While the Democratic candidates for President had a serious and detailed discussion on a number of important issues last night, they didn’t mention one key issue - manufacturing. In the 90 minute debate, the word “manufacturing” was not uttered once, even though it’s the largest sector of the economy of South Carolina, where the debate was held.

I’m not blaming the candidates or Brian Williams for the omission. The burden falls on all of us who care about not only manufacturing, but also American workers and companies, and the economic future of this country.

Next time, let’s make sure someone uses the “M” word.

Check out today’s NY Times’ look at AAM and our unique worker-management alliance.

A Unified Voice Argues the Case for U.S. Manufacturing

United States Steel, Alcoa, Goodyear and other manufacturing companies have formed an unusual alliance with the United Steelworkers, aiming to preserve and promote manufacturing in the United States.  Full story.

Steven Pearlstein knocks the cover off the ball in today’s WaPo. A definite home run from someone who’s in touch with reality. Hmm. Where to begin?

“Ever since David Ricardo constructed his simple, two-country, two-product analysis back in 1817, all right-thinking people have understood that trade is good.

“Economics has developed considerably since then, but the logic of free trade has remained essentially unchanged. Therein lies a problem. Because in the real world of many countries and many goods, of multinational corporations and the free flow of technology and capital, ‘free trade’ may not be the win-win proposition that economic theory suggests.”

Rounding second…Pearlstein cites Intel’s recent decision to build an advanced $2.5 billion chip fabrication plant in China and lays out the reason for questioning the “win-win” chorus of free traders.

“It would be one thing if the Chinese had developed the capacity to make advanced microchips on the basis of their own investment and ingenuity. But it is quite another when the technology for the chips and chip production has been created by American researchers and American companies, and transferred wholesale to a developing country that makes no secret of its intention to use that knowledge and experience to improve its own industry.”

In fact, he points out Intel’s decision to build the plant in China has little to do with lower labor costs, but instead a rumored $500 million subsidy.

“…there is a name for this kind of economic pump priming — strategic trade — and economists have known for decades that when pursued by a developing economy, it can largely negate the benefits of trade to a developed country like the United States.”

That folks is the real world we’re operating in today. One with little consequence for China, Japan and others who rely on things like illegal subsidies, currency manipulation, and in the case of China a lax enforcement of anti-piracy measures. BUT tremendous consequences for American workers and companies.

“Does this mean we should shut down trade or investment with a country like China? No. But it does suggest…that trade has morphed into something more complex called globalization and that we need mechanisms to ensure the benefits are well distributed, not only between countries but within them.

“Contrary to what you hear from editorial writers and other free-trade ideologues, it is not ‘protectionist’ for the United States to impose countervailing duties on imports from a country that subsidizes exports and keeps its currency pegged to the dollar.

“It’s not ‘anti-business’ to toss out a tax code that encourages multinational corporations to invest overseas and replace it with one that gives tax preferences to companies that create high-value-added jobs in the United States.

“And it is not ‘class warfare’ to raise taxes on those who have benefited from globalization to pay for health care, wage insurance and retraining of workers who have lost their jobs as a result of globalization.”

And, as Pearlstein brings it home in the last paragraph, don’t mind the cheering in the background. It’s just the AAM staff.

“There is a reason that, when it comes to trade and globalization, more Americans believe Lou Dobbs than Hank Paulson and Ben Bernanke — and it’s not because they’ve been bamboozled. The reason is that Americans perceive, correctly, that in recent years liberalized trade has not delivered as promised, that education alone is not the answer, and that neither party has come up with economic policies as tough and effective as China’s.”

Clearly, Pearlstein is living in the real world. Let’s hope we can get our policymakers to join him there.

On Thursday, April 26, the Alliance for American Manufacturing officially goes public.  We hope you will join us on what promises to be an exciting voyage. 

 When labor and management work together, much good can be done.  And that’s what we are all about. 

Our nation’s future security depends on a healthy manufacturing base.  More American manufacturing means good jobs, a robust economy and a strong national defense.

Please come and join us in this effort.  You can sign up at our website to stay informed, get involved, and let us know what you think.  See you on Thursday!

Martin Crutsinger of the AP has filed a terrific story on the challenges facing American manufacturing workers.  You can read it here.   

As Crutsinger points out, America has lost 3.2 million manufacturing jobs since 2000.  The fact that these workers are real people who worry about their future—and the future of their children—often gets lost in the statistical analysis. 

Policymakers and reporters in Washington should follow Crutsinger’s example, spending more time talking with real people like Dawn Zimmer and less time worshiping guys like the 18th Century’s Adam Smith, whose ideas have been so distorted by the proponents of unfettered trade at any cost that sometimes it’s hard to know his original meaning.

As the story notes, some policymakers suggest that we simply “compensate” the losers without changing course. 

If it’s not enough that we’ve already lost one in six manufacturing jobs, what will it take to spur that change? 

A shortage of essential semiconductors because of a supply disruption in Asia? 

An erosion of America’s middle class? 

A dangerous dependency on other nations for armored-plated steel? 

AAM wants to make sure that America wakes up before it is too late.

Yesterday’s NY Times looked at the “competitive pressure” on U.S. companies coming from companies in emerging markets like China, Brazil, India and Russia. In the bottom-line world of global business, gaining the competitive edge, even if it means exploiting cheap labor, is a reality.

“Some, particularly the Chinese companies, have mainly used cheap labor to undercut established companies.”

However, that reality aside, we have to disagree with the view expressed by Harold L. Sirkin of the Boston Consulting Group that “we’ve responded.”

“But Mr. Sirkin is optimistic that the United States economy will continue to flourish. “There are a lot of imports coming in from China today, but what’s our unemployment rate?” he said. “It isn’t 43 percent. We’ve responded.”

Far too many trade violations go unpunished, that’s the reality. In places like China, going around the system is the norm, not the exception. And, it’s American workers who are losing. Losing jobs, losing wages, losing opportunities and facing the risk of losing a secure future for their children.

We’ve not responded. More has to be done on the part of the Administration, the Congress and other policy makers, to strengthen our trade policies. And, those policies have to hold violators accountable when they don’t follow the rules.

We’re nowhere close to responding, and too much is at stake for us to feel otherwise.

Someone at the Financial Services Forum apparently failed to remember that our economy is interconnected.  According to a Bloomberg report today,

“Chief executives of the biggest Wall Street firms Tuesday urged President Bush to make greater access to overseas markets for U.S. financial services a higher priority than it is now.  Such a shift could come at the expense of manufacturers and farmers, groups that also are lobbying the White House on trade.”

This shouldn’t be an ”either-or” proposition.  America can and should succeed in manufacturing, financial services and agriculture.   

Manufacturing is, and will continue to be, an integral part of the “new economy.” With manufacturing, the new economy will thrive. Without manufacturing, much of this new economy wouldn’t even exist.  We hope that our trade negotiators -and our financial institutions - keep that in mind.

The LA Times’ editorial page today hits the right message, calling on China to start playing by the rules:

“The ultimate losers aren’t just U.S. companies but Chinese citizens and their government. Chinese officials have to start living up to their commitments under the WTO.”

We agree. But instead of saluting Intel and others who’ve chosen to shift production to China, which the Times does in its piece, it’s worth asking why those companies don’t stay in the U.S. and export to China. The answer: the rules are stacked against them. 

That’s why the actions the Times praises are sorely needed. The Administration and Congress need to tackle currency manipulation, unfair trade rules, illegal subsidies and other barriers to U.S. exports to China. Not just for U.S. interest, but as the Times points out, for China and its citizens, as well.

Add one more voice to the call for China to step up its efforts to enforce its anti-piracy laws:

“Luxury retailer Coach Inc. called on China on Tuesday to step up enforcement of intellectual property laws and said a lack of transparency was hampering the country’s fight against fakes.”

Coach’s Carole Sadler points out that it has had some success with its own efforts to go after kiosk owners, but adds that “the onus was on the company to protect its brand.”

“China is an evolving economy and I think it’s going to be very important for it to develop a real respect for an enforcement of the laws that they already have on their books.”

No matter whether it’s steel, circuit boards, DVDs or even women’s purses, China has demonstrated that it won’t self-police.  The Administration and Congress must continue to push for China to obey the trade rules it agreed to, otherwise American workers will be left holding the bag.

Chinese officials rejected claims that it isn’t doing enough to combat piracy. Their defense? There are “worse offenders,” specifically pointing to Canada.

“Chinese intellectual property officials rejected U.S. criticism of Beijing’s anti-piracy efforts, insisting Tuesday they are cracking down and saying countries such as Canada are worse offenders.”

Blame Canada? Haven’t we heard that one before? 

It doesn’t matter whether another country is a “worse offender.” The fact is that China has yet to live up to the promises it made when it entered the WTO. One of those promises was to remove restrictions on imports and distribution of books, CDs, DVDs and other goods, restrictions that many feel feeds the demand for pirated products.

The Administration is right to charge China with not living up to its commitments. It’s called accountability.