In your opinion, do you see the day coming where most if not all manufacturing jobs disappear from the North Amercan landscape?

The only factory jobs that are likely to remain in North America are those that require a highly trained work force.

People cry and wail about robotics and other mechanization taking factory jobs but the fact of the matter is that’s about the only way to keep the jobs ‘at home’. During the 20 years I worked in a food factory I saw lines that had 10–12 people doing strictly menial labor reduced to 2–4 people highly trained to operate a complex machine.
The other alternative was to literally crate the old machine up and send it to Mexico. I saw them crate entire low-tech lines for shipment. They’re easily run and maintained by people with more motivation than skill.

One of the biggest problems I see is people in North America(Canada and the u.s.a) don’t seem to think it’s very important to buy goods made here,myself included at times if we can save a bit of money buying the product made in another country cheaper, we will.
BUT at times I really go out of my way to find the product made here even at a greater price and get it.

There will always be certain industries where production will remain right here. The one which jumps readily to mind is anything having to do with food processing. But there are other niche industries destined to remain because of such advantages as availability of local relatively cheap raw materials. But I certainly agree with you Squeek that we’re in for some interesting times since the virtual elimination of our manufacturing sector. For example, is it merely a coincidence that now that the factories have all vanished we find ourselves in a recession that just “won’t go away”?

What is missing from your equation is the cost to import and export these products and materials. Shipping by ocean to or from China in a perfect world takes 4–6 weeks. Very few US companies have the luxury to tie up inventory for that length of time which only adds cost to the product. Now you need to factor in duties/import fees again this adds to the cost. Then you have land based transportation cost and additional delays to get those materials and products to the US companies dock.

Here in the good ol’ US of A…any one of my customers can place an order and I will manufacture and ship their order the next day or sooner and in 1–3 days they will have it. My customer can either use it and get paid right there and then or re-sell it to their customers and then get paid as well. Cash flow is king when it comes to commerce and tying up your money for over a month to get cheaper products is not always a competitive advantage as the company that can deliver goods and services on demand are the ones that consumers often will turn to. Very few companies and consumer have the luxury to wait for overseas goods to arrive.

So IMHO I do not see a day where much of the current manufacturing will be outsourced. I do though see a day coming real soon where if the $15.00 minimum wage gets pushed through that a LOT of entry level jobs will be replaced by robots, Siri style receptionists and holographic attendants.

@Cruiser that day is coming regardless of anything to do with minimum wage laws.

Recently I bought some fresh produce at Aldi in the rural Midwest that had been date-stamped 2 days prior, @Cruiser.

I worked on a line that made a just-add-water-and-nuke meal.
Wasn’t long that the identical product was on the market, assembled in China from ingredients made in the USA. Get your mind around that.
Sells for about a buck, retail.

I don’t see transportation as a huge factor today.

@Cruiser that is true to a point, a lot of companies have those cheaper goods already inventoried here so waiting doesn’t really fit.

I don’t, I see the trend continuing until the pendulum swings the other way and it’s cheaper to do it here again. We subsidize most of the shipping from places like China. I don’t know why but we do. If we stop that madness things would be back here rather quickly as it’s not such a good deal to outsource as it was a couple of decades ago.

@ibstubro I have my mind firmly wrapped around your assembled in China from ingredients made in the USA. as I have customers in China who are my customers all because they need “Made in USA” on their label. I sell many products to China for a minimum 150% profit….wrap your mind around that. The best part is I buy epoxy resin made in China for a $1.10 per pound and reformulate and compound that resin into finished goods and sell it back to my Chinese customers for $6.25 per pound on an average 20,000 lb order…do the math if you can wrap your head around a calculator.

As a CNC machinist, I’m not terribly worried about my section of the manufacturing sector. Why is that? Because if others could do what American machinists do, they would already be doing so. That means that at least one major type of manufacturing is relatively safe from outsourcing.

To be sure, there are a few places that can do precision work; often the same places that make the CNC machinery we use in American shops such as Japan (Mazak) and Germany (Handtmann). Small places that lack the resources to do precision work on the scale that we do. Sure, an aircraft manufacturer could get them to make a thousand wing spars in a month, but we could do it in about three days without sacrificing quality. Or they could get some sweatshop that could make them that many as fast as we can, but they would be unusable crap. When you need precision work done in large quantities, the US is still competitive. And when you want it done without the expense and delays of trans-continental shipping, American machine shops become even more attractive to US customers.

But that gets back to what @ibstubro said at the beginning; “The only factory jobs that are likely to remain in North America are those that require a highly trained work force.”. It takes a lot more skill to do what I do than it does to do menial labor. Like electricians, an apprentice-level machinist isn’t trusted to do much unsupervised, and are only really economically worth having on the payroll because they will eventually become skilled workers in the future. Since many shops don’t have the extra money to train people to the extent that one needs to be trained to work without having to pay a second guy to babysit you, they often require a certain level of experience to even submit an application.

The end result is that the workforce winds up split between those with skills and those who can be easily and cheaply replaced.

@Cruiser ” I do though see a day coming real soon where if the $15.00 minimum wage gets pushed through that a LOT of entry level jobs will be replaced by robots”

That depends. Entry level jobs in my field pay almost that right now. At one of my old jobs, one of my duties was training the FNGs and turning them from button-pushing part-loaders into machinists capable of doing setups and adjustments unsupervised. This particular employer had a pay scale below the 10th-percentile, so a lot of those kids wound up leaving for greener pa$ture$ after they got a year’s experience; about where I was when I graduated high school having taken a vocational course for CNC machining. But what they learned was enough to go out and get $16–18/hr to start with no more skill than I had at age 17.

So if by “entry level” you mean a job that a kid fresh out of high school could land, then it’s really a matter of what elective courses that kid took and what hobbies that kid has. But if by “entry level” you mean a job that someone with no skills can get, that implies a degree of laziness I wouldn’t want on my payroll anyways. (We all have hobbies, and if you don’t care enough about your hobby to learn about it enough to become at least semi-skilled, then how can I expect you to care enough about your job to even show up and do what you’re getting paid to do?)

The ones that have the most to worry about there are those in the service and administrative/clerical fields as many customer service needs are easily handled by a well-programmed automated system that allows the customer to avoid any human interaction at all, and probably more successfully than most actual humans working the squawk-box at the drive-thru.

No, for many of the reasons listed above. We’re not alone in this, you know. There are plenty of countries that pay their workers livable wages and have a thriving economies which include healthy manufacturing sectors. Take a look at how Germany and the Scandinavian countries do it. These countries have excellent worker’s education policies and pensions, produce quality goods such as Mercedes Benz, BMW, Audi, Opel, Krupp, Siemens… Volvo, Saab, Fairchild Aircraft, TetraPak, Hasselblad visual systems, Husqvarna, Bofors weapons systems, Ericsson communications systems, etc., etc., etc. They produce some of the highest quality products in the world. These companies aren’t leaving, although the wages they must pay are very high.

The Swedes took a huge hit when they lost their shipbuilding industry to Asia in the 1970’s due to high production costs, including high worker wages. They learned from this. They paid the redundant workers 90% of their pay, assessed their skills, offered them free schooling and paid for their relocation, then integrated them back into the workforce and these workers become taxpayers once again. Many were schooled in robotic manufacturing and other work that was in demand at the time. They adapted immediately. It was deemed less expensive than allowing these workers to go idle, collect welfare for their families, indulge in self-destructive behaviour, end up in jails and hospital ERs.

We need to take a look at what these countries are doing right and bring it home.

@Espiritus_Corvus ~But that’s Socialism!

@jerv I know! Well, Social Democracy, actually. I never dreamed a guy like Bernie Sanders would ever make it this far in American politics in my lifetime! The people are changing ever so slowly. We haven’t seen anything like this since Adelai Stevenson in ‘48. Bernie probably won’t make it all the way, but a very strong message has been sent.

The solutions and models are out there. For example, an amazing guy died last week. Helmut Schmidt, a Social Democrat and economist, who brought Germany into economic the post-WWII economic health you see today by increasing the Republic’s investment into the health, education, and welfare of it’s own people—opening up free universities and trade/technical school, increasing pensions and unemployment payouts, etc. He went against all the industrial doomsayers and today Germany is the economic powerhouse of Europe. Gee, who knew? Americans need to take a good look at his administration and what they did to accomplish this and stop listening to Wall Street’s bullshit.

We don’t have to re-invent the wheel to become a better America for Americans. All Americans.

@Espiritus_Corvus It stands to reason. Sanders’ positions are pretty mainstream by EU standards. The fact that many Americans consider him extreme should tell you how far we’ve drifted from the rest of the industrialized world. It’s almost like they evolved past where a nation that hasn’t existed nearly as long has; like they are adults and we are petulant children.

@jerv I know. The European community has been scratching it’s head over us for a long time. They really do see us as petulant, privileged children. I always had the feeling they liked us when I lived there. Being American was a free ticket to a lot of things. But there was the caveat: We have a reputation for having fun, we’re fun people to be with, not bogged down by that old, crusty, Euro-intellectualism. We gave them Jazz and Rock ‘n Roll and very little philosophy… along with the threat of nuclear war with them in the middle of the battle ground between Warsaw and NATO. We are seen as lucky, naive, energetic and innovative. But also like a four year-old with a .45 in a room full of adults.

So, what’s your point, @Cruiser?
Shipping is cost prohibitive or expertise makes American products worth more than the shipping costs?

I wasn’t being flip with the “wrap your mind around that” comment. I find it hard to wrap my mind around it.

@ibstubro I guess I did not finish my point…when companies and their employees become complacent and not as aggressive as they need to step it up to provide goods and services on time and at a fair market price, overseas companies in China, Vietnam, Korea, Indonesia etc. are laying in wait to provide a cheaper and inferior product. What exacerbates this dynamic is trade imbalances. Trump is spot on about the need for better stronger trade deals that diminish the cost savings of sending production overseas.

@Cruiser Yes, but those trade deals often have side effects. For instance, I strongly oppose the TPP based on the effects it will have on intellectual property; like the EFF, my biggest concerns about it have nothing to do with economics. Of course, most people don’t think that it will affect them until it does by which time it’ll be too late, but if you’ve ever done something as mundane as ripped a DVD to put onto your phone/tablet, then the TPP could become quite relevant to you real quick. We won’t even get into how it will stifle innovation except to say that those who make money off of the status quo already often have enough resources to stifle/quash anything that affects their profits and the TPP removes what little protection the true innovators have left.

It’s also funny that one of my previous employers did much of their business with overseas customers, so they actually prosper when the dollar is weak against the yen; their Japanese customers (who account for about half of the revenue) stock up by buying low.

Food for thought

Great article, @jerv.