There's Hope for Manufacturing

All good things must come to an end. Writing this blog for the past year has been a wonderful experience, but it's time for me to pass the baton into the able hands of Charlie Alter, who will be offering his advice on a weekly basis right here at http://www.allbusiness.com/manufacturing/3777495-1.html. We've been running in tandem for awhile, and now he'll be on his own.

I'll still function as Manufacturing Editor. I'll just be less visible. My main goal will be to support our new relationship with the Manufacturing Extension Partnership and continue to develop helpful content based on advice from the MEP Editorial Board.

I don't have to tell you that these are not easy times to be a small manufacturer. But I think there are reasons to be optimistic over the long term. The biggest problem for most of you probably has to do with credit, and resolution of that is already on its way. Credit may be a little harder to find for a while, and it may cost a little more, but it will be there.

For those of you connected to the automotive industry, the other big problem is the sad state of the whole sector. Government help is clearly on the way, so there may be hope, even if it's ultimately in the form of a semi-nationalized auto industry, similar to some European airlines.

Over the longer term, the most important question for small manufacturers - the one you should be thinking about every day - is how to deal with the reality of a global marketplace. This may involve learning how to sell in foreign markets, which can be a little scary. What do you do, for example, if something goes wrong. Pick up the phone and have a conversation in Chinese? The answer is, Of course not. You call the English speaking distributor you've carefully selected and resolve the matter through him. Believe it or not, the U.S. Government can be a big source of help getting started in this area.

Competing in the global marketplace is not impossible. The cost advantage that low-wage countries have in manufacturing is surprisingly small - about 17 percent on the average, which means it's a lot less in some areas. That's not insurmountable. But closing the gap will not be easy.

Which brings me to my last point. The fact of life that small manufacturers have to face is that it's not easy. You may be thinking, “It was never easy. True enough. But, even if you've been working hard for the past twenty years to get to where you are, you're not going to be able to coast.

Some of you who are reading this post should probably consider getting out “While the getting' is good.”

That's not my choice. I'm going to stick around as Manufacturing Editor here at AllBusiness.com. I'll just be working behind the scenes now.