Reminiscences Of An American Industrial Nation - How In A Few Short Years America Lost Its Manufacturing Sector

Tyler Durden's picture

Some time ago, there was a lengthy debate as to why anyone even cares
about the manufacturing ISM number. After all America is now by and far a
service economy. Obviously, that debate ended in a stalemate.
Nonetheless, the sad truth is that with each passing year America is losing ever more of its once dominant industrial advantage, and with
the chief export being "financial innovation", should the world
experience another risk flare up it is very likely that the world will
enforce an embargo on any future US "imports" and the country's current
account deficit will drop to a level from which there is no recovery. So
for those who are still not convinced of just how serious the
deterioration is, The Economic Collapse blog has compiled this handy list of 19 fact that demonstrate the deindustrialization of America in all its glory.

#1 The United States has lost approximately 42,400 factories since 2001. 

#2 Dell Inc., one of America’s largest manufacturers
of computers, has announced plans to dramatically expand its operations
in China with an investment of over $100 billion over the next decade.

#3 Dell has announced that it will be closing its
last large U.S. manufacturing facility in Winston-Salem, North
Carolina in November.  Approximately 900 jobs will be lost.

#4 In 2008, 1.2 billion cellphones were sold worldwide.  So how many of them were manufactured inside the United States?  Zero.

#5 According to a new study conducted by the
Economic Policy Institute, if the U.S. trade deficit with China
continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.

#6 As of the end of July, the U.S. trade deficit with China had risen 18 percent compared to the same time period a year ago.

#7 The United States has lost a total of about 5.5 million manufacturing jobs since October 2000.

#8 According to Tax Notes,
between 1999 and 2008 employment at the foreign affiliates of U.S.
parent companies increased an astounding 30 percent to 10.1 million.
During that exact same time period, U.S. employment at American
multinational corporations declined 8 percent to 21.1 million.

#9 In 1959, manufacturing represented 28 percent of U.S. economic output.  In 2008, it represented 11.5 percent.

#10 Ford Motor Company recently announced the closure of a factory that produces the Ford Ranger in
St. Paul, Minnesota. Approximately 750 good paying middle class jobs
are going to be lost because making Ford Rangers in Minnesota does not
fit in with Ford's new "global" manufacturing strategy.

#11 As of the end of 2009, less than 12 million Americans worked in manufacturing.  The last time less than 12 million Americans were employed in manufacturing was in 1941.

#12 In the United States today, consumption accounts for 70 percent of GDP. Of this 70 percent, over half is spent on services.

#13 The United States has lost a whopping 32 percent of its manufacturing jobs since the year 2000.

#14 In 2001, the United States ranked fourth in the world in per capita broadband Internet use.  Today it ranks 15th.

#15 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.

#16 Printed circuit boards are used in tens of thousands of different products.  Asia now produces 84 percent of them worldwide.

#17 The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States.

#18 One prominent economist is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040.

#19 The U.S. Census Bureau says that 43.6 million
Americans are now living in poverty and according to them that is the
highest number of poor Americans in the 51 years that records have been kept.

The conclusion:

So how many tens of thousands more factories do we need to lose before we do something about it?

How many millions more Americans are going to become unemployed
before we all admit that we have a very, very serious problem on our

How many more trillions of dollars are going to leave the country
before we realize that we are losing wealth at a pace that is killing
our economy?

How many once great manufacturing cities are going to become rotting
war zones like Detroit before we understand that we are committing
national economic suicide?

The deindustrialization of America is a national crisis.  It needs to be treated like one.

If you disagree with this article, I have a direct challenge for
you.  If anyone can explain how a deindustrialized America has any kind
of viable economic future, please do so below in the comments section.

America is in deep, deep trouble folks.  It is time to wake up.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Bastiat's picture

Service economy, new paradigm, none of this old school stuff counts, duh.  I mean how pre-postindustrial can you get?

Dr. Porkchop's picture

If it's lucky, America will have a Paradigms to rub together in a few years.

Dont Taze Me Bro's picture

Whats also important is to know where these new paradigms came from.

The trend towards dismantling the economies of the Western world started in the 80s, which is around the same time the voodoo economic theories of Milton Friedman was put into practice. When our economy finally collapses, (and hopefully by then the ruling elite will be out of power) a more balanced and accurate postmortem analysis would be conducted, and the findings of that report will most likely indentify Friedman as the god father and the architect of our demises.

chet's picture

Quite the trick huh?  Come out with a bunch of think-tank nonsense to support the "trickle-down" theory to justify cutting taxes and regulation.  Then when the plutocrats start vacuuming up all the capital in the country (as planned), they turn around and invest it overseas instead of here.

masterinchancery's picture

FAILING to cut taxes and regulation, or to break the grip of the public unions who are miseducating our children, has led to this pass.  A huge copper mine in AZ(200 million tons/yr) can't operate because the EPA has postponed the EIS 4 times, and doesn't know when it will get around to finishing it, after which there will still be much litigation.  Money goes where there is opportunity--not where Bureaucrats and lawyers are vacuuming up the extortion money.

Freddie's picture

Thank you.  Where do these idiots come from who think cutting individuals taxes is a bad idea.  Regulation, taxes, environmental laws up the ying yang, lawsuits, unions, drunken lazy workers in some cases and mega corporation whores like Obama's pals at GE drove manufacturing out.   I love these jerks who never ran a company, never met a payroll, never stayed at the office late at night doing some shitty govt form to insure thugs with "the state" did not fine you or arrest you because you forgot that form or did not pay that tax while your employees are at home. Plus most of the employees could gove a shit that you work like a dog to make sure they have a job along with your own job.

strannick's picture

Yeah, unions definately did their part in thwarting the American Dream. Between them and the Banks, I guess all that's left is Ron Paul and a few farmers in North Dakota

zaknick's picture

Unions and the great depression were what created the middle class moron.ñ Look up the history of what bosses used to get away with before unions ignorant troll.

poor fella's picture

Since we are reminiscing, this classic from 2004 features The Bernank before most remember him getting into the fray.

Outsourcing actually creates U.S. jobs, study finds

We only need to give it time, the turnaround is right around the next half decade or so. The Bernank is all about jobs you know - force feeding profits to W$ is just an unwanted side affect.

caconhma's picture

America is in a deep trouble.

America ruling elite is not American any more. Almost half of the White House staffers have a duel citizenship. The president and the Congress are Wall-Street and foreign banking oligarchy puppets. They do not serve America and its people.

They do not give a shit about America and its people. Their goal is to steal as much money as they can.

They perverted American Law, morality, and educational system. America became a nation of brainwashed fools and imbeciles.

Only Americans believing in America first, hard work, and honesty can save this once great country. But first, America must purge itself and punish people responsible for looting our country. People must forget about entitlements and star leaving productive lives.

Lord Koos's picture

It's been a very long time since the children of the rich fought in wars.

DFCtomm's picture

This wasn't done solely by Democrats or Repuclians, and it wasn't done by design. The destruction of U.S. manufacturing is a result of the two parties pursuing their ideologies with no regard for the nation. The Democrats worked to ensure the most inhospitable business environment, while Republicans worked to ensure the door to offshoring forever remained open.


Democrats slavishly pursued regulation, and taxation, while in the name of free trade Republicans religously resisted any type of protectionism. We haven't practiced free trade.  We've practiced reverse protectionism. We've handicapped ourselves while forcing none of these handicaps upon our primary competitior. We financed a foot race and then tied our legs together.

New_Meat's picture

you trolls gotta add EPA, ACLU, Environmental Pollution Agency, "minimum wage", the whole regulatory establishment, then, well, when the courts say "OK to drill in the gulf", the current administration says "no way".

Well, you're in the realm of the qwm where you get your handle:

did I say qwm?

- Ned


three chord sloth's picture

Sorry, but the truth is in the post WWII era, manufacturing employment in the US has been steadily declining since 1953, when it peaked at 33% of non-farm jobs. Now it is at about 9%. Friedman and friends didn't help things, but they sure didn't start them either.

AnAnonymous's picture

Sorry, but the truth is in the post WWII era, manufacturing employment in the US has been steadily declining since 1953,


Of ocurse, it has.

Lets take a look at the US society.

In the US, there are environments for people according to their revenues. There are environments for elite, environments for CEOs, environments for white collar workers, environments for blue collar workers, environments for destitute etc A society of peers.

What is  happening today on a world scale is no different from what  happened on the US local scale. The US model is spread to the world.

After the 1950s, the US started to grow exponentially richer as they turned to access the whole world resources with no restrictions.

That new inflow of resources helped to better the US general environment, a trend that, coupled with the US model, could but end with outsourcing.

As the US citizens invested on the quality of their environment, it has grown to one of the finest in the world, excluding de facto certain activities to be performed on it.

Wages are connected with the quality of the general environment. Upping the environment to deliver running water has to show on the wages bill as this new option has to be maintained.

In the US, a  distortion between wages, work output and the quality  of the environment has been growing since those days.

Adding more and more conveniencies to the life standards, conveniencies that show up on the wage bill while the work output grew not fast enough.


Today, the picture is plain: many places in the world offer the right general environment to host industrial activities with the adequate conveniences level.

The US industrial worker has to be paid more because of the quality of the environment while the work output is similar if not inferior to world counterparts. Can not work.


The US has been pressing their model on the world and have kept  being successful at it. Outsourcing low level jobs was desired and a success. Now remain mid level jobs, the next round in the scheme. Wont be as easy though.

Michael's picture

When they talk about creating jobs bla bla, they make sure not to mention the types of jobs that can actually be created.

Since 2001, military weapons manufacturing jobs rose by125%, at the same time consumer goods manufacturing dropped by 40%. 

As the economy collapses the military manufacturing will go bye bye and the decimation of the manufacturing base will be complete.

The only way to get manufacturing jobs back to the US is to default on the national debt, at which time the rest of the world will cut us off.

We will then have no choice but to make our own shit in our own country again.

I say default on the national debt as soon as possible.

Hubbs's picture

We have ourselves so glued to this tarbaby that what were once off the wall solutions may have to get revisited:

Protectionism and tariffs to block foreign imports? same end result as a default-but would also screw up the rest of the world, possibly cause mass exodus of big corporations who would become victims of retaliation. But hey, Japan did it after WWII-encouraged/protected many industries domestically to encourage domestic competition, which in turn strengthend those industires to the point that when unleashed on the rest of the world they could kick everyones' butts. To get such a domestic startup again would require strict anti-trust enforcement, so the Carnegies, Fords, and the like (yeah they were monopolies at one time but at least they did produce things of value-cars, steel, oil) couldn't build critical mass-enough to influence to commandeer the politicians.


Remember decades ago how whenever we bought something that fell apart and was cheap, we would snicker "Made in Japan", but by the 80's suddenly the Japanese cars were better quality? Now we buy Japanese stuff for quality, although I suspect a lot that is being outsourced now days. Some of the same attitude persists with Chinese goods, but that too has been changing.


In the meantime, if I can't produce or don't have a productive skill, then I should at least make some effort at being self sufficient which means getting back on the farm. Otherwise, I see the military being transformed into a meals on wheels food delivery service for the masses.


steve2241's picture

"The only way to get manufacturing jobs back to the US is to default on the national debt, at which time the rest of the world will cut us off." ----------------- Import tariffs; make it uneconomic to manufacture off-shore. Less drastic than default! OT - Donald Trump has announced his candidacy for President of the United States. He has shunned the Democrats and Republicans, choosing instead to run with the Rents Are Too Damn High! party.

Rider's picture

WTF needs factories if you can print all the money and pimp the rest of the world?

Fuck everyone who cannot print dollars. Yes fuck'em harder

They will never fight back this is the ethernal status quo.


TBT or not TBT's picture

It is the ongoing short term plan, in any case.

bigelkhorn's picture

Alot of people think we are doomed, but there are still great ways to make money. Even while the economy is collapsing around us.

I subscribe to the guy from australia and his FFT economic newsletter at  that guy has called many big events before they have happend, including the stock market crash in 2008 and the current financial collapse of the US. (currently happening) I found him from a friend last year, and he has some important work.

His oil calls are insane, and I have been making good money with them. He is well worth a look, if you want to keep two steps ahead of the sheeple out there.

I am worried about my financial future. Is anyone else nervous out there?

Star Warrior's picture

Nervious? I´m Scared Shitless!!!

Theta_Burn's picture

Oh Say Can You See.....

Sutton's picture

"We'll all do each other's laundry."

Congressman James Trafficant

Jake3463's picture

I've heard stories from the old Bethlehem Steel plants that as management was telling them out of date their equipment were, crates were being moved into ship the equipment to China.


The elite of the babyboomers gutted the country and sold it to the cheapest bidder.

Lord Koos's picture

Blame the boomers = lame.  Much was decided by much older people... boomers were in their 30s in 1980

Boilermaker's picture

Sorry, but it is the baby boomer generation that sold us out.  It's just a fact.

Dr. Sandi's picture

Divide and conquer. Keep buying those tickets, sucker.

Id fight Gandhi's picture

They did. But theyll be the ones drooling in nursing homes and forgotten by their chilldren. Any wealth they may have made will be snatched up and pissed away by their kids that hate them for ignoring them and putting stuff and token jobs ahead of them.

RockyRacoon's picture

Sorry, but it is the baby boomer generation that sold us out.  It's just a fact.

Right.  And look what we got for it.   Social security on the brink, and whiners like you who are looking for someone to blame.   Grow up, get a pair, go to work, and take care of yourself and yours.  If you and I don't go into this battle together we are flat-assed doomed.

lynnybee's picture

Is Robert Rubin a baby boomer? Larry Summers? Greenspan? direct your blame their way please. most of us baby boomers were too busy working & raising children to bring down the world !

strannick's picture

You mean busy snorting coke in your pinstripe suits while planning your next LBO

Bastiat's picture

Boomers sold us out?  What about Lyndon Johnson? Robert MacNamara?  The "Military Industrial Complex" a phrase coined by Dwight Eisenhower in the 50s--obviously another boomer creation.  Did the boomers start or continue the Vietnam fucking war and the Great (Bankrupt) Society?  The two things pushed us into Nixons default?  The 100s of thousands of boomers who weren't killed came back from Vietman to a busted economy, and an inflated and debauched currency. Though they were in their early 20s, it was clearly all their doing, eh? 

Did the boomers start Vietnam or end it?  How many of your generation have been killed or injured protesting the illegal invasion of Iraq?  Just curious--and why haven't you fixed everything?

"Just a fact"  Bullshit. 


Misstrial's picture

Well if you're going to bring up the death thing, let's discuss the 30 Million American GenX'ers and Millennials aborted by Boomers from 1972 through 1990.

And then, in order to satisfy drug addicted Boomers, at least 30 thousand Mexicans have been killed as a result of the cartel drug war during the last four years. 

As you may recall, it was the Boomer generation that espoused recreational drug use through popular music lyrics, rock concerts, and peer culture. They are the ones who are the primary proponents of marijuana legalization here in California.



Bastiat's picture

Almost all boomers parents were cigarette addicts and many were alchoholics and heavy drinkers -- a postl-WWII norm -- watch a 50s movie sometime.  Kids in the 60s were prescribed benzidrine for weight problems (my sister included).  Most drug addiction is not attributable to "boomers" but to the permanent underclass institutionalized and funded by Johnson's Great Society.  The coke snorting amoral boomer banksters of the 80s were hired and empowered by whom? 

And who declared the "War on Drugs" which institutionalized the Mexican drug cartels in exactly the way that prohibition did organized crime.  Was that a boomer?

Finally, it is completely fallacious "reasoning" to cut off the great concatenation of cause and effect at some arbitrary point and declare: "people born from this day forward are responsible!"  Think about it.

Dick Buttkiss's picture

Yes, let's blame one generation or another of the people, who have never ruled shit in this country, all being victims of "Hamilton's Curse" . . .

. . . and the larger fact that the very granting of licenses to steal lies at the root of all our problems:


living on the edge's picture


The steel mill equipment shipped to China in the 80's were either old obsolete mills, equipment from bankrupt companies, or part of the downsizing that occurred to the steel industry at that time.

Blame should be focused on the following: the downsizing of the automobiles, excessive EPA regulations, excessive union contracts and competitive pressure from foreign producers. (You can thank Mr. Volcker for the latter).

Lord Koos's picture

"Downsizing the automobiles"  You mean the reason Toyota kicked everyone's ass was because they were building bigger cars?

living on the edge's picture

Smaller cars equals less steel capacity utilization.

Freddie's picture

Nucor with mini mills and non-union workers is doing alright in the steel business.

living on the edge's picture

Nucor is an example of how America can innovate and recover from a once lost industry sector.

living on the edge's picture


I can't speak specifically about Bethlehem Steel but I did see old outdated equipment from US Steel, LTV Steel and others bought by the Chinese. The Chinese refurbished and updated the equipment in warehouses located in the Pittsburgh area. When completed the equipment was crated and shipped to China.

The Chinese successfully competed with the world class steel mills of the world with these refurbished rolling and finishing mills.

fredquimby's picture

Exactly the same happened with MG cars in the UK. They went bankrupt as a Chinese "buyer" pulled out, then another Chinese firm stepped in, bought it, loaded up the production line and shipped it to the homeland.

Now the Chinese sell MG cars to the English!!! How Fooked is that?! I guess the really fooked up thing is that the stupid English are actually buying these cars knowing what happened 5 years ago!!

From Wiki:

"The MG marque passed, along with the Rover marque to the MG Rover group in May 2000, when BMW 'broke up' the Rover Group. This arrangement saw the return of MG badges on sportier Rover-based cars, and a revised MG F model, known as the MG TF, launched in 2002. However, all production ceased in April 2005 when MG Rover went into administration.

The assets of MG Rover were bought by Chinese carmaker Nanjing Automobile in July 2005 who themselves were bought by SAIC in December 2007.[1]

In 2007 production of the MG TF roadster and MG 7 large sports saloon (derived from the previous Rover 75/MG ZT model) started in China.[2] Assembly of MG TFs for the European market, from Chinese built complete knock down (CKD) kits, was started by NAC MG UK at Longbridge in August 2008."

Incidentally, SAIC was the Chinese company that pulled out with their massive bid at the last minute and it was that massive loss of potential future support that finally tipped MG into bankruptcy and forced a MASSIVELY reduced sale price as the company was now bankrupt....

This is the first time I have heard that SAIC then bought Nanjing (who were the supposed "white knights"...who came in after bankruptcy to save the day)....more like "We will bankrupt MG, then get another branch to come in and pick up what we would have bought for £250,000,000 for £10 Mwahahahaha"

Good business if you can get it, but to be fair, a national bloody scandal, and all we got out of it was a million pound inquiry, thousands of job losses and more Chinese made goods coming to the UK....Result!!

I just saw this too:

March 2009:

"The car firm recently dropped the Chinese element from its company name, changing from NAC - Nanjing Automobile Corporation - to MG Motor UK."

Give it a year and no one will even know it's Chinese owned...


living on the edge's picture

Exactly, what a shame. By the way I had two MGB's over the years and loved the car. I wish I still had one.

Jerry Maguire's picture

We could get out of this.  We need:

1) an across the board debt cancellation; and

2) a furious baby boom; and

3) return to the gold standard.

That'll fix it right quick.


bunkermeatheadprogeny's picture

Working on it, 3 kids in the last 6 years.

hambone's picture


1) an across the board debt cancellation;

That isn't just a debt cancellation, it's also a benefit cancellation

2) a furious baby boom;

Way off base here (if you're serious) as the paradigm of ever growing markets is dead.  Countries, corporations need to learn how to work harder to take market share (better mouse trap) than ever more mice.

3) return to the gold standard.

1 out of three ain't baseball :)