I think beside all the reasons we know such as dotcoms not flying and their business reincarnating in brick and mortar space and the problems of service providers overbuilding the long haul, I think another major factor is also at play. I think manufacturing in the West is going thru another major shift and the shift is starting in telecom/datacom space, where one had seen a lot of manufacturing growth in the last decade. I think bottom line is *automation*.


I think manufacturing will have to go thru a major automation in the way it is organized and many companies that were not using contract manufacturers, may end up using it, but the contract manufacturers themselves and also companies that will continue doing their own manufacturing will have to go thru major restructuring and changes resulting from drastic automation. In other words, I think it does not cut it anymore just to use the same processes and move the manufacturing overseas. I think the process needs major automation overhaul to be competitive. 


This is just like what happened with Steel industry about three decades ago. I think we will see major restructuring in manufacturing in the next 6 months in the West and it will not be just about layoffs and moving of the jobs to Taiwan or Singapore, although layoffs in this sector will be a main component of this development. This is more like the way old economy industries in the last 40 years have been dropping their share of labor force due to automation and their "headcount" economically has shifted to sectors of the economy that are creators of such automated solutions.


Sam Ghandchi, Publisher



April 26, 2001






* The above article was first posted on SCI (soc.culture.iranian) Usenet newsgroup on April 26, 2001



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