Bill Clinton is bullish on U.S. manufacturing and believes improving America's policies towards factories is critical to foster a strong middle class. His passion for U.S. factories stems from his efforts of bringing manufacturing to his home state of Arkansas when he was governor.
I had the honor of meeting the former president earlier this month, when we discussed manufacturing ahead of his speech with the nation's manufacturing leadership. In our dialogue, Clinton was proud of his manufacturing pedigree.
He shared with me that he "got Nucor"--one of the world's premier steel mills --to move to Arkansas (unusual for a steel plant to move to the South in those days). He said a thriving manufacturing base was great for growing the middle class in his state and Nucor is still a huge employer. He shared with the audience that Nucor is rare and should be emulated by business leaders because three techniques they pursue including offering generous cash bonuses to their employees if the company does well.
In addition, Nucor subsidized the college education of its employees' kids to improve worker engagement and dedication. The former president promoted the Nucor plan as a way to adjust when times are bad by sharing prosperity/sacrifice with all employees. For example, during the recent Great Recession, top Nucor management cut their pay 3x more than the line worker pay reduction. These three Nucor ideas that Clinton promotes are proven tools to improve employee engagement. His moving embrace of the Nucor ethos showcased his drive to foster manufacturing.
Besides engagement techniques, Clinton shared reasons why US Manufacturing will "thrive over the next twenty years."
1. Energy Supplies
Natural Gas supply is rapidly expanding which reduces prices and reduces the costs our manufacturers are burdened (1/3 of China and Korea). This force is making U.S. manufacturing more competitive so we win more jobs. Clinton pressed the environmental benefit of Natural Gas because it is a bridge fuel "that is well below the water table." Clinton's embrace of science on the safety of fracking was refreshing.
The U.S. is blessed with a young workforce able to grow and shine in the future. Most developed countries have an old tired population ("except Ireland") that will not be able to grow their domestic economies. Simply put, "Youth Matters" and that will help US Factories.
The former president was confident that Washington would come to a grand bargain on immigration reform so the USA can help feed the looming skills gap of skilled workers and retain the engineers and scientists graduating from our colleges so they make innovations in American and not back overseas.
4. R&D Tax Credit
Another policy prescription Clinton was confident would be enacted (and hopefully permanently) was the R&D tax credit. He felt this plan will insure USA's innovation edge. It is critical that this gets passed soon so our scientists come up with the next great thing. As he reminded the audience, manufacturers generate more R&D than any other industry in America.
The last remaining issue our country needs to enact is a broad based tax reform because our taxes are the highest in the world compared to other developed competitors. Clinton emphatically demanded that we broaden the base and lower rates like Bill Bradley and Ronald Reagan did in 1986. He paused in his Clinton manner, and said this is "really important." We need Washington to follow through now.