I don't think Alan Tonelson has so much rebutted the stories by James Fallows and me in this month's "Atlantic" as he has provided some context, albeit pessimistic context.Manufacturing in the U.S. isn't in good shape at the moment, especially comparatively -- although we are still statistically tied with China as the two nations in the world that produce the highest dollar-value of manufactured goods. To read the press accounts, one would imagine that we produce almost nothing, rather than being #1 or #2 in the world.For my story, I set out to answer a single question:Given the last 30 years of relentless offshoring of U.S. factories -- and all the excited explanations about how inevitable, even good, that was in global economic terms -- why would anyone bring assembly lines back to the U.S.?Why, as the story asks, does it suddenly make sense for GE to manufacture dishwashers in the U.S. -- and not just dishwashers, but the plastic-coated wire racks that go into the dishwashers?The answer, from GE's Appliance Park, was much more thoughtful and strategic than I imagined.Neither story argues that we're about to return to the boom years of the 60s and 70s when everything we needed to get through the day, starting with our Fruit of the Loom underwear, was made right here. (The headline, "The Insourcing Boom," may have been a tad enthusiastic; the stories themselves are much more careful.)The stories make a case that the global manufacturing system is shifting again, that outsourcing may have been overdone, and that manufacturing may achieve a much different balance over the next decade.Tonelson's data points aren't wrong. But what GE is doing with its appliance division isn't a mere anecdote. It's a strategic bet that might signal a shift in the U.S. economy; and it's a competitive re-positioning that may cause some manufacturing companies to do what GE itself has done: Ask hard questions about where it really should be making products.
After the jump, a reader's response on this exchange.
The Atlantic articles were about signs of a turning point, while Tonelson's reply was basically to presume that recent historical trends will continue.A factor not mentioned by either is the social-behavioral one: the herd-following behavior of much of American business that makes changes simply because management sees competitors having already done so, rather than because they have analyzed their own strategic picture with any thoroughness or objectivity. The resulting popular trends typically reach their peaks just at the moment before their flaws become readily apparent.We have a whole consultancy industry based on the idea that smart people with no deep experience in any specific industry can convince clients that trend-following is the same as business leadership. And trends can turn as often as the drop (or rise) of a hemline, keeping too many consultants fully employed.I'm willing to bet that the Atlantic has correctly begun finding the bellwethers of the domestic manufacturing counter-trend, now just beginning its own ascent to future inevitable excess.