MFG 2.0

Export Boom Leaves Manufacturing Behind

Noone could accuse the New York Times of burying the lede (at least in this story).

Titled Export Boom Helps Farms, But Not American Factories, the story talks about how the only bright spot in the economic trainwreck known as the Bush Era is in export goods, and surprise -- the boost isn't coming from domestic manufacturing.

"Exports are the bright spot this year in an otherwise bleak economy. But the world is not suddenly snapping up made-in-America goods like aircraft, machinery and staplers. The great attraction is decidedly low-luster commodities like corn, wheat, ore and scrap metal.

This helps explain why manufacturing jobs are continuing to disappear by the tens of thousands and factories are closing even during a miniboom in exports. While the surge in commodities is a welcome relief, it is an unreliable prop for an industrial power."

The biggest irony is that, due to the weak dollar, we could be really cashing in on export sales -- however, the export of our manufacturing base in the past few decades has pretty much kneecapped our ability to export manufactured goods in the present one.

...manufacturers themselves acknowledge that they gradually undercut their ability to export as they moved more and more production to factories overseas. Bringing that production back to this country, so that it could be exported, would dismantle global networks constructed relentlessly over the last 25 years.

There is, of course, a distinct (and absolutely vital) upside to resourcing globally -- globalization means larger, world-size markets for US manufactured goods -- and the authors paint a well-balanced portrait of the tradeoffs of the global trade landscape for US manufacturers, citing Whirlpool and Parker-Hannifin as examples of companies that are both profiting from globalization in strategic fashion.

For me, the most fascinating stat in the story was this:

"The Bureau of Economic Analysis, tracking this trend for all of America's multinational companies, says 70 percent of the multinationals' operations measured in employment, investment and value added in turning metal into aircraft or wood into furniture or silicon into computer chips take place in the United States."

Although it's down from 75% since 1999, that figure testifies to the continuing strength of the manufacturing sector in some pretty tough times.

TAGS: Innovation
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