A Plan to Save American Manufacturing

TradeAlert.org ^ | Wednesday, December 31, 2003 | Kevin L. Kearns, Alan Tonelson, and William Hawkins

[ninenot]

I will no longer respond to your posts

Thank God.

[XBob]

320-"We beat Japan in the economic war and we will beat China as well --- providing we do not protect industries that should be allowed to die."

so, what indstries does that leave us, other than trans-shipping chinese toasters to the end user?

[ninenot]

You know, there was a time in this country when our grandfathers only made a couple dollars a day.

You've raised a number of issues...

First off, I did NOT state that "engineering jobs were gone forever...", it was another poster who is an engineer.

Back to topic.

While tax and reg numbers have risen significantly, so has the cost of living in the USA--partly due to tax/reg--and partly due to the Cost of Gummint, which is enormous.

But the 'couple of dollars a day' earned in this country was sufficient for the cost of living then, and as you recall, the world was on a Gold Standard--currencies could not be manipulated as they are now (by many, most egregiously the PRC.)

Further, the USA's growth opportunities were enhanced by trade agreements which were made for the BENEFIT of the USA, not for the benefit of the Rest of the World.

Thus, there are two major differences between "then" and "now"--gold, and agreement language.

As to Walt Williams: he certainly talks a good game for a tenured professor. Wonder how he would do in the real world?

[ninenot]

So far, all the Chinese have bought is a lot of cellphones. The basic Chinaman has no money for kitchen appliances, washers, dryers, car(s), or guns.

[ninenot]

"Propertyless proletariat..."

You mean like the record number of bankos filed in the USA in 2003? And the near-record number of foreclosures?

Say it ain't so.

Some on this thread don't yet understand that social unrest (I'm being rather restrained) follows deprivation of property; it's only a job which bestows dignity...

[Paul Ross]

China is a huge, emerging market for goods. You cannot argue with that.

Yes I can. The Chinese are the most protectionist market on earth, making the 'suffering' Japanese blush as being mere pikers at protectionism. This is why the myth of the chinese 'market' always was just that. Ultimately: They won't import anything that they want to be supreme in manufacture of. They will import our state of the art factories and all of the 'old' state-of-the-art tools and machines to jump-start this situation. And that is precisely what is happening. Our tool industry, with no domestic market due to its economic implosion and no foreign market due to the 'trade barriers' is almost gone. No tool industry, no industry. Period. To restore our industry, we will have to suddenly import the tools to make things. The entire infrastructure will have to be rebuilt from scratch. And a labor force which was allowed to be dissipated and atrophied will have to be reconstituted, again, from scratch...with virtually no skills and no training and knowledge. The Chinese universities have 17 million students. Almost all in technical fields of endeavor, hard sciences, engineering, etc. In the U.S., with about 15 million in universities, the balance has become grotesquely tipped towards liberal arts, with only a fraction in the hard sciences and technical fields...and many of those students are foreign...and will leave the U.S. when they graduate/or the last U.S. employers ship their manufacturing or R&D operations off-shore.

[Paul Ross]

According to you, the steel industry is just fine. I guess we don't have to build those plants for a war effort, we will just use those on hand now.

Higher Productivity does not mean it is fine. It is on the verge of bankruptcy due to a concentrated--and state-subsidized- attack on the U.S. industries HOME MARKET. The one it NEEDS to be profitable. The US has 'retired' and 'retrenched' its steel making capability 400% or so. In other words...we COULD NOT repeat what we did in World War II...all due to imbecilic Free Traitors who politically aided and abetted the destruction of the U.S. industry.

[XBob]

A'hem. CHINA...not Russia owns Magnequench. Moved the plants to Tianjin, China. Word is that Rumsfeld was AGAIN ordered by GWB to just let it happen, despite his intentions to stop it.

please note from below: "According to the Department of Defense, 80 percent of the rare-earth magnets used in the production of smart bombs come from the Valparaiso facility. " LOL - After china/US war starts - US "China, please send us some magnets to protect ourselves against you'uns".
===
3 Jan 04
Magnequench Employment Opportunities
Current Openings
There are no positions available at this time.
====
http://www.chestertontribune.com/Business/visclosky_and_bayh_still_working.htm

U.S. Rep. Pete Visclosky, D-1st, and U.S. Sen. Evan Bayh, D-Ind., have made another move in their efforts to prevent the closure of the Magnequench facility in Valparaiso and its re-location to the People’s Republic of China.

According to a statement released Friday, Visclosky and Bayh have requested the U.S. Department of the Treasury to release the facts of its investigation into its review of Magnequench’s sale in 1995 to a consortium which included Chinese interests and Magnequench’s acquisition in 2000 of the Valparaiso facility.

Visclosky also asked the House Armed Services Committee to review the contracts which Magnequench currently holds with the Department of Defense.

The closure of the Magnequench facility in Valparaiso would cost the jobs of 225 Northwest Indiana residents and “transfer sensitive bomb-making technology to China,” the statement said. According to the Department of Defense, 80 percent of the rare-earth magnets used in the production of smart bombs come from the Valparaiso facility. “In addition to costing more than 200 working families their livelihoods, the transfer of the facility to China raises serious industrial base concerns.”

“It is our obligation as public servants to pull out all the stops for the workers and their families who will lose their livelihoods,” Visclosky said. “I do not intend to leave anything on the table. I will use every resource at my disposal, and I am very grateful to have Sen. Bayh’s full support and cooperation in this effort.”

“The workers at Magnequench deserve a full explanation as to why their jobs are headed overseas,” Bayh said. “Moving 225 jobs out of Indiana, at a time when the economy is already in a weakened state, disregards the needs of hundreds of Hoosier families. We deserve answers not only about the economic impact of this move, but also about the potential threat to national security that it creates.”

Visclosky and Bayh added that the potential transfer of these operations to China raises new questions about maintaining both a significant source of domestic production of rare-earth magnets and U.S. technological leadership.



Posted 8/6/2003

[XBob]

339 - "It's actually from the DELIBERATE export of jobs to China. Ask FoMoCo., Eaton, Dell, H-P, GM, GE....."

see my last post, exporting US defense industry to china.

[XBob]

339-It's actually from the DELIBERATE export of jobs to China. Ask FoMoCo., Eaton, Dell, H-P, GM, GE.....

[notebob] - note that no red chinese companies are being sued in the lists below.

http://www.magnequench.com/mag_news/releases/mag_new_lawsuit.html

MAGNEQUENCH INTERNATIONAL FILES
PATENT INFRINGEMENT SUITS IN U. S. DISTRICT COURTS
AGAINST MAJOR ELECTRONIC AND COMPUTER FIRMS

New York, May 8 - Magnequench International, Inc., the patent holder and a world leader in the manufacturing of specialized magnetic powders and magnets, filed suit today in the United States District Court for the Southern District of New York as well as Indianapolis against 10 major electronic and computer firms in the United States, Asia and Europe for infringement of four of its patents.

The firms named as defendants in the infringement suit are Acer America Corp.; Acer Inc.; Best Buy Co. Inc.; Circuit City Stores, Inc.; CompUSA Inc. and its parent, Grupo Sanborns SA de CV; Philips Business Electronics North America Corp., Philips Business Electronics International B.V.; Koninklijke Philips Electronics N.V.; Samsung Electronics America, Inc.; Samsung Electronics Co., Ltd.; Sony Computer Entertainment America, Inc.; Sony Computer Entertainment, Inc.; Toshiba America Electronic Components, Inc.; Toshiba America, Inc.; and Toshiba Corporation.

A similar suit was filed in Indianapolis against Compaq Computer Corporation and Hewlett-Packard Company.

The subject matter of the lawsuits involves neodymium-iron-boron (Nd-Fe-B) magnets and magnetic materials used for small motors in most computers and many popular consumer electronic products, as well as automotive and industrial applications. For instance, the magnetic material is used in CD and DVD-ROM drive spindle motors found in computers and home entertainment systems and in the motors that operate the zoom lenses of camcorders.

The global permanent magnet market is about $6 billion. Nd-Fe-B magnets and magnetic materials, the materials involved in the present suit, account for about $2.4 billion of the dollar share of the industry.

Archibald Cox, Jr., president and CEO of Magnequench, commented, "We did not want to file these suits but we were forced to in order to protect our intellectual property investments and the interests of our customers who play by the legal rules. Many of our customers have strongly encouraged us to take this action, and we previously sent warning letters to suspect companies." He added, "Our patent position is strong. Our proof of infringement is indisputable, and our patents have been validated previously by the International Trade Commission. We intend to prosecute infringers vigorously."

Assistant Majority Whip Mike Pence (R-Ind.), who serves on the House Science Committee and whose Indiana district includes the Magnequench world headquarters, stated that "America's technological leadership is its future. We need to make sure that those who steal intellectual property are brought to the bar of justice."

Magnequench used the services of an outside independent testing laboratory to verify that products produced and sold by those named in the complaint used infringing material.

The suits charge that the named companies have infringed on four patents covering Nd-Fe-B magnets and magnetic materials.

Magnequench asks the court for past damages measured by no less than a reasonable royalty, treble damages, a recall of all existing products of the defendants that infringe and the destruction or reconfiguration to non-infringing embodiments of all infringing products.

Since their invention in 1982 and subsequent introduction, Nd-Fe-B magnets have been recognized as being a significant advance over prior materials because of their strength and flexibility in manufacturing.

The high magnetic strength of the Nd-Fe-B magnets permits the miniaturization of many products that use permanent magnets. Indeed, the magnetic properties of Nd-Fe-B magnets have contributed to the development of new electronic devices that would have been impossible or impracticable to make using other types of magnets.

The two largest markets for the patented products are computer data storage and automotive, which together account for 55 percent of the overall Nd-Fe-B market. Nd-Fe-B magnets are also essential components in consumer electronics, medical equipment, and industrial automation products.

Mr. Cox noted, "Our patents extend to 2007 and beyond. But, we are not hiding behind our patents. We understand how important costs are to our customers. We have promised and delivered price reductions of more than 7.5 percent a year for the past three years and we plan to continue on the same path through at least 2005."

Magnequench, with headquarters in Anderson, Indiana, has annual revenues of more than $250 million. It has more than 1,500 employees in seven countries and nine production facilities. In addition to Indiana, the company has operations in North Carolina, New Jersey, Germany, Switzerland, England, Singapore, Japan and the People's Republic of China.


For more information contact:
The Dilenschneider Group
Jonathan Dedmon (Chicago)
312-553-0700
Bill Smith (New York)
212-922-0900

Employment Opportunities

Current Openings

There are no positions available at this time.

[XBob]

345 - "Some on this thread don't yet understand that social unrest (I'm being rather restrained) follows deprivation of property; it's only a job which bestows dignity..."

What really bothers me is the 'arrogant ignoramuses' who continually get Marx backwards, and who are in fact Marxists, and haven't got a clue.

[Paul Ross]

Second, national security may be jeopardized in the short-run, however, we could build manufacturing plants in a few months to churn out what we need for any war effort (in face of a boycott). Do you remember WW2?????

Do you remember the most recent war with Iraq? We had depleted our inventory of cruise missiles and JDAMs almost completely after taking care of Afghanistan. These were the precision weapons critical to our military. We relied on a tiny Swiss company for an oscillating crystal (the strobe) for the electronics. Pretty basic technology. We invented it. And we used to make almost all of them right here. Not super-cutting-edge technology anymore. It became classified 'mature technology'. For analogy's sake, let's call the strobe a 'Nail'. We had allowed our semi-conductor manufacturers of strobe chips to go out of business and be bought up by foreigners, and their technology transferred, sold off-- outsourced to Asia and Europe, BTW.

So the Swiss company wound up being the supplying vendor for a chip no longer made in the U.S. There were no fabrications operations anywhere in the U.S. that COULD make them anymore.

Then the Swiss government, running with the French Anti-American tide...banned shipments of the crystal to their 'ally' the U.S. way back in 2001 as they protested our finishing the war against terror-sponsors. Fortunately, there were still a few people who remembered how to set up a factory from scratch again and churn out several thousand such chips. But they literally, from blank-check go-ahead at the beginning of 2002, to the end of October, 2002, had to have a crash program to get this one plant up and running. These chips, as a result, cost ten times what the 'global' market for them would have been. And it wasn't until October that we had any chips. A lot of ordnance had to be rebuilt very inefficiently awaiting the missing 'nail' which meant we had no 'shoes' or 'horses' for the war until very late. This re-armament effort was the reason we waited almost 14 months from the Afghan war's conclusion to go after Osama's biggest covert sponsor (or 'hiring agent').

This was an indusrial capability which, in a limited way, was reconstituted at great expense...but it took longer than 'a few months'. And many other industries which are being sucked into the Chinese black hole will be vastly more difficult to reconstitute. The Neodymium super-magnets for example. Also critical to the JDAMs, the F-16's, Pratt & Whitney's best engines, all our aeronautical servo-motors, etc... If China cuts us off, (they bought GM's highly profitable Magnequench division which invented them) and relocated it to Tianjin, lock stock and barrel...we're simply SOL.

[XBob]

346 - "They will import our state of the art factories and all of the 'old' state-of-the-art tools and machines to jump-start this situation. And that is precisely what is happening."

If you followed our Export Trade (deficit) we have been running a deficit for many years. And, numbers of years ago, the only 'surplus' we had was with Hong Kong.

This was because Hong Kong was a British colony, and therefore did not have 'trade restrictions' for high technology stuff. So, billions and billions worth of high technology was shipped to hong kong, from where it was directly shipped to red china.

When Hong Kong went back to China, the restrictions fell heavy on China, so xlinton got the technology restrictions lifted on shipments to China, and they continued importing our high technology, however, directly from that time on, as Xlinton gave exemption after exemption, until he got the WTO thing passes, allowing direct shipments again.

[Paul Ross]

Employment Opportunities Current Openings There are no positions available at this time

The devastating irony you have pointed out will undoubtedly be lost on the humorless CATO-commies who lurk around.

[XBob]

354 - "Employment Opportunities Current Openings There are no positions available at this time
The devastating irony you have pointed out will undoubtedly be lost on the humorless CATO-commies who lurk around."

How true - I got that quote direct from the Magnaquench site just before I posted.

[DannyTN]

EMERGENCY MEASURES 1. The president must declare that the United States faces ...outsourcing emergency.
What good will that do? Only shock the world economy.

2. ...create...task force ...to oversee ... crisis.
The task force should provide input to the czar. Otherwise death by committee.

3. Federal R&D spending should be tripled and Washington should offer matching grants to industry.
Certainly pursue high tech, but be careful of gov't strings that slow it down more than the funds help.

4. ... imposing a “variable trade equalization tariff” on imports from countries running a trade surplus ten percent or greater of total bilateral trade.
Tarriffs should be tied to both the unemployment in the US and to the mean wage. Tarriffs should also be higher on specific targeted industries that are defense and high tech related that we want to insure remain in the US as well as on countries that don't share our values of freedom and sanctity of life, ie China and middle eastern countries.

5. ...outsource ... medical and financial records
Just ban this outright. There is no reason that medical and financial data should leave this country unless it's an international transaction.

6.. moratorium on all ...free trade talks pending ... new national trade strategy.
No let the talks go forward, just don't sign anything new until the Czar is confortable moving ahead.

7. ...moratorium on U.S. compliance with WTO panel decisions
We might well have to drop out of this. Depends on whether we can effectively protect the key industries while remaining in.

8. moratorium on U.S. compliance with NAFTA
We might have to drop out of this as well. Depends on whether we can effectively protect the key industries while remaining in.

9. ...replacing the current FSC tax incentive with a major tax break for any company, either American or foreign-owned, that performs genuine manufacturing activity in the United States.
Tax policy via vie other countries does need to be reviewed. Either trade agreements need to be reworked to balance tax effects or our tax policy needs to change to be competitive. I don't like the idea of trade agreements dictating our tax policy. But I by no means am convinced our tax policy is optimal.

10. ...expedite procedures for anti-dumping and countervailing duty suits.
And vice versa, we should take full advantage of time frames withing current WTO proceedures to put temporary tarrifs up.

11. The current steel tariffs should be expanded
We should maintain a minimum production capacity for defense purposes. Beyond that lets use cheap foriegn steel and keep our resources.

12. A stiff tariff ...on countries ...manipulating their currencies for trade advantage.
I'm not sure about this. Protect key industries, beyond that if other countries want to subsidize their goods let them. Remember both funds and goods are highly fungible so the key is to protect the industry, not just try to penalize one specific country.

13. The defense industry must be treated different
Absolutely! This used to be a cornerstone of trade policy and somehow we lost it during the Clinton years.

14. Public money should be returned to the domestic economic
Agreed, to the extent reasonably possible. Borrowings should always be in US dollars also. To do otherwise gives up our sovergnty.

15. The scheduled abolition of the Multi-Fiber Arrangement pending a study of the effects of the MFA's abolition on domestic and third-world producers in these industries.
Don't know enough to say

16. Stiff tariffs should be levied on countries that impose offset requirements on U.S. defense manufacturers.
Sounds good.

17. ...a moratorium on foreign acquisitions of U.S. defense-related companies pending completion of comprehensive study.
Agreed. We might need to selectively target reacquisition of certain firms.

18. Strict, detailed country-of-origin labeling should be required on all food and agricultural imports. Especially green onions and cows!

19. Legal immigration into the United States should be limited to 500,000 annually.
Yes. Foreign nationals should not be allowed to study certain key fields in our universities. Immigration should be refocused on more culturally compatible countries such as Europe, Russia and Austrailia than the current emphasis on middle easterners and latinos. Immigration should be tied to the unemployment level.

LONGER-TERM MEASURES

1. ...insist ...trade agreements be strictly reciprocal and strongly enforceable...
Nice but too vague.

2. include provisions penalizing signatories for currency manipulation.
How do you define manipulation? What are the threshholds? Seems to me it gets back to let's protect our key industries by taxing or blocking imports, instead of trying to micromanage everyone elses economy.

3. ...launch a major diplomatic campaign to press other OECD countries to increase third world imports,...Greater burden sharing in this vital sphere is urgently needed.
It seems to me that cheap imports in certain areas are fine. We just need to protect key industries. So it doesn't matter what the OECD countries do. Let's do what is in our best interest and trade wherever it's appropriate.

4. ...focus any new trade agreements on high-income countries capable of serving as final consumers of U.S. exports.
No just make sure that what we are outsourcing to third world countries are activities that we really won't miss very much.

5. ...remove responsibility for ...trade agreements from ... the U.S. Trade Representative and place it in the Department of Commerce.
Agreed

6. ...enact strict foreign lobbying reform covering all federal officials,
Agreed

7. The Commerce and Defense Departments should be ...co-chairs of the inter-agency Committee on Foreign Investment in the United States, which reviews all proposed foreign acquisitions of U.S. defense-related companies.
Agreed

8. ...commission immediate reports ... on foreign subsidies existing outside the steel industry and implement tariffs to offset them.
Put under task force and consider tax policy implications as well.

9. ....publish more complete and timely foreign trade and investment data.
More regs, more paperwork. Tread lightly here.

10. comprehensive review of all U.S. defense alliances
Like this isn't already done and doesn't belong here.

[XBob]

354 - "CATO-commies"

good one, sad but true.

Willie Green, you are missing a lot of good posts, or are you just lurking for the time being.

[A. Pole]

Sounds like sore Democrats to me! One party rule --- SHEESH!!!

Why? I grew up under one party rule in Communist Poland and I in a way enjoyed when the American President belonged to one party while the Congress was dominated by another. It had some good sides under Reagan and under Clinton.

You seem to have preference for monarchy, which can be a good system and more fit for the empire, but it is not what Founding Fathers had in mind. Maybe it is wrong on my side, but I like when the parties have to compete for my vote.

[A. Pole]

The Japanese have proved that this does not work. Japan protected their industries and jobs against foreign competition and have been suffering the longest recession in their history.

No, they grew from the poor Third World country to the one of the world economical leaders under protectionism. Only at the end they run into some slowdown and even that AFTER abandoning the strict protectionism.

Without their protectionsim they would be another Indonesia.

[A. Pole]

I would prefer to look at JOBS that are protected --- teachers, professors, etc. Tenure is a form of protection that leads to lower standards and work ethics.

Wrong. The perspective of tenure is the main attraction of the professor work. Remove it and mainly the fools will go into this field.