Your “Battered economy simply part of a cycle” Viewpoint (Nov. 18, Page 6) seems to imply a comfortable position that this is just another typical economic “blip” that we will all weather once we get our costs in line and the economy recovers. However, I am sure that all of my processing colleagues would disagree “from the trenches”! It seems clear to me that there are some fundamental changes in our markets that are not going to go away or self-correct once the recession has run its cycle.
For instance the Pacific Rim countries, especially China, have:
c Fundamental capital advantages that have unleveled the playing field — major access to capital, new technology at lower costs and government incentives and subsidies.
c Profoundly lower labor costs.
c The ability and willingness to appropriate (our) intellectual property.
c Highly favorable tariffs, taxes and barriers to entry.
c Widespread absence of safety, social, regulatory and fringe benefit responsibilities.
c Raw materials at lower costs.
c An extraordinarily “business-friendly” bias on the part of governments.
c A “take no prisoner” competitive mentality.
So, without being argumentative, I must disagree and state that I don't think this is a “storm that we're going to weather”! It is imperative that we learn as much as we can as quickly as we can about the enormous threat to North American manufacturing business from all of our most aggressive foreign competitors.
“Unofficial trade missions” are popping up among processors and tooling companies, to places like like China, Taiwan and Singapore. And, hard as it is for those of us who run companies to drop what we're doing and fly halfway around the globe, it does not seem to me that we have any choice but to accelerate the learning curve to defend our businesses.
If this is just “part of the cycle,” then it's certainly a different part of the cycle than any we've experienced in my lifetime. Waiting until things get back to normal is not going to cure what ails our industry. At my recent presentation at the Plastics News conference in Indianapolis, I speculated that of today's 6,000 injection molders, the eventual number probably will be 5,000 or 4,000, and that it might be 3,000. Everyone in attendance agreed with that conclusion. I still believe that to be the case and it still scares the hell out of me.
It's going to take profound changes in the way we all do business to make sure that number doesn't get down closer to zero over the next generation. If we're not worried for ourselves — we'd better be really scared for that next generation. Sorry to be an “angel of doom,” but I think it's really doubtful to hope that “this too shall pass”!
Erie Plastics Corp.