Secretary Locke comes to Burnsville

The U.S. Secretary of Commerce outlined a daring plan to beat back joblessness during a visit with local business leaders in Burnsville: Double the nation's exports and re-build America's manufacturing economy in less than five years.

"Why exports? The more you export, the more you produce," said Gary Locke, leader of the Department of Commerce and advisor to President Barack Obama. "The more you produce the more workers you need and that means good paying jobs." 

Burnsville, like the rest of the nation, is still in the grip of high unemployment, a lingering and painful reminder of the recession. The ranks of the unemployed accounted for 6.6 percent of the city's workforce as of March 2011, the most recent figures available from the Minnesota Department of Employment and Economic Development — a total of 2,378 people out of work. It's an improvement over June of 2009 when local unemployment hit a peak at 8.2 percent, with 3,060 people on the unemployment roles.

On Tuesday, officials at the meeting with members of the President's Council on Jobs and Competitiveness, suggested that the solution lies outside the U.S.

"Consider this: Ninety-five percent of the world's consumers live outside of the United States. Reaching this market is critical to American growth and competitiveness," said Darlene Miller, the president and CEO of Permac Industries, Inc. which hosted the event. "The U.S. currently ranks lowest among the world's manufacturing nations in the ratio of manufactured goods sold overseas. While the U.S. stands on the sideline our competitors are winning business that should have gone to U.S. companies."

Locke added that only one percent of U.S. companies export their products and of those, 60 percent export to only one country.

On the plus side, both Minnesota and the U.S. at large have made significant gains in markets abroad. According to an annual report issued by DEED, Minnesota’s manufactured exports increased 17.3 percent in 2010—to $17.2 billion in 2010. Minnesota manufacturers of computers and electronics led the charge selling $4 billion in goods to buyers in Canada, China, Japan, Mexico and Germany.

Nationwide, manufacturers found similar success in foreign markets, which makes the Obama administration's ambitious goal appear within reach, Locke said.

"All we have to do (to double our exports by 2015) is grow exports by 14 to 15 percent every year. Compound that each year and in the next five years we will meet the president's goal," Locke said. "We're actually ahead of that. Last year in 2010 U.S. exports grew by 17 percent over 2009 and this year we're on a similar pace."

On a local level, one impediment to the plan is the relative scarcity of manufacturers. Miller's company is one of a select group. According to DEED, only 102 manufacturers called Burnsville home in the third quarter of 2010. That is just about 5 percent of Burnsville businesses.

For those who exist, Locke acknowledged that breaking into a foreign market can be daunting for a small to mid-sized company, but added that their participation in export trade is vital to job creation. Many have difficulty finding financing to branch out into the international sphere. Others lack a sales force abroad, Locke said. Still others are concerned that they will get stiffed by a foreign buyer and have no recourse.

"They may be worried about getting  timely payment from that unfamiliar customer in some foreign land," Locke said.

Some in the audience had encountered this problem before.

"Where are you going with enforceability of it? One of the issues has been with China," said one lawyer. "You can get the award and judgment but then it is stymied when we try to collect."

He asked what the U.S. government could do to hold partner countries accountable. As of now, the administration can use Department of Commerce and embassy employees to try to both find reliable foreign clients and resolve disputes, said Don Graves, the deputy assistant secretary for Small Business, Housing and Community Development at the U.S. Department of the Treasury. However, as yet no new trade agreement exists with China at this time.