Is Manufacturing the Answer to America's Economic Crisis?

In this era of global economic downturn, two countries, Germany and China, aren't doing too shabbily. Now they can't be further apart: Germany is a stable democracy with a mature economy and China is an authoritarian government with a nascent yet rapidly growing economy.

So, why are they surviving the recession better than the rest of us? Harold Meyerson of the Washington Post suggests an interesting answer: It's The Factories, Stupid.

What sets them apart from the world's other major powers, purely and simply, is manufacturing. Their predominantly industrial economies meet their own needs and those of other nations, and have made them flourish while others flounder. [...]

For the past three decades, with few exceptions, America's CEOs, financiers, establishment economists and editorialists assured us that the transition from a manufacturing to a post-industrial economy was both inevitable and positive: American workers would move to more productive jobs, and the nation's financial security would only grow. But after rising steadily during the quarter-century following World War II, wages have stagnated since the manufacturing sector began to contract.

Harold went on to explain why most Americans are wrong when thinking that we can't compete with China's cheap labor (after all, Germany's labor cost is even more expensive than ours): Link


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The UAW is a prime example of our problems.
Overpaid, Over-benefitted, Overstaffed, 'Featherbedded', Over-regulating toward the carcos they're staffed in (the rulebook weighs ~22 pounds), Disincentivized toward productivity, self-improvement and collective improvement. +AND on top of that they make unreliable crap that's ugly inside and out.

We ~may have the Capability to make something almost as well-engineered as a German car (the reliability would be similar though, hehe!) but almost everything about US car companies, especially GM, and their culture is broken.

It's a shame that the big 2.5 still deal with them, and that they haven't gone through the proper bankruptcy proceedings to give all the bolt-tighteners a 'thank you for your service' check and then just move on without them. Sadly, because of the Ford Family, Ford never will. GM will probably go BK 2x more before it's gone.

If you want to see what awesome US-based manufacturing can do, go have a look at Hyundai's plant in Alabama. They are probably the best.

Any comment about US manufacturing would probably be lacking if it didn't include a link to one of the best screeds on it, and the companies involved, The GM Deathwatch Series at TTAC: http://www.thetruthaboutcars.com/category/editorials/gm-death-watch/
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Getting back into a manufacturing economy will require a long-term strategy of training and education, as well as restructuring the economy. The NY Times today printed an article entitled "Factory Jobs Return, but Employers Find Skills Shortage"

http://www.nytimes.com/2010/07/02/business/economy/02manufacturing.html

The manufacturing sector increasingly relies on automated and computer-controlled machines, which are run by technically-skilled operators. Factories are hard pressed to find candidates who can read at a ninth-grade level, much less program a milling machine.
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Industrial planning? Sounds dangerously Socialist to me! However, it can be done - because advanced economies generally have better infrastructure, and comparatively lower transport costs - it can be cheaper. I heard that it is cheaper for Hyundai to make cars in the UK than in Korea. And 'Runson' is right, far too much of the capital of workers hard labour is going to pay the vast wages of bloated numbers of managers and executives.
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