About a month back I wrote a piece eloquently titled "Putting Perfume On A Pig", in which I blasted the collection of people so smart they have convinced themselves America doesn’t need manufacturing. This gang, called The National Summit On Competitiveness reissued an old Joe Lieberman study raising the alarm on outsourcing techie jobs (no problem with outsourcing manufacturing), and included the quote by the think tank dolt who said, "At the risk of sounding like a heretic, I have to say that quality and lean production is sooo last century."
Kathleen Fasanella commented that my post sounded rather depressing. She didn’t know the half of it. The depressing part just kicked in. The loud message from these folk to George Dubbya was that America needs more technical folks if we are to become competitive with the rest of the world. I am all for more technology competence, but what they are really saying is that manufacturing is best done elsewhere, and the way the country is going to prosper is by having people who can invent new stuff faster than the MBA/Wall Street crowd can outsource it to China. The President bought the package lock, stock and barrel. Those of you who caught last week’s State of the Union address heard all about the multi-billion dollar plan to re-energize science and engineering.
He also bought into the "lean is sooo last century" part. What didn’t get much ink – the really depressing part – is where our Commander In Chief is getting the money to pay for the techies. The federal budget that was sent to Congress guts the MEP’s. The official policy of the Bush Administration is to deal a body blow to lean manufacturing, in favor of the outsourcing strategy.
The MEP’s – Manufacturing Extension Partnerships – exist in every state and while much of what they do can be classified as "lean lite", they are the every day, nuts and bolts water carriers for the lean effort. Thousands of small manufacturers get their lean training, and for many of them their first exposure to lean, through the MEP’s. All of the MEP’s are good, and some of them are very, very good. Mostly they are staffed by people who are very committed to lean manufacturing. The Bush Administration is cutting MEP funding by almost two thirds, from $106 million to $39 million.
"Just as U.S. consumers have enjoyed lower prices from foreign manufacturers, so too should they benefit from services being offered by overseas companies that have lower labor costs," says N. Gregory Mankiw, chairman of the White House Council of Economic Advisers. This moron is so far gone he even said that, "We don’t have a comparative advantage in producing clothing, textiles, and that’s one of the reasons we’ve tended to lose textile jobs. Maybe we’ve learned that we don’t have a comparative advantage in radiologists." Now there’s a bright idea – outsource radiology to India. We can put our kids on the next flight to Bombay for X-rays when they break their arms on the school playground. What seems certain is that we do not have a comparative advantage in Economic Advisers.
In addition to the MEP’s, Bush is gutting the Small Business Aministration and its micro-loan program, along with a number of other SBA programs. The CATO Institute is cheering all of this along, referring to the SBA and the MEP’s as "Corporate Welfare".
Most depressing of all is the National Association of Manufacturers. Their response to trashing the MEP’s is silence; and nothing but praise for the Bush budget. Apparently they have devoted themselves entirely to the full time tasks of running a George Bush fan club, promoting free trade, and trashing Lou Dobbs. No time left for supporting lean manufacturing, or any other kind of manufacturing, it seems.
"These guys just don’t get it, period," said Paul Kennedy, president of Kennedy Die Castings Inc. in Worcester, Massachusetts.
"Let’s put it this way. The Bush/Cheney yard sign that was in front of my house may just stay behind the Oldsmobile this fall," said Gary Henderson, purchasing manager of Aircraft Precision Products Inc. in Ithaca, Mich.
Paul and Gary – count me in. If this doesn’t change, I may have to vote for Hillary in ’08, not because I think she will do better – she would be an abomination – but to send a message to the Republicans that they better get their heads out of Wall Street and the think tanks and back into the heart and soul of America.
Ken S. says
“Paul and Gary – count me in. If this doesn’t change, I may have to vote for Hillary in ’08, not because I think she will do better – she would be an abomination – but to send a message to the Republicans that they better get their heads out of Wall Street and the think tanks and back into the heart and soul of America.”
Let’s hope you guys wise up before the next election. The last time we “sent a message to the Republicans” was with Ross Perot, and we got two Clinton terms as a return “message”. If you don’t like the focus and direction of the current administration, do something about it. But cutting off your nose to spite your face, and encouraging others to do the same, doesn’t rise to the level of intelligent discourse. Go back and try again to come up with a constructive strategy.
Bill Waddell says
Awww, lighten up Ken. It was an exaggeration to make a point. I have voted Republican in every election since Gerald Ford, although I occasionally have to hold my nose to do it. And I take it as a compliment that you think my blogs have that much influence on national politics. If they did, of course, ‘W’ never would have gutted the MEP’s for fear of my wrath.
You have to admit, though, that the rate at which manufacturing has been gutted in this country over the last 30 years has not varied much whether the administration was Democratic or Republican. Whether it is ‘W’ cowtowing to Wall Street and killing manufacturing slowly, or the prospect of Hillary and her cronies in the unions and environmental extremist organizations killing it in one swift blow, the factories are left out in the cold.
Joshua Newman says
This supports the comments I made, and were promptly removed by the moderators, two weeks ago: that the Bush Administration is full of MBAs who have nice theories and words, but can’t execute for scrap. And after the massive deficient spending by this administration and the mindless/corrupt following of the House Republicans, you guys think voting GOP is really going to help? Course, I doubt many of the Dems would be much better. Maybe we should start a new political party. If we have to use new metrics for lean manufacturing, perhaps we should use new metrics for a lean government. Hmm…
I’ll admit I edited a line out of Joshua’s comment a couple weeks ago… just in an attempt to keep potentially inflammatory political commentary out of a non-political post. But obviously it is appropriate in this case… Bill opened the door wide with another great post!
Joshua’s most recent comment has given me another thought. There are several organizations that rate our political “leaders” by any number of measures. And there are some that purport to represent the manufacturing community, but as Bill points out they really don’t. Perhaps we need a “Superfactory Rating” that is an objective/subjective reflection of the politician’s support of real manufacturing? Not subsidized manufacturing, not the owners side of manufacturing, not constrained unionized manufacturing, but real long-term manufacturing effectiveness. Like the MEP’s could be. Or maybe to avoid being sucked into political hell we could just spotlight some politicians that really do “get it”. I’d even give them bonus points if they read Bill’s book. Food for thought.
Ervin Mastken says
Hillary? Oh god help us. Like Bill I may have had to hold my nose to vote for GW, but the alternative is far worse. A dem party that has a disdain for business, when it is business that employs most people and keeps our standard of living high. You only need to look at the stagnant EU, with high unemployment and the imminent collapse of massive social programs, to see where we could be. Many people must not remember the high inflation, high unemployment, and general malaise of the Carter years.
Aussie Ken says
The unthinking, ignorant attitude towards lean is unsurprising given the depth of critical evaluations given by W and his administration on almost ALL major issues.
Joshua Newman says
Don’t worry Kevin, I wasn’t nor am I, offended my that particular editing choice. And while I don’t recall the Carter year, having not been born until he was running for reelection, I am quite aware of the situation in Europe. So Kevin, to further develop you idea, we could take a lesson from some of the more reputable lobbying organizations, there are a few, and educate various politicians and civic leaders on the importance of lean manufacturing and manufacturing in general, something like a political arm of MEP. There a plenty of lean consultants who educate people for a fee, what if we organized some of them into teaching our “dear leaders” as an exercise in civic participation?
I kinda wonder if Bush and lot of the MBA types are mistaking tapping into the flow of wealth and creating wealth. A couple of numbers,
A mortgage broker can make $20K for selling a $500K mortgage with 1 point and 3 year prepay penalty. I repeat $20K. That’s over 6.5 weeks at Delphi labor rates ;-) or over 2 years work at minimum wage.
On a 300K house sale a realtor can make 6% commission or $18K. Almost the same numbers.
These are jobs that tap into the flow of wealth, but, in themselves, these jobs do little to increase the material wealth of the nation. While both types of work put dollars in peoples hands and create tax revenue, only wealth creation makes the world, in general, better. I think a lot of bad policies come from missing this distinction.
Graham Cameron says
Dear Ervin Mastken,
As a European reader of this blog i’d ask you to keep to the facts please. Wild assertions don’t jive with me.