Outside Detroit, U.S. manufacturing shows its muscle

International challenges forced manufacturers to get smarter, faster, Leaner
By PLE Staff June 9, 2009

An article on the Reuters news service notes that the struggles of General Motors and Chrysler and the fallout into related auto businesses are not indicative of improvements in the overall manufacturing landscape in the U.S.

Analysts quoted by Reuters said while manufacturing as a percentage of GDP is down, as is overall employment in the sector, the efficiencies of U.S. manufacturing are still formidable.

"That contraction is progress," said James Schrager, a professor at the University of Chicago Booth School of Business. "We have a larger output of goods and services than ever and we have a smaller number of workers doing it."

"The U.S. still manufacturers more than any other country in the world," said Tom Murphy of RSM McGladrey. "We’re just making different things than we made in the past and we’re making them differently. That’s not going away just because of what’s happened in the automotive industry."

Experts quoted in the Reuters story noted that there is a way out for automakers, but it requires fundamental change. "There’s no reason on earth why GM and Ford and Chrysler can’t be as efficient and cost-competitive as Toyota," said Alex Blanton, an analyst at Ingalls & Snyder. "All they have to do is run their plants the way Toyota does. But you can’t do that if you have these union work rules and costs — like pension and healthcare costs — that are not in line with the competition."

 

 

 

 

 

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