Who Will Lead Our Recovery?

It has been nearly three weeks since the U.S. elections, and according to published results, half the voters were pleased and half were not. How does this affect manufacturing and the way we do business? In the months leading up to the election, when it came to purchasing capital equipment, many businesses were reluctant to make a decision. Being in a state of flux seemed to give people pause, and the words, “after the election is over” were often heard.

Looking for Leadership

 In the aftermath of the election we see that the stock market appears to be slowly climbing back up, after the major indices fell by approximately two percent the day after the election. Many consider this to be due to concern over the “fiscal cliff” - the $600 billion in spending cuts and tax increases due to kick in early next year. With Republicans maintaining control of the House, and the Democrats the Senate, it is feared that continued gridlock will threaten resolution of the fiscal cliff. The entire industry waits to see what kind of leadership we have in Washington. We hope our government leaders will take action to keep America strong and growing. But at this point, political wrangling is largely out of our individual control.

Control What We Can Control: Profitability

There is an arena where individuals can make an impact. If you’re in the manufacturing industry, you’re already aware that this is a cyclical business and we have persevered through many political changes. This is why we all continually strive to increase productivity to make affordable products for our customers. To keep ahead of the global competition, we must continue to invest in education and the best capital equipment that money can buy. Regardless of what our elected officials do to impact manufacturing, profitability can be our “business as usual.”

The Swell of Reshoring

According to MAPI (The Manufacturers Alliance for Productivity and Innovation), the U.S. economy is in the midst of a transition period from sluggish growth to a longer period of moderate growth. Pent up demand for cars and new housing, combined with readily available credit, are forecasted to translate to increased sales. Even with all of the turmoil within our government, we see a trend toward “reshoring,” or the return of manufacturing to the U.S. According to Gardner Business Media, Inc. (publisher of Modern Machine Shop and other industry publications), the high cost of shipping, supply chain challenges, poor quality and a trend to manufacture locally continue to drive reshoring. With Chinese labor rates forecast to double in the next six years, reshoring appears to be a trend that will continue.

Once Again, We Must Lead

Our markets continue to be on the leading edge of manufacturing technology and innovation. I am very optimistic in the companies and our industry, more than our political leadership. The economy has counted on us to lead recoveries for generations. We must once again continue to lead.

How did the election (both leading up to and after) affect your business and your business decisions? Please comment below. I encourage a frank and respectful conversation.

For more information on the Reshoring Initiative visit www.Reshorenow.org

Follow me on Twitter: @jkokuma

Jim King is President & COO, Okuma America Corporation