Another election year over and the tides have turned again. But will things really change for the small to mid-sized manufacturing companies? What does the future hold in this country? There is so much debate between the Republican and Democratic parties on how to “fix” the country’s problems.
Recently, I had the opportunity to hear an incredible speaker, Clyde Prestowitz, and read his book, “The Betrayal of American Prosperity.” If you haven’t read it, and you own a manufacturing company, you should. Clyde worked in industry for many years and then went to work for the Reagan administration in the early 1980s as chief trade negotiator. This was during the time when the Japanese automotive companies were penetrating the U.S. market and trade issues were critical. His story is interesting, but frankly very troubling. But once you get past that, the message is outstanding. I’ve never been over the top on my political beliefs but after talking with Clyde, I have a whole new perspective.
The premise of his message is simple. Many years ago in American industry, manufacturing companies thrived primarily because no matter what the odds were, as long as a business owner put together the best management team, they could win, and the government generally stayed out of the way. But after World War II, the United States began to significantly broaden its focus entering into the era of making decisions with a geo political mind set; an era in which we began sacrificing our manufacturing base for geo political gains. In this era, the role of government created incredible forces that began to work against American business.
In the post World War II era, America developed a culture of entitlement, which never existed before. The U.S. decided to become the global police and wanted to lead the free world because of the power won in the war. The country became cocky and took their eye off of what got the country to prosperity—manufacturing. In the automotive industry, the union became an incredible force built on the concept of entitlement and forced into existence by the companies themselves. Then as a country, jobs began to go overseas in the effort to build this geo political position. An unfair playing field was created for manufacturers. The primary impact was in three key areas: tariffs, currency manipulation and overall philosophy of markets that are closed to U.S. companies.
The conclusion in Clyde’s book is that no matter how good a team manufacturing leaders build, it doesn’t matter because the company can’t win against these government forces. Companies can win small battles, but they won’t win the war. As we travel the country working with small and medium sized manufacturing companies, the trends are similar. Most companies hate government and believe they will never succeed as a result. They are frustrated with the current administration and believe it is the reason for our problems. Honestly, how can you blame them?
The natural question for Clyde is, now that you have manufacturers all riled up what can companies possibly do because all of this is so out of their control?
Manufacturers do have a voice and the message is simple. The time for change is now, and as manufacturing companies it is important to develop relationships with people in the government and other influential areas of business to get the message across. Most people think they won’t be heard or have an impact, but if they all work together, the impact will be far more significant. Obviously, government has the largest role. They have to buck up and level the playing field for manufacturing companies in this country. U.S. companies are some of the most competitive in the world. Going to low-cost countries is not the answer and what American companies proved in the last 18 months of one of the worst economic crises ever is that they are the best. Most have hunkered down and beat the odds. So government has to learn of our capabilities and begin to work for what made this country what it is today—manufacturing.