Labor & Employment Law

U.S. Manufacturing at ?Make or Break? Point

By James Parks

The auto industry?s revival proves the value of government investment in competitiveness.

U.S. manufacturing is at a ?make or break? point and it will require more, not less, government investment in key areas to ensure our future prosperity, according to a new book by one of the nation?s top CEOs.

In Make It in America, Andrew Liveris, CEO of Dow Chemical, argues that for decades, the U.S. government and businesses relied blindly on market forces and free trade to boost our economy and, all the while, sending jobs overseas because it fattened corporate profits. As we sent our manufacturing base overseas, governments like China and Germany were providing large targeted subsidies to lure companies away from the United States and investing deeply in infrastructure, education and workforce training. Now, they are attracting research and development and high tech industries away.    

Liveris writes:

At a time when U.S. companies?run by patriotic people?are moving offshore at the fastest rate in history, we should, at a minimum, recognize that the model we are relying on isn’t working It is time to recognize that if we don’t act soon, if we continue to let markets rule in every instance, we will become the global economy’s biggest bystander, and potentially its biggest drain. . . . It is time for us to recognize, whether we like it or not, that for now, in certain key areas, we actually need more government, not less.

The AFL-CIO and the Chamber of Commerce support President Obama?s plan to ?win the future? by investing in infrastructure. In a joint statement, AFL-CIO President Richard Trumka and Chamber President Thomas Donohue said:

Whether it is building roads, bridges, high-speed broadband, energy systems and schools, these projects not only create jobs and demand for businesses, they are an investment in building the modern infrastructure our country needs to compete in a global economy.

Public support is high for spending for infrastructure and education. In several recent polls respondents say they back increased government support for manufacturing. In the Hartmann poll, a whopping 95 percent believe Congress and the president should spend more time creating jobs, and 85 percent believe they should focus on creating manufacturing jobs.

Writing in The Washington Post, Steven Pearlstein says the steel and auto industries offer proof of what can be accomplished if government and industry work together to lower costs and increase productivity. He sums it up this way:

As Liveris and others have warned, high-tech manufacturing is now where the steel and auto industries were a generation ago. Although the specifics are somewhat different?the broader challenge is essentially the same. We can either cling to old ideologies and ways of doing business and keep fighting the same old battles, or we can roll up our sleeves and make the accommodations to assure our long-term prosperity.

Full post as published by AFL-CIO NOW BLOG on February 15, 2011 (boomark / email).