Reshoring Critical Pharmaceuticals and Manufactured Goods Would Create Millions of Jobs

March 31st, 2020

It’s a pity that it took the coronavirus pandemic to wake up Americans to the dangers of our dependence on foreign sources for pharmaceuticals and health care products. Perhaps we could have saved lives if our leaders had taken heed to the warning of co-authors Rosemary Gibson and Janardan Prasad Singh in their book China RX, published in 2018. The authors exposed how the pharmaceutical industry has transferred the manufacturing of generic drugs, vital medicines and medical devices to China and other countries, which has resulted in great risk to the health of Americans as well as a substantial risk to our national security.

In their book, they quote Dr. Goodman, dean of the Milken Business School of Public Health at George Washington University, saying, “It is a matter of national security that we have the essential drugs we need…I think it is time for an examination, for some of the most critical drugs, and it’s not just drugs, medical supplies, masks are all made overseas. Do we need to think about having at least some resilient manufacturing capacity built in this country?”

Yes, we do need to return the manufacture of pharmaceuticals and medical devices to benefit the health and safety of all Americans. Additionally, there would be economic benefits. On March 17th, the Coalition for a Prosperous America released a report on the results of the investigation conducted by Steven L. Byers, PhD and Jeff Ferry of their research team into the potential economic benefits of reshoring pharmaceutical production to the U.S.  They “found that an ambitious but realistic reshoring program could create 804,000 US jobs and add $200 billion to annual GDP in the first year.”

Their investigation showed that imports of pharmaceuticals had increased “dramatically as US-based drug manufacturers moved manufacturing facilities offshore.” By 2019, “pharmaceuticals ranked third as a US import category [$74 billion], behind automobiles ($180 billion) and crude oil ($132 billion) …”

The report states” Eighty percent of all pharmaceutical imports are accounted for by the top ten countries. Seven of the top ten countries we import from are in Europe…” Ireland is number one followed by Germany, Switzerland, Italy, India, Denmark, Belgium, Canada, United Kingdom, and Japan of the top ten. “China is well behind the leaders, in 17th place, with just $1.6 billion of pharmaceutical imports last year.”

However, “the Census category of pharmaceutical imports does not include the key ingredients that go into pharmaceuticals, known as Active Pharmaceutical Ingredients (API).” In recent testimony to Congress, Rosemary Gibson, author of China RX, stated “that three antibiotics used to treat coronavirus or related infections, azithromycin, ciprofloxacin, and piperacillin/tazobactam, are all dependent on supplies of APIs from China.” Senate Finance Committee chairman Charles Grassley commented, “80 percent of Active Pharmaceutical Ingredients are produced abroad, the majority in China and India.”

Byers and Ferry “used  the REMI Policy Insight Model[1] to estimate the impact on the US economy of restoring our level of pharmaceutical imports to the level of 2010, when we imported $61.6 billion of pharmaceuticals [and] reduced chemical imports by $4.9 billion in [their] simulation, to account for the increased imports of chemical ingredients that go into pharmaceuticals.” They ran the “model over a five-year period, 2020 through 2024.”

While the creation of jobs was the highest the first year at 804,000, the subsequent years created 614,000 in 2021, 548,000 in 2022, 453,000 in 2023, and 371,000 in 2024 for a total of 2,382,000 additional jobs.

Pharmaceutical and medicine manufacturing jobs pay a median income of $74,890, which is “47 percent higher than the median for all private-sector employees.”

The authors comment that “The economic benefits of reshoring US pharmaceutical production are thus substantial. They are also strategic; in that they would reduce US dependence on potentially hostile countries like China. In times of pandemic, there is also a non-zero risk that even friendly nations will prioritize their own citizens over exports. At the very least, the US needs a comprehensive audit of its dependence on individual nations and companies for pharmaceuticals, APIs, and any other key inputs.”

They conclude that “The US has become increasingly dependent on imports of foreign produced pharmaceutical and other health care products as well as the ingredients that go into their production. As a result, the supply chain is highly susceptible to interruption which would put significant pressure on our healthcare system…The benefits of reshoring pharmaceutical and ingredient production are large in terms of national security, patient safety, and economic welfare.”

On Friday, March 27th, the Trump Administration announced it would use the Defense Production Act, to compel General Motors to make more ventilators quicker than the company had planned to produce..

In an article in the Washington Post on March 28th, Joshua Gotbaum wrote: “Under the Defense Production Act, the federal government can, like a traffic cop, direct that inventories be allocated where they are needed most urgently. That’s what FEMA does during floods and hurricanes…The DPA also allows government to move its orders to the front of the line. The Defense Department does this regularly, but the act can be used for more than defense…The government can also use the act to order, and then pay for, expanded production, with new products or new plant capacity. “  

He recommended “The administration needs to act quickly, the DPA using all of its authority to procure not just ventilators but also test kits, masks and other equipment for health-care workers and covid-19 victims.” Mr. Gotbaum speaks from experience as he administered some Defense Production Act authorities as assistant secretary of defense in the 1990s and is currently a guest scholar in the Brookings Institution’s Economic Studies Program.

The benefits of reshoring would be even greater if we returned all critical manufactured goods to the U.S. than just returning pharmaceutical and medical products.  According to recent Reshoring Initiative data, Harry Moser, over 3,000 companies have reshored, creating about 740,000 jobs.  He estimates that if we reduce our trade deficit caused by importing more than we export by 20%, it would create one million jobs. Using the free Total Cost of Ownership Analysis calculator available at www.reshorenow.org would help more companies return manufacturing to America.

We need to ensure that we will have the critical products needed to weather future unforeseen events. In my opinion, the policies to address the Coronavirus crisis should be just the beginning of a concentrated effort to reshore all critical manufactured goods to America. Let’s use all of the potentially available policies:

  • Invoke the Defense Production Act on all critical manufactured goods
  • Impose 25% tariffs on all imported goods from China
  • Incentivize manufacturers to produce products that were offshored to China

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Would H.R.3666 – STRONGER Patents Act of 2019 be Beneficial to Inventors?

March 10th, 2020

On July 10, 2019, H.R. 3666, the “STRONGER Patents Act of 2019,” was introduced in Congress and referred to the Committee on the Judiciary and the Committee on Energy and Commerce. The purpose of the Act is “To strengthen the position of the United States as the world’s leading innovator by amending title 35, United States Code, to protect the property rights of the inventors that grow the country’s economy.”

This bill is a reintroduction of the Stronger Patents Act of 2017 that never got out of committee.  It has a long list of bi-partisan co-sponsors:  Rep. Stivers (R-OH), Rep. Mr. Foster (D-IL), Rep. McClintock (R-CA), Rep. Velázquez (D-NY), Rep. Babin (R-TX), Rep. Burgess (R-TX), Rep. Hill (R-AK), Rep. Huizenga (R-MI), Rep. Joyce (R-OH), Rep. King (R-NY), Rep. Norman (R-SC), Rep. Watson Coleman (D-NJ), Rep. Suozzi (D-NY), Rep. Peters (D-CA), Rep. Gosar (R-AZ), and Rep. Davidson (R-OH).

The “Findings of Congress” in the Act make several points similar to those made in the “Findings of Congress” for H.R. 5478, the Inventor Rights Act, regarding the importance of patents as “the foundation for the exceptional innovation environment in the United States” and “an essential part of the country’s economic success.” It includes reference to the fact that “strong patent protection improves the chances of success for small companies and increases their chances of securing financing from investors.”

Of particular note, the “Findings” state that “unintended consequences of the comprehensive 2011 [America Invents Act] reform of patent laws are continuing to become evident, including the strategic filing of post-grant review proceedings to depress stock prices and extort settlements, the filing of repetitive petitions for inter partes and post-grant reviews that have the effect of harassing patent owners, and the unnecessary duplication of work by the district courts of the United States and the Patent Trial and Appeal Board;”

This “Finding” refers to the abuse of invalidating patents by the Patent Trial and Appeal Board mentioned in my blog article of February 12th about the Inventor Rights Act.

In addition, the “Findings” point out that “efforts by Congress to reform the patent system without careful scrutiny create a serious risk of making it more costly and difficult for legitimate innovators to protect their patents from infringement, thereby weakening United States companies and the United States economy.”

The Stronger Patents Act of 2019 is much more complex that the simple one-page bill for the Inventor Rights Act.  Since I am not a lawyer, I do not have the legal expertise to analyze each of the specific clauses of the Act.  However, I will highlight certain sections that are particularly beneficial to inventor rights and attempt to correct specific problems created by the America Invents Act of 2011.

For example, in “SEC. 102. Inter partes review,” the proposed amendments would help reduce the invalidation of patents that is now occurring in PTAB cases. The bill states:

“(A) each challenged claim of a patent, or claim proposed in a motion to amend, shall be construed as the claim would be construed under section 282(b) in an action to invalidate a patent, including by construing each such claim in accordance with—

(i) the ordinary and customary meaning of the claim as understood by a person having ordinary skill in the art to which the claimed invention pertains; and

(ii) the prosecution history pertaining to the patent; and

(B) if a court has previously construed a challenged claim of a patent or a challenged claim term in a civil action to which the patent owner was a party, the Office shall consider that claim construction.”

The “Burden of proof.—Section 316(e) of title 35, United States Code, is amended to read as follows:

(1) PRESUMPTION OF VALIDITY.—The presumption of validity under section 282(a) shall apply to a previously issued claim that is challenged during an inter partes review under this chapter.

(2) BURDEN OF PROOF.—In an inter partes review instituted under this chapter, the petitioner shall have the burden of proving a proposition of unpatentability of a previously issued claim by clear and convincing evidence.”

One of the important amendments in Sec. 103. Post Grant Review, adds the following new subsection: “(d) Persons that may petition.—

(2) NECESSARY CONDITIONS.—A person may not file with the Office a petition to institute a post-grant review of a patent unless the person, or a real party in interest or privy of the person, demonstrates—

(A) a reasonable possibility of being—

(i) sued for infringement of the patent; or

(ii) charged with infringement under the patent; or

(B) a competitive harm related to the validity of the patent.”

Two of the amendments to SEC. 104. Composition of post-grant review and inter partes review panels, amend Section 6(c) of title 35, United States Code as follows:

“(1) IN GENERAL.—Each appeal, derivation proceeding, post-grant review, and inter partes review shall be heard by at least 3 members of the Patent Trial and Appeal Board, who shall be designated by the Director.

(2) INELIGIBILITY TO HEAR REVIEW.—A member of the Patent Trial and Appeal Board who participates in the decision to institute a post-grant review or an inter partes review of a patent shall be ineligible to hear the review.”

SEC. 105. Reexamination of patents amends the process of requesting a reexamination, while SEC. 106. Restoration of patents as property rights states is amended to provide injunctive relief stating:

“(b) Injunction.—Upon a finding by a court of infringement of a patent not proven invalid or unenforceable, the court shall presume that—

(1) further infringement of the patent would cause irreparable injury; and

(2) remedies available at law are inadequate to compensate for that injury.”

One of the problems that this Act addresses is the diversion of fees paid to the USPTO. Currently funds can be diverted to fund other agencies and cover other government expenses.  By this Act, SEC. 107. Elimination of USPTO fee diversion, clause regarding  (a) Funding.—Section 42 of title 35, United States Code, is amended as follows:

“(1) IN GENERAL.—Fees authorized in this title or any other Act to be charged or established by the Director shall be collected by the Director and shall be available to the Director until expended to carry out the activities of the Patent and Trademark Office.”

Item “(2) ESTABLISHMENT.—There is established in the Treasury a revolving fund to be known as the ‘United States Patent and Trademark Office Innovation Promotion Fund’.”

I particularly support the addition of SEC. 109. Assisting small businesses in the U.S. patent system, which states in part:

“(b) Small Business Administration report.—Not later than 1 year after the date of the enactment of this Act, the Small Business Administration, using existing resources, shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report analyzing the impact of—

(1) patent ownership by small business concerns; and

(2) civil actions against small business concerns arising under title 35, United States Code, relating to patent infringement.

(c) Expansion of patent pilot program in certain district courts.—

(1) IN GENERAL.—Not later than 180 days after the date of the enactment of this Act, the Director of the Administrative Office of the United States Courts shall designate not fewer than 6 of the district courts of the United States that are participating in the patent cases pilot program established under section 1 of Public Law 111–349 (28 U.S.C. 137 note) for the purpose of expanding that program to address special issues raised in patent infringement suits against individuals or small business concerns.

(2) PROCEDURES FOR SMALL BUSINESSES.—Not later than 2 years after the date of the enactment of this Act, each district court designated under paragraph (1) shall develop procedures for expediting cases in which an individual or small business concern is accused of patent infringement.

While this bill addresses many of the problems caused for the America Invents Act of 2011, it does not address the most egregious provision of that Act; namely, changing our patent system from a “first to invent” to a “first to file” system.  This change has done the most damage to the individual inventor or small business entity.  While a provisional patent that is good for one year is relatively inexpensive, it is expensive and time consuming to pursue obtaining a non-provisional patent (3-5 years average).  Individual inventors have to be extremely cautious not to reveal information on their technology to prevent others from being first to file a patent for the technology they invented. 

Because of the complexity of this bill, I don’t think it has any greater chance of getting out of committee to be voted on by the whole of Congress this year than the Stronger patent Act of 2017. In fact, it may have less chance in the Democrat-controlled House with many more Republican than Democrat co-sponsors. In my opinion, I think the simple, one-page Inventor Rights Act has a much better chance of being brought to the House floor for a vote this year, and it will restore the rights of inventor to their patents.

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Prairie State College Starts Innovative Mobile Training Program

February 26th, 2020

At the Made in America trade show last October, I stopped by the booth of Prairie State College in Chicago Heights, IL and met Craig Schmidt. V. P. of Community and Economic Development and Jim Kvedaras, Consultant. They were at the show to publicize the launch of their new Mobile Training Center (MTC) program that will provide innovative ways to train and retain workers and minimize workplace interruptions. Craig told me, “We recently received an Economic Development Administration (EDA) grant to create the MTC.  We used that grant and matching college funds to build two mobile training centers that can be moved at will to bring hands-on training to a company site.”

Last week, I checked back with Craig and Jim to see how the program was going.  He said they have been identifying manufacturers that would benefit from the program and will start the program at Ford Motor Company’s Stamping plant the week of March 16.  They have additional companies lined up.

He explained, “By using the MTCs, employers save the time and expense of sending employees off site to locations for industrial skills training, and workers will not be inconvenienced by having to commute to a community college campus or other location for training. We’ve been offering training in manufacturing skills about 41 of the 60 years since the College opened in 1958. Today, manufacturers need new ways to address the skills gap and retain their workers to be competitive in the global economy. Mobile training can provide some of those ways, and our local manufacturers wanted the training to be brought to them.”

“We’re the first in the area to have these,” he said. “Larger companies that operate three shifts around the clock will be able to provide equal and training opportunities to employees.  It’s all focused on advanced manufacturing. The top priority is to upskill current employees.”

He explained, “The MTCs are two 53 ft. highway truck trailers that are temperature controlled, Wi-Fi enabled, and handicap accessible.  The MTCs can come on demand, so that training doesn’t have to be confined to whatever facilities an employer can make available without shutting down production lines. The MTCs can be moved to other plant locations, providing training opportunities for more employees, and then moved to other employers.  Employers can work with the college to design a training curriculum based on their goals, while minimizing production downtime while the training takes place.”

Craig provided me with a brochure that explained that one trailer is a welding unit and the other is a manufacturing unit.  The welding trailer is “equipped with eight multiprocess welding stations and two virtual reality/augmented Arc welding simulation.” Students will learn “welding setup, operation, and troubleshooting using Miller multiprocess welders.”

The manufacturing unit is described as being equipped with the following equipment:

  • “Emco machines
  • Haas simulators,
  • Manual mill/lathe Combo machining centers
  • ABB Robotic operations for operation and troubleshooting
  • 3D printing capabilities”

The students will learn “PLC and electronics operation and troubleshooting using Siemens and Allen Bradley components” and be trained on “all CNC industry controls that are common to the market.”

The brochure states that MTCs offer:

  • “On-site, hands-on training using current technology
  • Customizable curriculum, including classroom instruction and practical application
  • Training that can be applied toward a college degree or as professional development
  • Lab exercises designed to enhance employee competence and performance”

The benefits to employers are described as:

  • “Minimize loss of production time and travel expenses
  • Increase engagement, efficiency, and retention
  • Maintain a competitive edge
  • Increase safety performance by uniform adherence to industry standards
  • Reduce the manufacturing skills gap”

Craig said, “We are also seeking company sponsorships to assist in offsetting the College’s match of the grant.  The College intends to put a portion of the sponsorship back into the community to promote manufacturing jobs to youth and train individuals who may not have easy access to education.”

I thanked Craig and Jim for the information and said that I hoped to see them at this year’s Made in America trade show in Detroit.  To learn more about the Prairie State College Mobile Training Center program, visit https://prairiestate.edu/MTC, call (708) 709-7722, or email mtc@prairiestate.edu.

When I browsed the College website, I learned that it also has a Department of Corporate and Continuing Education, which offers customized programs that are delivered either to company facilities or on their campus. Besides the typical business topics of business ethics, business writing, customer service, Secrets of Selling, and time management, the College also offers training in computer software and employee development topics.  The latter includes such topics as coaching and mentoring, leadership, and team building.

I was particularly pleased that the College offers training in Lean on such subjects as 5S Workplace Organization, Continuous Improvement, Six Sigma, and Total Productive Maintenance because becoming a Lean enterprise is key to being competitive in the global marketplace. 

All across the country, Community Colleges are taking the lead in providing education and training in the skills needed by today’s manufacturers.  What is still needed is more high schools restoring hands-on skills training at the high school level.  Let’s restore the “shop classes,” such as wood shop and machine shop and start mentoring middle school age children on the importance of choosing STEM careers. STEM careers include manufacturing because nearly all manufacturing today is based on advanced technology.

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H.R. 5478 would Protect Inventors Rights

February 11th, 2020

On December 18, 2019, H.R. 5478 was introduced by introduced by Representatives Danny K. Davis (D-IL) and Paul A. Gosar, D.D.S. (R-AZ), and on January 28, 2020, it was referred to the Subcommittee on Courts, Intellectual Property, and the Internet. This Act that would restore patent protection for inventors and mitigate a generation of laws, regulations, and court decisions discouraging innovation by failing to secure to inventors the exclusive rights to their discoveries.

It is crucial that this Act be passed this year because our patent system is in crisis. The text of the Act states “Recent changes to patent laws and procedures and Supreme Court decisions have adversely affected inventors such that the promise of Article 1, section 8 of the Constitution of ‘securing for limited times to inventors the exclusive right to their discoveries’ is no longer attainable.”  The biggest change to the U. S. patent system was made by the America Inventors Act of 2011,  

The Act states that “Inventors are denied the fundamental right to ‘exclude others’ by the Supreme Court’s 2006 decision in eBay Inc. v. MercExchange, LLC.” Thus, inventors have lost their injunctive rights granted by the Constitution.  It also states that “Inventors were stripped of the right to file suit in their own judicial district by the Supreme Court’s 2017 decision in TC Heartland LLC v. Kraft Foods Group Brands LLC.”

Imagine if you invested in a house, moved in, started to enjoy it, and then had squatters arrive, whom you can’t legally kick out. Yes, you could charge them rent, but if you can’t kick them out, they have no incentive to pay! They would just keep squatting and living in your house for free. That’s what has happened to our patent system.

The ability to stop others from infringing on inventor’s patent rights was what helped big tech companies years ago. Amazon never would have existed without Jeff Bezos’ patent for “the one click purchase” that he licensed to Apple to use for their app store.  Amazon and Microsoft ere helped to grow by their patent licensing revenue.

Now, large companies are stealing patents and inventors can’t stop them from using the technology. These large corporations are choosing to spend years in court in a process called “efficient infringement,” by paying legal fees to harm new innovation by inventors instead of paying fair licensing royalties to grow the new innovation. The inventors have to incur extensive legal fees to protect their patents, which often bankrupts them if they can even afford to initiate a lawsuit.

  While American innovation is faltering to grow here, China has out legislated America, (learning from our mistakes by mandatory licensing and punitive damages on intentional infringement to quickly grow innovation. Their strong patent legislation is growing their economy exponentially. They now have a billion dollar start up every three days in crucial fields like AI, 5G, and other new technologies, while in America we have none.

Instead, we only have large USA corporations stealing innovation from small companies, then bankrupting them in Patent Trial and Review Board (PTAB) trials by judges appointed by the USPTO at a rate of around 86%.

For further information on the patent crisis, you may watch the trailer for the documentary Invalidated: The Shredding of the U.S. Patent System  The full version is available on Amazon and iTunes.

Attempts to undo the damage of the America Invents Act of 2011 and Supreme Court decisions isn’t new.  There were three bills related to patents/inventor rights were introduced in the 115th Congress (2017-2018), but they never got out of committee for a vote on the House floor:

H.R.6557, Inventor Protection Act – “To amend title 35, United States Code, to restore patent rights to inventors, and for other purposes.” It was designed to restore patent protection for inventors by reversing a generation of laws and regulations.  (Sponsored by Rep. Dana Rohrbacher, R-CA)

S.1390, Stronger Patents Act of 2017 – A bill to strengthen the position of the United States as the world’s leading innovator by amending title 35, United States Code, to protect the property rights of the inventors that grow the country’s economy. (Sponsored by Sen Chris Coons (D-DE)

H.R.6264 – Restoring America’s Leadership in Innovation Act of 2018 – A bill “to promote the leadership of the United States in global innovation by establishing a robust patent system that restores and protects the right of inventors to own and enforce private property rights in inventions and discoveries, and for other purposes.” (Sponsored by Rep. Thomas Massie (R-KY)

H.R 5478 is a simple bill that would protect inventor’s rights. The main provisions of H.R. 5478 are:

“SEC. 3. Inventor protections.

(a) Inventor-Owned patent. —Section 100 of title 35, United States Code, is amended by adding at the end the following:

(k) The term ‘inventor-owned patent’ means a patent with respect to which the inventor of the invention claimed by the patent or an entity controlled by that inventor—

(1) is the patentee; and

(2) holds all ‘substantial rights.’

(b) Inventor-Owned patent protections.—Chapter 32 of title 35, United States Code, is amended by adding at the end the following new section:

§ 330. Inventor protections

(a) Protection from post issuance proceedings in the united states patent and trademark office. —The United States Patent and Trademark Office shall not undertake a proceeding to reexamine, review, or otherwise make a determination about the validity of an inventor-owned patent without the consent of the patentee.

(b) Choice of venue. —Any civil action for infringement of an inventor-owned patent or any action for a declaratory judgment that an inventor-owned patent is invalid or not infringed may be brought in a judicial district—”

As the findings cited in the Act state, “Inventors have contributed significantly to innovation in the United States and their continued dedication to inventing and sharing solutions to modern technical challenges is essential for the United States to maintain leadership in the global economy.” It is crucial for inventors to be able to have some assurance that the rights to their patents will be reviewed in a consistent manner, so that they will be able to secure investors and get their product into the marketplace.

Josh Malone, volunteer advocate and inventor of top selling Bunch O Balloons emailed me, “Our patent system was intended to incentivize individual inventors but has recently been captured by trillion-dollar corporations. Small businesses have virtually no chance when it costs tens of millions of dollars and takes a decade or more to bring an invention thief to justice. Inventors need to make their voices heard by contacting their Senators and Representatives to tell them to repair our innovation system by passing the Inventor Rights Act.”

In order to ensure that H.R. 5478 gets out of committee review and is voted upon by Congress, more co-sponsors are needed. Please urge your Congressional Representative to co-sponsor H.R. 5478, which would restore patent protection for inventors and mitigate the laws, regulations, and court decisions that have discouraged innovation by failing to secure to inventors the exclusive rights to their discoveries.

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FAME Develops World Class Manufacturing Technical Talent

February 4th, 2020

Over the past several years, I’ve written nearly 30 articles about programs that address the shortage of skilled manufacturing workers. Last Friday, I had the pleasure of being connected by a friend to interview Dennis Dio Parker, who heads up the Federation for Advanced Manufacturing Education (FAME). The purpose of FAME “is to be the driving force for developing global-best technical talent for manufacturing and other employers of technical workers.  FAME strives to be a powerful conduit between industry and education.”

Dennis told me that according to the 2018 Deloitte and The Manufacturing Institute Skills Gap and Future of Work study. “The Fourth Industrial Revolution is transforming the world of work through artificial intelligence, advanced robotics, automation, analytics, and the Internet of Things. Despite common fears, these technologies are likely to create more jobs than they replace—as illustrated by the tight labor conditions in the US and global manufacturing industry.”

While there was a shortage of about 500,000 unfilled jobs in 2018 due to the skills gap of manufacturing workers, the “study reveals that the skills gap may leave an estimated 2.4 million positions unfilled between 2018 and 2028, with a potential economic impact of 2.5 trillion.” The reason why 2028 is a watershed year for the age of workers is because the last of the Baby Boom generation (1946-1964) and the first of Generation X (1961-1981) would be starting to retire.

Dennis explained that the FAME Advanced Manufacturing Technician Program was an outgrowth of training that Toyota Motor North America provided for employees when they built their new manufacturing plant for vehicles in Georgetown, KY in 1987.  Dennis was one of the first 13 trainers hired to start the training in 1987 and he is the last one still working of the original 13 as he transitions to support transfer of the program after The Manufacturing Institute and Toyota Motor North America announced a partnership to hand-over operation and stewardship of FAME in September 2019.

Dennis added, “Toyota had the advantage of having a culture of continuous improvement, and we continually improve the program. The original vision was to have the training program set up at eight locations where Toyota has a manufacturing presence in North America. We wanted to have other manufacturers as partners in these regions to create a pool of skilled workers for all.  Part of our goal was to help solve the problem of the lack of skilled workers, but the problem is too big and endemic for one program to solve.  There are a lot of good programs, but FAME is different from the others in the way it is structured. This is an employer-led program, not an education-led program.”

When I asked how the training expanded out of Toyota, he said, “In 2005, Ernie Richardson and I made a proposal to Keith Bird, Kentucky Community Technical College Chancellor and Jim Kerley, BCTC President to build a new community college in Georgetown to introduce a new education program. The new campus design was established at NAPSC in 2006 and began operation with the first students in 2007.

With the campus in place, we completed development of the Advanced Manufacturing Technician program establishing an employer group to participate in it. I contacted Ken Carroll, then V. P. of the Kentucky Association of Manufacturers, and worked with him to develop an employer collaborative to support the AMT program. We held the first discussions with other companies in 2008 – 2009, and by October we had formed an organization and elected officers. The first name was the Bluegrass Manufacturing Development Collaboration. (B-MDC)”

He explained why the program stalled, saying, “The Great Recession hit full force in 2009, and we decided to be inactive until business conditions improved. However, Toyota began the first AMT training class in August 2010 at the new campus. By 2011, business conditions had improved to the point that Ken and I decided that it was time to restart the B-MDC. On September 29, 2011, the group met again. We had invited a number of special guests to help relaunch the effort, including Jennifer McNelly, president of the Manufacturing Institute; Wil James, president of Toyota’s Kentucky plant; Dr. Vince Bertram, national president of Project Lead the Way; and Dr. Stanley Chase, a national expert on educational collaboration with business and industry. Since that meeting, the employers group supporting the AMT Program has been in continuous operation.”

Continuing, he said, “Other companies sponsored their first students in the AMT Program with the class of 2012 when 3M, Central Motor Wheel Manufacturing, and GR Spring added their students. In March of 2013 the re-born B-MDC elected new officers, installing Terry McMichael of 3M as President and Danette Wilder of SealingLife as Vice President.”

When I asked how the name was changed to FAME, he said, “The West Virginia Toyota plant started the AMT Program with their college and in close partnership with the West Virginia Manufacturers Association (WVMA). When West Virginia governor announced the start of the AMT Program, he also announced “WV FAME” as the name for the future group of manufacturers which would support AMT in West Virginia.  The “FAME” name was immediately recognized as a powerful promotional identifier for the whole Advanced Manufacturing Career Pathways effort, and with permission of the WVMA, we adopted FAME as the name for North American use, and the B-MDC voted to change the name of the group to KY FAME.”

He added, “On January 14, 2014, Governor Steve Beshear announced the formal incorporation of KY FAME as a state-wide organization with a state board of directors to guide it and direct support of the Kentucky Cabinet for Economic Development. The Kentucky Community and Technical College System adopted AMT as a state-wide degree track, available anywhere that a local FAME chapter formed. a KY FAME chapter.

Dennis expressed that the results of the training were so compelling that the FAME sites became a destination for educators and educational researchers, business and industry, and news organizations. The AMT programs in Kentucky began contributing to research and study efforts, and had over 1000 visitors from across the U.S. and six foreign nations.  It was judged by many national educators and workforce leaders to be the best 2-year technical program in the U.S.  

He said, “The results of the program and the publicity fueled the growth beyond what Toyota ever expected. It became more than what Toyota could effectively support.  Toyota wanted to maintain what they had, but wanted to establish it on a long-term basis. This is what led to the program being transitioned to management by The Manufacturing Institute. In order to help make this transition successful, I am now on assignment by Toyota for the next few years to manage the transition.”

Dennis explained, “There are currently 403 participating companies at 34 community college campuses and four universities in 13 states, and the numbers are growing every year. The reason for the success is that the employer, not the student, is the number one customer and the profoundly higher outcomes of FAME AMT graduates compared to traditional graduates.  The program incorporates the six professional behaviors, the seven essential behaviors, and the five professional practices, all soft skills, in addition to the manufacturing core exercises that are based on five Lean manufacturing practices.  As a result, the program provides globally competitive technicians that support the success of U. S. manufacturing. The program is a core pipeline for students to continue to Advanced Manufacturing Business and Advanced Manufacturing Engineer degrees. In the AMT program, students go to school three days a week, and work for their sponsoring manufacturer two days a week.  The students are paid for their work, and the student makes enough to pay their tuition, so they can graduate without any student debt.”

He elaborated on future strategies by saying, “We want to proactively change the equation for technical career pathways.  We have been partnering with Project Lead the Way (PLTW) to engage PreK-12 students in the career pathway because they have a comprehensive, seamless, and coordinated PreK -12 program nationwide.  Toyota and others are already providing plant tours to high school students in PLTW programs.  Currently, the PLTW national office supports FAME with development or material and other engagement activities and FAME supports the PLTW national office with PR and involvement with activities on a regional basis.

We also partner with the National Alliance for Partnerships in Equity (NAPE) because they focus on encouraging young woman and minorities to choose STEM careers.  Their “Make the Future” program, developed at our request, is connecting girls to manufacturing.”

I told him this topic is dear to my heart as I have been a woman in manufacturing since starting as an engineering secretary at age 18. I concluded the interview by saying it was a pleasure to learn about FAME and hope that it will expand westward in the future all the way to California where I live.

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U.S. Private Sector Jobs Have Declined since 1990

December 10th, 2019

On November 14, 2019, Cornel Law School “announced the launch of a new tool for evaluating the U.S. employment situation and predicting related variables: the U.S. Private Sector Job Quality Index (JQI).” The Index described in the White Paper represents 18 months of research by Daniel Alpert, adjunct professor at Cornell Law School and founding managing partner of the investment bank, Westwood Capital, LLC, Jeffrey Ferry, chief economist at the Coalition for a Prosperous America (CPA), Dr, Robert C. Hockett, Professor of Law at Cornell Law School, and Amir Khaleghi, a Research Fellow at the Global Institute for Sustainable Prosperity (GISP) and a PhD student at the University of Missouri–Kansas City.

At the many economic summits I’ve attended over the past 25 years, I’ve heard economists state that the U. S. is creating more low paying jobs than high paying jobs but there hasn’t been any data available to track this trend on a regular basis.  For the first time, the Job Quality Index provides a tool to measure “desirable higher-wage/higher-hour jobs versus lower-wage/lower-hour jobs.”

The authors define job quality as “the weekly dollar-income a job generates for an employee” They explain that “The JQI is an analysis of weekly incomes earned by the holders of each of the private sector P&NS jobs in U.S. It derives its data from the hourly wages paid, and hours worked by, holders of jobs in 180 separate sectors of the American economy.”

Since the end of WWII, the “percentage of private U.S. jobs in the service-providing sectors increased steadily from approximately 55%” to “around 83.5%” at the end of the Great Recession in 2009.  It has remained flat since that point. However, the paper states that “While service-sector growth as a percentage of all jobs has leveled off, job quality continues to worsen.”

The authors commented, “As weekly earnings of services sector jobs have, to an increasing degree, materially lagged those of jobs in the goods- producing sector (Figure 6), an increase of the percentage of service sector jobs would naturally result in an increase in the number of jobs below the mean, as reflected in the JQI.”

In addition, the authors note that the gap between higher-wage/higher-hour jobs versus lower-wage/lower-hour jobs” has widened almost four-fold to $402 in 2018 from $104 in 1990”  

The paper states, “jobs as tracked by the JQI are defined by reference to data on private sector (nongovernmental) employment provided by third party employers—it does not include self-employed workers. In the first iteration of the JQI being presented in this paper, the index covers only production and nonsupervisory (P&NS) positions, which account for approximately 82.3% of the total number of private sector job positions in the country.”

By the end of 2020, a second index (JQL-2) “will run and be maintained side-by-side with the original JQI-1 index. This will track all private sector jobs, with data commencing in 2000.”

Monthly revisions to the JQI-1 will be published “contemporaneously with the monthly release of U.S. employment data by the BLS (generally on the first Friday of each calendar month. In the future, the JQI will be “presented as a three-month rolling average of monthly readings. This is done to address month over month variability which is too volatile to be a reliable directional trend measure.”

The November JQI stated:  “the U.S. Private Sector Job Quality Index (JQI)® has been revised to a level of 80.39, representing a minor decline of 0.04% from its level one month ago and reflecting a somewhat lower proportion of U.S. production and non-supervisory (P&NS) jobs paying less than the mean weekly income of all P&NS jobs, relative to those jobs paying more than such mean. The mean weekly income of all P&NS jobs as of the current reading (reflecting the level as of October 2019) was $794, a change of 0.9% from its level the month prior.”  The chart released is shown below:

The paper is divided into five parts:

Part I — Need for the JQI: The Unmeasured Problem with American Jobs

Part II — Construction of the JQI: Capturing and Tracking the Data (explains the development technical detail, setting forth the assumptions and algorithms inherent in its generation)

Part III — Applying the JQI: Illuminating Areas of Confusion in Economic Transmission (discusses the relationship and potential forecasting usefulness of the index in connection with other economic data)

Part IV — Further Developing the JQI: What the Future Holds for the Index (discusses future maintenance and expansion of the index)

Part V — Conclusion: An Index for our Time

Among other things, Part III discusses “The relevance of the resulting “Phillips Curve,” relating lower unemployment to higher levels of inflation…[which] remains—in various modified forms—part of central bank policy consideration to this day.”

It also discussed the impact of the JQI on household incomes and consumption with regard to the U.S. Balance of Trade in Goods. The authors comment, “…as American consumption has continued to rise, the goods consumed had to be produced by someone—even as U.S. goods production jobs plummeted. As evidenced by the U.S. balance of trade over the past several decades, goods consumed by Americans at the margin came increasingly to be manufactured abroad”

They later comment, “The decline in U.S. job quality over the past three decades is linked substantially to a decline in goods-producing jobs.”

 Some of the findings of the research that were of particular interest to me in Part III were:

  • “The JQI’s definition of high-quality jobs (those above mean weekly earnings) provided an average of 38.26 hours of weekly work at year-end 2018, compared with low quality (those below the mean) which provided 29.98 hours.”
  • The percentage of goods producing jobs as a percentage of total private sector jobs dropped from 25.6% in 1990 (down from a high of 43% in 1960) to 16.4% in 2018.

The researches commented, “Surprisingly, the data as analyzed with the JQI also tend to predict the performances of many other salient metrics of the national economy and—in the end—financial markets too…The JQI can significantly improve decision making of policymakers as well as better-inform participants in the financial markets.”

In their Conclusion, the authors remind us of the fact “that the US manufacturing workforce has declined dramatically in the past three decades.” Between 1970 and 1990, the decline was gradual, going down from “17.8 million manufacturing workers” to “17.7 million.” By the year 2000, “it was down 2.4 percent to 17.3 million manufacturing workers.” In the next decade, “manufacturing employment fell off a cliff. By 2010, manufacturing employment was down a shocking 33.2 percent at 11.5 million. Since 2010, the figure has crept up only somewhat, to reach 12.8 million in May 2019.”

 “Meanwhile, the total US working population has grown dramatically over those years. In 1970, manufacturing workers accounted for 22.6 percent of total US civilian employment. As of May 2019, they accounted for just 8.2 percent of the total.”

They comment, “An important question surrounding the decline of manufacturing is whether those leaving manufacturing are transitioning into better or worse jobs.  After building the new Job Quality Index, “the answer is that lost manufacturing jobs were chiefly replaced by lower-wage/lower hours service jobs.”

The White Paper confirms my research in writing three books and hundreds of articles in the past ten years — losing millions of manufacturing jobs between 2000 – 2010 resulted in a decline in the middle class because manufacturing jobs are the foundation of the middle class. Without a strong middle class, we risk becoming a nation of “haves” and “have nots.” I hope the Job quality Index will wake up more economists, Congressional representatives, and employees of government agencies to the dangers of this trend before it’s too late. 

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China RX Exposes Risks of Dependence on China for Medicines

November 26th, 2019

After her presentation at the Made in America trade show last month, I met Rosemary Gibson, co-author with Janardan Prasad Singh of China RX, published in 2018. China RX is an expose of the pharmaceutical industry just as Death by China by Greg Autry and Peter Navarro was an expose of the general manufacturing industry. China RX describes how the pharmaceutical industry has transferred the manufacturing of generic drugs to China, which has resulted in great risk to the health of Americans as well as a substantial risk to our national security.

If you take prescription drugs, over-the-counter medication, or vitamins, then this book is a must read for you. I was horrified to learn that both of my blood pressure medications (Amlodipine and Lisinopril) are produced in China. Would you believe that 80% of all ingredients of pharmaceuticals and 100% of ascorbic acid are now made in China according to Ms. Gibson’s presentation.  We are talking about antibiotics, birth control pills, antidepressants, pain relievers, not to mention drugs that treat HIV/AIDS, cancer, bipolar disorder, and epilepsy. The list even includes antidotes to Ebola and Anthrax. Doesn’t that frighten you?

The authors immediately capture your attention with the story of one of the victims of the contaminated heparin blood thinner scandal of 2008, Bob Allen, MD.  Heparin is routinely given to patients to prevent the formation of blood clots in the blood vessels, but in his case, the contaminated heparin caused blood clots leading to such a massive heart attack that his heart completely failed, and they had to remove his heart and hook him up to an artificial heart until he could have a heart transplant. Unfortunately, the heart transplant three months later didn’t succeed, and Dr. Allen’s death became another statistic of the 246 reports “made by healthcare professionals to the FDA about deaths associated with heparin from January 1, 2008 to May 31, 2008.” However, “As with all reports it receives, the agency makes no claim of certainty that a death was caused by a drug.”  

How did the pharmaceutical industry start sourcing pharmaceuticals in China? In Part II, “Pivot East:  How it Happened,” the authors document the complex chain of circumstances that led to China becoming a major source of pharmaceuticals.  The story is similar to what was described by the authors of Death by China. Once a patent for a drug ends, the manufacture of generic versions to that patented drug begins. Competition reduces the price of the drug sometimes to the point that the original manufacturer can no longer compete in producing the drug. In order to retain any market share, the original manufacturer may seek to reduce manufacturing costs by subcontracting the manufacture of the drug to an outside source.  Due to lower costs of labor and other costs of doing business, China became the source of choice. This outsourcing benefitted American pharmaceutical companies to begin with, but in the long-run has led to the decline of the American pharmaceutical industry resulting in closed plants and loss of jobs.

The authors point out that corporate America, and particularly multinational corporations, focus on short-term, profit-driven outcomes whereas China focuses on long-term outcomes. When American companies source production of goods or pharmaceuticals, they are essentially transferring the technology and know-how to Chinese vendors. The outcome for such pharmaceutical companies as Baxter, GlaxoSmithKline, Johnson & Johnson was that their Chinese vendors began to produce their own brands to compete with their former customers. As they have done with other manufactured goods, Chinese pharmaceutical companies began to flood the U. S. market with lower cost drugs driving prices down to the point that American companies stopped producing certain medications. For example, the authors state that the last plant making aspirin in the U. S. closed in 2002.

You might be asking yourself, why doesn’t the Federal Drug Administration put a stop to importing drugs and medicines produced in China? In Chapter 9, “Are Drugs from China Safe,” and Chapter 10, “Made in China, Sue in America? Good Luck” the authors outline the complex factors that prevent the FDA from preventing this from happening. 

In chapter 11, “The Perfect Crime,” the authors state: “A poorly made or deliberately contaminated prescription drug is a perfect crime. It is hard to detect. Manufacturers keep the public in the dark. Regulators are tight-lipped so they don’t offend manufacturers. Perpetrators are rarely caught. Most victims are unaware.” They outline how the underfunding of the FDA is a major source of the problem. In fact, in 2014, there were “Only two full-time FDA staff members are assigned to work in the agency’s office in China to inspect drug-manufacturing facilities…”  While funding has been increased since then, the authors conclude that “outsourcing of America’s medicine making is so complex it seems impossible to ensure that they are safe.”

Chapter 12, asks the question “Where does the Secretary of Defense procure his medicine?  You would hope that the answer would be made in America. The authors write, “They must be made in the United States or in an approved country according to the Federal Trade Agreement Act (TAA) of 1979. China is not a designated country. The TAA allows for exceptions when no other source is available…” Thus, when the authors contacted the Pentagon to see which drugs were made in China due to lack of availability, “A spokesperson replied that the department has had to buy thirty-one prescription drugs from China.” The same is true for the Veterans Administration that provides healthcare for all of our veterans and their families.

In chapter 13, The authors do an outstanding job of showing the danger to our national security. by being dependent on China as a source of vital medicines and medical devices. They quote Dr. Goodman, dean of the Milken Business School of Public Health at George Washington University, saying, “It is a matter of national security that we have the essential drugs we need…I think it is time for an examination, for some of the most critical drugs, and it’s not just drugs, medical supplies, masks are all made overseas. Do we need to think about having at least some resilient manufacturing capacity built in this country?”

The book concludes with the authors’ ten-step plan to bring the pharmaceutical industry home. You need to read this for yourself.  Relying on China for the bulk of our medicines and medical supplies makes about as much sense to me as if we had bought these products from the Soviet Union during the Cold War. China has not become the more market-oriented or more rule of law country that some hoped would happen. They have changed from producing commodities to going after advanced technology production in pursuit of their plan to become the Super Power of the 21st Century. China could bring the U.S. to its knees and achieve their goal by simply disrupting the supply of critical drugs to America. Medicines are essential to life. Think of what could happen if we had an epidemic, and China withheld the antidote. Congress and the White House must take the steps the authors recommend to ensure the health of Americans and our national security  

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Women Lead Made in America

November 12th, 2019

Few people are aware that more than 11.6 million firms are owned by women, employing nearly 9 million people, and generating $1.7 trillion in sales as of 2017.  In fact, women run businesses are helping to lead a resurgence in American manufacturing.

Many women-run businesses participated as exhibitors in the Made in America show, and as I mentioned in my last article, I participated as a panelist for the Women Leading America Made session that featured five women running their own American-made businesses. Moderator Rose Tennent asked each of us to briefly describe our businesses.

Barbara Creighton, CEO of Sarati International, Inc. started her company in 1992 in south Texas to make private label prescription drugs, proprietary drugs, and skin care products. She said, “We develop custom formulations and then private label them. We make products like you would purchase, and we private label them. We are woman owned and woman run.”

Beverlee Dacey, owner of Amodex Products, said that her parents started the company in the early 1970s, and now she runs it.  “We make a soap-based product that is an ink and stain remover liquid solution and do our own manufacturing in Bridgeport, CT. Amodex is the only stain remover recommended by the manufacturer of Sharpie to remove Sharpie ink from anything.”

Connie Sylvester said, “I am an inventor and founder of two companies, Water Rescue Innovations and Mommy-Armor USA.  I founded my first company six years ago in Duluth, MN to make the ARM-LOC water rescue device that slides onto the victim’s forearm and locks into place so that a rescuer can pull the victim to safety.  I sell to a male-dominated industry of first responders, fire-fighters, police, and rescue squads. I’m often the only woman telling men how to rescue people.”

She shared how she started her second company, Mommy Armor USA. On February 14, 2018, after she dropped off her son at school, she got a text message saying there was a school shut down due to a shooter. She was thankful that it wasn’t at her son’s school, but her heart broke for the 17 parents that lost their children at Parkland in Broward County, Florida.  She said, “There was a problem, and I came up with a solution. I had some bullet proof material and suggested to my son that I could make a bullet-proof backpack, but he said they had to leave their backpacks in their lockers. I asked what they got to take to class, and he said they get to take their 3-ring binders. My other son said they get to take their daily planners. So, I got the idea of making a bullet-proof cover for the 3-ring binder and the daily planner.”

She then demonstrated how the bullet proof daily planner could be attached to the 3-ring binder and how it could be used to shield your body like armor. She is just launching the product in time for Christmas.  She has the Mommy Armor fabricated by a company in the hills of the Appalachian Mountains, Capewell Aerial Systems LLC.

Leigh Valentine, founder of Leigh Valentine’s Beauty said that she went through a terrible divorce, lost everything, slept on the floor, and was on welfare for a while. Then, the Lord gave her an incredible idea for a non-surgical face lift product made from plant extracts that dramatically firms skin and takes away wrinkles.  She was on the QVC shopping network for 14 years and sold over 40,000,000 products.  She said many people have told her she could save money by buying from China, but she said, “All of my products are made in America, and I try to buy as much as I can in America.”

I shared that when I started my sales agency 34 years ago, I chose to only represent American manufacturers.  I was a woman in a man’s world because I started out selling castings, forgings, and extrusions. No buyer or engineer I saw had ever been called on by a woman.  I visited all of the companies I represented and learned everything I could about their manufacturing so I would be informed. When I saw what was happening to manufacturing and how it was being decimated, I started writing blog articles and reports and then wrote my book. Can American Manufacturing be Saved” Why we should and how we can that came out in 2009. A second edition came out in 2012, and I have written over 300 articles in the past ten years. We have saved American manufacturing, and now we need to rebuild it. I showed everyone my latest book, Rebuild Manufacturing – the key to American Prosperity.

Rose asked us to what message we would give to a woman who has an idea for a product or who has already started her own business.  Leigh said, “You really have to fight to bring your product to market. I partnered with some people that I wish I never had partnered with.” She would advise women that if they need a partner “be careful to pick a partner that has the same values and vision you do. They will steal from you and lie.” In the end, it cost her $6 million to end the partnership.

Beverlee said, “When you run a company, don’t think you are ever going to reach an equilibrium where you don’t have problems. Every single day there are stress and problems. Then you realize that the problems don’t go away, they just get bigger and worse.  It is normal.  It is part of what you do when you run a company. The other lesson I have learned is don’t grow too fast. There is only so much you can do and only so much you can do well. We are only a five-person company. When we got picked up by Lowes, we made the decision not to go with Home Depot because we wanted to be a good partner to Lowes.”

Barbara said, “Don’t believe all the lies that are being sold to young people. There is no a glass ceiling. Men created the glass ceiling to keep women down. I have never felt held back by a glass ceiling. I was the first women on the west coast to sell chemicals, and the first women in land development. The ceiling is only created by you.”

Connie said, “Don’t set the bar too low and never give up.”  She did high jumping like her brothers and they never lowered the bar for her even though she is only 5 ft. 3 in.  She actually coached track and field for five years.

I said that I would advise a woman to never stop learning. “I recently got my certificate in Lean Six Sigma to be of more service to my customers. Service is all I have to offer — service to the companies I represent and service to my customers.  When I started my company, I chose a motto:  you achieve your goals by serving others.”

Rose commented that there seems to be more comradery at this trade show and asked us to share what we thought about the show.

 Leigh said, “It is such an honor to be here. I am thrilled and honored to be here. This is a movement, and we’ve got to stick together and support each other’s businesses.”

Connie said, “This is like a family. I was actually at another Expo here and saw an announcement on the TV in my hotel about this show, and I knew I had to be here.  When I walked the aisles, I knew I had found my people. Everyone of these people know what it takes to make products in America.  We could have hit the easy button and made things cheaper in other countries, but we chose to make our products in America.”

Barbara said, “In this incredibly divisive world, we need to help one another. I am extremely excited about being able to share joy. I just try to lift others up. We are Americans and are proud to be Americans, and we want to have joy in a country that has given us amazing opportunity.”

Beverlee said, “The Made in America movement has been around for awhile now, but what I have enjoyed the most is that for the first time we have a “hubable” wheel where there were a lot of silos. All of us here are together in this.  It’s not a trade show, it’s a forum.”

I said, “This show is a dream come true for me. Most people don’t realize that manufacturing is the foundation of the middle class. We lose manufacturing and we lose the middle class. We’ve had wage stagnation for 20 years, and my children aren’t as well off as I was. We have to get the message across to our children and grandchildren of how important it is to make things in America again. I heard it said that there are only three ways to create tangible wealth: “Grow it, mine it, or make it.” We need to create wealth for our country by making things in America so we can have a safe and free country. After our panel session ended, we said that we would look forward to seeing each other again at the 2020 Made in America Show. We know it will be even bigger and better, so don’t miss it.

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Made in America 2019 Trade Show Sparks New Revolution

October 22nd, 2019

It was a dream come true to see so many innovative companies making products in America when I attended the first Made in America trade show that was held October 3-6th in Indianapolis, IN. The event began during Manufacturing Week declared by President Trump and the show opened to the public on the national Manufacturing Day. Not only was it the largest-ever public showcase of American made products, the focus was different than any other trade show I’ve ever attended. 

My plane from San Diego arrived too late Thursday to attend the gala kickoff party where the band Big & Rich and special guest Ted Nugent entertained the audience. While at the show, John Rich announced his generous donation of over $50,000 to Folds of Honor, a nonprofit organization that provides educational scholarships to families of military servicemen and women who have fallen or been disabled while on active duty in the U.S. Armed Forces.

Fox News sent Fox & Friend’s correspondent, Carley Shimkus, to report live from the show on Friday and Saturday, and she did an update every hour (watch the videos at foxnews.com).

On Friday, opening ceremonies began at 9:00 AM, an hour before the show opened to the public. After prayer was offered, a color guard presented the flag for saluting, and the national anthem was sung anthem, the audience was welcomed by show’s founder and chairman, Don Buckner, and COO, Brad Winnings, and Indianapolis Mayor Joe Hogsett welcomed everyone.

Then, Lloyd Wood, Deputy Asst. Secretary for textiles, Consumer Goods and Materials made brief comments on behalf of the Trump Administration, noting that 500,000 manufacturing jobs have been created since the beginning of 2017, there are 7,000,000 current job openings, and 300 companies of the National Council for American Workers have signed a pledge to expand apprenticeships  He also mentioned that President Trump just signed trade agreement with Japan and is working on trade agreement with United Kingdom.

Economist Stephen Moore, was the featured pre-show speaker. Highlights of his comments were:  average income has increased by about $5,000 per year since 2017, unemployment is down to 3.4%, and Black and Hispanic unemployment is at record low.  Federal tax revenue was higher than any previous year; regulations are down by 34%, yet air quality is better as CO2 emissions have been reduced by 70-80%. Also, for the first time, we are a net exporter of oil and gas.  

Radio talk show host Mike Gallagher, one of the most listened-to radio talk show hosts in America, broadcast his show Friday at the booth of Mike Lindell of My Pillow fame. Mr. Lindell had a booth for his new venture, My Store, which will feature only American-made products for online sales. He was one of the guests on the show along with economist Stephen Moore and Mike Lindell.

After the show opened, there was a simultaneous schedule of speakers from 11:00 AM to 3:00 PM.  Harry Moser, founder and president of the Reshoring Initiative started off the sessions with “What’s Happening with Reshoring.”  By using the TCO Estimator, nearly 3,000 companies have reshored manufacturing to America since 2010 creating nearly 800,000 jobs.  Next, marketing guru, Steve Schwander discussed “How to listen to the customer.”  After lunch, the afternoon sessions were “Protecting your IP from abuse in China” by Amy Wright and “Stay out of trouble when making Made in the USA claims” by Russell Menyhart. Mark Andol, CEO of General Welding & Fabricating, concluded the afternoon session by telling how his Made in America Store has reached big milestones in its mission to save and create American jobs by boosting US manufacturing for nearly a decade. His store in Elma, NY features over 9,000 Made in USA products.

I didn’t spend my time listening to these presentations as I wanted to see the displays by exhibitors.  Outside of the Consumer Electronics Show in Las Vegas, I’ve never been to a show with so much variety of consumer products.  Of course, most of the products exhibited at CES are made offshore, whereas all of these products were made in America.  It was a pleasure to see American made bedding, mattresses, furniture, rugs, draperies, flatware, dinnerware, cook ware, cabinets, and other kitchen goods. These are all industries that some said were lost forever.  There were also bicycles, sports equipment, tools, and toys.  It was especially nice to see Made in America apparel and make up.

While a few of exhibitors probably exhibit at county fairs for their homemade crafts and food stuffs like candy, popcorn, pickles, and sausage, other exhibitors were the more traditional plastic, rubber, and metal fabricators that exhibit at shows like WESTEC, FABTECH, and the regional Design2Part shows. There were also companies that probably don’t exhibit at traditional trade shows, including a company that builds roller coasters.  With about 300 exhibits, it took me both days to completely walk the show as I stopped to talk to so many exhibitors. 

While Friday’s show ended at 5 PM for the public, it was followed by a dinner and speeches for exhibitors, sponsors, and VIP’s.

First, Don Buckner shared his story of how and why he started the Made in American show.

Mr. Buckner said, “I started a company in my garage 20 years ago and recently sold it.  Now I have the resources, capitol, and desire to finally do something.  We decided to make a difference. So, we came up the idea of a trade show in Indianapolis. We rented the Indianapolis convention center for the first week of October to bring 700-800 manufacturers and celebrate U.S. manufacturing in a way that’s never been done before. If you draw a circle around Indianapolis, about a 200-mile radius, probably about half of our manufacturing is in that circle. And the other thing is the heartland of this country truly does believe in buying American-made products being pro union, pro-labor and blue collar.  The name and brand of Made in America has been around for over 100 years. It has value and means quality.  According to Consumer Reports, 80% of Americans still want to buy an American made product, and of those 80%, 60% of those are willing to pay a premium for an American product….” 

Next, Wahl Clipper Corporation, the household name in grooming, presented a $75,000 check to Jeremiah Paul, spokesperson for Wounded Warriors for the Wounded Warrior Project.

Hernan Luis y Prado, founder and CEO, described Workshops for Warriors (WFW), which is a GuideStar platinum-rated nonprofit that provides training for veterans, wounded warriors and transitioning service members to fill America’s void of qualified CNC machining, 3-D printing, welding and advanced manufacturing workers. Since WFW is located in San Diego, I’ve written three articles in the past to support his mission and goals.

Alfredo Ortiz, President and CEO of Job Creators Network, briefly explained that JCN is a nonpartisan organization whose mission is to educate business leaders, entrepreneurs, and employees and provide them “with the tools to become the voice of free enterprise in the media, in Congress, in state capitals, in their communities, and their workplaces—allowing them to hold politicians accountable to job creators and their employees.”

Paul Wellborn, President and CEO of Wellborn Cabinets, accepted the award for American manufacturer of the year on Friday night because he had to leave the show to attend the wedding of his grandson on Saturday. A whole Made in America kitchen was on display at his company’s booth. The award categories highlighted rebuilding America’s manufacturing workforce through reshoring and innovations in manufacturing techniques. The rest of the awards were presented on Saturday night.

My Pillow’s founder and President, Michael J. Lindell, ended the evening with his personal story of going from being a crack addict to becoming a multimillionaire business owner thanks to the intervention of friends and help from God. The evening event lasted until 9:30 PM and ended with a closing prayer.

There is no way to do justice to the show in one article, so my next article will cover day two of the show.

One of the video promos for the trade show said, “There was a time not too long ago when a little elbow grease and a whole lot of pride defined American made.  We were industrialists driven by determination and innovation. We set the bar for quality and ingenuity, generation after generation. Something changed — Technology, foreign influence, loss of respect for the American worker.  It cost us our jobs, factories, communities, our homes. Some called it a natural evolution.  We call is the spark of a new revolution. We are redefining the next chapter in American made history bringing prosperity to the red, white, and blue behind every man and women committed to returning our country back to its glory days of manufacturing.  We invite you to join us in this monumental revolution.  The power of change belongs to us…” 

I believe this trade show did become the spark of a new revolution and I am joining it. I made it my goal ten years ago when I published my first book, Can American Manufacturing be Saved?  Why we should and how we can to do everything I could for the rest of my life to first save and then rebuild American manufacturing to create prosperity. I am glad I am no longer a lone voice in this cause. Please join us.

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Baldwin-Hawley Act Would Fix Overvalued U.S. Currency Problem

September 3rd, 2019

The Baldwin-Hawley Senate Bill, S.2357, titled the “Competitive Dollar for Jobs and Prosperity Act” was introduced by Sen. Tammy Baldwin (D-WI) and Josh Hawley (R-MO) on July, 31, 2019. The purpose of the Bill is “To establish a national goal and mechanism to achieve a trade-balancing exchange rate for the United States dollar, to impose a market access charge on certain purchases of United States assets, and for other purposes.”

This Bill is the legislative vehicle for the Market Access Charge (MAC) first proposed in a paper titled, “The Threat of U.S. Dollar Overvaluation: How to Calculate True Exchange Rate Misalignment & How to Fix It” released on July 11, 2017 by the Coalition for a Prosperous America and written by Michael Stumo (CEO), Jeff Ferry (Research Director) and Dr. John R. Hansen, a former Economic Advisor for the World Bank, CPA Advisory Board member, and founding  Editor of Americans Backing a Competitive Dollar (ABCD).

The paper explained the problem of the dollar overvaluation, showed how to accurately calculate the dollar’s misalignment against trading partner currencies, and proposed a solution to this serious threat to America’s future by means of a Market Access Charge (MAC). Dr. Hansen’s proposal was “to initiate the MAC with a 0.5% charge “on any purchase of U.S. dollar financial assets by a foreign entity or individual…As a one-time charge, the MAC will discourage would-be short-term investors, many of whom hold dollars or dollar-denominated securities overnight or even for minutes for the sake of a tiny profit.

The MAC rate would operate on a sliding scale, geared to the value of the trade deficit as a percentage of GDP. The MAC tax would rise if the trade deficit rose, and fall as the trade deficit falls… Most importantly, the MAC would have a substantial impact on the dollar’s value, moving it gradually and safely to a trade-balancing exchange rate and keeping it there, regardless of what other countries do. If the trade deficit goes to zero, so would the MAC.”

In an email to supporters on August 13, 2019, Dr. Hansen wrote, “A major milestone has just been reached in the battle to kill the U.S. trade deficit, stop the offshoring of U.S. industry, and put millions of Americans to work at well-paying jobs…The bill’s presentation to the Senate is indeed a major milestone – but only one of many that lie between where we are today and the bill’s ultimate passage. You support and advice would be most welcome as the process moves forward.”

The Bill’s summary cites the following ”Findings” by Congress:

 “(1) The strength, vitality, and stability of the United States economy and, more broadly, the effectiveness of the global trading system are critically dependent on an international monetary regime of exchange rates that respond appropriately to eliminate persistent trade surpluses or deficits by adjusting to changes in global trade and capital flows.

(2) In recent decades, the United States dollar has become persistently overvalued, in relation to its equilibrium price, because of excessive foreign capital inflows from both public and private sources.

(3) Countries with persistent trade surpluses maintain or benefit from undervalued currencies over a long period of time. As a result, those countries overproduce, underconsume, and excessively rely on consumers in countries with persistent trade deficits for growth. Those countries also export their unemployment and underemployment to countries with persistent trade deficits.

(4) Countries with persistent trade deficits, including the United States, absorb the overproduction of countries with persistent trade surpluses, thereby reducing domestic wages, manufacturing output and employment, economic growth, and innovation.

(5) The United States possesses fiscal and monetary tools to pursue national economic goals for employment, production, investment, income, price stability, and productivity. However, exchange rates that do not adjust to balance international trade can frustrate the achievement of those goals. The United States does not have a tool to manage exchange rates in the national interest.”

The Bill defines a “United States asset” as “(i) a security, stock, bond, note, swap, loan, or other financial instrument—

(I) the face value of which is denominated in United States dollars;

(II) that is registered or located in the United States; or

(III) that is an obligation of a United States person;

(ii) real property located in the United States;

(iii) any ownership interest in an entity that is a United States person;

(iv) intellectual property owned by a United States person; and

(v) any other asset class or transaction identified by the Board of Governors of the Federal Reserve as trading in sufficient volume to cause a risk of upward pressure on the exchange rate of the United States dollar.

It excludes:  “(i) a good being exported from the United States; or (ii) currency or noninterest bearing deposits.”

In the above mentioned paper, Dr. Hansen proposed that the MAC to be “a 0.5% charge on any purchase of U.S. dollar financial assets by a foreign entity or individual…As a one-time charge, the MAC will discourage would-be short-term investors, many of whom hold dollars or dollar-denominated securities overnight or even for minutes for the sake of a tiny profit. The MAC rate would operate on a sliding scale, geared to the value of the trade deficit as a percentage of GDP. The MAC tax would rise if the trade deficit rose, and fall as the trade deficit falls…”

The Balwin-Hawyley Bill stipulates that “On and after the date that is 180 days after the date of the enactment of this Act, there shall be imposed a market access charge on each covered buyer in a covered transaction…The Board of Governors of the Federal Reserve System shall establish and adjust the rate of the market access charge at a rate that— (A) achieves a current account balance not later than 5 years after the date of the enactment of this Act; and (B) maintains a current account balance thereafter.”

However, under the “ALTERNATE INITIAL MARKET ACCESS CHARGE” clause, “If, on the date that is 180 days after the date of the enactment of this Act, the Board of Governors has not established the initial rate for the market access charge, the initial market access charge shall be established at the rate of 50 basis points of the value of a covered transaction.”

The bill concludes with a description of how the Market Access Charge should be charged, collected, and reported to the U.S. Treasury.

At the time of the CPA paper cited above, the “The U.S. dollar was calculated at 25.5% overvalued compared to itsFundamental Equilibrium Exchange Rate (FEER). However, in an article titled “Why We Need Baldwin-Hawley Currency Reform Now,” by Jeff Ferry, CPA Chief Economist, published on August 21, 2019, he writes that the Coalition for a Prosperous America estimates “the dollar is overvalued today by 27 percent.” He points out that” that an overvalued currency makes it harder for a nation’s exports to compete in world markets and easier for foreign imports to take share in its domestic market.”

Mr. Ferry explains that “…overvaluation undermines our industrial base, makes our agricultural goods less competitive and tilts the income distribution in favor of the top 10 percent. Instead of an economy built on production and employment, we get growth built on consumption and debt. In fact, the only sector that favors overvaluation is the financial sector, because it helps Wall Street bankers sell stocks and bonds around the world. On Wall Street they like to call overvaluation the ‘strong dollar.’”

He concludes by saying that “Voltaire said the world is like a giant watch: it runs automatically according to an internal mechanism. If one of the settings is wrong, the watch won’t run properly. Our economy is a huge $21 trillion watch. If an exchange rate is set too high, a national economy runs down. If an economy doesn’t invest enough in its own industry, it becomes less competitive…On the international side, the US economy has been underproducing and overconsuming for some 40 years and adjustments are needed. Right now, Baldwin-Hawley is the most crucial adjustment Congress could enact.”

As a sales representative for American manufacturers, I can testify that America’s manufacturing industry is hurt by the overvalued dollar.  It hurts the ability for American companies to export products that are competitive in the world marketplace. It even hurts the ability for American manufacturers to compete against the low prices of Chinese imports in the domestic market.  I firmly endorse the passage of this critically needed bill by Congress in this session to reduce the U.S. dollar’s overvaluation, discourage unwanted investment in the dollar, and significantly reduce America’s trade deficit.

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