National Manufacturing Week: Coexisting, surviving and thriving

Coexisting, surviving and thriving in a global economy was the underlying theme presented by a prestigious group of speakers during National Manufacturing Week.

By Ken Schnepf

Coexisting, surviving and thriving in a global economy was the underlying theme presented by a prestigious group of speakers during National Manufacturing Week, March 21 to 23, in Rosemont, Ill. The recurring message was that we should embrace rather than ignore global trade. The following summary of some of the speakers’ remarks explains why.

U.S. reliability

U.S. Commerce Secretary Carlos Gutierrez offered insights on how our willingness to engage in a global economy makes us stronger. “Our economy is a testament to world trade,” he says.

Last year, U.S. Gross Domestic Product (GDP) grew 3.5%. Comparatively, GDP grew 2.9% in Canada, 2.8% in Japan, 1.5% in France, 1.4% in the Euro-Zone, 0.9% in Germany and just 0.3% in Italy during 2005.

The U.S. unemployment rate is 4.8%, which is lower than France’s 9.2%, Germany’s 9.1%, Italy’s 7.5% and Canada’s 4.8% unemployment rates, he says.

One out of every five factory jobs is related to global trade. The U.S. economy is growing at the fastest rate in a decade and is the world’s largest trade market, he says.

“There seems to be a theory that we can keep our standard of living by walling off our economy and eliminating competition,” says Gutierrez. “History shows this does not work. Countries that trade grow faster than those that don’t.”

Foreign market assets

“The United States has only 5% of the world’s population,” says James Owens, chairman and CEO of Caterpillar. “That means 95% of potential customers are located outside this country … trade liberalization brings more and more of these people into the global economy. As their quality of life improves, they become potential consumers of the products you provide.” He spoke on the realities and rewards of globalism.

If trade barriers are adopted, then access to these prospective customers is restricted, Owens says. Turning inward is not the answer. A globalization study by the Institute for International Economics shows that a half century of gradually opening markets has generated $10,000 of additional yearly income for the average American household. Future policy liberalization could add another $5,000 per household annually.

“Today we have a new field of entrants to the global stage — not just China, but India, Russia and the countries of Southeast Asia and Eastern Europe. These new economies are young and fragile,” says Owens. “They need a champion — a leader and a mentor — as they take the important steps toward openness and liberalization. If that champion is not the United States, then who will it be?”

Overseas performance

Further emphasizing similar points, Jack Perkowski chairman and CEO, ASIMCO Technologies, says “The economies of China and the U.S. are now so closely linked you can’t talk about one without the other.” China is currently the largest investor in the U.S. economy.

ASIMCO Technologies was recently named one of the 10 best employers in China. The keys for doing business in China, he says, are that everything is possible, but nothing is easy.

“China is roughly the same size as the U.S. If you look at the next top three economies – Germany,France and Great Britain they all fit in the state of Texas,” says Perkowski. “This is significant because for the first time an economy is emerging that is the same size as the U.S.” (Russia was primarily a military competitor, not economic.)

Automation efficiency

To compete in a global economy, optimize automation for high value, not volume, advises Mike Santori, business and technology fellow at National Instruments. Adapt to customer needs and be flexible. Focus on how you can optimize production operations without relying on specialized tools.

“You have to understand the role automation plays in your competitive position,” says Santori.
Automation has increased plant efficiency and worker output. Additionally, industry standard technologies have increased plant productivity. Find and analyze inefficiencies and optimize performance through faster throughput, higher yields and increased systems.

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