Marlin Steel President, Drew Greenblatt, discusses what the administration can do to bolster production in the U.S. on America's Nightly Scoreboard. Obama stresses how important it is that our manufacturing industry continues to grow, and hopes a $500 million program will help. Greenblatt discusses how keeping your headquarters on U.S. soil is important for our economy and job market as a whole.
Host: is opening up talks with some of our scoreboards friends. The president invited one of our favorite guests to an event today in Pittsburgh 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 Pittsburgh, where the president was earlier, and Drew joins us now. So Drew, you see what these scoreboard appearances lead to? I'll tell you, they're great great PR for the company, right?
Drew Greenblatt: Amen. Thank you.
Host: All right. Well, did you actually speak with the President?
Drew Greenblatt: No. But he invited the White House invited me to come on out to Pittsburgh, and I'm glad to be uh incorporated into the uh dialogue and in the conversation out here.
Host: Well, a conversation takes two people, you know, you got to you got to listen and talk. Do you think it was a photo op or was the president really listening? Because 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 I think that's a a step in the right direction. Um, I think it's good that manufacturing is appreciated by all parties. Uh, and I want manufacturing to grow because it's it's wonderful for the health of our economy.
Host: Well, and it is you know, we shouldn't underestimate its power in in the nation. I mean, it is actually 21% of global manufactured 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. Uh, we just had this 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 uh more activity to help improve the health of manufacturers. Uh, I think our goal should be three things. Number one, we should try to make sure that you always want to have your headquarters in America. You want to 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 to be done in other countries. And lastly, we want to be have the most favorable climate to put a factory. We want to make all of our factories here in America, not in Shanghai or or in Mexico.
Host: Well, that's a great three-point program. But you have specific recommendations of how to achieve those goals. Uh, first of all, by taxes, the tax climate has to be better. Your competitors in Canada, for example, how does how does your corporate tax uh rate with theirs?
Drew Greenblatt: It's very frustrating. We we shipped a quarter million dollars worth of baskets to a automotive plant in Canada and it looks like we just lost $800,000 worth of follow-up business because a Canadian competitor lowballed us. Well, a lot of the reason why they can lowball 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's 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, we I think we lost this big job. and and I want to get those jobs
Host: on a second, let me just let me just say what the president would say right now is, well, hey, we have this new Obamacare plan. That's going to take away your expenses in terms of healthcare. How would you respond?
Drew Greenblatt: Well, I think we should have healthcare 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 uh health insurance. We should all buy our own health insurance. We're all savvy consumers. We're smart people, and 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 healthcare decisions.
Host: 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 than you did a couple of years ago before Obama became President. True or not?
Drew Greenblatt: True. And, you know, what happens is this, is that American factories have choices. They can continue either making things in America or make it in China. We got to make it compelling, a no-brainer, every single time it's always better to build in America. And if we make more and more work rules, what happens is it makes it more challenging. And and 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 like.
Host: All right. And finally, Drew, uh 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 and these guys are not millionaires and billionaires, are they?
Drew Greenblatt: No. 70% of all factories pay on their personal tax returns the 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 what happens is it makes it a a distinct disadvantage for American factories. And it's going to drive them to build.
Host: Drew, forgive me, we we got we got to wrap this segment, but forgive me, the president not only was he not listening to you today, doesn't look like he's listened to your report. Like he's paid attention to it, is he doing anything that you've suggested?
Drew Greenblatt: Well, uh, it's it's a challenge and and I think we have to get President Obama to consider a massive tax increase to get the American economy fired up and rolling again.
Host: A massive tax decrease, correct?
Drew Greenblatt: Decrease. I missed I misspoke. A massive decrease. That'll get the testosterone flowing. That'll get American entrepreneurs fired up and go out and buy that extra piece of equipment, buy the Ford F-150, buy the Chrysler Ram and get and get this economy chugging.
Host: Instead it sounds like they're calling for tax increases, which is not what you would recommend.
Drew Greenblatt: The wrong direction.
Host: Drew Greenblatt, always a pleasure to see you. Thanks for coming in.
