Posts from Matthew McMullan

Ford Is About to Start Cranking Out Rangers in Michigan

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

The Ranger is coming back to United States, and it’s almost here.

The Detroit Free Press had the story a few days ago about how the Ford Motor Company and the United Autoworkers worked together to bring the iconic truck’s production to southwest Michigan:

In the spring of 2015, Joe Hinrichs (president of global operations at Ford) and then-UAW President Dennis Williams, and Williams' executive administrative assistant, Chuck Browning, met for a private lunch near the Detroit airport.

Hinrichs asked how labor might feel if Ford moved production of the Ford Focus sedan from Michigan to Mexico, and then retooled Wayne Assembly to build SUVs. The plan would need to be part of an upcoming labor contract, and Ford didn’t want to make the move without knowing if the UAW might support it.

“They were very supportive,” Hinrichs said. “They knew the workforce would love building the Ranger and Bronco again. So, we ended up making it part of the 2015 negotiations. This is a great story of collaboration between Ford and the UAW.”

That collaboration is about to pay off. After retooling its Michigan Assembly Plant and an afternoon of festivities in its parking lot …

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While Trump Trade Fights Gain Steam, Manufacturing Still Gaining Jobs

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

President Trump’s trade fight with China continues on multiple fronts. This dispute the president is prosecuting against Beijing is a big deal that is regularly overtaken by other events in the news cycle, and it isn’t helped that the president himself is, ummm, an imperfect messenger to make sense of it all. Lord knows what he’s tweeting about today.

In spite of whatever faults one may find in the presidential rhetoric, though, manufacturing jobs have been on the uptick under this administration.  And stories of metals consuming businesses, in spite of tariffs on steel and aluminum, still pop up. Like this one out of Hillsborough County, Florida:

Report: The American Freight Rail Network is Unguarded and At Risk

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

Concern is growing about increased Chinese investment in the American economy.

So much so that the Trump administration has recently stepped up oversight into transactions that might affect national security. After Congress signed off on this expansion, the New York Times earlier this month reported “the administration signaled that it would apply its new authority very broadly and would review any foreign transaction involving a business that designs or produces technology related to 27 industries, including telecom, semiconductors and computers.”

Into this climate comes a new report from Brig. Gen. John Adams, U.S. Army (Ret.), on the security threats facing the American freight rail network. (You remember Gen. Adams -- he prepared for the Alliance for American Manufacturing a 2013 study of military supply chain vulnerabilities.)

To illustrate the threats facing rail, Adams’ report focuses on China’s national rail company, its recent entry in the American rail market, and its tie-in to the much-discussed Chinese industrial policy – Made in China 2025, which identifies rail as a critical manufacturing sector to dominate.

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What Lessons Can Be Learned from NAFTA?

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

What are America’s shifting politics around trade going to mean for the upcoming midterm elections? What lessons from the passage of NAFTA – and approximately 25 years of living with it – can advocates for American manufacturing and workers apply to its proposed replacement, the United States-Mexico-Canada Agreement?

Those were the among the topics of discussion today at the Economic Policy Institute in Washington, DC, where an expert panel unpacked the politics and policy influencing our dynamic nationwide trade debate.

Alliance for American Manufacturing President Scott Paul participated, and had this to say:

I don’t believe USMCA or trade are going to be major election issues. … I think an interesting question, though, is how does (USMCA) get passed? Because, ultimately, the congress has to approve it. And when you think about it, there’s not a good past reference to this. In ’93 (when NAFTA passed), you had a largely Democratic setup. Bill Clinton promised changes, it squeaks through with a number of deals and logrolling built into it. We were coming off a bad economy and into a better economy.

“Then in 2015-16, TPP gets done. You have a Republican Congress that should want to do this because they’re all-free traders, and a president (Barack Obama) who largely agrees with their agenda on this, and it doesn’t happen!

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Canada Erects Steel Safeguard Tariffs

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

Time for another steel tariffs update!

A few months ago, Canada was considering erecting safeguard tariffs against certain steel products after America’s broad steel tariffs caused a surge of dubiously cheap imports to wash up in the Canadian market.

It looks like Canada is done considering. Those safeguards are going up. Reports the Wall Street Journal:

The goal of the so-called safeguard measures is to prevent a surge of overseas steel imports from entering Canadian markets. Canada’s steel industry has complained in recent months that U.S. tariffs on steel and aluminum, imposed on national-security grounds and affecting most countries, have caused more shipments of cheap steel to be diverted to Canada from the U.S. …

The new measures could address concerns from the Trump administration that foreign companies are using Canada as a backdoor to move their metals into the U.S., trade watchers say. Canada is trying to convince the U.S. to lift tariffs on steel and aluminum imports from Canada, which it imposed earlier this year on national-security grounds. Canada is the largest foreign supplier to the U.S. of both metals.  

The national security tariffs on steel and aluminum were not lifted as a result of the renegotiated NAFTA, and have been received as an insult north of the border, according to Politico’s Alexander Panetta.   

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U.S.-China Trade Fight Increasingly Includes Currency

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

The last time the United States labeled China a currency manipulator was 1994. It looks like it might be preparing to do so again.

U.S. Treasury Secretary Steven Mnuchin, whose department is responsible for the biannual report (due out next week) that identifies currency distortions around the globe, didn’t flat out say so in an interview with the Financial Times, instead saying Treasury was “very carefully” monitoring the Chinese renminbi, which has fallen significantly during the past year.

But there has been speculation for some time that the Trump administration might take the plunge and place China on this list as part of the larger trade dispute between Washington and Beijing. And now other senior (and anonymous) Treasury officials are worrying about the trading value of the renminbi, too, before Secretary Mnuchin travels to a meeting of finance ministers in Indonesia.  

Naming China (or any other country) a currency manipulator via this report doesn’t immediately do anything. It doesn’t trigger sanctions, but it would require the administration to enter into direct talks with the country it accuses. And it would likely further chill relations between the Trump administration and Xi Jinping’s government in the context of the ongoing trade dispute.

While it’s hard to see how relations could get icier, currency manipulation is a big deal. By keeping a currency undervalued, a country can make its exports less expensive and imports more so. That has directly contributed to the yawning U.S. goods trade deficit with China in years past and has cost the United States a substantial number of jobs.

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The New NAFTA Has an Interesting Rule In It

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

A NAFTA renegotiation has been completed. Go put your transition shades on and head out to the Rose Garden to join President Trump for a victory lap!

It’s not a done deal, of course. Legislatures in all three countries will need to approve the United States-Mexico-Canada Agreement (USMCA), and, given the complicated politics of trade in this country, that is no sure thing.

But, as we said on Monday, there’s a lot that stands out in the text, including: stronger rules of origin for auto manufacturing, side letters on steel and auto tariffs, and improved labor protections for Mexican workers that could ultimately help workers in America. Vox explains:  

One of the biggest complaints against Mexico right now is that labor unions are largely controlled by employers, and workers are not even part of contract negotiations. So it’s no wonder why Mexican factory workers are earning so little. The average hourly wage for factory workers in Mexico is just over $2 an hour, and the country’s minimum wage is roughly $4.15 for a full day’s work. These low wages attract US companies to operate in Mexico.

The new labor rules in Trump’s pact with Mexico are supposed to remove the incentive to keep Mexican workers living in poverty. Under the new deal, the United States can use the same dispute system to resolve labor complaints that NAFTA previously allowed only for commercial trade violations (such as exceeding trade quotas).

So that’s cool. But there’s other interesting stuff in there, too. What’s this new clause all about?

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As Trade War Ramps Up, China Wonders Aloud What Trump’s Intentions Are

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

An interesting story appeared in today’s Washington Post, about China’s shifting reaction to the burgeoning trade war with the United States. Reporter Anna Fifield spoke to Paul Haenle, a former Bush and Obama administration China policy adviser, who had this to say:

“Early on, the Chinese had a very simple narrative that all this trade stuff was about Trump's short-term political objectives, about getting a tweetable victory. … Now, they’re at the other end of the spectrum. Now it’s all about the U.S. trying to block China’s rise.”

Huh. The article lists the other evidence the Chinese state media has pointed to. The revival of the “Quad” dialogue. The possibility of U.S. sanctions over human rights abuses against Muslim Uighurs in China’s west. The suspicious date of the latest U.S. tariffs, which happened to line up with the anniversary of the 1931 Japanese invasion of Manchuria! It’s beginning to look downright conspiratorial, and it’s all right in front of their noses: The United States is out to get China.  

But we should cut them some slack. Though it may be easy to roll your eyes at such commentary coming from state organs in China, a lot of people have a hard time wrapping their heads around President Trump.

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Foxconn Springs a Surprise for its Wisconsin Factory Plans

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

When we last checked in on Wisconsin’s plans to add a Foxconn plant to the southeast corner of the state, there was a lot of skepticism. None of that skepticism has abated, despite cheerleading from Gov. Scott Walker.

The governor -- currently locked in a tight race for re-election -- remains very bullish that this manufacturing facility, which could receive up to $4 billion in public subsidies if it follows through with its contractual plans to create 13,000 jobs in the Badger State, will come to fruition.

But there’s a new wrinkle to the Foxconn development saga: Foxconn might not build the type of factory it originally agreed to build! The Milwaukee Journal Sentinel reported this week:

“In a shift from its stance of two months ago, the company on Wednesday did not offer assurances that it still plans to build the type of liquid crystal display panel plant the contracts cite.

“Known as Generation 10.5 fabrication facilities, or fabs, such plants are the largest and most expensive in the display industry. They produce very large panels, such as 65-inch or 75-inch television screens, that are cut from ultra-thin pieces of “mother glass” measuring about 9.5 feet by 11 feet.

“Foxconn’s original plans last year called for building a Generation 10.5 plant, and both the state and local agreements reached with the company define the project that way.”

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The President Is Cooking Up More Beef with Harley-Davidson

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

President Trump welcomed members of a “Bikers for Trump” group to one of his golf resorts over the weekend. This must’ve had him thinking about motorcycles, because the next day, he fired off a tweet about Harley-Davidson, the Wisconsin-based manufacturer that started out Trump’s presidency in his good graces … only to run up against him after it used the administration’s steel and aluminum tariffs as an excuse to offshore some production of motorcycles to be sold to the EU.

Now, he’s suggesting a boycott.

That’s a pretty extraordinary move, for the president to single out a company like that. The company’s shares slid a little bit on Monday. Way to go, Mr. President, I guess.

Why would he do that?

Could be he read the New York Times articlethat sent a reporter to the annual Sturgis motorcycle rally and found bikers who saw through Harley’s tariff-blaming nonsense and acknowledged its plans to open factories offshore to supply growing markets in Asia and Europe (Harley sales stateside, on the other hand, have been declining for years).

Or maybe he sees a political value in it, and is trying to shore up support in the biker demographic – older, white, patriotic, often military veterans – by attacking the company and siphoning off its iconic, American-made bona fides.

That’s probably only half-right, but who knows? After all, he followed up his Harley tweet with a few denigrating a former White House aide – the one who was once a contestant on The Apprentice – with whom he currently has beef. It’s just as possible that it’s all simply stream-of-consciousness nonsense, albeit with stock-rattling consequences

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Union Matters

What's Wrong with GM?

Corporations’ stranglehold on our economy was put on further display last week, when General Motors announced it was laying off up to 14,000 workers across North America.

On a special episode of “State of the Unions,” co-host Tim Schlittner talked with AFL-CIO Industrial Union Council Executive Director Brad Markell, a lifelong UAW member, about what the layoffs say about the state of the economy as a whole:

Tim Schlittner: “Reading the CEO’s statement, Mary Barra, where she says this is about making GM agile, resilient and profitable, then thinking about all the stock buybacks, thinking about some of the incentives they got in the tax law that just passed. Mary Barra made about $22 million last year—that’s 295 times more than the GM median employee—my feeling is like this is crap. That’s just a crap excuse for hoarding more at the top, at the expense of the workers that make GM go. Am I wrong to say that?”

Brad Markell: “I think there are a couple issues there from my point of view. Mary Barra makes a lot of money and executive pay is out of control in this country. Part of what’s the problem with executive pay is how is it incentivized? It’s not that Mary Barra making $22 million is going to kill the company. It’s what does she do to get there, right? What does she do to make those cuts and—and those things that Wall Street wants to see because so much of it’s stock options—so instead of playing to the real economy, you’re playing to Wall Street. That’s a problem.”

Tim Schlittner: “And the stock went up that day. So Wall Street saw this decision to close these plants and basically took that as a positive sign, which shows to me an economy that is completely out of whack.”

Take a listen to the full episode here.

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Who Really Pays for Tax Cuts?

Who Really Pays for Tax Cuts?