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Turfscape (42.48)

A Manufacturing Beer Summit

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December 16, 2009 – Comments (2) | RELATED TICKERS: HOG , PG , GT

The White House will be hosting a meeting today (Wednesday, December 16th) of a dozen CEOs of companies in the manufacturing sector. Vice President Joe Biden, along with the Secretaries of Commerce, Labor and others, will discuss the administration's commitment to U.S. manufacturing and its importance for keeping the middle class alive.

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Now, I support a robust manufacturing sector for the U.S., of course. But, I'm a bit cynical by nature. What purpose could a meeting like this actually serve other than photo opportunities? What new information would come of such a summit? Obviously these CEOs (many of whom I respect) want fewer regulations, a better trained workforce, and lower corporate taxes. No surprises there. But what the WH can accomplish is extremely limited. Any impact from the Executive Branch, or Congress, would be nothing more than lip service.

The real turnaround for U.S. manufacturing lies with these CEOs, not with the Obama (or any other) administration! Looking at the list of CEOs attending, Keith Wandell of Harley-Davidson is one I have been following closely. He started in May and has jumped full bore into turning around HOG's manufacturing woes. He stared down the Union in York and made it clear that if HOG is to remain viable and return to peak production, then the current processes must not remain. He did not demand pay cuts or reductions in benefits...he demanded greater flexibility! It's not about pure pay and raw material costs. It's about the ability to scale operations to meet market demand at any time. It's about improving new product cycles. It's about implementing new improvements quicker and easier.

For far too long, corporations either gave in to the demands of Unions (labeling themselves as "Union Friendly" in the process), or they viewed Unions as "the enemy", a commodity, and refused to treat the workers as a resource. Yes, HOG has cut a good number of its manufacturing workforce, but in doing so it has created a stronger partnership with the Union. HOG wants manufacturing to increase. HOG wants those workers to provide high quality, to be well-trained, and to enjoy their job. The Union was given the option of partnering to achieve those goals...and they overwhelmingly accepted.

The true renaissance of U.S. manufacturing will occur when the majority of these corporations change the CULTURE of their manufacturing...not the payscale. In a leaner, more flexible manufacturing environment, each worker will provide more value to the company and the product. This will lead to greater reward (both monetarily and in job satisfaction), which will lead to greater competition for these jobs....a greater desire for new workers to get into these jobs, which will lead to a desire for more education and training PRIOR to getting these jobs.

Difficult and courageous steps will need to be taken, much like Wandell has been doing. I will be watching HOG anxiously over the next 3 years to see the results of these changes.

What do you see for the future of U.S. manufacturing?

2 Comments – Post Your Own

#1) On December 16, 2009 at 1:01 PM, Turfscape (42.48) wrote:

You can read more on HOG's efforts with their York manufacturing facility HERE

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#2) On December 17, 2009 at 10:01 AM, Turfscape (42.48) wrote:

So...what came out of this meeting yesterday? An extension of a "green manufacturing" tax credit.

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Seems to me that the meeting was indeed a photo opportunity, as the WH had a pre-planned announcement that appears to have very little to do with the CEOs that attended (I don't see Goodyear, Harley,  P&G being able to take advantage of such a tax credit...).

I'm glad the tax credit is there...reduces hurdles to ramping up production of new technologies, etc...but, it just seems to me that if you get a dozen CEOs in the room, maybe listen for a while instead of just announcing something that could have just gone out in a press release!

Meh, maybe it's just my cynicism.

Thoughts?

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