10 reasons why Made in America should be a top priority

Sponsored Content: American manufacturers and consumers can benefit by buying and emphasizing American-made products. Ten reasons why are highlighted.

By Shalli Kumar June 24, 2024

I am Shalli Kumar, an electronics engineer, who migrated from India to Chicago in 1969. I received my Master’s Degree in 1970 and went on to invent and design many automation products over the next decades. Included among them are the McDonald’s French Fry Computer, Motion Detector under crippling shock and vibration, programmable limit switch (PLS) and a others. I founded AVG Advanced Technologies in 1975, the parent of EZAutomation.

In many ways, I was instrumental in changing the way America produced goods, like making it possible for automotive stamping plants to produce different parts everyday instead of every quarter because it used to take two men, two shifts and two days to perform a die change over with different press time settings. A gain of even one stroke per minute (SPM) would result in plant productivity increase of thousands of dollars per day.

1975 Kumar Invention of PLS that changed the way America produces automobiles and two-piece aluminum cans.

1975 Kumar Invention of PLS that changed the way America produces automobiles and two-piece aluminum cans.

 

Metal Stamping Power Press using the newly invented PLS.

Metal Stamping Power Press using the newly invented PLS.

 

Example of some of Kumar's Patents and his award as Entrepreneur of The Year.

Example of some of Kumar’s Patents and his award as Entrepreneur of The Year.

During the 1980s, I was fortunate to serve on President Reagan’s small business advisory council. Since 1969, I had seen three recessions and was fascinated with the idea of no recessions under the model of supply-side economics, Kemp-Roth, Milton Friedman and Arthur Laffer.

Mr. Kumar when he served on President Reagan’s Small Business Advisory Council.

Mr. Kumar when he served on President Reagan’s Small Business Advisory Council.

Initially, I was skeptical and was waiting for the 4- to 5-year cycle of recessions to occur again in 1985-86 but the economy kept on growing. This brings me to the subject of U.S. manufacturing in the 1980s.

AVG’s operations were in the Bloomingdale and Elk Grove townships of Illinois near the O’Hare international airport. During the 1980s and 1990s, these two Illinois townships had thousands of small manufacturing plants, eight to ten plants in every city block. Electronics, mechanical, pneumatic, machine screws, printed circuit boards, medical electronics, telecomm, sheet metal, paint shops, machining, packaging and other industrial areas. Today, practically all are gone; they are in China. China today manufactures more than 30% of all products consumed by the world, more than 60% of all electronic goods and more than 80% of all automation products.

Made in America is important especially through the lens of history. Guess who said the following: “Anyone who has seen the auto factories in Detroit and the oil fields in Texas knows that Japan lacks the national power for a naval race with America… its industrial base makes America invincible!” That quote is from Admiral Yamamoto, the most celebrated commander in the Japanese Imperial Armed Forces, during World War II. Could we say the same thing today?

Admiral Yamato, the reluctant enemy, architect of Pearl Harbor.

Admiral Yamato, the reluctant enemy, architect of Pearl Harbor.

Imagine what the Reagan Gorbachev 1986 summit at Reykjavik, Iceland, would have looked like if USSR at that time was China of today, producing more than 30% of worlds’ goods and more than 60% of world’s electronics goods. I am sure you will agree that we would not have won the Cold War, and more than one-third of humanity would still be living under dictators and not enjoy freedom, the birth right of every human being.

President Reagan (left) and Chairman Gorbachev at Reykjavik, Iceland, 1986.

President Reagan (left) and Chairman Gorbachev at Reykjavik, Iceland, 1986.

 

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While most American consumers, including the engineers who buy and/or specify China-made automation products daily, need to be aware of what this convenience is doing to America. Addressing the subjects around Made in America head-on may raise awareness, re-establish habits and examine the advantages of specifying and using Made in America automation products, especially those costing less than Made in China.

Ten drawbacks to neglecting Made in America

Neglecting Made in America has 10 specific negative consequences.

1. American jobs: There is a very simple formula that can translate loss of manufacturing jobs to level of imports. $1 billion of imports translate to loss of 1,000 direct manufacturing jobs and at least 3,000 indirect support jobs. In 1985, Chinese exports to U.S. were zero. By 1996, they had climbed to $50 billion. By 2008, they had jumped up to a whopping $340 billion. When you apply the formula above, in 12 years, China displaced 2.9 million U.S. manufacturing jobs, 8.7 million support jobs for a total of 11.6 million American jobs. Imports increased to $536 billion in 2022 and will continue to increase until Americans understand the consequences. (Import Data from USTR).

2. American standard of living/inflation: Economics 101 tells us: A) Inflation lowers standard of living; B) Trade deficits lower the value of American dollar, which causes inflation. Here is a good parameter to measure standard of living. According to the National Association of Colleges and Employers, the starting salary of an engineering college graduate, adjusted for inflation. decreased from $54,304 in year 2000 to $47,823 in 2014. (Source NACE, National Association of Colleges and Employers). COVID-19 supply chain disruption caused inflation to spike upward. Double-digit (28%) increase in prices of food items, gas prices, airline tickets, transportation costs and travel costs resulted from those supply chain disruptions resulting from over-reliance on Made in China.

Guangzhou China from 1987 to 2014 as a result of manufacturing transferred from America to China. We hold no ill will towards Guangzhou or people from China but not at the expense of America.

Guangzhou China from 1987 to 2014 as a result of manufacturing transferred from America to China. We hold no ill will towards Guangzhou or people from China but not at the expense of America.

 

On the other hand: An abandoned industrial town in America due to loss of manufacturing jobs to China.

3. Intellectual property (IP) theft: One of the biggest issues with Made in China is theft of American intellectual property. Theft of IP of more than $500 billion per year results from  American companies moving their manufacturing operations to China. Even though corporate America now wants to get out from under this phenomenon, they have a price to pay from decisions made 30 to 40 years ago. (I am writing a book “Chinese Colonization of America 2049,” which is the stated goal of the Chinese Communist Party. Why 2049? That is the 100-year anniversary of the formation of People’s Republic of China. More on the book later.)

4. National security: It is well known to U.S. government (FBI and CIA both according to Bloomberg article of Oct 4, 2018) the Chinese government is perpetually engaged in spying on the American military-industrial complex. The article reported three instances of “spy chips” incorporated in Supermicro’s motherboards built in China.  China is not shy about showing its prowess in intelligence gathering. The Soviet Union duplicated the designs and production of integrated circuits made by Texas Instruments. I have no doubt China is spying on American factories, the very same factories and oil fields Admiral Yamamoto talked about. This should be a major concern to those who use Made in China Automation products.

5. National defense: Within 20 years, China, on the strength of Made in China, has emerged as the second most powerful military in the world, close behind the U.S. Its navy with almost 400 ships, is already bigger than the U.S. Navy with 350 ships. The Chinese edge in space warfare is already troubling the Pentagon. They have developed a capability to refuel their satellites in space and move ours out of orbit.

By Shalabh Kumar, Decades of First Hand Knowledge and Experience, to be released soon.

By Shalabh Kumar, Decades of First Hand Knowledge and Experience, to be released soon.

6. Security of American prosperity: China could severely damage the American economy within days by halting its daily purchase of U.S. Treasury notes. American interest rates would climb through the roof overnight and the American economy would crash. China also would be hurt, but under Communist rule most of its citizens living outside big cities need visas to travel to these cities. China today has the capability of shutting down America with these and other steps leading to a stock market crash, economic depression, rampant unemployment, dollar devaluation, crippling inflation and crushing debt that would shutdown public services. This capability, resulting from loss of Made in America, will only increase year by year unless we bring manufacturing back to U.S.

7. Fake and misleading legislation: In 2021, Congress introduced a bi-partisan bill that was presented as a premier legislative act to bring manufacturing back to the United States. Congress allocated $1.2 trillion dollars to rebuild America’s infrastructure. After touting the virtues of Made in America, the bill, a few paragraphs down, allowed the Federal agencies to allow exceptions if “Made in America products will increase the cost of the infrastructure projects.” The sad truth is politicians regardless of party cater to lobbyists. The bottom line is Americans, workers and professionals like automation engineers and small business owners will have to change purchasing habits to turn this tide.

8. 75,000 + annual American deaths due to Fentanyl from China: These are figures from U.S. government. Illegal imports are hidden among legal ones. When there was no dependence on Chinese factories, illegal imports would have been more difficult to hide.

9. Start the dialogue and start the process of bringing manufacturing back to the United States: Because China has become the manufacturer of 85% of automation products in the world, this dependency cannot vanish overnight, but all Americans should take steps to decrease the import of Made in China products.

10. Benefits of using Made in America Automation products: Manufacturers of automation products who provide Made in America Automation control products that cost less than Made in China and include other benefits.

Made in America has many inherent benefits over Made in China. Subsequent articles in the section will address additional advantages.


Author Bio: Shalabh “Shalli” Kumar, founder and chairman, EZAutomation