(Editor’s note: This guest column is excerpted from Michelle Nash-Hoff’s November 2010 newsletter, titled “Reviving American Manufacturing.” The unabridged version is available online.
The manufacturing industry is like the seat of a three-legged stool. One leg is manufacturers and what they can do to “save themselves.” The second leg [represents] people and what they can do as entrepreneurs, business owners, employees, consumers, and voters. The third leg is what government at all levels can do by means of tax policies, regulation, incentives, and national trade policies. This stool has been toppled over because only manufacturers have been trying to save themselves. It will take the cooperative effort on the part of all three legs to save American manufacturing.
People are starting to wake up to the importance of manufacturing to the American economy. They have already woken up to the fact that we’ve lost too many manufacturing jobs and that is causing our unemployment rate to stay so high (9.8% as of press time). They are waking up to the need to revitalize, rebuild, reinvent American manufacturing to save it.
On Sept. 28, 2010, the Conference for the Renaissance of American Manufacturing, held in Washington D.C. drew more than 200 manufacturing executives, legislators, union leaders, trade policy experts, and state and federal officials. At this conference, Sen. Don Riegle Jr. (D-Mich.) warned that the U. S. economy is on a “downhill trajectory” and “going at a velocity that is very dangerous...”
Gilbert Kaplan, president of the Committee to Support U. S. Trade Laws, provided his own insights on the issue. “The decline of American manufacturing happened not because of some inevitable shift to a post-manufacturing economy, as some argue, but because the United States has picked the wrong policies and not paid attention to preserving and growing manufacturing. American urgently needs unequivocal and bi-partisan policies in support of reviving manufacturing, with clear performance goals and timelines for action.”
After the conference, the Committee to Support U. S. Trade Laws, the Economic Strategy Institute, the New American Foundation’s U.S. Economy/Smart Globalization Initiative, and other groups released a “Statement of Principles,” recommendations for major reforms to the U.S. trade system, including specific legislative initiatives to revive American manufacturing.
Among the principles:
• Change tax policies so that manufacturing in the United States is encouraged, not discouraged, and making sure that imports pay their fair share of taxes
• Create tax policies that foster manufacturing investment by strengthening R&D and capital investment, and allowing for accelerated depreciation
• Provide [grants] and low-interest loans to companies that manufacture in the U. S. (as long as other countries’ governments are providing assistance to their industries)
• Encourage a change in corporate culture so that manufacturing in the U. S. becomes a primary objective. Meanwhile, discouraging moving plants off-shore.
Some of the recommendations for reforms to the U. S. trade system:
• A “plus jobs and plus factories” requirement for all existing trade agreements and future agreements, in which it can be shown that the agreement on a net basis has created or will create jobs and factory builds in the U. S.
• A commitment to balance trade in the U.S. by a date certain in the future
• Stronger, sustained trade action against foreign subsidization of manufacturing
• Creation of an unfair trade strike force within the U.S. government
• Addressing the fact that many imported products are not bearing environmental and health care costs
The five specific legislative initiatives recommended:
• Legislation to countervail currency undervaluations and enhance enforcement of trade case orders
• Rewriting U.S. trade laws in the next session to bring them up to date, deal with the realities of the 21st century, and make sure they are effective in preserving and reviving U.S. manufacturing
• Rewriting tax laws to encourage manufacturing in the U. S. to ensure that imports pay their fair share of taxes and encourage R&D and capital formation for manufacturing
• Altering the governmental policy apparatus to provide a voice for manufacturing at senior levels
• Passage of a Manufacturing Education Act that will develop targeted vocational and technical training programs at both the secondary and post-secondary level in order to strengthen manufacturing education. Additionally, funding programs and institutions to improve the skills of career-changing adults interested in manufacturing jobs
The first thing needed to solve a problem is to recognize that you have a problem. Now that key leaders in industry and government recognize that we have a serious problem, we need to work together to solve it. As Andy Grove, senior advisor to Intel and CEO/Chairman from 1987 until 2005, said, “...the imperative for change is real and the choice is simple. If we want to remain a leading economy, we can change on our own, or change will continue to be forced upon us.”
ABOUT THE AUTHOR
Michele Nash-Hoff has been in and out of San Diego’s high-tech manufacturing industry since starting as an engineering secretary at age 18. Her career includes being part of the founding team of an electronic component manufacturer and working in the Marketing Department of Cubic Corporation’s Military Systems Division. She took a hiatus from the high-tech industry for a few years, during which time she graduated from San Diego State University with a bachelor’s degree in French and Spanish, servings as a substitute teacher at a private elementary school.
After returning to the industry, she became vice president of a sales agency. After three years, Nash-Hoff left the company to form her own sales agency, ElectroFab Sales, to work with companies to help them select the right manufacturing processes for their new and existing products. In 1998, she served as manager of the San Diego Enterprise Center, a new business incubator for start-up companies, while continuing to run ElectroFab. The National Business Incubation Association published Nash-Hoff’s first book, For Profit Business Incubators, that same year.
Nash-Hoff has served as president of the San Diego Electronics Network, the San Diego Chapter of the Electronics Representatives Association, and The High Technology Foundation, as well as several other professional and non-profit organizations. She is an active member of the Soroptimist International of San Diego club. She has a certificate in Total Quality Management and is a 1994 graduate of San Diego’s leadership program (LEAD San Diego.) She has also taken classes in lean manufacturing and Six Sigma.
Nash-Hoff may be reached via e-mail at michele@SavingUSManufacturing.com.