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Getting the word out about manufacturing

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Reposted from the New Hampshire Business Review

Forum focuses the economic, educational need to focus on advanced manufacturing.

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‘It takes a partnership approach between state, education and industry to build the workforce and create well-paying jobs,’ says Ross Gittell, chancellor of the Community College System of New Hampshire.

 
If a workforce of highly skilled, well-paid advanced manufacturing employees and a robust state economy are the goals, partnerships involving education, industry and government are the ways to achieve them.

That was the consensus at a recent NH Works workforce development forum at New Hampshire Technical Institute in Concord. Staff from the Office of Workforce Opportunity and the New Hampshire Department of Employment Security joined representatives from vocational rehabilitation, adult education, veterans support and other state agencies for the daylong event.

During a forum led by Ross Gittell, chancellor of the Community College System of New Hampshire and an economist, advanced manufacturing was the topic of choice.
According to economist Dennis Delay of the New Hampshire Center for Public Policy Studies, the economic impact of smart manufacturing and high technology is five times that of one of tourism in New Hampshire. New Hampshire manufacturing took a debilitating hit decades ago, he said, but the sector has since undergone a major transformation. Delay said a 2011 study shows the industry has turned to higher-paying and higher tech markets like computers, electronics, defense and medical.

And now, said Gittell, “Employment is stabilizing and growth opportunities for manufacturers are adding up. This presents an exciting opportunity.”

Poised for growth, manufacturers need more technically skilled workers, and under a Department of Labor grant, CCSNH has partnered with businesses and state agencies to form the Advanced Manufacturing Partnerships in Education initiative.

“It takes a partnership approach between state, education and industry to build the workforce and create well-paying jobs,” Gittell said. Under the grant, “we met with manufacturers and asked them what they needed. We’ve been hard at work at all our colleges to build an advanced manufacturing curriculum with a focus on specialized industry sector training.” With e-learning, hybrid and common core courses, CCSNH is building stronger and higher capacity training programs, he said.

Curricula were designed with the guidance of more than 100 business and industry partners, and the consortium aims to touch thousands of students and add as many jobs in the state, he said.

All told, numbers from a 2011 Smart Manufacturing High Technology study by the Center for Public Policy Studies show that, if the initiative reaches its full potential, it could have a positive economic impact measured in the billions of dollars in New Hampshire alone.

“We are well-positioned for success,” Gittell said

‘Vision and direction’

Key to that success is the partnership the colleges and business leaders share with agencies like DRED, OWO, NHES and NH Works, which support both businesses and job-seekers by helping to them with training opportunities, he said.

While large “anchor” industry partners are essential to the advanced manufacturing initiative, Gittell said, 96 percent of businesses in New Hampshire are small businesses. That means options like the Job Training Fund can give high-tech companies a boost as they work with current and prospective employees to update skills.

Aid is also available through the Workforce Investment Act, an employment and training program funded by the U.S. Labor Department to help dislocated workers and other eligible adults and to help companies find skilled workers.

“To sustain ourselves, we need vision and direction, partnerships and skill-set development,” said Department or Resources and Economic Development Commissioner Jeff Rose. “Aligning education and training programs to industry needs is very important. We do have the vision of how we want the workforce to look, based on industry need, and state agencies are looking forward to working with you.”

State Sen. Molly Kelly, D-Keene, called growing the economy through advanced manufacturing “one of her favorite subjects.”

“What I see is not the kind of memory I had of manufacturing,” she said. “These places are incredible. The precision is fascinating; the things we’re making are works of art. Our workers are very good – and they are making very good livings. But I don’t think that is the common perception.”

For example, she said, many people aren’t aware of the need for science, technology, engineering and math-skilled employees, and they are shocked to see the clean, high-tech environments in which those employees work. She herself was surprised when, in 2008 as the nation’s economy reeled, New Hampshire manufacturers were telling her, “We have jobs. We don’t have skilled workers.”

That’s the focus of the state Advanced Manufacturing Education Advisory Council, she said. “We step outside of our silos. Educators know education and manufacturers know what they need to grow.”

This article appears in the July 12 2013 issue of New Hampshire Business Review

Reshoring: When Jobs Come Back Home

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Reposted from THonline.com:

Sometime during the past decade, when most everyone was focused on inflating the housing bubble, I was called into a senior manager’s office.  My employer was planning to move an assembly line to Mexico and thought I would be a great manager for the project. As the executive discussed the importance of the move, my thoughts wandered to Thanksgiving.


Although a city boy, I grew up with tractors. I played with scale models as a child, spent weekends on my grandfather’s farm and drove tractors long before I could legally drive a car.

My grandfather, dad and uncles farmed, built or repaired tractors. I loved to listen at family gatherings as they debated their politics — not of red and blue states but red and green tractors.

So when I graduated from engineering school, it was only natural for me to choose a supplier to the tractor industry. How I enjoyed contributing to those conversations.

“What are you working on now Rick?”

I would explain the latest technical advances, being careful not to violate customer confidentiality agreements. This would spark spirited conversation on the usefulness (or lack thereof) of the new features to farmers and the challenges to servicing the new features to mechanics.

Now, as the boss rambled, I could only envision the ensuing conversation:

“What are you working on now Rick?”

“Well, I’m managing the move of a major product line to Mexico.”

(Silence, followed by more silence)

“I believe the turkey is a little dry this year.”

I quickly told the boss that I wasn’t interested in spearheading the move.

So I’ve been more than a little pleased and interested as I follow the trend of manufacturing work moving back to the U.S. Known as reshoring, the development is so new that my word processing software doesn’t recognize the term.

While my motivation was primarily patriotic, that’s not industry’s driver. It’s simply making good business sense. Some of the primary reasons include:

* Shorter and predictable supply chains — the price on the invoice doesn’t matter when the product has to be air freighted due to changing customer demands or is stuck in a port due to a dock workers’ strike.

* Lessons learned regarding the criticalness for manufacturing and engineering to communicate when the product is more complex than a coat hanger.

* More lessons learned regarding the complexity of communicating, instilling quality systems and even ensuring protection of intellectual property when multiple tiers of suppliers are involved, with each subsequent layer becoming less sophisticated.

* Multiple years of double-digit wage increases in China, supported by government’s hopes of growing the middle class, narrowed the cost gap.

As a Lean advocate and former engineering manager, I foresaw the first three reasons. The fourth caught me completely off-guard. I reasoned that the sheer population of China would absorb wealth for generations before it materially impacted competitiveness. But the majority of the country lacks the basic infrastructure to take advantage of that population.

There’s one more important driver for reshoring. U.S. productivity continues to grow. We’re 20 percent more productive than we were 10 years ago, despite the fact the time span has been largely defined by tepid demand growth. Productivity always looks best in periods of high demand.

Therein lies the caveat with reshoring efforts. The work that is returning is not especially labor intensive, or at least not low-skills labor. The returning work values the top three reasons stated above — speed and agility, technical communication, and quality and protection of intellectual property.

The good news is that the jobs created by reshoring efforts, although not equal in number to those that originally left with it, are decent jobs. They rely on folks using their noggins more than their backs.

Oh, the rest of story regarding my personal outsourcing “opportunity?” The housing bubble burst, the Great Recession ensued and today that assembly line productively resides in central Iowa. And I can still attend and enjoy family reunions.

SOURCE:  THonline.com

Benefits of Reshoring-Bringing Manufacturing Back to the USA

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When manufacturing jobs move overseas we wondered if total landed costs are considered and if there is now an argument for bringing manufacturing back to the USA. This logistics practice is known commonly as “reshoring.” Our theme for the month of July is the United States or for all of you Bruce Springsteen fans – “Born in the USA.”  Although Mindspot Research is a Global research company, we are based in the United States in Orlando, Florida.

We conduct research for clients across multiple verticals (consumer packaged goods, manufacturing, logistics, supply chain, fashion, restaurants, healthcare, etc…) and as a result of that broad base of clients we are able to gain perspectives on the economy, industries, and social and market trends.

One topic that is in the news often is outsourcing labor-intensive jobs and manufacturing particularly to countries in the Asia-Pacific region. With the recent news of buildings collapsing and workers tragically losing their lives or being injured or trapped due to lack of building safety standards, or any loss of life is a call for consideration. As a result Wal-Mart and some other large companies have implemented their own safety standards and continued outsourcing.

Recently a businessman from Florida was held captive for 6 days because Chinese employees feared losing their jobs and did not feel they were adequately compensated. These workers did something extreme to have their voice heard. The question to ask not only on a cost basis but on an ethical basis: Is it worth it? Perhaps, there is an ethical argument for bringing jobs back to the United States in addition to the cost argument about to be presented.

The risk analysis for manufacturing in the United States is far more straight forward than using an offshore source. At one extreme, having your company name associated with tragedy may lead to catastrophe & national infamy, but at a minimum uncertain raw materials, process stability, and quality standards will exact unknown (and unexpected) costs, not to mention sleepless nights. The expanse of US regulations from watchdog organizations, industry designed and self-promoted, and government based, provide for many layers of product protection stripped away from manufacturing that is taken offshore.

Mindspot Research has a long-term manufacturing client who has been in business for 25 years.  ASH Industries, based in Lafayette, Louisiana, offers a range of engineering services and manufacturing processes. ASH addresses client needs from rapid prototyping to final assembly & custom packaging. Among ASH’s customers that cover the gamut of US Industry, from defense to medical and electronics to industrial, there is considerable pressure to outsource manufacturing work to places like Mexico and China.

Over recent years, Hartie Spence CEO of ASH Industries tells us that “While competing with China on a piece part basis is not possible, more and more observant customers do appreciate the impact that a knowledgeable US based manufacturer can have on reducing total product cost, increasing reliability, and shortening the timeline between concept to completion.”

Mr. Spence acknowledges that the argument for getting products from China because “it is so much cheaper” may, in fact, be limited to a range of products for which unit cost consideration far exceeds quality, manufacturing consistency, and communication needs. However, if the total landed cost is calculated along with manufacturing difficulties and inconsistencies, then the argument for “offshore” does start to disintegrate.

Additionally, consider that the number of defects per million parts will vary by the type of manufacturing. For example, if soldering parts is involved that is typically what causes the majority of the defects. If no soldering is involved it will be something else (i.e. pick and pack). Using a Six Sigma process improvement methodology the acceptable defects per million (DPMO) is 3.4. It is widely commented on that other countries have a higher defect per million number than the United States. Recent examples include solar panels manufactured in China with defect rates ranging from 5%-22% according to the New York Times. Perhaps that doesn’t seem like a lot. However, if we apply this to something that we are all used to like medical prescriptions; consider that 99% quality (3.8 sigma) and 99.9997% quality (6 sigma) is the difference between 200,000 wrong drug prescriptions a year and 68 wrong drug prescriptions a year.

Here are 15 potential hard cost benefits associated with “reshoring,” which is bringing manufacturing back to the USA from another country:

• Shorter delivery times/Faster
• Lower transportation costs
• Fewer defects
• Shipments not held at customs
• Reduces exchange rate risks
• Political stability
• Economic stability
• Established worker safety compliance (building, working conditions, # of hours worked)
• Established materials safety compliance (contamination)
• Stamp it “Made in the USA”
• Supports the U.S. economy by employing U.S. workers
• Reduces risk of being associated with negative events/PR
• U.S. plants are more established/higher number of years in business
• More world-class manufacturers in the United States
• Customer Service

At the end of the day, whether it’s the 4th of July or another day, it’s the total landed cost that matters to the bottom line.

Manufacturing is Sexy Again

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Reposted from Crains Cleveland Business

Irene Petrick thinks the next wave of manufacturers will come from unexpected sources — namely, from individuals and small businesses taking advantage of advances in technology.

Ms. Petrick, a Penn State University professor and managing director of Trendscape Innovation Group, was one of three participants in a panel discussion on manufacturing at The City Club of Cleveland on Friday. The forum featured some of the authors of Alliance for American Manufacturing’s “ReMaking America” book, and was moderated by the alliance’s president, Scott Paul. The event was hosted in partnership with WIRE-Net, a local manufacturing advocacy group celebrating its 25th anniversary.

While much of the conversation focused on hopes for the U.S. government’s future manufacturing policy and possible business incentives, Ms. Petrick focused on trends shaping manufacturing. 

She predicted that there are three major trends that would inspire innovation on a more individualized level in the future: the availability of cloud-based services, which would allow people to download just the programs they need, the spread of high-performance computing, which would make simulations more available to small businesses, and 3-D printing, which would allow individuals to make their own products. 

Sridhar Kota, a professor of mechanical engineering at the University of Michigan, echoed Ms. Petrick’s statements and said reducing costs and barriers to these types of tools would increase competitiveness in manufacturing. 

Carl Pope, former executive director of the Sierra Club, said he thought the federal government needed to do more to encourage manufacturers to make their products in the United States. He called for policy certainty for the industry.

But the panelists thought there was cause for optimism in the U.S. manufacturing sector. Mr. Paul said there is a lot of support and interest in the sector from politicians, management consultants and academics. It’s time now to take the “emergency care” manufacturing policy to a more sustainable one, he said.

Ms. Petrick noted that she sees lots of interest in entrepreneurship now, and that people are tinkering in her classes.

“Manufacturing is sexy again,” she said.

Farming, Food Safety Groups Ask U.S. to Stop Smithfield Foods Sale

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Reposted from Journal Star – 

Two Nebraska groups — The Center for Rural Affairs and the Nebraska Farmers Union — are among food safety and farm groups calling on federal regulators to halt the proposed sale of pork giant Smithfield Foods to a Chinese processor — a deal that would represent China’s largest purchase of a U.S. company.

In a letter sent Tuesday (07/10/13), the groups asked the Committee on Foreign Investment in the United States to oppose the sale of Smithfield to Shuanghui International Holdings Ltd.  The interagency committee of cabinet secretaries is responsible for reviewing sales of American companies to foreign concerns.

“The White House should reject the sale of America’s food supply,” Tim Gibbons of the Missouri Rural Crisis Center, one of the groups involved, said in a statement released Tuesday. “The Smithfield purchase turns over American farms to a consolidated, globalized meatpacking industry that leaves rural communities to clean up the waste while China gets the meat.”

Smithfield is the nation’s biggest pork packer and also raises more hogs than any other company. 

China is the U.S.’s third-largest pork export customer, buying more than 500,000 metric tons of pork a year. In 2012 the U.S. exported nearly a quarter of its pork, about 12 percent of it to China, where a growing middle class has increased demand for proteins of all kinds.

Shuanghui and Smithfield announced in late May that Shuanghui would purchase Virginia-based Smithfield, the world’s largest pork producer, for $4.7 billion. But since the announcement, some lawmakers and producers have cast a critical eye on the deal, and regulatory hurdles remain.

Smithfield’s chief executive, C. Larry Pope, is scheduled to testify Wednesday before the Senate Agriculture Committee. The chairwoman of that committee, Sen. Debbie Stabenow, D-Mich., has been critical of the deal and has called for more government oversight from additional agencies, including the U.S. Food and Drug Administration and the U.S. Department of Agriculture.

Tuesday’s letter echoes some lawmakers’ objections, saying that the deal could pose threats to U.S. security interests, undermine food security here and threaten the safety of the U.S. food supply.

China’s consumers have faced a number of food-related scares in recent years, including reports of adulterated and mislabeled meats. A Shuanghui subsidiary was recently accused of treating hogs with an illegal veterinary drug that’s hazardous for humans.

“The deal has been promoted as a way to facilitate U.S. pork exports to China, but ultimately Shuanghui could export pork back to the United States,” the letter says. “The adoption of Smithfield hog genetics and processing technologies could allow Shuanghui to reverse the global flow of pork.”

Processed pork products, including ham, bacon and sausage, are exempt from mandatory country-of-origin labeling requirements, which could mean that American consumers might see familiar brands but remain unaware that they were imported from China, the letter said.

In Nebraska, Smithfield owns the Cook’s Ham plant in Lincoln, which employs almost 500 people; the Farmland Foods pork plant at Crete, which employs almost 2,000; and an Armour-Eckridge sausage plant in Omaha that employs almost 200.

The letter was signed by Campaign for Contract Agriculture Reform, Coalition for a Prosperous America, Center for Rural Affairs, Contract Poultry Growers Association of the Virginias, Food & Water Watch, Iowa Citizens for Community Improvement, Land Stewardship Project, Missouri’s Best Beef Co-Operative, Missouri Farmers Union, Missouri Rural Crisis Center, National Family Farm Coalition, National Farmers Union, Nebraska Farmers Union, Organization for Competitive Markets, Rural Advancement Foundation International—USA, R-CALF USA and Western Organization of Resource Councils.

SOURCE:  JournalStar.com

Wal-Mart to Pull Out of D.C. After Minimum-Wage Vote

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Reposted from New York Magazine

For decades, Walmart has been known in the retail industry for its hard-line negotiating tactics. As the world’s largest retailer, it’s massive enough that it can offer to pay a ridiculously low price, threaten to walk unless its price is met, and watch suppliers trip over themselves to shrink their margins. So it shouldn’t be surprising that Walmart conducts its governmental relations the same way.

Earlier, Walmart threatened to pull three planned stores from Washington, D.C., killing thousands of potential jobs in the district, unless Washington’s city council abandoned a bill called the Large Retailer Accountability Act, which required companies that made more than $1 billion in annual revenue and have at least 75,000 square feet (read: Walmart) to pay employees a raised minimum wage, $12.50 an hour instead of the regular $8.25. Yesterday, D.C.’s city council passed the bill anyway.

Lydia DiPillis at Wonkblog thinks there will be “negative consequences” from the D.C. city council’s decision to go ahead with the bill, whether it’s in the form of lower property taxes, missing multiplier effects, and abandoned sites where the Walmarts would have stood. She points out that D.C. residents may go to Walmarts in the Maryland and Virginia suburbs now, instead of in D.C. proper, and that the stores that have been scuttled were likely to have the lowest profit margins for Walmart anyway.

That may be true. But D.C.’s decision to ward off Walmart is still a victory. In an era when suppliers, governments, and municipalities have all been scared into acquiescing to Walmart because of its size and job-creating potential, it also took tremendous courage. D.C.’s council members knew how many jobs a Walmart could bring to town and how good creating those jobs would look on their political record. But they also knew that despite Walmart’s white-washing PR campaign, those jobs were likely to be barely subsistence-wage, terribly depressing, and offset with jobs lost at local businesses. D.C. didn’t prohibit Walmart from setting up stores in the district (and there will still be three, even after the abandoned ones), but it did put in place what amounted to a fairly expensive penalty for doing so.

Not all jobs are created equal. But in politics, they often get equal weight. It would have been easy for D.C.’s city council to bow to Walmart’s threat, repeal or soften the minimum-wage hike, and brag to constituents about their job-creating success. Instead, they made a brave, values-driven decision about what kinds of jobs they wanted in D.C. and set policy accordingly. That’s the right of every municipality, and it’s an impulse that should be exercised much more often.

Smithfield CEO: China Deal Won't Hurt Food Safety

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Reposted from USA Today – 
WASHINGTON — Congressional lawmakers grilled the top executive at pork giant Smithfield Foods Wednesday about how the proposed $4.7 billion purchase of the company by China’s largest meat producer might affect the U.S. food supply and agricultural producers.
CEO Larry Pope told a packed Senate hearing his company remains committed to producing safe and plentiful food if the deal is approved. He underscored the benefits he said would come from the takeover by Shuanghui International Holdings, including jobs and higher pork exports.

“This is a wonderful opportunity for the U.S. to do what it does best: produce agriculture products and ship them around the world,” Pope told the Senate Agriculture Committee. “This is an opportunity for U.S. pork producers to grow.”

Pope said the merger would have “no noticeable impact on how we do business in America and around the world, except that we will do more of it.”

But committee members from both parties appeared unconvinced.

Lawmakers expressed concern the takeover would squeeze the U.S. pork supply by shipping more of the meat to China and leave the U.S. susceptible to food safety concerns that have plagued Chinese companies, including Shuanghui.

They also raised a host of other concerns, including what would happen to Smithfield’s intellectual property and the impact of the deal on U.S. agriculture producers.

“In the short term, I know this deal looks good for our producers. This also needs to be a good deal in the long-term,” said Sen. Debbie Stabenow, D-Mich., chairwoman of the Agriculture Committee. “One pork company alone might not be enough to affect our national security, but it’s our job to be thinking about the big picture and the long-term for American food security and economic security.”

Smithfield, founded in 1936 and based in Virginia, sells packaged products under its own name and other popular brands, including Farmland, Armour and Cook’s. The company, the world’s largest pork processor and hog producer, employs more than 46,000 people in 25 states and four countries.

Pope said the transaction would not lead to food imports from China. Instead, he said, it would open up the market for U.S. pork farmers by giving them more access to Shuanghui’s large distribution system and millions of meat-hungry consumers in China, South Korea, Japan and other Asian countries.

Smithfield has stressed repeatedly that the merged company would keep its current management and facilities in place and maintain existing relationships with U.S. pork producers. Pope made those points again Wednesday.

The deal, which would be the largest takeover of a U.S. company by a Chinese firm, is expected to close later this year. Shareholders and regulators, including the U.S. Committee on Foreign Investment (CFIUS), which reviews such transactions for their impact on national security, must approve the merger.

Sens. Chuck Grassley, R-Iowa, and Tom Harkin, D-Iowa, and other lawmakers have called for the CFIUS review of the Smithfield deal to include the Agriculture Department and the Food and Drug Administration. Lawmakers met privately with CFIUS officials after Wednesday’s hearing to ask questions about the Smithfield merger and the notoriously secretive review process.

The proposed takeover of Smithfield has stoked growing concern about an influx of foreign investment in the United States. Many expect cash-rich China to be an active player in the future, much to the dismay of Washington lawmakers reluctant to cede control of U.S.-owned businesses to the communist country.

“I think it is reasonable for you to expect a wave of Chinese investments into our food and agriculture industry, and this potential purchase is not a one-off,” said Daniel Slane, a member of the U.S.-China Economic and Security Review Commission, a government agency that monitors trade and economic relationships between the two countries. “Today, it’s Smithfield, but tomorrow, it could be Consolidated Grain, ConAgra or Tyson Foods.”

Slane said Shuanghui likely views the deal as a way to help minimize the risk of volatile commodity prices and to obtain Smithfield’s valuable intellectual knowledge of meat processing and animal genetics.

“This is really all about control,” he said. “The Chinese could easily go out and buy pork.”

SOURCE:  USA Today

On Manufacturing and Innovation

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Manufacturing: The Key to American Innovation

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Ralph Gomory
Reposted from the Huffington Post – 
Manufacturing was once widely recognized as the outstanding strength of America and the basis of its prosperity, but manufacturing also has a more recent history of being almost a pariah. This newer view equated computer chips with potato chips, asserted that manufacturing is better left to others, and suggested that the nation is actually fortunate to be losing manufacturing and aiming to replace it with design, research, and services.
But many Americans, seeing around them the loss of jobs and the devastation of what had been major industrial centers, have not been converted to this new perspective. Polls have clearly shown that most Americans still think that manufacturing matters, and these polls had an election-time impact last year. Politicians of every stripe suddenly rediscovered manufacturing, and high-ranking government officials were able, quite quickly, to come up with respectable economic studies that cast a more favorable light on manufacturing. 

With the 2012 elections over, discussion about manufacturing subsided and changed course, but did not go away. Today the doubts of the American people about the loss of manufacturing are being addressed in a different way. Since Americans can’t be persuaded that manufacturing doesn’t matter, they hear instead: “don’t worry, manufacturing is coming back.” Now we have a stream of news articles and studies, all announcing, on the flimsiest evidence, that manufacturing is returning to America. But this is closer to fiction than it is to fact.

Innovation, in contrast with manufacturing, seems immune to ups and downs. Day in and day out, innovation is everybody’s favorite. We hear over and over that America must innovate to survive, America must innovate to compete in the global economy, and that Americans can do it because Americans are inherently innovative.

This discussion of innovation has things fundamentally backwards. It does not make sense to talk about innovation as if innovation was an end in itself. We could innovate until the cows come home and if we can’t translate that innovation into something substantial that adds to the economic output of the United States, it does little for America. If our strategy is to generate new ideas that other countries acquire, either as the foundation of a new industry or to gain an advantage in an old one, we will have the expense and glory of being innovators, and they will have the resulting industries and the economic benefits.

But in this era of globalization, and of worldwide profit seeking, our global corporations are strongly motivated to move their manufacturing abroad, not only in response to the availability of cheap labor, but also in areas of high technology where cheap labor is not the attraction but foreign subsidies are. And manufacturing innovation goes abroad with manufacturing.

Innovation in manufacturing matters; innovation in manufacturing is what turns ideas into things that change the world. It took the steam engine 150 years of steady improvement to evolve from being something that barely worked into a machine powerful enough to create the industrial revolution. Sixty years of continuing transistor miniaturization has produced a cellphone you can carry in your shirt pocket with computing power that once required several large rooms to hold. And this cheap computing power is transforming the world.

In a less spectacular way the manufacturing of steel, of paper, or glass, or automobile tires, follow the same path. There are ideas, and then innovation in the manufacturing process steadily improves on them. Much of the progress, and the competition, in manufacturing, is based on incremental innovations whose cumulative effect is enormous. But manufacturing’s steady improvement also means that once you are out of an industry it’s hard to get back in. Your workers’ skills are out of date; the underlying networks of suppliers have gone out of business.

This picture of innovation — tied to manufacturing and incremental in nature — is very different from the popular picture of a few dedicated young programmers putting together a startup that sweeps the world. But it is this popular and easy and attractive picture of innovation that dominates many discussions about how to increase innovation in America.

Why can’t we just stick to this attractive startup picture? Do we really need the hard work of manufacturing and manufacturing innovation in America? We know we do need manufactured goods, they are a part of daily life, but isn’t there some other way to get the manufactured goods we need?

Here are the three ways we can get them: (1) produce them in America (2) trade something else we produce for them, or (3) buy them with dollars that don’t get spent on American goods, but simply remain in foreign hands as future claims on our economy. Today the third option is increasingly what we do.

The Chinese government, alone, now has more than two trillion dollars generated by these trade deficits, and this amount grows daily. This is an enormous resource, available whenever needed, to buy promising, or even full-grown, technology and companies. And who believes that in today’s world a buyer with two trillion to spend cannot wield major economic and even political power?

Despite this, many still proclaim that free trade benefits everyone and point as proof to lower prices for the imported Asian products. But lower prices are not low if you lose your job to get them, and the mutual gains predicted by free trade theory do not in fact materialize in a world where the well thought-out subsidies and controls of foreign governments create persistent trade deficits for our country.

We are allowing much of manufacturing, the great innovation engine that turns ideas into reality, to vanish quietly from our shores. Our global corporations may be benefitting from this; most Americans are not.

It is time for the steady wasting away of manufacturing, and the consequences of that wasting away, to become a matter for national debate, and to remain a matter for national debate, until the problem is resolved. Action is needed, and strong actions should be considered with a full understanding of the enormous importance of what is really happening.

SOURCE:  The Huffington Post

About the author:
Ralph Gomory – 
Research Prof. NYU, Pres. Emeritus, Alfred P Sloan Foundation, Former IBM SVP Science-Tech

If This Is a Good Jobs Report, Just Shoot Me

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The June jobs report shows we lost 6,000 jobs in manufacturing, but added 9,000 in garden supply stores and 19,000 at amusement parks and casinos.

Is this the picture of a healthy economic superpower?

While corporate media will focus on the big number — we added 195,000 jobs! — figures from the Bureau of Labor Statistics show the economy continues to produce low-skill, low-pay jobs while employment in the goods-producing sector lags.

The report shows summer is here: time to plant a garden, fix up the house and work on the car!

Retail trade employment increased by 37,000 in June. Within retail trade, employment increased by 9,000 in building material and garden supply stores and by 8,000 in motor vehicle and parts dealers.

But wait — there’s more. It’s time to hit the road and take the kids to the Fun Park!

Leisure and hospitality added 75,000 jobs in June. Monthly job growth in this industry has averaged 55,000 thus far in 2013, almost twice the average gain of 30,000 per month in 2012. Within leisure and hospitality, employment in food services and drinking places continued to expand, increasing by 52,000 in June. Employment in the amusements, gambling, and recreation industry also continued to trend up in June (+19,000).

Retail, bar and restaurant jobs may provide gainful employment for college students and struggling actors, but they do not sustain a strong middle class.

Debt collectors hired 6,000 and temp services added 10,000.

And the number of workers who want full-time jobs but are stuck in part-time jobs increased by 322,000.

The bright spots in the report are dim: 13,000 jobs added in construction (divide that by fifty and you see about 250 per state) and 5,000 in automotive manufacturing.

CNN says ‘June jobs report: Hiring beats expectations.’

It’s the bigotry of low expectations.

Read the BLS report here:

Fatal Fashion: Movement Seeks Way To Change Global Clothing Production

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Fatal fashion. That’s the derogatory new label dangling over the U.S. clothing industry following a deadly fire and a building collapse that killed more than 1,200 garment factory workers in Bangladesh in recent months.
The tragedies in November and April ripped open the unseemly side of the global clothing supply chain, where hundreds of American brands and companies, from H&M to Tommy Hilfiger, from Disney to Wal-Mart, use overseas factories in countries with woeful working conditions.

But now, in the wake of the tragedies, a new movement is being stitched together to change the way our T-shirts, tops and trousers are made and labeled.

Global sellers such as Wal-Mart are signing on with groups like LaborVoices that promise to get more candid assessments of factory conditions. Bangladesh’s government is being prodded by the United States and others to beef up worker safety. U.S. clothing companies are working on a new labeling system that will track a garment’s manufacturing history.

And many consumers are starting to take a closer look at where their clothing comes from.


Read more at The Kansas City Star: http://www.kansascity.com/2013/07/08/4334567/fatal-fashion-movement-seeks-way.html


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