Sunday, July 31, 2011

A perspective on the decline of manufacturing in the U.S.

You don't have to be an economist to understand that something is seriously, systemically wrong with the manufacturing industry in the United States. Consider the demise of the Great Lakes region in terms of employment and manufacturing.

First, you have to understand that the cheapest, most reliable way to transport tonnage over large distances is over water, if possible. If you have access to the Great Lakes, you have a direct water route to both international and domestic markets through the Atlantic and the Mississippi. This is a huge competitive advantage. How much extra costs do you have to pile on before that advantage evaporates? I don't have an exact number, but I know we've surpassed it. I know because people and companies are leaving the area and are not being replaced.

You can argue about the causes, but an exodus from an area that should be a geographic no-brainer from a manufacturer's point of view is an undeniable symptom that something is very wrong. The status quo is a loser.

I think we're finally getting to a point in our national conversation where things are becoming evident in terms everyone can clearly understand; dollars and cents. Good ideas attract cash. Bad ideas repel it.

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