GOP Presidential Mitt Romney made a campaign stop Charlotte, NC on Friday. He spoke at the Charlotte Pipe and Foundry Company, a manufacturer that has not laid off an employee for over 30 years. In addition to his normal stump speech, Romney promised that he would “[clamp] down on cheaters like China when they take away American jobs” and told the crowd that “We're on the verge of a manufacturing resurgence in this country”.

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GOP Presidential hopeful Mitt Romney stopped by Stamco Industries Co. in Euclid, OH to offer his thoughts on the U.S. industrial sector.

Stamco makes stamped metal for car parts and other industrial applications. Romney used the event to highlight President Obama’s “failed economic policies” and pledged to hold China accountable for their cheating:

Local news reported the following:

"Manufacturing is big part of Ohio, and of course, its history," Romney said. "I happen to believe that going forward over the coming decade, you're going to see a lot of manufacturing come back to America.

"If we finally crack down on China for cheating, if we also take advantage of the extraordinary energy resources we have here, and therefore low-cost energy, we'll be able to compete with people around the world," Romney said. "I think you're going to find Ohio, and particularly states that are right to work states, bringing a lot of manufacturing jobs back."

 

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The April jobs numbers, while still in positive territory, were not what we needed to see. AAM’s Executive Director, Scott Paul, called the numbers “well below the trend of the past two years.”

President Obama took the opportunity to praise the continued growth of manufacturing jobs:

Manufacturing continues to be a bright spot and added 16,000 jobs in April.  After losing millions of good manufacturing jobs in the years before and during the recession, the economy has added 489,000 manufacturing jobs since January 2010.  To continue the revival in manufacturing jobs and output, the President has proposed tax incentives for manufacturers, enhanced training for the workforce, and measures to create manufacturing hubs and encourage the growing trend of insourcing.

Meanwhile, Governor Romney thinks that we can do better:

"Well, we should be seeing numbers in the 500,000 jobs created per month. This is way, way, way off from what should happen in a normal recovery. The reason that you’re seeing the unemployment rate go down is because you have more people dropping out of the workforce than you have getting jobs. It’s a terrible and very disappointing report this morning. Clearly the American people are wondering why this recovery isn’t happening faster, why it’s taking years and years for the recovery to occur and we seem to be slowing down, not speeding up. This is not progress; this is very, very disappointing and a lot of American people are having very hard times and this is not good news this morning.”

At a campaign stop in Chillicothe, OH, Rick Santorum spoke about his plans for the American economy. The Cleveland Plain-Dealer reports:

During a 40-minute speech before about 300 people at Chillicothe High School, the Republican presidential candidate stuck to economic themes in a region still trying to rebound from the economic downturn.

"What kind of country do you want to hand off to the next generation?" asked Santorum. "We need innovative solutions to liberate the American people."

Meanwhile, Forbes is reporting that as Super Tuesday approaches, the candidates have stepped up their rhetoric, and are pledging to hold China accountable:

“If I’m president of the United States…on Day One, I will declare China a currency manipulator, allowing me to put tariffs on products where they are stealing American jobs unfairly. We can compete when there’s a level playing field and we’d win…. I’m going to insist that China plays by the same rules that everyone in the world plays by.” — Mitt Romney (my humble guess is he can call China chopped liver if he wants, but will do nothing to retaliate other than what Obama has already done. Romney’s the most anti-China of the bunch.)

“I want to beat China. I want to go to war with China and make America the most attractive place in the world to do business.” — Rick Santorum (quite mild; doesn’t want a trade war like Romney says he wants.)

“I think we’re going to have to find ways to dramatically raise the pain level for the Chinese cheating, both in the hacking side, but also on the stealing and intellectual property side. And I don’t think anybody today has a particularly good strategy for doing that.” –Newt Gingrich (he’s mostly come out against Chinese stealing of intellectual property; a legitimate, non-emotional complaint based on facts.)

“To fight with China now? They are our third best partners and are great customers. Why say that they are the problem? We complain that they’ve messed around with their currency. What have we done with the dollar over the last three years?” — Ron Paul (Doesn’t think China is the cause of our problems.)

The following originally appeared on our blog, ManufactureThis:

An analysis of the Conservative Political Action Conference (CPAC) from Alliance for American Manufacturing (AAM) Media Director Steven Capozzola...

I've talked with many domestic U.S. manufacturers over the past decade or so-- mostly small and mid-sized manufacturers (the backbone of America's industrial base). 

One particular manufacturer whom I knew well was the president of a family-owned company that produced printed circuit boards.  His firm had been around since the dawn of the computer age, manufacturing circuit boards for both commercial and military applications.

He used to tell me all the time that his workers and his factory were incredibly efficient and productive.  He would say, "I can compete with anybody in the world...But what's killing me is China's currency peg."

What he meant was that, because China deliberately undervalues its currency (in violation of world trade law), its manufacturers can export goods at an artificially reduced price.  Essentially, my friend's firm was competing against the full resources of the government of China.

Eventually, my friend had to close his factory.  He was one of the last printed circuit board manufacturers left in the U.S.  Losing his factory meant that the U.S. was now more reliant than ever on obtaining printed circuit boards from China.

I think back to my conversations with him now, after having attended the Conservative Political Action Conference (CPAC) in Washington, DC this week.

Specifically, I'm thinking of Newt Gingrich's speech yesterday.  In the midst of an address about "changing the trajectory" of the "Republican establishment," Gingrich started to lay out his vision for transforming the United States.  After a quick aside about the pitfalls of unemployment insurance ("Never again shall we pay somebody 99 weeks for doing nothing"), the former Speaker of the House turned to manufacturing.

Here was his solution for manufacturing:

"Now if we're serious about manufacturing, we have to eliminate the Environmental Protection Agency, which is a job killing agency."

When I heard that, I thought back to my friend who manufactured printed circuit boards.  He happens to be a Republican, and a retired Marine officer.  I'd never heard him complain about the EPA.  But I did recall his frequent frustration about China.  He said he believed in free trade, and what China was doing was protectionist.  It was not acceptable, and Congress needed to act.

This is why I find Gingrich's assertion disheartening.  What he should be saying is: "If we want to get serious about manufacturing, let's start standing up to China when they violate our trade agreements.  When they illegally dump product, when they illegally subsidize their steel and glass and paper exports with tens of billions of dollars, when they illegally undervalue their currency, let's enforce the laws we have on the books and say NO MORE.  Rules are rules.  Let's preserve the free market."

To be fair, Gingrich did mention China once, at the top of his speech:

"This is not about being revenue neutral, this is about maximizing economic growth to put Americans back to work and to create the most dynamic economy on the planet and to rebuild our manufacturing base, so we can pull away from China and we become once again the dominant country on the planet."

Along those lines, Gingrich did float one idea that could be helpful to manufacturers, a suggestion about revising U.S. tax law:

"You go to 100 percent expensing, so all new equipment at every level, farmer factory, doctor, business, all of that gets written off in one year.  The goal is to make the American system the most modern, most productive in the world."

Revisions to tax policy are one of a number of important steps that the Alliance for American Manufacturing (AAM) has outlined in a plan to save U.S. manufacturing.

The only other speech I saw was that of Mitt Romney.  Interestingly, Romney has been talking tough on the campaign trail when it comes to China, threatening to designate them as a "currency manipulator" on day one of his presidency.  However, he only made two passing mentions of China:

"I will approach every spending decision by asking a few important questions: Can we afford it? And, if not, is it worth borrowing money from China to pay for it?... I will cut off funding for the United Nations Population Fund, which supports China’s barbaric One Child Policy."

Romney never mentioned manufacturing in his speech, an unfortunate omission.  And while it's timely to cite the issue of U.S. indebtedness to China, it's ironic that Beijing is mentioned so prominently.  In actual fact, China only owns about 8% of publicly held U.S. debt, which means Beijing possesses far less leverage than is commonly believed.

All in all, it would have been helpful to hear both Gingrich and Romney focus more on manufacturing's outsized contributions to the U.S. economy, and why (for example) they would push for Buy America policy and much-needed infrastructure investment after taking office as president.

There's much this country urgently needs to do, and rebuilding U.S. manufacturing should be at the top of the list.

In last night’s GOP Debate, the four remaining candidates faced off in South Carolina. Here’s what they had to say about manufacturing:

Rick Santorum:

We need a party that just doesn't talk about high finance and -- and cutting corporate taxes or cutting the top tax rates. We need to talk about how we're going to put men and women in this country who built this country back to work in this country in the manufacturing sector of our economy.

…

I was in Boeing today and I was up in BMW yesterday. South Carolina can compete with anybody in this world in manufacturing. We just need to give them the opportunity to compete. And we are 20 percent more costly than our top nine trading partners, and that's excluding labor costs. That's why I say we need to cut the corporate tax in manufacturing down to zero. We need to give manufacturers a leg up so they can compete for the jobs, half of which -- we went from 21 percent of this country in manufacturing down to 9 [percent] and we left the dreams of working men and women on the sideline. We need to show that we're the party, we're the movement that's going to get those Reagan Democrats, those conservative Democrats all throughout the states that we need to win to win this election to sign up with us, and we'll put them back to work.

…

I'm the only person on this stage that will do something about it. I've got a specific plan in place that I've put out there, called the Made In the USA plan, for exactly these kinds of companies, that have great technology and then go somewhere else to make them because America is uncompetitive.
And that's why we have to cut the corporate tax for all corporations who manufacture and process in this country.
People have said, well, why are you doing it for corporations and only cutting it in half -- which I do -- to 17 1/2 percent for the rest? It's because the local pharmacy's not going to move to China. They're not going to -- they -- we -- the jobs that we're losing are jobs that we have to compete with other countries, and those are manufacturing jobs. The reason they're going there is not because our -- our -- our workers or our management in this country are not productive. We have great productivity gain. It's amazing the -- the transformation that has been made in the last decade or two about our manufacturing process here. It is simply government getting in the way.

Mitt Romney:

  We have to open up markets, and we have to crack down on China when they cheat.

In last night’s GOP debate, the candidates traded many jabs, but not much was said on the subject of manufacturing. Here’s what we culled from the transcript:

Rick Santorum:

What we do is cut corporate taxes for everybody. We cut it from 35 percent to 17.5 percent, make it a — basically a net profits tax. And then we take the area of the economy that’s under competition from overseas for our jobs. The rest of the economy is not being shipped off like the mills here in South Carolina were to other countries around the world because of foreign competition.

Why? The foreign competition that we are dealing with right now is much cheaper to do business, excluding labor costs than we are, about 20 percent more, and that 20 percent differential is government. It’s government regulation and it’s also government taxation.
So part of what we are trying to do is to have a government system that can compete with who our competitor is. The competitor at the local drugstore is not China. The competitor is other people.

And as long as that is level and everybody’s paying, the big corporations and the little ones — and that’s why we have a flat 17 1/2 percent — so we keep the little guys paying the same rate as the big guys who have — right now, with this very complex code, a lot of folks in there trying to reduce rates by using the tax code to shrink their tax liability.

So we’ve leveled the playing field for the guys here in this country and we’ve created a competitive environment for the manufacturer.

Mitt Romney:

First — first of all, I think — I think Governor Perry makes a — a very good point about — about Georgetown [SC]. For those that don’t know, it was a steel mill and — and my firm invested in that steel mill and another one in Kansas City, tried to make them successful. Invested there for seven or eight years. And ultimately what happened from abroad, dumping steel into this country lead to some 40 different steel mills being closed.

And — and that was one of those. I understand what happens when China cheats, or when others cheat and dump products into this country. That’s one of the reasons I’m running is to make sure we crack down on cheaters. By the way, we also started a new steel mill with new technology in Indiana. That one’s growing and thriving. I — I think that experience is what America needs in a president. Secondly I — I agree with the governor with regards to regulations. Regulations are choking off this economy.

I will do everything in my power to put a halt to all the Obama era regulations, review those that kill jobs and get rid of those so we can get the private sector working again.

On Saturday, the GOP candidates faced off in the 14th debate of the primary season. Here’s what they had to say about Manufacturing

Santorum:

I come from southwestern Pennsylvania, the heart of the steel country, the heart of manufacturing. And it’s been devastated because we are uncompetitive. Thirty years ago we were devastated because business and labor didn’t understand global competitiveness and they made a lot of mistakes. They did -- they weren’t prepared for it and we lost a lot of jobs.

That’s not what’s happening now. Our productivity gains, our labor force, their doing their job, they’re being competitive. But they’re running into a stiff headwind called government. And it’s government taxation, 35 percent corporate tax which is high -- the highest in the world. It’s a tax that doesn’t easily offset when we try to export, which makes it even more difficult...

Huntsman:

We are once again on the cusp of a manufacturing renaissance in this country, if we do it right. China is going down in terms of GDP growth from 8 percent, 9 percent, 10 percent to 4 percent or 5 percent, 6 percent. And as they go down in growth, unemployment goes up.

We have an opportunity to win back that manufacturing investment, if we are smart enough, with the right kind of leadership to fix our taxes. No one up here is calling for the complete elimination of all the loopholes and the deductions, where the Wall Street Journal came out and endorsed my tax plan. That’s what needs to be done, not tinkering around the edges.

On China, however, there were more varied statements:

Hutnsman:

Listen, we have the most important relationship of the 21st Century with China. We’ve got to make it work. Of course we have challenges with them. We’ve had challenges for 40 years. It’s nonsense to think you can slap a tariff on China the first day that you’re in office, as Governor Romney would like to do.

Romney:

My own view on the relationship with China is this, which is that China is stealing our intellectual property, our patents, our designs, our know-how, our brand names. They’re hacking into our computers, stealing information from not only corporate computers but from government computers. And they’re manipulating their currency.

And for those who don’t understand the impact of that, I’ve seen it. I’ve seen it. And that is, if you hold down the value of your currency artificially, you make your products artificially low-priced and kill American jobs. That has happened here in this country.

And if I’m president of the United States, I’m not going to continue to talk about how important China is and how we have to get along. And I believe those things. They’re very important. And we do have to get along. But I’m also going to tell the Chinese it’s time to stop. You have to play by the rules. I will not let you kill American jobs any longer.

Gingrich:

You cannot compete with China in the long run if you have an inferior infrastructure. You’ve got to move to a 21st-century model. That means you’ve got to be -- you’ve got to be technologically smart, and you have to make investments.

With Rick Santorum's recent surge to the head of the GOP pack, many pundits are trying to find out what fueled his rise. Over at The Nation, John Nichols seems to be on to something:

To a far greater extent than Romney, the venture capitalist who made his money dismantling American factories and offshoring jobs, and to a significantly greater extent than the wonkish Newt Gingrich and the ideologically rigid Rick Perry and Michele Bachmann, Santorum appealed to blue-collar workers and to Iowans who would like to be blue-collar workers. And he’ll do more of that in New Hampshire.

Eschewing predictable “let-the-market-decide” rhetoric about free markets and free trade, Santorum has made proposals for the renewal of American manufacturing an important part of his Iowa agenda. That is not an approach that endears the unexpected contender to the hedge-fund managers and Wall Street speculators who provide so much of the funding not just for Republican candidates but for conservative groups such as the Club for Growth.

But Santorum bet on the appeal of industrial renewal message. And there is good evidence to suggest that it was a smart bet. Santorum won communities such as Newton, a United Auto Workers town that was hit hard by the shuttering of its sprawling Maytag plant, and Ottumwa, a packinghouse town where the United Food and Commercial Workers union has a rich history. These are both communities President Obama has visited since his 2008 election, and they are communities where Obama will do well in 2012. But Santorum made inroads where Romney never will. In Ottumwa-based Wapello County, for instance, while Santorum finished first, Romney ran fifth—behind not just Santorum but Ron Paul, Newt Gingrich and Rick Perry. In the Newton area, it was Santorum, then Paul and then Romney.

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