The collapse of manufacturing

The collapse of manufacturing

Bruce Vernyi

Wrenching changes in the way that business is done around the world are underway.

Automobile assembly in the United States dropped 60 percent in January compared with the same month a year ago and, in the last quarter of 2008, industrial production dropped 3.6 percent in the United States, 6.8 percent in Germany, 12 percent in Japan and 21.7 percent in Taiwan.

No one has ever seen such precipitous declines in industrial output, and the best-case scenarios are that it will take two years to recover from the fall.

The worst scenarios compare the current economic conditions to the period in the late 1800s known as the Long Depression. Historians agree that that period of economic turmoil was long lasting, but they disagree about whether it started in 1870 or 1873 and whether it ended in 1879 or 1897. And that period of disorder was called the “Great” Depression until the 1930s came along.

We can only hope that what we’re going through now won’t eclipse that depression, and that we’ll emerge from it sooner than later.

However, we have to be aware that the Long Depression and the Great Depression ended the eras and ways of doing business that preceded them.

We are going through another world changing time.

Everyone is making cutbacks, and every business is in a struggle to survive, including magazines. Penton Media — American Machinist’s parent company — is going through a restructuring that has had John DiPaola replacing Robert Rosenbaum as the publisher of American Machinist.

Rosenbaum had become well known in the industry, and I know that many of you appreciate the work he did to make American Machinist successful over the past four years. I hope you will join me in wishing him well in the future.

However, despite the changes, I want to assure you that I and the other members of our team are continuing to work toward our success now under DiPaola’s leadership.

As with other manufacturing businesses, our struggle is to use the resources that remain in the best ways so that we can continue delivering a quality product to our customers.

Everyone in every sector of the global economy faces the same challenges.

As the numbers that I quoted above point out, these are disastrous times, and pulling through these difficult times will require changing the ways that business is done and developing skills that will help us to salvage the most productive and most efficient parts of our businesses.

Manufacturing is on its own. Congress appears to be making it clear that it will reserve financial bailouts for banks and Wall Street while it grudgingly provides support — in the form of loans — to General Motors Corp. and Chrysler.

Picking manufacturing up from that collapse is going to require greater determination and creativity than ever before. It’s no time to quit.

There still is time to participate in the American Machinist 2009 Machine Shop Benchmark Survey.

Our industry survey is available at www.AMBSurvey.com. Besides providing benchmark data for the machine shop industry, our survey is the first step in participating in the American Machinist “Best Machine Shops” program.

The survey and the “Best Shops” program have been parts of our effort to create a database of operating benchmarks for machine shops, and to recognize shops that are leading the industry with better ways of increasing productivity, serving their customers and making profit.

We started doing this three years ago, and we would like you to join our effort. All you need to do to get involved is fill out the survey. That will take 45 to 60 minutes of your time.

Bruce Vernyi
Editor-in-Chief
[email protected]

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