President Obama Stands Up For the Middle Class

“I Believe in Manufacturing”

ASHEVILLE, NC – President Obama came to town February 13th 2013 to hammer home the vision he described in his State of the Union address the night before. His 20-minute speech to an invited audience at the Linamar plant in Arden echoed many of the proposals he had made to Congress to restore the nation’s middle class by rebuilding its manufacturing infrastructure.

While the national economy as a whole is slowly recovering from the worst recession since the 1930s – the stock market has rebounded, the automotive market is showing increased sales, housing sales and prices are increasing – the middle class is still struggling. “While corporate profits have skyrocketed,” he said, “in the past decade wages and income for middle class working families have not gone up at all.”

The president described the American dream as one in which, “If you work hard and are willing to meet your responsibilities, you can get ahead; you can do better, and your children can do even better than you do.” It is a dream in which work is rewarded: “When you have a full-time job, you shouldn’t live in poverty.” A dream where American companies build products in America, with American workers, that are sold to markets everywhere.

Restoring the American Dream

Mr. Obama laid out Congress’s tasks necessary to achieve this dream. First, he said, we must reward families that work by raising the minimum wage so that a full-time worker won’t need to rely on the social safety net. He noted the importance of investing in early childhood education, programs in high schools that prepare students for high-tech jobs, and ways to make a college education affordable for any family.

He encouraged investment in new, renewable sources of energy and in an infrastructure that will enable manufacturers to want to return. He also called for restructuring corporate taxes, so that we reward companies for creating jobs in America, or bringing them back home, rather than for outsourcing jobs overseas. “Caterpillar,” he noted, “which is a major Linamar client, is bringing jobs home from Japan; Ford is bringing jobs back from Mexico; and Intel will make its most advanced chips here, not in China.” In fact, he said, more than 500,000 manufacturing jobs have been added in the U.S. in the past three years, after a decade of net job losses.

Local and federal partnerships

Closer to home, President Obama described a vision for federal, state, and local cooperation that reflects what happened in Buncombe County three years ago. “We can do more to help the resurgence of manufacturing. When a company leaves a community, but they have an empty plant, and an infrastructure, they should be able to use what they have to turn things around. We’ve built a center for high-tech manufacturing in Youngstown, where they’re doing Three-D printing, which could revolutionize manufacturing.”

Here, after the Volvo plant announced it would close, the Buncombe County Commission brought together a public-private partnership that allowed the county to purchase the empty plant, which was then used to help entice Linamar to the area.

Asheville City Council also bought into the program. Councilman Gordon Smith said, “We expect Linamar to reach 600 jobs in five years – and these are jobs with wages you can raise a family on.”

By agreeing to tax abatement in exchange for targeted job growth, the deal didn’t cost the city or its taxpayers anything. “Linamar pays taxes each year, but as it meets predetermined hiring targets, that money is rebated. After five years, however, the rebates end – if it has reached the full target of 650 jobs.”

Fellow Councilman Cecil Bothwell, who was on City Council when the package passed, said he voted against those incentives. Bothwell expressed a concern that businesses nationwide “have worked states, cities, municipalities to cave in. They say, ‘Everyone else is doing it.’ But it’s not clear that the benefits match the incentives.”

The Linamar package, he noted, “was certainly well structured. If they don’t hire the full number of people, they don’t get the benefits.” And, he added, “Don’t get me wrong; I’m glad Linamar is here; I’m just not sure incentives were needed to get them here.”

That thought was inadvertently echoed by Linamar General Manager Mark Treffinger. We asked if he thought the company would have relocated here without incentives. He said, “Anywhere we go we’d have to make a huge capital investment. But the decision to come to Asheville was a strategic decision for us. One, these 65 acres will allow us to grow our business in the future; there’s room for more buildings as we need them. Two, our customer base is geographically convenient; we ship those engine blocks to Hagerstown, Maryland; and we make axles for the huge mining trucks for Caterpillar that we deliver to Winston-Salem. This is a very convenient location for us.” He also noted that there is potential growth in other parts of the South.

Support for the local investment package was voiced by Republican District 3 Commissioners David King and Joe Belcher.

“This was an absolutely excellent investment of county funds,” said King. “We have to compete with other cities, and now we have a facility that will still be here far in the future that will also spin off across the county’s tax base. All the people working here add to the tax base; and in the future some of those employees will open their own businesses, as well.”

Belcher added, “It’s important to get the message out. Not everyone in the county knows who the company is, so they’ll have to come to events, job fairs and career days. And I think Linamar has a history of doing that.”

The president closed with an exhortation to the crowd. “We don’t just get up when we’re down,” he said. “We innovate, we adapt, we learn new skills, and we keep going. We work together – we use common sense and cooperation to bring our country back.” And that, it seems, was the core of his message: bring back manufacturing and we can bring back the American middle class; with a strong middle class, we will bring our country back to prosperity.