Manufacturing Chief Hails Industry Gains

JERRY JASINOWSKI says Americans are too pessimistic about the state of United States manufacturing. As president of the National Association of Manufacturers, he notes that in the 1980s manufacturing's share of total US economic output actually increased, rising to 23 percent from 20 percent of gross national product. An additional 25 percent of the US economy consists of services bought by manufacturers.

US exports doubled between 1986 and 1991. The trade balance with Europe has gone from a deficit of $20 billion in 1987 to a surplus of $17 billion. Except for automobiles and oil, the US has a trade surplus.

Mr. Jasinowski praises Democratic presidential candidate Paul Tsongas for "raising cultural awareness of the value of manufacturing," but says Mr. Tsongas "painted much too negative a picture of where manufacturing is."

Interviewed in his office overlooking the US Capitol, Jasinowski predicts that "in the '90s we'll be dynamic and competitive enough to hold or gain market share" globally. He is quick to add that "we have still more work to do than the things that we've acomplished."

Jasinowski notes three critical challenges for American competitiveness in manufacturing:

* Investment. The growth of investment in equipment and research and development has been dramatically lower in the US than in Japan or Germany.

* Job skills. Companies must reject 5 out of 6 job applicants because they lack basic education and skills.

* Burdensome government regulations. "Companies are going to continue moving offshore as a result of these regulatory costs." He adds: "You don't normally like to put health care into the competitiveness issue, but it's such a big drain along with the regulatory costs that you've got a lot of pressure on profit margins."

Jasinowski commented on several other issues:

On government-industry ties: "It's important to have cooperation in the technology area.... [But] if we can get rid of regulatory burdens, the excessive budget deficit and its effect on the cost of capital, and achieve product-liability reform, it would do more to advance the productivity of manufacturing in this country" than an aggressive federal industrial policy. He adds that federal labs can play a significant role by helping small companies get access to technology.

On access to financing: "The cost of capital has clearly improved in this country because of the fall in interest rates and improvements in the stock market. [But] our tax system penalizes investment relative to consumption.... Most other countries have zero capital gains" taxes.

On manufacturing employment: He says he expects more downsizing and layoffs this year. But he adds: "The companies that are still doing it are behind the bulk of manufacturers who did this a long time ago."