Hearing on H.R. 4692, the National Manufacturing Strategy Act of 2010

U.S. House of Representatives - The Subcommittee on Commerce, Trade, and Consumer Protection held a hearing on H.R. 4692, the National Manufacturing Strategy Act of 2010, on Wednesday, July 14, 2010, in 2322 Rayburn House Office Building. Representative Lipinski introduced the bill on February 25, 2010.

The National Manufacturing Strategy Act of 2010 will require the President to undertake a deep and broad analysis of the nation’s manufacturing sector, including the international and economic environment, related technological developments, workforce elements, the impact of governmental policies, and other relevant issues affecting domestic manufacturers. Based on this analysis, the President will develop a national manufacturing strategy that identifies goals and recommendations for how the federal government, as well as state, local and private institutions, can best support the improvement and growth of our nation’s manufacturers and support their efforts to move into the markets of the future. This process will recur every four years, in order to assess the implementation of prior recommendations, review changes in markets, adjust for changes in technology and the economic climate, and respond to any other influences that may arise.


 The President’s development of a national strategy for manufacturing will be informed by members of the Administration and the private sector. The act requires the President to convene a Manufacturing Strategy Task Force, comprised of federal officials and two governors, to make recommendations for the strategy. The task force may also convene subgroups, with additional governmental and private members, to address particular industries, policy topics, or other matters. In addition, the President must convene a Manufacturing Strategy Board to make recommendations. The board will be made up of 21 individuals from the private sector, representing a broad range of regions and industries.

Excerpts from the written testimonies...
 

Aneesh Chopra

Associate Director for Technology and Chief Technology Officer

Office of Science and Technology Policy

[White House Talking Points]

For the record, I will not be commenting on H.R. 4692, but rather my testimony will provide a perspective on the challenges the United States faces in manufacturing…The Obama Administration’s policies and initiatives that support manufacturing can be broken into seven parts that draw on the lessons from analyzing the manufacturing process and government’s role in each cost driver. We must:

1. Provide workers with the opportunity to obtain the skills necessary to be highly productive.

2. Invest in the creation of new technologies and business practices.

3. Develop stable and efficient capital markets for business investment.

4. Help communities and workers transition to a better future.

5. Invest in an advanced transportation infrastructure.

6. Ensure market access and a level playing field

7. Improve the general business climate, especially for manufacturing.

Through the President’s Council of Advisors on Science and Technology (PCAST), the Administration is able to gain invaluable insight…on Advanced Manufacturing. The PCAST subcommittee on Advanced Manufacturing plans to release a report in the coming months outlining their findings and recommendations.

Bill Hickey

President and Chief Executive Officer

Lapham-Hickey Steel Co.

[Supportive of Legislation]

I am Bill Hickey, President of Lapham-Hickey Steel Corp. of Chicago. Lapham-Hickey Steel is a family owned and managed steel service center founded in Chicago in 1926. Today we have seven locations in the states of Illinois, Wisconsin, Ohio, Minnesota, Connecticut, and Alabama. We currently employ approximately 550 people.

A focus of this Act, that I believe is needed today, is the manufacturing strategy task force. As a member of the DOC ITAC 12, I find it very difficult, at times, to understand what our nation’s strategy is on manufacturing. I actually think the strategy today is a policy of reacting to a crisis instead of planning for the future. A recent example of this lack of focus on national economic goals was the Import-Export Bank refusing to finance mining equipment for a Wisconsin based company for reasons that seem to be the whim of the appointed official.

Scott N. Paul

Executive Director

Alliance for American Manufacturing

[Supportive of Legislation]

We are a partnership formed in 2007 by some of America’s leading [steel] manufacturers and … the United Steelworkers.

The decline of manufacturing employment and manufacturing’s share of GDP is not inevitable, desirable, nor can it be explained solely through theories of churning capitalism, advances in productivity and technology, compensation costs or inefficiency. For instance, Germany’s global shares of manufacturing output and exports have held steady over the past decade, while America’s have declined and China’s have risen sharply. Yet, Germany is not a low-cost nation for manufacturing. But, Germany has an integrated strategy for boosting manufacturing, focusing on skills, technology, investment, labor-business-government collaboration, and aggressive trade policies, which allow it to successfully compete.

Owen E. Herrnstadt

Director, Trade and Globalization

International Association of Machinists and Aerospace Workers

[Supportive of Legislation]

While there are many reasons for the decline in manufacturing, one of the fundamental reasons is that the U.S. does not have a national manufacturing strategy and has not established a framework for creating one. A national manufacturing strategy could establish general and specific programs for coordinating related policies as well. Policies related to tax and investment, research and development, trade, employment, currency valuation, export initiatives, domestic procurement, and others must be integrated to produce a cohesive and effective strategy to restore our manufacturing sector and ensure the growth of jobs with good wages. Other countries have embraced manufacturing strategies. A few years ago, the European Commission presented its new industrial policy noting, “A flourishing manufacturing industry is key to fully exploiting the European Union’s potential for growth and sustaining its economic and technological leadership.” Separately, over 20 European countries have adopted sophisticated offset policies.

Kevin A. Hassett

Senior Fellow and Director of Economic Policy Studies

American Enterprise Institute

[Non Supportive]

In my view, the economic science supporting this Act is essentially nonexistent. Accordingly, passing it into law would be a policy error. Whether the policy error is major or minor would depend on whether the Strategy Task Force and Strategy Board are, like most such entities in Washington, irrelevant. If they are not, then the Act could significantly harm the business environment in the United States.

The language of the Act seems to invite antitrade actions and to glorify central planning. Many of the catch words used by protectionists are present in the charges to monitor specific industries that face “critical” challenges and the “identification of emerging or evolving markets, technologies and products that the Nation’s manufacturers could compete for.” Is the government to pick winners and losers within the manufacturing sector? While it is clear that at some point a manufacturing capability has national defense implications, even this angle is subject to abuse by protectionists. Are we to make sure that we have a vibrant clothing manufacturing industry for fear our troops might be forced to fight without uniforms?