Sunday, June 25, 2017

Atlanta Electronics

In the 1980s, Atlanta was an electronics manufacturing hub. This increase in engineering and manufacturing was a test to see how this Coke and Delta town would do. We had sizeable and growing electronics companies headquartered in Atlanta and every other electronics company had satellite operations in Atlanta. Some of these were commercial and others were defense. Atlanta Metro doubled in population from the 1980s to the 2000s from 3 million to 6 million.

After 2000, the multi-industry design cycles were ending and NAFTA had passed in 1993.  Also, Lean Manufacturing had developed to the extent that fully developed manufacturing processes were under control and could be moved anywhere.  This confluence of events made it possible for companies to consolidate back to their home offices and move overseas. They did both and the electronics manufacturing companies began to contract and close their Atlanta plants and offices.

Many “developing” countries were ready to offer lower labor costs, lower taxes, free land and buildings and little or no regulations.  They offered “bribes” to US companies to get them to move. This would allow US companies to move overseas and cut their manufacturing costs by 50%. Most of them did move overseas, because their competitors were all doing it and they didn’t want to be “priced out” of their markets.

Atlanta had been a player in the development of the PC and the upgrading of telephony, cable TV, defense electronics, smart phones and many other design cycles. Many foreign companies had design and manufacturing operations in Atlanta Metro.

The US is now in the process of reducing corporate and individual taxes and ending excessive immigration in order to move our 94 million working-age US citizens to jobs. Atlanta Metro can benefit from the return of companies and rural Georgia is likely to see manufacturing return to their cities as well.

Some electronics design and manufacturing may return, but it is more likely that Georgia will see more cyber security and placement of manufacturing based on proximity to venders and shipping. The old rules should apply. When Georgia had lots of design and manufacturing, the design work was largely in large cities and the manufacturing was in rural counties. Companies look for low land costs and low taxes as well as the right labor force. Georgia should compete well with California, Illinois and other bankrupt States, but it will need pipelines and liquid natural gas shipping infrastructure to export energy.

Norb Leahy, Dunwoody GA Tea Party Leader

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