Brandt On Leadership -- Monster Movie Madness!

What's really behind our fear of China Inc.?

It seems I can't talk to anyone in manufacturing without discussing the threat of Chinese competition. I don't know about you, but I've seen this movie before. In the late 1980s, you couldn't pick up a financial newspaper or business magazine without reading a story about the menace of Japan Inc. -- a manufacturing Godzilla that quickly would overtake the United States. So far ahead were Japanese management technique and performance, we were told, that there was little hope of retaining any advanced manufacturing. Analysts and authors told U.S. workers to prepare for a declining standard of living as the country became an island of low-paying service jobs. Unions, trade associations and politicians railed against unfair Japanese trade practices, restrictions on access to the Japanese market and exchange rates that put U.S. products and jobs at a disadvantage. Unless the government took action now, we were told, Japan's then-current growth rate assured its domination of the world economy in the 21st century. That was a scary movie, and its directors and cast -- all those authors, analysts, unions, trade associations and politicians -- sold a lot of tickets in the form of books, consulting reports, dues and votes. But as we sit here in 2004, with Japan still mired in a decade-long slump, we can appreciate that Godzilla Inc. was only a movie -- a chilling but make-believe vision of the future that completely ignored the reality of economics in general and American manufacturing in particular. Frightened by a temporary quality gap, we forgot that high growth rates are neither permanent nor projectable. Terrified by job losses, we forgot that the strength of American manufacturing has always been less about industry expertise or investment than about a sector-wide ability to innovate and adapt to changing technologies and markets. Not surprisingly, American manufacturing rose to the Japanese challenge. But that didn't stop the manufacturing moviemakers from producing an early 1990s sequel called NAFTA Inc., complete with a soundtrack from Ross Perot (remember the "great sucking sound" of jobs leaving the U.S.?). American manufacturing weathered that disaster epic, too. All of which leads me to wonder whether the fear stirred by our current box-office hit, China Inc., says less about an actual threat than it does about our need to have a villain. To paraphrase Eric Hoffer, groups often unconsciously need and use an "enemy" to create cohesion and to engender sacrifice to reach common goals. When the goals are noble, and the results benign (e.g., improved quality and processes), this use of an "enemy" may be relatively harmless. Unfortunately, we often have less savory reasons for needing an enemy. For many, it's easier to blame someone else for our problems instead of a changing market or, even worse, ourselves. Seen in this light, our obsession with manufacturing villains is less about unfair trade than it is about reassuring ourselves that the world isn't so scary after all, and that we won't have to constantly learn, adapt and change to remain competitive. Viewed from this seat, the enemy isn't really China or Mexico or Japan but the complacency that resides inside us, a fearful anxiety that longs to return to a fictional good old day where competition didn't exist, and we didn't have to worry about the future. But that's a movie most of us don't want to see. John R. Brandt, formerly editor-in-chief of IndustryWeek, is CEO of the Manufacturing Performance Institute, a research and consulting firm based in Shaker Heights, Ohio.

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