Off-Shorers Should Shut Up

Leo W. Gerard USW President Emeriti

Whirlpool, the big appliance manufacturer, stressed in recent years its preference to make it in America.  

In 2013, it actually moved dishwasher manufacturing jobs back to the United States from Mexico. The next year, it announced a $40 million investment in its Greenville, Ohio KitchenAid plant, adding 400 jobs. Last year, Whirlpool CEO Jeff Fettig said the company would spend another $40 million to expand its Findlay, Ohio dishwasher plant, adding 50 jobs and raising to $1 billion its investment in U.S. manufacturing since 2010

Last week, Intel announced it would spend $7 billion to upgrade an Arizona facility and employ 3,000 people to fabricate advanced computer wafers – meaning its CEO Brian Krzanich chose the United States over Ireland, Israel and China where Intel already produces silicon wafers.

So it makes sense that Fettig and Krzanich serve on President Donald Trump’s new Manufacturing Jobs Initiative. The initiative is supposed to help the president promote U.S. job and manufacturing growth.

Curiously, though, named to that same 28-member committee are at least seven CEOs who have recently – and sometimes infamously – offshored manufacturing and jobs. They include Greg Hayes, CEO of United Technologies, the corporation that is shipping Indiana jobs from its Carrier subsidiary to Mexico.

The performance of the manufacturing council is crucial to large swaths of workers who voted for President Trump based on his promises to stop unfair trade and resurrect American manufacturing. In his inauguration speech, the president told those voters that he would enact “America first” policies. It is no “America first” policy to send jobs from two profitable Carrier plants in Indiana to Mexico for the sole purpose of making extra bucks. That kind of offshoring exhibits a greed first mindset. The CEOs who have pursued that philosophy should shut up and take advice from the committee’s American job creators.

Former GE CEO Jack Welch wanted to be able to put factories on barges and ship them, on a corporate whim, to countries where it was cheaper to operate.

The U.S. job generators on the committee include the likes of Elon Musk, CEO of Tesla. His cars were rated the most American-made electrics for content and assembly for the second year in a row in 2016.

The council also includes Mario Longhi, the CEO of U.S. Steel, and Klaus Kleinfeld, who last fall became CEO of Arconic, but who for eight years before that was CEO of Alcoa, the corporation that split to create Alcoa and Arconic.  U.S. Steel and Alcoa have suffered from unfair trade, so Longhi and Kleinfeld have a strong interest in policies that support American manufacturing.

But, oddly, placed on the committee was recently retired Caterpillar CEO Doug Oberhelman, who announced two years ago that the corporation would move 230 jobs making gear and engine oil pumps and valves from its plant in Joliet, Ill., to a factory in Monterrey, Mexico.

Another advisor is Nucor CEO John Ferriola, who is building a new mill in Mexico instead of the United States. The joint venture with a Japanese company will make steel for the auto industry.

Dana CEO Jim Kamsickas is on the committee too. This month, Dana is closing a truck parts manufacturing plant in Kentucky, shifting the work out of the country and killing 180 good, family-supporting American jobs. In 2007, it closed plants in Syracuse, Ind., and Cape Girardeau, Mo., and shipped the auto parts manufacturing work to Mexico. More than 250 American workers lost their jobs.

This is what happens when so many corporations transport factories to Mexico. Then the supply chain – the manufacturing of components like engines and auto parts and steel – moves to Mexico too.

For example, while Ford announced in January that it would invest $700 million and create 700 new jobs in Michigan, the auto company still intends to transfer production of its small car, the Focus, from the United States to Mexico. And yet, Ford CEO Mark Fields was chosen for the American manufacturing initiative.

The United States lost 5 million manufacturing jobs since the North American Free Trade Agreement (NAFTA) took effect. Robots didn’t do it. Trade deficits did. Corporations like Carrier and Rexnord that offshore American factories then ship the manufactured products back to the United States kill good American jobs while ballooning the trade deficit. 

Those are the problems that workers who voted for Donald Trump wanted him to solve. They want those factories and those jobs back.

That, however, is the opposite of the longstanding philosophy of General Electric. Its former CEO Jack Welch famously said, “Ideally, you’d have every plant you own on a barge to move with currencies and changes in the economy.” In other words, when a country like China manipulates the value of its currency and suppresses its workers’ wages, GE would uproot production from Peoria and float it to Beijing – allegiance to the United States be damned.  

That’s exactly what General Electric does under its current CEO Jeff Immelt. The show 60 Minutes described GE this way in 2009: “No company has gone global more aggressively than General Electric, the conglomerate that makes everything from refrigerators to MRI machines to jet engines.”

Between 2004 and 2014, the number of GE employees in the United States declined by nearly 18 percent, from 165,000 to 136,000, while the number abroad rose 19 percent, from 142,000 to 169,000.

Immelt was GE chairman that entire time. So it’s confounding that he is a member of an initiative that’s supposed to prioritize American jobs. 

Under Immelt’s leadership, not only does GE move factories, it uses offshoring as a threat when lawmakers don’t cave to its demands.

In September of 2015, two months after Congress declined to reauthorize the Export-Import Bank, Immelt announced that GE, which had been among the largest benefactors of the bank, would move 500 U.S. jobs overseas.

It was Republicans in Congress who had called the bank corporate welfare and refused to renew its charter. The bank provides financing for transactions that commercial lenders decline as too risky.

But within six weeks of GE’s threats, Congress restored the bank, with a majority of Republicans suddenly on board.

Frankly, it’s unpatriotic CEOs like Immelt and Hayes who should be stuck on a barge and shipped offshore. An American Manufacturing Jobs Initiative needs more CEOs who actually focus on making it in America. 

Leo W. Gerard also is a member of the AFL-CIO Executive Committee and chairs the labor federation’s Public Policy Committee. President Barack Obama appointed him to the President’s Advisory Committee on Trade Policy and Negotiation and the President's Advanced Manufacturing Partnership Steering Committee 2.0. He serves as co-chairman of the BlueGreen Alliance and on the boards of Campaign for America’s Future and the Economic Policy Institute.  He is a member of the executive committee for IndustriALL Global Labor federation and was instrumental in creating Workers Uniting, the first global union. Follow @USWBlogger