MacNeil Automotive expanding, opening new headquarters
By Lisa Robertson | PLASTICS NEWS STAFF
Posted August 25, 2010
DOWNERS GROVE, ILL. (Aug. 25, 1 p.m. ET) -- MacNeil Automotive Products Ltd. -- a company that’s taken extraordinary steps to emphasize its “made in North America” pedigree -- is expanding its manufacturing operations and relocating its headquarters.
The company, the manufacturer of the WeatherTech line of automotive accessories, was founded about 20 years ago by CEO David MacNeil. The company makes injection molded and thermoformed accessories including floor liners and mats, cargo liners, no-drill mud flaps and license plate frames and covers.
MacNeil is currently headquartered in Downers Grove, Ill. The company’s new headquarters will be in Bolingbrook, Ill., where it already has a year-old manufacturing plant.
Sam Ezzo, creative director, said in an Aug. 19 telephone interview that the company moved into the new 57,000 square foot facility in March 2009.
Even though that plant is barely a year old, MacNeil Automotive is already selling more product than it can produce in the new facility, Ezzo said. That prompted the current expansion.
The new project will add 30,000 square feet of manufacturing space. Work on the project should be completed in the next two months.
The building housing the company’s new headquarters is a 77,000-square-foot existing building that will be used for office space and warehousing, and will include an outlet store.
Ezzo said the company plans to keep manufacturing in Downers Grove, though one of the two buildings at that location will soon close.
MacNeil Automotive currently has 80 employees, Ezzo said, and more hiring is expected to take place because of the expansion. He could not say how many more positions will be added, as the company is in the process of determining how many machines to add first.
As of right now, Ezzo said the company has decided to add four thermoforming machines in the new manufacturing space.
MacNeil Automotive has taken extraordinary efforts to stress David MacNeil’s belief in the importance of American manufacturing. In a regular series of advertisement that appear in AutoWeek magazine, for example, the company stresses its commitment to manufacturing quality products in American factories, using North American-made machinery and materials. (AutoWeek is a sister publication to Plastics News)
The ads specify that MacNeil’s injection molding machines are made in Bolton, Ontario (Husky); its thermoforming machines are made in Carol Stream, Ill. (Maac Machinery) — even its raw steel and aluminum billets come from U.S. suppliers.
Ezzo said the company has received favorable feedback about this campaign. He’s had “more letters about that ad than all others combined.”
He added that the new facility in Bolingbrook will have only American-made machinery.
While committed to American manufacturing, Ezzo said the company does source some products from a few overseas manufacturers.
WeatherTech products are available for 67 different vehicle makes. Ezzo said the company receives the highest number of accessory orders for the Chevy Tahoe and Honda Odyssey.
Customers can purchase WeatherTech accessories online or from one of the company’s domestic or international distributors. The company exports products to more than 35 countries, Ezzo said, and has several OEM partners, including BMW, Hyundai, Kia and Mercedes.
Aug. 24, 2010
Target Development Group: Author Challenges Washington and Wall Street to "Stop The Insanity" of Outsourcing America's Jobs and Economic Future
NEW YORK, NY, Aug 24, 2010 (MARKETWIRE via COMTEX) -- Best-selling author Barr McClellan wants economists, politicians and business leaders to change their thinking and stop promoting the foreign outsourcing of American jobs. The economic theory that displaced American workers will find better paying service-oriented jobs after U.S.-based factories are closed has not proven true, and is clearly documented in McClellan's new book, "Made in the USA," from Hannover House, the book publishing division of Target Development Group, Inc. (PINKSHEETS: TDGI).
"Made in the USA" presents a common sense solution for America's jobless problem, the economy and the country's growing trade deficit. McClellan's challenge to consumers is to buy USA-made products, and encourage retailers to support "Made in the USA" items.
McClellan has issued a debate challenge to economists and academics to defend the results of the past 25 years of outsourcing philosophy against the real life conditions in America's communities that have suffered under this failed theory. McClellan is also challenging the major cable news networks to host an economic debate and draw attention to this philosophical battle that has cost millions of American jobs.
"I've heard that the definition of insanity is doing the same thing over and over and expecting different results," said Hannover House President Fred Shefte. "Only major corporations benefit from foreign outsourcing of jobs, so it's surprising to see that many economists ignore the local impact and the ripple effect on the American economy. Sending jobs overseas undermines our communities, our national sovereignty and our position as a world power. It's amazing to me that some in academia ignore the obvious," he concluded.
Barr McClellan is an independent businessman, an entrepreneur and an attorney. His 2004 release of "Blood, Money & Power: How L.B.J. Killed J.F.K." (Hannover House) went to the number one best-seller's position on Amazon.com. In issuing his debate challenge, McClellan released the following statement:
Improve the Economy and Provide Jobs
For twenty years now, America has endured academic theories that companies going overseas are good for employees and that deficits are the way to boost the economy. The past two down years show, once again, that these theories do not work. Huge sums of money have been given to stimulate the economy. The economy remains flat. By any measure of rational thinking, when what you are doing is proven again and again not to work, try something else. The time is now to get rid of ill-conceived policies and try what works.
In a recent interview, the benefit of supporting America by doing business with American companies was emphasized. Buy America has been a grass roots movement ever since textile companies started going overseas in the 1950s. Since 1990, the loss has only worsened. Manufacturing companies abandoned America, leaving local communities devastated and workers without jobs. "Made in the USA," my book on Americans and how we exported our future, calls for buying American goods and services.
Over the past month, interviews across the United States have shown a major interest in buying here. The questions have been what to buy and where to buy it. The answers are to shop in local communities, statewide, nationally and on the Net. The products are there. To get the economy going, we have to take the initiative and buy American. The powerful consumer economy needs a jump-start. Buying here will do the job, and provide jobs. There is a bonus. By getting America back on its feet and back to work, we also help the global economy.
The academic economists continue to praise trade deficits, to reject any idea of buying in America, and to accept job losses as creative destruction, not personal losses to workers, their families and their homes. St. Lawrence economist Steve Horowitz expressed these views as the follow-up guest to my recent interview on the Fox Business Channel. Horowitz had his facts all wrong, saying among other erroneous points, that there are no telephone operators left in America. Typical of academics who have never had to meet a payroll, he is remarkably uniformed about what is happening in the economy.
In fact, Americans lost almost one trillion dollars to foreign interests in the year before the current downturn. In other words, the trade deficit was a major cause of the current recession. The job loss has been horrendous, but Washington has done nothing that works. Horowitz says job losses are technical corrections. Take a look at the economy. There has been a huge loss to workers and their families. Along with Horowitz, Washington accepts this tragedy as necessary and okay.
After two years now, the economy needs correction more than ever. Trade deficits must be eliminated with balanced trade. We cannot afford another downturn. The trade deficit now approaches $600 billion, almost the same level we had just before the last one. We need open trade where other nations disclose their regulations for trade and eliminate their corruption by exposing their practices. We need a level playing field where we restrict trade with those nations restricting us or we lower the burden on American enterprise and compete directly with those nations. We need parity on the terms of trade. With full disclosure and fair competition, we get the business.
Washington also needs to support American enterprise. Instead, Washington proposes still more costs and regulations. Business cannot compete at a loss. Business cannot move forward under the threat of still more government burdens. Business will not invest in new initiatives when Washington is clearly anti-business.
Horowitz defends government at a time government has to be pulling back and helping business build the economy. He says keep things the way they are.
During the unending politics, too often behind closed doors, the economy goes nowhere, jobs are lost and families bear the burden. To bring these key economic issues to the public and to show the fallacies of continued government intervention, we have challenged Horowitz to a public debate. We have suggested this debate occur at the GOP Club on 53rd Street between Park and Lexington in New York City, on Friday, August 27 at 7pm. As of the press time for this release, Mr. Horowitz has not yet replied.
If Horowitz accepts this challenge, we see the debate as taking about forty minutes, with equal time for each speaker. Questions from the audience will be welcomed.
The heart of the problem remains. Government has failed to work with the economy -- with business enterprise -- to get it to work. Change is obviously needed. Washington needs to try something else but remains stuck in the muck. Free the American free enterprise system, eliminate the trade deficit by demanding open trade with our trading partners, insist on a level playing field and stand back. The world's hardest working, most productive, most competitive and most generous people will get the economy going.
Most important, freeing the economy means jobs, lots of jobs.
The American spirit will end the current malaise and do the job.
~ Barr McClellan, New York, NY, August 24, 2010
For more information, or to set-up an interview with Barr McClellan, contact:
ERIC PARKINSON
Hannover House
479-751-4500 / 818-481-5277
or email at: HannoverHouse@aol.com
www.HannoverHouse.com
Wider Trade Gap Signals Weak Growth
Imports Jump, Exports Sag in Sign U.S. Upturn Is Slowing; Demand Rises for Foreign-Made Autos, Electronics Goods
Kia Soul is subject of safety probe after driver says steering shaft fell
Federal officials launch the investigation after the owner of the car says the shaft decoupled from the wheel, blocking the driver from hitting the brakes.
Federal safety officials have opened an investigation into a complaint about the steering system in Kia's small car Soul by a driver who claimed that he lost control of his car after the steering wheel came off.
Although normally a single complaint is unlikely to trigger a safety probe, the incident is cause for concern because "it occurred without warning on a new vehicle at low mileage and resulted in a complete loss of steering as well as a compromised brake system," according to a statement released Monday by safety regulators.
The National Highway Traffic Safety Administration said an owner of a 2010 Kia Soul reported that the steering shaft decoupled from the steering wheel as the vehicle was being driven, resulting in a complete loss of control. Additionally, the driver said the decoupled steering shaft fell into a position that interfered with the ability to apply the brakes.
The complaint said the vehicle was 2 months old and had 4,300 miles of use when the steering mechanism failed.
Kia said in a statement that it was "actively cooperating" with federal investigators and that "although the investigation is based on a single incident that did not result in an accident or injury, the entire Kia Motors organization — including our supplier base — is reviewing manufacturing processes with the goal of quickly determining if there is a manufacturing cause and preventing the issue from reoccurring."
The cube-shaped Soul is known as a brisk-selling small specialty car. Kia calls it an "urban passenger vehicle" and has built an upbeat advertising campaign using computer-animated hamsters to pitch the car. Year to date, Kia has sold almost 37,000 of the vehicles, and they outsell other specialty cars that are more iconic, such as the Mini Cooper and the Volkswagen Beetle.
The Soul was recently named to the "2010 Top 10 Back-to-School Cars" list for the second year in a row by Kelley Blue Book, the auto-pricing information company.
It's one of a number of models that has helped the South Korean automaker increase its share of the U.S. auto market over the last year. Kia's sales have risen by more than 16% through the first seven months of this year to more than 205,000 vehicles, according to Autodata Corp. Its market share has edged up to 3.1% from 3.0% in the same period a year earlier.
Trade deficit rises faster than expected: How worrying is that?
The US imported $49.9 billion more in goods and services than its exported in June, up from $42 billion in May. Such a large trade deficit is unsustainable and a drag on the economy, experts say.
Sagging exports and a rise in imports pushed the US trade deficit up sharply in June – an unwelcome development during an already-weak economic recovery.
In all, imports exceeded exports of goods and services by $49.9 billion in June, up from $42.0 billion in May, the Commerce Department reported. That was a significantly wider trade deficit than economists had predicted for the month and the widest trade gap the economy has seen since the financial crisis deepened near the end of 2008.
Last year, imports and exports were rebounding in tandem from recession low points. This year, the revival of imports has continued – led by consumer goods from Asia. But export growth has ground virtually to a halt.
That's occurring even though President Obama has set an ambitious goal of doubling US exports within five years, a target designed to bolster US job creation. The new trade numbers confirm that the goal won't be easy to reach.
June's export dip encompassed products ranging from soybeans to aircraft parts, computer chips, and steel products.
"The [trade] deficit has trended higher as the economy has recovered, and a return to the narrower deficits of a year ago does not look likely, at least not in the foreseeable future," economists at Wells Fargo Securities wrote in an analysis of the new numbers.
This also means that US gross domestic product probably grew even more slowly in the second quarter than the recently reported pace of 2.4 percent annualized growth. (Exports add to GDP, while money spent by Americans on imports is counted as a subtraction from economic activity in the US.)
How big a deal?
Economists differ on how big a headwind the trade deficit represents for the economy and job growth. Many agree that such large trade deficits are unsustainable. The June figure equals about 4 percent of GDP, and Americans are borrowing money from abroad to finance their appetite for imported goods.
Some suggest that while the mammoth trade deficit isn’t a good thing, it’s not the crux of America’s job problem. Trade deficits coexisted with decent domestic job growth for many years prior to the recession.
The more important issue, these economists argue, is reviving domestic consumer demand and business investment. And they see a risk that bold efforts to fix the trade deficit could be counterproductive if they lead to a retreat from the trend of expanding global commerce.
To other experts, however, the trade deficit represents a pivotal problem that must be addressed.
"Oil and consumer goods from China account for nearly the entire trade deficit, and without a dramatic change in energy and trade policies, the U.S. economy faces unemployment around 10 percent indefinitely," University of Maryland economist Peter Morici says in a written analysis.
The China problem
Mr. Morici says a core issue is China's efforts to keep its yuan currency artificially weak in value, which makes Chinese goods more attractive to foreign buyers. Beijing announced greater flexibility in its exchange rate earlier this year, but he calls that a token move.
To prod China on its currency policy, Morici urges the US to tax Beijing's conversions of yuan into dollars at a rate as high as 35 percent -- an amount designed to "offset Chinese subsidies that harm U.S. businesses and workers."
That idea is controversial, given that America's traditional role has been of encouraging more open trade and shunning practices that might be viewed by others as a trade war. Recent presidents including Obama have been reluctant to take the step of alleging officially that China manipulates its currency value.
Wherever the debate heads on US policy toward China, economists generally say it would be helpful for the world economy to become more balanced -- with the US running smaller trade deficits and Asian nations shifting their emphasis from exports toward domestic consumer-led growth.
Immelt on China: They Won’t Let Us Win Jeffrey Immelt, the CEO of General Electric, has become the latest high-profile U.S. business leader to sound off about China.
Reuters
General Electric said remarks by its CEO, Jeffrey Immelt, “do not represent our views.”
It’s getting harder for foreign companies to do business there, he told Italian business leaders. “I really worry about China,” the FT quotes him as saying. “I am not sure that in the end they want any of us to win, or any of us to be successful.”
Immelt was apparently giving vent to the growing anger among international businesses who believe that China is engaged in a systematic effort to siphon off their technology, and then turn that technology around and use it against them in China and overseas.
He should know better than anybody: GE has been handing over technology in everything from rail locomotives to antipollution equipment to gain access to the domestic Chinese market.
For international multinationals, technology transfer has long been the quid pro quo of landing deals in China.
Foreign businesses have meekly gone along with this arrangement because they assume that since the biggest markets in everything from wind turbines to mobile phones have moved to China, you have to be in the country if you want to be No. 1, No. 2 or even No. 3 in the world. Without scale, global businesses can’t be industry leaders, they can’t remain on the frontiers of technology, and they become more vulnerable to competition. But scale means that you’ve got to be in China.
That calculation gives China enormous bargaining power. It’s not as though China has to go about acquiring technology in a sly, underhanded way. In fact, it’s been quite open about what it expects in return for market access. Recently, GE upped the ante on technology transfer by injecting its entire global avionics business into a China JV as part of the price for participating in the development of a Chinese passenger jet.
If GE didn’t do it, perhaps some other company would have stepped forward. That’s often a part of the competitive thinking behind the most generous foreign technology giveaways in China.
But now that they’ve relinquished some of their most valuable industrial secrets, the world’s biggest technology companies are asking themselves: Was it all worthwhile?
Two years ago, Immelt said GE would double its revenues in China to $10 billion by 2010. That now seems wildly optimistic. Revenues last year were just $5.3 billion.
To understand the deep frustration that underlies Immelt’s reported comments, you have to know that most foreign business executives go to extreme lengths to avoid saying anything that could remotely antagonize the Chinese government.
Chinese officials respond favorably to flattery (it’s the way their underlings behave, and they expect foreign business executives to behave that way too). So an entire government-relations industry has grown up in China to scientifically go about the business of sucking up. The game is played out in endless fawning speeches, flattering remarks and fake smiles.
So it comes as a shock when somebody like Immelt speaks his mind on China, even at what was apparently a private event.
Immelt isn’t the first CEO to break ranks and talk bluntly about the problems multinationals grappled with in China. In an interview with Bloomberg earlier this year, Microsoft’s CEO Steve Balmer complained about rampant piracy in China and let drop that “China is a less interesting market to us than India, than Indonesia.”
After Immelt’s speech, in which he also reportedly disparaged President Barack Obama, GE spokesman Gary Sheffer went into damage-control mode. The comments, he said, “do not represent our views.”
Not officially, perhaps. But increasingly they represent the views of aggrieved technology companies in China.
– Andrew Browne
Cars.com adds MADE IN USA index. It is the position of this website that patriotic Americans should buy FORD or GM cars and trucks that are MADE IN USA. However, if you must buy a foreign brand please at least support SOME Americans jobs by buying one that is assembled in the USA.
To access the CARS.COM MADE IN USA index please click on the following link:
China maintains high tariffs and other arcane import barriers on Western products, subsidizes exports through an undervalued currency, and offers other inducements to keep Chinese products artificially cheap on world markets.
In other news, THE SKY IS BLUE.
China export surge stirs US anger
By Alan Beattie in Washington and Geoff Dyer in Beijing
Published: June 10 2010 14:40 | Last updated: June 11 2010 01:23
Tim Geithner, US Treasury secretary, arrives on Capitol Hill to give testimony to the SEnate Finance Committee
A surge in Chinese exports and rising anger in the US Congress will put renewed pressure on China to allow its currency to rise against the US dollar.
Chinese trade figures showed exports leaping by 48.5 per cent in May over the year before, way ahead of analysts’ forecasts. Data released in the US showed America’s trade deficit widening slightly in April, with some economists arguing that the improvement in net trade and its contribution to US growth appeared to have stalled.
The data gave more ammunition to China’s critics in Congress, who have said they will proceed with legislation to restrict Chinese imports to correct the perceived misalignment of the country’s currency.
Thursday, Tim Geithner, Treasury secretary, warned China that congressional anger could result in rapid action. “I think the strength of the sentiment in Congress is overwhelmingly strong, it’s bipartisan and it reflects how important this is to the United States,” he told the Senate finance committee.
Charles Schumer of New York, the Senate’s third most senior Democrat, said he would seek to have his bill made into law within two weeks unless he saw signs of action from Beijing.
The Treasury has been pursuing quiet diplomacy with Beijing to allow the renminbi to appreciate, but Mr Geithner on Thursday told the committee that he had no idea when that might happen. In what appeared to be a shift in tone, the Treasury secretary on Thursday signalled that he shared much of Congress’s frustration and suggested that China needed to recognise how close the US was to legislation.
However, Mr Geithner argued that China’s trade surplus had fallen by around half as a share of its gross domestic product over the past two years, and said US exports to China had been rising sharply. “As we emerge from the global financial crisis, US exports to China have rebounded much more rapidly than overall US exports, and are now running 20 percent above their pre-crisis levels,” he said.
Earlier in the year, many investors expected that the renminbi might be allowed to resume its upward movement against the dollar as early as mid-June. But that predicted date has been pushed back as the Greek crisis and the fall in the euro have left Beijing unwilling to see an appreciation against the currencies of both its major export markets.
The increase in Chinese exports announced on Thursday meant that China recorded a trade surplus in May of $19.5bn, significantly larger than the $1.7bn surplus reported in April and March’s modest trade deficit. The US data showed a trade deficit of $40bn, similar to the two previous months. Some analysts believe China’s May export numbers could give Beijing political cover to begin changing currency policy.
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Killed, aborted or neglected, at least 100m girls have disappeared—and the number is rising
Mar 4th 2010 | From The Economist print edition
IMAGINE you are one half of a young couple expecting your first child in a fast-growing, poor country. You are part of the new middle class; your income is rising; you want a small family. But traditional mores hold sway around you, most important in the preference for sons over daughters. Perhaps hard physical labour is still needed for the family to make its living. Perhaps only sons may inherit land. Perhaps a daughter is deemed to join another family on marriage and you want someone to care for you when you are old. Perhaps she needs a dowry.
Now imagine that you have had an ultrasound scan; it costs $12, but you can afford that. The scan says the unborn child is a girl. You yourself would prefer a boy; the rest of your family clamours for one. You would never dream of killing a baby daughter, as they do out in the villages. But an abortion seems different. What do you do?
For millions of couples, the answer is: abort the daughter, try for a son. In China and northern India more than 120 boys are being born for every 100 girls. Nature dictates that slightly more males are born than females to offset boys’ greater susceptibility to infant disease. But nothing on this scale.
For those who oppose abortion, this is mass murder. For those such as this newspaper, who think abortion should be “safe, legal and rare” (to use Bill Clinton’s phrase), a lot depends on the circumstances, but the cumulative consequence for societies of such individual actions is catastrophic. China alone stands to have as many unmarried young men—“bare branches”, as they are known—as the entire population of young men in America. In any country rootless young males spell trouble; in Asian societies, where marriage and children are the recognised routes into society, single men are almost like outlaws. Crime rates, bride trafficking, sexual violence, even female suicide rates are all rising and will rise further as the lopsided generations reach their maturity (see article).
It is no exaggeration to call this gendercide. Women are missing in their millions—aborted, killed, neglected to death. In 1990 an Indian economist, Amartya Sen, put the number at 100m; the toll is higher now. The crumb of comfort is that countries can mitigate the hurt, and that one, South Korea, has shown the worst can be avoided. Others need to learn from it if they are to stop the carnage.
The dearth and death of little sisters
Most people know China and northern India have unnaturally large numbers of boys. But few appreciate how bad the problem is, or that it is rising. In China the imbalance between the sexes was 108 boys to 100 girls for the generation born in the late 1980s; for the generation of the early 2000s, it was 124 to 100. In some Chinese provinces the ratio is an unprecedented 130 to 100. The destruction is worst in China but has spread far beyond. Other East Asian countries, including Taiwan and Singapore, former communist states in the western Balkans and the Caucasus, and even sections of America’s population (Chinese- and Japanese-Americans, for example): all these have distorted sex ratios. Gendercide exists on almost every continent. It affects rich and poor; educated and illiterate; Hindu, Muslim, Confucian and Christian alike.
Wealth does not stop it. Taiwan and Singapore have open, rich economies. Within China and India the areas with the worst sex ratios are the richest, best-educated ones. And China’s one-child policy can only be part of the problem, given that so many other countries are affected.
In fact the destruction of baby girls is a product of three forces: the ancient preference for sons; a modern desire for smaller families; and ultrasound scanning and other technologies that identify the sex of a fetus. In societies where four or six children were common, a boy would almost certainly come along eventually; son preference did not need to exist at the expense of daughters. But now couples want two children—or, as in China, are allowed only one—they will sacrifice unborn daughters to their pursuit of a son. That is why sex ratios are most distorted in the modern, open parts of China and India. It is also why ratios are more skewed after the first child: parents may accept a daughter first time round but will do anything to ensure their next—and probably last—child is a boy. The boy-girl ratio is above 200 for a third child in some places.
How to stop half the sky crashing down
Baby girls are thus victims of a malign combination of ancient prejudice and modern preferences for small families. Only one country has managed to change this pattern. In the 1990s South Korea had a sex ratio almost as skewed as China’s. Now, it is heading towards normality. It has achieved this not deliberately, but because the culture changed. Female education, anti-discrimination suits and equal-rights rulings made son preference seem old-fashioned and unnecessary. The forces of modernity first exacerbated prejudice—then overwhelmed it.
But this happened when South Korea was rich. If China or India—with incomes one-quarter and one-tenth Korea’s levels—wait until they are as wealthy, many generations will pass. To speed up change, they need to take actions that are in their own interests anyway. Most obviously China should scrap the one-child policy. The country’s leaders will resist this because they fear population growth; they also dismiss Western concerns about human rights. But the one-child limit is no longer needed to reduce fertility (if it ever was: other East Asian countries reduced the pressure on the population as much as China). And it massively distorts the country’s sex ratio, with devastating results. President Hu Jintao says that creating “a harmonious society” is his guiding principle; it cannot be achieved while a policy so profoundly perverts family life.
And all countries need to raise the value of girls. They should encourage female education; abolish laws and customs that prevent daughters inheriting property; make examples of hospitals and clinics with impossible sex ratios; get women engaged in public life—using everything from television newsreaders to women traffic police. Mao Zedong said “women hold up half the sky.” The world needs to do more to prevent a gendercide that will have the sky crashing down.
Why Free Trade Is Failing America
Peter Morici | Feb 15, 2010 5:00AM GMT
The Journal of Commerce Magazine - Commentary No economic policy could better serve Americans than genuine free trade, but open trade policies are failing Americans.
Free trade is a compelling idea. Let each nation do more of what it does best, and specialization will raise productivity and incomes.
Americans are not sharing in those benefits because President Obama, like President Bush, permits China and others to cheat on the rules, unchallenged, to the detriment of the U.S. interests he was elected to champion.
The World Trade Organization has greatly reduced tariffs, prohibits virtually all export subsidies, and regulates other national policies that could subvert trade, such as health and product safety standards arbitrarily slanted to favor domestic suppliers.
For these rules to optimize trade, raise productivity and boost incomes, exchange rates must adjust to reasonably reflect production costs. To buy Chinese televisions, Americans must be able to purchase yuan with dollars, but an artificially strong dollar that overprices U.S. tractors and software in China will unravel the benefits of trade by denying Americans opportunities to export goods to pay for those TVs.
Exchange rates are established in currency markets, created by companies trading through major financial institutions. Unfortunately, China and several other Asian governments blatantly manipulate those markets without a credible U.S. response and with ruinous consequences for American workers.
The U.S. exports $1.6 trillion in goods and services a year, and these finance a like amount of imports. This raises U.S. GDP by some $170 billion, because workers are about 10 percent more productive in export industries, such as software, than in import-competing industries, such as apparel.
Unfortunately, U.S. imports exceed exports by another $400 billion, and workers released from making those products go into non-trade-competing industries, such as retailing, where productivity is at least 50 percent lower. This slashes GDP by about $200 billion, overwhelming the gains from trade, and requires displaced workers to accept lower wages.
The trade deficit creates an excess supply of dollars in international currency markets, as Americans offer more dollars to purchase foreign products than foreigners demand to purchase U.S. products.
Simple supply and demand should drive down the value of the dollar against the yuan and other currencies, make U.S. imports more expensive and exports cheaper, and reduce or eliminate the trade deficit. But the Chinese government subverts this process by habitually printing and selling yuan for dollars in currency markets, keeping its currency and exports artificially cheap.
Currency manipulation creates a 25 percent subsidy on China’s exports, and other Asian countries are impelled to follow similar policies, lest their exports lose competitiveness to Chinese products.
Further, huge trade imbalances between Asia and the West, perpetuated by currency mercantilism, create an imbalance in demand — a shortage of demand for the goods and services produced in the U.S. and Europe, and artificially robust demand for products made in China and elsewhere in Asia.
Consequently, to keep the U.S. economy going, Americans must borrow from foreigners and spend too much, as they did through 2008, or their government must amass huge budget deficits by borrowing from abroad, as it is now does thanks to stimulus spending and the Troubled Asset Relief Program.
In the bargain, the U.S. sends manufacturing jobs to Asia in industries that would be competitive, but for rigged exchange rates. The trade deficit slices $400 billion to $600 billion off GDP, and Americans suffer unemployment above 10 percent.
China grows at nearly 10 percent a year and makes American diplomats look like fools for advocating free markets as a growth policy.
Campaigning for the presidency, Barack Obama promised to do something about Chinese currency manipulation. Instead, like a good supplicant, he now thanks Chinese officials for buying U.S. Treasury securities.
China’s development policies make its leaders look smart, but nothing makes them look like geniuses more than an American president who appeases their beggar-thy-neighbor policies.
It will be impossible for the U.S. to create the 9 million jobs needed to bring unemployment down to pre-recession levels without taking on China’s currency manipulation and other unfair trade practices.
For that, Americans may need to wait for a better president — one with the courage to stand up to China.
Peter Morici is a professor at the Smith School of Business, University of Maryland, and former chief economist at the U.S. International Trade Commission. He can be contacted at 703-618-4338, or at pmorici@rhsmith.umd.edu.
TO BUY AMERICAN!
Chinese New Year
Paul Krugman
Actually, the biggest problems with China involve climate change. But today I want to focus on currency policy.
China has become a major financial and trade power. But it doesn’t act like other big economies. Instead, it follows a mercantilist policy, keeping its trade surplus artificially high. And in today’s depressed world, that policy is, to put it bluntly, predatory.
Here’s how it works: Unlike the dollar, the euro or the yen, whose values fluctuate freely, China’s currency is pegged by official policy at about 6.8 yuan to the dollar. At this exchange rate, Chinese manufacturing has a large cost advantage over its rivals, leading to huge trade surpluses.
Under normal circumstances, the inflow of dollars from those surpluses would push up the value of China’s currency, unless it was offset by private investors heading the other way. And private investors are trying to get into China, not out of it. But China’s government restricts capital inflows, even as it buys up dollars and parks them abroad, adding to a $2 trillion-plus hoard of foreign exchange reserves.
This policy is good for China’s export-oriented state-industrial complex, not so good for Chinese consumers. But what about the rest of us?
In the past, China’s accumulation of foreign reserves, many of which were invested in American bonds, was arguably doing us a favor by keeping interest rates low — although what we did with those low interest rates was mainly to inflate a housing bubble. But right now the world is awash in cheap money, looking for someplace to go. Short-term interest rates are close to zero; long-term interest rates are higher, but only because investors expect the zero-rate policy to end some day. China’s bond purchases make little or no difference.
Meanwhile, that trade surplus drains much-needed demand away from a depressed world economy. My back-of-the-envelope calculations suggest that for the next couple of years Chinese mercantilism may end up reducing U.S. employment by around 1.4 million jobs.
The Chinese refuse to acknowledge the problem. Recently Wen Jiabao, the prime minister, dismissed foreign complaints: “On one hand, you are asking for the yuan to appreciate, and on the other hand, you are taking all kinds of protectionist measures.” Indeed: other countries are taking (modest) protectionist measures precisely because China refuses to let its currency rise. And more such measures are entirely appropriate.
Or are they? I usually hear two reasons for not confronting China over its policies. Neither holds water.
First, there’s the claim that we can’t confront the Chinese because they would wreak havoc with the U.S. economy by dumping their hoard of dollars. This is all wrong, and not just because in so doing the Chinese would inflict large losses on themselves. The larger point is that the same forces that make Chinese mercantilism so damaging right now also mean that China has little or no financial leverage.
Again, right now the world is awash in cheap money. So if China were to start selling dollars, there’s no reason to think it would significantly raise U.S. interest rates. It would probably weaken the dollar against other currencies — but that would be good, not bad, for U.S. competitiveness and employment. So if the Chinese do dump dollars, we should send them a thank-you note.
Second, there’s the claim that protectionism is always a bad thing, in any circumstances. If that’s what you believe, however, you learned Econ 101 from the wrong people — because when unemployment is high and the government can’t restore full employment, the usual rules don’t apply.
Let me quote from a classic paper by the late Paul Samuelson, who more or less created modern economics: “With employment less than full ... all the debunked mercantilistic arguments” — that is, claims that nations who subsidize their exports effectively steal jobs from other countries — “turn out to be valid.” He then went on to argue that persistently misaligned exchange rates create “genuine problems for free-trade apologetics.” The best answer to these problems is getting exchange rates back to where they ought to be. But that’s exactly what China is refusing to let happen.
The bottom line is that Chinese mercantilism is a growing problem, and the victims of that mercantilism have little to lose from a trade confrontation. So I’d urge China’s government to reconsider its stubbornness. Otherwise, the very mild protectionism it’s currently complaining about will be the start of something much bigger.
“In the end, the entity with the loudest voice is the consumer.” – Robert Iger, CEO The Walt Disney Company
Whirlpool to reopen Ohio freezer factory BLADE STAFF
OTTAWA, Ohio - Some laid-off workers in northwest Ohio got a Christmas present Monday when appliance maker Whirlpool Corp. said it will reopen an Ottawa, Ohio, freezer factory next month and call back an unstated number of employees who lost their jobs at the plant last month.
Whirlpool spokesman Jill Saletta said the former W.C. Wood Corp. plant would begin production Jan. 18 and some former workers would be contacted for jobs beginning tomorrow.
W.C. Wood of Guelph, Ont., closed the plant when it couldn't find a buyer. A Canadian court placed the business into receivership and early this month Whirlpool bought the assets of the Putnam County factory.
Whirlpool has not said how many people it will employ, saying only that "required manpower is being determined." The company sent letters to laid-off W.C. Wood workers last week to tell them it would resume production and be in contact with them, using Kelly Services, an employment agency.
Workers will be brought back in phases, but no new hires are planned at this time, Ms. Saletta said.
The regulatory closing notice the Canadian firm issued last month said 215 people lost their jobs, but the Lima News said only about 150 people worked at the plant when it shut.
Whirlpool said it will make upright freezers at the 500,000-square-foot factory, and is conducting a study to be done by spring on any production beyond 2010. The Ottawa plant used to make freezers for one of Whirlpool's product lines.
In Ohio, the company has a washing machine plant in Clyde and a dishwasher manufacturing plant in Findlay. Editors Note: If anyone can out find out what specific models are being made in these plants please e-mail us the information and we will promote these MADE IN USA products. Send information to info@ionlybuyamerican.com
Panama project to redirect flood of Asian goods
By CHRIS BALTIMORE, REUTERS Dec 15 2009 , LA PORTE, TEXAS
Warehouses holding everything from beer kegs to frozen chickens crowd the side of Highway
146 south of Houston, and a building boom is adding acres more, thanks to an even bigger project 1,800 miles away in Panama.
A $5.25 billion plan to triple the capacity of the Panama Canal is to be completed in 2014, opening the way to Houston, 2,900 kilometers to the northwest, for huge cargo vessels that cannot squeeze through the canal’s current locks and do not want to go around South America.
The prospect of bigger ships, and more of them, could be a boon for the Port of Houston, which already handles more foreign tonnage than any other U.S. port.
With an eye toward feeding American consumers’ demand for Asian-made goods, U.S. retailers like Wal-Mart Stores and Home Depot have built millions of square feet of warehouse space around the Port of Houston.
‘‘They’re popping up everyplace,’’ said Jimmy Jamison, director of operations at the Port of Houston Authority, referring to the warehouses. ‘‘If they wait until the Panama Canal expansion, that property won’t be there.’’ Many of the warehouses were built without dedicated tenants, and many remain vacant.
Port officials expect spare capacity to disappear, once the Panama Canal opens two new sets of locks — the first major expansion since the canal opened in 1914. The locks will give huge container cargo ships from Asian exporters like China an all-water route to U.S. Gulf Coast ports like Houston.
At present, the biggest cargo ships from Asia must unload their goods onto trucks or rail cars on the U.S.West Coast or travel via the Suez Canal to the East Coast.
After the expansion, shipping containers unloaded onto Houston’s docks, which nowgomainly to other Texas cities like Dallas and San Antonio, could end up in U.S. Midwestern cities like Chicago. Houston is the closest U.S. port to the Panama Canal.
The canal widening could lead to a shift in global shipping patterns and could reduce reliance on West Coast ports like Los Angeles and Long Beach, California, which have long dominated the U.S. market for unloading cargo containers.
Other ports on the Gulf Coast and East Coast — including those in New Orleans, New York, New Jersey, Georgia and South Carolina — are considering expansion to lure the big ships.
‘‘It’s really a game-changer,’’ said Chris Bonura, spokesman for the Port of New Orleans, referring to the canal expansion.
U.S. imports from East Asian nations like China and Japan are valued at about $410 billion a year, and about half of the total is handled by ports in California, Oregon and Washington, according to the Greater Houston Partnership business group.
But about 70 percent of cargo unloaded on the West Coast is sent by truck and railroad to markets east of the Rocky Mountains. That creates an opening for ports like Houston to extend their reach into the Midwest.
‘‘The expansion that is going on in Panama has got the Port of Houston written all over it,’’ said Jeff Moseley, president of the business group.
To the east of Houston, in Baytown, is the Cedar Crossing Business Park, the largest industrial park in Texas, which houses warehouses owned by Wal- Mart, Home Depot and others.
Wal-Mart’s distribution center at Cedar Crossing, covering 4 million square feet, or 370,000 square meters, opened in 2005 and is one of the largest such facilities in the world.
‘‘Wecan all agree that they are kind of the king of logistics,’’ Mr. Moseley said of Wal-Mart, calling its decision to locate in Houston ‘‘a loud resounding validation of this strategic location.’’ A Wal-Mart spokesman declined to comment.
Home Depot operates a 750,000- square-foot distribution center in Cedar Crossing, but most of the cargo housed there arrives by railroad from the West Coast, said Jeff Siewert, Home Depot’s director of international logistics.
Home Depot, which imports goods from about 30 Asian countries including China, Vietnam and Thailand, would consider a water route to Houston if its shippers offered one, Mr. Siewert said.
‘‘As we think about our opportunities to ship all-water into Houston, that has always been on our radar screen,’’ Mr.
Siewert said.
Some U.S. analysts have predicted that about 20 percent of cargo ships serving West Coast ports could divert to Houston, once the canal is widened to handle a new breed of container vessel known as post-Panamax ships. ‘‘There is going to be some market share gain,’’ said Paul Bingham, managing director at IHS Global Insight, an economic forecaster, who pegged the diversion rate at 5 to 10 percent.
About 14 percent of container traffic handled by the Port of Houston comes through the Panama Canal, a percentage that port officials say could grow to about 25 percent by 2020.
The port will spend about $1.2 billion to expand its Bayport Container Terminal to allow it to handle about 1.4million containers per year.
The port is buying giant cranes capable of unloading post-Panamax cargo ships, which can carry asmany as 12,600 containers, almost three times the number carried by Panamax ships, or ships capable of fitting through the existing Panama Canal.
Senator urges Adidas to keep NBA uniforms in USA
By SAM HANANEL (AP) – Nov 24, 2009
WASHINGTON — The official uniforms for NBA players could soon be made in Asia, a move drawing sharp criticism from a prominent lawmaker in Congress.
Sports apparel maker Adidas plans to end its contract with American suppliers and move production of NBA jerseys to a factory in Thailand. The move could cost about 100 jobs at a factory in upstate New York that makes more than half the uniforms worn by Kobe Bryant, LeBron James and other NBA players.
Sen. Chuck Schumer said the switch would blemish over a century of history for the marquee American sport. He is calling on Adidas to reverse its decision and to keep making the uniforms in the USA.
"To do anything else is an insult to the American worker and sports fans everywhere in America," the New York Democrat said.
The longtime New York Knicks fan planned a news conference later Tuesday at American Classic Outfitters, the Perry, N.Y., supplier that has been making NBA jerseys for 40 years.
Adidas is in the middle of an 11-year merchandising deal to be the official uniform and apparel provider for the NBA, WNBA and the NBA Development League. Representatives at Adidas and the NBA did not immediately respond to requests for comments.
NBA players' jerseys have always been manufactured in the United States.
Rob Knoll, senior vice president at American Classic Outfitters, said his company had a multiyear contract to make professional basketball uniforms for Adidas. But last month, he said, Adidas officials told him they were moving operations overseas. The New York plant had invested more than $1 million in facility improvements and equipment to produce the jerseys.
"It's a blow because the work that was in house and scheduled for production is gone now," Knoll said. "If they want to change their mind, we'd love it."
Adidas also had contracts with two other U.S. companies to make the official NBA jerseys.
German-owned Adidas is the second largest athletic shoe and apparel company in the world. Its U.S. subsidiary, Adidas America, has its U.S. headquarters in Portland, Oregon.
CNBC had a town hall type meeting Wednesday night called Meeting of the Minds - rebuilding America. CNCB should be applauded for talking about the topic of manufacturing in America, but the panel of guests missed the mark. Not one panelist or member of the audience asked Americans to purchase American made products.
U.S. Labor Secretary, Hilda Solis: Summary - Green jobs and retraining will save us.
Chairman & CEO, GE, Jeff Immelt: Summary - GE is a multinational company interested in selling to the 1 billion new customers in the rest of the world. We prefer to manufacture in the U.S. but we don't have to. He said, "This notion that you can design things in one place and manufacture them in another place is just wrong......exporting manufacturing capability is not a winning plan." Yet, this is exactly what GE does when they design kitchen appliances in Louisville, KY and manufacture them in Mexico.
President and CEO National Association of Manufacturers, John Engler: Summary - manufacturing in America is the most productive in the world. Head in the sand. Let me keep my job.
Executive Chairman, Ford Motor Company, Bill Ford: Summary - lied through his teeth about how much he loves the unions. Someone should have asked him why he imports so many cars from Mexico and Canada.
Chairman, President & CEO, Nucor Corporation, Daniel R. DiMicco: Summary - the only one in the group to bring up the trade agreements being violated by China and other countries. Way to go Dan!
To see excerpts from this event please click on the following link:
If only this audience had been urged to buy American made appliances, automobiles, and other durable goods MADE IN USA perhaps this made for TV event could have made a REAL difference.
Sign the petition to support the 'Made in America Information Act' (H.R.725) here: http://bit.ly/hYPGT
U.S. automakers sold fewer than 7,000 vehicles in South Korea last year, less than 1 percent of the market. By contrast, South Korean carmakers Hyundai Motor Co. and Kia Motors Corp. sold more than 53,000 vehicles in the U.S. last month alone.
Warren Buffett says this deal is "an all-in wager on the economic future of the United States". Read here why it really signals MORE IMPORTS FROM CHINA.
Really, Warren? Thank you for your confidence in America's appetite for cheap imports.
Express from Omaha
Nov 5th 2009 | NEW YORK From The Economist print edition
America's most famous investor buys a railway company
WARREN BUFFETT describes his latest deal as "an all-in wager on the economic future of the United States." On November 3rd his investment firm, Berkshire Hathaway, agreed to buy the 78% it did not already own of Burlington Northern Santa Fe, America's second-biggest railway operator, in a deal valued at $44 billion. Saluting the flag has become an integral part of Mr Buffett's carefully cultivated folksy image, but the deal also looks like a bet on many less stirring ideas, including ever-higher imports from China, heavier traffic through the Panama Canal, higher oil prices and the preservation of coal's big role in power generation in America.
The purchase is Mr Buffett's biggest yet, but the size is no surprise. Back in 2002 he said, "We are looking for big deals. We have got an elephant gun and it's loaded." Berkshire Hathaway is paying around 30% more for Burlington Northern's shares than their price on the day before the deal was announced, and barely 10% less than their all-time high. Unlike with Mr Buffett's $5 billion investment in Goldman Sachs in the depths of the crisis last September (now worth over $7 billion), he could have bagged this elephant for a lot less money: in March, Burlington Northern shares hit a low of $51, compared with the $100 Berkshire is paying for them now."This is all happening because my father didn't buy me a train set as a kid," joked Mr Buffett, who comes from Omaha, Nebraska, a historical rail hub. In fact Mr Buffett's enthusiasm for railway companies is relatively recent. For decades, he avoided them altogether. As his deputy, Charlie Munger, explained a few years ago, they tend to be "capital-intensive, heavily unionised, with some make-work rules, heavily regulated, and long competed with a comparative disadvantage versus the trucking industry. Railroads have long been a terrible business and have been lousy for investors."
But that comparative disadvantage has been evaporating of late. Mr Buffett's old friend Bill Gates has made a killing investing in the Canadian National Railway. Railways have benefited from such technological improvements as double-stacked rail cars and better software for managing both rolling stock and supply chains. Better yet, Mr Buffett reckons that a rising oil price hits truckers four times as hard as trains. And railways, as a greener means of moving freight than trucks, stand to benefit from stricter environmental regulation, especially if, as seems likely, Congress goes soft on America?s coal industry, a big customer of Burlington Northern.
Burlington Northern is also well-placed to benefit from the boost that the forthcoming expansion of the Panama Canal is expected to give to the port of Houston, as a gateway for trade between China and America's heartland. Wal-Mart, the world's biggest retailer, has already built a huge facility there to manage the transfer from ships to trains of goods on their way to its superstores in Chicago and other cities in the centre of the country. This route will attract far more traffic once ships can take advantage of the expanded canal, which is due to open in 2014. As for Mr Buffett's past worries that it is difficult to earn exciting returns in such a capital-intensive business, could he also be betting that America's government will soon unveil big tax breaks or subsidies for infrastructure investments?
First exclusive MADE IN USA walk-in store, AMERICAN AISLE, opens 40 miles north of Chicago in Round Lake, IL.
American Aisle 839 E. Rollins Road Round Lake Beach, IL, 60073
By phone: 847-543-1USA(1872) Fax: 847-543-1892
Store Hours: (Central Time) Weekdays: 9 am - 8 pm Weekends: 10 am - 6 pm
Buying American-made an investment in future - By BILL THOMPSON, Piscataway, NJ
October 31, 2009 Many of us in America have been conned into believing that products made in America either do not exist anymore, or are somehow inferior to foreign products. This kind of consumer manipulation is causing many of our product manufacturers to either go out of business or file bankruptcy. As a result of this, much of our quality American-made products are becoming virtually impossible to find in our stores. People need to realize that the power of maintaining our work force in America is not in the hands of our elected politicians, but this awesome power is ultimately in the hands of the American consumer - period. If our stores and businesses don't comply to our demand by making American-made products available for the consumer, we should simply refuse to buy from them at all.
Now is the time for us to begin to think, "America First," by insisting that our stores sell domestically made products. By just checking the labels of each product of purchase or simply asking store employees to point out products that are made in America we would immediately begin to see the magnitude of our power as consumers. Our companies would begin hiring again, American jobs would begin to return, foreclosures would again become the exception instead of the rule, and prosperity would again come to our cities and communities. The future of our great country depends on our power to maintain our manufacturing base.
America is not only the land of the free and the home of the brave, it is also the land of opportunity for our children. We must put aside our zeal to purchase the cheapest or least costly products, and realize that when we buy "American made," we not only contribute to American jobs, but also to the fabric of future generations. We must begin to ask ourselves, what is more important, buying the least costly products or saving our country from being acquired by foreign governments?
We all know that the primary reason that foreign-made products are cheaper than American-made products is because there are virtually no labor laws in these countries at all. People in labor markets in these countries are subjected to "sweatshops," or slave labor, working in deplorable conditions in locked buildings which are subsidized by their governments.
We have the power to change the fate of manufacturing in America if we stand together and demand to be once again given the option of buying products made in the U.S. I for one do not want my grandchildren to be faced with the prospect of living in the United States of China. We have the power to change the course of America's future if we have the will. Have you or one of your relatives lost a job? Do you know someone personally who has lost his or her job? If so, then remember that when you buy a foreign-made product that you have contributed to the loss of American jobs. Remember our motto, "Out of Many One." Has the meaning of these words changed in the 21st century? Are we no longer in the thing together? Have we become simply individuals in a global economy? Buy American-made products and help save our economy. Insist that your community businesses buy and sell products made in America.
Competition is great as long as the wages are fair for all. When competition is fair American companies can compete with any country anywhere, whether in quality, quantity or cost, even with foreign governments' subsidies. American manufacturers make the greatest products in the world, when the playing field is leveled. Unfair labor practices by foreign governments have jaded world trade and has undermined trade agreements everywhere.
When we place our trust in God and come together as one nation there is no obstacle that Americans cannot overcome.
Chinese-Made Turbines Will Fill Texas Wind Farm
By REBECCA SMITH
A Chinese wind-turbine company, with financing help from Beijing, has struck a deal to be the exclusive supplier to one of the largest wind-farm developments in the U.S., a sign of how Chinese firms are aggressively capitalizing on America's clean-energy push.
The 36,000-acre development in West Texas would receive $1.5 billion in financing through Export-Import Bank of China. Shenyang Power Group, a five-month-old alliance, would supply the project with 240 of its 2.5-megawatt wind turbines, among the biggest made in the world. The Obama administration is hoping a shift to renewable energy will inject new life into the U.S. manufacturing base and provide high-paying jobs, making up for losses in the auto, aerospace, textile, steel and other sectors. But while the U.S. has poured money into renewable energy through tax credits and other subsidies, China has positioned itself to reap many of the benefits by ramping up its brawny export machine.
Global manufacturing of wind turbines shifted primarily to Europe from the U.S. after the 1980s, as nations such as Spain created special pricing for renewable power. By 2005, less than a quarter of components going into turbines installed in the U.S. were made domestically.
The extension of a production tax credit stimulated domestic output during the past few years. But Elizabeth Salerno, a spokeswoman for the American Wind Energy Association, said that in the first three quarters of 2009, there were 33% fewer announcements of U.S. turbine-factory expansions than in the comparable period of 2008.
U.S. officials and domestic suppliers have been concerned that the U.S. wouldn't reap the full benefit of the country's rapid expansion in renewable energy. Sen. Jeff Bingaman (D., N.M.) has voiced concern that the U.S. has outsourced much of its clean-energy manufacturing capacity. As part of the stimulus bill earlier this year, he earmarked a $2.3 billion tax credit for domestic producers of clean-energy equipment.
Another hurdle is that many renewable-energy projects in the U.S. are having trouble securing financing because of tight credit markets and lower prices for power sales. As a result, many privately funded projects have been scaled back or canceled. Texas energy investor T. Boone Pickens earlier this year said he was postponing plans to build a massive wind farm in the Texas panhandle. The American Wind Energy Association last week said there is 33% less wind-generation capacity being built in the U.S. today than at this time last year.
The federal government is trying to breathe new life into the industry and last month handed out more than $500 million in grants to a dozen wind and solar-energy projects.
Cappy McGarr, managing partner of U.S. Renewable Energy Group, a private-equity firm that is lead partner on the 600-megawatt development, said the partnership would seek tax credits and support from the federal stimulus package, which should amount to millions of dollars. Mr. McGarr said the project should create 2,800 jobs -- of which 15% would be in the U.S. The rest would flow to China, where Shenyang employs 800 people.
Mr. McGarr called it a "win-win-win for everyone. We're two great countries and we need to work together."
Meanwhile, China is planning on future investments in the U.S. renewable industry as a way of creating a market for Chinese wind and solar equipment manufacturers.
"This is just the beginning," said Lu Jinxiang, chief executive of A-Power Energy Generation Systems Ltd., which controls Shenyang Power. He said the U.S. "is an ideal target" as it seeks to shift to renewable energy from fossil fuels. He said his firm, shares of which trade on the Nasdaq Stock Market, hopes to replicate the success of the Chinese solar industry, which has expanded capacity and driven down prices.
The West Texas project exclusively would use 2.5-megawatt turbines made at Shenyang's turbine-manufacturing facility, in the northeastern city of Shenyang. The Texas project would soak up more than half of Shenyang's current annual production of 1,125 megawatts of turbine capacity.
Shenyang uses wind-turbine technology licensed from Germany's Fuhrländer AG, Denmark-based Norwin and General Electric Co.
The project still must garner the necessary permits, but developers hope to have turbines in service in March 2011.
If there is one issue that is paramount to improving the fate of U.S. manufacturers, it is the trade issue with China, says Peter Morici, professor of international business at the Smith School of Business, University of Maryland, and the former chief economist at the U.S. International Trade Commission. "Our problems with China are macroeconomic, not microeconomic. There are unfair subsidies that need to be addressed by trade laws," Morici explains.
Morici has been an outspoken critic of China's trade policies, and he spells it out clearly in a recent op-ed titled "To Fix the Economy, Fix China Trade." He explains that the trade deficit with China is largely caused by an artificially undervalued yuan and Chinese protectionism.
While he points to the 35% tariff imposed on tires in September as well as the 31% duty on Chinese carbon or alloy tubular steel products as encouraging, he warns that it's not nearly enough.
"The most significant thing that the administration can do is to address the currency problem, which creates a 40% subsidy," he says. "If that's not fixed, the manufacturing sector simply cannot survive. If it is fixed, we will have a renaissance."
Morici believes the U.S. must get serious and hold China accountable. "If China won't re-evaluate or won't redirect their manufacturing subsidies, we should impose a tax to fix the problem." He also is concerned that at a fundamental level, China's current policies and other subsidies will so distort trade and destroy prosperity for the Western world that they may wholly undermine confidence in the World Trade Organization as a viable institution.
Ultimately it is a question of growth. Morici says that President Obama won't be able to achieve the growth that is needed to ensure high-paying jobs and benefits as well as pay for health care reform if the country doesn't deal with the trade issue with China. Without the necessary income, he says, the cost of health care reform will overwhelm Americans.
When asked how quickly the U.S. needs to move to address unfair currency and trade policies, Morici answers one to two years. "While the policies might be viewed as future corrections, they are in fact a necessity for today."
The policies being put forth with regard to green manufacturing are not sufficient, Morici claims. While the Obama administration has made the creation of green jobs the centerpiece of its plans to save the manufacturing sector, Morici doesn't buy it. He says the notion that we can create 5 million jobs is a fantasy. He doesn't agree with the number of jobs envisioned or the ability of one industry to adequately support a large manufacturing base. "The U.S. can't be a boutique manufacturer of green technology, as it is unable to support the large number of manufacturing jobs needed," he says. He also points out that battery technology is being developed through "an Asian mercantile trade system, which means that the U.S. is losing future opportunities as well." The major technology shift away from fossil fuels is "all going to happen in China," Morici says, unless the administration plays hardball now.
Peter Morici is a professor at the Smith School of Business, University of Maryland, and the former chief economist at the U.S. International Trade Commission.
Since 1934, Nokona baseball gloves have been designed and handcrafted here in United States. While other companies reach across the Pacific to source their glove production, we stand-alone - we are the last company making baseball gloves in America.
Conbraco Valves still MADE IN USA!
"Some of our competitors claim to be domestic while they are really sourcing most of their products from the Far East", said Glenn Mosack. "We actually manufacture 95 to 98% of all the components in our valves in our own plants in the Carolinas, right down to the yellow handles!"
NEWPORT, Rhode Island – For a year and a half, Defense Secretary Robert Gates has been trying to get the military establishment to focus on the guerrilla wars we’re in today – instead of hypothetical showdowns with another big power tomorrow. But this morning, at the Naval War College, Gates had a subtle message for the gathered sailors, marines, and soldiers: Don’t forget about China, either.
In recent years, Beijing’s buildup of quiet, diesel electric submarines and advanced, super-sonic cruise missiles has been met with increasing worry in some corners of the Pentagon and Congress. Gates, for the most part, has been seen as outside that camp. Today, however, the Defense Secretary warned that "we know other nations are working on ways to thwart the reach and striking power of the U.S. battle fleet – whether by producing stealthy submarines in quantity or developing anti-ship missiles with increasing range and accuracy. We ignore these developments at our peril."
Gates never mentioned China by name. Instead, he referred only to the "risks posed by the military forces of other state actors" looking to "deny the U.S. military freedom of movement and action." He also warned of "potential adversaries" building weapons that and "threaten" America’s "bases, sea and air assets, and the networks that support them." In military circles, such talk usually implies the Chinese.
Since Gates announced his radical overhaul of the Pentagon’s arsenal, his critics have accused him of something close to unilateral disarmament, in the face of China’s stockpiling of weapons. American Enterprise Institute analyst Tom Donnelly, for one, accused the Defense Secretary of ignoring a "persistent pattern of provocation by the Chinese military."
Of course, the American arsenal still dwarfs that of any potential foe, including China. Gates noted that the U.S. "battle fleet, by one estimate, is still larger than the next 13 navies combines – and 11 of those 13 navies are U.S. allies or partners." That’s "why, despite significant naval modernization programs underway in some countries, no one is aiming to bankrupt themselves by challenging the U.S. to a shipbuilding competition."
But Gates warned that the source of America’s strength at sea – her massive aircraft carriers and destroyers – could be a point of vulnerability, too. The loss of even one of these multi-billion dollar ships "would be a national catastrophe," he noted. In World War II, the Royal Navy lost two of its capital ships in part because British admirals "had little appreciation [for] the threat posed by a single, air-delivered torpedo." Gates didn’t have to warn the American officers assembled here too loudly not to make the same mistake.
WWW.WORKSMANCYCLES.COM MADE IN USA SINCE 1898! We can speak specifically about the bicycle industry, where 20 years ago over 10 million bicycles per year were proudly produced in the USA (out of approximately 12 million sold here). Sadly today more than 88% of bicycles sold in the USA are imported from China, leaving the remaining 12% to all other countries, including the USA. To put it simply, the number of bicycles made in the USA is basically insignificant.
Worksman Cycles made a conscious decision many years ago to maintain our tradition of manufacturing our bicycles and tricycles right here in the USA. Most of our competitors thought we were just foolish and old fashioned believing we could remain viable in the USA, let alone New York City. It would have been far easier to do what most of our competitors did….close the US factory and simply become an importer. Think of it, you can cut labor costs, cut overhead and just make life easier. But we thought differently….we could control quality, offer greater diversification of product, maintain our integrity, while also allowing hard working American citizens the chance to do a good job and live the American Dream. It may seem an old fashioned concept, but we actually respect our factory workers and believe in our own abilities. As it turns out, Worksman Cycles outlasted most of the household brand names in the bicycle industry, most of which are simply out of business.
Now consider the current state of our country and the economy including rising rate of unemployment, wage deflation, record numbers of home foreclosures, and bankruptcies. This does not even take into consideration the human emotion that goes with this, such as hopelessness, depression and decrease self worth.
So the next time you make a purchase, ask yourself if “Made in the USA” means something. At Worksman Cycles we have always known that “Made in America Matters!” We’ve known this since 1898. We have not lost our way.
Tuesday, September 15, 2009
Globalism vs. Americanism - Obama puts 35% tariff on Chinese tires
by Pat Buchanan
Down at the Chinese outlet store in Albany known as Wal-Mart, Chinese tires have so successfully undercut U.S.-made tires that the Cooper Tire factory in that south Georgia town had to shut down.
Twenty-one hundred Georgians lost their jobs.
The tale of Cooper Tire and what it portends is told in last week's Washington Post by Peter Whoriskey.
How could tires made on the other side of the world, then shipped to Albany, be sold for less than tires made in Albany?
Here's how.
At Cooper Tire, the wages were $18 to $21 per hour. In China, they are a fraction of that. The Albany factory is subject to U.S. health-and-safety, wage-and-hour and civil rights laws from which Chinese plants are exempt. Environmental standards had to be met at Cooper Tire or the plant would have been closed. Chinese factories are notorious polluters.
China won the competition because the 14th Amendment's "equal protection of the laws" does not apply to the People's Republic. While free trade laws grant China free and equal access to the U.S. market, China can pay workers wages and force them to work hours that would violate U.S. law, and China can operate plants whose health, safety and environmental standards would have their U.S. competitors shut down as public nuisances.
Beijing also manipulates its currency to keep export prices low and grants a rebate on its value-added tax on exports to the U.S.A., while imposing a value-added tax on goods coming from the U.S.A.
Thus did China, from 2004 to 2008, triple her share of the U.S. tire market from 5 percent to 17 percent and take down Cooper Tire of Albany.
But not to worry. Cooper Tire has seen the light and is now opening and acquiring plants in China, and sending Albany workers over to train the Chinese who took their jobs.
Welcome to 21st century America, where globalism has replaced patriotism as the civil religion of our corporate elites. As Thomas Jefferson reminded us, "Merchants have no country."
What has this meant to the republic that was once the most self-sufficient and independent in all of history?
Since 2001, when George Bush took the oath, the United States has run $3.8 trillion in trade deficits in manufactured goods, more than twice the $1.68 trillion in trade deficits we ran for imported oil and gas.
Our trade deficit with China in manufactured goods alone, $1.58 trillion over those eight years, roughly equals the entire U.S. trade deficit for oil and gas.
U.S. politicians never cease to wail of the need for "energy independence." But why is our dependence on the oil of Saudi Arabia, the Gulf, Nigeria, Canada, Mexico and Venezuela a greater concern than our dependence on a non-democratic rival great power for computers and vital components of our weapons systems and high-tech industries?
As Executive Director Auggie Tantillo of the American Manufacturing Trade Action Committee compellingly argues:
"Running a trade deficit for natural resources that the United States lacks is something that cannot be helped, but running a massive deficit in manmade products that America easily could produce itself is a choice -- a poor choice that is bankrupting the country and responsible for the loss of millions of jobs."
How many millions of jobs?
In the George W. Bush years, we lost 5.3 million manufacturing jobs, one-fourth to one-third of all we had in 2001.
And our dependence on China is growing.
Where Beijing was responsible for 60 percent of the U.S. trade deficit in manufactured goods in 2008, in the first six months of 2009, China accounted for 79 percent of our trade deficit in manufactured goods.
How can we end this dependency and begin building factories and creating jobs here, rather than deepening our dependency on a China that seeks to take our place in the sun? The same way Alexander Hamilton did, when we Americans produced almost nothing and were even more dependent on Great Britain than we are on China today.
Let us do unto our trading partners as they have done unto us.
As they rebate value-added taxes on exports to us, and impose a value-added tax on our exports to them, let us reciprocate. Impose a border tax equal to a VAT on all their goods entering the United States, and use the hundreds of billions to cut corporate taxes on all manufacturing done here in the United States.
Where they have tilted the playing field against us, let us tilt it back again. Transnational companies are as amoral as sharks. What is needed is simply to cut their profits from moving factories and jobs abroad and increase their profits for bringing them back to the U.S.A.
It's not rocket science. Hamilton, James Madison and Abraham Lincoln all did it. Obama's tariffs on Chinese tires are a good start.
Coming Home: Appliance Maker Drops China to Produce in Texas
Farouk Systems Inc., a $1 billion manufacturing company built around a popular line of hair irons, is moving all of its production of hand-held appliances from China to a new factory in Houston, Texas. Company head Farouk Shami says outsourcing has led to a loss of control over manufacturing and distribution. "We'll make more money this way - because we'll have better quality and a better image," says Shami, noting that his firm spends approximately $500,000 a month fighting counterfeits, most of which he says originate in China. The company collects the fake products and tracks the source, and then brings action in China to shut down illegal producers. Being closer to production, according to Shami, will help him control quality and inventory, and also fight the counterfeits, since imported irons will automatically be suspect. A growing wave of counterfeits has driven down prices and created a dilemma for Farouk Systems, which often finds that defective hair irons returned to the company for refunds are actually knock-offs. While Farouk Systems sells in 104 countries, the United States represents over 60 percent of the company's sales. "I think you're starting to see more manufacturers rethinking outsourcing," says Daniel Meckstroth, an economist at the Manufacturers Alliance/MAPI, a public policy and research group based in Arlington, Va., citing to a June speech by General Electric Co. CEO Jeffrey Immelt, where he said that overseas outsourcing had gone too far and that U.S. companies needed to expand domestic production. GE and such companies as electrical-equipment maker Emerson have shifted some production to the U.S., in part to be closer to customers in North America. Many U.S. producers were left holding large backlogs of good ordered from overseas when the recession hit. Meckstroth says producing closer to customers and limiting the inventory in the pipeline can successfully address such a problem.
From "Coming Home: Appliance Maker Drops China to Produce in Texas" Wall Street Journal (08/25/09) P. B1; Aeppel, Timothy
An excerpt from Richard Conniff commentary found at CBSMONEYWATCH.COM
New China strategy: Economist Peter Morici at the University of Maryland argues for getting tough with China, which he says grabs a 40 to 50 percent profit advantage — and the jobs that go with it — by keeping its currency artificially low. The Obama administration has spoken out against currency manipulation, a phrase American officials diplomatically avoided in the past. But Morici worries that “they just don’t have what it takes to deal with it. This economy cannot grow if they continue to permit the Chinese to victimize us on trade.” The major technology shift away from fossil fuels is “all going to happen in China,” Morici says, unless the Administration plays hardball now.
Government aid to manufacturers: Sue Helper, an economist at Case Western University, believes companies are already starting to recalculate the real costs of outsourcing their manufacturing to China, including the loss of key technologies. Low wages were attractive at first, but “direct labor accounts for only 10 to 20 percent of manufacturing costs, and a lot of costs rise to get that cheap labor.” She notes that General Electric chief executive Jeffrey Immelt, whose company helped lead the charge offshore, is now calling for the reindustrialization of America.
To grease the wheels of U.S. reindustrialization, Helper says the government should expand its Manufacturing Extension Partnership, which helps small- and medium-size manufacturers solve technical problems, much as the Agricultural Extension Service helps farmers. The difference, says Helper, is that agriculture accounts for less than 1 percent of gross domestic product and 2 percent of the workforce, but gets $430 million a year for its extension service. Manufacturing accounts for 14 percent of GDP and 10 percent of all jobs — but gets just $90 million. Shifting money to where it can produce the best return for the economy “could easily pay for itself in increased tax revenues.”
There is of course an irony in all this. The companies now in a panic about the vanishing American consumer are in many cases the same companies that shipped American jobs overseas. And now they worry that Americans can no longer afford their imported products? Well, gee, who would’ve thought? Maybe we should just stay missing for a little while, holding onto our pennies and letting them stew over that thought — until they bring back the jobs.
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More jobs on the scrap heap Manufacturing - In July, manufacturing lost 52,000 jobs. The dollar remains overvalued against the yuan and other Asian currencies, and the large trade deficit with China and other Asian exporters is a key factor pushing down US manufacturing employment.
By Peter Morici
The US Labor Department employment figures for August, to be released on Friday, are likely to report another 200,000 jobs lost, according to the consensus forecast, following the 247,000 lost to the economy in July.
Unemployment was 9.4% in July, and professional forecasters expect it to surge to 9.6% for August. My forecast indicates it will pierce 10% by year end. Factoring in adults that have left the labor force and those who work part time but would prefer full-time jobs, the unemployment rate is greater than 17%.
From December 2007 through July 2009, the economy lost 6.7 million jobs. The recession has wiped out all the jobs created in the private sector over the past decade.
Construction and manufacturing shed 1.4 million and 2.0 million jobs, respectively, as the credit market meltdown and trade deficit wrecked havoc on residential construction and manufacturing. Layoffs then spread to commercial construction, finance, retail sales, and other sectors.
The economy contracted in the second quarter at a modest 1.0%, but should register positivegross domestic product (GDP) growth in the second half in the range of 2%.
Consumer spending, residential construction and technology sales are gaining. Both the technology sectors and materials should benefit from stronger demand powered by growth in Asia.
The stimulus package should raise GDP by about 2.5 percentage points in 2010 and 2011 and add about 3 million jobs. Most of those jobs will be temporary and 3 million and not be enough to replace the more than 7 million that will be lost before the recession ends.
With productivity growing at least 2% a year and the working aged population increasing 1% a year, GDP growth must exceed 3% to bring down unemployment.
Unless the Barack Obama administration addresses the structural problems that caused the recession - management issues at the banks and huge trade deficits on oil and with China - the recovery will not generate strong enough growth to bring down the unemployment rate.
Regional banks are now laboring under the weight of commercial real estate failures. Unable to effectively access money center capital markets, regional banks are short on funds to lend to small and medium sized businesses.
As the stimulus package pushes up government and consumer spending, the trade deficits on oil and with China will grow. This will tax aggregate demand for US made goods and services and limit job gains.
Consequently, as the economy expands, businesses will struggle to find enough capital, and the trade deficits will create a shortage of demand for US goods and services and new layoffs will begin once the stimulus spending ends.
President Obama's near-term energy policies address mostly the more efficient use of domestic coal and natural gas and alternative energy sources to generate electricity, and will do little to quickly reduce oil imports. Increased mileage standards for cars and trucks will not have a meaningful impact on the value of oil imports for several years.
Obama, like George Bush, emphasizes diplomacy to persuade China to stop subsidizing exports, undervaluing its currency through currency market manipulation and blocking imports. It remains to be seen whether he will get serious about China's biggest unfair trade practice - its undervaluation of the yuan by some 40%.
In Friday's jobs report, the key variables to watch are: Jobs creation - On August 7, the Labor Department reported the economy lost 247,000 payroll jobs in July. The government sector added 7,000 jobs, and the private sector lost 252,000.
With a slowly accelerating economic expansion, job losses will continue for several more months, and total losses will exceed 7 million before the hemorrhaging ends.
Unemployment - In July, the unemployment rate, as computed by the Labor Department, was 9.4%, and is expected to rise to at least 9.6% for June. According to my forecast, unemployment will peak at 10.3% late in 2010 or early 2011.
Since 2001, more adults have chosen not to seek employment owing to worsening labor market conditions. If labor force participation today were at the same level as when president George W Bush took the helm, the unemployment rate would be about 12%. The difference is that discouraged workers who have quit looking for work are not counted by Labor Department when computing the unemployment rate. Add in part-time workers who would prefer full-time employment, and the hidden unemployment rate is above 17%.
Business vs government payrolls - In July, government employment rose 7,000, and since the recession began in December 2007, it is up by 195,000.
Importantly, state and local government employment has risen by 110,000 since the recession began. The emphasis in Obama administration stimulus spending on shoring up state and local government employment is misplaced, and the money would be better spent encouraging private-sector employment through infrastructure projections and incentives for private spending on domestic manufacturers.
Construction - In July, construction lost 76,000 jobs. Since construction employment peaked in October 2006, the sector has lost 1.4 million jobs.
Retailing - The retail trade has shed 843,000 jobs since November 2007, and lost 44,000 jobs in July.
Finance and insurance - During the economic expansion finance and insurance, along with technology sectors, offered some of the best new job opportunities, outside of healthcare and technology-related activities. Since December 2007, finance and insurance has shed 332,000 jobs, and 13,000 in July alone. Peter Morici is a professor at the Smith School of Business, University of Maryland, and former chief economist at the United States International Trade Commission.
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National retail chain MENARDS has MADE IN USA SALE! Click on this link to see MENARDS sales flier: http://www.howtobuyamerican.com/menards.pdf. Roger Simmermaker is urging us all to print this flier and take it to every Walmart, Lowes and Home Depot manager and urge them to do the same.
President's ‘Beer Summit' not made in America - corporations not based in American own all three. For the record, Budweiser, a longtime St. Louis staple, and Red Stripe are both now owned by Belgium-based Anheuser-Busch Inbev, and Blue Moon is a subsidiary of South African-Canadian owned Miller Molson-Coors. Full story click here: http://www.newjerseynewsroom.com/style/presidents-beer-summit-not-made-in-america
If you owned a car company would you pay your customers
to buy cars from your competition? The U.S. government,
who now owns 70% of General Motors, is paying Americans
$4500 to trade in their American built SUV for a Kia made in
South Korea with ZERO American labor or parts.
Are we really this stupid? And by the way. let's ask GM to build the Chevy Aveo in the U.S. and NOT in S. Korea by Daewoo like it is now.
70% U.S. Government owned - built in Arlington, TX
______________________ KIA: Killing Industry in America
ZERO U.S. PARTS OR LABOR
Economic talks with China not likely to accomplish much By Peter Morici Online Journal Contributing Writer
U.S. leaders are sitting down to another round of talks with China on security, the economy and the environment. With banks stabilized, nothing is more important to accomplishing a sustainable U.S. economic recovery than recalibrating trade with China.
The idea behind admitting China into the WTO was that it would expand trade based on comparative advantage -- both China and the United States would grow exports of what they do most efficiently. That simply has not happened.
China systematically undervalues its currency to boost exports of low wage products and products it should be importing. Hence, its exports exceed imports with the United States more than four to one, and it enjoys a $268 billion annual trade surplus with the United States
The huge trade deficit with China pulls down demand for U.S. goods and services -- in particular manufactured products -- much more than the lift provided by the stimulus package, because it is permanent and encourages U.S. manufacturers to relocate to China or shutdown completely. Yet the president has boxed in U.S. negotiators with idealistic and ideological stances on trade and the environment.
China maintains its huge currency advantage by systematically buying dollars with yuan -- increasing its hoard of U.S. Treasuries in the process -- instead of letting market forces determine its value, which would be much higher than its current pegged rate.
The U.S. could offset these purchases by taxing dollar-yuan conversions but has failed to act. Instead, like President Bush, he talks a good game and practices appeasement.
The president promises no protectionism to cure the recession, but his hands-off policy on currency is akin to unilateral disarmament. A tax on currency conversion would do no more than offset China’s currency subsidy.
The president promises no protectionism to cure the recession. But what are Western nations to do in the face of Chinese mercantilism if not take offsetting measures?
The president only pleads with China, making America a supplicant nation.
On cap and trade, limiting U.S. C02 emissions would do little to solve the global warming problem if C02 emitting are not similarly limited in China. Yet, China refuses to match the legislation President Obama is pushing through Congress.
Cap and trade, should it pass the Senate, will finish the job China’s currency intervention began -- decimating U.S. manufacturing and a good deal of the American middle class.
Peter Morici is a professor at the Smith School of Business, University of Maryland School, and the former Chief Economist at the U.S. International Trade Commission.
Obama's Donut Economics by Peter Morici 7/19/09 The stock market is rallying. The economy will recover by year-end, and strong profits among big players like Goldman Sachs (GS), IBM (IBM) and Google (GOOG) will spread to other big corporations. However, many small businesses and working Americans won’t be cheering.
Since December 2007, the private sector has shed 6.6 million jobs—half in manufacturing and construction. Lousy banking practices and a surge in imports, mostly from China, are the main culprits but are not getting fixed.
President Obama’s bank reforms will fix many abusive lending practices. However his reforms hardly touch Wall Street’s increasing aversion to the ordinary business of making sound loans, and its obsession with abusive derivatives trading and the big bonuses that creates.
The Federal Reserve and FDIC have poured $2 trillion in cheap credit into the banks and financial houses, mostly benefiting the biggest players. Hence, Goldman Sachs and J.P. Morgan (JPM) post record profits and Citigroup (C) and Bank of America (BAC) survive when they should simply be dismembered in bankruptcy court. Meanwhile, regional banks that rely on Wall Street for credit simply can’t get enough money to make loans or they end up like CIT Financial (CIT) and others—broke and bankrupt.
Small and medium sized manufacturers, builders and retailers rely on those disenfranchised regional banks and can’t borrow enough money to sustain operations as the economy recovers. New opportunities in the President Obama’s new green economy will go to big players like GM and to businesses in China, where the government understands global commerce is played by rules of prison football.
China has more than 100 million rural underemployed workers, who if moved into factories could replace every manufacturing job in the United States, Western Europe and Japan. China lacks the technology to capture all those jobs but Beijing recognizes its huge, growing market provides leverage to impose teach-to-sell conditions on the likes of GM and GE (GE).
Beijing maintains high barriers to imports, requires Western companies to transfer technology to sell in China and subsidizes exports to the tune of at least $500 billion a year.
Beijing requires 70 percent of all green energy hardware sold in China to be manufactured there. Buick is a top-selling brand, but GM can’t export from Michigan but must produce and source parts in China.
Any suggestion to get tough with Chinese mercantilism is naively labeled protectionism by President Obama and his aids.
Hence, the $789 billion stimulus will create some jobs but those will be mostly low-paying government jobs.
The economy will stage a moderate recovery but few jobs will be created that adequately replace lost high paying manufacturing and construction jobs.
Nevertheless, large companies like GE, GM and IBM are well poised to profit, having downsized domestic operations to service a smaller U.S. market and aggressively expanded in China.
President Obama is serving donuts. The big guys will get the cake and working Americans the hole inside
If the first 3 digits of the barcode are 690, 691 or 692, the product is MADE IN CHINA.
471 is Made in Taiwan If the first 3 digits are:
690-692 … then it is MADE IN CHINA . 00 - 09 … USA & CANADA 30 - 37 … FRANCE 40 - 44 … GERMANY 47 ... Taiwan 49 … JAPAN 50 … UK
BUY USA by watching for "0" at the beginning of the number.
Roger Simmermaker needs your help in compiling the largest on-line database of products MADE IN USA. The idea is to have an army of patriotic Americans help him gather the information from every retail store (except Walmart) in the nation. To contribute your time and efforts to this very good cause please click on the following link:
Question: Why hasn't someone started a chain of stores that sell nothing but MADE IN USA products? For help in starting such a chain please contact info@ionlybuyamerican.com
Click cartoon to read op/ed regarding how to fix trade deficit with China
John Smith started the day early having set his alarmclock
(MADE IN JAPAN ) for 6 am. While his coffeepot (MADE IN CHINA ) was perking, he shaved with his electric razor (MADE IN HONG KONG ) He put on a dress shirt (MADE IN SRILANKA ), designer jeans (MADE IN SINGAPORE ) and tennis shoes (MADE INKOREA) After cooking his breakfast in his new electric skillet (MADE IN INDIA ) he sat down with his calculator (MADE IN MEXICO ) to see how much he could spend today. After setting his watch (MADE IN TAIWAN ) to the radio (MADE IN INDIA ) he got in his car (MADE IN GERMANY ) filled it with GAS (from Saudi Arabia ) and continued his search for a good paying AMERICAN JOB. At the end of yet another discouraging and fruitless day checking his Computer (made in MALAYSIA ), John decided to relax for a while. He put on his sandals
(MADE IN BRAZIL ), poured himself a glass of wine (MADE IN FRANCE ) and turned on his
TV (MADE IN INDONESIA ),
and then wondered why he can't
find a good paying job
in AMERICA AND NOW HE'S HOPING HE CAN GET HELP FROM A PRESIDENT MADE IN KENYA
Attention patriotic Americans. Please send letters to Congressman John Yarmuth (D-KY) letting him know that you support a "NON-BINDING RESOLUTION" encouraging Americans to buy MADE IN USA products. In addition, please mention that this is NOT a call for tariffs; simply, an encouraging message for Americans to buy MADE IN USA products.
Please click the following link to send a message to Congressman John Yarmuth:
A non-binding resolution is a written motion adopted by a deliberative body that cannot progress into a law. The substance of the resolution can be anything that can normally be proposed as a motion. This type of resolution is often used to express the body's approval or disapproval of something which they cannot otherwise vote on,due to the matter being handled by another jurisdiction , or being protected by a constitution. An example would be a resolution of support for a nation's troops in battle, which carries no legal weight, but is adopted for moral support.
To buy MADE IN USA products please visit the latest link added to the "I Only Buy American" website:
www.madeinusa.org - this site has it all or can tell you where to find it!
John F. Kennedy had it right almost 50 years ago when he told Americans, "Ask not what your country can do for you, but what you can do for your country!"
We have forgotten this rallying cry and have gotten lazy; causing this current mess we are now so desperate to fix. We became dependent on our government for everything and now we all want to be "bailed out."
This won’t work! It will only postpone the inevitable, unless we ALL decide to roll up our sleeves and work our way out of it.
We need to bring work and jobs back into this country so that we have people/consumers with money that can buy our products. Sending all of our manufacturing jobs to foreign countries took our best-paying jobs with them, leaving too few consumers behind with jobs to buy our goods.
I know it is easy to blame big business for sending these jobs to foreign countries, but the American buying public is just as much to blame. We buy cheap, without any care for where or how an item is made.
How can you blame big business for trying to make cheaper products when that is what we are demanding? Granted, big business took the easy way out and sent the work over rather then finding better/leaner ways to operate, but then again, many of the unions fought this progress, cutting their own throats.
Big business had it half right in the 1980s when they marketed "Buy American." It should have included "Build American," because in the 1990s they started buying many of their manufactured goods form foreign counties or even opened American companies overseas or in Mexico.
Take Wal-Mart, for example. When Sam Walton started the company, he proudly marketed "Buy American." Now, you would be hard-pressed to find American-made products in his stores.
Better example, look what buying foreign goods has gotten us. Poisoned pet food and toothpaste, as well as toys with lead paint with little or no safety standards. Child labor abuse has skyrocketed worldwide and world pollution levels have increased due to the non-regulation or non-enforcement of pollution laws in the countries that build these products. Worker safety and care are also non-existent in many of these countries, as well.
Sending jobs to foreign countries to lower our costs does not and did not work. It did not work in our free market system because it eliminated the buying power (jobs) of the people who make up our market, our consumers.
It IS that simple.
All businesses outsource work, either to lower costs because someone else has a better way of making the product or because they need to increase their capacity. My brothers and I do this in our three companies (but only with American companies). However, now that times are tough and sales are down, we have brought many of these jobs back into our shops to better utilize our people and assets.
We are working harder, smarter and for less money just to survive these tough times. We know we need to take care of our own first. We also buy all of our equipment from American companies, even all of our company and personal cars are American-made. We, as a country, need to pull the outsourced work back into this country. We don't need cash bail outs, we need work.
Building roads and schools is good, but stimulus payments back to the American people are only a Band Aid. We need jobs, and to get jobs, we need to bring the work back.
Create incentives to buy American. Eliminate all the pet projects of our congressmen and women from the stimulus bill and work on helping to bring work back into this country. Hard work built this country, and hard work will save it!
As Americans we need to take back our country and have pride and loyalty in being the best country in the world. Stop blaming the other side and start doing what you can for your country. We don't need to wait for the stimulus. We can start today by “Buying American - Building American - Being American!" This goes for every American citizen, whether you are buying for your company or your family!
Jaime Maliszewski is president of RPW Inc., Elite Finishing LLC and Brilliance LLC in Milwaukee.
Trade Deficit Significant Cause of Recession
By Peter Morici Mar 1, 2009
The U.S. 2008 deficit on international trade in goods and services was $677.1 billion, down from $700.3 billion in 2007 but still 4.7 percent of GDP. The trade deficit was smaller in 2008 because economic growth and consumer spending began to decline during the second half of 2008.
Trade deficits and shoddy banking practices pushed the economy into recession, and until both trade and the banks are fixed, sustained economic growth cannot be accomplished. The trade deficit will rise again as the effects of the stimulus package are felt, but if its underlying causes are not addressed, the trade deficit will drag the economy back down into a double dip recession.
Pushed up by the surge in oil prices and the ballooning trade gap with China, the trade deficit is reducing U.S. GDP by $400 billion, annually, and significantly adding to the pain imposed by the unfolding recession. The negative effects of the trade deficit on GDP and employment overwhelm the potential positive effects of President Obama’s proposed stimulus spending.
Anatomy of the Hemorrhaging Current Account
In 2008, the United States had a $144.1 billion surplus on trade in services. This was hardly enough to offset the massive $821.2-billion deficit on trade in goods.
The deficit on petroleum products was $386.3 billion, up from $293.2 billion in 2007. The average price for imported crude oil rose to $95.23 in 2008 from $64.28 in 2007, while the volume of petroleum imports fell 4.0 percent.
Also, the American appetite for inexpensive imported consumer goods and cars is a huge factor driving up the trade deficit. The trade deficit with China was $266.3 billion, a new record, and up from $256.2 billion in 2007.
The deficit on motor vehicle products was $107.1 billion. Ford and GM continue to push their procurement offshore and cede market share to Japanese and Korean companies. However, the automotive trade deficit was down from $120.9 billion as Asian automakers continued to expand production in North America and demand for autos fell with the recession.
The trade deficit should ease in 2009 with lower oil prices and as the recession bears down on consumer spending. However, China is not permitting its currency to rise in value, despite its trade surplus, and has beefed up subsidies on its exports in an effort to export its unemployment to the United States and other industrialized countries. China’s beggar-thy-neighbor protectionism threatens to ignite a global trade war of devastating proportions.
In 2010, as stimulus spending in the United States and elsewhere lifts economic activity, oil prices will surge and China’s exports will rise above 2008 levels, thanks to an undervalued currency and larger export subsidies. That will push the trade deficit beyond its peak of 5.1 percent of GDP, and this may well pull the U.S. economy back into recession.
Dollars spent on imported oil and cars and consumer goods from China cannot be spent on U.S. goods and services, and every dollar that U.S. imports exceed exports negates at least one dollar of federal stimulus spending. Overall, the trade deficit overwhelms the positive effects of the Obama stimulus package on demand for U.S. goods and services, GDP and employment. Along with the banking crisis, the trade deficit is a primary cause of the U.S. recession.
The dollar remains at least 40 to 50 percent overvalued against the Chinese yuan and other Asian currencies. Although China adjusted the yuan from 8.28 per dollar to 8.11 in July 2005 and permitted it to rise gradually to 6.84 by July 2008, the value of the yuan has not changed since.
To sustain an undervalued currency in 2008, China purchased approximately $600 billion in U.S. and other foreign securities, creating a 40% subsidy on its exports of goods and services. Other Asian governments align their currency policies with China to avoid losing competitiveness to Chinese products in lucrative U.S. and EU markets.
Consequences for Economic Growth
High and rising trade deficits tax economic growth. Specifically, each dollar spent on imports that is not matched by a dollar of exports reduces domestic demand and employment and shifts workers into activities where productivity is lower.
Productivity is at least 50 percent higher in industries that export and compete with imports, and reducing the trade deficit and moving workers into trade-competing industries would increase GDP.
Were the trade deficit cut in half, GDP would increase by at least $400 billion, or about $2750 for every working American. Workers’ wages would not be lagging inflation, and ordinary working Americans would more easily find jobs paying higher wages and offering decent benefits.
Manufacturers are particularly hard hit by this subsidized competition. Through the recent economic expansion and recession, the manufacturing sector has lost 4.6 million jobs since 2000. Following the patterns of past economic expansions, the manufacturing sector should have kept at least 2 million of those jobs, especially given the very strong productivity growth accomplished in durable goods and throughout manufacturing.
Longer term, persistent U.S. trade deficits are a substantial drag on growth. U.S. import-competing and export industries spend three times the national average on industrial R&D, and encourage more investments in skills and education than other sectors of the economy. By shifting employment away from trade-competing industries, the trade deficit reduces U.S. investments in new methods and products, and skilled labor.
Cutting the trade deficit in half would boost U.S. GDP growth by 1 percentage point a year, and the trade deficits of the past two decades have reduced U.S. growth by 1 percentage point a year. Lost growth is cumulative. Thanks to the record trade deficits accumulated over the past 20 years, the U.S. economy is about $3 trillion smaller. This comes to about $20,000 per worker.
Had Washington acted responsibly to reduce the deficit, American workers would be much better off, tax revenues would be much larger, and the federal deficit would be much smaller. The recession would be much less severe.
If the Obama administration relies on stimulus and bank reform alone, the economy will fall back into recession once the spending has run its course. A pattern of false recoveries, much as occurred during the Great Depression, will likely emerge. Conditions will not be as bad, but unemployment will stay at unacceptable levels.
Peter Morici is a professor at the University of Maryland School of Business and former Chief Economist at the U.S. International Trade Commission.
First made-in-China Airbus makes maiden flight
BEIJING, May 18 (Reuters) - The first Airbus plane built outside Europe made a successful four-hour maiden flight on Monday in China, European consortium EADS said. Airbus began assembling some A320 jets in Tianjin near Beijing in September from fuselage parts shipped from Europe, increasing its presence in the world's fastest growing markets for large aircraft.
"This A320 assembled in China unquestionably demonstrated the same quality and performance as those assembled and delivered in Hamburg or Toulouse," Fernando Alonso, senior vice president at Airbus, said in a statement.
Airbus aims to reach output of four A320s a month in China by the end of 2011. Airbus has estimated that China would need more than 3,000 large aircraft between 2006 and 2025, including 180 super jumbo passenger planes.
The first aircraft will be delivered to Dragon Aviation Leasing in June and be operated by China's Sichuan Airlines.
Chinese firms have ordered more than 700 aircraft from Airbus, the majority of which are from the A320 family of planes, it said.
Airbus and U.S. rival Boeing (BA.N) have been turning to Asian markets, led by China, for growth as demand weakens at home.
But Airbus faces criticism from European unions who say the move adds to outsourcing fears amid the recession and could result in the loss of European technology to a potential jet-making rival.
Beijing may need an estimated $30 billion to realise an ambitious goal to manufacture passenger jets with more than 150 seats and freighters capable of handling more than 100 tonnes of cargo to take on Boeing and Airbus by 2014.
As debate on the stimulus package continues to rage, exactly the wrong sort of attention is being paid to one element of the proposal dealing with the “Buy American” clause. The usual list of suspects is lining up to tell us exactly how awful this is, including this New York Times piece by Gregory Mankiw. As usual, he invokes the ghost of Smoot-Hawley to frighten the unpatriotic peasants and also takes time out to instruct us on the virtues of so called “free trade.”
Like many economists, I cringe whenever I hear the term “fair trade.” It is not that I am against fairness — who is? — but the word “fair” is so amorphous in this context as to defy definition. Most often, the slogan “fair trade” is little more than a rallying cry for protectionism.
Protectionism! Hide the womenfolk and cover the children’s ears! Clearly, arguing for fair trade must be some sort of code talk for communism, if not satanism. We are constantly lectured about how all of this free trade will open up foreign markets for our goods, lower prices and encourage competition. This is looking more and more like a situation where if you repeat something often enough, no matter how much the facts may scream against you, it becomes accepted as truth. But I would ask Mr. Mankiw to take just a moment and examine the US Census Bureau’s numbers on exactly how well this free trade has worked out for us through the era of Clinton and George W. Bush while it’s been in effect. And oh, by the way, we now have a roughly 700 billion dollar Free Trade Deficit. But let us look at some of the specifics. (All figures adjusted for inflation.)
Let’s start with the real elephant in the room, China. This is a country which, as Steven Capozzola, spokesman for the American Alliance for Manufacturing, said “has violated trade laws through subsidizing domestic industries, manipulating its currency, lacks strict environmental laws and has shipped defective goods to the United States.” And how is our Free Trade Balance with China trending in Free Trade Era? In 1990 we had a $10.4 Billion trade deficit with them. In 2008 it was $256.2 Billion. These aren’t my numbers, folks. They are from our own Census Bureau. How’s that free trade working out for ya?
How about India? Our free trade policies have consistently resulted in American high tech companies laying of tens of thousands of our best, high paying, high tech workers and shipping those jobs to India faster than they can train workers to fill them. But how is India doing on the raw trade numbers? In 1990 our trade deficit to India was 710 million. In 2008? Try $6.3 Billion. How’s that free trade working out for ya?
Let’s move closer to home and visit Mexico, one of our “free trading” partners in NAFTA. Everybody loves NAFTA, right? So what about that Free Trade Deficit south of the border? In 1990 it was a $1.8 Billion deficit. In 2008? Enjoy your $60.2 Billion deficit. How’s that free trade working out for ya?
For an example of real irony, let us take a quick look at Columbia. The calls are still going out far and wide about how we need an agreement with Columbia similar to NAFTA. What does the big trade deficit board have to say on the subject? In 1990 our deficit with Columbia was $1.1 Billion. In 2008 it was $1.6 Billion and, in fact, that’s actually down from the $2.5 Billion deficit we had with them in 2006! But oh my gosh, by all means let’s rush into a NAFTA type agreement with Columbia. We’re falling behind in our race to massive trade deficits there! We should be losing at least 50 billion per year to them by now!
So what of this talk regarding buying American iron, steel and other materials with U.S. tax dollars for stimulus projects? We are told by breathless “Free Trade” enthusiasts that this will “upset the French” and spawn a new trade war! (One wonders where their heartfelt concern for the French was during the whole “Freedom Fries” debacle.) As Capozzola further points out, “The European Union and China, for example, have said they will use multibillion dollar stimulus packages to buy products made in their countries.” They’re going to keep doing the same thing to us that they’ve already been doing since we fell for this in the 90’s, and we’re the ones being bent over the barrel here.
We hear the same hysterics about how we can’t possibly do it. It might be illegal! (George Will actually tried that one this morning on ABC’s chat festival and was promptly kicked to the Curb.) We already have similar clauses in U.S. government and military procurement rules. And with some new thinking, we don’t need any sort of sweeping mandates and blanket tariffs as we did with Smoot-Hawley. We could easily offer “incentives” for companies working on job creating, stimulus package projects. You’re free to buy your steel wherever you like, but if you buy from an American company, we’ll kick in another ten million or so from the tax dollars. Such proposals are easily within reach if we have the will to do it, and we’ll only be doing what the Europeans and Asians are already doing anyway.
It’s high time to stop treating “protectionism” like a dirty word when you’re talking about protecting American jobs and industry. Look at the real trade deficit numbers above. Look at the real numbers of Americans not just unemployed (rising by the week) but underemployed (the downsized worker from Sun Microsystems whose job went to India and is now working at Starbucks) and also those who have simply given up looking for work. Protectionism? Damned straight, Skippy. And high time for it, too.
Asia: The coming fury - By Walden Bello To survive, transnational firms had no choice but to transfer their labor-intensive operations to China to take advantage of what came to be known as the "China price", provoking in the process a tremendous crisis in the labor forces of advanced capitalist countries. Click here for this must read op/ed: http://www.atimes.com/atimes/Asian_Economy/KB11Dk01.html
A stimulating idea:
Give every American taxpayer a $1000.00 voucher good towards any MADE IN USA product.
Please share this idea with your local congressman.
Though you never would know it from recent reporting, for 40 years the Detroit companies have been systematically undermined by foreign competitors' predatory pricing in the U.S. market. Click here to read full op/ed by Eamon Fingleton:http://www.freep.com/article/20081222/OPINION02/812220305
Simply, money spent on Middle East oil, Chinese televisions and coffee markers, Japanese and Korean cars can’t be spent on U.S. made goods and services, unless offset by a comparable amount of exports. Since U.S. imports exceed exports by 3.4 percent of GDP, the trade deficit creates an enormous drag on demand for U.S.-made goods and services. Click this link to read full op/ed by Peter Morici: http://seekingalpha.com/article/114568-u-s-records-huge-trade-deficit
Unfortunately, during the Great Depression we had the capacity to innovate, manufacture and otherwise create wealth that could drag us out of the hole we were in. Today, we no longer have that capability. We have forfeited that ability through disastrous trade policies that have shipped the majority of America’s manufacturing prowess across the border and overseas. Without the capability to manufacture and create wealth, the U.S. will never truly recover.
Today we are maintaining our living standards only with imports & through the good graces of our creditors who loan us money. How can our creditors have faith in our credit worthiness when we can only pay them if we can borrow money from someone else to pay them. Full complete op/ed click here: http://www.opednews.com/articles/America-Has-No-Means-to-Re-by-Dustin-Ensinger-081208-723.html
More Currency Conflict ahead for U.S. and China. Click here:
Lamborn adopts car dealer's call to buy American. Rep. Doug Lamborn is proposing giving consumers incentives to buy American instead of giving Detroit's Big Three automakers a bailout to stave off bankruptcy. Click this link to read full story: http://www.gazette.com/articles/american_43878___article.html/lamborn_bill.html
Buy American! Over the course of this year, China's government will find itself with more than $300 billion in new foreign-currency reserves, mostly dollars, that it will have to park somewhere - if China and the gulf states prove to be savvy investors--the U.S. will effectively be sending big checks abroad each year to pay for good times past. Click here to read full story: http://www.time.com/time/magazine/article/0,9171,1625188,00.html Big Shoes to Fill in Advanced Manufacturing When ?Boomers? Begin Retiring http://www.kamanufacturers.com/notes.htm Retooled U.S. manufacturing quietly rises to China challenge. Click her to read story: http://www.baltimoresun.com/news/opinion/oped/bal-op.manufacturing05mar05,0,4566029.story
Study: Trade deficit with China costs Florida 100,000 jobs
The United States' massive trade deficit with China cost Florida about 100,900 jobs between 2000 and 2007, with 17,000 lost last year, according to a new study.
The imbalance in trade between the two countries also suppressed workers' wages by about $8,150 per worker, and $19.4 billion overall, according to the study by the Economic Policy Institute, a nonprofit think tank devoted to researching impacts of economic trends and policies.
"All manufacturing is facing a critical challenge, as we know, but what may surprise people is how hard workers in advanced technology are being affected," said Scott Paul, Alliance for American Manufacturing executive director. "As China diversifies its export base -- and it's already expanding its electronic products, aircraft, auto parts and machinery -- more American produces will be unfairly disadvantaged."
Please check out this latest link added to the website! Based in San Clemente CA, Made in USA Forever.com was founded by Todd Lipscomb. To see recent interview with Todd on YOUR MORNING please click the following link: http://www.youtube.com/watch?v=OZv9FeVQwOI
That's BILLION with a B - wake up America!
Countries Contributing the Most to U.S. Trade Deficit
The list below shows America’s deficit amounts for its top 15 trading partners.
China … US$259.1 billion (up 11.4% from 2006, up 59.9% from 2004)
Japan … $83.1 billion (down 6.1%, up 10.5%)
Mexico … $74 billion (up 15.4%, up 64.4%)
Canada … $65 billion (down 10.7%, down 1%)
Germany … $44.5 billion (down 6.9%, down 2.8%)
Nigeria … $28.9 billion (up 12.5%, up 97.3%)
Venezuela … $28.4 billion (up 0.6%, up 40.4%)
Saudi Arabia … $24.5 billion (up 1.8%, up 57.3%)
Ireland … $21.6 billion (up 7.5%, up 12.5%)
Italy … $20.9 billion (up 3.7%, up 20.4%)
Malaysia … $20.8 billion (down 13.2%, up 20.4%)
France … $14.5 billion (up 12.5%, down 36.9%)
South Korea … $13.6 billion (up 2.5%, down 31.5%)
Taiwan … $12.7 billion (down 16.7%, down 1.9%)
United Kingdom … $6.7 billion (down 16.8%, down 36%).
Top Chinese exports to America are computers, accessories, parts and miscellaneous household goods. Japan’s leading exports to the U.S. are passenger cars.
Fastest Increasing Deficits
Below are the nine countries that grew the American deficit the fastest last year.
Mexico … US $74 billion (up 15.4% from 2006, up 64.4% from 2004)
Nigeria … $28.9 billion (up 12.5%, up 97.3%)
France … $14.5 billion (up 12.5%, down 36.9%)
China … $259.1 billion (up 11.4%, up 59.9%)
Ireland … $21.6 billion (up 7.5%, up 12.5%)
Italy … $20.9 billion (up 3.7%, 20.4%)
South Korea … $13.6 billion (up 2.5%, down 31.5%)
Saudi Arabia … $24.5 billion (up 1.8%, up 57.3%)
Venezuela … $28.4 billion (up 0.6%, up 40.4%),
Top Mexican exports to America are crude oil and automotive parts. Nigeria’s exports to the U.S. are principally oil and gas products.
Attention FTC: This is what American consumers should see when shopping for refrigerators, dishwashers, automobiles and all durable goods sold in America:
MADE IN CHINA
MADE IN USA
The flag of the country of origin should be on the face of every durable good sold in America!
A 2" sticker of these flags within eye view on durable goods sold in America could make a BIG difference in the buying habits of American consumers. This would protect manufacturing jobs in America and begin to reverse our devastating trade deficit.
Please urge your politicians, talk show host, union leadership, and local media to discuss this proposal.
Print, television, and radio advertising for all durable goods sold in the United States should require full disclosure about where the product is assembled and the percentage of U.S. content.
To find American made products click on these links:
As debate on the stimulus package continues to rage, exactly the wrong sort of attention is being paid to one element of the proposal dealing with the “Buy American” clause. The usual list of suspects is lining up to tell us exactly how awful this is, including 
