22 September 2008 19:42 [Source: ICIS news]
HOUSTON (ICIS news)--The US manufacturing sector has suffered through a decades long slump caused by dysfunctional regulations and rising energy costs, Dow Chemical CEO Andrew Liveris said on Monday before an economic group.
Liveris spoke before the Detroit Economic Club, a non-partisan group that hosts various economic and policy forums.
In the past 30 years, manufacturing's share in the US economy has dropped from nearly 22% to less than 12%, Liveris said. During that time, the nation has lost 5.2m jobs, which wiped out $190bn (€131bn)in wages and $76bn in benefits.
"I’m concerned - most concerned - that the U.S. is forfeiting its dominant position as the indispensable nation because it has lost sight of what first made it strong: a vibrant industrial and manufacturing base that drives innovation, technology - and creates jobs - from the shop floor, to the engineering centres, to the R&D labs and to the white collar offices," Liveris said.
"Instead of implementing policies that make our industrial heartland stronger, government has made it weaker," he said. "And we’ve allowed bad economic policies to drive good jobs out of the country."
To restore the nation's industrial sector, Liveris proposed two broad strategies that encompass energy and regulations.
The US needs to reform its civil justice system, streamline regulations, address healthcare and lower corporate taxes, Liveris said.
The US now has the world's second highest corporate tax rate, he said. Its inefficient regulations cost manufacturers as much as $10,000/employee.
Regarding an energy policy, Liveris repeated the proposal that Dow Chemical made four years ago.
Dow's proposal called for increasing crude oil production, developing alternative energy and improving energy efficiency - especially in buildings, Liveris said. "If we take these steps - in concert with one another - we can literally provide the fuel that will restore the power to American industry."
Without a comprehensive energy policy, the US will continue spending billions of dollars importing energy, in what Liveris called history's greatest transfer of wealth.
As it is, Dow is on track to spend $32bn on energy and feedstock this year, Liveris said. That amount exceeds the total that the entire US chemical industry spent just a few years ago.
"Frankly, this country needs a little panic because the truth hasn’t sunk in yet," Liveris said. "We have entered a new era in energy - one driven by a new global fact of life: less supply and more and more demand."
($1 = €0.69)
To discuss issues facing the chemical industry go to ICIS connect
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections