By Jack Healy, Director of Operations, Manufacturing Advancement Center, [email protected]
Why save manufacturing? Why don’t we just let it go, as we did with textiles and shoes? These questions were asked by a caller into a recent WPI Venture Forum Radio Show. We were surprised that such a question even needed to be asked. But on reflection we realized that only 10% of our total labor force works in manufacturing; as a result, the public’s exposure to the industry is limited. This, coupled with a deluge of media reports about outsourcing and continued stories of contraction within the industry, provide an environment that makes the question quite appropriate. Why save manufacturing?
The answers are best formed as questions. For instance, who will replace the $30 billion plus dollars in Gross State Manufactured Product that manufacturing currently contributes? Who will create 330,000 new jobs to replace the current workforce at a compensation rate of $56,000 per person? Who will replace the $20 billion dollars in manufactured exports and the wealth that they create, as well as all of the other jobs in trade that they support? Add to that the economic multiplier for manufacturing which means the industry supports 2.7 jobs for every manufacturing job. So, who will replace the 900,000 additional jobs in our state that manufacturing supports? In other words, when you read about the closing of a manufacturing plant with 250 employees, you are really reading about the loss of approximately 1000 jobs for the state.
If Massachusetts were to lose manufacturing, the state would actually be facing the loss of 1,200,000 jobs. Outside of Boston, where manufacturing accounts for over two thirds of the wealth-creating economy, we would be looking at a loss that is the equivalent of Vermont without the cows. And there would be plenty of scenic space available for viewing as the properties of over 8,600 manufacturing establishments would be coming onto the market!
Additional Costs The loss of manufacturing would also affect the public in other ways. For instance, the loss of manufacturing and its industrial energy consumption would leave energy providers no recourse but to pass on significant rate increases to cover their costs with the remaining utilization. The same case can be made for medical coverage. In addition, over 50% of the R&D work with in this state is related to manufacturing, the loss of which would affect the entire R&D sector.
In today’s economy, there is widespread awareness of the importance of high tech in economic development. Yet such technologies as medical devices, electronics, instruments, and computers are all developed, produced, and brought to market by a manufacturing base. Bottom line, no manufacturing = no high tech.
Cornerstone of the Economy The Department of Commerce acknowledges that manufacturing is a cornerstone of the U.S. economy. It is also a cornerstone of the Massachusetts economy and one that we cannot do without. According to the Department of Commerce, "Manufacturing matters to jobs, rising productivity, and higher standards of living, all of which improve the quality of life."
Yet it should be realized that this cornerstone which contributes so much to our economic base is now in serious trouble. Despite being 20% more productive than the average state, the Massachusetts manufacturing base is increasingly unable to maintain competitive prices while absorbing continued cost increases for materials, labor, healthcare, energy, taxes, etc.
In response to this deterioration, the Associated Industries of Massachusetts has put together an extensive list of common sense actions and proposals to address a range of policy issues that will specifically assist the entire manufacturing community. We hope that the community will support this agenda which seeks to gain the state’s attention regarding the needs of manufacturing and to increase the awareness of why we need manufacturing. This is an agenda that is applicable to any state. Hopefully the other New England states will see the need to do something to save manufacturing in their respective states as if manufacturing is to be saved it will need a broad based coalition. One state cannot do it all.
AIM Manufacturing Agenda 2005-2006 A.I.M. Manufacturing Institute Agenda
As part of its 2005-2006 Public Policy Agenda, A.I.M. will expand the scope of its Manufacturing Institute to help enhance the competitiveness of the Commonwealth’s 9,000 manufacturers, the great majority of which are smaller enterprises. Announcing plans to expand the Institute¹s agenda last fall, Richard Lord, A.I.M.’s president and chief executive officer, noted that while it is no longer exclusively a manufacturers’ organization, A.I.M. remains the dominant statewide organization for manufacturers, and takes the issues confronting them as seriously as ever.
To continue to promote the Economic Competitiveness of our Manufacturing community the Associated Industries of Massachusetts will:
Participate in a national coalition to get China to revaluate its currency, and the federal government to aggressively enforce existing trade agreements Continue to support the Massachusetts Defense Technology Initiative (MassDTI) to preserve Hansom Air Force Base and the Natick Systems Center.
Urge Congress and the Commonwealth to restore/maintain funding for the Manufacturing Extension Partnership (MEP) program.
Public Affairs Programs Supporting Manufacturing
Advocate for the appointment of a manufacturing director in the state’s Executive Office of Economic Development, as provided by current statute
Persuade the Legislature and the Administration to sponsor annually a high visibility statewide program celebrating the contributions of manufacturing to the state¹s economy
Encourage manufacturers to conduct plant tours of their facilities for the public and elected officials
Communicate with manufacturers, the public, and policy makers about issues and initiatives surrounding education and workforce development, and the need for an educated and skilled workforce
Continue participation in the Massachusetts Science & Technology Road Map and Strategic Alliance Study to inventory existing university/industry R&D work and to commercialize ongoing research Services Supporting Manufacturing
Support and publicize the Executive Office of Economic Development’s efforts to streamline the delivery of state services, programs and economic development incentives, and improve access to those programs and their utilization Promote A.I.M.’s Employers’ Resource Group offerings for training in Lean manufacturing, supervision, health and safety, productivity and customer satisfaction.
Provide technical assistance and encourage manufacturers to use the Commonwealth’s Workforce Training Grants Program, and the Express Grants Program for firms with 50 or fewer employees.
Urge manufacturers to take advantage of programs offered by The Alliance for the Commonwealth to help businesses enter or expand their international trade activities, and to identify cross-border affiliations, alliances and trade relationships
Promote the services offered by the Massachusetts Manufacturing Extension Partnership (MassMEP) and other statewide and regional service providers in such areas as lean manufacturing, innovation/technology transfer, and supply chain management
A few more organizations like this promoting an agenda such as this, will make all of the difference towards the future health of manufacturing in our country.
It would nice if we all stopped talking about saving manufacturing and started doing something about it.
