I have been following the Marlin Steel blog and the company for quite some time. They are a great company and very representative of the pride of American Manufacturing. Marlin Steel President Drew Greenblatt is on the Advisory Board of the National Alliance for Jobs and Innovation (NAFJI). We are featuring two of their quick blog posts below that are relevant to the state of American Manufacturing today: the real facts about the industry and why someone should work in manufacturing.
In February, the company, founded in 1968 in Brooklyn and later moved to Baltimore by Greenblatt, announced a new expansion. And in June of 2013, Fast Company, a magazine about innovation, featured Marlin Steel in an article titled “The Road To Resilience: How Unscientific Innovation Saved Marlin Steel.” The subtitle reads like an article in Industry Week, and countless other magazines, touting the renaissance or resurgence of American Manufacturing: “A Little Maker Of Metal Baskets Shows How U.S. Manufacturers Can Thrive Against All Comers.” Here is an excerpt from the article about Marlin Steel:
Within five years of buying Marlin, Greenblatt was getting killed. Chinese factories suddenly started making bagel baskets. Marlin sold its baskets for $12 apiece and with 36 baskets to equip a typical bagel shop made $450 when a company added a location. Chinese factories were selling baskets for $6 each. Marlin’s customers were switching to save $200 a store. And Marlin would never be able to match its Chinese competitors on price. “My steel was costing me $7 a basket,” says Greenblatt. “We were going to go extinct.” It would have been smarter for him to buy bagel baskets from China for $6 each and sell them for $6.50.
Marlin’s crisis came at an interesting moment in the history of making stuff. The bad news about U.S. manufacturing has been stark and recited relentlessly. The United States has 6 million fewer factory jobs today than in 1998, a decline of one-third in 15 years to just 12 million, the fewest since May 1941. Yet U.S. manufacturing is not dead or even moribund. Indeed, part of the job loss springs from growth in productivity. U.S. factories are relentless efficiency machines. The typical American factory worker today produces one-third more than in 2000, which is why manufacturers have been able to increase output while cutting employees. The United States still makes more stuff, by dollar value, than any nation in the world except China, which moved into the top spot only in 2010.
Marlin saved itself by facing a truth that few threatened manufacturers can stomach: It was failing because it had gotten everything wrong. It had the wrong customers; it had the wrong products; it had the wrong prices. Greenblatt realized—just in time—that even wire baskets could be innovative. The simplicity of Marlin’s technology is not what we typically associate with innovation—there’s no algorithm, no microchip, no touch screen. Instead, Marlin learned how its products could help its customers, providing the quiet innovation that can give a fellow U.S. factory a critical edge and help keep jobs in the United States.
So what saved Marlin Steel? Well, I don’t want to give away the story, so use the link above to read the full article, but simply…..it was Innovation.
As we have said in another blog post in the past, it is Innovation that will save and sustain American Manufacturing. We are already seeing such innovations put in place with Manufacturing turning away from it’s “dirty” past and looking more and more like the high tech companies we have come to know out of Silicon Valley.
To foster this innovation in Manufacturing, the federal government stepped up with it’s program to build innovation hubs throughout the United States earlier this year. Surely, the future of manufacturing is an exciting place and we are all living in that place now. No, there will not be as many jobs, unfortunately, in the manufacturing industry (with just today a report released about how by 2025 we will see more than 800,000 manufacturing jobs disappear even further than the peak in 1979) in the future. But, jobs are not the only indicator of success. As The Manufacturing Institute said on Twitter:
— TheMfgInstitute (@TheMfgInstitute) December 11, 2015
Despite the loss in jobs, each job will be more strategic, value producing and will require more skills, as there is also a large manufacturing jobs skills gap looming for 2025.
With all of that said, let’s get into some information to help continue to spread awareness around manufacturing.
So that brings us back to Marlin Steel. They publish a fantastic blog, that many the industry should read. The following is a blog post they published recently about 5 Facts of American Manufacturing originally published here.
It’s no secret that the American manufacturing industry has been on the mend in the last couple of years. With the cost of doing business overseas increasing steadily as wages and other operating costs continue to rise, many companies are reshoring their production capacity to the U.S.A.
So, what is the impact of American manufacturing on the economy? Why is manufacturing important to the U.S.?
The answers to these questions about manufacturing could be best answered by taking a look at some important statistics about the manufacturing industry in the U.S.:
Fact #1: The Manufacturing Industry Employs Millions of Americans
According to the Bureau of Labor Statistics, the manufacturing industry employed roughly 12,317,000 Americans in the month of October 2015. This figure takes into account all employees that work in the manufacturing industry, which may include purchasing agents, testers, inspectors, and other workers who don’t directly manufacture goods.
This is an enormous part of the American workforce. Even if you restrict the definition of a manufacturing worker strictly to just production and nonsupervisory employees, the manufacturing sector still employed more than 8.5 million Americans in October 2015.
Fact #2: Manufacturing Industry Jobs Outperform Fast Food Worker Jobs for Pay
One of the major issues in America is that many entry-level jobs simply don’t pay a living wage.
For example, according to the Bureau of Labor Statistics, the median wage for workers in the combined food preparation and serving industry, which includes fast food workers, was $18,410 a year in 2014, or $8,85 an hour.
Compare this to the median wage for machinists in the manufacturing industry, which was $39,930 a year in 2014, or $19.20 an hour. Here at Marlin Steel, however, employees make closer to $77,000 a year, depending on job performance and what skills they’ve mastered.
This gives manufacturing workers a better shot at being able to provide for their families and set aside money for retirement later in life.
Fact #3: Manufacturing Has a Significant Impact on the U.S.’s GDP
Statistics from the World Bank show that, in 2013, the manufacturing industry accounted for roughly 12% of the U.S.’s Gross Domestic Product (GDP). In that year, the GDP for the United States of America was $16,768,053,000,000.
This means that the manufacturing industry in the U.S. was worth roughly $2 trillion dollars in 2013. To put this in perspective, the GDP of Canada, our neighbor to the north, was less than $1.9 trillion in that same year.
Just this one section of America’s economy produces more value in a year than the entire GDP of an entire developed nation.
As the National Association of Manufacturers puts it, “taken alone, manufacturing in the United States would be the ninth-largest economy in the world.”
Fact #4: American Workers Out-Produce Their Chinese Counterparts
According to a report by CBS news, the average American manufacturing worker produces $104,606 of value” in a year while a “Chinese industrial worker produces $12,642 of output” in that same time frame.
This means that an American manufacturing employee creates eight times as much value in a year as their Chinese counterparts.
Much of this disparity in the productivity of American workers to Chinese laborers can be attributed to the use of manufacturing automation in American factories. Why? Here are a couple of reasons, using wire bending as an example:
- A single worker managing an automated wire bending robot can complete dozens of wire bends in a minute. A manual laborer might be able to complete a half-dozen bends in that same amount of time.
- Robotic assembly techniques increase consistency. Manually bending and cutting wires is less precise, increasing the chances that a part will have to be rejected.
While these examples are specific to wire bending, production automation can provide similar speed and consistency benefits in a number of manufacturing industries.
5: Manufacturers Account for Most of Private Sector R&D in America
According to statistics cited by the NAM, “manufacturers in the United States perform more than three-quarters of all private-sector R&D in the nation.”
From product research to the development of new manufacturing techniques and technologies, manufacturers do more to drive innovation in the U.S. than any other sector of the American economy.
This results in the creation of new intellectual properties and innovations that help to change the lives of Americans in both major and minor ways. In a way, the constant search for improvement by manufacturers is the lifeblood of innovation.
In many ways, the American manufacturing industry is incredibly remarkable. It provides well-paying jobs to millions of American taxpayers; jobs that build the middle class.
And speaking of manufacturing jobs, Marlin Steel also wants you to know why you should work in manufacturing, so they put together this quick blog post, originally posted here, about why someone should work in manufacturing.
A long time ago, the manufacturing industry was infamous for cramped, dirty work conditions and low pay. Dozens of low-skilled workers would be crammed into work spaces just barely large enough to fit them and perform repetitive, sometimes backbreaking tasks day in and out.
For decades, the preconception that manufacturing is hard, dirty, dangerous, and unrewarding work has haunted the American manufacturing industry. This preconception has kept many Americans from actively pursuing a career in manufacturing.
However, American manufacturing has gone through many transformations in the decades since the start of the industrial revolution. New innovations in manufacturing processes and technology have forever changed the manufacturing workplace for the better.
In fact, now is probably one of the best times in the history of America to begin a career in manufacturing.
“Why,” you ask?
Well, here are some of the top reasons that you should begin a career in manufacturing:
#1: Manufacturing Work is Safer Than Ever
For a long time, manufacturing work had a high level of risk, particularly in jobs where strong chemicals or heavy parts assembly was involved. Doing this work manually meant that workers would always be up close and exposed to various work hazards, even when strong safety protocols were in place.
The introduction of manufacturing automation has changed this.
Now, manufacturing workers can program and supervise manufacturing robots that do the heavy lifting. This keeps workers well away from hazardous materials and processes that can result in injuries.
In fact, since adopting manufacturing automation and enacting several key workplace safety programs, Marlin Steel has gone over 2,500 consecutive days without a major safety incident. Marlin Steel was even awarded with OSHA’s SHARP designation, one of only 5 businesses in the state of Maryland to earn the distinction.
#2: Manufacturing Work Pays a Living Wage
Manufacturers in the U.S. need skilled workers. To fill business-critical job positions in the manufacturing industry, manufacturers will pay well. Some manufacturers even offer bonuses and other incentives to acquire personnel with the skills they need.
For example, Marlin Steel uses a job skills matrix to track all of the skills each employee has. Each new skill that a worker masters is rewarded with a permanent pay increase. The more difficult the skill is to learn, the higher the raise.
Marlin also offers bonuses for meeting or beating aggressive production goals every pay period, not just once a season or year. If you can meet a tough production goal, you get a bonus on your next paycheck, not at some nebulous point in the distant future.
If you have the skills, a career in manufacturing can help pay your bills. With the right company, a career in manufacturing can put you on the road to financial stability and independence. It sure beats a dead-end job flipping burgers.
#3: Modern Manufacturing is Cerebral Work, Not Physical Labor
Another major change in modern manufacturing brought about by the use of manufacturing automation is that there is a greater emphasis on using your mind instead of your muscles.
Thanks to the introduction of robotic assembly techniques, workers on the production line can focus on tasks such as finding ways to speed up production or reduce waste rather than on tedious manual labor.
In modern manufacturing, knowing how to optimize a design or process counts for more than how much you can lift. American manufacturing companies now look for people who can program and maintain robotic assembly machines in top condition.
So, if you’re looking for a job where you get to use your smarts, and aren’t afraid of a little hard work, a career in manufacturing might just suit you perfectly.
American manufacturing has changed greatly in the last few decades. With the improvements in safety, pay, educational opportunities, and other benefits, there’s never been a better time to begin a career in manufacturing.