Bloomberg News

Obama Says Manufacturing Plans Crucial to Future U.S. Growth

February 13, 2013

President Barack Obama, on the road to promote his State of the Union proposals, said the U.S. is becoming more competitive in global markets and reviving the country’s manufacturing base is crucial to future growth.

A combination of government support for training and research, tax code changes to reward companies that expand in the U.S. and working with local authorities to lure investment is needed to make the nation more productive, he said.

“I believe in manufacturing; I believe it makes our country stronger,” Obama said at a Linamar Corp. facility that produces heavy duty engine and driveline components in Asheville, North Carolina.

The plant, the Canadian company’s fourth U.S. manufacturing facility, is in what had been a shuttered factory. It’s scheduled to employ 200 workers by year’s end.

Today is the first of three days of travel for Obama to highlight aspects of his economic agenda outlined in last night’s State of the Union address. He goes to Georgia tomorrow and Illinois the next day.

The president last night asked Congress to spend $1 billion to set up a network of 15 manufacturing institutes that would link up businesses, universities and community colleges to develop technology and train workers.

A pilot program, focused on creating parts from digital images using three-dimensional printing, is operating in Youngstown, Ohio. While waiting for Congress to act, Obama wants to create three more using executive authority.

Funding Centers

Jason Furman, deputy director of Obama’s National Economic Council, said the some of the money for the program would come out of existing funding and the $1 billion would be offset by savings that will be part of the fiscal 2014 budget that Obama sends to Congress next month.

Federal agencies, including the energy and defense departments, put $45 million into the Ohio project. There are pledges of additional money from a consortium of manufacturing firms, universities and non-profit organizations.

Obama’s second-term agenda includes reinvigorating U.S. manufacturing. In his speech last night, he highlighted steps by companies such as Apple Inc (AAPL:US)., Caterpillar Inc (CAT:US). and Ford Motor Co (F:US). to bring manufacturing jobs back to the U.S.

While Obama cites the 500,000 new manufacturing jobs added in the last two years, that isn’t enough to replace the 1.8 million lost since 2007.

Gene Sperling, director of the NEC, said Obama’s 2014 budget will seek $20 million for the Commerce Department to hire 100 employees who will “wake up every day” lobbying foreign companies to locate production facilities in the U.S.

“Manufacturing punches above its weight,” Sperling said. While only 12 percent of the U.S. workforce is employed in the sector, he said, “It represents 70 percent of corporate R&D, 90 percent of patents.”

He said wage increases in China and declining energy prices making U.S. more competitive for manufacturers. “We as a country have the wind at our back for the first time,” Sperling said.

To contact the reporter on this story: Julianna Goldman in Asheville, North Carolina, at

jgoldman6@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net


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