Made in the USA yeah right

It seems as if the country that used to make everything is on the brink of making nothing. In January, 207,000 U.S. manufacturing jobs vanished in the largest one-month drop since October 1982. U.S. factory activity is hovering at a 28-year low. Even before the recession, plants were hemorrhaging work to foreign competitors with low-cost labor. And some companies were moving production overseas.

But manufacturing in the United States is not dead or even dying. It is moving upscale, following the biggest profits and becoming more efficient, just as Henry Ford did when he created the assembly line to make the Model T car.

The United States remains by far the world’s leading manufacturer by value of goods produced. It hit a record $1.6 trillion in 2007 – nearly double the $811 billion of 1987. For every $1 of value produced in China factories, the United States generates $2.50.

So what is made in the U.S.A. these days?

The United States sold more than $200 billion worth of aircraft, missiles and space-related equipment in 2007, and $80 billion worth of autos and auto parts. Deere, best known for its bright green and yellow tractors, sold $16.5 billion worth of farming equipment last year, much of it to the rest of the world.
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Then there are energy products like gas turbines for power plants made by General Electric, computer chips from Intel and fighter jets from Lockheed Martin. Household names like GE, General Motors, International Business Machines, Boeing and Hewlett-Packard are among the largest manufacturers by revenue.

Several trends have emerged over the decades:

The United States makes things that other countries cannot. Today, “Made in U.S.A.” is more likely to be stamped on heavy equipment or the circuits that go inside other products than the televisions, toys, clothes and other items found on store shelves.

U.S. companies have shifted toward high-end manufacturing as the production of low-value goods has moved overseas. This has resulted in lower prices for shoppers and higher profits for companies.

When demand slumps, all types of manufacturing jobs are lost. Some higher-end jobs – but not all – return with good times. Workers who make goods produced less expensively overseas suffer.

Once this recession runs its course, surviving manufacturers will emerge more efficient and profitable, economists say. More valuable products will be made using fewer people. Products will be made where labor and other costs are less expensive. And manufacturers will focus on the most lucrative products.

Boeing announced last month that it was cutting about 10,000 jobs. At the same time, workers were streamlining the wing assembly for the 737, the company’s best-selling commercial plane, said Richard McCabe, a mechanic for 10 years and former Machinists union shop steward.

He and his co-workers at the factory at Renton, Washington, were asked about three and one-half years ago to figure out how to switch from building wings in huge stationary jigs mounted vertically, “the way things have been done here forever,” to “one-piece flow,” assembling them horizontally on a moving line similar to the way automobiles are constructed. The new process is set to begin by the end of the year.

“I won’t go to the wing,” McCabe said. “The wing will come to me. It’s going to save them millions in scrap and rework.”

McCabe said there had been a lot of initial resistance on the shop floor, but Boeing’s increased outsourcing – including the outsourcing of wing production for the new 787 to Japan – helped change workers’ minds.

“I told the guys, it’s development or die,” McCabe said. “If we can get this done, it assures us the future.”

About 12.7 million U.S. workers, or 8 percent of the labor force, still held manufacturing jobs as of last month. Fifty years ago, 14.6 million people, or 28 percent of all U.S. workers, were employed in factories. The numbers – though painful to those who lost jobs – show how companies are making more with less.

Still, the perception of decline is likely to grow as factories and jobs vanish and imports rise for most goods we buy at stores.

Thirty years ago, U.S. producers made 80 percent of what the country consumed, according to the Manufacturers Alliance/MAPI, an industry trade group. Now it is about 65 percent.

U.S. factories still provide much of the processed food that U.S. households consume, everything from frozen fish sticks to cans of beer. And U.S. companies make a considerable share of the personal hygiene products like soap and shampoo, cleaning supplies and prescription drugs that are sold in pharmacies. But many other consumer goods now come from outside the United States.

Via:iht