It's no secret there's a civil war going on out there. The U.S. manufacturing landscape is being ripped apart by a series of attacks on its traditional strongholds that has left few industries intact.
Already tens of thousands of small and midsize manufacturers have gone under. Those that remain are struggling. Whole industries such as furniture, shoes, textiles and many computer components -- once hallmarks of American ingenuity, productivity and competitiveness -- have virtually disappeared, the victims of the rapid emergence of easily accessible low-cost labor overseas.
While all manufacturers face the same lopsided trade policies, surging prices for raw materials and relentless competition from China and other low-cost markets, small manufacturers get squeezed the hardest.
The statistics bear this out, reports Joel Yudken, sectoral economist at AFL-CIO. Using figures from the Bureau of Labor Statistics, Yudken found that out of a net loss of 27,000 U.S. manufacturers' establishments from 2001-2004, 90% were companies or individual plants employing fewer than 250 employees.
"Large manufacturers don't feel the market changes anywhere near as fast or as hard as the smaller companies," observes Martin Piszczalski, research director and automotive industry analyst at Gartner Group in Ann Arbor, Mich.
In fact, these days large manufacturers benefit from the very policies and practices that harm smaller companies. They tend to have the financial padding to withstand price increases while their market share and assets enable them to partner with contract manufacturers and overseas competitors to leverage the advantages that these companies have over U.S.-based companies.
This phenomenon has divided U.S.-based manufacturers in an unprecedented way.
While
IndustryWeek has reported on many supply-chain partnerships that are healthy and mutually beneficial, it's evident that these are rare and that a growing faction sees large manufacturers as indifferent toward the struggles of their smaller and midsize counterparts.
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