Hard Truths for American Manufacturing

Hard Truths for American Manufacturing

The effort to strengthen U.S. manufacturing gets a boost from Manufacturing Day, but the industry faces major challenges.

Another Manufacturing Day is now behind us. In hundreds of American communities, students walked through the open doors of local manufacturers to learn more about the amazing technologies and opportunities for jobs. Public officials from across the nation said great things about manufacturing. And more than a few hardy souls binge-watched How It’s Made on the Science Channel.

It’s a heavy lift to make all of it happen, so my hat goes off to the producers of the event. I’ll add that the Alliance for American Manufacturing has been proud to be a sponsor of the day.

Some have questioned the worth of Manufacturing Day. I don’t think that’s the case at all.

But I think that now the really hard work starts. And as a community of makers, we have some painful truths to face:

  1. American manufacturing indicators have been trending down this year. An overly strong dollar, global weakness, China’s economic misbehavior, and currency devaluations overseas have all taken their toll on manufacturing. Getting kids into factories helps to bust the myth of the dirty and dangerous workplace, but questions of job security have to linger: Will my job be shipped overseas? Even if I work hard and play by the rules, can I count on my factory job to be there tomorrow? Those are tough to answer, with GE and Caterpillar announcing massive layoffs over the past few weeks.
  2. There’s still a disconnect between the expectations of some employers and where the labor market is today. Is there an enormous shortage of workers in manufacturing today? Employment data doesn’t suggest that’s the case, but employer surveys sure do. At a time of heightened anxiety in many manufacturing communities around the U.S., it doesn’t make sense to play up the notion that there are 600,000 or more unfilled jobs in manufacturing. And the data doesn’t appear to support that claim. However, it does makes sense to prepare for the future, which is unquestionably a concern. The combination of retirements and demographic shifts mean we will have a lot of jobs to fill in the future. Works is underway to rebuild the pipeline through a focus on STEM in high school, workforce training, apprenticeships, and technical college programs. Let’s keep it up.
  3. Don’t expect much from Congress. The dysfunction in Washington is likely to continue, even with the resignation of Speaker Boehner. Long-term infrastructure investment? It’s essential for the future of manufacturing, but even a grand coalition of businesses and labor can’t shake it loose. Tax reform? A manufacturing policy? We’ll need to press for these even harder.
  4. Hot air on the campaign trail evaporates after the election. President Obama promised to get tough with China in 2008, and promised 1 million new manufacturing jobs in 2012. Neither promise ever materialized. The truth is this: There isn’t really a manufacturing candidate, only a candidate who wants our votes. Made In America advocates need to be savvier than ever heading in to the 2016 election.
  5. China is likely to be even less cooperative. Cyberthefts, forced technology transfers, restrictions on investment, and championing domestic industry are unlikely to stop, whatever President Xi claims. State-owned industry is here to stay until China constructs an alternative to keep its masses employed. And Chinese industry won’t cut back production nearly enough to align with domestic demand. The net result: Dozens of American industries will experience pain from dumped and subsidized imports.
  6. Manufacturing isn’t experiencing an employment resurgence right now, but at least we have our heads above water. Our industry lost 2.3 million jobs during the Great Recession. We’ve gained back about 800,000, and most of those were simply refilling positions as consumer demand picked back up. Reshoring is happening, and it has many champions, but it’s not yet an economy-wide trend. And offshoring hasn’t stopped.
  7. The additive manufacturing revolution won’t mean much if we repeat the mistakes of the past. 3D printing is an amazing technology, one developed at MIT and perfected around the United States. But its benefits to our economy will be muted unless we put into place incentives for 3D printers to be made in America, as well. AmericaMakes and other innovation institutes hold a lot of promise, but they must be backed by smart manufacturing policies.

These are big challenges. But they are not insurmountable.

I draw hope from a company like SHINOLA, which rose from the ashes in Detroit to grow and make amazing products that are in demand around the globe. I look at all of the young makers inspired to invent, create, and work with their hands as well as with their minds.

I see the rebirth of manufacturing in cities that long ago deindustrialized. I see amazing new technologies transforming industries, and eventually, the way in which we work, travel, and live.

Our nation is still a magnet for talent, innovation, and people looking to achieve the American Dream. Our system of higher education is still envied abroad. And the newest generation of American makers and workers will be building a manned spacecraft that will someday land on Mars, assembling driverless cars, and manufacturing useful things we haven’t even imagined yet.

We can re-make America. The conversation starts with Manufacturing Day, but it’s up to all of us to carry it through.

Scott Paul is president of the Alliance for American Manufacturing.

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