As difficult as it is to keep a business running effectively these days, I suspect that there is a greater burden for organizations and the individuals who are responsible for them. Sure, demand is flat for manufactured goods, and raising capital or extending credit can be difficult. But, these factors can be quantified. Overlaying those headaches is the stress of trying to prepare for some gamechanging policy or mandate.
From labor laws to environmental regulations, to tax and trade policies, there is running through the federal government these days an impulse to keep everyone in doubt about how much of the standard operating principles will be undone. As a result, even an ordinary degree of forward planning can be nearly impossible.
But, while federal officials deliberate over their standards and practices, they’re boldly describing their vision for the future of manufacturing. They must assume that their big ideas will inspire optimism among U.S. businesses, but much of it is so impractical that raises doubts about how well they understand manufacturing — or questions about their motives.
To begin, there is the Administration’s vision of filling U.S. roads with 1 million plug-in hybrid vehicles by 2015. All of the major domestic automakers and some specialty manufacturers have development programs for models that would fit the broad outline here, but it’s plain that the goal hasn’t been set in order to grow business or to satisfy consumers: today’s most successful hybrid vehicles are not profitable to their manufacturers, and their popularity with drivers rests entirely on high fuel costs and social postures. It’s a fact that hybrid vehicle technology is not a reliable alternative for the range of automotive applications.
Getting 1 million vehicles into service will require some fundamental changes in the automotive market — a simultaneous process of tearing down and building up. How this will be initiated and orchestrated is the source of uncertainty for manufacturers and their suppliers. It will require some combination of fines and incentives that will destroy the financial models used by manufacturers and consumers, leaving everyone confused and intimidated (to say nothing about the technological barriers still remaining.)
But, when it comes to unnecessary overreach, hybrid vehicles can’t measure up to the latest big idea, a nationwide high-speed rail network. This is a perennial favorite of big thinkers, who commonly assert that superfast trains speeding from city to city will be a boon to economic expansion and benefit the environment by reducing car and plane traffic. They point to government-subsidized rail in Europe and Japan as proof of what’s possible, but they fail to justify their vision on any basis of cost, convenience, or efficiency.
To make good such an investment the federal government would again have to play favorites. Securing the success of high-speed rail would mean punishing airlines and freight companies, the businesses and manufacturers that support them, and the customers that rely on them. If you’re included among any of the latter groups, how do you plan for that?
Let’s be clear: even through this ongoing recession some manufacturers are trying to position themselves to supply emerging industrial markets. Wind-power is a hot topic, and rightly so considering the level of investments by utilities and builders of windmills and turbines. Nuclear power equipment has shops getting ready to service and supply a new range of customers. Demand for high-tech medical equipment is guiding manufacturers to improve their design and production capabilities, and to update their quality programs.
Each of these markets is in various stages of advancement, and there are other sectors where consumer demand is drawing investors’ interest and spurring risk-takers with their own big ideas. As ideas develop, more partners sign on. Eventually supply chains form, production standards are established, and customer-supplier relationships are built.
These are the indicators of organizations and individuals pursuing their own big ideas. They can succeed, too, assuming that the government will get out of the way.