China Is Not U.S. Manufacturing’s Biggest Foe

National Association of Manufacturers (NAM) President and CEO Jay Timmon has never run a manufacturer himself. Yet he is fond of passing judgement on what has hurt the large economic sector, particularly through criticism of the federal government’s position on Chinese imports and attacks on the failure of the Administration and Congress to support manufacturing jobs. What Timmon never mentions is that the industry he represents has begun to cut its own throat, at least as far as job growth or even retention are concerned.

The New York Times recently reported that a Philips Electronics plant in the Netherlands is much more efficient than one that performs similar functions in China. The reason is the use of robots. The Times reports that:

All told, the factory (in the Netherlands) has several dozen workers per shift, about a tenth as many as the plant in the Chinese city of Zhuhai.

The employment among the manufacturers Timmon represents has moved quickly away from imports to a once-in-a-century transformation.

The Economist wrote late last year:

The evidence is irrefutable that computerised automation, networks and artificial intelligence (AI) — including machine-learning, language-translation, and speech- and pattern-recognition software — are beginning to render many jobs simply obsolete.

This trend lowers the cost of labor at many manufacturers. These companies will jettison workers as quickly as is practical. Machines are not just more cost efficient to operate. They probably make fewer mistakes.

The debate about the use of robots in manufacturing is already largely over at some of America’s largest manufacturers. Observers need only walk onto the floor of a car assembly plant to find that tasks once done by people are now done by complex machines. The auto industry is a poster child for the National Association of Manufacturers argument about lost jobs. But its battle plan has been undermined because of the trends among its own members:

“The ability of the machines to register any difference in each vehicle on the line improves our quality by providing a custom-like build,” said Ford engineer Thomas Burns in a release.

China may have had a part in the trouble in American manufacturing, but the threat now is just as much from within the industry.

Douglas A. McIntyre