American Manufacturing Doesn't Need a Bailout, Just a Level Playing Field

On Tuesday, I joined more than 1,000 people-mostly laid-off Steelworkers and their families in a dusty, windswept lot where piles of subsidized, imported steel pipe from India destined for a major oil pipeline served as the backdrop.

Just a mile or two away stood the Granite City, Illinois works of United States Steel, a massive facility that is now shuttered because of the recession. When it is operating, the mill employs over 2,000 workers and makes a quality, competitive product.

The familiar noises of a busy, industrial town have vanished in Granite City. The hum of machines is nowhere to be found. The downtown is now a ghost town. It would be easy for the laid-off workers and their families to simply stay at home, hang their heads, hope for the best, and complain about the hand they've been dealt.

But that's not what I saw. Instead, I saw hundreds upon hundreds workers and family members gathered together, unified in their call for jobs, justice, and a change in the way we do business. They were angry, but not xenophobic. Upset about unfair trade, but unafraid to compete. Not asking for a bailout, only an opportunity. Concerned about their own jobs, but downright scared about the future their children and their community might face.

Across the Mississippi River from Granite City lies the famous Gateway Arch in St. Louis. To me, the Arch is a symbol of hope, of a new day dawning, of a call to move forward. It's the gateway to what's possible in America, one of the simplest yet most meaningful structures in our nation. And it's made with a lot of steel: stainless, rebar, and carbon.

All of these things are visible from 15,000 feet in the air, in a plane on my way back to DC: the massive Granite City works, the piles and piles of green pipe, and the Gateway Arch. But you can't see humans from that altitude. Yet I'm afraid that's the view too many Americans have of our manufacturing crisis.

The pipe for TransCanada's oil pipeline project should have been made in America. But TransCanada chose the low road and selected the subsidized Indian pipe for the vast majority of the project. While Granite City doesn't make pipe, it is capable of making the hot-rolled steel that eventually becomes the pipe.

It might be too late to ditch this pipe. But it's not too late for TransCanada to make the right call on its new Keystone XL pipeline. And it's not too late for federal, state, and local officials to tell TransCanada that if the company wants to secure permits and right-of-way, they need to make the pipe in America.

Besides pipe, we make a lot of other things with steel. Everything from durable goods, automobiles and commercial jets to the tanks and warships that keep us safe. But we are losing the capacity to manufacture at an alarming rate. Our nation has lost 1.5 million manufacturing jobs since the recession began in December 2007. Forty thousand factories have closed over the past decade.

One lesson of the recession is that we need to make more things here. Developing new technology and consuming alone do not make for a stable economy, but that's been our economic strategy for the past decade. Manufacturing generates real wealth, family-supporting jobs, and exports. It does matter where things are made.

Granite City is ground zero in the crisis in manufacturing. To recover, it will take a trade policy that insists on reciprocity and fair play. India subsidizes its steel and should be held to account. Other countries that cheat should understand the consequences. It will take smarter domestic policies on health care, taxes, and energy to make manufacturing more competitive. Finally, it will take sizable investments in infrastructure, innovation, and education. This will only come about through the initiative and collective action of Americans across the political spectrum.

But it starts with a single act. Paul Revere's "midnight ride" sounded the alarm in the American Revolution. Ironically, he was also a famous metal manufacturer after the war. Perhaps Granite City's Paul Revere is Jeff Rains, a retired steelworker. On his way to a meeting in February, Jeff saw the green pipe from India loaded on rail cars, took a couple of pictures, and alerted his local union. The rest is now history.

We owe it not just to Jeff Rains and the thousands of unemployed workers in Granite City, but also to our children and grandchildren to make things in America again. American manufacturing and American workers will do their part by producing quality, competitive products. We'll even remind people why it is so important to make things here. We need a government as willing to fight for manufacturing as it is willing to give out $700 billion to Wall Street. The difference is this: we don't need $700 billion, we just need a level playing field.

Comments

[themodernleader]

Scott Paul has hit the nail on the head. Without manufacturing, there is no or only a feeble middle class. Without manufactruring there is no technology funding; Wihout manufacturing there is no need for education requiring knowledge of science; Without manufacturing, we will be unable to repay our debts; Without manufacturing we will become the servants of countries with manufacturing and growing, developing citizens.
With a bailout of swindling, fraululent finance, our national weath will be essentially concentrated in the hands of a cabal. With a renewed finance, we will be under the yolk of usurious financing terms; With renewed finance international finance will dictate the terms of our debt and future; With a domineering finacial institution the government will no longer have control of the Nation's mission ot domestic tranquility, common defense, welfare and liberity for ourselves and our descendants.
Chosing finance over economic renewal is an historical blunder that will seal the fate of American democracy.

[avraamjack]

It is better to pay a little more for a product , if it means that Americans get good steady jobs in the process.
.

[SingingGuy]

The fact is, what we make and grow used to be the foundation upon which our national wealth and the value of our dollar rested. Manufacturing not only creates blue collar jobs, but it also creates white collar jobs. As so much of our economic stability has been shipped overseas during the last decade or two, it was replaced with the economic bubble created by the overheated housing market. People were encouraged to use the increasing value of their home as a personal ATM. That was what drove the rosey story of our economy during a greater portion of the Bush years, certainly not the rising income levels of the average American worker (non-existent). Until we re-vitalize our manufacturing sector on a large scale and create an abundance of good paying jobs that allow the average worker to actually support their family on their wages, our economy and our government institutions will continue to sputter.

[BARRISTER]

Instead of "fake tea parties", souldn't we all be insisting on buying only"Made in America" products?

I do. If the store etc. does not have the product I want "Made in America" I go elsewhere.

Why should I, like WalMarts does, destroy America while enriching China and India and elsewhere, for the sakes of buying a vastly inferior product and cheaper prices? The "Made in America " products last longer, perform better and help American Families.

I have a friend who was ecstatic about a diesel generator he purchased on the cheap from a dealer. It was Made in China. He laughed at me for buying my Made in America generator which cost about 1/3 more than his. My generator is going strong while he has had to replace his Chinese generator twice! He bought two Chinese replacements until he finally saw the wisdom in buying American. He is now a happy camper!

"Buy Start the Made in America Tea Parties "NOW!!!!

[dadw5boys]

But the Wealthy want the USA to be a class of Investors with support staff.

In the long run that means a few Super Wealthy people with Super Computers and their SLAVES.

Welcome to Americak.

.

[Sundialsvc4]

I suspect that, if we ever do get around to purging our ranks of financial crime and its leprechaun vision of "eee-zee mo-nee," the importance of manufacturing might become apparent to some people again...

[Viper]

Yes it needs government paid healthcare and rebatesiof VAD taxes on exports like its competitors and protected markets...

But then it still cant compete against slave wage labor where the govenrment like in China or vietnam is 50% business owner...


regards

[Javani]

The biggest problem is foreign subsidisation, as with the Indian steel. Yet fighting back will be named "trade war" as is any attempt to level the playing field.

The politics behind trade and treaties has been weighted to favor American financial services sector gaining access to foreign places in trade for letting our manufacturing fall and not enforcing balance. Bush, Obama same words, they'll "monitor" the problem and kick it down the road.

Especially for the National Democratic party elite, they are multi-gene­rationally disconnected from labor, and align themselves more in the culture of finance. They hold onto idea their trade policies don't hurt Americans in the aggregate, so they create fictions to distract any doubts, the latest, the "Green Economy" of tending windmills and maintaining solar panels. They won't play fair with India or china because those countries will increase problems for the likes of Goldman.

[KillTheMessenger]

I don't know. I am American manufacturing. I sell almost half of my products to Europe and Asia. Last week I shipped a couple of boxes to China. It was the second order from over there this year and I bet I will have another two or three by the end of the year. The transactions with Chinese buyers are always pretty painless.

No big deal. If you can't compete, your products suck and you need to make better ones. Because, you see, mine sell just fine and there is not a single Asian competitor who can keep up with us.

[William1950]

wait until they take them apart and see what makes them tick... they will make whatever you do cheaper, and no laws apply to stop them. ... I agree with you in principle, but you see that is the problem, our principles are not universal and big business has no principles past the bottom line.

[steelmill]

A couple of boxes to China ,yep,sounds like a huge manufacturing base

[KillTheMessenger]

"wait until they take them apart and see what makes them tick"

They don't have to. We give our customers detailed instructions on how the products work. Almost all companies (like HP etc..) used to do that in the old days. We just stick to the past by not cheating the customer out of vital technical information.

Having said that, not one of our products has been successfully copied. Why? For one thing because we provide them at a cost that is hard to undercut, even with production in China. But if your competitor can not hope to make a significant profit at a significantly lower price, copying a product becomes a waste of time. Chinese do not engage in that kind of unprofitable business. Some American and European companies have tried... and they all failed to attracts a significant number of users. Why buy the copy if you can get the original that's known to work for $200 more?

:-)

[TakeSake]

Well, good for you. The product I work on is the same way.

As it turns out, there are plenty of industries and products that are subsidized - like the steel example here, that make it impossible to compete. That is, unless the Federal Government drops a few hundred billion into subsidies. Which they do - for oil companies.

High-tech custom engineering is great business. However, the quantities are naturally limited - they don't wind up in every house down the block, and they can't employ everyone down that block either.

The people whose jobs are to make steel and make things out of steel are not your customers. Are they your neighbors? Your cousins? Your friends? Don't be so quick to dismiss them. Eventually they drive some percentage of your business and your overall prosperity.

[KillTheMessenger]

My point was that we need to focus on businesses that we can make profitable, rather than trying to engage in a "Who shall we out-subsidize today?" trade war. It does not make sense to produce steel in the US if it can be produced cheaper somewhere else. Nobody wins, especially not the steel mill worker who risks his health every day for an unprofitable product. The country as a whole loses because the taxes that go into these subsidies are now missing as investments for industries that actually have a future. If you win a steel worker and you lose two PhDs along the way, you have made a poor trade-off, indeed.

[kankan]

Agree that American manufacturing companies need a level field. But could it be that American manufacturers have not been able to successfully implement marketing strategies that add value to American culture? Are there any foreign manufacturing companies that are really profiting because of the decline of manufacturing in the US? So when did job creation in America depend on how much US manufactures versus what is imported and exported?

[William1950]

"So when did job creation in America depend on how much US manufactures versus what is imported and exported?"
Answer: it doesn't matter at all unless we want jobs other than working in a convenience store or serving coffee ... the service industry, look around, those businesses are hurting too - why? because most of us either do not have discressionary income to spend or if we do we are keeping it for the unforseen emergency ahead. It doesn't matter if we are happy exporting our dollars to whoever we are importing from. I would like to see some of their money coming here. America is now the biggest debtor nation ever... we owe like no one else in history ... sometime, somehow that will have to be paid. It's not just about nationalism, it's about survival.
If ... If society really worked on a global basis then it wouldn't matter at all, but it doesn't yet.

[hmargret]

Rught on!
We remain the most innovative country in the world. with the most can-do people.
our work ethic is as strong as any. but the corporations and goverment have betrayed us.

why anyone would be invested in corporate America now is beyond me. they clearly think only of themselves. when the retirements aren't there, the disillusionment may become complete.
our leadership has lost it, but we still hold the trump card -----how we spend our money.

[KillTheMessenger]

Please read up on how well the German's were served with the Dolchstosslegende after WW I.

You want to play that game? Be my guest. History will prove to you how well it remembers, even if you don't.

[Arthur954]

Very good article ! without manufacturing, how is the US going to make a living ?
We are turning into a paper-shuffling economy, based on speculation and spending. A level playing field would begin with a national health care and retirement system, like in any other civilised country except the US. This, along with industrial policy, would enable our manufacturing to be more competitive.

The main question is : what kind of society does the US want to be ? if we want to be an advanced, fair country, based on the principles of Christian civilisation, there has to be a good manufacturing base and a diversified economy.

I am worried that the Obama government has not brought the issue up, and it was not debated in the past elections. We absolutely have to keep insisting on making everyone aware of how crucial manufacturing is for the future of the US.

[sueinmn]

Big business has too much to lose if we were to manufacture here again. They are not interested in American soil or the American people. The United States government has too much to lose from big business if they actually were serious about helping our country. Big business continues to pour millions into lobbyiest to continue present day outsourcing and importing. Obama does not even talk about American manufacturing to return home! So what do we do about our future?

No one cares that has the power to change. Not even the Democratic party really want change! They are all too busy with "game on" as usual. If they really wanted change, they would tak a different atitude about immigration to begin with. 138 thousand monthly immigrant workers when we are having all time high unemployment.

Whats this tell you about the "change" we elected? NOT MUCH other than the same as usual! Not one republican stands for the citizens in manufacturing and apparently not even one democrat is for us either! Change is not going to happen.

[KillTheMessenger]

Tons of big business manufactures here. You just don't know about it because you are not in technology. Is manual labor going out the door? Absolutely. That does not mean the end of manufacturing. It just means the end of low end manufacturing in the US.

[gunnerbear]

KTM,

Most steelworks I know of in the Western economies are hi-tech, very capital intensive industries so in that respect I would agree with you. They make 'commodity' items but that isn't 'low end' manufacturing. It is highly skilled, precison heavy engineering.

In any case. here in the UK a government advisor recently suggested.­....

"Only high-quality professional services, financial services and the City of London have any real value and they should be supported at all costs. The rest of the country can be turned over to tourism.” http://www.telegraph.co.uk/news/newstopics/politics/4929712//Gordon-Brown-advisor-says-City-all-important---and-rest-of-the-country-can-be-turned-over-to-tourism.html)

Of course Under Chatham house rules the identity of the speaker isn't allowed to be disclosed but I'm willing to bet he or she is from the group of idiots that sparked the entire banking crisis.

Given the comments above, that is why those of us engaged in manufacturing here in the UK feel that we really are a tribe under threat at the moment. I suspect that steelworkers in the US feel the same way.

[kennethjkranz]

then why are we running a 700 billion dollar trade deficit? The US hasnt had the "hi-tech" trade edge in years. we run a deficit in that too. This isnt about productivity or bad products. Unless you've been lost our trade policy is to import poison food and toys while exporting fraudulent securities.

China is all manual labor. They arent more productive. output per worker...o­r real productivity is less than the US. This is about cheap labor and govt subsidies.

And when have those costs fallen for the consumer? Where is this sustained drop in CPI? It doesnt exist. Thats how trade was sold right? Lower prices? Oh yeah thats right...it would increase profits and increase capital investment. So where is the new capital investment? Not here either. as a percentage of GDP that has fallen since the Reagan adminstration. and by the way wasn't that the one of the goals? To increase real capital investment?

All the things the hack supply-sider austrians were selling have blown up in their face. all that is left is a pathetic clinging to a failed ideology..­...and your post

[Robert59]

I'm unconvinced either party gives a damn about restoring American manufacturing. They believe in globalization; even worse they believe the finance sector creates all the wealth we need. The investment class owns the policy debate on trade.
I also wonder how many of our leaders really believe those who work in manufacturing are grossly overpaid. Anecdotally, I have friends who are the sons and daughters of now retired union workers. They believe union workers are overpaid. Their mindset is hard to fathom because the only reason they were in the lower rungs of the middle class is because organized labor got their parents a decent paycheck.

[jerrypl]

Scott, you are so right. I write about this on my blog and have dedicated one blog to handmade manufacturing. Obama has failed to see that without manufacturing at the nation's core, there is no economy. Since Reagan, manufacturing has been declining in favor of the financial-­monopoly-c­apitalist economy. We need our economy to have an equal part given to the manufacturing capitalist economy. This is the Real Economy.

Instead of handing money to the bankster. Had Obama taken over the banks and put them into receivership, then taken the bailout money to stimulate the manufacturing sector, investing in companies that would bring our energy, agriculture, and transportation industries into the 21st century we would have products that the rest of the world would buy, and the trade deficit would be shrinking as we speak even more than it is now.

http://eye-on-washington.blogspot.com