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US Commerce Secretary Shares the Urgent Need to Re-Invest in American, Michigan Manufacturing

Listen to a podcast recording of the presentation.

 

In a discussion hosted by the Detroit Economic Club on Monday, Nov. 29, U.S. Secretary of Commerce Gina Raimondo discussed the critical role the manufacturing industry plays in the state and national economic recovery and the imperative to invest domestically in the R&D and production associated with semiconductor chips. While such investment is a priority across the country, Raimondo acknowledged the particular benefits to be reaped in Michigan.

“It [Michigan] is the epicenter and the beating heart of America’s manufacturing industry,” said Raimondo. “Manufacturing is vitally important to America’s well-being. You cannot have a great economy if you don’t make things as a core part of that economy.”

Competing Globally by Investing Domestically

Raimondo touted the success of the bipartisan passage of a $1.2 trillion infrastructure package that will allow the largest ever EV investment in Michigan, along with a host of other improvements to roads, replacement of lead pipes, expansion of broadband, and more – creating thousands of jobs in the process. The next step to make the most of this investment, she said, is passing the Build Back Better bill which will support workforce training, universal pre-k, affordable child care, and more.

“That bill is an investment in our people; It’s an investment in the workforce,” said Raimondo.

As Secretary of Commerce, Raimondo’s focus is on enhancing America’s competitiveness in the global economy. Citing many examples of the manufacturing industry taking hits and losing jobs to other countries, “those are millions of jobs people deserve to have,” here in the U.S.

“In order for our economy to thrive and compete internationally and globally, we need to invest domestically,” said Raimondo.

Taking Back the Semiconductor Industry

The U.S. needs to be investing domestically in bolstering its supply chains, manufacturing sector, and specifically, in revitalizing the semiconductor industry, which was invented in American. Over time, the manufacturing of semiconductor chips was moved overseas. Thirty years ago, the U.S. produced 40% of all chips domestically. Today, we make 0% of leading-edge chips in America and are experiencing a critical shortage of these semiconductor chips. This shortage has particularly damaging impacts in Michigan because of how essential these are to the automotive and electric vehicle (EV) industries. The solution? Create more chips in America.

By making these chips and better semiconductors domestically, the U.S. can make better EV batteries and capture a larger share of the global EV market and create more American jobs. Chips also support innovation in industries beyond automotive. Raimondo stated that strengthening America’s electronics supply chains and manufacturing will boost its GDP by up to $55 billion and add 95,000 jobs.

On what needs to be done to activate this solution, Raimondo called for legislative support of the CHIPS Act, which includes $52 billion that would allow the U.S. Department of Commerce to create a semiconductor fund to incentivize the domestic manufacturing and R&D of semiconductor chips. This cause is urgent.

“We can’t wait, because the rest of the world isn’t waiting,” she said. “American is the best place on earth to do business and start a business. We have the best entrepreneurs, the best scientists, and the best innovators in the world, but we’ve got to get to work making investments. Investing in our infrastructure, investing in American manufacturing, investing in job training, and making sure we do all that with an eye toward equity. If we do do that…we will shore up our economic security and our national security.”

Solving Problems, Expanding Broadband, and Securing the Supply Chain

In a follow-up discussion with Detroit Mayor Mike Duggan, Raimondo reflected on the lessons learned and best practices from her time as governor of Rhode Island that influence her approach to her current role in the Commerce Department. She reached solutions to economic problems by first facing hard truths.

“I didn’t have it in me to be dishonest about the problem,” said Raimondo. “This is math, not politics.”

With American Rescue Plan allocations and funding from the infrastructure plan, Duggan asked Raimondo if a portion will be put toward increasing broadband access and fiber installation programs. She responded with an emphatic “yes.”

“Broadband is no longer a luxury,” Raimondo said. “It’s the difference between working and not, going to school and not, going to the doctor or not.”

Sixty-five billion dollars is coming to the Commerce Department to cities and states to support programs that will enable access to affordable broadband across the country. Michigan will receive at least $100 million and can apply for more.

The conversation shifted to the chip shortage and the fragility of our nation’s international supply chains. Duggan shared insight from conversations with automotive executives, that despite years of rewarding procurement directors for price and timeliness, they weren’t rewarding them for the security of the supply chain or longevity of connections.

“There’s been an obsession for a long period of time around ‘just in time,’” said Raimondo. “But then they leave out ‘just in case.’”

Part of the legislation is an initiative to create a department within the Commerce Department committed to supply chain management to help reduce the vulnerabilities that currently exist for a variety of critical components.

Audience Q&A

In an audience Q&A, Raimondo addressed several more workforce issues, like the current labor shortages the nation is facing. She suggested getting everyone vaccinated, investing in workforce training to fill vast openings in fields like education, advanced manufacturing, and pharmaceuticals, and expanding the labor pool to underrepresented groups like women and people of color, will help businesses fill lingering vacancies. On helping young professionals entering the in-person workforce for the first time, she called on businesses to offer opportunities for students, interns, and entry-level workers to get in-person experience or get creative with remote training to prepare them for the in-person workforce. She also addressed federal support for cybersecurity, citing a new set of standards and best practices for businesses to follow and again emphasizing the need for training and investment in that field. In conclusion, on the question of whether bipartisanship is dead, she said no, and shared the key to success is compromise, finding a middle ground, and staying committed to solving problems.