A Plan to Save American Manufacturing

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

[Erik Latranyi]

If you are in the industry, you then understand that a large number of manufacturers are deferring the investment in automation and simply going for the cheap labor overseas.

Yes, I do understand that companies like Black & Decker are simply going for cheap labor overseas instead of modernizing their factories here. That is called mis-management. It cannot be stopped with gov't regulation or tarriffs. Companies like this are doomed.

BTW, there are no "unskilled jobs" anymore, at least not in a well-run plant.

Absolutely not true!!!!!! Obviously, you do not go into many manufacturing plants. There are thousands of jobs done by people like filling bottles of perfume by hand, or packing bottles into boxes by hand. These companies are doomed to move overseas if they do not automate.

[Erik Latranyi]

Why would FOMoCo do that? Simple. Five years of vastly increased profits and concomitant debt reduction. Ford is in trouble financially, and the Chinese have offered them a solution.

Are vastly increased profits bad? Is that not the basis for capitalism? Ford owes this to its stockholders who are mainly ordinary workers.

Billy Ford's interests lie in maximizing the value of his shares, not in maintaining FoMoCo's employment in America. Henry Ford would kill this poor kid, if he got his hands on him.

Two different eras. I think Henry would kill Billy if he did not take the actions necessary to keep the company alive.

[Erik Latranyi]

Templar: The fact is that high tech and IT jobs are being eliminated to "lower-cost overseas labor eventually.". Skill levels are relative, and there is no job that is so highly skilled that it cannot be competed with by others in countries with substantially lower standards of living than ours. The question is: How do we lower the standard of living in our country (everything from job saftey to building codes and zoning laws) enough to make us again competitive with the third world? Or, perhaps, do we want to?

True that many high-tech jobs are leaving. But many are coming back because the education levels of other countries does not allow for true "low-cost" manufacturing.

We do not have to lower our standard of living. We have to make it more cost effective to stay here. Lowering taxes and decreasing regulations (not reasonable safety) will result in more manufacturing remaining in our nation.

[ninenot]

Actually, Erik, I spend a lot of time in plants for someone who doesn't work in one.

But my "territory" is metalbenders--the folks who ARE automated, and who HAVE multi-tasking sophisticated workforces, and who are STILL moving overseas.

No perfume factories for me. That's East Coast hoity-toity stuff.

[Erik Latranyi]

Although your earlier posts hinted at it, you've here made it clear that you are another robot/disruptor without foundation in elementary philosophy.

Your office in Beijing is calling.

Name-calling, which I have not engaged in, only demonstrates your lack of argument ability.

[ninenot]

Focus on profit to the exclusion of all other factors is a very dangerous thing. That's why corporate success stories include references to their workers, mid-managers, etc.,; the people who actually come up with the ideas to improve the Company's operations.

But since you think all workers are merely ciphers on a spreadsheet, you might not get that concept, Erik.

[Erik Latranyi]

No, that was the deal Ford had to accept to gain access to the Chinese market. Its called a trade barrier and counter to agreements the Chinese already made. It is the job of our government to policy such agreements. A job they have proven either unwilling or unable to do.

No, Ford did not *HAVE* to accept the deal. They accepted the deal for benefit, not loss.

Ask yourself why would they benefit?

[ninenot]

Frankly, I think Henry would have killed HFII, would have LOVED Iacocca, and then killed Billy's predecessor as well as Billy.

Ford understood that "preservation of the Company" is much easier to do if the Company's employees can afford to buy his products. On the larger scale, it will be helpful if average citizens in the USA can buy FoMoCo product--evidently Billy thinks so, regardless of whether they are employed.

[Erik Latranyi]

But remember, Erik--those union agreements were agreements on BOTH sides. Big Steel, like Big Auto, gave a lot away; usually because management was just as greedy as the unions.

Or didn't you learn that in automation class??

Name-calling again? I agree that management gave away too much to the unions. Unfortunately, that is what happens when decisions are made in the context of "feel-good" instead of reason.

[Erik Latranyi]

But my "territory" is metalbenders--the folks who ARE automated, and who HAVE multi-tasking sophisticated workforces, and who are STILL moving overseas.

Are they moving overseas to ship the goods back to us or are their markets moving overseas?

No perfume factories for me. That's East Coast hoity-toity stuff.

And those perfume factories are the lowest-tech around and charge the most for their products! They are leaving quickly due to that.

[Erik Latranyi]

Focus on profit to the exclusion of all other factors is a very dangerous thing. That's why corporate success stories include references to their workers, mid-managers, etc.,; the people who actually come up with the ideas to improve the Company's operations

If a company focuses on profit only, then they will lose workers and decay into oblivion. A company has to retain people with ideas, but it also has to get rid of the dead weight and hire new people with new ideas.

Hence, people are a resource.

[Erik Latranyi]

Ford understood that "preservation of the Company" is much easier to do if the Company's employees can afford to buy his products. On the larger scale, it will be helpful if average citizens in the USA can buy FoMoCo product--evidently Billy thinks so, regardless of whether they are employed.

Billy is not moving all the Ford plants overseas. Domestic auto manufacturing is at an all-time high if you include the number of new plants in the US. Auto industry is a good example of expansion to fill demand in other nations.

[Cold Heat]

Just like it is with people, companies have either good, bad or mediocre personalities.

The profit motive is certainly important, because without profits, a company cannot survive and with low profits it cannot grow or innovate which is necessary for survival.

Most of these companies who move operations to foreign labor and tax markets do it reluctantly.

I know of no company that did it gladly.

Many have just folded and cashed in or bankrupted.

The federal government really can do little for them except to make sure the regulatory environment is not killing them off for no particular important reason and to deal with them on back tax issues.

State governments actually have more ability to help and do not have the resources needed at this time to do so.

I have been worried about this subject for many years and have learned that change is upsetting, but it is change that often sets the stage for new realities and new prospects for profits and employment.

One this that is certain, the assembly line, labor intensive manufacturing operations will not be here much longer. We cannot save them unless we subsidized their balance sheets and we cannot do that for many reasons.

We do, however need to maintain heavy industries that are critical to our security like ship building, electrical grid components and petroleum.

Small manufacturing that rolls with the flow and changes direction quickly can survive well in this market. Mini mills have replaced the big smelters in the steel industry. Small innovative tech firms are making great profits.

Our intellectual capital is as good as ever but needs improvement. Our work ethics have suffered and need to improve. Our ability to innovate and take risks has suffered in recent years and Bush is trying to jump start it.

Our future is not dark. On the contrary, it is wide open and likely will be a bright future, but we need to put our noses to the innovative grindstone and stop making improvements with productivity alone. That street has come to a end I believe.

[ninenot]

Are they moving overseas to ship the goods back to us or are their markets moving overseas?

Both and.

If they are components suppliers, their "markets" (the large OEM's like FoMoCo) have moved some ops overseas--but the product will be shipped back here, eventually, in a FoMoCo product.

In other cases, they just moved for the slave labor and lack of regs--mostly, these are the Fortune 100 firms (who then force their suppliers to provide nearby-overseas markets.)

Finally: why don't you have your perfume-manufacturers look at used brewing equipment in Milwaukee, or anyplace ELSE where breweries have closed?

Automated bottling was damn near invented here in Mke; Pabst, back in 1972, could fill over 100 bottles/minute on just ONE line...

[ninenot]

Yeah. Domestic auto production is at a high--note, please that it is so BECAUSE of Ron Reagan's tariffs. THe Japanese decided to build plants here rather than fight.

OTOH, a large percentage of both domestic AND foreign-produced autos contain offshore-made OEM parts from, (inter alia) Parker-Hannifin, Eaton, etc...

[Willie Green]

This is where you are completely wrong. Steel manufacturing in the US is ancient compared to newer, smaller steel manufacturers overseas.
I know this industry well. It is not advanced compared to overseas facilities.

Horsefeathers.

2000 National Productivity of Steel Production

Country	Steel Production  (million metric tons)	Employment  (thousands)	Productivity (tons/employee)
Australia	8.5	21	404
Austria	5.7	12	475
Belgium	11.6	20	580
Brazil	27.9	63	443
Canada	16.6	56	296
Finland	4.1	8	512
France	21.0	37	567
Germany	46.4	77	602
Italy	26.7	39	684
Japan	106.4	197	540
Luxembourg	2.6	4	650
Netherlands	5.7	12	475
South Korea	43.1	57	756
Spain	15.8	22	718
Sweden	5.2	13	400
United Kingdom	15.2	29	524
United States	101.5	151	672

US steelmaking technology remains among the most productive industries on the face of the planet. In fact, US steelmakers such as Nucor operate at productivity levels exceeding 1000 tons/employee. However, these high-tech mini-mills achieve their productivity levels by recycling scrap. Our national average is somewhat lowered by the existance of larger, integrated mills that are used to produce steel from virgin raw materials and ore. Many smaller nations do not have this capability.

Advanced US steelmaking technology is being undercut in the global market by more antiquated, pollution-belching technology.

Frankly Erik, your lack of understanding of these facts exposes you as a fraud.

[ninenot]

Willie----for crying out loud, Erik understands PERFUME bottling!!! Ain't that almost like steel-making??

[gooleyman]

The jobs still exist, the difference now is that the jobs are in other counties.

-----
This I simply don't believe that statement. Sounds like one of those sayings that keep being repeated without evidence until people believe it and go into despair. Kinda like the "jobless recovery" saying. Please provide a link to a credible source for this info, or else state that it's just your opinion. Either way, my suggestion at the start of this discussion still applies. If indeed these jobs have been exported, lower taxes and regulations drastically and they too will come back. We also have the best of the best Engineers, in my humble (biased) opinion.

[Willie Green]

Eau De Martensite?

[ninenot]

Ah--about 2 million jobs were lost from the domestic manufacturing sector in the last 4-5 years. You can look it up, either at BEA's analysis/Department of Labor, or in the thread-head article (or on their website.)

I cannot tell you how many of the 2 million re-appeared overseas, but I CAN tell you that it's a large portion, certainly well over 35%.