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Thread: Light bulb factory closes; End of era for U.S. means more jobs overseas

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    Light bulb factory closes; End of era for U.S. means more jobs overseas

    The green movement, creating jobs in the USA. Oh wait, no.

    washingtonpost.com

    Light bulb factory closes; End of era for U.S. means more jobs overseas
    By Peter Whoriskey
    Wednesday, September 8, 2010; 9:48 PM

    WINCHESTER, VA. - The last major GE factory making ordinary incandescent light bulbs in the United States is closing this month, marking a small, sad exit for a product and company that can trace their roots to Thomas Alva Edison's innovations in the 1870s.

    The remaining 200 workers at the plant here will lose their jobs.

    "Now what're we going to do?" said Toby Savolainen, 49, who like many others worked for decades at the factory, making bulbs now deemed wasteful.

    During the recession, political and business leaders have held out the promise that American advances, particularly in green technology, might stem the decades-long decline in U.S. manufacturing jobs. But as the lighting industry shows, even when the government pushes companies toward environmental innovations and Americans come up with them, the manufacture of the next generation technology can still end up overseas.

    What made the plant here vulnerable is, in part, a 2007 energy conservation measure passed by Congress that set standards essentially banning ordinary incandescents by 2014. The law will force millions of American households to switch to more efficient bulbs.

    The resulting savings in energy and greenhouse-gas emissions are expected to be immense. But the move also had unintended consequences.

    Rather than setting off a boom in the U.S. manufacture of replacement lights, the leading replacement lights are compact fluorescents, or CFLs, which are made almost entirely overseas, mostly in China.

    Consisting of glass tubes twisted into a spiral, they require more hand labor, which is cheaper there. So though they were first developed by American engineers in the 1970s, none of the major brands make CFLs in the United States.

    "Everybody's jumping on the green bandwagon," said Pat Doyle, 54, who has worked at the plant for 26 years. But "we've been sold out. First sold out by the government. Then sold out by GE. "

    Doyle was speaking after a shift last month surrounded by several co-workers around a picnic table near the punch clock. Many of the workers have been at the plant for decades, and most appeared to be in their 40s and 50s. Several worried aloud about finding another job.

    "When you're 50 years old, no one wants you," Savolainen said. It was meant half in jest, but some of the men nod grimly.

    If there is a green bandwagon, as Doyle says, much of the Obama administration is on board. As a means of creating U.S. jobs, the administration has been promoting the nation's "green economy" - solar power, electric cars, wind turbines - with the idea that U.S. innovations in those fields may translate into U.S. factories. President Obama said last month that he expects the government's commitment to clean energy to lead to more than 800,000 jobs by 2012, one step in a larger journey planned to restore U.S. manufacturing.

    But officials are working against a daunting trend. Under the pressures of globalization, the number of manufacturing jobs in the United States has been shrinking for decades, from 19.5 million in 1979 to 11.6 million this year, a decline of 40 percent.

    At textile mills in North Carolina, at auto parts plants in Ohio, at other assorted manufacturing plants around the country, the closures have pushed workers out, often leaving them to face an onslaught of personal defeats: lower wages, community college retraining and unemployment checks.

    In Obama's vision, the nation's mastery of new technology will create American manufacturing jobs.

    "See, when folks lift up the hoods on the cars of the future, I want them to see engines stamped "Made in America," Obama said in an Aug. 16 speech at a Wisconsin plant. "When new batteries to store solar power come off the line, I want to see printed on the side, "Made in America." When new technologies are developed and new industries are formed, I want them made right here in America. That's what we're fighting for."

    But a closer look at the lighting industry reveals that isn't going to be easy.

    At one time, the United States was ahead of the game in CFLs.

    Following the 1973 energy crisis, a GE engineer named Ed Hammer and others at the company's famed Nela Park research laboratories were tinkering with different methods of saving electricity with fluorescent lights.

    In a standard incandescent bulb, in which the filament is electrified until it glows, only about 10 percent of the electricity is transformed into light; the rest generates heat as a side effect. A typical fluorescent uses about 75 percent less electricity than an incandescent to produce the same amount of light.

    The trouble facing Hammer was that fluorescents are most efficient in long tubes. But long, linear tubes don't fit into the same lamp fixtures that the standard incandescent bulbs do.

    Working with a team of talented glass blowers, though, Hammer twisted the tubes into a spiral. The new lamps had length, but were also more compact.

    "I knew it was a good lamp design," he recalled recently. In retrospect, in fact, it was a key innovation. The Smithsonian houses Hammer's original spiral CFL prototype.

    At the time, however, the design had one big problem. Bending all that glass into the required shape was slow and required lots of manual labor.

    "I used to say you would need 40,000 glass blowers to make the parts," Hammer said. "Without automation, it was economically unfeasible. It was a lamp before its time."

    The company decided to make investments in other types of lighting then being developed.

    Years passed. The next major innovator to try his hand at CFLs was Ellis Yan, a Chinese immigrant to the United States, who had started his own lighting business in China and then in the early '90s turned his attention to the possibilities of CFLs.

    To make CFLs, he had workers in China sit beside furnaces and bend the glass by hand. Even with the low-wages there, the first attempts were very expensive, clunky and flickered when turned on, he said. But he persisted.

    "Everybody [in the industry] stayed back and was watching me," he recalled. "No one else wanted to make the big investment for the next generation of technology."

    The business prospered and Yan's factories in China employed as many as 14,000 - not so far off from the 40,000 glass blowers that Hammer had once imagined would be necessary. With new automation techniques, Yan is seeking to cut the number of his employees in China, where wages are rising, to 5,000 by year's end.

    Today, about a quarter of the lights sold in the United States are CFLs, according to NEMA, an industry association. Of those, Yan says, he manufactures more than half.

    Someday soon, Yan says, he hopes to build a U.S. factory, though he so far has been unable to secure $12.5 million in government funding for the project.

    Manufacturing in the United States would add 10 percent or more to the cost of building a standard CFL, he said, but retailers have indicated that there is a demand for products manufactured domestically.

    "Retailers tell me people ask for 'Made in the USA' " Yan said. "I tell them the product will cost 45 to 50 cents more. They say people will pay for it."

    Sales of the CFLs began slowly, but they spiked in 2006 and 2007, when federal and state government efforts promoted their use.

    The Energy Department teamed with Disney to develop a public service announcement based on the Disney Pixar film "Ratatouille" to encourage the adoption of technologies such as CFLs. It was shown on CNN, HGTV and the Food Network.

    Lawmakers in California and Nevada drafted legislation calling for higher efficiency standards for light bulbs. And in December 2007, Congress passed its new energy standards.

    GE balked at the standards at first, knowing that they could impact their U.S. manufacturing. But the company also saw that with restrictions gaining momentum in more states and other countries, some kind of legislation was unavoidable. They decided to support the bill as long as it didn't amount to a ban on traditional incandescents, but instead simply set energy standards.

    "We obviously pointed out to legislators that the impact of an outright ban would be an elimination of some manufacturing operations," said Earl Jones, senior counsel in government relations and regulatory compliance at the company. "But it was inevitable that some kind of legislation would be coming to the U.S."

    As expected, the new standards hurt the business in traditional incandescents.

    The company developed a plan to see what it would take to retrofit a plant that makes traditional incandescents into one that makes CFLs. Even with a $40 million investment and automation, the disparity in wages and other factors made it uneconomical. The new plant's CFLs would have cost about 50 percent more than those from China, GE officials said.

    The company also makes halogen light bulbs, which are an innovative type of incandescent, and Sylvania is transforming its incandescent light bulb factory in St. Marys, Pa. to halogen as well.

    But the era of traditional incandescents built in the United States was coming to an end.

    In announcing the plant closure here, GE said in a news release that "a variety of energy regulations," including those in the United States, "will soon make the familiar lighting products produced at the Winchester Plant obsolete."

    "For those who make incandescent bulbs the law was bad for business," Yan said. "For people like us, it was very good."

    Temperatures at the traditional incandescent plant here can be sweltering because of the heat coming from the machines that melt the glass. It's noisy, too, and workers wear ear plugs and safety glasses. And the pace of the work demands constant hustle, an atmosphere created by managers over the years who set up competitions among teams of workers striving to meet production goals. The winning line could post a black-and-white checkered flag on their machinery.

    Jobs at the plant have been prized locally for years: They pay about $30 an hour.

    One day after punching out recently, the workers gathered around the picnic tables by the employee entrance.

    Some expressed grievances with the plant managers, who they note will get new jobs elsewhere, or with Congress for passing the energy legislation. Several took aim at the new new technology itself, noting that CFLs have mercury in them.

    Some at the plant will be able to retire off their severance packages. Those with less time on the job, or those who are younger, have braced themselves for whatever comes next.

    Some are taking classes at the Lord Fairfax Community College, hoping that familiarity with solar panels or HVAC might land them a job. Others scan the want-ads but don't see how they will replace what they were making at the factory.

    This small town has not been terribly hurt by the recession; local unemployment is running at 7.5 percent, well below the national average.

    But good-paying jobs in manufacturing, they said, have become difficult to find.

    Beverly Carter, 50, who feeds cardboard sleeves into a machine and makes sure it doesn't jam, has worked at the plant for 32 years.

    "It's very hard to find a job like that around here," she said.

    Moreover, because many of the workers are in their 40s and 50s, some were nagged by worries that other employers would see them as washed up.

    "We gave GE the best years of our lives," Savolainen said.

    Matt Madigan, 40, and his twin brothers, Wayne and Dwayne, also work at the plant.

    "We've always had a lot of industry here in the valley, I've never had a problem finding a job," he said. "A person really wanted to work, you could go from one factory to another. Everything nowadays is tougher."
    "So little pains do the vulgar take in the investigation of truth, accepting readily the first story that comes to hand." Thucydides 1.20.3

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    As unfortunate as this is, plants closing because of competition from overseas is not something new. Fact of the matter is, they were the first in the market and decided not to run with it. They are paying the price for that now, but isn't that what economics is all about?

    According to the article, the push is for things that are made in America and this guy Yan will be opening a factory in the US, thereby creating jobs to replace the ones lost by these people. Again, it's unfortunate, but it's the way of life. I guarantee you these folks are not the only ones in their 40s and 50s being laid off, even in manufacturing. How do the others manage?
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    Battleship Enthusiast Defense Professional USSWisconsin's Avatar
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    My heart goes out to those people who lost their jobs after years of loyal service. It is a painful experience to lose a job you enjoy, even harder in a down economy.
    "If your plan is for one year, plant rice. If your plan is for ten years, plant trees.
    If your plan is for one hundred years, educate children."

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    Quote Originally Posted by bigross86 View Post
    As unfortunate as this is, plants closing because of competition from overseas is not something new. Fact of the matter is, they were the first in the market and decided not to run with it. They are paying the price for that now, but isn't that what economics is all about?

    According to the article, the push is for things that are made in America and this guy Yan will be opening a factory in the US, thereby creating jobs to replace the ones lost by these people. Again, it's unfortunate, but it's the way of life. I guarantee you these folks are not the only ones in their 40s and 50s being laid off, even in manufacturing. How do the others manage?
    I'm agnostic about where the jobs are and fully appreciate the creative destruction that must go on in a dynamic economic. The issue I've got is the cocksureness that politicians display in proclaiming that certain actions will be good for the American economy and their social engineering backfires with unintended consequences. Let the market decide when it wants to adopt greener energy standards instead of forcing it upon the market while at the same time proclaiming - "it's good for you!"
    "So little pains do the vulgar take in the investigation of truth, accepting readily the first story that comes to hand." Thucydides 1.20.3

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    Yeah, that makes sense. People with little or no applicable knowledge making your decisions for you? Yeah, that would piss me off too...
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    Senior Contributor bonehead's Avatar
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    There is nothing wrong with using a more efficient lightbulb. What we need to do is offer tax incentives to companies who come up with such technologies AND decide to produce them at home rather than shipping the new ideas elsewhere to be made.

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    Problem is, they will still be made somewhere else, just not here in the US, and THAT is basically the mounting problem here in the US. We are getting out of the production business. The green movement is only killing those countries stupid enough to participate!:madder:

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    Turbanator Senior Contributor Double Edge's Avatar
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    What made the plant here vulnerable is, in part, a 2007 energy conservation measure passed by Congress that set standards essentially banning ordinary incandescents by 2014.
    That right there is the problem. I get into this argument endlessly with my countrymen who think that alternatives like CFL's are always a better alternative. I found some of my arguments in this excellent Aussie article on the same.

    Should There be a Ban on Incandescent Lamps?

    Why can't we let the market do its thing

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    And when you break a CFL you need a HAZMAT team to clean it up.

    Government, please get the hell out of my light bulbs.

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    http://www.latimes.com/business/la-f...,7883731.story
    U.S. hard-pressed to stem domestic R&D losses
    The nation's ability to turn ideas into products and profits at home has been eroded by deep manufacturing cuts and policies that result in others reaping the benefits.

    By Don Lee, Los Angeles Times

    September 13, 2010

    Reporting from Washington
    Advertisement

    President Obama's proposal to boost the research tax credit for businesses is widely seen as necessary to bolster American competitiveness in the global economy.

    But even if the $100-billion plan is approved, it won't begin to address the fundamental question of how to turn that research and new technology into jobs and renewed prosperity for Americans.

    Over the last two decades, U.S. scientists and engineers have discovered or pioneered the science behind one blockbuster product after another — from flat-panel screens and robotics to the lithium batteries that run next-generation power tools and electric cars.

    Yet in almost every case, production, jobs and most of the economic benefits that sprang from those breakthroughs have ended up overseas.

    America's innovative spirit may still be the envy of the world — major steps forward in nanotechnology and biomedical fields, among others, continue to be made in U.S. labs. But without more effective policies to translate those achievements into gains at home, the fruits of America's creative genius will probably continue to be reaped by others.

    And new reports show that during the recession American companies ramped up investment overseas for plants and new hires, as well as research and development — even as they cut back domestically.

    Foreign subsidiaries of U.S. corporations increased their spending on research and development by more than 7% in 2008 from the previous year, pushing the total to nearly $37 billion. But these same multinational companies sliced R&D expenditures in the U.S. that year 2.2% to $199 billion, Commerce Department data showed.

    A similar but less dramatic difference was evident in hiring: Employment at these overseas units rose 1% in 2008 — and a stunning 15% in China — but was down 2% for the U.S. elements of the 2,200 multinational firms the Commerce Department studied.

    Some of these jobs were lost to automation, but Obama and many independent economists said a big factor was the sharply different policy approaches of U.S. and foreign governments.

    For decades, Washington has taken a largely hands-off, or laissez faire, approach, sometimes even adopting tax and other policies that critics said actively encourage the movement of manufacturing and other business activity overseas.

    By contrast, export giants such as Germany, Japan and South Korea have embraced government policies — and even pressure tactics — that push businesses to maintain operations at home.

    "Other countries do a much better job," said Robert Atkinson, president of the Information Technology and Innovation Foundation, a nonpartisan Washington think tank. "We're pretty much the only country with the illusion that we're not in competition with the rest of the world."

    Obama, as he announced a package of stimulus measures last week in a Cleveland suburb, sought to sound a populist, even nationalistic note:

    "Instead of tax loopholes that incentivize investment in overseas jobs," he said, "I'm proposing a more generous, permanent extension of the tax credit that goes to companies for all the research and innovation they do right here in Ohio, right here in the United States of America."

    Some corporate chiefs bristle at the notion that they are exploiting loopholes. Rather, they said, they are sending work overseas because it's efficient and because otherwise they wouldn't be able to compete. And many would argue that American innovation and entrepreneurism remain the envy of world.

    But there's little doubt that U.S. research investment has slipped from its once-preeminent position. By one common measure, private R&D spending as a share of economic output, the United States was No. 8 among developed countries in the latest tally by the Organization for Economic Cooperation and Development.

    Washington's funding for basic research, meanwhile, has been essentially flat since 2003, on an inflation-adjusted basis. The federal R&D budget for 2011 shows a decline, according to the National Science Foundation.

    "This is the last trend one wants to see with global R&D spending continuing to grow rapidly," said Gregory Tassey, senior economist at the National Institute of Standards and Technology, a federal agency promoting technology and industry.

    Yet economists and business leaders worry that increasing support for U.S. laboratories and technology centers will not necessarily strengthen the economy.

    The nation's ability to turn ideas into products and profits at home has been eroded by manufacturing cuts so deep that entire supply chains have vanished, and with them skilled labor, component makers and specialized companies needed to bring scientific discoveries to market.

    Examples include A123 Systems Inc. in Massachusetts. With government support, the company is building plants in Michigan to produce its breakthrough lithium-ion batteries for electric cars, but as a start-up it had little choice but to rely on the technical and manufacturing capabilities of China to crank out products quickly to show potential customers.

    Even then, despite its MIT-born technology, A123 lost out to a South Korean company to supply batteries for General Motors Co.'s Chevy Volt.

    Similarly, the technology behind silicon-based solar panels was originally developed in America. But even as the solar panel industry took off in countries such as Germany, where it was backed by strong government policies, the industry in the U.S. declined, partly because electronics manufacturing and other production capabilities had dried up years earlier.

    "If you just do breakthrough R&D and in the end don't make the stuff, that's a losing argument," said Ralph Gomory, a research professor at New York University and former head of research at IBM. He called it "the innovation delusion: We can design things; others will build them."

    Apple Inc. has perfected the trend, making a fortune selling snazzy products that are designed by legions of creative people in the U.S. but manufactured almost entirely in China. Analysts note that Apple captures the bulk of the profit while the U.S. economy loses little in giving up low value-added assembly operations to the Chinese.

    But Apple's case is rare. A lot of companies design things and try to hold on to the technology but eventually lose control over it in the process of using overseas manufacturers — or are beaten out by rivals who produce similar goods at cheaper prices.

    So the decline of U.S. manufacturing has increasingly become an economic Achilles' heel.

    "When products are designed and manufactured side by side in America, businesses can discover new efficiencies and develop second-, third- and fourth-generation upgrades that simply would never occur in a cloistered research lab," U.S. Commerce Secretary Gary Locke said in a speech early this year.

    "When they are not, we allow other countries to develop new businesses and new jobs," he added.

    At least a handful of efforts are underway to create such self-reinforcing systems in the U.S., including tech areas in New York's Hudson River Valley and in San Diego.

    Forming similar clusters may be one way to compete against manufacturing powerhouses such as Germany and Japan, where government plays a much stronger role in driving research and pressing business leaders to focus on making and selling goods at home.

    The question is whether these or other possible answers to the problem can be developed in the United States within the present ideological and policy framework, or whether more fundamental change would be required.

    don.lee@latimes.com

    Copyright 2010, Los Angeles Times

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    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Don't worry. I wouldn't hedge my retirement on CFL technology. LED will replace it in about 10 years.
    "Only Nixon can go to China." -- Old Vulcan proverb.

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    Turbanator Senior Contributor Double Edge's Avatar
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    Quote Originally Posted by highsea View Post
    And when you break a CFL you need a HAZMAT team to clean it up.
    Hehe, i guess thats OSHA for you. Over here, we stil use those 4ft tubelights, and in case of a mishap, we umm, open the window, switch on the fans, leave the room and let it ventilate out those mercury vapours

    Quote Originally Posted by highsea View Post
    Government, please get the hell out of my light bulbs.
    Too late they already passed the law.

    Quote Originally Posted by gunnut View Post
    Don't worry. I wouldn't hedge my retirement on CFL technology. LED will replace it in about 10 years.
    Enough time for LED to come down from three figures a piece to two ?

    Course when there aren't any other cheaper alternatives due to this *cough* ban, that might just take a bit longer.

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    Official Thread Jacker Senior Contributor gunnut's Avatar
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    Quote Originally Posted by Double Edge View Post
    Hehe, i guess thats OSHA for you. Over here, we stil use those 4ft tubelights, and in case of a mishap, we umm, open the window, switch on the fans, leave the room and let it ventilate out those mercury vapours
    Gun Grape, who is a contractor and does building work, can tell you that he cannot just dump used florescent lights (tube or CFL) into the trash. Normal households can. Businesses cannot.

    Quote Originally Posted by Double Edge View Post
    Enough time for LED to come down from three figures a piece to two ?

    Course when there aren't any other cheaper alternatives due to this *cough* ban, that might just take a bit longer.
    Most of the traffic lights around my neighborhood have switched from traditional lights to LEDs. The good thing is they last a long time while putting out more light with less energy. Even if one element breaks, the other 100 still work. There's no need to replace anything until enough of them break (probably 50% of the elements).

    My office building have switched the halogen lights inside the elevators to LEDs. They don't break nearly as much. The lobby's lighting have partially switched from halogen to LED. Just give it a few years, LED will replace most CFL applications.

    Here's an interesting problems regarding LED technology for use in traffic lights. They don't generate heat. That's not a problem in most of the world....except in the cold regions during winter. Traditional lights generate heat and keep itself from freezing over. LED generate less heat than florescent lighting and freezes or will be covered by ice in cold winters.
    "Only Nixon can go to China." -- Old Vulcan proverb.

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    Senior Contributor antimony's Avatar
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    Quote Originally Posted by gunnut View Post
    Here's an interesting problems regarding LED technology for use in traffic lights. They don't generate heat. That's not a problem in most of the world....except in the cold regions during winter. Traditional lights generate heat and keep itself from freezing over. LED generate less heat than florescent lighting and freezes or will be covered by ice in cold winters.
    So with global warming, even that scenario will not ensue as we will simply not have ice cold winters anymore

    Problem solved, ta da

    :banana::banana::banana:

    Sorry Gunnut, couldn't resist
    "Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God?" ~ Epicurus

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    Turbanator Senior Contributor Double Edge's Avatar
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    Quote Originally Posted by gunnut View Post
    Gun Grape, who is a contractor and does building work, can tell you that he cannot just dump used florescent lights (tube or CFL) into the trash. Normal households can. Businesses cannot.
    I can believe that.


    Quote Originally Posted by gunnut View Post
    Here's an interesting problems regarding LED technology for use in traffic lights. They don't generate heat. That's not a problem in most of the world....except in the cold regions during winter. Traditional lights generate heat and keep itself from freezing over. LED generate less heat than florescent lighting and freezes or will be covered by ice in cold winters.
    Sure ? Article I linked to said that a LED lamp he tested did get hot.

    the lamp doesn't get excessively hot in use. This is not to say that it runs cool - it doesn't. The front bezel is a heatsink, and this gets quite hot after it's been on for a while.
    That's just for one if there are a hundred of these packed into an enclosure there should not be any issue.

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