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Panel defines strategy for U.S. advanced manufacturing

7/19/2012 03:16 PM EDT
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DMcCunney
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re: Panel defines strategy for U.S. advanced manufacturing
DMcCunney   7/20/2012 11:15:08 PM
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"But as we dig deeper into the issue, it is becoming apparent to me anyway that flexible, value-added manufacturing isn't going to make much of a dent in the U.S. employment rate." That should have been obvious from the start. Manufacturing was traditionally a place where people who *were* unskilled/low-skilled could find employment, because it didn't require high skills or knowledge to work on an assembly line. But those jobs steadily moved overseas where unskilled labor was a lot cheaper. They aren't coming back. Those sorts of jobs that have to be done *here* still exist - think "flipping burgers in McDonalds" - but they don't pay anywhere near as well as an assembly line job used to. We do indeed need to invest in retraining, but we will still be left with some folks who simply won't get new jobs. Not everyone can be retrained for the new jobs that will be created. Flexible, value-added manufacturing will create *some* new jobs, and have other indirect benefits to the economy because the work is being done here. But by itself, it's not a panacea. Nothing is.

DMcCunney
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re: Panel defines strategy for U.S. advanced manufacturing
DMcCunney   7/20/2012 10:55:01 PM
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"Still, I don't agree with the assertion above that high U.S unemployment is "structural."" What would you call it, when it isn't across the board, and tends to affect certain kinds of jobs? The underlying process has been going on for decades. Ask what used to be the ILGWU. As a rule, work flows to where it can be done cheapest, and it has been doing so. I'll make a few flat statements about the future: 1: If your job *can* be done by a machine, at some point, it *will* be. 2. If your job *can* be done somewhere else by someone getting paid less than you to do it, at some point, it probably will be. (Think "outsourcing to India") 3: You will need to find things to do which either *must* be done here, or things which carry a high enough value that someone will be willing to pay what you ask, or both. (And what those high-value things will be can and will change. Today's hot, in-demand, you can name you own salary level skills are tomorrow's outsourcing candidates as people elsewhere acquire them.) 4: You cannot be ignorant or stupid. You will have to know various things, and be able to continually learn new things. If you do not know various things, and are incapable of learning them, you will have insoluble problems. You will be unable to get a decent job because you can't do anything anyone will pay for.

george.leopold
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re: Panel defines strategy for U.S. advanced manufacturing
george.leopold   7/20/2012 10:07:52 PM
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Your friend's question is the same one that inspired us to launch the "Rebuilding America" series. The underlying premise is that we needed to return manufacturing to the U.S. since the ability to manufacture is the key to continuing technology and product innovation. But as we dig deeper into the issue, it is becoming apparent to me anyway that flexible, value-added manufacturing isn't going to make much of a dent in the U.S. employment rate. Still, I don't agree with the assertion above that high U.S unemployment is "structural." As you pointed out earlier, there's a lot of capital out there looking for a return in investment. We need to invest in our workers through retraining as much as we need to rebuild our manufacturing infrastructure. At the same time, the service sector that provides most of U.S. employment is changing as more services are "produced" via the cloud. In the long run, that could be a far larger source of future employment for workers with the skills needed to fill those types of jobs.

DMcCunney
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re: Panel defines strategy for U.S. advanced manufacturing
DMcCunney   7/20/2012 6:43:26 PM
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"The question is whether a revived manufacturing "ecosystem" can help boost U.S. job growth." It can, with caveats many people will be unhappy about. Unemployment is structural, not across the board. Certain *kinds* of jobs are disappearing. Initiatives like this can create *new* jobs, but they won't help those currently out of work. By definition, they will *be* new jobs, and require knowledge and skills those currently unemployed will not have and may not be able to acquire. Building a robotic factory certainly creates employment for those who build it, and continuing jobs to maintain it. What will go away will be the large numbers of low-skilled workers that used to do the assembly. The factory of the future will employ many less people overall. Essentially, labor is being replaced with capital. The labor being replaced is all unskilled/low-skilled, and the sort of jobs that moved overseas because unskilled/low-skilled labor was simply a lot cheaper elsewhere. But replacing labor with capital has its own requirements. There must be a potential return great enough to justify the investment. There must be ready markets for the products the automated factory will make. The market will have volume requirements. You will need to sell at least X number of what you are making simply to cover the costs of making it, let alone make money, and X may be a large number indeed. I don't see an autmomated factory like this being used for low volume manufacturing unless what is being made carries a high price. It will start at medium volume and scale from there. I had a phone conversation last night with a friend who asked "But what do we *do* about the unskilled/low-skilled people? What opportunities can we provide for them?" My answer was "I don't know, and I consider that the biggest question we need to answer."

george.leopold
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re: Panel defines strategy for U.S. advanced manufacturing
george.leopold   7/20/2012 5:36:52 PM
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Indeed, we have heard from some domestic EMS providers that they attempt to "design the labor out" of products. Hence, electronics manufacturing by itself doesn't hold much promise for creating a lot of jobs. The question is whether a revived manufacturing "ecosystem" can help boost U.S. job growth.

george.leopold
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re: Panel defines strategy for U.S. advanced manufacturing
george.leopold   7/20/2012 5:30:27 PM
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Please note that I have linked to Rep. Johnson's bill in our story. So far, it has no cosponsors. Here's what her office released: "H.R. 6081, the Advancing Innovative Manufacturing (AIM) Act of 2012, to accelerate research, development, innovation, and education in advanced manufacturing. H.R. 6081 addresses a number of the recommendations included in the [manufacturing] report and will help to ensure our common goal of making sure the U.S. manufacturing sector is the most sophisticated and innovative in the world. American manufacturing is a cornerstone of our economy – it creates jobs, increases our national security, and promotes innovation across the private industry." It's highly likely that introduction of the bill was timed to coincide with release of the manufacturing report.

DMcCunney
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re: Panel defines strategy for U.S. advanced manufacturing
DMcCunney   7/20/2012 4:46:28 PM
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Manufacturing jobs *left* the US for lower labor costs, but the jobs involved were low-skilled/unskilled. Bringing manufacturing *back* to the US replaces large numbers of low-skilled people with a much smaller number of high-skilled ones. One issue is the lack of the high-skilled workers required.

pixies
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re: Panel defines strategy for U.S. advanced manufacturing
pixies   7/20/2012 4:11:21 PM
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Well, I thought the reasons manufacturing jobs leave US is because the cost of the labor, not the lack of skilled workers.

C VanDorne
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CEO
re: Panel defines strategy for U.S. advanced manufacturing
C VanDorne   7/20/2012 3:44:44 PM
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Three things: 1) This report is an improvement over the last one George highlighted (at least the last one I saw) in that the industry contributors look more credibile. In other words they actually came from industry. So that's a step in the right direction. 2) But to me all these large-scale proposals miss the point in that they address supply (fullfillment infrastructure) while paying lip service to that which preceeds it: demand. And we can't forget about profitability. 3) George, what are the details of the bill introduced by the Texas Democrat? The optimist in me assumes they correlate with this report? The realist in me compells me to other conclusions. Please advise.

george.leopold
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re: Panel defines strategy for U.S. advanced manufacturing
george.leopold   7/20/2012 1:09:14 PM
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A lot of that potential investment money is sitting offshore, and we have to find "sticks and carrots" to get companies like Apple to bring some of it back and invest in manufacturing and people. Let's start with wages at Apple Stores.

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