Manufacturing works : the vital link between production and prosperity

Prologue

      America was in a sharp recession in 1990–1991. Journalists, politicians, professors, and consultants blamed American manufacturers. They said cheap foreign labor, automation, and consolidation were flattening U.S. producers.

      They argued that Japan Inc. and Germany Resurgent had done it right and the United States had done it wrong. Thus, they said, America was in for sustained hard times.

      In those dark and doubtful days, this book took root. In the years that followed, it turned out that American manufacturing didn’t just shrivel up and go away. The scope of production, from the tractors made at John Deere’s factories to Dick Conrow’s tool-and-die shop in northern Indiana, was too vast and too essential to disappear.

      In fact, our research, factory visits, and interviews taught us that American manufacturing has grown more productive in recent years. For sure, keeping the factories going has not been easy. The country’s manufacturers are burdened with a daunting array of vulnerabilities, sometimes self-inflicted by their own managements. Managers face difficult challenges from producers abroad, and they have to comply with regulations not always enforced elsewhere. Yet, American workers still make things, many things, that are the best in the world. At the end of the day, making things—from instruments to engine blocks—remains embedded in our national work culture and is essential to our prosperity.

      Curiously, we found that U.S. manufacturers did not get much credit for the good times of the 1990s. Mere mention of the word manufacturing frequently stirs images of layoffs, shuttered plants, unskilled workers, dirty floors, and faded glory. This vision, enhanced by the technology stock bubble of the late 1990s and the rapid growth of service jobs in recent years, held promise for greater opportunity in nonindustrial sectors. Frequently, though, such service work is done by manufacturers or through their complex networks of service providers. The rush to endorse the new economy, often diminishing the role of our industrial sector, became much less persuasive as the country fell into an economic recession in 2001.

Behind the Data

      Manufacturing is subtly, almost invisibly, woven deeply into the U.S. economy. At auto dealerships, employees rebuild cars and parts. At banks and insurance companies, print shop workers turn out brochures and financial statements. At distribution centers, lift-truck operators rumble through the aisles picking and stacking goods. Watching them go about their work may well give the sense of being in a factory. Yet, the federal government views these jobs as outside the manufacturing sector. We use the government’s job classifications for the purpose of this book, even though these occasionally change. These classifications say that employers must be engaged principally in the production of tangible products.

      Seeking to get at the stories behind our data, we talked with managers, workers, and others holding stakes in the manufacturing sector. We went to the principal regions of the country and viewed firsthand manufacturing on other continents. In counties away from a state’s major metropolitan areas, we found many factories doing well. In the larger cities, we saw the distress of layoffs and shutdowns. Where manufacturers were succeeding, so were their communities. Where they were faring less well, cities and towns were often slipping. Everywhere, we saw close links between production and prosperity.

      We have organized our material into five parts. The first part is an overview of the U.S. industrial scene. Part Two examines the striking contrasts we found between counties. Part Three explores our trade deficit and other aspects of today’s global economy. In Part Four, we look at the negatives facing U.S. manufacturers. We conclude in Part Five by considering the positives.

      Throughout our project, we unearthed substantial data to support the fact that manufacturing is one of the biggest forces behind the U.S. economy’s successes in recent years. Roughly 17 million Americans work for manufacturers, slightly fewer than a generation ago. The service and retail workforces have grown at the same time that industrial productivity has risen, so that only one of every seven jobs is in manufacturing today versus one in three in 1960. Yet, American manufacturers still generate rising output, drive exports, pay good wages and benefits, spark most of the country’s innovation, and provide immigrants with their first jobs. They still set the pace for making the American economy more productive.

      America’s challenge is to maintain a competitive economy, sensitive to demand and capital markets. Then, if the country supports its factories with education, transportation, utilities, and public services, U.S. manufacturers will be better equipped to respond to customers’ needs and thus to survive and prosper in their communities. This is the way it was with the emergence of American agriculture and railroads more than a century ago. It’s true of tool-and-die makers and instrument makers today, even though these craftsmen may be using computers as well as acetylene torches and precision machines.

      The need for prosperity has been apparent through history. And, manufacturing still matters, if we care enough to consider its importance. That is the overriding reason for this book.