Category: From Alliance for American Manufacturing

How holiday favorite Wendell August Forge rose from the ashes, stronger than ever

Jeffrey Bonior Researcher/Writer, AAM

The artisans and craftsmen at Wendell August Forge have been making holiday-ready hand-hammered metal gifts and ornaments in Mercer, Pa., for nearly 100 years.

But in 2010, it all went up in flames.

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Located about 40 miles north of downtown Pittsburgh — the capital of the American steel industry — America’s largest and oldest forge sits tucked away in an industrial part of Pennsylvania.

Forging is one of the oldest working techniques of artisans. It involves heating, hammering and shaping metal objects. Every Wendell August Forge piece follows this old school tradition, hand-shaped one at a time by the company’s craftsmen (who also are members of the United Steelworkers).

Wendell August Forge makes a variety of items, including holiday gifts — the company is well-known for its one-of-a-kind Christmas tree ornaments — and just launched a new line of NFL-themed coasters and keychains. The company also creates home décor items including bowls, dishes, cutting boards, glassware, and other tabletop pieces. Wendell August Forge has a gift for nearly every special occasion, including wedding gifts, commemorative gifts, baby gifts, Mother’s and Father’s days gifts and patriotic holidays. 

Will Knecht owns Wendell August Forge with his sister. His mother and father bought the company in 1978, and Knecht continues to take pride in the time-tested traditions of its past.

“We really believe in this thing called American craftsmanship. We get calls two or three times a quarter with people saying there is this factory in China that you guys should really consider, and it is no way,” Knecht said. “We were Made in America before it was cool to be Made in America, and we will continue to be Made in America.”

But the future of the tough-as-metal company looked grim in 2010, when a fire caused the factory, corporate offices and flagship retail store to burn to the ground. This was just after the company had gotten its largest order ever from the Pittsburgh Penguins National Hockey League team.

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Global Steel Industry Groups Unite for Action on Steel Excess Capacity Crisis

Monique Mansfield

Monique Mansfield Press Secretary, AAM

Steel industry associations in the Americas, Europe, Africa and Asia are urging their governments to intensify efforts to confront and solve the issue of excess capacity in the global steel sector.

Apparently, current methods just don’t seem to be working effectively!

The 19 associations involved released a statement, urging their various governments into action including implementing “strong rules and remedies that reduce excess capacity, its impact and causes.”

Just get some strong rules going! Sounds like a simple fix, right?

The solution becomes more complicated as the unexpected growth of new steelmaking facilities have contributed to trade tensions and have aroused some concern. Wherever could those be? The steel industries concurrently agree that the systems in place aren’t working and that “efforts by the governments to eliminate practices that lead to excess capacity should be doubled.” And they also praised a September statement from the Organization for Economic Cooperation and Development that expressed concern over the recent capacity expansions.

In the statement the associations said they’re “hopeful that the diligent efforts of Japan, the current G20 Chair, are successful in extending the G20 Global Forum on Steel Excess Capacity beyond 2019.” That means these industries want these global organizations to keep talking about fixes to the overcapacity problem.

But let’s be clear about where the overcapacity problem starts and stops: In China.  

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Global Steel Industry Groups Unite for Action on Steel Excess Capacity Crisis

Monique Mansfield Press Secretary, AAM

Steel industry associations in the Americas, Europe, Africa and Asia are urging their governments to intensify efforts to confront and solve the issue of excess capacity in the global steel sector.

Apparently, current methods just don’t seem to be working effectively!

The 19 associations involved released a statement, urging their various governments into action including implementing “strong rules and remedies that reduce excess capacity, its impact and causes.”

Just get some strong rules going! Sounds like a simple fix, right?

The solution becomes more complicated as the unexpected growth of new steelmaking facilities have contributed to trade tensions and have aroused some concern. Wherever could those be? The steel industries concurrently agree that the systems in place aren’t working and that “efforts by the governments to eliminate practices that lead to excess capacity should be doubled.” And they also praised a September statement from the Organization for Economic Cooperation and Development that expressed concern over the recent capacity expansions.

In the statement the associations said they’re “hopeful that the diligent efforts of Japan, the current G20 Chair, are successful in extending the G20 Global Forum on Steel Excess Capacity beyond 2019.” That means these industries want these global organizations to keep talking about fixes to the overcapacity problem.

But let’s be clear about where the overcapacity problem starts and stops: In China.  

China, Which Has a Steel Overcapacity Problem, Leaves Forum on Steel Overcapacity

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

Last week we noted how an international group of steel industry associations had released a statement, calling on their governments to figure out a way to reduce steel production overcapacity – the difference between an industry’s potential output and current production.

They released it ahead of a meeting of the G20 Global Forum on Steel Excess Capacity, which convened in Japan over the weekend. That forum was created in 2016 to find some international consensus on how to fix the overcapacity problem, which is (not entirely but) mostly a problem created by China’s massive steel industry.

The Chinese government might dismiss that as an outsider’s biased opinion, but consider the context in which China’s steel industry grew. In the early 90s it became a “strategic” industry in government planning documents. According to an analysis of the industry produced a few years ago at AAM’s behest by Duke University, “state direction, supplemented by state subsidies, incentives, and strong internal demand for steel, had an important role in developing China’s steelmaking capacity.”

And so it went from responsible for a fraction of global production in 2000, when it produced 129 million metric tons (MMT), to approximately half of production in 2015, when it produced 804 MMT. While most of that Chinese steel was consumed in China – the country spends a lot on infrastructure as a form of economic stimulus, and infrastructure requires steel – its considerable excess spilled out into the international market, depressing prices and triggering bankruptcies and layoffs. This was essentially the preamble to the import tariffs the Trump administration finally raised on steel in 2018.

So back to this weekend’s G20 steel forum: Was any news created during this meeting? Anything of note?

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Why China’s CRRC and BYD Pose Such a Serious Threat to the United States

Brian Lombardozzi VP for State Government Affairs, AAM

People seem especially skeptical of China these days.

South Park put together a whole episode about China (and saw its existence in China vanish). The NBA spent the week stumbling over itself to appease the Chinese government, and then on Oct. 9, at least three fans in Philadelphia and in Washington, D.C. were removed from NBA exhibition games at U.S. arenas for holding up signs in support of pro-democracy protests in Hong Kong. 

That same day, New York Times opinion columnist Farhad Manjoo penned this:

“The People’s Republic of China is the largest, most powerful and arguably most brutal totalitarian state in the world. … Yet unlike the way we once talked about pariah nations — say East Germany or North Korea or apartheid South Africa — American and European lawmakers, Western media and the world’s largest corporations rarely treat China as what it plainly is: a growing and existential threat to human freedom across the world.”

A lot of people are finally waking up to the shuddering effects China’s model of state-led capitalism is having around the world. But many in the United States are still willing to overlook these concerns (and others, like say China’s abysmal record on human rights) so long as they can turn a profit by accessing the Chinese market.

That part of the story has gotten a lot of attention (watch that South Park episode for more). What garners less notice is that many Americans are also willing to welcome China’s heavily subsidized state-owned enterprises (SOEs) to set up shop in their communities. This is a mistake.

American Jobs At Risk

We already have seen the destructive impacts of China’s model of state-led capitalism on our domestic manufacturing sector, and the damaging ripple effects on thousands of communities across our nation. Between 2001 and 2017, 3.4 million U.S. jobs were lost or displaced because of our massive bilateral trade deficit with China.   

Most of those jobs went away because American companies offshored production to China following its entry into the World Trade Organization, which was supposed to move China toward a market-based economy (spoiler: the opposite happened).

But now China’s government-owned, controlled and subsidized companies are setting up assembly operations right here in the United States.

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China Wants $2.4 Billion from the U.S. Over an Old WTO Tariff Dispute

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

Amid an enormous trade war between the U.S. and Chinese governments, China’s trying to get $2.4 billion from the United States for its non-compliance with a World Trade Organization (WTO) ruling over the legitimacy of tariffs from the Obama era.

Yes, that’s right: In 2012 China disputed the application of a bunch of tariffs on solar panels, wind turbines, and certain steel and aluminum products, and a WTO appeals court agreed that some of the U.S. tariffs were unfair. From Reuters:

China’s request appears on the agenda of the (Dispute Settlement Body) set for Oct. 28. The United States could challenge the amount of retaliatory sanctions sought, which could send the long-running dispute to arbitration.

The office of U.S. Trade Representative (USTR) Robert Lighthizer has said the WTO ruling recognized that the United States had proved that China used state-owned enterprises to subsidize and distort its economy.

But the ruling also said the United States must accept Chinese prices to measure subsidies, even though USTR viewed those prices as “distorted”.

Without having read the text of the WTO ruling, that ruling seems kinda odd ... despite being in a vein similar to previous WTO rulings against the U.S. It’s well documented that China has for years subsidized the friggin’ heck out of these industries, saturating some of them so much that they caused global overcapacity problems. And accepting Chinese prices to measure subsidies would seem to fly in the face of the fact that China remains a non-market economy.

The lawyers are gonna wrestle this one out, and we’ll keep an eye on it. This case is illustrative, though, of a larger point: The trade policies pushed by the Chinese government were a problem before Donald Trump became president. And although negotiations toward a comprehensive deal continue, and although it’s a good thing that this guy has (however ham-handedly) squared off with China over its unfair trade practices, these problems are almost guaranteed to continue after him.

This is a long game. Whatever deal the USTR is able to reach with his Chinese counterparts needs to be a comprehensive as possible. No settling for soybeans!

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Reposted from AAM

Robots On Everyone’s Mind At the Fourth Democratic Debate

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

Another hours-long primary debate is in the books. There were 12 candidates on stage last night! For another three hours! Not a great format for TV!

That said: One of these people could be in the White House in a little over a year from now, so we should probably pay a little attention, even if we're still months away from voting. So let’s boil it down. What did we notice in last night's debate?  

Elizabeth Warren on trade vs. automation 

Moderator: “Senator Warren, you wrote that blaming job loss on automation is, quote, ‘a good story, except it's not really true.’ So should workers here in Ohio not be worried about losing their jobs to automation?”

Warren: “So the data show that we have had a lot of problems with losing jobs, but the principal reason has been bad trade policy. The principal reason has been a bunch of corporations, giant multinational corporations who've been calling the shots on trade, giant multinational corporations that have no loyalty to America. They have no loyalty to American workers. They have no loyalty to American consumers. They have no loyalty to American communities. They are loyal only to their own bottom line.”

“I have a plan to fix that, and it's accountable capitalism. It says, you want to have one of the giant corporations in America? Then, by golly, 40 percent of your board of directors should be elected by your employees.”

Insta-Analysis: That is indeed Sen. Warren’s plan. Requiring 40 percent of all corporate boards to worker-elected is not the only part of it, but it’s a real big part. You can read about the rest here.

Is she right, though, that trade’s a bigger job-loss culprit than automation? It depends on which jobs you’re talking about. Manufacturing jobs have definitely been lost as we’ve run up trade deficits with China over the years. There’s a plausible argument to be made that import competition killed off factory employment in the United States.  

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Factories Lose 2,000 Jobs in September

From the AAM

Manufacturing employment dropped in September, with the sector losing 2,000 jobs, the Bureau of Labor Statistics reported on Friday. Motor vehicles and parts saw 4,100 lost jobs, while computer and electronic products gained 3,800 jobs.   

Meanwhile, new trade figures showed that the overall goods and services deficit hit $54.9 billion in August, up $0.9 billion from July, while the goods deficit with China reached $28.9 billion.

Alliance for American Manufacturing President Scott Paul said:

September was a lousy month for factory jobs. While many pressures may have contributed to this month's employment decline, one thing is becoming more clear: Manufacturing is weak right now.

There are a couple of policy shifts that could help strengthen the sector. First, passing a robust new investment in our nation’s infrastructure. Second, reconsidering the merits of an overvalued dollar, which is hampering our exports. Third, a final trade agreement with China that will rein in its massive industrial overcapacity and subsidies, and provide our businesses and workers with more certainty and a better playing field.

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The FTC’s Enforcement of “Made in USA” is Notoriously Weak. It’s Time to Change That.

Elizabeth Brotherton-Bunch

Elizabeth Brotherton-Bunch Digital Media Director, Alliance for American Manufacturing

We cover a lot of ground here at the Alliance for American Manufacturing — Trade! Infrastructure! Tom Cruise! — but there’s nothing that gets us more excited than learning about an American-made product. Whether it’s a small piece of jewelry or a big piece of steel, we love highlighting the amazing workers and companies who manufacture their products in the United States.

After all, a lot of hard work — and often extra expense — goes into that “Made in USA” label. U.S. companies and workers must take care to ensure that “all or virtually all” of their products are made in the United States.

When something is labeled as “Made in USA,” many consumers recognize the effort that is behind it, along with the millions of jobs that American-made products support. The label can be a deciding factor when someone is deciding on what product to buy.

Made in USA means something.

And while nothing gets us more excited than a Made in USA product, nothing gets us more fired up than when a company knowingly mislabels its product as Made in USA. What’s worse is that these cheaters have been getting away with it.

It happens more than you think. In 2018, the Federal Trade Commission (FTC) caught some pretty brazen Made in USA cheats:

  • One company sold military-themed backpacks – including on military bases! – with an “American-made” label.  The FTC found that the vast majority of that company’s products were made in China or Mexico.
  • Another company made hockey pucks, and even positioned itself as “the all-American alternative to imported pucks.” All of the company’s pucks were imported from China.
  • A direct-to-consumer mattress firm advertised its mattresses as assembled in the United States. The mattresses were made in China.

But in all three of these blatant cases of Made in USA cheating, the FTC politely asked these bad actors to stop this deceitful behavior.

The cheaters paid zero fines — they kept every penny they made deliberately deceiving consumers. No notices to consumers were issued. The companies didn’t even have to admit any wrongdoing!

What’s the point in even having a strong “Made in USA” standard if it isn’t enforced?

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Teamsters Say Taxpayer Dollars Shouldn’t Go to Chinese Companies to Build Transit

Elizabeth Brotherton-Bunch

Elizabeth Brotherton-Bunch Digital Media Director, Alliance for American Manufacturing

The International Brotherhood of Teamsters weighed in on the National Defense Authorization Act (NDAA) last week, sending the chairpersons and ranking members of the Senate and House Armed Services Committees a letter outlining their priorities for the legislation.

First thing on the list? Make sure that the final legislation includes language from the Senate version of the bill that would prohibit “the use of tax dollars from supporting Chinese rail car and bus companies.” Here’s General President James P. Hoffa with more:

“As the proud representatives of American workers who both manufacture and operate thousands of American-made buses, we believe that American companies must be allowed to compete on an even playing field, free from Chinese interference into our transit system and manufacturing base.”

The Teamsters’ support for banning both rail cars and buses is significant. The Senate’s version of the NDAA included language prohibiting China’s state-owned, controlled or subsidized companies from receiving taxpayer dollars to build rail cars and buses, but the House version of the bill only applies to rail cars.

If Congress moves forth with the House version, it would be a huge oversight, to say the least. As we’ve discussed in this space before, there’s widespread bipartisan economic and national security concern about China’s role in building both.

First, there’s the threat to 750 companies and 90,000 jobs up and down the transportation supply chain, as China is aiming to dominate rail car and bus manufacturing via its “Made in China 2025” plan. China heavily subsidizes its state-owned and controlled companies, allowing them to severely underbid on government contracts to build these systems. The point isn’t to make money — China’s ultimate goal is to put competitors out of business and monopolize the global industry.

If you don’t think that’s realistic, just look at what has happened to the pharmaceutical industry.

“When you can subsidize, when you can wholly own an enterprise like China does, you can create a wholly unlevel playing field,” Sen. Tammy Baldwin (D-Wis.) recently told the New York Times. “We’re used to that unlevel playing field existing between the U.S. and China, but now it’s happening in our own backyard.”

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Union Matters

Labor Wins

From the AFL-CIO

On Tuesday, the labor movement drove historic wins for pro-worker candidates like Governor-Elect Andy Beshear in Kentucky and new legislative majorities in Virginia. Not only did union members come out to vote in droves, 270 union member candidates were elected to public office last night and counting. This adds to the total of more than 900 union members elected up and down the ballot in last year’s midterms, a product of the Union Member Candidate Program launched by the AFL-CIO just two years ago. The share of union members who won in the 2018 midterms is two-thirds. The program will continue through 2020 and beyond, electing even more union members to public office. 

“Our efforts recruiting, training and supporting labor candidates have led to the passage of pro-worker legislation from coast to coast and everywhere in between,” AFL-CIO President Richard Trumka said.

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There is Dignity in All Work

There is Dignity in All Work