In an effort to address the loss of three million jobs since January 2000, the Bush Administration has nominated Al Frink to be the first Assistant Secretary of Manufacturing, a newly created post within the Commerce Dept.
Frink is a co-founder and executive vp of Fabrica International, a carpet and rug manufacturer that employs 400 workers. He will be officially charged with the economic task of ensuring the health of the sector— and the unofficial political task of making sure manufacturing jobs stay in America.
According to The Wall Street Journal Online Nebraska businessman Anthony Raimondo was previously selected to fill the position but dropped out when it was discovered he outsourced some of his operations to China. Many of the three million jobs lost have been outsourced in favor of cheaper overseas labor.
“Al’s extensive background as a manufacturer makes him a great candidate to serve because he has walked in their shoes and knows first hand the barriers that are challenging American manufacturers,” said Commerce Secretary Donald Evans.
While manufacturing job losses have been dogging the Bush administration in campaigning for the coming election, the whole picture is not as bleak when increasing output and productivity are considered.
On the job issue, there are indications that manufacturing job losses are leveling off. The Bureau of Labor Statistics posted only a 0.02% (3,000 jobs) decrease in construction jobs from January to February.
There is evidence that manufacturing jobs are set to rebound in the coming months, said Chris Brady of Commercial Vehicle Consulting, noting that businesses are spending more. Truck manufacturers are anticipating brisk sales through the year and have ramped up production as a result. Volvo and Cummins are among the manufacturers that recently announced adding second shifts to plants in America.
“It shows that you can’t increase output by just productivity alone,” Brady told Fleet Owner.
Meanwhile, the productivity factor has been consistently positive throughout the 90s and throughout President Bush’s term. Manufacturing output per hour has seen an almost unbroken upward trend since 2000. While this is great news for business, it does little to help the administration politically.
Given this situation, a big question remains. Will the introduction of a manufacturing czar in the political picture affect the sector positively?
“In the short term, Frink won’t affect anything dramatically,” Brady said. “The best you can hope for is that he may change things in the long term depending on what kind of power he gets.”
Brady points out that despite leveling job losses and increasing productivity the manufacturing sector remains somewhat volatile as it is still restructuring.
“It happened in the early to mid-80’s due to the rising dollar and Japan becoming a major supplier. Now you have a different situation today with China becoming a major supplier. Some segments of the sector will prosper and some will die off,” Brady said.