Back in the ‘80s I worked for a Fortune 500 company that had manufacturing facilities all over the place. They built massive things, like railcars, but they decided it was more profitable to stop creating products and start buying them elsewhere. At the time, this saddened me, even though I was all for increased profitability.
It seemed a bit penny wise and pound foolish to have invested in people and equipment for decades and then just stop. All that expertise down the drain. All those jobs gone overseas. All those people here in the U.S.—whole towns—idle. Seemed like a waste, even though items being manufactured had become commoditized and could be produced cheaper elsewhere.
There’s an interesting article by Andy Grove in Business Week that articulates the problem with more nuance. He says, “Not only did we lose an untold number of jobs, we broke the chain of experience so important in technological evolution. As happened with batteries (that are now being manufactured overseas), abandoning today’s ‘commodity’ manufacturing can lock you out of tomorrow’s emerging industry.”
I’m not sure there’s an emerging industry we’ll miss by not building railcars, but maybe. You don’t know for sure unless you continue to build them. But you do know it’s more satisfying to actually produce something, a physical thing you can touch and be proud of. And you do know it’s a good thing to create jobs, not lose them.
When you manufacture things, you also manufacture jobs.
Tags: B2B manufacturing, jobs