News Column

US Manufacturing Policy in 'Disarray'

Dec. 8, 2011

John Schmid

Manufacturing machines

Unlike export powerhouse nations such as Germany and China, the United States' policy for manufacturing is in disarray, according to the latest blue ribbon report on American manufacturing and how to make it competitive.

"We must take immediate action to remain globally competitive," according to the report to be released Thursday by the Council on Competitiveness, a Washington, D.C., think tank.

"America cannot rely forever on a consumption-based, debt-fueled economy," the council warns in the 85-page study. "The competitiveness of U.S. manufacturing has never been more uncertain or more important -- nor have policy prescriptions been more contentious."

U.S. manufacturers, which already feel squeezed between low-cost developing nations and highly automated manufacturing in developed countries, show signs of slipping further. According to the Global Manufacturing Competitiveness Index, the U.S. falls to No. 4 behind China, India and Korea. The index, which measures availability of scientists and researchers as well as business climate issues and metrics of labor, materials and energy, shows that the U.S. is on track to fall to No. 5 within five years, overtaken by Brazil.

The issue is more than academic in Wisconsin, which leads the nation in the proportion of its workforce involved in manufacturing.

The state's greatest concentration of factories lies in metro Milwaukee, with a diverse production base for motorcycles and power generators to high-end medical imaging equipment and sausage. Among U.S. metro areas with a minimum of a half million non-farm jobs, metro Milwaukee consistently shows up with the second-highest share of its workforce in manufacturing, behind San Jose, Calif.

No U.S. strategy

"Today, the U.S. has the world's oldest industrial base with no strategy to help American businesses construct or modernize factories with 21st century smart manufacturing technologies," according to a statement from Keith Nosbusch, the chief executive of Milwaukee-based Rockwell Automation Inc.

Nosbusch, who champions the idea of industrial modernization, was one of the advisers for the council report.

"Global competition is becoming a marathon race toward a new age of 'smart' manufacturing," Nosbusch wrote in his statement to the Council. Nosbusch will speak Thursday at a manufacturing symposium in Washington hosted by the Council on Competitiveness.

The report, "Make -- An American Manufacturing Movement," highlights the hurdles for American manufacturers as well as six pages of policy recommendations that run a gamut from tax policy and regulatory changes to immigration reform and intellectual property protection.

One of the trickiest pitfalls is the popular perception of factory work, the report said.

"The image of manufacturing as dumb, dirty, dangerous and disappearing is far from accurate," the report said, echoing a lament often heard in Milwaukee business circles.

Contrary to conventional views, modern factory floors are clean facilities with advanced automation. Skills seldom involve menial or repetitive work but often require technology, math and programming skills. While modern factories employ far fewer staffers than they did only a generation ago, "they create an increasingly larger number of 'indirect' jobs required to support them," Nosbusch said.

Revolving door

Few if any of Washington's policy-makers devote themselves to manufacturing policy, even though manufacturing accounts for more than half of all U.S. exports, notes Rockwell spokesman John Bernaden.

Washington has had no fewer than three "manufacturing czars" installed as White House advisers in the course of two administrations. Former President George W. Bush created the role in 2004 as he wrestled with a political backlash against inexpensive Chinese imports and outsourcing. But neither of his two appointments left any lasting policies, analysts and economists concur.

Ron Bloom, Obama's policy adviser on manufacturing, wrote his own report with a catalog of his policy recommendations but resigned in August.

"It is no wonder that policy prescriptions for manufacturing are in disarray," the council report concludes, commenting on the conflicting views on the nation's manufacturing sector.

Thursday's report, which was two years in the making, involved a long list of contributors that included Samuel Allen, chief executive of Deere & Co.; Susan Hockfield, president of the Massachusetts Institute of Technology; and George Miller, director of the Lawrence Livermore National Laboratory.

Source: (c) 2011 the Milwaukee Journal Sentinel

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