Spokane Journal of Business

Manufacturing job gains lag targeted pace, group says

Also, alliance-sponsored report asserts military too reliant on foreign suppliers

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The latest monthly U.S.jobs reportshows America's manufacturing sectordidn't gain a single jobin April 2013, a setback in the effort to create 1 million new manufacturing jobs in the president's second term, says the Alliance for American Manufacturing.

Scott Paul, president of that industry organization, says, "The latest jobs report shows that we are a long way from a true resurgence in American manufacturing. We strongly believe that we won't see real growth in manufacturing jobs without the right policies from Washington, D.C."

Paul points to AAM'sblueprintfor manufacturing, which offers key policy prescriptions that it believs will revitalize America's industrial sector.

"We're falling further behind the pace needed to add 1 million manufacturing jobs in President Obama's second term, yet no one in Washington seems very serious about a jobs agenda," he contends, adding, "That must change."

By usingmonthly jobs datafrom the Bureau of Labor Statistics (BLS), the alliance maintains a running monthly tally of manufacturing jobs created during the president's second term.

Through the first four months of this year, the manufacturing sector has added 39,000 jobs, it says, which it notes is well off the 21,800-jobs-a-month pace needed to create 1 million jobs during the four-year term.

Also, the AAM asserts that urgent action is needed to reduce the U.S. military's dependence on foreign suppliers for the raw materials, parts, and finished products needed to defend America, citing anew studyit commissioned that was prepared by retired U.S. Army Brigadier General John Adams.

The report, titled, "Remaking American Security:Supply Chain Vulnerabilities & National Security Risks Across the U.S. Defense Industrial Base,"was released earlier this month at a Capitol Hill event led by Sen. Chris Murphy (D-Conn.), Rep. Mo Brooks (R-Ala.), and Rep. Tim Ryan (D-Ohio).

The report claims that U.S. national security and the health of the nation's defense industrial base are in jeopardy because of an over-reliance on foreign suppliers for critical defense materials. Foreign sourcing, the report asserts, puts America's military readiness in the hands of potentially unreliable supplier nations and undermines the ability to develop capabilities needed to win on future battlefields. The report calls for action to increase domestic production of the natural resources and manufactured goods necessary to equip our military.

"America's vulnerability today is frightening," Adams says in comments quoted by AAM. "This report is a wake-up call for America to pay attention to the growing threat posed by the steady deterioration of our defense industrial base. Excessive and unwise outsourcing of American manufacturing to other nations weakens America's military capability. As a soldier, I've witnessed firsthand the importance of our nation's ability to rapidly produce and field a sophisticated array of capabilities. There is a real risk that supply chain vulnerabilities will hamper our response to future threats."

For example, the U.S. depends entirely on a Chinese company for the chemical needed to produce the solid rocket fuel used to propel Hellfire missiles, the study says. As current U.S. supplies diminish, the military will be reliant on the Chinese supplier to provide this critical chemical—butanetriol—in the quantities needed to maintain this missile system, it says. Hellfire missiles are a widely used, reliable, and effective weapon launched from attack helicopters and unmanned drones, and are a critical component in America's arsenal, the report says.

The commercialization of rechargeable batteries has moved offshore along with new innovation capacity, the report says. Lithium-ion (Li-ion) batteries are built on complex chemistries that offer superior weight savings per unit of energy density. They last a long time during disuse and are low maintenance. Although the original invention of the Li-ion battery took place in U.S. laboratories housed in universities funded by the federal government, the United States is now at a competitive disadvantage, relying on foreign suppliers for both current products and next-generation batteries, the report says.

Also, the U.S. imports from China 91 percent of the rare earth element lanthanum, which is needed to make night-vision devices.

This near-total dependence creates a risk that China, in theory, could withhold access to lanthanum to force up the price, inhibit a U.S. technological advantage, pressure the U.S. to resolve disputes on terms favorable to China, or worse, completely withhold supplies. Night-vision devices give U.S. warfighters a critical advantage in low-light operations, such as the night raid that resulted in the death of Osama bin Laden, the report says.

Production of high-tech magnets also has migrated offshore, even though American research initially developed this important technology, the report says. Today, there reportedly is no domestic neodymium-iron-boron (NdFeB) magnet producer, and 75 percent of NdFeB magnets are fabricated in China. The disappearance of a U.S. magnet industry has eroded U.S. leadership in patents and our ability to design new applications, the report contends.

AAM President Paul says the report is a call to action for a renewed focus on American manufacturing capacity.

"Allowing our defense industrial base to keep shrinking and our dependence on foreign manufacturers to keep growing will make America weaker, less secure, and less safe," Paul contends. Recommendations in the report to foster domestic manufacturing capacity and make the U.S. less dependent on imported military include:

•Increasing long-term federal investment in high-technology industries, particularly those involving advanced research and manufacturing capabilities.

•Properly updating, applying, and enforcing existing laws and regulations to support the U.S. defense industrial base.

•Developing domestic sources of key natural resources that our armed forces require.

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