Tag: Youngstown

The Link: Natural Gas and Manufacturing Jobs

President Obama visited Youngstown, Ohio, in mid-May to promote the Administration’s economic policies, pointing to the stimulus bill’s success in encouraging investment and job creation. To illustrate his argument, he appeared at V&M Star, a manufacturing of steel tubular goods, embarking on a $650 million expansion.

In the President’s remarks, he hailed the new railroad spur that encouraged the company’s expansion.

So as a result of this investment, V&M Star’s parent company decided to invest $650 million of its own money — its own money — (applause) — to build a new one-million-square-foot mill right here in Youngstown, the largest industrial plant built in the valley since GM built its plant over in Lordstown in the 1960s.  Think about that — biggest investment since the 1960s — 50 years.  (Applause.)  So right here, in the heart of the old steel corridor, where some never thought we’d see an investment like this again, they’re placing a bet on American manufacturing and on this community.

And that bet is going to pay off for 400 construction jobs once they break ground this summer; 350 new manufacturing jobs once the mill comes online, which doubles the current workforce.

Infrastructure investment is critical to the manufacturing sector, of course. It was one of the key elements of a Milken Institute study, “Jobs for America: Investments and Policies for Economic Growth and Competitiveness,” sponsored by the National Association of Manufacturers.

But there better be an economic reason to justify the infrastructure, some underlying demand that inspires the investment. Unfortunately, President Obama made only one passing reference to the basic reason for V&M Star’s expansion — natural gas, that is, shale gas, that is, the Marcellus Shale, made accessible by hydrofracturing technology.

Groundbreaking ceremonies were held at V&M Star the end of June, and the local newspaper, The Vindicator, reported on the event. From “V&M Star’s $650m expansion gets rolling“:

Philippe Crouzet, chairman of the Vallourec Management Board, praised the private- and public-sector cooperation that made V&M’s expansion possible. [Vallourec is the French parent company.]

“Every aspect of our endeavor is coming together remarkably well,” Crouzet said. “There was an unprecedented collaboration between elected leaders, government professionals and the business community.”

The expansion will allow V&M Star to respond to the growing demands of its natural-gas customers in the Marcellus Shale, Crouzet said. The shale, a natural-gas formation the size of Greece located under Pennsylvania, New York, West Virginia and Ohio, could contain as much as 489 trillion cubic feet of recoverable gas.

“We are building the future in a market that has great opportunities,” Crouzet said. “V&M is well-positioned to serve as a bridge between this demand and supply.”

In case there was any doubt about the connection between economic activity, jobs and the Marcellus Shale, the American Petroleum Institute has released a new study that documents the value of natural gas. From the news release, “New Study Finds Natural Gas in Marcellus Shale Region Worth 280,000 Jobs, $6 Billion in Government Revenue“: (continue reading…)

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President Obama on Manufacturing

From President Obama’s remarks at the V&M Star Plant, Youngstown, Ohio:

A year ago, we took significant action to jumpstart economic growth and job creation. That action included making investments in sectors with the greatest potential for private sector job growth — areas like clean energy and infrastructure.

And one of those investments is going towards revitalizing the site right next door, preparing it for new construction, and building a rail spur that connects to the Norfolk Southern line that runs through town. So as a result of this investment, V&M Star’s parent company decided to invest $650 million of its own money — its own money — (applause) — to build a new one-million-square-foot mill right here in Youngstown, the largest industrial plant built in the valley since GM built its plant over in Lordstown in the 1960s. Think about that — biggest investment since the 1960s — 50 years. (Applause.) So right here, in the heart of the old steel corridor, where some never thought we’d see an investment like this again, they’re placing a bet on American manufacturing and on this community.

And that bet is going to pay off for 400 construction jobs once they break ground this summer; 350 new manufacturing jobs once the mill comes online, which doubles the current workforce. And, as everybody here knows, every time a new factory or plant opens or expands in America, it doesn’t just employ the people who are working at the plant, everybody here, suddenly, they’ve got a little more money to go buy lunch somewhere or buy a computer for their kids or do something else, and so it becomes an economic lifeline for the whole community, capable of supporting hundreds or even thousands of jobs indirectly. And so that’s a success story that all of you are part of.

A nice summary of the economic impact of manufacturing.

Two points worth adding:

  • V&M Star’s parent company to which the President alludes is Vallourec, a world leader in premium tubing goods based in Boulogne-Billancourt, France. From the company’s news release welcoming the President: “With over 2,500 people in 18 manufacturing facilities and service operations in the US, Canada and Mexico, Vallourec in North America primarily serves the local Oil & Gas market.” It wouldn’t have hurt for President Obama to say, “Thank you foreign investors!”
  • V&M Star’s expansion will serve the natural gas boom in the Marcellus Shale region, primarily Pennsylvania, New York and West Virginia. Now and then the President issues a “shout out” to friends, allies and groups at his public events. We were hoping for, “Hydrofrac is in the house! A big shout out to my friends in the natural gas industry. Your are helping to bring economic recovery to the nation.”
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