More of the many letters we received on our piece on Saving Western Manufacturing, Part 2, most (but not all) of which think Western manufacturing must be saved. That includes our Feedback of the Week from Arrow Plastics’ Victor Romano, who says its time for tariffs.
You'll find that and many other views below.
Feedback of the Week – On Saving Western Manufacturing, Part 2:
I don’t think we are losing the ability as much as we are the desire to do large-scale manufacturing in this country. It’s more about the bottom line than it is sustaining an economy.
It is extremely important that we retain this ability to be competitive in a global market place. How else will we feed people without sustainable jobs and that has always been mfg. We have always been on the leading edge of technology, why should that change.
Most may not want to hear this and all I can say is that we need to impose tariffs and duties on imports that level the playing field for American mfg. Do that and you’ll see what American ingenuity can do, just like in the past. We are still a nation that takes pride in its accomplishments and innovation. Where have most of the advancements in society come from over the past two hundred years? From light bulbs to medicine, refrigerators to air conditioners, television to computers. Sounds like America has helped make many people’s lives easier.
Who, but maybe Japan, has contributed as much? And we helped Japan become the leader they are in technology, we just weren’t smart enough to listen as intently as they were to the engineers in this country, so they took the knowledge to someone who was.
Victor R Romano
Arrow Plastic/Illinois Bottle Manufacturing Co.
More on Saving Western Manufacturing, Part 2:
You inspired me to finally put fingers to keyboard and write about a topic that I’ve had on my whiteboard for quite some time: ‘Have We Mis-interpreted What it Means to be Green? Globalization vs. Re-localization…The impacts to the Supply Chain Eco-System.’
Should U.S./Western Manufacturing be saved?…Yes. Why? National security, job protection and product traceability for all the obvious reasons, but I believe sustainability practices holds the key. Is it going to take government policy (such as tariffs and/or carbon cap-and-trade policy) to compete with offshore labor costs? Quite possibly, but the true issue is product and supply chain design. As much as we in the industry like to tout that supply chains are multi-directional (or dare I sa, an eco-system), a majority of the world’s supply chains remain linear. Yes, returns are part of the reverse supply chain flow, but essentially raw materials are mined/created/refined, handed off to manufacturing to create finished goods, stored, sold, consumed and then off to its final resting place…the landfill. All at a cost to the environment and enterprise.
I believe there’s a significant amount of savings on the table if supply chains and products are designed with reuse in mind. Some industries are beginning to crack that nut. Take, for instance, the carpet industry. The trend is to move towards square-foot/square-yard pieces, which can be individually replaced when worn or damaged, sent back to manufacturing to be melted down and resold as new carpet, all while being cost effective. Then, there’s HP’s refillable/reusable ink cartridges and returns process. Finally, The Coca-Cola Company and Coca-Cola Enterprises are both investing heavily on recovering and recycling packaging materials. For goodwill? Sure, but really for bottom-line savings.
Is it more difficult to justify when fuel is cheap - yes, but that’s where a cap-and-trade system comes into play (which I think is inevitable policy to wean the U.S. off of foreign oil and to reduce carbon emissions). Think of the emission offset of recycling 2 billion, 20-ounce coke bottles a year. That’s a nice tax break, but the real shortcoming is comparing apples to apples. What is the true cost of doing business/manufacturing overseas (management, materials, labor, traceability, transportation/port costs, lead-times, safety-stock, and tariffs) compared to doing business/manufacturing in the U.S. (materials - reused/recycled and related carbon credits, labor, traceability, lead times, safety-stock)? Plus, with ongoing intelligent LEED facility design and development (manufacturing and distribution), these cost savings will further justify US manufacturing. TI proved this point when it built its semiconductor facility in Texas.
I must say, a few recent readings have inspired me. For a little bed-time reading, check out Natural Capitalism: Creating the Next Industrial Revolution. Why not apply these concepts to supply chain design? My $.02…
Manhattan Associates Inc.
I’m a 20+ year manufacturing veteran with emphasis on supply chain. Due to the rise to power of the party that absorbed the Communist party in the US, and the apparent ineptitude or apathy of the opposition to stop the Socialist tide that began almost 80 years ago, I have found myself thinking what would have never crossed my mind 20 or even 10 years ago.
I’m thinking about what country might be a good one for a manufacturing/logistics professional to work in. In other words, I no longer see a compelling reason to stay in the USA! I feel almost like a microcosm of what manufacturing businesses have been facing during the past decade. The hand is writing on the wall, “Find work in a developing country where they value your skills."
It’s not that I do not love my country. I simply find it hard to seek the“American Dream” when so many slackers are designated a “protected class," and anyone who has the audacity of hoping to earn over $250K annually is demonized as an evil, rich capitalist.
Everyone knows the US has the 2nd highest corporate tax rate in the world. What most don’t know is that the highest is in Japan – and we’ve seen how their economy has done for the past two decades. This is the 1st time I’ve ever written you. The next time might just be from Panama. (My Spanish is much better than my Mandarin).
P.S. The opinion expressed herein is strictly my own, and should not be construed to reflect my employer’s position on the matter.
David J. Gaskill, CPIM, CIRM
Manager - Logistics Planning
I think the problem goes way beyond manufacturing. You quote the BW article line “invented here, industrialized elsewhere." Whether manufacturing in China to get lower costs or to address the potential Asian market, manufacturing is soon followed by engineering, which, in turn, is followed by inventiveness.
If we do nothing to address this loss, the USA will ultimately become a second or third-world nation of consumers. I recently saw a quote that the U.S. is or has lost its global leadership role as a result of the financial crises.
Principal Consultant and Chief Researcher
Supply Chain Visions
I don’t know why people are worried too much about manufacturing? Do you think only low cost works forever? If so, then people work in developing country, & after some time, retired & live in developing country where living cost is low & they are not doing so. So consumer is the same people who like quality of life & new era is to marketing of quality. Since from centuries, only quality producers survive & I am for sure they will survive in future too.
Now, there are other factors than low-cost labor in manufacturing, like minimizing waste, better planning to better utilization of resources & reducing inventory, collaboration & co-operation to work towards reducing cost of supply chain whole, starting from performance-based design to convenient moving & storage packaging.
Take an example of Walmart, how nicely they are leader in implementing & gaining fruits of supply chain management. They integrated & implemented together their supplier, information technology, reducing waste, use of local resources, etc. Like Japanese, we also can gain by lean manufacturing, which ultimately helps in low cost + surviving manufacturing industry.
Mehul S. Pandya
It is one thing this administration does not understand. We cannot bring manufacturing (and service jobs for that matter) back here by repeating “I want a pony, I want a pony, …". The US has the second highest corporate tax burden in the world. Add that to onerous environmental restrictions, it is no wonder we have not added to our manufacturing capability in the USA.
This must be fixed if we are to be competitive.
Having said this, remember that in the 80s and 90s, we thought everything would go to Japan, which it did not. Japanese salaries went up, tax burdens went up (they have the highest corporate tax burden in the world) and they shifted production offshore, even to the USA in the case of cars.
Quality Assurance Manager