The State Of American Manufacturing

[Bear Up North]

In the news the other day was the CEO of General Motors, frankly admitting that if conditions do not improve for his company then Pontiac or Buick may be eliminated. No suprise if you follow this sort of thing.

Here are some of my observations on "the state of American manufacturing". Many of you are significantly younger than this 56-year old coot and chances are you have had limited exposure to any manufacturing plants or processes.

The 1960's
After I graduated from high school and before I wandered off to university I spent some time living in Chicago, with a friend who was going to school there. When we would cruise the streets of the metro we would see hundreds of signs in front of manufacturing plants advertising for "help wanted". I remember cruising past a Sunbeam plant and the sign had about twenty (20) different jobs listed.

Inside that plant.....and most American plants.....most of what was being made was done internally, almost from scratch. A garage door, a refrigerator, a transmission.....all of these were made from stamped and cast materials, usually metal. Giant stamping machines would do a "flywheel dance" and punch out a metal hinge or a door panel or a metal clip that was part of the inside of a medical machine.

The 1990's & After
Because of the size of many products......garage doors, refrigerators, lawn mowers.....many products are still assembled in the USA. Some of the larger parts, such as larger metal stampings, are still done stateside. But many of the internal "stuff" that helps to make all of the things we use is now plastic, usually poured into a mold in a city in China or Japan or Sri Lanka.

Productivity
The rate at which we now make "things" is the highest ever. Ergonomically-friendly machines, controlled by a micro-chip, now do the work that used to require a group of people lined up at a bench. Products have been re-engineered so that now-plastic "clip" is built so it can handle a number of different placements in the assembly process.

Better minds than ours have discussed forever the issues that drove these changes. Unions, the move of manufacturing to "the south", environmental laws.....all played important parts in the changes. The bottom line is that American manufacturing is now just a shadow of its' former self.....if you measure in the terms of humans involved. American manufacturing is more productive, safer, and more techically-advanced than ever before.

The days of cruising past a Sunbeam plant and reading the "help wanted" sign are long gone. American manufacturing is still here, still strong, but is a whole lot different than when I was coming out of high school.

Your views on the state of manufacturing?

Bear

[BKM]

I don't know what the answer is. General Motors, except for maybe the Corvette and a couple of pickup trucks, has simply "lost it" as far as designing cars that anyone really wants to buy. Their cars are either ramshackle junk or even more bland than the Japanese ergoblobs (with the added disadvantage of being less reliable and less well-engineered). It's EMBARASSING that an American industrial giant produces cars that are uglier and less reliable than a Korean manufacturer that like Hyundai. Throw in the Union problems and pension costs, I don't know. Does anyone other than 73 year old living in the industrial midwest WANT to buy a Buick anymore?

I've often thought this is a conglomerate that should be broken up and spun off. Maybe sell the Corvette line to BMW? The pickup trucks to Chrysler or Toyota. Pontiac and Buick and the rest of Chevy are not worth saving.

It's too bad. We cannot compete with the Asians on manufacturing or costs (watch the forthcoming Chinese auto industry. Quality chinese cars sold for $5,000 in WalMart) and we cannot compete with the Europeans on panache and engineering and style (although semi-American Chrysler has gotten style down somewhat).

These are all my ramblings, not "fact" or course It's sad. Dozens of communities will be devastated when GM inevitably collapses. Is Ford next?

[jtmnkri]

Automobile manufacturing can succeed in the United States. The answer is no unionization and, to a lesser extent, government incentives.

Foreign automakers' investment in US manufacturing is enormous and growing. And these are good jobs, judging by this USA Today quote:

"Most workers at car plants in the [South] are locals who were earning less — sometimes even if they held two jobs — and had skimpy or no health or retirement benefits. They can make $15 or $20 a hour, plus benefits, at the car factories, leaving little incentive to unionize."

Auto workers are smart to reject the UAW. According to the Detroit Free Press, "the union has seen its ranks fall from 1.5 million in 1979 to 624,000 in 2003". I wouldn't trust the UAW to preserve my job.

Rust belt state governments, unions, and workers should replicate Southern states' policies and attitudes concerning auto manufacturing.

Here a sampling of new plants, along with a link to an article about foreign parts suppliers flooding into the US South.

Nissan - Texas, Mississippi 2003
BMW - South Carolina 1994
Mercedes Benz - Alabama 1995
Hyundai - Alabama 2005
http://www.southernautocorridor.com/.../supplier_news

[Bear Up North]

I would agree with jtmnkri that unions have had a negative impact. However, there are pockets of very successful automobile manufacturers in the rust belt.....even today, after all those years of the southlands grabbing those jobs.

In the Chicago area a supplier park is being built adjacent to assembly factories. This supplier park concept greatly reduces transportation costs and inventory costs for the amanufacturer. The parts he needs at 3:15 PM are being assembled just down the road at 2:15 PM and the parts will be delivered to a specific location in the assembly plant.....just-in-time. (I have seen this in action at a supplier park in Toledo, feeding the new Jeep factory.)

Toledo's Jeep plant is also going to be fed by additional supplier plants that are adjacent to Jeep. One (1) plant is now under construction and a couple of others will break ground soon.

Honda's investment in mid-Ohio is huge. Toyota has plants in Indiana and Kentucky (the Bluegrass plant is within an hour of rust belt Ohio). Diamler-Chrysler is building a huge facility about twenty (20) miles north of Toledo.

It's not all doom and gloom for automobile manufacturing in middle America.

Bear

[Wulf9]

Unions are the reason most employees today get good salaries, a reasonable workweek, retirement, and benefits.

Unions did get out of hand, but watch what happens when they disappear. In the grocery business, $17 per hour jobs are dropping to $8-10 an hour jobs.

Unions are the reason blue collar workers were able to become part of the middle class.

I guess the question is whether we want the world of the mid-20th century, where most workers are middle class. Or the world of the late 19th century, when most blue collar workers worked long hours and for very low wages.

Just for example, Wal Mart is lobbying to increase the work day for their truckers. Expect more of the same with government as the prime agent in union busting.
Welcome to 1890.

[Nor Cal Planner Girl]

[QUOTE=BKM] Does anyone other than 73 year old living in the industrial midwest WANT to buy a Buick anymore?

My mom drives a Buick ha-ha!- she loves 'em and, she's 61

[BKM]

[QUOTE=Nor Cal Planner Girl]

Does anyone other than 73 year old living in the industrial midwest WANT to buy a Buick anymore?

My mom drives a Buick ha-ha!- she loves 'em and, she's 61

Well, my previous car WAS a Ford (and I do like the styling of the new Mustangs )

Can't think of a single General Motors vehicle I would purchase. Not one. Sad, huh?

jtmiki does amake a point about foreign carmakers setting up shop here. As does Wulf's response to reflexive anti-unioinsm. It's hard to criticize Unions alone-observe the system of "golden parachutes" for top management that run companies into the ground while still making out like bandits.

[Bear Up North]

Much of the discussion on this thread, so far, has revolved around the state of American automobile manufacturing. I will add a couple examples of stateside manufacturing that is non-auto related, but still makes a point about what is happening. (I have personal experience with both of these examples.)

The largest moving object in your house is the garage door. Small doors weigh a couple hundred pounds.....2-car garage doors can be around four-hundred (400) pounds. Because of their size, most manufacturing of garage doors still takes place in the states.

All of the hardware that attaches to the door and attaches to the house used to be made out of metal products. Metal track, metal springs, metal hinges and rollers, metal top and bottom brackets, metal woven cable. These products were stamped out by small manufacturers all over the country and sold to the door manufacturers, so the parts could be included in the complete kits necessary for installation.

Now, many of these parts are molded overseas.....plastic. Dozens of lighter-weight plastic hardware on a big door reduces the overall weight. This leads to less steel used in the spring wire (that pulls the door up). American jobs lost in this small example.

Toilet bowl brushes are a useful little tool. They have always been made out of a plastic material, with strands of fluffed cloth pulled through the end of the handle or puffy cotton-like material attached to the end. Companies that distribute this low cost item used to rely on American manufacturers for it. But, to stay competitive with the guy around the corner, distributors now go overseas and buy the same product at a greatly-reduced cost.

In the toilet bowl bursh example, the former method of purchasing provided the distributor with a carton of brushes, perhaps two-hundred (200). Those were sold to the secondary distributor in full cartons. The brushes coming from overseas still are cartoned in the same quantity. The difference nowadays, though, is this:

Secondary distributors no longer want just a carton of brushes. They want those brushes with a bar code attached to each brush (so it can be efficiently "picked" in a warehouse by using a bar-code reading gun) OR they may want those brushes packaged in a 12-pack, with a bar code, and a sombrero punch hole so it can be hung on a display hook at the final place of sale.

This secondary work is almost always done stateside, by USA workers.

Bear Highlighting Some Changes To The Way Things Are Made

[Architorture]

so much of manufacturing now revolves around the cost of moving the product...

as with the example of garage door parts, until they were made of plastic they probably weren't economical to ship them from overseas due to their weight...

my favorite example to explain this phenomena is the demise of the glass bottle... there is absolutely no reason for the glass bottle not to succeed accept for its weight, which is much higher than a plastic [PET] bottle...

glass is 100% recyclable and never loses its quality...1 bottle in equals 1 bottle and it takes less energy to make bottles from recycled glass... this isn't the case with plastic where you don't recover all of your material and you have to do a significant amount of chemical gymnastics to get a bottle to be a bottle again...

glass also is associated with higher quality and generally people look more fondly upon products packaged in glass containers...

but in the end, plastic is a lot lighter than glass and since shipping is such a huge portion of the costs for the container and beverage industry, they go with plastic instead of glass....

it is a really bizzarre situation if you sit down and think about it...

anyway, it'll be interesting to see how the oil crunch will effect transoceanic shipping and if that cost increase can offset the cheaper labor and force companies to relocate back to the united states...

as for foriegn auto manufacturers, many of them have relocated simply to avoid heavy tariffs and other such fees associated with cars that don't meet a particular 'american content' level that was layed out by NAFTA... i think at one time it was actually cheaper for honda and toyota to make cars in the US and ship them back to japan as opposed to make cars in japan and ship them to america...

[Bear Up North]

Looking again at the plastic bottle business, a prime ingredient in manufacturing plastic is the resin. Resin is made from petroleum. You never know......it may eventually be more cost-effective to use glass.....again.

This Bear is located in the Toledo, OH, area.....self-proclaimed "Glass Capitol Of The World".....because of the numreous Fortune 500 glass manufacturers that have or had corporate headquarters here. There are also still a number of plants in the area that manufacture glass products. Because of our location we are quick to see trends.....positive and negative.....in this industry.

Bear

[Architorture]

indeed that is glass country... of course that industry in particular is consolidating so much b/c of new technology and such...

[Wulf9]

A couple of other things have affected American manufacturing.

One has been to allow goods from countries with the equivalent of slave labor, gross environmental destruction, unacceptable treatment of citizens, totalitarian governments, and currency manipulation. All of these allow sale of goods at non-market prices.

The U.S. could have put a "democracy, environmental, and human rights means test" on trading partners and achieved what we have not been able to achieve by military action. Instead, we have supplied these countries with our technology, intellectual property, and imported their artificially underpriced goods to the point that we are awash in cheap consumer goods -- and retail outlets that undercut good wages in order to compete on prices that are not truly free market prices.

The two biggest potential changes to restore American manufacturing might come because of increasing fuel prices (and possibly the absolute decline in fuel supply) or a military action that could cause the U.S. to stop importing from a major supplier.

[SkeLeton]

The U.S. could have put a "democracy, environmental, and human rights means test" on trading partners and achieved what we have not been able to achieve by military action. Instead, we have supplied these countries with our technology, intellectual property, and imported their artificially underpriced goods to the point that we are awash in cheap consumer goods -- and retail outlets that undercut good wages in order to compete on prices that are not truly free market prices.

That's not really convenient for the US itself..... Your "democracy", lack of good enviromental laws and frightening disrespect fro human rights (ok.. maybe just in Gitmo and Afghanistan and iraq and all the countries you invade) doesn't leave you standing in a good position....

Also, Governments aren't good controlers in such matters... consumers on the other hand can boycott sweatshop products and the like... unless they do it like the boycott against the french a few years ago (2003? 'cause France didn't want to invade iraq?)

[Bear Up North]

In this thread we have been discussing the manufacture and movement of goods. As you know, many of the goods that used to be manufactured in the USA are now produced in China, and other Pacific Rim and Indian Ocean countries. These goods arrive on our shores via the huge containers.

Just read an article this week about the USA ports that handle containers. Here is the rating, based on container "units" (a 20-foot container). Numbers are in millions.....

Los Angeles 4.87
Long Beach 3.76
New York City 3.16
Charlestown SC 1.42
Savannah, GA 1.29
Norfolk 1.21
Oakland 1.20
Houston 1.10
Seattle 1.05
Tacoma .94

The list suprised me. I knew that LA/Long Beach would be high. But I thought Seattle and Norfolk would be much higher. I never-ever suspected that Charlestown and Savannah would even be on the list.

The southern California ports have a real problem. The rail service in and out is way too congested, creating a lot of "wait" time for ships. According to the article (in Logistics Management Magazine) there are also problems at all ports with trucks and trailers not being on-time.

These problems will just get worse. Experts indicate that the numbers on the list above will double in just a few years. More and more products are being manufactured overseas. The trucking companies are having a hard time getting drivers.

Bear

[chukky]

I don't know what the answer is. General Motors, except for maybe the Corvette and a couple of pickup trucks, has simply "lost it" as far as designing cars that anyone really wants to buy. Their cars are either ramshackle junk or even more bland than the Japanese ergoblobs (with the added disadvantage of being less reliable and less well-engineered). It's EMBARASSING that an American industrial giant produces cars that are uglier and less reliable than a Korean manufacturer that like Hyundai. Throw in the Union problems and pension costs, I don't know. Does anyone other than 73 year old living in the industrial midwest WANT to buy a Buick anymore?

I've often thought this is a conglomerate that should be broken up and spun off. Maybe sell the Corvette line to BMW? The pickup trucks to Chrysler or Toyota. Pontiac and Buick and the rest of Chevy are not worth saving.

It's too bad. We cannot compete with the Asians on manufacturing or costs (watch the forthcoming Chinese auto industry. Quality chinese cars sold for $5,000 in WalMart) and we cannot compete with the Europeans on panache and engineering and style (although semi-American Chrysler has gotten style down somewhat).

These are all my ramblings, not "fact" or course It's sad. Dozens of communities will be devastated when GM inevitably collapses. Is Ford next?

Is GM really so far gone? I got a list of the world's biggest economic entities by revenue a while back (though from 2000)

9. GM.....US$185 billion

which compares favourable to successful empires like

8. Wal-Mart..... US$193 billion

which well exceeds most countries like

18. Canada ..... US$122 billion
12. Brazil....US$151 billion

and pathetic little

31. Australia.....US$91 billion. We should really stop pretending to be part of the world economy....

[Breed]

I'm a bit late on the scene... but here's my two cents.

Your views on the state of manufacturing?
Bear

I did a paper on the future of manufacturing back in college. My basic premise was that as time goes on, due to increases in efficiency and the resulting decrease in human involvement, the economic impact will be much like a slave society, but not in a bad way .

Slave societies... two examples I used: pre-Civil War south, ancient Rome, etc, had two things in common: extensive philanthropic sectors and large "slave-maintenance" employment. In both the South and Rome, the existence of slaves freed the non-slave population to work in other fields like the arts. In addition, both slave societies had a significant amount of their population dedicated to slave maintenace (i.e, military might).

As time goes on, I argued that the impact of industrial improvements will head more and more in that direction. Population that was previously engaged in industry will be redirected to work in service and entertainment related fields... and our "slave maintenance" professions (computers, engineering, planning ).

Of course, one wrinkle that will delay this is the fact that the discrepancy between wages in our country and poorer countries of the world is so great that it is in many ways cheaper to do business elsewhere than to make big strides in efficiency improvements. But with that being said, the impact of our not doing alot of our own "grunt-work" is having the impact of greatly increasing our service and entertainment industries.

I would agree with jtmnkri that unions have had a negative impact. However, there are pockets of very successful automobile manufacturers in the rust belt.....even today, after all those years of the southlands grabbing those jobs.

Here in South Carolina, our industry is the most dominant sector of our market. We have minimal unionism. It is a marketing point our local economic development organizations use to market to international companies. Of which, we have alot. I've read that we have the highest per capita concentration of foreign companies. I haven't been able to verify it, but the claim has been made.

This secondary work is almost always done stateside, by USA workers.

One thing that I found interesting... In my new job, I am involved in tracking development in a variety of sectors. One project I was involved with involved analyzing a variety of the west coast markets.

Alot of manufacturing space is being resued as warehouse space. This is especially true on the west coast, where the flood of products being shipped in from Asia needs a place to stay. The west coast industrial markets are seeing record vacancy rates.... dropping from 15-20% to 2-3% in little more than a decade. What this means is that many west coast industrial facilities can be sold for record amounts of cash. A lot of companies are selling their facilities, especially if they are large and well suited for warehousing purposes, and then relocating to facilities in Nevada, Utah, and Arizona where the labor and facilities are cheaper.

This doesn't apply directly to industry necessarily, but it is an intersting phenomenon.

One has been to allow goods from countries with the equivalent of slave labor, gross environmental destruction, unacceptable treatment of citizens, totalitarian governments, and currency manipulation. All of these allow sale of goods at non-market prices.

The U.S. could have put a "democracy, environmental, and human rights means test" on trading partners and achieved what we have not been able to achieve by military action. Instead, we have supplied these countries with our technology, intellectual property, and imported their artificially underpriced goods to the point that we are awash in cheap consumer goods -- and retail outlets that undercut good wages in order to compete on prices that are not truly free market prices.

The big globalization dilemma. On one hand, we see poorer nations and want to help them by providing them with our assistance. But because we are assisting them, we are introducing an artificial economic impact on their country that exacerbates many of the problems they have. Whenever you have two extreme economies mingling, corruption is often rife. In order to help with corruption, we get more involved. The more involved we get, the more potential corruption there is. Unfortunately, I don't know what the best answer is to that dilemma.

Also, Governments aren't good controlers in such matters... consumers on the other hand can boycott sweatshop products and the like... unless they do it like the boycott against the french a few years ago (2003? 'cause France didn't want to invade iraq?)

I'm not sure a boycott in this day and age is possible anymore. Sure, there may have been a claim to boycott France after the Iraq War began, but it was really without any teeth. Our society is filled with so many distractions (internet, television, 1-900 lines) that I'm not sure our society could really boycott much of anything effectively.

Just read an article this week about the USA ports that handle containers. Here is the rating, based on container "units" (a 20-foot container). Numbers are in millions.....

Los Angeles 4.87
Long Beach 3.76
New York City 3.16
Charlestown SC 1.42
Savannah, GA 1.29
Norfolk 1.21
Oakland 1.20
Houston 1.10
Seattle 1.05
Tacoma .94

The list suprised me. I knew that LA/Long Beach would be high. But I thought Seattle and Norfolk would be much higher. I never-ever suspected that Charlestown and Savannah would even be on the list.

Charleston is the second biggest port on the east coast. I was surprised when I first heard when I visitied Charleston for the first time a year and a half ago. But when you consider the amount of manufacturing around here, it makes some sense.

One thing I recently found out. The Greenville, South Carolina market has the second largest manufacturing workforce per capita in the United States. (#1 is Wichita, Kansas) About 21% of our workforce is involved in manufacturing. The bulk of our production is sent out of Charleston.

The southern California ports have a real problem. The rail service in and out is way too congested, creating a lot of "wait" time for ships. According to the article (in Logistics Management Magazine) there are also problems at all ports with trucks and trailers not being on-time.

These problems will just get worse. Experts indicate that the numbers on the list above will double in just a few years. More and more products are being manufactured overseas. The trucking companies are having a hard time getting drivers.

I know Charleston is starting to get shipments that were orginally headed for California, as in some cases it is more cost efficient. In addition, I know there are two auto-manufacturers that are looking at locating plants in our market. One of the main reasons they are considering this market as opposed to Asia is because they are concerned about the cost of warehousing out west. Even though labor costs are incredibly cheap in Asia, there is so much product being shipped out that it is creating expensive logjams to get to the consumer.

[passdoubt]

Just think about it, we could stop losing these manufacturing jobs to 3rd world countries if we simply became a 3rd world country!

[michaelskis]

Here is how I see it. As a resident in a former rust belt manufacturing area, things have changed but manufacturing is not dead, it is only changed. Instead of manufacturing physical tangible products we manufacture ideas. We will always have some manufacturing of particular products, but in the past we have relayed on heavy manufacturing to be successful. We can’t do that anymore.

[BKM]

Instead of manufacturing physical tangible products we manufacture ideas.

But why do you assume this is true and sustainable? Why do you assume an American engineer, 5,000 miles from the manufacturing and all the suppliers, will be able to compete with a Chinese or Indian engineer who is right there, tied directly into the whole network of suppliers and local manufacturing expertise? Especially when said Chinese or Indian engineer earns $15,000 per year? And, when Chinese conglomerates are steadily buying up old, decaying American "brand names." The only thing really propping this idea up is that the United States is/was the world's biggest consumer market/trend setter. Increasingly, this is no longer true (the Japanese, for example, get the best electronics well before we do. And, you notice that there are no more American consumer electronics engineers outside of a few computer companies and specialized firms). In the future, China will drive the consumer markets. What ideas will be generateed in the United States other than military weapons and ways to repackage debt?

[Tide]

Numbers are in millions.....

Los Angeles 4.87
Long Beach 3.76
New York City 3.16
Charlestown SC 1.42
Savannah, GA 1.29
Norfolk 1.21
Oakland 1.20
Houston 1.10
Seattle 1.05
Tacoma .94

The list suprised me. I knew that LA/Long Beach would be high. But I thought Seattle and Norfolk would be much higher. I never-ever suspected that Charlestown and Savannah would even be on the list.

Seattle and Tacoma could easily be combined for a total of 1.99 Mil. The two cities are within an hour of each other and there is really no separtation between the two urban areas.

I also believe the NYC number is the total Port Authority of NY/NJ (NYC, Newark, Elizabeth etc etc.)

[michaelskis]

But why do you assume this is true and sustainable? Why do you assume an American engineer, 5,000 miles from the manufacturing and all the suppliers, will be able to compete with a Chinese or Indian engineer who is right there, tied directly into the whole network of suppliers and local manufacturing expertise? Especially when said Chinese or Indian engineer earns $15,000 per year? And, when Chinese conglomerates are steadily buying up old, decaying American "brand names." The only thing really propping this idea up is that the United States is/was the world's biggest consumer market/trend setter. Increasingly, this is no longer true (the Japanese, for example, get the best electronics well before we do. And, you notice that there are no more American consumer electronics engineers outside of a few computer companies and specialized firms). In the future, China will drive the consumer markets. What ideas will be generateed in the United States other than military weapons and ways to repackage debt?

Why is it that mass numbers of immigrants are coming to the United States to work in Technology, Information, Medical, and Technical Sector jobs from Asian and Middle Eastern countries? The City of New York lost population in American Born Citizens over the past 15years, but the massive amounts of Immigrants coming to the US more than made up for the loss resulting in a net gain. The great majority of them were educated in these types of jobs because they realize that they can make more here than overseas.

Many companies are looking else where for cheep labor and moving their manufacturing pants over seas, while many companies from overseas (including many foreign auto makers) are moving their tech, research, and design plants to the US.

The US is in the process of changing from country that employees repeated physical activity jobs to a country that employees varying mental activity jobs.

We will always have some manufacturing jobs, but the numbers are becoming minimal at best as they move to places with cheaper labor.

Another thing that this shows is a shift in the dynamic of industry. Instead of locating companies in locations for transportation and physical reasons, they are locating based on their desired demographic.

[BKM]

Many companies are looking else where for cheep labor and moving their manufacturing pants over seas, while many companies from overseas (including many foreign auto makers) are moving their tech, research, and design plants to the US.

I hope you are right, but I think your optimism is again, obsolete. Many of these well-educated immigrants are now returning overseas (Bangalore is full of Indian returnees from Silicon Valley) to make fortunes in their native countries. Or, at least they will, as immigration restrictions make easy movement of educated labor more difficult.

Many of the "mental" jobs can be cheaply done overseas. Architecture (Romania, China), tutoring (per El Guapo), law (Indians know English and have training in a legal system similar to ours), computer programming (China, India, Romania) Sure, a very few top end jobs may stay here, but as capital flows shift, and Chinese, Indian, and European firms begin buying up American corporate brands (like IBM computers), even those jobs are easily subject to off-shoring. Part of the reason for the design facilities being located here is because of the American market. As the Chinese and East Asian markets grow and mature, consumer goods, even cars, will increasingly be designed to those markets. There is less incentive to do the design here, then.

Especially as the United States' policies encourage a backlash against U.S. cultural exports. Korean cinema, Japanese pop culture, are all increasingly important. Throw in the fact that "Hollywood" is increasingly rarely Hollywood, California any more. It's cheaper to film in Vancouver, in Mexico, in New Zealand. All those skilled technical jobs associated with moviemaking flow overseas, then.

Of course, if Peak Oil is real, this debate is moot, anyway

[michaelskis]

I hope you are right, but I think your optimism is again, obsolete. Many of these well-educated immigrants are now returning overseas (Bangalore is full of Indian returnees from Silicon Valley) to make fortunes in their native countries. Or, at least they will, as immigration restrictions make easy movement of educated labor more difficult.

Many of the "mental" jobs can be cheaply done overseas. Architecture (Romania, China), tutoring (per El Guapo), law (Indians know English and have training in a legal system similar to ours), computer programming (China, India, Romania) Sure, a very few top end jobs may stay here, but as capital flows shift, and Chinese, Indian, and European firms begin buying up American corporate brands (like IBM computers), even those jobs are easily subject to off-shoring. Part of the reason for the design facilities being located here is because of the American market. As the Chinese and East Asian markets grow and mature, consumer goods, even cars, will increasingly be designed to those markets. There is less incentive to do the design here, then.

Especially as the United States' policies encourage a backlash against U.S. cultural exports. Korean cinema, Japanese pop culture, are all increasingly important. Throw in the fact that "Hollywood" is increasingly rarely Hollywood, California any more. It's cheaper to film in Vancouver, in Mexico, in New Zealand. All those skilled technical jobs associated with moviemaking flow overseas, then.

Of course, if Peak Oil is real, this debate is moot, anyway

That is a very good point.

[Bear Up North]

Here's another aspect of the change in manufacturing in the United States.....

"Lean Manufacturing".

What is "lean"? Quite simply, the elimination of waste in a workplace. Wasted motion. Wasted space. Wasted time.

Very much related to what is called "The Toyota Production System", lean's goals include zero wasted time and zero inventory.
_____

Example: You are a manufacturer of bowling balls. To make a good bowling ball it has to go through ten (10) machines at your factory. Each machine does something different, as the ball works its' way to completion.

In the olde way of doing things, the people at each machine are paid incentives to process as many bowling balls as they can in a shift. Machine number six (6) has a highly-skilled been-there-forever operator who really can crank out the balls. His output is always greater than the other machines.

Machine number two (2) is an olde machine with an inexperienced operator. He is trying very hard to get his incentive, maybe too hard, creating defective balls in the process. Operators on the machines after his machine do their thing, working on bowling balls that have defects (unless there is an inspector at each step.)

In this example, piles of bowling balls (wasted inventory) are at a number of machines. Wasted time and wasted labor have happened throughout the process. (Ahhhh.....but everybody is "happy" because the bean-counters see high production run numbers and the operators are getting their big-money incentives. Everybody who tours the plant is all smiles because everybody is working very hard. Great job!)
_____

In lean, each process has a process that allows instant inspection (without a costly inspector in a lab coat and a clip board). It might be something as simple as two (2) devices that the operator has to push a ball through.....one (1) device is too small for an over-sized out-of-spec ball and the other device is too large for an under-sized out-of-spec ball. The operator sees the problem with the first ball and adjusts the machine.

In lean, the managers would take out a couple operators. The operators would move from machine to machine, creating a balanced flow, with little to no inventory.

In lean, the managers would identify the "bottleneck" and eliminate it. That might mean buying a new machine or fixing the old machine. And when you eliminate a bottleneck, you create another.....although your productivity (not production) just got better.
_____

For great reading on this topic......and this is from twenty (20) years ago.....grab the book called "The Goal". Written like a novel, it remains the best business book this Bear has ever read.

Lesson over. (And say what you will.....the lessons of lean can have a dramatic influence on the wanderings of the American economy......and that affects you.)

Bear

[Breed]

Especially as the United States' policies encourage a backlash against U.S. cultural exports. Korean cinema, Japanese pop culture, are all increasingly important. Throw in the fact that "Hollywood" is increasingly rarely Hollywood, California any more. It's cheaper to film in Vancouver, in Mexico, in New Zealand. All those skilled technical jobs associated with moviemaking flow overseas, then.

One thing I thought was funny when we went into Iraq... there was a pickup truck with a NYFD bumper sticker on it that the Iraqi soldiers were using as a military vehicle. Just a symbol of how pervasive US culture is. It's not uncommon to have people fundamentally hate everything about the United States, but than to lap US pop culture like dogs.

Lesson over. (And say what you will.....the lessons of lean can have a dramatic influence on the wanderings of the American economy......and that affects you.)

Bear

Something interesting about industry. When times are tough for the industrial market, it is common for industrial real estate to improve, as each manufacturer wants to occupy the best space to increase their efficiency. I'm sure there's some kind of relationship to "lean" manufacturing there.