MCAD Industry View — A March 2006 Update

Geopolitical & Economic Factors:

The MCAD/PLM Industry is just one of many thousands of industries affected by geopolitical and economic factors around the world. Here in the United States, the last five years have resulted in far more than a baker's dozen enervating political and economic factors: (1) unremitting extravagance and unwarranted tax cuts in the face of the shift from US federal budget surplus to deep deficit, (2) the definite long-term trend of a rich-get-richer, poor-get-poorer US income distribution, (3) sluggish net job growth below the requirements of US population increases, (4) a net US disadvantage in globalization, (5) weakened US environmental stewardship and deteriorating US infrastructure, (6) the ballooning real and psychic costs of war, in lives and treasure, (7) reduced worldwide and domestic admiration for US leadership, with an astonishing lack of accountability, (8) the weaker US dollar, (9) elevated energy, oil & gas prices, (10) a deteriorated domestic NASDAQ market vs. 2001, (11) ongoing corporate fraud, (12) indictments and criminal investigations in both the White House and Congress, (13) double-digit rises in the cost of US health care and ongoing increases in the number of US uninsured, (14) stunning US federal incompetence (disaster relief, Medicare drug plan, nation building, ), (15) reduced US civil liberties and personal privacy, (16) unrelenting illegal immigration, and (17) record US trade deficits, requiring the US to borrow billions of dollars every week from abroad.

Things are not going so well recently, either.

In February 2006, the Bureau of Labor Statistics of the U.S. Department of Labor reported preliminary productivity data -- as measured by output per hour of all U.S. persons -- for the fourth quarter of 2005. In the fourth quarter, productivity declined 0.6 percent in the nonfarm business sector. The fourth-quarter productivity decline was the first since the first quarter of 2001.

On March 6, 2006 Bloomberg News announced that orders placed with US factories in January 2006 fell 4.5%, the biggest decrease since July 2000.

As reported by the San Francisco Chronicle, the final tally is in as of February 12, 2006, for item (17) above, the US Trade Deficit for the full year calendar 2005:


Almost everything about running a national trade deficit is bad. Among them: Countries that allow huge trade deficits can become too dependent on their creditors' good will, leading those debtor nations to federal decisions not in the debtors' national security interests.

Finally, here's the latest poll regarding Item (6) above, the ballooning real and psychic costs of war, in lives and treasure. An overwhelming majority of Americans believe that fighting between Sunni and Shiite Muslims in Iraq will lead to civil war, and half say the United States should begin withdrawing its forces from that violence-torn country, according to the latest Washington Post-ABC News poll announced March 07, 2006 by the Washington Post. The survey found that 80% believe that recent sectarian violence makes civil war in Iraq likely, and more than a third say such a conflict is "very likely" to occur. These expectations extend beyond party lines: More than seven in 10 Republicans and eight in 10 Democrats and political independents say they believe such a conflict is coming. In the face of continuing violence, 52% of those surveyed said the United States should begin withdrawing forces. The survey also found growing doubt that the Bush administration has a strategy in Iraq. Two-thirds of those interviewed said they do not think the president has a clear plan for handling the Iraq situation, the highest level of doubt recorded since the question was first asked three years ago. Nearly six in 10 disapprove of Bush's job performance, the 11th consecutive survey since last April 2005 in which at least half the country has been critical of his leadership. Americans also expressed disappointment with Congress, wherein both houses are of course controlled by Republicans. Only 36% of those Americans surveyed said they approve of the way Congress is doing its job, down seven percentage points in the past five weeks and the lowest marks for the legislative branch since October 1997. A total of 1,000 randomly selected Americans were interviewed March 2 to 5. The margin of sampling error for the overall results is plus or minus three percentage points.

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About the Authors

Since 1996, Dr. Russell F. Henke has been president of HENKE ASSOCIATES, a San Francisco Bay Area high-tech business & management consulting firm. During his corporate career, Henke operated sequentially on "both sides" of MCAD and EDA, as a user and as a vendor. He's a veteran corporate executive from Cincinnati Milacron, SDRC, Schlumberger Applicon, Gould Electronics, ATP, and Mentor Graphics. Henke is a Fellow of the Society of Manufacturing Engineers (SME) and served on the SME International Board of Directors. He is also a member of the IEEE and a Fellow of ASME International. An affiliate of the HENKE ASSOCIATES team since 2001, LA-based Dr. John R. (Jack) Horgan co-authored this article. Jack's career included executive positions at Applicon, Aries Technology, CADAM, and MicroCadam as well as a stint at IBM. Since May 2003 the authors have now published a total of thirty-nine (39) articles on MCAD, PLM, EDA and Electronics IP on IBSystems' MCADCafé and EDACafé. Further information on HENKE ASSOCIATES, and URL's for past Commentaries, are available at http://www.henkeassociates.net.

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  • October 09, 2008
    Reviewed by 'Brian'
    I really feel the liberal Political points of views are unnecessary for this type of new letter. I have commented on this before to the editor and he said there was several comments of the same concern and that something would be done about it. It seemed to calm down for a while and now it’s back. This seems to be from the very liberal side (Which seem to thrive in big cities i.e.:S.F. and our educational institutions) which in fact is the minority of this country by far. It’s just that they take polls that always seem to back up there view and flash them all over and then when it comes time for elections the polls are blown out of the water . Bottom line there is no place for this one sided view in this type of publication. Again I will see if things are rectified and if not I will campaign to all the people in this type of work to boycott this otherwise great CAD News tool. It's easy to grap liberal ammo from our large liberal media.

    Sincerely,
    Brian

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  • October 09, 2008
    Reviewed by 'Kurt'
    An informative article until the Geopolitical & Economic Factors heading. I agree with the two posters above- this is an entirely different topic that belongs elsewhere.


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  • October 09, 2008
    Reviewed by 'Jay'
    I fail to understand why the authors feel so compelled to include their clearly biased and subjective rants against the Bush administration at the end of what otherwise appears to be an informative well-researched article. By injecting that into the article one has to wonder whether they harbor other biases that effect their reporting. More importantly, there is no relevance to their “Geopolitical & Economic Factors” to a report on the MCAD industry. No doubt, they would argue these topics must be reported on to offer a well-rounded review of the industry within the context of the economy in which it operates. However, this is not reporting, it is nothing more than a string of adjectives incorporated into one-sided rant that clearly exposes the author’s biases.

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