Geithner asserts 'critical role' of manufacturing
Thursday, April 1, 2010
U.S. Treasury Secretary Timothy F. Geithner used a trip to a Pittsburgh metals factory on Wednesday to buff the image of American manufacturing ahead of a key decision on China's currency policy, showcasing the type of heavy industry that can succeed in the United States despite stiff -- and some argue unfair -- competition from abroad.
"This is a sector that will play a critical role in helping to spur our economic recovery and contribute to our long-term prosperity," Geithner said after a day in which he toured a mill where Allegheny Technologies Inc. produces specialty metal plates. He also met with representatives of United Steelworkers and U.S. Steel.
ATI produces titanium, zirconium and stainless steel for aircraft frames, jet engines, chemical plants and other industrial uses. Company officials said investments in new equipment coupled with the unique nature of the metals they produce allowed them to remain profitable through the economic downturn. The company has a U.S. workforce of about 7,800 and several hundred employees abroad -- including at a joint venture in China.
Geithner said facilities such as ATI's show that American manufacturing remains strong -- despite what has been a steady loss of jobs as the production of textiles, consumer electronics and other goods has shifted overseas.
The loss of manufacturing jobs is central to a debate Geithner is going to have to referee April 15, when he is to rule on whether China's policy of pegging the value of its renminbi to the dollar amounts to currency manipulation. The renminbi is estimated to be undervalued by anywhere from 25 to 40 percent, giving Chinese goods an advantage in global markets -- and leading to accusations that the policy is costing U.S. jobs at a time when unemployment is stubbornly hovering around 10 percent.
In recent weeks, pressure has built among members of Congress and manufacturing and business groups for Geithner to cite China for its currency policies.
"We seem to have been in denial that this is a problem. Well, it's a problem," said Wayne Ranick, a spokesman for United Steelworkers International. He said union leaders have told Geithner that China's currency policy was "one of the chief causes of bankruptcy and job loss" among U.S. manufacturers, and urged him to act.
But there are also concerns about an open break in relations between the United States and China, and arguments in favor of addressing the currency issue by working through organizations such as the G-20 group of economically powerful countries. On Wednesday the U.S. Trade Representative's office released an annual survey of trade barriers around the world, and cited Chinese practices that it said discriminate against U.S. goods. The United States runs a trade deficit with China that has exceeded $200 billion annually for the past five years, part of an economic relationship far more complex than the currency issue alone.
Geithner has said recently that the United States cannot "force" China to revalue its currency, and said after a meeting with the United Steelworkers that it was important to keep the relationship cooperative and "work with China to create a level playing field for American exporters."
After Geithner's tour, ATI spokesman Dan Greenfield said the company agreed that the United States should fight for better market access and fairer policies from its major trading partners. But he also said plenty of American manufacturers succeed by "making things that no one else does."
Geithner's visit "was not about currencies; it was not about any specific country," Greenfield said. "It was about how a company can be successful with the majority of its employees in the U.S. We believe we can be competitive in the world economy. . . . We have to focus on what we do better than anybody else."