A different perspective on U.S. manufacturing

July 11, 2008
By: Dan Davis

Never let it be said that I don"t read most of what comes across my desk.

I was perusing the 2007 annual report for Fraunhofer USA, the Plymouth, Mich.-based arm of the German research organization, and I came across the farewell address from Dennis Tsichritzis.

He was leaving the Fraunhofer family and had some interesting takes on the American way of business.

First, he pointed out that America does not promote endless subsidies in business. Sure, there are farm subsidies, but the U.S. government doesn"t fully support new technologies, such as solar- or wind-powered energy development, as other countries do. For example, Fraunhofer is involved heavily in laser research and receives permanent government subsidies. In the U.S., subsidies come in the form of tax breaks and little else.

To be fair, a great amount of research across a vast array of subject areas occurs at the university level, and plenty of that is supported by government grants doled out by the likes of the Department of Energy and the military. But does such a hodgepodge of spending really maximize the taxpayer"s investment in the government?

I think most U.S. voters would be hostile to any talk of permanent government subsidies; subsidies, such as tax breaks for research and development efforts in the manufacturing base, seemingly face uphill battles every time they come up for renewal.

Second, Tsichritzis called America the land of the quarter horse. He said the quarter horse runs in one direction for a quarter of a mile to catch a cow and then it darts off in another direction for another quarter to catch another cow. U.S. business moves fast with little interest in time-consuming planning. As a result, many companies learn by trial and error, but they learn their lessons fast. On the other hand, German companies are methodical and adhere to well-planned strategies that are sometimes difficult to abandon.

In the U.S., the quarterly financial report from publicly held companies affects so many areas, Wall Street to Main
Street. What have you done for me lately? has replaced What are your plans for the future? as a shareholder mantra. All of us could use a little more long-term perspective.

Third, Tsichritzis said America believes that the only successful way is the American way. It"s hard to argue with
success, but that doesn"t always translate to success in other geographic areas. Tsichritzis credited Americans with
constantly analyzing and questioning their system to adapt to new situations, but perhaps a broader perspective is needed?

Large U.S. corporations have figured out how to do business overseas, and they learned the hard way. It takes a combination of humility and respect to integrate into a culture, but for many brash, loud Americans and their companies, they are unable to accomplish that.

Tsichritzis had more points, but these three jumped out at me. It"s refreshing to see constructive criticism delivered from someone who truly has admiration for what this country has to offer.

It would be refreshing to see both private and public organizations in the U.S. explore some of the ideals held up by others in the world and see if they might work here.

Dan Davis

Dan Davis

FMA Communications Inc.
2135 Point Blvd
Elgin, IL 60123
Phone: 815-227-8281