By Mark Felsenthal
RALEIGH, N.C. Jan 15 President Barack Obama on
Wednesday announced a new public-private manufacturing hub in
North Carolina during his visit to the state, seeking to bolster
an industry that he considers essential to raising middle class
The manufacturing hub in Raleigh is a consortium of 18
businesses and six universities that will by led by North
Carolina State University and will lead an institute to develop
high-power electronic chips. Obama had called for three such
hubs in his State of the Union speech a year ago. The other two
have yet to be selected.
Backed by $70 million in federal funding, the hub would
connect manufacturers with emerging research on energy-efficient
chips that would help make electronic devices smaller and
faster. Companies involved include ABB, APEI, Avogy, Cree,
Delphi, Delta Products, DfR Solutions, Gridbridge, and Hesse
Mechantronics, among others.
Eager to press economic themes in an election year after
struggling with the rollout of his healthcare plan, Obama has
said he would like to create a network of 45 manufacturing hubs
around the country, but that would require money from Congress,
which has not been as enthusiastic about the idea.
"I don't want the next big job creating discovery, the
research and technology, to be in Germany, or China or Japan; I
want it to be right here in the United States of America," Obama
said on the North Carolina State University campus following a
tour of Vacon, which manufactures components used in electronic
"Where I can act on my own I'm going to do so, and today I'm
here to act," he said. "Manufacturing is a bright spot in this
While manufacturing accounts for only about 12 percent of
the economy, it has been the key driver of recovery from the
2007-09 recession. Its continued show of strength is combining
with improving fortunes in other sectors of the economy to set a
foundation for sustained strong growth this year.
But problems persist. Intel said a major chip factory it had
built in Chandler, Arizona, will not open for the forseeable
future. Obama, on the campaign trail in 2012, had held up the
facility as an example of U.S. manufacturing potential.
Although manufacturing output has recovered well from the
recession, job growth in the sector has not tracked the gains,
said Peter Ward, professor of operations management at the
Fisher College of Business at Ohio State University.
"The number of jobs in manufacturing don't reflect the
bounce back in output," Ward said. "Manufacturers are doing more
Obama's decision to bail out the auto industry was key to
helping the manufacturing sector recover, said Mark Zandi, chief
economist at Moody's Analytics.
"I think the Obama Administration has been generally
manufacturing friendly, certainly in rhetoric but also in
substance," Zandi said.
While the president can take some credit for increased
demand for goods and services, gains in manufacturing come from
management decisions and worker productivity, Ward said.
"I really have a pretty hard time putting a causal link
between any president and what happens in the manufacturing
economy," he said. "It's much more the management and
performance of smart managers and smart workers who are out
there doing it."
Obama said he plans to soon unveil two more manufacturing
hubs focused on digital manufacturing and lightweight metals
The government will spend a total of $200 million on the
three centers, which will be matched by money from private
companies, universities, and state governments.
Obama's efforts to spur stronger economic growth have been
overshadowed by his inability so far to persuade Congress to
approve legislation extending emergency unemployment insurance
for people who have been out of work for at least six months.
The president has said the benefits would provide 1.5
million Americans a much-needed cushion and also would boost
Despite pressure from the administration, Democrats and
Republicans in the U.S. Senate rejected one another's proposals
on Monday. While they vowed to keep working to find middle
ground, a compromise appears unlikely before next week's Senate
recess. The measure would also have to pass the Republican-led
House of Representatives.
Obama's presence in North Carolina comes as the
Republican-dominated state government has carried out a
conservative agenda, cutting jobless benefits, banning same-sex
marriage, and freezing pay for teachers.
In that environment, North Carolina's Democratic Senator Kay
Hagen faces a tough reelection battle in November. She was not
with Obama during the trip, citing the need to participate in
votes in Washington - although Obama thanked her for her hard
work during his speech.
Analysts said it would not serve her to be too closely
associated with Obama, whose bungled healthcare law roll-out has
reduced his popularity ratings in the state.
"Kay Hagen is suddenly reluctant to associate herself with
Obama," the Republican National Committee said in a statement.