Thesis on American Niche Machinery Manufacturing
January 14, 2023
by a searcher from University of Pennsylvania - The Wharton School in New York, NY, USA
American manufacturing is often seen as in decline but with increasing "onshoring trends", there could be new life in an industry that has seen underinvestment over the years. Interested in hearing the group's overall thoughts on trends in the space and specifically niche machinery makers
from Oregon State University in San Antonio, TX, USA
1) China labor is subsidized by the CCP, so its impossible for USA based labor to compete in most high volume, low priced or low margin manufactured goods. Exceptions are manufactured goods that, in the USA, use extremely high rates of automation, so very few operators are needed.
2) for lower volume, higher margin products, USA manufacturing can compete with China.
3) for products where the manufacturer does not want supply chain risk (by going to China), then USA can compete.
4) Mexico has been ramping up their manufacturing. Mexico has an advantage over USA because of reduced labor (though more expensive than China), but a lot less "overseas risk" and less geo political risk due to declining China-USA relations.
5) Because the USA has been off-shoring manufacturing for so long, and only now trying to reshore, there is a massive shortage in skilled labor. I'm an engineer, and while I could run a CNC, its not the highest and best use of my skill, as running a CNC is not engineering. I typically work with machinists who are skilled tradespeople. There are other "blue collar" skilled jobs but not enough people to do them. There is a massive shortage of these people.
from Texas A&M University in Elizabethton, TN, USA
American manufacturing is competitive in low through high volume scenarios, for the right products and customers. For "niche machinery" USA is competitive even at super low volumes. Though not sure if we're thinking same thing on this phrase. Germany probably is biggest maker of niche machinery in world. It takes deep product knowledge and service for the niche. Also, a niche with its customers in USA, EU probably best, so favors the local support.
I'm not sure I'd agree that American manufacturing is "under invested", tons has been and is being spent on automation and equipment, but not the "recession resistant" types of things many here want.