Manufacturing on the rebound across the U.S.

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About a year ago we wrote about a dramatic and unusual TV ad for the 2011 Jeep Grand Cherokee.

You may remember that it featured rail spikes being driven, a locomotive racing across the skyline and a blast furnace turning iron into steel.

“The things that make us Americans are the things we make,” said the ad’s announcer.

We spent the rest of the editorial celebrating good news from the American auto industry, which just three years ago was threatened with extinction.

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Last week there was more positive news to celebrate. Much more.

Chrysler announced Thursday that it will repay $7.5 billion in government loans years ahead of schedule.

The company received the loans as part of its bankruptcy proceedings. That agreement also called for concessions from unionized workers, including lost jobs and lower wages.

Chrysler bondholders also lost money and highly placed executives were fired.

While the bailouts of General Motors and Chrysler were opposed by some, few can now argue that it wasn’t the right decision.

General Motors is doing so well it is expected to recapture its long-held position as the world’s biggest automaker.

While much of that is due to the misfortunes of Toyota, namely quality issues and an earthquake in Japan, General Motors recently reported a $3.2 billion first-quarter profit, three times what it earned in the same period last year.

That is the company’s fifth consecutive positive quarter.

And who could have seen this coming — manufacturing is leading the country out of the recession?

The Boston Consulting Group recently predicted the U.S. will now see a “manufacturing renaissance.”

That’s partly due to the cheaper dollar, which makes U.S. goods less expensive abroad.

But it is also due to rising incomes in China, where wages are growing by 15 to 20 percent per year.

When you combine higher worker productivity in the U.S. with increasing transportation costs, China is quickly losing its manufacturing advantage.

“As a result of changing economics, you’re going to see a lot more products ‘Made in the USA’ in the next five years,” Harold Sirkin, author of the report, told ABC News.

Caterpillar Inc. recently announced it would build an excavator manufacturing plant in Texas that will employ more than 500 workers.

NCR Corp., meanwhile, is building a factory in Columbus, Ga., that will make ATMs.

The study predicts, however, that many of the new jobs will go to Southern states that have lower costs and provide more incentives to companies.

Indeed, Gov. Paul LePage and the Republican Legislature have recognized this problem and are taking steps to make Maine more competitive.

From reducing income tax rates to passing regulatory reform and cutting red-tape, we are slowly making Maine a better place to do business.

We have long argued that true prosperity must be based upon education, innovation and manufacturing.

The U.S. has lost much of that edge during the past 20 years, but there are certainly signs we are on the way back.

rrhoades@sunjournal.com

The opinions expressed in this column reflect the views of the ownership and editorial board.

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