reports of the demise of US manufacturing have been greatly exaggerated

[ElFenix]

Included in the UAW materials pitching last week's GM deal was the usual lament blaming foreigners for GM's trouble, saying U.S. manufacturing "does not operate on a leveling playing field" with the rest of the world. Never mind that the UAW has been losing jobs not to foreign factories and workers, but to U.S. factories and workers not burdened by UAW contracts.

The myth plays into the hands of protectionists in both parties who bellyache about high-paying jobs supposedly being exported to China and India. Yet American manufacturing actually has been on a roll lately and job losses are almost exclusively a result of productivity gains -- which means U.S. workers are producing more output with less work, which generally translates into higher, not lower, wages.

According to a newly-released National Association of Manufacturers report, manufacturing wages are rising and during the last twelve months manufacturing workers earned "30 percent more than the average wage for the private sector workforce."

Meanwhile, the Cato Institute's Daniel Ikenson has been studying trends in manufacturing and reports: "Despite all of the bluster about 'saving' U.S. manufacturing, the truth is that the sector is in robust health. Record output, record sales, record profits, record returns on equity, and record compensation define the most recent year's performance."

Mr. Ikenson also says trade is responsible for the health of American manufacturing. How? For one thing, what the anti-globalists like CNN's Lou Dobbs can't seem to comprehend it that "greater access to raw materials and components has helped control costs of production, while greater access to foreign markets has been crucial to surging sales revenues." Mr. Ikenson reports that real manufacturing output in the U.S. has grown by 13% since China became a full member of the World Trade Organization in 2002.

A powerful real-life example of the manufacturing strength in the U.S. is Caterpillar in Peoria. It produces more tractors today than 15 years ago with 30% fewer man-hours. That's called productivity. And these Cat workers are UAW members with high pay and high benefits. According to a Caterpillar spokesman we interviewed: "The biggest increase in our business, by far, is tractors sold to China."

All of this seems overlooked by the media. A recent Boston Globe article was titled "Disaster relief needed for manufacturing." The real relief needed is in Congress, where more than a dozen bills aiming to narrow the scope of trade have been introduced since last November.

As Mr. Ikenson quips, "Reports of the death of U.S. manufacturing have been greatly exaggerated." Just don't tell anyone on Capitol Hill.

troubles of the automakers aside, looks like we're doing pretty well. now if only ford could figure out that they should be selling this rather than this.
hopefully the new CTS is a sign of things to come from GM.

 

[StageLeft]

People do assume a lot of manufacturing will go away. All we know for sure with certainty is that manufacturing will increase in efficiency; more robots, less man-hours. This can mean a loss of jobs or, depending on what is being made, simply mean more of it made at the same wages.

The reason manufacturing will not inexorably leave the US (and this goes for any country that produces, BTW), is that shipping costs will never be zero. If you make a car in China on lower Chinese wages, you then need to ship it to the US. As things are automated, actual wages--and these, besides any tax implications of setting up shop in one area or another, are the only benefit to changing where something is made--become a smaller and smaller part of the equation. The rest of the equation is machinery, raw materials, and energy needs. If a $2M Machine costs the same here as in China, the raw materials cost the same, and energy costs are similar, moving something there has to be considered in terms of a lower Chinese wage vs the negatives of then shipping the end product back to the US.

Of course, if you want to expand to China, it makes sense to put a factory there, but it doesn't always make sense to make something elsewhere and ship it back to where you want it.

Items that are cheap to ship and require high manpower, like little toys that $2/day laborers put together, are well suited to China. Highly-automated, hard-to-ship items like cars are not and this is why Japanese automakers are increasingly creating their products here.

 

[Moonbeam]

I believe our manufacturing base will improve in direct proportion to our move to third world status.

 

[Engineer]

Manufacturing isn't dying, just the number of jobs are shrinking. And for those stating that those jobs are being replaced with higher paying jobs, the line from the article stating that manufacturing jobs earned 30% more than private sector jobs should tell you that the "average" manufacturing job that leaves makes more than the average available job.

Click me!

 

[CADsortaGUY]

Originally posted by: Engineer
Manufacturing isn't dying, just the number of jobs are shrinking. And for those stating that those jobs are being replaced with higher paying jobs, the line from the article stating that manufacturing jobs earned 30% more than private sector jobs should tell you that the "average" manufacturing job that leaves makes more than the average available job.

Click me!

And what does that tell you? Maybe those manufacturing jobs are over-waged?

 

[dmcowen674]

Originally posted by: CADsortaGUY

Originally posted by: Engineer
Manufacturing isn't dying, just the number of jobs are shrinking. And for those stating that those jobs are being replaced with higher paying jobs, the line from the article stating that manufacturing jobs earned 30% more than private sector jobs should tell you that the "average" manufacturing job that leaves makes more than the average available job.

Click me!

And what does that tell you? Maybe those manufacturing jobs are over-waged?

and why does the product price continue to rise proportionately with insane CEO salaries while the employees wages go down?

 

[Engineer]

Originally posted by: CADsortaGUY

Originally posted by: Engineer
Manufacturing isn't dying, just the number of jobs are shrinking. And for those stating that those jobs are being replaced with higher paying jobs, the line from the article stating that manufacturing jobs earned 30% more than private sector jobs should tell you that the "average" manufacturing job that leaves makes more than the average available job.

Click me!

And what does that tell you? Maybe those manufacturing jobs are over-waged?

LOL. That tells me that the corporate profits are at record levels as are executive salaries, but because Mexican's, Chinese and others around the world will work for less than $10 per day, the work will be shipped there. Productivity in the US has skyrocketed, yet wages, especially for middle and lower classes, have stagnated at even or lower levels than inflation for nearly 30 years.

 

[bctbct]

Since China is at its infancy in the manufacturing sector I would expect when their production levels increase, this will futher depress american jobs.


The article you quote lacks, well, numbers. Percentages really mean nothing. His tone also seems anti UAW.



Apr 20 02:58 PM US/Eastern
By MARTIN CRUTSINGER
AP Economics Writer


Factory Jobs: 3 Million Lost Since 2000

WASHINGTON (AP) - Three weeks ago, Dawn Zimmer became a statistic. Laid off from her job assembling trucks at Freightliner's plant in Portland, Ore., she and 800 of her colleagues joined a long line of U.S. manufacturing workers who have lost jobs in recent years. A total of 3.2 million?one in six factory jobs?have disappeared since the start of 2000.
Many people believe those jobs will never come back.

"They are building a multimillion-dollar plant in Mexico and they are going to build the Freightliners down there. They came in and videotaped us at work so they could train the Mexican workers," said Zimmer, 55, who had worked at Freightliner since 1994.

That's the issue for American workers. Many of their jobs are moving overseas, to Mexico and China and elsewhere.

Just ask Tom Riegel.

He worked for 27 years making Pennsylvania House furniture at a factory in Lewisburg, Pa., until the plant shut down in December 2004. The production was moved to a plant in China, which kept making the furniture under the Pennsylvania House label for shipment back to the United States.

Rigel, 48, who has had health problems, hasn't worked since he lost his job running a molding machine. He says his prospects aren't good given the number of other furniture plants in the area that have suffered layoffs.

"It started with just a few pieces of furniture made in China. Then it snowballed," he said. "Manufacturing was built on the back of the American worker and then boom?one day your job is gone."

Even though manufacturing jobs have been declining, the country is enjoying the lowest average unemployment rates of the past four decades. The reason: the growth in the service industries?everything from hotel chambermaids to skilled heart surgeons.

Eighty-four percent of Americans in the labor force are employed in service jobs, up from 81 percent in 2000. The sector has added 8.78 million jobs since the beginning of 2000.

 

[StageLeft]

Originally posted by: dmcowen674

Originally posted by: CADsortaGUY

Originally posted by: Engineer
Manufacturing isn't dying, just the number of jobs are shrinking. And for those stating that those jobs are being replaced with higher paying jobs, the line from the article stating that manufacturing jobs earned 30% more than private sector jobs should tell you that the "average" manufacturing job that leaves makes more than the average available job.

Click me!

And what does that tell you? Maybe those manufacturing jobs are over-waged?

and why does the product price continue to rise proportionately with insane CEO salaries while the employees wages go down?

You make what you're worth. If a person is making bad wages doing work that a robot can do, it's their fault, not the fault of the exec who is able to increase production for less cost; he has the skilled position. The robot operator does not.

Since China is at its infancy in the manufacturing sector

No way. China has been throwing stuff together for DECADES. How many things in your house say "Made in China" on them? Many, many.

 

[bctbct]

Since China is at its quality manufacturing infancy. Sure they have thrown cheap junk together for decades but they are now starting to do some decent machining.

 

[CADsortaGUY]

Originally posted by: Engineer

Originally posted by: CADsortaGUY

Originally posted by: Engineer
Manufacturing isn't dying, just the number of jobs are shrinking. And for those stating that those jobs are being replaced with higher paying jobs, the line from the article stating that manufacturing jobs earned 30% more than private sector jobs should tell you that the "average" manufacturing job that leaves makes more than the average available job.

Click me!

And what does that tell you? Maybe those manufacturing jobs are over-waged?

LOL. That tells me that the corporate profits are at record levels as are executive salaries, but because Mexican's, Chinese and others around the world will work for less than $10 per day, the work will be shipped there. Productivity in the US has skyrocketed, yet wages, especially for middle and lower classes, have stagnated at even or lower levels than inflation for nearly 30 years.

I understand what you are saying but it doesn't mean what I said isn't true. How high should unskilled/non-technical wages go? American companies just can't compete if they over-pay - thus they either automate and/or have it made where labor is cheaper. I'm not saying it is all "correct" or "right" but that's the way things work.

Oh, and without this dynamic - I wouldn't be where I am today, and I'm saying this as someone who started at the bottom and worked my way into an Automation Engineering position as you know.

 

[CADsortaGUY]

Originally posted by: bctbct
Since China is at its quality manufacturing infancy. Sure they have thrown cheap junk together for decades but they are now starting to do some decent machining.

This is true to a point. Their quality still sucks(relatively) but they are making gains on actual machine exports - not just end products. A company I do work for has used some chinese equipment and while it's a lot cheaper than American, German, or even Brazilian equipment it still lacks the quality of the others.

 

[dmcowen674]

Originally posted by: CADsortaGUY

Originally posted by: bctbct
Since China is at its quality manufacturing infancy. Sure they have thrown cheap junk together for decades but they are now starting to do some decent machining.

This is true to a point. Their quality still sucks(relatively) but they are making gains on actual machine exports - not just end products.

A company I do work for has used some chinese equipment and while it's a lot cheaper than American, German, or even Brazilian equipment it still lacks the quality of the others.

But it sure puts a lot more money in your Boss's pocket so that makes it OK right?

 

[StageLeft]

Originally posted by: dmcowen674

Originally posted by: CADsortaGUY

Originally posted by: bctbct
Since China is at its quality manufacturing infancy. Sure they have thrown cheap junk together for decades but they are now starting to do some decent machining.

This is true to a point. Their quality still sucks(relatively) but they are making gains on actual machine exports - not just end products.

A company I do work for has used some chinese equipment and while it's a lot cheaper than American, German, or even Brazilian equipment it still lacks the quality of the others.

But it sure puts a lot more money in your Boss's pocket so that makes it OK right?

Maybe it puts some in his too at Christmas because the company is making money.

I do buy some radio control plane equipment from China in stead of the US. Its quality is overall less, but not bad and it's a small fraction of the cost, so it makes sense to me.

 

[chucky2]

Now that the UAW has made concessions and GM largely got what it wanted, those MSRP prices are going to be dropping at least $1500 right?

No?

Wait, how can that be????? Those UAW workers health benefits alone were costing $1500 a car, plus now there's wage concessions (50% wage concessions no less).

But, amazingly, CEO wages and bennies won't be going down...

Long term we in the US are going to seriously, in what will most likely be a very very painful way collectively, regret sending our manufacturing jobs out of the US.

Might not happen in 30 years, or even 60....but, it will happen...

Chuck

 

[Rainsford]

Originally posted by: chucky2
Now that the UAW has made concessions and GM largely got what it wanted, those MSRP prices are going to be dropping at least $1500 right?

No?

Wait, how can that be????? Those UAW workers health benefits alone were costing $1500 a car, plus now there's wage concessions (50% wage concessions no less).

But, amazingly, CEO wages and bennies won't be going down...

Long term we in the US are going to seriously, in what will most likely be a very very painful way collectively, regret sending our manufacturing jobs out of the US.

Might not happen in 30 years, or even 60....but, it will happen...

Chuck

The problem is that the only thing anyone is interested in making anymore is money. I don't think it's a coincidence that the two countries that are spanking Detroit in the auto market are famous for hard work and dedication to making a quality product. Somewhere along the way, it stopped being about having the most successful company making the highest quality product and became about trying to own the world's most ridiculous yacht.

 

[charrison]

Originally posted by: bctbct
Since China is at its infancy in the manufacturing sector I would expect when their production levels increase, this will futher depress american jobs.


The article you quote lacks, well, numbers. Percentages really mean nothing. His tone also seems anti UAW.



Apr 20 02:58 PM US/Eastern
By MARTIN CRUTSINGER
AP Economics Writer


Factory Jobs: 3 Million Lost Since 2000

WASHINGTON (AP) - Three weeks ago, Dawn Zimmer became a statistic. Laid off from her job assembling trucks at Freightliner's plant in Portland, Ore., she and 800 of her colleagues joined a long line of U.S. manufacturing workers who have lost jobs in recent years. A total of 3.2 million?one in six factory jobs?have disappeared since the start of 2000.
Many people believe those jobs will never come back.

"They are building a multimillion-dollar plant in Mexico and they are going to build the Freightliners down there. They came in and videotaped us at work so they could train the Mexican workers," said Zimmer, 55, who had worked at Freightliner since 1994.

That's the issue for American workers. Many of their jobs are moving overseas, to Mexico and China and elsewhere.

Just ask Tom Riegel.

He worked for 27 years making Pennsylvania House furniture at a factory in Lewisburg, Pa., until the plant shut down in December 2004. The production was moved to a plant in China, which kept making the furniture under the Pennsylvania House label for shipment back to the United States.

Rigel, 48, who has had health problems, hasn't worked since he lost his job running a molding machine. He says his prospects aren't good given the number of other furniture plants in the area that have suffered layoffs.

"It started with just a few pieces of furniture made in China. Then it snowballed," he said. "Manufacturing was built on the back of the American worker and then boom?one day your job is gone."

Even though manufacturing jobs have been declining, the country is enjoying the lowest average unemployment rates of the past four decades. The reason: the growth in the service industries?everything from hotel chambermaids to skilled heart surgeons.

Eighty-four percent of Americans in the labor force are employed in service jobs, up from 81 percent in 2000. The sector has added 8.78 million jobs since the beginning of 2000.

And in the same time, china lost something like 30 million manufacturing jobs. Manufacturing jobs are going away and we are just going to have to deal with it. There was an article the other that stated that after 10,000 years farming is no longer the top worldwide job. That is not much of a surprise, the real surprise is that those ex farmers are skipping manufacturing work(typical historical path of industrialization) and going straight to information based jobs.

The world is changing and we are going to have to be prepared to deal with these changes.

 

[Rainsford]

Originally posted by: charrison

Originally posted by: bctbct
Since China is at its infancy in the manufacturing sector I would expect when their production levels increase, this will futher depress american jobs.


The article you quote lacks, well, numbers. Percentages really mean nothing. His tone also seems anti UAW.



Apr 20 02:58 PM US/Eastern
By MARTIN CRUTSINGER
AP Economics Writer


Factory Jobs: 3 Million Lost Since 2000

WASHINGTON (AP) - Three weeks ago, Dawn Zimmer became a statistic. Laid off from her job assembling trucks at Freightliner's plant in Portland, Ore., she and 800 of her colleagues joined a long line of U.S. manufacturing workers who have lost jobs in recent years. A total of 3.2 million?one in six factory jobs?have disappeared since the start of 2000.
Many people believe those jobs will never come back.

"They are building a multimillion-dollar plant in Mexico and they are going to build the Freightliners down there. They came in and videotaped us at work so they could train the Mexican workers," said Zimmer, 55, who had worked at Freightliner since 1994.

That's the issue for American workers. Many of their jobs are moving overseas, to Mexico and China and elsewhere.

Just ask Tom Riegel.

He worked for 27 years making Pennsylvania House furniture at a factory in Lewisburg, Pa., until the plant shut down in December 2004. The production was moved to a plant in China, which kept making the furniture under the Pennsylvania House label for shipment back to the United States.

Rigel, 48, who has had health problems, hasn't worked since he lost his job running a molding machine. He says his prospects aren't good given the number of other furniture plants in the area that have suffered layoffs.

"It started with just a few pieces of furniture made in China. Then it snowballed," he said. "Manufacturing was built on the back of the American worker and then boom?one day your job is gone."

Even though manufacturing jobs have been declining, the country is enjoying the lowest average unemployment rates of the past four decades. The reason: the growth in the service industries?everything from hotel chambermaids to skilled heart surgeons.

Eighty-four percent of Americans in the labor force are employed in service jobs, up from 81 percent in 2000. The sector has added 8.78 million jobs since the beginning of 2000.

And in the same time, china lost something like 30 million manufacturing jobs. Manufacturing jobs are going away and we are just going to have to deal with it. There was an article the other that stated that after 10,000 years farming is no longer the top worldwide job. That is not much of a surprise, the real surprise is that those ex farmers are skipping manufacturing work(typical historical path of industrialization) and going straight to information based jobs.

The world is changing and we are going to have to be prepared to deal with these changes.

The problem is that "adapting" may work well for society as a whole, but it kind of sucks for the folks who have to go from assembling tractors to writing VOIP software.

 

[charrison]

Originally posted by: Rainsford
The problem is that "adapting" may work well for society as a whole, but it kind of sucks for the folks who have to go from assembling tractors to writing VOIP software.

No one ever said the process that economist call "creative destruction" of jobs is easy for all, but they all agree the net result is progress for all.

 

[kranky]

While I salute Caterpillar for their continued success, there is no doubt that manufacturing jobs in the US have been shrinking year after year. I know two machine shop owners who have closed down in the last couple years, and a guy who runs a local tool & die operation is going to pack it in at the end of the year. Their customers have gone to Chinese vendors.

In our own industry I estimate about 30%-50% of what used to be made in the US is now imported from China. Castings, forgings, gearboxes, etc.

I just have a very uneasy feeling about becoming a non-self-sufficient nation. Before very long, we won't even be able to manufacture certain items because the skills will be lost.

 

[CADsortaGUY]

Originally posted by: dmcowen674

Originally posted by: CADsortaGUY

Originally posted by: bctbct
Since China is at its quality manufacturing infancy. Sure they have thrown cheap junk together for decades but they are now starting to do some decent machining.

This is true to a point. Their quality still sucks(relatively) but they are making gains on actual machine exports - not just end products.

A company I do work for has used some chinese equipment and while it's a lot cheaper than American, German, or even Brazilian equipment it still lacks the quality of the others.

But it sure puts a lot more money in your Boss's pocket so that makes it OK right?

Umm, we don't make the decisions on what the end customer buys for their lines. You see, I am an automation Engineer and we do the programming for an OEM here in the states. The OEM's equipment is manufactured here in the US but they some times have to partner with other companies if the customer wants a turnkey line.

So yes, it puts money in my owner's pocket but we don't get to make those decisions - we just make what others choose work. Oh, and my profit sharing pool is already 6X what it was last year, thanks for asking. Anyone want to move to Iowa and program PLCs?

 

[umbrella39]

So Iowa is where those jobs went.. I used to work for these guys in the 90's designing, never really got into the programming side. I remember that even back then, those guys that could made a shitload of money.

 

[desy]

Honda and many Japanese companies have their stuff built in China to their specs.
Welcome to globalization.
So many things are best built locally and we need to concentrate on those by having more machines do it and cheap energy to run those machines to offset cheap labor.
There aren't many blacksmiths around anymore, capitalism is the most adaptive tool we have.

 

[CADsortaGUY]

Originally posted by: umbrella39
So Iowa is where those jobs went.. I used to work for these guys in the 90's designing, never really got into the programming side. I remember that even back then, those guys that could made a shitload of money.

Yeah, OEM programmers seem to make a bit more $ than us but how fun is it to program the same equipment year after year? I get to work on new projects every month or so.

From my view of Industry (food, beverage, seed, and misc other manufacturing) things are quite healthy as lots of money is being spent on upgrades and expansions. I'm sure it isn't that way in every area of manufacturing but we sure are taking a ride. Record years the last 5+ years and this year will blow them all out of the water despite the fact we've had to turn work down since we are so loaded with projects. Most of next year is booked as well without even a sales effort.

 

[chucky2]

Originally posted by: kranky

<snip>

I just have a very uneasy feeling about becoming a non-self-sufficient nation. Before very long, we won't even be able to manufacture certain items because the skills will be lost.

x 2.

Chuck