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On Jobs, Workers and the American Manufacturing Renaissance

Not too long ago I read an amazing (and frankly uplifting) story in the New York Times about the textile and apparel industries returning to the U.S. in the form of new (and renewed) small-to-midsize companies that just a few years ago had been off-shoring much if not all of their work.  Unfortunately, according to the story, the resurgence in those two industries, a phenomenon that remains concentrated in the Atlantic Coast, has come without a corresponding increase in American jobs.

In fact, manufacturing jobs are but a fraction of what they used to be only a few years ago.  Why?  One word:  automation.

A radical decrease in the amount of manpower required to make textiles and clothing products in this country, combined with increasing labor costs abroad, has leveled the playing field considerably for American manufacturing firms.

Toss in variables like worker safety in the third world, ever-increasing shipping costs and other logistical considerations, ease of supply chain management, and of course, the growing demand for “Made in the U.S.A.” products, and what you have is a perfect storm of circumstances, all of which have led to this new “renaissance” in manufacturing in the U.S.

There’s just one problem.  This renaissance remains in jeopardy as worker skills in this country continue to erode and as more and more of those handful of new manufacturing jobs out there remain unfilled for a lack of qualified candidates.

But before I go any further down that path, let me go back to this boom in the textile industry.  It is critical to understand that this revolution has been a product of supply and demand and has been entirely market driven.  It has not been because of good ol’ boys from the Carolinas started waving their red, white and blue banners and got all star-spangled in their decision-making.

No, this re-shoring of those industries was fueled by market factors that led managers and owners to a series of inevitable decisions.  In fact, as one conspicuously successful factory owner told the Times, “When I framed the business, I wasn’t saying, ‘From the cotton in the ground to the finished product, this is going to be all American-made,’ ” he said. “It wasn’t some patriotic quest.”

To the contrary, it was because global competition and the demands of the marketplace led to dramatic changes in those two industries, and it is those changes in things like factory air quality, production capability and plant efficiency that have made the textile and apparel industries stronger and far more profitable today.

And that competition for jobs and those world market influences are exactly what the American worker needs to come to understand and needs to adapt his thinking to.  These days, if you are an unemployed or hopeful factory/plant worker, you are not going to land a job in manufacturing simply because you know someone, or because you’re a U.S. citizen, or because you’ve filled out the necessary paperwork and maintained a clean record.

You’re going to get hired because, just like those textile and apparel firms in the Times story, you’ve made the kinds of enhancements to your own personal set of skills that have made it financially prudent for a manufacturer to hire you.

It is supply and demand taken down to its most-basic, most-personal level.

That’s why, as industry leaders and as people invested in the long-term economic viability of American manufacturing, we cannot leave it up to the individual worker to enhance his or her skills.  Some of the most motivated and forward-thinking, of course, will take it upon themselves to go back to school or get the training they’ll need to service, build and repair the sophisticated machinery that will drive the factories of tomorrow.  But we must also do what we can to systematically instill in our industries and job markets the kind of training/worker development programs needed today to keep us strong in the short term and will not put at risk all we’ve earned back over the past decade.

My take on the manufacturing job/renaissance dynamic, which remains complex and multi-dimensional, is maybe best summed up by a single paragraph from the Times story, which I found at a point deep into the piece.

“Now, companies that want to make things here often have trouble finding qualified workers for specialized jobs and American-made components for their products. And politicians’ promises that American manufacturing means an abundance of new jobs is complicated — yes, it means jobs, but on nowhere near the scale there was before, because machines have replaced humans at almost every point in the production process.”

 

From the Shop Floor — The Week in Manufacturing (10/10/2013)

Sam Asano, a first generation immigrant whose many inventions, among them the portable  fax machine and the data tablet, apparently led MIT to dub him one of the ten most important inventors of the 20th Century, writes that the U.S. needs a strong manufacturing base.

The Associated Press writes that investment in the Mexican auto industry has become a major challenge for China.

Here’s an interesting Q&A with Susan Brennan, VP of Manufacturing at Nissan’s much-heralded and highly productive auto plant in Smyrna, GA.

A new $470 million manufacturing center and lab may be opening on the campus of the State University of New York at Albany.

A Chinese floor manufacturer will soon be opening a new $15 million, 40K sq. ft. manufacturing facility in Danville, VA, which will mean more than 100 new jobs for the local economy.

One blogger opines why, with manufacturing contracts and global pricing competitiveness as the central reasons, China hopes to dump the U.S. dollar.

One industry exec takes on Obamacare’s perceived threat to U.S. manufacturing and asks, it is real or it is manufactured?

U.S. cutting tool consumption rose another 1.3% in August.

One report says that the U.S. plastics industry continues to boom.

Meanwhile, U.S. manufacturing technology orders shot up almost 5% in August.

It was announced this week that the State of Illinois, a number of the state’s manufacturers and key educators are going to be pooling their resources to help train interested U.S. military veterans for careers in manufacturing.

A group calling itself American Made Matters urges consumers to bring back American manufacturing one purchase at a time.

Great Lakes Cheese of Ohio is building a new $100 million processing plant in Tennessee, which will mean some 200 new local jobs.

We chanted this mantra many times, but here’s one more story about how automation is propelling U.S. manufacturing forward.

China is becoming increasingly concerned and weighed in this past week on America’s ongoing political gridlock and repeated calls to cap our debt ceiling.  As might be expected, one North Carolina manufacturer took exception to those comments and returned volley by criticizing China for what he calls the country’s hypocrisy and its “phony standards.”

If you think China is fast becoming a fading force in global manufacturing, Forbes profiles at least one billionaire who would beg to differ.

The U.S./China Manufacturing Symposium, which had been slated for next month, has been pushed back to a to-be-determined date in March, yet another victim of the government shutdown.

Mike Collins, the author of Saving American Manufacturing, offers these nine vital signs which point to the resurgence of the U.S. industrial sector.

And finally, this one bit a great news; one recent survey says that anticipated manufacturing hiring reached a five-year high this past month, as more and more manufacturers say they’ll be hiring in the coming months to keep up with demand.

 

 

 

 

 

On Taking on Giants

By know I’m sure you’ve heard of Malcolm Gladwell, the pioneering journalist whose unlikely best sellers, Blink, The Tipping Point and Outliers, have turned so much conventional thinking on its ear and defied us to take a second look at accepted wisdom and countless things we take for granted.

Well, Gladwell’s at it again, having just released his latest book, David and Goliath, which critics say parses a number of what experts have always considered shocking victories and analyzes how a number of underdogs throughout history were able to achieve victory in the face of overwhelming odds.  And while I’ve not read the book yet, I did recently pick it up and plan on plowing through it over the next few days.

After all, when you’re a small manufacturer competing against some of the biggest corporations in the world, often from countries that channel millions of taxpayer money directly into the workings of those same corporations, a little understanding of how other Goliaths have been brought to their knees might not only be informative and inspiring, it might just turn out to be life-sustaining. 

And I bring this up today because a few weeks back I read the obituary of a small manufacturer the New York Times described as a “serial entrepreneur,” and I wanted to share with you in today’s blog post one of the most remarkable decisions he ever made.  

Also because in reading his obit, I was reminded once again how manufacturers like me – relatively small guys with a limited number of resources – are often given no alternative but to try to out-smart, out-quick and, perhaps most of all, out-think the big guys we’re trying to compete against.

Here’s the story: Robert R. Taylor was a soap salesman for Johnson & Johnson in the 1960s who found himself frustrated by the limitations and drudgery of corporate life.  In time he branched out on his own and started his own soap and cosmetics manufacturing firm, a decision that compelled him to constantly experiment and tinker with many of the very same products he used to schlep around the country for a giant he was now trying to go after with a slingshot. 

Then one day Taylor hit on something, and he knew immediately it was going to be big.

For years he had obsessed over how to make everyday bar soap better, since at the time soap used in the shower, sink or workplace always got smaller, softer and less useful with each usage.  Eventually, the bar and all that still-useful soap would simply have to be thrown away.

So Taylor invented a liquid version of everyday hand soap that he planned to sell not in bars, but in small plastic containers with pump dispensers.  The problem was, he realized, it would only be a matter of time until Colgate-Palmolive, Lever Brothers, Proctor & Gamble, Johnson & Johnson and the rest of the big boys started producing their own variation of his invention, patent or not, and that his product would soon be swallowed whole by his competitors’ almost unlimited resources – in either the courts or in the marketplace.

So what did he do?  He made a strategic decision in which he bet everything he had on his understanding of what it would take to bring liquefied bar soap to market.  And it turned out to be a classic bet-the-company strategy. 

Taylor borrowed against his company’s few assets, put together as much cash as he could get his hands on, targeted the two manufacturers of plastic bottles in the country, and then split his order between them – an unprecedented total order that amounted to some 100 million small plastic bottles, or what he projected to be a year’s supply of liquefied soap containers for his company.

Taylor gambled, correctly so, that by tying up the capabilities of his competitors’ potential vendors for a full year, he’d give himself a twelve-month head start with which to hit the market, relentlessly brand his radical new product and establish it as a breakthrough alternative to the messy and wasteful bar soap his competitors were going to spend the year trying to pass off as hand soap.

Which is exactly what happened, and for the duration of 1972, Softsoap – and Softsoap alone – set about the process of changing forever how America washed its hands.

The lesson?  When you’re a small manufacturer, industriousness, smarts, blood, sweat and long-hours will only take you so far.  So, frankly, will even the greatest idea.  At some point, it is probably also going to require a level of intestinal fortitude on the manufacturer’s part, or something our friends south of the border might call, “cojones.”

My friends, Robert R. Taylor had cojones in spades.  And my guess is Malcolm Gladwell has just written about a number of people who had a surplus of them as well.

And even as I write this, I promise myself to finish Gladwell’s book right away.  I promise too to never lose sight of the role that guts and courage have to play in the process of waking up each morning and realizing that, as a small manufacturer, right outside my door is yet one more giant laughing at me, my smarts, my experience, my staff, and most of all, my slingshot.