Letter from Phil Kirk

We Must Save Manufacturing

Manufacturing is far from dead in North Carolina and the United States, but it needs some assistance from government or it will become a disappearing act. Or at the very least, government should not be a barrier to this very important part of our economy.

NCCBI, which serves as the state manufacturers association as designated by the National Association of Manufacturers, is very concerned about the future of manufacturing in our state. Apparel jobs have practically disappeared, textile jobs are being lost almost on a daily basis and likely never to return, and furniture is facing the same global challenges.

In North Carolina, it was not many years ago when manufacturing jobs comprised 22 percent of our state’s employment. Now the percentage has dropped to just over 16 percent — still a most significant part of our economy.

Manufacturing in the U.S. historically has generated economic growth and has produced very high living standards. If we do not overcome domestic and international economic challenges to manufacturing, we will suffer a dramatic reduction in the quality of life for millions of our hard-working citizens.

Manufacturers are responsible for nearly two-thirds of all private sector research and development — $127 billion in 2002. Productivity gains in manufacturing are twice that of the rest of the private sector.

Manufacturing jobs, including salaries and benefits, average $54,000 per employee per year. Manufacturing is an important contributor to both regional economic growth and tax receipts at all levels of government. During the last decade, manufacturing corporations paid a third of all corporate taxes collected by state and local governments.

The loss of manufacturing jobs in the U.S. has been significant – more than 2.3 million in the past two years. The manufacturing recovery in the U.S. is extremely weak.

Our trade deficit has increased to record levels as a result of the strong dollar overseas, the impact of the recession on our trading partners, the terrorist attacks in the U.S., and increased global competition.

Despite the loss of jobs, we still need more skilled workers in the U.S. NCCBI and the N.C. Economic Development Board, on which I serve, are very concerned about the challenges associated with our having enough skilled workers to fill existing and future jobs. The community colleges strive valiantly to fill the need in N.C., but they are requesting additional rigor and focus from our public and middle schools.

There are three major factors responsible for raising the cost of doing business in the U.S. – health care, litigation by greedy plaintiffs’ attorneys, and burdensome, unnecessary regulators.

As our state and nation gain more immigrants, we find more differences in their educational needs, compared with those already here. The same can be said about the training and re-training of existing workers who have lost their jobs through no fault of their own.

That is why any lesser efforts would be greatly misplaced. Our 59 community colleges, public and private universities, and K-12 schools are frequently mentioned as national leaders in public education.

If the U. S. manufacturing base continues to shrink, the manufacturing innovation process will shift to other global centers. If that happens, a decline in the U.S. living standards is virtually assured.

We need to do everything possible to educate the public about the importance of manufacturing and to convince our public officials to take concrete action before the end of manufacturing does indeed come to North Carolina.

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