Here is a bold manufacturing revival proposal from someone who has been deep in strategy. I worked with John A. Bernaden in his roles with Rockwell Automation and the Smart Manufacturing Leadership Coalition. Now retired, he evidently has time on his hands to think. I saw his blog post go up before he sent me his press release.
[Disclaimer: Bernaden is retired and no longer works for either organization nor speaks for them.]
Not one to be bashful, Bernaden begins, “Wall Street’s short-sighted leadership of U.S. Manufacturing has created a crisis!”
“They reap; but they do not sow. They restructure to take billions; but they do not reinvest to make trillions. They destroy industries; but they do not build new ones,” said John A. Bernaden, co-founder and past vice chairman of the Smart Manufacturing Leadership Coalition, Inc., a Washington DC nonprofit group.
Past bipartisan 20th Century U.S. industrial policies and Congressional programs have been complacent in creating this crisis, he continued.
“We need new leadership to create and construct a new era of revolutionary, highly-automated, IT-driven, super-productive, 21st Century Smart Manufacturing with a long-term vision to make America’s manufacturing great again,” Bernaden said.
Other nations have long-term policies and long-range programs to more smartly support their manufacturers at home and abroad, he said pointing to a new “Policy Makers Guide to Smart Manufacturing” published last week by the Information Technology and Information Foundation (ITIF), a Washington DC think-tank. The report provides a comprehensive summary of the long-term Smart Manufacturing policies and long-range programs established by other governments around the world, most notably by China, Germany, Japan and Korea.
“As a leader who values building things, President-elect Trump will soon have an opportunity to smartly lead our nation’s Manufacturing, to renovate the world’s oldest factories, as well as to start a construction wave of smart new factories and plants in every State in America,” said Bernaden.
To achieve the President’s huge vision to make American manufacturing great again, Bernaden drafted a bold $2 trillion to $3 trillion U.S. Manufacturing Stimulus Package with almost no cost to taxpayers for Congress to consider that he released today.
Here is the gist of his proposal. Comments welcome, but I’d suggest making them on John’s site. I did graduate studies in political science, but I have little appetite for politics anymore. The refreshing thing about this proposal, however, is that I find even “conservative” business leaders going to Washington or their state capitals with their collective hands out wanting a gift. This proposal supposedly eschews that.
Between $2 trillion to $3 trillion from repatriated corporate wealth stranded overseas could catalyze a construction wave of between 2,000 to 3,000 new factories — highly-automated, super-productive smart plants, via a stimulus package developed by Bernaden, co-founder and past vice chairman of the Smart Manufacturing Leadership Coalition, Inc., a five-year-old Washington DC non-profit group. Disclaimer, Bernaden is no longer affiliated with either Rockwell or SMLC. This is his proposal all by himself.
Corporations that repatriate past overseas earnings and purchase 20-year USA Industrial Bonds will annually receive 1/20th of their investment totally tax-free, although at a zero interest rate. USA Industrial Bond funds will then become 20-year interest-free loans for States to use in stimulating the construction of new smart factories, mainly by midsize manufacturers.
To avoid federal or state governments picking “winners and losers” which has been a historic failing of past U.S. industrial policies, according to Bernaden, each state’s Governor will appoint 15-member commissions, chiefly consisting of manufacturing and business leaders, to make loan decisions.
State commissions will make loans that range from $500 million to $5 billion to construct smart factories, with typical costs averaging $1 billion each. If multinational corporations repatriate $2 trillion tax-free by investing in these USA Industrial Bonds, a state like Alabama’s share will be $34 billion to loan to business leaders who could construct about 34 smart manufacturing plants, according to Bernaden.
American midsize manufacturers, in a “Mittelstand” movement, are expected to construct most of these new factories because of this unprecedented access to billion-dollar-size, long-term interest-free loans. In Germany, the “Mittelstand” or midsize manufacturers, are renown as the engine of their economy. The Trump-size stimulus plan is also expected to create millions of new jobs needed to operate as well as supply, support and service these newly constructed 21st Century smart factories
[Gary talking again] I find the interesting thing about this proposal to be reference to a highly successful strategy from Germany. The US seems to venerate hugeness. In the common business mind small to medium businesses exist for the purpose of acquisition to make larger companies even larger. But this inevitably stifles innovation and competition. Things grow stagnant.
Unfortunately, I doubt that a politician exists that has a clue about the German Mittelstand. Further, none seem to have any clues about manufacturing or technology. We elect lawyers and career politicians who in many cases never worked a day in their lives building things. Prove me wrong, I dare you. [Please note: in this entire conversation I’ve not said anything about the opinion spectrum or political parties.]
Further unfortunately, I don’t find Mr. Trump to be a manufacturing guy. He negotiates deals, buys properties, builds hotels and other buildings. However, he claims true religion on helping the manufacturing guy. Here’s hoping this proposal gets a little visibility and at the least spurs some conversations around the country.
