Death of Manufacturing

The American Conservative ^ | 8/23/03 | nonglobalist

[cp124]

Death of Manufacturing

The rise of free trade has eroded America’s industrial base and with it our sovereignty.

By Patrick J. Buchanan

After Mass at St. Mary’s, a retired FBI agent who had worked as a boy in the great steel plant in Weirton, W.Va., whose father had died in an accident at the mill, handed me the Weirton Daily Times. “Where Do We Go From Here?” read the May 20 banner. The front page was devoted to the bankruptcy filing of Weirton Steel, which had once employed 14,000 workers in a town of 23,000. Mark Glyptis, president of the Independent Steelworkers Union, said it didn’t have to happen. It was a poignant story. When I began my campaign of 2000 at the Weirton mill, Mark and his ISU endorsed me.

That same week, a friend e-mailed me. Timco, a lumber mill where we spent the last day of the New Hampshire campaign of 1996, had shut down. As Weirton Steel had been hammered by subsidized steel dumped in the U.S. market, Timco had to compete with subsidized lumber from Canada.

Across America the story is the same: steel and lumber mills going into bankruptcy; textile plants moving to the Caribbean, Mexico, Central America, and the Far East; auto plants closing and opening overseas; American mines being sealed and farms vanishing. Seven hundred thousand textile workers—many of them minorities and single women—have lost their jobs since NAFTA passed in 1993.

Thirty years have elapsed since our free-trade era began and 30 months since George W. Bush became president. It’s time to measure the promise of global free trade against the performance.

Undeniably, free trade has delivered for consumers. A trip to the mall, where the variety of suits, shoes, shirts, toys, gadgets, games, TVs, and appliances abounds, makes the case. But what has it cost our country?

Every month George Bush has been in office, America has lost manufacturing jobs. One in seven has vanished since his inauguration. In 1950, a third of our labor force was in manufacturing. Now, it is 12.5 percent. U.S. manufacturing is in a death spiral, and it is not a natural death. This is a homicide. Open-borders free trade is killing American manufacturing.

In 2002, we ran a trade deficit in goods of $484 billion. This May, it reached the level of $562 billion, nearly 6 percent of GDP. Evangelists of free trade tell us trade deficits do not matter. Michael Boskin, Chairman of the Council of Economic Advisers under Bush I, declared, “It does not make any difference whether a country makes computer chips or potato chips.”

History teaches otherwise. In 1860, Britain abandoned its Britain First trade policy for the free-trade faith of David Ricardo, John Stuart Mill, and Richard Cobden. By World War I, Britain, which produced twice what America did in 1860, produced less than half and had been surpassed by a Germany that did not even exist in 1860.

Free trade does to a nation what alcohol does to a man: saps him first of his vitality, then his energy, then his independence, then his life.

America today exhibits the symptoms of a nation passing into late middle age. We spend more than we earn. We consume more than we produce.

Why does it matter where our goods are produced? Because, as I wrote in The Great Betrayal:

Manufacturing is the key to national power. Not only does it pay more than service industries, the rates of productivity growth are higher and the potential of new industries arising is far greater. From radio came television, VCRs, and flat-panel screens. From adding machines came calculators and computers. From the electric typewriter came the word processors. Research and development follow manufacturing.

Alexander Hamilton, the architect of the U.S. economy, knew this. He had served in the Revolution as aide to Washington and lived through the British blockades. He had led the bayonet charge at Yorktown. And he had resolved that never again would his country’s survival depend upon French muskets or French ships.

As first Treasury Secretary, he delivered in 1791 the “Report on Manufactures,” one of America’s great state papers. Reflecting on how close his country had come to losing its liberty, Hamilton wrote,

Not only the wealth, but the independence and security of a country, appear to be materially connected with the prosperity of manufactures. Every nation … ought to endeavor to possess within itself all the essentials of a national supply. These comprise the means of subsistence, habitation, clothing and defense.

Under the Constitution he helped write, a national free-trade zone was created. Hamilton’s idea was to use tariffs to end our dependence on Europe and force British merchants to finance our government and the roads, harbors, and canals that would tie America together with commerce.

Tariffs would give our national government the revenue to operate, while providing our people both privileged access to the fastest growing market on earth and incentives to go into manufacturing. With American manufacturing thus encouraged, we would soon produce ourselves the guns and ships to defend the republic and the necessities of our national life so we could stand alone against the world.

For 12 decades, America followed Hamilton’s vision. On the eve of World War I, the 13 agricultural colonies on the eastern seaboard had become the richest nation on earth with the highest standard of living, a republic that produced 96 percent of all it consumed while exporting 8 percent of its GNP, an industrial colossus that manufactured more than Britain, France, and Germany combined.

The self-sufficiency and industrial power Hamiltonian policies created enabled us to rearm in security, crush the Axis in four years, rebuild Europe and Japan, and outlast the Soviet empire in a Cold War, while meeting all the needs of our people.

But in the Clinton-Bush free-trade era, Alexander Hamilton is derided as a “protectionist.” Woodrow Wilson’s free-trade dogma is gospel. Result: our trade surpluses have vanished, our deficits have exploded, our self-sufficiency has been lost, our sovereignty has been diminished, and an industrial base that was the envy of mankind has been gutted.

And for what? All that junk down at the mall? What do we have now that we did not have before we submitted to this cult of free trade?

The Loss of Independence

Consider the depths of our new dependency. Imports, 4 percent of GDP for the first 70 years of the 20th century, are near 15 percent now, and 30 percent of the manufactures we consume. Pat Choate, author of Agents of Influence, gives the following levels of U.S. dependency on foreign suppliers for critical goods:

* Medicines and pharmaceuticals: 72 percent * Metalworking machinery: 51 percent * Engines and power equipment: 56 percent * Computer equipment: 70 percent * Communications equipment: 67 percent * Semiconductors and electronics: 64 percent

In July, the U.S. Business and Industrial Council reported that the Pentagon officials responsible for procuring U.S. weapons had joined with defense industries to oppose legislation requiring 65 percent U.S. content. U.S. missile defense and the Joint Strike Fighter would be imperiled if 65 percent of the components had to be made in the USA.

As Choate writes, Dell Computers of Austin has 4,500 suppliers. Its just-in-time supply line, which stretches across the Atlantic and Pacific, has an inventory of four days. A dock strike on either coast, and Dell begins to close down after 96 hours.

The Loss of Sovereignty

In the lame-duck session of Congress after the GOP triumph of 1994, Bob Dole and Newt Gingrich colluded with Clinton to bring us into a World Trade Organization where we are outvoted 15-1 by the European Union. In its most important ruling, the WTO has held that the foreign sales corporations of U.S. exporters like Microsoft and Boeing, set up to receive tax benefits voted by Congress, violate the rules of free trade.

Europe is now authorized to impose $4 billion in tariff penalties on U.S. exports if Congress fails to rewrite our tax laws to conform to WTO commands.

When America bailed out the world in the Asian crisis of 1997-98, Indonesia, South Korea, Russia, and Brazil devalued their currencies, slashing the dollar price of their exports. To enable them to earn the hard currency to pay back Western banks and the IMF, America agreed to keep her markets open. Soon, steel from Indonesia, South Korea, Japan, Russia, and Brazil was being dumped in the United States, and American mills were reeling.

The recent steel decision is instructive. By 2002, 25 steel companies had gone bankrupt, and the International Trade Commission had identified dumping as the industry killer. Invoking U.S. trade law, President Bush imposed tariffs. The dumpers howled and ran to the WTO, which declared the U.S. tariffs unjustified. Either the Congress removes them or the EU is empowered to impose $2 billion in tariff penalties on U.S. exports.

Consider what submission to the WTO has meant. Our Congress is ordered by foreign bureaucrats to alter U.S. law or our companies face penalties. Presidential decisions to protect vital American industries are declared invalid by Eurocrats. The terms of access to the U.S. market are now to be decided in Geneva by Lilliputians of the New World Order.

Why are we letting this happen?

Libertarians teach that free trade provides a check on government power. By enabling citizens to buy outside their borders, free trade forces governments to reduce regulations and taxes to stay competitive.

A fine theory. Has it worked out? Hardly. History shows that the opposite is true. Bismarck’s Zollverein, or customs union, went hand-in-hand with the rise of the Second Reich. The EU evolved from a free-trade common market into the socialist superstate of today that is the model for the world government under which all nations surrender sovereignty and how we live will be decided by Platonic guardians.

In the protectionist era from 1789 to 1933, U.S. taxes rarely took more than 3 percent of GNP, except in wartime. Government relied on tariffs. Before 1913, except for the Civil-War era and briefly under Cleveland, we had no income tax. But in the free-trade era, U.S. tax rates on incomes, currently 35 percent, have risen as high as 70 percent, and spending has exceeded 20 percent of GDP in peacetime. The free-trade era is the era of Big Government.

As a former Friedmanite free trader, let me say it: free trade is a bright shining lie. Free trade is the Trojan Horse of world government. Free trade is the murderer of manufacturing and the primrose path to the loss of national sovereignty and the end of our independence.

NAFTA: The Big Sting

In 1993, the NAFTA debate gripped the country. Clinton had the backing of the political establishment, the Heritage Foundation, AEI, Brookings, National Review, New Republic, Wall Street Journal, Washington Post, Chamber of Commerce, Business Roundtable. Perot, Buchanan, Nader, and the AFL-CIO were opposed, as were the people. But that did not matter. Before the vote, the bazaar opened, and Congressmen began selling votes to Clinton for whatever they could get. NAFTA won.

Ten years later, returns are in. We were told our trade surplus with Mexico would grow, that NAFTA would create jobs here, that the rising wages in Mexico would end the invasion of illegal aliens.

But, the year after NAFTA passed, Mexico devalued the peso, and the United States began to run a string of trade deficits that has reached $40 billion a year. Drug cartels in South America shifted operations to Mexico. U.S. exports to Mexico are up, but it is not finished goods we send south but parts to be assembled—and factories and jobs as owners shutter plants north of the Rio Grande in search of wages that are 10 to 20 percent of what they have to pay in the United States.

By 2000, a million Mexicans were working in maquiladora plants south of the border at jobs once held by Americans. But now, the creative destruction of globalization has come to Mexico. Factories there are being shut down and moved to America’s new enterprise zone, China.

And the Mexican people? Half of the 100 million are still mired in poverty. Tens of millions are unemployed or underemployed. Real wages are below what they were in 1993. And the migration north continues as 1.5 million are caught each year breaking into the United States. Of those who make it, one-third head for California where their claims on welfare, Medicaid, schools, and prisons have tipped the state toward bankruptcy as the taxpayers have begun a great exodus to Nevada, Idaho, and Colorado.

NAFTA has helped to convert California into Mexifornia and the Golden State into a Third-World country. Ten years after its passage, Mexico’s leading export continues to be Mexicans.

Factory Floor to the World

While Americans are sacrificing the future for the present, China is sacrificing the present for the future.

Beijing’s boom began after it devalued its currency in 1994. While a blow to Chinese consumers, devaluation gave Beijing a competitive edge over the other “Asian tigers.” Beijing then invited Western companies to locate new factories there to tap its pool of low-wage labor. As the price of access, Beijing demanded that Western companies transfer technology to Chinese partners. What the companies do not transfer, the Chinese extort or steal.

By offering excellent workers at $2 a day, guaranteeing no union trouble, allowing levels of pollution we would not tolerate, and ignoring health and safety standards, China has become the factory floor of the Global Economy and surpassed the United States as the world’s first choice for foreign investment.

What analyst Charles McMillion calls “the world’s most unequal trading relationship,” can be seen in the trade statistics. In 2002, the U.S. trade deficit with China was $103 billion. In May, it was running at $120 billion, the largest deficit between two trading nations in history.

It is thus a myth to say President Bush is presiding over a “jobless recovery.” The Bush tax cuts and Bush deficits are creating millions of manufacturing jobs —in China. America buys 14 percent of China’s production and delivers Beijing a trade surplus of 12 percent of its entire GDP. American purchases probably account today for 100 percent of China’s economic growth.

The U.S.-China relationship cannot truly be described as trade. It is rather the looting of America by China and its corporate collaborators in the United States. Beijing understands what economic nationalist Friedrich List wrote long ago: “The power of producing wealth is infinitely more important than the wealth itself.”

China has now amassed $360 billion in reserves from her trade surpluses since 1990. Much of that is invested in U.S. bonds and T-bills, earning Beijing billions in interest from the U.S. Treasury. America may be the most advanced nation on earth, and China a developing country, but you could not tell that from studying the trade statistics.

In 2002, China ran up its largest trade surpluses with us in electrical machinery, computers, toys, games, footwear, furniture, clothing, plastics, articles of iron and steel, vehicles, optical and photographic equipment, and other manufactures. Among the 23 items where we had a surplus with China were soybeans, corn, wheat, animal feeds, meat, cotton, metal ores, scrap, hides and skins, pulp and waste paper, cigarettes, gold, coal, mineral fuels, rice, tobacco, fertilizers, glass. Beijing uses us as George III used his Jamestown colony.

One who has studied how China deals with craven capitalists who come courting is columnist Terry Jeffrey. On inspecting the Web site of Motorola, Jeffrey found this description of how it sees its future:

Motorola is moving toward … taking China as its home and development base. Motorola Chinese Electronics … has increased its investment several times in China without taking away a single dollar. The company reinvested all the profits in China. … Since the very beginning Motorola has brought forward the idea of trying to be a good citizen of China, taking China as its home and thriving with the Chinese people. … The development goal is to become a true Chinese company.

The hilarity of Motorola’s kowtow to the mandarins of the Middle Kingdom aside, this passage reveals a hidden cost of globalization. When U.S. companies go global, they shed their loyalty to America.

Consider Boeing, last surviving U.S. manufacturer of commercial aircraft. Apparently, Boeing has gone beyond building plants in China to make horizontal stabilizers and vertical fins for its fleet. On Jan. 1, this story ran in the New York Times:

The State Department has accused two leading American companies of 123 violations of export laws in connection with the transfer of rocket and satellite data to China during the 1990s. The Boeing company and Hughes Electronics Corporation, a unit of General Motors, were notified of the accusations last week.

Hamilton, Clay, Lincoln, and T.R. would recognize China’s policy for what it is and counter it. But this generation of free traders does not have a clue as to what is going on, or does not care. Either way, the consequences will be the same: de-industrialization of America, decline of the dollar, a deepening dependency on foreign countries for the necessities of our national life, diminished sovereignty, and eventual loss of our independence. If you disbelieve this, look at the once sovereign and independent nations of Europe.

Implosion of the Global Economy

One need not have a Nobel Prize in economics to understand that U.S. trade deficits cannot continue rising indefinitely. As Choate reports,

In the 1970s, [the United States] mounted a decades-long deficit of $75 billion. … In the 1980s, the deficit soared to $843 billion as Japan began to take away our industries. … In the 1990s, that trade deficit doubled to $1.7 trillion. … At this pace, we’re probably going to have a $6 trillion cumulative deficit in this decade—and that’s probably an understated number given the pace we are losing our manufacturing base.

But the world is not going to continue lending Americans $500 or $600 billion a year to indulge our appetite for foreign goods. The U.S. dollar has already lost 25 percent of its value against the Euro, and foreigners have begun to buy up America, purchasing our land, stocks, bonds, and T-bills. Foreigners now claim a lion’s share of the $300 billion we pay in annual interest on the U.S. debt and have liens against all future profits of our Fortune 500 companies.

Consider the altered situation we face today compared with five years ago. When the Asian crisis broke, our economy was booming. We could see budget surpluses out to the horizon. With the IMF, we poured over $200 billion in fresh loans into Thailand, Indonesia, the Philippines, South Korea, Russia, Argentina, and Brazil. To enable them to earn the cash to pay back the sums they owed private creditors and international banks, we pledged to keep America’s markets open to their exports.

These, then, are the three pillars of the Global Economy: first, the willingness of America to bail out nations about to default. Second, the willingness and capacity of America to run enormous trade deficits indefinitely. Third, continued wealth transfers to the Third World.

And this is why the Global Economy is in peril. When Argentina declared it could not service its debt, America and the IMF refused to lend new money. Argentina defaulted. A tottering Brazil was bailed out, but the message was clear. The days of automatic bailouts of bankrupt regimes are over.

And with the dollar sinking, the U.S. budget deficit soaring, our merchandise trade deficit at $562 billion and rising, and manufacturing jobs vanishing at the rate of 80,000 a month, America’s willingness and ability to continue sacrificing for the Global Economy are coming to an end.

Perhaps the most inexplicable free traders are the neoconservatives who champion “unilateralism,” talk of a Pax Americana, and cheer the coming American empire of pith helmets and jodhpurs. Do they not understand that trade is not an end in itself but a means to an end: national power? Can they not see that our growing dependence on foreign oil and nations like China for the necessities of national defense imperils our security? Can they not see that these mammoth trade deficits must sink the dollar and that no nation with a falling currency can maintain the troops and subsidies to sustain an empire?

In 1962, Prescott Bush stood with Barry Goldwater and Strom Thurmond to vote no on JFK’s Trade Expansion Act. President Bush rejects the economic patriotism of his grandfather and embraces the Wilsonian faith that free trade will lead to global democracy and world peace. Like his father, he also embraces Wilson’s faith in open borders and moral interventionism. Wilsonism may cost him his presidency.

August 11, 2003 issue Copyright © 2003 The American Conservative

[Ronly Bonly Jones]

Yeh, Pat. It's clear that the UAW no longer exists because all our cars are being made in Indonesia. This explains why there are so many hamburger flippers where Detroit used to be. Riiiiiiight.

[cp124]

DCX mandate: 'World prices'
132 suppliers told to cut - or get cut

By Robert Sherefkin
Automotive News / June 16, 2003

DETROIT The Chrysler group is getting tough on parts makers that fail to deliver the world's lowest prices.

Chrysler has targeted suppliers that have a gap between their price to Chrysler and the lowest price that can be found anywhere in the world - prices that suppliers say come from low-wage Asian nations.

The automaker told 132 suppliers to cut prices by today, June 16. Chrysler also has demanded that the price cuts be made retroactive to Jan. 1, according to letters from Chrysler to the suppliers. Automotive News obtained a copy of one letter sent this month.

The new deadline is the latest move in Chrysler's campaign to establish the lowest possible "world price" for each component. Typically, world prices include the cost of transporting components to the assembly plant.

This effort has gained a new sense of urgency in the wake of Chrysler's warning that it will lose nearly $1.2 billion in the second quarter.

In recent weeks, Chrysler has delayed merit pay raises, reduced health care benefits for white-collar employees, limited overtime pay and canceled plans for a new assembly plant in Ontario.

Chrysler's letter to suppliers is part of a three-year effort to cut annual purchasing costs by $4.4 billion. In 2001, the company announced across-the-board price cuts of 5 percent, then made those cuts retroactive.

Next the automaker told of plans to save an additional 10 percent by the end of 2003. To achieve that goal, Chrysler is redesigning components. The company also has asked many suppliers to match prices set by factories in low-wage nations such as China.

Chrysler says most of its top 850 suppliers have responded with substantial price cuts. The recent letter targets 132 suppliers that Chrysler says have failed to match its world price.

Those who fail to respond could lose contracts. Over the past three years, Chrysler has re-sourced $5 billion in contracts.

Not happy

Suppliers were not pleased to receive Chrysler's warning. "It's just an effort to use Chinese prices against us," says one supplier.

But a senior Chrysler executive insists that the automaker is not arbitrarily slashing prices.

"We tell them there is a (price) gap, and we ask them to come up with cost reductions," says Peter Rosenfeld, who was named Chrysler group's executive vice president of procurement and supply, effective Dec. 16.

Rosenfeld says he sent letters to the 132 suppliers because they have not responded. "We are saying, 'You have to fix this. If you don't, here are the consequences.' "

Keeping score

Rosenfeld also notes that pricing is not Chrysler's sole measure of performance. Chrysler keeps scorecards for 850 major suppliers. Those suppliers are graded according to cost, quality, delivery and technology.

Chrysler characterizes its scorecards as a scientific way to measure each supplier's performance.

But one supplier's president complains that Chrysler's world prices sometimes exclude engineering costs. The president, who asked not to be named, says he lost a contract after Chrysler gave his blueprints to a rival company.

He says the bid was unfair because the rival did not have to pay any engineering costs. The executive says Chrysler told him: "We don't pay engineering costs."

Rosenfeld says Chrysler does pay engineering costs: "Any supplier with an issue should see me."

[magellan]

It seems Pat forgot about Toyota, Nissan, Honda, BMW, and Mercedes, building car manufacturing plants in America to take advantage of our superior productivity and lower costs.

Even Korea's Hyundai is building a plant in America.

[cp124]

VW Group to source parts in China

By Alysha Webb
Automotive News / July 16, 2003

SHANGHAI, China — Volkswagen, which has complained frequently about the high cost of auto parts in China, will follow the example of Ford Motor Co. and General Motors and begin sourcing parts here for its global operations.

Peter Wolters, head of finance for FAW-VW Automotive Co., a joint venture in the north China city of Changchun, has been named head of purchasing--China for VW Group, a new position.

“At the moment, Chinese suppliers are too expensive,” Wolters said in a brief interview. “But bringing in new cars to China on a common platform will achieve economies of scale.”

China is VW’s largest market. It expects to sell more than 600,000 cars here in 2003.

The automaker will boost its production capacity in China to close to 1.5 million cars and light trucks over the next five years by building a new plant in Changchun and adding capacity at Shanghai Volkswagen.

Ford has said it will source $1 billion in parts from China this year, while GM has announced plans to source $10 billion in parts here, without naming a timeline.
Read more about...

[cp124]

Assembling a product is only a fraction of the benefit to the economy. These parts are supplied from Japan, Taiwan, and China. Producing the parts makes a trickle down effect on the economy. Part manufacturers buy machine tools, tooling, etc. The machine tool and tooling companies buy machinery and tooling. etc,etc,etc.

[RaceBannon]

http://www.freerepublic.com/focus/f-news/959787/posts
Lawmaker predicts defeat for 'Buy American' language (Defense Department procurement update)


"But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade." ~ Karl Marx, On the Question of Free Trade, January 9, 1848
http://www.marxists.org/archive/marx/works/1848/01/09ft.htm#marx


"Communists and socialists feel sure that setting up international “free” trade systems which impose regulations chuck full of intrigues, redistribution plans, arbitrary law, and interdependence schemes, will win out against the conservative interests of every free nation. What could be better than to use “free” trade to reverse the advantage of the relatively free, moral, prosperous,
and strong nations of the Earth, so that the tyrannical, amoral, poor, and weak nations of the socialist bloc might get the upper hand? What could be a more cunning approach than to market the idea that those who oppose “free” trade are enemies of freedom?" http://www.newsmax.com/commentarchive.shtml?a=2000/6/27/105655


http://www.freerepublic.com/focus/news/954156/posts

http://www.freerepublic.com/focus/news/957315/posts

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http://www.freerepublic.com/focus/news/957331/posts

http://www.freerepublic.com/focus/f-news/957635/posts

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http://www.freerepublic.com/focus/f-news/960206/posts

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http://www.freerepublic.com/focus/f-news/963930/posts

http://www.freerepublic.com/focus/news/969207/posts

http://www.freerepublic.com/focus/f-news/969195/posts

[cp124]

Industry official: U.S. manufacturing will never be the same
Overseas competition killing low-skill jobs
Rich Rovito

The prolonged economic slump has forever changed the manufacturing sector, forcing companies to re-evaluate the way they do business as they face intense competition from around the world.

This was the message delivered to a select group of manufacturing executives invited to attend a roundtable discussion that kicked off the "Manufacturing Matters" conference May 5-6 at the Midwest Airlines Center in Milwaukee.

"This isn't just another business cycle. Nothing will ever be as it was," said Phyllis Eisen, vice president of The Manufacturing Institute, a Washington, D.C.-based arm of the National Association of Manufacturers. "This is a period of transition."

The recovery is the slowest on record, Eisen said, and has created a crisis in the manufacturing sector, with U.S. companies permanently losing business to low-cost overseas competitors.

Although there are signs of hope, such as increased factory orders, the manufacturing sector "is still hemorrhaging jobs," she said.

Wisconsin manufacturers alone have shed 88,000 jobs over the past three years.

"Some of these jobs are gone forever," Eisen said. "What's left are high-skilled jobs."

It's "fantasy" to think that low-skill jobs that have been lost to Mexico, China and other countries will ever return to the United States, she said.

"I don't know what's going to happen to poor people," she said. "If they don't have skills, they won't be part of society."

Although low-skill jobs are disappearing, manufacturing jobs that require higher-skill levels are in demand, Eisen said. The challenge is turning young people on to careers in the sector, she said.

Most students view factory jobs as "dark and dirty," unaware that manufacturers can provide family-supporting jobs, she said.

High school students are pushed by teachers and counselors to attend college, with little thought given to technical or trade schools, she said.

"The thought is that you're first-class if you go to college and you're a loser if you go to trade school," Eisen said.

Students must be allowed to see the relationship between manufacturing and technology, she said.

"I wouldn't let a kid out of eighth grade without visiting a modern manufacturing floor," Eisen said.

In order to secure the long-term health of the country's manufacturing sector, funding needs to be preserved for organizations like the Wisconsin Manufacturing Extension Partnership, Eisen said. The Madison-based organization provides small and midsize manufacturers with consulting services on advanced manufacturing technologies and business practices that are intended to boost revenue and overall efficiency. It has been battling to maintain federal and state funding.
Concerns about China

The discussion also touched on perhaps the most immediate threat -- low-cost manufacturers in China.

"China is going to be to this decade what Japan was to the 1980s, but blown up to 20 times the size," Eisen said.

The threat is heightened by China's undervalued currency, she said.

Chinese manufacturers are quoting projects at less than the cost of raw materials for U.S. manufacturers, said Paul Ericksen of the Wisconsin Supplier Development Consortium, a manufacturing group that fosters relationships between the state's suppliers and original equipment manufacturers.

"The Chinese have the power to take away our manufacturing base," he said.

It's key for small and midsize suppliers to enlist the help of original equipment manufacturers if the state's manufacturing sector is to remain viable, Ericksen said.

"If I can save 30 percent by going overseas, I have to do it out of responsibility to our shareholders," Ericksen said.

However, manufacturers that are flexible to customers' needs often are able to win orders away from companies that compete on cost alone, provided they are "ballpark competitive" when it comes to pricing, Ericksen said.

Keith Peterson of Humane Manufacturing in Baraboo said he can retool his manufacturing operation in about half an hour, which gives his company an advantage over inflexible, low-cost competitors. By running a more efficient operation, Humane Manufacturing, which makes rubber flooring from recycled products, is able to charge higher prices than its overseas competitors, he said.

State Rep. Terri McCormick (R-Appleton), who hosted the roundtable discussion, said there are also domestic threats to Wisconsin manufacturers. Other states offer incentive packages that make it attractive for manufacturers to relocate their operations. Government regulations and high business taxes also pose hardships for Wisconsin companies, she said.

"We must, as a state, be collaborators and supporters of jobs," she said.

Eisen claims the Bush administration has vowed to make manufacturing a priority, a pledge Peterson said he has heard from prior administrations with few results.

"There are more roadblocks than assistance," he said.

[Bon mots]

Part of the blame lies with US cities. The confiscatory level of property taxation first drove many companies out of cities, but there are NO or nominal property taxes in other countries. All you need do is cross a little ocean, which is not the obstacle it used to be.

Just think, you dream up some idea for a widget you want to manufacture. You look to locate your plant in, say, New Haven, Connecticut. The mil rate there is over 8 mils, that is, for every $1 million you invest in your factory, you have to pay the dunderheaded lazy thieves in city hall $80,000.00 per year. Say your factory costs a modest $5million. You will have to pay the thugs in city hall $400,000.00 per year just for the privelege of locating your plant in the midst of the squalor known as New Haven.

Do you know how hard it is to make an extra $400,000.00? One must stay up pretty late at night to earn such a sum. It doesn't come easy, and in fact, it's simply easier to leave town, or not show up in town in the first place. They wonder where the businesses have all gone. Where the jobs have all gone...

Then you have to worry about the lawyers.

Now, put your factory in sunny Mexico, or Guangdong, and you don't have any of those worries. No little old ladies will slip on your sidewalk, or if they do, no lawyers will come knocking. Oh, and property taxes? Guess again.
And you just might find more people there who speak English and who can read a ruler than you will in New Haven.

Why would anyone in their right mind put a manufacturing plant in an American city? Because they erected nice billboards to "attract business"? Right.

Low costs will attract business. Low risk of litigation, a business friendly environment.

I'm really surprised at the nitwits that run our cities. They steal and tax and run violent filthy slums right into the ground, then they spend taxpayers' money on billboards as if someone is going to actually be fooled by such misguided blather... like this one:

Hey suckers! Put your factory here! We can tax you, sue you, inspect you, steal you right out of business!! Step right up...
When a city has to put up a billboard, it's time to get out of town!

[Ronly Bonly Jones]

I've heard of voodoo economics, but this is the first time I've ever encounterd cargo-cult autarky economics.

The world economy is here to stay. If you want to live in a world where cave men sell rocks to each other, you're free to move to North Korea and live under the joyful principles of ju-chi (self-reliance) at your convenience.

[harpseal]

Now my big question when China fishes the nationalization of the rights to the technology transfered to them by some of these automobile makers will they demand a lsicese fee for the use of that technology?

On or off this list let men know

[harpseal]

No why should you suggest to Race that he move to North Korea he is clearly not an internationalist or a Marxist as clearly anyone who subscribes to the current governing priciples of what is called Free Trade by its advoxates sometimes a the World Economy by otehr advocates or those who have not examined the deatils of what we are talking about.

Clearly if you had any positive evidence to provide of teh current trade policies providing a NET benefit you would provide that.

I for one would look forward to seeing sucvh evidence of a NET benefit but I am not going to be convinced by any arguments of the like that we saev a couple of cents on every washclosth sold so that is good for consummers so teh rest of teh economy be damned. I would like sound and rational reasons why national policy should allow any Chinese access to American markets whatsoever given their current policies.

[LibertyAndJusticeForAll]

"As a former Friedmanite free trader, let me say it: free trade is a bright shining lie. Free trade is the Trojan Horse of world government. Free trade is the murderer of manufacturing and the primrose path to the loss of national sovereignty and the end of our independence."

Thanks for posting.

[harpseal]

For any who would be interested in proposal to address the structural defects in teh American economy introduced by teh Internationalists.

[harpseal]

Yeh, Pat. It's clear that the UAW no longer exists because all our cars are being made in Indonesia. This explains why there are so many hamburger flippers where Detroit used to be. Riiiiiiight.

Now please explain what light this brings to the issues raised?

Clearly a higher percentage of the work on Automobiles sold in the USA is done outside the USA compared to Jan 1, 1993.

[Tokhtamish]

You posit an utterly false dichotomy.

As for your remark about Detroit, the Detroit of 1960 was a nice place. The post-deindustrialization Detroit of today is not. In fact, none of the cities of the Northeast have recovered from deindustrialization. When the factory closed, the supply chain of firms that fed it collapsed. A high tech firm, on the other hand, needs only phone lines. Financial services could not replace the jobs lost when the factories closed.

And you ignore a key result of the destruction of those low-semi skilled stable jobs. A huge and growing underclass as it is impossible to work your way out of the ghetto the way the Italians and Irish did. The explosive growth of vice industries such as stripping, porn, and gambling in a world where labor is cheap, life is cheap, and flesh is cheap. A pervasive culture of violence and depravity in urban America as honest labor and deferred gratification are not rewarded but crime and hustling are.

Pat Buchanan sees where free trade is taking America. Somewhere like Brazil where the well off live behind walls and everyone else treads water.

[american spirit]

Yes, we're in a world economy but any fool should be able to realize that when a country runs huge trade deficits, ever-growing fedgov budget deficits, debt exploding at the personal, corporate & gov't levels, increased regulation and taxation, open borders that allow millions of non-Americans to attach themselves to our system...sucking out billions in services, then it should be obvious that the US approach to this "new world" is patently suicidal. Anyone who cannot fathom the de-construction of this country as a result of these disastrous policies suffers from ultra severe rectal-crainial inversion.

[american spirit]

My post #17, was intended for you.

[1rudeboy]

According to Pat, when Dell Computer imports parts for assembly in the U.S., that's bad.
According to Pat, when GM exports parts for assembly in Mexico, that's bad.

I wish he'd make up his mind.

[harpseal]

It is clear Chrysler can ask to pay whatever it wishes for parts just as I can ask to pay $100 for a new mercedes from Daimler Chrysler.

Now for those who are aguing for the rights of private property as an excuse for Chrysler trying to tie things to the chinese auto parts industry. I note one little part of this reply that has a great deal of significance.

But one supplier's president complains that Chrysler's world prices sometimes exclude engineering costs. The president, who asked not to be named, says he lost a contract after Chrysler gave his blueprints to a rival company.

Please as part of your defense include the right to steal intellectual property and how that is part every individual's natural rights. I can only go on what is replied with this one. Also while we are it would someone explain Chrysler's retroactive contract revisions is this soem new part of freely negotiated contracts I have no heard about that one party may retroactively revise the terms of a contract without the consent of another. Now can I use this with the bank that hold's my home's mortgage and tell them they must retroactively refund all mortgage payments from January 1 and lower my future payments to zero? Or do I have to be Chrysler to qualify? Just asking.