Local Commentaries
1:08 pm
Wed October 7, 2009

Bill Knight - October 8

Macomb, IL – Reader reaction to a recent newspaper column reference to layoffs at Maytag reveal a lingering resentment of the appliance maker's abandoning Galesburg five years ago - and a reminder that some U.S. corporations have about as much loyalty to American workers, communities or the manufacturing sector as foreign terrorists or fictional alien invaders.

However, such shameful desertion of our towns and people by some companies -- a passive/aggressive assault -- could be an increasing rarity.

That's right, according to some economists and leaders from business and labor: After this Great Recession, there may be a "new normal." And that so-called Reset Economy may be far less likely to include manufacturers stooping to runaway shops or outsourcing than in previous years.

Simply put, the financial disadvantages are starting to outweigh the advantages.

Paul Laudicina, chair of A.T. Kearney, a global consulting firm and business-strategy expert, told reporters, "It's less a knee-jerk political reaction and more a hard-headed, sharp-pencil assessment of the costs and benefits of outsourcing certain activities as the dynamics of the new normal present themselves."

Concerns about transportation costs, quality control, energy prices, consumer resistance, protectionism and products' carbon content all factor in to the reassessment, which is happening in various manufacturing sectors.

For example, NCR two years ago began outsourcing the manufacture of bank Automated Teller Machines, following others in the electronics industry for the previous 10 years. However, after analyzing the process, NCR executives realized it had been a costly move that delayed production and upset customers.

Business Week's Pete Engardo wrote, "NCR may be in the vanguard of a shift in corporate thinking that could bring skilled manufacturing jobs back to the U.S."
Instead of making ATMs in Brazil, China, Hungary or India, NCR is producing the equipment at an 800-worker factory in Georgia.

NCR CEO Bill Nuti said, "By outsourcing, we just couldn't move as quickly."

OK, NCR isn't yet abandoning outsourcing altogether. Its Europe-based Fluiditi subsidiary will continue to produce supplementary ATM gear, and other foreign plants will manufacture ATMs to be sold in those geographic regions.

Still, Laudicina and other experts are optimistic about the start of the return of manufacturing to the United States.

Laudicina told Business Week and CNBC commentator Maria Bartiromo, "I think we're going to see a burst of productivity enhancements come out of this recession and help drive economic growth."

Meanwhile, filmmaker Michael Moore has released his latest edgy documentary, "Capitalism: A Love Story," and it's getting good reviews in these bad times. Why?

Moore said, "I name the names others seem to be afraid to name, the men who have ransacked the pensions of working people and plundered the future of our kids and grandkids. Somehow they thought they were going to get away with this, that we'd believe their Big Lie that this crash was caused by a bunch of low-income people who took out loans they couldn't afford."

Moore continued, "Much of the mainstream media bought this storyline. No wonder Wall Street thought they could pull this off."

Between conscientious bookkeepers -- who are finally standing up and saying it makes little economic sense to abandon workers, neighbors and a society that used to make products - and a growing sense of conscience in the nation - exemplified by some footage in Moore's movie, maybe the country is turning a corner and returning to its roots.

The USA used to be more of a democratic republic where workers created things, where producing was better than consuming, and where prosperity was shared by more than the elite.

Maybe it could be again.