Production Part 1
Manufacturing isn't dead, and neither is the potential for the next Industrial Revolution
Production Part 1
When I returned to the United States during the first Covid 19 outbreak in China, all I saw was unmet potential. It really bothered me how pessimistic everyone in America was about America while America gave almost all of them the most comfortable lifestyle in the history of the world. I’ve come to view most of America as a sleeping giant, or more accurately, a comatose giant. The cause of the coma is comfort. We don’t feel an urgency, or, in some cases, we lack true desperation, and it seems we just kind of slip into this malaise that is only interrupted by our dissatisfaction with change or our revolt against being reminded that we’re actually in a better position than our ancestors. We get angry when we’re reminded that we should likely just keep perfecting this Union.
From an infrastructure and natural resource perspective, the Cleveland area won the lottery. We have freeway systems and roadways that were initially planned under the assumption that we would have a million residents in the city limits, a projection that didn’t assume the capital class’s multiple attempts to take industrial production behind the barn and put a bullet in its head. The book “Divided Highways” is a great read and touches on why cities like Cleveland have more miles of interstate in a couple of counties, than entire states have total. I’ve spent my entire life being told that Cleveland was dead, dying, over, a relic, a warning against reliance on industrial assets. It was a prelude to the death of America. It was in decay. Then I left. I traveled the world, witnessing the transformation of poverty into stability and the conversion of nothing into something.
I watched as China built the tallest “this”, or the longest “that” or the biggest “the other”. At first it was evidence of America being quickly surpassed, then I looked closer, eventually starting to build my own things, and I was reminded about the story of Mao Ze Dong anticipating his meeting with Nixon. His feeling of inadequacy and his excitement at finally getting to normalize relations with America were all based on the desire of one revolutionary to meet the generational representative of another country based on revolution. There was an anger in the top echelons of the Chinese Communist Party that America chose to rebuild Japan, the United States’ enemy during World War 2 and the geographic antagonist of China for half a millennia, rather than recognizing fellow revolutionaries and helping to rebuild China, their wartime ally, at that point now under the control of the CCP.
When your brother is a jerk, you want to beat him, but deep down you want him to just accept you and tell you that you are just as cool as he is. China’s economic development was robust, although likely misrepresented and exaggerated statistically, but it wasn’t really that unique. It was just the road map of most other developing countries as they transition to “developed”. Most notably, it resembled, to a T, the growth of the United States. Just like when a younger brother emulates the gate, style and even haircut of his older sibling. There was a lot of “look at what I can do!?!” vibes whenever China would finish their “Hoover Dam” or their “Golden Gate Bridge” and we continue to see it with their desire to land on the moon. What I witnessed in China was not an example that America was being surpassed as much as it was a screaming example that with the right focus and policy, an entire economy can lurch forward and achieve things that no one thought possible. Especially if you are trying to impress your bigger brother in the process.
The same thing is possible in the United States in 2025. I’ve felt it in my bones for five years. That feeling started to seep into my soul after my return from China in 2021. America is not done. We have a capability and foundation that would cost a country like China another couple of trillion dollars to acquire, build or emulate. The Chinese short-hand name for America is “Beautiful Kingdom”. No where else in the world do they have an ocean of sweet water all to themselves, (We share a couple with Canada, but Canada doesn’t claim any to itself). No where else in the world has a congruous, non-islandic, coast to coast expanse, soaked in the blood of conflict, oppression, failure, perseverance and hope. No where else in the world have more natural resources been held in reserve and conservation than entire other continents have in total. There is no other place that is built on the hope of self-determination and the experiment of choosing to co-exist.
My wife reminds me all the time that this experiment is a civil contract, that just happened to be executed on a pile of dirt and rocks and basins and ranges that can provide immense abundance. An abundance equal only to the hope of the people that, a majority of whom, put their lives on the line for the chance to make it here, or stay here, and try to find their dreams or their peace. Every other example of a system that “works” is not built on the desire to try, from scratch, something completely different. Scandinavia and most of Asia are insanely tribal places that, in most cases, having robust social services only because they reflect the desire to take care of those that look and act exactly like you. The UK is a mess that, historically, most of the UK doesn’t really want to belong to because it means being subjected to England and their sectarian class divisions and overall… Englishness. Europe is Europe. Cool to visit, but if you think America has prejudice, misogyny and racism, I can draw a straight line back to Europe from whence we inherited it and where it is still thriving.
Seeing America through her eyes, watching her at her naturalization ceremony and holding the little souvenir flag was one of the most emotional moments I’ve had in years. That unique American expression of acclimation and being folded into our national tapestry is something to be cherished, amplified and encouraged. Watching her experience also taught me that there is rejuvenation in taking risks and lurching yourself into the future.
As a result of being inspired by her, I took the chance to work in the steel industry in Cleveland, an industry that I spent my entire life believing was dead and buried, I wanted to put my gut on the line and try and push a small part of my America into the future. For two years I got to operate as an executive consultant to a metal fabricator’s fourth generation CEO. We tackled several problems together and I was able to visit peers in the industry and talk to their ownership and executive management about the future of American fabrication and manufacturing. What I found after a coast-to-coast tour of American steel fabricators was that most were not the cavalier and brave mindsets that we often assume would inhabit such an industry. I found a professional managerial class, void of Carnegies, Fricks or Rockefellers. Most were operating on a scarcity mindset and almost all had some sort of direct or shared trauma when it came to taking risks against foreign competitors. If it wasn’t Japanese steel dumping, it was Korean IP theft and if it wasn’t Korean IP theft it was most certainly just the word “China”.
I tend to find myself in very interesting rooms doing things that I can only assume haven’t been done before, but when I traveled America meeting the generational benefactors of the guilded age industrial revolutions, I often walked away confused and sad. Comments and conversations varied, but the main themes are as follows:
No one can beat China
China monopolized global white metal (zinc alloy and corrosion resistant metals like 300 and 400 series stainless, Inconel and titanium) fabrication
The Chinese government will supplement and subsidize any export focused manufacturing business
It’s pointless to compete with China
It’ll make you more money to just stay out of competition with China than you’ll ever make competing with them
This wasn’t one or two industrial concerns; this was an entire rolodex. I was shocked. I thought all titans of American industry read ‘The Art of War’ and at least understood the idea of strategic incursion, probing and theatrical feints. When asked, some even admitted that their entire mindset was based off quoting one (1) bid against a Chinese competitor and losing. ONE. Singular. That’s all it took to break the back of the American industrial system. A handful of losses to China when bidding small to moderate sized fabrication jobs. Boilers, telescopic cranes, mining equipment, truck rails, on the carbon steel side and then pressurized tanks, nautical corrosion resistant application for shipping vessels and cruise lines and food processing equipment, if the finished work could fit the dimension of a forty foot shipping container, American manufacturers just kind of stepped out of China’s way and then perpetually shared stories of the boogie man that scared them out of the forest and forced them to find shelter inside their walled cities. I tried to elucidate the reality of true Chinese resiliency and the concept of a “paper tiger” when it comes to competition in this space and asked them why they didn’t fight back.
The reality is that Chinese manufacturers during the 90s and early 2000s were operating under the pressure of the local party security and the National Development and Reform Committee (NDRC). Less lock step with the government and more at the whim of and as an extension of CCP policy. They needed to show strong export numbers, and they needed to hire as many people as possible, in exchange for filling those two quotas, they would, to an extent, have access to low interest/no interest loans. And that’s about it. Cheap money always works on a long enough timeline of economic competition. China’s timeline was never super long when it came to runway, they just scared enough American and foreign industries on short enough timelines to abscond with entire markets. The first wave of competition that was backed by cheap government debt was then overrun with smaller private companies in the late 2000s and 2010s, that were backed by Wall Street and American private equity money first and then backstopped with government debt once those first waves of investors cashed out or were simply pushed out of the way. If America’s manufacturing industry was backed and supported by the same development philosophies and access to cheap money that was guaranteed by the US government, no one would be able to compete with us on a fair or even slightly unfair footing.
I would share these thoughts and ideas if the rooms had enough patience, but usually the response was “listen kid, I think we all understand China a little bit better than ‘some guy off the street’”. I would laugh and grit my teeth and then lament for the lack of organized and strategic industrial planning in the United States and shed a tear for all the lives that have been ruined and communities that have been gutted as a result.