Obama’s Manufacturing-Centric State of the Union You’ll Never Hear

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Humor, Manufacturing

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MetalMiner was able to obtain a copy of an alternate version of President Barack Obama’s State of the Union address, one that was geared more toward US manufacturing industry. Evidently it was only about two minutes long – but we were most likely the ones least surprised.

Mr. Speaker, Mr. Vice President, Members of Congress, my fellow Americans.

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We are fifteen years into this new century. Fifteen years that dawned with terror touching our shores; that unfolded with a new generation fighting two long and costly wars; that saw a vicious recession spread across our nation and the world. It has been, and still is, a hard time for many.

Especially the US manufacturing sector.

You see, tonight, after a breakthrough year for America, our economy is growing and creating jobs at the fastest pace since 1999. Our unemployment rate is now lower than it was before the financial crisis. More of our kids are graduating than ever before; more of our people are insured than ever before; we are as free from the grip of foreign oil as we’ve been in almost 30 years. I myself just bought a new Ford GT for Malia; I mean, have you seen the gas prices?? Kuh-reh-zee.

But for US manufacturers, we’re still not where we were – or should be – before the 2008 recession. Over the past five years, our businesses have created more than 11 million new jobs. And since February 2010, American manufacturing has added 786,000 jobs, as my colleague and homegirl Penny Pritzker, the US Commerce secretary, has noted.

Yet that’s still only about one-third of a full US manufacturing recovery.

And I desperately want to tell the American people that we’re bringing manufacturing back to US shores in droves, and for good – 57% of US manufacturing CEOs are with me, and now believe that “the United States is undergoing a manufacturing renaissance.” However, I simply cannot tell a lie.

“Despite some high profile cases of companies moving production back, the reality is that at the end of 2013 there were 15,000 fewer manufacturing establishments in the United States than in 2007,” according to the Information Technology & Innovation Foundation. Also, “inflation-adjusted value added in US manufacturing remains 3.2% below 2007 levels, although overall GDP is up 5.6%.”

To the reshoring end of things, my buddy Harry Moser of the Reshoring Initiative estimates that “at present around 30,000 to 40,000 manufacturing jobs are reshored while 30,000 to 50,000 jobs are offshored annually.”

Hmm. Now, I know what you’re thinking. That can’t be so good. But I have hope.

For example, “durable goods industries such as motor vehicles, other transportation equipment, and primary and fabricated metals have accounted for 72% of manufacturing job growth since 2010.” That’s good, right? Heartbeat of America and all that? But we have to remember, the manufacturing recovery we’re seeing may be more cyclical than structural in nature – and that’s cool! That’s cool…just something to keep in mind.

OK, you’re right to point out that we have the highest corporate tax rate in the developed world, and cutting that would help things a lot. So let me noodle on that for a while…

In the meantime, I’m here to honestly tell you that putting all our eggs in one basket of a full US manufacturing revival may be a bit…risky, to say the least. Especially if Congress and I don’t move our butts to help things out. And I’ll do my darndest.

But first, let me get to just a few other things on my To-Do list…

God bless you, and God bless America.

How do you think President Obama and Congress have done on the manufacturing economy? Let us know your thoughts – leave a comment! (For more MM coverage of historical State of the Union addresses, click here.)

Comment (1)

  1. Thanks for mentioning the Reshoring Initiative.

    Here is a quote from Harry Moser, president/founder of the Reshoring Initiative that may present a clearer understanding of reshoring efforts.

    According to Harry Moser, “Essentially, reshoring should be seen as not a measure of the renaissance but the most efficient tool to start achieving it.”

    We agree that steps need to be taken and that we must not become complacent about the manufacturing renaissance. We need a national manufacturing strategy to ensure the continued rebound of U.S. manufacturing.

    The challenge is to pick the most effective and implementable actions to overcome the loss of manufacturing and the trade deficit.

    The Reshoring Initiative sees two choices:

    1. In the short to medium term: reshoring – getting companies to understand all of the benefits of local production and adopt a more comprehensive total cost analysis. This could cut the trade deficit by 25% and bring back 1 million manufacturing jobs. Mainly this requires education of companies and is entirely under the control of our society. Detailed, objective reporting is necessary to motivate companies to reevaluate offshoring.
    2. In the longer term, to get the other 75%, requires improved competitiveness: taxes, currency/tariffs, skilled workforce, basic education, etc. All are political, most are cultural and endemic, currency/tariffs is subject to WTO rules, other countries’ actions and our need to raise interest rates. There has been almost no progress on these fronts in decades of trying.

    Ideally, it is best to do both sets of actions. We should be enthusiastic about reshoring but not optimistic about the renaissance until we begin to take the steps to allow us in the future to become optimistic about renaissance.

    Data from the Reshoring Initiative shows that offshoring of U.S. manufacturing is now in balance with reshoring.

    Since 2003, new offshoring is DOWN by 70%-80% and new reshoring is UP by 1500%.

    The most important accomplishment has been the net-loss of 100,000+ manufacturing jobs each year has ended. The economic bleeding has stopped.

    New reshoring is now balancing new offshoring at about 40,000 manufacturing jobs/year, resulting in the first neutral year of job loss/gain in the last 20.

    According to the Reshoring Initiative reshoring and FDI yielded between 2010 and 2014:
    – About 170,000 manufacturing jobs
    – 25% of manufacturing job growth
    – 400,000 total jobs including the manufacturing multiplier effect

    The Reshoring Initiative Can Help.
    The not-for-profit Reshoring Initiative’s free Total Cost of Ownership software helps corporations calculate the real P&L impact of reshoring or offshoring. In many cases, companies find that, although the production cost is lower offshore, the total cost is higher, making it a good economic decision to reshore manufacturing back to the U.S. http://www.reshorenow.org/TCO_Estimator.cfm

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