Obama wants to show manufacturers some love and money

WASHINGTON Wed Feb 13, 2013 9:10am EST

WASHINGTON Feb 13 (Reuters) - When the Volvo manufacturing plant shut its doors in Asheville, North Carolina, in 2010 and moved more than 200 jobs out of state, it was time for Ben Teague to go to work.

As the region's economic development officer, he worked with state and local officials to advertise the town's skilled labor force and offer the right mix of incentives to lure in a new business.

Now, Linamar Corp, a Canadian manufacturer, is making engine blocks and wheel axles for giant mining trucks at the plant, employing 150 people with a plan to expand to 650 in coming years.

"That's a huge piece of business for us," Teague said in an interview.

The manufacturing turnaround that happened in Asheville is something that President Barack Obama wants to spur in more communities.

Obama, set to visit the Linamar plant on Wednesday, devoted a sizeable portion of his State of the Union address to describing how he sees manufacturing as a linchpin for expanding good-paying middle class jobs.

"Our first priority is making America a magnet for new jobs and manufacturing," Obama said in his Tuesday night speech, urging Congress to support a plan to invest $1 billion in 15 manufacturing hubs across the country.

Obama said he would use executive powers to launch the first three hubs, with the Defense and Energy departments partnering with businesses, universities and community colleges to invest in the training and development centers.

He also proposed to lower taxes for manufacturers to 25 percent from the current level of 35 percent and offer tax breaks, while putting in place a minimum "offshoring" tax.

Obama will face headwinds in Congress for the plan from Republicans, who believe government spending needs to be reined in because of ballooning deficits. And critics from labor groups were also underwhelmed by the plan.

"I saw no mention of his campaign pledge to create one million new manufacturing jobs," said Scott Paul, president of the Alliance for American Manufacturing, after Obama's speech.

The group represents the United Steelworkers union and some large manufacturers.

LOVE IS GREAT, MONEY IS BETTER

Wednesday's visit will be Obama's fourth to the Asheville area since he first ran for president in 2008. Most recently, he started a bus tour in the community in October 2011 to try to build public support for a jobs plan that Congress had rejected.

The attention showered on the town has been a great promotion, said Hank Dunn, president of Asheville-Buncombe Technical Community College, which has developed specialized courses to help Linamar and other employers train workers.

But community colleges need government help to provide spots for students and invest in their own infrastructure so they can help train people to fill advanced manufacturing jobs, he said.

"We get a lot of love, and that's about it," Dunn said in an interview in Washington, where he was meeting with lawmakers to talk about community colleges. "You've got to follow it up with money."

Businesses are eager to see government investments as well, said Jim Jarrell, president and chief operating officer at Linamar.

While state and local governments in the United States offer incentives, federal governments in Canada, Germany, Hungary and China are adept at offering grants in exchange for meeting job creation targets, Jarrell said.

"It's not a giveaway," Jarrell said in an interview. "It's getting something in return."

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