Siemens Gives Software Used by SpaceX to Manufacturing Hub

Siemens AG, Europe’s largest engineering company, is contributing its PLM software toward an initiative President Barack Obama announced today that’s designed to put the U.S. back on the manufacturing map.

The company plans to spend millions of dollars in the next five years as a partner in a digital manufacturing institute that Obama said he’ll create in Chicago, according to Chuck Grindstaff, chief executive officer of Siemens’s PLM software business. The Siemens technology is already used by customers including Elon Musk’s Space Exploration Technologies Corp.

“We actually participate in the research, we learn some, we contribute to the advances, and then ideally we’ll find opportunities to sell the technologies to potential customers,” Grindstaff said before attending the White House event where the Chicago institute and another near Detroit to focus on advanced metals research were announced.

The Obama administration is committing $140 million for the two manufacturing innovation initiatives led by the Defense Department, according to the White House. Another more than $140 million from the private sector will support the two centers, the White House said in a statement.

“We’ve got to make sure sure we’re on the cutting edge of new techniques and technologies,” Obama said at the White House event. Revitalizing U.S. manufacturing will have “a ripple effect throughout the economy.”

Youngstown Project

Today’s announcement fulfills a promise that Obama made in 2013 to open three manufacturing hubs using existing funding after the success of a pilot project in Youngstown, Ohio. The first was placed earlier this year in Raleigh, North Carolina.

Representative Tim Ryan, an Ohio Democrat whose district is home to the Youngstown manufacturing hub, said the program has demonstrated its worth.

“We’re already seeing private investment come to Youngstown,” Ryan said in an interview before the president’s remarks. The Ohio manufacturing center is focused on creating parts from digital images using three-dimensional printing.

Obama has asked Congress to authorize 15 hubs. Lawmakers have yet to act on the bill, which has Democratic and Republican co-sponsors.

Rob Atkinson, president of the Washington-based Information Technology and Innovation Foundation said companies wouldn’t undertake such initiatives without government support.

Long Investment

“The centers are exactly what we need to be doing if we want to advance manufacturing,” Atkinson said. “U.S. companies have become very, very short-term in their investment limitations in the last 10 to 15 years.”

Neal Asbury, chief executive officer of the Legacy Companies, which makes food-service equipment, said the U.S. needs “ more than a feel-good speech to bring our manufacturing jobs back home.”

“We need to rethink education and put more emphasis on vocational and technical training,” he said in an e-mail. “Invest in the kind of skills needed by a strong manufacturing base.”

Siemens, which also makes trains, medical equipment and wind turbines, is one of six lead partners in the digital manufacturing institute, in which a total of 41 companies are participating. Others include Boeing Co. and Caterpillar Inc.

The U.S. needs to catch up in manufacturing, said Eric Spiegel, CEO of Siemens USA, noting that Germany already has dozens of manufacturing initiatives like these.

“If we want to be leaders in this, if we want to see the U.S have a resurgence in manufacturing, we’re going to have to put this thing on steroids and get going,” he said in a phone interview.

Success will be measured in how many new ideas come out of the projects and in whether people bring their new ideas there to develop, Spiegel said.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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