In catching-up on newsletter and blog reading this week, I ran across an interactive poll being conducted by Industry Week Magazine which poses the question: What will the election of Barack Obama mean for U.S. Manufacturers?  I don’t know about you, but I noted a slant of cynicism in the layout of the potential responses. 

In full disclosure, I was a supporter of President-elect Obama, and took great joy in observing the positive and supportive reactions of both U.S. and global citizenry to the final results of the U.S. presidential election.  I also take some comfort and trust in reading that President-elect Obama will seek out the smartest people vs. the most politically connected to makeup the leadership team that must address the most challenging global economy experienced in many years. So let’s accept this at face value, at least for now, and put our collective heads together in constructive descourse towards a bold direction.

In an unbiased way, let us reflect upon a required agenda for U.S. manufacturing and supply chain needs for the next decade.  I will pose three key questions to Supply Chain Matters readers, provide some of my initial thoughts, and encourage comment and opinion from our community of blog readers.

1. Will the Obama administration provide active leadership and commitment in insuring that the United States is a global leader in product innovation and manufacturing capability in the next ten years?

My view is yes on leadership, but time and money will tell the story on execution and commitment.  For me, Barack Obama clearly articulated an understanding that in order to grow the economy, the U.S. must be prepared to assume a leadership role in the technologies and products of the next decade.  This would include areas such as alternative energy, green and sustainability technology, nanotechnology, and others related to computing, electronic content, and electronic infrastructure.  As pointed out in Thomas L. Friedman’s latest book, Hot, Flat, and Crowded, the potential rebuilding of the U.S. energy, utility, and information infrastructure are all possibilities that must be realistically considered.

Execution and commitment, on the other hand, relies on the ability of industry leaders and politicians coming together in a joint understanding that solving the U.S. financial crisis and investing for the future will require tough and informed decisions as part of a strategic plan based on prioritization. Not all technologies and products can be realistically funded and supported without an abundance of private equity or corporate funding. 

 

2. Will the Obama administration understand the strategic importance of manufacturing in spurring the growth of the U.S. economy?

My view is yes, but again, setting realistic goals and moving beyond just politics as usual will be the challenge.  President-elect Obama’s campaign efforts were directed at building the basis of an economy that could lead the U.S. beyond its current recession.  This was especially a driving concern for those regions of the U.S., such as Illinois, Michigan, Pennsylvania and Ohio where manufacturing and supply chain jobs were once a mainstay of the economic well-being of those residing in those regions.  This new administration will have no choice but to address the question of re-invigoration of manufacturing in the U.S.

Reality is grounded in the fact that a lot of the existing U.S. manufacturing jobs have moved to other global manufacturing regions such as China, Eastern Europe and other key regions. They moved for two fundamental reasons, economics related to lower-cost manufacturing, and more importantly, access to more growth-related markets.  Global manufacturers cannot turn their backs to these new growth markets, and thus manufacturing will remain in these high growth regions.  The real issue, therefore, is the long-term growth of the U.S. related market, and insuring the U.S. manufacturing capability is able to compete in supporting this geographic market.

The first real test is already underway, reflected in the current posturing for continued financial assistance of certain of the big three U.S. auto manufacturers.  This will most likely spread to concerns and calls for help among the other industries related to autos and other capital-related goods.  These are the industries that are first to suffer the consequences of a severe recession, and usually the first to see daylight on the recovery.

In my opinion, what really should matter is whether these hat-in-hand U.S. based companies that make up a substantial amount of manufacturing and supply chain employment can finally be motivated toward an objective for compelling products and world-class global manufacturing capability to lead in the green revolution.

 

3. Will the Obama administration provide active leadership and commitment to renewing U.S. supply chain infrastructure?

 

I have often commented that the U.S. logistics and transportation infrastructure is long overdue for investment.  Bridges, rails, ports and highways are deteriorating. Countries such as China, Singapore, and Europe continue to invest in assuring their countries have the most modern and efficient infrastructure for the 21st century. India may join this list in the near future. 

A lesson we have collectively learned in my home town of Boston is that “big-dig” projects are not necessarily the answer, since they tend to gravitate quickly to money sink-holes and serve only one geographic area. Broader vision as to what is required for a 21st century transportation network for the entire U.S. that meets the commitment to global competitiveness, low carbon emission and sustainability must be outlined and evaluated.  I believe that such a network must include more leveraged use of railways in connecting port facilities, natural resource regions, as well as major population areas, and should include supporting the movement of larger volumes of goods and people.  Americans need a serious option of high and normal speed rail networks connecting coast-to-coast supply chains and business center needs. One example, California voters just approved the funding of a high-speed rail network connecting San Francisco and Los Angeles.

A suggestion I would offer is to “draft” knowledgeable and visionary executives of experienced global-based transportation carriers, rail companies, and consulting agencies to layout the vision and long-term strategic plan for investment, and insures that when this plan reaches Congress, it transcends earmarks, political favors and ‘bridges to nowhere”.

Now it is your turn to share a comment.  What are your expectations regarding these three questions? You can provide your input in the Comments section directly below this post.

Bob Ferrari