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Will the AME, NAM and NACFAM Alliance Revitalize Manufacturing?

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The Association for Manufacturing Excellence (AME) is joining with leading organizations, such as the National Association of Manufacturers (NAM), and the National Council For Advanced Manufacturing (NACFAM) to form an alliance to revitalize manufacturing and grow the economy, while improving the standard of living of all citizens in North America. These organizations are inviting public and private sectors to come together to build on the NAM study, A Manufacturing Renaissance: Four Goals for Economic Growth.

The AME white paper "Challenges Facing the Manufacturing Industry..." states: "The strategy calls for putting people, schools, businesses and the government to work; producing literate career-ready citizens capable of joining the workforce; and enabling manufacturers to once again lead the designing, building and exporting of quality products and services around the globe." The top three priorities are:

• Build a better educated and trained workforce
• Promote product and process innovation, as well as research and development
• Improve global competitiveness for companies

AME advocates that each priority "must be considered in developing public policies that support the revitalization of the manufacturing sector, and policy-makers must consider these elements in shaping future public policy and legislation." The goal is to help companies and our education systems transform themselves by using more innovative processes to become more competitive to put people back to work in making things in America.

I strongly agree with AME's viewpoint that we need to revitalize American manufacturing because "manufacturing is very critical to economic growth, prosperity and a higher standard of living." This is because manufacturing jobs have a multiplier effect -- every manufacturing job creates three to four other jobs. Manufacturing creates more wealth than any other sector in the economy.

Manufacturing pays higher wages and provides greater benefits, on average, than other industries. It performs almost two-thirds of private sector research and development, creates the highest number of jobs to support the industry while serving the surrounding communities, and contributes to more than 50 percent of the country's total exports.

The White Paper notes that we've lost nearly six million manufacturing jobs in the United States since January 2000, for an average of about 54,000 per month, according to the Bureau of Labor Statistics. We also lost 56,190 manufacturing facilities from 2001 to 2010, or about 15 per day.

AME has issued a call for action to policy-makers, industry professionals and academic leaders to play critical roles in revitalizing the economy through the rebirth of manufacturing jobs. To do this, we need to ensure the supply of educated citizens, necessary physical infrastructure, and a favorable tax and regulatory framework that fosters increased collaboration between public and private sector partners.

AME has been leading the "Revitalization of Manufacturing" initiative, wherein AME and their allied organizations have been reaching out to policy-makers nationwide, and encouraging them to join or develop efforts focusing on local and state job creation. AME states that "it is imperative that policy-makers recognize the importance of an industry that has been the backbone of the North American economy. To date, AME has received more than 400 signatures of support from state and federal policy-makers, industry trade associations and operations executives representing manufacturers across North America."

AME advocates "a renewed emphasis on making businesses more competitive by developing the educational and training infrastructure to produce qualified individuals to fill these new opportunities." To accomplish these initiatives, AME is joining with leading organizations to adopt the three priorities by:

Reforming public education to produce career ready citizens -- Parents, teachers and business leaders need to recognize that other nations are both out-educating us and out-competing us. Some of the ongoing initiatives by manufacturing organizations to help reform public education are:

• The Manufacturing Institute's Roadmap to Education Reform for Manufacturing, a comprehensive blueprint for education reform
• American Productivity and Quality Center's (APQC) Education North Star program that helps school districts do more with less by transforming education through process and performance management
Career Pathways, a program that encourages students to consider a career in manufacturing and help prepare them by using the Manufacturing Pathway Map.

Last fall, I wrote about a number of programs sponsored by other organizations to interest and prepare youth for careers in manufacturing in the article, "How Can we Attract Youth to Manufacturing Careers?"

Establishing consortia of like-minded individuals with the same mission to help sustain and grow businesses through sharing technology and innovative ideas, AME recommends that businesses "grow a culture that achieves results through engaging their people" to "develop pragmatic, working-level leaders who can pull it all together." In addition, businesses "need to foster rapid advancement of technology and innovation by establishing regional consortiums to help bring jobs back home."

"AME Northern Kentucky/Cincinnati Consortium is the first building block of the AME Consortia network, and the organizations plans to deploy at least 10 more in 2012. AME also has alliance partners, like the Virginia Business Excellence Consortium."

Reshoring by making better informed business decisions to keep and bring jobs back home -- the Reshoring Initiative was founded by Harry Moser in 2010. He is collaborating with AME to promote reshoring as part of the "Revitalization of Manufacturing" initiative. AME recommends that companies use the Total Cost of Ownership (TCO) analysis tool Mr. Moser developed "to effectively compare total cost of local and offshore sources, enabling them to make informed business decisions. 'We are committed to changing the sourcing paradigm from 'off-shored is cheaper' to 'local reduces the total cost of ownership,' said Moser."

Redeploying Training Within Industry (TWI) programs to train or retrain workers to have the skills to work in advanced manufacturing jobs to revitalize manufacturing and re-energize the economy. First created during WWII to replace workers who left the factories and went off to war, the TWI programs were revived in 2001 by the Central New York Technology Development Organization, a member of the U.S. Manufacturers Extension Partnership (MEP), after which the TWI Institute was formed to oversee the global deployment of the program.

AME's White Paper only identifies the TWI programs, but I wrote about training programs sponsored by other organizations, such as the Society of Manufacturing Engineers' Tooling U and The Fabricators and Manufacturers Association, International in my article, "What's Being Done to Address the Lack of Skilled Workers?

In order to be more globally competitive, AME recommends that companies use Lean Certification, an internationally recognized certification process developed by the Society of Manufacturing Engineers (SME), AME, Shingo Prize, and the American Society for Quality (ASQ), which establishes the standard for continuous improvement and Lean practices.

The White Paper states that at its 2012 national board meeting, "AME reaffirmed its commitment to helping small-and medium-sized businesses create more manufacturing jobs, and the organization's strategic plans address the challenges facing manufacturing by formulating counter-measurements to address them with its public and private alliance partners."

In conclusion, the White Paper states:

...the public and private sectors must come together to build an integrated plan supportive of these initiatives, especially NAM's Manufacturing Strategy for Jobs and Competitiveness and Roadmap to Education Reform for Manufacturing; the LEARN Act; and the Reshoring Initiative. These will ultimately revitalize the industry and grow the economy.

I have repeatedly said in my book and blog articles that it will take the efforts of the public and private sectors, as well as individual Americans, to first save and then revitalize American manufacturing. I agree that these strategies will be beneficial, but they will not be enough to accomplish this goal. First of all, I do not agree that the challenges to accomplish this goal are the "four major challenges on which its future depends and has been failing to meet... globalization, the revolution in information technology, the nation's chronic deficits and its pattern of energy consumption" that are quoted from Thomas L. Friedman and Michael Mandelbaum's book, That Used to Be Us, How America Fell Behind in the World It Invented and How We Can Come Back.

These are all realities that must be addressed, but they are not the main challenges that face America's manufacturing industry. The main challenge can be summed up in one word: China. By this I mean China's predatory mercantilism in the form of currency manipulation, export subsidies, theft of intellectual property, product "dumping," export restrictions on raw materials, and more recently, technology transfer and rare earth hoarding.

As long as companies that are members of AME, NAM, and NACFAM, such as Westinghouse, General Electric, and Caterpillar, choose to close factories in the United States to offshore manufacturing to China for the illusion of selling to the 1.3 billion Chinese consumers, we will continue to lose manufacturing jobs.

As long as these organizations and their member companies advocate so-called free trade policies and are afraid to stand up to China's predatory mercantilism and urge our elected officials to demand that China adhere to the terms of its admission into the World Trade Organization, our huge trade deficits will continue to escalate.

These companies must stop being Chinese apologists and appeasers just to add more profit to their bottom line. They need to realize that complying with China's demand for technology transfer in order to build or establish a plant in China is destroying the future of their own companies.