November 30, 2007

News & Opinion: The Rust Belt Redux

By: 800-CEO-READ @ 12:18 AM – Filed under: Management & Workplace Culture

The News Hour with Jim Lehrer began a new series on America's response to globalization last night, and their first installment focused on our home city of Milwaukee. We don't see Milwaukee on television that often anymore, so it was kind of odd to turn on the news and see them tearing down the old tannery on Water Street. "Wonderful," I thought to myself, "another uplifting story about the demise of the Upper Midwest and decline of manufacturing in America."

After the shot of the tannery coming down, there were the requisite shots of other abandoned factories accompanied by stories of the thousands of jobs lost when they stopped churning out their truck frames, beer, and all the other things that made Milwaukee famous. And then something unexpected happened. A shot of a factory that's not abandoned, a shot of sparks flying in front of welding masks.

News Hour Economics Correspondent Paul Solman had found Bucyrus, a manufacturer that is not only staying, but currently expanding inside America. This story wasn't about the demise of manufacturing after all, but its unlikely comeback. It focuses on Bucyrus and Harley Davidson, and how the management and unions there are now working together to keep high-end manufacturing jobs here in the Industrial Midwest to produce high-end products. "In fact," Solman reports, "Bucyrus is expanding right here in Milwaukee, increasing its manufacturing space by 50 percent, doubling its workforce, tripling its production." After moving jobs overseas to China for years, Tim Sullivan--president and CEO of Bucyrus--is now bringing them back, explaining his philosophy of productivity this way:


The misconception really is that by paying a guy $22 bucks an hour, that's not cost-effective. That's the wrong way to look at it. You pay a guy $22 bucks an hour, you expect $22 bucks of good productivity out of him. If you pay a guy $10 bucks an hour, you're going to get $10 bucks an hour.

I was 17 when I got my first job in Milwaukee. It was in a factory on the south side, where I packed bricks and cut the fiberglass used in steel furnaces. My three older brothers all worked for that same company around that time, but they worked on the road, traveling across the Midwest cleaning and repairing furnaces on weekends and holidays when the factories were shut down. They'd have to bust out the old brick in recently shut off--and therefore sweltering--steel furnaces with 50-pound jackhammers and lay in new brick. It wasn't glamorous work, but it was honest, and it paid relatively well. None of them wanted to do that work forever, but more importantly, we didn't think it was possible. None of us thought that the factories they were going out to were going to be around much longer. We were using the job to save some money, to move onto other things. With companies like Bucyrus, maybe that trend is reversing. Many of the workers there are making $100,000 a year or more.

As pointed out in the video (which I highly recommend by the way), that is more than a job, that's a profession.