Auto Czar Steve Rattner New York Times article Debunked – USA Manufacturing Renaissance is Real

Recently Steve Rattner, the former Auto Czar for President Obama, wrote a piece in the New York Times denying the blossoming American Manufacturing Renaissance. In my weekly INC Column, we debunked his article.

7 Reasons Auto Czar Steve Rattner is Wrong

 

Steven Rattner, formerly the Obama-appointed czar for the auto industry and a former banker at Lehman Brothers, wrote a provocative piece in the New York Times recently trying to debunk the so-called “Made in America” renaissance, which he terms a “myth.”  He makes some good points. But he’s wrong.

Make no mistake, there IS a surging American manufacturing renaissance. Here are some overriding  issues that overwhelm his myth thesis.

First, value added in manufacturing recently exceeded $2 trillion for the first time (wow), showing that output continues to rebound strongly. That’s not chopped liver.

Second, Rattner’s analysis is a static one. He ignores the dynamic nature of the American spirit of capitalism, particularly the brilliant and innovative leaps in energy efficiency and labor productivity (among other things) that have made U.S. manufacturing more globally competitive. The advances behind the energy and labor are based on work by American engineers.

Third, natural gas. Rattner doesn’t even mention natural gas, and this is a game changer. We are now the Saudi Arabia of natural gas. Soon we will be exporting natural gas and even, you guessed it — oil. This is the feedstock for many companies that will change their investment plans and park more money here – more new U.S. factories because of this advantage. That is good for us. Plus, we won’t be sending $700 billion each year to people who hate us. Instead, it will go to property owners in places like Ohio, Pennsylvania, North Dakota, and Texas. Those folks pay taxes, for our schools, roads, and national defense. Most importantly, they like us more than the oil sheiks in many parts of the Middle East.

Fourth, many of the announced investments for the natural gas and energy boom have not yet come online. These projects take two to five years to launch. Permitting and improving these facilities takes time. The snowball effect is going to kick in soon and then expand rapidly. You ain’t seen nothin’ yet.

Fifth, Rattner decries manufacturing wages, but the average U.S. manufacturing employee makes $77,000 a year (with benefits) and if the company exports, the average pay is $95,000 (with benefits). This is a lot better than the $14.50 per hour jobs in Tennessee and Kentucky that Rattner derides. Yes, those jobs exist, and they don’t pay as well as assembly line work used to. However, if the alternative for an auto worker is a minimum wage job, this is more than two times better. Many people like that alternative.

Sixth, Rattner does not mention WHERE the manufacturing job loss has occurred. Virtually all of the shrinkage in manufacturing employment has happened in union manufacturing jobs. Non-union jobs have been flat, on the other hand. Rattner missed the point, which is that while union manufacturing jobs evaporated, nonunion did okay. If there is a myth, it is that the problem is manufacturing.

Lastly, Thomas Edison, Henry Ford and Steve Jobs did not need the government-supported Manufacturing Innovation Institutes that Rattner blames for propping up industry statistics. That’s because those Institutes are not where the next Facebook or stunning innovation will come from. It will come from some entrepreneur working in a garage right now. We don’t even know his or her name — yet. Government cannot spearhead the next flash of brilliance. And that’s okay.

Baltimore Sun Opinion Editorial Piece – Give President Trade Promotion Authority so we grow jobs

This Op Ed Piece was in today’s Baltimore Sun about growing USA Trade & Jobs:

Earlier this month, the powerful Senate Finance Committee met to consider crucial legislation that would grant the president Trade Promotion Authority (TPA), which would make it easier for him to negotiate deals with other countries. Maryland’s own Sen. Ben Cardin, who sits on that committee, will help decide whether the United States continues to lead the world in promoting jobs and market-opening trade deals or falls behind.

TPA is a common sense procedural agreement between the legislative and executive branches of government, and every president since Franklin Roosevelt has had, according to the National Association of Manufacturers, where I’m an Executive board member. NAM describes TPA as a partnership between Congress and the president that facilitates deals and ensures “congressional input” on trade negotiations. TPA would also limit Congressional consideration of deals and amendment ability, giving the administration more power in trade negotiations.

Since TPA was last renewed in 2002, the United States has concluded trade agreements with 16 countries around the world. During that time, Maryland’s annual manufactured goods exports have more than doubled to nearly $11 billion. My company manufactures material handling wire baskets and sheet metal fabrications wholly in Baltimore City, however we owe 25 percent of our jobs to our exports.

Recently, Sen. Barbara Mikulski visited our factory when we shipped a container of complex wire forms to China. Think about that — U.S. steel, U.S. robots and Maryland engineering and labor combined to execute a “Made in the USA” product that a Chinese receiving clerk in Shanghai will open weeks later and disseminate to his or her clients. We need more Baltimore jobs created because of expanded trading partners.

The U.S. wins on these deals. In fact, countries with which the U.S. has negotiated trade deals under TPA purchased more than 30 percent of Maryland’s manufactured goods exports in 2012.

TPA is essential to pass pending trade agreements, including with 11 Pacific Rim nations — Maryland’s largest export market. We need these prospects to sell to so we can grow and hire local talent and end the recession. Trade agreements are critical because they enable manufacturers to reach more of the 95 percent of the world’s consumers who live outside the United States. These deals open up markets to Maryland manufacturers so we can compete for a greater share of the $11 trillion global market for manufactured goods. Trade agreements level the playing field so we have a better shot to grow jobs. The United States enjoys a $130 billion manufacturing trade surplus with its 20 trade agreement partners.

In Maryland alone, Trade agreements drive manufactured goods exports contributing nearly $11 billion to the Maryland economy in 2012. Specifically, those exports support more than 32,000 Maryland jobs — more than a quarter (27.8 percent) of all state manufacturing jobs.

Manufacturing jobs are great jobs. Jobs linked to manufactured goods exports pay, on average, 18 percent more than other jobs. Moreover trade does not just benefit big companies; export gains are broadly shared. Specifically, 88 percent of Maryland exporters are small businesses, like mine, with less than 500 employees.

Unfortunately, TPA expired in 2007 and must be renewed quickly to ensure America continues to lead in leveling the playing field for manufacturers and workers. The stakes are high. Without new market-opening trade agreements, manufacturers will be at a competitive disadvantage. The United States is open to the world but faces higher tariffs abroad than almost any other country. While we sit on the sidelines, other major economies are negotiating their own agreements that could put Maryland manufacturers and workers at a significant competitive disadvantage.

Tell our senators and Congress people to vote for more great jobs by granting our president Trade Promotion Authority.

Drew Greenblatt is the President of Baltimore-based Marlin Steel and a Vice Chair of the governor’s International Advisory Council and the Maryland Commission on Manufacturing Competitiveness.

Marlin Steel president on health care on Greta Van Susteren last night

 Greta Van Susteren

Marlin Steel President Drew Greenblatt was on the Greta Van Susteren show last night to discuss the impact of health care insurance costs on small business after testifying on the topic earlier in the day before a Senate committee on behalf of the National Association of Manufacturers. Click here for the video link.

Newest U.S. senator to Marlin Steel president: “You rock”

Marlin Steel President Drew Greenblatt

Marlin Steel President Drew Greenblatt

U.S. Senator Cory Booker

U.S. Senator Cory Booker

At a hearing this morning on health care before the U.S. Senate Committee on Small Business and Entrepreneurship, at which Marlin Steel President Drew Greenblatt testified, we appreciated the stream-of-consciousness comments (1:48:23 – 1:53:00) of the newest U.S. senator, Cory Booker of New Jersey, who proclaimed Mr. Greenblatt an honorary “Jersey boy.”:

“Mr. Greenblatt, first of all, I appreciate your Jersey connection (as) a guy who vacations in Jersey. You have some Jersey-boy-aura to you and I want to say there’s a geologist saying “You rock” and you rock not because of your Jersey connection, but because I feel a kinship to you. We both came down to Washington. You get to go home, I think, and I’m gonna stick it out here and battle it out. You deal with the pragmatism that I deal with. I had to cut 25 percent of my employees as a mayor and one of the reason I had to cut so much is because health costs were going up so much, my taxpayers couldn’t afford it. I had to balance a budget every year. So do you. And the challenge that you have and that I’ve seen from working with global manufacturers in my city that I wanted to expand — and you said you export products to China, right? You’re competing globally, right? I like you a lot — and when you compete globally you’re competing against companies in Europe and Asia and across the globe, right?, and many of those countries have different health care systems and most of our competitor nations have much lower health care costs, right?”

When Marlin Steel’s president also pointed out large tax inequities that make it difficult to compete globally, such as against Canada, Senator Booker responded, “I want to compete with Canada in every way, expect for Toronto. Their mayor is having challenges there ….” Continue reading

20 ideas to spur U.S. manufacturing now

From Drew Greenblatt‘s latest column on Inc.com on how to accelerate manufacturing: 

The most recent jobs report was just the latest sign that the economy continues to plod ahead in fits and starts–but hasn’t been able to achieve “escape velocity.” So what to do about it? Here are 20 ideas that would help create manufacturing jobs, both short term and in the long run.

Why manufacturing? With a multiplier effect of $1.48 added to the economy for every $1 spent, the highest multiplier of any sector, manufacturing needs the attention of lawmakers and policymakers now. Continue reading

Maryland senator to Texas governor: We’ll take on the challenge

U.S. Senator Ben Cardin told a meeting of Maryland manufacturers and workforce development officials yesterday that the state isn’t going to take a recent challenge from Texas Governor Rick Perry sitting down.

“We’ve all been challenged by the governor of Texas. We’re going to take on the challenge,” said Cardin, referring to TV advertisements that feature Perry urging Maryland businesses to move to Texas for lower taxes and less regulation. “We are open for business in every conceivable way.”

U.S. Senator Ben Cardin at roundtable of the Regional Manufacturing Institute of Maryland (RMI)

U.S. Senator Ben Cardin at roundtable of the Regional Manufacturing Institute of Maryland (RMI)

Maryland’s manufacturing advantages include proximity to markets, to major transportation infrastructure, to decision-makers in Washington and to workers with engineering and technical skill, he said. The senator praised several examples of manufacturing prowess in the state, including Paul Reed Smith Guitars; Lion Brothers, which embroiders uniform decals for professional sports teams, and Marlin Steel Wire Products.

What’s done at Marlin is the best in the world,” the senator said. “You understand quality.” Continue reading

How to fill the skills gap: Taking a hard look at soft skills

From Drew Greenblatt’s latest column on Inc.com about filling the skills gap:

Roundtable on "Strengthening Skills in Our 21st Century Workforce," Anne Arundel Community College, Arnold, Maryland

Roundtable on “Strengthening Skills in Our 21st Century Workforce,” Anne Arundel Community College, Arnold, Maryland, Sept. 9, 2013

Midway through a recent roundtable discussion on job skills that I attended with others in business, government and education, someone mentioned a need for workers to cultivate co-called soft skills. Thomas Perez, the new U.S. Secretary of Labor, bristled a bit, saying he didn’t like the term: “Let’s change that to essential skills,” he said.

He’s right. The ability to write a grammatically correct email to a client, or to calculate diameters and radii to confirm the quality of a manufactured part, isn’t inconsequential. In manufacturing plants like ours and in many other workplaces, these skills are critical. They are essential to the experience you provide to your customer and critical for the success and survival of every business, no matter its size. There is nothing “soft” about them.

During the panel, which was convened to consider solutions to the “skills gap,” one panelist said he knew an employer who has kept a position unfilled since 2004 because she couldn’t find the right fit, despite so many people searching for work. The remark elicited gasps. Continue reading