Trump-Proofing American Manufacturing

Trump Hard HatFor the past six months it seems, one of my wife’s primary duties each evening was to talk me off the ledge whenever I happened to watch the nightly news and see yet another proud proclamation from Donald Trump about what he’s doing to “bring back manufacturing” to the U.S.

Our thin-skinned, tone-deaf, and often ham-fisted Chief Executive would invariably do something utterly unnerving like threaten China, pull America’s support of the Paris Accords on climate change, or offer some bold and painfully misdirected praise of coal as an energy source, so that – as a small manufacturer in the global arena, mind you, and one who trades on this country’s reputation as a beacon of advanced technology and thinking – all I could do was hang my head in disbelief.

Trump TweetTo me, President Trump’s woefully misguided and provincial rhetoric has not only been counterproductive to the cause of U.S. manufacturing for past six months, it has hurt us manufacturers in the one market we’ve spent decades cultivating; the still-growing and hyper-competitive international one.

But I’m happy to report (and I am writing this now because) I have finally seen the light. I have come down, so to speak, from that thin ledge I’ve crawled onto so many times this past half year.

I now realize U.S. manufacturers have created so much momentum in the global market, and we’ve invested so wisely and so incredibly well in cutting edge technology and new product development that, by doing so, we’ve created an industrial sector so powerful it transcends the politics of any one nation or world leader.

Trump Climate ChangeWe have, in other words, “Trump-proofed” American manufacturing.

Look, I was willing to give the Donald every benefit of the doubt when he first took office. And, while I continue to disagree with him on so many policy, personal and economic issues, I still hold he’s President and, as such, deserves the respect of every U.S. citizen – even when he’s at his most petulant, inept and non-presidential.

Siemens MfgBut any manufacturer worth his salt knows a trade war with China would be catastrophic, if not seismic. We know too that alienating foreign industrial superpowers like Toyota and Siemens, two of the largest employers of American workers in the world, would be suicidal. And we likewise realize every tariff that our country imposes on one of its international partners would be answered in kind, and then some.

For that reason, I am telling my fellow manufacturers we must look beyond this one loose cannon of a politician, beyond his curious, impulsive, bombastic, and often hollow words, and, above all, beyond any one party or ideology. Instead, we must continue to operate with the exact kind of passion, commitment to the future, and clear-headed thinking that three decades ago first triggered this glorious renaissance in American manufacturing we’re still enjoying.

ExportsManufacturers throughout America must continue to invest in new technology and new product R&D, even as our new president tries his ever-loving best to herd this economy we’ve helped catapult forward back to the days, the jobs, the working conditions, and even the energy sources of the 1950’s.

We must continue to train our best and brightest people in advanced engineering, computer, and technical skills, even as our president gives his chest-beating lip service about blue collar re-shoring and continues to crow about putting thousands of low-skilled American workers back to work in jobs that, we all know, no longer exist.

We must continue to hire the best trained and most qualified candidates, regardless of their place of birth. And we must continue to fight for their right to live and work in America after graduation, so they can continue to play key roles in helping their new homeland defend its hard-won place at the top of the global food chain.

Trump MfgAnd finally, we must continue to cultivate markets and build relationships across the globe, regardless of politics, even as Mr. Trump traffics in trade-war rhetoric, opts for veiled threats over insight, understanding and mutual respect, and keeps alienating many of our longest-standing and most loyal international customers.

Look, my friends, this essay may have sounded like a blistering attack on well-intentioned but otherwise bumbling world leader and the man’s ongoing attempt to, apparently, love American manufacturing to death. But I can assure you it was meant to be anything but.

To the contrary, it has simply been a heartfelt message to my friends and colleagues in the industrial sector that I’ve grown to love deeply over the years; a message I hope many will take to heart. And that message is this; since our darkest days the 1970’s, as a sector we American manufacturers have proven time and time again we have it in us to not only survive in the face of ravenous and lethal global competition, but to succeed in a way few others could have ever thought possible.

Smart FactoryNow, ladies and gentlemen, I implore you, let’s do that very same thing in the fickle and fleeting world of global politics.  And, to that end, the first thing we should all try to do is rise above it.

Four Ways President Trump Can Help U.S. Manufacturing

Trump CarrierI am not an economist.  I don’t even play one on TV.  I’m just a small business owner who’s spent his life in the most important sector in this economy.

I am, in other words, a manufacturer.

Yet when I hear President Trump dusting off the Laffer Curve, trafficking in 80’s-era supply-side rhetoric, and proposing tax reforms that recall the days of trickle-down prosperity and “voodoo” economics, it gives me real pause.  But, as I said, I’m not an economist and have no intention of debating the subject with you today.

Instead – and given that our president has made it clear he wants to do whatever possible to help U.S. manufacturing – let me offer four suggestions to Mr. Trump, all of which would help me greatly as both a businessman and a manufacturer.

 

Dr. Arthur Laffer, Economist and professor at University of Southern California, with "Laffer Curve" on blackboard, Feb. 23, 1981. (AP Photo)

1. Rebuild America
It’s not as sexy to call it fixing our infrastructure, but the idea’s the same. Let’s rebuild America.  There’s no sector of the economy more reliant on the strength and efficiency of our national supply chain than manufacturing (a chain, by the way, now solely reliant on miles of crumbling roads, bridges, tunnels, pipes, rail tracks and power lines).

And while Candidate Trump made some wild promises in pursuit of the presidency, one, in particular, that he made continues to have merit.  So much so, that President Trump would do well to not only hold onto Candidate Trump’s promise, but act on it.

Yes, it will cost trillions to reimagine and reconstruct the backbone of our economy.  But those dollars would prove to be money, not so much spent on construction, but invested in U.S. manufacturing’s future.

Tens of thousands of displaced and underemployed American workers would find jobs, along with a real sense of purpose. Hard dollars would start moving again among those ever-challenged workers who make up our ever-threatened middle class.

But more than anything, manufacturers like me would save billions in waste, downtime and inefficiency, allowing us to be more competitive abroad.

Infrastructure 12. Reduce Tariffs
The president, for as much as he’s travelled overseas, and for all his ties to the global community, seems strangely unaware of globalization.

Today’s world marketplace has grown radically smaller.  International borders, especially for multinational conglomerates (but even for small businesses like mine), represent not so much barriers to be overcome, as markets to enter and growth opportunities to be leveraged.

Imposing tariffs in an attempt to manipulate the trade balance, while noble in its intent, would be both short-sighted and dangerous.  Globalization is here.  And, if the wisdom of the marketplace has its say, it’s not going away anytime soon.

To deny that, or to try to breathe life into the inflammatory, populist rhetoric that got Mr. Trump swept into office, would constitute economic suicide of the highest order.

Large manufacturers would be hurt.  But small ones like me could be devastated.  New tariffs would invariably trigger return fire from countries across the globe, and put much of our new revenue at risk, while giving many of our current international customers the perfect excuse to start looking for a new supplier.

In fact, the best way to ensure even greater demand for American-made brands and products in the global arena would be for the president to do the opposite; reduce tariffs significantly, if not eliminate them altogether.

Green Mfg3. Increase Green Energy Tax Credits
If President Trump knows anything, he knows the power of a carefully crafted brand name.  Heck, his very presidency is living testament of the power of a strong brand name.

Yet, to embrace the carbon-intensive, 19th Century fuel sources he has – coal and oil, especially – is not only bad decision-making, it’s horrifically bad brand management.

The world marketplace is getting cleaner and greener all the time, fueled by a new generation of upwardly mobile consumers who are younger, more environmentally aware, and in pursuit of what might be called sustainable harmony with the planet.

And goods and services that play on that dynamic, while embracing clean fuel sources, are ones that will continue to steal market share from their archaic, carbon-intensive competitors.

And should U.S. goods suddenly begin to carry the global taint of environmental irresponsibility in developing markets like China and India, not to mention more mature ones like South America and the EU, we manufacturers will suffer – because the Made in America brand we’ve leveraged to expand our businesses will quickly start to stand for something rapidly growing out of favor in the global marketplace.

Like tariffs, the president should do the opposite of something on which he ran. His coal industry/campaign rhetoric notwithstanding, he should impose meaningful tax credits for manufacturers trading in (and reliant on) clean and renewable energy sources.

H-1B VisaBelieve me, that’s the kind of branding message that will resonate with the newest and most upwardly mobile consumers around the globe. And that will help U.S. manufacturing in the very way promoting dirty, unsustainable fuels like coal will help disembowel it.

4. Pursue Sensible Immigration Reform
One thing President Trump seems to have done is learn on the job.  That, as much as anything, is likely why he’s softened his stance on so many issues that not too long ago he wielded like a bloody sword.

Take immigration reform, and especially something called the H-1B visa, a specialty work permit designed to allow U.S. companies to engage and employ highly skilled foreign workers – such as technicians, engineers, and computer geeks.

And, yes, some companies indeed exploit the H-1B visa and use it to underpay workers.  The majority, however, including many manufacturers, use it to fill critical positions that may otherwise  go unfilled for lack of qualified candidates.

Trump Mfg JobsAnd until American workers get up to speed and rededicate themselves as a group to learning the skills necessary to get a good job in today’s manufacturing, the H-1B visa will remain a critical manufacturing tool. It will not only allow U.S. factories to seek and find the best and brightest workers, but it will help us recruit the most talented foreign students as they earn degrees from U.S. colleges.

What’s more, there is likely not a manufacturer in America who does not have at least one valued (and, perhaps, longtime) employee who wouldn’t be deeply impacted by a blanket, by-the-numbers deportation of undocumented immigrants.

I urge the president to think long and hard about that, and what it might mean to American manufacturers, large and small.

Yes, this country needs immigration reform.  And, yes, the sooner that reform happens, the quicker we can put the issue behind us and get on with the business of America – which, as we all know, is business.

ExportsBut, as a manufacturer, I urge President Trump to consider the possibility that, just like so many of the issues he embraced on the campaign trail – and just like the issues at the heart of these four suggestions – the cure he suggested could turn out to be deadlier than the disease.

Want a Good Manufacturing Job? Stay in School.

Skills Gap 3The stories are anything but apocryphal. They’re as real as real can get.

Throughout this country, even as Donald Trump continues to boldly promise to bring manufacturing jobs back from distant shores, tens of thousands of high-paying U.S. manufacturing jobs remain open, begging for qualified men and women to fill them.

Why? Because so many of the same factory workers who’ve been relegated to the sidelines as globalization, technology and automation have changed the very face, shape and nature of manufacturing no longer possess even the most basic skills required to perform them.

Training and development business education concept with a hand holding a group of gears transfering the wheels of knowledge to a human head made of cogs as a symbol of acquiring the tools for career learning.

Today’s manufacturing, you see, is less about physical talents than it is about mental ones. It is less likely to require a specific knowledge of, say, tool-and-die making than it is a deep understanding of (and comfort with) computers, software and all kinds of management, design, modeling and/or production programs.

When the German engineering giant Siemens held a job fair recently in North Carolina to try to fill some 800 positions, over 10,000 showed up. The problem was, only 15% of those wanna-be employees were able to pass a reading, writing and math test developed by the company to target those with roughly a ninth grade education level.

That Siemens plant produces gas turbines. And, because the nature of how gas turbines get manufactured these days, Siemens knew it needed a certain type of worker with a specific aptitude and set of skills – a type of worker that these days, sadly, is becoming a rare and highly coveted commodity.

Skills Gap 5And, as I said, such stories are anything but apocryphal. They’re real. They’re prevalent. And, perhaps most unsettling, they’re increasing in both frequency and regularity.

Though many, including our own president, have apparently not yet gotten the memo, the days of dropping out of high school and landing a career-worthy job with the local smokestack manufacturer have gone the way of the transistor radio, the nickel candy bar, and Pac-Man. Today, if you want even a basic job on a shop floor, you sure as heck better have the mental agility and computer skills to put yourself into consideration for it.

Skills Gap 6As Eric Spiegel, Siemens’ retired president and CEO, said about his company’s operations around the globe, including its turbine plant in the Carolinas, “In our factories, there’s a computer about every 20 or 30 feet. People on the plant floor need to be much more skilled than they were in the past. There are no jobs for high school graduates at Siemens today.”

Even beyond the core facility, the same understanding holds true.

In John Deere, for example, the company’s hundreds of dealerships around the country are routinely tasked with the maintenance and repair of millions of dollars worth of high-end farm, construction and earth moving equipment. As a result, all available jobs in Deere’s service centers require so much more than garage mechanics of a generation ago. As Andy Winnett, who directs a training program for the company at a community college in Washington, told the New York Times, “The toolbox is now a computer.”

Skills Gap 4Indeed, even as Mr. Trump continues to toss about sound bytes about the demise of American factory jobs, a study by Ball State University reveals that 9 out of 10 of all factory jobs lost in the U.S. since 2000 have been lost, not to foreign workers or cheap labor, but to automation.

And, as you might expect, that’s a much messier and far less politically compelling tidbit for a presidential stump speech.

Yet, even all that messiness has not managed to pour cold water on the president’s inflammatory and isolationist rhetoric. Even now, President Trump has just signed an executive order to rework the H-1B U.S. visa program, a program designed to give companies – especially those that, like many manufactures, require a highly trained and technically proficient workforce – access to the most qualified foreign workers.

Skills Gap 2I have been trying to make this point for years, and it’s one I will repeat yet again. The crisis in manufacturing is not an erosion of jobs. It’s an erosion of skills. It is an encroaching and ever-increasing gap between what we factory owners want and need in a worker and what so many of candidates nowadays are capable of providing.

This leaky ship can certainly be righted. But in the end, it’s ultimately not up to shop owners and hirers to do the heavy lifting. It’s up to America’s workers and the thousands of men and women who populate our factory and shop payrolls.

It reminds me a bit of that line from the Shawshank Redemption about every man (and woman) has to choose. He can either “get busy living, or get busy dying.”

Engineer Teaching Apprentices To Use Computerized Lathe

Every American factory worker today – former, current and future – has a choice. Right here. Right now. And it’s pretty simple and straightforward.

He (or she) can choose to jump on the manufacturing train that’s rapidly pulling away from the station and make skill development job #1. Or, as so many American workers continue to choose to do, he can bury his head in the sand and spend the rest of his life wondering where the heck his career, his life, and his once-bright future just went.