Government Help for Manufacturers

Attendees at a Manufacturing Town Hall Meeting convened at National Manufacturing Week got the word on what’s being done in Washington to make U.S. manufacturing more globally competitive.

Al Frink, Assistant Secretary for Manufacturing and Services, U.S. Department of Commerce
Al Frink, Assistant Secretary for Manufacturing and Services, U.S. Department of Commerce

The salutation, “I’m from the government and I’m here to help,” may have taken on new meaning for some attendees at a “Manufacturing Town Hall Meeting” held as part of the National Manufacturing Week 2005 trade show and exhibition March 7-10 in Chicago.

Panel participants at the meeting included Al Frink, the first-ever Assistant Secretary for Manufacturing and Services at the U.S. Department of Commerce (DOC), and Don Wainwright, chairman of a DOC Manufacturing Council formed last year to advise the Bush administration on manufacturing policy. Also on the panel was John Engler, president of the National Association of Manufacturers (NAM), a Washington, D.C.-based sponsor of National Manufacturing Week.

Both Frink and Wainwright are long-time manufacturing executives who are new to their federally appointed roles. And both stressed their manufacturing credentials in their opening remarks. “Like many of you here, I have experienced the fear and uncertainty that comes with business ownership. I know what it’s like to stare at the ceiling at night, wondering sometimes if you’re going to make your payroll,” said Frink, who spent 30 years in manufacturing as the co-founder of Fabrica International, a Santa Ana, Calif., maker of carpets and rugs.

Bigfoot

As experienced manufacturing executives themselves, Frink and Wainwright assured the Town Hall audience that they not only understand the problems that U.S. industrial companies face daily, but that they intend to push hard for manufacturing-friendly federal legislation and policies. “If we do one thing in the next year or so, it will be to make sure that the Manufacturing Council is established well, and carries a big footprint in Washington,” said Wainwright, who is chairman and chief executive officer of St. Louis-based Wainwright Industries, a manufacturer of stamped and machined parts.

During prepared remarks and in response to audience questions, Frink, Wainwright and the NAM’s Engler identified a number of areas deemed key to improving global competitiveness of U.S. manufacturers. Engler listed “four major principles” guiding NAM activities—namely, reducing the cost of production in the United States, leveling the global playing field for U.S. manufacturers, strengthening the manufacturing workforce for the future, and improving the climate for innovation and productivity.

Those objectives correlate well with a series of 57 specific initiatives detailed in a DOC report released in January 2004 titled “Manufacturing in America.” The initiatives were formulated based on results of a series of 24 manufacturing roundtables held around the nation in 2003, Frink noted. And during the past year, DOC efforts have already led to progress on 18 of those 57 initiatives, the most recent being the passage of the federal Class Action Fairness Act aimed at tort reform, Frink said.

According to the NAM, U.S. business spends $250 billion on tort litigation yearly, several times more than that spent by global competitors. These expenses, combined with costs tied to health care, energy policy, environmental regulations and other issues, contribute to a 22.3 percent cost disadvantage for U.S. manufacturers, said Frink. “So when people talk about companies going offshore, these companies don’t just choose it. We force them offshore with these various costs that are in place.”

Copycats

An NAM survey released at the show reveals that 65 percent of U.S. manufacturers large and small are already exporting products to foreign markets. And some audience questions at the town hall meeting dealt with efforts to combat unfair foreign trade practices, as well as problems such as loss of intellectual property, or IP, to unscrupulous foreign copycat competitors.

The issue of IP losses “will continue to get top-level attention,” Frink said. The DOC currently has more than 100 people in China, representing a recent 25 percent boost, he noted. “Since I’ve been with Commerce, I don’t know of anything that’s received more attention than leveling the playing field with China.” Wainwright and Engler both noted that manufacturers who are victims of IP theft can help by reporting incidents to DOC and NAM, not just in general, but with as many specifics as possible, including exactly what happened, the names of offending companies and the impact of the IP loss.

Another topic that came up for heavy discussion, both at the town hall meeting and at other NAM-sponsored events at the show, involved a shortage of manufacturing workforce skills. The recent NAM survey revealed that 36 percent of NAM member companies currently have jobs unfilled because they are unable to find qualified candidates.

Many individuals applying for manufacturing jobs today don’t have the necessary math, science and technological aptitude needed to work in modern manufacturing, Engler said. One initiative aimed at addressing this problem is the “Dream it. Do It.” campaign launched recently by NAM and others. That campaign, launched initially in Kansas City and expected to expand to other cities soon, is aimed at attracting young adults into manufacturing jobs and expanding education and training opportunities.

Get involved

Given the new manufacturing representation and the pro-business bent of the Bush administration, the outlook on legislative and regulatory issues for manufacturing interests may be looking up. But Wainwright reminded attendees at the meeting that their participation is important. He likened the legislative process to the quality process in manufacturing, in which incoming components and materials are checked for quality, as one means to ensure that products at the end of the line will meet quality standards.

Legislation works the same way, Wainwright said. “You have to get involved early, when the process starts, and make sure that your voice is heard,” he told the audience. By communicating their needs and concerns to the DOC Manufacturing Council and other interested parties, manufacturers can start the process of lifting legislative and regulatory burdens from their backs, Wainwright said. “There will no longer be uncontrollable regulations coming down on us, but regulations that we can live with, work with and be profitable with.”

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