The co-chairman of the House Manufacturing Caucus sizes up the state of U.S. manufacturing and what's needed to keep it growing.
Donald Manzullo is a 10-term congressman representing Illinois' 16th Congressional District. The Republican understands the importance of manufacturing to the U.S. economy. After all, the city of Rockford in his district is home to more than 950 factories. Some 850 of them employ 100 or fewer people.
In 2003, Manzullo helped found the House Manufacturing Caucus. IndustryWeek recently asked him to discuss the work of the caucus and his agenda for promoting U.S. manufacturing.
How does the House Manufacturing Caucus benefit the manufacturing community?
The caucus gives an opportunity for the manufacturing community to educate members of Congress and their staffs about the importance of this sector to our overall economy. In addition, the caucus provides a forum to discuss in detail specific issues that the government can work on for the betterment of manufacturers.
Is there common ground for Democrats and Republicans regarding manufacturing?
|Rep. Donald Manzullo|
Manufacturing has helped lead the economy's recovery. How would you characterize the health of U.S. manufacturing?
The U.S. manufacturing sector is slowly coming back. It is not a dying segment of our economy. But much more remains to be done to assist in the full recovery of the manufacturing sector.
You are a sponsor of the National Manufacturing Strategy Act. Why is it needed?
The National Manufacturing Strategy Act would force the federal government at least once every four years (once every administration) to review policies that either hinder or help the manufacturing sector. This bill would not institute an industrial policy -- it simply forces a quadrennial review of all the laws and regulations that impact manufacturers. In the past, these types of reports have been produced in a haphazard manner, usually during a down-cycle in the manufacturing sector in response to public pressure. This bill would institutionalize these reports, similar to the annual National Export Strategy, so that the government does not forget and keeps the focus on the manufacturing sector in good and bad times.
Many manufacturers think the answer to helping their industry is to simply lower taxes and reduce regulation of their businesses. Do you support those initiatives?
Yes, but there are other issues that affect the manufacturing sector, too -- energy, mining, intellectual property, health care, trade, labor, infrastructure and legal reform.
How do you view the recovery of GM and Chrysler? Does their performance vindicate the bailout investments made by the federal government?
With a Chrysler plant located in Belvidere, Ill., and employing more than 2,000 constituents I am privileged to represent, I am pleased that GM and Chrysler have bounced back. I don't know if the "auto bailout" from the Troubled Assets Relief Program (TARP) can be directly tied to their recovery because the government is still expected to lose $14 billion from the transaction. In addition, as a result of this bailout, hundreds of viable automobile dealerships were terminated, which had a negative effect on jobs and communities across the nation. Thus, the number of cumulative jobs saved and lost as a result of the "auto bailout" may have been about the same when you factor in the dealerships. Ford seems to be in the best position among the Big Three automakers, and that company did not take one cent of this funding. I supported an alternative approach that focused on encouraging demand for new vehicles as opposed to the "top down" approach of the bailout.
Some 6 million jobs have been lost in manufacturing in recent years. What is your outlook on bringing back manufacturing jobs?
I'm encouraged with various "re-shoring" initiatives that some manufacturing jobs will come back. In northern Illinois, a division of GE is bringing back 15 to 20 machining jobs to Loves Park, some from Thailand. However, we must recognize that because of advances in productivity, not every single one of those 6 million jobs will come back. That is why we need to sustain an innovative and entrepreneurial economy that will create the industries of the future to employ formerly displaced workers. For example, small business incubators, such as the EIGERlab in Rockford, Ill., are important because of their role in fostering local "clusters" of innovation and research. At the EIGERlab, research in micro-machining led to the creation of Harrison Harmonicas, now the only harmonica production facility in the United States, employing six assembly workers who produce high-value, high-quality products sought by professional musicians.
There are a lot of plans circulating to "fix" U.S. manufacturing. What do you think are the key steps needed?
- Fundamental tax reform -- Most importantly, our nation needs to move to a territorial-based tax system and lower the corporate tax rate to 25%.
- Regulatory reform -- Pass the Regulatory Flexibility Improvements Act of 2011 (H.R. 527) to make sure that the federal government's small business advocate can stop potentially onerous regulations from becoming finalized.
- Energy -- Support an "all you can create" national energy policy to increase the supply of energy resources in order to reduce price pressure and to decrease our dependency upon unstable foreign sources of energy.
- Mining -- Our nation's manufacturers could be held hostage by China, which has a 97% market share of "rare earth" minerals, critical in high- and green-technology applications. We need to devise a strategy that diversifies our sources of "rare earth" minerals in order to eliminate our dependence upon China.
- Intellectual property -- We need to retain our "first-to-invent" patent system in order to protect and reward our unique innovative and entrepreneurial society.
- Health care -- We need to repeal the Democratic health care bill, with its job-destroying employer mandate and replace it with free-market alternatives that increase access to quality health care services.
- Trade -- We need to pass market-opening trade agreements, along with reforming our nation's outdated Cold War-era export control system.
- Labor -- We need to streamline and harmonize job-training assistance programs to target those jobs that manufacturers need.
- Infrastructure -- We need to reauthorize the nation's surface transportation and aviation programs so that manufacturers can get goods to market efficiently.
- Legal reform -- We need to pass product liability reform so that manufacturers are not on the hook for decades for product failure.