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Business

Policies fall short for industry, forum told

| Tuesday, July 15, 2003

The U.S. manufacturing industry is in trouble, suffering from a weak economy, a lack of research-and-development dollars, and government-subsidized competition from other nations, specifically China.

That was the opinion delivered to a meeting of the Northeast-Midwest Congressional Coalition Manufacturing Forum Monday at Carnegie Mellon University. The forum consisted of two panels of area manufacturing CEOs, academicians and policymakers, discussing what the federal government could do, if anything, to help out the manufacturing industry.

The panels heard how China leads the world in global competition with low-cost labor and government investment in technology and infrastructure. As a result, China is now the top country for electronics; and imports from China are now 40 percent of the U.S. furniture market.

"Ain't a lot that policymakers can do," said David Barensfeld, chief executive officer of Ellwood City-based Ellwood Group Inc., which manufactures specialty-steel ingots and forgings for heavy capital equipment. He said Federal Reserve Chairman Alan Greenspan and Treasury Secretary John Snow don't know how to influence conditions in foreign trade regarding China and other markets.

Barensfeld said the problem of competing with those countries requires a long-term solution and may require waiting on the Chinese culture to change, as the Japanese and Korean cultures did before them. "It far outweighs anything we can do with research subsidies," he said.

Dr. Sunder Kekre, Carnegie Mellon University professor and director of that school's Center for E-Business Innovation, warned that once a nation loses manufacturing capability, it also will lose the technological capability to make manufacturing work. "The role of the federal government is not just to give money," he said.

Other speakers pointed out that Congress should not cut the funding for organizations like the Manufacturing Extension Partnership that work to help manufacturers, especially smaller manufacturers, keep up with the technology that will allow them to compete.

"I'm just a hard-working small businessman," said Joe Magdic, CEO of Magdic Precision Tooling Inc. of East McKeesport. Magdic describes his 17-employee firm as "struggling," and said, "I still feel optimistic about the opportunity for my business, as long as it doesn't get much worse. I really wonder how long we can hold out, if present conditions continue."

"This is not the time to be cutting (our) budget," said Kevin Carr, director of the National Institute of Standards and Technology Manufacturing Extension Partnership.

The meeting was hosted by Rep. Mike Doyle, a Swissvale Democrat, and Rep. Melissa Hart, a Bradford Woods Republican, who are members of the Northeast-Midwest Congressional Coalition Manufacturing Forum.

Hart pointed out that just slightly more than 2 percent of the federal research-and-development budget is directed toward manufacturing technologies, while manufacturing contributes more than 17 percent of the gross national product and provides 71 percent of the nation's exports.

"Surely, this represents an under-investment in a crucial sector of the economy," she said.

"During the last decade, the United States has lost more than 53 percent of its manufacturing jobs," Doyle said. "The worst decline since the 1930s. And it's not just jobs. Thousands of manufacturers have closed their doors permanently."

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