The unions and the workers destroyed most of it. When it is cheaper to buy coal and steel overseas and ship it half way around the world than it is to buy home produced then the home industry is unsustainable. It is only worth pouring state money into such industries if you have a chance of making them work. Maggie's knew that she never could, the rot was too deep.
I think most developed countries eventually evolve out of manufacturing anyway; the money is then made by selling technology, expertise, research capabilities, etc. to the countries that are developing into the new industrial nations.