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Manufacturing Still Right for Iowa
But More Support Needed for Schools, Colleges, Research
Des Moines Register
May 14, 2006
[Note: This material is copyright by the Des Moines Register, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of the Des Moines Register.]
Maytag was Iowa's model for the kind of industry the state wanted to thrive here.
Which is why it was such a blow last week when new owner Whirlpool Corp. announced it would pull all Maytag-brand operations out of Iowa. The job losses will be felt keenly in the Newton vicinity, but because employment at the Newton plant was already down, the number of jobs lost will not be devastating in the statewide scheme of things.
Psychologically, however, the loss of Maytag shakes Iowa to the core, and it raises the question of whether the state is on the right path in pursuing advanced manufacturing as a key economic-development strategy.
If Maytag can't survive in Iowa, can any manufacturer?
The answer is yes. The loss of one iconic manufacturer shouldn't change Iowa's vision of building a thriving network of advanced manufacturers around the state.
The right investments can keep manufacturing healthy, and its revival has already begun.
Job losses tend to come by dramatic announcements, like the pending shutdown in Newton. Job gains tend to come quietly, in small numbers. Five jobs here, 10 jobs there.
That's been happening in Iowa manufacturing lately. Iowa had about 234,000 manufacturing jobs in March, up more than 5,000 from the same month a year ago.
Like the rest of the nation, Iowa saw a precipitous decline in manufacturing employment beginning in the late 1990s. Iowa still has not regained all of the 253,000 manufacturing jobs it had in 1999. Due to greater efficiencies, that number might never return to historical highs, but the trend, at least in Iowa, is encouraging.
Iowa is a manufacturing state. It's the biggest sector in our economy, bigger than agriculture. With some exceptions, factories tend to be modest in size and dispersed across the state — perfect for complementing the farm economy by providing a second income for farm families.
It's crucial for Iowa to maintain its manufacturing base. Fostering advanced manufacturing is the way to do it.
Advanced manufacturing is roughly defined as operations that are highly innovative, always on the cutting edge with new products and manufacturing processes. Old-fashioned assembly-line manufacturing can't compete with low-wage foreign labor, but advanced manufacturing can.
Reliance on a well-educated and motivated workforce is another reason advanced manufacturing is a perfect match for Iowa.
The consultant who advised the Department of Economic Development on a strategy for advanced manufacturing noted that the quality of workforce is "a key differentiating asset" between Iowa and other states.
But Iowa's workforce is also an impediment to growth, because it is small. Manufacturers worry about not having enough workers in Iowa.
It's also true that advanced manufacturing requires ever-higher levels of worker skills. The education of current Iowa workers will be insufficient for tomorrow's workers.
Those factors suggest that, in the end, keeping manufacturing in Iowa rests on improving the schools and community colleges, restoring support to the universities and investing a lot more in the research from which new products and processes come.
Education and research investments will not only bolster advanced manufacturing, but also mesh with Iowa's other development initiatives in biosciences, including alternative fuels, and information technology.
Iowa has taken some positive steps, such as networking the advanced manufacturers in the state, but sufficient investments in the critically important core of education, training and research simply haven't been made.
Iowa needs to get back to those basics. There are hundreds of little companies out there that might, in the right environment, employ 50 or 100 people. And one or two might grow to be the next Maytag.
Thousands of young Iowans out there might stick around to help them if they see a good future in it for themselves.