U.S. Factories Added 136,000 Workers in 2010 First Net Increase Since 1997

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U.S. manufacturing has edge, despite China's might

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Monday, January 31, 2011
 By PAUL WISEMAN • Associated Press

WASHINGTON • U.S. factories are closing. American manufacturing jobs are reappearing overseas. China's industrial might is growing each year.
And it might seem as if the United States doesn't make world-class goods as well as some other nations.
"There's no reason Europe or China should have the fastest trains, or the new factories that manufacture clean energy products," President Barack Obama said in his State of the Union address last week.
Yet America remains by far the No. 1 manufacturing country. It outproduces No. 2 China by more than 40 percent. U.S. manufacturers cranked out nearly $1.7 trillion in goods in 2009, according to the United Nations.
The story of American factories essentially boils down to this: They've managed to make more goods with fewer workers.
The United States has lost nearly 8 million factory jobs since manufacturing employment peaked at 19.6 million in 1979.
U.S. manufacturers have ranked near the top of world rankings in productivity gains over the last three decades.
That higher productivity has meant a leaner manufacturing force that has capitalized on efficiency.
"You can add more capability, but it doesn't mean you necessarily have to hire hundreds of people," says James Vitak, a spokesman for specialty chemical maker Ashland Inc.
Industry's fortunes are brightening enough that U.S. factories are finally adding jobs after years of shrinking their payrolls. Not a lot. But even a slight increase shows manufacturers are growing more confident. They added 136,000 workers last year — the first net increase since 1997.
What has changed is that U.S. manufacturers have abandoned products with thin profit margins, such as consumer electronics, toys and shoes. They have ceded that sector to China, Indonesia and other emerging nations with low labor costs.
Instead, American factories have seized upon complex and expensive goods requiring specialized labor: industrial lathes, computer chips, fighter jets, health care products.
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