Today’s headline in USA Today, “UAW Strike Comes as a Shock”, underscores the importance of U.S. manufacturers to rethink the way they mitigate risks in their supply chain. Today, GM faces production problems because 73,000 workers at 82 U.S. plants walked off the job. Imagine for a moment a climate where we are not facing the prospect of 73,000 striking workers but an entire country on strike.

Given the impact that the GM/UAW strike with have on the U.S. economy we should think of the consequences to production as we continue our push towards globalization with its current drumbeat of outsource, outsource, outsource –especially given today’s volatile geopolitical climate. I am not against globalization by any means. I think a healthy global economy benefits not only U.S. interests but helps lift up developing countries. My concern is that we need to inject some sanity back into our thinking. We cannot afford to continue the unchecked outsourcing of production. What does our continued outsourcing of manufacturing mean for U.S. companies? Allow me to speculate.

1. We become a country with a diminishing middle-class leaving a wider chasm between high-wage earners and low-wage service providers and retailers. A healthy U.S. based manufacturing sector is a vital to a healthy middle class. Upward mobility of lower income workers is wholly dependant on our ability to expand opportunity in the middle.

2. We lose our ability to create. There is a magic that happens when engineers and product development teams are locate closer to factors of production. As we move production offshore it follows that our engineering and design teams—both valuable assets and higher-wage positions—will move offshore too. What’s left? Let me posit a list; Lawyers, marketers, media, Wal-Mart greeters, hamburger flippers…is this what we want for the future of the U.S.?

3. Exposure in volatile geopolitical markets. As we outsource more of our production we hamper our ability to make geopolitical decisions based on other factors other than economic grounds. It is not prudent to be living in a world where we cannot produce our own manufactured goods where supply chains are interrupted.

These are just a few things that keep Alex and I motivated on a daily basis. We are building a company. We are entrepreneurs seeking to make a profit. However, we want to do so in a way that is socially responsible. We believe that fractional manufacturing interjects some of the sanity to reverse these negative trends.

Either we can enhance ours country’s competitive ability and create new and innovative ways of keeping a balanced working economy or we will lose our country’s working class to a strike…a strike on working in America.

This entry was posted on Tuesday, September 25th, 2007 at 8:13 pm and is filed under David A. McInnis, Repatriating Manufacturing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.