President-elect Donald Trump has made it known that he will “Make America Great Again”.
As a family owned and operated U.S. manufacturing company, GreenLeaf Industries has been active and outspoken in the value of re-shoring work to America. We have successfully won back custom plastic injection molding work and created jobs in our hometown of Lenoir, City Tennessee. As a result, more companies who have outsourced plastic part manufacturing off-shore are now engaged in talks about bringing manufacturing back home.
We care a great deal about the issue of securing U.S. Manufacturing and American jobs… so what our President-Elect intends to do about supporting the issue hits close to home.
So what exactly does it look like for the Plastic Injection Molding Industry and U.S. Manufacturing as a whole with Trump at the helm?
Most have heard that Trump plans to return America to its former glory through economic stimulation. So far, Trump has promised to bring not only manufacturing but non-manufacturing jobs back to the states.
The question is whether he will… or can, actually follow through on his promise to America.
If Trump successfully blocks the outsourcing of manufacturing jobs to foreign countries, he just might kick-start a sluggish economy in which nearly 100 million working-age adults are unemployed. That’s a good thing… let’s pray he can at least partially jumpstart the economy.
Early Signs Show Trump Might Be Making Good on his Promise
Though Trump’s approval of corporate power brokers to key cabinet positions appears to conflict with his mantra of “draining the swamp” that is Washington D.C., most agree he has made progress on the jobs front. Trump has not yet taken office and his scolding of corporate America for jumping at the opportunity to outsource manufacturing jobs has induced some very real shock waves.
Take Carrier Corp. for example. The HVAC company planned on sending all of its jobs to Monterey, Mexico until he put the pressure on to keep a significant portion of these positions in Indiana. Carrier obliged soon after he won the election. Carrier’s acquiescence will cost the company a large part of the expected $65 million in savings that would have been realized had the move been made across the border.
In the end, he convinced Carrier executives to stay by offering $7 million in tax cuts along with a promise to decrease corporate taxes and loosen the grip on regulations.
Trump also put the squeeze on another Indianapolis manufacture, Rexnord Corp. Like Carrier, Rexnord planned to shift its work to Mexico as a means of cutting overhead costs. This outsourcing of labor would have resulted in the elimination of 350 positions in Indianapolis. Though it appears that Rexnord might move forward with its plan to rely on comparably cheap Mexican labor, the ending to this story has not been written.
He criticized Rexnord executives in a very public manner. His willingness to lambaste Rexnord’s outsourcing plan is likely responsible for the generous severance package agreement between company management and its Indianapolis workers.
Those workers hope that Trump will soon pressure Rexnord into keeping their jobs right here at home.
How Trump Plans to Rescue the U.S. Economy
Blasting corporate leaders with a severe tongue-lashing will not be enough to preserve American jobs.
The good news is that Trump appears to be well aware of this fact.
So far, he has proposed a 35 percent tariff on American companies that send jobs out of the country.
He has also floated the idea of slapping 45 percent duties on goods imported from China.
If Trump is successful in passing such legislation, companies would endure significant financial pressure to employ American workers and produce goods even those that require custom plastic injection molding right here in the good ole’ USA.
The mere fact that Trump is threatening to impose financial penalties on companies that outsource work to foreign nations might be enough to prevent corporate moves abroad.
Aside from the financial losses, a move might also severely damage the company’s reputation with American consumers. Add the fact that Trump seems more than willing to shine the spotlight on “traitorous” companies that send jobs abroad (watch out for his tweets!) and it is easy to see why corporate executives could think twice before planning a move.
Statistics to Consider
There is plenty of hyperbole and even some misinformation uttered and written about the impact of outsourcing American jobs to other nations.
The truth is that U.S. companies sent 2.3 million manufacturing jobs abroad during the Great Recession of 2007 and beyond. A whopping eight million factory jobs, some of which require plastic injection molding (dear to our own hearts), have been sent abroad since the late 1970s.
Rewind the clock to 2006 and about 200,000 manufacturing positions were sent to other nations each year. It’s reported that jobs were sent abroad for two reasons: American companies were looking to cut costs and many pivoted to low-cost foreign suppliers in place of comparably expensive domestic partners.
It must be noted that the U.S. has made some progress on the jobs front since the spring of 2010.
About 800,000 manufacturing positions have been added to the domestic economy across the past six years. The country’s factory employment is slightly above the 12 million mark. Back in 2009, this figure was 11.5 million.
According to Boston Consulting, a million more manufacturing positions will be added in the next four years. These additions are not strictly “new jobs” created by an uptick in demand or the creation of new businesses. Rather, many of these jobs are returning home after being held by foreign workers for years. American businesses are already beginning to see the value of re-shoring.
It’s even clear that there is a concerted effort to re-shore custom injection molding positions that were previously outsourced to foreign nations.
If a million or more manufacturing jobs return to the U.S. by 2020, it could put Trump in the “catbird seat” for a second term. After all, nothing matters more to the majority of Americans (as well as all people for that matter) than their economic well-being.
It is certainly possible that Trump’s tariffs turn out to be “all talk” and he (and therefore the American people) still might benefit from good timing.
The truth is that the factory closures Trump loves to reference bottomed out back in 2013. Statistics show that payroll losses to the outsourcing of labor fell to a mere 60,000 in 2015. Though 60,000 is a large number in its own right, it pales in comparison to the 230,000 payroll losses attributable to off-shoring that occurred nearly every year in the early 2000s.
It’s clear that the job loss “wound” is no longer bleeding as profusely as it once was. Combine this economic trend with Trump’s reshoring push and America could be in store for an epic economic bounce-back. Could be…
A Question of Politic Question of Political Support
Trump certainly talks a good game about reshoring jobs and returning the American economy to prominence. However, he can only do so much unilaterally.
He will need the support of Congress to pass laws that raise the price of goods imported from foreign countries and penalize companies that outsource jobs.
Some members of Congress will hesitate to lend Trump their support. They will feel that a placement of tariffs on businesses that ship jobs offshore is fundamentally unfair. Some Congressmen and women will argue corporations that sent jobs abroad in years past should not get away scot-free. After all, those who outsourced in the 1990s and early 2000s have enjoyed considerable financial gains as a result of cutting costs with cheap labor.
In the end, Trump’s ability to return the American economy to glory will likely hinge on whether he can garner enough support from what he has dubbed the “swamp” of Washington D.C.
He certainly has not made many friends during his Presidential campaign. Yet Trump can never be counted out. He defied the odds by winning the Presidency. His passionate patriotism combined with a somewhat endearing aloofness and sharp sense of humor just might be enough to win enough support amongst the swamp-dwellers of the Beltway. When you consider what is at stake for Americans, lets hope he, his administration and our elected officials find a way.
About GreenLeaf Industries:
GreenLeaf Industries is an American plastic injection molding company located in Lenoir City, Tennessee. The company provides design and production services for plastic injection and is one of the only plastic injection molding companies exclusively using all-electric injection molding machines. Established in 1999, they take pride in high-quality craftsmanship and superior customer service. An ISO Certified company, GreenLeaf Industries is extremely process-oriented with a relentless pursuit of manufacturing excellence and continuous improvement. They are family-owned and operated by two generations of hard-working, hands-on, professional engineers. The entire staff at GreenLeaf Industries is obsessive about engineering quality, on-time delivery, and cost containment for every single one of their designs and projects.