NASF Washington Forum Presentation Highlight: Richard McCormack Challenges Claims about U.S. “Manufacturing Renaissance”

Among the NASF Washington Forum keynote speakers in April was Richard McCormack, long time editor of Manufacturing & Technology News. Mr. McCormack is finishing a book on manufacturing due out this summer, and he previewed for the NASF audience a web of market data and analysis that in his estimation points to serious challenges ahead for the U.S. economy and the manufacturing base.

He noted that the U.S. government has stopped collecting some critical market figures. “They are all very hard to find,” said McCormack. He argues that if there is indeed a manufacturing renaissance, “the government has no idea there is one. The numbers don’t say so, sorry to say.”

“Imports are surging into the U.S. market, but nobody is talking about it,” said McCormack. “Only one in three Americans works in making products. More people were unemployed than were working in manufacturing at the end of last year. More than twice the number of people work for government than in making products.”

The NASF Forum audience and McCormack then discussed his rather sobering catalogue of data, summarized below:

Manufacturing Job Trends

  • Lackluster job growth in manufacturing: -3,000 jobs in March 2013. Only 90,000 new manufacturing jobs created in the last year.
  • In March 2000, there were 17.302 million manufacturing payroll jobs. But by February 2010, that number had gone down to 11.460 million – the low point. The loss: 5.842 million manufacturing jobs.
  • In March 2013, there were 11.981 million manufacturing payroll jobs, a gain of 521,000 from the trough, producing an average growth of 14,000 per month since. At this rate, it will take 35 years to regain those lost jobs – the year 2048. At that time, there will be 70 million more Americans – the U.S. population will be 385 million.

Automotive

  • 2013 global production – 84 million units. U.S. production – 10.3 million units.
  • U.S. automobile imports – 4.15 million units, or 29 percent of U.S. market.
  • China’s production is approximately double U.S. production – 19.3 million units in 2012.
  • Total U.S. imports of autos and parts in 2012 were $300 billion, up from $256 billion in 2011.
  • The U.S. auto parts and vehicle trade deficit surged from $117 billion in 2011 to $147 billion in 2012 – major growth year to year.

Cell Phones

  • 1.75 billion cell phones were produced globally in 2012. Not one was made in the United States. That means 200,000 cell phones were being produced globally per hour or 3,327 per minute. In 2017, it is projected that cell phone production will reach 2.6 billion, 300,000 per hour.

Steel

  • U.S. production in 2012 – 87 million tons vs. China’s production in 2012 – 827 percent more, or 716 million tons.
  • U.S. steel output is 5.7 percent of global production vs. China steel output is 46 percent of global production.

Industrial Robots

  • U.S. output is not even measurable according to the International Federation of Robotics. A single company is the only U.S. producer of industrial robots, but if you look at the company’s Form 10-k filed with the SEC, it states that the company is not a manufacturer.

Crystalline Photovoltaics

  • A US report on the industry states that the U.S. produces only 1.5 percent of global output – of a technology it invented.

Women’s Handbags

  • 163 million American women imported 245 million bags in 2011.

Ceramic Tile

  • The U.S. produced 60 million square meters in 2011 – 0.6 percent of global output. China’s production was 4.2 billion square meters.

Semiconductors

  • There were 36 major fabs under construction globally in 2011 and 2012 – ONE in the United States vs. 21 in China.

Copper Consumption

  • U.S. in 2010: 1.73 million metric tons vs. China in 2010: 7.6 million metric tons.
  • U.S. in 2000: 2.73 million metric tons vs. China 2000: 1.94 million metric tons.

Machine Tools

  • U.S. Production in 2012: $4.98 billion vs. China Production in 2012: $27.5 billion.

U.S. Trade Deficit with China

  • $315 billion ($863 million a day or $36 million an hour).
  • If $1 billion in GDP equals 5,000 jobs, that would be 4,315 jobs per day lost due to trade with China, or 1.57 million jobs in 2012.

Medicare

  • Cost in 2002: $266 billion vs. Cost in 2012: $549 billion.

Food Stamps

  • 17 million people receiving Food Stamps in 2000 vs. 47 million people in 2012.
  • The number of new jobs created over that same period of time: 2 million.
  • The cost of Food Stamps in 2012 was $95 billion, plus $19 billion for the school lunch program to feed kids who are hungry.

Imports of Goods and Services

  • U.S. imports in 2012 were $2.74 trillion. That equals:
    • $7.5 billion a day;
    • 23.81 per day per American;
    • $8,690.65 per year per American;
    • $34,763 for a family of four per year (which is equal to one $18 an hour job).
  • Imports are displacing one job for every American household of four.

In his closing remarks, Mr. McCormack acknowledged his depressing calculus but pointed to the historic practical sense of Americans and their leaders to ultimately respond to a crisis when needed. NASF leaders were on Capitol Hill the next day working to ensure the message got through.

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