Lose manufacturing base---Engineering will soon follow 2

[Ron07663]

In a recent interview, a Siemens CEO stated, "If you give up your manufacturing base, sooner or later you have to give up your engineering and R&D as well."
(See

http://wwww.thenewfrance.com)

In the USA, manufacturing has been on decline for many years, and now it is apparent that Engineering is also starting to go off-shore. So, this agrees with his comments.
He further states that,"Unlike other countries...France has maintained its manufacturing base."

Why do some countries value manufacturing/Engineering while other countries forgo this for the "service" sector?
Is shedding of the industrial base just the normal evolution of an advanced society or symptoms of the beginnings of the decline?

 

[davefitz]

I guess it depends on how you define "decline". If a society can obtain the same amount of goods and services by simply sitting on its butt all day versus the case that they work 12 hrs a day at a dull job , it will normally choose the former. I am not sure if that is a decline, but it is a change, and in some important ways the society is weaker as a result.

The probable reason France has not yet evolved in that directin to the same extant as others may be that the foreign countries that France has influence over ( Africa, Mid east) have not yet demonstrated that they can sustain an industrial economy.

 

[GregLocock]

Yup, and when you stop making horse drawn buggys then you pretty soon stop making buggy-whips.

Germany doesn't seem to have this problem, and has no colonial states to speak of to provide a buffer.

I honestly believe it is partly laziness/greed, and partly (especially in the case of the UK) that the Establishment does not much like industry or trades.

I've worked in a couple of companies where we manufactured as well as providing "out-source" design and development services to other companies. There is no doubt that in both cases we provided a better consulting service than the non-manufacturing consultancies, partly due to Been There Done That, partly due to a wider exposure to other vendors, and partly, obviously, because we had more resources to call on.

I suspect a similar experience applies at a national level.

In Europe an engineer's job has tended to be itinerant, perhaps it is time the USA woke up to this trend. There's a million factories in China looking for advice. Anyone who has read "The Goal" could probably double the productivity of the average Chinese factory in a month.


Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[chris9]

I watched a documentary the other night about Sheffield in the UK. Sheffield used to be known as 'steel city' and most people who lived in the city were in some way dependant on steel making and manufacturing.

There is a well known film 'The full monty' and this was about some lads trying a new career as strippers when their factory was closed down. For years I thought that Sheffield had little future in steel making and I was suprised to learn that in fact steel production output is as strong now as it ever was. The only difference is that just a fraction of people are required to produce much higher volumes.

 

[moltenmetal]

You're asking some pretty fundamental questions and I don't have the answers. I'm interested to hear from anybody who does!

Here are some of the issues I see:

1) Automation and mechanization result in the need for fewer people to produce the same quantity of goods- even when you factor in the work associated with making the machines. If you want to employ the same net number of people, then society has to consume MORE goods to do so. Hmm- isn't this basically a geometric pyramid scam? And who benefits from this arrangement- and who loses? And is this trend limited merely to the production of goods, or does it extend to services like engineering?

2) Manufacturing is a key economic engine in all the western economies. If manufacturing shifts offshore, where will western economies find the funds to continue purchasing manufactured goods from offshore, regardless how cheap the labour is there?

3) If manufacturing goes offshore, why is it that engineering, R&D etc. would stay in the western world?

I see several things happening:

1) The standard of living in the western world falling with a reduction in their manufacturing capacity

2) The standard of living in the developing world rising with an increase in their manufacturing capacity

3) A net increase in worldwide economic activity

4) An overburdened planet choking in its own filth due to massive increases in consumption by huge populations

5) A new equilibrium established between the developed and developing economies, with the developed world being big losers in this process

6) Rich people in both locations getting very rich indeed, with an uncertain future for the rest of us

 

[davefitz]

greglocock:

I am not too sure one can state that Germany has not exported jobs. It was Siemens itself that led the way to export german jobs to the US ( via the Westinghouse buyout) and to China ( new joint ventures in telecom). The problem they faced was very high labor costs in Germany, inlcudig issues related to long vacations, extended unemployment responsibilities, and pensions. The sellig point abut sending jobs to the USA was that it was far easier to fire a US worker than a gernman worker.

Moltenmetal:

Most of your reply is correct, but there are different ways of viewing the same result. If "standard of living" is synonymous with consuming large amounts of resources, then it is probably correct to state that the western developed world will soon see a decrease in its "standard of living".

There seems to be an inherent dampener on how fast the rest of world can increase its "standard of living", in that there is now seen to be a limit on oil prduction rates, and other fossil fuel resources may also soon have their production rates limited due to the newfound cause of all the world's woes, "global warming".

If one is able to uncouple one's status and social definition of happiness ( aka the american dream) with conspicuous consumption, then an eventual decline in per capita consumption would not be met with so much trepidation. But since the relative "standard of living" is also tied into the relative strength of a country's military and economic power, there will always be an organized attempt to maintain a country's maximum rate of consumption.

 

[ghghghgh]

moltenmetal,

My field is structural so my perspective is slightly different, and there are a lot of macro forces at play here so I don't have the answers either, but here are a couple of counter points:

Considering the enormous barriers to development facing some countries that may never be entirely overcome, true economic parity seems unlikely. Particularly, abundance and access to natural resources, climatic disparity, vulnerability to natural disasters, and geographic constraints like access to ports, navigable waterways, arable land, etc. are all key factors to economic growth. I just don't see Chad ever being on par with the US in standard of living, although I agree some “leveling” of the playing field is inevitable.

I apologize to Chadians as I could have used any number of nations as an example.

Also, I’m not totally sold on the premise that the loss or reduction in manufacturing imposes irreparable harm to an economy. I don’t know how much these industries comprise the US economy but tourism, transportation, government, medicine, education, military, entertainment, banking, retail, mining, defense, pharmaceuticals, services, forestry, construction, politics, agriculture, all have elements that can’t be outsourced. Now, are these industries or economic activity creators “net loss” to a local economy in a global environment and thus doom the economy, I don’t know. I’ve read that manufacturing is the only true economically additive industry, but I am not entirely convinced of this either. Additionally, as the pendulum swings and costs rise in developing countries, manufacturing may become economical in the developed countries again. So, could this be economically healthy in the long term to allow this to happen? Of course, this would be a highly unpopular political position and the unions would certainly opine differently.

How many times can one person use economy or some derivative thereof in one post?

Am I just naïve?

Thoughts?

 

[epoisses]

France has to let go their manufacturing base as well. The other day I saw a news item about a socks factory that cannot cope with chinese competition anymore. Workers ask for state protection of their overly expensive product.

Nobody seems to realise that when the French can buy their pair of chinese socks at, say, 1 Euro instead of 10 for French, they will save money for more sophisticated, luxury things like, random example, swimming pools. This is called increase of standard of living and will create demand and employment again.

There is no such thing as permanent unemployment because of too high salaries. Anybody who loses their job because of an increased standard of living simply has to adapt to the new jobs that are created. Stop worrying about this natural phenomenon, guys......

 

[epoisses]

to ghghgh,
You're not naive. I'm not an economist, but according to a brilliant book I read, there only few reasons why you would want to keep manufacturing a product in your country if it cannot be done very cost-effectively. There can be strategic reasons, like for defense equipment, but hardly any other valid reasons.

 

[ScottyUK]

No one has yet mentioned that France's government has a large stake in French industry, including manufacturing and utilities. Two of the big French automotive companies are tied pretty closely to the government. The excellent rail system is state-run. The power industry is state-run. Etc.

So far as I can see, the country invests inward quite heavily. The taxation in France is quite high, but the public services are good. Those services are largely of French origin and paid for with French money.


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If we learn from our mistakes,
I'm getting a great education!

 

[makeup]

France is an excellent country from a UK prospective. Its big, it has a great climate, it has space, property is cheap relatively, it has great food, wine, and its women are beautify. And despite what people say, its denizens are great. Knock it if you can. I give full respect to the french because they stand up for what they believe.

 

[EddyC]

The engineering being done by manufacturing companies to design their products is second only to that done to design military products. Sometimes, they are one and the same. When manufacturing goes offshore any engineer should be concerned.

 

[ScottyUK]

makeup,

I wasn't criticising the French way of doing things - if it came over that way then I need to take more care with my scrawl. There is much to admire about France: for example, it is a shame the people responsible for the TGV can't run the UK rail system. It is a disgrace that the country that invented the railway has a system which combines high cost and poor service, while just a few miles over the channel is a world-class system.


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If we learn from our mistakes,
I'm getting a great education!

 

[makeup]

No offence taken, sorry if I came across as if there was. The problem with us in the UK is well putting it bluntly, we didnt get bombed enough during the second world war. Had we then the old railway systme would have had to be rebuilt.

 

[DonPE]

makeup,

"The problem with us in the UK is well putting it bluntly, we didnt get bombed enough during the second world war'

That's a pretty sick line of thinking.

 

[ScottyUK]

makeup,

I disagree: the mess we are in is a result of years - decades - of under-investment by central government. It is an unending source of amazement that the UK can always find money to send overseas for all manner of reasons - from aid to africa to invading Iraq - yet we can't find money to invest in our own country. Once our own problems are sorted out, then we can start fixing everyone elses.

Regarding WW2: had we been bombed more, we might well have lost the war. None of us would be free enough to be making off-the-cuff remarks on an Internet site.



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If we learn from our mistakes,
I'm getting a great education!

 

[DrillerNic]

Makeup- the UK got bombed quite enough in WW2...

The problem with the UK is that the gneral population want a European Social Democracy (free healthcare, free schools, good & cheap public transport) with US levels of taxation. You can't square that circle!

Until a UK polititian is brave enough to stand up and say that to the UK media and to the general population, instead of doing the ususal thing of promising increased spending and tax cut with "efficiency gains", things won't change...perhaps with the showing of the Liberals, the UK electorate may be growing up and reallising if you want it you have to pay for it!

 

[makeup]

Valid points and while it might be a contraversal point I made, look at places like Plymouth where there was a lot of distruction leaving no choice but to totally rebuild and not patch up. Please don't think that I am suggesting that there wasn't enough suffering for my liking, this is not my point. I can remember seeing a well documented program that sited the same point. It looked at cities across europe that had been extensive distroyed during the war and made comparison to the UK where relatively we got of lightly. Those cities have move on significantly and the infrastructure in modern and up-to-date while in the UK we are held back by old systems and over congestition, which makes it impossible make much needed change.

 

[epoisses]

Yes, the French state invested quite a lot in railways and cars manufacturing, but Renault for example in the 70s/80s used to be as sick as Rover is now, and was artificially kept alive. Now that the state is actually very slowly taking its almights hands off the industry, Renault appears to finally have become competitive and cost-effective and can now compete with the Japanese and Korean in "neutral" (non-car producing) countries like South-Africa. That used not to be the case at all.

Not everything in France works well. Railways are great. Energy companies are good. Mail is mediocre. Banks are absolutely hopeless. Many good things are direct result of governement involvement, many bad things too. I hate it when the government allows or even encourages people to spend their precious time, getting back to the example, producing socks that any Chinese can produce much more cost-efficiently.

 

[arunmrao]

I just received this in my mail box. "So you want to be an engineer" Part 1 by Mark Delvin

http://news.thomasnet.com/IMT/archives/2005/05/so_you_want_to.html?WT.mc_t=upd&WT.mc_n=E_505I