U.S. Manufacturing Jobs Vanish With Stunning & Mostly Final Swiftness

Discussion in 'Economics' started by ByLoSellHi, Jun 17, 2009.

  1. This guy is a conservative columnist for the Detroit News and raises some excellent points.

    I don't always agree with his POV, but he's right to point out major impediments such as high structural tax rates in the U.S. and restrictions on right to work free of forced unionization...

    Paper-pushing England, here we come!

    London's calling!


    U.S. letting manufacturing slip away

    Forget the bailouts and the billions of taxpayer dollars pumped into the rescue of Detroit's auto industry -- the crisis in American manufacturing is far from over.

    "We're absolutely still falling behind," Richard Dauch, chairman of American Axle & Manufacturing Holdings Inc., told me in an interview Tuesday, day two of the National Summit at the Marriott Renaissance Center. "We're now immersed in a global war and we simply need to learn how to compete again in America."

    But America, judging by the government-imposed burdens weighing on its manufacturers and the headlong rush toward a green promised land that may or may not deliver as advertised, increasingly looks like a country unsure whether it wants to fight to preserve the jobs that countries around the world want because they create wealth -- now.

    Here, companies pay a corporate tax rate of 40 percent that is second only to Japan's. Here, research and development credits are less attractive than those granted in Canada. Here, successive administrations have failed to deliver a coherent energy policy that would give energy-consuming manufacturers some certainty in business planning. Here, litigation costs drive up the cost of doing business.

    Here, too, a new riff on the old protectionist tune is getting a reprise. "Made in America" is politically correct again, even as the same voices calling for it strangely go silent on corporate tax reform, tort reform or opposition to the labor-backed Employee Free Choice Act, which would eliminate secret ballots in organizing elections.
    Lost a plant? Then it's gone

    Can't have it both ways. And we wonder why manufacturing jobs, now totaling roughly 12 million nationwide, are disappearing with stunning -- and mostly final -- swiftness? "If you lose an assembly plant," says Don Walker, co-CEO of Magna International Inc., "it will not be coming back to this country."

    Yet it's taken the bankruptcies of General Motors Corp. and Chrysler Group LLC, the failure of dozens of auto suppliers, the closure of thousands of car dealers, the abandonment of dozens of plants across the country and the infusion of billions into the smaller carcasses that remain to get the attention of Washington -- mostly because the impending collapse is too big and too costly to ignore.

    "But for too long, American businesses -- particularly our manufacturers -- have been fighting against systemic imbalances that make it tough for them to compete and create new jobs," Commerce Secretary Gary Locke told the summit.

    Really? Easy to say, if belatedly, and obvious in this town. The hard part's in the doing.

    How can "Made in America" be a legitimately realizable goal if Americans and their representatives in Congress and state legislatures ignore the accumulated burdens weighing on the companies they look to for jobs, personal wealth creation and community tax revenue? Answer: They can't.

    "All we can do is to educate people about the challenges," says John Engler, the former three-term Michigan governor who now heads the National Association of Manufacturers. "Fifty states are competing head-to-head for jobs. People are competing for a General Motors plant" likely to be restarted in Tennessee, Wisconsin or Michigan.
    Granholm goes big on green

    Countries -- China, India, Russia, Brazil -- are no different. They understand the value of making things and selling them to others, the contribution competitive manufacturing makes to stability, economic growth and innovation. They're on the prowl while the political class here claiming to prize manufacturing jobs shows by its actions that it mostly doesn't prize the manufacturers or helping to make them competitive.

    Take Tuesday at the National Summit, sponsored by the Detroit Economic Club. The biggest draw wasn't the session featuring the former governor of Michigan and bosses of two global auto suppliers successfully negotiating the real world and telling folks what they needed to hear about manufacturing.

    It was the one featuring President Barack Obama's "green" adviser and Gov. Jennifer Granholm, energetically heralding a green revolution that she says would replace some of the 1 million jobs likely to be lost in Michigan over this decade.

    She was long on future, opportunity and change, as usual. But she was short -- indeed, silent in her opening remarks -- on tax, regulatory and other government-assessed burdens weighing on business, partly explaining why the Big Mitten has lost so many of the jobs she rightly lamented.

    "We're proud of our university system. We're proud of our work force. We're proud of our resources," she said, adding that she envisions Michigan becoming a recognized leader in providing "climate-change solutions." The "bread-and-butter auto industry," as she called it, seemed more an afterthought.

    The contrast was striking: An hour earlier, there was Engler making the case for revising government policies that could help struggling manufacturers right competitive imbalances, now and with the kind of effect that matters to the bottom line. Then there was Granholm conjuring a vision of a "net carbon zero" future in 2030 of electric cars, solar powered homes and trash converted into bio-fuel.

    I asked Engler: What would you have done differently as governor? He didn't want to answer, but then said this: "She's nearly eight years into office. You can't make up for lost time. The auto companies are finding this out."

    They're not the only ones.

    dchowes@detnews.com (313) 222-2106 Daniel Howes' column typically runs Tuesdays, Thursdays and Fridays.