U.S. manufacturing is poised for a breakout, but the last mile seems impossibly hard

The business leaders who navigate America’s diminished supply chain to successfully manufacture in the U.S. also carry with them a hard-edged realism about domestic production.

The facts on the ground are these: It’s damn hard in many cases to travel the last mile, to see it through with U.S. fabricators and suppliers when so many core manufacturing capabilities, materials, and expertise are elusive. Or offshore.

Pete Wagner makes award-winning skis from an idyllic perch in Telluride, Colorado. His innovation is changing the sport: Skiers provide a full range of biometrics to optimize the performance “fit” of a ski, information that’s processed by Wagner’s technology suite to fully customize the product for a buyer. It’s every bit the digitization of American manufacturing we read about weekly.

Yet to the extent manufacturing’s digital evolution is key to its future, it’s not the primary barrier for Wagner to make skis in the U.S.

“Our company, our brand, is all about American-made and sourcing everything we possibly can in the U.S.,” Wagner says. “But occasionally we run into an issue that speaks to what U.S. manufacturing has lost.”

Wagner offered the example of his national search for a key component. “We buy an anodized aluminum alloy from a company in Austria that’s used in our skis. I wanted to source the material from a U.S. company,” he explains. “I figured it must be available for aerospace or other applications. I talked with some great people in the U.S. aluminum industry. After getting material analysis done, I was told that we can’t get a similar type of high performance alloy material in that configuration from a U.S supplier.

“It makes you question how much we value manufacturing in the U.S.,” he adds. “Or, it’s just a smart business decision, given the global market. Either way, it makes it tough.”

Wagner’s frustration plays out by orders of magnitude for other companies, and for entire industries, including his own. Wagner Custom Skis is an anomaly in America’s burgeoning outdoor industry; few of its leading companies are committed to U.S. production. Some can’t. Some don’t try. So the topic is largely avoided, or relegated to the back burner by other more positive story lines.

Others are less sanguine about America’s industrial state, including the Pentagon. Metalcraft Industries CEO Larry Caschette pointed me to a U.S. Department of Defense Industrial Capabilities Report to Congress with this rather grim assessment:

“[The] Department of Defense is still the colossus of the federal system, i.e., the single biggest buyer of goods in the U.S. government. But unless the industrial and manufacturing base that develops and builds those goods modernizes and adjusts to the world’s new geopolitical and economic realities, America will face a growing and likely permanent national security deficit.”

Caschette is encouraging manufacturing enthusiasts to tag the report in messages to elected officials to reinforce the findings. Framing U.S. manufacturing as a “national security” issue certainly gets the attention of elected types.

It’s also hard to imagine how the DoD’s prescription comes to fruition without more vigorous public sector support. Per the report, a “national defense industrial strategy” is needed, a four-part program to:

1. Reshore our defense industrial base and supply chains to the United States and to allies, starting with microelectronics, and restore our shipbuilding base.
2. Build a modern manufacturing and engineering workforce and research and development (R&D) base.
3. Continue to modernize the defense acquisition process to fit 21st century realities.
4. Find new ways to partner private sector innovation with public sector resources and demand. All these steps will be necessary to create a robust, resilient, secure, and innovative industrial base.

It’s stuff we write about every week.

But how much will government intervention truly help, even with a new and exciting “industrial strategy,” to reshore our industrial base? Can the U.S. government also build a modern R&D ecosystem?

American companies in part funded China’s world-class supply chain. Cheap labor and short-term profits were too hard to pass up. Now it’s up to us to bring it home. Let’s earmark substantial public sector support to hasten its reshoring as we take matters into our hands.

One good outcome would be locating anodized aluminum alloy for an intrepid American manufacturer. Let’s work on a thousand more. One company at a time.

Bart Taylor is publisher of CompanyWeek. Contact him with a source or supplier for Wagner Custom Skis, or reach him at btaylor@companyweek.com.