Obama's Impossible Leap

No area demonstrates the Obama administration's lack of intrinsic knowledge and stubborn failure to seek competent guidance than manufacturing policy.

Early on, candidate Obama pontificated about the need to end tax breaks for companies moving jobs offshore. More recently, the Creating American Jobs and Ending Offshoring Act attempts to institutionalize that goal in law. Unfortunately, what Obama and many members of Congress on both sides of the aisle fail to realize is that most of the jobs they propose to save have already left or no longer exist. What is neither understood nor appreciated is the fact that, especially in the United States, technology has forever changed manufacturing, and we are currently ill-prepared to meet its new challenges.

In the minds of many individuals, the word manufacturing calls forth images of mass production, the assembly line, and the so-called American System of Manufacture. While the ability to mass-produce precision parts was a high point in our industrial development, the situation has now radically changed. For example, a curbside walk anywhere will demonstrate the incredible variety of models, styles, colors, and options available to automobile purchasers -- a far cry from the days when Henry Ford stated that the purchasers of a Model T could have any color they wanted "as long as it's black." Manufacturing today, in every sector, has achieved new heights of flexibility and sophistication.

In older mass production operations, low-skilled labor held a prominent place. It did not take a great deal of education to bolt a transmission to a chassis or to turn lug nuts on a wheel. Many functions, including screw manufacture, metal stamping, and certain grinding operations, were mechanically automated early on and required people only to tend the machines. Mass-produced commodity items, such as common hinges and hardware, were among the first to move offshore, where labor requirements were simple and wages low. These are the jobs that will not be coming back. 

Despite the difficult economy, many manufacturing sectors in the United States are doing quite well, but their methods and technologies would likely be foreign to all except those who are engaged in them. Some explanation is in order.

Modern parts are designed on computer-aided design (CAD) systems. The designer today must take an unprecedented number of considerations into account, ranging from manufacturability to recyclability. The preliminary design is typically solid modeled, utilizing extremely sophisticated computer software. Three-dimensional images of the part permit advance testing under simulated conditions.

As opposed to low-value commodity items, both major manufacturers and the so-called job shops that subcontract for them produce what are referred to in industry as complex, high-value parts. Frequently made of specialized alloys, or even ceramics or composite materials, these parts, once designed, are produced on computer-controlled, multi-axis equipment using the latest in specialized tooling. Because of the extremely tight tolerances (permissible deviation from the specified size), automation is frequently necessary in order to assure proper location on the machine. When completed, the parts are subject to quality inspection that takes place in a temperature/humidity-controlled room on laser-based or other advanced measuring machines.

The up-to-date shop or plant resembles a laboratory much more than a traditional factory, and the production staff includes individuals ranging from design engineers to programmers to operators and operational specialists. All have been extensively trained and take advanced classes to maintain their skills.

The equipment and software with which they work -- from computer stations to machine tools to automated handling equipment -- is extremely expensive. As in any technological environment, it requires frequent updating.

The physical factory isn't the only thing that has changed. In mass production situations, machines were cost-justified on the basis of the number of units of a single part that they could produce. Today's parts are produced in small to medium quantity lots, and both justification and depreciation have become much more complex. As yet, government policies have taken no real notice of the change. 

Any administration serious about maintaining and extending our manufacturing base and creating the jobs of the future clearly has much to do. Initiatives must range from refurbishing, rebuilding, and increasing our vocational education base to providing improved investment tax credits for new machinery and revising depreciation schedules in line with current practice. This cannot be done by professional politicians. Rather, it will take the active and ongoing involvement of individuals at every level of business and manufacturing to ensure that the steps taken are practical and effective. 

As important as our armies were to winning the Second World War, it was our manufacturing capability as the arsenal of democracy that made victory possible. No president is an expert in all things. FDR enlisted the best industrial minds of his generation, regardless of their political persuasion. Henry J. Kaiser would design and build the liberty ships that became the backbone of the war's supply chain. Edsel Ford's creation and management of the Willow Run plant resulted in the mass production of the B24 Liberator aircraft. The talents of physicists, process engineers, and manufacturing specialists were combined in the Manhattan Project and resulted in the development of the war's ultimate weapon. 

In most administrations, both Republican and Democrat, the percentage of individuals from the private sector has ranged from the mid-thirties to the high forties on average. In the Obama administration, the number of individuals with private-sector experience is less than ten percent, and many of these came from finance or law. The administration's refusal to learn from experience, public opinion, and polling data indicates that there will be no leap to center.

The quality of the work produced by our American manufacturers has been recognized worldwide and, especially as the dollar has declined, has attracted customers from Europe and Asia. Even in a highly competitive world, American manufacturing can achieve a preeminent position with the right support and incentive mechanisms. To do so, however, requires that we understand the best of the present and look to the future. Failed policies and wishful thinking bent on recapturing yesterday will not work.