This keynote is from Day 1 of FreightWaves’ Global Supply Chain Week. Day 1 focuses on military, aerospace and manufacturing.
The Texas weather disaster is the latest example of America’s failure to address its crumbling infrastructure. The situation will only worsen without intentionality, Scott Paul, president of the Alliance for American Manufacturing (AAM), said in a FreightWaves Global Supply Chain Week keynote address.
“It is clear that our nation has underinvested in our public capital,” Paul said. “We see that with the situation with the energy grid in Texas. Or the dam that ruptured recently in Michigan. Our infrastructure is crumbling. And it’s past time that we addressed this.”
AAM is a nonprofit, nonpartisan partnership founded by American manufacturers and the United Steelworkers in 2007. It had good relations with the Trump administration in advocating for a Made in America agenda. It expects that to continue under President Joe Biden.
“I think we can have a decidedly American plan that recognizes the value of manufacturing,” he said.
Historical precedents for growing manufacturing
Paul recalled the efforts of America’s first treasury secretary, Alexander Hamilton, to improve manufacturing following the Revolutionary War.
“When he served with George Washington in the Continental Army, they were always complaining about the lack of supplies and how they were dependent on the French and how the British had everything they needed. And there was a paucity of American manufacturing capability at the time.”
Hamilton sought to “make more stuff” in the 13 new states despite a merchant and plantation economy.
“It takes intent to get there,” Paul said. “And the Hamilton plan was a bit of tariffs to start industry up. But also investing in infrastructure.”
President Abraham Lincoln’s fostering of the transcontinental railroad and land grant universities came later. President Dwight Eisenhower’s interstate freeway system in the 1950s boosted an infrastructure now sorely in need of repair or replacement.
Refocusing educational priorities
The way the nation invests in education needs revamping.
“We need to place a value on our education dollars” to give manufacturers a fighting chance against countries that gain a competitive advantage by subsiding their manufacturing, Paul said.
“It’s great that we have world-class Ivy League institutions. I am all in favor of those,” he said. “But unfortunately some of that has come at the expense of our community colleges and career and technical education.”
More congressional leaders recognize that a big corporate tax cut and easing regulations — signature moves under President Donald Trump — are insufficient to reskill Americans and reshore manufacturing.
“It takes a little more shaping than that to have the economy that we want,” Paul said.
First things first
However, it will be difficult to get any of those changes made until the COVID pandemic is overcome.
“From an employment perspective, manufacturing is still about 580,000 jobs in the hole in a sector of almost 13 million workers. We’ve seen lots of disruption in supply chains,” Paul said.
The spirit of partnership during the early days of the pandemic — manufacturers shifting to make personal protective equipment and working directly with hospitals that needed it — was one of the best things to happen, Paul said.
“I do think there’s a lot that we didn’t get right about the response to this as a nation and from a public policy perspective,” he said. “One of the things we did get right from a private-sector perspective was the amount of altruism and sense of duty that so many manufacturers had to contribute to be part of the solution. I think that can give us some hope.”
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