Manufacturing Generates Exports

June 23rd, 2020

The third reason why manufacturing is important is that the United States is still a top leader in generating manufacturing exports. The U.S. was the world’s largest exporter until 1992, when Germany took over this position. The U.S. maintained a position as the second-highest exporter, until China surpassed it in 2008. Germany remained number one until 2009, when China surpassed it to become the world’s top exporter. The U.S. overtook Germany as the second-highest exporter in 2014. The latest data for world exports is from 2019 when China’s exports totaled $1.8 trillion, down from $2.49 trillion in 2018; the U.S. exports totaled $1.24, down from $1.66 trillion in 2018, and Germany’s exports were $1.12, down from $1.55 trillion in 2018.

According to a 2020 report on exports: ”The following export product groups categorize the highest dollar value in American global shipments during 2019. Also shown is the percentage share each export category represents in terms of overall exports from the United States.

  1. Machinery including computers: $205.9 billion (12.5% of total exports)
  2. Mineral fuels including oil: $199.7 billion (12.1%)
  3. Electrical machinery, equipment: $173.2 billion (10.5%)
  4. Aircraft, spacecraft: $136 billion (8.3%)
  5. Vehicles: $133 billion (8.1%)
  6. Optical, technical, medical apparatus: $90.8 billion (5.5%)
  7. Plastics, plastic articles: $64.9 billion (3.9%)
  8. Gems, precious metals: $59.6 billion (3.6%)
  9. Pharmaceuticals: $53.6 billion (3.3%)
  10. Organic chemicals: $39.3 billion (2.4%)

America’s top 10 exports surpass well over two-thirds (70.3%) of the overall value of its global shipments.”

Manufactured goods “make up more than 66% of U.S. exports…One-third of exported goods are capital goods double the level of 20 years ago… Only 12% of U.S. exported goods are consumer goods…Just 8% of exported goods are foods, feeds, and beverages ($131 billion). The big three are soybeans ($20 billion), meat and poultry ($20 billion), and corn ($9 billion).”

According to the U.S. Small Business Administration, small- and medium-sized enterprises (SMEs) comprised 97 percent of all identified U.S. exporters, generated 64 percent of net new jobs between 1992 to 2009, and represented 31 percent of U.S. export value in 2008. About 65 percent of all U.S. exports come from small businesses with fewer than 20 employees.

Exports of manufactured goods is important to the economies of most states – even in those areas where manufacturing has declined as a portion of the Gross State Product (GSP).  

The top five U. S. export markets:

  • Canada
  • Mexico
  • China
  • Japan
  • United Kingdom

Both President Bush and President Obama had the goal of doubling U.S. exports during their administrations. President Obama even established the Export Promotion Cabinet by Executive Order 13534 On March 11, 2010 and tasked them with a plan to achieve the goal of doubling U.S. exports in five years that he had presented in his 2010 State of the Union address. 

The National Export Initiative (NEI) Executive Order had five components: improve advocacy and trade promotion, increase access to export financing, remove barriers to trade, enforce current trade rules, and promote strong, sustainable, and balanced growth.

The NEI identified eight priorities for the plan, and the Export Promotion Cabinet developed recommendations to address each of these priorities, which covered all five components, cut across many federal government agencies, and focus on areas where concerted federal government efforts can help lift exports.

It was no surprise to me that the plan to double exports in five years was unsuccessful because we are fighting against the predatory mercantilism of countries such as China, India, and Japan. The biggest problem is that the United States is no longer the manufacturing source for consumer and household goods and commodities that it once was. American brands such as IBM, General Electric, and Maytag were known worldwide for their quality and innovation. These types of products are now being made in Asia, mostly in China, and imported by the United States and other countries for their consumers to buy rather than being manufactured in the United States for export worldwide.

The majority of manufacturers that were able to survive the great stampede to offshore manufacturing to China don’t produce a finished product; they are the Tier 2, 3 and 4 suppliers that produce components, parts, and assemblies for Original Equipment Manufacturers. Thus, they don’t have a product to sell for export.  I have been representing this type of company as a manufacturers’ sales rep for over 30 years. Most of these companies do not have engineering staff to design a complete product and don’t have the capability to market a product internationally. 

I’ve been working with inventors and entrepreneurs of start-up companies for years to help them select the processes and sources for their new products.  As a director on the board of the San Diego Inventors Forum, I give a presentation of how to select the right processes and sources for a new product as part of our annual curriculum at our monthly meetings in our program of helping inventors go from product design to market.

If we want to increase our manufacturing exports, we need to help inventors and entrepreneurs develop their products and get them to market.  Additive manufacturing has enabled inventors and entrepreneurs to produce low cost prototypes rapidly here in the U.S. The biggest hurdle is to fund the tooling needed to manufacture their products at production volume levels. For advanced technologies that require research and development, there are government funded Small Business Research Grants that enable small start-up companies boot strap their product development.  Perhaps, we can create a grant program for inventors and entrepreneurs to fund the tooling and initial production runs of new products. 

Remember, Albert Einstein is widely credited with saying, “The definition of insanity is doing the same thing over and over again, but expecting different results.” We aren’t going to increase exports by doing the same things we have been doing for the past 20 years.

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Manufacturing Jobs Pay Higher Wages than Retail or Service Jobs

June 9th, 2020

Continuing my series on why manufacturing is important to America, the second reason is that wages and benefits for manufacturing jobs are approximately 21 percent higher than for non-manufacturing jobs.

As manufacturing jobs have declined over the past 40 years, the difference between the lowest personal income and highest personal income has steadily grown wider.

This difference was projected to get even worse according to data from the U.S. Department of Labor Occupational Outlook for 2018-2028. Employment growth was projected to continue to be concentrated in the service-providing sector of the economy.

  • “The service-providing sector as a whole will grow at a projected rate of 0.6 percent annually, slightly faster than the annual rate of 0.5 percent for industry employment overall. This growth is projected to add more than 7.6 million jobs, resulting in 136.8 million jobs in the service-providing sector by 2028. After declining slightly from 2008 to 2018 (-0.3 percent annually), the goods-producing sector is expected to change little from 2018–28, with an annual growth rate of 0.1 percent.
  • The sectors projected to experience the fastest annual employment growth are health care and social assistance (1.6 percent), private educational services (1.2 percent), and construction (1.1 percent). These three sectors alone are projected to add more than 4.6 million jobs by 2028—including 3.4 million new jobs projected in healthcare and social assistance.”

In an opinion article in IndustryWeek magazine, John Madigan, a consultant with Madigan Associate, wrote:

“Jobs paying $20 per hour that historically enabled wage earners to support a middle-class standard of living are leaving the U.S. Public sector aside, only 16% of today’s workers earn the $20-per-hour baseline wage, down 60% since 1979.  Service and transportation jobs, per se, cease to exist in the absence of wealth. Rather, they exist and thrive as by-products of middle-class incomes buying products and services.” (source)

According to Facts about Manufacturing by The Center for Manufacturing Research of The Manufacturing Institute, “In 2018, the average manufacturing worker in the United States earned $87,185 annually, including pay and benefits. The average worker in all nonfarm

industries earned $68,782.  Looking specifically at wages, the average manufacturing worker earned more than $27 per hour, according to the latest figures, not including benefits.”

According to the IndustryWeek 2018 Salary Survey, the average salary for manufacturing management is $110,200. By industry sector, the salary ranged from a low of $88,500 in the textiles/apparel sector to a high of $142,500 in the medical device/lab equipment sector.

The 2018 Manufacturing Compensation Report, sponsored by the SME Education Foundation and the Arconic Foundation, “found an average compensation of $64,014 for hourly workers and $111,731 for salary workers, including base pay, bonus/commission and dividends/stock options/profit sharing, and such perks as a company car and mobile phone. Following the trend in the rest of the country, 68 percent of hourly workers and 73 percent of salary workers reported a wage increase in the last year.”

In this report, Christopher Barger, senior director of communications at SME, said, “There are multiple paths to success and good-paying careers at all levels of manufacturing, and the good news is these jobs are in high demand. Individuals who pursue a career in manufacturing have several options to gain solid training education, be it entering the workforce from high school through apprenticeships or internships, attending a vocational school and getting certifications, or attending community colleges, and obtaining associates or four-year degrees.”

Most people have no idea of the variety of jobs that are available at manufacturing companies. Besides the usual corporate/executive management jobs, some of the other management jobs available at medium to large manufacturers are in these areas: operations, plant/facilities, manufacturing/production, purchasing/procurement, sales/marketing, quality, supply chain, lean/continuous improvement, human resources, R&D/product development, and safety/ regulatory compliance.

If you have the opportunity to visit the modern manufacturing facilities in the U. S., you would see the most productive, highly skilled labor force in the world applying the latest in information, innovation, and technology. Contrary to popular opinion, the industrial age is not over. We are in the midst of incredible advances in manufacturing – from nanotechnology, Industrial Internet of Things, robotics, artificial intelligence, and biotechnology.

The innovation found in the manufacturing industry has helped to increase economic productivity too. Since the Industrial Revolution, the way we produce and consume goods has drastically changed, and it is continual innovation that allowed and continues to allow our country to become increasingly more productive in the services offered.

Automation and robotics have helped keep American manufacturers not only competitive but the most productive in the world. Manufacturing has long led U.S. industries in productivity growth. Gains in productivity raise a country’s standard of living. In the past 20 years, productivity – output per hour – has more than doubled – actually 2.5 times – that of other economic sectors.

There is also a multiplier effect of manufacturing jobs that reflects linkages that run deep into the economy. For example, every 100 steel or automotive jobs create between 400 and 500 new jobs in the rest of the economy. This contrasts with the retail sector, where every 100 jobs generate 94 new jobs elsewhere, and the personal and service sectors, where 100 jobs create 147 new jobs. In addition, for every $1.00 spent in manufacturing, another $2.74 is added to the economy. Thus, this economic data indicates that each manufacturing job creates three to four other jobs, while service jobs only create one to two other jobs.  

Thus, manufacturing is an important vehicle to grow and sustain a higher standard of living for our nation, our states, cities, communities and individual families. The higher wages of manufacturing jobs contribute to a better quality of life while ensuring that we have a strong domestic manufacturing sector to protect the health and welfare of all Americans as well as protect our national security. 

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Why Manufacturing is Important to America

May 27th, 2020
This week’s article begins a series of short articles on why manufacturing is important to the America economy. Our country’s Founding Fathers recognized the importance of developing a domestic manufacturing base instead of continuing to rely on imports from England, France, and the Netherlands.  They established the U.S. patent system and protected the developing manufacturing industry with tariffs to discourage imports.  This allowed the United States to be the world’s number one manufacturer for more than 100 years, accounting for as much as 25 percent of global manufacturing output in 2007. In 2010, China overtook the U.S. to become the world’s top manufacturing country by output. 
The first reason why manufacturing is important is:  Manufacturing Supplies Millions of Jobs

Manufacturing is the engine that drives American prosperity and is the foundation of the U.S. economy and the basis for its middle class. In February 2020, manufacturing employed 12.6 million workers. According to the National Association of Manufacturers’ facts about manufacturing, “manufacturers contributed $2.381 trillion to the U.S. economy in the fourth quarter of 2019, a new all-time high…Overall, manufacturing accounted for 11% of GDP in the economy.”

In addition, “For every $1.00 spent in manufacturing, another $2.74 is added to the economy. That is the highest multiplier effect of any economic sector. In addition, for every one worker in manufacturing, there are another five employees hired elsewhere.”

The U.S. lost 5.8 million jobs in manufacturing from the year 2000 to 2010 due to a combination of factors, such as the offshoring of jobs to Asia, especially to China, increased productivity of American workers, automation, and robots, as well as the domestic outsourcing of service jobs within a manufacturing company, such as accounting and payroll services, janitorial services, cafeteria/food services, and legal departments. Thus, jobs that may have been classified as manufacturing are now classified as service jobs.

The below chart shows that the U. S. has regained about 1.5 million jobs since the end of the recession. 

American workers achieve a high productivity rate year in and year out, and the growing trend of training in “Lean manufacturing” has accelerated the increase in the productivity of American workers

In 2019, the ten states with the largest manufacturing workforces were:  California, Texas, Ohio, Michigan, Illinois, Pennsylvania, Indiana, Wisconsin, South Carolina, and New York. California’s manufacturing workforce of more than 1.2 million exceeds Illinois and Pennsylvania’s combined manufacturing workforce

A blog article by Alex Carrick of January 14, 2019 on the website www.constructconnect.com, states:  “The five major contributors to U.S. manufacturing employment are:  transportation equipment, a 13.2% share; food manufacturing, 12.9%; fabricated metal products, 11.7%; machinery, 8.9%; and computer and electronic products, 8.4%.

Michigan (with an 11.4% share) leads all states in number of transportation equipment jobs. It’s followed by Indiana (8.2%). California and Ohio (each with 7.3% shares) are tied for third.

By a wide margin, California is out front among states in number of food manufacturing jobs.

California and Texas provide the most ‘fabricated metal product’ jobs; Ohio is in third spot.

Texas, which is big in oil and gas drilling equipment, is the nation’s leader in machinery manufacturing jobs.

More than a quarter of U.S. ‘computer and electronic products’ manufacturing jobs are in California. Second-place Texas has only about one-third of California’s contingent.”

The sooner we reopen all manufacturing, instead of just allowing manufacturers in critical industries to remain open, the sooner we will get millions of manufacturing workers off the unemployment roles and back to producing the goods we need to remain a strong industrial nation, while protecting the health and national security of all Americans.  

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How to Leverage New Technologies & Energize a New Generation to Close the Labor Gap

May 12th, 2020

With over 30 million people unemployed right now due to shutdowns and stay-in-place orders in most states because of COVID-19, it may seem like odd timing for American Machinist and IndustryWeek to release a new eBook titled, “Closing the Skills Gap – How manufacturers are leveraging new technologies and energizing a new generation to finally close the labor gap,” sponsored by Epicor Software Corporation. However, now is the time to be prepared to take advantage of the increased interest in returning manufacturing to America and strengthen our manufacturing base as a result of the weaknesses in the domestic supply chain revealed by the COVID-19 pandemic. 

This eBook is important because the Executive Summary states: “We are on the cusp of a full-scale digital revolution in the manufacturing industry…[and] on the cusp of an enormous wave of retirements as Baby Boomers exit the job market…we have a perfect storm.”  The result could be that the “500,000 unfilled manufacturing jobs today…[could] balloon to 2.5 million over the next decade.”

The facts are that “a whopping 10,000 Baby Boomers retire every day” and “the skills required for a job don’t match talent in existing worker pools. Five out of 10 open positions for skilled workers in the U.S. manufacturing industry remain unoccupied today. This shortage is due to the skills gap.”

The good news is that “Over the last few years, manufacturers across the industry have begun systematically attacking the skills gap head-on…” The eBook outlines the application of the new tactics that manufacturers are applying across industries.

First, the eBook mentions that Gen Z may be the generation that saves manufacturing from the “silver tsunami.” It reports that a new study, 2019 L2L Manufacturing Index, examining the American public’s perceptions of U.S. manufacturing, found that adults in Generation Z (those aged 18-22) are:

  • 19% more likely to have had a counselor, teacher or mentor suggest they look into manufacturing as a viable career option when compared to the general population.
  • One-third (32%) had manufacturing suggested to them as a career option, as compared to only 18% of Millennials and 13% of the general population.
  • 7% more likely to consider working in the manufacturing industry
  • 12% less likely to view the manufacturing industry as being in decline, both compared against the general population.
  • one-third (32%) have family members or friends working in the manufacturing industry, compared to 19% for Millennials and 15% for the general population.

However, there is still work to be done about the perception of manufacturing, as “A majority (56%) of Generation Z would consider working in the tech industry, while only 27% would consider working in the manufacturing industry. Additionally, they are more likely to consider manufacturing jobs boring when compared to Millennials and the general population.”  

In the chapter “5 Ways Manufacturing is Tackling the Labor Shortage,” Poornima Apte lists creative ways manufacturing companies are attracting and recruiting talent:

1. Encouraging a Test Drive – hiring for short-term assignments as a way to company and worker to test whether there is a good fit for permanent employment.

2. Advancing and Training Internal Talent – “Promoting internal talent can be a two-fer. It serves to retain valuable employees, and the company invests in known entities.” Instead of traditional tuition reimbursements for back-to-school training…manufacturing companies are forking over the money upfront.”

3. Tapping into Unconventional Talent Pools – “Companies are looking beyond the pool of graduating students to recruit blue-collar workers… such as ex-convicts looking to reenter the workforce.

Manufacturing companies are also partnering with organizations that cater to veter­ans and minorities.”

4. Looking beyond the resume – “By checking on skillset rather than education alone, companies are more closely aligning specific jobs to the talent they need…77% of employers are willing to prioritize a candidate’s skills and potential over experience.

5. Diving into Data Analytics – “Manufacturers can analyze demographic factors across the country and find out which places will have the best talent…companies can act on that intelligence proactively and recruit more aggressively in areas they feel have more desirable candidates.

Next, Jared Lindzon presents three ways companies can use technology to attract younger employees in the chapter “How to Leverage Technology to Attract a Younger Workforce:”

  • Offer elearning – “As the first generation to grow up with the Internet, younger workers like having constant access to information. But…they’re often not interested in anything that feels too much like school. Leveraging modern technology that millennials know and love, through eLearning, makes a huge difference.” Millennials are eager to learn. They just want to do it using modern, digital platforms.”
  • Update Administrative Processes – …younger workers expect the same level of efficiency, convenience and usability in their work tools as they enjoy in their consumer products. “They bring those same expectations to their jobs, so employers are increasingly exam­ining processes to provide the same quality experience and ease-of-use for employees using technology in the workplace…”
  • Avoid the ‘If it’s not broke…” Fallacy’” – “… staying ahead of technology trends can help attract younger workers…They thrive off of staying ahead of the tech curve to discover new methods of completing tasks and auto­mating processes…Younger workers want to feel like they’re working for a company on the cutting edge. The new generation is more flexible, open to change and willing to get hands-on to discover new techniques…”

The eBook also offers a list of ten suggestions from consulting firm Mercer on how to optimize an experienced workforce in the chapter, “Let’s Not Forget The Value of Experienced Workers,” warning that “ignoring this group is risky. By 2040 the average life expectancy is predicted to be 80 years, up from 56 in 1966 and 72 in 2016. As a result, many people are working longer for a variety of reasons, including financial necessity, purpose, and social/ intellectual engagement.” A few important key suggestions are:

  1. Collect and analyze your age-profile data to explore demographic and skills pinch points.
  2. Develop and implement people and careers strategies that embrace the experienced workforce.
  3. Develop a lifelong learning attitude that positions people to embrace jobs of the future.
  4. Implement an effective flexible-working strategy.

I was really gratified to see that the eBook included the chapter “How Manufacturing Day is Helping Combat the Labor Shortage,” by Tom Bidinger.  Manufacturing Day (aka MFG DAY) was started in 2012 to combat the common misconceptions about manufacturing, and it has made a difference. “MFG DAY—gives manufacturers the opportunity to open their doors and show what it’s really like to work in manufacturing.”

I was pleased to read that Manufacturing Day is contributing to breaking “the cycle of misinformation when it comes to manufacturing careers. A recent survey found that just 67% of parents would encourage their child to learn more about job opportunities in manufacturing. That number needs to increase.” I’ve attended events for MFG DAY in three counties, San Diego, Riverside, and Los Angeles, since it began in 2012 and have visited dozens of companies to see what they were manufacturing.  It’s been a pleasure to see that parents are taking the time to take their children and teens to visit local manufacturers. 

Bidinger writes, “By working together during and after MFG DAY, manufacturers can begin to address the skilled labor shortage, connect with future generations, change the public image, and ensure the ongoing prosperity of the whole industry. “

In the next chapter, “About the Skills Gap and Start Solving it,” Michael Collins writes that “A lack of training and job security is at the root of manufacturing’s image problem.” He adds, “the skills gap is real and a two-pronged problem. First, manufacturing does not have the advanced training programs needed to produce the high skilled workers they need. Second, young people, their parents and counselors do not see manufacturing as a good career.”

He provides a good summary of what manufacturers, especially large, multinational corporations, have done in the past 40 years to reduce labor costs and other costs of doing business and then discusses some of the tools that can be used to address the skills gap. 

The final two chapters provide examples of what two companies are doing to address the skills gap.  In the chapter, “Modern Machining & The Need for Speed,” John Hitches describes what former boxer and machining revolutionary, Titan Gilroy, has done in “an aggressive strategy to combat all the threats to American manufacturing, from outsourcing to the skills gap.”

In the final chapter, “Creating a National Workforce of Trained Welders,” IndustryWeek Senior Editor, Adrienne Selko, describes how Lincoln Electric has partnered with Tooling U-SME to expand its welding education program in order to close the national skills gap in welding.

Utilizing all of the suggestions contained in this eBook will rebuild American manufacturing to create jobs and prosperity and protect Americans from being so severely impacted by unexpected disasters whether natural or manmade like the Coronavirus.

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Who Are My Heroes? Part Two

April 28th, 2020

My additional heroes are people with whom I connected after my first book, Can American Manufacturing be Saved? Why we should and how we can was published in 2009. We shared a focus on doing what we could to save and rebuild American manufacturing. Again, they are presented alphabetically, not chronologically.

Greg Autry, Ph.D., is “an educator, writer and technology entrepreneur. He researches and publishes on space commerce, entrepreneurship, technology innovation and trade policy. He is an Assistant Professor of Clinical Entrepreneurship with the Lloyd Greif Center for Entrepreneurial Studies in the Marshall School of Business at the University of Southern California, where he teaches entrepreneurship and technology commercialization courses.” I met Greg when he was a doctoral candidate at the Merage School of Business at UC Irvine, before he became Senior Economist for the non-partisan, non-profit organization. Coalition for a Prosperous America,  We were also fellow board members of the non-profit American Jobs Alliance for five years. Dr. Autry is the co-author of the book Death by China and a producer on the documentary film, Death by China, (directed by Peter Navarro). His opinion articles have been published in major news outlets including the San Francisco Chronicle, LA Times, Washington Times, Wall Street Journal, and SpaceNews. He was a regular contributor to Huffington Post and is now a regular contributor to Forbes. He is currently on the advisory board of the Coalition for a Prosperous America.

Den Black is President of the non-partisan, non-profit organization, American Jobs Alliance (AJA). He earned a BSME at Kettering University and worked as a Senior Strategist, Futurist, Innovator at Delphi Automotive Systems for 37 years.  Den invited me to join the board of AJA in 2012 after he was referred to me by Executive Director, Curtis Ellis after we met when he was on a West Coast trip. AJA is “dedicated to fostering the public’s understanding of the American System of free enterprise, a system established by the Founding Fathers of the United States to develop the domestic economy of the United States and promote the employment of Americans in diverse occupations through investment in infrastructure and promotion of key industries and technologies in the United States.” Currently AJA is promoting a window decal  “Boycott China for Jobs, Human Rights, Peace” and AJA’s affiliated website:  www.GetOutofChina.us.

Don Buckner is the Founder and CEO of MadeinAmerica.com, MadeinUSA.com, and MadeinAmerica.org. His vision started in 1998 “when he attempted to find several American-made products online, but was unable to do so. Frustrated, he took matters into his own hands, purchasing the Domain MadeintheUSA.com. The website served as a directory resource connecting patriotic consumers to more than 300,000 American-made manufacturers for several years. He also acquired the Domain MadeInAmerica.com.” After the company he founded in 1997, Vac-Tron Equipment, was acquired in 2018, he and his wife decided to invest some of their profits to hold the first Made in America trade show.  They rented the convention center in Indianapolis, IN, where the first show was held October 3-6, 2019. I met Don when I attended the show as one of the many featured panelists and speakers.  The next Made in America show will be held at the TCF convention center, Detroit, Michigan Oct. 1-4, 2020. 

Dan DiMicco, is an American businessman who is the former CEO and chairman of Nucor Steel company and is now Chairman Emeritus. Dan was appointed to the United States Manufacturing Council in 2008 by then-U.S. Commerce Secretary Carlos M. Gutierrez, and served on the board until 2011. Dan also served on the boards of the National Association of Manufacturers and the World Steel Association on the Executive Committee. He also served as a Senior Trade/Economic Advisor to the Trump Campaign and the Lead on the USTR Transition Team. He currently serves on the Board of Directors for Duke Energy Corporation and continues to represent Nucor on the US Council on Competitiveness. He is currently Chairman of the Coalition for a Prosperous America (CPA). He is the author of American Made: Why Making Things Will Return Us to Greatness, published in 2015. I had the pleasure of hearing Mr. DiMicco speak as the keynote speaker at several of the Manufacturing Summits held in California between 2013-2018, when I was the chair of the California chapter of CPA and at the Trade Conferences held by CPA in Washington, D. C. during this same time period.

Curtis Ellis was the Executive Director of the American Jobs Alliance, an independent non-profit organization promoting pro-jobs and Buy American policies, when I met him after my first book was published. He recommended me as a potential board member to Den Black of AJA. He had previously worked in Congress and on federal, state and local campaigns. For his work as a journalist, producer, writer and reporter, he has appeared on 60 Minutes, HBO, NBC, CNN, NPR and in the NY Times, San Francisco Chronicle, Chicago Tribune, TIME, Huffington Post, The Hill, and other outlets. His commentary has appeared on CNN, MSNBC and radio shows nationwide. Currently, Mr. Ellis is currently Policy Director with America First Policies. He served as senior policy advisor on the 2016 Trump-Pence campaign, was on the Presidential Transition Team, and served as special advisor to the U.S. Secretary of Labor in the International Labor Affairs Bureau in 2017.

Ian Fletcher, author of Free Trade Doesn’t Work, What Should Replace it and Why, published in 2011. When I met him, he was a Research Fellow at the U.S. Business and Industry Council. Alan Tonelson asked him to meet me when he was in southern California in the summer of 2010, not long after I started writing blog articles. When, he switched to becoming the Senior Economist of the Coalition for a Prosperous America in early 2011, he suggested I join CPA, which I did.  I immediately read his book from which I learned everything I didn’t know about the dangerous effects of our trade agreements. While he was at CPA, he and Michael Stumo (CPA CEO) edited the second edition of my book, Can American Manufacturing be Saved? – Why we should and how we can, which was published in 2012 by CPA. Ian was a featured speaker at several of the above- mentioned Manufacturing Summits.  He was educated at Columbia and the University of Chicago, and he lives in San Francisco. He is currently on the advisory board of the Coalition for a Prosperous America.

Rosemary Gibson is a “national authority on health care reform, Medicare, patient safety and overtreatment in medicine, as well as “an award-winning author, inspirational speaker, and advisor to organizations that advance the public’s interest in health care.”  She is the co-author of China RX, published in 2018, as well as Medicare Meltdown (2013), Battle Over Health Care (2012), Treatment Trap (2010), and Wall of Silence (2003). I met Ms. Gibson when she was a featured speaker at the Made in America trade show in October 2019. With the outbreak of the COVID-19 pandemic this year, her book is getting the full attention it deserves as an expose of the offshoring to China of pharmaceuticals, PPE, and medical devices.

Harry Moser founded the Reshoring Initiative in 2010 after 25 years as the North American president of GF AgieCharmilles, now GF Machining Solutions. The mission of the Reshoring Initiative is to help bring manufacturing jobs back to the U.S. using the Total Cost of Ownership Worksheet calculator he developed. Harry was inducted into the Industry Week Manufacturing Hall of Fame 2010 and was named Quality Magazine’s Quality Professional of the year for 2012…won the Jan. 2013 The Economist debate on outsourcing and offshoring, and received the Manufacturing Leadership Council’s Industry Advocacy Award in 2014. Harry and I connected in August 2010 after he read my blog article about the importance of understanding Total Cost of Ownership.  He told me I wrote about what he just started and trained me how to use his TCO worksheet, authorizing me to be a speaker on behalf of the Reshoring Initiative.  

James Sturber is the author of What if Things Were Made in America Again: How Consumers Can Rebuild the Middle Class by Buying Things Made in American Communities, published in 2017. Subsequently, he founded the Made in America again organization. After obtaining a law degree, he “devoted his career to public policy, law and entrepreneurship.  He began his career as legislative assistant to a member of the U.S. House of Representatives, focusing on matters before the Committee on Energy and Commerce.  He subsequently practiced legislative and administrative law in Washington, D.C. I met Jim at the Coalition for a Prosperous America trade conference in Washington, D. C. in 2018. When I read his book, I discovered we had some up with much of the same data in our research as my last book, Rebuild Manufacturing – the key to American Prosperity was also published in 2017. He currently co-chairs the Buy American committee for CPA of which I am a member.

Alan Uke is a San Diego businessman, entrepreneur, and community leader, who “started his company, Underwater Kinetics, 41 years ago while attending the University of California at San Diego. Uke holds over 40 patents and exports his SCUBA diving, industrial lighting, and protective case products to over 60 countries.”  He is the author of Buying America Back, A Real-Deal Blueprint for Restoring American Prosperity, published in 2012. Uke documented that in 2011, the U.S. had a trade deficit with 88 countries provides a chart showing the trade balance with every country with which the U. S. trades. When we met for lunch, I found out that he was also a member of the Coalition for a Prosperous America, so we had something else in common. “He is also Founder Emeritus/Founding Board President of the San Diego Aircraft Carrier Museum which acquired the USS Midway in June 2004.”

I would be remiss in not giving Honorable Mention to the many members of the U.S.-China Economic and Security Review Commission that was “created on October 30, 2000 by the Floyd D. Spence National Defense Authorization Act of 2001…” The primary purpose of this Commission is “to monitor, investigate, and report to Congress on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China.” Beginning in December 2002, the Commission submitted “to Congress a report, in both unclassified and classified form, regarding the national security implications and impact of the bilateral trade and economic relationship between the United States and the People’s Republic of China. The report shall include a full analysis, along with conclusions and recommendations for legislative and administrative actions, if any, of the national security implications for the United States of the trade and current balances with the People’s Republic of China in goods and services, financial transactions, and technology transfers.”  I read several of the reports as I was researching my three books, and each year, China’s unfair trading practices threats to U.S. national security, and other violations of the principles and terms of China’s membership in the World Trade Organization were well documented.  Yet, no action was taken by Congress under the administrations of President Bush or President Obama.   

I met many other people at the Made in America trade show last October, some of whom have recently joined the CPA Buy American committee. Some of these people could very well be listed in a future article on my heroes as I get to know them and their work better.  I would encourage you to join our efforts to rebuild America’s economy to create jobs and prosperity by becoming a member of CPA.

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Who Are My Heroes? Part One

April 21st, 2020

As you might expect my heroes are people who have played a role in trying to alert Americans to the effects to our economy of the decimation of American manufacturing and the dangers of outsourcing manufacturing to China and other countries.  These are real people and none are elected officials.

This month marks the 13th year of my journey to do what I could to save American manufacturing. In May 2007, I e published one of my periodic San Diego County Industry reports that I had been writing since 2003.  I titled it, “Can U.S. Manufacturing be Saved?” My report had grown from four pages to 13 pages, and I realized that what I was documenting about the loss of manufacturers in San Diego and California was going on all over the country.  That’s when I made the decision to start writing my first book, Can American Manufacturing be Saved? Why we should and how we can, published in May 2009.  In the course of researching and writing my first book, my second edition of the same (2012), and my third book, Rebuild Manufacturing – the key to American Prosperity (2017), I have connected with many people who shared my concerns and were early advocates of saving American manufacturing.

My first set of heroes are those who either wrote books, articles, or newsletters that I came across researching my first book. When I was writing my reports, I was blaming the loss of manufacturing in California on the bad business climate, high taxes, and the cheap Chinese wages. These heroes expanded my knowledge greatly by showing that it was our primarily our national trade and tax policies, the trade cheating of China and other Asian countries, and corporate greed that was responsible for losing over five million manufacturing jobs between the year 2000 and 2009.  In alphabetical order, my heroes are:

Michael P. Collins is author of Saving American Manufacturing, Growth Strategies for Small and Midsize Manufacturers, published in 2006 and its companion handbook, The Growth Planning Handbook. Prior to becoming a writer, he was Vice President and General Manager of two divisions of Columbia Machine in Vancouver Washington. He is President of MPC Management, a consulting company that focuses exclusively on the problems and challenges of small and midsize manufacturers (SMMs) of industrial products and services. His book is written from the viewpoint of what manufacturers can do to save themselves and grow their business.  I arranged for him to come to San Diego to give a presentation to the Operations Roundtable of the American Electronic Association in 2011.

Lou Dobbs, is an American television commentator, radio show host, and the anchor of Lou Dobbs Tonight on Fox Business Network, and author of Exporting America, Why Corporate Greed is Shipping American Jobs Overseas, published in 2004 as hard cover and 2006 as a paperback. In his book, he “takes aim at the corporate executives and Washington politicians who profit by exporting U.S. jobs overseas—and shows readers what they can do to save not only their own careers, but the American way of life.

Ralph Gomory, who is well-known for his mathematical research and his technical leadership. For twenty years he was responsible for IBM’s Research Division, and then for 18 years was the President of the Alfred P. Sloan Foundation. He is the co-author with the late William J. Baumol of the book, Global Trade and Conflicting National Interests, published by MIT Press in 2001. After connecting by phone and email for years, it was nice to finally meet him at the Coalition for a Prosperous America trade conference in Washington, D. C. in 2018.

Richard McCormack, journalist and founder/publisher of Manufacturing & Technology News which he found in 1994. McCormack also served as the editor of the 2013 book on revitalizing manufacturing, ReMaking America. I read every issue of MT&N from July 2007 until it stopped publication at the end of 2016. He was also recognized as an American Made Hero by AmericanMadeHeroes.com for his newsletter “coverage of the profound financial and economic ramifications of the shift of industrial capability from the United States to Asian competitors.” He wrote “thousands of articles on outsourcing, industrial and technological competitiveness, government policies, and trends related to management, quality, technology and markets.”Mr. McCormack is currently Press Secretary and Program Manager, Office of Public Affairs, for the Department of Commerce.

Peter Kent Navarro is a Harvard Ph.D. economist and author of several books. I read his book The Coming China Wars, published in 2006, while I was researching my book. At that time, he was a professor of public policy at the University of California, Irvine. He currently serves in the Trump administration as the Assistant to the President, Director of Trade and Manufacturing Policy, and the national Defense Production Act policy coordinator. I first met Mr. Navarro when he was a professor at the University of California, San Diego and running for mayor in 1992. I also had the pleasure of seeing him when I attended the trade conference in 2018. I also read his book, Death by China, which he co-authored with Greg Autry, published in 2012.

Raymond Richman, Howard Richman (son), and Jesse Richman (grandson), authors of Trading Away our Future: How to Fix Our Government-Driven Trade Deficits and faulty Tax System Before It’s Too Late, published by Ideal Taxes Association in 2008. Raymond died in October 2019 at the age of 101. His tribute by Ideal Taxes states, he “authored four books, dozens of journal articles and hundreds of commentaries about economic development, tax policy and trade policy…Beginning with a commentary in the Pittsburgh Tribune-Review on September 14, 2003 (The Great Trade Debate), he became one of the first advocates of a policy of balanced trade, an alternative to the free trade vs. fair trade debate. His essential argument was that trade, free or not, benefits both countries if it is balanced.” I am sorry that I didn’t get to meet him before he died.

Roger Simmermaker, author of How Americans Can Buy American: The Power of Consumer Patriotism, third edition published in 2008. He also writes Buy American Mention of the Week articles for his website and World New Daily. His book provides a guide to assist American’s who wish to purchase products made in America and discusses the importance of “Buying American” for the future economic independence & prosperity of America. He earned special recognition as an American Made Hero. After years of connecting to him by phone and email, it was a pleasure to also meet him at the same trade conference in 2018.

Alan Tonelson, a Research Fellow at the U.S. Business and Industry Council Educational Foundation, and a columnist for the Foundation’s globalization website, Tradealert.org and a Research Associate at the George Washington University Center for International Science and Technology Policy. He is also the author of The Race to the Bottom, published in 2000. “He has written extensively on the trade deficit between the United States and other countries. He has also written on free trade, globalization and industrial decline. He argues that U.S. economic policy should aim for “preeminence” over other countries, just as, he believes, other countries’ economic policies seek their own national interests. He is critical of various forms of “globalism” and internationalism.”

When I was researching my first book, the U.S. Business and Industry Council was the only organization that had a written plan to save American Manufacturing.

I introduced my book as a speaker at the Del Mar Electronics Show in San Diego County, California on May 6, 2009, and had my book on display at my company’s booth at the show. One of the first persons to buy my book was Adrian Pelkus, President of contract manufacturer, A Squared Technologies.  He was also the informal leader of the steering group running the San Diego Inventors Forum.  He invited me to the next SDIF meeting which I attended, and then invited me to join the steering committee, which I did.  After reading my book and endorsing the purpose and ideas I presented in my book, the steering committee changed the focus of SDIF from helping inventors source their products in China to sourcing the manufacture of their products in the U.S.

The SDIF meetings have an informal curriculum of topics to cover in a year, and I have been giving an annual presentation on how to select the right manufacturing processes and vendors to make their products.  It has a pleasure to be able to help so many inventors and entrepreneurs source their products in America.

My connections to theses heroes led me to connections with many other people and organizations who became part of my second set of heroes after my book was published.  I will write about these people in My Heroes Part Two. 

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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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