World trade drives rise of advanced area factory
HOCKLEY — What’s built in the Houston area cools the nation and could ultimately cool the hemisphere.
Inside the nation’s secondlargest industrial building, home to one of America’s most advanced factories, more than 4,000 Texans will soon manufacture air conditioners and furnaces in this small town on the northwestern outskirts of Houston.
Daikin, a Japanese heating, ventilation and air conditioning company, officially opens its new 94-acre facility this week. How many more good-paying, highskilled jobs will come to this corner of Harris County depends on politicians in Washington getting realistic about foreign trade and keeping America competitive in
the global marketplace.
After all, the Daikin Texas Technology Park is a creature of globalization and a demonstration of how a rising tide of globalprosperity can float all economies.
Daikin bought Goodman air conditioning for $3.7 billion in 2012 to enter the North American market after establishing itself in Europe, China and Latin America. The company’ s strategy is to engineer, develop, market and manufacture products as close as possible to a region’ s consumers, making sure the H VA C systems meet local needs.
Daikin has spent$ 500 million to upgrade Goodman by building a 4 million square foot facility, increasing production capacity by 30 percent and adding new product lines. The company is proud of the factories and jobs it creates around the world, said Takes hi Eb isu, Goodman’s CEO.
“Two years ago, we felt it was the right decision, but now I feel like this was definitely a great choice that we made ,” he told me in an interview .“We are so happy to have such talented people in Houston.”
The company took no government incentives to build in Texas, and the decision to create American jobs came long before President Donald Trump’ s election. But while Eb isu agrees with Trump’ s“Buy American” rhetoric, he points out that the “Made in America” is more than assembling foreign parts.
“Madei n America is not as simple as built in America ,” he said .“My hope is that President Trump thinksthesameaswedo.It’s not just whether it was made in the U.S ., but we should seriously ask whether it was engineered, developed, marketed and manufactured wholly in the U.S.”
When the factory reaches capacity, the products made here will be able to compete on price and quality with any competitor, he added. But Daikin never intended for this factory to only compete for U.S. customers.
Executives made the investment counting on the North American Free Trade Agreement to guarantee access to Canada and tariff-free access to raw materials, such as steel, aluminum and copper. This is where the Trump administration’s policy proposals worry Ebisu.
“We are alreadythe Canadian market with exports from China, so if a tariff is imposed, its going to be harder ,” he said .“Thinking about raw materials such as steel, aluminum and copper, it is definitely raising the price of everybody’ s products, including ours. He is simply pushing the sale prices higher and higher, which reduces competitiveness, so ‘Made in America’ does not work under that plan .”
Trump’s immigration policy could also be Daikin eventually plan store place all Japanese executive sin Houston with Americans, but for now it needs H 1 visas for Japanese expatriates and engineering talent.
“I personally believe that the U.S. is strong because it has such a diversewe can give visas for skilled people, we have diversified with people from all over the world, and that blend has sparked creativity at this facility and created new things ,” he said.
And those are only the short-term policies that could impact Daikin’sthough the company has onlyacres in Hoc kley, there was a reason it bought 500 and is making duct less systems, even though most U.S. and Canadian homes use ducted HVAC.
Several factory walls are removable to make it to compete in new markets, Eb is us aid.
“Canada is one of our targets, but I am also moving into Central and South America in the future ,” he said .“That’ s the area where we can ship our products easily for light commercial. We will be able to compete with exports from Chinahave to pay a lot of transportation costs.”
Daikin is demonstrating how foreign capital, local workers and accessible export markets can make U.S. factories competitive. Manufacturers don’ t need the crutch of tax incentives or protective tariffs that only raise costs for consumers.
Nationwide, millions of American workers rely on trade agreements for their livelihood. Let’ s make sure our politicians improve them, not ruin them.