them somewhere between $30 to $39 an hour.”

Distributors care more about currency exchange rate

Instead of worrying about losing manufacturing jobs, packaging firm for chocolate products, Tomric, said its concerns are centered around whether Trump might put US dollar in a more disadvantageous position.

Tomric has become a North America distributor for many European equipment companies over the years, and it recently introduced a one-stop-shop bean-to-bar equipment to the US market through a partnership with Selmi Chocolate Machinery from Italy.

“We bring a solution at a certain price point [from Europe], and then as markets vary, we really don’t control that… when there is a lot of currency fluctuation, that tends to affect our sales,” Tomric’s CEO Thomas Elsinghorst said.

“I honestly don’t know if Donald Trump will make a difference to what we do at this point. The Trump campaign hasn’t even looked passed this election. They haven’t looked forward. I haven’t either.”

Related suppliers

Key Industry Events

 

Access all events listing

Our events, Shows & Conferences...