Hillary on Lean and GM
I don't mean to turn this into a political forum. I will say I don't like Hillary Clinton or her politics. But, it always catches my interest when you hear any politician talking about lean and the role of manufacturing in our U.S. economy.
I tend to agree with what she says, not that there's anything earth shattering here, but she acknowledges that we CAN be successful in manufacturing. The interviewer asks if our “competitive advantage” is gone, does he mean cheap labor? We can certainly use lean and other creative methods, along with staying close to domestic customers, to be competitive.
“HUNT: You're going out to the heartland of America, Chicago. Manufacturing – have we reached a point where our comparative advantage in manufacturing has just gone and we have to live with it?
CLINTON: No. No. I know that there are many who say that. I just reject it. I think it's both defeatist and dangerous to say that we cannot have a manufacturing sector that is globally competitive. In fact, we have a lot of companies that are.
What we don't have is any real sense that manufacturing must be a part of our economic future, not only for the jobs that it produces, which are still good paying jobs above the average for the education that people bring to the, and it ripples through the economy, but also for security reasons. We have a very important part of our industrial base that is directly tied to our advantage in weaponry and other military components that I don't want to see us outsourcing.
So, the question is how do we have a fair, level playing field. I spoke just Friday night up in Seneca Falls, New York, to about 2,000 New Yorkers who work in manufacturing at a forum sponsored by Nucor Steel. Now, Nucor Steel has done everything right. It has had lean manufacturing. It has had bonus and pay incentive programs so that people really have to work to get what are very good incomes. And yet they are already seeing some problems in their ability to continue to compete because of the externalities. They have a very legitimate compliant that currency manipulation really does undermine their ability to compete, primarily with China, that entering into trade agreements that we don't even enforce that we have no real follow-up on gives us the worst of both worlds.”
On GM, Sen. Clinton makes a good point that GM must own up to mistakes in management and product design. I can't disagree with her there. But, she loses me when she starts talking about quid pro quo, that the government can bail out GM's legacy costs IF they'll accelerate development of alternative vehicles. Great, more government meddling in the market.
HUNT: Let me try one more question in manufacturing. General Motors is on the ropes. They've been in terrible troubles. If necessary, would you favor the federal government bailing out GM?
CLINTON: Well, what I do favor is legislation that Senator Obama has introduced that I'm co-sponsoring, where we basically say, look, they were part of the American social contract in the '40s, '50s, '60s and '70s. They made some mistakes, which they have to take responsibility for in terms of management decisions, product design, et cetera. But there are certain burdens that they carry for the rest of us, and providing legacy health care for their retirees is one of them.
I think we could in return for over a period of, say, 10 years lifting some of those legacy costs off of the car companies in return for them expediting a move for more energy efficient products. That would be a good bargain for America. It would help us keep jobs we can and should keep here, remain competitive in a major industry, but also move us closer toward the kind of energy efficiency we must have, both for our economy and our security.
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Of course, how could we have missed it? When all else fails, get the most bureaucratic, waste-ridden, clueless, inefficient organization around–the gov’t–involved in helping businesses become leaner and more competetive. Worse, the senator thinks she knows better than the rest of us what is best. God help us all.
Nucor is indeed a good company, but let’s not forget exactly what they do–melt scrap steel and reprocess it into high-quality construction steel. Nucor made a lot of money selling this steel to the Chinese, sometimes to the extent that there wasn’t enough left for US customers. Now the Chinese have become an “externality?”