Lessons from Decades of Global Competition

Feb. 10, 2012
Learning to live with -- and compete against -- state-supported industry.

U.S. manufacturers' global competitive situation is, and has been for quite some time, more than a little complicated -- and it's only going to become more so in the coming years. With a strong belief in free-market economics, U.S. manufacturers compete in what we'd like to believe is a world of free and fair trade, even as we acknowledge that it just isn't true.

The most significant challenges over the past half century, most notably from Japan and China, have invariably involved credible charges of state-supported unfair trade practices, including currency manipulation and protective tariffs. Increasingly, though, U.S. manufacturers are competing against state-owned enterprises, which enjoy the open support of their governments. Two-thirds of emerging-market companies that are among the 500 largest in the world are state-owned, declares a report in The Economist.

It remains to be seen whether we're witnessing a new world economic order, but my bet remains on the resilient, ever-adaptive U.S. manufacturer. While both Japan and China succeeded in capturing a significant share of the lucrative manufacturing sector, U.S. manufacturers continue to effectively compete. That isn't to say U.S. manufacturing has been unscathed. The wrenching restructuring required to adapt to other nations' emergence has decimated entire industries. It's also debatable whether the U.S. manufacturing sector is in danger -- there are strong arguments on both sides of that premise. However, not in doubt is that U.S. manufacturers have learned valuable lessons from the experience.

my bet remains on the resilient, ever-adaptive U.S. manufacturer.

From Japan, we learned and adopted lean management principles, which vastly improved productivity. From China, we learned the importance of calculating the total landed costs of outsourcing and global supply chains. We've learned that for manufacturing to continue to grow, we must continuously move into higher-value-added manufacturing, adopt new production technologies and expand into new markets.

More important, U.S. manufacturing executives understand to succeed they must lead the effort to strengthen U.S. manufacturing. That's why we're pleased to highlight executives who've stepped up to challenge their peers to do their part. In this issue, we highlight the efforts of Carlos Cardoso, CEO of Kennametal, who is working to address the skilled-worker shortage, the myths about manufacturing employment and public policy shortcomings. After describing some of Kennametal's efforts to address these challenges (see story on page 16), Cardoso called on his fellow manufacturers "to join Kennametal in delivering the promise by sharing success stories and innovative solutions for building the manufacturing workforce of tomorrow. Together we have the power to drive solutions, dispel those misperceptions about manufacturing and rebuild confidence in the industry."

IndustryWeek couldn't agree more. We're dedicated to sharing manufacturing success stories and innovative solutions in every facet of manufacturing -- and to help manufacturers succeed against all comers. We hope you join us.

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