President Obama has asked the U.S. industry to "win the future" and to do so with “innovation and by doubling exports within the next five years”. The current data makes it seem that things look good. U.S. exports are up about twenty percent so far in 2011. The problem is that the exports are being drowned out by a renewed flood of imports. As a result, the U.S. trade deficit is rising back toward the four percent of GDP level that is considered unsustainable, and portends even lower economic growth potential.
With the goal of ‘doubling’ exports, and spurred on by additional funding for development of high-speed trains, wind turbines, batteries, and solar panels, American factories are supposed to be looking toward increased production of vast high-tech products in the near future to “spur a U.S. economic renaissance that would produce good middle class jobs”.
Hi-Tech manufacturing requires an educated, trained workforce, at every level. …so why is ‘manufacturing’ relegated to the ‘hi-tech’ industries as defined by the larger companies in the industrial complex? Manufacturing is ANY kind of work that requires mastery of real things. The demands of eye-hand coordination can be intellectually demanding - with maintenance and repair work also fostering individual responsibility.
Many inventions are the result of a reflective moment when an individual worker made an assumption based on the skills acquired while on the job. Experience in production leads to innovation!
In a recent interview about companies who move their production to China, Applied Materials Executive Vice President Mark Pinto emphasized that “the critical factor in the trend is not R&D or innovation per se, but the availability of production facilities. Manufacturing also requires innovation.”
As stated by Clyde Prestowitz, President of the Economic Strategy Institute, “Innovation isn't the mana from heaven - It doesn't arise from some unique American gene. Rather than innovation leading to production, it is production that leads to innovation.”
The reason for this imbalance of exports vs. imports is not that America lacks innovation. No country has been more innovative in the past one hundred years than the United States. The reason America is increasingly losing out and lagging behind is that it lacks production - and that lack of production capability is now also leading to a decline in innovative capability.
Consider this: There is NO industrial training in most of the major US city’s schools with an alarming 38% (average) drop-out rate. These young people are willing and able to learn how to ‘make something’!
The truth is that an export-doubling target is meaningless unless all manufacturing is considered worthwhile and supported by the academic community within their curriculums, and by the removal federal, state, and local government restrictions and barriers for those entrepreneurs willing to invest in small manufacturing facilities, and train entry level employees. Investments in modern production facilities require the availability of an experienced workforce.
An experienced workforce would result in a renewed effort for modern production facilities. We do need to focus more on domestic production that can competitively substitute for imports by using our competitive advantage of ‘innovation’……that is the ONLY thing that will lead to more exports.
About Me
- Ilse Metchek, California Fashion Association
- Los Angeles, CA
- Ilse Metchek, the President of the California Fashion association (CFA), created the organization in 1994, with assistance from the major financial and manufacturing participants of the region’s apparel industry. The CFA provides leaders of the Southern California’s manufacturing and textile community with the opportunity to share information about the business of conducting business in the current global economy.
Showing posts with label CFA. Show all posts
Showing posts with label CFA. Show all posts
Monday, March 7, 2011
Thursday, February 17, 2011
Impressions of MAGIC
Show floors visited: MAGIC, PROJECT, Workroom, Off-Price, Platform, Pool
Attitude of the exhibitors toward the 'traffic' depended upon the expectations of the exhibitor. Most of the newer 'hot' contemporary companies thought the show's traffic was positive because they were seeing more retailers and press people. The retailers in this space were looking for something new and reaching out to view the lines they may not have shopped before. The show, however, was disappointing for the long-time exhibitors expecting to 'write' orders based on past experiences, and who did not make appointments.
There was a cautious approach by the vendors at every level due to price increases of source materials. The specialty store retailers are realizing they will have to charge higher prices for the merchandise that will be coming in from their current vendors. This is another driver for the retailers 'shopping' frame of mind: The retailers are getting ahead of the curve by seeking alternatives, and are sampling new down-market vendors. This is the case unless they have established a 'must have' brand within the store or the department.
Even the higher priced lines (not quite 'luxury') know that the consumer has price on his/her mind. The vendors who are accustomed to higher margins for their fashion merchandise are caught in the middle of the re-thinking that is going on.
The cautious approach was echoed by retailers buying much closer to need. There was much more activity in the booths where bright colors and summer-y styles were being shown, than where transitional and fall merchandise in dark colors were in view.
Another impression is that the retailer is cautious as to the individual or company with whom they are dealing. With no specific trend as the most important one right now, retailers are selecting the vendor with the best reputation and track record for on-time delivery and service within their buying plan strategies. Conversely, when a new speck on the horizon (the return of 'preppy') is talked about, the knowledgeable retailers go back to those brands synonymous with that look (i.e.: Pendleton, Timberland, etc.)
As Roth Capital Partners' Senior Research Analyst Liz Pierce writes, "The obvious question being will price increases lead to demand destruction and if so, who in the supply chain will bear the brunt of the increase? At this point we think it is too early to tell, but we did hear that more and more retailers have accepted the reality of the situation and have started to raise prices, especially on newer and non-basic items."
The Off-Price show also showed the effect of the current economy. There was a clear lack of 'newer' merchandise available, whereas in recent years there was copy-cat availability throughout. Perhaps because there is nothing 'hot' to copy. On the other hand, it could be that vendors of all stripes and sizes are controlling inventory, mindful of the costs of over-cutting.
Ilse Metchek
CFA President
Attitude of the exhibitors toward the 'traffic' depended upon the expectations of the exhibitor. Most of the newer 'hot' contemporary companies thought the show's traffic was positive because they were seeing more retailers and press people. The retailers in this space were looking for something new and reaching out to view the lines they may not have shopped before. The show, however, was disappointing for the long-time exhibitors expecting to 'write' orders based on past experiences, and who did not make appointments.
There was a cautious approach by the vendors at every level due to price increases of source materials. The specialty store retailers are realizing they will have to charge higher prices for the merchandise that will be coming in from their current vendors. This is another driver for the retailers 'shopping' frame of mind: The retailers are getting ahead of the curve by seeking alternatives, and are sampling new down-market vendors. This is the case unless they have established a 'must have' brand within the store or the department.
Even the higher priced lines (not quite 'luxury') know that the consumer has price on his/her mind. The vendors who are accustomed to higher margins for their fashion merchandise are caught in the middle of the re-thinking that is going on.
The cautious approach was echoed by retailers buying much closer to need. There was much more activity in the booths where bright colors and summer-y styles were being shown, than where transitional and fall merchandise in dark colors were in view.
Another impression is that the retailer is cautious as to the individual or company with whom they are dealing. With no specific trend as the most important one right now, retailers are selecting the vendor with the best reputation and track record for on-time delivery and service within their buying plan strategies. Conversely, when a new speck on the horizon (the return of 'preppy') is talked about, the knowledgeable retailers go back to those brands synonymous with that look (i.e.: Pendleton, Timberland, etc.)
As Roth Capital Partners' Senior Research Analyst Liz Pierce writes, "The obvious question being will price increases lead to demand destruction and if so, who in the supply chain will bear the brunt of the increase? At this point we think it is too early to tell, but we did hear that more and more retailers have accepted the reality of the situation and have started to raise prices, especially on newer and non-basic items."
The Off-Price show also showed the effect of the current economy. There was a clear lack of 'newer' merchandise available, whereas in recent years there was copy-cat availability throughout. Perhaps because there is nothing 'hot' to copy. On the other hand, it could be that vendors of all stripes and sizes are controlling inventory, mindful of the costs of over-cutting.
Ilse Metchek
CFA President
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