As stated many times on this blog, Rogue River Wind, seeks, for a multitude of reasons including rebuilding local economies to build its products in the US. Everyone wants jobs, right? So it ought to be pretty much a slam dunk to get production manufacturing done in America or better yet, Oregon, but consider the experiences of A123 lithium-ion batteries and Amazon’s Kindle.
The answer is a story of the obstacles to a rebirth of U.S. manufacturing, and of the tantalizing possibilities if such a rebirth could be achieved. For Chiang’s company has one foot in China and the other in the U.S., reflecting the forces that drive manufacturers overseas and the potential for a renaissance at home.
The obstacles here are rooted in the sad history of manufacturing’s decline in the United States: Despite the promise of Chiang’s batteries, many on Wall Street and in Silicon Valley were incredulous when he and other leaders at A123 asked for capital to build factories in America — Asia, yes, but Michigan, why would you want to?
Even more daunting, nearly all of the world’s battery manufacturing industry is in Asia, where plants can be built faster and supplies and equipment are much easier to get than in the United States. These days, it’s hard to find Americans who even know how to build a battery factory.
Rogue River Wind is certainly learning the complexities of taking a relatively simple device albeit one requiring precise tolerances in Oregon despite the clamber for green jobs. The US has lost control of its own innovation and hence its independence as it has outsourced manufacturing to foreign countries.
The story of the Kindle and its E-Ink technology shares another sad side of what has become of Yankee ingenuity.
…More salient today as an insight into America’s standing in a globalized production system may be the backstory of another consumer electronics sensation–Amazon’s Kindle e-reader–yet here the story has a darker hue.
This I learned reading an excellent forthcoming paper by Gregory Tassey, which referenced a very troubling blog post by the Harvard Business School professor Willy Shih, entitled “The U.S. Can’t Manufacture the Kindle and That’s Problem.” What’s the problem here? Well, according to Shih, the global distribution of Amazon’s production sources for the Kindle betrays a far less benign story of out-sourcing than did the iPod and one that suggests that it does indeed matter how and where U.S. firms locate their production.
Recognizing this, the Obama administration is funding billions of dollars through programs like the USDA to rebuild manufacturing jobs in the US but it isn’t obvious how these funds help a company like Rogue River keep innovation in the US.
