Made in the USA–Part 1

By May 5, 2006Taking It for Granted

Blog-Icon-MI.jpgManufacturing output is higher today than at any point in US history. It’s remarkable, but it’s a fact. Many Americans think nothing is made in the USA anymore and there is a good reason that they think that way. Many of the consumer goods with which we come in contact day in and day out are definitely not made here anymore.

Last month, the Washington Times ran an excellent series of four articles about today’s manufacturing. We are blogging on all four of them, starting today. In his first article, author Jeffrey Sparshott looked into some of the prominent consumer goods companies that have gone by the board. He focuses especially on “sunset industries”, such as television manufacturing, which as recently as 1989 had 3,500 employees in the U.S. Now there are virtually none and the production has gone overseas. He notes that foreign goods now account for about one-third of the manufactured products consumed domestically, up from 15 percent in 1982.

Not all of U.S. manufacturing is in decline. He writes, “other industries that make products Americans seldom see in stores, such as machine shops and medical equipment manufacturers, have increased production and added employees in recent years.” He interviewed NAM chief economist Dave Huether for the article, who points out that manufacturing is a “mosaic” and that it is hard to paint all sectors with the same brush.

There are a wide range of public policy steps that can be taken to bolster US manufacturing. You have read about many of them right on this blog. But too many public officials either take manufacturing for granted and think it can survive more and more taxes and more and more regulation. Or else they are beholden to other special interests who they put first when they vote. We’ll have more on the Washington Times series in the next few days. Be sure and click on the link above to read Sparshott’s first article. Kudos to the newspaper for putting these issues front and center.

Join the discussion 3 Comments

  • As Peter alluded to, custom and value-added manufacturing is where America’s strength is. It’s tough to compete on commodity items (due to cheaper overseas labor, their tariffs, etc.), but we excell when it comes to engineered and more complex products.

    I work in PR for a handful of manufacturers. One makes injection molding machines for the plastics industry. China and other low-labor cost countries have made huge dents in the commodity machines, but US and some European machine makers still excell in the value-added processing IMMs.

    US engineering and labor just have to keeping developing new and better machines and technology to stay ahead. And, as been done before, I’m sure “American know-how” will continue to lead the world.
    Mike

  • Gillian says:

    A lot also depends on how you define “manufacturing output”… similarly to “productivity.” Yes, final manufacturing output may be up, but does that include a larger share of subassemblies being made offshore? If so, U.S. “manufacturing activity” may be down while “manufacturing output” is up. That flaw was recently pointed out on EvolvingExcellence.com and in ManufacturingNew.com on the productivity numbers, which don’t take into account subassemblies made offshore. With productivity being calculated as domestic output divided by manufacturing hours, it looks like productivity is up. But more and more of the intermediary and subassembly hours are offshore, thereby not consuming any domestic hours… giving the incorrect impression that domestically we’re making more for less hours. That also explains the discrepancy between productivity numbers and the Bureau of Labor Statistics numbers, which the BLS discusses in the excerpt in the article referenced in EE… see

    http://www.evolvingexcellence.com/blog/2006/04/business_week_n.html

  • Peter Renton says:

    Some manufacturing is thriving. I am the founder of a small label printer and we are growing at 50% a year right now. The old mass production type of manufacturing is what has suffered most in this country; but custom manufacturing, where every job produced is different, is in better shape.

    When every job is custom, you have to be in constant communication with your customers, and I think most people here are more comfortable dealing with a US company in these situations. Also, when fast production speed is necessary as in printing, US manufacturers have an advantage over their overseas competitors.