Manufacturing at the Crossroads

Aug. 17, 2011
Manufacturing is not disappearing in the U.S; in fact we produce 21% of the globally manufactured products.

Manufacturing in America is at a crossroads.

Our business climate -- including taxes, regulation costs and tariffs -- puts U.S. manufacturers at an almost 18% competitive disadvantage relative to our major trading partners.

Energy and raw materials cost are rising. Fewer young people are attracted to manufacturing as careers, and many Americans believe, erroneously, that U.S. manufacturing is disappearing.

However, the truth is quite the opposite. The fact is that the United States is the world's largest manufacturing economy, producing 21% of globally manufactured products. China is second at 15%, with Japan third at 12%.

U.S. manufacturing produces $1.6 trillion of value each year, or 11.2% of U.S. GDP.

Taken alone, U.S. manufacturing would be the ninth-largest economy in the world, and the quantity of manufactured goods produced in the United States has kept a steady pace with overall economic growth since 1947, as both GDP and manufacturing have grown by about seven times.

Leading the Recovery

Manufacturing is leading the recovery -- slow as that recovery may be -- and legislators and policymakers across the country are starting to take notice.

To grow our economy, we have to make something or grow something, plain and simple. Good jobs and a strong middle class depend upon it.

Manufacturing supports an estimated 18.6 million jobs in the United States and nearly 12 million Americans (or 9% of the workforce) are employed directly in manufacturing.

And these are well-paying jobs. In 2009, the average U.S. manufacturing worker earned $74,447 annually, including pay and benefits, compared to the average non-manufacturing worker who earned $63,122 annually.

As the industry and our country stand at this crossroads we have the opportunity and the obligation to shape the future of manufacturing in America.

We as manufacturers need to work with our policymakers and elected officials to educate them about the manufacturing sector. Our hard-won knowledge and resources can help them make policies that will advance innovation, promote exports, address our challenging tax codes and evaluate unduly burdensome or redundant regulation.

The results will be more well-paying careers for the American workforce and solid, sustainable companies for the future economic health of our country.

The Next Generation of Manufacturers

Let's not forget the next generation of manufacturers! Many in the industry, including Kennametal, have educational outreach programs intended to attract more young people and create a sustainable, healthy future for manufacturing.

This year, in addition to our existing education and training programs, we will embark on a pilot in our world headquarters' hometown school district. This initiative, the Young Engineers Program, is intended to attract high school students into engineering careers in manufacturing.

Now, while the entire nation is focused on the economy and job creation, we as manufacturers can and must play a more prominent role in helping to develop a common-sense manufacturing policy agenda that promotes growth with a continued commitment to sustaining and improving the environment.

We have to work together to get the word out, not just to policymakers but to young people as well, that manufacturing in America means jobs.

The first-ever imX manufacturing summit taking place in September is a great example of what manufacturers can do when they come together to work on improving, innovating and solving problems.

Departing from the traditional trade-show model, imX brings manufactures together to focus on education and interaction. This interaction provides yet another platform for engaging the industry to get involved in shaping the future of manufacturing through involvement in policy and education.

Make a point to be part of the conversation and make a difference in manufacturing for the future.

Carlos Cardoso is chairman, president and CEO of Latrobe, Pa.-based Kennametal Inc., which provides custom and standard wear-resistant solutions.

Note: Kennametal joins seven other leading machine tool manufacturers and two national industry associations in developing the Interactive Manufacturing Experience, Sept. 12-14 in Las Vegas.

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