Manufacturing still economic backbone

November 23, 2009
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It is no surprise that the service sector is now bleeding jobs from law firms, accounting agencies and the like. Those jobs hinge on this country’s ability to make things, whether it is software or auto parts. What is surprising is the necessity to explain such facts to folks, as is intended during the seminar set for Dec. 2: “The State of Manufacturing: Why Manufacturing is Still Alive!”

The West Michigan region is home to national and international leaders in regard to the state of manufacturing. Cascade Engineering founder Fred Keller is chairman of the federal government’s Manufacturing Council, established during the George W. Bush administration under the U.S. Department of Commerce. Peter Perez, Carter Products president, chairs The Right Place Manufacturers Council and sits with Keller on the national board. The national chairman of the American Machine Tool Distributors’ Association is Joe Braun, general manager of Kentwood’s Braun Machinery.

But a survey released in late summer of this year by Deloitte LLP and the Manufacturing Institute showed the youngest group of workers, ages 18 to 24, do not understand the importance of  manufacturing to the overall economy, nor what modern technology manufacturing looks like. Another finding is that 61 percent of the respondents believe schools are not encouraging such careers, which is certain to leave a vacuum of these skilled trades in the very near future, even as this economic sector rights itself. The situation must be addressed before Michigan’s recession is prolonged even further for lack of education, trained employees and recruitment issues.

The survey found that young students — and their parents — believe future careers are best paid by the service sector, despite the fact that federal bailouts of banks and financial institutions were far more grave than that of two of the Detroit Three.

The fact is that the service sector will disappear almost altogether unless Americans are making something to provide the revenue to take to banks.

The question is not whether manufacturing will “come back”; it is a question of how it has changed as part of the economic diversity and whether its backbone will remain in Michigan.

Perez notes the U.S. still produces 22 percent of the world’s manufactured goods. “The United States and particularly West Michigan is renowned for innovation and new product development. We hold the bulk of the patents in the world,” Perez told the Business Journal, also noting the strength of colleges and universities in this country over any other, of particular importance in regard to continued research and development efforts.

In August, Braun told the Business Journal: “Technology is the key to the future, not cheap labor.” And: “What Americans do best is software. We write the best software in the world” for manufacturing technology. Braun also noted that the university system in Michigan offers world class manufacturing programs, and is witnessing the beginnings of growth in defense, medical products, energy and new technology manufacturing as area companies diversify.

Keller notes that the national council is focused on “failed trade policies” and “record manufacturing trade deficits that are unsustainable.” Both issues were in play last week as President Barack Obama held talks with Chinese and Korean leaders.

Equally crucial is the understanding that manufacturing is the foundation of the economy.

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