American Manufacturing in a Global World
Is American manufacturing actually dead? No. At least according to Drew Greenblatt, the president and owner of Marlin Steel. Drew spoke about globalization on WTCI's AGILE Global Innovation Series panel. He sat down with us afterwards to expand on some of his points and to talk about why the death knell for manufacturing has been sounded far too soon.
WTCI: You’ve been in the manufacturing business a while, given that you bought Marlin Steel in 1998. Just a couple years before that, the North American Free Trade Agreement passed. That’s when we point to globalization really kicking into full gear, at least in the way we think about it today. As someone who’s been dealing with this for more than 20 years, how has that felt working in this changing industry?
Drew: I think it is a misguided approach. The concept of buying everything from China or Mexico is shortsighted and is leading to major problems. For example, think about when we had supply chain drama with COVID-19. This devastated our ability, for example, to get things like IV poles to our patients. Which is a debacle. Marlin Steel stepped up and we made IV poles so the COVID-19 patients could survive.
We shipped millions of dollars’ worth of IV poles, all made in Baltimore. The problem, largely, is that the IV pole market has been completely decimated in America. And we’ve basically farmed it all out to China. And when China stops shipping those things to us because they decide they want to keep the IV poles for themselves, it becomes problematic for American patients.
It has caused other problems too. It has hollowed out our middle class. In the old days, 35% of people who worked in America worked in manufacturing and they created great middle-class jobs. People could send their kids to college, people could own a home, people could own a car. And now, people don’t have as many opportunities because we’ve basically farmed out an entire swath of our industry manufacturing over there. So, there’s a whole host of reasons why the pendulum has just swung too far. Things should be made more locally. It’s better for our nation if it’s not so tilted in favor of just buying overseas.
WTCI: One of the things I think of, and what the general wisdom regarding the benefits of globalization is that I can have something made in China and I only have to pay someone $10 a day in order to work the line. And it’s very cheap labor. Is there a way we can compete with that or is that perspective no longer valid since so much more is mechanized and we have technological support?
Drew: The business about $10 an hour is true in some cases. However, in other cases it’s not true. For example, when they’re using people in concentration camps to do the labor. Forget about $10 an hour. Try zero. You know, they give them some gruel.If they’re not harvesting their organs, they’re making them do slave labor. And a lot of the solar panels coming in from China, which are much cheaper than the solar panels made in America, are made in slave labor camps. So there’s just a moral topic. Forget about, “Hey, you’re saving a couple bucks.” You’re buying from people who are sitting in a concentration camp. And you don’t know how many Uyghurs are in concentration camps, whether it’s 1 million or 3 million, but it’s a number like that.
And that’s 2022. We’re not talking about 1944. And this is going on. We have big American companies buying from these guys. So it’s a moral outrage. By the way, they’re working in a fashion that’s wildly unhealthy. They take the effluent from their Chrome lines or whatever, and they dump it in the Yangtze. Our factory doesn’t dump stuff in the Chesapeake Bay. I eat crabs out of the Chesapeake Bay, you know? And when they spoil the environment on their side of the world, well, sooner or later it comes to our side of the world. So it’s very shortsighted to talk about “Ah, it’s $10 an hour or $10 a day.”
WTCI: If we’re talking about bringing some of this business back, and bringing these supply lines back within the U.S., what is the path forward for a U.S.-based company? Are they going to have start building their own factories here? Do we have the workforce that’s trained up for working smarter not harder?
Drew: Absolutely. We have to roll up our sleeves and we have to build factories in America. Like Intel putting the factory into Ohio to make Silicon chips, it’s not good for us to put our eggs in the Taiwanese basket. Just like Putin marched into Ukraine without cause or provocation. We’re about to watch Mr. Xi do the same thing in Taiwan, which is a capitalist democracy minding its own business. And it’s going to get attacked by China and they’re going to take over those semiconductor factories.
It’s going to cause a world of hurt for a lot of us. People are not used to spending $5,000 on an iPhone, and it’s coming. The root cause is, we have tyrants going to attack an innocent democracy. So to answer your question, yes, we have to roll up oursleeves. We have to build factories in America. We have to train our workforce. We have to upgrade our workforce. We’re going to have to make a lot of changes. But I think when the smoke settles it’ll make us more self-reliant and less likely to get beaten by a rogue actor.
WTCI: Onshoring and re-shoring in the U.S. are two things you’ve mentioned companies can take the lead on. Are there other ways you see U.S.-based companies leading? Where are the real opportunities here?
Drew: I’m not saying we should import nothing. I’m not saying a complete blockade of outsiders. I’m saying a more localized approach. So, if you’re making stuff in China, it probably makes sense to to sell that stuff to the Chinese population. However, the stuff that Americans are going to consume probably makes more sense, within reason, to make it in America. I’m not a person that says we should shut down borders. Trade is good. But what I am saying is that, as a nation, we have to be mindful of our strategic weaknesses, and we should be able to make things here in America, in a fashion so that we never get jammed up. If we buy X, Y, and Z in America, well, we should be domestically manufacturing a lot of that in America. We should not have 100% of our eggs in the Chinese basket hoping that the CCP is going to be a good partner for us for the next five or 10 years. I think that’s based on sand.
WTCI: Is there anything else you wanted to touch on related to this subject?
Drew: I’m very optimistic about the future of American manufacturing. The stars are in such alignment, because what’s going to happen is, as we have more of these supply chain tumults, American manufacturers could be seen as more and more critical. Look at how our pharmaceutical industry saved America and saved the world by creating vaccinations.
This interview has been edited for length and clarity.