The Global Manufacturer

Sweet Home Alabama, Where Have Your Jobs Gone?

For the 12-month period ending March 2010, Alabama lost 21,132 industrial jobs and 306 manufacturers, according to the 2010 Alabama Manufacturers Register, published by Manufacturers' News Inc (MNI). That's a drop of 6.8% for the 12-month period and, MNI notes, the sharpest decline in 20 years. Those figures symbolize the worries many manufacturing proponents voice over employment trends in the U.S. industrial sector.

"It's a perfect storm of negative conditions," says Tom Dubin, president of the publishing company. "The country has suffered deep losses in manufacturing employment due to automation and technology, outsourcing and the recession, while the faltering housing market has affected industries such as wood products, furniture and building products."

The numbers out of Alabama made me think of the contrasting views of American manufacturing presented at IndustryWeek's Best Plants conference in Cleveland by John Ferriola, COO of Nucor, and James Griffith, CEO of Timken.

Griffith cited an "enormous gap" between "the real strength and vibrancy of manufacturing and the image of decline that exists in the public perception." He noted that the U.S. share of global manufacturing has not declined since 1980 and that the U.S. makes 22% of all manufactured goods in the world, compared to 13% from China. Manufacturing is responsible for half of all R&D in America. While Griffith acknowledged that U.S. employment in manufacturing has dropped nearly 33% in the last 20 years, he pointed out that manufacturing output has grown 30%.

Ferriola, on the other hand, warned of massive trade deficits with China and other nations that are "destroying American manufacturing" and "crippling the American economy."

Ferriola said currency manipulation by China provides its manufacturers with a 40% advantage and prevents U.S.-based companies from competing on a level playing field. "Globalization is a good thing. It expands our markets, creates new trade relationships and allows goods and raw materials to flow around the planet," Ferriola said. "But when governments ignore or deliberately break the rules by which we agree to trade -- by engaging in currency manipulation, employing illegal export subsidies or intervening in commodity negotiations -- then our businesses, your businesses, are forced to compete with entire nations."

Both men make excellent points, which is why there is such a split in the U.S. manufacturing community. We have to learn to compete in global markets if U.S. manufacturing is going to prosper, but we can't afford a narrowly-defined victory where employment flourishes only outside our borders. U.S. politicians don't receive votes in China or Mexico, and you can bet that as long as unemployment continues to hover around 10%, we'll hear plenty of complaints about unfair trade practices and, perhaps, even some real action to address them.

TAGS: The Economy
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