EoW July 2007

Manufacturing

The Bush administration appoints a new manufacturing chief

After leaving the job open for months, the Department of Commerce (DOC) on 4 th May named Rear Admiral William ‘Woody’ Sutton (Retired) as the new Assistant Secretary for Manufacturing and Services. Once confirmed by the Senate, he will advocate, coordinate, and implement policies to help US manufacturers compete globally. The position – vacated by its original holder in December, just before the opposition Democrats took power in Congress – was created by President George W Bush during his re-election campaign in 2004. Mr Bush acted in response to criticism that too many American manufacturing jobs had been lost during his first term in office. As noted by the Detroit News (5 th May), Adm Sutton brings to the job a familiarity with the problem. Until February he was president of the Air Conditioning and Refrigeration Institute (ARI), a trade group representing the makers of more than 90% of the central air conditioning and commercial refrigeration equipment produced in North America. According to the ‘Business Insider’ feature of the newspaper, “Air conditioner makers have faced tough times in recent years, closing several major US factories and moving production abroad.” During his five-year tenure at ARI, Adm Sutton also served as an officer of the Council of Manufacturing Associations of the National Association of Manufacturers (NAM), as well as on the Board of Directors of the American National Standards Institute (ANSI). The conflation of manufacturing and services in Adm Sutton’s brief will have him presiding over two markedly dissimilar sectors. For all its recent attrition, US manufacturing, taken by itself, would constitute the eighth-largest economy in the world. But DOC data for 2005 shows that manufacturing accounted for only 12.1% of US gross domestic product (GDP), as compared with 67.5% for services. This last percentage represents the total output of private non-goods producing industries and includes both wholesale and retail trade. A notable feature of these statistics is the disproportionate domestic consumption of services. The World Trade Organisation (WTO) reports that the US was the world’s largest exporter of goods and services in 2006. Of these (reflecting 10.8% of GDP), goods accounted for 7.7%; services, 3.1%. Both sets of exports are growing, but the great bulk of the services are still being rendered and received Stateside. According to the WTO, US exports by the end of April 2007 had grown 10.1% from their year-before level at that point: the increase was 11% in goods exports, 7.6% in services exports. ❈ Proceeding apace on its ‘Way Forward,’ Ford will close one Ohio plant, and shut down another for a year Ford Motor Co said on 7 th May that it will close its casting plant in Brook Park, Ohio, in 2009. The company will also mothball Cleveland Engine Plant 1 in Brook Park for at least a year. A second engine plant at the complex just west of Cleveland will remain open. Ford had already announced nine of the 16 closures to be completed by 2012 under its Way Forward restructuring plan. The casting plant – which makes crankshafts for the company’s four-cylinder engines, bearing caps, engine blocks, and related items – will be the tenth to go, and marks the company’s departure from the casting business. Joe Hinrichs, vice president of Ford’s manufacturing operations in North America, told the business press that Ford decided suppliers are well able to serve its casting needs. The company intends eventually to have outside parts suppliers make all of its castings. Automotive

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EuroWire – July 2007