Yesterday, I visited my son’s plant in rural Kentucky.He runs a small business with about 20 employees making parts and assemblies for the medical and aerospace industries. He told me that in the past to produce the amount of parts he does now, it would have taken two or even three times the number of people.But because of the investments he has made in advanced CNC(Computer Numerical Control) machines, they can be produced by fewer than 5 people, the rest being support staff.The machines that produce these parts are,of course, made in Japan.They require people with sophisticated knowledge of Machine Programming.These people are hard to come by.
This quiet revolution in manufacturing technology has been going on for sometime.It is this kind of technology that is going to make it possible for us to compete against countries like India, China, Taiwan and Korea.
I hope more people learn about what is happening in manufacturing and gain hope for the Midwest’s economy.
The fly in the ointment here is that the machines used for production were designed and manufactured in Japan, and could also be run with a small number of employees in a country like India which has low labor costs and a rapidly improving education system.
Using machines designed and made abroad to generate products for the world market was the role Japan once played for us – the tables have been turned. That’s the underlying problem.
The best jobs and highest profits will go to the countries at the very headwaters of the manufacturing process – the design stage, the making of “the machines that make the machines.” That is the prime turf everyone is jockeying for – the other positions can provide a decent livelihood, but maybe not for as many, or as easily.
If you’re not “at the headwaters” there’s less profit to trickle down, because someone is “upstream” from you drawing water from the stream first.
I believe that the US is fighting a two-front battle in the manufacturing area:
It seems to me that until the US increases the number of next generation engineers that can pioneer new concepts and ideas, the US will continue to fall behind in manufacturing versus other up and coming countries.
What I found encouraging was that my son’s entire labor force has only high school education with intensive training in machine programming and skills in reading drawings.Plus by locating in a very rural area,where labor costs are already way lower than metropolitan areas, he is able to make money while paying full benefits to his employees.He calls his system outsourcing inside the country.I like that.
Because he is able to provide fast turnarounds and is able to troubleshoot for his customers he has been able to beat the overseas competition.I hope he expands his business in Indiana where I live.
To my liberal democratic eyes, small companies with high technological skills and using unused local talent are the key to our political and economic independence.