The July 7th issue of Manufacturing News has a lengthy article on a schism taking place within the National Association of Manufacturers. We’ve written many times about NAM and how it appears to represent company owners and executives while completely missing the point from a lean manufacturing and employee perspective. This current situation is rather amazing in that neither side of the dispute gets it.
The dispute revolves around U.S. House bill HR-1498 by Hunter (R-CA) and Ryan (D-OH) that would allow U.S. companies to petition the U.S. government for relief under trade laws due to foreign governments subsidizing their currencies. Obviously this is aimed at China, and most observers agree that it could provoke a trade war that would hurt everyone.
NAM’s International Economic Policy Committee met on June 27th to debate whether NAM should endorse the legislation. Large company representatives were strongly opposed out of fear of what trade tariffs and a resulting trade war could do to their companies. They believe that the Hunter-Ryan bill is a form of "procedural protectionism" supported by lawyers who "believe the road to prosperity is through litigation". Sort of falls in line with NAM’s usual rants, often justified, against lawyers. Small company representatives were organized and fed up with the lack of action against what they perceive to be a serious competitive disadvantage caused by China’s artificial currency level.
After a couple hours of debate a vote was held, and a motion for NAM to endorse the legislation passed by a margin of 75 to 46 with five absentions. Somewhat surprisingly GM, Ford, and Chrysler voted with Toyota and Honda to reject the motion, although the legislation would also bring to the forefront some issues with Japan’s undervaluation of the yen.
The recommendation of the policy committee still needs to be voted on by the NAM board, and will be a test of whether NAM really represents all manufacturers (and thereby respects the policy committee vote) or if it caters to the large multinationals. Companies on both sides are threatening to leave NAM if the vote doesn’t go their way, therefore this could represent a turning point for the association.
But the real bottom line is that neither side really gets it. Once again you have a bunch of people trying to blame their problems on (pick one or more) lawyers, regulations, currency valuation, uneducated workforce, lack of handouts for research, energy prices, lack of domestic subsidies, foreign subsidies, infrastructure… I could go on and on. Do those issues impact efficiency and competitiveness? Of course they do. Do they make or break a company? Only if you’re fundamentally incompetent.
Domestic companies of all sizes can compete with the rest of the world and win. They do it every day, and we’ve profiled many of those successes on this blog. They are the companies with the guts to take a long and often painful look inside themselves to find waste. They are the companies that can realize how traditional accounting practices can force incorrect decisions, such as making excess unsold and uncommitted inventory magically become an asset. They are the companies that recognize that there is value in all employees that far surpasses their hourly wage, and they grow and tap into that knowledge and experience instead of trying to bribe 35,000 of them to leave.
If NAM truly wanted to help American manufacturers they would be lobbying for changes in accounting rules, lobbying for continued funding of the Manufacturing Extension Partnerships, creating systems for manufacturers to share knowledge, and basically helping their membership to create fundamental competitive advantage.
Stop whining and start learning and improving.