With oil flowing into the Gulf of Mexico and President Obama urging the nation to reduce its use of fossil fuels, a new report by a Duke University research team says U.S. manufacturers could play a major role in producing the rail cars that might help coax more Americans out of their cars.
The team's report, "U.S. Manufacturing of Rail Vehicles for Intercity Passenger Rail and Urban Transit," identifies nearly 250 U.S. manufacturing locations in 35 states that could support new rail infrastructure projects.
With $8 billion of the federal stimulus bill dedicated to new high-speed rail corridors and intercity passenger rail, and Congress preparing a new surface transportation bill, "this research pinpoints considerable opportunities for job growth in manufacturing at an especially opportune time," says Marcy Lowe, the study's lead author.
Lowe is a senior research analyst at Duke's Center for Globalization, Governance & Competitiveness (CGGC), which has been carrying out a series of studies over the past two years of whether U.S. companies are ready to compete with China and other nations in providing the parts and labor needed for low-carbon technologies. The team's answer, in this case and others ranging from LED lighting to hybrid trucks, is yes -- but time is wasting for both the private and public sectors to make the investments needed to keep green jobs at home.
"What our research has revealed is that every one of these technologies has complex supply chains that touch on many different industries," says Gary Gereffi, a Duke professor of sociology and director of CGGC. "We need to understand the linkages across these different supply chains. That's something missing in our discussion of job creation."
Gereffi notes that major manufacturing industries were once dominated by well-known companies that did everything from producing components to selling finished products. However, with the advent of globalization and outsourcing, big firms look increasingly to other industrial suppliers to contribute to the process.
"To understand what it takes to produce a rail car or LED light, you need to knit together 10, 15, 20 different types of firms participating in different industries," Gereffi says. Understanding how the different firms stack up and might fit together -- or not -- is essential to determining how competitive the U.S. might become in an industry overall.
"Value chain studies show that individual companies don't really control destinies as they did in the past," Gereffi says. "To be competitive, companies have to find ways to collaborate or link strategies with other companies in the same value chains. That kind of collaboration strategy is something really new in the business arena."
For an industry such as rail car production that stands to receive a sizeable government investment, supply-chain mapping is one way to look beyond generalities about green industries to understand which are most likely to produce jobs and profits for American companies while helping the environment.
For its rail study, Lowe's team contacted nearly every firm it could identify in the supply chain -- 177 in total. "We found a significant piece of U.S. manufacturing in almost every segment of the chain, and additional areas where U.S. manufacturers could move up the supply chain into higher value activities," she says.
This rigorous approach has begun to pique the interest of Washington policymakers who want both stimulus spending and federal energy investments to also strengthen domestic manufacturing, which has been hit hard during the recession.
After studying the supply chains for energy-efficient windows, hybrid trucks and other low-carbon industries, Lowe says a green economy can indeed emerge to advance multiple U.S. goals, but it needs greater support from both public and private sources.
"What it takes is consistent, long-term investments on the public side and policies that are very steady -- much steadier than piecemeal tax credits and short-term investments," she says.
With the rail study now completed, the CGGC team is turning its attention to supply-chain studies of lithium ion batteries, solar panels and geothermal energy technologies. It also will examine why some U.S. clean-energy firms have decided to open facilities in China and other countries, and how to capture high-value supply chain activities such as design and engineering.
"Our trading partners use public policy to stimulate demand through energy pricing and long-term incentives, and this approach works," Lowe says. "It creates a demand trajectory that trumps all piecemeal efforts."