“Eliminate the Trade Deficit” Resonates in Halls of Congress

“Eliminate the Trade Deficit” Resonates in Halls of Congress

Mar 22, 2017

By Michele Nash-Hoff, Savingusmanufacturing.com  “You were ahead of the curve on trade.” This was the common refrain heard last week by members of the Coalition for a Prosperous America who attended our annual fly-in to Washington, D. C. We had eight teams of members visiting Congressional Representatives and Senators on March 14th and 15th. As Chair of our developing California chapter, it was my fifth year attending the CPA fly-in, and our simple message of eliminating the trade deficit resonated well in the halls of Congress. No one could deny that we have a huge deficit as shown on the chart below: The annual trade deficit has reduced our U. S. GDP by some 3% to 5.5% each year, and those reductions compound over time. There is no historical record of any other country in history running 41 years of consecutive trade deficits. Why is this important? Because every billion dollars of net imports costs 4,500 American jobs according to conservative estimates. So last year’s $502 billion deficit equates to 2.25 million jobs lost. As a result, our Labor Force Participation is in serious decline. The U. S. is the only G7 nation with a DECLINE in LFPR since 1998 for workers ages 15-64. It peaked at 77.4% in 1998 and dropped down five points to 72.6% in 2015, meaning that over 7 million people dropped out of labor force since 1998. The remedy recommended by the Coalition for a Prosperous America is simple:  Congress should establish a national goal to eliminate the trade deficit. Balanced trade over time is the goal of free trade and of fair trade. Balanced trade will re-industrialize our country, enable massive job creation, grow our wealth and effectively neutralize foreign mercantilism. Trade policy must address true drivers of deficit, these countries and their practices. Many of these countries have export-oriented growth strategies in which they rely upon the US market to consume their exports rather than increasing their internal consumption. China, Germany, Japan and other countries pursue net exports through strategic mercantilism, not free trade. Currency manipulation, value added taxes, state influenced enterprises, and other tactics are used. The following top 10 countries account for 90% of America’s...

Why Universities are Important to Rebuilding US…

Why Universities are Important to Rebuilding US…

Mar 14, 2017

“Why Universities are Important to Rebuilding US Manufacturing” By Michele Nash-Hoff, President, ElectroFab Sales, IndustryWeek The United States needs more engineers to rebuild American manufacturing, and universities play a key role in providing this education. The fact that more and more manufacturers are returning manufacturing to the U. S. or keeping manufacturing here instead of moving to Mexico or Asia is good news, but on February 23, 2017, President Trump met with two dozen manufacturing CEOs at the White House. While they “declared their collective commitment to restoring factory jobs lost to foreign competition,” some of the CEOs “suggested that there were still plenty of openings for U.S. factory jobs but too few qualified people to fill them. They urged the White House to support vocational training for the high-tech skills that today’s manufacturers increasingly require…The jobs are there, but the skills are not,” one executive said during meetings with White House officials that preceded a session with the president.” “We were challenged by the president to … come up with a program to make sure the American worker is trained for the manufacturing jobs of tomorrow,” Reed Cordish, a White House official, said after Thursday’s meetings.” Training today’s workers in the skills they will need for the jobs of the future in manufacturing is important, but we also need to educate the next generation of manufacturing workers. We need more engineers to rebuild American manufacturing, and universities play a key role in providing this education. Recently, I had the opportunity to interview Dr. David B. Williams, executive dean of the Professional Colleges and dean of The College of Engineering at The Ohio State University, located in Columbus, Ohio, to discuss the role universities are playing in rebuilding manufacturing and educating the next generation of manufacturing workers. His official biography on the university website states, “Williams is involved in many university-industry economic development partnerships. He serves on the boards of ASM International, the State of Ohio’s Third Frontier Advisory Board, Lightweight Innovations for Tomorrow (formerly American Lightweight Materials Manufacturing Innovation Institute), Columbus 2020, Metro Early College STEM School, EWI, Ohio Aerospace & Aviation Council, and the Transportation Research Center.” Dean Williams said, “Ohio State University...

Opinion: How the U.S. could bring back up to half…

Opinion: How the U.S. could bring back up to half…

Mar 9, 2017

“Opinion: How the U.S. could bring back up to half the manufacturing jobs moved overseas” By Harry Moser and Sandy Montalbano, Reshoring Initiative, MarketWatch Many companies that offshored manufacturing didn’t really do the math For decades, U.S. companies have been chasing cheap labor offshore and then importing products to sell in the U.S. market. Now, Trumponomics, a broader focus on Total Cost of Ownership (TCO quantifies all relevant costs, risks and strategic factors) and advanced manufacturing together have the potential to end the manufacturing stagnation of the last 30 years and create millions of manufacturing jobs in the U.S. Over the last 20 years, the boom in offshoring drove our goods trade deficit up by about $640 billion a year, costing us three to four million manufacturing jobs. The most direct way to reduce the trade deficit, as President Trump has said he wants to do, is to substitute domestic production for imports, i.e. via reshoring and foreign direct investment (FDI) in the U.S. The result of eliminating the trade deficit would be a rapidly growing manufacturing workforce for the first time in 40 years, a rise in average wages and a 25% to 30% increase in manufacturing output and jobs. Many companies that offshored manufacturing didn’t really do the math. An Archstone study revealed that 60% of offshoring decisions used only rudimentary cost calculations, typically just price or labor costs and ignored other costs such as freight, duty, carrying cost of inventory, delivery and impact on innovation. Most of the true risks and cost of offshoring were being ignored. Now is a good time to re-evaluate the cost of domestic vs. offshore production, and not just because of the risk of an angry tweet from the president. Chinese wages have been rising by about 15% a year since 2000. As a result, the Chinese labor cost in dollars per unit of output is now about four times what it was in 2000. We estimate that about 25% of what is now offshore would come back if companies quantified the total cost. These products would generally have characteristics such as high freight cost vs. labor cost, frequent design changes, volatility in demand, intellectual property risk,...

How ‘Made in the USA’ can see a renaissance, and…

How ‘Made in the USA’ can see a renaissance, and…

Mar 6, 2017

“How ‘Made in the USA’ can see a renaissance, and what will (and won’t) change” By Trent Gillies, CNBC President Donald Trump has promised to bring jobs back to America, but the number of U.S. manufacturing jobs has been on a 30-year decline. Can that entrenched trend be reversed? A growing number of market experts believe the answer is yes. “I’m very optimistic,” small businessman Drew Greenblatt told CNBC’s “On The Money” in an interview. “We’re going to see an American manufacturing renaissance” Greenblatt, chair of the National Association of Manufacturers and president of Baltimore-based Marlin Steel Wire Products, pointed to policies that Trump wants to enact as a potential catalyst to new hiring. “We’re talking about reducing regulations by 75 percent, cutting our tax rate from 40-something percent to 15 percent,” he said. “It’s just going to make America more attractive to bring back opportunities to our country,” he added. However, in industries such as apparel, more than 97 percent of clothing and shoes are made overseas. Given the entrenched economic realities, others are skeptical that any government policy can spark a manufacturing rebound “There’s not much that can bring most of those jobs back, ” retail consultant Jan Kniffen told CNBC in an interview. “We haven’t made patterns in America, we haven’t made the product in America forever,” he said.   Kniffen added that the U.S. “would need factories, but those factories would have to be so automated, the jobs would be maintaining the equipment not producing the product.” That is because “the cost of producing abroad is so low and shipping not that much,” he said. Greenblatt remained optimistic that at least some sectors could see a resurgence. ” I acknowledge some industries are not coming back here, it makes more sense to do it elsewhere. But things like making airplanes and bulldozers and cars, it’s going to grow here, it’s going to thrive here.” Greenblatt’s Marlin Steel exports to 39 countries from its Maryland factory. He told CNBC that the company designs and fabricates wire baskets for automotive clients including Toyota Motor and General Motors. “We make baskets for Caterpillar and Boeing,” he said. “These companies are building factories in...

LG Electronics Building New Manufacturing Plant In Tennessee

LG Electronics Building New Manufacturing Plant In Tennessee

Mar 2, 2017

By Business Facilities The home appliance manufacturer will invest $250 million, create 600 new jobs in Clarksville, TN at its first U.S. washing machine manufacturing operation. After a lengthy site selection process that considered eight states, LG Electronics Inc. has decided to build its first washing machine manufacturing operation in the United States in Clarksville, TN. The South Korean manufacturer of appliances, electronics and mobile devices will invest $250 million in the facility, creating at least 600 new jobs in Montgomery County. “LG is proud to make further investments in America, to create jobs and to bring state-of-the-art home appliance production technology to the great state of Tennessee,” said Dan Song, president of the LG Home Appliance and Air Solutions Company. “Over the past six years, LG studied eight states for the location of this facility. Tennessee is the clear choice for LG’s latest major investment in America, due to the state’s excellent business climate, quality workforce and central location for distribution to our U.S. customers.” LG’s new Tennessee facility is expected to be the world’s most advanced production plant for washing machines. Construction on the 829,000-square-foot facility will begin later this year. Starting in 2019, the factory will initially  produce front- and top-load washing machines. Longer term, the 310-acre site offers the potential to expand for production of other home appliances. “We are proud to welcome LG to Tennessee and thank the company for creating 600 valuable, new jobs in Clarksville,” said Gov. Bill Haslam. “LG’s decision to establish new manufacturing operations in Tennessee is a testament to the business-friendly environment, ideal location and highly-skilled workforce we offer to companies around the globe. Tennessee is the top state in the nation for advanced industry job growth, an accomplishment that would not be possible without the many successful companies that choose to do business here. I look forward to building a lasting partnership with LG in the years ahead as we work together to make Tennessee the No. 1 location in the Southeast for high quality jobs.” Tennessee was ranked No. 1 among all U.S. states for foreign direct investment (FDI) job commitments in 2015, according to the 2016 IBM Global Locations Trends report. South Korea is among the top...