Surging Costs Complicate Plans for New U.S. Factories

Wall Street Journal ^ | April 6, 2025 | John Keilman and Owen Tucker-Smith

[karpov]

Roofing-products manufacturer IKO North America has been on a factory-building spree in the U.S., with one plant completed and four more under construction. After President Trump launched a barrage of tariffs on U.S. trading partners, the math abruptly changed.

Chief Executive David Koschitzky said IKO’s just-finished factory in Texas now faces higher prices on the steel it uses to fabricate metal shingles, while the plants that are still being built need machinery that isn’t made in the U.S. The company will continue with the projects, he said, but tariffs will make them much more expensive.

“If we’re to be successful, that’s a cost that’s going to be passed on to the consumer,” Koschitzky said.

Trump’s tariff announcement threw a wrench into factory builders’ plans—and complicates a yearslong government effort to reinvigorate U.S. manufacturing. Companies are double-checking the numbers on planned factories, or halting them altogether.

Tariff-swollen building costs helped to kill a $300 million plastics recycling plant in Erie, Pa., that had been in the works for four years. International Recycling Group, helmed by CEO Mitch Hecht, said Thursday it was canceling the factory partly because new duties on material and imported machinery had created “expectations of substantially higher project development costs than anticipated.”

The company said the plant, which had been expected to generate 200 jobs, was also hampered by delays in securing a $182 million loan guarantee the federal government conditionally granted last year.

The past three years have seen an explosion of U.S. factory investment, driven in part by billions of dollars in Biden administration subsidies for manufacturers supporting the semiconductor and electric-vehicle industries as well as renewable-energy projects. Companies have also sought to shorten supply chains that became strained during the Covid-19 pandemic.

[FreedomNotSafety]

“…hampered by delays in securing a $182 million loan guarantee the federal government conditionally granted last year.”

How about that? Tariffs saved the taxpayers $182 million without an import being made.

[Kazan]

If things don’t look bright by spring and summer next year, the Dems will be back, impeachment, and maybe conviction. Then deep state misery forever.

The economy will be booming by next year.

But, even if it isn't, there is virtually no chance of Democrats taking back the Senate and absolutely no chance of a two-third vote necessary for impeachment.

You realize that you're spewing bullsh$t, don't you?

[ProtectOurFreedom]

I’m glad you are so confident.

[Pollard]

yearslong government effort to reinvigorate U.S. manufacturing

Yeah right. Haven't seen it.

[Pollard]

Tariff-swollen building costs helped to kill a $300 million plastics recycling plant in Erie, Pa., that had been in the works for four years. International Recycling Group, helmed by CEO Mitch Hecht, said Thursday it was canceling the factory partly because new duties on material and imported machinery had created “expectations of substantially higher project development costs than anticipated.”

In the works for four years? Sounds like they were waiting on fedgov grants and subsidies which means it wasn't a viable business anyway. Kind of like the Non Governmental Organizations aka NGOs that can't survive without government money. They were never "on Governmental" in the first place.

[Kazan]

Trump knows what the hell he’s doing.

[Karl Spooner]

plants that are still being built need machinery that isn’t made in the U.S

LOL
I got an old lathe sitting in my garage that I can donate if that would help.

[TexasGunLover]

You can’t buy the land for an auto factor within a year, much less build one. Nothing to say of the electrical and plumbing infrastructure the city must provide... Large grocery stores average 18-24 months of build time following 3-4 YEARS of planning.

[unclebankster]

It is so bad that if the globalists could figure out away to import entire buildings and houses built with wage slave labor they’d do it.

******************

Don’t give them any ideas, they have a woke status quo to uphold.

[USA-FRANCE]

It seems you might be right — for Tesla at least, it seems like setting up a new such facility could take as little as a year, which honestly surprises me.

However, when it comes to semiconductor manufacturing, that timeline is a whole different story. Building a new fab typically takes 5 to 7 years, and that’s only if everything goes perfectly — no delays, no hiccups.

Here’s why it takes so long:

Facility construction alone can take at least 3 years. These fabs are some of the most intricate and technically demanding buildings on the planet.

Equipment installation and calibration is another huge undertaking. Tools like EUV lithography machines are incredibly delicate, astronomically expensive, and require custom cleanroom setups. This phase alone can stretch over 1–2 years.

Tech transfer adds more time. Moving proprietary process technologies from, say, Taiwan to the U.S. isn’t just a plug-and-play operation — it involves years of knowledge transfer and navigating intellectual property restrictions.

Then there’s the workforce gap. The U.S. simply doesn’t have as many experienced semiconductor engineers as Taiwan or South Korea, which slows down ramp-up.

And finally, supply chain localization is a beast of its own — everything from specialized chemicals to ultra-pure gases has to be sourced or manufactured domestically.

So yes, compared to that, a Tesla gigafactory going up in a year feels almost magical.

[fireman15]

Facility construction alone can take at least 3 years. These fabs are some of the most intricate and technically demanding buildings on the planet.

I am not an expert on this type of thing, but we live in an area that has had working semiconductor manufacturing plants built, operate and then was sold multiple times before it went out of business largely because of foreign competition. I had relatives that worked at one. It did not take as long as you have projected... from the time that we first heard that the plant had been proposed to the time that it was actually operating.

The county jumped at the chance to get more high-tech jobs, and they faced no opposition from the normal enviro-whacko faction that typically challenges every new business project. Of course, the construction jobs created economic activity immediately. My relatives started their training during the time plant was being constructed.

Of course, this plant opened in the 80s and the technologies have advanced tremendously since that time. So that might explain a difference in the amount of time that it would take to build another plant. I am sure that the equipment has to be upgraded frequently in this type of operation. The last owner was Microsoft, and I am not sure that they would go out of their way to preserve American jobs.