Dick Morley on manufacturing jobs

Dick insists that the idea that manufacturing is somehow bad has caused jobs to be replaced with automation. US jobs are not leaving; they are being driven out. No community in N. America really wants a new assembly plant, a printed board facility or a semiconductor enterprise. Manufacturing companies are penalized with high taxes, strict zoning regulations and infinite bureaucracy. NIMBY (Not In My Backyard) attitudes are driving manufacturing offshore.

Ireland, China, Korea and Hong Kong - all invite industry with open arms and deferred taxes, and their economies thrive. They treat manufacturing people as heroes. During the early days in the US, Ford, Edison and Steinmetz were treated as heroes. But today, big factories are despised and penalized. In television dramas, the villain is the businessman, and the hero is the scrubby squatter who fights to prevent job development.

India, Russia, Hong Kong, Malaysia and Viet Nam all have growing industries in outsourced software. In the US, the software engineer is positioned much as the small farmer was half a century ago, and faces the same certain future of erosion. The real unemployment rate of higher skilled people is now estimated at 40%. The erosion of non-service jobs is moving up the food chain.

Dick Morley proposes solutions:

• The prevailing wisdom of lower-cost, higher-volume manufacturing is clearly wrong. Stick to high-value non-commodity items.
• Stop thinking that innovation is high risk and high cost. The US has a significant level of entrepreneurship and talent which should be encouraged and stimulated.
• Develop mini-enterprise zones: micro-China locations supported on a national basis, not provincial. The US should own them and they should be leased to the needs of engineering and manufacturing talent. Much like national parks, the species of manufacturing and innovation needs protection.

Invensys will move to US - CEO will exit

Rick Haythornthwaite joined Invensys just 2 years ago to rescue the ailing company, after Allen Yurko had already screwed it up. The company now has a £900 mn pension deficit and debts of £1.6 bn. Since Haythornthwaite arrived, employment has fallen from 79,000 to 55,000. After the second wave of disposals, there will be just 15,000 people.

The latest news is that Invensys is expected to move its headquarters to Boston, MA, USA. The rail division employs 2,960 people in the UK, with British Rail its primary customer. The remainder (primarily Foxboro) is US based, so the move makes some sense. The intention is for Invensys to continue to be listed on the London Stock Exchange - dismal prospects caused a plan for NY stock listing to be abandoned.

The relocation plan has yet to be approved by the board, but insiders say that it is just a matter of time before it happens. Insiders report that Invensys HQ in London is already seeing a staff exodus, about 5-20 departures per month.

Here's the strange part - but not too strange if you take a broader perspective. Rick Haythornthwaite has told friends that he does not wish to move to the US. One would assume that, by the terms of his current contract (changed in May 2003), he could exit with just a month's notice.

The US move is supposed to occur after a year or so. But, don't bet on Haythornthwaite staying that long. After he has sold off more than half of Invensys (£1.8 bn worth) and re-structured the finances, what is there left for him to do? He really doesn't know beans about industrial automation.

After the Haythorn weight has departed, who will be the new CEO? The board (now buoyed by the booting of Lord Marshall) may look around for a tough US manager, like David Cote of Honeywell. Or, perhaps they already have someone in mind - someone who has insisted that the company must be moved before he joins. Or, perhaps the new CEO is already in tow - how about Leo Quinn?

Jim Pinto Book: Automation Unplugged

Automation Unplugged -
Pinto’s perspectives, pointers & prognostications.

Here is the Table of Contents for Section 1:

Industrial Automation Majors - the good, the bad and the ugly.

• Introduction by John Berra, President Emerson Process
• The Urge to Merge (includes the "famous list" - revenue rankings)
• Siemens - American manager’s view
• Emerson - strong management drives performance
• Honeywell Industrial Systems - The GE-Honeywell fiasco
• Aggressive French giant - Schneider Electric
• Invensys in decline
• Whither Rockwell Automation?
• The ABB Blahs
• Yokogawa exemplifies Japanese automation companies
• Companies in Trouble
• The second tier-tomorrow's leaders

"Advance orders" are now being accepted (see weblinks below), and the books will be shipped as soon as they become available.

And I'll be at ISA Houston, presenting and autographing my hot-off-the-press book. Join this presentation (at no charge if you attend ISA EXPO 2003 in Houston). Or register now for one of the limited number of online seats if you cannot be in Houston.

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Editorial - why aggressive antagonism?

Most thinking people I know are a mix of views, defying any restrictive label. And I worry about the ones who are not such a mix; this usually means that they haven't thought much about the issue, and are simply falling back on "the party line". I remember one response, "I don't know. I haven't had a chance to read Newsweek..."

Change is slow, because people don't like to change. Change means admitting you were previously wrong, which no one likes to admit. And when one does reverse one's position (for whatever reason) the "opponent" pounces viciously victorious, "Aha! You see! You finally admit it!"

I'm starting to think that the 2 major political parties are the problem. The political "hierarchy" somewhere develops the "party platform" and then the rank and file have to toe the party line. No matter what awful problems arise, the administration is supported with excuses for failure, and criticism is immediately dismissed as purely partisan politics. The whole political system seems to be based on polarized, aggressive antagonism. I cannot help but feel that is a subversion of democracy.

Someone said, sadly, that 9/11 did indeed have one positive effect. For once, all Americans stood together, united against the evil that had been perpetrated against our country.

How then, and when, can we unite again?

eFeedback

"Wow! Joe Martin needs to calm down and give people a little more credit! The point of Dilbert is that it presents an exaggerated view of the workplace, which means that there is always something which readers can relate to, no matter how unlikely the situation. It's just something to provoke a wry smile, and give workers perhaps a sense of bonding, whilst recognizing certain traits in themselves and each other.

"I think the fact that Joe believes Dilbert is leading America's workforce astray is bizarre for two reasons: Firstly, it shows that he has little faith in the working population if he truly believes that people are that easily influenced. Secondly, come on, Joe - IT'S A CARTOON!!

"I consider myself a productive, hard-working individual, but enjoy my own lazy streak. Hence, I appreciate Garfield and his relaxed attitude to life. But this does not mean that I'm likely to eat lasagna with my hands, sleep in a box or abuse slow-witted dogs.

"Of course, it is entirely possible that Joe was being ironic, in which case kudos to him for writing an entertaining letter, and inspiring me to join this irreverent and enjoyable debate."

"Roy's solution does however suffer from the problem of assuming that everyone is driven purely by greed and competition with others. Yes, many corporate people seem primarily motivated by getting more power and more income/stock options etc. But I think that there are far more who have other goals.

"There are a larger number of people who once they have got past the lower levels of Mazlow's hierarchy, have other goals. Some are business oriented and work at having a long term business strategy. Some are engineering oriented and want to have their name on patents or be a contributor to a product development. Others are people oriented and enjoy developing people to reach their potential. Yet others develop relationships with customers as part of a long term selling plan. The list goes on.

"It is not clear to me that going to a union for professionals is the answer. I think that companies managed solely by self-serving executives will, in the long term go out of business. New companies will grow in their place or some companies may start to understand the value of the knowledge represented by their employees. I know of one person laid of by one company has been recruited by a competitor to help migrate customers from one to the other. I know of others who provide support for customers who don't get it from the original supplier."