Are We In A Parallel Universe?
For 6 days in September, the manufacturing sector trotted out its best and brightest technologies for a receptive audience. More than 92,000 metalworking professionals made the trek to McCormick Place in Chicago to kick the tires on offerings from 1,803 exhibiting companies that participated in IMTS.
According to show sponsor AMT – The Association For Manufacturing Technology, “The feedback from exhibitors and the purchasing activities of attendees proves that manufacturing is not only healthy, but thriving. Manufacturers coming to the show from around the world clearly understand that investing in the latest technology is key to being competitive.”
The IMTS experience was real; I was there. Of course there is always the “show buzz” that flows like a river through such an event. When things are good, we get swept up in a current of optimism that can mask reality. However, this was my 14th IMTS, and after almost 30 years of attending I feel confident that this show’s exceptional performance was real.
Upon returning home from the show, I was slapped up the side of my head by the disconnect between what I had just experienced and the grave state of the financial crisis occurring on Wall Street. It was like parallel universes. Somehow metalworking manufacturing continues to be a bright light in a dark economy.
Are we somehow immune? It’s doubtful. Credit or the lack of is the elephant in the room. There are many positive indicators for manufacturing remaining strong, but our Achilles’ heel is liquidity in the banking system. The ability to borrow at reasonable rates must somehow be restored to the economy so that businesses can operate. Credit is the grease that keeps the wheels of our economic system turning.
As I write this, the debate over bailout/rescue plan rages. So far, our Congress has shown why the American people rate its performance in the teens. A friend of mine, a shop owner, sent me a suggestion that we citizens simply vote out all incumbents. It’s bipartisan and only half the Congress is up for re-election so there would be continuity (for better or worse). Now wouldn’t that send a message to the remaining half?
The debate seems to boil down to making much of the banking and financial industry wards of the state in exchange for $700 billion. Or, let the market do what it does by culling the weak and stupid through bankruptcy, merger or acquisition.
The problem is we (the people) don’t know which course is better. Our administration seems bent on a government bailout, but is confidence high that the Feds can manage something this big and complex? As for the latter—letting the market self-correct—there is some evidence that faltering institutions will see their shares devalued and likely taken over by stronger institutions. White knights can swoop in and/or the herd can be culled through Chapter 11.
This mess is not really our mess. As demonstrated at IMTS and confirmed by many readers I hear from, we’re doing pretty well. Our recession occurred earlier in the decade, and shops that had not implemented technology and good practices to make them competitive went out of business or were absorbed by others.
I don’t really care what happens to the greedy financial companies except as it influences manufacturing. Liquidity is vital to us and must be restored as soon as possible. My hope is that whatever happens on Wall Street happens soon, before we get sucked up into the mess.
We have much in our favor such as the weak dollar, which encourages export from here and insourcing from other countries. We are now a global low-cost quality producer because of the work done by our shops to continuously improve their productivity and reduce costs.
Manufacturing is an underappreciated yet fundamental wealth-producing sector of our economy. It’s small, but mighty. Seeing the squandering of wealth produced by manufacturing, as it adds value to less valuable resources, is disappointing.