Coronavirus Pandemic Exposes America’s Weakness In Manufacturing

One thing laid absolutely bare by this Coronavirus is that America, the most powerful nation in the world, is highly dependent on China’s manufacturing sector for many of its basic necessities and raw materials. Is it time to reverse that? More to the point, are we ready, as a nation, to live with the consequences to our environment and our workforce if we do?

What if, after this pandemic, The United States declared returning manufacturing to our shores  a strategic necessity? Would unleashing American innovation and its can-do spirit on the manufacturing sector galvanize our nation and create a positive economic pivot from this nightmare? Could a post-CoVid Pandemic manufacturing renaissance be like Kennedy’s moonshot, which ushered in an accelerated period of technological development or Roosevelt’s call of duty for Rosie the Riveter which helped lead to the modern women’s empowerment movement?

David Dussault, CEO of P1 Industries, a manufacturer of high precision metal parts based in Schenectady, NY, built his entire business on this ideal. His company’s motto is “Revitalizing American Manufacturing Through Entrepreneurship.” P1 employs just over 100 workers, many who grew up on farms and learned their ingenuity from a life where “they didn’t throw things out just because they were broken” according to Dussault. He credits these blue collar workers for making P1 a success by “blending culture, advanced machinery and engineering creativity.” 

According to the Federal Reserve, the U.S. percentage of GDP from manufacturing has shrunk from 13% to 11% in the past 15 years. We already know that this represents a significant loss of jobs but it’s now evident that we also risk losing our strategic power in the world because we’ve outsourced our manufacturing to Asia, particularly China. 

It’s very tempting for both businesses and consumers alike to purchase goods from China. First of all, their goods are a lot cheaper than the same ones made in America—if American manufacturers even make those items anymore. Second, China’s pretty darn good at manufacturing by now, aside from the fact that they “repurpose” a lot of our I.P.. Third, by outsourcing so much of our manufacturing to China and Asia in general, we’ve also outsourced our pollution. 

“Sure, we can bring manufacturing back to America,” says Amany Mansour, founder of Chemistry RX, a Philadelphia-based pharmaceutical component manufacturer that purchases raw materials from China, “but we’d have to accept that we’re also bringing back all of the runoff that leaks into the environment and the water system when you manufacture. That’s what happens in China now.”

“It’s true,” says Stephen Fernands, CEO of Customized Energy Solutions, a global energy management firm also based in Philadelphia, PA. “If you move manufacturing from China to the U.S., you move the pollution back with it. While we’re much more efficient about that here and our restrictions are greater, net net, the amount of pollution America would create would go up if we manufactured more here. If we are ready for that,” says Fernands, “then we can bring manufacturing back.”

Dussault agrees but still thinks American manufacturing deserves a renaissance. “Manufacturing in America is as clean as it’s ever been,” he says. “Everything is either water soluble or recyclable. Every scrap gets recycled or reused and EPA protocols have been in place for decades.”

And how about jobs? Mansour has concerns about that as well. “People get hurt in China in manufacturing. It’s dangerous work.” Dussault, a manufacturer for over 20 years, agrees that risk goes with the job but thinks it should be put in context. “Every job has some element of danger to it. But America is so far ahead of managing risk compared to places like India and China. Besides,” he says, “every worker should be protected no matter where on the planet they work.”

Fernands believes American plants would use a lot more automation in equivalent American factories making it less hazardous but also reducing the number of jobs it would create.

How do we regain the strategic authority we lost when we outsourced our manufacturing to Asia? By building expensive, cleaner-but-not-totally-clean plants, empowering regulators to keep our environment and workers safe and automating so workers don’t have to do the most dangerous jobs. 

If that sounds complicated, it is. That’s why we like manufacturing in Asia. It’s faster, cheaper and it’s always much easier when the damage is someone else’s problem. This pandemic has made it clear that, while manufacturing in China may be the path of least resistance, it’s not the best choice for America anymore.

StlouisfedValue Added by Private Industries: Manufacturing as a Percentage of GDP