Blog

Gilbert B. Kaplan
Former Deputy Assistant and Acting Assistant Secretary of the U. S. Department of Commerce

Nations around the world are engaged in a battle for manufacturing dominance, and the United States, almost in spite of itself, is still a major player in the race. The U.S. manufacturing sector ranks number two in the world, slightly behind China, in output. But what we have lost in the last few decades is so large, and we continue to move in the wrong direction. U.S. industries are losing market share and manufacturing employment is down a third from ten years ago. Many U.S. companies are putting plants abroad, or sourcing their products abroad, for reasons unrelated to foreign market access. As we lose manufacturing plants, we also lose the seed corn of manufacturing — research and development — which is clearly tied at the hip to manufacturing production. Innovation cannot happen in a manufacturing vacuum.

This cannot go on. But what do we do?

Several months ago, a group of Americans committed to reviving manufacturing in this country, and having expertise in a wide range of areas relevant to that goal, met for a day-long meeting, The Second Annual Conference on the Renaissance of American Manufacturing: Jobs, Trade and the Presidential Election, in Washington, D.C. The Conference focused on what needs to be done to revive U.S. manufacturing and why this objective must be a central issue in the 2012 Presidential Election. Speakers ranged from Gene Sperling, Assistant to President Obama for Economic Policy, to Grant Aldonas, former Undersecretary of Commerce for International Trade under George W. Bush, speaking for the Romney Campaign. Corporate and labor leaders included Gordon Brinser, President of SolarWorld; Brian Toohey, President of the Semiconductor Industry Association; and Thea Lee, Deputy Chief at Staff at the AFL-CIO. Policy gurus included writer Clyde Prestowitz, Rob Atkinson, President of the Information Technology and Innovation Foundation, Ralph Gomery, former Senior Vice President at IBM, Leo Hindery from the New America Foundation, and Alan Tonelson of the United States Business and Industry Council. Present and former elected officials included Senators Rob Portman (R-OH), Jeff Merkley (D-OR), and Jeff Sessions (R-AL), and former Governor of Maryland, Bob Ehrlich.

Such a diverse group of participants has no one solution for reviving manufacturing in the United States. But a number of key ideas emerged, which are described below. These need to be followed-up on immediately by policy makers, and by candidates at the Presidential, Congressional, and State levels.

Two-Part Strategy: As a matter of process, we need to embrace a two-part strategy: (1) specifying what we need to enhance based on that we are already doing (i.e., trade enforcement, R&D tax benefits) and (2) taking on major new strategic elements (e.g., trade action against currency undervaluation, creation of a Secretary of Manufacturing, a large Economic Development fund at the Federal level).

Capitalizing on Recent Growth Areas: We need to take advantage of events that are already occurring, capitalizing on three areas of robust economic development in the United States: the communications boom, the tremendous increase in natural gas production, and the health care boom. We should think of health care in Buy American terms-in other words we should buy from domestic manufacturers–given the heavy subsidies from the U.S. Government to this industry. (more…)

Jackie Tortora
AFL-CIO Blog/Social Media Manager

The TTI Floor Care vacuum bag plant, the last vestige of Hoover Vacuum operations in Stark County, Ohio, has announced plans to end all local Hoover production of vacuum bags when it closes the Canton plant at the end of this year. The closing will affect about 17 jobs at the plant. This is the final chapter in a long story of jobs lost to overseas outsourcing—more than 3,000 workers have lost their jobs at Hoover in Canton over the past several years. The company plans to move bag production to a facility in China.

“You have your livelihood taken away from you…where do we go from here?” Hoover employee Linda Thorpe said. Thorpe and her sister, Joanne Upperman, both worked at the vacuum bag plant for more than 30 years. Now they will likely move to a warehouse job, loading trucks when they should be starting to think about retirement. Thorpe and Upperman both will receive wage and benefit cuts.

Thorpe and Upperman joined local unions, community leaders and working families outside the factory Monday after work at a Bring Jobs Home rally. The rally addressed different ways elected officials can create good jobs and rebuild local communities hit hard by the recession. The United Steelworkers (USW), Electrical Workers (IBEW Local 1985) and the Hall of Fame Central Labor Council took part.

Participants called on elected leaders to commit to ending the ability of U.S. corporations to defer paying taxes on their offshore profits, which acts as an incentive to export good jobs overseas, and to support legislation to stop currency manipulation by our trading partners, which also leads to off-shoring. (more…)

By Dave Johnson
Fellow, Campaign for America's Future

Which is better for an economy: millions of future jobs and trillions of future dollars, or a few people making a quick buck today by selling out their country? For decades America’s 1%-backed conservatives have chosen the latter course, and we can see the results all around us. Now the Obama administration has imposed stiff tariffs on Chinese solar panels because China was “dumping” — selling below cost — to drive American manufacturers out of business. Will conservatives support their country and our companies or will they continue to side with our country’s competitors?

US Imposes Stiff Tariffs

The Commerce Department yesterday concluded that Chinese solar panel companies are “dumping” product – selling below the cost of production – into the US market, and imposed stiff tariffs. NY Times, U.S. Slaps High Tariffs on Chinese Solar Panels,

The United States on Thursday announced the imposition of antidumping tariffs of more than 31 percent on solar panels from China.

… The antidumping decision is among the biggest in American history, covering one of the largest and fastest-growing categories of imports from China, the world’s largest exporter.

Industry Of The Future

Again and again technology revolutions come along and disrupt economies. Countries that jump on new technologies are the countries that win the industries and jobs and revenue. This is how the United States became the world power that it is was. Railroads, steel, automobiles, airplanes, electronics, semiconductors, computers, the Internet, pharmaceuticals, biotech and software are a few examples. And in every case our government helped these new industries get off the ground. When these industries took root the payoff was enormous.

Green energy is one such technology of the future. Producing solar panels, wind turbines, etc. will bring millions and millions of jobs and trillions of dollars, and several countries are competing to win a share of this new industry.

China is fighting hard for those jobs and dollars. They are being smart and they are also pushing past the limits of the rules. From the NY Times story,

Alan Price, a partner who heads the international trade practice at Wiley Rein, the law firm representing the United States companies in both the solar and wind cases, said that China posed a particular threat to America’s developing green energy sector.

“China’s method is straightforward: it sets forth industry-specific Five-Year Plans and then uses all forms of national and local subsidies and other governmental support to quickly transfer jobs, supply chains, intellectual property and wealth, to the permanent detriment of U.S. and global manufacturers,” he said. “China’s ability to ramp up and overwhelm an industry is unique and particularly devastating with new and emerging technologies, where global competitors may be less established and can be knocked out more easily and quickly.”

To compete for a share of this new industry we need to be proactive. We need national efforts to develop the industrial commons, or ecosystem, that will foster green-tech industries. We also need government policies that promote a market for these products until they take hold, just as our defense industry did for aircraft and other new technologies. And we need to enforce the rules for international economic competition, which is what has happened with the tariff decision.

Decision Not Political

The NY Times story points out that this was not a political decision by the Obama administration,

The American decision was made by civil servants in a quasi-judicial process that is heavily insulated by law from political interference and does not represent a deliberate attempt by the Obama administration to confront China on trade policy. But that distinction has been largely lost in China, where the solar panel issue has been one of many causes embraced online by the country’s vociferous ultranationalists, who put heavy pressure on Chinese officials to respond forcefully to perceived snubs to China.

The rules say that if a country is dumping, then we must impost tariffs. The Commerce Department investigated and concluded that China has been dumping so they had no choice. If we do not enforce trade rules, they are meaningless and countries that cheat gain an advantage, driving out the honest players. That is how cheating, accountability and enforcement work. (Hint: this also applies to banking fraud laws.) (more…)