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How the U.S. Manufacturing Economy Is Critical to the Global Supply Chain

Posted 04-26-2010 at 09:44 PM by 95th Annual
As president and CEO of the National Association of Manufacturers, John Engler represents 12 million Americans directly employed in manufacturing. In this role, Engler – also the former three-term governor of Michigan – maintains a strong focus on maintaining American competitiveness in manufacturing.

“Today, I want to talk about the manufacturing economy’s criticality in the global supply chain,” he told attendees during his lunchtime keynote session.

On one hand, Engler feels the U.S. is, and will continue to be, a top manufacturing destination for some time. As evidence, he cites a 1.4 percent increase in the production of business products in March 2010 (versus February 2010) and, during that same period, improved retail sales of about 10 percent. “Both are positive signs of economic recovery,” he said.

However, Engler also pointed to a few worrisome signs: the loss of two million manufacturing jobs during the recession, and a predicted unemployment rate of 9.4 percent – down versus 2008, but still historically high.

“The question, then, is what it will take to put people back to work,” he told the audience. “And I wonder: Is our government even aware of the competition we face in manufacturing?”

While Engler acknowledged that supplier relationship management is a prominent topic at this year’s Conference, he wanted to talk about a different kind of relationship in his session – namely, the value of a less adversarial one between the U.S. government and the private sector.

As he pointed out, by December 2009, the United States had fallen from no. 1 among the 21 OEDC nations to no. 17. Engler cited as factors the failed maintenance of infrastructure (roads, ports, etc.) and an information infrastructure that needs to be fixed, including a need for implementation of the next generation of air-traffic control systems.

Additionally, Engler contended that the U.S. needs to match its comparatively high corporate income tax rate with other industrial nations’.

All these sweeping initiatives would cost about $425 billion; however, according to Engler, they would also create 3.4 million jobs and grow the GDP by 1.2 percent.

Furthermore, if the U.S. is to remain competitive in the quest for talent on a global scale, Engler believes it needs to be not only the best place to manufacture, but the best place to do R&D, as well.

“Our challenge is to make sure our congressmen and congresswomen truly understand the difficulties we, as job providers, face – about how tough and relentless this fight is,” he told attendees. “Get them into your plant or company. Show them, in real terms, what an extra day’s day on delivery costs you.

“I think you’ve all got the ability to explain all this to Congress,” he urged.
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