From: lessgovt@gmail.com   
      
   American Labor’s Real Problem: It Isn’t Productive Enough   
   By Greg Ip, Sept. 20, 2023, WSJ   
   For the United Auto Workers, it makes perfect sense to demand more pay and   
   better work-life balance from Detroit’s three automakers. After all, workers   
   throughout this historically tight labor market are getting exactly that.   
      
   But what makes sense to striking factory workers makes no sense for   
   manufacturing as a whole. Pay is ultimately tied to productivity: the quantity   
   and quality of products a company’s workforce churns out. And here, American   
   manufacturing companies and    
   workers are in trouble. The issue isn’t with labor-intensive products such   
   as clothing and furniture, which largely moved offshore long ago. Rather,   
   it’s in the most advanced products: electric cars and batteries,   
   power-generation equipment,    
   commercial aircraft and semiconductors.   
      
   Biden might be celebrating a manufacturing renaissance based on new factories,   
   but the share prices of former manufacturing icons Ford Motor, Intel, Boeing   
   and General Electric suggest skepticism is warranted about the durability of   
   this renaissance: All    
   are at a fraction of all-time share-price highs.   
      
   Yes, American companies still lead the world in design and innovation, but the   
   resulting products increasingly are made abroad, especially in Asia. Biden,   
   like former President Donald Trump before him, wants to reverse this, through   
   tariffs, subsidies    
   and other government interventions. Japan, South Korea, Taiwan and especially   
   China certainly intervened plenty to help their manufacturers.    
      
   But attributing manufacturing performance to government policies alone is   
   dangerous; it underplays how far Asian manufacturers have come in cost and   
   quality and how far their American counterparts have slipped.    
      
   Since 2009, manufacturing output per hour in the U.S. has grown just 0.2% a   
   year, well below the economy as a whole and peer economies in Europe and Asia,   
   except Japan.   
      
   In motor-vehicle manufacturing, the picture is especially bad: From 2012   
   through last year, productivity plummeted 32%, though some of this was no   
   doubt due to pandemic disruptions.    
      
   To say American workers aren’t productive enough isn’t to say it’s their   
   fault; after all, productivity depends on a multitude of factors beyond the   
   workers, including management decisions, the supply chain, public   
   infrastructure and regulation.    
   For example, American manufacturers use far fewer robots than their   
   competitors, in particular in Taiwan, South Korea and China, according to the   
   Information Technology and Innovation Foundation, a Washington think tank.   
      
   Nonetheless, workers’ fates are inextricably tied to how these factors in   
   combination perform, and for the UAW, they have performed badly. The Detroit   
   Three—Ford, General Motors, and Stellantis, owner of Chrysler—have been   
   losing market share for    
   years, to other brands and to nonunion U.S. plants. They account for just two   
   of the 10 most dependable brands ranked by J.D. Power and just one of the 10   
   best cars picked by Consumer Reports. In electric vehicles, they are far   
   behind Tesla, whose    
   highest-output plant and main export base is in Shanghai.    
      
   Warehouses and hospitals can pass the cost of higher wages and reduced hours   
   to customers without being undercut by foreign competitors. Manufacturers   
   don’t have that luxury. That’s why Detroit is recoiling at the UAW’s   
   demands. While their output    
   per employee is among the highest of 11 global manufacturers ranked by   
   consultants AlixPartners, so are their costs per vehicle. The lowest cost:   
   China’s.    
      
   Labor presents problems other than just cost, such as the shortage of skilled   
   workers. “They find desirable candidates, they hire them, they train them,   
   they don’t retain them,” said Jim Schmidt, an automotive expert at   
   consultants Oliver Wyman. “   
   A lot of the younger workforce doesn’t want to do that type of work.” For   
   some, absenteeism is another problem.   
      
   “You need a lot of additional labor to backfill for absenteeism,” Schmidt   
   said. “That can lead to large effects on productivity, quality and   
   culture.”   
      
   The U.S.’s manufacturing problems go much further than autos. Since its   
   top-selling 737 was grounded by crashes in 2018 and 2019, production problems   
   have left Boeing far behind Europe’s Airbus, which delivered three times as   
   many aircraft last year    
   and twice as many this year. Boeing’s 787 Dreamliner has been plagued by   
   quality defects. Since the pandemic, Boeing has experienced “a crisis of   
   loyalty among its workforce” with high turnover compounding supply chain   
   problems, said Michel    
   Merluzeau of AIR, an aerospace advisory firm.    
      
   In semiconductors, U.S. companies still dominate design, while steadily ceding   
   production to Asia. Intel is the last major U.S. firm that both designs and   
   makes chips, but its manufacturing capabilities have fallen far behind Taiwan   
   Semiconductor    
   Manufacturing Co. Today, none of the most advanced chips are made in the U.S.   
      
   This is a national security threat which the Trump and Biden administrations   
   have sought to correct by persuading TSMC, in part through subsidies   
   authorized by the Chips and Science Act, to build two fabs, or semiconductor   
   fabrication plants, in Arizona.    
      
   Whether those fabs will be as productive as those in Taiwan depends crucially   
   on management and labor. Burn Lin, a former vice president of research and   
   development at TSMC who is now dean of the college of semiconductor research   
   at National Tsing Hua    
   University in Taiwan, said it isn’t enough to have the most sophisticated   
   tools. He said employees must know how to interpret thousands of measurements   
   that the tools generate, and monitor the tool just the right number of times:   
   too often wastes time,    
   too infrequently introduces defects.   
      
   Getting this right often depends on culture, training and learning-by-doing,   
   which can’t be instantly transplanted. TSMC has had a fab in Washington   
   state since the 1990s, and its yields are still lower than at the equivalent   
   fabs in Taiwan, Lin said.    
   A TSMC spokeswoman said yields are comparable.     
      
      
   [continued in next message]   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)