The Controversial Economic Report That Challenges Everything We Think We Know About U.S. Manufacturing

Job losses in manufacturing from 2000 - 2010 were devastating in almost every state. And a new report claims that productivity gains in manufacturing were not as strong as advertised. Credit: The Information Technology & Innovation Foundation

Economic reports are not usually the kind of thing that gets the heart racing. But earlier this week, a non-profit think-tank called The Information Technology & Innovation Foundation put out a report that amounts to a bombshell.

The report is titled “Worse Than the Great Depression: What the Experts Are Missing About American Manufacturing Decline.”

We first read about the report in the Washington Post. The basic claim is that manufacturing in this country is not doing nearly as well as advertised. At Changing Gears, we’ve made a lot out of the productivity gains in manufacturing over the past couple of years. According to everything we’ve heard, manufacturing productivity has led the way out of the recession, and Midwest manufacturing has been a major driver of growth.

But the ITIF report provides a blunt challenge to that story line. Some of the claims in the report are controversial, and not widely accepted. But even the federal government now says there could be problems with how it measures manufacturing productivity.

And that could have big implications for the policies our leaders consider in the future.

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Detroit And Austin Should Totally Be BFFs

This weekend's Austin American Statesman, as posted on

Ok, we’ll admit, Changing Gears has not always had a friendly tone toward Austin. But, mean-spirited jokes aside, Austin does seem to come up on this site a lot more than other non-Midwest cities. We’ve even written about Austin’s hopes to build its own local auto industry.

But when we saw the headline above, from this weekend’s Austin American-Statesman, it just seemed like this strange, long-distance flirting between cities could be the real deal. Detroit and Austin actually have a lot in common – both have great music, both have hipsters and both are pretty weird.

So how about it Austin? Do you want to go steady with Detroit?

Circle one:

Yes      or      No

Meet The Machine That Makes Most Of The Things In Your Life

Instructor Steve Henkelman programs a CNC machine at Grand Rapids Community College. Credit: Dustin Dwyer


This month, we’re taking a look at some of the hidden assets of the industrial Midwest – the parts of our economy that don’t often get noticed when we talk about our strengths.

We found one hidden asset right smack in the middle of our manufacturing sector. It’s a machine that’s in literally thousands of factories across the Midwest. And, though, you might not have heard of it before, the CNC machine – and the people who operate it – are at the core of our economy.

CNC stands for computer-numerically-controlled. And what the computerized machine does is it machines things. That sounds ridiculous unless you know that machine is not just a noun. It’s also a specific manufacturing process.

It’s when you cut away a material. It’s basically commercial sculpting.

“Machining is at, or very close to, the foundation of manufacturing,” says Peter Zelinski, senior editor at Modern Machine Shop magazine.

Zelinski says, even if you’ve never heard of it, CNC machining is essential to your life.
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It’s Monday. Here Is Something Beautiful.

HD hi res Aurora Borealis over Lake Superior, Upper Peninsula of Mi from LakeSuperiorPhoto on Vimeo.

Here’s what you do: Click on the video, and pop it out to full screen.

As you watch, remind yourself that this is the place they call the Rust Belt. Remind yourself that this is the place that cannot keep its talented young people, because they say it’s too cold. Too uninspiring. Too boring.

Remind yourself that they say those things.

Remind yourself that none of it is true.

Then, get back to work.

The Chicago “L” Overlaid On The City Of Detroit

The Chicago L route map overlaid on the city of Detroit. Credit: reddit user northsider1983

What would it look like if you took a platoon of helicopters and airlifted the entire Chicago L system and dropped it on Detroit? It would look like the map you see above. The map was made by a reddit user, who goes by the handle “northsider1983.”

The map gives a sense of the scale of both cities, and their very different transit options. Detroit, of course, doesn’t have a rail system. It has the People Mover, which covers all of 2.9 miles. It’s pretty arguable whether Detroit even has a functioning bus system these days (though there was a time when Detroit’s streetcar system was far more extensive than today’s L).

But Detroit’s transit dreams still have some life left in them. Businessman Dan Gilbert said again this week that he expects the new light rail line along Woodward Ave. “will be in the ground by the end of this calendar year.”

Can You Imagine Life In The Midwest 100,000 Years From Now?

The goal of Changing Gears is to talk about the transformation of our economy in the Midwest, and to prepare ourselves for a brighter future. The time scale we’re usually talking about is in range of decades, maybe a century or two.

But, this morning, we found ourselves thinking about what life could be like in the Midwest 100,000 years from now. The inspiration came from the animation created above by New Scientist.

We’re not scientists around here, but it seems there are some good reasons to be bullish about how the Midwest could fare over the long, long term. We’ve got all this water around us. We do pretty well at growing our own food. And, even though our manufacturing economy has taken a beating in the last few decades, our culture of making things has to be worth something in the grander scheme.

Just for a moment, forget what the next 10 years will look like in the Midwest. Forget about what will happen in your lifetime. Tell us what you think the Midwest will look like a thousand years from now. Then 10,000 years. Then 100,000.

Then, think about what things we can do now to make a difference.

Meanwhile, In Flying Car News…

The Jetsons

In more than 100 years of manufacturing ingenuity in the Midwest, there have been very few limits. From steamships, to motor cars, to solar panels, people in the industrial Midwest can make almost anything.

So, where is my flying car? Seriously. I’ve been waiting for, like, ever.

Flying cars have been a fantasy for almost as long as there have been cars. Henry Ford reportedly tinkered on a plan. The first car to get regulatory approval for both air and land in the U.S. was in 1956.

Now, here comes news of the Terrafugia Transition, which will have its public debut at the New York Auto Show next month.

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A Meeting Of The Minds On How To Revive Industrial Cities

As the Federal Reserve Bank of Chicago said in a recent paper outlining how to inject some new life into our industrial cities, “‘Rust Belt’ is a phrase that speaks for itself”.

ArtPrize Grand Rapids - this 2010 entry, Elephant Walk, made it into the top ten finalists. (Niala Boodhoo)

That’s why I was pleased to learn that the bank invited a group of people from different cities across the Midwest for a day-long event yesterday to kick off a new project that will look at what works – and what doesn’t – when encouraging economic revitalization.

Among the attendees: representatives from ArtPrize, the annual Grand Rapids public art competition that has brought hundreds of thousands of people to the city’s downtown during the fall event. If you’re not familiar with ArtPrize, here’s some of our reporting on the competition.

ArtPrize’s Brian Burch said the day went well, with lots of analysis and recommendations but a few overarching solutions that are applicable to many industrial cities.

Burch said it also confirmed many of the concepts behind ArtPrize – the idea that a focus on people and creativity foster innovation and economic growth.

“The best things communities can do is invest in education and develop a marketplace of ideas that make it easier for anyone to realize their dreams and take ideas into action,” Burch said.

You can learn more about the Fed’s initiative here.

How To Change The Dark And Dirty Image Of Manufacturing, A Live Web Chat With The Creator Of The Edge Factor

Last week, we told you about a new show called The Edge Factor. The show is trying to give a view of manufacturing as it exists today: high-tech, challenging and cool. Join us here at 1p.m EST, noon Central time for a live web chat with Jeremy Bout, creator of The Edge Factor.

Click here for more info on the show. Click here to watch the pilot episode.

The chat will go live at 1p.m. EST!