“We are becoming a legitimate, export-oriented country.”
So said Chris Kuehl, economist for the Fabricators & Manufacturers Association, at yesterday's economic forecast breakfast at FABTECH 2011. Judging by the high traffic today at the show—evidence of a major resurgence in capital equipment spending—his point carries some weight. The weak dollar has helped exporting companies gain a foothold in foreign markets, he said, and once these midsized manufacturers prove themselves in those markets, they can stay in them and grow. This, he added, is one factor that has been driving America's manufacturers, many of which are growing much faster than the overall economy.
And it may be why the show floor is so busy. The crowds here belie an economy only projected to grow by 1.8 percent in 2011. Japan's earthquake shook supply chains. Storms from earlier this year have reduced oil refining capacity. Despite it all, metal fabricators are out in force and looking to buy. The shale gas boom continues. Aircraft orders are up. Things are looking good.
Still, yesterday's keynote panel of several manufacturing executives focused briefly on broad economic issues, but the discussion quickly diverted to an old problem: The skilled labor shortage. One attendee asked a poignant question: With employment so variable in manufacturing, the question about company as well as employee loyalty came into play. As just one example, one welding instructor said that during the recession only 30 percent of his students could find jobs. Now all of them can, and he can't teach enough of them for local industry.
David Lazzeri, president of DuPont Powder Coatings North America, describe this as a two-pronged problem that has been building for years. First, young workers want to be mobile, to move around from job to job. At the other end, though, he said that “manufacturing has 'variablized' its workforce” by contacting work out, hiring temps, or by other means.All the talk and effort of “getting labor cost out of a product” may be backfiring during this current time of growth, when shop owners continue the call for good help. As manufacturing becomes more sophisticated, it needs people to build, operate, and troubleshoot those machines. In a sense, labor has gone out of the product--but into manufacturing technology.
Even though manufacturing seems to be driving economic growth, those on Capitol Hill seem to be woefully uninformed about what industry needs. That's according to Rep. Don Manzullo, R-Ill., who gave Monday's keynote. He attributed this in part to the view that America has “moved on” from manufacturing. Factory workers in previous generations sent their children to college in the hopes of giving them more opportunity—at least that's the stereotypical story. Being the first one in a family to go to college is as American as you can get. That mindset has remained, he said, even though manufacturing has moved on to an entirely different world, one that needs technical professionals who can take charge and advance up the career ladder. An added bonus: They don't need tens of thousands of dollars in student loans to do it.
Manzullo recalled one business council meeting in Illinois in which several business leaders wanted to attract not manufacturing, but “technology related industries.” Manzullo said nothing, but wanted to say, “'Don't you know they're the same thing?'”
He paused, shook his head, and added a coda. “We need to change the minds of an entire generation.”