I’ve argued, along with Harry Moser and others, for a new industrial policy that picks U.S. manufacturing “to win.” As contrarian a view this was a decade ago, there’s consensus today that we should do just that.

The list of desired outcomes reads like an economic manifesto:

• Protecting key domestic manufacturing industries and nurturing new or reimagined sectors — like semiconductors

• Providing incentives to localize manufacturing supply chains from offshore outposts, via new investments in domestic supply chains, or both

• Accelerating the pace of automation in small manufacturers to overcome workforce shortages but more, to improve their global competitiveness

• Aligning underutilized economic zones — including rural economies — with high-potential manufacturing opportunities

There’s more, but the big takeaway is that “free trade” is dead. The staggering loss of middle-class jobs, the transfer of wealth and expertise and infrastructure to offshore outposts, today underscores the hard lesson that nothing was free about free trade. Time to complete the policy scaffolding to protect and subsidize U.S. manufacturing.

Here are suggestions to update the protectionist playbook in light of recent events:

> Work to roll back the value of the dollar

As tariffs or BATs (border adjusted tax) are used to level the domestic playing field, we should also work to improve the competitiveness of U.S. companies manufacturing at offshore locations in support of local consumers. America’s stalwart dollar is a problem. As the Wall Street Journal‘s Bob Tita notes, “For U.S. manufacturers operating overseas factories, their sales in foreign currencies are worth less in dollars now because of the unfavorable exchange rates caused by the strengthening dollar.”

The fix is straightforward: jettison “market-based” thinking and intervene to manage the value of the dollar. Robert Blecker of the Economic Policy Institute outlines the path forward: “The dollar has not fallen compared to the currencies of the developing nations that now account for more than half of the U.S. trade deficit. Some of these nations, especially China, maintain fixed exchange rates and intervene heavily to prevent the type of market-driven adjustment that is now occurring between the dollar and the euro. As a result, relying on financial markets to bring the dollar down is not enough. More active management of the dollar’s decline including cooperation with major U.S. trading partners and action to end foreign manipulation of currency value is vital to ensure that the dollar falls in a comprehensive and sustainable fashion.”

> Focus grants and loan programs on uptooling small manufacturers

Economic development can be a miasma of local and regional assistance for business that lacks focus or operates at cross-purposes. Whatever the case, well intentioned efforts often fall flat.

There should be no confusion today about what U.S. manufacturers need from development funding: targeted manufacturing-related grants, awards, and loan programs that facilitate automation and tech-fueled upgrades. Full stop. Uptooling U.S. manufacturers today achieves a rare trifecta of outcomes: improved processes that result in better products, relief from a tight labor market, but also workforce development, as technology attracts a new generation of employees.

> Tap in to manufacturing’s nerd appeal

As the “tech wreck” leaves STEM grads uncertain about a career in tech, manufacturing is today poised to fill the career void for this wave of nerdy talent. The timing couldn’t be better. Investments in technology provide manufacturers with a calling card for talent that’s long eluded them.

But the latest wave of technology layoffs this fall has been met by a tepid response from manufacturing brands and associations who otherwise should be coordinating a full-blown recruiting campaign to attract this generation of STEM talent.

At its core, the dissonance between what should be done and what is being done can be chalked up to what Glenn Plagens, CEO of Colorado MEP Manufacturer’s Edge, called the need for “community players coming together again to determine what the next steps are.” In other words, the ongoing challenge of developing a more connected manufacturing community.

Nevertheless, developments today are trending toward alignment. If a concerted national campaign that emanates from Washington D.C. is a bridge too far, coordinated local efforts that highlight manufacturing’s tech stars is an important next step.

It’s a straightforward tactic that, in addition to the others, will work to protect U.S. manufacturing at this important time.

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

Machinists, fabricators, and brokers fueling a manufacturing boom along Colorado’s Front Range gathered in Denver last week wasted no time getting to the topic du jour — workforce development. Speakers at the 2022 Rocky Mountain Machining & Tooling Association (RMTMA) Fall Conference parsed workforce topics throughout the day, from retention to recruitment to change management, in response to the sector’s acute workforce need.

But a dearth of employees did little to dampen good feelings here about prospects for growth and new work. Demand for U.S.-manufactured products is strong — generationally strong. A decade or so removed from an historic crash, U.S. brands and contractors have refocused on domestic manufacturing. Domestic supply chains are in. Outsourcing is out.

For suppliers here, it means that as prospects for growth are high even as most pursue opportunity with one hand tied behind their back. Focused on Machining‘s Justin Quinn, the outgoing RMTMA chapter president, summed it up: “It’s easier to find a customer than a good employee.”

Angela Rose’s summary this week of challenges, opportunities, and needs of the manufacturers we’ve profiled so far in 2022, bears out the challenge of pursuing new business that’s there for the taking. Managing growth is the third-most cited challenge behind manufacturing’s two steady and pervasive headaches: supply chain and workforce.

Still, the need for human capital is this time framed against a backdrop of opportunity for domestic machine shops and OEMs that’s fundamentally different from anything we’ve seen.

I sum up this generational opportunity in three macro-trends powering a new golden age of domestic manufacturing:

1. Offshore supply chains are irrevocably broken. Among the factors: We’re decoupling with China. It may happen over time. It may happen overnight.

2. With business leaders joining the “Made in America” consumer movement, there’s enthusiasm economy-wide for U.S.-made products. Domestic production options are more competitive as companies see brand value in manufacturing here.

3. We’re nearer to solving the workforce problem than we think. Automation and technology are set to catalyze manufacturing employment, not diminish it.

We’ll report on all the above in future editions, but today nothing is more important than funding a new wave of technology and automation in manufacturing. Outcomes would work at once to improve processes and products that would keep more work in the U.S., but also work to attract a new generation of STEM employees.

Eric Peterson’s report this week on automation and the manufacturing workforce alludes to the possibilities, including this from Summit Peak Manufacturing CEO Ken Curry in Murray, Utah:

“As we grow this business, we don’t want to just grow it by employees,” he says. “We want to grow by automation, by use of robots, and different things we’re interested in doing.”

That makes for different prerequisite skill sets, and a pair of employees in their twenties are up to the task. “They’re really adaptable to automation,” says Curry. “A lot of the challenge is to keep them challenged. That’s a big thing for us: We want to give them opportunities to be challenged.”

Imagine manufacturers competing for engineering and technical talent graduating from the university system. It would fuel exponential employment growth in the sector, through a generation of new companies. We’re nearing that point.

How to accelerate the momentum? For starters, it’s crucial to align the vast ecosystem of money — grants, opportunity funds, and the like — toward helping small manufacturers automate.

And quickly: The Hill recently quoted Deputy Secretary of Defense Kathleen Hicks, who “noted that over the past decade, the number of small businesses in the defense industrial base shrank by over 40 percent. ‘The data shows that if we continue along the same trend, we could lose an additional 15,000 suppliers over the next 10 years.'”

Tooling up small manufacturers is a vital step to stop the slide.

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

Harry Moser had already anticipated a U.S. manufacturing comeback in 2013 when I started telling stories of American manufacturers. He was tracking how many jobs companies planned to reshore in support of U.S. production, and today is among the nation’s top experts on reshoring because the trickle he reported early on became a tsunami.

It’s good to be right.

His new report measures more of the same: Moser’s Reshoring Initiative (RI) tracks the number of manufacturing jobs U.S. companies plan to reshore, as well as foreign direct investment (FDI) in domestic manufacturing, and RI’s “current 2022 projection of jobs announced is around 350,000 — another record, up from 260,000 in 2021. If the projection is achieved, 2022 will bring the total jobs announced since 2010 to over 1.6 million.” (Kentucky, North Carolina and Georgia are the top three destinations for jobs, all with large EV battery investments. Texas has dropped from #1 in 2021 to #13. Arizona ranks #16.)

It’s no mystery why companies want more U.S. manufacturing: Doing business in China (the source of 44 percent of reshoring announcements) is risky, offshore supply-chain bottlenecks are wreaking havoc, and consumers want stuff made in the U.S. Brand promises matter.

Companies are also just doing the math — with Moser’s help. RI’s Total Cost of Ownership (TCO) tools are helping many companies factor in all the expenses involved in offshore manufacturing operations, not just price (cost of production.) As the report notes, “The Chinese factory price is, on average, 30 percent lower than the U.S. price,” but “by switching to TCO, companies will see that about 20 percent of what they now import from China can be sourced domestically without raising prices or cutting profits.”

How important is TCO? Moser notes that historically, most companies that left to find cheaper factories offshore just didn’t do the math — in industries like machinery, transportation equipment, and appliances. “More recently, activity has shifted to include more essential products which the U.S. government should have recognized as too essential to rely so heavily on imports, including electric batteries, semiconductors, PPE, pharmaceuticals, and rare earths,” the report concludes.

But demand for more U.S. manufacturing runs headlong into what Moser describes as America’s “deindustrialization” policy — a mix of anti-manufacturing policy outcomes that stand in the way of more domestic production. He’s leading the charge for a “permanent industrial policy” that would “level the playing field enough that the companies would decide to reshore in their own self-interest.” Here’s Moser’s Congressional testimony to that effect.

His roadmap is part of a new national narrative that’s identifying ways to lower barriers to growing U.S. manufacturing. His prescriptions would:

• Train a new — and much larger — skilled workforce

• Reduce the value of the U.S. dollar

• Maintain low corporate income taxes and capital investment breaks

• Lower healthcare costs to reduce burden

• Make the Section 301 tariffs permanent, or, better, replace it with a border adjustment tax (BAT) on all imports from all countries

• Eliminate other sales taxes and use the extra revenue to fund Social Security and Medicare

• Cooperate with Mexico and Canada to attract work from Asia to North America

• Fill supply-chain gaps in the U.S. — and aggregate demand to drive the domestic supply chain

While Moser’s roadmap may end up being his true legacy, it’s also worth asking how realistic it is to assume that key pieces of the plan are likely to cross a finish line. For example, how likely is it that Congress would agree on a strategy to lower the value of the U.S. dollar and implement tariffs to specifically benefit manufacturing?

It’s fair to say that U.S. policymakers — and most U.S. multinational corporations — oppose tariffs, border taxes, and industry-targeted VATs of any kind. You’re normal if you support “free trade” and seen as a bit unconventional if you don’t. It’s deeply ingrained: Most business leaders, politicians, and chambers of commerce and trade associations oppose tariffs. Because most U.S. corporations do.

Instead, America’s new industrial reality will likely be shaped by us, by families and young people and employers who decide manufacturing is an occupation worth pursuing. The U.S. will need more than 3 million new, highly skilled manufacturing employees in the next decade, to meet the demand Moser anticipates and sustain a post-global industrial economy.

RI’s report touches on a promising trend: “Currently, reshoring and FDI are continuing to add more high-tech jobs than low-tech ones, again driven by the essential products push. . . . . The challenge is to upskill our workforce so that more of them can work competitively on more highly automated production of lower-tech products.”

I anticipate a pivot to this seminal point in future RI reports — that automation and technology transforming U.S. manufacturing will catalyze employment growth in the sector, not diminish it, which is today conventional wisdom. When U.S. manufacturing companies can compete with their technology counterparts for STEM students, we will have won.

We might look back on one small nugget in Moser’s 2022 Congressional notes as a clue to what might transpire in the years ahead — Utah’s new Manufacturing Modernization Grant, a modest $10 million fund designed to help “establish, relocate, retain, or develop the manufacturing industry in Utah.” If companies use the money to invest in new equipment, assets that act as a magnet for new talent, others will follow.

More on the challenge and promise of transparent supply chains, and their potential to fuel more reshoring, in future editions.

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

I’ve written about the manufacturing supply chain since 2013, and today believe the “next big thing” in America’s latest (and ongoing) industrial revolution — a.k.a. Industry 4.0 — will be the interconnection of the U.S. supply chain.

The big breakthrough is AI-enabled search that will help manufacturers find ideal suppliers. In May, I bet the future of CompanyWeek on the idea, joining forces with Sustainment, the ascendent tech startup developing an advanced sourcing and connectivity software platform.

It’s left to all of us to nurture a growing community of suppliers, and our new partnership will enable us to showcase more companies and people, but to also lean into our role as a champion for domestic suppliers. For me, it will be more of the same.

In early 2015, I took note of companies leaving Colorado in search of suppliers. “Gold Star is a good example of how much manufacturing growth in Colorado will pivot on supply chain development,” I wrote. “It’s why manufacturing is developing unevenly across industries and why the economy will be well-served by efforts to shore up resources that will drive manufacturing businesses.”

Our clarion call was underway by 2016. “Want to engage in a real conversation to advance U.S. manufacturing?” I asked after the election. “Be an advocate for the domestic supply chain so that U.S. manufacturers have everything they need to make things here, including labor.”

In 2018, I encouraged communities to “assess how well-matched target industries are to local and regional business assets,” and “whether steps can be taken to address supply-chain gaps, or whether a pivot to better-matched manufacturing industries might be a better plan.”

By January 2021, my optimism had turned to pandemic-fueled exasperation. I complained that: “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.”

But during the pandemic, we launched SCoP, short for “supply-chain portal”, to provide more transparency into the growing community of manufacturers featured in CompanyWeek, and to enable easier and more informed connections between manufacturers and suppliers. We put words into action. But it wasn’t great.

By January of this year, in a column entitled “Supply-chain scramble: the race to connect you with suppliers and OEMs,” I acknowledged others were in the game. Today, multiple players are striving to better connect the U.S. manufacturing economy, from Xometry/Thomasnet to Mfg.com to Connex Marketplace.

But Sustainment impressed me most, and by May, we’d joined forces. Here’s why.

First, our shared vision is that the community, not the technology or data, is most important. As I discussed a partnership with CEO Bret Boyd and the Sustainment team, the narrative always returned to one thing: you. Today our community is 50,000-plus CompanyWeek readers and technology users in 20,000 manufacturing companies across the West — and growing – connected by stories and a common mission but not yet by advanced tools and software.

That will change quickly. Sustainment has been building software and enabling tools since 2020 to help U.S. Air Force customers in Oklahoma and Texas reimagine procurement in what is a massive defense supply chain — millions of parts, components, and products. It’s a “local and regional first” development strategy: locate and map the closest suppliers to start.

It’s a tech foundation that I trusted would be the best match for CompanyWeek’s audience. Our goal is to bring together our community with Sustainment technology to connect with each other, meet new people, find new buyers and providers, publicize new processes and capabilities, and otherwise help you be successful. Today, we’re in this together.

Our approach is to perfect the platform for suppliers and contractors in the machine-shop economy, by focusing on supplier processes, then expand the platform into other key manufacturing industries beginning this fall. Every small business machining, fabricating, or finishing parts or products should be listed in the Sustainment platform now — and we can help.

Join the platform. There are no fees. Take it for a drive. Tell us where we can improve. I’m confident we’re building on a solid foundation.

Join here.

We’re not alone in this quest, nor should we be. If we’re successful, manufacturing will have taken a momentous next step — as a prelude, it turns out, to Industry 5.0 – an era that “recognizes the power of industry to achieve societal goals beyond jobs and growth to become a resilient provider of prosperity.”

As we’re a public benefit corporation, we’re ready for that, too. More on that in future editions.

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