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Posts Tagged ‘Alliance for American Manufacturing’

For the Strength of Rosie the Riveter: Make It in America

Tuesday, August 3rd, 2010

Leo GerardRosie the Riveter defiantly rolls up her blue work shirt to show off a brawny bicep. She’s a symbol of American strength.

She worked in a manufacturing job, one of millions that constructed the defense machine that won World War II for the Allies. She said, “We can do it.” And America did.

Now, however, shuttered U.S. factories and off-shored manufacturing are sapping American strength. The nation has lost more than 40,000 manufacturing plants and one-third of its manufacturing jobs, nearly six million, over the past dozen years. China is on the verge of overtaking the U.S. in manufacturing output. And Americans know it. Late in April, 58 percent of 1,000 likely voters told pollsters they believed America’s economy no longer led the world.

They also told pollsters they supported enacting a national manufacturing policy to promote resurgence of domestic production — a return to the days of a robust Rosie the Riveter and a country that could secure its independence with dynamic manufacturing capability.

Democrats in Congress heard that message. They’ve created a program called “Make It in America.” They plan to pass a series of bills to create an environment in which both Americans and American manufacturers make it. “We want everybody to make it in America,” House Speaker Nancy Pelosi said as she described the plan to 2,000 bloggers and progressive activists at Netroots Nation 2010 last week in Las Vegas.

After all the support America has given the financial sector – estimated to total more than $4 trillion – it’s time for Congress to invest in the productive sector, the one that creates jobs, real wealth and American power.

“We must stop the erosion of our manufacturing base, our industrial base, our technological base,” the Speaker told Netroots Nation, “It is a national security issue to do so, if we had no other justification,” she said, adding that there are, of course, plenty of other reasons.

She said the strategy is to pass “one bill after another” supporting American manufacturing. The House started last week with two, one to ease American industries’ access to raw materials and parts and another to improve specialized workforce training.

In addition, Speaker Pelosi said, House leaders want to address currency manipulation – the deliberate undervaluing of currency to make a country’s exports artificially cheap and imports into that country artificially expensive. Currency manipulation by China, for example, is believed by both conservative and liberal economists to be adding as much as 40 cents to every dollar of the cost of U.S. products exported to China and discounting Chinese goods sold in the U.S. by 40 cents on every dollar.

“There is a strong interest in our caucus in holding China accountable for manipulation of currency. That would make a tremendous difference in our trade because currency manipulation is really a subsidy to their exports to America – an unfair advantage,” the Speaker said at Netroots Nation.

Other bills Speaker Pelosi hopes to pass soon include $5 billion in tax credits for domestic manufacturers that produce components for alternative energy and a requirement that foreign manufacturers keep at least one worker stationed in the U.S. so the company can be officially served with court papers. Also, there’s a bill by Illinois Congressman Daniel Lipinski that would require each U.S. president to produce a manufacturing strategy in the second year of office and to review progress annually.

The survey that prompted Democrats to create the “Make It in America” program was commissioned by the Alliance for American Manufacturing (AAM) and conducted by Democratic pollster Mark Mellman and Republican pollster Whit Ayres. They found that likely voters believed creating manufacturing jobs was more important than reducing the federal deficit and more important than cutting government spending.

The survey also showed strong support for policies requiring the government to buy American-made goods. Similarly, it showed the Democrats, Independents and Republicans surveyed felt the quality of products manufactured in American exceeded those made in China, Japan, India and Germany.

Americans now even prefer U.S.-made cars: An Associated Press-GfK Poll in April showed 38 percent of Americans favor U.S. vehicles. Asian brands got 33 percent.

Chrysler takes advantage of that sentiment in its commercial for the new Grand Cherokee. The words are chilling:

“The things that make us American are the things we make,” it begins.

“This has always been a nation of builders, craftsmen, men and women for whom straight stitches and clean welds were matters of personal pride. They made the skyscrapers and the cotton gins, colt revolvers, Jeep 4-by-4s,” the ad continues.

“These things make us who we are,” the narrator says. Yes. The things Americans make, make the country strong.

To the sound of a sledge hammer pounding a railroad spike, the narrator goes on to describe the reborn Grand Cherokee, “This, our newest son, was imagined, drawn, craved, stamped, hewn and forged here, in America. It is well-made and it is designed to work. This was once a country that made things, beautiful things, and so it is again.”

Well, not quite. Chrysler may make a terrific Grand Cherokee in Michigan. But American manufacturing needs some help. And with unemployment stuck at 9.5 percent, so do the American people. “Make it in America” is that aid. The AAM poll showed 85 percent of those who said the U.S. had lost economic leadership believed America could regain it.

Americans believe we can still do it.

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Make sure Congress acts. Join the One Nation Working Together march on Washington Oct. 2 to demand good jobs, as well as Wall Street and immigration reform.

About The Author: Leo Gerard is the United Steelworkers International President. Under his leadership, the USW joined with Unite -the biggest union in the UK and Republic of Ireland – to create Workers Uniting, the first global union. He has also helped pass legislation, including the landmark Canadian Westray Bill, making corporations criminally liable when they kill or seriously injure their employees or members of the public.

U.S. Politicians Deny the Obvious Injury; U.S. Manufacturing Bleeds

Thursday, July 1st, 2010

Leo GerardIn the film, “Monte Python and the Holy Grail,” King Arthur severs both of the Black Knight’s arms during a sword fight, but the Black Knight attempts to battle on.

The king admonishes him: “You’ve got no arms left.”

The knight refutes that: “Yes I have.”

“Look,” at the obvious, the king tells him.

“Just a flesh wound,” retorts the knight, who clearly is suffering a state of denial.

Similarly, in the trade clash between China and America, the Asian giant has gravely wounded the United States. China knows it. U.S. voters of all political stripes know it. But too many American politicians, like the Black Knight, are in denial.

Their deliberate blindness, and resulting inaction, has enabled China to continue devaluing its currency, the Renminbi, against the dollar, a practice that makes its exports artificially cheap in U.S. markets and U.S. exports to China wrongfully overpriced. China announced just before the G-20 summit in Toronto that it would allow the value of the Renminbi to float up on world markets – and then permitted the currency that is undervalued by as much as 40 percent against the dollar to rise an underwhelming one half of one percent.

Political inaction also has facilitated China’s flouting of international trade rules forbidding government subsidies to manufacturers. The Chinese subsidies result in falsely low-priced Chinese goods flooding U.S. markets and submerging U.S. manufacturers.

Main Street Americans see the obvious. They said so in a poll conducted late in April by The Mellman Group for the Alliance for American Manufacturing (AAM). The likely voters – who identified themselves as Republican, Democrat, Tea Party and Independent – said Washington must focus on manufacturing because it is crucial to America’s economic strength. Large majorities said the U.S. should strengthen domestic manufacturing and develop a national manufacturing policy.

Unfortunately, too many politicians who loll in the rarefied world of Washington, D.C. — so far from Main Street, so very far from an actual factory — don’t see it. So they’ve failed to solve the problems.

A report issued this week by the Economic Policy Institute (EPI) details the trade difficulties encountered by one American industry – paper manufacturers. Its struggles mirror those that have maimed many other U.S. manufacturers, including pipe mills and tire plants.

The report, “No Paper Tiger: Subsidies to China’s Paper Industry from 2002-09,” notes that in 2008, China overtook the United States to become the world’s largest producer of paper and paper products. This score by China is the solid evidence for the gut feeling Americans expressed in the Mellman poll for AAM. A significant majority told the pollsters they believed the U.S. had lost to China the position of world’s strongest economy.

Americans didn’t need a report to spell out for them what their families and neighborhoods had suffered over the past decade. They’d experienced the closing of more than 10 percent of U.S. manufacturing plants in their communities from 2001 to 2009 – a loss of 42,404 factories. In the paper industry alone, 159,000 of their relatives and neighbors lost their jobs as paper mills closed or cut production during the seven-year period covered by the “No Paper Tiger” study.

A woman from Los Angeles told the Mellman pollsters that this relentless loss of manufacturing capability enfeebles America: “When you consume more than you produce, you become dependent, and we are consuming more from other countries than producing our own. . .truly we have become weak and in order to strengthen the economy, I think we need to produce more.”

The U.S. will, however, continue to produce less, the “No Paper Tiger” report makes clear, if Washington doesn’t act against predators violating international regulations. The report explains that China’s government granted at least $33 billion in subsidies to paper manufacturers to accomplish the country’s rapid rise to global leader in paper production.

In its central government-controlled economy, China gives paper companies money and breaks, much of which is improper under international trade regulations. For example, some paper companies get “loans” that they don’t have to repay. The government provides tax breaks, artificially low-priced electricity and underpriced raw materials. This explains how Chinese paper companies increased capacity by an average of 26 percent every year since 2004 even as prices for paper fell internationally and costs for raw materials for paper production in China rose steeply.

China’s rule-violating subsidies and deliberate currency devaluation explain the low price of Chinese paper. Labor costs don’t account for it. That’s because labor is such a tiny percentage of the price of paper – in both the U.S. and China. In China, it’s 4 percent of production cost; in the U.S. it’s 8 percent.

By contrast, Chinese paper manufacturers confront expensive problems that the American industry does not. In China, obtaining raw materials for paper making is complicated and costly because the country has among the smallest forestry resources in the world per capita. In addition, the “No Paper Tiger” report says, the Chinese industry is relatively inefficient. In the U.S., the paper industry is highly efficient and has easy access to abundant natural resources.

The U.S., a market economy, simply does not routinely prop up manufacturers the way China does.

The “No Paper Tiger” report says that if nothing changes, U.S. paper manufacturers will continue to lose money, close mills and bleed jobs. The U.S. could be reduced to serving as nothing more than the supplier of raw materials for Chinese paper production, as if America were an undeveloped third world country incapable of manufacturing on its own.

China’s subsidization of its paper manufacturers isn’t unique. It supports many of its industries. Chinese government intervention in the market accounts for a significant portion of the manufacturing loss in America. That loss diminishes American security.

America is losing her arms. Denying it doesn’t help.

About The Author: Leo Gerard is the United Steelworkers International President. Under his leadership, the USW joined with Unite -the biggest union in the UK and Republic of Ireland – to create Workers Uniting, the first global union. He has also helped pass legislation, including the landmark Canadian Westray Bill, making corporations criminally liable when they kill or seriously injure their employees or members of the public.

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