Govt. policy depresses manufacturing, incomes
Dan Focht recalls that Erie and the I-79 corridor extending south to Pittsburgh was “the injection mold capital of the world,” supplying manufacturers with the formed components of their products — anything from the caps of toothpaste tubes to household containers and medical laboratory ware.
Now, he laments that the “domestic supply chain is falling apart” as government policies are driving U.S. manufacturers and their vendors out of business.
As the owner of Bioptechs, a Butler-based producer of specialized equipment for the microscopic examination of living cells, Focht has lost numerous suppliers to the decline of domestic manufacturing.
There was the time that an Erie injection mold company that had been a prominent supplier called to tell Focht to come right away to get his mold before it was scrapped. The company was going out of business and anything not being sold off was being thrown away.
“When I got there I found the football field-size building, previously well equipped, now empty of everything but a few forklifts moving out what little was left,” he says.
Focht retrieved his mold, which he took to a New Castle company. That company supplied him for 12 years until it dropped him when he became the only customer for its clean room. The company went out of business a few months later. The part is now made by a Jeannette company.
In another case, Focht had to upgrade his circuit boards and could find no U.S. suppliers for the needed advanced components. His boards are still made in Pennsylvania, but the parts for the upgrade had to come from abroad.
“It is very hard for producers to compete globally given that businesses are burdened with making up for the inefficiencies of government,” says Focht.
“In my case, the largest part of our customer base are researchers at government-funded institutions such as universities. With the government being broke and not passing a budget, many of our customers are paying 60, 90, 120 days late.
“The U.S. economy is breaking down and there’s no excuse for it other than that we have a bureaucracy chocking on bureaucracy!”
When Focht isn’t running 20-year-old Bioptechs along with his wife, he is speaking to community groups and politicians about the problems of the U.S. manufacturing sector.
Focht references a variety of sources, including the National Federation of Independent Business and a paper recently published in “The Journal of Applied Business Research” by John H. Dunn of Robert Morris University.
The Dunn paper makes a case that reinvigorating domestic manufacturing would narrow the disparity of incomes between working people and higher-income groups because the value-added aspect of manufacturing typically commands a wage premium.
Dunn’s recommendations include lowering corporate taxes, allowing manufacturers to expense capital investments rather than depreciating equipment and buildings over longer periods, making trade policies more fair, addressing excessive litigation costs and reducing the uncertainty of federal tax and health care policies.
“Most CEOs polled during the Great Recession cited uncertainty in the economy, especially regarding tax and health care costs, as a significant restraint against new investment,” Dunn writes. “Traditionally business investment has been close to 17 percent of the GDP as opposed to the present 12.6 percent.”
Gordon Tomb is director of communications for the Pittsburgh-based PA Coalition for Responsible Government.
