Rising imports of glass containers are just one sign of how the US lost its manufacturing culture. The value of glass-container imports has more than doubled to $1.7 billion in the last two decades from $660 million. The trade deficit for glass containers has tripled to $1.4 billion over the same period.
Local manufacturers of glass containers should have advantages over imports from halfway around the world. The shape of empty bottles, jars and other glass recipients means the shipper is moving a lot of air along with the product. Glass is heavy and obviously breakable, requiring extra packing materials during transportation. Moreover, the raw materials are basic and readily found in the US: sand, limestone and sodium carbonate, more commonly known as soda ash. Blowing glass has been around for millennia, and the industry is often one of the original manufacturing activities of nations. In other words, it has deep local roots.
José de Diego Arozamena, the chief executive officer of Arglass, is trying to tap back into those roots and claw back US market share with a new factory that’s operated in large part by machine-learning software and lots of robots. His strategy could cut across many industries seeking to reshore and demonstrate that the US — through technology and automation — can reestablish itself as a producer of goods, not just a creator or designer of products that are then made by foreign companies.
The lack of self-sufficiency in glass bottle production isn’t a national security problem, like China’s near monopoly on rare earth metals, but it depicts how the country dropped the ball on manufacturing. Concern about glass-container imports may have sounded like a waste of time in the 1980s. After all, plastic was seen as a cheaper, more flexible alternative. And more than four decades ago people weren’t worried about the micro plastics turning up in the fish they ate.
At that time, there also was a belief that inexpensive imports were great because they ease inflation. Besides, the US really didn’t need to compete with low-wage countries for these types of dirty jobs. Instead, all kids were expected to go to college and seek the riches of a service economy. That thinking ended up hollowing out US manufacturing. The wake-up call didn’t hit with full force until the pandemic revealed how reliant the US had become on foreign nations — especially China — for most of the products that we used to manufacture. US supply chains now have large holes, which make it difficult for companies to build plants here without having to import components.
Supply-chain resiliency became a priority during the pandemic, and President Donald Trump’s tariffs have hammered home this lesson. This is actually a good time to bring factories back. Technology, including software and automation, have reduced the labor component of manufacturing that before required many tedious manual tasks.
Such technology paved the way for Arglass, a US company founded by Arozamena in partnership with Japan’s Nihon Yamamura Glass, to invest in a new glass plant in Valdosta, Georgia, that began operations in 2020. Arozamena is about to fire up a second furnace at the plant, which is near the Florida state line. The factory made about 350 million containers last year, and capacity will rise to about 800 million with the new furnace.
The furnaces are fired by natural gas combined with pure oxygen in a new technology called oxy-fuel, which increases efficiency and reduces pollution. The glass factory is full of robots, which do a lot of the dirty work including tending to hot molds and lubricating the machinery, Arozamena said. About 19 employees are needed in a shift, about 60% less that a older glass factory because of the automation. Machine learning helps improve quality and productivity, he said.
The plant has the ability to produce eight different containers at the same time with the existing furnace, Arozamena said. This means Arglass can handle both long production runs, say a standard beer bottle, and short ones for custom containers.
A lack of this flexibility is what got the US glass industry in trouble in the first place. After surviving the onslaught of plastic containers in the 1980s, the remaining glass plants focused on the long production runs that were more profitable. Private equity entered the picture and milked assets instead of making the heavy investments needed to stay competitive. Soon customers were turning to foreign glassmakers for those shorter runs.
For the more generic bottles, Chinese manufacturers began to eat into the US market with price. Low wages, tax breaks, energy subsidies and cheap shipping are some of the ways that the Chinese government has supported industries, including glass. China’s decision to use subsidies to create jobs instead of funding a safety net for its people paid off as its mercantilism model chewed up market share around the world.
Price is still king, said Arozamena, who boasts that his plant is much more environmentally friendly than foreign competitors including a closed-loop water supply. With a new plant full of cutting-edge technology, Arglass can compete on price.
O-I Glass Inc., a Perrysburg, Ohio-based producer of glass containers with plants in 19 countries, just began initial operations on a glass plant that uses such new technology in Bowling Green, Kentucky. O-I calls the technology MAGMA and hails it as having more flexibility and productivity while saving on time and money to install. The modular production equipment is mobile and can be set up in a warehouse. More important, it allows O-I to make more glass bottles in the US.
Yes, the US can manufacture products competitively. Tariffs to offset China’s subsidies also help. No, it won’t take an army of factory workers. But it will take a lot of technicians and trade professionals. Arozamena knows the recipe: New technology run by software and robots.
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