Tuesday, April 19, 2011

Sen. Casey Talk Tough on China

JATCO Machine & Tool Co. on Ohio River Blvd in Bellevue makes the molds that other manufacturers use to make plastic parts that go into everyday products. Co-owner Ed Sikora says he can walk into any store or sit in any car and find parts made by his molds. However, he says his workforce is a third smaller than it was 10 years ago.

US Senator Bob Casey of Pennsylvania says much of the decline can be blamed on China refusing to allow its currency to trade on the open market. He says if the Obama administration will not force China to change its monetary policy congress will take action. A recent study from the Economic Policy Institute found undervaluation of the Yuan provides a 40% subsidy to China’s exports. “It is imperative that we crack down on Chinese currency manipulation before consideration of any free trade agreement,” says Casey. The Obama Administration is expected to send congress three trade agreements this year.

Sikora says his business gets squeezed from both sides. As manufacturing firms leave the US for China he loses customers and at the same time he has to compete to do work for the smaller pool of customers with machine and tool companies in China.

David Frengel is with Penn United Technologies, which does similar work as JATCO. He says it is not just an issue of working smarter or paying less. “We can compete with foreign companies, we can’t compete with foreign governments and that’s why our industry is going away.” Frengel says the low cost of goods from China even makes it impossible for him to compete for market share in Europe, Africa and other continents.

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