(pictured above is the gearbox for startup EV maker, Lucid, manufactured in Arizona)
April 6, 2022 by Michelle Nash-Hoff
In November 2021, the Ronald Reagan Institute released a Report of the Task Force on National Security and U.S. Manufacturing Competitiveness titled “A Manufacturing Renaissance: Bolstering U.S. Production for National Security and Economic Prosperity.”
I came across this article last week, having missed it when it was released because many reports similar to this are ignored by the mainstream news outlets focused on the daily news and don’t reach the large national audience they deserve.
The Task Force was co-chaired by Ms. Marillyn Hewson, Former Chairman, President, & CEO, Lockheed Martin Corporation and Dr. David McCormick, CEO, Bridgewater Associates, and former Undersecretary for International Affairs, U.S. Department of Treasury. The Task Force members represented a cross section of business, government, and elected representatives.
I recently joined the board of the non-profit Industry Reimagined 2030, which is transforming the myriad of well-intentioned efforts to revitalize U.S. manufacturing into coherent, aligned action. Our strategic aim is to shift the implicit national narrative from manufacturing in ‘inevitable decline’ to one of ‘vibrant opportunity.’
What the Manufacturing Renaissance report has to say about ‘inevitable decline.’
In the Introduction, the Task Force “considered the causes and implications of the continued erosion of American industrial and manufacturing capabilities in sectors critical to national security, such as defense equipment, semiconductors, telecom supplies, and pharmaceuticals.” They acknowledge that the U. S. is at a “dangerous status quo” and as a result, “at the highest ranks of the U.S. federal government, consensus is emerging that the continued degradation of America’s industrial base is creating domestic vulnerabilities and weakening our ability to compete.”
As I have pointed out in previous articles, the Task Force admitted that “As America moves slowly, China is accelerating ahead. In 2019, China led the world in global manufacturing output at a level 12 percent higher than the United States.” In addition, “China’s push for self-reliance starkly contrasts with America’s increasing dependence on imports…”
To usher in a new era, it is essential that we wake up to the consequences of this prevailing worldview. I participate on the Buy American committee for the Coalition for a Prosperous America, and the members of Congress who have spoken at our virtual committee meetings recently have emphasized the realization that we have become too dependent on imports from China and other nations and urgently need to rebuild the supply chain of American manufacturing to produce critical products in the U.S.
The Executive Summary emphasized the following key points:
- “The COVID-19 pandemic underscored manufacturing’s essential role in ensuring our national health, safety, security, and economic vitality. It also revealed how vulnerable the global supply chains are to shocks and disruptions.”
- “Chinese leadership is leveraging state industrial and technological planning to achieve global economic and military power. In doing so, it has made substantial progress in achieving its stated goals of supplanting America as the world’s foremost economy and recasting the rules-based international system.”
What the Manufacturing Renaissance report has to say about ‘vibrant opportunity.’
The Task Force commented that “The daunting challenge before America also brings with it an opportunity to usher in a new era of productivity and economic growth through new technologies, human capital, managerial innovation, and updated business models.”
- Build unprecedented collaboration at the local level to scale the skilling and placement of workers in high demand, high skill jobs. Let’s encourage U.S.-headquartered manufacturers to fund 500,000 apprenticeships over the next decade. Let’s write policy allowing employers and high school graduates to use federal education grants for credential programs, apprenticeships, and internships.
- Modernize the Defense Production Act (DPA) for the 21st Century. There are specific “industries that require the establishment of new, enhanced policy measures to support supplier ecosystems and strengthen government coordination.” They recommend updating the DPA to “enable holistic solutions for critical manufacturing facilities.”
- Stand up a public-private capability to finance investments in domestic manufacturing sectors critical to national security. It could be done by “a new government-sponsored investment entity like the proposed Industrial Finance Corporation, changes to existing institutions such as the U.S. International Development Finance Corporation, direct bond buying programs, a sovereign fund, or private capital funds focused on the on-shore manufacturing ecosystem.”
The Task Force recommends setting the following goals to use as metrics to measure progress over the coming decade:
- “Bring 2 million new or retrained workers into strategic manufacturing sectors by 2030”
- “Improve American productivity growth in critical industries to 3.9 percent, which would represent a return to the historic average for manufacturing growth.”
- Widely deploy and couple modern technology and management practices
- “Add 35,000 new small- and medium-sized enterprise (SME) manufacturers in critical subsectors by 2030 to strengthen the core of the American supplier base and replace half of the small business capacity lost since the late 1990s.”
It’s amazing how close three of the above five goals are to the goals our board has established for the new non-profit, Industry Reimagined 2030, that I wrote about in my last blog article. It’s also coincidental that the Task Force also chose 2030 as the date for achieving their goals.
We have two distinct futures … It is up to each of us to make a choice and take a stand
The report states that “America stands at a fork in the road, facing a choice between two distinct futures” — “Mounting National Security Risk and Economic Vulnerability” or a “A Better Way Forward: Strength, Renewal, and Prosperity.” The Task Force “is confident that a renaissance of American manufacturing is possible if policy makers and business leaders make the necessary choices for our economy and our long-term security.”
As I wrote last time, we have a choice of continuing “inevitable decline” or choosing “vibrant opportunity” for American manufacturing. As a country, we have the choice of becoming subservient to China or remaining a free, independent nation. The future of our country rests on which choice we make.
by Michelle Nash-Hoff, published 04/06/2022