The Cutting Edge™ - February 2004

Public Policy

Perhaps it was three years ago, but I can recall standing in a hotel hallway at a Woodworking Industry Conference with Frank York. Frank was asking me, "John, who in Washington is doing anything to save American manufacturers." I can recall answering Frank, "Frank, forget about finding somebody who is doing something, I cannot even list five people who are thinking about the long-range future of manufacturing in America." We both agreed it was a sad state of affairs.

From there we moved into a public policy session, and other members of WMMA® joined the debate. Collectively we agreed we needed to do more to bring this issue to the forefront. The story from that point is about the "little engine that could." The Board, the Public Policy Committee, and many of you joined the effort. In an example of association executive leadership at its best, your Executive Vice President Ken Hutton, heard your message and used any bully pulpit available in the manufacturing association community to cajole, urge, push, and pull the community to be more aggressive in raising alarms about the future of manufacturing in the U.S., the need for visionary thinkers and then, of course, the need to provide specific recommendations. The last part is an important element, often lacking in such campaigns. Often times, great tomes are created that document the problem, but concrete solutions are seldom put on the table.

You probably have heard about it already, and may have read about it, but last month we observed the first serious blossoms from our efforts. The United States Department of Commerce released a report, "Manufacturing in America." It offers a state of the sector summary, a vision for the future, and specific recommendations for action. While I am not saying it is a direct result of WMMA®'s efforts, I am confident WMMA® did more than most will appreciate to get the train rolling that ultimately led to the issuance of this document.

Now we need to turn the blossoms into fruit. While we may not agree with every recommendation, if we could secure enactment of half of the recommendations in the report, we would have accomplished something.

The recommendations are divided into the following six sections:

• Enhancing Government’s Focus on Manufacturing Competitiveness

• Creating the Conditions for Economic Growth and Manufacturing Investment

• Lowering the Cost of Manufacturing in the United States

• Investing in Innovation

• Strengthening Education, Retraining, and Economic Diversification

• Promoting Open Markets and a Level Playing Field

Some of the recommendations will require major congressional efforts such as enacting job education programs or simplifying the tax code. Others are more doable and perhaps not as glamorous. For example, one recommendation calls for the creation of an Office of Industrial Analysis. According to the report, "Through a new Office of Industry Analysis, the assistant secretary would be responsible for assessing the cost competitiveness of American industry and evaluating the impact of domestic and international economic policy on U.S. competitiveness, particularly in the manufacturing sector." WMMA® has complained for years that the government needs to provide better, timelier, and more comprehensive data on industries.

In my opinion, the report falls short in a couple of areas. The recommendations call for class action reform, medical liability reform and asbestos liability reform. It does not call directly for product liability reform. It does state, "In addition, the administration and Congress should undertake a long-term effort to ensure an appropriate balance in the tort system between plaintiffs’ and defendants’ interests. As questions of tort liability are frequently adjudicated at the state level, any such effort would ultimately require close cooperation with the states to ensure the best approach and a higher degree of consistency."

I would like to have seen it deal more directly with China, in particular the currency issue. Also the report mirrors the Administration's commitment to the value of Free Trade Agreements. I am not sure the underlying premise of opening up all markets at any cost remains a valid thesis today. Perhaps some sectors benefit, but is there a net gain to the United States? As the years go by, the notion that U.S. companies will win more market share abroad than we lose at home may not be true. But I want to caution that I am not saying agreements should be opposed, rather I am saying I am not sure the answer is an automatic "let's do it." A "free trader" at heart, my instincts are to promote export activity, but I have not seen any compelling analysis that we know the true impact of the free trade agreements that have been implemented.

All that aside, it is a wonderful document and in the current vocabulary of the campaign trail, it gives us plenty of "red meat" to chew on. Unfortunately, this is a congressional and presidential year, so I do not expect much action. However, you do have the opportunity to challenge the presidential candidates and your congressional candidates on their vision for manufacturing in America and specifically what would they do to ensure we remain a diverse and stable economy with a vibrant manufacturing sector. The report can be found on the Department of Commerce's website, www.doc.gov.

To read last month’s Public Policy article on Energy Policy, click here http://www.wmma.org/cuttingedge/ce0104_pg2.cfm.

To learn more about WMMA®’s Public Policy efforts, click here http://www.wmma.org/members/public_policy.cfm.