UNIONISTS, ALLIES BRAINSTORM ON
HOW TO RESTORE U.S. MANUFACTURING
By Mark Gruenberg
PAI Staff Writer
WASHINGTON (PAI)—Unionists and their allies brainstormed on April 14 on ways to restore the eroded U.S. manufacturing industrial base, using national security and holes in vital defense items as a “hook” to get policymakers’ attention – but then spreading their restoration effort far beyond key defense technologies.
But even though one defense official at the session agreed with the goal, the advocates of restoring U.S. industry may face a problem of getting the Defense Department itself on board, according to a report commissioned by the AFL-CIO Industrial Unions Council, which hosted the session.
That’s because DOD still fights “Buy American” clauses Congress inserts in legislation and because it stood benignly by for years – especially 2000-2006 – as huge segments of key manufacturing industries, such as semi-conductors and printed circuit boards for everything from computers to rockets, migrated overseas.
The report covered not just defense industries, but manufacturing concerns of all types. It noted that 57,000 factories – large and small – have gone out of business since 1998, taking 6 million factory workers out of jobs, too. They’re not just small shops, either: One-third of factories that employed at least 1,000 workers each closed.
And the nation’s manufacturing workforce has shrunk from more than 17 million to around 11 million. Manufacturing’s share of gross domestic product is down, too. The report, Manufacturing Insecurity, is posted on the Industrial Union Council website.
Key causes for decline include outsourcing, mergers and a corporate race to the bottom in wages and benefits – a race that often leads multi-nationals to offshore even the most basic work overseas. The report showed 59% of the jobs were lost to imports.
The data was stark: In several industries, import penetration is so high that finding U.S.-made goods is virtually impossible: Household furnishings (94% imported), pulp mill products (92%), newsprint (91%), medicine (96%), industrial valves (78%). And 77% of machine tools – which are used to make everything else – are imported.
And that was just one of many indicators of declining U.S. industrial might.
“Economic security, national security and manufacturing security are all linked,” said Industrial Unions Council director Bob Baugh in opening the conference. “The idea that the free market will fix everything hasn’t worked so well” in those areas, he added.
“The interests of trans-national corporations and the financial community are not (his emphasis) the same as our national interests,” he noted.
“The Bush-Rumsfeld Pentagon promoted a policy to globalize defense procure-ment,” said Dr. Joel Yudken, an academic and consultant specializing in industrial and technology issues, and the report’s author. “Their argument was this could lead to faster maturation” of new technologies DOD could use “while cutting costs.”
But it didn’t quite work out like the Pentagon predicted, Yudken pointed out. The U.S. is short domestically made machine tools, semiconductors and printed circuit boards, among other things – and has a yawning manufacturing trade deficit. And now there are fewer skilled workers to restart the nation’s factories. Former factory workers were forced to take other jobs, and their job-specific skills have eroded, too.
“That’s why we looked at the whole industrial sector, on which the defense base rests,” Yudken added. Manufacturing’s decline over the last 20 years “is a contributing factor to the current economic crisis,” added Owen Herrnstadt of the Machinists.
An extensive discussion of the gloomy data, including migration of high-tech aerospace manufacturing and of research and development of new products, led to suggestions on how to revitalize manufacturing. Many came from the Machinists, who have warned of the defense implications of deindustrialization for years. Ideas included:
* “Separating wants from needs,” in defense industries, and ordering the needs, from U.S. firms, according to Dr. Gerald Abbott, a retired military officer who now teaches at the Naval War College. That may be tougher than expected, he warned: After 11 straight years of huge increases – following the 9/11 terrorist attacks – the DOD budget, which could fund R&D and reindustrialization, is due to shrink.
* Insistence on enforceable buy American requirements in government procurement, advocated by Herrnstadt and others. IAM also wants “employment impact statements” for government projects and purchases, showing how many jobs each would create, and, more importantly, where they would be. “We have to ensure that ‘Made in the USA’ means it,” he said.
* Barring U.S. contracts to firms planning to subcontract work overseas if those firms don’t agree to ban “offsets” – the export of U.S. technology. IAM also advocated
“creating a new culture to convince companies to keep jobs in the U.S. and to create jobs in the U.S.,” by carrots – tax credits – and sticks, such as contract denial.
* Creation of an outright U.S. industrial policy, just as our trading partners have, to foster manufacturing innovation, especially in new areas. Several lawmakers plan to reintroduce industrial policy legislation in this Congress, Baugh said. ###
