Building and expanding in North America - Manufacturers rethink strategies for moving forward
by Steve Elliott
The manufacturing sector has undergone significant changes since 2020. A global pandemic helped to create ongoing supply chain challenges and geopolitical unrest is adding more uncertainty.
Equipment manufacturers also face labor challenges, costs and access to raw materials, and freight and transportation logistics that are causing companies to rethink and perhaps remodel future strategies. As a solution, some companies are investing in manufacturing and distribution facilities in North America, whether it be through expansion or new startups in an effort to meet customer needs.
“The last two years have revealed how volatile it can be to import products and components,” says Jeremy Rupp, marketing director, Granite Industries, Archbold, Ohio. “Not only are there very long lead times, but the costs from freight and tariffs have led to sky-high product costs. We are investing now to increase our manufacturing capabilities here in the U.S., and we plan to continue investing in the future,” Rupp says.
“As part of a long-term strategy, we want to depend less on imports and more on products made at our manufacturing plant in Archbold, Ohio,” he says.
Supply chain challenges. Manufacturers like Takeuchi Manufacturing (U.S.), Pendergrass, Ga., are putting production closer to demand while trying to minimize outside costs.
The company recently purchased an existing 156,000-sq.-ft. manufacturing facility and stand-alone office building in Moore, S.C. The $34.4 million investment is bringing equipment production to the U.S. Jeff Stewart, Takeuchi Manufacturing (U.S.) president, says he is expecting a start date before the end of 2022.
The facility is expected to employ around 100 people when fully operational. He says future investments also are expected to increase capacity in the U.S.
“Currently, Takeuchi produces all of its compact track loaders at our head office factory in Sakaki, Nagano, Japan,” Stewart says. “However, more than 90 percent of this production is consumed by Takeuchi U.S. in the United States. Investing in a manufacturing facility closer to our end users will allow Takeuchi to shorten lead times and establish a more responsive supply system for our dealers. Producing machines in the U.S. also will allow Takeuchi to increase our domestic suppliers and help shore up supply chain issues from other worldwide events.”
Stewart says this should help the company solve some of the biggest challenges Takeuchi is facing — sea freight and container availability — but that there will be other obstacles such as finding employees for the new facility.
“Our investment in a U.S. facility helps put production closer to demand while trying to minimize outside costs,” Stewart says. “The second issue is people. Finding good people is always hard, but currently, it is exponentially more difficult.”
Stewart says Takeuchi aims to provide quality jobs and benefits to help establish a better work-life balance for its employees and hopefully attract the additional quality team members the company needs.
“I think this just makes sense to expand our production in North America once established,” Stewart says. “The more products we can manufacture closer to demand, the better we will be able to meet customer needs. Shortened lead times and more flexibility in production will help us grow the market.”
Manitou Group, Ancenis, France, is investing $80 million in its two North American manufacturing facilities in Yankton and Madison, S.D. The expansion will be done in two phases, with the Yankton facility producing Manitou- and Gehl-branded telehandlers and articulated loaders. The Madison plant will produce Manitou- and Gehl-branded track loaders and skid loaders.
The 325,000-sq.-ft. Madison facility will expand by 80,000 sq. ft. and the 200,000-sq.-ft. Yankton facility will expand by 65,000 sq. ft.
The company plans to hire 50 additional people at each of the plants between now and 2023. Job categories include welders, assemblers, maintenance technicians and purchasers.
Franck Buisard, managing director, Manitou Equipment America, West Bend, Wis., and vice president, compact & articulated loader product unit (CAL PU), says when looking at the current environment, all manufacturers are facing the same challenges of a very tense supply chain and labor market.
“Investing in our current North American facilities allows us to capitalize on our current strengths to support the growth,” Buisard says. “On another side, we will also invest in research and development of new products. With the large investment we are making, it will allow us to significantly increase our production capacity by more than 150 percent by 2026. We feel as though this investment will allow us to meet
the demands we currently have.”
Stan Kanevsky, founder and CEO, Airsled, Newark, Del., says his company, which makes air dolly products in the U.S., also is expanding operations.
“We started looking for a new facility about 12 months ago and quickly learned that the industrial real-estate market in the Newark, Del., area where we are based is incredibly hot,” Kanevsky says. “With prices at historic highs, we opted to lease a new facility that is more than twice the size of Airsled’s current space. Airsled sales have grown by over 400 percent over the past 36 months despite the pandemic. We squeezed every inch possible out of our current building to expand production to meet demand.”
Kanevsky says ultimately, Airsled was overwhelmed by space constraints, which impacted the company’s ability to add more production stations, purchase new capital equipment and warehouse its growing inventory.
“The new facility dramatically increases our ability to expand all aspects of our operations,” Kanevsky says.
Kanevsky says Airsled products are made in the U.S. with domestically sourced materials. While not totally immune to the pandemic-driven supply chain delays, he says his company has been able to keep up with the growing demand for products because his suppliers were not crippled by the global supply chain chaos.
“To stay competitive, Airsled naturally explores ways to reduce costs, which can include using off-shore suppliers,” Kanevsky says. “However, the events of the past 18 to 24 months have really made the possibility of pursuing off-shore sourcing options to be a decision of last resort for me personally. I have to imagine other leaders in the U.S. manufacturing sector are giving greater weight than ever before to protecting and fortifying their supply chains, which will undoubtedly drive investment and growth in domestic manufacturing.”
Distribution. Not only are manufacturers facing challenges with production, but also with distribution.
Bobcat Co., West Fargo, N.D., is opening a new assembly plant in Rogers, Minn., adding more than 100 full-time employees. Scheduled to be fully operational by fourth quarter of 2022, the addition of the Rogers facility is designed to contribute to the company’s strategic manufacturing footprint plan and support its investments in facilities across North America, including a $26 million expansion at its Litchfield, Minn., facility and $70 million expansion in Statesville, N.C.
“This investment further demonstrates our commitment to our presence in Minnesota, while supporting the growth we are experiencing in the marketplace,” says Mike Ballweber, president, Doosan Bobcat North America.
John Cleary, vice president of sales and distribution development, Western Global, Troy, Mich., says his company has opened a new Pineville, N.C., facility just outside of Charlotte. The new location brought 20 new jobs to the area and is designed for shipping the company’s line of job-site mobile fuel tanks to customers.
The company manufactures transportable tanks that can be towed, craned or forklifted filled with fuel along with larger stationary units that eliminate downtime on larger and longer-term projects.
Western Global does not manufacture fuel tanks at its Charlotte facility. However, at this location, the company attaches the pumps, hoses and other accessories to the customer’s specifications before shipping the tanks to the customer.
“This new Charlotte facility is bringing local support and faster shipping times to customers, including the many rental operations located in the southeastern United States,” Cleary says.
Cleary says Western Global strategically chose the Charlotte area to further increase the company’s responsiveness in emergency situations like hurricanes, “when rental centers often need fuel storage solutions on short notice for their customers to power equipment, including generators.”
Research and development. Research and development (R&D) also is becoming more important than ever to manufacturers.
Kubota North America Corp. (KNA), Gainesville, Ga., the parent company for Kubota Tractor Corp. (KTC), Kubota Manufacturing of America (KMA) and Kubota Canada (KCL), recently held a grand opening of its new 280-acre research and development center in Gainesville. Kubota has invested more than $85 million to bring the new facility online and will open with 70 technical and engineering employees and grow to nearly 200 employees over the next five years.
“Constant investment in our North America infrastructure keeps Kubota evolving and forward-looking,” says Yuichi “Ken” Kitao, president and representative director, Kubota Corp. “This new R&D center here in Georgia is going to allow us to continue to innovate products and solution advancements with our U.S. and Canada customers’ needs in mind.”
Kubota has more than 15 facilities in the U.S. and employs about 6,000 people, according to Todd Stucke, senior vice president of marketing, product support and strategic projects for Kubota Tractor Corp. He also holds the position of vice president, sales and marketing, Kubota North America.
“The pandemic put a strain on the supply chain, as it has with all manufacturers,” Stucke says, adding demand outpaced supply during the pandemic. “While it created inventory challenges, we’re making more product here in the U.S. than ever before. Setting up the R&D operation in Georgia is valuable for Kubota, because it gives us a great opportunity to strengthen our U.S. presence as we grow as well as contribute to the local community. We will continue to invest in the North American market, in our facilities to manufacture more Kubota products and to efficiently distribute them to American customers across the country.”
Finding the right balance. Kanevsky with Airsled says price increases of raw materials, such as steel, aluminum and resin, have hit his company’s margins. Shippers charge more, further eroding profitability and finding quality candidates is a tremendous challenge. His company has increased wages to promote retention.
“The common theme in all of this is dramatically rising costs from all directions,” Kanevsky says.
But Kanevsky is an optimist. As an example, he sees one of his products, an entry-level light duty appliance mover rated to lift 450 lbs. becoming a top seller, something he says emerged out of the pandemic. He continues to look for ways to expand and meet the company’s financial objectives.
“This surprising outcome along with the steady stream of inquiries we receive about product rentals truly reinforces the opportunity for Airsled rentals,” Kanevsky says.
Stewart with Takeuchi says the new facility in South Carolina helps “fulfill our company commitments of Creation, Challenge and Cooperation. This facility will challenge us to find new and better ways to manufacture our products, create more jobs locally where our products are used, and allow us to develop long relationships and better cooperate with the local economy.”