Metals Service Center Institute Southern California Chapter Town Hall Meeting

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Metals Service Center InstituteSouthern
California ChapterTown Hall Meeting
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TOM SHARPE President Bergsen Incorporated
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BOB WEIDNER President Chief Executive
Officer Metals Service Center Institute
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Capacity Utilization Durable Manufacturing
85.0 82.5 80.5 77.5 75.0 72.5 70.0 67.5
90 91 92 93 94 95 96
97 98 99 00 01 02 03
www.Economagic.com


September 15, 2003
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Recessions

• Cyclical
• Vs.
• Structural

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Recovery Preconditions

• Low Interest Rates
• Improved Financial Market Conditions
• Tax Cuts
• Weaker Dollar

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However

• GDP Anemic
• Unemployment High
• Under-employment

Jobless Recovery
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Economic Landscape

• Struggle continues for manufacturers
• Chicago Tribune 7-4-03
• Unemployment rate jumps to 9-year high
• Chicago Tribune 7-4-03

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Declining State of Manufacturing

• Over 2.7 million manufacturing jobs lost in
  past 3 years
• Manufacturing employment in the U.S., currently
  at approximately 14.8, has fallen below the
  level at which it was first officially
  announced
• The flight of labor-intensive goods-making
  tasks to low wage countries isnt the only
  reason for manufacturing unemployment anymore.
  Lately its been big companies tendency to
  order parts from foreign countries that has cost
  small to medium-sized U.S. family firms a lot of
  business. (Los Angeles Times 5/18/03)

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Metalworking Alliance to Save North American
Manufacturing

• Need for collaborative coalition of metals and
  manufacturing groups
• We need to elevate awareness level of the
  manufacturing crisis
• Large and small manufacturing businesses need
  to work together to insure fair and free trade
• Securing Americas Future The Case for a
  Strong Manufacturing Base
  Joel Popkin Study

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MSCIs Role

• Leverage the strength of our diverse membership
  base focusing it on saving N. A. manufacturing
• Utilize our chapter infrastructure to conduct
  6-8 town hall meetings by year-end
• ? Chicago on 8-21, Charlotte on 10-9, Atlanta on
  10-16, Los Angeles on 10-21, Cleveland on 12-2
  and others to be scheduled
• CEO fly-in to Washington, D.C. in the fall
• Coalition for a Sound Dollar

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BILL HICKEY President Lapham-Hickey Steel
Corporation
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Currency Manipulation

• Market fundamentals have historically not set
  the value of the Japanese Yen, Taiwanese
  Dollar, Korean Won and Chinese Yuan
  Governments Have!
• Chinas growing trade surplus and huge foreign
  investment inflows would suggest one thing a
  stronger yuan reality is visa vie the U.S.
  dollar theres been no change
• Optimism that Treasury Secretary Snow
  understands the issue

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The U.S. Current Account Deficit
6 Mos.
Source U.S. Department of Commerce October 7,
2003
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Factory Jobs in Decline
37th Consecutive Monthly Decline in Manufacturing
Jobs
U.S. MANUFACTURING JOBS Seasonally Adjusted,
scale in millions
01
02
03
Source U.S. Bureau of Labor Statistics
October 7, 2003
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Coalition for a Sound Dollar

• Coalition of over 80 trade associations focused
  on achieving a sound dollar policy
  www.sounddollar.org
• Growing momentum to utilize Section 301 of the
  Trade Law of 1974 to get the Administration and
  Congress to address currency manipulation
• IMF Article 4
• Various provisions of WTO regulations

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Personal Commitment Participation

• Write your elected officials (federal, state
  local)
• Invite elected officials into your plants
• Hold elected officials accountable to take a
  stance on pro-manufacturing agenda
• Get engaged in championing manufacturing at
  home . . .

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SANDY NELSON President Chief Executive
Officer EMJ
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ANTHONY VINTER Vice President General
Manager Schultz Steel Company
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10/21/03 MSCI TOWNHALL MEETINGPRESENTATION
OUTLINE

• WHY WE NEED MANUFACTURING.
• MANUFACTURING CREATES WEALTH.
• MANUFACTURING EMPLOYMENT IS ON THE DECLINE.
• SHULTZ STEEL IS A SMALL BUSINESS (WAS 400, NOW
  250).
• SHULTZ STEEL HAS MULTIPLE CAPITAL INVESTMENTS.
• SHULTZ STEEL IS CONSTANTLY RE-INVENTING.
• LOSS OF BUSINESS TO OVERSEAS COMPANIES.
• WHAT IS NEEDED TO SUPPORT MANUFACTURING.
• THE NEED TO MAINTAIN AND GROW MANUFACTURING
  COMPANIES.
• WHAT WE ALL CAN DO TO HELP.

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SECURING AMERICAS FUTURE________________________
_______THE CASE FOR A STRONG MANUFACTURING
BASES. A. M.
EXCERPTS FROMJUNE 2003 STUDY BYJOEL POPKIN
COMPANYWASHINGTON, D.C.
PREPARED FORTHE NAM COUNCILOF MANUFACTURING
ASSOCIATIONS
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MANUFACTURINGS INNOVATION PROCESS PROVIDES
ENORMOUS BENEFITS FOR THE ENTIRE U.S. ECONOMY

• GROWS THE ECONOMY EVERY 1 OF FINAL DEMAND FOR
  MANUFACTURED GOODS GENERATES AN ADDITIONAL 0.67
  IN OTHER MANUFACTURED PRODUCTS AND 0.76 IN
  PRODUCTS AND SERVICES.
• INVENTS THE FUTURE MANUFACTURERS ARE
  RESPONSIBLE FOR ALMOST TWO-THIRDS OF ALL PRIVATE
  SECTOR RD -- 127 BILLION IN 2002.
• GENERATES PRODUCTIVITY INCREASES.
• PROVIDES MORE REWARDING EMPLOYMENT.
• PAYS THE TAXES DURING THE 1990s MANUFACTURING
  CORPORATIONS PAID 30-34 OF ALL CORPORATE TAXES.

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MANUFACTURING MATTERSITS INNOVATION PROCESS
GENERATES WEALTH
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MANUFACTURING EMPLOYMENTJANUARY 1960 TO APRIL
2003
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SHULTZ STEEL COMPANYSOUTH GATE FACILITY
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40,OOO TON ALL-FORGED PRESS

• Worlds newest heavy press - Installed January
  2000
• Designed by Shultz Steel
• Highest tonnage press installed worldwide since
  1976
• Large closed die forgings and extrusions (up to
  12,000 lbs. 5,440 kg)

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TYPICAL PRODUCTS MANUFACTUREDAT SHULTZ STEEL
COMPANY
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LOSS OF BUSINESS TO OVERSEAS COMPANIES

• SHULTZ HAS LOST 10 - 15 OF ITS BUSINESS TO
  RUSSIA.
• A SIMILAR LOSS TO CHINA IS EXPECTED.
• IT IS HARD TO COMPETE IN EUROPE WITH ALL OF THE
  GOVERNMENT PROTECTIONS THEY PROVIDE TO THEIR
  MANUFACTURING BUSINESSES.

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WHAT IS NEEDED TO SUPPORT MANUFACTURING

• A STABLE DOLLAR THE KEY.
• TRADING ON A LEVEL PLAYING FIELD.
• TAX INCENTIVES FOR CAPITAL IMPROVEMENTS.
• TORT REFORM.
• HEALTHCARE COST CONTROLS.
• DOMESTIC ENERGY DEVELOPMENT.
• PRACTICAL ENVIRONMENTAL REGULATION.

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• WE MUST MAINTAIN AND GROW OUR MANUFACTURING
  INDUSTRIES.
• SERVICE INDUSTRIES ONLY SERVE.
• CRITICAL MASS IS REQUIRED TO MAINTAIN GROWTH
  THROUGH RD INNOVATION.
• UNEMPLOYMENT LEVELS ABOVE 10-12 WILL LEAD TO
  ANARCHY.

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WHAT YOU CAN DO TO HELP

• WRITE, CALL OR E-MAIL YOUR CONGRESSIONAL
  REPRESENTATIVES AT THE LOCAL, STATE, AND
  NATIONAL LEVELS.
• INVITE REPRESENTATIVES TO YOUR PLANT.
• BE PERSISTANT IN YOUR REQUESTS.
• PARTICIPATE IN ORGANIZATIONS WORKING ON EDUCATING
  AMERICA TO THE PLIGHT OF THE MANUFACTURING
  INDUSTRY.

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SAM IS A GRASS ROOTS MOVEMENT, MEANING IT IS
DEDICATED TO ORGANIZING AMERICAN WORKERS
AND SMALL BUSINESS OWNERS, AND
ENCOURAGING THEM TO SPEAK UP AND BE HEARD IN
WASHINGTON. SAMS MISSION IS TO

• BUILD PUBLIC AND GOVERNMENT AWARENESS TO THE
  DEVASTATING EFFECTS THE INCREASING ECONOMIC TRADE
  DEFICIT WITH CHINA IS HAVING ON U.S. BUSINESSES.
• PROVIDE SOLUTIONS THAT WILL RE-ESTABLISH THE
  UNITED STATES AS THE MANUFACTURING LEADER AND
  PROMOTE REINVESTMENT IN THE AMERICAN LABOR FORCE.
• FOR MORE INFORMATION, VISIT WWW.SAM-USA.ORG

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DAVE STANYO Micro-E Inc.
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Metals Service Center InstituteSouthern
California ChapterTown Hall Meeting