Bold steps needed to advance a national manufacturing blueprint

Somewhere, on a Forbes magazine list of most-hated professions, manufacturer must appear just above lawyer and journalist.

It’s one explanation for the manufacturing-related musings of columnist Tim Worstall who, in a snarky column last month entitled Manufacturing Isn’t Important But Factory Goods Orders Are Rising — That’s Nice, proclaimed of manufacturing:

“It just doesn’t have all that much relevance in a modern economy. I mean, sure, it’s nice, manly men have been doing more manly things with machines and all that, but in terms of how it affects the rest of the economy we’re down at a level of significance where, well, it doesn’t. Affect the rest of the economy in any manner we’ll notice that is.”

In working up a response, I instead fell upon Fast Company’s saving feature, 25 Brands that Matter. Of the 25 “companies whose products you love to love because they stand for something more than merely what they sell,” eight were manufacturers, and two of the top five. It’s a beautiful repudiation:

By Fast Company’s reckoning, technology and manufacturing companies are the pin-ups of the U.S. economy.

It’s unlikely that FC’s editors or readers will draw the same conclusion, let alone Worstall. Today, Apple is known as technology company, Patagonia an outdoor industry brand, and Nike a sporting goods giant.

We’ve been okay with these labels because manufacturing’s been something companies just do offshore, out of sight and out of our globalized view of what should constitute a “modern” economy. But until manufacturing is considered the full extension of a brand’s identity, America’s sector will continue to be marginalized.

It’s ironic that voices emerging to challenge conventional wisdom are often not mainstream business media but instead entertainment-and-culture rags like The New Yorker, who last week explored manufacturing’s conundrum in Joshua Rothman’s smart column, “Should We Subsidize Manufacturing?”

He does all of us a favor by collating the thoughts of economists, industrialists and sociologists like Louis Uchitelle, author of Making It: Why Manufacturing Still Matters. For this group, America’s relationship with manufacturing is cultural as well as economic. As a result, a retreating sector tears at the social fabric of the country.

Uchitelle’s ideas are especially thought provoking. For one, he argues that Americans “are in denial about the importance and prevalence of subsidies.”

From Rothman’s New Yorker piece: “Our factories have always been ‘semipublic institutions’ funded, to a surprising degree, by taxpayer dollars. ‘The false premise that manufacturing is a free-market activity — that subsidies don’t exist or are inconsequential — should finally be put to rest,’ Uchitelle writes. ‘No one anywhere in the world makes steel or autos or shoes or virtually anything else in a factory without subsidies.’ Uchitelle thinks we ought to subsidize manufacturing more, and more rationally. We should also recognize that, when we decide not to subsidize manufacturing, we are deciding to kill it.'”

Uchitelle’s prescriptions are bold: “Subsidies should be increased, and their role emphasized. The dollar should be devalued to encourage exports and slow the financialization of the economy. Import tariffs should be raised and trade agreements renegotiated. Taxpayers should have more say in where factories are located: similar factories should be built near one another, ideally in or near densely populated cities, to strengthen the industrial base and force companies to compete for workers. ‘Buy American’ clauses should be extended: Uchitelle notes that the glass in the new World Trade Center was made in China, as was the steel in the new Verrazano-Narrows Bridge.”

And the coup de grace: “A G.D.P. percentage target for manufacturing. In the nineteen-fifties, twenty-eight per cent of G.D.P. came from manufacturing; today, it’s twelve, and only Britain and Canada lag behind the United States in manufacturing output. Uchitelle argues that a figure of seventeen per cent would put us in line with other industrialized nations. In Germany, he points out, ‘manufacturing output has generated a steady 22 percent of the national income year after year for at least seventeen years, and the government is quite open about its participation.'”

With the the current dialogue stuck at ‘how important is manufacturing?’, bold steps like a G.D.P. target can seem a bridge too far. On the other hand, a new, disruptive agenda may be exactly what’s needed to reorient policy makers, and reticent business columnists, to a new manufacturing reality.

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