No Place Like U.S. for Manufacturers?

If it hasn’t quite sunk in how much the struggling economy in the U.S. is changing the mindset of industry, heed the words of Dr Heinrich Hiesinger, CEO of Siemens’ Industry Sector. His firm, at least at present, views the U.S. as a “low cost” production country, ripe as a base for exportation. Siemens has always had a strong manufacturing presence in the U.S., and a weak dollar makes exporting attractive. But perhaps Hiesinger’s remark is a sign that corporations may be leaning more towards the U.S. as a desirable manufacturing center, and less towards other countries.

The occasion for Hiesinger’s comments was the eve of the annual Siemens Automation Summit, held this week in Chicago. Siemens is banking on green manufacturing technologies, Hiesinger noted; its windpower drives business is expected to grow by 20% through 2010, compared to, for instance, 9% for product lifecycle management (PLM) software. Hiesinger also called attention to his company’s growing “environmental portfolio”—promoting wind power, enabling low-emission transportation systems, reducing factory energy consumption—which comprised 23% of its entire portfolio in 2007. For Siemens, the U.S. remains the focal point of these manufacturing initiatives.

What’s this have to do with pharma, besides the fact that Siemens has a major presence in the pharmaceutical automation and control market? The company’s bullishness on U.S. manufacturing reminded me of a news item I’d read just a few weeks about a small pharma company, Galexe Pharma Sciences, which chose to build in the U.S. rather than break ground abroad. Galexe, a subsidiary of Virginia-based Excela PharmSci, Inc., is set to open a new drug manufacturing facility in Lenoir, North Carolina. The company will invest $8.6 million over the next three years and create 55 jobs at an average annual salary of $55,455 per year.

“Upon careful consideration of competing locations within the U.S. as well as Hyderabad, India, we chose North Carolina,” says Phanesh Koneru, president and CEO of Galexe. The reasons: low cost of living and doing business, tax incentives, good talent pool, mild year-round weather. Sure, Hyderabad remains a good place for a manufacturing plant. But, weak dollar or no, the U.S. isn’t a bad place either.

Here's more on the Galexe story from the Hickory Record in Caldwell County, North Carolina.

--PWT