Tuesday, July 21, 2009

Will we recognize the future manufacturing industry?

What happened? Did I wake up from one nightmare to find I was living another? What happened? Did I wake up from one nightmare to find I was living another? Coping with the current recession is enough of a problem, now I am supposed to look beyond to the recovery to see what shape the industry will take?

What will the post-recovery world of manufacturing look like? Notice I'm still wearing rose-colored glasses, believing that global recovery will start in 2010, regardless of what the pundits and now our leaders are telling us. Not to deviate from this stream of consciousness, but I have read comments from a few writers who know the manufacturing economy and they speculate that the recovery rate could be steeper than generally being projected. Now that's a thought to hold on to.

What got me thinking about the post-recovery landscape in the manufacturing sector was the translation of a very well-written Spiegel International Online article by Alexander Jung titled "Germany's Export Champions Slammed by Economic Crisis." In this the writer paints a bleak picture for industry in Germany's Musterlaendle. What could have been another litany of company woes, and is, actually, really has a more compelling message--how will these companies cope with a changing world brought on by the global recession. Traditional export markets, the strength of the German companies referenced, may be challenged by new competitors who used the recession to position themselves for the "new" markets. My read on the writer's view is that political, economic, and social effects of this downturn taken together will possibly be seismic.

Only one writer's view, but enough to get me thinking about the near future and what a recovery period will bring. It seems to me that forward-thinking companies who are able to gut out this recession, who leaned down to the bare bones, who have not cut product development funds but have invested in them, who have sustained their market presence and visibility, who have used this terrible economic climate to better measure their customers' future needs, will be the survivors. That's right; I use the word survivors because it’s been that brutal to do business this past year. I know because I'm not just an observer, I'm one of you.

We can look no further than Detroit where mighty General Motors has been brought to its knees in part by their misunderstanding of their markets. Gone are the badges of Pontiac, Saturn, Saab, and Hummer. Gone, perhaps forever, will be the arrogant GM buyers who had the power to make or break vendors. Now they must go, hat-in-hand, to their vendors who are asking for up-front payment terms that would have been laughable two years ago.

Paraphrasing Charles E. Wilson, the CEO of General Motors 55 years ago, "What's good for GM is good for the country." "Engine Charlie" must be turning in his grave as he sees his beloved company humbled, shamed, and vilified by the media. In 1953 he was arguably more powerful than President Eisenhower. Now his company is forced to go begging in Washington to a new President who wasn't even born when he uttered that famous phrase. My how the times have changed.

Lesson learned; be careful, it might take a half century for you to have to eat your words.

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