Viewpoints: We Are Competitive
Is everything really broken? Is American manufacturing truly in jeopardy? Before we throw in the towel, let's pause for a moment and consider the facts about US manufacturing.
American manufacturing is not dead or dying. It is alive and well, and continues to be vital to our future. As with all segments of our complex economy, manufacturing is undergoing change—we produce more, much more, with fewer people. We are a shining example of the value of productivity. To some, this situation seems to signal decline. It is not decline; it is salvation for our economy. Last year, US manufacturers produced more products of higher value and higher quality than at any time in our history.
Some years ago, the late Peter Drucker made a general comparison between the paths of US agriculture and US manufacturing. At the beginning of the 20th Century, agriculture was the largest employer in the country. Today, agriculture employs a very small percentage of our workforce, and yet our agriculture leads the world, feeds our nation, and exports surpluses all over the world. The comparison isn't perfect but, like US agriculture, US manufacturing is adjusting to a global economy, and finding ways to produce more with fewer workers.
We are blessed in our world of manufacturing to have active trade associations who sor t through the maze of statistical data and reports to keep us informed of our accomplishments, risks, and threats. I am particularly grateful to Eric Mittelstadt of NACFAM, John Byrd of AMT, and John Healy of AMTDA for their help in getting the facts straight on the present state of US manufacturing.
The most common charge against US manufacturing is that we are exporting products and jobs overseas, and becoming content to let others build for us. There are two important aspects to this charge that need to be understood. The first is that we are facing a critical lack of skilled machinists and technicians as baby boomers leave the workforce. As much as 50% of our current manufacturing workforce will retire in the next decade, and no training and skill-development programs are in place to compensate for this loss. Some work is going overseas simply because we have no capacity to man the machines to produce what is required.
The second reality that contributes to broad judgments about the health of US manufacturing is the relentless pressure of the global economy. There are some parts, and product lines, that can be made at lower cost offshore—but not all parts and not all products. The make-or-buy-offshore decision must consider all aspects of product cost, including quality, logistics, and response time to market changes.The actual loss of US jobs as a result of offshore sourcing is low, but is often perceived to be massive and irreversible. The long-term success and security of US manufacturing depends on productivity and low inflation. We have both. We are competitive against the world, and will continue to be as labor costs and transportation costs in all world markets increase. We must keep reminding the misinformed that we are producing more products today than at any time in our history.
Are we in a new service economy that relies on information rather than products to provide output? Call it what you may, but we are not now, nor in the future, going to easily abandon our legacy of innovation and building. It's in our blood to make things. Just when bicycle manufacturing was all but gone from the US, somebody invented the mountain bike, and then the snowmobile, and the heart pump—all of which created new industries, new markets, and new jobs. Some will fade and some will go offshore, but more will follow.
We must not let others describe what we do as insignificant or easily conceded. A manufacturing job is not the same as a job in the service sector. Manufacturing jobs create wealth—they provide the living wage that buys a home. They are not seasonal, and they add value. There are real durable goods and a contributing lifestyle that come from manufacturing jobs.
We are a nation of innovators and builders, and those of us who make our living in manufacturing have a particular obligation to set the record straight—to be voices of hope opposing a sometimes overwhelming tide of negative opinions. It is our job to let others know that we have new strategies to keep our manufacturing traditions alive and well.
This article was first published in the September 2007 edition of Manufacturing Engineering magazine.