Western manufacture decline

This might be a copyright theft but perhaps opinion on blogs are public domain. Anyway I reproduce verbatim a blog post from Dale R McIntyre, PhD on Andy Revkin's dotearth blog. A blog that seems to be frequented mostly nowadays by realists rather than the wooly-minded Malthusians who used to dominate. Several are admitting now that they don't have quite the same belief that scientists know any better than the rest of us about the state of the planet. However, enough about fantasy science, let's focus on real engineering. This post shows that the USA is now facing the same effects of neo-liberalist de-manufacturing that the UK faced in 1980's. It's difficult to say if it's avoidable or not but it's worth chronicling at least - especially the part about cheap and nasty Chinese cheese-like steel which we've all become accustomed to encountering in household items. When will a major engineering catastrophe occur because of that short-termist thinking?

"Those of us who have tried to manufacture anything here in the US over the last 20 years could explain it to you. The manufacturing skills and enterprizes which led America to prosperity for over two centuries are in a parlous state.

The causes are many but let me detail some of the high points.

In the mid-1990's, China was allowed to join the World Trade Organization with its currency, the renembi, pegged to the dollar and undervalued by about 30%. (For why this was done, you might enquire to the husband of our current Secretary of State, or to Al Gore.)

With an undervalued currency, labor paid at rates on the order of $1.50 PER DAY, no union work rules and no environmental rules worth mentioning, the leadership of China made mercantilism their national policy and export earnings were the order of the day.

American manufacturing firms were soon putting thousands of man-hours of engineering into their proposals, presenting their best, most finely-honed price, only to be told that they had to meet the "China price". That is, unless they cut their best price 30% to match what the Chinese, with their undervalued currency, could do the job for, the work would go overseas. (For documentation please see Business Week and Fortune articles all through the late 1990's and early 2000's)

US firms who met the China price, hoping to keep business and cash flowing in the door, ended up going bankrupt. I believe I am correct that every single major auto parts supplier in this country has been through bankruptcy.

This attack of the "China price" came on top of twenty years of steady erosion of profitability in the manufacturing sector, due to litigation costs, union work rules and the capital requirements of installing pollution control equipment. America led the world in mandating pollution control all through the 1970's and 1980's, at a time when our competitors faced no such requirements. It came at a price; the hollowing out of America's manufacturing infrastructure.

America's steel industry, once the world's strongest, is just a vestige of its former self. What happened? Steel mills had to put their capital into flue gas scrubbers; Asian mills did not. Union wages made America's steel workers the highest paid in the US, paid 47% more than comparable jobs in other US industries. Until the mills went bankrupt, that is.

Every one of those wind turbines will need a tall steel tower to hold it up in the breeze. The Chinese steel industry is now the world's largest, with huge over-capacity, so they sell their steel cheap. It's not very good steel, but boy is it cheap.

Little critical detail items stopped being made here because of high labor costs, the cost of legal liability and the cost of environmental compliance.

Take fasteners, for instance. Big deal, they're just bolts and nuts, right? Well, Boeing is losing customers for their 787 Dreamliner because there are no domestic suppliers of fasteners to hold the wings on, and the foreign suppliers didn't deliver on time.

Every single blade of every wind turbine will be held on by a circle of about 50 high-strength steel bolts. China makes tons and tons of bolts. They are not very good bolts, and a shocking number of them are of cheap low-strength steel but "decorated" with markings to make them look like high-strength steel bolts.

When cheap bolts are installed in a wind turbine they will fail by metal fatigue and their blades will fly off and impale whatever cow or coyote or farmer happens to be passing by. But you can buy Chinese bolts and you can't buy American bolts any more.

Literally thousands of small forges and foundries have shut down in the last 20-30 years. Zinc and chromium plating shops have been particularly hard hit because of the environmental costs of disposing of the chemical plating baths. All of those steel wind turbine towers will need to be coated or plated; otherwise the towers will buckle in 10 or 12 years due to corrosion damage. Where would we do that here in the US? The Chinese don't do a good job of zinc plating but they do it, and nobody cares much what gets dumped in the rivers.

Finally you will need three very long very stiff fiberglass blades for each turbine. (Dow Corning was a pioneer in glass fiber manufacture, but they were driven into bankruptcy here in the US, over the bogus silicone breast implant lawsuits.)

You need epoxy or polyamide resin to soak the glass fibers in to make fiberglass. The resins are petrochemicals. There has not been a new oil refinery built in this country since 1976, and only one new chemical plant in the same time. Oil and chemicals are bad, right? Lots of lawsuits, no building permits."

Dale R McIntyre, PhD

Sphere: Related Content