Industrial Manufacturing isn't Changing; it's Already Changed.

Colorel Blinds, RIK Medical, Jetstream Systems and Binks Manufacturing were four successful manufacturing companies I worked for in Colorado between 1990 and 1999. All four of these shops manufactured products in Colorado for years: Not one of these companies exists under the same name or the same ownership today; not one of these companies manufactures products in Colorado today; only one of these four companies went out of business; the rest were merged, acquired or "off-shored."

Today, in a plant where 3,500 employees worked three shifts manufacturing televisions in 1990, fewer than 100 employees work a single shift at the last domestically-owned TV maker in the U.S. The one-million square-foot facility is nearly empty, with most overhead lights switched off and most machines idle. The only television manufacturer left in the U.S. without foreign ownership is nearly a ghost town. In an industry that was not long ago dominated by American manufacturers, nearly all TVs are now made by non-U.S. companies. There are only six U.S. plants making TVs today, and the vast majority of the televisions we watch are now imported from Mexico, Japan , China and Taiwan . Since 1995, U.S. employment in the television manufacturing industry has fallen 44 percent. Television set prices have declined by more than 50 percent in the last ten years, as new technologies have emerged and sales have increased.
    
The deterioration of the North American manufacturing base and the associated loss of jobs are not news to any of us, but the exponentially rising purchases of imported goods in the U.S. and Canada, as well as some of the relative details are worth examining.
    
In 2005, U.S. manufacturers set production records, but consumers and companies bought more imports than ever. Imported goods account for nearly 33 percent of the manufactured products consumed in the U.S. in 2005, compared with about 25 percent in 1992 and 15 percent in 1982. This trend has led to the decline of many North American companies that were once considered amongst the best manufacturers in the world. Heavy job losses across entire industrial sectors struggling to compete with imports are no longer shocking, but expected. One manufacturing executive lamented, "It's probably going to take something like the U.S. automotive industry disappearing entirely before people realize that the U.S. is not the world's leader in manufacturing."
    
Many find it difficult to envision the U.S. standard of living being preserved if the domestic economy is based solely on service industries. Instead of an economy anchored by manufacturing stalwarts, retailers like Wal-Mart, Home Depot, Block Buster and the major grocery store chains are where the jobs are today. "Made in the U.S.A" used to mean something, but in 2005 Wal-Mart imported an estimated $18 billion in goods from China . America imported $243 billion in goods from China in 2005, increasing the trade deficit to nearly $202 billion. In 1995, the U.S. imported $46 billion from China . China and other developing nations like India and Vietnam are capitalizing on eager, well-trained labor pools that are willing to work for wages much lower than Western competitors. Hourly compensation, including benefits, for manufacturing workers in the U.S. averaged a little more than $23 an hour in 2004. In China , wages are less than $1 an hour at official exchange rates.

Manufacturing employment in the U.S. peaked in 1979 at 19.6 million. In November 2005 that number was down to 14.2 million or 27.5 percent. During that time, companies that helped forge the U.S. into an industrial leader have been acquired by non-U.S. owners, sent work overseas, made mass layoffs or simply closed up shop.

Manufacturers are shifting work to Mexico Honduras, China and elsewhere to save millions of dollars in labor cost every year. Levi Strauss & Co., the U.S. apparel icon, closed its last remaining North American plants in 2003, and has moved all production to Africa, Asia, Europe and Central America . The majority of U.S. steel companies are now owned by foreign investors. In the U.S over the last decade, computer and electronic manufacturing jobs are down by 22 percent, communications equipment jobs are down 33 percent, while semiconductor and electronic component jobs are down 25 percent. This trend is expected to continue in the U.S. because of wage competition from overseas, burdensome labor rules, strict environmental regulations and high health care costs.         
    
For more details on this topic, please see the four-part series in The Washington Times that looks at the past, present, and future of products made in the U.S.A. www.washingtontimes.com.