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Remarks at Manufacturing Council

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Thursday, August 5, 2010

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Commerce Secretary Gary Locke
Remarks at Manufacturing Council

Thank you, Senator Stabenow, for the kind words and for hosting us today.  And let me say how fortunate the people of Michigan are to have such a strong and effective leader and advocate working for them.

Along with Senator Lindsey Graham, Senator Stabenow chairs the Senate Manufacturing Caucus; and at the Commerce Department, we are looking forward to working with her and other members of the Caucus to revitalize American manufacturing.

We are looking to our newly-chartered Manufacturing Council to be important players in this joint effort to strengthen America's industrial base. 

And I am pleased to announce that Bruce Sohn, president of First Solar, Inc., is the new Chair of the Manufacturing Council and Joseph Anderson, chairman and CEO of TAG Holdings, has agreed to serve as Vice Chair.

The Council’s mission is threefold:

  • To ensure regular communication between government and the manufacturing sector;
  • To advise the Commerce Secretary on government policies and programs that affect the industry and provide a forum for resolving problems; and
  • To recommend ways to ensure America remains the preeminent destination for investment in manufacturing throughout the world.

We have a number of members of the 2010 Manufacturing Council with us today, and I want to thank them, and the others who couldn’t be here, for their service. 

I also want to especially recognize my Cabinet colleagues who have recently been added as ex-officio members of the

  • Secretary Geithner at Treasury
  • Secretary Chu at Energy; and
  • Secretary Solis at Labor

We’re looking forward to working with them on the cross-cutting issues the Council will be addressing.

There is an unprecedented level of diversity on this Council.  It is an innovative and impressive group that represents small and large companies and the core industries of the manufacturing sector, including:

  • Steel;
  • Automotive and aerospace equipment;
  • Semiconductors, superconductors, and supercomputers;
  • Medical devices; and
  • Green technologies.

With Bruce as chair, we’re sending a message that President Obama and this Administration are committed to making renewable energy and efficiency technologies a cornerstone of a revitalized American manufacturing sector.

A report released last month by the President’s Council of Economic Advisers estimates that Obama Administration investments in areas like clean energy production, energy efficiency, electric grid modernization, and advanced vehicles manufacturing, will help create over 800,000 jobs by 2012.

But this is just the tip of the iceberg.

Consider the fact that a single commercial wind turbine, uses an amount of steel equivalent to 225 midsize cars, and also contains 8,000 parts, from copper wire and gearboxes to electronic controls. 

From the people who form the steel and build the gearboxes to those who assemble the turbines and market them to customers, that's a lot of jobs at every step in the economic value chain.

And manufacturing jobs like these are good jobs.

Consider the fact that manufacturing employees make 13 percent more than the average for all other workers. 

Unfortunately, these jobs have become increasingly scarce over the years.

Once accounting for one third of U.S. jobs, manufacturing now claims just 1 in 10.

And it’s not at all coincidental that as the number of good paying manufacturing jobs have dwindled, so too have the fortunes of America's middle class.

In the last decade, millions of American families watched their wages stagnate or decline while the cost of necessities like tuition, health care and housing skyrocketed.

A revitalized manufacturing sector can turn this trend around and help provide the dignity, security and stability that American families need and deserve.

But it's also important to understand that a vibrant  manufacturing sector isn't just critical for the millions of Americans who depend on it for direct employment.

Manufacturing is absolutely central to driving the innovation that fuels the American economy, comprising two-thirds of our nation’s research and development spending.

I think an unfortunate line of thinking developed over the past few decades in America that figured as long as we designed products and owned a piece of the intellectual property, it didn't really matter if someone else made it.

But now we're starting to see the folly of that approach. 

When products are designed and manufactured side-by-side in America, we get a spillover effect where businesses can discover new efficiencies and develop second-, third- and fourth-generation upgrades that simply would never occur in a cloistered research lab.

When they are not, we allow other countries to develop new businesses and new jobs that can only be created when a company is engaged in the entire chain of innovation: from the inception of an idea, to its production and ultimately sale to the customer.

For all these reasons, manufacturing has been a central Obama administration priority since day one.

President Obama made a significant down payment to jumpstart manufacturing, with over $100 billion dollars worth of grants, tax cuts and incentives in the Recovery Act devoted to manufacturing investments.

The president also boldly stepped in to help stabilize and restructure the American automotive sector. 

The president took a lot of heat in Washington for that decision.

But there is no question it was the right one.

For the first time in six years, all three U.S. automakers are operating at a profit. 

And they have demonstrated the strongest job growth in more than 10 years.

We are going to keep building on that success.

To spur innovation in manufacturing and throughout the American economy, the President’s 2011 budget proposes large new investments in R&D while simultaneously making it easier for companies to write-off their own research investments. 

The 2011 Budget includes:

  • $148 billion for federal research and development;
  • And it calls for making the Research and Experimentation Tax Credit permanent

At Commerce, we’re working every day to jumpstart manufacturing, with programs to:

  • Improve manufacturers’ efficiency and sustainability;
  • Help unlock the potential of promising new markets like clean energy; and
  • Expand exports by increasing manufacturers’ access to foreign markets around the world.

And we are getting out there in American communities to get people engaged on this challenge.   

Commerce Assistant Secretary Nicole Lamb Hale has kicked off a “Manufacture America” tour – where she’s traveling throughout the country to meet with manufacturing executives and state and local government officials to talk about ways to help U.S. manufacturers become more competitive in the global marketplace.

Nicole's outreach program is consistent with what we are trying to do today. 

This administration knows full well that we don't have all the answers. . .

. . .  that we need to hear from people on the front lines what works and what doesn't.

That's why the Manufacturing Council will be such a critical resource for me in the months ahead. 

I'm looking forward to getting to work with Council members and to developing policies that will make a concrete difference for American manufacturing and for the millions of people whose livelihood depends on it.

Thank you all for coming