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CruisingRam
I have been trying to search data for manufacturing in the US- one member, in a thread I can not remember, said something to the effect of "American manufacturing is dead"- and it got me to thinking, because this is a field I am striving to enter.

With all the obvious news about China ruling the world in exports (they don't -Germany holds that title) - and the numerous corporate layoffs at US large scale manufacturers- and I believe bucket talked about Intellectual Property trade being on the postive side of the export equation- I have applied that anecdotally- and found that perhaps large scale manufacturing as we know it may soon be on a very much smaller scale- while small scale home shop selling may boom yet.

http://usinfo.state.gov/products/pubs/oecon/chap4.htm

Many visitors from abroad are surprised to learn that even today, the U.S. economy is by no means dominated by giant corporations. Fully 99 percent of all independent enterprises in the country employ fewer than 500 people. These small enterprises account for 52 percent of all U.S. workers, according to the U.S. Small Business Administration (SBA). Some 19.6 million Americans work for companies employing fewer than 20 workers, 18.4 million work for firms employing between 20 and 99 workers, and 14.6 million work for firms with 100 to 499 workers. By contrast, 47.7 million Americans work for firms with 500 or more employees.

Also, lots of info here:

http://www.nam.org/s_nam/sec.asp?CID=201746&DID=230317

I am presently doing business with lots of other small businesses for my small custom bike biz as well.

I am starting to think we really dont NEED large corporations in this country, with thier near total lack of customer service, horrible mismanagment, bloated executive pays, and anti-capitalistic predatory marketing strategies.

My own experiance says this: American manufacturing is a long, long way from dead, it is just less visible than say, GM

So my questions are this:

1) Do you think manufacturing is dead or dying in the US, or that it is shifting back to the small scale enterprise?

2) Do you think that the small time enterprise (50 employees or less) is just simply more adaptable to the global demands, and more willing to take risks in other markets?

3) Do you personally have some anecdotal comment or know someone personally that is in manufacturing of durable goods on a small scale? If so, what is your definition of "manufacturing of durable goods" - what does that mean to you? Do you think hubcaps or coats?
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Yogurt
QUOTE(CruisingRam @ Feb 5 2006, 04:44 AM)
1) Do you think manufacturing is dead or dying in the US, or that it is shifting back to the small scale enterprise?


My take on it supports your theme. In the foundry industry the "outsourcing" caused some consolidation in our industry, but the more flexible and progressive survived. We are now seeing work returning from overseas, usually for:

a] Engineering Change Orders - By the time the oversees equipment can be retooled and the "pipeline" purged you are looking at a minimum of 2 months, often as many as six. In the U. S. this is where the small shops have a decisive advantage over the more cumbersome mega-corps...

b] Quality - We have to repackage many shipments just to sort out defects.

c] Cost - With the shortages of raw materials in our industry, the non-labor costs are increasing, shrinking the real spread in pricing. Shipping costs are also going up significantly due to fuel costs. Most importantly, there is some movement from China on allowing the currency to "float". I would look for this to continue. The trade deficit is unsustainable, and China is smart enough to know that it would do them no good to be holding a bunch of worthless paper should the U.S. economy collapse.



Much is made of the shift from an agrarian to industrial to information age. But if you look in hindsight we never really "left" agriculture, just added industry. We need to make sure we don't "leave" industry. We didn't win WW1 & WW2 by being better generals or more accurate shots, they were won because we out produced the other guys (and had some good luck!).

Borgen
Advise your children to train for jobs that are impossible to outsource because anything possible to go over seas WILL GO. That includes almost all manufacture.

What is difficult to outsource....

Health Care --- and a growth industry at that.
Repair -- Auto Repair for example. They can be assembled anywhere, but have to be repaired close to home.
Construction
The Service Industry Generally, and that includes everything from
Busboy to Attorney.
RedCedar
I don't think manufacturing is dead. And the issue of complete outsourcing to say China is not perfectly clear.

But to address your "there are many small companies" point, just remember GM is really supported by many small companies. I should know living in Detroit. I worked for a company that made handheld diagnostic readers for Detroit Diesel and we had no affiliation with the giant corp.

You can't manufacture cars on a small scale, unless you're willing to pay $150,000 per vehicle. You need giant corporations for some industries. And when those giant corps go, so do those medium sized companies (called tier companies) and the small shops.

But I agree, many large companies are horrible, like the giant bank that I work for now. They keep accumulating other banks while the CEO is making 1500 times the average worker. I get to listen to them rape the poorest of people with high interest rates and fees. Our service is terrible and they have plans to move service to India where they already have most of the tech support.


But going back to the outsourcing issue. GM was encouraging all those small companies to move to China or lose contracts. GM is trying to cut costs and is pushing the lower tier comapnies to leave the US.

There are a lot of major issues whether it is profitable to go to China as mentioned in the prior thread. But another option is Mexico to resolve some of those problems and here in Michigan they're moving to Mexico very quickly. Just recently AMF Brunswick (bowling equip) in Muskegon, Mich came out and blantantly said they were leaving to Mexico for cheap workers and they no longer had any loyalty to American workers or the city they were located.

American icon leaving Muskegon for Mexico
Brunswick cites profit woes in decision to move

http://www.lsj.com/apps/pbcs.dll/article?A...325/1004/news03

This is one of those small companies you're talking about.

And prior to that, Electrolux in Greenville, Mi said they didn't care if they received tax cuts they wanted cheap mexican workers.

http://www.conway.com/ssinsider/pwatch/pw040419.htm

Maytag, an American icon in Illinois moved to Mexico.

http://www.inthesetimes.com/site/main/article/1790/


These don't even address those big companies, like Delphi that wants to leave the US and wants to pay workers in the US 1/3 of what they are making now(around $10/hr).


Here in Michigan, manufacturing may not be dead, but it's dying quickly. Large or small companies.

There are a ton more examples. The trend is leaving.

Just ask the plethora of unemployed machinists and manufacturing workers here in Detroit where manufacturing is headed.


Amlord
When assessing manufacturing in the US, we must clarify what we are speaking about. Are we talking manufacturing jobs or manufacturing output?

Manufacturing jobs have dropped from 21% of all US employment in 1980 to 11% today. That's pretty significant. There are definitely less jobs in manufacturing.

However, US manufacturing is at the same percentage of the GDP as it was in 1980. The industry is just as big. However, it is doing more with fewer workers.

1) Do you think manufacturing is dead or dying in the US, or that it is shifting back to the small scale enterprise?

Neither. Manufacturing is moving to larger, higher tech companies in general. In my experience, small shops are cost effective for providing prototypes, but rarely are they cost competitive on production scale orders. The reason is that the level of automation (CNC equipment, CMM measuring, quick change tooling) is lower. Quality is generally higher on more productive equipment as the operator is more of a quality inspector than a machine operator.

There will always be a market for small scale manufacturing, but it remains what it is: small scale.

2) Do you think that the small time enterprise (50 employees or less) is just simply more adaptable to the global demands, and more willing to take risks in other markets?

As RedCedar pointed out, larger companies need the support of smaller companies. These smaller companies are not as efficient as larger companies but are more responsive. This gives them the advantage of quick turn-around and since they have lower overhead, lower cost on smaller runs. In general these businesses are unlikely to turn away your business, taking whatever they can get. It is rough on them sometimes and they are often at the mercy of larger companies.

Larger companies have more investment in equipment and thus their workers are more productive on larger scale jobs. It's two sides of the coin, really.

3) Do you personally have some anecdotal comment or know someone personally that is in manufacturing of durable goods on a small scale? If so, what is your definition of "manufacturing of durable goods" - what does that mean to you? Do you think hubcaps or coats?

I know people who do this. From two man shops to 20 man operations. It is a tough business unless you have a steady customer base (usually a larger company that outsources certain jobs). Of course that's true for any business: if you don't have a steady source of customers, you probably shouldn't be in business.
RedCedar
QUOTE(Amlord @ Feb 6 2006, 11:58 AM)
When assessing manufacturing in the US, we must clarify what we are speaking about.  Are we talking manufacturing jobs or manufacturing output?

Manufacturing jobs have dropped from 21% of all US employment in 1980 to 11% today.  That's pretty significant.  There are definitely less jobs in manufacturing.

However, US manufacturing is at the same percentage of the GDP as it was in 1980.  The industry is just as big.  However, it is doing more with fewer workers.

1) Do you think manufacturing is dead or dying in the US, or that it is shifting back to the small scale enterprise?

Neither.  Manufacturing is moving to larger, higher tech companies in general. 


I won't argue against the idea that tech is a big reason for losing manufacturing workers. But to completely ignore the amount of jobs that are leaving the country in manufacturing is just being blind.

But your point is well taken about "output vs jobs". Because something can be made in Mexico or China but still count toward US manufacturing output. So that can be misleading. But it is clear that we are losing jobs very quickly to technology but also to companies leaving the country for cheap workers.
CruisingRam
I have been trying to figure out how a gov't even tracks the "little guy" manufacturers that I know.

For instance- I know a guy with a CNC mill - a benchtop model. They are actually not as expensive as you might think- the accesories can run as much as the mill itself though- trust me on this one LOL thumbsup.gif

But he makes "triple tree top clamps" and I make brackets for hard bags for motorcycles. We operate WAY under the radar- only thing you can track if you are the gov't is our tax return. And you would get very, very little information from just a tax return from either of us, as far as what we are making, and who are customer base is etc.

Also- one guy I do biz with USED to work for the honda factory- then a race team called RC engineering that was the race arm of Honda. When they "outsourced" a big chunk of what he was doing in the late 80s, he opened up his own , very, very succesful business working on these old bikes as well. He has since invented and patented several things for V4 hondas, upgrading this or that. He sources different components from all over the world- a steel braided line from the US, a spec made oil block from china etc.

He then assembles the item, and tests them, himself- and he makes I think one part himself right in his shop, because it is very precision and he doesn't want folks killing thier bikes with junk stuff.

How does the gov't track his manufacturing? He has 2 full time employees, and one part time "shop gopher" - can they track his biz through them?

I am genuinely curious, because I have no idea where some of these numbers are compiled, or how accurately they CAN compile them.

I know at least 10 chopper frame builders personally, that make frames for low cost choppers as a living. Most of thier biz is straight up cash, again, and these guys are pumping out bike frames on a regular basis, real high quality stuff, real craftmenship. But they are "titled" through the donor bike necks, do to US DMV laws and such- so they are not "manufacturing" anything according to the DMV, simply modifying an old bike.

Get my drift on all this?


And this is a super, really big, movement in America, I am sure it is in the billions of dollars, and nearly completely off the radar screen.

Not completely though- I have noticed H-D has been behind new EPA regs trying to shut down these small time builders- because it is certainly taking a big chunk of market share, and the only way to slow them down is to make it harder to register these bikes.

The Yamaha XS650 is an inline twin that was basically a copy of the old BSA/Triumph inline twin bikes- and they sold millions of them. Go to e-bay and do a search on them- you will get a glimpse of what I am talking about- and they are one of the most popular bikes in the world to "mod". There is a guy, Mikes'XS, that has a booming business making parts, right in his own shop, dirt cheap, I mean REALLY cheap. Cheaper than China stuff. He has like 20 employees (I hear- it is second hand thumbsup.gif ) - and all us other small time guys are trying to figure out how he does it. We know he does have a pretty big and top of the line CNC mill- but that is about it. We also know he used to work for Yamaha- so his development costs are nil.

The only way the goverment could realistically track what is being done with this XS yamaha is to track DMVs re-titling of old bikes. I mean, why, after not being registered for 15 years, are so many XS 650s suddenly being registered? hmmm.gif
Amlord
QUOTE(RedCedar @ Feb 6 2006, 01:16 PM)
QUOTE(Amlord @ Feb 6 2006, 11:58 AM)
When assessing manufacturing in the US, we must clarify what we are speaking about.  Are we talking manufacturing jobs or manufacturing output?

Manufacturing jobs have dropped from 21% of all US employment in 1980 to 11% today.  That's pretty significant.  There are definitely less jobs in manufacturing.

However, US manufacturing is at the same percentage of the GDP as it was in 1980.  The industry is just as big.  However, it is doing more with fewer workers.

1) Do you think manufacturing is dead or dying in the US, or that it is shifting back to the small scale enterprise?

Neither.  Manufacturing is moving to larger, higher tech companies in general. 


I won't argue against the idea that tech is a big reason for losing manufacturing workers. But to completely ignore the amount of jobs that are leaving the country in manufacturing is just being blind.

But your point is well taken about "output vs jobs". Because something can be made in Mexico or China but still count toward US manufacturing output. So that can be misleading. But it is clear that we are losing jobs very quickly to technology but also to companies leaving the country for cheap workers.
*



Technology marches on.

In 1860, 60% of the workforce was involved in agriculture. Today, it is less than 3%. We have many more mouths to feed, but fewer workers doing it. In fact, we export more food today than ever before. Technology allows workers to be more productive and therefore less of them are needed to get the job done.

Over the past 20 years, the same trend has occured in manufacturing. We still manufacture as much as before, but we needed fewer people to do it.

There is a balancing point, however, where transportation and communication costs equalize the low labor rates.

Manufacturing productivity has grown by an average of 2.8% per year since 1950. That means that in real terms, each laborer in manufacturing produces four times as much today as they did in 1950. Since 1990, that rate has grown by an average of 3.9% per year.

The Manufacturing Sector: Remarks of Dr. N. Gregory Mankiw

QUOTE
In some ways, the long-term trends that we have recently seen in manufacturing mirror what we saw in agriculture a couple of generations ago. A hundred years ago, about 40 percent of Americans were farmers. Today, farm workers make up less than two percent of the labor force. This transition was made possible by tremendous advances in farm productivity. The United States still produces more than enough to feed our citizens. Indeed, farm products are a major export of the United States. But we produce this output with fewer and fewer workers.

To be sure, the transition of workers from farming to other sectors of the economy was difficult, as many farming families can tell you. But the transition away from farming to other industries has been a key element of economic growth and prosperity. Similarly, the productivity growth and the resulting employment declines in manufacturing have been difficult for many families. Yet this dynamic reallocation of workers toward industries where they are more valuable is at the heart of why free-market economies prosper.

<snip>

Before taking my current job at the Council of Economic Advisers, I taught for 18 years at Harvard University. Like cutting hair, teaching is a service industry with relatively low productivity growth. The best practices in education have not changed radically since Socrates. As a result, employment in teaching, like employment among barbers, has remained strong, and will likely continue to remain strong in the decades to come.

Many people are surprised to hear that higher education in the United States is an export industry. Students from abroad come to study here because we have the best university system in the world. Last year, the United States ran a trade surplus of about $10 billion in higher education. And that figure includes only the direct payments to colleges and universities by foreign students, and not the many other U.S. goods and services these students buy while they are here.


An interesting read.
CruisingRam
See- my own (anecdotal) evidence about higher education is much different than that-

Here goes- my cousin from Russia is coming over here to get his MBA- something he could do over there, as far as education on par with what he needs- but America doesn't recognize Russian education- my wife had a 4 year degree in economics- the local U gave her 2 years- and she is light years ahead of every class she has been in, and has the highest grades in her school EVER. It is all about how to snatch the money out of the rubes hand- universities don't make money by recognizing other countries programs! In some fields of medicine, the Russian doctors are light years ahead of American- and the most obvious field is space- they are kicking NASAs butt big time with alot less money.

So why is my cousin coming over here? Because he can't get the connections or get a job with an American company without the American education- regardless if what he has is superior to what is being offered here.

There is, however, lot's more money for research here in the US than in other countries- so it is good for a student to be at an american U so they can work on research, and earn money while doing it- something that may not happen abroad.

Engineering is Engineering the world around- and I think the Russian system is far better than ours- and one of the reasons I am working with them in manufacturing- the machinist is usually an engineer as well- I have seen engineers here that can't work on a modified bike or hot rod- they are lost- or make a part on a CNC mill- whereas the Chinese, Indian and Russian engineers I have worked with are very capable of taking something from the drawing board and making it themselves right there in the local shop.

I had thought of returning to school to be an engineer- but the workload is way to heavy for me, and I have to take alot of classes I just don't need.

So I tried to find machinist courses like they have in Germany or Europe, which gives each component of your machinist educations with a small background in that field of engineering- seems it doesn't even exist in the US, and if it does, not on a very large scale.

I think they come here more for American jobs than American education personally.

I have yet to meet one foriegn national, and I have met probably over 100, that values the education they got here, but rather, value the job opportunity it provides instead- most call the American schools system a "rip off".
RedCedar
QUOTE(CruisingRam @ Feb 6 2006, 04:58 PM)
I have yet to meet one foriegn national, and I have met probably over 100, that values the education they got here, but rather, value the job opportunity it provides instead- most call the American schools system a "rip off".


You don't have to look at foreigners, just ask Americans. US education is a racket, plain and simple.

Schools are gov't run so you you'd think they would be honest and have your best interests at heart (seeing no monetary incentives) but you'd be wrong. Unversities create crap programs just to increase sutdent population. How many worthless MBA programs are out there at state run Univs?

Then throw in all these corporate certifications. What a boon for companies those are. Look at something like getting SAP certified. Courses that run 3-4 days for $3K?? Ya right, I'm sure it's worth it. I took a MCSE course, one week long, from a certified MS center, paid by my employer of course. It was near $4000 and it was the biggest waste of money. They sat a Russian guy who barely spoke english in front of us to read straight from a manual. Boy that was worth every penny!

Education is worth a lot of beans these days. It creates a lot of revenue and jobs, regardless if it's worth a damn. You even see it in the media, er MSNBC or CNN, where they say "top rated professions: people with .NET certification will make tons of money". Hmmmmm, a kickback from Bill Gates perhaps?

US education is quite the racket indeed. Some schools, like Phoenix or other high costing ONLINE schools dole out As to students like they're nothing.

It's very unnerving if you're trying to work hard to get to a good job and people tell you that you need education and you just end up WASTING dollars after dollars for worthless education.

I think the Matt Damon quote in Good Will Hunting says it all:

"You wasted $150000 on an education you coulda got for a buck fifty in late
charges at the public library"

Too bad you can't just take certifications instead of having to pay $1000s to prove you know it.
Google
Cube Jockey
QUOTE(RedCedar @ Feb 6 2006, 08:26 PM)
You don't have to look at foreigners, just ask Americans. US education is a racket, plain and simple.
*


And what Americans other than yourself are making the claim that education is a racket? Please cite the studies and/or public opinion polls conducted by national organizations that prove this.

QUOTE(RedCedar)
Unversities create crap programs just to increase sutdent population. How many worthless MBA programs are out there at state run Univs?

Again, proof please? Are you suggesting that an MBA is a worthless degree or just MBAs at state schools?

The idea behind an MBA is to get you into a job that pays more with more responsibility, you are investing money to make money in the future. Presumably you are going to learn things while obtaining that degree that will help you be successful after your resume and interview land you that job. The only other way to do it is to get "lucky" and work your way up the ladder.

QUOTE(RedCedar)
Then throw in all these corporate certifications. What a boon for companies those are. Look at something like getting SAP certified. Courses that run 3-4 days for $3K?? Ya right, I'm sure it's worth it. I took a MCSE course, one week long, from a certified MS center, paid by my employer of course. It was near $4000 and it was the biggest waste of money. They sat a Russian guy who barely spoke english in front of us to read straight from a manual. Boy that was worth every penny!

Actually most certifications are valuable and they are what you make of them. You took one course where you had a bad instructor and you are going to go ahead and label the whole industry a racket? Did you even bother to register a complaint with Microsoft about their class? Ask for a refund?

Training classes cost a lot of money because they take a lot of time and effort to prepare, you often have equipment costs and of course you have the person's labor conducting the class and profit. I don't believe you are qualified to state that $3K for a 3 to 4 day class is "too high" until you've tried to prepare and deliver one on a complex subject and do a good job.

Employeers and clients (if you are a consultant) have to sift through tons of resumes, certifications are a standard to say that you know how to perform a certain job. Employeers and clients are also pretty good about knowing which ones are bunk and which ones actually mean something. But in the end they just ensure that you get looked at for an interview, it is up to you to actually perform the job hopefully based on the knowledge you gained getting your certification.

QUOTE(RedCedar)
You even see it in the media, er MSNBC or CNN, where they say "top rated professions: people with .NET certification will make tons of money". Hmmmmm, a kickback from Bill Gates perhaps?

Um... no. As an IT professional I can tell you with certainty that the reason the media would report on that is because it is... wait for it... true. A good many of the Fortune 500 are turning to .NET as their language of choice for software development. If you know .NET then you are more likely to get one of these high paying jobs. It has absolutely nothing to do with some Bill Gates conspiracy. Microsoft designed a solid programming language that is popular right now and therefore that is where the high paying jobs are.

Any proof for that conspiracy filled rant above?

QUOTE(RedCedar)
US education is quite the racket indeed. Some schools, like Phoenix or other high costing ONLINE schools dole out As to students like they're nothing.

Again, proof please?

QUOTE(RedCedar)
It's very unnerving if you're trying to work hard to get to a good job and people tell you that you need education and you just end up WASTING dollars after dollars for worthless education.

That's pretty simple, don't waste your money on bad education. There are good courses and there are bad ones. There are good training organizations and there are bad ones. There are certifications that bring you additional money and job prospects and there are those that don't. It is up to you to do your homework and find out which certifications and educators are good and make the most out of them while you are there. If they aren't valuable thhen it is also up to you to complain and get your money refunded.
CruisingRam
Hmm- seems we have wandered a bit on this one- I will just say I am not saying "it is crap" - but, from a strictly performance issue- it is not the greatest either thumbsup.gif - please- feel free to start a topic on higher education- me and my wife are both pretty sophisticated consumer's of the post-secondary education system- I might have something to add LOL

That being said- if there is a DISTINCT disadvantage we have against other countries and manufacturing of high tech durable goods (say- carb tops for a 1985 V65 Sabre- the die and plugs for them? thumbsup.gif )- we are woefully behind.

Like I said- I am a pretty sophisticated consumer of education whistling.gif - I know what I need, I know what I am looking for, and I know what I am able to handle load-wise.

I have not been able to find a German-French-English-Euro style of vocational training I need though to be competitive with the same small scale work that those countries are able to churn out and China and big market manufacturers can never hope to excell in at this stage of the game.

I need some basic engineering courses- but not an entire engineering degree. I need some high tech machinist courses- but all we have on any kind of scale is a journeyman's program- you work for a machine shop for 2 years, and then you get an associates degree if you take a couple electives as well- and of course- pay the astronomical fees that they wish to "process your paperwork" - a few thousand $ for nothing.

Bridgeport and others give a pretty good lesson on thier machines- but the price of the machine is around 85k dollars- a tad steep for a few week course- but hey, you have a machine when you are done LOL

As it sits now- if I want a "fat tire" mod on my old honda- I have to ship the rim to France- and pay around 1100 bucks USD- not including shipping, but including VAT tax- to have this specialized machine work done.

Funny thing is- they are doing it on a bridgeport machine made 100% right here in America- though I understand a Russian writes the code when talking to the factory rep w00t.gif thumbsup.gif

Now- if I had that machine- and the education to re-tool in midstream quickly like those darned frenchman devil.gif - I could undercut thier price in about half, maybe even more- and have a booming domestic business.

The only thing is- how would the goverment even know I was in the manufacturing biz, and on what scale?

I am hoping CJ- with your source resources- you can help me find out how they track such a thing.

But I am handicapped by:

1) the education system in America is not responsive to the manufacturing industry
2) shipping and such to Alaska- which is a hub, so not as bad as you would think.

Now- the machine shop here locally is able to handle just about anything I want it to do- but they have a pretty nice "bread and butter" doing rebuilds on auto motors- and in fact, have not even bothered to upgrade the software to handle a straight AUTOCAD program- instead- just use the CNC mills basic "G" code auto programs- because there is no need with the amount of rebuild work they are doing to branch out.

They have 3 top level machinists working in the shop- not one of them has a high school diploma.

Not saying there is anything wrong with that biz- they do excellent work- and they are not looking to expand- but I just wanted to give you an idea of the "who" a machinist, or welder, or fabricator is in America vs abroad.
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