Letters To The Editor For December 2005

Opinions run strong.

Small Manufacturers Serve Vital Role

This was a good article [A House Divided: Manufacturing In Crisis, Nov. 2005]. We need to pay attention to the plight of small manufacturers. We should also not ignore the fact that, as stated in the article, "more than half of manufacturers... required their suppliers to cut prices as a contractual obligation". This practice ignores the fact of rising prices in all areas of manufacturing, from health care to energy to raw materials.

Most large companies euphemistically use terms such as Chrysler's HI-PO Initiative to drive cost improvement from their suppliers, when in fact they are using their size to take much needed margin away from innovative manufacturers. The results of this practice are the loss of small-to-medium businesses. Large manufacturers need to understand that without the smaller enterprises' existence, their only sourcing choice will be the Wal-Marts of manufacturing: low cost, poor quality products, which travel through manufacturing to the ultimate consumer, who will reject poor products.

More Reader Feedback

Reader Reply: AMT Responds
Reader Reply: NAM Responds
Finally, to address the comment from Mr. Piszczalski about the Canadian Policy of "assuming the health care costs of workers". When are writers on this side of the border going to get their heads out of the sand? While it is true that most Canadian provinces provide basic health care coverage, this is paid for out of taxation, both from general tax revenue and from payroll taxes. To keep publishing half-truths about this system does nobody any good. Just look at the big deal being made about the cost of prescription drugs and the attendant misinformation that surrounds that topic.

Maybe IW would consider publishing an article about the so-called advantage of "government provided" healthcare in Canada. Having seen this issue from both sides of the border, I'm frankly tired of not being told the facts. Let's quit whining about some unfair trade practice and understand the Canadian system. Something could be learned here.

Godfrey Demarco
Iowa

Great article [A House Divided: Manufacturing In Crisis, Nov. 2005] and I whole-heartedly agree with 99% of it. More importantly; now that some folks finally realize we have a problem on our hands; what is American industry and entrepreneurs in general going to do to change course?

In my opinion for one, we all need an attitude change. This "Short Term Profitability" sickness has got to be treated with some good old fashion common sense! We have come to rely on government to fix all our problems but the truth is the solution lies in our own inner beliefs and strengths that originally created the greatest economy in history.

"Greed" is the plain and simple culprit!

Doug Dileski
Holland, Mich.


Nice editorial [Editor's Page -- Filling Manufacturing's Leadership Void, Nov. 2005]. . . . NAM addresses the needs of larger companies for sure. Everyone in Washington seems to forget the small enterprises that dot the USA and make America what it is. We can't even get the Washington bureaucrats to acknowledge that China is a Communist country! Thanks for your support of manufacturing. We all need to tout how great we are.

Roger J. Sustar, owner
Fredon Corp.
Mentor, Ohio

Will Incomes Keep Up With Mortgage Borrowing?

I found the article [Evans On The Economy -- Ignore The Bubble Babble, Nov. 2005] missed a few key points. If incomes were high enough to justify such high prices then why are so many resorting to "funny money" mortgages? Many [people] are taking these mortgages out counting that there will continue to be 10% plus increases a year. Without that increase they won't be able to draw on equity and won't survive the balloon payment. When many start defaulting the same psychology that led prices up will carry them down.

BusinessWeek online had this to say. "Heavy mortgage borrowing since 2000 has enabled the housing market to dodge an iron law: House prices can't perpetually rise faster than incomes. For the past four years, they have. The ratio of house prices to median family income is a record 3.4, a figure that's 19% above the 1975-2000 average, according to data from the Office of Federal Housing Enterprise Oversight and the Census Bureau. As rates rise, a return to the long-term-average ratio would require housing prices to fall 19% -- or incomes to shoot up an implausible 24%." The quote seems to contradict your article.

Will Cherone
Fiber Technician
Verizon
Lake Elsinore, Calif.

While I agree with Mr. Evans findings [Evans On The Economy -- Ignore The Bubble Babble, Nov 2005], I suspect he may be ignoring the effect of lagging investment demand on housing prices. If housing appreciation decelerates to the level of inflation, the smart money will pull back from the real estate market, which will ease demand and could cause prices to soften. It seems that Mr. Evans has confined his remarks to a small universe of variables, indeed, those seemingly favorable to the status quo projection of the housing market.

Gregory Block
Palm Beach Gardens, Fla.

An Action Plan

It [Brandt On Leadership -- VPs Unite! It's Cushy Job Vs. Pushy Upstart, Nov 2005] clearly illustrates what the old peanut farmer of White House fame stated, but never did himself. Define the problem, focus, develop a solution and execute. Disregard and eliminate the extraneous (the meetings) and the complex(legal) language.

Alexander Virostko, engineer
Parker-Hannifin
Cleveland

A Question of Politics?

Regarding your two cents added on Hillary Clinton [Editor's Page -- Filling Manufacturing's Leadership Void, Nov. 2005]-- you couldn't stop from bringing your own bias into the editorial. You just had to say that Hillary is my kind of candidate even though you guys out there with a more capitalistic bent don't always agree with her politics. You should really stop and consider Ms. Clinton as your friend in manufacturing. I only wish that the two heavyweights, in the Senate -- Hillary and Lindsay Graham--had any influence over anything involving manufacturing.

Please name a couple of things that Ms. Clinton has done for the manufacturing sector, what Senate passed proposals has she been involved with that have had a direct positive impact on manufacturing in this country?

Dave Hamlin
Director of Materials
Norco Industries, Inc.

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