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Midwest Manufacturers Bid to Stay Competitive amid Globalization

The American Midwest, traditionally a base for manufacturing, has been hit hard by globalization in recent years. Economic correspondent Paul Solman reports on efforts aimed at strengthening the region's competitive edge.

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  • JIM LEHRER:

    Next tonight, Paul Solman begins an occasional series of special reports on America's competitive response to globalization. Tonight, he looks at manufacturing's bid for a comeback in the Midwest.

  • PAUL SOLMAN, NewsHour Economics Correspondent:

    Another rust belt factory bites the dust. The demolition site is Milwaukee, Wisconsin, poster town for the death of manufacturing in the upper Midwest, a tannery, a brewery, an auto parts plant.

    Rhandi Berth of the Wisconsin Regional Training Partnership.

  • RHANDI BERTH, Wisconsin Regional Training Partnership:

    They built truck frames mostly, thousands and thousands of jobs in the central city.

  • PAUL SOLMAN:

    All gone.

  • RHANDI BERTH:

    All gone.

  • PAUL SOLMAN:

    Yet just 16 miles from this lot, where Tower Automotive once stretched for acres, multibillion-dollar manufacturer Bucyrus is booming.

    TIM SULLIVAN, President and CEO, Bucyrus: This is an 85-cubic-yard dipper for an electric mining shovel.

  • PAUL SOLMAN:

    A mining equipment maker in Milwaukee for so long its shovels were shipped to Panama to dig the canal, Bucyrus is now investing $150 million in a new plant here, after going the way of all business, manufacturing in China for years.

  • TIM SULLIVAN:

    We finally said, "We're crazy. Let's move this work back into Milwaukee. Let's bring the workers back in. Let's try to rejuvenate what we can do."

  • PAUL SOLMAN:

    So Bucyrus has brought work back from China, and another Milwaukee manufacturer, Harley-Davidson, has just kept growing, still makes its iconic bikes here, despite the siren songs from abroad.

    So which is it, Milwaukee manufacturing doomed or something less expected? Manufacturing on the rebound, and in the rust belt of all places, making someone's dreams, as the song says, come true.

  • LAVERNE AND SHIRLEY:

    Schlemiel! Schlemazl! Hasenpfeffer Incorporated!

  • PAUL SOLMAN:

    TV's "Laverne and Shirley" from the '70s, already nostalgic back then for the sudsy job-fest that once was Milwaukee. Now, while it's easy to idealize manufacturing jobs, the Mrs. De Fazio and Feeney were not exactly living high off the hops.

  • ACTRESS:

    And this is where the unskilled workers take their break.

    CINDY WILLIAMS, Actress, "Shirley": Don't push her, Karen.

  • ACTRESS:

    You don't even need a high school diploma.

    PENNY MARSHALL, Actress, "Laverne": I have a diploma, and the punctuality pin.

  • PAUL SOLMAN:

    As you've heard before, though, for Americans with no college degree — the vast majority back then — "Laverne and Shirley" jobs weren't bad. And if you had a union behind you and were in a boom industry like autos, you could make real money.

  • WAYNE POOLE, General Motors Worker:

    Where else are you going to get out of high school and make, back then, $18,000 a year or $4.25 an hour and everybody else was making $2?

  • PAUL SOLMAN:

    But two familiar forces were driving down the pay for such jobs, if not snuffing them out: productivity, ever more mechanized plants, and globalization, competition from abroad.

  • DAN LURIA, Michigan Manufacturing Technology Center:

    Just in the last 10 years, the U.S. has lost 5.5 million manufacturing jobs.

  • PAUL SOLMAN:

    Dan Luria of the Michigan Manufacturing Technology Center.

  • DAN LURIA:

    For the states of Wisconsin, Illinois, Indiana, Ohio and Michigan, if you look at that region, what it has in common is that it produces and makes the parts for automobiles, construction equipment, and industrial machinery.

    And in those industries, what we find is we have increasingly a difficulty supplying ourselves. More and more of the components that go into those products are coming in from outside. And that's, not surprisingly, why we're only one-fifth of manufacturing and one-fifth of the national economy, but we have lost almost 40 percent of the jobs since the late 1990s.