Manufacturing

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James Watson

Often thought of as the heart and soul of a country's economy, companies within the manufacturing industry produce everyday, common goods on a massive scale. These companies typically engage in very labor intensive productions and employ over 60,000 people, who are in effect the farmers of industrialization. Labor Unions, raw materials, emerging markets, and globalization are factors familiar to most of the companies within manufacturing. The rising worldwide demand for energy and ensuing rise in oil prices has benefited companies that manufacture oil drilling and transportation equipment like US Steel (X) and hurt the automobile manufacturers that are lagging in hybrid technology like General Motors (GM) and Ford Motor Company (F). Additionally, the 2007 credit crunch caused by the subprime lending crisis has made cars less affordable and forced automobile manufacturers to either offer better interest rates on loans or not sell cars. Below is a break down of the companies within the manufacturing industry:

Subsets of the Manufacturing Industry

Automobile Industry

• Ford Motor Company (F)
• General Motors (GM)
• Toyota Motor (TM)
• Volkswagen (VLKAY)
• DAIMLERCHRYSLER AG (DCX)
• Harley-Davidson (HOG)

Metal and Materials Industry

• US Steel (X)
• Alcoa (AA)
• DuPont (DD)

Multi-Industry Conglomerates

• General Electric Company (GE)
• Siemens AG (SI)
• 3M Company (MMM)
• Toshiba (TOSBF)

Defense Contractors

• Lockheed Martin (LMT)
• Raytheon Company (RTN)

Construction Industry

• Caterpillar (CAT)

Manufacturing Industry Trends & Forces

Labor Unions

Due in part to the physical intensity of the work, sheer size of the labor forces working for each company, and historic financial success of the major manufacturing companies, Labor Unions have played an integral role in the costs associated with running a manufacturing company. Historically, successful manufacturing giants like the Big Three automakers, Boeing, and US Steel (X) have turned extravagant profits, inspiring the masses of employees to organize and demand higher pay, better benefits, and safer working conditions. Labor Unions drive up company's costs and cut into profits, making it tougher for the companies to compete in the global economy. Labor Unions are characteristic of the United States, which puts many U.S. manufacturers at a distinct disadvantage to developing countries where labor is cheaper. A lack of Labor Unions gives companies like Toyota Motor (TM) a comparative advantage.