All too often, we hear that China is the world’s top manufacturer simply because of their “cheap labor.”  But that isn’t the case.  (Of course, why should anyone commend the fact that China’s workers are so brutally exploited?  Unsafe working conditions are not an acceptable reason for a “cheaper price”).

FarLeftField tackled this issue on Monday, and we want to praise them for their smart work.

Until the U.S. begins to strongly enforce its trade laws against China’s cheating, we’ll simply see more lost U.S. manufacturing jobs and more exploited workers in China.

Read more.

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A guest column from AAM Field Coordinator Mark Musho…

Delaware, “ The First State”  (or “The Small Wonder”), is for some a shore vacation alternative to South Jersey or Ocean City, Maryland.  For others it is a stretch along the I-95 corridor between Philadelphia and Washington DC, where the speed limit drops down to 55 mph.  And if you’re ticketed for speeding, the State Trooper in an unmarked vehicle could be driving anything from a minivan to a tricked-out Camaro.  But is also a state where the manufacturing sector has experienced a dramatic decline over the past six years.  Companies that were at one time recognized as the backbone of the Delaware economy such as Chrysler and General Motors have closed their doors and laid off thousands of Delaware workers. 

Delaware has lost over 4,300 manufacturing jobs from 2008-2009, and over 6,800 manufacturing jobs from 2003 through 2009. That is why approximately 200 attendees from business, labor, state and local government met last night at a “Keep It Made in America “Town Hall meeting. 

The event held in Newark attracted a cross section of concerned Delawareans who listened to a panel discussion on the present state of manufacturing and what the future may hold.  Scott Paul, Executive Director for the Alliance for American Manufacturing (AAM) moderated the panel which consisted of: Sam Letham AFL-CIO Delaware State President; Alan Levin, Director of Delaware Economic Development; Jim Wolfe, President and CEO of the Delaware State Chamber of Commerce; and, Deborah Armstrong, United Way.  

The panel addressed the question of what is needed in Delaware from different viewpoints, but the central theme was the same, JOBS.  Sam Letham put it in more definite terms when he said “What we need in Delaware and the rest of this country is a true manufacturing strategy.”  He’s right.  To sit and discuss what once was and what the future might hold in manufacturing is all well and good but what is really needed is a plan. 

This thought was echoed by many in the audience. Mike Cadwell said, “We need a process that lays out step by step how we get from point A to B and get both Federal and State governments to support and implement it…We have the manpower right here in this room to get that started in Delaware.”

As I drove back up I-95 to Philadelphia, I couldn’t help but wonder if Delaware, “The First State,” was going to lead the way once again and start the process of putting together a manufacturing strategy that would one day bring back good paying manufacturing jobs to the state.  I also was wondering if the Ford Pinto I just flew past had a State Trooper in it.
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Sharp Electronics Corporation, Memphis, TN:

Sharpy, which is one of the world’s leading manufacturers of solar cells, is commemorating the production of its two millionth solar panel at the Sharp Manufacturing Company of America in Memphis.

Sharp is a great example of a company that creates sustainable American jobs, in addition to leading the way into the future with green energy and clean tech manufacturing.  The corporation’s facility in Memphis has produced enough solar modules to power over 65,000 homes, saving millions of metric tons of CO2 each year. 

And, as with all manufacturing, the ripple effect is very present with Sharp’s products.  According to Ron Kenedi, vice president of Sharp Solar Energy Solutions Group, “Our customers are creating jobs by hiring electricians, roofers, and other labor to install our high-quality solar panels, thus driving local economies while helping to build the nation’s renewable energy portfolio.”

The best part about Sharp solar products sold in the United States is that they “qualify as American goods under the ‘Buy American’ clause of the American Recovery and Reinvestment Act (ARRA) and have been installed in several ARRA-funded projects around the nation.”

Sharp Electronics CEO and chairman Kozo Takahashi said, “Sharp is very proud to reach a milestone of this magnitude. Having the two millionth panel roll off of the production lines is a testament to the growing demand for solar electricity, and our steadfast dedication to growing the solar electricity market. This is a tremendous achievement for Sharp and the entire clean tech sector.”

Read more here.

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President Obama is visiting Wisconsin today.  Hopefully the President will focus his attention on revitalizing the state’s hard-hit manufacturing sector which has lost 158,500 manufacturing jobs in the past decade. 

Wisconsin’s paper industry is particularly threatened by subsidized exports from China, with more than 38,000 jobs at risk.  In fact, a recent study shows the U.S. trade deficit with China costing Wisconsin more than 52,000 jobs between 2001 and 2008.

Regarding the President’s trip to Wisconsin, Alliance for American Manufacturing (AAM) Executive Director Scott Paul said: “The President needs to outline his strategy to revitalize manufacturing jobs in Wisconsin.  That’s the only path to true economic recovery.  And, it’s a strategy the American people desperately want.  The stimulus alone will not do the trick.”

Compounding Wisconsin’s woes is the problem facing Bucyrus International Inc., a major manufacturer in the area.  This past weekend, the U.S. Export-Import bank denied the company a loan guarantee for mining equipment that would have been sold to India.  The decision put an estimated 1,000 jobs in jeopardy.  On Monday, Senator Russ Feingold (D-WI) wrote to the head of the Export-Import bank asking that it reconsider its decision.

Bottom line: Wisconsin, like the rest of the U.S. needs strong action right now to help save manufacturing jobs that are being threatened by illegally dumped and subsidized imports.

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A new report by the Economic Policy Institute (EPI) shows China providing $33 billion in subsidies for its paper industry. 

At the same time, U.S. Bureau of Labor Statistics data shows that “From 2002 through the end of 2009, U.S. employment in the paper and paper products sector dropped 29 percent, from roughly 557,000 workers to 398,000.”

China’s massive subsidies are hurting the U.S. paper industry.  Find out how many jobs are at stake in your State and Congressional District.

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Luke, Maryland:  NewPage Corp. says it is cutting about 90 jobs at its paper mill.

Roughly 400,000 U.S. Jobs at Risk as China Primes Global Overcapacity in Paper

WASHINGTON, DC – Heavily subsidized by the Chinese government in violation of global trading rules, the Chinese paper industry has tripled production over the past decade, killing jobs throughout the United States and driving up the massive U.S. trade deficit with China, according to a report released today by the Economic Policy Institute (EPI).

The EPI report, No Paper Tiger: Subsidies to China’s Paper Industry from 2002–2009, says that China’s rapid rise in the global paper industry has been fueled by more than $33 billion in government subsidies from 2002 to 2009.

The U.S. paper industry is large and highly competitive, employing 474,000 workers in nearly 5,000 plants in the 2005-2007 period.  However, thousands of U.S. paper producers, and the roughly 400,000 remaining jobs, are at risk due to the rapid growth of highly subsidized paper exports from China.  Almost every state has workers in the paper sector. Among the highest are California, Georgia, Illinois, Ohio and Wisconsin.  

“China’s massive subsidies to its paper sector are doing severe damage to the U.S. paper industry, its workers and their families,” said Scott Paul, executive director of the Alliance for American Manufacturing (AAM). “The only way to stop the bleeding is for U.S. policymakers to take action against China’s blatant violations of trade laws, including sweeping subsidies to paper and many other industries.”

China’s export-driven paper industry has added 26 percent of new production capacity on average every year from 2004, increasing the U.S. trade deficit with China. Imports from China’s paper industry to the United States are rising faster than those from any other country. In February 2010, the report estimates, the annualized growth rate of Chinese paper and paper-product imports into the United States was 22 percent.

China has no natural competitive advantage in papermaking and lacks the natural resources to fuel the industry. China’s forest base is among the smallest in the world per capita. Consequently, the country is the world’s largest importer of pulp and recycled paper.

Despite the explosion in new China paper mills, the country’s paper industry uses outdated, obsolete and polluting machinery and technology, contributing to China’s growing status as one the world’s leading polluters, according to the report, which was written by Usha C.V. Haley, Chaired Professor of International Business at Massey University in Auckland, New Zealand, and an EPI research associate. 

The EPI report estimates that subsidies to China’s paper industry have included:
• $25 billion for pulp;
• $3 billion for coal;
• $1.7 billion for recycled paper;
• $778 million for electricity;
• $442 million in subsidy income reported by companies; and
• Loan-interest subsidies of $2 billion.

China’s strategy of dominating the global paper market through illegal subsidies is especially evident because it has no inherent cost advantages in the capital-intensive paper industry. Labor makes up only about 4 percent of the costs in the industry; in contrast, imported recycled paper and pulp comprise more than 45 percent.

“Raw materials, which make up three-fourths of the costs of producing Chinese paper, as well as electricity, coal and transportation, have nearly doubled in price over the last decade,” Professor Haley said in the report. “Yet, Chinese paper sells at a substantial discount compared to U.S. or European paper.”

Click here to read the full report.

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Steve Pearlstein says we should put tariffs on Chinese goods, ASAP.

And why not?  It’s not like our giveaway of jobs to China has helped on foreign policy.

Sixteen automakers in China are receiving massive government subsidies for energy efficient automobiles.

In the US, Tesla’s IPO indicates that there may be a future in electric cars.

Nearly one in three home sales in the first quarter of 2010 was a foreclosure.

With stimulus money ending soon, what will fuel the economy?

David Leonhardt says betting on the private sector for the recovery may lead us to a double dip recession.  (Remember 1937.)

President Obama visits Racine, Wisconsin today to talk jobs.

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Delaware radio station WILM is reporting on tonight’s AAM Town Hall meeting in Newark.  Host Mark Fowser interviewed AAM Director Scott Paul today:

Keeping It Made in America is the focus of a town meeting in the Newark area.  Alliance for American Manufacturing Executive Director Scott Paul says revitalizing the manufacturing base is a key aspect of reinvigorating the economy in Delaware.  He says jobs that focus on the actual making of things keep mortgages paid and provide for many families, but for a variety of reasons -including global competition from nations such as China - many manufacturing jobs have been lost.  The public is invited to the town hall meeting tonight (Tuesday June 29th), 6:00 p.m.
at 205 Executive Drive in Newark.  Dinner will be served and admission is free.

Learn more.

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U.S. Senator Sherrod Brown (D-OH) has written an excellent piece on China’s recent head fake regarding its ongoing currency manipulation. 

For those of you who missed it, Beijing recently offered a few promising statements ahead of the G-20, in which they suggested they would start to “gradually” adjust their undervalued currency.  After a few incrementals nudges, however, they’ve slipped back to business as usual–a preferential exchange rate that helps boost their exports.

In response, Sen. Brown has taken Beijing to task, saying, “We’ve seen China take actions like this before when the spotlight is on, and then revert back to old tricks.” 

He calls China’s recent, miniscule currency adjustments a “drop in a huge bucket”:

“Too many Ohio manufacturers continue to face unfair competition from China and congressional action is long overdue. I will continue to work with Senators Schumer and Graham to move our legislation which cracks down on Chinese currency manipulation.”

Read more.

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