A Manufacturing Mandate

We are pleased that the Obama Administration has recognized that a strong manufacturing sector is important to America’s vitality. The administration’s “Manufacturing Framework for Revitalizing American Manufacturing” is an important first step in strengthening our country’s beleaguered manufacturers. Manufacturing needs the focused attention of our government if high-value jobs are to be created, if our trade deficit is to be reduced and if we hope to generate the tax receipts to outweigh our spending. Now it is time to turn ideas into initiatives and tactics.

 

This administration was elected based on its promises of hope and change that played squarely on the wave of despair washing over America in the fall of 2008. U.S. manufacturers are encouraged by the President’s speeches promoting the importance of education, manufacturing jobs and innovation to our economy. In the heydays of the 1950s, manufacturing represented more than a quarter of the country’s economy and about a third of employment. Today, manufacturing is about 12 percent of the economy and less than 10 percent of employment. U.S. companies work at a 17 percent cost disadvantage versus their foreign competitors. Yet, U.S. manufacturing continues to grow in absolute terms and remains a well-spring of innovation. It is a sector that is still competitive globally.

 

AMT has prepared a Manufacturing Mandate that we feel addresses the need to align our nation’s infrastructure towards developing an innovative economy that can sustain future economic growth. The mandate is comprised of six basic initiatives and 18 underlying tactics. The basic initiatives include incentivizing innovation and R&D in new products and manufacturing technologies; ensuring the availability of capital; increasing global competitiveness and promotion of exports; minimizing structural cost burdens; enhancing collaboration between government, academia and industry; and building a better educated and trained “Smartforce.”

 

In January, I met with almost 200 AMT members during our association’s regional meetings. The members were excited about the mandate. They can see both short- and long-term potential in the mandate. Still, the most driving issue on their mind is the uncertainty related to the economy. They want to know what taxes the government plans to put in place and to understand when credit will be readily available. The AMT members I met with feel they compete with anyone on a global basis as long as our government establishes a set of rules and lives by them. 

 

I delivered that message to Ron Bloom, the senior advisor on manufacturing to the President, when we met in early February. It was heartening to hear that the White House is aligned with a majority of the initiatives that the mandate promotes. We differ on some issues such as taxes and regulations, and there will clearly be a continuing debate on these points. It is also clear that the administration wants to achieve a stable environment in which our manufacturers can operate. 

 

However, they require the support of your elected officials to get the job done. I urge you to contact your elected officials through their home offices and make them aware of your concerns. You can download from amtonline.org, copies of the initiatives and tactics as well as a letter sent to the President by a leading group of manufacturers. I hope to have the opportunity to share with you in future columns more on the mandate and the progress as it occurs.

 

I represent my family’s third generation in the manufacturing business, which provided me the opportunity to “grow up” in the shop with what Tom Brokaw so aptly referred to as our “greatest generation.” These men and women that shepherded my apprenticeship almost 35 years ago were the same people who took U.S. manufacturing from its second tier status to the pinnacle of manufacturing in both the U.S. and world. As they brought manufacturing into its U.S. renaissance, tort issues were unheard of, energy was cheap, and market growth more than offset the 49 percent corporate tax rates of the day. While other sectors clamored for subsidies, import protection, bailouts and tax loopholes, manufacturing grew rapidly. We need to recreate some of those conditions to recreate growth.