Tuesday, September 27, 2011

Manufacturing will never be the same.


There are those who want to do whatever is necessary to return well-paying manufacturing jobs to America. Well, surprisingly, it's beginning to happen. As Joe Nocera points out in his column in this morning's NY Times, that's both good and bad.

Nocera tells the story of Stephen Gray, whose family-owned company builds factories for big firms. A couple of years ago, Gray had no more projects in the pipeline, and he was laying off employees. A little over a year ago, things began to look up and now his firm has 22 projects underway.

Siemens is building a plant in Charlotte, NC to turn out 280-ton turbines. According to Nocera: "When I asked Richard Voorberg of Siemens why the German company chose to put its new plant in Charlotte instead of, say, China, he said that for highly skilled work, the labor cost differential wasn’t very big and that, in any case, factors like shipping costs and efficiency mattered more. “For this kind of manufacturing,” he said, “the U.S. can compete with China.” Gray Construction’s backlog of projects suggests that other manufacturers — many of them foreign companies — have come to the same conclusion."

But, as Nocera points out, this is where the story gets depressing. Manufacturing has changed greatly over the last 50 years.

My undergraduate degree is in a field called industrial engineering. Fifty years ago, the industrial engineer's job was to take a manufacturing process and break it up into pieces that could be done by someone with an average IQ, and who showed up for work--on time--on a daily basis. In many cases, a strong back helped. The worker on the plant floor was encouraged to check his brain at the plant door. Any intelligence required would be supplied by those at a higher pay grade.

Then came the revolution in manufacturing caused by Japanese influence. Workers were organized into teams, and those teams were encouraged to use their brains to improve the manufacturing process.

Today, manufacturing is done mostly by robots and machines all controlled by computers. The people on the factory floor are mostly there to tend the machines and diagnose and solve problems created when the computers and machines misbehave. This requires lots of mathematical and mechanical skill as well as a good dose of independent thinking and creativity. Average intelligence and showing up for work on time isn't nearly enough anymore.

Nocera points out: " ...these plants offer something that has become increasingly rare: middle-class jobs that don’t require a college degree. The jobs pay between $20 and $30 an hour, plus benefits, allowing a skilled machinist to make a decent middle-class living. The key word, of course, is “skilled.”

The other problem is that modern manufacturing doesn't require all that many bodies. The Siemens plant will employ only 800 people. North Carolina has lost about 108,000 manufacturing jobs.

Even if we boost the skills of our non-college workforce and manage to bring manufacturing back to America, there will never again be enough manufacturing jobs to stem the tide of job losses.

So, how do we compete with the rest of the world? Once we get off the yellow-brick road of firing bad teachers and getting rid of unions, what will really make a difference in our educational system?

Turns out, the folks at the New Commission on the Skills of the American Workforce have some interesting ideas. That's next. 

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