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With opportunity comes obligation.

George Bernard Shaw once wrote that You don't learn to hold your own in the world by standing on guard, but by attacking and getting well hammered yourself.'

One thing that is certain about U.S. manufacturing during the last decade is that it has been well hammered, and not because it was attacking. But if my sense is correct about what's going on now, manufacturing has an opportunity to get back some of what it has lost during the last 10 years.

Maybe it was the recent announcement by General Motors that it will close 21 plants and eliminate 74,000 jobs that got people's attention. That announcement came on the heels of IBM saying that it would be reducing its work force by more than 20,000. Follow up these bad news stories with President Bush's troublesome trip to Japan and what you have is a bunch of frightened people who are now just thinking about fighting back.

Many of these same people were the ones who were writing off manufacturing and predicting a switch to a service economy. The 1980s were a time when U.S. government types were suggesting to manufacturers that they should move their operations overseas because we couldn't compete here. it was a time when American consumers showed little concern about the health of U.S. industry. And maybe we deserved their lack of concern.

Nonetheless, what is distressing about these attitudes is the fact that there was little consideration given to the long term consequences. Consequences that with the GM and IBM announcements are now beginning to smack Americans where it hurts: on the job and in their pocketbooks.

The vital role that manufacturing plays in the U.S. economy was brought home by George Booth, who spoke to the AFS Detroit Chapter last month. Booth, general manager of Ford Motor's Casting Division, put it this way: The erosion of the U.S. manufacturing base seriously concerns me-and it's real. A real threat to the future economic well-being of this country. My concern is as we lose our manufacturing base, we gradually lose the clout of the biggest wealth-generating sector of our economy. Let's not kid ourselves that we can continue to have the rising standard of living we've enjoyed since World War II by taking jobs from manufacturing and putting them into the service sector.'

He then pointed to these facts:

* Productivity in manufacturing rises faster than in any other sector in the U.S. economy. Since 1985, productivity improvement in manufacturing has been double that of the total economy-3% versus 1-1/2%.

Manufacturing accounts for the bulk of private R&D expenditures. In 1988, for example, R&D spending in manufacturing was $61 billion compared with under $6 billion outside of manufacturing.

Manufacturing provides higher quality jobs that pay 20% more than jobs outside of manufacturing. Also, estimates are that an increase in employment in manufacturing of 1% increases overall employment by 2%. Shipments by manufacturers represent about 60% of our gross domestic product.

With this data, it doesn't take a genius to figure out that the erosion of our industrial base is crippling this country.

Taking it a step further, Booth told about the significant role that the domestic automotive industry plays in the health of the overall economy by pointing out that it represents 4.5% of GDP. Domestic automakers have 300 plants in 35 states providing 800,000 jobs and more than $25 billion in payroll. Put this into perspective when considering the GM announcement of eliminating 74,000 jobs. That is 7% of total domestic automotive plants and 9% of direct jobs," he said. Indirectly, the domestic car and truck business accounts for one of every seven people employed in the U.S.

Booth exploded the myth that the Japanese transplants are adding jobs in America. The fact is that for every job the Japanese transplants create, America loses two. The reason is that the average transplant car has only 48% domestic content. The average car produced by domestic manufacturers has 88% domestic content. Contrast those numbers with the content of an imported car of I % and you can understand the importance of manufacturing domestically."

Getting the general public and our government to understand the vital importance of industry is essential. And considering the events of recent months, we have an excellent opportunity to do so.

But this is only half the battle because with opportunity comes obligation. Our obligation is to continue improving the quality and value of our products. If we are to win back the hearts and minds of the American public and regain the confidence of our customers, we must prove to them that American goods are the best that money can buy.

Let's not blow our chance.
COPYRIGHT 1992 American Foundry Society, Inc.
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:US manufacturing industries
Author:Kanicki, David P.
Publication:Modern Casting
Article Type:Editorial
Date:Feb 1, 1992
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