U.S. manufacturing: Engineering social media

Social media engineering topics include manufacturing trends: Is industry returning to the United States? What are they talking about when they say “Made in the USA”?

02/16/2012


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Social media, such as LinkedIn’s Automation & Control Engineering Group, provide a platform for automation and controls engineers to share ideas, opinions, and solutions.

LinkedIn’s Automation & Control Engineering Group provides a platform for automation and controls engineers to share ideas, opinions, and solutions and is managed and monitored by CFE Media’s Control Engineering.CFE Media’s Control Engineering manages and monitors this discussion platform, keeping its fingers on the pulse of participants as they air issues and offer opinions. Below are some of the group’s observations and insights, with more online.

 

Are we really seeing a manufacturing trend away from China back to the U.S.?

When Craig Henry, director of business development at RT Engineering, Raleigh-Durham, N.C., posed this question to our automation and controls social media group, he certainly hit a nerve. His query unleashed a flood of responses and a lively discussion about a topic that has relevance for virtually everyone—at home and abroad. Turn on the national news just about any evening and reporters are talking about the impact of Chinese manufacturing on domestic and global markets and suggesting that an increasing number of companies are choosing to once more make goods in the United States. But does this translate into a trend to return manufacturing to the U.S. and away from China? Henry’s question elicited strong and substantive views from numerous forum participants.

Made in USA logo; Courtesy: Control Engineering“It’s funny that this question arose today,” said Michael Grillo, engineering recruiter at City and National Employment, Waterloo, Iowa, “because, at the same time, a friend shared a story with me that addresses a related issue. It’s called, ‘One light bulb at a time’ and tells about a physics teacher in high school who told students that while one grasshopper on the railroad tracks wouldn’t slow a train very much, a billion of them would. With that thought in mind, consider this: This past weekend I needed 60 W light bulbs. In the store, next to the name brand I normally buy, was the ‘everyday value’ brand. I compared the products and they were the same except for the price. The name brand was made in Mexico and the other, which cost less, was made in Cleveland. I looked at a number of other products and found the same situation: more expensive name brand made offshore, value brand made in the U.S. So I say start looking. In our current economic situation, everything we buy or do affects someone else—even his or her job. My challenge is to start reading labels when you shop. The job you save may be your own. We should have awakened to this fact a decade ago. Start buying American, one light bulb at a time!”

At the other end of the spectrum is a different perspective offered by Jacob Decker, senior programmer analyst, Albuquerque, N.M. Although he sees a trend for software development to move back to the U.S. for reasons of quality and project complexity, he predicts a large part of manufacturing in the future will come from India. “Population there is growing faster than in China,” he noted, “which has restricted population growth. That will mean fewer laborers for the marketplace in China and more cost in time. India has no population control at this point and will become the world’s largest population in years to come. That means ample bodies for the workforce. As much as I would like to see the United States become the land of production again, I just don't see most companies moving manufacturing away from places that make it easy for them to stay. The U.S. needs to make a lot of changes before production will become a mainstay again. We need to create environments to encourage corporations to stay.”

Chris Scott, PLC programmer at Tennessee Rand Co., Nashville, Tenn., believes the United States will see a lot of jobs coming back to the country—at least in the automotive industry. “A lot of manufacturers assemble cars in the U.S.,” he said, “probably due to quality issues, but most of their suppliers build their parts in other countries. A head weld engineer for a major supplier told me if the cost of laborers elsewhere went up even a little bit, they would start moving machinery back to the U.S. So I think some jobs will start to come back here in the next few years from the automotive industry alone.”

In the opinion of Craig Henry, the person who initiated this discussion, automation is the likely key to staying competitive in manufacturing in the West overall. For example, he said, “BMW built the Z4 automobile in Greenville, S.C., and then determined it could make the car for less in Germany. So the company moved production to Germany into a much more highly automated plant in a country with a higher labor rate.”

So is manufacturing, then, trending away from China? Is it returning to the U.S.? Elsewhere? Obviously it depends on who you talk to…and answers vary, from yes to no to maybe to somewhere in between. What is certain is that opinions are varied and intense, and automation and controls engineers have a lot to say!

See additional "Online extra" comments below.

-Jeanine Katzel is a contributing editor to Control Engineering. Contact her at jkatzel(at)sbcglobal.net.

ONLINE EXTRA

Michael Grillo, who offered the “light bulb” story (above) and is an engineering recruiter at City and National Employment, Waterloo, Iowa, added these thoughts: “If we look at the numbers, we will find that there is probably as much manufacturing in the U.S.—maybe more—than 50 years ago. What is lacking is that we are not expanding and growing our home base as much as we need to. I also want to make it clear that I do not discourage expansion into other countries or markets,” he continued. “In fact, history shows when we expand into other countries, we grow and prosper at our best and our import dollars are offset. The problem is in the technology and innovation that we are not reinvesting into our own business. We would rather have some other country develop and innovate rather than reinvest in ourselves. This is where China has started to take a turn with using and developing current technology.”

Consider the case of John Deere or Caterpillar, said Grillo, offering an example. “Both are expanding offshore, but they have not neglected their home base. Innovation and engineering for the most part are still done in the U.S. Quality is maintained here and when they expand to other countries. They don’t build overseas just to ship product back home. They do so to develop sales and products to export to other countries or to the market they are building in. Yes, they import components and other assemblies made in plants, but for the most part this is done not just to retail but to control the supply chain effectively.”

In Grillo’s estimation, more and more components are brought back to the U.S., while the presence of these products in other countries grows the markets there. “We have to face being part of a global manufacturing world,” he insisted. “At one time, we were the world. Now we are now only part of it. The key is to never let it get away from us on our homeland. If something costs a dollar more to produce in the U.S., does it really need to be made offshore? This is where the trend back to the U.S. sits at the moment. As the cost of goods and the control of raw materials in China become more vulnerable, CFOs are starting to ask if it is really cost effective to manufacture in China. When we put numbers on the benefits of building in the U.S. versus saving a few dollars in another country, the trend will equalize. Let’s hope the trend continues with the move of letting more and more manufacturers in the U.S. get their production levels back to where they need to be.”

Agreeing with Grillo, Saad Ahmad, an embedded systems programmer in electrical/electronic engineering from Pakistan, offers a slightly different perspective. “My father visited England back in 1970s.” said Ahmad. “He and a German worked together on a car suspension system project. My father noticed that his German coworker wasn't shaving his beard. He thought it was unusual because he seemed to have the personality of a businessman who would shave regularly. So my father asked him, “Are you intending to grow a beard?" The German replied, “No. I am out of shaving cream and can't find any German-made products here.” I was very young when my father shared this story and I am proud of him for sharing such words of wisdom. It is a true example of patriotism from a different perspective, one I and my father follow every day. I respect that German. I saved Mr. Grillo’s comments and will share them whenever the topic of patriotism is discussed. Such examples are hard to find.”

Scott Norman, president, Nortec Design Solutions, Louisville, Ky., said he believes capitalism will always succeed if it is not intentionally halted or obstructed. “Is America on track?” he asked. “I say that America has taken a small detour off the road of capitalism, but I trust that the American people will take control and steer ourselves back on track simply because we have the power to do so. In a country like China, very few have the power to determine or control their course. Having only a few in control, combined with the prosperous opportunity that they now have, can be the forerunner for greed. That will lead to the eventual decline of a noncapitalist nation. If you could ask the average Chinese worker how prosperous he feels since China’s rise in the global economy, I think you would feel better about saying that the U.S. is still on track.”

North-of-the-border neighbor Jonathan Pinchbeck, research technologist and mechanical engineering student, Ontario, Canada, observed that, “In Canada, we do our own thing and just follow up on what works. We follow the successes of individual companies more than of nations. Manufacturing has been steadily increasing in Canada.

Manufacturing GDP rose 0.3% last quarter. Automation is actually keeping work here, bringing it back as it increases overall productivity. It also focuses on creating highly skilled, high-paying jobs. There are new sectors of development in medical, HVAC, meteorology, mining, nuclear, waste management, and food handling. Growth is not just in automotive and aerospace industries anymore.”

Johnson Lukose, business manager at Scadatech Engineering Sdn. Bhd., Selangor, Malaysia, admitted he is not sure if the trend is away from China or back to the U.S. and the EU, but offers this philosophy: “The Industrial Revolution and its dogma of mechanized mass production have brought profits and expensive social and economic consequences for local economies, not to mention the environmental destruction wrought by mega production facilities/plants. To heal the nation and the local economies, we must go back to manufacturing locally and using local products, local production, local resources, and the like. We must move away from the mega-plants and multi-acre facilities that cause environmental damage by their sheer size and the volume of waste they produce. Mini-plants save the economy and environment. Ample evidence shows that we can produce more cost-effective and competitive products in mini-plants. This approach provides jobs locally to each location. The jobs provide wealth for the local population to enable them to manufacture and produce. The population will be happy and proud to support products manufactured at the plants where their families and friends are working. At Airbus production in Europe, every country has a stake in the manufacture of a piece of it. The mini-plant concept can work for many other products, I would say.”

With a view from “down under,” Thomas Mitchell, owner, Profile Solutions, Sydney, Australia, observed that the U.S. may have a trade deficit with countries like China and Japan, but may have huge surpluses with some others. He said, “The U.S. exports $36 billion per year to the U.S. We only export $15 billion, so for a long time we have been helping a lot of jobs stay in the U.S. If something was better, faster, and less expensive, and made in Australia, would U.S. consumers buy the more expensive goods that cost more under the current ‘jobs at home’ mode, or buy the better one from Australia? This is from a country where trade is very biased in favor of the U.S. Australia also supports the U.S. heavily on the security/military front with some of the most important bases in the world, and that has helped keep U.S. citizens in jobs for a long time. Maybe giving someone on the outside a bit of a chance may shake things up and get the locals moving with more competitive products.”

Looking at corporate sentiment and environmental impacts, Stephen Reilly, an associate engineer at ProSys, Baton Rouge, La., offered these observations. “I wouldn't quite say that there is growing anti-corporate sentiment in the U.S., but when a major corporation appears more concerned about its stock price than its employees, its produced goods, and how it impacts local and regional environments, it rubs the general public the wrong way. Outside government regulations shouldn’t be a bottleneck for industry, but some internationally respected outside source should be in place for environmental concerns.”

Reilly continued, “It is regrettable that the U.S. champions itself as a ‘global leader,’ yet turned its back on the Kyoto Protocol a decade ago and now only follows China in new, global environmental negotiations. The point I am making is that as new, international environmental talks are being organized, the U.S. is saying it will not be a part of or follow any standards unless China is also held to them. [See Whiteman, Hilary, “Canada: First out of a sinking Kyoto Ship?” CNN Online Web Page; December 13, 2011; www.cnn.com/2011/12/13/world/americas/canada-kyoto-protocol-explainer/index.html?iref=allsearch .] These decisions, coupled with Canada’s recent departure from the Kyoto Protocol, plus other big countries like Russia and Japan reconsidering their stands, threaten to unravel said agreements in the process. I understand that environmental caps on developed nations can lead to unlevel playing fields, but that is why a close watch should be maintained on developing nations and why environmental limits ideally should also be imposed on them as soon as possible. Undoubtedly, this is a tricky political dilemma.”

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