Telling a true story about manufacturing
The grand opening of Volkswagen’s new plant was the culmination of years of planning and plenty of intense lobbying.
They occurred three months and 600 miles apart, but two of the most interesting news items about the current American automobile industry are instructive as we look toward manufacturing’s future.
The most recent news surrounds Volkswagen’s $1 billion investment in the U.S. automobile market – and the U.S. automobile worker. The grand opening of Volkswagen’s new plant in Chattanooga, Tenn. in May was the culmination of years of planning by the automaker and plenty of intense lobbying for the new U.S.-based VW plant. Chattanooga won the lobbying war, adding another pushpin on the map of southern-based automobile manufacturers.
The $1 billion plant meets all of the LEED certification rules, plans to limit emissions, wants to be a significant member of the Chattanooga community – and – oh yes – brought about 12,000 direct and indirect jobs with them.
This whole thing about automobile jobs in Tennessee is important when we look at the other news story. Back in February, three of the dimmer bulbs attending the Chicago Auto Show were arrested after doing about $30,000 worth of damage to a number of show cars. They attacked cars at the Toyota booth with screwdrivers and razor knives and were ultimately caught slicing up a Toyota Camry. The three men said they were doing it to protest automobile jobs being shipped overseas.
The problem for these guys, not counting their inability to play nice in public, is that Toyota manufactures the Camry in Kentucky, with American workers and mostly American parts. In fact, if you were to look around, there are few cars sold in the U.S. with more American-sourced parts and American labor than the Camry.
Unless you buy an X3 from BMW. In fact, wherever in the world you buy an X3, you have bought one manufactured in Spartanburg, S.C. These are American cars, American jobs, and American revenue. If foreign-owned automotive manufacturers are profiting from all those American-made products, doesn’t that say something good about American manufacturing?
Of all the perceptions we need to reverse about American manufacturing – the nature of the work, the stability of the jobs, the crying need for workers in our future – the one that seems to start it all out is that we are not making as many things in the U.S. as we used to.
The level of foreign investment in the automobile manufacturing in the U.S. over the past decade has been extensive, consistent, and transformative. The cars have been huge drivers of growth in the sector, but so have the Tier 1 and Tier 2 suppliers who have grown up around them. In Chattanooga, for example, about 10,000 of those 12,000 jobs created by the arrival of VW are suppliers to the plant.
There is more manufacturing going on outside the U.S., and many of those jobs used to be performed here. When labor cost is the only factor, countries with low labor costs will get more jobs. But that is not the only factor in manufacturing, and it is not the only truth. You repeatedly see manufacturing gravitating to those places where quality matters, where distribution costs matter, where speed to market matters. Those factors often overwhelm the pure labor costs – especially in a summer when transportation costs are rising with the cost of fuel.
So why is there a disconnect between what is really going on and what it is perceived is going on? It is mostly because we as an industry have done a lousy job of connecting our neighbors, our communities, and our schools to the things going on within our plants.
I suggested a couple of months ago that we throw open our doors to the community and let them see what manufacturing is really about. Now that we have reached the summer picnic season, it seems like a good time for just such a project.
And when you do it – and I hope you do – send us the stories and pictures from your experience. Let’s keep sharing the story of manufacturing, as WE see it, and stop letting guys with screwdrivers and screws loose create a negative impression.
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Annual Salary Survey
Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.
There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.
But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.
Read more: 2015 Salary Survey