By Barbara Hagenbaugh, USA TODAY
ROCHESTER, N.Y. — Charles Seitz remembers
when Rochester was a bustling manufacturing town. Now, all
the 58-year-old unemployed engineer sees is a landscape of
empty buildings.
"There's nothing made here anymore," the former
Eastman Kodak employee says, his eyes welling with tears as
he talks about his struggle to find a new job. "Wealth
is really created by making things. I still adhere to that."
It's a situation that's been playing out across the country
for decades but has received increased attention in recent
years.
Fifty years ago, a third of U.S. employees worked in factories,
making everything from clothing to lipstick to cars. Today,
a little more than one-tenth of the nation's 131 million workers
are employed by manufacturing firms. Four-fifths are in services.
The decline in manufacturing jobs has swiftly accelerated
since the beginning of 2000. Since then, more than 1.9 million
factory jobs have been cut — about 10% of the sector's
workforce. During the same period, the number of jobs outside
manufacturing has risen close to 2%.
Many of the factory jobs are being cut as companies respond
to a sharp rise in global competition. Unable to raise prices
— and often forced to cut them — companies must
find any way they can to reduce costs and hang onto profits.
Jobs are increasingly being moved abroad as companies take
advantage of lower labor costs and position themselves to
sell products to a growing — and promising — market
abroad. Economy.com, an economic consulting firm in West Chester,
Pa., estimates 1.3 million manufacturing jobs have been moved
abroad since the beginning of 1992 — the bulk coming
in the last three years. Most of those jobs have gone to Mexico
and East Asia.
Last month, film giant Eastman Kodak — the largest employer
in Rochester and the central focus of the community since
the company was founded by George Eastman in 1888 —
announced it was shutting down an area plant and laying off
the 500 employees who make single-use, sometimes called "throw-away,"
cameras. The work will now be done in China or Mexico, two
countries where the company already has operations.
The movement of jobs to other countries angers Seitz the most.
"The United States got to where it is today by making
things," he says. "People are suffering, and communities
are suffering."
Four years ago, the materials engineer was laid off after
26 years at Kodak. It was right before Christmas, and he was
two months away from being eligible for full retirement benefits.
Seitz's father had worked as a toolmaker at Bausch & Lomb,
another major Rochester employer. After leaving Kodak, Seitz
found work at another manufacturer, but was laid off after
11/2 years. He's since worked a bit for his son-in-law's plumbing
business and is now collecting unemployment benefits.
Fearing for his job, Bill Williams, 56, took a buyout package
from Kodak in January after 27 years with the company.
"I don't see much future in manufacturing," says
Williams, who started out mopping floors and later ran a machine
that coated film. "It's too easy for them to move their
plants overseas."
Changing, not dying
Many in manufacturing disagree that the sector
is dying. They say it's just changing. The sector's output
grew for a decade through 2000 before weakening during the
economic downturn in 2001 that swept across the economy but
hit the manufacturing sector hardest.
And economists say the change in manufacturing, albeit painful,
is healthy for the sector and for the overall economy in the
long run.
"It's good for us to displace low-wage, manual kinds
of labor with higher-skill, higher-tech, higher-education-content
labor," says Federal Reserve Bank of St. Louis President
William Poole, who compares what's happening with the decline
in agricultural employment of the early 20th century.
"It's an ongoing process, but it obviously means that
people who fall behind in the accumulation of skills find
their incomes advance more slowly, and they suffer a greater
risk of unemployment," he says.
The Manufacturers Alliance, an Arlington, Va.-based group
that represents mostly large manufacturers across the USA,
is publishing a book next year: U.S. Manufacturing: The Engine
for Growth in a Global Economy. They argue the sector has
strong footing.
"Our economy is flexible enough, inventive enough, that
we'll find a way to keep a vibrant manufacturing sector,"
Manufacturers Alliance President Thomas Duesterberg says.
What the future looks like, according to the group, economists
and other industry watchers:
• High technology. Companies
will constantly be coming up with new products and new high-tech
ways to cut costs, with U.S. manufacturers leading the way.
Budgets will intensely be geared toward research and development,
a trend already underway.
At Kodak, a machine now mixes filmmaking ingredients
with precision. Ten years ago, it took 14 workers to do the
job — in the dark — a repetitive process asking
for on-the-job injuries and mistakes.
Few workers are seen at all in "Building 38," which
employs the highest level of technology at Kodak Park —
a sprawling 1,300-acre, 170-building complex dotted by smoke
stacks. Most of the people who are there watch computer screens
and closed-circuit TV monitors behind protective goggles in
control rooms.
• Development in the USA.
Most of the innovation will still happen at home, taking advantage
of the nation's highly skilled and educated workforce.
• Production abroad. Actual
production of those products will likely happen in other countries.
That's not just to take advantage of the lower labor costs
but also to position products in global markets. For example,
many U.S. companies are making or preparing to make products
in China, because they expect increased demand for consumer
goods in the quickly developing country as well as in other
parts of Asia. Making the products closer to the point of
sale reduces transportation costs.
• Fewer U.S. factory workers.
Many economists believe most of the manufacturing
jobs that have been lost are gone for good, especially repetitive
work on the factory floor. More job losses in the sector can
be expected.
• Cooperation. To quickly
build technology, U.S. companies will team up to do research.
Kodak, copier giant Xerox and Corning, a fiber-optics company
two hours south of Rochester, along with government and area
universities, are raising $300 million to build a research
center that will focus on "photonics" (technology
that harnesses light) and microsystems. Planners see the center
as developing technology that can be used in several fields,
including medical care.
• Constant education. To
keep up with the rapidly evolving technology, workers will
need to hit the books. "You're going to go to college
the rest of your life," says R. Thomas Flynn, president
of Monroe Community College in Rochester. In the past five
years, the college's program that provides training for companies'
employees, laid-off workers and those trying to learn a specific
skill has doubled to 20,000 students a year.
At Kodak Park, Charles Brown, head of global
manufacturing, continues to work on ways to make Kodak's operation
leaner. Two-and-a-half years ago, the company began a campaign
to boost productivity after seeing growth in output-per-hour
level off in the late 1990s, when most companies were seeing
the opposite. Since then, productivity growth has skyrocketed
and inventory levels have been greatly reduced.
Brown says his work in reducing waste, as he
puts it, is not done.
"There was a beginning, but there isn't
an end," he says.
Job
cuts announced
In the past 20 years, the Rochester area has
lost one-third of its manufacturing jobs. Currently, approximately
101,000 workers are in manufacturing, less than one-fifth
of the total workforce.
Kodak alone has slashed its local workforce
by nearly two-thirds in the past two decades, to 23,000. In
1982, 13.7% of area workers worked at Kodak. That's down to
4.2% this year, according to the Center for Governmental Research,
a non-profit consulting firm for state and local governments
in Rochester.
Wednesday, Xerox announced plans to cut another
165 area workers, bringing the company's layoffs in the region
to more than 1,000 in the last few months. Those who are being
laid off aren't just on the assembly line. Managers, marketing
executives and finance officers with high salaries are also
finding themselves out.
Lois Niland lost her marketing job at Xerox
late last month on a day that 530 workers at the company were
let go. "It felt like you've been hit in the gut,"
says Niland, 50, who has both an undergraduate degree and
an MBA from Cornell. Still, she's optimistic and is thinking
about starting a new company.
As the number of manufacturing jobs has declined,
entrepreneurs have helped keep the local economy afloat. In
the last 20 years, the number of jobs in the economy has jumped
nearly 30%. Until the recent surge in manufacturing job losses,
the area's unemployment rate was below the national average.
"It's hard to make the case that the economy's
in really bad shape," says Kent Gardner, director of
economic research at the Center for Governmental Research.
As in other parts of the country, most job gains
have been in the service sector. Today, a third of Rochester's
workers are employed in education, health care, check processing
and other service fields. Biotechnology is also emerging as
a key sector. The University of Rochester is the second-largest
employer in the metropolitan area. And thousands of small
start-up companies have emerged.
Many local manufacturers, including Kodak and
Xerox, offer employees large severance packages, including
money for retraining and job-search help, assisting workers
as they make the transition into new careers.
'Lifetime job'
For some, seeing a way of life disappear is
too hard to swallow.
In Rochester, generations have worked in manufacturing,
many families for the same employer. The thought of being
laid off rarely crossed people's minds. Companies were paternalistic,
offering generous pay, pensions and health benefits.
"You could almost count on a lifetime job,"
Mayor William Johnson says.
Johnson and other residents still reminisce
about "Kodak bonus day," a once-a-year event when
the company handed out checks to employees, from janitors
to management. Checks weren't tiny — many totaled thousands
of dollars. Local businesses, including auto dealers and appliance
retailers, stayed open late as workers cashed checks and put
money into the local economy.
"It was a holiday in this town," Johnson
says.
Cab driver Joe Territo, 64, says in those days,
"The company was dedicated to the employee, the employee
was dedicated to the company."
Territo's story is typical of many in Rochester.
His father worked for manufacturer General Dynamics for 40
years. After Territo got out of high school, his dad got him
a job in the stock room. He rose to production supervisor
but was laid off after working there for 11 years.
He then went to Xerox, where he worked for 13
years until being laid off in 1982. At that point, he was
44, and turned his part-time gig as a cab driver into a full-time
job — a job the chatty man, who shows clients pictures
of his kids and grandchildren, loves.
None of Territo's four kids is in the manufacturing
sector: hairdresser, FedEx courier, photographer and hospital
admitting clerk. He says they made the right choice.
"The industry just isn't what it was years
ago," he says while maneuvering the snow-covered streets
of Rochester.
'Cheers'
Actor Promotes US Manufacturing
(full article at)
http://www.forbes.com/feeds/ap/2007/11/09/ap4322523.html
By STEPHEN MAJORS 11.09.07, 10:42 AM ET
COLUMBUS, OHIO - Actor John Ratzenberger, visiting
a state considered a bellwether in presidential elections,
said Thursday candidates must address the problem of U.S.
workers losing jobs because of outsourcing to foreign countries.
Ratzenberger, best known for his role as a know-it-all
letter carrier on the hit television show "Cheers,"
came to Ohio on his third stop in a series of "Keep it
Made in America" town hall meetings.
China's
business practices threaten jobs here
By Kerri Houston
For more than 100 years, Ohio's Huffy Bicycle
Company has been a nationally recognized brand that Americans
have associated with recreation and the outdoors. Launched
in Dayton back in 1892, Huffy has more recently become known
for laying off workers in three states - including Ohio -
and moving operations to China.
With Huffy bikes now made in China, the company
is majority owned by the Sinosure Group, a Chinese government
entity. Several Sinosure representatives sit on Huffy's board
of directors.
Since the China takeover of Huffy, American
consumers of Huffy products have been rewarded with a series
of recalls for both children and adult bikes, the most recent
taking place this October.
The Huffy story is part of an unfortunate and
continuing trend of U.S. manufacturing moving offshore. It's
an especially disappointing story for Ohioans because the
Buckeye State is an ideal location for manufacturing. With
the nation's 10th largest highway network, and water transport
links through the Great Lakes and the Ohio River, goods can
be shipped from Ohio to half of North America within a day.
Ohio's manufacturers produce many consumer goods
and are prominent in producing capital goods such as tools
and chemicals used in the manufacture of other products. And
Ohio's highly skilled workforce constitutes a political "swing
state" that gives it a prominent voice on the national
stage.
Yet Ohio's manufacturers have suffered massive
losses over the last decade. Ohio's manufacturing sector has
experienced a 22 percent decrease in employment since 2000.
And although manufacturing still contributes $85.3 billion
to the state's economy and is its largest individual contributor,
the job losses continue.
As a direct result of the enormous U.S. trade
deficit with China, it's estimated that Ohio lost 66,100 jobs
from 2001 to 2006.
This happens because China cheats.
Because of the explosion of safety problems
with Chinese products, its booming manufacturing sector has
recently attracted attention from U.S. consumers - but not
necessarily our politicians.
Some analysts take the incomplete view that
the low cost of Chinese-produced goods outweighs the loss
of manufacturing jobs. It is unlikely that the 242,000 Ohioans
who've lost manufacturing jobs since 2000 would agree.
China ignores international treaty obligations
and flaunts its non-compliance fearlessly. Although it promised
to end currency manipulation when joining the World Trade
Organization in 2001, it continues to illegally undervalue
its currency.
Chinese manufacturers, predominately owned by
the government in the first place, are given free land, infrastructure,
and "loans'' with no expectation of payback. In the last
five years alone, the Chinese government poured $52 billion
of subsidies into its state-owned steel industry.
Chinese manufacturing benefits financially from
ignoring the few environmental laws on its books. Waterways
and wells in China run red and purple with dyes and toxins
that factories dump into ground and river.
Many Chinese factories disregard international
norms for workers by embracing low pay, forced labor, and
deplorable work conditions.
The migration of jobs to China also has serious
national security implications. Large military equipment sits
idle in repair centers as the few American companies left
that provide spare parts or tools have dwindled to a trickle.
Humvees receive armor plating at a painful pace as only one
U.S. manufacturer of armored steel remains.
Thanks to its lopsided balance of trade with
the U.S., China has been able to increase its military funding
by 18.2 percent during the last year, much of it focused on
emerging military space applications.
Despite the ability to address China's cheating
through existing trade laws, our government has done little
to solve the problem. But Ohio's status as an important swing
state in presidential elections provides an opportunity for
Ohioans to pose questions to presidential hopefuls about U.S.
job losses and China's looming economic threat.
In fact, the urgency of America's manufacturing
crisis has prompted the Alliance for American Manufacturing
(AAM), a non-profit partnership of some leading manufacturers
and their union, to hold a Town Hall meeting in Columbus on
Nov. 8 to specifically address these voter concerns. AAM wants
voters to ask simple, direct questions of the various presidential
candidates: As president, how will you save American manufacturing
jobs? What steps will you take to strengthen U.S. manufacturing?
How will you enforce U.S. trade law and hold cheating countries
accountable?
These are vital questions that deserve clear
answers.
It's well past time for America to steer its
way back to creating new manufacturing jobs.
Kerri Houston is a senior analyst with the Alliance
for American Manufacturing
http://www.americanmanufacturing.org/
and is serving a congressional appointment as a commissioner
on the U.S.-China Economic and Security Review Commission.
Publication date: 11-06-2007
As Holidays Near, A Race To Keep Toys Safe
The Truth About Toys: How Manufacturers And
Stores Test For Lead
NEW YORK, Nov. 1, 2007
(CBS) At the legendary toy
store FAO Schwarz, the Christmas catalogs had already been
printed and the holiday toys were already on the barges when
recalls started happening this summer. It's forced FAO and
others to play a game of catch-up.
“The vast majority of toys, really, the
manufacturers and the brands haven't been able to get in and
change anything,” said FAO Schwarz’s CEO Ed Schmults.
“What they've been doing is testing vigorously.”
Popular playthings have been arriving by the
hundreds at labs like one CBS News transportation
and consumer safety correspondent Nancy Cordes visited
in New Jersey.
There, they scrape the paint off to test for
lead - and all too often, they find it.
Just this week, ten more kids’ products
were recalled due to lead.
“The vast majority of toys that we are
seeing that have problems are originating in China,”
said James Menoutis, the president and lab director of Quantex.
Mattel, at the center of the recall firestorm,
has banned its Chinese contractors from outsourcing their
work.
Hasbro is checking paint before, during and
after production.
The maker of Thomas and Friends is now testing
toys from every production run.
These are changes that will make a difference
next Christmas. In the meantime, here’s the bottom line.
“The toy industry is going to great lengths
to retest all of the product coming into the United States
for the holiday season to be sure there's no lead in it,”
said the Toy Industry Association’s Carter Keithley.
As for the retail giants - Wal-Mart says it's
doing 200 extra tests a day starting with toys for kids under
3.
Sears, K-mart, Target and Toys "R"
Us have also developed new testing regimens, though none would
do an interview about it - or show us their testing.
“In this case of Barbie, it was the dog,”
said Julie Vallese of the Consumer Product Safety Commission.
The government body that oversees toy safety,
the CPSC, says the lead contamination has run the gamut -
from dangerous levels in children's jewelry, to just a dot
in the middle of the hubcap on a Sarge car toy, modeled after
Pixar’s “Cars.”
“Just because a toy is in violation, does
not mean a child will get sick,” Vallese said.
Looking to repair its tainted reputation, the
toy industry is working up plans for an independent testing
organization.
It would be modeled after Underwriters Laboratories,
or UL, which certifies electronics, and has 1,200 testers
in China alone.
“Having an independent third party mark
on a product, like a UL mark, says to the customer this product
has been tested by an independent laboratory, a laboratory
that has no conflict of interest in any way,” said Kurt
Williams, CEO of Underwriters Laboratory.
But that will take a year or more to create.
In the meantime, FAO Schwarz is playing a hopeful
tune. After all, parents need to buy presents.
Schmults told Cordes: “People ask me,
‘are all the toys made in China unsafe?’ I say
‘no.’ They say, ‘are all the toys made in
the U.S. safe?’ I say, you know, also ‘no!’”
Still, it’s the U.S.-made toys he’s
highlighting this holiday - along with those from Germany
and Spain … anywhere but China.
Manufacturing in the United States (from
http://www.americanmanufacturing.org/
Manufacturing in the U.S. generates about $1.6 trillion, or
12 percent of our gross domestic product, accounting for nearly
three quarters of the nation’s industrial research and
development (R&D), two-thirds of our nation’s total
exports of goods and services, and supports more than 20 million
high-paying jobs. Manufacturing also ensures we have a strong
industrial base to support our national security objectives.
AAM believes that America’s leadership
in the information age does not mean that we have to accept
defeat when it comes to manufacturing. On the contrary, the
nation that has the ideas and innovation, as well as cutting-edge
technology and manufacturing, to win the global economic battles
of the future.
Inside modern manufacturing facilities, you’ll
see the most productive, highly-skilled labor force in the
world applying the latest in information, innovation, and
technology.
The fact is, our manufacturing industry has
been, and will continue to be, a vital component of America’s
success.
Today,
Manufacturing Faces Extraordinary Challenges and Opportunities
(From
American Manufacturing.org)
American families and communities depend on
a strong manufacturing base to improve our quality of life.
American manufacturers should have more opportunities to export
their products and increase production in the U.S., but a
staggering set of circumstances has resulted in millions of
layoffs and threatens the foundation of our economy: rising
health care and retirement costs, a trend towards outsourcing
jobs to low-wage countries, currency manipulation that distorts
the marketplace, and unchecked cheating on international trade
rules.
Some critics argue that a decline in manufacturing
is inevitable. AAM begs to differ. Other
sectors of the American economy—finance, information,
services, technology—are clearly on the rise. But that
does not mean manufacturing should decline. Just as manufacturing
depends on technological advances and on access to information
and finance, these sectors depend on manufacturing.
With manufacturing,
America gets:
• More R&D – American manufacturers
are responsible for two-thirds of research and development
investment in the United States; nearly 80 percent of all
patents filed come from the manufacturing sector.
• More Technology – American manufacturers are
the leading buyers of new technology in the United States.
• More Jobs – American manufacturing directly
employs 14 million Americans and creates 8 million additional
jobs in other sectors.
• More Growth – American manufacturing is the
largest single contributor the U.S. economy.
Tomorrow,
America’s Success Depends on a Strong Manufacturing
Base
(From
American Manufacturing.org)
As Federal Reserve Chairman Ben Bernanke stated
on Feb. 28, 2007, “I would say that our economy needs
machines and new factories and new buildings and so forth
in order for us to have a strong and growing economy.”
Contrary to popular misconceptions, the industrial
age is not over. In fact, just the opposite is true. From
nanotechnology, and robotics, to lasers and biotechnology,
we are on the cusp of incredible advances in manufacturing.
America must be the nation that leads the world into the next
stages of development.
Manufacturing is, and will continue to be, an
integral part of the “new economy.” With manufacturing,
the new economy will thrive. Without manufacturing, much of
this new economy wouldn’t even exist.
