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September 24, 2012

Growth Requires Changes to Manufacturing Policies

September 24, 2012

For more information:
Jonathan Kalkwarf, vice president, finance and administration, 847-485-3007
Ashley DeVecht, director of communication, 847-485-3011 or 616-260-2785

 

Growth Requires Changes to Manufacturing Policies

Kansas City, Mo.—On Thursday the Mid-America chapter of the Metals Service Center Institute (MSCI) held its 2012 Manufacturing Summit “Closing the Divide Between Jobs, Policy and Growth”. The event, which was attended by 150 members and their customers, was moderated by MSCI president and CEO M. Robert Weidner, III, and hosted by MSCI chapter president Gregory Otto, general manager of the Iowa market for Ryerson, Inc. The event took place at UNITECH, a division of United Technical Industries, Inc. Participants included: Richard Robinson, president of Norfolk Iron and Metal Company; John Sunderman, president of Owen Industries, Inc.; and Craig Schroer, president and CEO of United Technical Industries. Political candidates attending the event were:

  • U.S. Rep. Todd Akin (R-MO 2nd District)
  • Mr. Jacob Turk, Republican candidate for the U.S. House of Representatives, Missouri's 5th district

The summit was an opportunity for national and local manufacturing leaders, policy experts, employees and political candidates to discuss the most pressing issues facing the manufacturing and metal services sectors. “Manufacturing is vital to our economy. If we want to see job growth in this country, candidates and incumbants must understand that the industry's needs aren't isolated to one or two key issues,” said Mid-America chapter president Gregory Otto. He went on to explain that trade, regulation, taxes and work force training initiatives and the policies concerning them should work together to make the economy and the political environment manufacturing friendly.

According to a study by MSCI, the metals industry has a direct impact on more than 500,000 jobs. While concerns about outsourcing and moving jobs overseas have dominated the news, manufacturing is actually one of the bright spots of the current economy. Manufacturing accounts for 11.7% of the U.S. GDP, according to the U.S. Bureau of Economic Analysis. However, significant challenges remain, including the rising cost of health care and the increasing costs the federal government has imposed on businesses.

While questions for the panel centered around MSCI’s policy agenda, which includes positions on energy, trade, tax and regulation, panelists highlighted the importance of strong leadership and decisive action to support the growth we’re beginning to see in the manufacturing industry.

“Industries that create wealth—mining, manufacturing and farming—are also industries that are capital intensive,” said Schroer, explaining how that creates difficulties as far as cash flow. “Most politicians don't realize that in our system of taxing, you pay twice. You pay first for the tax bill for the current year, but then they hit you up in advance for the estimated tax, assuming you're going to have the same tax the following year. It starves companies of cash.”

Robinson agreed, “There is a sentiment that it's bad to be successful. That's not what this country was built upon. It was built upon successful people reinvesting in their companies, buying other companies, employing more people. If you're not successful, you're not employing people. The tax code should be set up to incent growth.”

“Having lived in socialist countries and then coming back to America to start a business, I know what the effects of debt are,” said Schroer, regarding the national debt. “If you look at the $16 trillion of debt, that's $160,000 of debt per taxpayer (assuming 100 million working taxpayers). My employees can't pay that and I can't pay that, even if it's spread over 10 years. So it's a multi-generational problem already. The impact it has on my small business: we have kept salaries low, we're trying to reduce debt. Our thinking is that when the crunch comes, we need cash to survive. We can either pay interest, or we can pay taxes. We can't pay both.”

Thursday’s summit was just one of 11 being held across the country this year. Other host cities include: Cincinnati, Cleveland, Philadelphia, Charlotte, Pittsburgh, Atlanta, Rochester and Los Angeles. MSCI hosts these events every election cycle, following an initial set of town hall meetings in 2004 and 2005. The program was expanded this year to more forcefully address the continued economic uncertainty many manufacturers and American industries face and to provide the leadership necessary to find workable solutions.

“This year is a critical election year, at a time when manufacturing could play a very pivital role in getting the nation back on track. We wanted to give our members and their communities a chance to learn more about the concerns of our industry and to understand where their local candidates stand on addressing those issues,” said Weidner. “As a nonpartisan organization, it’s our duty to inform our membership, state and federal representatives and the media about our industry and provide them with the tools to solve the challenges facing it. There are real issues facing the manufacturing sector, which will have real costs for employers and employees alike. Today’s discussion was frank, open and insightful. I hope it will lead to concrete, practical action.”

ABOUT MSCI

Founded in 1909, the Metals Service Center Institute, based in Rolling Meadows, Ill., has nearly 400 members operating from more than 1,500 locations in the United States, Canada, Mexico and throughout the world. Together MSCI members constitute the largest single group of metals purchasers in North America, amounting each year to more than 55 million tons of steel, aluminum and other metals, with about 300,000 manufacturers and fabricators as customers. MSCI’s membership also includes almost all ferrous and non-ferrous industrial metals producers in North America. Service centers inventory, process and distribute metals to manufacturing intermediaries and original equipment manufacturers.

For more information, visit www.MSCI.org. “Like” us on Facebook at Metals Service Center Institute, follow us on Twitter @MSCITweets, and connect with us on LinkedIn at Metals Service Center Institute.