On Tuesday, I started out with a story about the death of the “3,000-mile Caesar salad – a metaphor for how the ingredients of this iconic appetizer must travel thousands of miles from their origin points just to arrive on your plate at your local Italian restaurant.
In this decades-old metaphor, futurist author James Howard Kunstler claimed that the world was well on its way to becoming more “localized” – and that more of what we need/want/like will be produced much closer to home.
I don’t think he was at all off-base with that prediction.
We’re entering a new era of “deglobalization;” the initial strike of the COVID-19 pandemic exacerbated already-problematic supply-chain issues across the globe, and we were forced to make do with what we could produce on our own turf.
So, today, we’re going to continue exploring this lucrative new trend – and see what profit opportunities can come of it…
The Wealth Shift You’d Least Expect
Right now, one of the poorest areas in America is reemerging as a new breeding ground for incredible wealth. Investors are flocking to this 300-square-mile spot with plans to join the “one-percent.” Eric Fry has the full story… plus five key stock recommendations that could unlock 1,000% gains…
A “New Normal”
Last year, a UBS survey questioned U.S. manufacturing executives about their future production plans. More than 90% of the respondents said they either were in the process of moving production out of China or had plans to do so. And about 80% said they were considering bringing some portion of it back to the U.S.
Bloomberg researchers attempted to gauge the intensity of the deglobalization trend by tabulating the number of times buzzwords like “onshoring,” “reshoring,” or “nearshoring” appear in corporate earnings calls or conference presentations.
According to the researchers’ calculations, these deglobalization buzzwords are appearing 10 times more frequently now than they were before the pandemic.
As I observed 10 months ago in my Investment Report trading research service…
Sourcing products from home, or close to home, is no longer a casual corporate pastime; it has become a political and economic imperative for every major U.S. corporation.
Or to express the same thought differently; no U.S. CEO can “play dumb” any longer about supply-chain issues or be caught flat-footed by the next supply-chain “surprise.”
As the old saying goes, “Fool me once, shame on you; fool me twice, shame on me.”
So rather than being “fooled twice,” most U.S. companies will begin erring on the side of “localizing” their production and sourcing. They will accelerate plans to deemphasize relatively unreliable and/or distant supply-chain sources while emphasizing relatively reliable and/or local ones.
In some industries, these supply-chain shifts will proceed incrementally. In others, the changes will come fast and furiously.
Over the months that have followed this observation, numerous companies have announced significant new investments in U.S.-based production.
Ford Motor Co. (F) is one of those corporations.
The automaker has broken ground on the largest, most advanced production complex in its 120-year history. This new project is also the first major factory Ford has constructed since the 1960s.
The company is calling the new complex BlueOval City (named after the shape and color of its logo) and it is building it in Stanton, Tennessee – not far from Memphis.
This $5.6 billion project will feature both an EV factory to make “an all-new, revolutionary electric truck,” and a lithium-ion battery cell gigafactory (43 GWh annually).
Besides the new Tennessee plant, Ford and a South Korean partner, SK On, are investing about $5.8 billion in the BlueOvalSK Battery Park in Kentucky to build two additional 43 GWh gigafactories.
But wait, there’s more…
Ford announced last month that it would also be partnering with China’s Contemporary Amperex Technology Co., the world’s largest battery maker, to produce EV batteries here in the U.S.
This announcement is notable for two related reasons…
- It shows that Ford is beefing up its production capabilities here in the U.S.…
- And it shows that its Chinese partner is doing the exact same thing.
As Bloomberg reports…
Ford’s timing is astute. To compete in the coming shift in industrial technologies, America’s federal climate package has set off a factory-building boom. Billions of dollars are being poured into domestic battery manufacturing, with almost $40 billion committed to new car factories last year.
Ford recently trotted out a catchy new tagline for itself: Ford, The Future Comes Standard. The company’s ambitious expansion plans in the EV industry would seem to validate that claim.
But Ford’s new tagline could also describe Intel Corp. (INTC), another American company that is expanding aggressively in the U.S.
Stay Tuned
Now, Ford and Intel (which I’ll talk about more on Saturday) are not the only examples of companies that stand to benefit from our evermore deglobalizing world.
The companies that will take a piece of this massive boom often form “superclusters” – right in our own backyard. And not only could these companies kickstart the rest of the U.S. economy, but also their shareholders could reap immense rewards.
When that happens, I hope you won’t sit on the sidelines.
Because right now, just by clicking here, you could learn one of my top plays in this new, more Americanized world.
I’ll be back with you on Saturday.
Regards,
Eric
P.S. Though I do reveal one of my favorite picks for free right here, it’s certainly not going at this “Made in America” trend solo; if you join my Investment Report trading research service today, you’ll get five more stocks I see winning big over the next few years as we continue to deglobalized. Details here.
