第1章
The Soul of American Manufacturing: Innovation in a Global Economy
When Ro Khanna traveled across America as President Obama's Commerce Department appointee, he encountered a startling contrast to Washington's prevailing pessimism. While politicians and pundits lamented America's declining manufacturing prowess, Khanna discovered remarkable entrepreneurs defying conventional wisdom. These manufacturers weren't just surviving against cheaper foreign labor, currency manipulation, and intellectual property theft-they were thriving. Their stories challenge the narrative that American manufacturing is doomed. In fact, until 2009, America remained the global manufacturing leader, with labor productivity six times higher than China or India. Embraced by figures from Elon Musk to Warren Buffett, "Entrepreneurial Nation" arrived at a pivotal moment when America was reconsidering its industrial future. The book's influence extended beyond business circles into policy discussions, with former Secretary of Labor Robert Reich calling it "a must-read for anyone who wants to understand what a 21st-century American economy might look like."
第2章
Why Manufacturing Matters: Beyond Jobs to Innovation
Andy Grove, Intel's legendary former chairman who escaped Hungary during the Holocaust, understood something fundamental about American manufacturing: innovation requires proximity between design and production. "When manufacturing moves overseas," Grove warned, "design follows." This isn't theoretical-it's practical reality. Harvard professors observed this pattern when offshoring semiconductor manufacturing disadvantaged American companies in developing solar panels. Similarly, Dow Chemical's Andrew Liveris explained why they build research facilities near their overseas factories: "We cannot afford to separate innovation from manufacturing."
The numbers tell a compelling story. Manufacturing accounts for 70 percent of America's $250 billion annual business R&D spending and nearly 90 percent of U.S. patents. A National Science Foundation survey found manufacturing companies reported innovations at nearly three times the rate of service companies (22 percent versus 8 percent). This innovation ecosystem-with its "physical proximity, face-to-face contact, and organizational proximity"-has produced unparalleled technological breakthroughs.
Manufacturing also plays a crucial role in addressing America's $375 billion trade deficit. Since manufactured goods constitute 60 percent of our export base, increasing domestic manufacturing is essential for economic balance. While service exports are valuable, they alone can't close the gap. In 2009, despite having a $6 billion service trade surplus with China, our total trade deficit exceeded $220 billion.
Beyond innovation and trade, manufacturing creates pathways to the middle class. Manufacturing jobs pay weekly wages over 20 percent higher than service sector jobs, spanning industries from transportation equipment to clean technology. Though globalization and lower unionization rates have created downward pressure on wages, manufacturing jobs remain relatively well-compensated.
The employment landscape has shifted dramatically-manufacturing jobs peaked at 19.6 million in 1979 but now stand at 11.8 million, about 10 percent of the total workforce. Manufacturing's share of GDP has fallen from nearly 28 percent after World War II to about 11 percent today. Yet this decline isn't simply due to automation. Foxconn employs over a million workers manufacturing iPhones and iPads, with China still having nearly 100 million manufacturing jobs. Even highly automated companies like Boeing require thousands of workers for precision tasks. As GE's Louisville factory demonstrated, "people often do it better than machines"-they can think and adapt where machines follow fixed processes.
Manufacturing also underpins national security. During the Gulf oil spill crisis, Ohio-based Miller Weldmaster supplied containment booms within five days-something impossible had production been overseas. During the Iraq War, America's limited manufacturing capacity for small-caliber ammunition forced reliance on allies-who might not always be geopolitically positioned to help. As General Lawrence Farrell of the National Defense Industrial Association pointedly asked: why does agriculture, at 3 percent of our economy, have its own cabinet agency, while manufacturing at 10 percent lacks comparable representation?
第3章
The High Road to Manufacturing Success
What distinguishes successful American manufacturers from those who succumb to global competition? The concept of "high road" versus "low road" manufacturing provides clarity. High-road manufacturers invest in training and technology, focus on continuous improvement and innovation, and compensate workers well. They create high-value products with favorable revenue-to-cost ratios. Low-road manufacturers, with minimal investment in training or technology, often fall victim to global competition.
Vitamix exemplifies the high-road approach. Based in Cleveland, Ohio, this maker of premium blenders doesn't simply sell technically superior products-they customize solutions to address specific business needs of major coffee chains like Starbucks. Rather than competing on price alone, Vitamix designs blenders that eliminate ice chips (which disrupt texture), operate at half the noise level of cheaper alternatives (allowing customers to linger longer), and feature technology that reduces wait times.
This customization creates value that cheaper imports can't match. Fourth-generation president Jodi Berg frames Vitamix's value through practical applications-like helping schools reduce childhood obesity through appetizing fruit and vegetable preparations. The company's Cleveland facility reflects a people-first philosophy with walking trails, natural lighting, wellness programs, and a clean assembly environment that communicates employees' value beyond being "expendable cogs."
Steel Dynamics offers another compelling example of high-road manufacturing. The global steel industry has faced intense competition, with Japan, Germany, and now China heavily subsidizing their producers. Despite these challenges, the American steel industry is rebounding, with nearly 80% of steel purchased in America now made domestically.
Keith Busse, who rose from "abject poverty" to reshape the American steel industry, founded Steel Dynamics after 21 years at Nucor. Now America's fifth-largest carbon steel producer with $8 billion in annual revenue and 6,000 employees, Steel Dynamics remained profitable during the Great Recession while offering some of the industry's highest wages despite being non-unionized.
What makes them so competitive? Steel Dynamics takes only 0.25 labor hours to produce a ton of steel, compared to the American average of 2 hours and Chinese producers' 8-10 hours-making them approximately 40 times more productive than Chinese competitors. This advantage stems from strategic decisions like acquiring a scrap metal processor and implementing thin slab casting technology. But Busse emphasizes that "anybody can buy the tools"-what truly distinguishes his company is its "world-class employees" who earn $30/hour plus generous performance bonuses.
Busse's philosophy of "incessant innovation" drives Steel Dynamics to develop revolutionary products like their 240-foot rails. Traditional producers make only 80-foot rails, requiring 19 welds to create a 1,600-foot string for railroad tracks, while Steel Dynamics needs just 6 welds. With welds being the weakest points most susceptible to derailment and wear, this innovation creates safer rails with lower maintenance costs.
These success stories suggest the federal government has a role in helping manufacturers compete through programs like the Manufacturing Extension Partnership, while ensuring fair currency values and reciprocal access to raw materials and markets globally.
第4章
The Air Capital of the World: Cluster Power in Action
Wichita, Kansas isn't just home to Oz memorabilia-it's the world's top-ranked aerospace manufacturing hub. Proudly calling itself "the Air Capital of the World," Wichita hosts Spirit AeroSystems (Boeing's primary supplier), Airbus's largest North American facility, and global private jet leaders Cessna, Hawker Beechcraft, and Bombardier Learjet. The city has developed a network of over 200 precision machine shops serving as aerospace subcontractors, with locals boasting that nearly every plane contains Wichita-made parts.
Carrol Anderson exemplifies Wichita's machinist tradition. Working at Boeing's Wichita facility for nearly 34 years, he helped build military planes and Boeing's newest commercial aircraft, including modifications to Air Force One before retiring in 1989. Workers like Anderson helped America achieve dominance in aerospace manufacturing, producing nearly $200 billion annually-48% of global output, far ahead of the European Union's 39%. The industry generates a $50 billion trade surplus, providing a partial counterweight to America's oil and gas deficit.
Wichita exemplifies cluster theory in action-a network of companies, universities, government agencies, and nonprofits collaborating on shared objectives. Aircraft companies work together to address the looming retirement of 40% of their workforce by partnering with the National Center for Aviation Training to produce 6,000 new skilled workers annually. They collaborate with the National Institute for Aviation Research at Wichita State University on R&D and find common cause on federal issues.
Spirit AeroSystems anchors this cluster with 10,800 workers in six million square feet of manufacturing space. Their massive facility produces fuselages for all current Boeing planes. Buck Buchanan, whose father worked 42 years on the same factory floor he now oversees, explained how Wichita's aerospace hub developed through a combination of early 1900s oil money funding pioneers like Cessna, Beech, and Stearman, along with government contracts during WWII when a B-29 was built every 40 minutes.
Spirit has resisted offshoring by reducing "high-touch labor," improving production planning, and flipping the traditional engineering-manufacturing dynamic so manufacturers lead integrated product teams. A unique 10-year labor contract with the machinists union provides stability and flexibility. But Buck credits Wichita's workforce most: "Our folks are the most engaged, hardest-working in the world... It's in the blood here."
Despite Wichita's dominance in aerospace, companies face an unlevel global playing field. Cessna executives argue this isn't about protectionism but ensuring fair competition. Even President Reagan, a staunch free trade defender, imposed restrictions on Brazil, the EU, and Japan to counter unfair practices. Beyond enforcement, Cessna executives emphasize the need for cheaper financing within WTO legal frameworks, noting the irony that while Brazil and China finance their jet makers, the U.S. government criticizes private jets.
The lesson from Wichita is clear: America's most successful manufacturing clusters weren't mandated by federal decree or created through massive government investment in industrial parks. Instead, visionary entrepreneurs established uniquely American collaborative cultures that continue thriving today. These bottom-up clusters develop over generations through regional leadership, companies, civic associations, and educational institutions that foster experimentation and idea exchange.
第5章
Making the World's Next Big Thing: Silicon Valley's Manufacturing Edge
President Obama's praise for Fremont, California reflected his appreciation for the clean technology companies emerging in Silicon Valley and their contribution to American manufacturing. Contrary to popular belief, Silicon Valley maintains significant manufacturing operations, with the San Jose-Sunnyvale-Santa Clara area having the third highest concentration of manufacturing workers nationwide at nearly 20 percent of the total workforce.
Kevin Surace, CEO of Serious Materials, believes America is losing an economic war with China while politicians argue about trivial matters. As a leader in green building materials, Kevin's company has attracted praise from President Obama, President Clinton, and Governor Schwarzenegger. Raised in upstate New York when "Made in the U.S.A." labels were ubiquitous, Kevin's patriotism drives his mission to help America dominate energy efficiency manufacturing.
Serious Materials embraces the "triple bottom line" philosophy-equally valuing environmental impact, profits, and social responsibility. Kevin emphasizes that buildings account for 52% of CO2 emissions while automobiles contribute only 9%, making energy efficiency in buildings "low-hanging fruit" for environmental improvement. The company's social impact includes reopening shuttered factories, like their Chicago plant where they rehired 50 laid-off workers in partnership with the United Electrical Workers union.
Silicon Valley rejects traditional silos, seeking good ideas regardless of source-whether from college dropouts, immigrants, or factory workers. This open culture extends to policy development, where business and labor groups collaborate to strengthen American manufacturing. The partnership between Cindy Chavez of the South Bay Labor Council and Carl Guardino of the Silicon Valley Leadership Group exemplifies this approach. Though representing different constituencies, they consider each other friends and consistently seek each other's perspectives.
The bankruptcy of solar manufacturer Solyndra after receiving a $535 million Department of Energy loan guarantee became a political football, with accusations of cronyism overshadowing the fact that the loan process began under the Bush administration. Solyndra failed for three key reasons: they scaled manufacturing prematurely without controlling costs, Chinese dumping of solar panels at 50% of manufacturing cost created impossible competition, and bad timing with tight capital markets in 2011 prevented raising needed funds.
Despite Solyndra's collapse, industry experts remain cautiously optimistic about America's solar prospects. Over 90% of Americans support developing solar energy regardless of political affiliation. While the U.S. may never regain its 1990s dominance in the field, we can still lead in technological innovation, benefiting both our economy and the environment.
The plight of displaced workers in Silicon Valley reveals the human cost behind economic transitions. Michael, a 60-year-old former Macy's manager with 30 years of experience, found himself "involuntarily retired" despite his college degree and computer skills. So desperate was he that he applied to be a Walmart greeter, becoming 170th on the waiting list while his savings depleted and health insurance vanished.
America's manufacturing leadership stems from our culture of risk-taking, with Silicon Valley exemplifying this "dare to be different" ethos. The most successful manufacturers compete on vision rather than price, creating products with higher value that consumers willingly pay more for. While not every bold venture succeeds, taking risks to evolve industry standards remains essential when competing against subsidized, low-wage foreign companies.
第6章
Going Global: The Export Imperative
American manufacturers must adopt an offensive strategy by seeking foreign markets, recognizing that 95% of consumers and 70% of purchasing power exist outside the United States. Despite bipartisan export initiatives dating back to Kennedy, America lags behind-only 1% of American businesses export, with 58% of those selling to just one market, typically Canada or Mexico. While exports comprise only 11% of U.S. GDP compared to Germany's 50% and China's 30%, increasing exports remains crucial for economic growth.
American manufacturers played a crucial role in the Chilean miners' rescue, with Pennsylvania-based companies leading the effort. Center Rock Inc.'s Brandon Fisher designed the specialized drill bits, while Schramm, Inc.'s T130XD drilling rig-later dubbed "the Miracle"-provided the platform for the rescue operation. When their equipment reached the Chilean miners in just over a month-far ahead of the expected four-month timeline-it created a wide enough escape hole to safely rescue all miners by mid-October.
At Schramm's 27-acre West Chester facility, CEO Ed Breiner, VP Fred Slack, and manufacturing VP Jim Dolan showcased their operation's success factors: rigorous quality control at every component stage, customization for each $2.5 million rig, cutting-edge technology like plasma burn tables and Integrex CNC machines, and most importantly, their skilled workforce. With 70% of revenue from exports, Schramm partners with the Commercial Service to enter new markets.
The U.S. and Foreign Commercial Service, America's principal export promotion agency, operates 109 domestic offices and has presence in nearly 80 nations. With just 1,500 staff and a $250 million budget, it facilitates over $50 billion in export sales annually. Despite this remarkable $200 return for every tax dollar spent, the agency faces shrinking budgets while competitors invest heavily-China spends $1.5 billion with 4,000 personnel, Britain $500 million with 2,400 specialists, and Germany employs 2,700 trade specialists.
Alabama demonstrates that inland states can excel at exporting through extraordinary teamwork. The Export Alabama Trade Alliance unites state agencies, chambers of commerce, city governments, educational institutions, and federal partners under one umbrella to implement a cohesive trade strategy. This coordinated approach yielded impressive results-Alabama's exports grew 25% from 2009 to 2010, outpacing the national growth rate of 20%.
America's diversity provides a crucial edge in the global economy, with immigrant populations understanding local cultures, languages, and challenges of overseas markets. This immigrant advantage is exemplified by companies like A123 Systems, founded by MIT professor Yet-Ming Chiang with Desh Deshpande as chairman, which keeps most manufacturing domestic due to superior American engineering quality.
With 95 percent of consumers overseas but only 1 percent of American businesses exporting, U.S. manufacturers must venture beyond domestic markets to grow. Securing foreign buyers requires extensive travel, trade show participation, and relationship building. The federal government should advocate for manufacturers by challenging unfair WTO practices and investing in the U.S. and Foreign Commercial Service to help small and medium-sized manufacturers navigate overseas bureaucracies.
第7章
Importing Jobs: The Onshoring Revolution
In contrast to offshoring trends, some American manufacturers are bringing jobs back home. GE's Appliance Park in Louisville, Kentucky, once employed 25,000 workers before the company moved significant manufacturing to Mexico and China, reducing the workforce to 3,600. However, GE's strategy has evolved as the company realized that relying solely on brand recognition was insufficient against competitors like LG and Samsung.
GE developed comprehensive metrics beyond labor costs to evaluate manufacturing location decisions. Speed to market became a critical factor, as separating design from production added months to product launches. The company also measured customer satisfaction, quality differentials, and comprehensive outsourcing costs including projected wage increases in China, currency appreciation, shipping expenses, and transportation costs for defective products. This analysis led GE's board to invest hundreds of millions in renovating the Louisville plant to bring refrigerator and water heater manufacturing back from China.
GE's "One Team Reshaping Our Future" mantra permeates their culture with genuine egalitarianism. Campbell, unlike executives in hierarchical societies, takes his own notes and conducts performance reviews on the factory floor. The collaborative environment extends throughout-union president Jerry Carney notes you "can't tell a production worker from a maintenance engineer" on the floor. This approach yielded a competitive wage agreement where unions accepted that new hires would start at $13 instead of $21, with existing workers taking a two-year wage freeze.
In Monterrey, Mexico, Khanna discovered Sigma, a Mexican food processing company that invested $60 million to open a plant in Seminole, Oklahoma-creating American jobs where Wrangler Jeans had previously laid off 600 workers. Despite paying wages five times higher than in Mexico, manufacturing in America made business sense: proximity to market reduced shipping time from 8-10 days to just a few days, eliminated cross-border inspection hassles, and allowed them to serve the $1 trillion Hispanic consumer economy in the U.S. with fresher products.
Setting up Sigma's Seminole plant required navigating a labyrinthine bureaucracy spanning 27 different agencies-from the Oklahoma Department of Commerce to the IRS, EPA, and even the State of Delaware for incorporation. Plant manager Jerry Karp emphasized that "anything the U.S. government can do to make it easier to cut through the red tape would help," echoing Andy Grove's suggestion that Commerce should serve as an ombudsman.
Companies are increasingly finding economic sense in manufacturing within the United States rather than China or Mexico. America offers distinct advantages: faster product launches when design and manufacturing are co-located, better product quality, rising foreign wages and shipping costs, stronger intellectual property protection, and a skilled, flexible workforce delivering higher productivity. The federal government must actively sell America as a business destination by removing regulatory uncertainty, providing incentives for domestic investment, and having civil servants engage with companies considering U.S. locations.
第8章
The Skills Gap: Developing America's Manufacturing Workforce
America faces a critical challenge: over two million job openings remain unfilled because businesses can't find candidates with the right qualifications, many in manufacturing. While policy makers emphasize STEM education, the reality is more nuanced. The skills gap particularly affects middle-skill technical positions, not just top engineering roles or entry-level jobs. As manufacturing veterans approach retirement, companies struggle to find younger workers with both technical abilities and diagnostic skills.
Austin Polytechnical Academy prepares students with marketable manufacturing skills while keeping college pathways open. Almost all graduates earn National Institute for Metalworking Skills (NIMS) credentials, qualifying them for well-paid precision manufacturing jobs through NIMS's network of 6,000 employers. The school receives significant funding from private manufacturers but deserves more federal support.
Manufacturers themselves play a crucial role in workforce development. Troxler, a construction test equipment company founded by William F. Troxler, exemplifies how companies can cultivate skills in their employees rather than waiting to find workers with perfect qualifications. Under William's son Billy's leadership, Troxler has embraced employee engagement through kaizen methods, encouraging workers to improve production processes continuously.
William F. Troxler, a natural inventor with an electrical engineering degree from North Carolina State, founded his company after creating valuable construction measurement devices including the density gauge. His entrepreneurial journey began in his basement, eventually securing funding from friends and professors who bought company stock at $1 per share.
Billy Troxler has built upon his father's legacy by modernizing production processes with employee engagement at the core. Unlike many heirs to family businesses, Billy started by apprenticing on the factory floor before earning business and MBA degrees. Facing competition from cheaper overseas products, he implemented kaizen methods-continuous improvement driven by worker participation-without hiring outside consultants. Billy maintains employee trust by promising that productivity improvements won't lead to layoffs, sharing financial information, and knowing his workers personally.
Rob Atkinson argues that permanent expensing would increase domestic investment and worker productivity, supported by research from Obama advisors Larry Summers and Austan Goolsbee. He also advocates expanding the R&D tax credit from 14% to 20%, noting that China, India, Brazil, and Singapore all provide more generous research incentives than the US.
Billy Troxler advocates for increased highway spending to help American manufacturers compete globally. While China invests hundreds of billions in railways and highways, only 8% ($64 billion) of America's stimulus package went to infrastructure. Our infrastructure ranks twenty-third globally, with highway spending down 25% since the 1950s and a $400 billion funding gap through 2015.
America faces a critical shortage of skilled manufacturing workers that constrains growth potential even for our best manufacturers. We must support vocational education programs that teach advanced manufacturing skills without tracking students prematurely into trades. Companies like Troxler demonstrate how manufacturers can train employees in modern techniques and equipment operation. Our government should provide tax benefits for employee training investments and improve infrastructure to enable manufacturers to invest in their workforce.
第9章
The Soul of America: What's at Stake
My grandfather valued engineering because "engineers helped build civilization." This inspired my father to become a chemical engineer in America, where he worked at Rohm & Haas for nearly 30 years. The manufacturers I've met share his dedication-working collaboratively without fanfare, committed to excellence rather than quick profits. This entrepreneurial spirit can't be quantified, but it's what makes America flourish by allowing individuals to make meaningful contributions regardless of background.
Today, we face strong competition from Asian countries, particularly China with its mercantilist policies. Our manufacturers show we can compete globally, but they rightfully argue that "our companies can't compete against countries." We risk losing our manufacturing competitiveness and millions of American jobs without policy reform.
Based on travels across America's manufacturing sector, essential policy reforms are needed to maintain our competitive edge. We must address currency manipulation, take a firmer stance against unfair dumping and illegal subsidies, revise WTO tax distinctions that discriminate against U.S. exporters, eliminate foreign export restraints on raw materials, and aggressively combat piracy and forced technology transfers.
Congress should offer tax credits or five-year tax holidays for manufacturers expanding in the U.S., allow repatriation of foreign earnings at reduced rates if used for factory expansion or job creation, make temporary equipment expensing permanent, and continue providing tax credits for alternative energy manufacturers.
We should double funding for the Manufacturing Extension Partnership, strengthen SelectUSA to help manufacturers navigate regulations, increase the U.S. Foreign Commercial Service budget by 25%, support vocational education at both high school and community college levels, fund defense technology investments, improve our infrastructure, and create an undersecretary for manufacturing position to coordinate federal support.
Manufacturing isn't just economically critical-it speaks to who we are as Americans. While many dismiss it as obsolete, our manufacturers demonstrate remarkable resilience and innovation. They represent the soul of America, working purposefully far from Washington's noise and Wall Street's failures. People like the Freese brothers, Keith Busse, and Alix James give us reason for optimism about our future, even as we acknowledge the challenges ahead. Self-criticism is a hallmark of a great democracy, but these everyday citizens with their sense of purpose and ingenuity are the soul of America and give us reason to be optimistic.
