Sunday, May 09, 2010

Made In The U.S.A... Or Not

If this story doesn't get your blood boiling...

After everything that's gone on with "big" finance on Wall Street in the last decade not the least of which is buying off politicians of every stripe we find an attitude that is lining up the final nail in the coffin of the American worker.

Meet Yet-Ming Chiang. His company, A123 Systems, has devised safer and longer-lasting batteries than the conventional lithium-ion currently slated for most production hybrids/electric cars. A remarkable feat packing in excess of 600 cells into a case no larger than an airplane carry-on bag. The 52-year old MIT professor and inventor already has this technology in use in many of the worlds cordless power tools.

But Chiang and his company are having a devil of a time moving to full-scale commercial production and creating thousands of new American jobs? Why?

It's just another chapter in the depressing history of manufacturing's decline in this country. Regardless of the clear advantage these batteries would give to American competitiveness and the add-on value of further technical development, many on Wall Street were incredulous when A123 asked for capital to build factories in America. Asia, yes. China, yes, of course, but Michigan, why?

Is it the American public who is really the one to blame here, and not Wall Street? The fact is Wall Street is not there to be altruistic. As hard as it is to swallow Wall Street bankers, investors and venture capitalists are only interested in the maximum return on any investment. That's their job. Guaranteeing Americans have jobs isn't. The question is: is the public willing to pay for American labor? The answer is clearly no they are not. People are still paying the same price they paid in 1975 for a whole host of products that are now made with Chinese labor at slave wages. People don't care, they want their their carts overflowing with cheap junk at Wal-mart. Unfortunately along with cheap, junky toys and sometimes poisonous everyday household goods our high tech gadgets are built in China too.

For too long there has been the view that the American economy could continue to prosper even when manufacturing moved to Asia, as long as Americans delivered the best ideas for new high-tech products - think Apple's iPod, iPhone. Unfortunately with the rules imposed by the Chinese government for intellectual property transfers it suggests that manufacturing devoted to thriving high tech industries acts as a magnet for research and development facilities too. It makes perfect sense. So, America loses twice.

Along with the American consumers appetite for cheap junk we also have negligent and out of touch labor unions and Stalinesque bureaucratic and environmental regulators. They make it so unattractive to set up shop in hometown U.S.A. that eager patriots go to China anyway so they can strike while the iron is hot! America loses three times.

When we can't move the means of production oversees, such as agriculture or construction we illegally import cheap Mexican labor. It is exceedingly clear that Americans won't pay the price for American workers. Wall Street doesn't see value to the bottom line using American labor when high tech communication and manufacturing systems as well as ample transportation make it more profitable to do the work elsewhere.

There may be no way of turning it around. America may never be a major manufacturing country again, if that's so America will stop being a powerful country eventually. What can be done? For one, when patriots like foreign born Yet-Ming Chiang want to build factories here we (collectively) should move heaven and Earth to assist him. Prove Wall Street wrong, prove me wrong, please.