← Autodidact Archive · Original Dissent · Ragnar
Thread ID: 7044 | Posts: 1 | Started: 2003-06-01
2003-06-01 03:00 | User Profile
Not many Americans care, but the paragraph in bold highlights the fact that we went through this same dog and pony show with Japan over the yen 20 years ago. The annoyance was that the yen was overvalued for quite some time. As Richard Nixon poignantly put it earlier, "I don't give a sht about the yen." Americans generally don't seem to give a sht about much of anything anymore; Tricky Dick was just ahead of the curve.
Free Trade With China Leads To Crisis In US Manufacturing
Mom And Pop Businesses Going Under As Chinese Steal Patents And Exploit "Free Trade"
Milwaukee Journal Sentinel
[url=http://www.jsonline.co]http://www.jsonline.co[/url] m/bym/news/may03/144360.asp Crisis in manufacturing
Firms complain about unfair competition from China
By THOMAS CONTENT
tcontent@journalsentinel.com
Mark Knudson, owner of a mom-and-pop manufacturing business in East Troy, used to gripe about paying taxes.
Thursday's round table is part of a series of events being held around the country to hear perspectives on challenges and opportunities facing the manufacturing sector. The U.S. Commerce Department is also accepting written comments, which can be sent via e-mail to: manufacturing@ita.doc.gov
"Now I don't complain because I'm not paying them. I'm losing $35,000 to $50,000 a month," he said.
Knudson's company, Modern Fence Technologies, developed a unique and proprietary, fully adjustable gate hardware for vinyl fences. The product was well received, but before long, a Chinese company had copied its design and is selling the hardware at half of MFT's price.
"That's lower than my raw materials costs," Knudson said Thursday during a round table on the state of manufacturing.
Knudson said he and his small firm, with fewer than 15 workers, have worked hard for years to make a decent product and a good living. But today, he wonders whether he can remain in business.
Knudson and other manufacturers told a leading Bush administration official that the crisis in manufacturing needs action, as low-cost overseas competition is threatening to wipe out entire sectors of U.S. industry at a time when firms are reeling from soaring health care costs.
The forum at the Milwaukee School of Engineering was the third in a series of forums being held around the nation by Grant Aldonas, head of the U.S. International Trade Administration. Aldonas will draft a report to President Bush in summer on the state of the manufacturing sector.
"There's a real sense of urgency in the tool and die trade," said Ray Proeber of Accurate Die Design Inc. in New Berlin. "This isn't something where you can lose thousands of tool and die shops over the next couple years and expect to recover any time soon."
Example in Racine
The industrial downturn - the longest since the Great Depression - has pummeled manufacturers and factory workers alike. More than 2.6 million jobs have been lost nationwide in the past five years - tens of thousands of them in Wisconsin.
Look no farther than Racine to see what's happening, said Steven Tyler, an executive at CNH Global. Employment has dropped by two-thirds even as health care costs have escalated.
The former J.I. Case Co. couldn't find a buyer for its foundry - "I couldn't give it away," Tyler said - amid competition from foundries in China and Brazil that can sell finished castings for 30 cents a pound - 35 cents a pound cheaper than it costs to make them in Racine.
Asked what he thinks the factory sector and employment will look like five years from now, Tyler said, "I have no idea. We can't keep going the way we have. It's a very painful situation, and I don't see the end of it."
Chinese firms are aggressively targeting the injection mold industry and unfairly undercutting U.S. suppliers, said Mike Retzer, controller of W.G. Strohwig Tool & Die in Richfield and head of the Milwaukee chapter of the National Tooling & Machining Association.
Retzer said he knows of one tool and die company for which precision molds account for 70% of its business. "They've made one mold so far this year," he said.
Retzer and others called on the administration to take steps to urge China to stop tying its own currency to the dollar. Though most world currencies fluctuate, the Chinese have pegged theirs to the dollar, creating a situation in which the yuan is considered by many to be 40% devalued.
**The problem of the Chinese currency will be the chief economic issue President Bush will bring up with Chinese President Hu Jintao during a meeting next week in France, Aldonas said. **
But Aldonas cautioned against expecting the Chinese government to change its policy in the near term. China is using its devalued currencies to expand exports and generate cash to help an ailing banking system. Until that banking system addresses bad loans and other problems, the Chinese aren't likely to budge on the currency issue, he said.
But the administration has also stepped up its enforcement of anti-dumping laws designed to protect U.S. firms from imports that come into the United States at unfairly low prices, Aldonas said.
But China wasn't the only issue facing manufacturers. Business owners and employees alike are fed up with soaring health insurance costs, said Rick Patek, president of Telsmith Inc., a Mequon construction equipment-maker.
Medical insurance costs his firm $7.06 an hour per employee, up from $3 an hour per worker in 1998-'99. Meanwhile, his workers have seen out-of-pocket costs for insurance rise to $300 a month from $85, and they're not getting anything more for that extra contribution.
At a time when wages in manufacturing are essentially frozen, those soaring costs effectively lower the standard of living for workers, he said.
From the May 30, 2003 editions of the Milwaukee Journal Sentinel