COMMENTARY
Manufacturing Michigan
By Ryan Dinkgrave
February 1, 2009
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FEBRUARY 2009
 | YOUR BEST FRIEND
Your Best Friend will be a tough band to catch up with by the time Spring comes around. If you were to buy stock in one band locally, you would want it to be YBF. |
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 | THE TRAVELING KID SECRET
The number of Traveling Kid shows has decreased a little bit. The reason is due to a special surprise that The Tridge has an exclusive on. |
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 | MANUFACTURING MICHIGAN
2008 will certainly not be remembered as a year that was friendly to the manufacturing sector, Michigan businesses, or anyone for that matter. |
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 | WAITING TO EXHALE
The Mackinac Center's Russ Harding discusses that regulating CO2 is a good way to move the economy into depression |
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2008 will certainly not be remembered as a year that was friendly to the manufacturing sector, Michigan businesses, or anyone for that matter. The Big Three - or, as the national press has taken to calling them, the Detroit Three - teetered on the edge of bankruptcy, were kicked to the curb and spit on by Congress, and then finally received a little lifeline loan by surprise Santa President George W. Bush. Meanwhile, the decline in manufacturing that Michigan has been feeling for the better part of a decade finally spread to the rest of the world, just as the American financial system (and like dominoes, the financial markets of much of the rest of the world) collapsed.
However, unlike many of the crooks and thieves who brought down the financial system, the manufacturing sector has not been "bailed out" with massive, unrestricted sums of taxpayer money. Worse still, the storm is not over yet, as economists predict the recession to drag on through the new year. Given these complicated and powerful forces, what does the future hold for manufacturing in Michigan?
The question is not an easy one to answer. Before attempting such, take a step back and consider what manufacturing means for Michigan and the United States. Modern industrialized Michigan (and much of the nation) was born from and reared by the manufacturing sector. From the furniture makers of western Michigan, to the automakers and suppliers across south central and southeastern Michigan, to the newest technologies in medical equipment, next generation battery components, and plastics, manufacturing has largely defined and dictated Michigan's growth for over a century. Contributing over $76 billion annually to the Gross State Product, manufacturing towers above all other sectors in Michigan. A robust manufacturing base is critical to the United States in terms of increasing international economic competitiveness, as 60% of American exports are manufactured goods. Domestically, manufacturing is critical to sustaining American high standards of living and maintaining strategic advantages crucial to national defense.
These facts make a rather compelling case to support manufacturing in our state and our nation, but the industry as a whole suffers from a massive perception problem. Even those words don't quite do the situation justice - perhaps a more appropriate term would be "identity crisis." In some ways, manufacturing is even more poorly understood than the financial sector, a stunning fact considering manufacturers produce real products that people can see and hold, whereas the investors and traders that brought down the financial sector dealt in "derivatives" and other barely tangible concepts that cost billions. Despite the value of and need for a manufacturing base detailed above, the sector is seen by many as dull, tiresome labor that lacks opportunities for creativity and entrepreneurship. Some of this can be attributed to the fact that as foreign competition for manufactured goods increased, rapid gains in productivity were made, which has caused a steep decline in manufacturing employment since 2000. As people read about factories relocating outside of America and a 22% decline in manufacturing jobs between 2000 and 2008, it is easy to see how manufacturing could be viewed by many as a fading and failing sector.
No piece of the manufacturing sector symbolizes this perception problem better than the automotive industry. When the executives of General Motors, Ford, and Chrysler went to Congress to ask for aid for the automotive industry, legislators flocked to the hearings like vultures to newfound prey. They were eager to spew venom over every car repair, disagreement with a dealer, and complaint - warranted or unwarranted - that they or anyone they know ever had. Some of these criticisms were deserved - for much of the 1980s and 1990s, many of the cars coming from Detroit were grade-A lemons. But while Southern legislators were busy throwing millions of dollars at foreign-based automakers to lure plants and non-union jobs to their region, major changes took place in Detroit. Though the evolution of the domestic auto industry has been very painful and that pain has been felt the most in Michigan, today the Detroit-based automakers are producing some of the best cars they have ever designed. Many of these models are on par with or even superior to those of the foreign-based makers.
You wouldn't know that from the words exchanged in the halls of Congress last year, and you certainly wouldn't know that from watching most of the media coverage or even talking to most people on the street. There is certainly much blame to be shared for these image problems, but finger pointing won't do much to help the crises in Michigan or the nation. What is needed now is what the founders of the organization where I work in Detroit call "intelligent and practical action" that takes advantage of Michigan's strengths and aggressively works to redefine manufacturing for people across the country, especially the younger generations.
Michigan and Detroit have long been known as the birthplace of the automobile, the builders of the middle class, and at times the "Arsenal of Democracy." But these names refer to our state's past and today we need names that define our future. Michigan is uniquely positioned for major advanced manufacturing investment, including the production of battery components for the next generation of autos, plastics and other processed materials, metal products and treatments, furniture, medical supplies and equipment, and much more. Our state produces the most engineers in the nation and 85% of North American auto-related intellectual property and patents are developed in the Mitten State.
The potential for Michigan to once again lead the nation into the future - as it did with the automobile, labor unions, and World War II defense production - is enormous. But to truly reach our greatest potential, a few things must change. First, Americans - from the first-time car buyer in Kansas to the production line worker in Hamtramck to the senior Senator in Washington, D.C. - must be educated and informed about what makes manufacturing so important to our vitality and security. The manufacturing sector and organizations like the National Association of Manufacturers and the Michigan Manufacturer's Association must actively communicate and display the value of their work and redefine for many just what modern manufacturing really looks like.
One of the challenges facing manufacturing is that many people still envision dark and dangerous facilities where workers repeatedly perform tedious tasks. In reality, advanced manufacturing takes place in lean and clean production settings full of high-tech equipment and intelligent operators. Their work is backed by the creative minds of engineers at the cutting edge of research and development. When young people in particular see the opportunities that exist in manufacturing careers, they will be more inclined to pursue studies in the science, technology, engineering, and math (STEM) fields that are needed for the jobs of tomorrow.
Finally, public policy that supports and recognizes the importance of manufacturing must be developed and implemented at all levels of government. American businesses such as the auto companies cannot be expected to be competitive when their foreign counterparts receive heavy subsidies from their governments and do not have to encumber the ongoing and legacy costs of health care. Combined with educational efforts, investment and progressive policy are the primary drivers of the innovation that can put our state and our country back into the global spotlight. But just as one cannot solve a personal problem until he or she admits it exists, we cannot turn manufacturing around until we define what it really is and what it really means to us as a state and nation.
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