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Manufacturing Summit in Search of Answers

A recent Minneapolis gathering provided a forum for government and association representatives to address solutions to problems faced by U.S. manufacturing.

Roughly 400 Minnesota manufacturing executives gathered in Minneapolis on April 5 to hear what government and association leaders see as the key problems faced by manufacturing today, as well as some solutions that various agencies and government branches are working on. It wasn’t long into the meeting before a consensus could be seen about the problems facing American manufacturers. Speakers called for changes in a number of areas. These included a reduction in health care costs, tort “reform” to reduce what is seen as exorbitant liability awards, revisions in the tax code to encourage innovation, raising the skill level of the workforce and “leveling the playing field” for America relative to its trading partners.

“During the past 10-15 years, as we became enamored with the new, so-called knowledge economy, we somehow lost sight of the fact that manufacturing is the true bedrock of many local economies,” said Charles Arnold, executive director, Minnesota Precision Manufacturing Association (MPMA). “These well-paying jobs with good benefits have helped create the American middle class, and with the application of increasingly advanced technology, they also have become very exciting and challenging career opportunities.”

Frustrated by the lack of consensus and energy focused on the industry’s needs, MPMA partnered with the Precision Metalforming Association (PMA), Twin Cities District, to develop the conference.

Patrick J. Cleary, senior vice president of Public and External Affairs at the National Association of Manufacturers, explained that the U.S. manufacturing sector is by comparison the fifth largest economy in the world and is about a sixth of the U.S. gross domestic product.

NAM has developed an initiative, called the Prosperity Project, that is designed to create a climate in the United States in which manufacturing can grow and prosper. One way is to reduce the cost of doing business in the United States. Cleary states, “We're at a 22 percent disadvantage versus our trading partners.” In addition, NAM would like to see legislation that would “level the playing field” for American manufacturers relative to those in other countries, change the tax system to encourage innovation and improve the skills of the workforce. The Prosperity Project details can be found at www.nam.org/p2. Concluding his talk, Cleary asked, “If manufacturing is so large in this country, why do manufacturers have so little clout?”

Economist Jeremy Leonard, who works with the Alliance (MAPI), reported on his studies that show the combination of health care costs, taxation, tort costs, cost of regulatory compliance and pension costs cause American manufacturers to be “fighting with their hands tied.”

Leo Reddy, founder and chief executive officer of the National Coalition for Advanced Manufacturing (NACFAM), took a solutions approach, along with pointing out sobering statistics. He noted that manufacturing was 14 percent of the U.S. gross domestic product in 2001, down from 29 percent in 1953. He believes, though, that most manufacturing workforce reductions have been at the low skills end of the spectrum. He says that it is time to work to develop the skills of the workforce. He would like to see a manufacturing certification program similar to the ASE certification of an automobile technician, or like the Cisco and Microsoft certification programs.

“Someone asked me, ‘What if I train my employees and they leave?’ ” related Reddy. “I say, what if you don’t and they stay?”

U.S. Department of Commerce Secretary Don Evans pointed to the six-point plan in his department’s “Manufacturing in America” report. Programs that will be proposed, according to Evans, will include a manufacturing council to give manufacturers access to government decision makers, a study of the costs to manufacturers of regulatory compliance and an effort to aggressively confront countries that exhibit unfair trading practices and that do not protect intellectual property. Evans exhorted the audience not to become isolationist, but to recognize that involvement with the world is still a good thing. People should think of America as a bridge, not a fortress, he said.

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