Jim Pinto takes a look at the issue in his column this month. He analyzes the tremendous growth in economies and education in India and China and the potential they have to challenge U.S. interests.
Dick Morley, a long time industry leader, angel investor and pundit, wrote in Pinto’s Oct. 3 e-newsletter that Americans have the idea that manufacturing is bad, so “don’t put it in my backyard.” He contends that jobs are not leaving, but are being driven out by American communities (http://www.jimpinto.com/enews/oct3-2003.html).
I challenge that assertion as too negative. Just check out western Ohio, where I live. My little city of 17,000 has an enviable number of manufacturing jobs. Community leaders have not stopped to rest on their laurels, either. Every other city and town in the region competes for every new manufacturing plant. Further, competition for these jobs is never limited just to our area. It seems that companies are weighing offers from at least four different states before deciding on location.
Is automation to blame for the erosion of jobs? Remember that productivity is a good thing, and no less an authority than Alan Greenspan has praised technology’s role in boosting it. Automation has no doubt replaced many unskilled jobs, but has also created jobs requiring technical training. When automation replaces jobs, it just means that the workforce must become more highly trained.
Suddenly Wal-Mart has become the subject of articles in the business press analyzing its impact on the U.S. economy. The best of the lot that I’ve seen is “The Wal-Mart You Don’t Know,” by Charles Fishman, published in the Dec. 2003 Fast Company magazine. Fishman uses a few anecdotal stories and some interviews to reveal how the company squeezes manufacturers relentlessly for cost reductions to the point of driving much of the manufacturing offshore in endless pursuit of lower wages and other costs.
Consider this. Who forced the companies to do business with Wal-Mart? Many find themselves in a profit bind after the initial surge of sales. Some executives look for growth in sales. My training, which has proven out over years of experience, held that the only true growth is growth in profits.
Build for the future
I think that a major factor in job loss in a country is lack of vision. Sure it’s other things, too, but where are the companies and people today that we’ll remember like those companies founded 100 years ago this year? Ford Motor Co., Harley-Davidson, Allen-Bradley (now Rockwell Automation) and Square D (now Schneider Electric) are still going. Let’s get down to it, and build our companies for the future. As Pinto says in this month’s column, “Move strongly to maintain a lead in technology innovation.”
Assuming that you are working for a company with vision, then how do you justify purchasing a new automation system? Or even justify upgrading that faithful one that’s on its last legs after years of service?
This month, Automation World looks at how the buying decision has changed in the last few years. One thing stands out above all else—justification is almost entirely on economic terms. Few executives are approving funds just to have the latest technology.
I’ve been a student of this for a long time—ever since I was known as “the kid in engineering” (obviously a long time ago) at a manufacturing company. There’s nothing that will make you learn the language of finance any faster than standing before executive and senior vice presidents of a Fortune 50 company and explaining why they should put capital into your plant. I hope the article on justifying projects helps you get your next project approved.
