President Trump’s import taxes have always been a tactic lacking a strategy. As such the possible outcomes are limited. If the goal is to end unfair and unreciprocated access to the U.S. market, tariffing the import of Chinese-made shoes, or European cars, is arguably an effective tool.

But if the goal is also to encourage companies to make more stuff in America, tariffs aren’t a remedy. Companies operate in China for a reason. In many cases the means of production reside there, not here. Moreover, as Harry Moser at the Reshoring Initiative points out, “uncertainties from the tariffs will cause 2019 reshoring and FDI (foreign direct investment) to be moderately below the 2018 level.” Tariffs may actually be slowing down the reshoring of manufacturing jobs from China to the U.S.

Now that the President is ordering American companies out of China and production reshored, all eyes are on the domestic supply chain. But if U.S. companies are to actually make more stuff in the U.S., two things must happen.

First, we need to agree that the patient is sick.

Today we labor under the assumption that, in some parts of the U.S., we’re a manufacturing superpower. The past few years, I’ve hashed out the results of Ball State University’s national manufacturing report card, which this year again basically flunked the manufacturing economies of the West. California was an exception in the 2019 Report, improving from a D to a C.

At the same time, the Rust Belt manufacturing economies in states like Indiana, where the report’s sponsor, Ball State University, is located, get As and Bs every year. The difference? Manufacturing employment per-capita. It’s a metric that reflects decades of legacy manufacturing.

Why, then, haven’t we witnessed a tsunami of American brands returning to the U.S. to set up shop in Kentucky, Michigan, or Ohio? I wrote last month of Black Diamond’s decision to return to Asia after reshoring manufacturing in 2013. Why not Indiana? Easy answer. Even in U.S. communities that support high concentations of manufacturing jobs, often the ecosystems lack the skilled labor and advanced processes and machinery that comprise the modern, integrated supply chains found in China.

Are there pockets of highly advanced manufacturing operations in the U.S.? Of course. But scale is lacking, in part because American companies have invested in offshore operations, for decades.

When we acknowledge that U.S. companies can’t immediately walk away from investments in offshore manufacturing, but should redirect resources in the future, we’ll pursue a second imperative: embracing a ‘moonshot’ strategy to modernize America’s means of production.

In a smart column, “Trading Up: Why America Must Ditch China and Pursue Better Manufacturing Opportunities,” Robert Atkison summarizes it this way:

“The second tactic in a market-based decoupling strategy should be to weaken China’s comparative advantage in manufacturing and strengthen America’s manufacturing industry by establishing a national moonshot initiative to modernize and automate U.S. factories. There are various manufacturing applications for new technologies, including 5G, sensors, robotics, and artificial intelligence, which, with the right policy support, could significantly improve factory productivity, making it possible for much of the U.S. manufacturing sector to be a competitive alternative to China. But without a national manufacturing automation strategy, this vision will be fruitless.”

We’re talking a national industrial policy. Are we ready to embrace such a plan? What of the naysayers who object that we’d be playing favorites with manufacturing?

There’s a litany of less ambitious means to pursue as we debate the merits of a manufacturing Marshall Plan: invest in technologies, people, and process for most-favored industries, in some cases driven by regional and community preferences; publicize companies and leaders currently reimagining manufacturing; develop resources that make it easier for companies to locate capable supply-chain partners; elect officeholders who advocate for local manufacturing.

There may never be a better opportunity to rally the nation around a moonshot-like goal to reconstruct our manufacturing commons, our national means of production. At the same time, we should look closer to home. And make small changes that add up to something big in the future.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

To tour the new Ross Reels factory in Montrose is a bit surreal, as if you’re looking at something that’s not supposed to be there. So many voices have written off manufacturing, but here it is, one of Colorado’s finest new manufacturing facilities, on the stunning Uncompahgre River because, of course, they make world-class fly-fishing gear. It’s a lot to take in.

What may truly separate this facility, though, is the roadmap it provides for other communities. There’s a model here, with lessons to be learned.

Whether others follow is an open question. Hosting a panel discussion with manufacturers at Grand Junction’s first-ever West Slope Startup Week suggests that towns on the Western Slope of Colorado are still ambivalent about manufacturing.

But first, what Doug and Dave Dragoo, owners of Ross parent Mayfly Outdoors, have accomplished in Montrose is eye-opening. The Dragoos celebrated the official grand opening of the new building with employees and a couple hundred of local notables, pleased as they seem not only with the new physical space but with the city’s support of the project and vision of a modern business cluster focused on the outdoor industry.

Manufacturing for two of fly-fishing’s most respected brands — Ross Reels and Abel Reels — is now consolidated in Montrose at the Mayfly headquarters. It’s part of the Colorado Outdoors development, with a plan that envisions an outdoor industry cluster of light manufacturing, along with new workforce housing, retail, logistics, and hospitality tenants. The end goal is to foster a destination for outdoor enthusiasts and new business and commerce from the region and around the world.

It’s a vision shared by the private and public sector, and here, public action has meant the difference between idea and reality. The city has offset hard expenses on roads and infrastructure and provided financial incentives for incoming firms, but it’s also a co-developer of the river assets and adjacent open space. Colorado Parks and Wildlife is partnering to improve an already spectacular fishery in Montrose’s city limits. Overall, the development is a multi-institutional collaboration, with manufacturing jobs at its core.

If it sounds straightforward, or easy, it’s not.

The type of willful pursuit of manufacturing jobs on display in Montrose runs headlong into economic and social barriers that frame the economic development conversation in other towns in western Colorado. One involves growth — economic growth of any kind. A strong anti-growth sentiment informs local and regional deliberations in tourism- and recreation-fueled communities like Durango, Telluride, and Steamboat Springs. One consequence is that building consensus around the idea of investing city and county resources in roads, infrastructure, and other new assets to recruit new manufacturing companies is often hard.

To be fair, some communities have no interest in manufacturing, even outdoor industry- related manufacturing. They prefer stronger tourism and recreation service economies, or seek a place in the new technology economy, where Google campuses and tech startups, not light manufacturing clusters, dot the landscape. It’s a worthy, modern goal.

In Grand Junction, this seems to be on the minds of some. But the Makers and Producers track in Techstars’ first West Slope Startup Week points to the undercurrent of interest in the Grand Valley to combine a legacy of manufacturing with a tech-savvy future.

In theory, it’s a powerful combination. New manufacturing can be a breathtaking mix of technology, automation, and innovation. Industry clusters in the future will include companies flashing enabling software, automation, tech-driven logistics, and other advanced services. Alongside more advanced CNC shops and other new forms of prototyping and fabricating, these ‘centers of manufacturing excellence’ will be the destination for future for brands and OEMs.

It won’t happen by accident. A new development in Grand Junction, Riverfront at Los Colonias Park, promises similar outcomes as Colorado Outdoors. But how aggressive will the city be in offsetting the costs of roads and infrastructure, moves that are critical to attracting new companies? Is affordable housing and workforce development tuned to the needs of manufacturing brands? These and other questions seem open.

The stakes are enormous. An outdoor industry-focused commerce and manufacturing corridor, with major hubs in Grand Junction and Montrose, would put the region on the national map.

It’s a vision the folks in Montrose have willed into reality. Who will be next?

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

A common theme in business is that automation will continue to sap U.S. employment in manufacturing even as productivity rises.

This week the New York Times‘ Louis Uchitelle surmised that “manufacturing is unlikely to be capable of producing a great deal of additional employment,” making the familiar argument:

Modern assembly-line machinery continues to eliminate jobs. Production has been increasing, but factories are doing this with fewer people.

From a post-World War II peak of 19.6 million workers in 1979, employment in manufacturing has declined to 12.5 million, according to the Bureau of Labor Statistics. Put another way, manufacturing has dropped from 23 percent of the total work force to nearly 8 percent. That happened even as factory output rose in total value to $2.154 trillion in 2018. America is making more goods and materials with fewer people.

But to make his case, Uchitelle shorts the argument. Manufacturing bottomed out in January of 2010 at 11.3 million jobs, two years after President Obama took office, but has since then recovered, adding 1.5 million to a total today of 12.8 million manufacturing jobs.

How, then, to square conventional wisdom — that American manufacturing is losing jobs to automation — with the positive trend the past six years?

Let’s back up. Clearly, Obama walked in to a buzzsaw: Manufacturing employment was in free-fall from 17.3 million jobs when President Bush took office in January 2000 to the low-mark in 2010. In all, the economy shed 6 million manufacturing jobs during the Bush presidency.

But from 2010 to 2016, Obama added 900,000 or so jobs, and President Trump’s on a faster pace, adding 480,000 or so jobs in 26 months of his presidency. I’ve pointed to growth in new manufacturing industries as a source for new employment, and clearly red-hot market sectors like food and beverage are piling up the numbers. Manufacturers are generally bullish on Trump’s tax policies and his efforts to reset trade policy with manufacturing powers like China. It’s also more economical to make things in the U.S. than in decades, and fabricators in growth industries like aerospace are finding that innovation is enabling more domestic production. The numbers would look even more impressive if companies were able to fill the half-million or so manufacturing job openings that bedevil recruiters.

It’s possible we’ve reached a peak and employment will head down again. Or, perhaps we’ve found a new equilibrium, where huge jobs losses to offshoring are a thing of the past, and steady growth in new industries will sustain moderate growth.

If the Trump administration is able to maintain it’s hot start, economists and pundits might even be forced to reassess the premise that American manufacturing employment is in irreversible decline. Today President Trump’s cheerleaders boast of his gains compared to Obama, which seems the wrong argument to make. If a Trump manufacturing surge continues at its current pace, to add a million or so jobs in four years, it could reshape the narrative of manufacturing in the U.S.

How likely is it?

The numbers are daunting. The economy added 2.9 million manufacturing jobs 40 years ago, from June 1975 to June 1979, a staggering number by today’s standards. There’s no period in the past four decades that comes close to this surge in manufacturing employment. A Trump recovery of a million manufacturing jobs would be equally impressive, given technology’s influence.

Mining more jobs from legacy industries to add over half a million net new jobs in the next two years seems implausible. Or does it? The president may do well to add carrots to a manufacturing strategy that today relies on sticks.

His manufacturing legacy may depend on it.

Bart Taylor is publisher of CompanyWeek. Contact him at btaylor@companyweek.com.