Manufacturing’s Strength Is Stability

As I write these words, the Detroit automakers are asking the federal government for money. In the course of making their case, auto company spokespeople have cited how much these companies spend just to keep their facilities open, just “to keep the lights on,” as it were. The numbers are huge. So why not idle some facilities for now? One spokesperson recently gave an answer: To idle a plant costs money. Steps have to be taken, and expenses have to be incurred. In terms of short-term finances, keeping the lights on is actually the cheaper thing to do.

I don’t mean to add to what has already been said about auto industry loans or bailouts. Instead, what interests me about the above exchange is something it says about the worth of manufacturing. Manufacturing facilities have inertia that can make them anchors during uncertain times.

It’s typically big news when a plant closes. The event makes headlines locally and perhaps nationally, too. However, headlines are not necessarily an indicator of trends. Plane crashes are big news as well—not because they are common, but because most planes land safely every day. Similarly, most manufacturing facilities stay open through good times and bad.

Indeed, even when a slump is deep, a manufacturing plant generally keeps a large percentage of employees at work making product until the slump passes. Plants do close, but because the investment is so large, it takes a lot of misfortune or missteps before a closure occurs. Once they are up and running, manufacturing facilities are inherently more stable than other enterprises—even if headlines can create a different impression.

Because of the benefit of this stability, manufacturing sometimes does merit public support. But from where? Even though eyes are on Washington at the moment, it is actually the state and local governments—as the beneficiaries of having manufacturing in their regions—that are in the best positions to determine what encouragement (if any) they are willing to provide manufacturing.

In fact, that may well describe what is happening. Here again, it is the out-of-the-ordinary that makes news instead of the commonplace. In contrast with the picture of the auto industry asking for federal support, production facilities have been founded or have flourished in recent years throughout the United States—in many cases partly because of state or local programs or incentives aimed at manufacturers. True, in any particular case, the merits of the specific support may be debatable. (Local voters hopefully will weigh in.) But what can be said is this: These measures represent a consensus—in one area of the country after another—that manufacturing is a blessing in the places where it occurs.