17 ms·

The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

204 points by walterbell 2y ago

pinewurst 2y ago
Book recommendation: When the Machine Stopped, by Max Holland
- eth0up 2y ago
  Can't find an old dogeared copy for under 40+ w/shipping, but this book is now at the top of my list.
mikewarot 2y ago
On top of the issues highlighted, I think an overly cautious ITAR regime didn't help. The state of the art CNC machines all trip over this on a whim. North Korea responded by building their own CNC machine tool industry, for example.
jackyinger 2y ago
How’s basing the US economy on services looking now? My brother is an extremely skilled machinist, the sort who could build machine tools if he had the resources. And let me tell you there ain’t many of them, especially not young ones. Why? Because the US has emphasized college as the only respectable education path, as well as the only path to well paid jobs. That’s how you end up with a manufacturing industry full of lazy knuckleheads (and believe me I’ve got the stories to back this assertion).
- gjsman-1000 2y ago
  I have plenty of stories of programmers being lazy knuckleheads. The industry is full of them.
  - xigency 2y ago
    Well, that's a bit different. Laziness is a virtue in our field in ways that it is not in other fields. Math is a good example. Mathematicians are even more lazy than programmers. That's how they end up with shorter proofs than our programs and end up able to work lying down as well as just sitting on a computer.
    - gjsman-1000 2y ago
      This feels like cope; ignoring that there are multiple kinds of “lazy.” There’s the kind that focuses on simplicity and avoiding unnecessary work to achieve the same goal (the good kind); and there’s the kind that just ignores necessary work and drags out the process delaying the goal (the bad kind). There are plenty of programmers, and machinists, in both camps. Many programmers actually are lazy knuckleheads in the worst sense of the word - and, according to recent researchers, 10% of programmers self-admit to doing nothing at their jobs.
      - xigency 2y ago
        Well, I guess democracy has spoken. And so has the market as the do-nothing people continue to get paychecks and I collect unemployment.
- turtlesdown11 2y ago
  > How’s basing the US economy on services looking now? You mean the worlds strongest, most developed and most successful economy?
  - franktankbank 2y ago
    On paper. That's not to say we don't have the greatest potential for even greater prosperity but you can't eat stonks. Right now we are making good on promises to the boomer generation while absolutely dicking over the generations who are making good on the promises of old.
    - sorcerer-mar 2y ago
      The US has by far the world's strongest economy no matter how you measure it. We obviously can and do eat the fruits of our labor. In fact we (being Americans broadly) eat only a tiny, tiny, tiny fraction of the absolutely gargantuan amount of value we (being Americans broadly) create.
      - ben_w 2y ago
        > The US has by far the world's strongest economy no matter how you measure it. Strong, yes. Strongest by nominal, yes. But not strongest by PPP: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
    - jayd16 2y ago
      Wealth inequality seems like completely perpendicular subject. What does on shoring lower paying jobs and ballooning the cost of goods do to help that?
  - jackyinger 2y ago
    Reminds me of a friend’s defense of the service focused economy: “I’ve got a PhD in economics”. Sure services may be great when things are going well, but you can’t ONLY have services, and then go and blow up international trade and expect to have a good time.
- jackyinger 2y ago
  And this isn’t going to change overnight. You know what I’m talking about. Most of the good machinist knowledge in America has retired, if not already literally died. And mechanical engineers in the US largely don’t have the hands on skill to really understand making these machines. Not that that can’t gain it. But to achieve truly high precision (the pinnacle from which all other percussion is derived) is an extreme art form. CNC doesn’t come close. The state of the art (and has been for eons) is hand scraping: https://www.krcmachinetoolsolutions.com/machine-tool-scraping/ https://www.krcmachinetoolsolutions.com/machine-tool-scrapin... Things used to be made better because people cared about making a good product and took pride in their work. This is especially true in the machine tool industry: don’t try to make it in the field if you don’t really legitimately care.
  - whimsicalism 2y ago
    things used to be made better because of baumol cost disease and far fewer people having those things.
  - hwillis 2y ago
    > The state of the art (and has been for eons) is hand scraping No, it absolutely is not. Optics machine tools make things flat and accurate within a few atoms. Cheap surface plates are more precise than any human could hope to achieve by hand. Hand scraping is remarkable- skill can get you ~micron cutting depth. It would be totally obsolete except that the rough crosshatch pattern it creates is useful for retaining oil. Modern tools, especially the most precise tools, are not hand scraped. Cheap clone knee mills are hand scraped. Single-point diamond cutters run on air bearings with no oil, because the oil gap in plain ways is too large. Hand scraping is thoroughly limited by the viscosity of the marking fluid. You identify high spots by painting a flat blue and rubbing it on another flat part. If the whole surface rubs off then you can't tell where to scrape. The fluid does not spread out in single atom thickness.
- morkalork 2y ago
  Crushing unions is partly to blame here. I've got relatives whose families have been working in the mining industry for a few generations. They all lament the good old days that are long gone now.
  - Galatians4_16 2y ago
    There was a related hashtag that was banned for hilarious reasons.
  - whimsicalism 2y ago
    how would increasing the cost of labor mean that we have more manufacturing jobs in the US today?
    - whatshisface 2y ago
      There are a lot of manufacturing jobs. In fact, the "Manufacturing" category is four times larger (12M vs 4M) in terms of employment than "Information." The primary interests of people working in manufacturing are higher pay and better working conditions. https://fred.stlouisfed.org/release/tables?rid=50&eid=4881#snid=4900 https://fred.stlouisfed.org/release/tables?rid=50&eid=4881#s...
      - whimsicalism 2y ago
        right, but what i am missing is the connection to ‘more machinist jobs’. unions pretty much necessarily trade off number of jobs with average pay for that job, it’s the whole name of the game to restrict entry and wage negotiation.
    - os2warpman 2y ago
      Every single country on earth, except China, that has a more robust and profitable machine tool sector than the US has unions strong enough to make a social media libertarian shit their pants. Indeed, the three countries listed in the report as being better than the US all have EXTREMELY strong machinist/metalworking unions. Japan: JAM Italy: FIOM And Germany, with probably the most powerful union in the entire world: IGM The problem isn't unions. The problem is the parasite MBA class, shuffling memos and spreadsheets around to make it look like they're doing something.
- franktankbank 2y ago
  > How’s basing the US economy on services looking now? It looks really hollow, like we will be over a barrel when we experience a real embargo. I wish your brother all the luck in the world, I think his time will come soon because at the very minimum having guys like him on our team keep us from getting gouged to death.
- ryandrake 2y ago
  > Because the US has emphasized college as the only respectable education path, as well as the only path to well paid jobs. If I could make as a machinist what I make as a software monkey, all other things being equal, I'd go back in time and train to be a machinist. People will go where the money is.
  - jackyinger 2y ago
    Exactly. This is the problem with throwing all the money into “hot spots”. Growing the heck out of a few hot industries virtually ensures established ones will decline.
  - whatshisface 2y ago
    The only way to "solve" this is to reduce US output of valuable goods so that people are attracted to jobs that pay less and make less valuable goods. I don't understand why everyone's so enamored with the prospect of making $50k working a lathe in a world where engineering jobs have been made rarer artificially. It won't even be a job in a factory that makes something cool like rockets or lithography machines, without the ability to buy stuff from overseas those people will all have to quit to work on final assembly for digital wristwatches. They're right that they've been alienated from labor, they're so alienated they don't know that Fred Flintstone spent all day scheming to get promoted into working behind a desk.
    - tmpz22 2y ago
      [flagged]
      - DebtDeflation 2y ago
        The factories of today are nothing like the 1980s factories this administration thinks they are going to bring back. Go to FRED or any other economic data site and plot manufacturing output and manufacturing employment on the same chart. The US manufactures more today than we ever have in history and it grows every year. Meanwhile, manufacturing employment is around its all time low and declines every year.
- hwillis 2y ago
  > My brother is an extremely skilled machinist, the sort who could build machine tools if he had the resources. Machine tools are not designed by extremely skilled machinists, they are designed by engineers. Machinists do not know how frames deflect or resonant modes or overconstraint or the other things that are critical in machine tool design. Machine tools are inherently dynamic systems where moving cutters cause feedback into the system. Being able to make something accurate under static conditions is very different.
  - jackyinger 2y ago
    Skilled machinists are very well aware of deflection and resonance. Operating a machine tool is not static in the slightest.
    - deleted 2y ago
      [deleted]
    - potato3732842 2y ago
      The average software engineer is working on A to B plumbing code to confer more privacy violating javascript onto webpages, not novel implementations of algorithms at scale. Likewise the average machinist is not "skilled" in the way that most here are implying.
    - hwillis 2y ago
      I can tell when a dirt bike is running rough, but that doesn't mean I can design the helmholtz resonator in the exhaust. That difference is engineering.
  - letitbeirie 2y ago
    > Machine tools are not designed by extremely skilled machinists But they're built by extremely skilled machinists. I've practiced engineering for decades but I wouldn't even want to be in the same room as any object I've personally made being spun up the first time.
    - 2y ago
- jayd16 2y ago
  > How’s basing the US economy on services looking now? Until this administration kicked in, historically high?
- kcb 2y ago
  Shoot yourself in the foot...guess we shouldn't have depended on that foot to walk for so long.
- InfiniteTitan 2y ago
  This whole line of reasoning is so similar to consumers picking up chicken breast in a grocery store and not realizing that it comes from chickens somehow. The US manufacturing base is extremely broad, deep, and strong. The onus is on you to try to prove otherwise.
  - drewcoo 2y ago
    > The onus is on you to try to prove otherwise. You each made claims. You each have onus for them because you made the claims, not because someone says you do. That's how the burden of proof works. https://en.wikipedia.org/wiki/Burden_of_proof_(philosophy) https://en.wikipedia.org/wiki/Burden_of_proof_(philosophy)
- analog31 2y ago
  To put a finer point on it: How's basing the US economy on advertising looking? I went to college and eventually got a PhD in physics. I've built specialized machine tools. Yet I'm considered a schmuck because I didn't go into software development, and the software developers are considered schmucks if they didn't go into financial services or advertising. And none of that was about emphasizing college. Becoming a programmer doesn't require college. And lazy knucklehead stories are part of the workforce culture in virtually every occupation and industry. I'm sure I'm the lazy knucklehead in some of those stories.
  - Teever 2y ago
    The west coast is in for a rude awakening when they realize that they can't win a war against china with code, and they don't have jobs because they don't have chips to run their advertising code on anymore because China took Taiwan. Manufacturing is what builds up strong economies and it's what saves lives by preventing wars as long as possible and minimizes casualties on your side in war by fielding troops with more/better equipment.
    - analog31 2y ago
      Hard to imagine rebuilding a manufacturing economy while your scientists are fleeing the country.
    - jopsen 2y ago
      If only the US had allies. But I guess it's hard to count on them when you're actively threading invasion! A war with China won't be won with manufacturing. It'll be won by having allies. If it actually comes to pass, you'll probably declined fighting the hot war, and opt for a cold one. But without allies it'll get real cold.
      - Teever 2y ago
        You can have all the allies in the world but if none of you have weapons and the means to make them you won't win.
- rainsford 2y ago
  > Because the US has emphasized college as the only respectable education path, as well as the only path to well paid jobs. There's this idea that the shift to college and white collar jobs was some artificial push, but it seems more like an incredibly natural and obvious move to me. A lot of blue collar work is just not super great from a working conditions and pay perspective and while not every white collar job is awesome, the pay and conditions are generally better and at their best can be incredibly intellectually stimulating. My Dad started out working in an industrial plant but pretty quickly ended up going to college to get a computer science degree because that job sounded way better than what he was doing...and that was way back when those kind of factory jobs were still a reasonable way to make a living. I can somewhat agree with the Dirty Jobs philosophy that non-college careers can be valuable and the right choice for some people, and the world after all still needs crab fishermen. But it's really easy to slip into overly romanticizing those careers even to the point of suggesting they're better than getting a degree.
  - xienze 2y ago
    > But it's really easy to slip into overly romanticizing those careers even to the point of suggesting they're better than getting a degree. Well they are better in the sense that you can’t really outsource HVAC or plumbing work to India. The downside of course, and the reason that so many Americans fell out of love with the trades, is that we’re extremely eager to import foreign labor, legally or otherwise, to suppress wages.
  - deleted 2y ago
    [deleted]
  - AnthonyMouse 2y ago
    The flaw is in putting these things out as alternatives to each other. The future of manufacturing is in automation, but in order to do automation you need machinists and computer science. You need people who can design a machine that makes other machines, which is a physical device that operates under the direction of software. Getting people to learn to code instead of learning how to build machines doesn't get it.
ferguess_k 2y ago
I have a sense that manufacturing is not coming back until there is a real Cold War 2.0 (or Hot War 3.0 which hopefully never realizes). I mean a real one, like the NATO-WP one when there was not a lot of trading between the two blocs.
- A_D_E_P_T 2y ago
  There's a way to do it. This playbook has been used repeatedly throughout the 20th century. First you invite industry to reshore via subsidies and preferential access to government contracts. If necessary, the government must directly invest in new firms. (They already do this in a very small way with In-Q-Tel and others, so it's not totally beyond the pale. For a time there was even a US Army VC firm.) If you talk to a Chinese factory owner or mine boss, many of them will tell you that they got their start with a >$2M direct investment from their government. Second you gradually tighten the screws on foreign finished products, not industrial inputs like metals, plastics, ores, etc. Third you streamline export paperwork requirements and relax things like ITAR. Then, when that's all humming along and the factories are working, you can launch blanket tariffs to protect your nascent industries, if need be. But you must exempt necessary industrial inputs from tariffs. What's happening now is completely backwards/inverted and it's going to lead to total chaos.
  - whatshisface 2y ago
    Don't forget the step where you ignore intellectual property law so that it becomes temporarily legal to start companies without a "war chest" of patents to ward off disputes with.
    - A_D_E_P_T 2y ago
      I mean, patents only apply in the nation where they're granted. So "ignoring" IP is just a matter of refusing to recognize foreign patents, which is something that all nations do implicitly. Also, in most foreign countries, court cases are cheap. (They could literally be 100x cheaper to litigate than they would be in the US.) If you're talking about in a US context specifically, then if absolutely necessary the federal government could either buy or nationalize the patents in dispute, just as all states nationalize land from time to time under eminent domain. Zvi recently wrote about this in the context of the state buying the Ozempic patent: https://thezvi.wordpress.com/2025/01/21/sleep-diet-exercise-and-glp-1-drugs/ https://thezvi.wordpress.com/2025/01/21/sleep-diet-exercise-... > [The US Government] should buy out the patents to such drugs. > This solves the consumption side. It removes the deadweight loss triangle from lost consumption. It removes the hardship of those who struggle to pay, as we can then allow generic competition to do its thing and charge near marginal cost. It would be super popular. It uses government’s low financing costs to provide locked-in up front cold hard cash to Novo Nordisk, presumably the best way to get them and others to invest the maximum in more R&D. > There are lots of obvious gains here, for on the order of $100 billion. Cut the check.
walterbell 2y ago
Andy Grove, "How to Make an American Job" (2010), https://www.anderson.ucla.edu/documents/areas/adm/loeb/11_355.pdf https://www.anderson.ucla.edu/documents/areas/adm/loeb/11_35... The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars—fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability—and stability—we may have taken for granted. Aaron Slodov, "Rewiring Silicon Valley for the World of Atoms" (2025), https://x.com/aphysicist/status/1906552189880844664 https://x.com/aphysicist/status/1906552189880844664 Manufacturing demands capital, tech, and execution, creating moats through scale and complexity. Returns could dwarf SaaS multiples if a startup nails a sector where efficiency gains translate to real massively scalable growth. The risk is higher (upfront costs, R&D, hardware flops), but it does scream classic venture asymmetry. Compared to, say, biotech's long timelines or consumer tech's saturation, this hits a sweet spot: tangible impact, massive macro tailwinds, and a shot at monopoly-like dominance.. The greatest returns of the next decade won't come from shuffling bits, but from reimagining atoms—and it will take our entire capital ecosystem working in concert to make it happen.
- pjc50 2y ago
  > make these sums available to companies that will scale their American operations As always, it comes back to the solution which pays executives and shareholders from taxpayer and consumer money. That's the system which gave America Boeing: too big to fail.
  - walterbell 2y ago
    > pays executives and shareholders from taxpayer Maybe 2010-2024, but 2025 has seen CHIPS Act deprioritized in favor of foreign (e.g. TSMC $100B) investment in US manufacturing.
- 2y ago
sleepyguy 2y ago
The problem is cost. We used to buy tooling for Acme Multi-Spindle Screw Machines but the Chinese could produce it for a fraction of the cost. You would have the first set made locally, then send the drawings to China, and pay less than the material cost to have them shipped to your door. In competitive markets, customers hammer you for every penny on a machined item that costs 0.12. These days not many Screw machine shops left, very few in the USA. Material costs were too high, and the Chinese could make it for 1/10th the cost. To bring it all back is very difficult since even the products that the parts were being made for are no longer manufactured in the USA. On a tangent, watch Ives speak about trying to build the iPhone in America. When you understand what it takes, you quickly figure out it is impossible. The supply chains make it impossible when none of the 1000's of parts from screws to glue to chips are not manufactured in the USA. It won't hurt if we try to bring it all back, but it will take the same amount of time and sacrifice China put in to take it. Who thinks our Gov has what it takes to do it?
- myrmidon 2y ago
  Completely agree on the cost aspect. > It won't hurt if we try to bring it all back, but it will take the same amount of time and sacrifice China put in to take it. I think this is missing a huge aspect: Chinese workers are very cheap compared to US levels of income ($25k/15k with and without adjusting for purchaising parity!). Those differences are gonna be paid by the average American, but not only that: Inputs for all those industries are gonna become more expensive than they are (because of retaliatory tariffs), and everything else (retail, restaurants, craftsmen, etc.) is gonna become more expensive, too, because the onshored industries compete for labor (and there is not a lot of unemployment in the first place). Compare agriculture: Faces similar pressure (wages lower elsewhere), but is harder to offshore (goods expire, food safety)-- the US still pays ~20 billion every year just to prop the sector up (and I recon that is money well spent). But I would not want to spend similar amounts in direct/indirect taxes (i.e. tariffs) on mining, ore refining, metalworks, textile processing, electronics assembly and a dozen others, just to have "more self-sufficiency"- you could maybe make an argument for it in some cases (involving Russia or China), but what is the actual problem with buying some machine-tools from allies like Germany or Japan? I'm very confident that we are NOT gonna see a large, self-sufficient American manufacturing industry in 4 or 10 years; people may continue with the current approach for a bit, but will realize at some point that the situation is not improving (prices rising faster than wages, as well as government debt and/or median effective tax burden spiraling out of control). My prediction is that we're either gonna see Trump declare "mission accomplished" at some random point, or reverting on the ~20% average import tariff because of mounting pressure. In conclusion: It will hurt to try to bring manufacturing back, and there probably won't be much to show for it in the end.
1970-01-01 2y ago
AI will be a better at manufacturing than any human ever. It will do the best machining ever. It will never need to rest or slow down. It will be able to build and rebuild parts to nanometer tolerance 24/7/365. It simply cannot fail at any job once it learns how to do it. If you don't believe me, go watch the latest keynote at Zombo.com
jmward01 2y ago
I keep seeing people advocating that the idea that we should build everything, and every piece or everything, here is a good one. Why? Is this just an isolationist dream? The reductive, absurd, extreme of this is why don't individual people go out and build all their own stuff like cars and houses. Let's all go out and learn how to mine and refine metal ore so we can get started on building the family sedan! There is an argument for what the right balance is, and likely a good argument that at lest some minor capability should exist so we can keep re-assessing the value of that industry, but the notion that we should have it all in-house will just limit us to much more primitive tech since we can't gain the benefit of world wide innovation and build off of that.
- slicktux 2y ago
  That is a pretty hyperbolic paragraph only to imply that we as a nation would loose out on innovation by doing so; nowhere do we want to isolate as a country. Look at all the jobless Americans in once thriving industrial cities. Generations left without pensions or skills all because we outsource our workers to other countries. That’s one of the many problems that need to be solved and by manufacturing here in the USA it may help resolve or alleviate that problem.
  - killingtime74 2y ago
    It may or may not but the cost is definitely huge and it's already arrived. Would you build a new factory, spend a huge amount of effort marketing, hire workers, incur large debts, if you knew that in three and a half years the presidency may change and it would not be competitive again.
    - slicktux 2y ago
      That’s a self fulfilling prophecy…say that is the case. The one thing that won’t change is the jobless and skill less Americans; I understand that the road to hell is paved with good intentions but at this point we can’t help but not ignore the homeless, jobless and skill less problem. Though we can solve it by just creating a UBI, right (sarcasm)?
gaze 2y ago
I don't think the MAGA crowd is prepared for the quality of goods produced by a country at the early stages of relearning manufacturing. American made, for at least 5 years, will be synonymous with poor quality, just has made in ___ has been synonymous with poor quality for any country at the early stages of industrialization.
WorldPeas 2y ago
My town used to host the company that made the "Bridgeport machine"(the name of the town itself) and the Singer company. When both left, it relied on banking to pick up the slack, but now that seems to be falling apart as well with the skyline mostly empty after the banks left post-pandemic. Whenever I machine something on a Bridgeport I think about it. https://bridgeportmachinetools.com/about-us/ https://bridgeportmachinetools.com/about-us/ https://www.singersewinginfo.co.uk/bridgeport https://www.singersewinginfo.co.uk/bridgeport
deleted 2y ago
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hayst4ck 2y ago
These tariffs are a radical action that rhymes with the "Four pests" campaign of Mao Zedong's China which led to one of the worst famines in human history. Defenders of these tariffs say they might bring back manufacturing or say they are a response to some bad effect of the current state of America... They don't accept what the experts say, but what their authority says, and their authority says that these will bring manufacturing back. The current argument in the face of backlash is "let's wait and see." Mao Zedong, another populist authoritarian who didn't like to listen to experts or acknowledge reality implemented the four pests campaign. Sparrows were eating Chinese crops, much like trade deficits eat American labor. Mao decided it would be wise to kill these pests to protect the crops, failing to predict that the death of these sparrows would cause even worse pests to damage crops. This led to one of the worst famines the world has ever experienced. China's cultural revolution (our project 2025) and great leap forward (liberation day) had truly disastrous effects like the four pests campaign for those who lived through them. If there are no checks on this administrations power soon, we are likely to see even more short sighted incompetent policy that radically changes society that will damage us for generations. In china they erase history because history gives you a foundation to judge your leaders. "Purifying" the Smithsonian is an admission that understanding history there there would make you dissent from what will happen or be dissatisfied with some of your leaders in the past who might be similar to current leaders. We should take the lesson's of history and understand that what is happening now rhymes with everything the America I grew up in, including the conservative America, stands against, like unchecked power. It might get better... but it can also get much much much worse.
- everybodyknows 2y ago
  > four pests Mao's "backyard" steel furnaces might be an even better comparison: https://en.m.wikipedia.org/wiki/Great_Leap_Forward https://en.m.wikipedia.org/wiki/Great_Leap_Forward
- Danmctree 2y ago
  Yes the current period is reminiscent of the Mao period in more than one way. You've got blind loyalty and optimism by the followers, unwillingness to listen to critism, anti-intellectualism, attempts to purge aspects of culture and dissappearing disliked people to faraway prisons. It's not gone nearly as far as in that period, but we ought to be careful not to get closer. When information countering government policy is suppressed, the mistakes keep growing bigger until the consequences become so grave they can no longer be ignored.
xenadu02 2y ago
I just bought a lathe to lock in prices before tariffs cause them to rise. Its a hobby I've wanted to get into for a long time. There are no manufacturers of screw cutting lathes (a variant of engine lathes and what most people think of as a manual lathe) left in the USA. If you look at old 60s/70s catalogs of lathes the basic models would cost around $15,000 in adjusted money. The Chinese imports are $3000. Could someone make a competitive lathe for around $3000 in the USA? Perhaps. But it will take significant investment to make that happen. I'm not sure where that investment will come from as Wall Street has no interest in such things.
- bitmasher9 2y ago
  A lot of manufacturing doesn’t have the market cap to gain investment in the US, lathes included. The total annual lathes sales are <$50b/yr, so you’d have to corner the global market to make it into the Fortune 500. Maybe you could get investment, but you would need killer patents and a working prototype first.
  - xenadu02 2y ago
    That's true and unfortunate. In the past many more banks were local and there was greater appetite for investments in small and medium businesses, without the expectation that the business had to make the Fortune 1000 or it wasn't worth doing.
cduzz 2y ago
This is weird. There was a huge disruption to lots of industries between the 1950s and the 1990s. Lots of established machine tool companies (bridgeport and such) didn't modernize and went out of business or otherwise shrank. But at the same time Haas automation started in the early 80s and is now quite large and successful. The US economy is huge. Lots of other parts of it have made the US manufacturing part of it seem quite small. If Canada invaded us very slowly, I'm sure we'd figure out (over the course of 2-3 years of massive disruption to our economy and lifestyle) how to make munitions and other engines of war at a much larger scale than we do right now. Unless someone's willing to cut long-term contracts nobody is going to make this stuff in the USA when it's 10x more expensive to do so here than there. And right now, the counter-parties for any such contracts aren't trustworthy. I think most people are happier just paying someone else to make these same things. "I want to wear nikes, not make them" is how people feel everywhere...
linkerdoo 2y ago
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thescriptkiddie 2y ago
obviously re-industrializing a de-industrialized economy is not something that has ever been tried before, it's not clear it would even be desirable, and industrializing in the first place was a traumatic process. that said, machine tools and similar specialized equipment are exactly the kind of high-margin low-volume goods that you want to be manufacturing in a developed country. well, that and microchips.
gkanai 2y ago
What is sadly ironic is that every manufacturing industry this administration wants back in the US- the US spent decades getting rid of those exact industries in order to focus on higher wage, higher skill roles in services, etc. That said, the US should never have gotten rid of industries that are critical for defense such as semiconductor manufacturing and ship building among others. That those industries left the US to go to Japan and then Korea and then now China- those were terrible mistakes that were made.
Animats 2y ago
And that's 30 years ago. It's worse now. The US isn't producing much manufacturing machinery. Machine tools last a long time, many decades. Replacement of worn-out machine tools does happen, but slowly. Because of this, the market for new machine tools is mostly driven by the growth rate of manufacturing, not the total level of manufacturing activity. If manufacturing is flat or in decline, new machine tool sales become rare. The US does have a big used machine tool market, and much demand is filled from there. China now makes quite good machine tools. (Plus many crappy ones.) Search Alibaba for "CNC mill". There are decent 3-axis machines below US$20,000, and 5-axis machines below $30,000. Haas, the biggest machine tool builder in the Western world, has almost nothing below $70,000.[1] As a rule of thumb, 10x the volume cuts manufactured product cost in half. It's hard to come back from being a small volume producer. [1] https://www.haascnc.com/index.html https://www.haascnc.com/index.html
- aj7 2y ago
  Yes. We have a low end industry, but China has the ability to kill it. Haas is already importing from China. And at their current list prices, their machines, with known problems, are not that competitive with imported products costing 30% more, but using higher tolerances and heavier components.
- Animats 2y ago
  Bad news. Haas announced yesterday they are cutting US machine tool production during the tariff mess.[1] The exact opposite of what was supposed to happen. [1] https://x.com/peteoxenham/status/1909751767610654795 https://x.com/peteoxenham/status/1909751767610654795
user3456 2y ago
people that say it doesn't matter should look at the graphs in that article - at that point 20 years ago the 3 other competing nations in this where all (broadly speaking) allies, totally different than a potential adversary holding a near monopoly on essential tools.
stblack 2y ago
What so many commentators here seem to under appreciate, so far, is the following: Financial power is a bad proxy for military power. Military power is ultimately a bad proxy for industrial power. The linked article is about the clear decline of US industrial power.
enaaem 2y ago
I have a hunch that America is not competitive in industries that don't get infinite VC money. Think of clothing, cars, and in this case machine tools. If you want cheap go for China. For quality/luxury you go for Europe and Japan.
acyou 2y ago
Interesting article. This is the key takeaway for me: "U.S. firms are at a further disadvantage in that their foreign competitors benefit from sustained government incentives to invest in advanced industrial equipment." True then, and true now. If you want to buy a machine, you are basically on your own, and machine financing isn't favorable, it's on the contrary somewhat predatory. But this article was written prior to Haas really taking off in the 90s and 2000s, and I think Haas has been somewhat successful in selling into North America, if only for relatively cheap, low-quality, general-purpose machines. And, if you extend the axis of that graph back past 1980, I think Germany, Japan and the UK were dominating advanced machine tool manufacture since their industrial revolutions. I am not convinced that USA was EVER a real leader in advanced machine tool manufacture, I think it was always traditionally imported. Correct me if I am wrong. Sure, the Americans made crappy low tech Bridgeport mills and engine lathes by the millions, then relied onto that technology for 100+ years (and are still trying to make it work). The Haas vertical mill is the new Bridgeport mill, it is 30 years behind state of the art, and American industry is still buying that en masse. I think that the computer industry was successful enough in the 1990s, American policy makers were essentially OK with losing ground in the machine tool industry. Then the computer industry also got offshored. But remember! The equipment and production lines were originally shipped offshore wholesale, the production lines can get shipped back, but American land, energy costs, wages, taxes and other input costs are too high to make it work (without protective tariffs).
- xenadu02 2y ago
  This is true. A Chinese state bank will loan you a couple million to setup a factory with few questions asked. Loan repayment will be repeatedly deferred until you can find customers. The risk is comparatively low. As you noted here in the US getting financing to start a small business of any kind, let alone loans to invest in manufacturing is predatory or downright impossible. The US Government could easily setup a system like for student loans: money for factories and machines without having to jump through a billion hoops, defer payments until you can find some customers, and a department dedicated to retooling the factories that don't make it and handing them to someone else to try again. We'd need to include more investment in making automation profitable at smaller scales for those starting out but look at anything else (solar, computing) and you can see how scale could lower the cost. Instead I guess we'll use tariffs to start a trade war. FWIW it is unfair that countries like China impose tariffs on our products and restrict our ability to operate without a "local partner". But the current effort is ham-fisted at best.

204 points by walterbell 2y ago

pinewurst 2y ago

Book recommendation: When the Machine Stopped, by Max Holland

eth0up 2y ago
Can't find an old dogeared copy for under 40+ w/shipping, but this book is now at the top of my list.

mikewarot 2y ago

On top of the issues highlighted, I think an overly cautious ITAR regime didn't help. The state of the art CNC machines all trip over this on a whim. North Korea responded by building their own CNC machine tool industry, for example.

jackyinger 2y ago

How’s basing the US economy on services looking now? My brother is an extremely skilled machinist, the sort who could build machine tools if he had the resources. And let me tell you there ain’t many of them, especially not young ones. Why? Because the US has emphasized college as the only respectable education path, as well as the only path to well paid jobs. That’s how you end up with a manufacturing industry full of lazy knuckleheads (and believe me I’ve got the stories to back this assertion).

gjsman-1000 2y ago
I have plenty of stories of programmers being lazy knuckleheads. The industry is full of them.
- xigency 2y ago
  Well, that's a bit different. Laziness is a virtue in our field in ways that it is not in other fields. Math is a good example. Mathematicians are even more lazy than programmers. That's how they end up with shorter proofs than our programs and end up able to work lying down as well as just sitting on a computer.
  - gjsman-1000 2y ago
    This feels like cope; ignoring that there are multiple kinds of “lazy.” There’s the kind that focuses on simplicity and avoiding unnecessary work to achieve the same goal (the good kind); and there’s the kind that just ignores necessary work and drags out the process delaying the goal (the bad kind). There are plenty of programmers, and machinists, in both camps. Many programmers actually are lazy knuckleheads in the worst sense of the word - and, according to recent researchers, 10% of programmers self-admit to doing nothing at their jobs.
    - xigency 2y ago
      Well, I guess democracy has spoken. And so has the market as the do-nothing people continue to get paychecks and I collect unemployment.
turtlesdown11 2y ago
> How’s basing the US economy on services looking now? You mean the worlds strongest, most developed and most successful economy?
- franktankbank 2y ago
  On paper. That's not to say we don't have the greatest potential for even greater prosperity but you can't eat stonks. Right now we are making good on promises to the boomer generation while absolutely dicking over the generations who are making good on the promises of old.
  - sorcerer-mar 2y ago
    The US has by far the world's strongest economy no matter how you measure it. We obviously can and do eat the fruits of our labor. In fact we (being Americans broadly) eat only a tiny, tiny, tiny fraction of the absolutely gargantuan amount of value we (being Americans broadly) create.
    - ben_w 2y ago
      > The US has by far the world's strongest economy no matter how you measure it. Strong, yes. Strongest by nominal, yes. But not strongest by PPP: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
  - jayd16 2y ago
    Wealth inequality seems like completely perpendicular subject. What does on shoring lower paying jobs and ballooning the cost of goods do to help that?
- jackyinger 2y ago
  Reminds me of a friend’s defense of the service focused economy: “I’ve got a PhD in economics”. Sure services may be great when things are going well, but you can’t ONLY have services, and then go and blow up international trade and expect to have a good time.
jackyinger 2y ago
And this isn’t going to change overnight. You know what I’m talking about. Most of the good machinist knowledge in America has retired, if not already literally died. And mechanical engineers in the US largely don’t have the hands on skill to really understand making these machines. Not that that can’t gain it. But to achieve truly high precision (the pinnacle from which all other percussion is derived) is an extreme art form. CNC doesn’t come close. The state of the art (and has been for eons) is hand scraping: https://www.krcmachinetoolsolutions.com/machine-tool-scraping/ https://www.krcmachinetoolsolutions.com/machine-tool-scrapin... Things used to be made better because people cared about making a good product and took pride in their work. This is especially true in the machine tool industry: don’t try to make it in the field if you don’t really legitimately care.
- whimsicalism 2y ago
  things used to be made better because of baumol cost disease and far fewer people having those things.
- hwillis 2y ago
  > The state of the art (and has been for eons) is hand scraping No, it absolutely is not. Optics machine tools make things flat and accurate within a few atoms. Cheap surface plates are more precise than any human could hope to achieve by hand. Hand scraping is remarkable- skill can get you ~micron cutting depth. It would be totally obsolete except that the rough crosshatch pattern it creates is useful for retaining oil. Modern tools, especially the most precise tools, are not hand scraped. Cheap clone knee mills are hand scraped. Single-point diamond cutters run on air bearings with no oil, because the oil gap in plain ways is too large. Hand scraping is thoroughly limited by the viscosity of the marking fluid. You identify high spots by painting a flat blue and rubbing it on another flat part. If the whole surface rubs off then you can't tell where to scrape. The fluid does not spread out in single atom thickness.
morkalork 2y ago
Crushing unions is partly to blame here. I've got relatives whose families have been working in the mining industry for a few generations. They all lament the good old days that are long gone now.
- Galatians4_16 2y ago
  There was a related hashtag that was banned for hilarious reasons.
- whimsicalism 2y ago
  how would increasing the cost of labor mean that we have more manufacturing jobs in the US today?
  - whatshisface 2y ago
    There are a lot of manufacturing jobs. In fact, the "Manufacturing" category is four times larger (12M vs 4M) in terms of employment than "Information." The primary interests of people working in manufacturing are higher pay and better working conditions. https://fred.stlouisfed.org/release/tables?rid=50&eid=4881#snid=4900 https://fred.stlouisfed.org/release/tables?rid=50&eid=4881#s...
    - whimsicalism 2y ago
      right, but what i am missing is the connection to ‘more machinist jobs’. unions pretty much necessarily trade off number of jobs with average pay for that job, it’s the whole name of the game to restrict entry and wage negotiation.
  - os2warpman 2y ago
    Every single country on earth, except China, that has a more robust and profitable machine tool sector than the US has unions strong enough to make a social media libertarian shit their pants. Indeed, the three countries listed in the report as being better than the US all have EXTREMELY strong machinist/metalworking unions. Japan: JAM Italy: FIOM And Germany, with probably the most powerful union in the entire world: IGM The problem isn't unions. The problem is the parasite MBA class, shuffling memos and spreadsheets around to make it look like they're doing something.
franktankbank 2y ago
> How’s basing the US economy on services looking now? It looks really hollow, like we will be over a barrel when we experience a real embargo. I wish your brother all the luck in the world, I think his time will come soon because at the very minimum having guys like him on our team keep us from getting gouged to death.
ryandrake 2y ago
> Because the US has emphasized college as the only respectable education path, as well as the only path to well paid jobs. If I could make as a machinist what I make as a software monkey, all other things being equal, I'd go back in time and train to be a machinist. People will go where the money is.
- jackyinger 2y ago
  Exactly. This is the problem with throwing all the money into “hot spots”. Growing the heck out of a few hot industries virtually ensures established ones will decline.
- whatshisface 2y ago
  The only way to "solve" this is to reduce US output of valuable goods so that people are attracted to jobs that pay less and make less valuable goods. I don't understand why everyone's so enamored with the prospect of making $50k working a lathe in a world where engineering jobs have been made rarer artificially. It won't even be a job in a factory that makes something cool like rockets or lithography machines, without the ability to buy stuff from overseas those people will all have to quit to work on final assembly for digital wristwatches. They're right that they've been alienated from labor, they're so alienated they don't know that Fred Flintstone spent all day scheming to get promoted into working behind a desk.
  - tmpz22 2y ago
    [flagged]
    - DebtDeflation 2y ago
      The factories of today are nothing like the 1980s factories this administration thinks they are going to bring back. Go to FRED or any other economic data site and plot manufacturing output and manufacturing employment on the same chart. The US manufactures more today than we ever have in history and it grows every year. Meanwhile, manufacturing employment is around its all time low and declines every year.
hwillis 2y ago
> My brother is an extremely skilled machinist, the sort who could build machine tools if he had the resources. Machine tools are not designed by extremely skilled machinists, they are designed by engineers. Machinists do not know how frames deflect or resonant modes or overconstraint or the other things that are critical in machine tool design. Machine tools are inherently dynamic systems where moving cutters cause feedback into the system. Being able to make something accurate under static conditions is very different.
- jackyinger 2y ago
  Skilled machinists are very well aware of deflection and resonance. Operating a machine tool is not static in the slightest.
  - deleted 2y ago
    [deleted]
  - potato3732842 2y ago
    The average software engineer is working on A to B plumbing code to confer more privacy violating javascript onto webpages, not novel implementations of algorithms at scale. Likewise the average machinist is not "skilled" in the way that most here are implying.
  - hwillis 2y ago
    I can tell when a dirt bike is running rough, but that doesn't mean I can design the helmholtz resonator in the exhaust. That difference is engineering.
- letitbeirie 2y ago
  > Machine tools are not designed by extremely skilled machinists But they're built by extremely skilled machinists. I've practiced engineering for decades but I wouldn't even want to be in the same room as any object I've personally made being spun up the first time.
  - 2y ago
jayd16 2y ago
> How’s basing the US economy on services looking now? Until this administration kicked in, historically high?
kcb 2y ago
Shoot yourself in the foot...guess we shouldn't have depended on that foot to walk for so long.
InfiniteTitan 2y ago
This whole line of reasoning is so similar to consumers picking up chicken breast in a grocery store and not realizing that it comes from chickens somehow. The US manufacturing base is extremely broad, deep, and strong. The onus is on you to try to prove otherwise.
- drewcoo 2y ago
  > The onus is on you to try to prove otherwise. You each made claims. You each have onus for them because you made the claims, not because someone says you do. That's how the burden of proof works. https://en.wikipedia.org/wiki/Burden_of_proof_(philosophy) https://en.wikipedia.org/wiki/Burden_of_proof_(philosophy)
analog31 2y ago
To put a finer point on it: How's basing the US economy on advertising looking? I went to college and eventually got a PhD in physics. I've built specialized machine tools. Yet I'm considered a schmuck because I didn't go into software development, and the software developers are considered schmucks if they didn't go into financial services or advertising. And none of that was about emphasizing college. Becoming a programmer doesn't require college. And lazy knucklehead stories are part of the workforce culture in virtually every occupation and industry. I'm sure I'm the lazy knucklehead in some of those stories.
- Teever 2y ago
  The west coast is in for a rude awakening when they realize that they can't win a war against china with code, and they don't have jobs because they don't have chips to run their advertising code on anymore because China took Taiwan. Manufacturing is what builds up strong economies and it's what saves lives by preventing wars as long as possible and minimizes casualties on your side in war by fielding troops with more/better equipment.
  - analog31 2y ago
    Hard to imagine rebuilding a manufacturing economy while your scientists are fleeing the country.
  - jopsen 2y ago
    If only the US had allies. But I guess it's hard to count on them when you're actively threading invasion! A war with China won't be won with manufacturing. It'll be won by having allies. If it actually comes to pass, you'll probably declined fighting the hot war, and opt for a cold one. But without allies it'll get real cold.
    - Teever 2y ago
      You can have all the allies in the world but if none of you have weapons and the means to make them you won't win.
rainsford 2y ago
> Because the US has emphasized college as the only respectable education path, as well as the only path to well paid jobs. There's this idea that the shift to college and white collar jobs was some artificial push, but it seems more like an incredibly natural and obvious move to me. A lot of blue collar work is just not super great from a working conditions and pay perspective and while not every white collar job is awesome, the pay and conditions are generally better and at their best can be incredibly intellectually stimulating. My Dad started out working in an industrial plant but pretty quickly ended up going to college to get a computer science degree because that job sounded way better than what he was doing...and that was way back when those kind of factory jobs were still a reasonable way to make a living. I can somewhat agree with the Dirty Jobs philosophy that non-college careers can be valuable and the right choice for some people, and the world after all still needs crab fishermen. But it's really easy to slip into overly romanticizing those careers even to the point of suggesting they're better than getting a degree.
- xienze 2y ago
  > But it's really easy to slip into overly romanticizing those careers even to the point of suggesting they're better than getting a degree. Well they are better in the sense that you can’t really outsource HVAC or plumbing work to India. The downside of course, and the reason that so many Americans fell out of love with the trades, is that we’re extremely eager to import foreign labor, legally or otherwise, to suppress wages.
- deleted 2y ago
  [deleted]
- AnthonyMouse 2y ago
  The flaw is in putting these things out as alternatives to each other. The future of manufacturing is in automation, but in order to do automation you need machinists and computer science. You need people who can design a machine that makes other machines, which is a physical device that operates under the direction of software. Getting people to learn to code instead of learning how to build machines doesn't get it.

ferguess_k 2y ago

I have a sense that manufacturing is not coming back until there is a real Cold War 2.0 (or Hot War 3.0 which hopefully never realizes). I mean a real one, like the NATO-WP one when there was not a lot of trading between the two blocs.

A_D_E_P_T 2y ago
There's a way to do it. This playbook has been used repeatedly throughout the 20th century. First you invite industry to reshore via subsidies and preferential access to government contracts. If necessary, the government must directly invest in new firms. (They already do this in a very small way with In-Q-Tel and others, so it's not totally beyond the pale. For a time there was even a US Army VC firm.) If you talk to a Chinese factory owner or mine boss, many of them will tell you that they got their start with a >$2M direct investment from their government. Second you gradually tighten the screws on foreign finished products, not industrial inputs like metals, plastics, ores, etc. Third you streamline export paperwork requirements and relax things like ITAR. Then, when that's all humming along and the factories are working, you can launch blanket tariffs to protect your nascent industries, if need be. But you must exempt necessary industrial inputs from tariffs. What's happening now is completely backwards/inverted and it's going to lead to total chaos.
- whatshisface 2y ago
  Don't forget the step where you ignore intellectual property law so that it becomes temporarily legal to start companies without a "war chest" of patents to ward off disputes with.
  - A_D_E_P_T 2y ago
    I mean, patents only apply in the nation where they're granted. So "ignoring" IP is just a matter of refusing to recognize foreign patents, which is something that all nations do implicitly. Also, in most foreign countries, court cases are cheap. (They could literally be 100x cheaper to litigate than they would be in the US.) If you're talking about in a US context specifically, then if absolutely necessary the federal government could either buy or nationalize the patents in dispute, just as all states nationalize land from time to time under eminent domain. Zvi recently wrote about this in the context of the state buying the Ozempic patent: https://thezvi.wordpress.com/2025/01/21/sleep-diet-exercise-and-glp-1-drugs/ https://thezvi.wordpress.com/2025/01/21/sleep-diet-exercise-... > [The US Government] should buy out the patents to such drugs. > This solves the consumption side. It removes the deadweight loss triangle from lost consumption. It removes the hardship of those who struggle to pay, as we can then allow generic competition to do its thing and charge near marginal cost. It would be super popular. It uses government’s low financing costs to provide locked-in up front cold hard cash to Novo Nordisk, presumably the best way to get them and others to invest the maximum in more R&D. > There are lots of obvious gains here, for on the order of $100 billion. Cut the check.

walterbell 2y ago

Andy Grove, "How to Make an American Job" (2010), https://www.anderson.ucla.edu/documents/areas/adm/loeb/11_355.pdf https://www.anderson.ucla.edu/documents/areas/adm/loeb/11_35... The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars—fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability—and stability—we may have taken for granted. Aaron Slodov, "Rewiring Silicon Valley for the World of Atoms" (2025), https://x.com/aphysicist/status/1906552189880844664 https://x.com/aphysicist/status/1906552189880844664 Manufacturing demands capital, tech, and execution, creating moats through scale and complexity. Returns could dwarf SaaS multiples if a startup nails a sector where efficiency gains translate to real massively scalable growth. The risk is higher (upfront costs, R&D, hardware flops), but it does scream classic venture asymmetry. Compared to, say, biotech's long timelines or consumer tech's saturation, this hits a sweet spot: tangible impact, massive macro tailwinds, and a shot at monopoly-like dominance.. The greatest returns of the next decade won't come from shuffling bits, but from reimagining atoms—and it will take our entire capital ecosystem working in concert to make it happen.

pjc50 2y ago
> make these sums available to companies that will scale their American operations As always, it comes back to the solution which pays executives and shareholders from taxpayer and consumer money. That's the system which gave America Boeing: too big to fail.
- walterbell 2y ago
  > pays executives and shareholders from taxpayer Maybe 2010-2024, but 2025 has seen CHIPS Act deprioritized in favor of foreign (e.g. TSMC $100B) investment in US manufacturing.
2y ago

sleepyguy 2y ago

The problem is cost. We used to buy tooling for Acme Multi-Spindle Screw Machines but the Chinese could produce it for a fraction of the cost. You would have the first set made locally, then send the drawings to China, and pay less than the material cost to have them shipped to your door. In competitive markets, customers hammer you for every penny on a machined item that costs 0.12. These days not many Screw machine shops left, very few in the USA. Material costs were too high, and the Chinese could make it for 1/10th the cost. To bring it all back is very difficult since even the products that the parts were being made for are no longer manufactured in the USA. On a tangent, watch Ives speak about trying to build the iPhone in America. When you understand what it takes, you quickly figure out it is impossible. The supply chains make it impossible when none of the 1000's of parts from screws to glue to chips are not manufactured in the USA. It won't hurt if we try to bring it all back, but it will take the same amount of time and sacrifice China put in to take it. Who thinks our Gov has what it takes to do it?

myrmidon 2y ago
Completely agree on the cost aspect. > It won't hurt if we try to bring it all back, but it will take the same amount of time and sacrifice China put in to take it. I think this is missing a huge aspect: Chinese workers are very cheap compared to US levels of income ($25k/15k with and without adjusting for purchaising parity!). Those differences are gonna be paid by the average American, but not only that: Inputs for all those industries are gonna become more expensive than they are (because of retaliatory tariffs), and everything else (retail, restaurants, craftsmen, etc.) is gonna become more expensive, too, because the onshored industries compete for labor (and there is not a lot of unemployment in the first place). Compare agriculture: Faces similar pressure (wages lower elsewhere), but is harder to offshore (goods expire, food safety)-- the US still pays ~20 billion every year just to prop the sector up (and I recon that is money well spent). But I would not want to spend similar amounts in direct/indirect taxes (i.e. tariffs) on mining, ore refining, metalworks, textile processing, electronics assembly and a dozen others, just to have "more self-sufficiency"- you could maybe make an argument for it in some cases (involving Russia or China), but what is the actual problem with buying some machine-tools from allies like Germany or Japan? I'm very confident that we are NOT gonna see a large, self-sufficient American manufacturing industry in 4 or 10 years; people may continue with the current approach for a bit, but will realize at some point that the situation is not improving (prices rising faster than wages, as well as government debt and/or median effective tax burden spiraling out of control). My prediction is that we're either gonna see Trump declare "mission accomplished" at some random point, or reverting on the ~20% average import tariff because of mounting pressure. In conclusion: It will hurt to try to bring manufacturing back, and there probably won't be much to show for it in the end.

1970-01-01 2y ago

AI will be a better at manufacturing than any human ever. It will do the best machining ever. It will never need to rest or slow down. It will be able to build and rebuild parts to nanometer tolerance 24/7/365. It simply cannot fail at any job once it learns how to do it. If you don't believe me, go watch the latest keynote at Zombo.com

jmward01 2y ago

I keep seeing people advocating that the idea that we should build everything, and every piece or everything, here is a good one. Why? Is this just an isolationist dream? The reductive, absurd, extreme of this is why don't individual people go out and build all their own stuff like cars and houses. Let's all go out and learn how to mine and refine metal ore so we can get started on building the family sedan! There is an argument for what the right balance is, and likely a good argument that at lest some minor capability should exist so we can keep re-assessing the value of that industry, but the notion that we should have it all in-house will just limit us to much more primitive tech since we can't gain the benefit of world wide innovation and build off of that.

slicktux 2y ago
That is a pretty hyperbolic paragraph only to imply that we as a nation would loose out on innovation by doing so; nowhere do we want to isolate as a country. Look at all the jobless Americans in once thriving industrial cities. Generations left without pensions or skills all because we outsource our workers to other countries. That’s one of the many problems that need to be solved and by manufacturing here in the USA it may help resolve or alleviate that problem.
- killingtime74 2y ago
  It may or may not but the cost is definitely huge and it's already arrived. Would you build a new factory, spend a huge amount of effort marketing, hire workers, incur large debts, if you knew that in three and a half years the presidency may change and it would not be competitive again.
  - slicktux 2y ago
    That’s a self fulfilling prophecy…say that is the case. The one thing that won’t change is the jobless and skill less Americans; I understand that the road to hell is paved with good intentions but at this point we can’t help but not ignore the homeless, jobless and skill less problem. Though we can solve it by just creating a UBI, right (sarcasm)?

gaze 2y ago

I don't think the MAGA crowd is prepared for the quality of goods produced by a country at the early stages of relearning manufacturing. American made, for at least 5 years, will be synonymous with poor quality, just has made in ___ has been synonymous with poor quality for any country at the early stages of industrialization.

WorldPeas 2y ago

My town used to host the company that made the "Bridgeport machine"(the name of the town itself) and the Singer company. When both left, it relied on banking to pick up the slack, but now that seems to be falling apart as well with the skyline mostly empty after the banks left post-pandemic. Whenever I machine something on a Bridgeport I think about it. https://bridgeportmachinetools.com/about-us/ https://bridgeportmachinetools.com/about-us/ https://www.singersewinginfo.co.uk/bridgeport https://www.singersewinginfo.co.uk/bridgeport

deleted 2y ago

[deleted]

hayst4ck 2y ago

These tariffs are a radical action that rhymes with the "Four pests" campaign of Mao Zedong's China which led to one of the worst famines in human history. Defenders of these tariffs say they might bring back manufacturing or say they are a response to some bad effect of the current state of America... They don't accept what the experts say, but what their authority says, and their authority says that these will bring manufacturing back. The current argument in the face of backlash is "let's wait and see." Mao Zedong, another populist authoritarian who didn't like to listen to experts or acknowledge reality implemented the four pests campaign. Sparrows were eating Chinese crops, much like trade deficits eat American labor. Mao decided it would be wise to kill these pests to protect the crops, failing to predict that the death of these sparrows would cause even worse pests to damage crops. This led to one of the worst famines the world has ever experienced. China's cultural revolution (our project 2025) and great leap forward (liberation day) had truly disastrous effects like the four pests campaign for those who lived through them. If there are no checks on this administrations power soon, we are likely to see even more short sighted incompetent policy that radically changes society that will damage us for generations. In china they erase history because history gives you a foundation to judge your leaders. "Purifying" the Smithsonian is an admission that understanding history there there would make you dissent from what will happen or be dissatisfied with some of your leaders in the past who might be similar to current leaders. We should take the lesson's of history and understand that what is happening now rhymes with everything the America I grew up in, including the conservative America, stands against, like unchecked power. It might get better... but it can also get much much much worse.

everybodyknows 2y ago
> four pests Mao's "backyard" steel furnaces might be an even better comparison: https://en.m.wikipedia.org/wiki/Great_Leap_Forward https://en.m.wikipedia.org/wiki/Great_Leap_Forward
Danmctree 2y ago
Yes the current period is reminiscent of the Mao period in more than one way. You've got blind loyalty and optimism by the followers, unwillingness to listen to critism, anti-intellectualism, attempts to purge aspects of culture and dissappearing disliked people to faraway prisons. It's not gone nearly as far as in that period, but we ought to be careful not to get closer. When information countering government policy is suppressed, the mistakes keep growing bigger until the consequences become so grave they can no longer be ignored.

xenadu02 2y ago

I just bought a lathe to lock in prices before tariffs cause them to rise. Its a hobby I've wanted to get into for a long time. There are no manufacturers of screw cutting lathes (a variant of engine lathes and what most people think of as a manual lathe) left in the USA. If you look at old 60s/70s catalogs of lathes the basic models would cost around $15,000 in adjusted money. The Chinese imports are $3000. Could someone make a competitive lathe for around $3000 in the USA? Perhaps. But it will take significant investment to make that happen. I'm not sure where that investment will come from as Wall Street has no interest in such things.

bitmasher9 2y ago
A lot of manufacturing doesn’t have the market cap to gain investment in the US, lathes included. The total annual lathes sales are <$50b/yr, so you’d have to corner the global market to make it into the Fortune 500. Maybe you could get investment, but you would need killer patents and a working prototype first.
- xenadu02 2y ago
  That's true and unfortunate. In the past many more banks were local and there was greater appetite for investments in small and medium businesses, without the expectation that the business had to make the Fortune 1000 or it wasn't worth doing.

cduzz 2y ago

This is weird. There was a huge disruption to lots of industries between the 1950s and the 1990s. Lots of established machine tool companies (bridgeport and such) didn't modernize and went out of business or otherwise shrank. But at the same time Haas automation started in the early 80s and is now quite large and successful. The US economy is huge. Lots of other parts of it have made the US manufacturing part of it seem quite small. If Canada invaded us very slowly, I'm sure we'd figure out (over the course of 2-3 years of massive disruption to our economy and lifestyle) how to make munitions and other engines of war at a much larger scale than we do right now. Unless someone's willing to cut long-term contracts nobody is going to make this stuff in the USA when it's 10x more expensive to do so here than there. And right now, the counter-parties for any such contracts aren't trustworthy. I think most people are happier just paying someone else to make these same things. "I want to wear nikes, not make them" is how people feel everywhere...

linkerdoo 2y ago

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thescriptkiddie 2y ago

obviously re-industrializing a de-industrialized economy is not something that has ever been tried before, it's not clear it would even be desirable, and industrializing in the first place was a traumatic process. that said, machine tools and similar specialized equipment are exactly the kind of high-margin low-volume goods that you want to be manufacturing in a developed country. well, that and microchips.

gkanai 2y ago

What is sadly ironic is that every manufacturing industry this administration wants back in the US- the US spent decades getting rid of those exact industries in order to focus on higher wage, higher skill roles in services, etc. That said, the US should never have gotten rid of industries that are critical for defense such as semiconductor manufacturing and ship building among others. That those industries left the US to go to Japan and then Korea and then now China- those were terrible mistakes that were made.

Animats 2y ago

And that's 30 years ago. It's worse now. The US isn't producing much manufacturing machinery. Machine tools last a long time, many decades. Replacement of worn-out machine tools does happen, but slowly. Because of this, the market for new machine tools is mostly driven by the growth rate of manufacturing, not the total level of manufacturing activity. If manufacturing is flat or in decline, new machine tool sales become rare. The US does have a big used machine tool market, and much demand is filled from there. China now makes quite good machine tools. (Plus many crappy ones.) Search Alibaba for "CNC mill". There are decent 3-axis machines below US$20,000, and 5-axis machines below $30,000. Haas, the biggest machine tool builder in the Western world, has almost nothing below $70,000.[1] As a rule of thumb, 10x the volume cuts manufactured product cost in half. It's hard to come back from being a small volume producer. [1] https://www.haascnc.com/index.html https://www.haascnc.com/index.html

aj7 2y ago
Yes. We have a low end industry, but China has the ability to kill it. Haas is already importing from China. And at their current list prices, their machines, with known problems, are not that competitive with imported products costing 30% more, but using higher tolerances and heavier components.
Animats 2y ago
Bad news. Haas announced yesterday they are cutting US machine tool production during the tariff mess.[1] The exact opposite of what was supposed to happen. [1] https://x.com/peteoxenham/status/1909751767610654795 https://x.com/peteoxenham/status/1909751767610654795

user3456 2y ago

people that say it doesn't matter should look at the graphs in that article - at that point 20 years ago the 3 other competing nations in this where all (broadly speaking) allies, totally different than a potential adversary holding a near monopoly on essential tools.

stblack 2y ago

What so many commentators here seem to under appreciate, so far, is the following: Financial power is a bad proxy for military power. Military power is ultimately a bad proxy for industrial power. The linked article is about the clear decline of US industrial power.

enaaem 2y ago

I have a hunch that America is not competitive in industries that don't get infinite VC money. Think of clothing, cars, and in this case machine tools. If you want cheap go for China. For quality/luxury you go for Europe and Japan.

acyou 2y ago

Interesting article. This is the key takeaway for me: "U.S. firms are at a further disadvantage in that their foreign competitors benefit from sustained government incentives to invest in advanced industrial equipment." True then, and true now. If you want to buy a machine, you are basically on your own, and machine financing isn't favorable, it's on the contrary somewhat predatory. But this article was written prior to Haas really taking off in the 90s and 2000s, and I think Haas has been somewhat successful in selling into North America, if only for relatively cheap, low-quality, general-purpose machines. And, if you extend the axis of that graph back past 1980, I think Germany, Japan and the UK were dominating advanced machine tool manufacture since their industrial revolutions. I am not convinced that USA was EVER a real leader in advanced machine tool manufacture, I think it was always traditionally imported. Correct me if I am wrong. Sure, the Americans made crappy low tech Bridgeport mills and engine lathes by the millions, then relied onto that technology for 100+ years (and are still trying to make it work). The Haas vertical mill is the new Bridgeport mill, it is 30 years behind state of the art, and American industry is still buying that en masse. I think that the computer industry was successful enough in the 1990s, American policy makers were essentially OK with losing ground in the machine tool industry. Then the computer industry also got offshored. But remember! The equipment and production lines were originally shipped offshore wholesale, the production lines can get shipped back, but American land, energy costs, wages, taxes and other input costs are too high to make it work (without protective tariffs).

xenadu02 2y ago
This is true. A Chinese state bank will loan you a couple million to setup a factory with few questions asked. Loan repayment will be repeatedly deferred until you can find customers. The risk is comparatively low. As you noted here in the US getting financing to start a small business of any kind, let alone loans to invest in manufacturing is predatory or downright impossible. The US Government could easily setup a system like for student loans: money for factories and machines without having to jump through a billion hoops, defer payments until you can find some customers, and a department dedicated to retooling the factories that don't make it and handing them to someone else to try again. We'd need to include more investment in making automation profitable at smaller scales for those starting out but look at anything else (solar, computing) and you can see how scale could lower the cost. Instead I guess we'll use tariffs to start a trade war. FWIW it is unfair that countries like China impose tariffs on our products and restrict our ability to operate without a "local partner". But the current effort is ham-fisted at best.