A Plan to Save American Manufacturing

TradeAlert.org ^ | Wednesday, December 31, 2003 | Kevin L. Kearns, Alan Tonelson, and William Hawkins

[ninenot]

BTW: all the Milwaukee Journal articles on China are posted on FR. Do an FR search on my screen-name (by poster) and you'll find them. Lotsa commentaries which are interesting.

[afraidfortherepublic]

And yes, we are automated. Some of our customers can import finished goods from Asia and Eastern Europe for less than we can secure parts -- most of which are imported. The only reason that we are still in business is that we service small to medium production runs -- as soon as the product catches on, it heads offshore.

[ninenot]

No documentation. Learned that from a SAMNow Board member who calls on the BigThree. Re-affirmed by another SAMNow guy in a different business.

These items are not published because until VERY recently nobody gave a damn, and of course, there's a certain amount of confidentiality expected...

[IronJack]

the decline of American manufacturing is fast nearing the point of irreversibility

I was a little curious about this contention. IS there a "point of no return" for manufacturing? What are the constraining criteria? At what point would American manufacturing slip below that threshold, and what would be the consequences?

Well-reasoned responses are welcome.

[searchandrecovery]

...as soon as the product catches on, it heads offshore.

This sucks really bad.

[Last Dakotan]

People are CONSTANTLY reinventing themselves. Take Madonna....

Things still have a long way to go for us in arguing for some rationalization to "free trade", but you know you are winning the argument when the only free trader left here wants us to emulate Madonna.

[searchandrecovery]

Did the google thing on samnow - I think you'll find alot of interest in this org here at fr. It seems to be about a 50/50 split (imho) between free-traders & protectionists.

I myself believe in free-trade, but fair-trade, which is not in any way being managed fairly by the us gov. So much senseless pain is being generated. It could be managed so much better (I implicate repubs & dems).

[gooleyman]

maybe your employer will think twice about offshoring if they would lose several experienced people.

NO!! The only thing that will make any business think twice about opening a shop overseas vs here is as I stated to start this whole thing off....A SERIOUS REDUCTION IN TAX RATES AND A DRASTIC REDUCTION IN REGULATIONS. As long as we keep raising taxes (federal AND local) and piling on the regulations, jobs will continue to go overseas. NAFTA and GATT have absolutely nothing to do with it. Companies ONLY look at the bottom line, especially since most of them are run by bean counters today. The threat of the loss of employees is of no consequence to bean counters. Employees are a dime a dozen in their eyesight. In fact if they lose a few, they can hire more at a reduced price and save even more money. They'll probably send a few high paid Engineers over there purposely so their heads get blown off and they can hire cheaper Engineers and avoid paying them a pension. I worked at one company where a guy died on the job and the forman immediately clocked him out so they wouldn't have to pay his widow for the rest of that day. Talk about a heart....what heart?

[RLK]

Sorry, I disagree. I spent enough time in 3rd world countries to know that there are lots of people with lots of money in these countries

---------------------

A few oil shieks buying sports cars won't get you anywhere. To have a strong market it is necessary to have a population with approximately the same median income as we have had here.

[Huber]

How does the rate of manufacturing job loss in the US compare with the rates of manufacturing job losses overseas?

Thanks for your intelligent and well-meaning inquiry.

According to the CIA's "Factbook," manufacturing as a percentage of GDP is dramatically higher than the USA's in a number of countries.

Ireland 48%, Austria 33%, Germany, Japan, Spain 31%, Sweden 29%, Australia, Canada, France 26%, India 25%, Belgium 24%, USA 18%, Hong Kong 13.5%.

Must be that all those other countries are composed largely of stupid, fat, lazy, buggy-whip makers, eh?

1. Interesting that you sidestepped the underlined question above. If you checked the data, you would find that the US is actually retaining manufacturing jobs at a much higher rate than many of the top ten offshore outsourcing destination countries.

2. Interesting that with the exception of Ireland, the largely deregulated tiger of Europe, the countries that you listed have economies and overall employment rates in far worse shape than ours. What inferences should we draw from this? Perhaps France is stealthily outflanking US business by ensuring that its workers are virtually impossible to fire, strike frequently and receive six weeks of vacation?

3. Interesting that you assume that buggy whip makers are lazy. Laziness is not the issue. The point there is simply that certain professions are rendered obsolete by technology. As manufacturing becomes more automated, more production is achieved with fewer workers.

I think that we can all agree that it would be a bad thing from both an economic and a national security perspective to lose manufacturing capacity and capabilities. However, it seems that you are instead defending "full employment" in sectors where it is no longer economically justified.

[Redcloak]

The other course of action would be to stop trying to compete with the "mud and straw hut" types. Like a said, one o' them there paradigm shift thingees.

[Huber]

I'm sorry that your company is not doing well. However, it would be misleading to extrapolate a trend from a single example.

[Last Dakotan]

Your kind has been around a long time. Parasites last forever.

In reading more than a few manufacturing threads here, it seems those that argue most stridently for the status quo free trade crap just aren't likeable people. In addition to knowing very little about the subject, they come across as selfish and short-sighted. In short the very worst stereotypes of Americans.

[Last Dakotan]

Your question deserves an answer.

I have a couple degrees in engineering and work in manufacturing - competing against the Chinese and others everyday. Manufacturing is unique in its ability to create wealth by taking raw materials and making something of tangible value. Unique also are manufacturing's requirements of capital and knowledge.

I see it as near the tipping point when (as now) lenders won't approve loans to manufacturing businesses simply on the basis of their being in manufacturing, not on balance sheets and market planning. Likewise, I was surprised when on a recent recruiting mission for a local college the high school seniors I met where really skeptical about long careers in engineering. I can't fault them.

What does the loss of manufacturing mean to this country? I'll give you a story; One hundred years ago a couple of bicycle makers from Dayton stood on a beach on North Carolina and and changed the world. Does it matter that they made bicycles and where from Dayton? Of course not, but they had developed a skill set from their experience in manufacturing for technical problems. I see the miracle often of something moving from a concept in a human mind to a useful product.

We'll have to get used to a world were this just doesn't happen here anymore.

[afraidfortherepublic]

However, it would be misleading to extrapolate a trend from a single example.

Certainly, but the numbers of companies that are having problems in my area are legion. In my community alone there are about 10 major employers (manufacturers) who have closed, or will soon close. They all tell the same story.

[XBob]

149- "A few oil shieks buying sports cars won't get you anywhere. To have a strong market it is necessary to have a population with approximately the same median income as we have had here."

Sorry - normally I agree with you, but that is not the point I was making. You really need to learn a bit about the real way the world is. Cars were only a simple example. However, the only countries in the world which have similar incomes to ours are European and Japan. They have relatively large middle classes, who can afford to buy our stuff, which generally, they already make.

The rest of the world is made of countries with rich and poor, and little middle class. That means that we are cut out of about 85% of the world markets by these various tarrif and other walls.

As long as we fail to insist on pulling down the barriers, we won't have the markets.

Egypt is not full of rich oil shieks - in fact it is a poor country, which must import oil. But, because of the economic system, there are a relatively large number of relatively rich people, who could afford to buy what we make, if their tariffs didn't discriminate against us.

If I remember, the GM dealers in Egypt sold 170 cars in 1994, while the Mercdes dealers sold around 80,000+ that same year.

[XBob]

153 - btttttttttttttt - well put

"In reading more than a few manufacturing threads here, it seems those that argue most stridently for the status quo free trade crap just aren't likeable people. In addition to knowing very little about the subject, they come across as selfish and short-sighted. In short the very worst stereotypes of Americans."

[XBob]

56-"Free traders believe that eating/selling corn seed and throwing away the work of generations is justified by the short term profit for the few."

btttttttttttt

[Fledermaus]

Are you sure this wasn't written by Chicken Little?

[Fledermaus]

We'll have to get used to a world were this just doesn't happen here anymore.

No, you'll have to get used to the fact that more and more and more people around the world are going to be living in better run countries with democracy and the ability to learn and earn and turn their economies into viable formats to compete around the world.

Sorry if that fact frightens you and all the other "let's build a wall around the country" protectionists that see Wal-Mart as the doom of mankind.

Oliver Stone sounds more sane in comparison.