“The mills and smelters that supply the raw material, and that would directly benefit from the tariffs, have been shrinking for years. Today, those industries employ fewer than 200,000 people. The companies that buy steel and aluminum, to make everything from trucks to chicken coops, employ more than 6.5 million workers, according to a Heritage Foundation analysis of Commerce Department data.”
A nice scenario’ing of brining manufacturing back to the US, told through Under Armour. For example, with factory-automation and higher labor prices, you don’t end up hiring 1,000’s of people:
Plank has lamented that we’ve been making clothes the same way for 100 years, and he hopes to change that with the innovation happening at UA Lighthouse. But a huge innovation in the footwear industry, as in other industries, is automation. Adidas now has two Speedfactories, its automated robot-helmed sites. According to Fortune, these only require 160 employees, cutting out many of the humans formerly needed for this kind of factory work.
Plank is fully aware of this tradeoff. When asked about creating jobs in the US, Plank told Footwear News, “It’s not pegged to have 175,000 of those jobs come back to America. I just wonder if there is a way that we can be more thoughtful, creative, and innovative. What if we could bring 100 of those jobs or 500 or 1,000 or 10,000 here?”
The summary is: on shoring manufacturing will create jobs, but probably much less than “like back in the good old days” notions. Further, in the overall retail system, it’ll require much investment and change.
As ever, for an administration that wants to “shock the system,” it fits what’s on the tin. Get some rubber shoes.
At a fast-fashion retailer such as H&M, a simple cut-and-sew top can cost as little as $15. At Gap, something similar might run about $45. At Elizabeth Suzann, a small fashion label based in Nashville, Tennessee, one of the brand’s minimal kimono-sleeved t-shirts, made of cotton twill, is $140.
This seems like the kind of analysis that’ll be handy in the up-coming trade wars.
[Michael Dell] said that production plants in foreign countries are largely there because that’s where plants have been developed and have ready access to computer device components, including batteries, semiconductors and other supplies. “Building a final assembly plant in the United States is actually quite easy. But that’s not really the point,” he said. “The point is that without the feedstock industries… the components… that plant would be uncompetitive. So we need to have a thoughtful approach to those feedstock industries.”
A nice discussion that highlights the complexity id trade policy and, thus, rhe high risks of fucking it up. I like this critique of trade criticism:
What makes Navarro’s critique challenging is that it’s not wholly wrong, at least from the American worker perspective, yet it’s not particularly actionable.
So often, that last part is overlooked: you have to actually be able to on something, despite the past. Until we have time machines, finding flaws and suggesting how we should have fixed them is little use on its own. Sure, you need a good analysis of history to figure out what to do next, but it’s deciding what to do next, and doing it, that count.
“What’s enterprise software?” manufacturing edition at #ibmpulse. Using IBM’s Maximo to get an old factory floor troubleshooting manual on an iPad at Honda.
As we emerge from the aftermath of the flooding, we are mindful of coming back with a more robust supply chain model that seeks to disperse in-house and supplier risks across geographies and factory locations. This dispersal of volumes across a wider geographical area will contribute to some structural and logistical cost increases which should be recovered from customers in order to maintain the continuing investment required in what is a high-technology and capital intensive business. An unanticipated benefit of our recovery activities is that we are taking advantage of the downtime to improve process efficiencies and cycle-times.