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Are moves to add jobs to US factory floors a harbinger, or outliers?

Apple, Lenovo, LG Chem, and now Daimler AG have all recently said they plan to add manufacturing jobs in the US. President Obama hopes it's a sign of the times, but economists say it's, at best, a nascent trend.

By Staff writer / December 10, 2012

President Obama watches a worker during a visit to the heavy duty engines line at the Daimler Detroit Diesel plant in Redford, Mich., Monday, Dec. 10. Detroit Diesel Corp., which makes heavy-duty diesel powertrains for the commercial truck market, said it would expand its line of transmissions and turbo chargers – investing $128 million and adding jobs to its Detroit-area plant.

Charles Dharapak/AP

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Chicago

Recent days have produced a steady drip, drip, drip of good tidings about new jobs on America's factory floors. 

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Last week, Apple said it is investing $100 million to create new manufacturing jobs in the US, following similar announcements by fellow-electronics makers Hewlett-Packard and Levono Group and battery company LG Chem. On Monday, with President Obama in attendance, Detroit Diesel Corp., which makes heavy-duty diesel powertrains for the commercial truck market, said it would expand its line of transmissions and turbo chargers – investing $128 million and adding jobs to its Detroit-area plant. 

“That means more work. That means more jobs and more products stamped with the stamp ‘Made in America,’ ” Mr. Obama said at the Detroit Diesel plant, which is owned by German conglomerate Daimler AG.

This is good news for the communities where the jobs are incoming, but economists caution that manufacturing is not likely to rebound to levels of 20 years ago – at least not anytime soon. 

In remarks to Bloomberg News last week, Michael Marks, former CEO of Flextronics International Ltd., the second-largest electronics manufacturer in the world, said the Apple announcement represented “a trend that will start in little ways … and will pick up steam as suppliers move here. But this does not herald a booming return of high-volume manufacturing to the United States.”

Still, there are some encouraging signs. Since January 2010, the US has gained 496,000 manufacturing jobs, according to data from the US Bureau of Labor Statistics. That's fewer than one-quarter of the 2.3 million jobs the manufacturing sector lost during the Great Recession, which officially ended in June 2009. Manufacturing employment has remained relatively stable since last spring, according to a new BLS report, released Friday. While the food and chemical manufacturing sectors experienced losses, they were offset by job gains in motor vehicles and parts and wood products.

High fuel and energy costs worldwide, increased consumer and government scrutiny, the declining value of the US dollar relative to other currencies, and rising labor costs abroad are collectively making it more expensive for companies to outsource manufacturing, a point Obama emphasized at Detroit Diesel on Monday. 

“When you factor in everything, it makes sense to invest right here, in America,” he said.

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