NMW speakers encourage common ground with China

By Plant Engineering Staff March 31, 2006

The role of a growing global economy was on the minds of attendees at the 16thNational Manufacturing Week keynotes this week in Rosemont, IL. The topic was also the topic of three addresses by leaders from industry and government.

Caterpillar chairman and CEO Jim Owens called on policymakers focus on keeping U.S.-China relations positive and constructive at his Wednesday, March 22 keynote. “Personally, I can think of no faster path to a worldwide recession than for the twin engines of the global economy — the United States and China — to turn against one another,” said Owens. “Both countries need to make an extra effort to ensure that we treat each other with mutual respect. Rather than threatening protectionism, leaders must redirect their energies toward improving competitiveness and opening markets,”

Owens specifically called on U.S. lawmakers to reject legislative proposals to impose tariffs on Chinese imports. Instead, he suggested that China would be more responsive to the trade concerns of the United States if China had a greater role in multilateral organizations such as the G-8, The International Energy Agency and The International Monetary Fund.

In the last few years, Caterpillar has more than doubled its workforce in China and significantly expanded sales in China. At the same time, Caterpillar’s U.S. exports to China have increased by 40%—helping to create more than 5,000 new production jobs at Caterpillar’s U.S. based facilities.

“I’m optimistic about the future of U.S. manufacturing. We have our challenges, but they are no more formidable than those we’ve overcome in the past,” Owens said. “The recipe that has made Caterpillar a successful manufacturer in the global marketplace can be used by others.”

Jack Perkowski, founder and CEO of Asimco, the leading auto parts manufacturer in China, said the economic relationship between China and the U.S. is closer than ever. “The economies of China and the U.S. are now so closely linked you can’t talk about one without the other,” Perkowski told the attendees Thursday, March 23. “This was not the case even 10 years ago. In 1994, China had less than $25 billion in foreign currency reserves. Today it is over $1 trillion. China is now the largest investor in the U.S. economy.”

Perkowski also noted there are specific differences between the cultures, and U.S. manufacturers need to understand those differences when looking at the market. “If you have a problem, the U.S. manager will pull out the contract and call a lawyer,” Perkowski said. “A Chinese manager doesn’t go near the contract but starts thinking about who they’re going to talk to, to fix the problem.”

“You’ll have a lot more success doing things the way they are dong in China.”

U.S. Commerce Secretary Carlos Gutierrez also addressed the attendees, noting that greater success in education would lead to greater manufacturing success.

“Two-thirds of R&D is within the private sector,” Gutierrez told the audience. ”We need to protect the intellectual capital, encourage engineers and scientists to continue to work and pursue advances in technology and innovation.

While Gutierrez noted that education is key to leadership in manufacturing, “the U.S. is being outpaced by other countries. Manufacturers can help by volunteering at the school level — going into the schools and universities, helping to show the benefits of a career in math and science.

“Get involved in making our country more competitive,” he added. “I encourage manufacturers to be part of increasing U.S. competitiveness, supporting students and encouraging them to pursue careers in math, science and engineering.”