Industryweek 1910 1010election

A Vote for Manufacturing

Sept. 16, 2010
As midterm elections approach, manufacturers seek candidates who will support policies that strengthen their competitiveness in the international arena.

James McGregor Sr. is a frustrated manufacturer. He's frustrated that the federal government hasn't done more to turn proposals to help U.S. manufacturing into policies to help U.S. manufacturing. He's frustrated that politics impedes progress at times. He's frustrated that when he thinks about growing his company, he's got to think smaller than he would like.

McGregor is vice chairman of Ohio-based McGregor Metalworking Cos. He will be taking his frustration with him to the polls in November as the midterm elections promise the potential for sweeping changes in Congress. All 435 seats in the House of Representatives and about one-third of Senate seats are up for election, with the Democrats currently in control of both houses.

McGregor believes others share his frustrations. "I think there is going to be a lot of turnover because people are angry," he says. "Now, is it going to be good for everybody and for manufacturing? I'm fearful sometimes." McGregor is a member of the Department of Commerce's Manufacturing Council, a group of 25 representatives from the manufacturing industry who advise the government on issues related to improving manufacturing competitiveness. While he says the council has been given "unprecedented access" to administration officials, who have been receptive to its ideas, "it's time for these ideas to become a reality." (McGregor's comments reflect only his views as a manufacturing company owner.)

Like McGregor, Chris Kuehl believes in the potential for "some fairly significant turnover" as a result of the midterm elections. "If only because there is a generally frustrated attitude toward the incumbents," says Kuehl, chief economist for the Fabricators and Manufacturers Association International (FMA). "It's not that either party is really coming to this election with a compelling message. It's just that you've got a very irritated electorate that is in the mood to throw somebody out."

Manufacturers such as Batavia, Ohio-based Milacron LLC, are paying close attention to the midterm elections. David Lawrence, Milacron president of worldwide plastics, urges manufacturers to work together to assure that government officials recognize the issues important to manufacturers.How an irritated electorate will impact manufacturers' concerns is uncertain. But their concerns are many. McGregor knows which manufacturing issues he'd like to see Congress address as top-priority measures. They are: Increase access to credit, develop tax policies that encourage manufacturing investment, pursue energy policies that don't substantially increase costs, enforce trade agreements, correct currency imbalances, promote exports, and provide aid for developing a skilled workforce. He has some hope that the access-to-credit issue gets addressed prior to the election, sharing his belief that the Senate would pick up the Small Business Jobs Act when it reconvenes in September. Among its provisions, the legislation authorizes the creation of a $30 billion lending fund to provide small financial institutions with additional capital and incentives to boost small business lending. "A yes' vote [on the Small Business Jobs Act] will be mandatory in my opinion for future support to members of Congress," McGregor says.

Still, the Ohio manufacturer is frustrated by politicians' seeming unwillingness to make what he calls the "tough decisions" necessary to help manufacturing survive. McGregor points to the administration's actions with regard to China's currency as one example. "Why can't we just call them [currency] manipulators," he asks. "The time has come. Are they tough political decisions? Yes. Are there consequences? Yes. But weigh the consequences because I don't know how the country survives without a manufacturing industry paying the taxes, hiring the people."

Manufacturer David Lawrence, president of worldwide plastics for Milacron LLC, says his list of priority issues includes making the research and development tax credit permanent. Presently the credit, which provides tax relief to encourage investment in research and development, is a temporary measure that typically has been reauthorized by Congress on an annual basis. "I think we should stop wavering and make the research and development tax credit permanent, make it part of the infrastructure businesses can rely on and make investment decisions on rather than being uncertain about what is going to happen with that," Lawrence says. (The Milacron president's comments preceded the September call by President Barack Obama to expand and make permanent the R&D tax credit.)

Export initiatives like those espoused by the White House should be among the leading priorities for the next Congress, suggests Kuehl. "What we've seen in the last couple of years is that the export sector is the growth sector for almost any size manufacturer. We've been waiting for the consumer to come back to life in the U.S., but meanwhile the consumer has come back to life in Brazil, India and China. We need better access to that." To that end, he says the next Congress should work to get trade deals signed with Panama, Colombia and Korea, and to start trade negotiations with additional countries. However, Scott Paul believes such trade deals would bring limited benefit to manufacturers. Paul, who is executive director of the Alliance for American Manufacturing (AAM), a partnership of select manufacturers and the United Steelworkers, says, "Dealing with China would be time that is well-spent."

On the other hand -- and in contrast to some who suggest Congress isn't doing enough -- Kuehl suggests that some FMA members might like to see the "frenetic pace" of Congress slow down and give them an opportunity to adjust to legislation that already has been passed. "There has been a rather constant feeling of change, which has been difficult for manufacturers to keep up with," he says. "They know there are things that need to be changed as far as the health care system. They know that global warming is an issue. They know that all these things are on the table. But in the effort to address them it's kept [members] in a state of limbo for a couple of years and that makes their decision-making challenging. I think what a lot of them are hoping for in the midterm elections is perhaps a little clarity as to what's going to be addressed first as far as the political agenda going forward."

Keep Partisan Politics Out

The goal for the midterm elections is to bring aboard Congress members who are pro-manufacturing, not pro-partisanship, say several manufacturers. Indeed, Lawrence says partisanship has been a big factor in the lack of progress on manufacturing issues. "That's not the way we are going to get things done," he says. "I would encourage them to work together no matter what the outcome of the election is."

They may have to. In late August, Kuehl was predicting that the midterm election outcome would be a split Congress, with Republicans taking over one house and thus making it difficult for either party to establish a mandate without consulting the other. Traditionally such an outcome tends to throw power toward the moderates because they are the ones who can make deals with moderates from the other party, he says.

Before then, AAM will hold a series of town hall meetings in key districts and invite House, Senate and gubernatorial candidates to discuss their views on manufacturing-related issues. At press time, meetings were slated to be held in Ohio, New Hampshire, Connecticut, Pennsylvania, West Virginia, Michigan, Indiana, Wisconsin, North Carolina, Texas and Missouri, beginning in October.

AAM's Paul questions whether issues that are important to manufacturers will be deciding factors in any race. He describes voters in the upcoming midterms as an "incredibly volatile, unhappy electorate." As a result, the mix of issues important to voters likely will vary from race to race. That said, he believes more attention will be paid to manufacturing issues because of voter interest. "There are opportunities to talk about [manufacturing] in ways it hasn't been done previously."

The Alliance for American Manufacturing backs up its claim with results from a poll it had conducted of 1,000 likely general election voters. Increasing the number of manufacturing jobs, as well as strengthening manufacturing in the United States, was identified as among the most pressing issues Congress and the president should be working on. AAM also suggested that the poll results were an impetus for the "Make It in America" legislative initiative pushed by House Democrats.

Milacron's Lawrence says that while the profile of manufacturing has been raised recently, he does not believe enough people recognize its value. Manufacturers should do more to raise the awareness, he says. "What we are really focusing on and what I try to share with my fellow manufacturing executives is that we need to band together to make the governments and others involved . . . aware of some of the issues and what we can do to improve the environment for manufacturers overall."

Ultimately, McGregor knows who he'd like to see in the 112th U.S. Congress: members who listen to manufacturers and fully understand the ramifications of their vote, without regard for party line. "When you look back at what's happened in the last two years of manufacturing, there have been more difficult decisions made than any one of us in our lives thought would ever be made, and the people who survived had to make those decisions. That's what I'd like my members of Congress to think about," he says.

See Also:
NAM's Challenge to Office Holders

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