Manufacturer's association head responds to State of the Union endorsement of industry

January 27, 2012

The President and CEO of the National Association of Manufacturers (NAM) issued a statement following President Barack Obama's State of the Union address, outlining how Washington needs to work with manufacturing companies across the country to spur a resurgence in the industry.

According to a NAM release, Jay Timmons spoke to the existing cost gap for U.S. manufacturers, something that he noted was "self-inflicted by Washington," and cited several key issues that the Obama administration must act on in the coming months.

"Manufacturers are poised for a renaissance," said Timmons. "However, it is 20 percent more expensive to manufacture in the U.S. compared to our largest trading partners. This cost gap is a barrier that must be eliminated. The existence of this gap is not the work of our competitors but rather is self-inflicted by Washington. We have the opportunity to fix it and to reaffirm the global leadership of manufacturing in the U.S."

Timmons then cited the NAM roadmap, "A Manufacturing Renaissance: Four Goals for Economic Growth," as he noted that this plan would help to take the country to a place of prominence in the industry.

This plan, according to the executive, outlines how America can become the best nation to manufacture, innovate and serve as a hub of the global marketplace.

According to the Royal Society of Chemistry, the U.S. chemical industry applauded Obama's speech, as the sector would benefit from a doubling of their tax deductions if companies make their products in America.

The news source reported that the prevention of companies moving manufacturing operations overseas would be supported by American industry, as the President proposed eliminating tax breaks for businesses who outsource work to foreign lands.

"We have a huge opportunity, at this moment, to bring manufacturing back," the President said, according to the news source. "But we have to seize it."

According to Daily Finance, the increase in Chinese wages has prompted many manufacturers to bring operations back to the U.S., and a report from the Boston Consulting Group (BCG) noted that the average worker in China is only about 25 percent as productive as the average American worker.

The news source reported that these factors, combined with the rising costs for fuel and transport, have led the BCG to believe that by 2015, Chinese-made goods will be reduced to just a 10 percent price advantage over those made in the U.S.