An erosion of manufacturing capacities has contributed substantially to America's trade problems. The difficulty lies not in U.S. machines and technology, but in U.S. strategies for automation and the goals American firms seek to achieve through production innovation. Mass production and administrative hierarchies created the basis for American industrial preeminence in the years after World War II. There is substantial evidence that American firms have been unable to adopt or adapt to the production innovations emerging abroad. A sustained weakness in manufacturing capabilities could endanger the technology base of the country.