The murder of US manufacturing

Asia Times ^ | Jun 18, 2008 | Martin Hutchinson

[Last Dakotan]

GE's announcement a week ago that it would accept offers for its appliances business marked the death-knell of yet another US manufacturing business, one among so many in US manufacturing's long and seemingly unstoppable downtrend since 1980. - snip -

The sad story of GE Appliances is a paradigm of what has gone wrong in the US economy since 1980. No, manufacturing did not need to leave the United States; US manufacturing was killed by a multitude of foolish short-term-profit motivated decisions by inept and overpaid US management.

[Last Dakotan]

Should be required reading in every Business school.

[Titus Quinctius Cincinnatus]

US manufacturing was killed by a multitude of foolish short-term-profit motivated decisions by inept and overpaid US management.

Even more so, US manufacturing was killed by massive government over-regulation, excessive taxation, and out-of-control union demands.

[RC2]

Another problem is the corrupt and money hungry unions. The UAW is probably the worst. They will ruin this country and could care less, as long as they are getting rich.

[Steely Tom]

America has no more manufacturing because our elites didn't want it any more. Too dirty, and the jobs it provided put too much money in the hands of certain (ahem) types of people they didn't want to see moving in next door, or going to school with their kids.

[edcoil]

manufacturing losses turned towns into ghost towns - what are they saying, mfg has not moved to china, mexico and india in one of the biggest transfers of wealth (among oil) in world history.

Government taxed, spent, burden mfg and unions attacked and lawyers for a reason to sue for anything.

That is why people left.

[Uncle Miltie]

Let’s see a show of hands:

Who wants their child to work in a repetetive dirty factory, screwing on widgets?

[skeeter]

In the 1920s through the 1950s, the production engineering of Frederick W Taylor was fashionable, and the United States built the first mass-production economy. In the 1960s, MBA-credentialed top management was thought able to run anything, and so both conglomeration and strategy consulting came into fashion. From the early 1980s, it became received wisdom that all organizations could usefully be "downsized" and that the traditional corporate welfare protection of employees was wasteful. All these theories had their virtues; the reality however is that they cannot all be universally true since they are largely mutually incompatible.

Food for thought for the Wall St pollyannas.

[Parmenio]

This article is over the top. The value of US manufactured goods reached an all time high in 2007. The mix has changed from what it was in decades past, that’s all.

[DuncanWaring]

...US manufacturing was killed by a multitude of foolish short-term-profit motivated decisions by inept and overpaid US management.

The vast majority of whom are holders of MBA degrees.

[Incorrigible]

This article was written in a vacuum.

With the weak dollar, US manufacturing is finding it’s way back home.

[PGR88]

In my State (New York) we actually penalize manufacturers. High employment taxes, high property taxes, high insurance and labor compensation rates, gangs of protected tort lawyers ready to pounce on any transgression, Union favorable laws, excessive regulation to protect the ruling party’s special interests.

In the short-medium term, it seems to make much more sense to dump the burdensome manufacturing operations, teach the Chinese to make it, and keep ones sales operations. The long-run may prove to be very different, but what middle-manager cares about the long-run?

[BfloGuy]

There is some truth in this article. American manufacturers have, for too long in my opinion, operated too short-term. Of course, American tax laws encouraged that thinking. But, as mentioned in the comments above, U.S. manufacturing is hardly dead -- our industrial output continues to grow and is at record levels.

The bitter tone of this piece leads me to think that the author has a personal grudge against Jack Welch.

[saminfl]

The vast majority of whom are holders of MBA degrees.

I will never forgive the MBA's and beancounters who killed Hughes Aircraft Company.

[Da Coyote]

As a senior engineer who’s seen many business practices, the term “business school” is an oxymoron. It appears that current managers feel that producing vision statements along with a two-month budget constitutes management. It was always amazing watching fledgeling EE students who couldn’t get basic LaPlace theory drop out and enter management courses.

[ClearCase_guy]

Who wants their child to work in a repetetive dirty factory, screwing on widgets?

If you go back a few decades, you can see people campaigning against dirty factories and repetitive jobs. There were health and safety issues, too. These campaigners said: "Let's automate the factories! No one should have to do these repetitive, dirty jobs!"

Who opposed it? The Left. The unions saw this as an effort to take away their jobs and they fought it as much as they could.

Of course, the manufacturing facilities I've seen lately are remarkably clean, quiet, and safe. But we don't seem to have as many of them as we used to. We can all thank the unions for that.

[1rudeboy]

Don't forget that our corporate income tax laws actually encourage American firms to set up subsidiaries overseas. Good luck explaining the above to anyone in DC, much less a Democrat.

[Brilliant]

The article does not really say what the mistakes were. The reality is that unionized US labor simply cannot compete against the low wage foreign labor. As a result, cheap imports will continue to dominate until the dollar adjusts to much lower levels. I think that is not too far down the road, but for now, imports from China are still pretty cheap.

It will be interesting to see what Obama does about this. My suspicion is that he’ll go whole-hog on protectionism, and will completely ignore GATT, while cracking down on non-union manufacturers in an attempt to unionize everything.

[em2vn]

Bull sh*t!

[WOBBLY BOB]

I thought GE was going to be saved by passing the light bulb bill.

Wasn’t that their biggest lobbying push?

[L98Fiero]

LOL! America sucks because GE doesn’t make robots that vacuum your floor? That was a pretty funny article.

“Should be required reading in every Business school.”

In a textbook called “The Modern Isolationists Imaginary America”.