John Bernaden, cofounder and past vice chairman of the Smart Manufacturing Leadership Coalition, last week proposed a stimulus package aimed at getting US companies to bring back the trillions of dollars in profits that are parked overseas and invest it in manufacturing.
The Washington, DC, nonprofit was not involved in introducing nor developing the language included in the proposal, which Bernaden said he is proffering to policymakers who could introduce it in Congress.
Bernaden looks forward to working with the nascent administration of President-elect Donald Trump, he said, adding that he has spoken with some people slated to be part of it.
Under his proposed US Manufacturing Stimulus Act of 2017, the estimated $2 to $3 trillion corporations have stranded overseas would be used to create about 3000 new smart factories.
Stephen Gold, CEO of the Manufacturing Alliance for Productivity and Innovation, mentioned those funds in a recent Smart Manufacturing magazine interview addressing the state of US public policy on manufacturing.
Through the proposed stimulus package Bernaden is pushing, corporations that repatriate offshore funds and purchase 20-year USA Industrial Bonds will annually receive 1/20th of their investment tax-free at a zero interest rate.
The USA Industrial Bond funds would then become 20-year, interest-free loans for states to use in stimulating the construction of smart factories, according to a summary of the plan.
The plan would make it easier for midsized manufacturers to get loans to build highly automated, super productive smart plants.
Bernaden believes Wall Street makes it tougher for midsized manufacturers to get loans by favoring wealthy corporations over them, he said
It is difficult for midsized manufacturers to get affordable, long-term loans, which can prevent them from building smart factories, he noted.
The cost of a smart factory averages around $1 billion. A manufacturer would need to generate at least $500 million a year in revenue and make a $50 million annual payment on such a loan, said Bernaden, who retired as Rockwell Automation’s director of corporate affairs in 2015. This year, he wrote for Smart Manufacturing and spoke as a smart manufacturing expert on a panel SME assembled for Mfg4.
“The middle-sized factories, I have come to learn late in my career, are really these hidden gems in America, and they do not have a voice in this country,” he said. The big and fortune 1000 companies have lobbyists in Washington and a lot of lawyers. They have all the money.”
Midsized manufacturers could be an “economic miracle” for the economy, just like they are for Germany, Bernaden added.
His proposal will only happen if Americans put enough pressure on Congress to invest in smart manufacturing before fixing roads, bridges and infrastructure, he said.
“Smart manufacturing is a revolution,” Bernaden said. It is a risk, and to make this revolution happen, we need a change.”
The US in 2009 spent $1 trillion in stimulus funds to fix infrastructure, he noted.
“Our nation’s manufacturing sector, especially midsize manufacturers, are in worse shape than our nation’s roads,” Bernaden said.