FOX Business - Obama Looks to Improve Manufacturing in America

FOX Business Scoreboard - Obama Looks to Improve Manufacturing in America
Jun 27, 2011 Marlin Steel Wire President Drew Greenblatt discusses what the administration can do to bolster production in the U.S.

David Asman - FOX Scoreboard: >> President Obama is opening up talks with some of Scoreboard's friends. The President invited one of our favorite guests to an event today in Pittsburg, focusing on shoring up our nation's manufacturing sector. Drew Greenblatt, who you might remember, is the president and CEO of Marlin Steel Wire Company and he is still in Pittsburg where the President was earlier and Drew joins us. So Drew, you see what these Scoreboard appearances lead to - I'll tell you, they're great PR for the company right?

DREW GREENBLATT >> Amen. Thank you. David Asman - FOX Scoreboard: >> Did you actually speak with the President?

DREW GREENBLATT >> No, but The White House invited me to come on out to Pittsburg and I'm glad to be incorporated into the dialogue and the conversation they're having out here. David Asman - FOX Scoreboard: >> Well, Conversation takes two people, you know you've got to listen and talk. You think it was a photo op or was the President really listening? Clearly, he wasn't listening to you.

DREW GREENBLATT >> You know, the President talked about manufacturing today. He talked about how it's important for our country. He talked about how it's critical for manufacturing to thrive so we can grow this economy out of the recession. I think these are good things and if that could be a bipartisan effort, I think that's a step in the right direction. I think it's good that manufacturing is appreciated by all parties and I want manufacturing to grow because it's wonderful for the health of our economy. David Asman - FOX Scoreboard: >> Well it is and we shouldn't underestimate it's power in the nation. I mean it is actually 21% of global manufacturer's goods are made right here. So don't believe the junk that we have died as a nation, but we are hurting as a manufacturing nation. It's down 9% from 2007. We just had these figures out from Empire State Manufacturing index shows a clear downward trend. Is the President doing anything to turn that trend around?

DREW GREENBLATT >> We need more activity to help improve the health of manufacturers. I think our goal should be 3 things. Number one, We should try to make sure, you always want to have your headquarters in America. We want to make America the best place to make headquarters for a factory or for any kind of company. Secondly, I think we need to make sure that all R&D is done here in America or we're the best place in the world to do R&D. We don't want research and development in another country. Lastly, we want to have the most favorable climate to put a factory. We want to make all of our factories here in America, not in Shanghai or in Mexico. David Asman - FOX Scoreboard: >> Well that's a great three-point program but you have specific recommendations of how to achieve those goals. First of all, by taxes. The tax climate has to be better. Your competitors in Canada for example, how does your corporate tax right with theirs?

DREW GREENBLATT >> It's very frustrating. We shipped a quarter-million dollars worth of baskets to an automotive plant in Canada and it looks like we just lost $800,000 worth of follow-up business because a Canadian competitor low-balled us. Well, a lot of the reason they can low-ball us is because their tax rates are half of what our tax rates are. Plus, embedded in their taxes is health insurance. I pay Blue Cross/Blue Shield for all my employees. I don't have that embedded in my own taxes. So my tax rate is twice as high plus I have to pay health insurance. So it makes it very challenging to compete with Canadian factories and for that reason, I think we lost this big job. I want to get those jobs. David Asman - FOX Scoreboard: >> Hold on just a second, let me just say that what the President would say right now is, well hey, we have this new Obama Care Plan. That's going to take away your expenses in terms of health care. How would you respond?

DREW GREENBLATT >> I think we should have health care like we buy car insurance. We're all adults. Everybody should be able to buy their own car insurance, we all do a good job of buying our own car insurance. It should be the same way with health insurance. We should all buy our own health insurance. We're all savvy consumers. We're smart people. We should have the freedom to buy from whomever we want to buy. I don't think companies should be involved, I don't think the government should be involved in health care decisions. David Asman - FOX Scoreboard: >> Okay, well the other thing that costs you a lot of money, particularly compared to your competitors are work rules. You have a lot more work rules, it seems to me, now, then you did a couple of years ago before Obama became President. True or not?

DREW GREENBLATT >> True. You know, what happens is this. American factories have choices. They can either continue making things in America or make it in China. We've got to make it compelling, a no-brainer. Every single time, it's always better to build in America. If we make more and more work rules, what happens is it makes it more challenging and many companies will say, you know what, let's build the next plant over in Shanghai. That's not what we want American owners and American plant managers to be thinking. David Asman - FOX Scoreboard: >> Finally, Drew, individual tax rates. The President still uses this expression: millionaires and billionaires, but as you pointed out, about half of your manufacturers would be hit by an increase in taxes if the top rate went up. But these guys are not millionaires and billionaires are they?

DREW GREENBLATT >> No, 70% of all factories pay on their personal tax returns, the company's consolidated income and profits. So what happens is, if the company has a good year, rather than having a rainy day fund or buying a new machine, we have to pay that out in taxes. That's not true in other countries. So that makes a distinct disadvantage for American factories. David Asman - FOX Scoreboard: >> So Drew, forgive me, we've got to wrap this segment but forgive me, the President, not only was he not listening to you today, it doesn't look like he's listened to your report, like he's paid attention to it. Is he doing anything that you can suggest?

DREW GREENBLATT >> It's a challenge. I think we have to get President Obama to consider a massive tax increase[sic] to get the American economy fired-up and rolling again. David Asman - FOX Scoreboard: >> A massive tax decrease, correct?

DREW GREENBLATT >> Decrease I misspoke. A massive decrease. That will get the testosterone flowing. That will get American entrepreneurs fired up and go out and buy that extra piece of equipment, buy the Ford 150, buy the Chrysler RAM and get this economy chugging. David Asman - FOX Scoreboard: >> Instead, it sounds like they're calling for tax increases which is not what you want.

DREW GREENBLATT >> Wrong direction. David Asman - FOX Scoreboard: >> Drew Greenblatt, always a pleasure to see you, thanks for coming.

DREW GREENBLATT >> Thank you.