
If it’s possible to gauge administration interest in an issue by the number of mentions it gets, then a survey of State of the Union speeches since 1981 reveals that emphasis on manufacturing and the auto industry is a relatively recent phenomenon, and largely exclusive to President Obama.
Presidents Bill Clinton, George Bush Sr and Ronald Reagan didn’t talk about manufacturing at all in their addresses, save for passing, oblique references.
Before Obama’s first State of the Union in 2009, the last time any president had offered anything of substance on the automotive industry was in 1981, when President Carter said his administration had worked to help the industry “modernize and compete effectively”. He focused on reducing Americans’ dependence on cars.
The auto industry’s next mention was in Reagan’s 1985 speech, when he noted that Detroit had “overhauled assembly lines, increased worker productivity, and is competitive once again.”
George W Bush mentioned manufacturing only once, in 2004, as part of a list of things that were going well in America. He spoke about the auto industry twice, in 2003 and 2006, in reference to the need to develop alternative fuels and reduce carbon emissions. (He did, however, use the word “freedom” an average of 10 times per State of the Union, peaking at 21 in 2006.)
President Obama has cut a different path.
With General Motors and Chrysler dealing with bankruptcy – Ford escaped disgrace after then-CEO Alan Mulally prudently sold off the automaker’s excess brands just before the recession hit – the auto industry got plenty of attention in 2009.
After mentioning manufacturing in vague terms in 2011, Obama has, since his 2012 speech, been moreforthright.
In 2012, he said the auto industry was back on its feet, calling for a “blueprint for an economy that’s built to last.”
“Now, this blueprint begins with American manufacturing,” he said.
In 2013, the president said that bolstering manufacturing would become a priority.
“After shedding jobs for more than 10 years, our manufacturers have added about 500,000 jobs over the past three,” he said. “Caterpillar is bringing jobs back from Japan. Ford is bringing jobs back from Mexico. And this year, Apple will start making Macs in America again.”
Last year, the president mentioned manufacturing five times in his State of the Union address, zeroing in on the high-tech sector.
“We also have the chance, right now, to beat other countries in the race for the next wave of hi-tech manufacturing jobs,” he said.
This year’s State of the Union address is likely to signal the direction Obama plans to take in his last two years in office. That seems to be to aggressively promote US auto manufacturing.
In a speech he made January 7 at Ford’s Michigan assembly plant, Obama said manufacturing was leading the way in job creation in America, and called the auto industry the “heartbeat of American manufacturing.”
The president made similar remarks in October at Millennium Steel, in Princeton, Indiana.
“About 10, 15 years ago, everybody said American manufacturing is going downhill, everything is moving to China or other countries,” he said, adding that the sector had benefitted from increased investment into new technology and plants, and new training opportunities for workers. “What we’ve now seen is manufacturing driving economic growth in a way we haven’t seen in about 20-25 years.”
A report released last summer by the US Department of Commerce’s economics and statistics administration supports the president’s claim.
It says that, between February 2010 and May 2014, about 646,000 jobs were added to the manufacturing sector, and that the number of “manufacturing establishments” had risen for the first time since 1999. The value of US manufactured goods exported in 2013 was $1.3trn.
In the auto industry in particular, the change has been marked since its near collapse around the time Obama entered office.
The US Bureau of Labor Statistics reported that the number of jobs in the automotive sector has risen to nearly 900,000 since 2009. Between 2001 and 2009, the number of jobs in motor vehicle and parts manufacturing had dropped from more than 1.1m to just over 600,000.
In fact, the automotive industry is a bright spot in manufacturing – a notable reversal from only a few years ago. In 2010, the Commerce Department’s international trade administration said “portion of US production attributable to manufacturing has steadily declined since 1965.”
The trend in US manufacturing is now upward. An ESA report optimistically points out that between 2009 and 2013, 75% of research and development spending, 52% of exports, and 43% of foreign direct investment have been generated by the manufacturing sector.
Coal manufacturing was the largest contributor to that, racked up more than $370 bn in shipments and more than $70bn in exports. Other significant contributions to America’s manufacturing portfolio during that period included chemicals, primary metals, machinery and food.
It helps America’s position that its largest rival, China, is slowing down, with manufacturing becoming more expensive there. According to a report from Bloomberg Businessweek in October, wages in China’s Yangtze delta had risen from 82 cents an hour in 2001 to about $5 per hour this year. Oil prices have also risen since 2001, from $20 to about $80 a barrel, making manufacturing in China that much less attractive.
A recent Wall Street Journal article suggests that in the US, stable wages, competitive energy prices and the desire to shorten supply chains is causing many American companies to consider putting “Made in USA” stickers on products.
