Friday, March 31, 2017

China poses a real threat to WNY jobs

Donald Trump became president of the United States for a variety of reasons that voters might have found intriguing during his campaign. One of his biggest selling points was his disdain for Chinese manufacturers and American outsourcers as he believes they pose threats to good-paying manufacturing jobs here in America. That was a populist rallying cry for blue-collar workers which caused many traditionally-Democratic areas and states to turn Republican at the polls in November.

A lot of folks who count themselves as big thinkers – economists, the media, professors, and the corporatists on Wall Street -- have publically stated that fears over China taking our jobs are misguided and that the loss of jobs to overseas competitors is almost mythological. They believe that we no longer need to emphasize the manufacture of goods because we’ve become and/or are better off as a high-tech service economy; that most manufacturing job losses were attributed to robots and productivity; we’re in a global economy that knows no borders; and consumers are better served by lower prices.

That wrong-headed world view about manufacturing posed by those folks, who have a huge impact on public policy, are precisely why manufacturing has been hurting in America. Rules, regulations, taxes, damaging trade agreements, and more that they have helped to develop have crippled the producers that are an absolutely necessary part of our nation’s health.

A service economy doesn’t create wealth. A mixed economy with strong manufacturing, mining, and farming sectors does – the workers, plants, and equipment that make something out of nothing drive a nation’s wealth. For every $1 spent in manufacturing, an extra $1.40 is added to the economy. That’s twice the multiplier effect seen in service.

For that reason, and the obvious one that I have a deeply vested interest in manufacturing, I side with the blue collar view of China’s threat. I’ve seen it firsthand. We live it every day at the plant…and so do other workers in many factories across the region.

As an example, there is a Chinese manufacturer that ripped-off some of the swimming pool steps and ladders that we currently make. The look, feel, design, and even the assembly manuals were all copied to a “t” – except for the name and our one patented portion of the products. Some would say that imitation is the sincerest form of flattery, but that doesn’t make you feel good when you’re certain that the business lost to these cheap goods would keep 24 people busy for two-and-a-half months ever year.

Going further back in time, in the 1970s my dad invented the flexible fuel funnel that you see in almost every garage. When that patent expired in the late-1980s we lost that business because we couldn’t compete with overseas plants, their lower input costs and their ability to fill shipping containers with cheap goods. We haven’t made any of these ubiquitous tools since 1990.

We aren’t alone.

Consider the origin story behind the Made in America Store. That awesome enterprise, which has garnered national acclaim and has become something of a tourism destination, was founded by Mark Andol as a means to overcome the foreign monster that was hurting his first business, General Welding & Fabricating. Low-cost, low-quality Chinese competition forced him to close 2 of his 5 plants and layoff a third of his workforce in 2009.

Mark knew that he needed to “Save Our Country First” (the store’s slogan), so he opened the first of his retail locations in 2010 to showcase goods made by his fellow domestic producers. That store now has multiple locations and carries 7,000 American-made products. While the stores prosper, the back story is still there: Mark still struggles to keep his skilled machinists and welders busy at his factories because of China.

Or, how about General Motors? The one-time Harrison Radiator – Delphi plant in Lockport is busy for sure, employing 1,400. But, that number is only a portion of what it was in its heyday. Some of that is attributed to changes in business models and greater productivity, but hundreds of jobs were no doubt lost to Asian rip-offs. I know engineers and managers who worked there in the 1980s and 1990s who worked with foreign “partners” that ended up stealing ideas and technology and becoming competitors, even going so far as to commit espionage with concealed cameras.               

Then there’s the matter of tire dumping being committed by China for years. The U.S. imported 8.9 million truck and bus tires from China in 2015 worth $1.07 billion, up from 6.3 million units worth $885 million in 2013. Almost all of those tires came in below market rates and were unfairly subsidized by the Chinese government.

Last fall, the US government finally woke up to it and placed tariffs on Chinese tires. But the damage was done. There are 8 plants in the US that make truck tires – one of them, Sumitomo Rubber USA, is right here in Tonawanda.

You see, the specter of China is not some made-up bogeyman. It’s real. China manufacturers are taking jobs from Western New York and taking money out of local families’ pocketbooks.

From the 03 April 2017 Greater Niagara Newspapers 

No comments: