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OPINION: Getting Our Technology Back on Track
By Tim Davis, General Manager, GPAX, Inc., Reynoldsburg, OH
Price, Value, Availability, Quality — these are the words we hear whenever the discussion turns to our next planned purchase. We only think in passing how those important ingredients are balanced and how they make a profound impact on where these goods are made. The Americas and much of Europe are competing with low labor cost regions of the world in a battle to maintain production of technically complex mechanisms. What we see is an increasingly competent group of competitors throwing the weight of large numbers of highly skilled and talented but poorly compensated souls against any challenge the market demands. The difference that has made low labor cost markets the successful bidder on so much of the world's assembly business also reduces their ability to be a more balanced trading partner, because of their low disposable income.

Already ingredients from these same low cost labor markets are flooding the U.S., causing us to question the wisdom of depending on these sources for components we depend on so much. And when we question the control of these components, we often get a strong response reminding us of the balance of payments deficit and how they are holding our Treasury hostage.

Technology Competitions
In the U.S., high school regional challenges called FIRST Competitions (For Inspiration and Recognition of Science and Technology), founded by Dean Kamen, have proven that tomorrow's generation will be ready to meet any challenges. In the national completions in Atlanta a few months ago, tens of thousands of students and their mentors gathered to solve technology problems that could have just as easily been solved by manpower alone. The way that problems were solved made all the difference. Using technology: motors and solenoids and grippers and PLCs and vision technology and a myriad of sensors, the students learned that they not only can look forward to tomorrow, but that they can build tomorrow.

They learned that they could build tomorrow — without an army of low cost employees working hard to somehow generate the desired results, but with robotics and brains, which once employed, stopped only for routine maintenance; didn't complain because it (the robot) was getting tired or had a problem with the repetitive nature of the work or needed a coffee (or green tea) break. This is the same equipment and kinds of operations that don't develop bad habits or intermittently forget to insert a key component.

Balance of Trade Deficit
When the U.S. technology products trade balance went most vertically negative, shortly after 2000, there was at first a crashing noise and then a relatively constant sound of deflation as the wind was being taken out of the U.S.'s high technology sails and we went into a relative free-fall of unbalanced trade. With the U.S. trade imbalance with the World heading towards $400 billion annually (according to U.S. Census Bureau, Foreign Trade Division Data Dissemination Branch), we must do more to plug the leaks. The trade deficit is not only made up of crude oil purchases from the Middle East, as some have mentioned, but our increasing thirst for low cost technology. Keep in mind, history students, that the U.S. Trade Balance was in the favor of the U.S. as recently as 1970 (according to the U.S. Census Bureau, Foreign Trade Division). Moore's law is perpetually tried in the court of assembly economics and the consumer ends up the winner. Now there are multiple companies vying to produce notebooks so inexpensive that every child in the developing world can find access to one. One particular cell phone model sold over 200 million units (http://www.engadget.com/2007/05/07/nokias-1100-handset-over-200-million-served/) since its launch. Apple has sold over 100 million IPods.

Thomas Friedman (http://www.thomaslfriedman.com/) is right when he says that the "World is Flat", but the true agony of the situation is that we believe that we must mirror the methodology of other regions of the world as we compete with them.

Getting Back on Track
Automation is one of the most important and effective ways to move technical production back "onshore". The automotive world wants components that are produced in nearby areas, where they are free of port closures and long logistic paths that can be devastating to production plans (idled production plants make for unhappy shareholders, employees, and customers).

If we can use our skilled workforce in a more aggressive fashion, to address with brains and investments in technology the disparity in labor costs, then we may bring some of the balance back to America instead of fueling a continuing slide towards dependence on the Pacific Rim.

We recognized far too late that the energy markets showed us what will happen when we lose the ability to convert raw materials into finished products. The market spikes in automotive fuels of recent note were caused not only by an increase in raw material prices, but in a reduced ability to convert the raw material into finished goods; in the energy markets the reduction in refining capacity can be equated with America's increasing dependence on low labor cost assembly plants.

Just as America is increasingly turning towards home grown agriculturally based vehicle fuels with corn based ethanol-gasoline blends and soy based biodiesel, we should look more aggressively at restoring our assembly production to onshore manufacturers, give lots of good paying jobs to those kids that excelled in the FIRST competitions, and reduce our dependency on foreign oil. This would get kids (and lots of older folks, too) off the streets and rebalance the economy in a way that the U.S. benefits.

Look those projects over again that have, at first seemed difficult to land in the U.S.; rethink automation, not just most of the process, but all of it. Consider the possibility of a skilled workforce that builds the products where the customers are — in the U.S. Consider the reduced logistics costs, the carbon footprint, look outside the box and if the numbers are close, bring those programs back onshore.

At GPAX, we make an odd form tape packaging system that gives robots a leg up when compared to slide lines in assembling unusually shaped or difficult-to-handle products. We believe that re-domesticating assembly and manufacturing in the U.S. is not just the right thing to do, it's the only thing to do.

For more information, contact: GPAX, Inc., 555 Lancaster Ave., Reynoldsburg, OH 43068 614-501-7622 fax: 614-501-7626 Web: http://www.gpax.com  

 

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