In a spring 1940 fireside chat, President Franklin Roosevelt warned listeners in living rooms and boardrooms across the country that because of the "approaching storm" of World War II, manufacturers would be called on to build 50,000 combat airplanes in 12 months.
It was an audacious, even alarming goal. At the time, the U.S. military only had a small fraction of that many airplanes and many of them were obsolete.
What followed, however, was the biggest industrial boom in American history, with around 300,000 fighter aircraft and more than 2 million military vehicles produced by the end of the war. Many historians contend the war was won by machine shops as much as by machine guns.
Now, U.S. manufacturers are at another historic moment as dependence on foreign-made microchips and other advanced technologies, combined with rising global tension, threaten to disrupt supply chains for a wide range of products, from electronic and computer hardware to key raw materials to life-saving pharmaceuticals.
Microchips, a set of electronic circuits on a small flat piece of silicon, run everything from cellphones to military weapons. The United States produced nearly 40% of the global supply until as recently as the 1990s, but that’s since fallen to around 10% because of the industry's growth in Asia.
Chip shortages became especially visible during the COVID pandemic when a surge in demand for products even as basic as home appliances stressed the supply chain. The chip content in vehicles compounded the shortages. New cars and trucks sat unfinished in factory parking lots. Milwaukee-based motorcycle manufacturer Harley-Davidson's global supply chain was broken and material costs soared. Bikes couldn't be built until essential computer chips arrived from Asia; dealerships sales dried up.
“We didn’t know when the factory would be opening again…We had to find a couple of billion dollars to make sure things could stay afloat,” Harley-Davidson CEO Jochen Zeitz said in a Journal Sentinel interview last summer.
Reshoring advanced technologies, especially microchips, has been a priority for the federal government. The CHIPS and Science Act, signed into law by President Biden in August 2022, was aimed at boosting production and countering China’s gains in the field. It’s allowed for nearly $53 billion in subsidies and other industry incentives, including a 25% tax credit for companies that invest in microchip manufacturing.
“We think there are a range of things that are critical to our economic security and national security for us to be investing in here in the U.S., paving the way with public investment for private investment to come at the same time,” said Daniel Hornung, Special Assistant to the President on economic policy.
In New Albany, Ohio, microchip maker Intel has two chip fabrication facilities under construction that will eventually employ around 3,000 people with an average annual wage of $135,000. The $20 billion operation is scheduled to start production in 2027 but could take years to reach full capacity.
It's the beginning of the "Silicon Heartland," Intel CEO Patrick Gelsinger proclaimed at a Sept. 9, 2022, groundbreaking at the 250-acre site about 20 minutes from Columbus. The CHIPS and Science Act, he said, was the most seminal piece of industrial legislation since World War II.
Thousands of jobs likely will be created by suppliers and businesses surrounding the plants. It is the single largest economic development project in Ohio's history, said Kenny McDonald, president and CEO of the business group The Columbus Partnership.
For an eyeglasses company, relying only on China became too risky
Thirty minutes from the Intel site, Zenni Optical opened its first U.S. eyeglasses factory after nearly 20 years of manufacturing solely in China.
The highly automated plant is near Rickenbacker International Airport, which during WWII was called Lockbourne Army Air Base. Later it was renamed in honor of Captain Edward V. Rickenbacker, a World War I fighter pilot and Medal of Honor recipient.
During the height of COVID, California-based Zenni needed a backup to its Chinese factory which closed temporarily. The company also launched a line of prescription glasses which would be delivered nearly anywhere in the U.S. in two to three days.
An American plant was the solution, giving them options simply not available in Asia.
“We had a customer who lost their glasses while on vacation in Hawaii, on a Monday, and they had a new pair delivered to their hotel Wednesday,” said Rob Tate, senior director of U.S manufacturing.
The Ohio plant employs several hundred people. It’s in the Village of Obetz, known as “Optical Village” because of the concentration of ophthalmology companies that have been there for decades.
Zenni chose Obetz for its abundance of industry talent and technology support, and for fast shipping to the eastern U.S. where around 60% of its customers reside.
Automation is essential to the plant's speed and efficiency, but technicians do the final assembly, cleaning and inspection of each pair of glasses before they’re shipped to the customer. For now, machines can't match humans for those important steps.
“You need to have strong hands, good dexterity, and as cliché as it sounds, a keen eye to spot any defects,” Tate said.
Ohio is more expensive than China to manufacture eyeglasses. But if Zenni's Chinese operations were shuttered by another pandemic, a major political fallout — or worse — between the U.S. and China, the Ohio plant would keep filling orders.
“Some of the geopolitical events going on in the world played a role in our planning,” Tate said.
Wichita made heavy bombers in WWII. Now it's a smart-factory hub
As the “Air Capital of the World,” Wichita, Kansas, had a strong connection with building airplanes in World War II. Now, it's at the epicenter of advanced manufacturing in areas like cloud computing and artificial intelligence.
Wichita produced nearly 26,000 aircraft of various types for the war, including B-29 Superfortress heavy bombers. Thousands of men and women flocked to the city in south-central Kansas for the jobs. The city’s population jumped from 114,966 in 1940 to around 200,000 in 1943.
The flat plains surrounding Wichita were well suited for the aviation industry’s runways, but it was a golf course on the campus of Wichita State University that in June 2022 became home to what's called "The Smart Factory by Deloitte @ Wichita," a showcase for cutting-edge manufacturing methods.
The 60,000-square-foot demonstration lab, built on what was the golf course, is part of the Innovation Campus at Wichita State. It helps companies navigate some of their biggest challenges, such as how to reshore work to the United States amid skilled labor shortages and intense competition with low-cost countries.
It's important to recognize that manufacturing is unlikely to return in the way it left 20 years ago. The required skillsets are going to be quite different, said Stephen Laaper, a Smart Manufacturing Leader with Deloitte Consulting.
Smart factories are responsive, adaptive, connected, manufacturing systems that can "learn" and adapt in near-real time, autonomously running entire production processes while reducing costs.
Some companies now have a “digital twin” of their manufacturing plant — a computer model for testing ideas before they’re implemented on the shop floor.You could push the virtual system to its breaking point without any consequence, damageor interruption to the real thing. Rockwell Automation, based in Milwaukee, has been a leader in that kind of technology.
The Wichita facility has a working shop floor that uses data to drive actions. Autonomous mobile robots replenish materials on the production line that makes science kits for a STEM (Science, Technology, Engineering, Math) program Deloitte leads called "The Smart Factory Believers" in U.S. schools.
Overlooking the factory floor is a command center with a wall-size, live dashboard providing a holistic view of the operations. The entire facility is powered by a renewable energy grid outfitted with wind trees, solar panels and smart lighting, resulting in a net-zero environmental impact, according to Deloitte.
"The really modern, smart manufacturing is going to increasingly have sustainability at the center," Laaper said.
Around 20 technology companies are affiliated with the Wichita smart factory. A striking 86% of surveyed manufacturing executives said smart-factory solutions will be the primary drivers of competitiveness in the next five years, according to Deloitte.
After years of losses, a resurgence in American manufacturing
If the United States is able to successfully reshore critically important industries, such as chipmaking operations in Ohio, Arizona, Oregon and other states, the competiton with Asian manufacturers will still be intense.
And although helpful, U.S. government subsidies cannot make the economics of chip manufacturing work forever, according to Kearney, a Chicago-based global management consulting firm.
At some point, Kearney says, the American plants will have to be competitive on a cost-per-wafer basis.
In other industries, companies have asked their Chinese suppliers to open factories in North America, lessening the risk of supply chain disruptions and tariff penalties should relations between the U.S. and China worsen.
"I think there's still a lot of dependency on Asia, particularly China," said Omar Troncoso, a partner with Kearney who leads the company's Mexico City office.
Still, he said the movement to make products for the American market closer to its home is now well established. "We believe this is just the beginning of what we're seeing as a reshoring or nearshoring trend," he said.
For nearly 30 years, Brian Baker of Sentry Equipment, in Oconomowoc, has had a special vantage point into U.S. manufacturing.
“It isn’t just alive and well. It’s thriving,” said Baker, president and CEO of the 100-year-old company that's involved in various industries, including nuclear power generation, petroleum and chemical manufacturing.
About 30% of Sentry’s industrial equipment sales are outside the United States, yet its manufacturing is firmly planted in southeast Wisconsin. The company’s main factory, in Oconomowoc, has highly automated machines than can be operated by one person and even run on their own at night when the plant is largely shut down.
Most of Sentry's suppliers are in the United States.
“We don’t have to go far and wide to find them. They’re right here,” Baker said.
Early in his career, he witnessed massive losses of work to Asia. Today, he's seen a resurgence in U.S. manufacturing.
“The tsunami we’re seeing now is the real thing, and I think it’s unstoppable,” Baker said.
The Bringing It Home series was created with the support ofthe Pulitzer Center andthe Richard C. Longworth Media Fellowship. The Center champions the power of stories to make complex issues relevant and inspire action. The Longworth Fellowship, which was awarded to reporter Rick Barrett and photojournalist Mark Hoffman, is devoted to bringing global issues to Midwestern readers. Neither the Pulitzer Center nor Longworth played a role in the reporting, editing or presentation of the series.
