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In Manufacturing, Americans Are Back in Action

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In Manufacturing, Americans Are Back in Action

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Reports of NASA’s Juno spacecraft’s entering the orbit around Jupiter lit a sparkler in this American heart — on the Fourth of July, no less. It showed that Americans still have what it takes.

To keep spirits orbiting, let’s note another recent American feat that few could have imagined a couple of years ago. The United States is now gaining, not losing, factory jobs. This glad trend has some sobering asterisks attached, but there’s no denying this:

There are now nearly a million more factory jobs in this country than there were in 2010. Many of them are coming — surprise, surprise — from China. China, meanwhile, has lost about 6 percent of its factory positions from four years ago.

Why do Americans seem to know more about Jupiter’s 67 moons than about the turnaround in factory employment?

Reason No. 1 is politics. From Donald Trump on the populist right to Bernie Sanders on the left, trade agreements have become the obsession, the all-purpose villain behind U.S. factory closings and “movings” to low-wage countries.

In documenting the brutal departure of U.S. factory jobs, the candidates’ rearview mirrors have been quite accurate. We’re still down over 7 million manufacturing jobs from a peak of about 19.5 million in 1979.

But any serious plan to address the future of blue-collar America must focus on what’s actually happening now. What’s happening is automation. Robots enable manufacturers to make lots of stuff with relatively few workers. The ability to do the job with far fewer humans goes far in canceling the advantage of low-wage countries. (Lower U.S. energy costs have helped, too.)

This is how General Electric could move 4,000 jobs from China and Mexico to a new appliance plant in Louisville, Kentucky.

“We have (only) two hours of labor in a refrigerator,” GE CEO Jeff Immelt explained, “so it really doesn’t matter if you make it in Mexico, the U.S. or China.”

Another reason many don’t know about the improved outlook for factory work is that most of the new manufacturing jobs are in the South — especially North Carolina, South Carolina and Tennessee. The rattling job losses occurred in the industrial Midwest. Conditions are better there, too, but many of the region’s laid-off workers still suffer.

The asterisks:

—The technology that lets U.S. companies slash the labor content of their products is something anyone can use. Foxconn, a supplier for Apple and Samsung, recently replaced 60,000 Chinese workers with robots.

—The new factory jobs require more training. The workers must be able to program and oversee fancy machinery. They need to be flexible, to move to another task as orders change. Happily, the pay is much higher.

—Advances in automation seem destined to reduce human workforces even more, here and everywhere.

—Brexit chaos has made the dollar stronger. That makes U.S. products more expensive on the global market.

We should probably abandon hope that a Trump stump talk on U.S. manufacturing will delve in reality. That U.S. factory output and employment have been trending upward is something Trump may not even know. In any case, it’s not useful information for his purposes.

But Trump’s thundering vows to bring factory work back to this country by the container shipload do everyone a disservice. Robotics are upon us. Peddling a dated vision of U.S. factories humming along with thousands and thousands of workers is just another con. China won’t be able to have that soon.

To restore prosperity to blue-collar America, we will need a moonshot program to retrain and rebuild. A country that can send spacecraft spinning around Jupiter should be able to pull that off.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com.

Photo: An Airbus A321 is being assembled in the final assembly line hangar at the Airbus U.S. Manufacturing Facility in Mobile, Alabama September 13, 2015.  REUTERS/Michael Spooneybarger 

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Froma Harrop

Froma Harrop’s nationally syndicated column appears in over 150 newspapers. Media Matters ranks her column 20th nationally in total readership and 14th in large newspaper concentration. Harrop has been a guest on PBS, MSNBC, Fox News and the Daily Show with Jon Stewart and is a frequent voice on NPR and talk radio stations in every time zone as well.

A Loeb Award finalist for economic commentary in 2004 and again in 2011, Harrop was also a Scripps Howard Award finalist for commentary in 2010. She has been honored by the National Society of Newspaper Columnists and the New England Associated Press News Executives Association has given her five awards.

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19 Comments

  1. Jinmichigan July 7, 2016

    40 years in manufacturing says this article is dead on.

    Reply
    1. JPHALL July 7, 2016

      Try telling that to a right winger!

      Reply
  2. bobnstuff July 7, 2016

    I tell people this everyday at work and you can tell the Trump supporters because have problems believing it. I work retail and love pointing out just how many thing they are buying that are Made in the USA. Try buying an imported trash can. On the other hand our local beer moved into a new brewery and now they can make the same volume that once took three hundred people with just seven.

    Reply
  3. Hank Gagnon July 7, 2016

    Yes robotics and technology will reduce humans labor. But that is not the main reason the jobs are being moved out of the country. The US Corporate traitors are still building factories in foreign countries, hiring human workers in foreign countries,and hiring human green carded foreigners here in this country over their fellow countrymen. All because they were able to bribe a bunch of American politicians to push Anti-American worker trade agreements secretly through congress to screw America and it’s people and feed the GREED.It started in the 80’s under the disastrous presidency of Reagan, Regulations were lifted, downsizes, mergers and acquisitions by the top GREEDY TRAITORS in the 1%.. The more power the CONS(TOP 1%) got, the lower their taxes got, the better their tax loop holes got. Sweet heat deals given to them by the United States Government under the guise that they would take that money and invest in their company in America. But just the opposite happen. The GREEDY traitors have been hoarding their money in off shore accounts, looking for more tax breaks, lower regulations, lower American wages, and more sweet heart tax deals, all while continuing their move to destroy American workers. They use our Military for protection, our roads and skies for commerce, our financial system for financial security and give nothing back but take, take take. That is why the rights hates TRUMP. They have managed to bribe every politician for the last 40 years to not even talk about these disastrous trade agreements that have swindled on the American public

    Reply
    1. johninPCFL July 7, 2016

      A little reality, from a recent report:
      “In the first place, the expansion of manufacturing jobs is not synonymous with prosperity. As countries grow richer, manufacturing’s share of employment declines. South Korea, singled out by Trump for killing American jobs, has seen it shrink by nearly half since 1991. Japan and Germany have followed a similar path.

      But U.S. manufacturing output is 54 percent higher today than in 1994 and 27 percent higher than in 2001. Those years are pertinent because 1994 was the year NAFTA took effect and 2001 is the year China gained entry to the World Trade Organization — events Trump portrays as catastrophic for American industry.

      Manufacturing jobs have vanished not because we don’t manufacture anything but because companies have learned to produce more goods with fewer people. Higher productivity is what eliminated most of the jobs Trump mourns. He’s no more capable of restoring them than he is of bringing back the dodo.

      Blaming Mexico and China for the fate of our steel industry is like blaming email for the decline of telegrams. The biggest reduction in steel jobs came before the globalization of the past two decades. The number fell from 450,000 to 210,000 in the 1980s.

      The total today is about 150,000. Even if Trump could manage the impossible feat of doubling the number of steelmaking jobs, it would be a blip in the overall economy — which adds more jobs than that every month.”

      Reply
      1. Hank Gagnon July 8, 2016

        American Corporate Factories all over the world are employing Human labor that are doing Human jobs. Jobs that should have stayed in this country. But the greedy top 1% and Wall Street Banksters, ant-American greedy bastards bribed our Government to pass these disastrous trade agreements lifting tariffs on imports giving the green light for Corporate American CEO’s and top executives to betray America and Betray American workers. Its called Bribery and Treason!

        Reply
      2. Hank Gagnon July 8, 2016

        The same corporate greedy bastards, right wing immoral, and unethical people that complain about all the Americans on Welfare, food stamps and other government help are the ones who put them there. Hypocrisy!

        Reply
  4. itsfun July 7, 2016

    Must be the makers of Oreo’s haven’t gotten the message. Either has Hersheys

    Reply
    1. Eleanore Whitaker July 7, 2016

      When I was the assistant to the VP at CPS Chemical back in the mid 80s, I saw why selling offshore was causing domestic product prices to go through the roof.

      First? The cheap labor isn’t really so cheap once these foreign countries get a taste of a flourishing economy built on US money. So what starts at 11 cent an hour soon becomes $11 dollars and the prices on the goods produced in foreign countries goes up. This is something China knows all too well.

      Second, the other costs involved has to do with shipping from a foreign port to a US port. This depends on the goods. If they are toxic or hazardous materials, the costs are even higher and they cannot be shipped via air.

      Third, before any load of goods can be shipped out of a foreign country for import into the US, it has to remain in customs where it is taxed and depending on the type of goods, retaxed if safety is a concern.

      Fourth, in many countries like Central and South America, their banking systems are hugely corrupt and cannot be relied on not to crash midstream after US goods are shipped there or exported from these countries.

      In 1987, CPS lost nearly half a million dollars when the banks in Argentina and Honduras both crashed. Even with liability insurance on letters of credit at that time, there was still monetary loss.

      It never was cost-effective to import goods from foreign cheap labor countries even back in the mid 80s. That’s the reason there aren’t more American businesses willing to get involved with selling in foreign countries. And there certainly isn’t as much profit to American consumers to buy imported goods when at least 35% of the price is due to shipping and taxation like VAT taxes. Not to mention that many countries of the world from which we purchases imported goods do not have the same level of FDA or EPA safety regulations. So who knows what the quality of these goods really is?

      Reply
    2. bobnstuff July 7, 2016

      The Mexican market is growing as the US market for Oreo’s is not so placing a factory their makes sense. Your Oreo’s will most likely be made in one of the other three factories in the US.

      Reply
      1. itsfun July 7, 2016

        It was reported last week that they are moving out of the U.S.

        Reply
        1. bobnstuff July 7, 2016

          http://www.dispatch.com/content/stories/business/2015/08/26/oreos-made-in-mexico-wont-enter-trumps-lips.html
          You got you news from Trump so of course it was only a little bit true, mostly false..

          Reply
    3. johninPCFL July 7, 2016

      Yeah. Moving a single factory into an emerging market to better serve that market and simultaneously lowering their transportation costs is something The Donald would stop in a New York minute! He’s JUST THAT GOOD!!!

      Reply
  5. Eleanore Whitaker July 7, 2016

    I can only speak from observation of my near 25 years as an accounting manager in environmental engineering since 1989.

    When if was first hired by this very old company (even then it was already 20 years old and had clients the newbies would kill for), we had a glut of manufacturing companies we provided services to. It was around that time we began to see venture capitalists shopping around to buy up the receivables from manufacturing companies and conglomerating them into big box manufacturing facilities under a single name.

    I recall what happened when Allied Signal, Campbell Soup and LTV Steel went extinct. These were huge companies with tens of thousands of employees who lost their jobs when the VCs sold them and parceled them out piece meal like a garage sale to the highest bidders, usually a foreign offshore entity with big money.

    Back in 2009, The GOP stupidly refused to fund solar energy because of their addiction to oil and need to hold the rest of country hostage to the costs to keep Big Oil profitable, none of which our tax dollars should EVER be used for.

    But, when they stupidly used the only solar company that went belly up, it only proved their ignorance. Suddenly, CA, AZ and NJ solar companies flipped the bird at Republican slash and burn and went right ahead with their plans.

    The only Americans who don’t realize the impact solar energy has had on just these 3 states are the Americans who are brainwashed into believing coal, oil and fracking are their only job options.

    Here in NJ, there are hundreds of solar energy companies who are making fools of the conservatives and GOP. They are hugely profitable AND the blessing they bring are JOBS…something the GOP has yet to even address.

    So now NJ solar companies are creating jobs in small parts manufacturing and solar panels that not only compete with the prices in China but surpass them for affordability.

    Reply
    1. Dominick Vila July 7, 2016

      One minor correction: AlliedSignal did not go extinct. They adopted the name HONEYWELL after buying that company to take advantage of its name recognition. Allied Chemical bought the Signal corporation, Bendix, Fram, and a few others several years earlier.
      Your point addresses an issue that a lot of people ignore. Every time there is a merger or buyout jobs are lost. One of the goals of those mergers is to reduce staffing by consolidating certain departments with similar functions, such as payroll, accounting, and the benefits department. Reduced staffing translates to reduction in operating costs, higher profits, and higher return on investment for the shareholders. The ones that lose are the employees affected by capitalism run amok.

      Reply
      1. Eleanore Whitaker July 7, 2016

        My understanding from the plant manager at Allied Signal is that in 1993, it was Allied Signal that acquired Honeywell and as you stated, decided to drop the name Allied Signal and became Honeywell which was a more recognized name than Allied Signal.

        This is also what happened when Akzo Chemie bought Cincinnati Milacron in the late 70s here in NJ. Akzo Chemie, out of Amersfoort Holland dropped the “Chemie” and became Akzo. I left that company in 1985. I believe it later became Akzona.

        Reply
  6. Dominick Vila July 7, 2016

    Our manufacturing sector, including the steel and aluminum industry, is doing very well. What Trump does not want to point out, because it would destroy his narrative, is that the reason for the dramatic reductions in labor in that sector of our economy is caused by automation (robotics).

    Reply
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