Without Manufacturing Base, Nation’s Future Threatened
United Steelworkers (USW) President Leo W. Gerard recently sat down for a Q&A session with Richard McCormack, editor and publisher of Manufacturing & Technology News. McCormack, an expert in economic competitiveness and globalization, is editor of the new book, Manufacturing A Better Future for America, for which he wrote the first chapter, “The Plight of American Manufacturing.”
Gerard: How do we make politicians understand how vital manufacturing is?
McCormack: Politicians need to be hit over their heads with a baseball bat as forcefully as is possible, with Americans insisting that they at least acknowledge that a country that doesn’t make what is consumes is going to fail. It is a simple concept. There are many historical precedents of countries and empires failing after having lost their productive capacity. It is an ancient concept: a country that does not have industry cannot support an army.
Gerard: Ralph E. Gomory, the retired IBM senior vice president for Science and Technology and a winner of the Heinz Award for Technology, the Economy and Employment, says the interests of American corporations have diverged from the interests of America, yet politicians act as if they’re still the same. Can you explain what that means both in terms of the economy and employment?
McCormack: Ralph Gomory has made one of the most profound and important observations on the current global economic situation. He says that outsourcing is not free trade. Yet the federal government still represents the interests of the powerful companies that are firing millions of American workers and shifting those jobs offshore.
Domestic manufacturers have told me repeatedly that the greatest protectionists in our country are the corporate and financial companies that are doing everything in their power to protect their assets in China. To influence policy in their favor, the multinationals, retailers, importers and foreign producers fund think tanks, trade associations, lobbyists, lawyers and public relations firms. These are the real protectionists, not American businessmen who want to save American jobs and the American middle class.
The U.S. government continues to craft policies that are beneficial for companies that outsource jobs
Gerard: Would you talk about how something as positive-sounding as free trade devastated American industry?
McCormack: A friend of mine works at the Commerce Department. He says that free trade is a farce. The United States has tariffs of 2 percent or 3 percent on incoming products. Yet the United States trades with countries with tariffs that are 10 times higher. Is that free trade? He has a simple solution to the U.S. trade crisis: hold up a mirror to any nation trading with the United States. Whatever their tariffs are on U.S. products entering their country that is what the U.S. tariff should be on their products entering America.
How can U.S. producers compete when they must pay for all of the costs that foreign producers don’t have to add to the price of their product?
U.S. manufacturers have to abide by a thousand EPA rules and OSHA standards. Not so in China. That is a huge advantage. The United States government lets American companies that have set up shop in China get away with not having to abide by American standards – even though
Foreign producers should NOT have this unfair advantage. It is an outrage that the United States has allowed this to occur.
Gerard: When I go to Washington, what I hear is that we don’t need manufacturing. That’s old and dirty. So many politicians say the U.S. can move to a financial and service economy.
McCormick: This argument is what has led to the demise of the United States. People are just starting to realize that as manufacturing goes offshore, high-end jobs in design and research and development go with it. When a plant closes, the supply chain disappears. This supply chain includes materials and parts producers, software providers, like CAD (computer-aided design), ERP (enterprise resource planning) and dozens of other high-tech equipment providers, machine tool companies, maintenance, accounting, packaging – the list goes on to include such things as the local restaurants, janitorial services and those dependent on the plant’s tax revenues, like librarians, county clerks, police officers and teachers. These are service jobs, all of which depend on manufacturing.
One manufacturing job supports 15 other jobs. No other category of job has such a high multiplier. The United State must do whatever it can to start creating manufacturing jobs.
Click here for the full interview.