MANUFACTURING

On Texas tour,  U.S. producers aim to reshape view of modern manufacturing

As production gets more tech-focused, manufacturers put science, technology, engineering and math education among top priorities.

Posted February 22nd, 2017

The National Association of Manufacturers kicked off its annual State of Manufacturing tour Wednesday in Round Rock, seeking to capitalize on a friendly atmosphere in Washington and refashion the perception of American factory jobs and what’s happened to them.

Officials with the industry trade group, one of the largest and most influential in the country, were scheduled to meet with President Donald Trump on Thursday to discuss ideas for tax, trade, regulatory and other reforms.

“Manufacturing has seized the American imagination,” association CEO Jay Timmons said in a speech at the Emerson facilities in Round Rock. “Our industry has earned the overwhelming support of the American people. … The country is rooting for us.”

Timmons and other industry officials said the possibility of streamlining federal policies and putting them more in line with lower-regulation states such as Texas would help make American manufacturing more competitive and stimulate job creation.

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A recent study by the association identified 297,696 regulations that directly apply to manufacturers today. That’s not as much a factor of political philosophy, the association’s leaders said, but the natural outcome of policies stacked atop policies over the years. Eventually, that produces an outdated and overly complex set of rules, they say.

The idea isn’t to just strip away restrictions, Timmons said, but to update and streamline regulations so they still satisfy labor, environmental and other protections but do so “in a way that results in the least harm to the economy.”

Still, association leaders also acknowledged that U.S. manufacturers face a broader, structural transformation that has changed the nature of modern factory work and prompted a sharp decline in manufacturing payrolls.

As of January, U.S. manufacturers provided 12.3 million jobs nationwide, but that was down from 14 million in January 2007 and off about 5 million jobs since 1997, according to the Bureau of Labor Statistics.

Labor economists have blamed offshoring and automation for the sharp decline in factory jobs, once considered a core occupation for the American middle class.

On Wednesday, association officials sought to reframe that argument, arguing that technology and automation will create a variety of higher-skilled jobs both in and outside of today’s factories.

“The real story is about upskilling jobs, helping workers move up the ladder in a company,” Timmons said in his prepared remarks. “It’s about upscaling jobs, making jobs pay more as technology allows them to do more.”

Emerson CEO David Farr, who is chairman of the manufacturers association, agreed, noting how much today’s production jobs differ from the ones he used to see at his father’s factory.

The kinds of investments manufacturers have made in Austin and around the country “are creating jobs not imaginable when I was walking around the plant floor with my dad years ago,” he said.

Deborah Cannon/American-StatesmanDavid Farr, chairman and CEO of Emerson and chairman of the board for the National Association of Manufacturers, center and Julian Alvarez, labor commissioner for the Texas Workforce Commission, laugh prior to a presentation at the National Association of Manufacturers State of Manufacturing Tour at Emerson in Round Rock on Wednesday, February 22, 2017.

In an interview after the event, Farr stressed that Emerson and other U.S. manufacturers will need to continue to develop innovative products and services that command higher prices. Of the $9 billion in revenue generated by Emerson’s automation unit, he said, about 15 percent to 20 percent now comes from services and solutions — up from maybe 5 percent when he ran the unit.

But producing that advanced equipment and providing those expert support services requires a more skilled workforce, so the association has made science, technology, engineering and math education one of the priorities for its federal outreach, including its meeting with the president Thursday.

“If you go into my facilities today and you watch how we make of the control valves or the instrumentation or the control systems, it’s still manufacturing,” Farr said. “But I’m using more and more automation … and I have people on the lines who are technical experts that can understand what’s going on.”

Those jobs pay more — Farr said his factory payrolls have actually increased during his tenure — but they also reduce the opportunities for the low-skill workers who could rely on well-paid factory jobs in the past.

But it’s what more American manufacturers will have to do to remain competitive in a global marketplace and against low-cost labor overseas.

More-innovative products built by more-skilled workers — that’s the perception of “modern manufacturing” the association hopes to foster as it kicks off its 2017 tour.

Manufacturing jobs “are still out there,” Farr said. “They’re definitely higher paid jobs. They’re (more) technical jobs. The difference is products are getting more and more sophisticated, so you have to do it that way.”

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