Saving American Manufacturing
When the average American thinks about manufacturing, and it seems most rarely do, they tend to think about it as "dying." There is little doubt that in today's increasingly global economy that American manufacturing needs to be saved. In the new book Can American Manufacturing Be Saved: Why We Should And How We Can, author Michele Nash-Hoff highlights the current state of manufacturing in this country and what we can do to promote more of it and save it as well.
Nash-Hoff, drawing on her experience of 25 years as a manufacturer's sales rep, details how manufacturing developed in America through the labor movement and industrial revolution, analyzes the impact and future of outsourcing and our nation's trade policies, looks at the organizations that are trying to help save manufacturing, what they are doing, and how we can help.
The author makes a strong case about the importance of avoiding Chinese products, especially food. For example, lax pollution controls in one Chinese city (Xiditou) with several chemical factories have caused the rate of cancer to be 18 times the national average as toxins like sulfur dioxide are dumped into a nearby river.
Nash-Hoff also points out that while our trade deficit with China is near an all time high, we continue to create competition for our own manufacturers through assisting China in cleaning up their environmental mess with our tax dollars. She also claims it would not be an exaggeration to say that American consumers have paid for the bulk of China's military buildup.
She rightly contends that if we don't help save American manufacturing jobs, which pay much higher wages than service industry jobs, our tax base will erode, our infrastructure will weaken, and our nation's standard of living will decline. Why? Because manufacturing corporations pay 30 to 34 percent of all corporate tax payments, and workers who make higher wages pay more taxes to our national treasury. Offshore tax haven locations like Bermuda cost the U.S. government another $10 billion in lost tax revenue each year.
A 2008 report by the National Association of Manufacturers stated that regulation costs like health care, pensions, corporate taxes and tort litigation add over 30 percent to the costs of American manufacturer's costs, making maintaining a U.S. base for production more difficult.
Maintaining that offshore outsourcing will continue in the future, the author interestingly claims that the purely financial benefits of lower cost will erode over time. Transportation costs for shipping from overseas are rising. Other expenses like the appreciation of the Chinese yuan, travel to visit offshore vendors and communications also represent additional costs that are eating up foreign labor-cost savings.
In 2007, 60 percent Exxel's sleeping bags were made in Shanghai, but by 2010, 90 percent will be made in their Haleyville, Alabama factory. As wages in urban China jumped 18 percent in the first half of 2008 compared to a year earlier, overall costs in Haleyville actually run three percent cheaper than in China, and Exxel can deliver an American made sleeping bag in three days. Shipping a Chinese-made sleeping bag, however, can take up to two months.
But still there are circumstances and factors beyond the control of an American manufacturer. For example, Harley-Davidson plans to lay off over one thousand American workers due to sinking demand. If China were to allow Harley-Davidson to import their motorcycles, these American jobs would likely be saved. The problem? Lack of trade reciprocity means China imposes a 30 percent tariff on foreign vehicles.
Author Michele Nash-Hoff makes a convincing argument that unless we change our trade policy, we will not be able to save American manufacturing. She also supports a "Buy American" policy and recommends we should prevent the sale of strategic U.S.-owned companies to foreign companies and enact legislation to prevent corporations from avoiding the U.S. income tax by reincorporating in a foreign country. The author also says that if 200 million Americans refused to buy just $20.00 each of Chinese goods, that's a four billion dollar trade imbalance resolved in our favor.
She says now is the time for trade organizations and professional societies to stop undercutting each other on issues that only benefit their members and instead work together to save American manufacturing.
I highly recommend Can American Manufacturing Be Saved: Why We Should And How We Can to every American who is concerned about the future of our great country. Even if you haven't particularly paid attention to the importance of American manufacturing to our future well being as a nation, you'll realize its importance after reading this book. And if you have regarded American manufacturing as an important part of our survival as a nation, you'll likely come away with the opinion it is even more important than you once thought after reading this book. You can learn more about the book, including how to order, at www.savingusmanufacturing.com.
The challenge for America, the author contends, is to keep as many companies as possible growing and prospering within the United States. I couldn't agree more.
Roger Simmermaker, Buy American Mention of the Week