We may be on the road to recovery, but it is full of potholes

As bad as 2009 was, it really ended on a high note and brings promise for the new decade. Bloomberg reports that U.S. companies expanded in December at the fastest pace in almost four years, signaling the economic recovery is gaining speed heading into 2010.

Additionally, the Manufacturers Alliance/MAPI expects a 5% growth in manufacturing production in 2010 and 6% growth in 2011. “There are, however, cautionary flags that may dampen this recovery,” says Daniel J. Meckstroth, MAPI chief economist. “For example, job losses will continue through mid-2010; there is relatively little, if any, wage growth; credit is still difficult to obtain without stellar credit scores; housing prices may fall further; and consumers are repaying debt and building a cash cushion.”

While these cautionary flags are real and can cause major headaches for manufacturers, there are even bigger threats on the horizon. Troubling signs are surfacing that indicate manufacturing is not keeping up with technology investments and favorable government policies in order to remain competitive with emerging industrial powerhouses like China and India, and the high-tech leaders in countries such as Germany and Japan.

Worst of all, the government is not helping manufacturers to compete on a worldwide basis. Rather, they are thwarting technology investments with additional taxes. Hopefully, individuals like Ron Bloom and Aneesh Paul Chopra will come to the rescue of the manufacturing sector and get our elected officials to legislate investment tax credits rather than imposing new taxes.

Now, if you’re wondering who these individuals are, don’t panic. In all likelihood, I would guess less than 2% of all manufacturers know them. Bloom is the new manufacturing czar and Chopra was appointed to the position of chief technology officer of the United States.

Waiting for Bloom and Chopra to surface as strong manufacturing advocates may take some time. Since neither of these individuals have a manufacturing background, I have serious doubts as to what they can accomplish in the short term.

However, if you’re concerned about your business and wondering how to get U.S. manufacturing back in the world series of global competition, take the time to read “U.S. Manufacturing at a Crossroads: Choices Now Will Shape the Future.” Co-authored by Thomas J. Duesterberg, president and CEO, Manufacturers Alliance/MAPI and Emily Stover DeRocco, president, The Manufacturing Institute, this commentary on the facts about modern manufacturing can be found at mapi.net.

Expounding on the viewpoints of General Electric Chairman and CEO, Jeffrey Immelt and Rockwell Automation Chairman and CEO, Keith Nosbusch, both Duesterberg and DeRocco make a strong argument for paying attention to basic research and development, an environment promoting innovation, and to a skilled workforce. In addition, they stress the importance of making sure the incentives to invest are adequate and that public investment adds to the strength of the private economy. They also see the need for our elected officials to address cost burdens, such as those related to tax, healthcare, regulation and tort policies, all of which undermine our global competitiveness.

After you read the MAPI commentary, highlight the points most important to you and send it off to your senator, asking him/her to deliver it personally to both the new manufacturing czar and the chief technical officer. Perhaps some eyes will be opened concerning the problems U.S. manufacturers are facing.