Report On Manufacturing Lists Recommendations For Government

U.S. Commerce Secretary Donald L. Evans has released a study on what the government should do to address the downturn in manufacturing. The study is titled “Manufacturing in America: A Comprehensive Strategy to Address the Challenges to U.S. Manufacturers.”

The report is the result of more than 20 roundtable discussions held between manufacturing executives, managers and commerce department officials.

The document includes recommendations that will establish a president’s manufacturing council, create the office of industry analysis and call for streamlining of regulations. It also gathers several previous administration policy initiatives such as tort reform and extending tax cuts, into one record. The entire report is available at www.commerce.gov.

During the presentation, Secretary Evans announced that Grant Aldonas, under secretary for the International Trade Administration, would serve as interim coordinator within the Department of Commerce for the manufacturing sectors until Congress passes legislation to create and fund the new post of Assistant Secretary of Manufacturing and Services. On Labor Day, President Bush announced his intention to launch that new position.

Initial reaction from Washington-area manufacturing lobbies is upbeat. Jerry Jasinowski, president of the National Association of Manufacturers (Washington, D.C.), stated “this is the first time in modern history that an administration has made manufacturing in America a top national priority.”

Ralph Nappi, president of the American Machine Tool Distributors’ Association (Rockville, Maryland), says the Commerce report is “all good,” in that his members are happy the administration is finally acknowledging the manufacturing sector. But he notes that much of its content is rhetoric and steers clear or barely mentions some topics such as currency valuation or upcoming trade agreements.

John Byrd, president of AMT—The Association For Manufacturing Technology (McLean, Virginia), agrees that the document is “very positive” in that it identifies the issues. “The key now is the follow-through,” says Mr. Byrd, noting that passing legislation and providing funding will take perseverance.

AMT government-relations vice president Paul Freedenberg agrees that the administration must now back up its good intentions. Mr. Freedenberg notes a study released last month by NAM in conjunction with the Manufacturers Alliance/MAP (formerly the Machinery & Allied Products Institute, Arlington, Virginia). According to the study, “How Structural Costs Imposed on U.S. Manufacturers Harm Workers and Threaten Competitiveness,” external, nonproductive costs add around 22 percent to unit labor costs of U.S. manufacturers relative to their major foreign competitors. The report is available at www.mapi.net.

“With that kind of situation we’re not going to match China on the labor side of the competition, but rather, we can beat them with higher productivity.” Mr. Freedenberg says. “That means helping by putting money into manufacturing R&D.”

AMT had been working with Under Secretary Aldonas during the course of the roundtable discussions that were incorporated into the study.

The report’s 63 recommendations are divided into six sections. The topics for the sections are aimed at enhancing government focus on manufacturing competitiveness, investing in innovation, creating conditions for economic growth, lowering the cost of manufacturing, strengthening education and promoting an open market and a level playing field. More information on the recommendations is available at www.manufacturing.gov.

This article appeared in the January 28, 2004 issue of Metalworking Insiders Report, a biweekly newsletter on global factory equipment. For subscription information, call (800) 950-8020. To look at archived issues, visit www.metalworkinginsider.info.