"Luttwak on trade and tariffs and ships" Topic

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This is mostly about trade and tariffs, but Luttwak is of course a military analyst, and this piece ends thusly:

And then there is another thing. It turns out that without a civilian shipbuilding industry, the US Navy can only make hugely expensive prototypes, not the 200 warships we need. The same is true of other sectors, including civilian aviation: Boeing is currently years late in delivering tankers to US and allied air forces (the Israelis must rely on 65-year-old converted airliners), and also terribly behind fulfilling orders for commercial airlines around the world. Why? Because of the collapse of the hundreds of machine shops, which once trained skilled workers who could walk into any Boeing factory at a pinch.

All of the above is more than enough to justify today's temporary global turmoil, which caused stock markets to temporarily tumble, but there is one more consideration. Unless the US industrial economy is vigorously rebuilt, the US armed forces will have to import their vehicles and weapons. From where? Likely China, so good luck with that.

Interesting about the machine shops. A friend works in a machine shop, says it's hard to get people to work there, esp younger folks, and they are very busy.

"Unless the US industrial economy is vigorously rebuilt, the US armed forces will have to import their vehicles and weapons."
Huh? Improvement in the industrial economy would be good, of course. But we are no-where close to this situation. And to suggest we would get our military gear from China is absurd (and fear-mongering).

My grandfather was a skilled machinist, had papers to prove it. About 1952 or so he and my grandmother went to San Diego to see their son in the Coast Guard and the new grandchild. My granddad got bored within a day or two, and went out and found a job in a machine shop, to start the next day, so my grandmother went to Pennys and got him overalls and a lunch bucket. Next day he went off to work, but he couldn't remember where the place was, him being new in town. So he walked into ANOTHER machine shop and they put him to work on the spot. Worked there for a week until it was time to take the train back to Texas.

He ended at a GE plant in Tyler making air conditioners. GE had a program where a worker could suggest a better way to do something, and if it resulted in savings, you got a % of that as a bonus. He did that twice, and one time for the highest award ever. With a sixth grade education and two missing fingers from learning the trade as a young teen. He died of Parkinson's and the last year or so before retirement he really couldn't do much, and GE (no union, Texas being right-to-work) carried him until he was eligible for SS and his GE retirement.

Need freighters, etc. fast? Drag out the old Liberty ship plans. Your biggest problem would be getting the engines for them, though…

What is ignored here is the rise of robotics in US manufacturing. It has been replacing a significant percentage of the manufacturing workforce, while creating more jobs in the tech sector.

The cost of returning manufacturing to the US via tariffs is too high and would take too long to be a logical business choice. Factories take years to build. AI will change how things are made. The infrastructure and Chips bills were specifically designed to bolster jobs in particular areas, many Red states, while
Improving efficiency and development for the future economy.

Economist Paul Krugman said yesterday that European tariffs on the US average 1.7%.

Makes you wonder how all of the women in the UK were able to walk into factories and produce weapons during WW1 and WW2 without having worked in machine shops prior.

Rosie the riveter worked in a machine shop prior to WW2?

Not for nothing but what exactly is stopping Boeing from hiring and training machinists in the first place? Sometimes you need to train your workforce it's just that industry now sees that as a cost and is too worried about their profit margins to actually invest in their future. The instability caused by the tariffs would make that investment less likely.

How much did they pay the UK women? Today you would have to pay $40 USD-50 an hour. One of the reasons many companies moved production overseas in the first place.

I think the point was missed, if there is a need for skilled labor as happened in WW1 and WW2 because the men were mobilised to fight then previously untrained women were hired, trained and then capable of filling the roles.

You are correct in that the reason production moved was because it was cheaper but that was a corporate decision based off profit. So my point about Boeing not hiring and training skilled workers is about profit still stands especially when Wall Street will kill their stock price if projections are not met. Increasing tariffs will not change that calculus enough to bring that production back to the US but it will put a large sales tax on US consumers as they are the ones that pay the tariff.

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See Sen Tuberville's questions and admiral's answers about machinists.

and this on Chinese demographics:

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In the 1970s, China's median age was 18 years old. In 2020, it was 38.4. Today, it's in the 40s.

The guy whom the piece discusses thinks China collapses within a decade.

Doc would note, however, that if that is true, it makes them MORE dangerous and not less in the short run.