Manufacturers want national policy to boost their fortunes
This winter, President Obama took the unusual step of naming Ron Bloom his assistant for manufacturing. But Bloom stepped down in August to return to his family in Pittsburgh. He hasn’t been replaced. This comes as manufacturers in our region are clamoring for attention. Many want a sign that manufacturing policy is a priority.
They say it’s time for a national manufacturing policy.
Germany has one. So do Japan and China. And, many manufacturers in the US think we need one too: one document that puts all the existing policies together and says manufacturing matters.
“There needs to be some sort of coordination at the top level that says all of these things add up to something bigger. And, right now we don’t have that,” says Bill Rayl, who heads the Jackson Area Manufacturers Association near Ann Arbor, Michigan.
He was at a meeting in Lansing the other week where the topic of a national manufacturing policy came up. Rayl says most of his members are eager for a cohesive strategy that says “that manufacturing is important to national defense and our national economy.”
Jim McGregor agrees. He’s Vice Chairman of McGregor metalworking in Springfield, Ohio.
He says there’s just too much uncertainty in the manufacturing sector: uncertainty about regulations, legislation, and policy.
One reason businesses aren’t spending and hiring more is fear. And, he thinks a cohesive national manufacturing policy could help change that.
“I think there’s a lot of talk and no action,” McGregor says. “And, we’re passed wishing and hoping."
“For a long time, I think the preponderant view in Washington was that the decline in manufacturing was number 1, inevitable, and number 2, just fine,” says Ron Bloom.
If there was anyone in government who could have pushed a manufacturing agenda, it’s him. Until August, he was President Obama’s assistant for manufacturing policy. You might know him as one of the key players in the government’s bailout of GM and Chrysler.
Injecting taxpayer dollars into the auto industry was one of the most aggressive government actions in decades, but what about before companies fail? What about promoting and helping the ones that can succeed?
“I don’t think we have a formal, capital-P policy in the sense of something you can look up—a bound volume, as it were,” Bloom says. “We did not think it was a good use of our time to try and formalize a capital-P policy.”
"What we do have," Bloom says, "is an administration that has pushed a number of initiatives that help manufacturing, if not exclusively."
“The president pushed very hard and hopefully we’re going to get patent reform. Is that a manufacturing policy? Twothirds of all patents are filed by manufacturing companies. Export promotion, infrastructure spending, allowing capital spending to be depreciated, all areas that are not absolutely to manufacturing, but the preponderance of their benefits go to manufacturing,” Bloom says.
Unlike Japan and China, American leaders tend to be reluctant to get too involved in private industry. That’s a big reason why the administration doesn’t want to create a document that looks like Industrial Policy. To many, even the term reminds them of something like China’s Five Year Plan or suggests the government picking winners and losers. The flap over the taxpayer losses in failed solar company Solyndra shows what happens when the government gets too involved in one company.
Ron Bloom says, in general, the government’s role is to help where the market won’t. He says actions like the auto bailout should be the rare exception. Instead, he says government should boost research and development on technologies that might not see a payoff for many years to come.
The closest thing the administration has to a formal policy is its promotion of so-called advanced manufacturing as an engine for innovation and productivity.
“Now, that does mean that the aggregate number of jobs per se in manufacturing is not going to be huge,” Bloom says. “But that’s the price of a productive sector. That’s not a bad thing.”
He says the jobs that do remain will have a bigger effect on the overall economy. After all, he says Walmarts follow auto plants. Not the other way around.