Obama Manufacturing Policy Questioned

Does the Obama administration have any kind of plan to support U.S. manufacturers?

One industry economist asserts he has yet to see ?anything remotely resembling a policy? from the Obama administration to support U.S. manufacturers in this turbulent economy. ?For the most part, actions taken by the White House have been long on rhetoric and very short on pragmatic help,? says Dr. Chris Kuehl, economic analyst for the Fabricators & Manufacturers Association, International (FMA).

?The only thing that could be construed as a policy is the bailout of the auto industry, but even that was limited in the sense that it paid little attention to the issues facing tier two and three suppliers,? states Kuehl. ?There has been lip service paid to training and to making competitive moves, but the actions from Congress have actually gone in the wrong direction,? he adds. ?There is some faith the President really does have concerns about the fate of U.S. manufacturing, but there is also a sense that nobody on the President's team quite understands the key issues.?

According to Kuehl, the four issues that either haven't been addressed or are going in the wrong direction include:

? The move toward reforming the way unions are allowed to organize,

? Efforts to change the health care system,

? The use of the stimulus money, and

? The attitude toward exports and foreign competition.

?The Employee Free Choice Act would make union organizing much simpler, and that presents a major problem for most small- to medium-sized manufacturers,? Kuehl says. ?It could put many of them in a very severe financial slump. This bill has started to lose some steam in Congress, but it is still part of Obama's plan.

?The most frightening aspect of the original plan was the mandated mediation by the government,? he adds. ?For manufacturers trying to survive the recession through cost containment, the threat of mandates that force higher labor costs can be enough to push them over the edge.?

HEALTH CARE DEBATE A CONCERN

The second area of concern is the health care debate and the proposal to fine companies that do not provide health care for their employees. ?Many small manufacturers struggle to cover benefits now, and this additional mandate will cost them millions,? Kuehl says. ?The notion of universal coverage is hard to dispute, but the real issue has been paying for it. If the funding comes down to fining business and raising taxes, the small and medium-sized employer may be convinced that the effort is simply not worth it. This stands to make unemployment issues a lot tougher to handle.?

Kuehl also believes the stimulus bill has been largely unimportant to the manufacturing sector with very little of the money finding its way into programs and efforts that benefit the industry. Training programs have been launched for health care jobs, but nothing to address the shortage of skilled workers in the manufacturing sector.

?The majority of this money is being distributed through cash-strapped states, and the majority of these states do not place manufacturing at the top of their priority lists,? Kuehl says. ?The sense has been that the sector is getting what is left of the stimulus money after everybody else has had a chance to feed at the trough. Some efforts have been directed at the energy sector, which has been good for the manufacturers that can play in that business, but these have been limited.?

EXPORT ISSUE A PROBLEM

In terms of exports, Kuehl says the Obama plan called for a Buy America provision, but this has done little except lock other markets away from the United States.

?Export activity is the area that is growing for manufacturers, but this is the very sector that has been largely ignored or opposed by Obama,? Kuehl adds. ?The data tends to show that overseas markets are rebounding faster than the U.S. domestic market, which means emphasis should be placed on opening these up to the United States through trade deals and agreements. Instead, the United States has been almost hostile to trading with the very markets that are growing the fastest.

?After reviewing all of these issues, what would be welcome is some kind of manufacturing policy that doesn't make matters more difficult,? Kuehl concludes. ?To the extent the Obama presidency has interacted with business and manufacturers, it has seemed to create more problems than it has solved. The best approach would seem to be staying out of the way, for the most part, and reducing opportunities for intervention that add costs to the industry.

?If there is true discussion around a policy for promoting the manufacturing sector, there needs to be some communication with the companies that are actually going to be affected by such a policy.?

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Fabricators & Manufacturers Association, Intl.,