U.S. Manufacturing Heads in New Directions

April 25th, 2013 by DWM Magazine

The Washington Post hosted a summit Tuesday regarding America’s New Manufacturing, discussing how manufacturing in the U.S. is changing as new technology emerges and a younger, more diverse generation enters the workforce.

According to Eric Spiegel, president and CEO of Siemens Corp., the current view and knowledge surrounding manufacturing is to blame for lower manufacturing numbers.

“America has a training gap,” said Spiegel. “I know it’s more common to say we have a skills gap … but in truth it’s not a skills gap, it’s a training gap. Modern manufacturing has a branding problem. It has an image problem, especially with younger workers.

“[Manufacturing] is the most sophisticated and forward-looking business function today,” he added.

Following Germany’s apprenticeship model, Siemens is sponsoring 12 students who will be employed by Siemens after graduation. Spiegel said the training they will receive will adequately prepare them for roles in manufacturing positions the students previously had not considered until offered the opportunity.

Ron Bloom, former assistant to President Obama for manufacturing policy, followed Spiegel and discussed the political economy of manufacturing and the role he believes government should play in manufacturing.

Bloom said half of Americans polled say China is the leader in the global market noting the perception that China “makes everything.” He denied this misperception, however, saying that the U.S. is three times larger than its closest competitor, but needs to use innovation to overcome the misunderstanding.

“In important parts of manufacturing; where you make something is related to where you think of something … If we lose the manufacturing, the innovation leaves with it,” said Bloom. “If we let our manufacturing go and the innovation goes with it, what’s our core competency anymore?”

Bloom further noted that it takes merely one man hour to make a ton steel at whatever the current hourly wage is, but costs around $60 to transport one ton of steel from China to America. “There’s no economics anymore to making steel any place but here,” he said.

As for the role of government Bloom said supplying a strong infrastructure for manufacturing to grow is a primary responsibility of the government, however, government is not responsible for actually manufacturing products or creating corporations. “Government has to worry about getting trade right. For manufacturing to work there has to be a system of rules … that is a complicated problem,” he said.

James Manyika, director of McKinsey Global Institute, added that transformation is currently underway for manufacturing. “The price-volume shift that is going to occur is pretty significant. Global competition is also intensifying … the U.S. is still on top. It is important to know how the nature of the competition is going to change over time,” Manyika said.

“Many of these competitors are in countries that themselves are driving demand … the innovation flows here are no longer just going to be one way … Good news that I think bodes well for the U.S. is the huge amount of innovation,” said Manyika.

Manyika also added that the nature of work within manufacturing appears to be changing.

Training a changing workforce is another important tenet for reviving American manufacturing. Jennifer McNelly, president of the Manufacturing Institute, discussed one manufacturer who has an apprenticeship program but is still encountering problems with hiring skilled workers because there is the perception that manufacturing isn’t a viable job option. She also noted that how manufacturers look at “soft” skills and skillsets that may not specifically apply to manufacturing, such as those held by returning veterans and female workers should be looked at more closely and reevaluated for their value. For instance, veterans may hold stronger abilities for working in high-pressure situations and assessing potential outcomes.



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