THE FUTURE OF AMERICAN MANUFACTURING

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Dr. John Psarouthakis

Executive Editor

 

Let me illustrate by looking at three pivotal industries: motor vehicles; electronic computing equipment; and machine tools. In the past couple decades the share of the domestic market held by domestic manufacturers producing in domestic plants has declined from approximately 80% to about 50% for motor vehicles, from 90% to below 60% for computing equipment, and from 80% to below 60% for machine tools. In recent years there has been a move toward recovery.

It is hoped that we can find a way to put our talents together to deal with the very real problems facing manufacturing in the USA. My purpose here is to suggest ways to do so.

We have one relatively simple decision to make: do we accept the current situation, continuing the decline in our manufacturing base or do we recognize that manufacturing and industries which support our manufacturing base are critical to our position in a global economy and commit intellectual and financial resources to improve our manufacturing base?  Recognizing the situation and doing something about it, however, are two very different issues.

Nevertheless, manufacturing accounts for nearly 20% of our Gross National Product, as it has for about 40 years. There is a much lower percentage of the total work force employed in manufacturing, but they are responsible for a large part of our economy.

In addition, our burgeoning service industries are in fact dependent greatly upon manufacturing. About half of all U.S. service employment is tied to manufacturing related activities.

There is a second reason why manufacturing really matters. Most if not all of us to some extent value the principles, “free” market economic system, and political structure of our nation. Some of us also feel it is important that we remain influential and powerful

in an uncertain and sometimes dangerous world. We cannot maintain our influence on the world affairs, if we become a second rate industrial power. While I don’t see us in the same context as colonial Great Britain, the declining influence of Britain for years was in part due to its neglect of its technological and industrial bases.

If we value our political and economic systems, we must strengthen and enhance our manufacturing base. But what are the specific tasks we need to address? As I see it, there are three tasks to be addressed. First, we must improve manufacturing related technology development and deployment. Second, we must improve the art of managing our manufacturing base. And, third we must “up-grade” and strengthen our human resources in manufacturing.

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