TWO VISITORS attending this year's Fabtech International show in Chicago sat down for a brief rest. One was eager to talk, the other ready to listen.
“We recently outsourced our human relations operations,” he announced, “and we are saving a bundle.”
But for someone saving a bundle, he was not completely happy. That's because this resident of America's heartland, who proudly stamps “Made in USA” on the products his company manufactures, saved his bundle by outsourcing his HR department to the Philippines.
There are some who argue that it doesn't matter if products can be manufactured cheaper overseas. After all, that just means that we as consumers get a better price on the widgets that we buy.
But our job losses aren't being confined to guys operating press brakes and welding torches. As our manufacturing friend explained, rather than contact an on-site HR representative, his employees now call a toll-free number for routine business such as insurance claims. The call is simple to make, and most of the employees do not even have a clue that the person on the other end of the line is speaking to them from halfway around the world.
The service is good, he said. The US-based human-resource service provider has even trained its Filipino employees to engage callers in small talk about Chicago weather and the Chicago Cubs. But the cost reduction comes at a price — the jobs of his neighbors.
The situation at this company highlights the difficulty that the United States encounters in making its manufacturing sector more competitive in the face of cutthroat global competition. On one hand, sending our jobs overseas hurts our own economy. The human resource specialists who were outsourced by the Chicago-area manufacturer earned an average of $40,000 annually — money used to buy U S goods and services. By contrast, the Filipino HR representatives earn a fraction of their U S counterparts. Their salaries flow outside of the U S economy.
On the other hand, management also must consider what is best for the individual company. North American manufacturers have been forced to make some tough cost-cutting decisions in order to remain profitable — or even viable — during this latest economic downturn. Like many others in a similar situation, he chose to save his company money instead of saving jobs.
It's a complex issue that has even like-minded individuals at odds with one another. For example, two bills in Congress, both sponsored by House Republicans and both seen as pro-business, have the House divided. In October, the House Ways and Means Committee pushed through a bill designed to help make U S international companies more competitive abroad. In opposition, the chairman of the Small Business Committee Don Manzullo is pushing for help for domestic manufacturers. He promoted his ideas in his keynote address to this year's Fabtech International in Chicago.
In his speech, titled “Restoring Manufacturing in America,” Manzullo said that the U S manufacturing sector is in crisis. According to the Illinois Republican, American manufacturers trimmed payrolls for the 39 consecutive months leading up to his address November 17. The result: A loss of 2.8 million manufacturing jobs — an average of 75,000 per month.
The manufacturing sector is the lifeblood of the U S economy. It circulates dollars throughout our system — to those involved in raw materials, to fabricators and suppliers, to wholesale distributors and retailers. When we manufacture here, the economy benefits far more than when we simply unload finished goods from a shipping container and place them on retail shelves.
While there might not be an easy path to protecting American jobs, our plant safety story on Page 18 shows some specific things our industry is doing to protect American workers.
In today's customer-driven markets, it's easy to focus on ways to deliver products faster, at less cost, and with higher quality. But no matter how automated our plants become, the best way to achieve those goals is to have healthy employees on the job, doing the job. Creating a safe work environment isn't just the smart thing to do — it's the right thing.
Most of the companies we interviewed for the story are regular winners of the Truck Trailer Manufacturers Association's annual plant safety awards. We congratulate these companies for being able to walk across the stage at the TTMA convention each year to receive their awards. But even more, we applaud them for implementing policies and practices that help their employees return home safely each day — as if nothing could ever happen.