Manufacturing is Not Dead
Last month the TMA and ACG had a great joint program featuring Harvey Rosenbloom, Senior Vice President and Director of Research for the Federal Reserve Bank of Dallas and Associate Economist for the Federal Open Market Committee. Harvey, as always, gave a great talk. I found his outlook for the economy to be very reassuring and upbeat. I did find one thing troubling. During the Q & A someone asked about our GDP, which is 20% manufacturing, and whether that was a “good” percentage. Mr. Rosenbloom replied that zero percent was just fine with him. Mr. Rosenbloom made the analogy. If Plano were a separate country and its only industry were EDS (an entirely service based economy) , would that be a problem? In that case maybe not, however in our real would I think it presents a problem. A couple of issues come up right away:
National Security: Our technology and manufacturing sectors must remain strong for our military to remain as strong as it is today.
Service sector support for Manufacturing: Take EDS for example would EDS be where it is today without GM and other pure manufacturing companies business?
If the 20% of the GDP was to be totally outsourced to China and India, a large number of the service sector jobs would also be eliminated.
This made me think about the state of manufacturing in the US. I did a little research. How much do you think manufacturing production has declined over the last decade? None it has increased by 40%! It is not dead, just changing. BMW, Honda, Toyota,etc. are building new plants here while at the same time most of the things we buy at a WalMart are being imported. The Semiconductor lines being built in Asia are made in the USA as is the construction equipment building the plants. Just about everything is in a state of flux, and in that lies a world of opportunity.