Does Manufacturing Matter?

From the Desk of Jack Healy

Does Manufacturing Matter?

By Jack Healy, Director, Manufacturing Advancement Center, [email protected]

A recent Boston Herald newspaper article revealed that President Eisenhower secretly recruited six private citizens to run key areas of government should the Soviets launched a nuclear attack that eliminated key American leaders. One of the six members of this secret cabinet was Harold Boschenstein, President of Owens Corning Fiberglass Corp.; his charge was manufacturing and production, the core of the early 20^th Century manufacturing economy.

Unfortunately, that was a different time from today. Now we are a finance economy. And the current administration does not yet have a senior level administrator to speak on behalf of the manufacturing industry.

It’s interesting to note how times have changed. The following are statistics for employment in manufacturing versus government (non-military):

1955 – 15 million people in manufacturing

            7 million in government (excluding military)

2004 – 14 million in manufacturing

            22 million in government (excluding military)

Over the past two years, 2.5 million manufacturing jobs have been lost in the United States, accounting for 90% of the total number of jobs lost during that time. Staggering facts, indeed, but they have yet to lead to recognition from our government nor efforts to make manufacturing more viable.

China is now the top contributor to our trade deficit. We buy more than $5 worth of goods from China for every $1 we sell. Last year, we ran an $83 billion deficit with China alone. Since Congress granted China Permanent Normal Trade Relations (PNTR) status and China joined the WTO, the U.S. trade deficit with China has grown more than 20%, by more than $14 billion.

The Coalition to Save Manufacturing states, “Trade deals touted as being market-opening agreements have instead dramatically worsened our trade balances. These trade policies have caused the trade deficit to explode and have cost 4.5 million actual and potential U. S. jobs since 1994. Last year the U.S. imported more than $450 billion than we exported, a trade deficit of $1.2 billion per day. The Trade Deficit is 16 times larger than it was 20 years ago and is now five percent of GDP. Over the past 10 years, it has grown by 600%. Our combined trade deficit with Canada and Mexico has ballooned to nine times its size before NAFTA, jumping from $9 billion in 1993 to $83 billion in 2001. The U.S. Department of Labor says more than 450,000 workers have lost their jobs because of NAFTA. Using different methodology, the Economic Policy Institute estimates that the growth in U.S. trade deficits with our NAFTA partners has resulted in a net loss of more than 750,000 U.S. jobs.”

So what can you, the manufacturer, do? The MassMEP offers the only program that touches small manufacturers. Unfortunately, the federal government has reduced the MEP program’s funding by 68% for fiscal year 2005. Attempts to restore funding have been vetoed on a regular basis within the administration. Not only is the administration not providing funding, it is not recognizing manufacturing as an industry with a significant impact on the U.S. economy.

Here are some interesting facts. About 60 Congressman sit on a federal coalition designed to save manufacturing vs about 170 Congressman who sit on the American Indian Caucus. The state has a  Commissioner of the Massachusetts Department of Food and Agriculture; the gross state product of agriculture is $221 million. Compare that with the gross state product for manufacturing at over $34 billion, yet there is no comparable position in the administration for manufacturing.

The logical question is why is there such a disconnect? Part of the reason is that manufacturing companies do not get involved. They believe that their voices do not need to be heard or that they cannot make an impact. Therefore, they are not connected politically and their voices are not being heard by politicians.

I cannot emphasize enough that it is very important for you to get involved with local politics. It directly effects your business and anything that effects your business effects your bottom line. Start by inviting your elected officials to your company events or to your new product announcements. When you receive a political solicitation, return it with your comments on why you are not contributing to the campaign fund. 

And make sure you get involved with an organization, such as the Associated Industries of Massachusetts (AIM), so that your voice can be heard along with other companies.  There is a greater impact in numbers. Associated Industries of Massachusetts is the voice of more than 7,500 Massachusetts employers from all industries on legislative and regulatory issues in Boston and Washington, D.C. AIM works on behalf of employers to improve the Massachusetts business economy. AIM is also the Employer’s Resource, providing services to member companies in the areas of human-resource management, employment law, environmental compliance, employee training and education, and energy.

This is the time to get involved, start by getting involved with these organizations for legislative and regulatory support:

–         National Association of Manufacturers – http://www.nam.org

–         Associated Industries of Massachusetts – http://www.aimnet.org

–         Manufacturing Coalition – http://www.manufacturingcoalition.org

If you would like to learn about the Manufacturing Advancement Center, please contact Kathie Mahoney at [email protected] or 508-831-7020.