My concern is that we will forget how to manufacture. Jack Welsch when CEO of GE said the ideal situation would be to have the factories on barges and tow them offshore of countries where labor would be cheapest, then move them when cheaper labor appeared elswhere. Unfortunately many American manufacturers followed this flawed logic and started the trend for offshore production. In many cases I have convinced manufacturers to asses the true cost of offshore production including cost of shipping, losses in the supply line, inflexibility, cost of money tied up in large inventory, frequent travel to the low cost country etc. and have proven the false economy of buying offshore. In ost cases the most expensive American bidder for the work is cheaper than the asian alternative. But the piece price is often the only thing folks look at.
I wonder at the fact that many of the transplant auto companies such as Toyota source all their content within a small radius of their factories getting 100% American content, but our major automakers are sourcing more and more offshore. I think that is one of the reasons they are floundering. They are following the trend and making their own situation worse.
I see the trend starting to turn, but what is going to be the human cost. The good news about Winchester is that it is relatively few workers affected at the end. But in the same week we hear of 30,000 Ford workers idled. The lowest estimate I have heard is an additional 90,000 workers in supplier companies. That has to hurt the US economy. And the more of these folks that eventually source the new jobs being created by our governmental policies at much lower wages in the service sector the closer America gets to forgetting how to make things.
Years ago an Econmics professor told me that the only way we create wealth is to mine, manufacture, or grow something. Where does this service economy get us?
Pretty good rant for 2:00 AM, eh?
