I Wanted to Build Cool Things
Op-Ed was originally published in The Hill on April 7, 2020.
By Stanley Chao
It’s clear our medical supply chains are in complete chaos. Supplies are so short that New York City doctors and nurses have reverted to wearing garbage bags, reusing N95 masks, and afraid to hug their spouses and children for fear of transmitting the coronavirus. We don’t have enough test kits, latex gloves and ventilators. People will die as a result.
We’re mad as hell, and we’re looking for culpability. The Obama administration? President Trump? China? Wall Street? Well, it depends on who you ask. When I ask myself, I put the blame squarely on one person. Me. Here’s why.
As a kid growing up in the 70’s, all I wanted to do was build cool things. I spent hours in my family’s garage, building B-17 model aircrafts or Apollo spacecrafts. My father, an aerospace engineer, would take me to his office to show me replica satellites that he designed. They were awesome. I attended Columbia University and studied electrical engineering so I could one day build cool things, too.
As an engineer, I, like my father, designed satellites. It was nice, but I wanted to know more about manufacturing, so I decided to enroll in business school. But a funny thing happened in the early 90’s.
It was the beginning of the deindustrialization of America. “Why on earth would you ever want to go into manufacturing?” asked a UCLA finance professor. “Manufacturing is moving to China. You won’t get a job. Think about a career in Wall Street.”
Suddenly, my aspirations of becoming the next manufacturing guru like Edwards Deming came into question: Should I go to my dream school, Carnegie Mellon to immerse myself in such opaque topics as operations management, Kanban systems and cost accounting? Or attend UCLA for an opportunity to make millions managing M&A transactions, or trading stocks and new fangled financial instruments like junk bonds or derivatives? I chose the money.
And so did corporate America. It chose money over manufacturing. Factories all over the Midwest were closing. The big three auto companies announced joint venture manufacturing operations in China. Wall Street used big words like “globalization” to describe these events. I should know; I was a card-carrying member of this “new world order.”
There were still and still are many good, valid reasons for American companies to do business in China, primarily involving easier and less costly access to that country’s enormous consumer markets and to other markets across Asia and Eastern Europe.
Yet, either as an employee or a consultant, I did my fair share in contributing to America’s manufacturing exodus. In the early 90’s, I took part in transferring products like lighting ballasts, plastic forks and knives, and Christmas lights to China to be built. After gaining confidence in their Chinese partners, western corporations outsourced more complicated and sophisticated industrial products—temperature sensors, aircraft nose cones, and computer circuit boards.
Next came the really hard stuff; highly-complicated systems like jet aircrafts, medical, and telecommunications equipment. Closing one of these deals required specialized business skills that I so happened to possess: fluency in the Chinese language, experience dealing with the Chinese, and a technical and manufacturing background.
I consummated these deals. I found Chinese companies. I mediated and translated the hundreds of meetings and negotiations. I assisted in handing over trade secrets, training Chinese engineers, and giving up majority ownership of Chinese joint ventures that were doomed from the start. I joined in the many signing ceremonies where exuberant executives laughed and drank themselves silly as they counted the many of billions of dollars that China would bring their way. Yes, I was the perfect conduit to deindustrialize America.
Fast forward to today, and we find ourselves vastly short on such simple medical supplies as pipette tips and cotton swabs. How did we get in this position? Who do we blame it? Why, of course, the Chinese. After all, they’re communists, and we can’t trust communism. They’re the easy pick. In the movies, the butler always did it, and, likewise, the Chinese did it in this case.
But it’s not that simple. How about the Fortune 1000 executives who chose quarterly profits, six-figure bonuses and hyper revenue growth trajectories? Or the Wall Street firms that made trillions directly and indirectly, off of China’s supply chains? How about the good old consumer who’d rather buy a $5 dollar hammer from China than a $15 one “Made in USA”? And don’t forget the myriad of government regulations that burdened American manufacturers to the point of near extinction.
There’s plenty of blame to go around. But as my mother always said, “Look in the mirror my son, and you’ll find the answer.” So yes, I blame myself. I always wanted to build cool things.