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Factories still producing in the Pittsburgh region

| Thursday, Oct. 20, 2011

Sure, we don't make cheap shirts anymore. Nor low-end furniture, phones and TVs. On countless products "Made in USA" is a label no longer.

But it doesn't follow that American manufacturing is dead.

That's been a premature obituary for years. An equivalent regional myth around Pittsburgh is that steel is gone. It isn't. Look at U.S. Steel's Edgar Thomson plant in the Mon Valley or Allegheny Ludlum in Brackenridge.

This is a country that produces manufactured goods.

U.S. factory output went up in September -- just two-tenths of a percent but up, not down -- the Federal Reserve said the other day. Third straight month, too. Airplanes, trucks and home electronics were stickout gainers. Typically higher end stuff, well-paid workers.

Since the official end of the recession, June 2009, industrial production has risen a surprising 12.8 percent -- surprising because conventional slants on the economy are so cheerless. Unemployment remains stuck at over 9 percent nationally and as much as 16 percent all told.

But manufacturing is no dead zone -- and deserves very timely support on the trade, tax and labor fronts. A sure road to mediocrity would be to let China, Mexico and Bangladesh do all our goods production for us.

There's a lot of ground to make up. U.S. factories in September turned out 5.8 percent less than in September 2007, when the economy dived.

But the trend is up. Production of business equipment (machinery, computers, communications gear, the guts of capital spending) gained 1 percent. Auto output rose for the third month, home electronics for the fifth. Parts shortages are mostly over from Japan's earthquake of last March.

"The third quarter turned out to be a lot better than some feared," economist Paul Ashworth told the Associated Press. He sees momentum from the reduction in working people's payroll taxes, which peps consumer spending. But it's due to expire Dec. 31. On the other hand, Social Security benefits will get a cost-of-living boost.

According to another survey (they don't always agree) manufacturing in the northeast, which includes us, was still in shrink-mode last month. Yet new orders, shipments and hiring turned from negative to positive. But other government data showed manufacturers cutting 13,000 jobs in September after a 4,000 drop in August. The average length of factory work week also declined. So output was up, workers' input down -- only conclusion: higher productivity.

Hard to believe now, but the making of low-cost shirts, pants and glassware flourished in this region until late in the 20th century. But there was no long-run defense against cheap labor, automation and ocean transport by container ships that spread up-to-date factories all over the world.

Short of applying protectionist tariffs -- which would be bound to stir retaliation, as they did in the 1930s -- American manufacturers have to fight back with high-end products, advanced designs, and smart workers. And to positively want to keep making goods in the U.S.A., whatever it takes. Trade negotiators have to insist on fair treatment for our exports. And no more stealing of U.S. technology. (That's to you, China.)

Let's quit thinking manufacturing is another lost war.

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