CAMBRIDGE, Mass.--America's industrial plight, and a resultant deterioration in American economic power, have spawned a search for quick fixes ranging from overt protectionism to half-baked "reindustrialization" schemes designed to "Japanize" the U.S.A.
The Reagan recession, as one might have expected, has intensified the search and the emotional overtones: Barry Bluestone and Bennett Harrison, from a left-of-center academic viewpoint, argue that 30 million plant jobs have been lost in the last decade because corporations have been pulling capital out of basic industry.
Reaganites insist that mostly, the problem comes down to too much government. Get it "off our backs," they say, and America's social and economic vigor will be restored.
Itchy Democratic politicians, loosely described as "Atari Democrats," want to de-emphasize declining industries, and generate employment based on new technologies such as robotics and genetic engineering, helped by an American government agency styled on Japan's Ministry for International Trade and Industry. Then there are old-style Democrats, backed by the AFL-CIO, who mostly want to bail out the ailing smokestack industries where union membership is concentrated.
But it is too simple to blame the decline of American industry on Japan, on corporate investment policies, cheap labor abroad, or on the welfare state. Nor is the answer to ignore autos and steel, certainly a critical part of the industrial base of any major nation. Mostly, the pat answers serve only to salve a middle-America, Archie Bunker-style ego that for too long has had a blind faith in American productive superiority, ignoring what is going on in the rest of the world.
Three members of the Harvard Business School staff have now shattered this mythology in what may turn out to be a landmark study, "Industrial Renaissance--Producing a Competitive Future for America."
William J. Abernathy, Kim B. Clark and Alan M. Kantrow, drawing on the plight of the auto industry as symbolic of all American manufacturing industries, have come up with a compelling thesis that American corporate managers and politicians in both parties must reflect upon:
American manufacturers are in their present desperate condition because they "lost the determination to manufacture well."
How did that happen? For two decades after World War II, American industry, led by General Motors and United States Steel, disgorged an enormous volume of goods. The huge domestic market was a "safe haven," untroubled by competition from abroad.
All had been led to believe there was a golden goose, Abernathy, Clark, and Kantrow say: "True, no one really knew why or how the goose did what it did, but who was to complain?"
But--slowly at first, then with greater force--foreign producers began to make inroads, shattering the idyllic picture.
Now, the industrial landscape in America "is already littered with the remains of once-successful companies that could not adapt their strategic vision to altered conditions of competition." The essence of their message--elaborated in a conference for editors here--is that if American managers don't get back in close touch with the actual production process, more plants will close and the cities they're in "will become the ghost towns of late 20th-century America."
Their recommended strategy is embodied in the awkward phrase, "de-maturity." As an industry matures, its products become more or less standardized. This is what happened to Detroit: by the 1950s, with only a handful of companies left, one Detroit nameplate was almost indistinguishable from another, except for cost.
Innovative activity everywhere in American industry tended to consist of relatively minor "tinkering." It was almost as if all corporate CEOs were acting on the adage Bert Lance repopularized in the early Carter administration days: "If it ain't broke, don't fix it."
But thesystem was "broke," even if most corporate managers refused to recognize the devastation, and it needs to be changed, because as Kantrow said_"nothing is once and for all." Prof. Robert Hayes of the Harvard Business School pointed out that the real secret of the Japanese success has been their "skill for managing change." That's why they have been able to bring out new products, faster.
As Abernathy, Clark, and Kantrow put it: "High quality, reliable performance, relatively low cost based on real manufacturing efficiencies--these have been, time and again, at the heart of the competitive strategy that has enabled foreign producers to outflank, outfox, and outperform their American counterparts."
Therefore, the authors of "Industrial Renaissance" beg American manufacturers to reverse the maturing process. Hence the concept of "de-maturity." This would mean abandoning mere tinkering for basic innovations that can lead to radical new products and markets.
It is the actual product--and the skills involved in production--that are all-important, these Harvard professors say. And shrewd Japanese observers of the American scene agree. In a recent interview in Tokyo, Hisashi Shinto, president of the giant Nippon Telephone & Telegraph Co., pointed to a corollary of this theme: American engineers, instead of dirtying their hands on the production line or on the shop floor, stay behind the scenes at computer keyboards.
For those companies that seize new opportunities, the Harvard professors see a true renaissance of American manufacturing. In fact, they report that it is already under way in some areas--including autos--and that here and there, plants following a non-confrontational pattern between the unions and management have yielded a level of performance as impressive as anything they've seen in Japan.
But it's as yet a fragile trend that needs encouragement from the top brass in the unions and in corporate board rooms. The unions find it difficult to give up huge hourly wages and workshop perks. Management is still hung up with the drive to show short-term profitability. But these things have to change, or it may be curtains.