WASHINGTON — President Obama said on Wednesday that he would propose tax incentives for companies to bring home manufacturing jobs they had moved overseas, and curtail tax breaks for those that keep relocating jobs abroad.
Flanked by executives from the aerospace, chemical and furniture industries — all of whom are building or expanding factories in the United States — Mr. Obama declared that the nation was beginning to see the reversal of a long-term trend toward outsourcing. He called the new trend, perhaps inevitably, “insourcing.”
“We’re at a unique moment, an inflection point, a period where we’ve got the opportunity for those jobs to come back,” Mr. Obama said in the White House, after meeting with the executives. The American economy, he noted, has added manufacturing jobs for two years in a row, after more than a decade of losses.
The president did not offer details of the tax proposals, which presumably would be subject to approval by Congress, though he renewed his call on lawmakers to approve a one-year extension of the payroll tax cut that will expire at the end of February.
Mr. Obama said an increase in labor costs in China was eroding its advantage over the United States as a manufacturing base, a message the White House sought to buttress by circulating a research report from the Boston Consulting Group, a prominent management consulting organization. The president also said recent trade agreements with South Korea, Colombia and Panama would open markets for American exports.
Economists said small changes in tax policy would play only a marginal role in deciding where companies build factories. But with labor costs rising overseas, such changes could help reinforce a fledgling trend, they said. “There’s been a little bit of momentum on ‘insourcing’ because a lot of firms overdid it,” said Jared Bernstein, the former chief economic adviser to Vice President Joseph R. Biden Jr. “So it could help a bit at the margin.”
Mr. Obama cited examples from companies represented in the room: Ford Motor, which the president said had moved 2,000 jobs back to the United States; Master Lock, which relocated manufacturing to Milwaukee from China; and Lincolnton Furniture, a specialty manufacturer, which set up shop in North Carolina after its owner, Bruce Cochran, closed a family-owned furniture company in 1996 and spent time consulting with companies about moving operations to China and Vietnam.
“I don’t want America to be a nation that’s primarily known for financial speculation, and racking up debt and buying stuff from other nations,” the president said. “I want us to be known for making and selling products all over the world stamped with three proud words, ‘Made in America.’ ”
Mr. Obama’s message served as a riposte to the Republican front-runner, Mitt Romney, who repeated his charge Tuesday, in his speech after the New Hampshire primary, that the president was hostile to free enterprise.
One of the executives at the meeting, James M. Guyette of Rolls-Royce North America, said his company was making investments in Indiana, where it builds aircraft engines, and in Virginia, where it opened an advanced manufacturing and research campus last year that will eventually employ 500 people.
In an interview, Mr. Guyette said Rolls-Royce was not actually moving operations back to the United States. But he said it was pouring money into American operations, like a factory in Indianapolis that once had the company’s highest labor costs and lowest productivity. Negotiations with the United Automobile Workers union had cut those costs, he said, and made the factory competitive again. “Everyone could see where this road was going to end, if we didn’t do it differently,” he said.
Via | Nyt
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