April 6, 2020 | 12:01 AM
How we got away from Made in the USA
There was a time, and it really was not that long ago, when Made in the USA was the standard and norm and not the exception. The US manufacturing sector, combined with US labor both union and non-union, built the middle class and was the backbone of a rock solid economy that ruled the globe and made America the economic powerhouse.
However, things started changing in the 1970’s that would begin an erosion of our manufacturing and labor base. It has taken a global pandemic to shake the core of Americans to realize we must get back to Made in the USA with American Labor to control supply chains, critical products, and protect the security of the nation. While those opportunities will begin to present themselves soon, as a nation we cannot commit the same mistakes of the past. I am going to walk you down a few streets on Memory Lane of those mistakes.
The Rise and Fall of Labor
Loads of labor are involved and impacted here. I am going to focus on a few key ones for this review – the auto sector, trucking, and construction.
Facts are facts – blue collar workers, union and non-union, helped build the middle class and America with it. Post World War II US skilled labor was unmatched globally. That changed in the 1970’s when the first oil embargo hit the US. The US auto sector, the largest labor manufacturing sector, was coming out of the heady 60’s and first few years of the 70’s being in a performance war. Gas was cheap, MPG’s were low, and the auto sector was booming. When the oil embargo hit, the Japanese hit the US auto consumer market like a tsunami with fuel efficient and low priced cars. The US automakers were out of position and unaccustomed to responding to market changes of this level. While WWII had seen great innovation and maneuverability to help a nation, that edge was gone and Detroit sank in mediocrity. Now labor, the workhorse that manufacturing had ridden to the high times, was cast off. Layoffs across many sectors crushed the middle class. The auto sector was not exclusive in labor impact – electronics, durable goods, construction, and logistics were permanently impacted with the shift to reduce labor costs. This was also the first introduction of basic automation into US manufacturing with one goal and one goal only – replace labor. The illegal immigration issue was quietly becoming a new labor source without all of the costs of unionized and domestic labor. The goal of this cost shift was to compete with foreign manufacturers on more stable ground. While there was success stories, more often that naught the US lost the edge over and over again in manufacturing. In the 1980’s the US labor force would see itself diluted by automation and illegal labor. In the 1990’s – and the farming out of labor to overseas nations.
Labor’s impact on the auto industry has been the most significant. Detroit went from owning the US auto market to hemorrhaging sales to foreign companies overnight. It has never recovered. From then to now, the US auto market has been made over. While GM, Ford, and Chrysler are still heavy weights, we now have a slew a foreign auto companies that make cars here. While the US benefits with many foreign cars made here using US labor alongside automation, at the end of the day, we produce products and US consumers buy those products that send money overseas. Now labor has been all over the place and has a good part still in the manufacturing of car, but the day of US labor without automation building predominant US products has been gone for decades and will never return.
Trucking was impacted in the late 1970’s with the deregulation of motor carriers. At the time it was hailed as an innovator to bring more US goods to US consumers due to the complicated and heavily controlled motor carrier laws of the time. The AFL/CIO was the union and truck drivers had it good in terms of routes, pay, benefits, etc. Funny thing – I was alive and I don’t remember any want for products we could not get. Reality was that deregulation was a way to unload costs of labor. Now, there are arguments for and against deregulation and success stories of companies without union ties becoming giants in the sector are numerous. It also opened up the door for more mom and pop operators and independent companies than ever before to operate their own motor carrier. I focus on this segment ever so slightly because trucking moves 100% of the goods we need in the US. They move 70% from original points of origin and the other 30% comes from products that come in via air, ship, and rail. When the economy crashed in 2008, many seasoned trucking companies bit the dust and never returned. When the sector starting growing again, most of the growth came from legal immigrants from the former Soviet Eastern Block and droves from East Africa. All legal and hardworking, but given advantages to setting up shop over domestic interests due to laws of the Obama Administration. We did not help our own once again.
During the COVID19 crisis, the nation has finally started to understand the importance trucking plays. However, I still see the horrid ways truckers are treated in the real world. People who do quick searches state that more drivers are needed for the sector. Truth is, driver applications are not the issue. Pay, benefits, decent schedules, and crushing regulations have taken the profit and joy from the people that make the sector great. 2018 and 2019 saw the most losses in motor carriers since 2008. While companies will return, who will be the focus – domestic interests or those coming to the nation?
A final note on trucking – it is now seeing what auto manufacturing started seeing almost 40 years ago in the introduction of automation. Autonomous trucks goal is to replace drivers plain and simple. Question is whether you want an 80000 plus pound unit be driven by a computer that not only puts someone out of job, but is a security risk from being hacked and being used as a weapon. This is separate from good old fashioned accidents that will occur.
Construction has been made over from illegal immigration in the south and southwest US. Jobs that once were held by black and white crews were given to illegal labor that would work for less and keep their mouths shut on bad business practices. I watched in happen first hand in Texas from the 70’s to present. Work that should have went to domestic crews and money that could have stayed in the US to strengthen our economy was sent back south of the border. That segment has over taxed our infrastructure system meant for legal citizens all while paying none of the same taxes required of US workers. While I understand the need and desire to improve their lives, the facts are that all immigration must be legal.
We are already seeing great improvements in the lives of black communities under President Trump. A whole bunch in construction. Imagine what might have been had blacks had not been squeezed out here?
Let’s be honest – it’s not good the illegals living in shadow. The don’t blend into the Great American Melting Pot for the most part, have had horrid things happen to them that will never be reported out of fear of reprisal to immigration. We have created a service system to accommodate them (Press 1 for English) that we pay for and we wonder why the American born children and grandchildren of the great wave of illegals want those declared citizens?
Then there are the Visas we grant for immigrants coming to the US. Are we getting the best of the best and only in an area the US is undeserved in? Many times the answer is no on both.
The US is all over the place on immigration.
The current illegals and Visas in the nation must be addressed in a majority manner for the electorate. Whatever that looks like, a hard border must be maintained.
Lawyers and US Liability Laws
Labor was not the only reason we say Made in the USA go away. US product liability laws have always been very strict. Sometimes labor could make a production mistake that would cost a manufacture dearly. However, as the shift for automation became more prevalent, the courts became less tolerant of manufacture errors that harmed the population. Lawyers became the purveyors of modern justice by soaking that nasty old manufacturing company that laid off workers to bring in machines that did not make as good of a product. Jury awards for manufacturing liability skyrocketed as did the insurance premiums on policies. Most policies would not cover all the costs from lawsuits and many companies either shuttered their doors or left to go overseas where other nations with more favorable tax laws and lax manufacturing liability laws welcomed them with open arms.
By the time serious tort reform was discussed on a national level, the damage to the US manufacturing and a mass exodus starting in the 1990’s, was already underway. The US has lost manufacturing jobs to Mexico, Japan, S Korea, and China in vomitus numbers in the last 30 years. COVID 19 has put the spotlight on just how dependent we are on the imports from China and other nations for items critical to our supply chain.
An opportunity is about to start to bring massive amounts of manufacturing back to the states. Many are thrilled, but those that wanted a global inter-dependency are not happy at all. Those that will criticize will start with “environmental concerns” about potential pollution the US would incur. Then they will complain workers may not have sufficient benefits, yada-yada-yada. These are the people in the hip pocket of China and other nations paying them off to keep the gravy train running on biscuit wheels. They must be removed from office because they will never support the type of tort reform needed to keep manufacturing in place.
Remember where you read it.
The US Consumer
We have to shoulder some blame here. Whether it was from a lack of knowledge of what was happening in manufacturing to certain segments “demanding” foreign goods, if the US Consumer had not signed off for this sell out, it would not have happened. That includes myself. My generation started the sell out in the 80’s to trendy Japanese electronics and flat out ignoring domestic offerings. Sometime there was quality gaps (which should not be supported) and sometimes not. By the time 2000 came around, a whole new buying generation was out there with zero thought of domestic production. As time marched on, that “Made in the USA” became less and less of an option and thus exited our mind. Fortunately, we are about to have a chance to change that. Most I know, regardless of political spectrum, are just now realizing how much China has us by the short and curlies and just how precarious that is.
I don’t know how to put it any plainer – our political representatives have not done a smashing job here save Reagan and now what we are seeing in Trump for manufacturing.
Nixon and the Democrat Congress he had get the first turd nugget. Had they taken action and imposed tariffs on the Japanese and Germans on the cars being imported, Detroit might have been able to re-position itself. You can research trade policies of the 1970’s and you will see the same old bullshit that the US cannot be “protectionist”, yet admit where our economy is flat or down there is no “free trade” only attempts at “fair trade”. Interesting enough, before OPEC and the oil embargo, the US was in a trade war with Japan and the European Economic Committee https://www.finance.senate.gov/imo/media/doc/Sprt2.pdf. So warnings were there of bad actors trying to take us out economically. Sound familiar?
When illegals began flooding the US and taking jobs, both parties profited. Republicans touted lower costs to businesses that ate it like candy and the Democrats realized that they were importing a new demographic that they could use for future voting purposes. That has not changed.
FYI – the next politician that tells you tariffs are not in the best interest of the US, punch that sumbich in the mouth. Tariffs are the ONLY way to level the playing field against slave labor, currency manipulation, or other tactics used by bad actor nations. There are conditions of when to use them, but they are a tool to protect an economy. Also, the one parroting this is getting a payoff somewhere. Either direct or a relative getting a contract, etc.
Ford & Carter were both trade morons and did nothing one way or the other to help manufacturing.
Reagan bolstered manufacturing with massive tax cuts that started one of the greatest economic engines that lasted till the next 4 Presidents mucked it up.
Yes, 41 started fast tracking globalism with shutting down military bases in 1991 after the Gulf War. When you wipe out military contract manufacturing, what did you think would happen?
Clinton – Christ I could write all day on Billy Boy, suffice it to say that he did not just screw unsuspecting women but he really diddled the middle class and the manufacture sector. Let’s give a quick synopsis on this bugger:
• Got China into the IMF and launched the beast we now deal with
• Closed more military bases around the nation
• Got NAFTA going – R’s and D’s share in this crime
Now there will be those that tout his jobs records, which was great. Problem is that the type of job created was not better than what left. For the tech that happened under Clinton, they set up manufacturing in Mexico and S Korea.
43 – not great jobs numbers for 2 reasons. September 11, 2001 was the first economic shock and that hurt, but did not cripple the economy. Now military contracting and manufacturing companies did well under 43, but had tax breaks to move manufacturing jobs out of the states. So, certain jobs were created, but the middle class did not benefit. Manufacturing jobs left the states under 43 just like Clinton. Service sectors did well and purchased, which propped up the economy, but they were raped and pillaged with bad loans for houses that lead to reason number 2 on poor jobs.
Reason 2 is the meltdown of 2008 which was built on a house of straw – literally. The job losses for that went on 43’s watch. He had tax breaks for companies moving overseas that stayed on the books till Trump. I am ashamed today to write I voted for him twice.
Obama – Barry’s tried his hand at trade and just was not good. He got a trade deal with S Korea and 2 nations in S America that were decent for exporters. However, the exported good did not have to be US made and in most cases was not. In fact, most of those goods being exported were made in China and assembled in the US for export. Obama expanded this principle in government contracting. 43 had made it where US contractors could bid on government contracts for items and they did not require that item be made in the USA. Obama expanded this.
Then, Barry had moments when he gave the appearance of trying to stave off China, but ended in disaster. He tried a stiff tariff on Chinese tires in 2009. The challenge is to have a successful tariff, your manufacture and supply chain AND economy must be strong. The US was not in 2009 and it cost loads of jobs. Backfire number two was the Trans Pacific Partnership. The original goal was to ding China, the final product was far from it and why Trump killed it in the early days of his administration.
For all of the touted tech startups and Dow success that Barry touts, how many are made here or in China? You already know that answer.
Manufacturing’s Future is Our Future
Right now the US is an exposed nerve operating in a manner not in our best interest. President Trump has said from Day 1 of his Administration that we have to get away from China. Many companies started that process and you are seeing it play out now with the conversion of US domestic manufactures to help the cause against the Wuhan Flu. This would not have been possible had Trump not decided that it must be America First.
While Made in the USA is here and more is coming, the electorate must keep politicians on target. A mass purging of politicians, on both sides in both houses, must occur. The Chinese Virus has shown where the power hungry are as well as to identify those that are in the hip pocket of and in alliance with China.
They must be removed.
Then and only then can Made in the USA be here to stay.
Darren Yancy has always been a self-starter and hard-working individual. He knows the value of a dollar and through diligent perseverance has achieved the American Dream.