The Editor's Page

Dec. 21, 2004
Revenge of the old economy

It looks like old-economy, Rust Belt industries have survived yet another widely reported near-death experience. With barely a mea culpa, the mainstream business and financial media that proclaimed the new economy's triumph over the old have begun talking about the wondrous advances made by old-economy companies over the last year. It's about time. For years readers of IndustryWeek have been learning how manufacturers have harnessed the power of new-economy technologies to streamline the value chain, improve customer service, and increase competitiveness and profitability. This year IW struggled to be heard above the din of the Internet-focused business media, to champion the importance and strength of the manufacturing industry to the economy and, yes, as a sound investment. Many manufacturers paid a heavy price for the irrational exuberance that diverted capital from their well-established, profitable industry. As detailed in Senior Editor Weld Royal's report The Good 'Old Economy' Days for many companies manufacturing's return to favor has been too little too late. As an information organization dedicated to the manufacturing industry, IW has struggled along with you, trying to grab the attention of advertisers who only had eyes for the Internet media. We grew, like most manufacturers, albeit more slowly than the Internet-focused books. Perhaps the sweetest revenge of the year was confirmed quietly on the last day of trading for 2000. After all the dust had settled on this, the Year of the New Economy, the Dow had a better year (down 6.2%) than the Nasdaq (down 39.3%), buoyed by-you guessed it- none other than old-economy companies Philip Morris, up 89.8%, Boeing, up 58.8%, and Merck, up 39.6%. Join us to revel for a moment in the news that the old economy is, in fact, the new economy. We've compiled a list of 10 hot manufacturing stocks to invest in this year, IndustryWeek's Global Manufacturing Portfolio. It's our bet on the successful future of the old economy. But let's not be too hasty to throw the whole of the Internet industry out with the dot.coms-without-a-profitable-business-model. The Internet and, more broadly, the explosion of information technologies are here to stay, and it's a good thing. Manufacturing companies that invested wisely in information technology as a means to speed products through the value chain are poised to capitalize now that investors are giving them another look. As for the market, we know that over time it picks winners. While the immediate future looks relatively bright, this wasn't the first time manufacturing has been declared a dead or dying business and it won't be the last. Ask yourself one important question: What investments are you making to stay competitive and win in the next new economy? Patricia Panchak is editor-in-chief of IndustryWeek.

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