The coronavirus pandemic has peeled back the curtain and showed American manufacturing’s weaknesses. Now is the time to create a viable economic environment for U.S. manufacturing companies through the implementation of new tech and a focus on a new generation of workers.
A couple of years ago, I visited a manufacturing plant that produced mobile lighting equipment, and was left with an image in my head that I still can’t shake.
At one production station, a woman was using large manual shears to cut through thick layers of rubber insulation on conduit, to prepare the large wire for termination. I watched as she strained herself repeatedly, trying to cut through layer after layer of insulation, her muscles straining with each pass.
I asked my tour guide if this was a temporary operation. I was told no, it’s part of their regular production.
“You’ve got to be kidding; you need to automate that.”
I was told this is just the way they do it.
A while later, we passed back through that same part of the factory as our tour was over. Not surprisingly, that woman was at the first aid station, applying balm to her forearms.
This experience revealed not only a problem for that particular plant, which will inevitably have to replace that employee (once she is unable to meet the physical demand of the role again) – but it also exemplified the reluctance strangle-holding the industry, preventing it from doing what must be done to advance American manufacturing.
Our Weaknesses Exposed
COVID-19 has wreaked havoc on the global economy, exposing specifically a deep flaw in American manufacturing. How have we gotten to a point where so much of our crucial manufacturing—be it pharmaceuticals, basic materials, or even PPE—is controlled by a hostile government overseas?
This pandemic has shown American manufacturing’s weak spots, illustrating a lack of critical infrastructure that China in particular is dominating in an attempt to control the global supply chain.
The pendulum has swung too far away from us, but the good news is that we can reverse this trend. We can create an economically viable environment for American manufacturing, keeping jobs and thriving factories here.
One of the first steps is accepting automation as a key to progress, and not a shortcut to profit by eliminating American jobs. In fact, a recent study by the London School of Economics demonstrated that the introduction of industrial robots led to increased employee wages and an increase in job opportunities for high skilled workers.
Those manufacturing companies that intelligently, and fairly, apply automation tend to grow faster; and those who don’t tend to shrink, and eventually die. The illusion of keeping jobs manual to protect the work force is misguided and counterproductive.
We need to apply automation to low skilled jobs to compete globally. Adding automation and robotics in the right applications will assure higher levels of output for every hour of labor, which is necessary for America to compete globally with low-cost countries. Automating mundane, repetitious, strenuous, and low-tech functions makes a manufacturing operation safer and stronger.
But the act of automating must be equitable for people—progressive, growing companies are increasingly willing to train their loyal workforce up to higher value (and ultimately higher paying) jobs, which is good for the company, good for employees, good for people.
Robots as Friend, Not Foe
This misperception that robots will take American jobs is certainly not something to take lightly, as America is experiencing economic uncertainty. The truth, however, is that embracing automation will enable manufacturing companies to onshore jobs from overseas while opening the opportunity for enterprise growth through increased output and reliability brought on by these machines.
Take Stanley Black & Decker for example, which is moving production of Craftsman wrenches and other tools back to the U.S. from China.
The company said they will leverage robotics and fast-forging presses to “boost output compared to the older forging machinery now used in China.” This is welcome news that will bring back American jobs while homing in on the importance of quality American-made production.
We’ve allowed too much of our manufacturing to be moved out of the U.S. based on profit margins, but the implementation of automation and robotic technology will lower overall costs and open the door for jobs lost to offshoring to come back home.
Integrating these new technologies into American manufacturing plants will not only create opportunities of growth for these businesses, it will also help to swipe away an old stereotype of manufacturing: that it’s dirty, dark and dangerous.
Reversing the Stereotype
Millennials and Generation Z alike will need to be a part of this mission to bolster American manufacturing. These groups have been described as “purpose-driven,” and what better purpose to serve than helping to strengthen an industry that has shaped our country—one that is critical to our national security and prosperity as a nation.
The mission of manufacturing, simply put, is to build a stronger America. For every employee that is hired in manufacturing, studies have shown that three to five other dependent jobs are created.
If younger generations are shown how integral manufacturing is to the development and progress of our country, I’m confident they will see that manufacturing still serves as the backbone of America.
Effectively recruiting a viable workforce should start with a strong look at postsecondary education. Technical colleges are under-appreciated, yet they are in the position to deliver a more highly trained workforce. Although there are many four-year degrees that are worthy of pursuit, many studies show the greater gap in the workforce over the coming 30 years will be in areas of technical trades. Technical colleges can help achieve the development of a higher-trained workforce, and manufacturing jobs will cause them to be in high demand as we grow both organically and due to job onshoring.
Take Hennepin Technical College, where I serve as a board member. Hennepin Technical College is the largest technical college in the State of Minnesota, and it has a record of over 98 percent job placement upon graduation in the field of study of each student. I’d call that a short-cut to success for the student, and the employer.
Embracing new technologies and reframing our approach to education aren’t the only necessary steps to creating a viable pathway for American manufacturing companies to succeed against global powerhouses – the government must play a central role.
The Need for a Comprehensive Plan
Government financial incentives should also be a part of our plan to revitalize American manufacturing.
In a recent piece of proposed legislation called the FORWARD Act, the research and development tax credit is significantly increased for companies “that generate the majority of their gross receipts from manufacturing their products in the United States.” With bipartisan and bicameral support, legislation like this could tip the scales and be the incentive that these firms need to finally come home, create high paying jobs and lower our reliance on a global supply chain.
These changes, however, won’t come today or tomorrow – but we must start working now to build a better future for American manufacturing companies to do work here. It’ll be a heavy lift, and certainly will require public/private partnerships, and a focus on R&D, to strengthen our technological advantage. The payoff will be undeniable.
Others have suggested that states implement reshoring technical assistance teams to help manufacturing businesses overcome market failures that result in firms not considering reshoring. Many simply don’t realize how cost-effective the transition of reshoring can be.
The U.S. has seen a steady decline in manufacturing jobs in recent decades. Ensuring that we prioritize domestic manufacturing is not just an economic imperative – with foreign adversaries having control of critical supplies, it becomes a matter of national security.
Now is the time to embrace all the benefits of “made in America” and to help manufacturing firms to flourish right here in the U.S.
About the Author
Myron Moser is the Chairman of the Board of Hartfiel Automation in Minnesota. He joined Hartfiel Automation in 1990 and quickly rose in the ranks to the executive level in 1995 and is one of the top executives in the U.S. automation industry. Under his leadership, Hartfiel Automation has seen incredible growth, continuing to diversify its product offerings in hydraulics, aluminum extrusions, and robotics and automation solutions. His company has helped strengthen the American manufacturing industry through innovative solutions for more than 60 years. Myron will be helping alliantgroup by leveraging his decades of experience as a top executive in the world of automation for strategic benefit of alliantgroup’s clients and CPA partners.