WCA July 2007

From the Americas

asserting that US factory owners and workers have been hurt by Beijing’s allegedly improper currency manipulation and industry subsidies. It also claims that American manufacturers are not well served by the National Association of Manufacturers (Washington, DC), the nation’s largest industrial trade association. NAM denies the accusation and itself claims credit for putting the Chinese currency problem ‘on the [Bush] administration’s radar screen.’ The founding members of the Alliance for American Manufacturing are: US Steel, Mittal Steel, AK Steel, Alcoa, Allegheny Technologies, and Goodyear Tyre and Rubber Co, which has an extensive presence in the aerospace, military, and hardware technology industries. International Herald Tribune , outlined the main mission of the group, which announced its formation on 26 th April in newspaper and online advertisements: “[It] aims to be partly a research organisation, tackling subjects like international trade practices and what alliance officials say is inadequate enforcement of trading regulations by the US government. “The group also plans to focus on health policy because of concerns that high health costs have hurt American competitiveness.” (‘Steel Union Joins Companies to Promote US Manufacturing,” 26 th April). Leo Gerard, president of the Pittsburgh-based USW, said his union pushed for the alliance because it believed the National Association of Manufacturers has not been forceful enough in seeking to preserve US manufacturing jobs. In the matter of China, he declared that NAM did not vigorously challenge trade violations because many members of the association had operations in China and did not want to anger the Chinese government. Clyde Prestowitz Jr, president of the Economic Strategy Institute, a Washington-based policy research organisation that has long promoted American industry, endorses the view that the new group grew out of tensions within NAM. “There’s a civil war going on within the American manufacturing establishment,” said Mr Prestowitz, who is not connected with the alliance. “It’s a divide between companies that are global manufacturers and companies that are mainly US manufacturers.” These companies have clashed over such issues as how vigorously Washington should challenge China’s trade practices and whether promotion of free-trade agreements helps financial institutions at the expense of manufacturers. But what is acknowledged by all parties is that the US has lost one-sixth of its factory jobs over the last six years. “The haemorrhaging of manufacturing jobs is hurting America down to the local level,” Terrence Straub, US Steel’s senior vice president for public policy and government affairs, told the Tribune . “Until and unless there is a political understanding of that – and political attention paid to that – our fear is that it won’t change much and in 10 years the American manufacturing base could be gone.” In brief . . . Some economists in Japan have warned that a slowdown in the US economy, which is still largely ❖ Steven Greenhouse, of the

limited to the housing sector, could inhibit American demand for Japanese goods. But trade statistics released by Tokyo on 25 th April showed that exports to the US, Japan’s largest export destination, rose for the 26 th consecutive month in March, and in fact grew 2.4% over March 2006. Virgin Blue said on 22 nd March that it would buy US$1.8 billion worth of planes from Boeing Co (Chicago) as the Australian airline steps up its plans for long-haul flights to the United States. Virgin Blue said it would buy six Boeing 777-300ER widebody aircraft, with an option for six more, and had signed an agreement with the International Lease Finance Corp for a seventh. The purchase is part of Virgin Blue’s plans to start flights to the US beginning in 2008 as it seeks new ways to overcome competition on its routes within Australia and to islands in the South Pacific. No surprise but still a shock: Toyota’s first-quarter sales put it out in front of General Motors for the first time ever Global sales reported by Toyota Motor Co for the January- March period hit 2.35 million vehicles, topping the first-quarter tally for General Motors Corp of 2.26 million. The Japanese auto maker is expected to maintain its lead over the Detroit giant for the rest of the year, which would confirm its status as the world’s No 1 auto maker. Toyota is achieving record profits at a time when much of the industry is struggling. When results are in for its 2006 fiscal year, Toyota is expected to have earned $13 billion – much of it on GM’s home ground. Toyota’s American sales rose more than 12% last year, and are increasing at a double-digit rate again this year. The company’s Camry has been the best-selling car in the US every year except one since 1997. As noted by Detroit Free Press business writer Joe Guy Collier, the idea of Toyota surpassing General Motors is something many longtime Detroiters thought they would never see. GM has been the world’s largest auto maker for 76 years, and there was a time when it commanded more than half the US market – almost, it seemed, by right. (‘Toyota Takes No 1 Spot from GM,’ 25 th April). While those days are long gone, industry experts consulted by Mr Collier do not believe the latest results necessarily spell doom for Detroit. Analysts pointed out that GM is making the tough choices that should help it in the long run. After losing $10.4 billion in 2005, GM has trimmed its workforce, closed plants, reduced incentives and decreased fleet sales – the high-volume sales to rental car companies, corporate customers, and government agencies that often cut into profits. While these moves hurt GM’s chances of staying No 1, they improve its prospects for making money, Global Insight auto analyst Aaron Bragman told the Detroit Daily . ❖ Automotive

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Wire & Cable ASIA – July/August 2007