Posted on 04/21/2003 11:18:33 AM PDT by Willie Green
For education and discussion only. Not for commercial use.
The Black & Decker Corp. once was a $4 million-per-year account for M.S. Willett Inc., a Cockeysville, Md.-based metal-stamping company only five miles from the power tool giant's Towson, Md., headquarters.
"Today it's a fraction of that," says David Sandy, Willett vice president.
All of the production stamping his 120-employee company did for Black & Decker "will be gone within the next few months," he says.
"We had a mutually successful relationship with Black & Decker for over 30 years," Sandy adds. "This is coming to an end because the work is going to be done in other countries."
His company's plight isn't unusual. Large U.S. manufacturers are turning to overseas suppliers or moving plants to foreign countries to take advantage of cheaper labor, lower taxes and less regulation.
To Sandy, that suggests many of the 2.2 million manufacturing jobs that have been lost in the United States since July 2000 aren't coming back.
"Unlike typical business downturns of the past, when manufacturers simply cut back and waited for recovery, in the current downturn manufacturers are rapidly relocating outside the U.S., and large numbers of small and midsized U.S. manufacturers are closing down permanently due to foreign competition," Sandy says.
The trend disturbs Rep. Don Manzullo, chairman of the House Small Business Committee, whose hometown of Rockford, Ill., is the machine tool and die capital of the United States.
"Our domestic manufacturing base is being hollowed out right before our very eyes," says Manzullo, a Republican. "And it's other American companies that are doing it. We are fast becoming a nation of assemblers, and even that may disappear soon."
Weakness in the manufacturing sector also hurts the service sector, which counts on manufacturers as clients. The loss of high-paying manufacturing jobs also translates into lower sales for businesses of all types, says Eric Anderberg, general manager of Dial Machine Inc. in Rockford.
Anderberg cites the case of an employee Dial Machine was forced to lay off two years ago. Instead of making $15 per hour, as he did with Dial, that individual now makes $7 an hour, with no benefits, working at a home-improvement store.
"How many vacations will this man and his wife take?" Anderberg asks. "How many airline tickets will they buy? How many hotel rooms will they stay in?
"The trickle-down effect on the American economy is clear," he adds. "I believe that the American economy will not recover without having a successful, sound manufacturing base."
The Bush administration says its proposed tax cuts, particularly ending double taxation on dividends, would help manufacturers by reducing the cost of capital. But the Senate appears determined to give the president only half of his $726 billion package.
The administration's manufacturing agenda, unveiled last month, also calls for opening new markets for U.S. manufacturers by eliminating all industrial tariffs for World Trade Organization members within 10 years and by negotiating additional bilateral free-trade agreements.
The agenda also includes reducing health-care costs, while also improving workers' skills through retraining and better math and science education.
The U.S. Department of Commerce will hold five hearings across the country this spring and summer to gather suggestions on what else needs to be done to revitalize manufacturing.
The House Small Business Committee recently held its first hearing on manufacturing, Manzullo's top priority for the committee this year.
Trade policy dominated the conversation. Even the National Association of Manufacturers, a supporter of trade agreements, acknowledged that unfair trade practices are hurting manufacturers.
"Enforcement is very weak," says NAM President Jerry Jasinowski.
"Many of our trading partners routinely exacerbate their natural advantages with unfair trade barriers, including manipulation of currency values," he says. "China is the most conspicuous offender in this regard and is emerging as the primary threat to many of our core industries."
China quickly is moving beyond its traditional manufacturing base of textiles, toys and footwear, Jasinowski says. Machinery imports from China are up nearly 50% in the past year, and furniture imports are up 40%, he says.
"We cannot afford to keep hiding our heads in the sand to avoid facing up to this challenge," Jasinowski says.
Richard Trumka, AFL-CIO secretary-treasurer, says America's experience with China demonstrates why the United States should reconsider a half-dozen trade agreements now being negotiated.
Since permanent normal trade relations were granted to China in 2000 -- "which we were told would help us sell American goods in China" -- the U.S. trade deficit with China has increased by nearly 25%, Trumka says.
"America's trade policy has failed," he says.
.Bunk. I am blue collar and I buy all over the world, and I benefit. The last 15 years I have seen tremendous improvement in the quality of machines and tools that I can buy and at lower prices. So if you mean some illiterate ticket punching clock-watcher, then yes, they have take a hit and the job for life trough is moving away. But for skilled, quality driven trades, times have never been better. I can’t count the skilled trades that I know that make 50k, at least, or better.
And you know what, those old line companies never did anything for me, and I am not a slave to what they supposedly did fifty years ago.
I can't answer for "willie", but the proverbial phrase; "even a broken clock is correct twice a day", applies.
Any rebate will need to be applied for. By their very condition of being "poor", for whatever reason, good or ill, the poor will fail to "file" for their rebate. Most of the poor are so, because of crime. Gov't checks will be stolen, or not received. If their money goes through the Fed or State first, it will be skimmed for cost and therefore, will still be, a regressive tax.
I understand what you mean. Bridgeport and South Bend let the Japanese get the jump on them in price, productivity and utility. The old line machine tool company's did the same thing the British motorcycle industry did in the 60's. They became complacent and the Japanese left the Limey's in the dust. Your comment in regards to attitude is appropriate too. Bridgeport always acted as if they were doing me a favor when I needed TO PURCHASE a repair part.
What consumers don't realize is that they must pay shipping cost and find a company to assemble the unfamiliar tables so, end result is they cost buyers more . Still, it was suggested by the American manufactures that we discontinue low end tables.
Hawley-Smoot Tariff Act
Hawley-Smoot Tariff Act, 1930, passed by the U.S. Congress; it brought the U.S. tariff to the highest protective level yet in the history of the United States. President Hoover desired a limited upward revision of tariff rates with general increases on farm products and adjustment of a few industrial rates. A congressional joint committee, however, in compromising the differences between a high Senate tariff bill and a higher House tariff bill, arrived at new high rates by generally adopting the increased rates of the Senate on farm products and those of the House on manufactures. Despite wide protest, the tariff act, called the Hawley-Smoot Tariff Act because of its joint sponsorship by Representative Willis C. Hawley and Senator Reed Smoot, both Republicans, was signed (June, 1930) by President Hoover. The act brought retaliatory tariff acts from foreign countries, U.S. foreign trade suffered a sharp decline, and the depression intensified.
Source: http://www.infoplease.com/ce6/history/A0823033.html
Tariffs will only precipitate another trade war - Moreover, tariffs are nothing but taxes levied on purchasers, for the direct benefit of domestic producers. While the problem needs to be addressed, tariffs are not the answer.
Dude! You shoulda got a Dell. :^)
Stupidity is its own reward.
A relatively low, flat rate revenue tariff applied to all imported goods is not the same as the excessively high and ineffective protectionist tariffs that are targetted against specific commodities or nations for the benefit of special interests. Revenue tariffs do not precipitate trade wars and, according to James Madison, are compatible with the principles of free trade.
Moreover, tariffs are nothing but taxes levied on purchasers, for the direct benefit of domestic producers.
Making a distinction between purchasers and producers is a false diversion.
In order to be a consumer, one must also be a producer.
In a comparison of two such bills one point on one of them was that it would be rebated by reductions in Social Security taxes. I can't remember how it was done in the other.
As regards the rest of your scenario, the poor folks I know have no problem receiving and spending their "Earned Income Tax Credit" checks.
HORSEFEATHERS !!! If this were the case we wouldn't have so many technical people (especially in their 40s & 50s) being forced out of technical fields.
I'm tired of hearing that we have to suck it up in the name of free trade, when there's nothing free about it. How many people do you see flocking to India to take jobs? Don't get me wrong, I don't blame anyone for coming over here to earn 25K a year writing code, when they'd make about $5000 at home, but what happens then, the wage scale in this country goes down. How many Americans do you suppose you'll attract to the technical fields if they see thier career path ending at middle age? It's no accident that the brightest in this country end up in law school, that seems to be the only expanding profession in this country.
Bottom line, as long as the government keeps caving in to corporate cries for more and more cheap labor, we'll just keep watching our living standard go down. Reagan used to say a rising tide lifts all boats, well the same is true about a falling tide.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.