MIT Looks For Clues To Revive US Manufacturing

Walter Lino uses a wrench on a wheel assembly of a New York City subway car at the Kawasaki manufacturing facility in Yonkers, N.Y. (AP)

Walter Lino works on a wheel assembly of a New York City subway car at the Kawasaki manufacturing facility in Yonkers, N.Y. (AP)

New numbers from the Institute for Supply Management show that manufacturing expanded for the 17th straight month. But the industry has also shed more than two million jobs since the start of the recession, accounting for about a quarter of the jobs lost.

We look at what’s happening in U.S. manufacturing and explore a new panel at the Massachusetts Institute of Technology that’s researching how to revive U.S. manufacturing. We speak with Suzanne Berger, co-chair of the new panel, and professor of political science at MIT. She’s also author of the 2005 book “How We Compete: What Companies Around the World Are Doing To Make It In Today’s Global Economy.”

We welcome comments from all of our listeners. Post below. Please stay on topic and be civil. Comments may be moderated by us, but you are solely responsible for the content of your comments.

Danya Baudis

BU…..BIP, BIP
Please correct the Professor that the reason German manufacturers train their workers is the fact that it is very costly and almost impossible to fire them, it is much more economical to train them further in the profession.
Rosalind Horton Cauffman

Thank you for the excellent discussion of American manufacturing. I am very puzzled, however, that nothing was said about the fact that American companies are saddled with the burden of employee health care coverage, whereas I do not think that is the case in the countries your guest mentioned: Germany, Denmark, Japan, Sweden. Clearly, in countries where health care is universal and part of the social safety net, companies can spend those savings on education and training.
Could you please follow up with your guest on this question?
It seems to me that the playing field will never be equal as long as health care is tied to employment in the U.S.
Doris Dengler

What an encouraging story. Education is the root of so many of our problems. And it needs to start at its base. Unless this country recognizes the need to reform the whole educational institution from the bottom up (starting with nursery school) we are doomed.

Yes, an educated work force is necessary, but we will have to start at the beginning if we are going to be successful.
http://www.p-p-s-ltd.com Benjamin

There is also a different mentality in Germany and France for example. There is greater loyalty to domestic manufacturers unlike the U.S. I know packaging people in Germany and when approached by P&G if they could mfg in China they said “why should we” and gave an analytical defense. American companies usually just say OK, we will mfg in Asia.
In addition we have lost competitive technical edge in several fields such as printing & prototyping. I know companies that have technicians to produce exact printing in Asia because U.S. companies are not always willing to do what they ask, but they can, its called laziness.
We have huge mental obstacle that needs to be addressed.
http://www.p-p-s-ltd.com Benjamin

Gravatar error on my 1:39pm posting.
Monty

What “clues” are they looking for? Can they say “FREE TRADE?” We were the world’s leading creditor nation prior to the first rounds of GATT, and with the other rounds, NAFTA, CAFTA, and all the others we are now the largest debtor nation in world history. It takes MIT to search for the cause of our manufacturing problem?
Peter

Health care is always tied to employment… European employers carry a huge social cost burden for their employees, with what the employee takes home often amounting to less than half of what the employer actually pays (my experience was in Poland). Otherwise, where would the money come from to insure people who don’t work?
It seems that here we put more value on working long, hard hours than on working competently. Until that changes, there won’t be any motivation to better our educational system or to hire people with a higher level of competence.
Matt

Executive bonuses tied to cost reductions +

Trade agreements have lowered/eliminated barriers to imports from foreign sources +

Shipping manufacturing jobs to Mexico and Asia lowers labor costs +

= Dramatic reductions in US manufacturing base

Our weakness is not technological nor “health care” in nature. Our weakness is a system based upon greed and avarice at the expense of the country and it’s working population.

(For years we’ve heard the idea that we’re heading towards a more “service economy”. Since our military spending now makes up over 5% of our GDP it seems the primary service we provide to the world is war.)
Dr. Dev Gupta

It was symptomatic that the guest you interviewed in yesterdays program on Revival of Manufacturing in the US was not a Manufacturing expert but a Pol. Sci, even though from MIT. One of the root causes of the decline of science, technology & manufacturing in the US is that while the Sci / Engr. remained stuck in their tradiional pursuit of accuracy and predictability, Charlatans like the MBAs, financial ‘engineers’, lawyers and various rights activists ( all those unemployable English majors ) have taken over and killed the golden goose ( US dominanace in industry and science ) that allowed the unproductive part of the Society to live well.
http://www.twillingersvoyage.com Dan Turner

If 25% of the job loss in this “recession” was in mfg, a sector which accounted for 12% of the workforce last time I checked, then mfg is shedding jobs at twice the rate of the economy at large. I have to agree with Matt about the cause. Prof Berger cites “productivity gains” as the reason why mfg has dropped from 30% of the workforce in the early/mid 20th century to probably less than 12% now, and she cites aircraft and autos as two mfg sectors active in the US. Both those sectors use huge quantities of outsourced parts (Mexico, Canada…etc). How well do statisticians adjust for “productivity” gains when outsourced (~offshored) parts are bought for less than it would cost to make them in-house? In my opinion, US labor productivity gains are made on the backs of cheap offshore labor to a significant degree!