The group had just spent 11 days last November traveling through Taiwan, China and Chinese mainland, visiting sheet metal stamping and fabricating operations, as well as the facilities of tour sponsors SEYI Presses and The TRUMPF Group. They had seen global PC brand logos applied to products in large factories pumping out computer parts for the world's PC OEMs. They had seen sheet metal fabricating shops using state-of-the-art equipment.

More important, they experienced firsthand the competitive and entrepreneurial spirit driving the economic boom that's been under way in China since 1978—from the aggressive bartering in the shops and street markets, to the fabricating shop three hours outside Shanghai, spitting out laser-cut metal parts in a scene that could just as easily have played out near Cleveland, Chicago, Los Angeles, or Seattle.

Tour sponsors SEYI Presses, with headquarters in Taiwan, China and The TRUMPF Group, based in Germany, both maintain global presence, including operations in Chinese mainland and the U.S. It was their customer relationships that opened the doors to the stamping operations and sheet metal fabricators that were the main events for the tour.

Opportunity Versus Threat

China's threat to U.S. manufacturing, particularly small companies, was a motivating factor for most participants. But they also shared a sense that there may be opportunities as well. The need to explore and understand those opportunities is what ultimately got them on the plane.

Neil McCall feels the rise of job shops in China will be a slow process, mainly because of the proliferation of large, vertically integrated manufacturing complexes that are reluctant to offload their processes. He noted that this leaves open a secondary market characterized by relatively low part volumes fabricated from heavy-gauge materials.

In the meantime, the need for process control, management expertise, cash flow management, and efficiency improvements will only grow as China continues its manufacturing evolution and is forced to compete on the world stage, not to mention serve its own domestic markets in the face of growing wage and employment pressures and constant expectations for higher living standards.

There also appears to be a need for middle-management skills, marketing experience, and training, all of which will become more important as the world increasingly holds China to its quality standards.

Finally, as consolidation inevitably enters to correct endemic overcapacity in China's manufacturing sector, the urgency of all these challenges will accelerate, and the stakes will rise.