The mechanical engineering sector has played a significant role in the innovation of renewable energy and green technology. Due to this role, many industry leaders have a high awareness of both economic and ecological problems related to climate change, as well as a vested interest in creating solutions.
Putting aside the question of whether climate change is natural or human-made, at Pivot International, we’ve earned a reputation for our agile and innovative supply chain solutions. Thanks to our global network, we’re well prepared to protect our partners against threats posed by climatic disruptions, as well as geopolitical upheaval and currency fluctuations.
This article briefly explores some of the mechanical industry’s primary concerns related to global climate change, as well as emerging solutions.
The US-China Trade War
American tariffs on Chinese goods have brought both economic and ecological impact. Economically, the trade war “will cut 2019 global growth to its slowest pace since the 2008-2009 financial crisis,” and both countries are grappling with how to reprioritize spending. Ecologically, the trade climate is rendering low-carbon products and processes challenging to obtain.
In 2017, solar equipment firms penned a letter to the ITC in an attempt to stop the tariffs on imported solar modules. The firms stated that the tariffs would undercut “the cost-competitiveness of solar” and reverse “its high growth trajectory. We would be forced to cut our operations, seriously endangering manufacturing jobs at our factories.”
Their concerns were justified. The Solar Energy Industries “estimates that nearly $8 billion in new solar investments capable of generating 7 GW were lost due to tariffs, along with the loss of 9,000 jobs due to layoffs or hiring freezes, far less than the expected increase in manufacturing jobs.”
Unions as a Resolution
At the mechanical engineering sector world conference in Germany, IndustriALL General Secretary Valter Sanches spoke of the need for a “union 4.0.“ Unions, according to Sanches, must formulate new global agreements.
Matthias Hartwich also stated that unions must act soon, “otherwise [the transformation] will be left to the decision of companies and their management alone, and then change will happen to the workforce rather than with them. We need to be proactive and put forward our demands and proposals.”
Competition From Platform-Based Companies
According to Forrester’s James Staten: “A platform business makes money from services delivered via apps and APIs on a scalable technical foundation that customers and suppliers can integrate into their operations, incorporate into their offerings, and extend through their contributions.”
There are concerns that the platform-based company is overpowering mechanical engineering. Platforms, however, need the data that mechanical engineers supply. Engineering companies hence “need to be careful that they do not end up as hardware vendors competing to make products for platforms.”
In the words of Ahmed Ghoniem, the Ronald C. Crane Professor of Mechanical Engineering at MIT, “global warming is a global problem.” What’s more, there is no single mechanical engineering solution to the problem. “Unless we all agree to work on it, invest resources to develop and scale solutions, and collectively implement these solutions,” Ghoniem warns, “we will have to live with the negative consequences.”
In an industry where the margin for error is incredibly small and incredibly costly, and in a world where supply chain disruption is a constant and ever-escalating risk, partnering with Pivot provides protection against both immanent and potential threats to your business’ bottom line.
Do you have a product idea that can help move us toward a cleaner, greener future or need help securing your supply chain? If you’re seeking advanced expertise in mechanical design, development, production, or any other services we provide, request a free consultation. Contact us today to get started!