Ron Bloom Is Obama’s Manufacturing Emissary

Not since Ronald Reagan has an American president spoken so emphatically about the importance of manufacturing. “We’ve got to go back to making things,” Barack Obama says, embedding that view in his oratory. Yet manufacturing’s presence in the American economy continues to shrink, defying the administration’s attempts to reverse that trend.

The president has named Ron Bloom, a Harvard M.B.A. who has worked both on Wall Street and in the labor movement, as a special adviser to help tackle the problem. Mr. Bloom’s tools, however, are limited. Apart from his persuasiveness, they have consisted mainly of tax credits and subsidies, many of them flowing to new industries, like the production of wind turbines, solar panels and auto batteries powerful enough to replace gasoline engines.

The goal is to invigorate private sector initiatives in these industries, then in a host of supplier companies and eventually throughout manufacturing. That, in a nutshell, is the administration’s manufacturing strategy.

But some, including the United Steelworkers union, say it is not enough. The union is pressing the administration to challenge China over what it calls unfair subsidies for its clean energy industries.

“The president has been very clear and articulate that we believe the nation’s trade laws must be respected,” Mr. Bloom said in an interview. Although he declined to comment on the complaint filed Thursday by the steelworkers, claiming that Chinese subsidies violated World Trade Organization rules, he noted that the administration had imposed tariffs on tubular steel and tires once the private sector successfully brought antidumping cases against China.

“Our policies assume that the dominant role in manufacturing will continue to be played by the private sector,” Mr. Bloom said. “We are not willing to accept manufacturing’s decline, but it is simply not feasible to make the government the principal actor in its revival.”

No other sector has lost so much ground relative to the rest of the economy. Manufacturing’s share of gross domestic product topped out at nearly 30 percent in the 1950s. It is 11 percent today. The fall has accelerated since 2007, with the recession a contributing factor.

The president reiterated the need for manufacturing in a speech on Wednesday in Cleveland. “We see a future where we invest in American innovation and American ingenuity; where we export more goods so we create more jobs here at home; where we make it easier to start a business or patent an invention; where we build a homegrown clean energy industry, because I don’t want to see new solar panels or electric cars or advanced batteries manufactured in Europe or in Asia. I want to see them made right here in the U.S. of A. by American workers.”

The Obama administration argues, often through Mr. Bloom, that the United States cannot sustain itself as a global economic power without a thriving manufacturing sector. Too much research and development, too many well-paid jobs and too many exports flow from manufacturing.

Mr. Bloom, speaking more forcefully than others in the administration, challenges the idea that research and development can be pursued entirely separate from production. In his view, Americans cannot excel at high-end innovation while factory production continues to decline or to slip overseas. “I am deeply afraid that if you lose the ability to make things,” he said, “all the intellectual activity involved in innovation and design will over time erode as well.”

Grumbling by American manufacturers is fairly constant on Mr. Bloom’s trips to the heartland as the president’s senior counselor for manufacturing, his official title. On his most recent trip, to Cleveland — he has visited nearly two dozen cities since his appointment a year ago — more than 60 executives and factory owners in northeastern Ohio listened, and then had their say. In some cases, they called for a more expansive government role in manufacturing, along the lines of China, Germany or Japan.

“We don’t have to reinvent the wheel,” said Andre Morrison, an executive at Green Mill Global, which makes lighting products. “But why can’t we model our policies on those of other countries, where government and private industry are in bed together?”

Mr. Morrison’s biggest complaint was credit. He said he knew five or six established companies that wanted to expand within the United States but could not get loans from commercial banks. He asked, in effect, that the federal government expand its support for such loans, and Mr. Bloom replied that the administration was doing just that, but with a caveat. “It is not government’s role to direct banks to lend to particular companies or industries,” he explained.

That unwillingness to interfere with the private sector is characteristic of the administration’s industrial policy. Shunning even the term, Mr. Bloom prefers to call it a “manufacturing strategy.”

Still, some of the Ohio executives pushed for more intervention. Several seemed to nod in agreement when William N. McCreary, a vice president of the NSG Group, said that private equity firms and other financiers frequently asked for an American manufacturer’s “China strategy,” meaning that having an operation in China made a company more worthy of financial support.

The NSG Group, which makes flat glass of the sort used in auto windshields, operates in many countries, including China, and is based in Japan. Even so, Mr. McCreary, who is based in Toledo, Ohio, sounded perplexed by this lack of faith in American producers.

“The private equity world is heavily on the side that you have to be in China,” he said. “It thinks the U.S. is not a place you make things.”