AAM has just returned from a very big “Keep it Made in America” Town Hall meeting in Pittsburgh.  KDKA TV, which covered the event, estimated that roughly 1,000 people turned out to hear host John Ratzenberger discuss the need to strengthen U.S. manufacturing.

The large turnout may have stemmed in part from blanket coverage in the Pittsburgh Post-Gazette on the day of the event.  Reporter Ann Belser’s noted that AAM was holding a “Forum to push message of jobs,” and AAM executive director Scott Paul published an op-ed entitled ”Keep it Made in Pennsylvania.” 

It wasn’t just the people of Pittsburgh who attended the event, though.  Concerned voters from across the region, including Ohio residents from cities as far ranging as Youngstown and Steubenville, as well as people from parts of West Virginia, rode in on buses specifically to learn more about what they can do to press the nation’s presidential candidates for action on saving U.S. manufacturing jobs.  The sort of dedication that inspired these men and women of all ages to ride for hours to attend the event makes it clear that voters “get” the issues. 

The crucial question now is whether the candidates do as well.

AAM will keep pushing our message.  You can read more on the Pittsburgh event in articles today from Reuters and the Pittsburgh Tribune Review as well as Global Erie.  We head to Buffalo, NY in two weeks for another Town Hall meeting, and we’ll be keeping you posted.

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AAM’s Town Hall in Columbus, Ohio last night proved to be another successful, informative event, with an enthusiastic audience and an engaged media.  We’ll be posting more information and photos on the event soon enough.  In the interim, you’ll probably want to read the article on it by the Associated Press’s Stephen Majors.

In response to the Town Hall meeting, we’ve already received a number of follow-up calls and emails.  So here’s a sample from our mailbag:

FROM: John D. Diamond, Columbus, OH
“My name is John D. Diamond and I just heard the American Manufacturing.org presentation by John Ratzenberger last night in Columbus, Ohio and would like to praise you for the work that you are doing!  I am a union steward for the Internationol Brotherhood of Electrical Workers (IBEW) and a third generation union member. My father and grandfather both worked in the Steel mills outside of Pittsburgh until all our jobs went overseas.”

If you’re interested in a full summary of Town Hall meeting, you can read Lisa Renee Ward’ account on Glass City Jungle. 

Ohio voters sounded off clearly at the Town Hall meeting.  We’ll be watching to see if the various presidential candidates heed the message.

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Guess, where the largest company in the world is located?  You guessed wrong.  U.S.- based ExxonMobil has just been bumped off the top spot by a Chinese company, PetroChina.  China’s state-owned oil and gas producer became the world’s largest company after an initial public offering valued the company at $1 trillion this week.  China now has five of the world’s 10 biggest companies.  This is “size” in terms of the market value.  In terms of sales, only two out of top fifty companies in the world are Chinese. 

What does it mean to be the “world’s biggest company”?  Biggest in the global marketplace generally means the best.  In order to become the biggest, a company has to offer the best product quality; its employees have to work the hardest; and its management has to provide the best vision and leadership.  That is how a company beats out the rest of the competition and gains the number one position in the market place. 

Are all those conditions true for PetroChina?  Not quite.  PetroChina is a state-owned enterprise.  Because it is state-owned, it also is a monopoly in its market.  So, in the absence of competition, PetroChina can grow as gargantuan as possible; no other company is there to check its growth. 

What about the IPO that valued the company at $1 trillion?  When PetroChina was offered up on the stock exchange, only 2% of the company’s shares were released by the government.  That is because the government still wants to maintain control of PetroChina, even though it is now publicly traded.  The ease with which a Chinese company can raise capital on the domestic stock exchanges, shouldn’t be discounted, either.  The massive Chinese population saves at the rate of over 40% and those savers don’t have much choice on where to invest their money.  Chinese banks do not offer rates that would even safeguard the savings from inflation, much less bring income.  And Chinese citizens are not allowed to invest their saving overseas. 

For all these reasons, experts, such as Fraser Howie, an independent financial analyst, and a co-author of two books on China’s stock markets To Get Rich is Glorious and Privatizing China, in an interview with National Public Radio contended that it is at best “misleading” to compare Western publicly-traded companies and the Chinese state-owned enterprises.  However, there are no distinctions made when the companies meet in the world market place.  Our own government unfathomably does not recognize that the playing field is not even for the U.S. private companies that are trying to compete with the state-owned behemoths that are the Chinese companies, such as PetroChina.
 
Take for instance the steel industry.  The U.S. International Trade Commission recently held a public hearing on the subject of the Chinese Government policies that affect U.S. trade.  At that hearing, the representatives of the domestic steel industry drove home the point that the main reason why the U.S. steel companies can not fairly compete with their Chinese counterparts is the issue of state ownership.  Witness after witness testified to the subsidies the Chinese government-owned steel enterprises receive–preferential loans, subsidized inputs, such as energy and key raw materials, and debt- equity swaps between the state, the state-owned banks, and state-owned enterprises–making it impossible for the U.S. companies to beat out competition from China.

We should not be blinded by the sheer size of the Chinese companies, or the speed with which the Chinese economy is growing.  It all comes at a tremendous cost to our own companies and workers, and our own government needs to assess those costs and enforce an even playing field for our companies that play by the rules.
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With Ohioans fighting to save their manufacturing jobs, AAM looks forward to tonight’s Town Hall meeting in Columbus, Ohio.  At 6:30 pm at the Columbus Athenaeum, we’ll begin a hard-hitting discussion on how and why the U.S. needs to take serious action to strengthen its manufacturing base and save Ohio (and American) manufacturing jobs.

Those of you unable to attend the meeting can follow it live by tuning in to Glass City Jungle.  The Toledo Free Press’ Lisa Renee Ward will be blogging live on Glass City to give a full report.

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One subject that will be covered at AAM Town Hall meeting in Columbus tonight is Chinese pirating of American goods.  One of our panelists, Steve Bishoff, the president of Steelworkers local 525, will be discussing the specific difficulties that Ohio manufacturers face due to Chinese theft of U.S. designs.  It’s a subject that Steve has studied firsthand. 

It happens that piracy and counterfeiting are timely issues.  In the Senate today, Indiana Senator Evan Bayh (D-IN) testified yesterday regarding the inadequacies of current U.S. efforts to enforce global intellectual property rights. 

By the way, AAM Senior Analyst Kerri Houston published an interesting piece on Ohio manufacturig in yesterday’s Lima News.

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AAM is getting ready for our third “Keep it Made in America” Town Hall meeting tomorrow night in Columbus, Ohio.  Our host, John Ratzenberger, has been making the rounds in Ohio today, giving interviews and talking to local officials.  Strengthening U.S. manufacturing is a cause John strongly supports, and he wants to see the voters of Ohio attending the 6:30 pm event at The Columbus Athenaeum. 

For those of you who are unable to attend the event, you can ask John a question by emailing him at askjohn@aamfg.org.

As we get ready for the big night in Columbus tomorrow, we thought ManufactureThis readers would enjoy the feature article on the Town Hall meeting in today’s Columbus Dispatch.

AAM has been spreading the word throughout Ohio.  Yesterday’s Cincinnati Post featured an op-ed from AAM Senior Analyst Kerri Houston entitled “China’s business practices threaten jobs here.”  Kerri’s piece discusses the 242,000 manufacturing jobs that Ohio has lost in the past seven years and encourages Ohio voters to ask presidential candidates what they’ll do to save U.S. manufacturing jobs, something we’ll explore in greater depth at the Town Hall meeting.

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There’s an interesting blurb in the sports section of the Washington Post today.  The number one woman’s tennis player in the world, Justine Henin, may not compete in the 2008 Olympics because of asthma troubles exacerbated by Beijing’s smog and overall poor air quality.  While U.S. manufacturers and environmental advocates have attempted to draw attention to these horrifying conditions for years, it may take the spectacle of an Olympics with wheezing athletes and haze-filled pictures on television to force China to finally act.

In its race to build a manufacturing juggernaut, China has overlooked the need to balance full-tilt factory production with safe emissions standards—the standards that we take for granted in the U.S.  As a consequence, the people and workers in Beijing are breathing unsafe, smog-filled air every day.  That’s not surprising because Chinese steel and chemical companies spend only 10% of what U.S. Steel and Dow Chemicals routinely spend for environmental controls. 

It’s often said that China can build products more cheaply.  But that “cheap” price comes with its own extreme costs, including widespread upper respiratory illnesses.  And when such basic differences as lack of health and labor standards are combined with illegal currency manipulation and subsidies, one can see why the U.S. is suffering a $232 billion annual trade deficit with China and 1.8 million jobs lost to China in the past six years.

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AAM is gearing up excitedly for our Town Hall meeting at the Columbus Athenaeum this Thursday evening.  Ohio bloggers will be reporting live from the event, and you can visit ManufactureThis for the latest updates. 

In the meantime, you can read an interesting piece on Ohio manufacturing by AAM Senior Analyst Kerri Houston in yesterday’s Chillicothe Gazette.  Chillicothe happens to be a mere 48 miles south of Columbus, and word has been spreading about the Thursday meeting.

Kerri’s piece explains why Ohio voters should demand more from their presidential candidates.  We’ll be reiterating this message at our Town Hall meeting—that voters need to press candidates for specifics on how they plan to strengthen U.S. manufacturing.  Specifically, when voters attend meetings and campaign appearances they need to stand up and ask candidates some blunt questions:

1. As President, how will you save American manufacturing jobs?
2. What specific policies will you support to strengthen the American manufacturing base, which is vital to our economic and national security?
3. What steps will you take to enforce our trade laws and hold cheating countries like China accountable?

Tough questions beget action, which is what we need.

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This week consumer-product regulation has been on lawmakers’ minds.  The Senate Commerce Committee approved on Tuesday the Consumer Product Safety Commission (CPSC) Reform Act of 2007 that would expand the CPSC’s authority and increase its budget and staff.  On Thursday, the House Energy and Commerce Subcommittee on Oversight and Investigations held a hearing on FDA’s Foreign Drug Inspection Program, putting Commissioner Andrew C. von Eschenbach in the hot seat over his agency’s inadequate inspection of foreign drug manufacturers.

All this Hill activity is certainly appropriate: consumer anxiety about the safety of the products we buy every day remains high and mainstream media reports about new potential dangers posed by Chinese-made products keep coming. 

We’ve already highlighted the New York Times story this week that exposed the frightening reality of the Chinese pharmaceutical market.  What does it mean for the American consumer?  Over the last six years, manufacturing of active pharmaceutical ingredients (AIPs) has been increasingly moving to China and India, to the point that now, approximately 80 percent of the active pharmaceutical ingredients that go into the finished medicines Americans will consume are manufactured abroad, mostly in those two countries.  

Neither China nor India has the same regulatory standards as the U.S. and the European Union.  Moreover, U.S. regulators are not able to carry out the same degree of oversight at foreign production facilities as they do at home.  By law, FDA has to inspect domestic drug manufacturers at least every 2 years.  However, of the 700 FDA-registered firms in China, the agency was able to carry out inspections at only 17 last year. 

Even more alarmingly, firms that are not registered with the FDA, such as Chinese chemical companies that are making pharmaceutical ingredients illegally, never get inspected.  According to the Times, China has an estimated 80,000 chemical companies, but our FDA does not know how many sell ingredients used in drugs consumed by Americans. 

The pharmaceutical industry stresses that there is a duality to the regulatory system: government oversight on the one side and the company’s own quality control on the other.  Yes, the pharmaceutical companies try to ensure that their supply chains are not compromised, but how successful can they be when even the local authorities in countries like China have no idea who is producing what components for the medicines that end up on the world market?

The U.S. has a state-of-the-art regulatory system, but even our system has gaps.  When manufacturing shifts to developing countries, the high quality and safety standards that the American consumers have come to expect from products made in America can no longer be guaranteed, as we have seen time and time again.  When production shifts abroad, the costs of production may decrease, but society’s costs rise, whether to pay for better regulation, or to deal with the consequences of consumer exposure to inferior, or dangerous products.

We’ve already seen recalls of toys, pet food, toothpaste, and many other goods, that may be dangerous to consumers.  If more medicines are imported from China, the health and lives of our most vulnerable citizens may be put at risk.  

There’s no question that production quality, inspections, and the level of regulation need to be dramatically enhanced.  But the only way to guarantee the highest possible quality standard for our pharmaceuticals is to manufacture more of them in the U.S. under our close scrutiny, rather than trust others to take the matter of consumer safety to heart.
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In Iowa today, Mitt Romney announced the trade policy plank of his campaign platform.  While his proposal contains a very brief mention of combating currency manipulation, it focuses primarily on concluding the Doha Round and dramatically increasing the number of free trade agreements that the U.S. signs.

AAM spent time in Iowa recently during our Des Moines Town Hall meeting just a few weeks ago and we talked with a number of voters from both parties.  This helped us to gather a rather frank sense of their views on trade, and it surprises us that the Romney plan doesn’t focus more on enforcing trade laws and holding China accountable for its illegal practices. 

As the Wall Street Journal recently noted, most Republican voters have soured on the trade policies of the past decade.  Iowa alone has lost more than 22,000 manufacturing jobs in the past seven years.  Governor Romney should pay close attention to what people in his own party are saying—that there’s no point in negotiating more trade agreements that don’t work. 

As AAM has suggested in its Town Hall meetings, the U.S. needs a president who is willing to hold our trading partners accountable for their cheating and who will stand up for policies that strengthen U.S. manufacturing.

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