The Detroit Free Press last week featured a well-timed article written by Bill Ford, the Executive Chairman of Ford Motor Company, entitled Why Manufacturing Still Matters. Mr. Ford’s current concern is that maintaining manufacturing capability in the U.S. absolutely matters not only in producing jobs and tax revenue, but in fostering innovation and new technology. I could not agree more. I found this quote to be the most powerful takeaway from the article. “Our home team – America – can no longer take its economic leadership for granted. Other countries have strategic plans and carefully thought-out growth policies. We don’t have a plan, and sometimes it seems we don’t have a clue”.
Coincidentally, in the backdrop of this week’s financial crisis, the U.S. Congress did pass a $25 billion loan subsidy bailout for the three major U.S. auto companies, Ford, General Motors and Chrysler, and several of their suppliers. This legislation provides so-called loans that would allow each of the big three to borrow money at interest rates as low as 4 percent, and have five years time to start repaying the government back for these loans. Indications are that there are few strings attached as to where these companies can apply this money, and we would all hope that based on Bill Ford’s eloquent article, that some of these monies would be invested in new manufacturing capability. Interesting enough, the same industry lobbying group that influenced the legislation is also seeking another $25 billion in loans, but the political climate right now is probably not the best for implying bailout.
Rather than adding more political commentary as to why U.S. legislators continue to prop-up specific U.S. auto companies that have a legacy of being non-competitive in fuel efficient products and cost-competitive manufacturing capabilities, I will rather take to heart the spirit of Mr. Ford’s comments. I would propose that if there is going to be any consideration of another $25 billion legislative proposal, that it instead be directed at developing a U.S. long-range plan for manufacturing innovation and capability that would be available to all U.S. companies. One would think that Mr. Ford and all of his other auto industry executive colleagues would take to heart the message of having a carefully thought out U.S. strategic plan available for all U.S. industry. Isn’t that what America is all about, all boats rising!