Tuesday June 16, 09:12 PM
Manufacturing must drive US recovery, summit told
By Rob Lever
DETROIT (DETROIT.SN - news) (AFP) - A revived manufacturing sector is critical for a recovery of the slumping US economy, business leaders told a national economic summit, underscoring the need for new policies.
The second day Tuesday of the Detroit, Michigan summit drew attention to the critical importance of the industrial sector in the global crisis.
"One of the lessons we have learned from the crisis is that you cannot create wealth in an economy simply by spinning things around and around," said Jayson Myers, president of the Canadian Manufacturers and Exporters Association. "You create wealth by building things people want to buy."
Those comments were echoed by others at the gathering.
"Prosperity comes from building, creating and producing," said Chip McClure, CEO of auto parts maker ArvinMeritor (NYSE: ARM - news) .
"Can we sustain commerce based on financial engineering over real engineering? Simple answer, no way."
McClure said the US needs "a pro-industry climate with policies on trade, taxes, energy, health care, and education that make it competitive for US and foreign manufacturers to build here.
"An economic downturn is not the time to walk away from 12 million American manufacturing jobs," he said "It's the time to build."
Richard Dauch, chairman and CEO at American Axle & Manufacturing, said manufacturing is "revered" in other countries, but has lost its luster in the United States.
"It is time for America to re-establish manufacturing as a first-string priority," Dauch said.
"Manufacturing is essential for the vitality and economic future of the USA. It is our ticket to compete globally. It is how we generate wealth, value, and provide jobs for society."
Craig Giffi, vice chairman at the consultancy Deloitte LLC and author of a book on manufacturing, said Americans must realize that manufacturing is not a dirty word.
"Most Americans still cling to a belief that manufacturing is not safe, that pay is not good .... that the jobs are dangerous."
Still, he noted that "we are the most productive nation in the world when it comes to manufacturing."
The three-day gathering aimed at defining a US economic strategy, heard several calls for a formalized US "industrial policy" to help compete with countries, notably in Asia, that offer direct aid to key firms.
But others warned about going too far down a protectionist track, saying this could backfire on the United States.
"Increasing global trade is one of the greatest forces to get us out of this crisis," said Scott Davis, chairman and chief executive of delivery giant UPS.
"It is not uncommon for countries during an economic crisis for countries to turn inward and to put up barriers to protect jobs."
But he argued that a "Buy America" measure in the US stimulus, even though watered down, "sends a horrible signal to the rest of the world and gives a lot of other countries cover for their protectionist practices."
This may hurt the US because "one out of every five manufacturing jobs is linked to the export of goods."
John Engler, president of the National Association of Manufacturers, said the United States needs more coherent policies to support industry.
"We are still the number one manufacturing country in the world," he told the forum.
"It seems to me that if you are number one you would want a strategy to remain number one."
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