- The Washington Times - Thursday, June 30, 2005

U.S. factory jobs, which have declined in recent years, are unlikely to be fully restored, though manufacturing will see higher levels of output and increased market share, says the head of the National Association of Manufacturers.

“Reports of the demise of U.S. manufacturing are a bit premature,” said NAM President John Engler, who pointed to higher productivity and increasing competitiveness fueled by technological innovations and stronger export growth. “I think 2005 is turning out to be a very big year. The second half is going to be especially strong,” he said in an interview with The Washington Times.

Mr. Engler, a former governor of Michigan, suggested that the long-term structural trend in manufacturing to produce more goods with fewer workers was probably not over and that it may become more difficult for manufacturers to find technically skilled workers to fill the factory jobs of the future.

“I think you will not see us competing in areas that are heavily labor dependent, and total labor costs are a significant factor in the costs of the product,” Mr. Engler said.

“I believe that manufacturing has a very bright future, but there is certainly some capacity that has gone out of the manufacturing base here, there’s no question about that. I still think it has a lot of upside.

“Now, it may not be that upside is 5 million new jobs, but it could continue to have new levels of output, and it could capture significant market share in our marketplace.”

About 14.5 million persons are employed in manufacturing, accounting for 11 percent of total U.S. employment, well below the 17 million of a few years ago.

The decline in higher-paying manufacturing jobs has been the largest blot in an otherwise strong economy during President Bush’s tenure, a trend that was one of the Democrats’ chief economic targets in last year’s election. Mr. Bush lost most of the major industrial states in the Northeast and Midwest, where unemployment was highest.

Manufacturing, especially in the automobile industry, has been hit hard in Mr. Engler’s home state of Michigan, where the jobless rate stands at 7 percent, two points higher than the national average. Mr. Bush lost the state by more than 165,000 votes.

Asked whether the future in manufacturing is to produce more goods with fewer workers, Mr. Engler replied, “I think so. But then the people who are working, what are they going to have to have? They are going to have to have [an education in] math, sciences and statistics, the kind of educational background that is going to allow them to do high-level work.”

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