It seems like just yesterday that everyone was talking about the U.S. becoming a service and knowledge economy. To a large degree, we are, because manufacturing accounts for less than 15% of our GDP. Compared to other advanced countries, this is quite low. We still import more than half of our needed manufactured goods and probably import 10 times the amount we export. But a funny thing is happening... all the buzz in America today seems to revolve around the resurgence in manufacturing.
At a recent Manufacturing for Growth (MFG) meeting, sponsored by the Association for Manufacturing Technology and several other associations, there was lively discussion about the future of manufacturing in the U. S. Harry Moser, founder of the Reshoring Initiative, noted that based on total cost of ownership, 40% of American companies actually have a cost disadvantage importing goods from China instead of making them here.
Economist Alan Beaulieu pointed out that productivity in the U.S. continues to grow while unit labor costs have remained constant since 2000. China’s labor costs, by comparison, have risen 250%. Of course, that does not mean China’s wage scale is going to match ours anytime soon. But it does show a trend that must be considered when determining where to locate a plant, along with all the other associated issues such as travel, language, quality, and shipping.
Many companies are finding out the hard way that China is not the cost panacea we all believed it to be.
It’s clear that more and more companies will keep their manufacturing plants in the U.S. for North American consumption, rather than offshore them. Many are also looking to boost exports.
For today’s manufacturers to be competitive, however, they have to automate. Automation is the main reason for the massive improvements in productivity, and it requires investments in equipment like CNC machines, advanced controls, precision motion systems, and flexible fixturing to meet rapidly changing customer demands.
Automation also requires a skilled workforce. The days of the dirty factory, with mind-numbing repetitive tasks requiring minimal training, are over. Today’s factory worker must be knowledgeable, committed to quality, and skilled in multiple disciplines. According to a Deloitte and Touche study, right now 600,000 high-paying manufacturing jobs are going unfulfilled due to lack of skills in the workforce. We must change this and do it fast.
To help satisfy this demand, we’ve made education an integral part of our business, both inside and outside our organization. Festo has a long history of developing learning systems and training for engineers and manufacturing personnel. The company’s founders started an education group in the 1950s, originally to educate people on pneumatic circuitry. Since then, Festo’s education arm has grown to provide custom learning systems and education courses in all kinds of factory automation. Last year approximately 42,000 participants around the globe attended more than 2,900 Festo courses. Here in the U.S., our Didactics Div. routinely supplies complex automationlearning systems and customized training for outside companies and community colleges.
What sets our Didactics program apart is that it provides generic automation- technology training, not the vendor-specific training typically encountered. The knowledge and skills imparted by these classes can be applied to any equipment or plant. For example, current automation topics still cover basic fluid power, as well as electrohydraulics and electropneumatics. Didactics also covers electronics and electrical engineering, sensors, CNCs, PCs and PLCs, and fieldbus technology, not to mention mechatronics, robotics, and process engineering.
We are also partnering with other companies and local colleges, offering scholarships, financial support, and equipment to organizations that help foster student involvement with engineering. Supporting initiatives such as the FIRST Robotics competition are part of our corporate DNA.
Of course, training, financial support, and community-company partnerships are only part of the solution. We need to encourage enough people to enter manufacturing. We need young people and displaced workers to believe manufacturing offers high-paying careers, and that the jobs will be here for the long haul. And we should drive home the point that while the average college graduate will earn $1 million more than a high-school graduate over the course of their working lifetime, people with skilled manufacturing jobs earn more than most liberal-arts graduates.
The U.S. has the ability to compete globally. We are well positioned economically and have the market demographics to be successful. Please join Festo in emphasizing education to ensure the future of our industry, and our country. Let’s train, teach and encourage students to enter the exciting field of manufacturing.