Greg Autry
Co-author, ‘Death by China’
Senior Economist, American Jobs Alliance
December 31, 2012
“The fate of the U.S. economy will be decided in the next four to five years. The question is: Do we continue on the course to becoming a third-world country, importing finished goods and exporting raw materials, or will we rebuild our manufacturing base and once again become the premier industrial leader?” — Michele Nash-Hoff
Can American Manufacturing Be Saved? – Why We Should and How We Can is a dynamic new book by fellow Huffington Post blogger, Michele Nash-Hoff. I strongly recommend this book, which tosses a much-needed bucket of cold water over the annoying cheer squad of globalization. It does this simply by assuming that America, Americans, and the values we have promulgated actually matter. The author makes the audacious assertion that the standard of living in America should be the primary focus of U.S. policy, both foreign and domestic, and that this practical objective should trump all ideological delusions. Imagine that!
As the quote above illustrates, her arguments fly in the face of the current U.S. business school paradigm which seems to be: Leverage America’s R&D and capital to create great consumer products, manufactured abroad — usually China — in order to maximize shareholder return. In this mindset capital is not king, but God, bearing no allegiance to any nation, community, firm or employee. As academics, we teach our business leaders: The fate of individuals is not your concern — unless they are CEOs or stockholders — as competing with third-world wages and standards will actually do them good. In this curriculum the only thing that matters is getting the biggest number on the left side of the equation next quarter, even if the ironic long-term consequences of this short term thinking may be the subjugation of the capitalist system that created it to a foreign and avowedly communist regime.
Let me be clear that
Can American Manufacturing Be Saved? is no emotional, xenophobic rant against trade. Nash-Hoff views trade as a tough playing field that Americans used to rule and can win on again. The book starts with a gritty history of U.S. manufacturing and its associated politics. It accepts no sacred cows as it turns over all the rocks and exposes the good, bad and ugly in four centuries of American industry, unions, and politicians. The author happily skewers the intransigent labor leaders, complicit managers, and naïve politicians of the last century who guided American manufacturing into a period of ludicrous union contracts and built our Kafkaesque regulatory environment.
That said, Nash-Hoff is quick to remind cynics that just because the pendulum may have swung too far, it doesn’t mean that we want to be living in the 19th century again either:
“It is important for Americans to remember that unions can be credited with the end of child labor, improved worker safety, increased wages for both union and non-union workers, reduction in the work day from more than 10 hours to eight, and the raising of our entire society’s standard of living. In essence, unions raised the lower class of workers up into the middle class.”
In the end does all this really matter? Does it matter to anyone besides a handful of rust-belt union members or a few quaint little manufacturers of novelty “Made in U.S.A.” products, living off the gullibility of avid American nationalists? Nash-Hoff would answer with a resounding, “Yes, it really does matter to us all.” It matters at the personal level as the author reminds us in Chapter 4:
“Jobs paying the $20 per hour that historically enabled American wage earners to support a middle-class standard of living are leaving the U.S. Only 16 percent of today’s workers earn the $20 per hour baseline wage, down 60 percent since 1979.”
It also matters at the national level as Nash-Hoff states in Chapter 6:
“Manufacturing is the foundation of the U.S. economy and our country’s large middle class. Losing the critical mass of our manufacturing base would result in larger state and federal budget deficits and a decline in U.S. living standards. This, in turn, would result in the loss of the large portion of our middle class, which depends on manufacturing jobs. America’s national defense would be in danger and it would be impossible to maintain the country’s position as a superpower.”
What can we do about the current disaster? Nash-Hoff tells us we need to roll up our sleeves and get to work at the policy level so Americans can get back to work on the factory floor:
“Well, Americans now need to get as “mad as hell” about bad trade laws, bad tax laws, and over-burdensome regulations on manufacturers. It’s time to become engaged in a grassroots fight to change the bad free-trade laws into better fair-trade laws that will reflect the interests of small manufacturers who’ve been absent from trade policy deliberations for far too long.”
Is anything being done? Nash-Hoff ‘s book suggests the tide may be turning. She details a number of promising policy proposals and new signs of manufacturing success across the country, from the broad Reshoring Initiative to specific innovative programs taking root right now at the state and local level in Indiana. Chapter 10 even details some of the specific innovative strategies firms are using to compete on an uneven global playing field. However, the author does not own a pair of rose-tinted glasses and she bluntly warns us that small firms cannot compete against an assault by a huge foreign government if Washington stands idly by:
“A manufacturer can apply all of the recommendations in this chapter and still fail because of circumstances and outside factors beyond its control. Very few American manufacturers can survive when their industry has been targeted by China for product dumping.”
Frankly, Nash-Hoff is right. We’ve got a big problem and it needs to be fixed and it won’t be improved with more obdurate, partisan bickering. We need to check our ideologies at the door, be unmercifully honest about the nature of our competitors, and be willing to undo some of the things we thought we loved. If you care about America, your neighbors and our children’s future and you are willing to approach all that with eyes wide open, then you need to read this book. When you are done with it, I would encourage you to mail it to your congressperson.
An Eyes Wide Open Look at U.S. Manufacturing
in Uncategorized/by MAM TeamCo-author, ‘Death by China’
Senior Economist, American Jobs Alliance
December 31, 2012
As the quote above illustrates, her arguments fly in the face of the current U.S. business school paradigm which seems to be: Leverage America’s R&D and capital to create great consumer products, manufactured abroad — usually China — in order to maximize shareholder return. In this mindset capital is not king, but God, bearing no allegiance to any nation, community, firm or employee. As academics, we teach our business leaders: The fate of individuals is not your concern — unless they are CEOs or stockholders — as competing with third-world wages and standards will actually do them good. In this curriculum the only thing that matters is getting the biggest number on the left side of the equation next quarter, even if the ironic long-term consequences of this short term thinking may be the subjugation of the capitalist system that created it to a foreign and avowedly communist regime.
Let me be clear that Can American Manufacturing Be Saved? is no emotional, xenophobic rant against trade. Nash-Hoff views trade as a tough playing field that Americans used to rule and can win on again. The book starts with a gritty history of U.S. manufacturing and its associated politics. It accepts no sacred cows as it turns over all the rocks and exposes the good, bad and ugly in four centuries of American industry, unions, and politicians. The author happily skewers the intransigent labor leaders, complicit managers, and naïve politicians of the last century who guided American manufacturing into a period of ludicrous union contracts and built our Kafkaesque regulatory environment.
That said, Nash-Hoff is quick to remind cynics that just because the pendulum may have swung too far, it doesn’t mean that we want to be living in the 19th century again either:
Lessons Learned From 100% Made in USA House
in Uncategorized/by MAM TeamDecember 27, 2012
Now, about a month from completion, the three-bedroom house on the Conway Chain of Lakes stands as a pioneering lesson in the challenges, costs and limitations of building a made-in-America house. The couple have cataloged their construction story at buildtheusa.us.
Two rules were imposed on the job: All products had to be made in the U.S., though not necessarily by a U.S. company. And all workers had to be legal residents of the country. The point, the Gents said, was to support jobs in the U.S.
In some cases, the workers were employed by companies with plants on American soil but with global headquarters elsewhere; it is a mistake, Greg Gent said, to assume that a U.S. company manufactures all its products in the States, or that companies marketing their U.S. presence actually manufacture their wares domestically.
“We started checking all the products, and then [contractor] John [Carr] did, and then John got the subs to,” he said. “No one tried to sneak anything by.”
The ashen porcelain tiles that cover the floors throughout the two-story house were made in the United States, though the supplier is a subsidiary of Italy’s Florim Ceramiche SpA. The shingles were similarly manufactured in the U.S. by a business owned by a French corporation.
Carr, president of Belle Isle-based JPC Construction Inc., said the biggest challenge was finding legal workers in a market abandoned by many crews after the housing slump started five or six years ago. An increase in production-home construction during the past year has left skilled workers in high demand, he added.
Difficulties finding the right workers, plus rain delays, added at least three weeks to the job. And ensuring the house was built with U.S. products, materials and labor added several more weeks.
Subcontractors were dutiful about the made-in-America mission. Carr said his father-in-law, Russ Willis, did the electrical work in the house and discovered a low-voltage surge-protector box marked “Made in the USA” that, upon closer inspection, had components within it from Canada and Mexico as well as the U.S.
Part of the home’s soffits were manufactured by a company that had just started purchasing its supplies from China, so an earlier product batch built in the U.S. had to be tracked down and used.
Carr, who used his cellphone camera to document where products had been manufactured, estimated that the additional cost of wrapping the house in a virtual American flag was about $2,500 to $3,000, or about 1 percent of the overall cost of construction. Two of the project’s seemingly least-expensive items — screws and nails — were responsible for driving much of that higher tab, because they cost about four times as much as their foreign-made versions.
“I’d like to change to do this entirely” with other houses, the contractor said. “But you’ve got the competition. My clients now say they’d like to do this, but there’s the cost.”
Greg Gent is able to recite the origins of almost every part and product used in building the house, from the suppliers of sand and limestone in Lake Wales to the cement company in Sumterville. The item he is most excited about, however, is the Pawleys Island handcrafted rope hammock from South Carolina.
Unable to find a ceiling fan manufactured on U.S. soil, he said he and his wife are holding off on ordering any. Maybe someone in this country will start manufacturing them again, he said.
Apple to Move Mac Mini Production to America: Report
in Technology/by MAM TeamDecember 27, 2012
A report from the Taiwanese tech publication DigiTimes, quoting sources in the upstream supply chain, said Apple is set to move its Mac Mini production lines back to the U.S. “Currently, Foxconn has about 15 operating bases in the U.S., and the company reportedly plans to start recruiting workers in 2013 for new automated production lines,” the report said.
Foxconn, the Taiwanese manufacturing company that makes the iPhone handset, among other Apple components, would be responsible for handling the establishment of production, DigiTimes reported. The Mac Mini offers third-generation Intel Core processors, an integrated memory controller that connects 1,600MHz memory directly to the processor, Intel HD Graphics 4000, either a 500GB or 1TB 5,400rpm hard drive and up to 256GB of flash storage in a solid-state drive instead of a traditional hard drive.
According to a DigiTimes research report, Apple’s Mac Mini shipments are projected to rise 30 percent to 1.8 million units in 2013, up from 1.4 million units in 2012. Apple upgraded the Mac Mini in October, which now includes four USB 3.0 ports in addition to its Thunderbolt, High Definition Multimedia Interface (HDMI), Secure Digital Extended Capacity (SDXC), Gigabit Ethernet and FireWire 800 ports.
The Mac Mini is available with a 2.5GHz dual-core Intel Core i5 with Turbo Boost speeds up to 3.1GHz, 4GB of memory and a 500GB hard drive for $599; a 2.3GHz quad-core Intel Core i7 with Turbo Boost speeds up to 3.3GHz, 4GB of memory and a 1TB hard drive for $799; and a 2.3GHz quad-core Intel Core i7 with Turbo Boost speeds up to 3.3GHz, OS X Server, 4GB of memory and two 1TB hard drives for $999.
Earlier this month, Apple CEO Tim Cook told NBC news anchor Brian Williams that Apple will, in fact, be moving the production of one of its Mac lines to America, a move that will cost the company approximately $100 million.
In the interview, Cook’s first since he took the helm as CEO in mid-2011, he also said the company plans to build a data center in Texas, in addition to existing data centers in North Carolina, Nevada and Oregon. Cook declined to state specifically where the computers would be made, however.
“We’ve been working for years on doing more and more in the United States,” Cook told Williams. “When you back up and look at Apple’s effect on job creation in the United States, we estimate that we’ve created more than 600,000 jobs now.”
What Mac to be 'Made in USA'? Maybe Mini, perhaps Pro?
in Uncategorized/by MAM TeamDecember 26, 2012
Elmer-Dewitt notes that Cook mentioned a $100 million investment and that a Bloomberg source, Dan Luria, estimated that such a sum would add up to a factory employing about 200 workers and turning out about a million units of whatever product per year. (Luria studies factory operations as a labor economist at Michigan Manufacturing Technology Center in Plymouth, Mich.)
“Only the Mac Pro and Mini sell fewer than 1 million per year,” Elmer-Dewitt says. And here’s why he casts his lot with the Pro: It’s heavier than the Mini, and thus more expensive to ship from overseas; Pros are, he says, “easier to build and customize than any other Apple product;” and Cook has indicated that Apple will be making a new Pro in the coming year.
So which Mac will bear the “Made In USA” label? That, of course, remains to be seen. It’s interesting, though, to play armchair CEO/COO and begin pondering such logistical questions.
Manufacturing “Insourcing” to Gather Steam in 2013
in News/by MAM TeamIn the wake of the BP drilling rig failure in the Gulf of Mexico almost 18 months ago, costing untold billions of dollars in penalties and losses, this unfortunate incident has added to the importance of “ultimate responsibility” by the “front line” installer and ultimate user.
Added to these changing circumstances are both escalating and time consuming overseas transportation costs, plus the shrinking of direct labor costs that have actually dropped in the U.S., but quintupled in China during the last 10 years. In the case of high technology, the imbalance has even grown tighter as the cost of labor in finished goods have continued to be less important as part of the total price picture.
But what surprised me most in the Atlantic Monthly article is the fact that GE, universally derided as the “champion of outsourcing,” has taken a leadership role in reopening production facilities in the U.S.
Although dismissed by some as a public relations gesture, due to CEO Jeff Immelt’s previous collaboration as the White House chief of non-existing domestic job creation, the GE “insourcing turnaround is primarily due to the rapid need for constant product innovation, and the shift to “just-in-time” inventory control. This is made almost impossible by today’s multi-month delivery time and the volume of purchases necessary from abroad to achieve a satisfactory cost preference. Other major American multi-nationals are indicating a similar predisposition.
When viewing America’s 2013 domestic production expansion through the prism of “insourcing” rapidity, trade deficit shrinkage. and setting new export records, especially in energy, heavy machinery, military equipment, technology and agriculture, guarded optimism has entered the picture. But it still leaves in doubt economic direction, so heavily colored with questionable politico-economic leadership emanating from Washington, D.C.
Is Manufacturing Making A Comeback In The U.S.?
in Manufacturing, Skills Gap/by MAM TeamRead more
R-CALF USA – USDA Prepares to Expose the U.S. to an Unnecessary and Avoidable Risk of FMD
in Uncategorized/by MAM TeamDecember 18, 2012
According to Iowa State University, swine are a “special concern” for FMD because they are more susceptible to the disease than other species of livestock. The United Kingdom also identifies pork meat from FMD affected countries, especially bone-in pork or with lymph glands attached, as bearing a higher risk for transmitting the disease.
Brazil is not a country recognized as FMD free by either the U.S. or the World Organization for Animal Health (OIE), yet both the U.S. and the OIE claim that Santa Catarina, the second most southern state in Brazil, is free of the disease.
Santa Catarina borders Argentina, which also is a country not recognized as FMD free. In 2011, Paraguay, which borders Brazil, reported an outbreak of FMD and a Brazilian journalist reported that after the outbreak, Paraguayan cattle were crossing freely into Brazil along a 254-mile stretch of the border and further reported no inspection crews at two border crossings.
“Our only means of preventing the introduction of FMD into the United States from raw Brazilian pork will be immediate notification by Brazil in the event of another FMD outbreak in that country,” said Max Thornsberry, D.V.M. and Chair of R-CALF USA’s Animal Health Committee.
But therein lies the rub.
Thornsberry said the fact that Brazil took two years before notifying the U.S. on December 7, 2012 that it had detected a cow with bovine spongiform encephalopathy (BSE) that had died in 2010 clearly demonstrates that developing countries like Brazil are not in the same league as the United States in preventing, detecting and reporting dangerous livestock diseases.
“The U.S. faces a real risk of introducing FMD from Brazil and USDA must start to realize that its system of relying upon foreign countries to prevent disease spread and introduction is badly broken.
“The USDA’s goal of free trade at any cost will soon cost the U.S. cattle industry much more than we can withstand and both cattle ranchers and consumers will suffer,” Thornsberry concluded.
# # #
R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. For more information, visit www.r-calfusa.com or, call 406-252-2516.
12 Days of Christmas & Holiday Giveaway – DAY 12
in Uncategorized/by MAM TeamWelcome to Day 11 of our Fabulous
12 Days of Christmas & Holiday Giveaway
Please help us in thanking our wonderful members and sponsors of our our daily giveaways. This would not have been such a success without the generous contributions of our corporate members and sponsors.
Now, on to our last giveaway of the year…
Today’s giveaway includes 16 prizes, valued at over $1,000!!
Rules for each day/entry:
(1) Comment at the bottom of this BLOG
(2) Enter via Rafflecopter widget below.
It may seem overwhelming at first, but its really quite easy.
(3) Are you on GOOGLE+? Give us a “+” up on the right hand corner of this blog. Not necessary to enter, but while you’re here… ;-)
It will help us rank higher on GOOGLE!!
(3) SHARE (via Facebook) blog link on your wall.
The more you share this link, the better your chances are to win.
Giveaway begins at 12PM EST
Giveaway will run for 24hrs only
One winner will be chosen at random.
Name of winner will be posted at 6pm EST.
Winner will have 24hrs to get in touch with us;
otherwise prize will go to runner up.
Today’s retail value of all 16 prizes is about $1,000
That’s $1,000 worth of American Made gifts you won’t have to spend a dime on!
We want to keep our giveaways flexible and allow our readers to enter in whatever ways they are most comfortable. There are a LOT of entry options below, but don’t be overwhelmed. The FACEBOOK likes are required, the Twitter follows are not… however, the more entry options you complete, the more chances you’ll have to win.
This giveaway will close at 12pm EST on 12/21. The winner will be randomly selected, verified for correct entry participation, and notified by email.
Now, let’s have some fun and win some prizes!!!
12 DAYS OF PRIZES
DAY 12
12 Days of Christmas & Holiday Giveaway – DAY 11
in Uncategorized/by MAM TeamWelcome to Day 11 of our Fabulous
12 Days of Christmas & Holiday Giveaway
Rules for each day/entry:
(1) Comment at the bottom of this BLOG
(2) Enter via Rafflecopter widget below.
It may seem overwhelming at first, but its really quite easy.
(3) Are you on GOOGLE+? Give us a “+” up on the right hand corner of this blog. Not necessary to enter, but while you’re here… ;-)
It will help us rank higher on GOOGLE!!
(3) SHARE (via Facebook) blog link on your wall.
The more you share this link, the better your chances are to win.
Giveaway begins at 12PM EST
Giveaway will run for 24hrs only
One winner will be chosen at random.
Name of winner will be posted at 6pm EST.
Winner will have 24hrs to get in touch with us;
otherwise prize will go to runner up.
Today’s retail value of all prizes is over $800.
That’s over $800 worth of potential American Made gifts you won’t have to spend a dime on!
We want to keep our giveaways flexible and allow our readers to enter in whatever ways they are most comfortable. There are a LOT of entry options below, but don’t be overwhelmed. The FACEBOOK likes are required, the Twitter follows are not… however, the more entry options you complete, the more chances you’ll have to win.
This giveaway will close at 12pm EST on 12/20. The winner will be randomly selected, verified for correct entry participation, and notified by email.
Now, let’s have some fun and win some prizes!!!
12 DAYS OF PRIZES
DAY 11
Foxconn Begins Manufacturing Amazon Smartphone
in Uncategorized/by MAM TeamDecember 18, 2012
Perhaps the most surprising part of the report relates to the price of the supposed device. The report claims that Amazon’s smartphone will be offered for a price somewhere in the range of $100 to $200. If true, such a low price point would be consistent with the company’s strategy of bringing customers into its e-commerce ecosystem over profit margins on its hardware. Despite the success of the Kindle line of devices, the company barely breaks even on every Kindle Fire $159.00 at Amazon device produced.
But, contrary to the high profit margin strategy of Apple, Amazon CEO Jeff Bezos apparently believes in a different approach. In October, in a statement accompanying Amazon’s third quarter results, Bezos said, “Our approach is to work hard to charge less. Sell devices near breakeven and you can pack a lot of sophisticated hardware into a very low price point.”
The Asia-based news source also claims the device is scheduled to be launched some time in the second or third quarter of 2013, which might allow the handset to compete, give or take a few months, with the release of an updated iPhone, assuming Apple hews to its usual release schedule.
Last month, Digitimes reported that Foxconn was producing phones for Amazon and Microsoft.