TRAVERSE CITY, MI – The much publicized off-shoring of manufacturing jobs to China and other low-cost manufacturing areas is being seen as a bigger boogieman than it deserves, argues Ernest Miller, vice president-automotive, Capgemini.
Speaking at the Manufacturing Efficiency and Quality session at the Management Briefing Seminar here, Miller argues that automation and productivity improvements historically have had a far more devastating impact on manufacturing job losses than off-shoring – and that’s a necessary trend that is likely to continue.
In other words, if manufacturing jobs are disappearing in an industry, it doesn’t necessarily mean the industry is dying.
Miller points to the steel and coal industries – which have lost hundreds of thousands of jobs since the 1960s – and whose production is higher now than it was then.
The U.S. steel industry produced 100 million tons (90.7 million t) of steel with 600,000 workers in the 1960s, he says. It now produces a similar amount with only 150,000 workers, thanks to the popularity of so-called mini mills and process and productivity improvements.
The same happened with the coal industry, which now produces more than twice as much coal as it used to, with a fraction of the workers.
The success of the Japanese transplant auto makers shows the U.S. still can be an efficient low-cost site for manufacturing, he says.
Resisting productivity enhancing moves, from new technology to lean manufacturing techniques, actually will destroy more United Auto Workers union jobs, Miller argues, because it will give a greater advantage to the mostly non-union transplants.