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issue: July 2012 ApplianceMagazine.com

Manufacturing Called Urgent National Priority

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A new report by former Homeland Security Secretary Tom Ridge and former Assistant Secretary for Homeland Security Robert B. Stephan sees the United States as too dependent on foreign suppliers in crises.

The report said the United States is at risk of being dangerously unprepared for serious emergencies because of the offshoring of critical manufacturing sectors and a reliance on foreign suppliers for products that would be needed in the wake of catastrophic events.

The report was released on July 25, 2012, by the Alliance for American Manufacturing (AAM). It says the U.S. must revitalize its manufacturing capacity to reduce such vulnerability. The report was co-authored by Tom Ridge, the first secretary of the U.S. Department of Homeland Security, and Robert B. Stephan, a former Assistant Secretary for Homeland Security for Infrastructure Protection.

"There is a direct nexus between a strong domestic manufacturing sector and America's ability to prevent, mitigate, recover from, and rebuild quickly in the wake of catastrophic events," said Ridge. "Revitalizing America's domestic manufacturing capacity must become a clear and urgent national priority at all levels of government and among industry leaders."

The report illustrates the growing frequency of major catastrophic events, man-made and natural, as well as new threats like cyber attacks and pandemics.

The report contains specific recommendations for restoring the nation's internal capacity to address emergencies, including:
* revitalized manufacturing
* investment in America's infrastructure using U.S.-made materials
* strengthened public-private collaboration
* enforcement of trade laws

Reliance on Foreign Suppliers

The report said the United States now relies on foreign suppliers for everything from steel, cement, batteries, and critical high-technology components to every day medical supplies like antibiotics and penicillin. The result: a risk that the country will not have access to needed materials and products, delayed delivery times, and the poor quality of some imported products. The report said the problems are becoming more noteworthy given the fragility of the nation's aging infrastructure.

AAM said the report is the first comprehensive analysis of America's growing reliance on global suppliers - many of whom may not have the best interests of the United States at heart in a time of crisis, or who cannot meet demand quickly in times of emergency, given the complexity of the global supply chain.

"Relying on a potentially hostile trading partner in a time of need puts our national security at risk," the report states. "There are also many important vulnerabilities associated with the structural fragility of our infrastructure nodes and systems, many of which are at or near the end of their projected operational life spans and in need of a thorough overhaul."

Examples of infrastructure supply problems noted in the report:
* China produced five times the amount of steel that U.S. companies did in 2008
* Chinese cement was used in construction of half of American home foundations prior to the 2008 recession
* No U.S. plant currently produces the key ingredients for antibiotics, making the nation more vulnerable to pandemics and bioterrorism attacks

"The nation's worn out infrastructure is the soft underbelly that provides an inviting target for attacks that can have a widespread, devastating impact," said Stephan. "Hardening our critical infrastructure is key to preventing and mitigating disastrous events such as terrorist attacks or natural disasters concerning power plants, pipelines, and transportation systems."

Recommendations for Reducing Vulnerabilities

The report recommends a two-track approach to reduce vulnerabilities and to build the capacity to respond and recover quickly and efficiently in the aftermath of a catastrophic disaster. Some recommendations include:

* Develop a plan to make the restoration of a strong American manufacturing sector a key component of both national and economic security strategies.
* Reinvest in America's infrastructure, using U.S.-made materials.
* Incentivize the revitalization of American manufacturing, including the use of domestic-content preferences that maximize the power of federal procurement funds.
* Enforce trade laws to ensure a level playing field for U.S. manufacturers and their workers facing unfair competition.
* Invest in the American workforce to provide the trained workers needed to rebuild our infrastructure and work in a larger, more modern manufacturing sector.

"Reliable domestic supply chains could help mitigate the risk associated with our current over-reliance on long-lead-time offshore supplies and suppliers regarding those products and materials critical to supporting response and recovery requirements," the report stated.

Ridge and Stephan say that revitalizing American manufacturing must be a "clear and urgent national priority since we are losing manufacturing capacity with each passing day." They add that the "21st Century risk environment poses perhaps the most significant set of challenges we have yet had to face."

"This report should serve as a wake-up call for action," said Scott Paul, the Executive Director of the Alliance for American Manufacturing (AAM), which commissioned the report. "We must take concrete steps now to insource our preparedness capabilities."

"Unfortunately, not enough has changed since the tragic events of September 11, 2001, and even since Hurricane Katrina seven years ago," Paul added. "Tragically, we've seen a further decline in America's manufacturing capacity, even while new risks are emerging. This report underscores just how critical it is to the safety of the American people to rebuild our industrial base now."

Paul concluded, "We may not be able to predict when catastrophic events will occur, but we can do much to ensure that America is equipped to prepare for, respond to, and minimize the impact when disaster strikes."

The full report can be downloaded from the AAM web site:
Alliance for American Manufacturing


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