Editor's Page -- A Celebration Of U.S. Manufacturing

Dec. 21, 2004
You've soundly disproved the myths of your demise.

It's fitting that we close 2003 with a group of articles that celebrate manufacturing and its bright future in the U.S. It's been another difficult year, during which we confronted the biggest challenge to U.S. global manufacturing dominance in nearly a quarter century -- the emergence of China into the world marketplace. This combined with the most persistent recession the domestic economy has endured since the Great Depression leveled a one-two punch to a sector already feeling the effects of persistent suggestions that U.S. manufacturing's glory days were past. It's a wonder anyone is left standing. But standing -- and standing strong -- they are. While others were wringing their hands about the influx of low-cost goods and the competition it presented, manufacturing's leaders were identifying and implementing strategies that trump low-cost production as a competitive edge. While some investors fled to the perceived safety and easy money of the services and financial sectors, others in the community were increasing their holdings in -- and their returns from -- the manufacturing sector. While some were bemoaning the "loss" of industries to other countries, others were busy in the lab creating technologies that will create future industries. In the process, these leading executives debunked some myths that have dogged the manufacturing community in recent years. Myth 1: Production is too expensive in the U.S.: It isn't hard to find public policy or business leaders who believe that U.S. manufacturing's future is at either end of the process -- the R&D phase at the beginning and assembly at the end. Even a few diehard manufacturing gurus have thrown in the towel, advising U.S. manufacturers to outsource or move production to off-shore, low-cost locations and focus on assembling the imported components. Yet we at IW thought that with manufacturing accounting for $3.2 trillion of U.S. GDP, surely a rich vein of production activity is being tapped here. We were right. The result is the story "Home-Run Hitters," which was difficult not because we had trouble finding successful manufacturers with production in the U.S., but because so many companies have deployed successful U.S. production strategies, it was difficult to choose which to feature. Myth 2: Nobody invests in manufacturing companies: Similarly, we've worried along with the rest of you that the investment community has generally abandoned manufacturers. Certainly the valuations of the traditional manufacturers suffered in the '90s.Yet when IW's Senior Editor John McClenahen went looking for manufacturing's financial backers for "Investors Who Love Manufacturing," he found a sizable group not only enamored of the money it can make, but the excitement it finds in the manufacturing world. Myth 3: Manufacturing success is driven by the next big thing (read: next big technology): We didn't go looking to disprove this theory, but discovered it in our choice of IW's 2003 Technology Leader, IBM Corp.'s Nicholas Donofrio, who's profiled in "Interconnecting Innovation." I won't spoil Senior Editor John Teresko's story by recounting the best parts here. Suffice it to say that when you read the three features together, you'll realize no single technology, a la the Internet, will drive manufacturing production strategies and competitiveness in the future. Rather, manufacturers will carefully cultivate and coordinate from among countless "next big things," to create a strategy that meets their specific customers' demands. So where's the celebration? We're celebrating the people who believe in manufacturing and make it work. Those who continue to see strength where others see weakness, who see opportunities where others see road blocks and, best of all, who prove the naysayers wrong by their success. Patricia Panchak is IW's editor-in-chief. She is based in Cleveland.

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