The story of global commerce in recent times has been about the relocation of production to places where labor costs the least, a trend that has been damaging to U.S. competitiveness. Service industries have grown while manufacturing has shrunk, a combination that limits the outlook for long-term U.S. prosperity.

But it doesn't have to be that way, says Chip McClure, Chairman, CEO and President of ArvinMeritor.
The company is a major global supplier of drivetrain components for heavy-duty trucks.

"Prosperity comes from building, creating, developing and producing," he said. "It comes from technology and innovation. It comes from manufacturing," McClure said in recent remarks to a national conference on U.S. competitiveness in Detroit.

And it is possible for the U.S. to remain the world's leading manufacturer even though it is not the low-cost manufacturer, he said.

"Manufacturing is not a sprint for cheap labor. It's a marathon that takes an increasingly sophisticated workforce and government policies to generate continued growth."

For McClure, a long-distance runner himself, the marathon reference has particular meaning. He's pushing for a strategic realignment of U.S. policies on trade, taxes, energy, health care and education that will over time bring manufacturing back to the forefront of the economy.

Key to long-term success is the restoration of trust in manufacturing with consumers, investors and the government, he said. A negative, he said, is legislation now being considered by Congress that would alter current labor-management relations by making it easier to unionize companies. Card check, as the measure is called, "must be carefully measured because it will significantly impact the cost base for manufacturers and it could eliminate up to 600,000 jobs in an already weakened economy," he said.

Labor interests are pushing hard for passage of card check, but Congress appears unlikely to enact the bill in its current form.

McClure also called for reforms that encourage investors to put their capital into manufacturing, as well as a national effort to encourage technical education.

"We need a coordinated effort between the private sector, the public sector and academia, including universities, community colleges and even K through 12," he said. The U.S. workforce has the spirit and innate skill: "You have people here who have for decades and generations demonstrated the ability to commercialize new technology, new inventions and bring them to the marketplace probably better than most parts of the world."

McClure, who chairs the Health Care Task Force of the National Association of Manufacturers, thinks that the current debate over health care reform is a good thing. "It's an extremely important issue that needs to be addressed," he said, but added that he worries the legislation might be proceeding too quickly for proper vetting.

He did suggest one idea: make health insurance portable, like a 401(k) retirement plan. "If an insurer has a person for 30 years instead of just, say, five, it will take a much different view on illness prevention," he said.

The other major piece of legislation now working its way through Congress - the cap-and-trade bill for greenhouse gas emissions - makes McClure worry about unintended consequences. The U.S. needs to protect the environment and reduce dependence on foreign oil, and in that respect the debate is worthwhile, but cap-and-trade contains inherent costs and administrative complexities that are worrisome, he said.
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