Yes, There Is Still a Way to Save (and Create!) American Manufacturing Jobs
Donald Trump and other 2016 candidates say they’ll bring factory jobs back from overseas. Here’s how they can actually do it.
Like so many American industrial cities before it, the town of Anniston, Alabama could have fallen into a deep, steady decline from which it never recovered.
Founded in 1873, Anniston was built on manufacturing, employing workers in the iron and textile industries. In 1917, Anniston got another boost when the U.S. Army opened a facility on 18,952 acres adjoining the town, which later became Fort McClellan.
Anniston, which is located on a slope of Blue Mountain, took a major blow to its economy when Fort McClellan was closed in 1999. The Army base had an average military population of about 10,000 people and employed 1,500 civilians in the last decade of the 20th century.
While the military moved on, the manufacturing sector in Anniston has been able to keep this quaint city on its feet — and a little-known provision included in the 2009 economic stimulus package is among the reasons why.
As presidential candidates from Donald Trump to Bernie Sanders take up the cause of blue collar employees on the campaign trail, they’d be wise to look to Anniston as an example of how America can save factory jobs and rebuild its manufacturing base.
Anniston is home to Tyler Union Foundry and M&H Valve, both subsidiaries of McWane Inc., a family-owned company headquartered in nearby Birmingham. Both facilities manufacture parts used in water infrastructure systems, like ductile iron pipe and fittings, fire hydrants, cast iron soil pipe and related products.
Both facilities directly benefited from Buy America provisions initially set up in President Obama’s 2009 American Recovery and Reinvestment Act. The stimulus legislation applied a Buy America requirement to the $8 billion appropriated by Congress in the Clean Water and Drinking Water Revolving Loan Funds, requiring that all steel pipe and related water infrastructure products be made in America. Congress has renewed the provision through 2016 on an annual basis with the bipartisan support of local members of Congress.
Because of Buy America, Tyler Union and M&H Valve have been able to avoid layoffs and permanent job loss. The manufacturing plants are up and running 24 hours a day, providing much-needed material for America’s neglected infrastructure and good-paying, middle-class jobs for factory workers and the entire community.
“I have seen the hard times when China first started manufacturing and America was buying the water fittings. Man, we were down to 30 hours a week. And it hurt. It really hurt,” said Brian Smith, a 45-year-old lab technician at Tyler Union. “When the government finally got involved in this it helped us tremendously. If this plant shut down, it would be bad. It would be like a ghost town. It hurt bad when Fort McClellan closed down, but luckily we still have jobs around here.”
Bucking the Job Loss Trend
Unfair foreign trade has dominated the 2016 GOP primary season. Frontrunner Donald Trump has taken up the cause, boasting he’ll bring jobs back from China. Trump’s unorthodox approach to politics aside, he has tapped into a real concern among many Americans about blue collar job loss. On the Democratic side, Bernie Sanders’ success can be largely attributed to his tough trade talk — especially in Michigan, where he scored an upset victory.
Roughly 5 million American manufacturing jobs have been lost since 2001. The pending Trans-Pacific Partnership trade agreement may well lead to further job loss — a pro-TPP study finds 50,000 Americans could be out of a job each year during implementation; another says nearly 450,000 will be lost.
Many of those jobs were lost to China. There’s now even a term for the devastation of manufacturing job loss — “China Shock” — penned by researchers David Autor, David Dorn and Gordon H. Hanson, who noted in a January 2016 paper that Americans who lost their job due to trade with China continue to struggle.
But in Anniston, McWane’s facilities are keeping this city of 22,000 people going strong.
“I think manufacturing is a big part of Alabama,” said Jerry Clark, a 65-year-old pattern maker at the Tyler Union foundry. “I think the Buy America program is great for the people in the United States and it needs to continue on. China is stealing American jobs and I think it’s going to affect not just our grandkids but our great-grandkids if we don’t make a stand and do something about it now.”
Clark has worked at the foundry for nearly 45 years and his current job is designing the moldings used in creating the cast iron steel. He’s also a married father of two adult children and three grandchildren, and his wife has three children from a previous marriage.
His career at Tyler Union Foundry has provided him and his family with a comfortable middle-class lifestyle. He has faith in the future of American manufacturing.
“I’ve seen several plants shut down and I can’t really see this foundry shutting down,” Clark said. “I think the McWane family has really put a lot of money and a lot of trust in the people they need at the foundry. It’s not just the direct impact on Union Foundry, it’s the other people too that support Union Foundry. The trucking companies, the people that bring in the scrap steel, the people that bring in the coke.”
(For those not familiar with steel manufacturing, coke is selected coal from specific mines and is an essential ingredient, along with limestone and iron ore, in producing steel.)
“Buy America helps everybody. Everybody in the area. Everybody in the community. It provides for everybody. We need to make all of our parts here in America. That will provide jobs itself.”
Jeremy Austin, project manager of Logan Construction, is one of those people affected by the pipe-making supply chain. A subcontractor for Tyler Union, Austin has six full-time employees that work at the Tyler Union landfill near the plant.
When the housing market collapsed in 2008, Austin’s company and employees faced an uncertain future. That’s when he connected with Tyler Union, doing a variety of work that kept his small business intact.
“Our major projects involve Tyler,” said Austin. “Everything we do is basically for them. When we were building subdivisions we actually bought a lot of Tyler Union fittings and pipes. It’s a much better product. I feel better using American-made products. I feel better when we have to warranty our work. That’s what we put in the ground. I feel comfortable giving that to the owner.”
Austin is skeptical of so-called “free trade” with countries like China and India, whose companies operate with advantages not available to U.S. producers.
“I agree with them about free trade if we were all on the same level playing field,” he said. “But when they are not on the same level playing field, as far as environmental restraints and labor constraints, you are not getting the same quality in the end.”
Like many manufacturing factories throughout the U.S., Tyler Union has a fair share of older workers like 68-year-old Charles L. Smith, who has worked at the plant for 47 years and is the father of lab technician Brian Smith.
“Made in the USA is important to me,” said Smith, who works creating the casting molds. “When I see those pipes loading up on a truckload, that’s a big thing because I take pride in our work. I raised three kids out here. I’ve got a son working right here.”
Manufacturing is often a family affair. Smith’s son Brian and many other workers are part of a growing community of younger manufacturing employees that realize the benefits of manufacturing work.
Jake Betts is a 28-year-old computer numerical control (CNC) operator that found a home at Tyler Union after unsuccessfully pursuing a career in auto-body repair in Tennessee. He is married and a new father of his first child, a baby daughter.
“My wife will be out of work for at least six to eight weeks, but we’re not really going to miss anything,” said Betts. “I make a good salary and am lucky to get a little overtime out here. … I plan to be here until I retire. Hopefully I don’t have to take some kind of super layoff.”
When asked about the government buying American-made products, he added: “It’s important that our products are made in America. We need jobs out here to support our families and put food on the table. We’ve got to have American-made so we can do our jobs.”
“I agree with them about free trade if we were all on the same level playing field. But when they are not on the same level playing field, as far as environmental restraints and labor constraints, you are not getting the same quality in the end.”
M&H Valve Company, located a short distance from Tyler Union, manufactures fire protection and water distribution products such as fire hydrants and a variety of valves. Outside the factory doors are numerous stacks of fire hydrants waiting to be shipped to different municipalities. The hydrants vary in size according to the freeze line in a particular city.
On this day, there’s a completed set of fire hydrants in the shipping area bound for New York City. They are painted black on the part of the hydrant that is visible above ground. This is New York’s signature style.
Danny Ray Smith had earlier helped put the finishing touches on the new fire hydrants inside the factory. Smith, once owned his own small metal shop but lost his business when the economy took a turn for the worse in 2008. He is thrilled to have a job working in manufacturing that is boosted by Buy America laws.
“This job, it provides everything,” said Smith. “It provides the way of living my life. This job is my life. It pays my bills, it keeps me going.
“Buy America helps everybody. Everybody in the area. Everybody in the community. It provides for everybody. We need to make all of our parts here in America. That will provide jobs itself.”
A Ripple Effect
Tyler Union and M&H Valve employees keep small businesses up and running in the town. It’s a ripple effect, as the workers spend money at the local establishments and support the community as a whole.
Thomas Coleman, owner of Dad’s Bar-B-Que, depends on the financial success of workers in the city.
“Us small businesses have it harder than large corporations,” said Coleman. “We need everybody to be working around us to be our customers. The more you buy America, the more our customers are working and then come eat with us. It’s really important.”
Coleman’s general manager at Dad’s two locations is Kayla Harris, who oversees about 30 employees.
“As long as the employees are getting paid, then it helps boost the economy and then we make more money,” said Harris. “When the economy drops, then it’s hard for us to continue to make money and during those times we don’t make a profit.
“It’s extremely important. If you don’t buy American then our economy is not going to flourish.”
Don Hopper is the Anniston-based director of the Economic Development Council for Calhoun County. He has taken Buy America a step further.
“We promote ‘buy local’ all the time, so Buy America just makes sense,” said Hopper. “We talk about jobs, however, that really represents families. Our manufacturers are our backbone. Whether they are directly working for the McWane companies or whether they are working for a company that provides services or products to these companies, it gives them an opportunity to provide better for their family and that’s really what it is all about.
“We may have lost over the last several years in our economy, locally, thousands of jobs. But our manufacturing continues to grow. We continue to see growth and manufacturing continues to be the basis of our economy.”
The success of the foundries in Anniston also helps the ongoing programs at the Boys & Girls Clubs of East Central Alabama and the YMCA of Calhoun County. The children, who may one day work in local manufacturing, are provided with opportunities that may not be available without the assistance of corporate sponsors.
Johnny Byrd, the chief professional officer of the Boys & Girls Clubs in Anniston, depends on corporate sponsorship to fund the community-building program for children.
Byrd considers manufacturing one of the “strongest partners here in the community” in recent years. “They are one of the stronger partners in making sure that we are able to provide the services and opportunities that our young people certainly need and are able to take advantage of which kind of helps level the playing field for many of our young people. They are very strong, great wonderful partners.”
Anniston-based YMCA CEO of Calhoun County Shane Ruffin echoes the sentiments of Byrd.
“Tyler Union, M&H Valve have been amazing partners with the YMCA,” said Ruffin. “M&H Valve just came on a couple of years ago for our annual support campaign and they help us tremendously. Tyler Union we’ve had a relationship with since about 2007.
“We service the entire county of Calhoun, which is about 120,000 residents. But we impact about 10,000 lives a year through our programs and services.”
Rebuilding America with Buy America
While the small town of Anniston thrives because of manufacturing, residents in nearby Birmingham are feeling the pain in the loss of manufacturing jobs. The city has suffered from plant closings, including the recent idling of steelmaking at the U.S. Steel mill in suburban Fairfield.
But Birmingham is keeping its eye on manufacturing. Several major manufacturers, including Honda, Mercedes Benz and Toyota, have built auto plants in the area, and the medical products manufacturing industry has also found a home in Birmingham.
Rick Davis is the senior vice president of Economic Development at the Birmingham Business Alliance. He is responsible for economic development recruiting activities and planning and implementing strategies and programs to attract and place new business and investment in the Birmingham region.
“Our buzzword here is jobs. If we can help companies create jobs, then we have been successful,” said Davis. “It’s been a struggle and we’ve lost a lot of manufacturing jobs. We were one of those communities that lost thousands of manufacturing jobs. We are just now getting back to where we are backfilling in, replacing those jobs.”
One of the issues plaguing the U.S. steel industry is the unprecedented surge in steel imports from China, part of China’s massive industrial overcapacity problem.
“We have to be very, very careful about how we look at these foreign products that are coming in because there is a cost and a lot of times people don’t associate what that cost is and how it impacts the American economy and the American consumer.”
After years of economic growth, the Chinese economy is slowing down. But China has thus far not slowed down production at its state-owned factories, and instead has opted to dump its steel at rock-bottom prices onto the U.S. market.
It’s an unfair advantage, especially given the facts that China is a non-market economy, nine out of its 10 top steelmakers are state-owned and the Chinese government manipulates its currency to artificially discount the country’s exports.
“I think the real problem there is that we are sympathetic to the Chinese economy… and we are sympathetic to that, but don’t dump it on U.S. shores,” Davis said. “That’s not the answer. That doesn’t help anybody.”
He added: “We have to be very, very careful about how we look at these foreign products that are coming in because there is a cost and a lot of times people don’t associate what that cost is and how it impacts the American economy and the American consumer.”
Davis believes that Alabama provides some of the best manufacturing workers in the world. And he believes in the importance of American manufacturing as our nation begins to rebuild our infrastructure.
“As good as we are about repairing and remediating our infrastructure, we ought to use the gold standard. This is something that we should do just one time over the next two or three generations and do it right,” he said. “And when you do that, you have to look at American-made products because they are the gold standard.”
The majority of Americans think of our infrastructure as roads, highways, bridges and other means of transportation. But the nation’s water systems are part of the infrastructure, too. In many areas of the country, the water systems are more than 100 years old. Water main breaks are occurring at an alarming rate.
In Flint, Michigan, city and state officials looking to save money decided to change the city’s drinking water source from the treated Detroit Water and Sewage Department, which procures its drinking water from Lake Huron, to the local Flint River. As a result, the corrosive Flint River water caused lead from aging pipes to leak into the water supply, creating extremely elevated levels of lead. Between 6,000 and 12,000 children have now been exposed to lead, which may produce a range of serious health problems.
Flint is now in the process of trying to build its own facility to source water from Lake Huron. This is an opportunity for American-made infrastructure, the building of which will provide thousands of new jobs and update our water safety measures.
And a whole lot of America’s water and sewer systems need to be rebuilt or repaired. A study by the Center for American Progress indicates the government needs to spend $129 billion each year over the next 10 years to get our entire infrastructure, not just water infrastructure, back to world-class efficiency. But one way or another, this has to be done.
A major investment in America’s infrastructure represents a major opportunity for American-made businesses and the manufacturing workforce for decades to come.
“Infrastructure, in general, is an absolute necessity,” said Davis. “It’s not something that people consider a luxury. If you don’t have infrastructure, if you can’t move people, materials and products in and out of your community, then you’re really going to lose.”
McWane’s flagship foundry was built in Birmingham in 1921 but was forced to cease operations in 2010. It employed 500 workers as recently as 2007 and by the time of its closing, only 117 employees remained.
McWane had been a leading supplier of pipes that connect homes to the water systems. When homebuilding slowed tremendously in the midst of the recession, the Birmingham area was hit hard in its manufacturing base.
But the family-owned company continued to invest heavily in its other manufacturing locations in Alabama and throughout the United States. That’s what’s happening in nearby Anniston, Alabama — but without the recent Buy America provisions stabilizing business, it could all disappear.
That’s a possibility — only part of the Buy America law is permanent. Advocates are now looking to the annual appropriations measures and the Water Resources and Reform Development bill as ways to finish the job. But they are facing opposition, including from well-funded importers and companies that have moved their supply chains abroad.
In an era of intense bipartisanship, Buy America does enjoy bipartisan support. In the House of Representatives, Alabama Republican Reps. Robert Aderholt has taken up the cause alongside Indiana Democratic Rep. Pete Visclosky.
“It’s not enough for members of Congress to talk about manufacturing being the means to support the middle class through good jobs,” Aderholt said. “We need to practice what we preach in ensuring American goods are used for federally funded projects.”
For factory workers like Tyler Union’s Jerry Clark and the people of Anniston, Buy America is their livelihood.
“If it shut down, it would affect a lot of people,” Clark said. “It would devastate this community but I just don’t think that will happen because of the Buy America laws.”
This story was written by AAM staff writer Jeff Bonior.
