WCA July 2007

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From the Americas
31 Wire & Cable ASIA – July/August 2007
asserting that US factory owners and workers have been
hurt by Beijing’s allegedly improper currency manipulation
and industry subsidies.
It also claims that American manufacturers are not well
served by the National Association of Manufacturers
(Washington, DC), the nation’s largest industrial trade
association. NAM denies the accusation and itself claims
credit for putting the Chinese currency problem ‘on the
[Bush] administration’s radar screen.’
The founding members of the Alliance for American
Manufacturing are: US Steel, Mittal Steel, AK Steel, Alcoa,
Allegheny Technologies, and Goodyear Tyre and Rubber Co,
which has an extensive presence in the aerospace, military,
and hardware technology industries.
Steven Greenhouse, of the International Herald
Tribune, outlined the main mission of the group, which
announced its formation on 26th April in newspaper and
online advertisements: “[It] aims to be partly a research
organisation, tackling subjects like international trade
practices and what alliance officials say is inadequate
enforcement of trading regulations by the US government.
“The group also plans to focus on health policy because
of concerns that high health costs have hurt American
competitiveness.” (‘Steel Union Joins Companies to
Promote US Manufacturing,” 26th April).
Leo Gerard, president of the Pittsburgh-based USW, said
his union pushed for the alliance because it believed the
National Association of Manufacturers has not been forceful
enough in seeking to preserve US manufacturing jobs. In the
matter of China, he declared that NAM did not vigorously
challenge trade violations because many members of the
association had operations in China and did not want to
anger the Chinese government.
Clyde Prestowitz Jr, president of the Economic Strategy
Institute, a Washington-based policy research organisation
that has long promoted American industry, endorses the
view that the new group grew out of tensions within NAM.
“There’s a civil war going on within the American
manufacturing establishment,” said Mr Prestowitz, who
is not connected with the alliance. “It’s a divide between
companies that are global manufacturers and companies
that are mainly US manufacturers.”
These companies have clashed over such issues as how
vigorously Washington should challenge China’s trade
practices and whether promotion of free-trade agreements
helps financial institutions at the expense of manufacturers.
But what is acknowledged by all parties is that the US has
lost one-sixth of its factory jobs over the last six years.
“The haemorrhaging of manufacturing jobs is hurting
America down to the local level,” Terrence Straub,
US Steel’s senior vice president for public policy and
government affairs, told the Tribune. “Until and unless there
is a political understanding of that – and political attention
paid to that – our fear is that it won’t change much and in
10 years the American manufacturing base could be gone.”
In brief . . .
Some economists in Japan have warned that a
slowdown in the US economy, which is still largely
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limited to the housing sector, could inhibit American
demand for Japanese goods. But trade statistics
released by Tokyo on 25th April showed that exports
to the US, Japan’s largest export destination, rose for
the 26th consecutive month in March, and in fact grew
2.4% over March 2006.
Virgin Blue said on 22nd March that it would buy
US$1.8 billion worth of planes from Boeing Co (Chicago)
as the Australian airline steps up its plans for long-haul
flights to the United States.
Virgin Blue said it would buy six Boeing 777-300ER
widebody aircraft, with an option for six more, and
had signed an agreement with the International Lease
Finance Corp for a seventh.
The purchase is part of Virgin Blue’s plans to start flights
to the US beginning in 2008 as it seeks new ways to
overcome competition on its routes within Australia and
to islands in the South Pacific.
Automotive
No surprise but still a shock: Toyota’s
first-quarter sales put it out in front of
General Motors for the first time ever
Global sales reported by Toyota Motor Co for the January-
March period hit 2.35 million vehicles, topping the
first-quarter tally for General Motors Corp of 2.26 million.
The Japanese auto maker is expected to maintain its lead
over the Detroit giant for the rest of the year, which would
confirm its status as the world’s No 1 auto maker.
Toyota is achieving record profits at a time when much of
the industry is struggling. When results are in for its 2006
fiscal year, Toyota is expected to have earned $13 billion
– much of it on GM’s home ground. Toyota’s American
sales rose more than 12% last year, and are increasing at a
double-digit rate again this year. The company’s Camry has
been the best-selling car in the US every year except one
since 1997.
As noted by Detroit Free Press business writer Joe Guy
Collier, the idea of Toyota surpassing General Motors is
something many longtime Detroiters thought they would
never see. GM has been the world’s largest auto maker
for 76 years, and there was a time when it commanded
more than half the US market – almost, it seemed, by right.
(‘Toyota Takes No 1 Spot from GM,’ 25th April).
While those days are long gone, industry experts consulted
by Mr Collier do not believe the latest results necessarily
spell doom for Detroit. Analysts pointed out that GM is
making the tough choices that should help it in the long run.
After losing $10.4 billion in 2005, GM has trimmed its
workforce, closed plants, reduced incentives and decreased
fleet sales – the high-volume sales to rental car companies,
corporate customers, and government agencies that often
cut into profits. While these moves hurt GM’s chances
of staying No 1, they improve its prospects for making
money, Global Insight auto analyst Aaron Bragman told the
Detroit Daily.
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