| Anyone expecting to hear happy stories about recycling and energy-saving light bulbs at the Trade and Green day of a major exporting conference in Detroit Monday must have been disappointed.
What they heard instead was speaker after speaker urgently hammering one point: Grow sustainable manufacturing exports or get used to an ever-dwindling economy.
“It’s not just something that’s nice to think about,” Fred Keller, CEO of Grand Rapids-based Cascade Engineering Inc., said of growing sustainable exports. “It’s something that’s essential, something as a country we absolutely must do.”
Keller and ArvinMeritor Inc. Chairman and CEO Chip McClure said the U.S. is losing its edge in high-tech products to China.
“I’ve seen firsthand this country’s leadership role in manufacturing g! o on a long, slow downhill slide,” McClure said. “Somewhere along the way ‘manufacturing’ became a dirty word among those who set the policies for our state and our country...
“There’s only one dirty word and that’s ‘inaction.’”
They spoke at the 2010 International District Export Council Conference in downtown Detroit. The event was sponsored by the Department of Commerce, which is playing a central role in meeting President Barack Obama’s goal, announced in this year’s State of the Union address, to double exports in five years.
Other speakers included Commerce officials, researchers from the Brookings Institution and Wal-Mart’s director of sustainability, Miranda Ballentine.
Government officials throughout the conference pointed out that 95 percent of the world’s consumers are not in the U.S., and only 1 percent of U.S. companies export. Of those, 58 percent export to only one country, typically Mexico or Canada, sa! id Secretary of Commerce Gary Locke on Tuesday.
“Imag! ine if w e could just get those 58 percent of U.S. companies that now export to only one country to export to an additional country, Locke said. “You do that enough times and America will not just meet but beat the goals set out by the president.”
Exports have increased 18 percent this year and accounted for more than half of U.S. gross domestic product growth in the past four quarters, he said.
Monday’s keynote speaker was Stephanie Burns, chairman and CEO of Dow Corning Corp. in Midland.
“We need to do this now,” she said of getting the right mix of policies, incentives and subsidies to encourage development of solar energy products.
Dow Corning is the majority owner of Hemlock Semiconductor L.L.C., a subsidiary of Down Corning that is based in Hemlock, in Saginaw County, and makes polycrystalline silicon.
The material is an important ingredient in solar cells, and Hemlock is the largest manufacturer in the world, Burns said. She has glo! bal customers in the solar industry who “consider the U.S. an emerging market for renewable energy.”
Many statistics were offered that reflect the threat the United States faces. Exports represent 12 percent of U.S. GDP, whereas in Germany they represent 42 percent, said Ro Khanna, deputy assistant secretary for domestic operations at the U.S. Commercial Service.
The U.S. trade imbalance works out to $140 for every person in the country, Burns said. She also said 12 years ago the U.S. had 45 percent of the global share in solar panel manufacturing, and now it’s down 7.
A brighter statistic offered by Secretary Locke was that jobs associated with exports in general pay 15 percent more than the typical wage in America.
The country and Michigan need to get down to making the sorts of products needed to stay at the global economic forefront, speakers said. Those products will be sustainable, green products that are becoming increasingly in dema! nd and will be an export boon to the nations that get the jump! on them , they said.
“We cannot grow our way out of this economy by asking the American consumer to consume more,” Cascade’s Burns said.
Cascade’s Keller said a renewed emphasis on manufacturing is the way to deal with unemployment.
"Manufacturing can and should lead us out of this," Keller said. “Doubling our exports is pretty dramatic, and supporting the manufacturing base is a way to do that.”
His company has increased exports 26 percent, and they now make up 19 percent of total sales.
"By focusing on sustainability, we’ve expanded our product line and increased our sales,” he said.
The examples given of the types of products the country needs to produce reflected the companies represented. Keller said his company is further developing its small, lightweight wind turbines that can be put on home rooftops. Expected to come out in six to nine months are turbines that can be adjusted to increase energy output.
ArvinMer! itor is developing technologies that allow semi-trucks to use less fuel. A hybrid semi-truck is under development, and Wal-Mart is testing one in its fleet.
Speakers uniformly called for more public-private collaboration, promoting research into renewable energy and other forms of sustainability, changing regulations and taxes to encourage sustainable manufacturing, and developing a workforce suited to green manufacturing.
"We need help from the government to level the playing field," McClure said. He said more effort is needed on trade barriers in other countries, currency manipulation, and the regulatory and tax environment in the U.S. He also said education is a factor.
“Can a nation of MBAs trump the need for engineering Ph.D.s?” McClure asked.
Dow Corning’s Burns said her company usually sells its materials to customers abroad, which then make solar modules and sell them back to customers in the U.S.
Incentives for consumers to ! buy solar products are necessary for building a solar industry! , she sa id. That’s because manufacturers of solar panels and solar-related products want to cluster with suppliers in regions that have incentives in place so they have immediate access to customers, she said.
"We’re talking about game-changing incentives for citizens" Burns said. "This is what’s differentiating a manufacturer’s choice in deciding where (to locate)."
McClure also called for supporting free trade agreements.
“Free trade gets a bad rap. It’s a misperception, and it’s a big one,” he said.
He suggested they be called "export promotion agreements" to give people a different, more pointed, idea of what the deals do.
Secretary Locke said the Obama administration is working to finalize pending FTAs with South Korea, Panama and Colombia. Obama wants to have a deal settled with Korea before heading to a G20 meeting there next month.
Locke also said the Obama administration wants to make a federal tax credit for researc! h and development permanent, something that several speakers called for the day before.
“The president very much supports making permanent and expanding and making more generous the R&D tax credit,” Locke said in an interview at the Detroit Regional Chamber.
Kristine Gough, purchasing manager at Full Spectrum Solutions in Jackson, said she was encouraged by hearing that the federal government and business leaders see exports as vital to growth. Her company makes energy-saving lights for outdoor and institutional use. Full Spectrum has grown in recent years and is looking to begin exporting.
“What they say needs to happen, we can do,” Gough said. “That’s what we’re ready to do.”
Thomas Gross, president of Dynamic Manufacturing in Weidman, northwest of Mt. Pleasant, runs a company that makes wood chippers. Were it not for an effort to go after exports beginning in 2007, his company of 40 employees probably wouldn’t be around t! oday. He said 70 percent of his sales are now in exports.
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Dynam ic Manufacturing had $10 million in sales in 2009, he said.
“Anybody who tells me that exporting is about shipping jobs overseas is absolutely wrong,” Gross said.
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