Kevin recently wrote on the schism opening up at NAM and he quite accurately pointed out that neither side grasped the fundamental issues they must face to succeed in the long haul. However, I see the fallout at NAM as both inevitable and quite welcome. The issue is between companies that actually manufacture, and companies that have redefined themselves as glorified importers and, at best final assemblers, falsely defining themselves as manufacturers in order to elicit the support of the federal government.
Way back on May 4 I wrote about the clueless number crunchers at Furniture Brands who have succeeded in destroying more solid American manufacturing companies than just about anyone else I know. In that post, I noted that their top guy boasted of having closed 31 of 57 American plants, and they have since closed another handful. Said the CEO in the annual report, "I have frequently pointed out that we are not really a manufacturer." Nonetheless, a guy named Lynn Chipperfield, Furniture Brands exec and lawyer, testified before the International Trade Commission, "Furniture Brands is the largest residential furniture manufacturer in this country."
The issue before the Trade Commission was a charge of dumping filed by some truly domestic furniture manufacturers against China. Furniture Brands, as primarily an importer from China – and hardly the large domestic manufacturer Chipperfield described – was opposed to any sanctions against China that might result in import tariffs. He falsely described Furniture Brands as a manufacturer, however, in order to con the regulators into believing that sanctioning China was somehow against the interests of American factory folks.
That has become a very serious, big time game – wrapping the company image up in an American flag in front of a fine old factory – while importing everything and laying off factory workers at the same time.
The rift at NAM is along the same lines. The big, publicly held "manufacturers" who have committed to offshore outsourcing everything are opposed to any regulation or policy that is aimed at ‘leveling the playing field’ with China, even if it hurts their few remaining U.S. plants. Their profits depend on keeping the China price low. Legitimate U.S. manufacturers, on the other hand, have a very obvious interest in assuring that trade policies do not let foreign competitors have any more advantage than their labor cost structure already provides them.
The big public companies have long dominated NAM and have long dominated the policy making of the U.S. government, much of it through bold-faced lies like the one Chipperfield told the ITC. I have been known to describe NAM as the National Association of Multi-National Outsourcers precisely because the big importers have Shanghaied NAM and turned it into a lobby for the Chinese export industry to the detriment of American manufacturing. What is taking place at NAM is that the true domestic manufacturers are drawing the line – holding NAM’s feet to the fire – demanding that they either support American manufacturing or oppose it – but putting an end to the shell game NAM is playing on the government and the taxpayers.
John Engler should take a long hard look at himself in the mirror and decide whether he is a principled leader of manufacturing, or just a Wall Street shill in a fancy suit. The days of NAM putting on a public front of homespun stories of their mom and pop manufacturing membership, while pouring all of their lobbying money and effort into giving offshore outsourcers every advantage over American manufacturing must come to an end. While the domestic manufacturers may well have the wrong solutions to their problems, they understand who their enemies are at NAM.
Once they kick the big company con artists out, the real NAM member ship should turn the focus of their lobbying effort in the right direction – for a regulatory environment that supports excellent lean manufacturing, and punishes manufacturing numbers games.