The High Price of Locks

by BILL WADDELL

Another in a long line of contentious debates is raging in Washington, this one with a direct bearing on lean manufacturing. The Trade Adjustment Assistance Act is up for renewal, the Republicans are against it, the Dems for it.  The TAA is a program to funnel training and other benefits to workers affected by foreign trade.  About a $2 billion annual tab to train workers who have been laid off, as well as those still working in companies in danger.  The Obama administration is holding off on submitting trade agreements with Korea, Panama and Columbia to the Senate for approval – agreements the Republicans want to see happen – unless they give in on the TAA renewal issue.

The big dog among the trade agreements is the one with Korea, and as is usually the case, it throws manufacturing in general under the bus.  The big winners in the deal will be agriculture and automotive.  The Bush administration folks who initially hammered it out, then the Obama folks who saw it through, went to the mat to make sure those two groups came out on top … and the rest of manufacturing is pretty much further up the creek having to compete with another place where folks work cheap – about half what an American worker makes.

Funny how all of those economic wizards who rail against protecting American manufacturing don't seem to apply that logic to agriculture, where government subsidies amount to about a buck and a quarter per day per person for every man, woman and child in the USA to assure that American agriculture keeps booming, but you can bet Mexican farmers who can't compete against our subsidized farmers have noticed.  The farmer can have everything from his hat to his tractor imported from Asia, but the corn will be grown in the USA come hell or high water no matter what the cost to the taxpayers … but I digress … back to lean manufacturing.

So here we have Accra-Fab, a sheet metal outfit from Washington.  They got their hands on $75,000 of TAA money because they were taking a pounding from foreign competition.  They were getting pounded so bad they had to let 115 of their 525 workers go back in 2001.  They spent the 75 large on training the rest of their folks in lean, and it has worked out pretty well.  Their director, Barry Stewart "said the value of TAA training has been significant. Without it, sales would have dropped, he said. 'With the TAA help, it has at least stabilized and allowed us to keep our sales level steady'."

While I am 100%, foursquare in favor of lean training, and while I am generally against government spending and government involvement in business, of all the things our money is spent on lean training is among the better ideas, this picture is fundamentally wrong.

Congress and the administration haggling over whether the government should pay for lean training after companies are hammered by foreign trade, or whether the companies should have to worry about succh things themselves, is like tow guys arguing over which of them should have to pay for the lock on the barn door after the horse is gone.  I suppose training the 420 people left at Accra-Fab is a lot better than no training at all, but it seems to me that it would have worked out better all the way around had someone paid for the lean training when Accra-Fab had 525 people to train.  Just maybe the 115 people would still have their jobs.  I imagine that thought has crossed Mr Stewart's mind.  Great that their lean skills have enabled them to keep sales steady – would have been greater had they had the wherewithall to keep sales steady before 20% of the workforce went out the door.

 For Chrissakes, the lawyers and community activists running things in Washington dig deep and come up with $125 million a year to fund the MEP's (Manufacturing Extension Partnerships) who are tasked with training people in lean while they have jobs – and $2 billion to train people in lean after the jobs are gone.  One would think even a lawyer could see what is wrong with that picture.

And shame, of course, on manufacturing leaders who wait for the government to pay for the lean training at all.  It's not the government's role, even if they were smart enough to get it right.