New England Molders Inc. first saw pressure from low-cost manufacturing in China in 1998, when a customer that makes sporting goods pulled work from NEM's Shrewsbury, Mass., plant and moved it to China.
The customer said it was cheaper to hire press operators in China than use the fully automated equipment in New England's plant.
President Claire Beauregard responded by bringing lean manufacturing techniques to the small, $3 million company. Since then sales have been steady, because ``we've watched our growth opportunities go overseas,'' she said.
Beauregard joined more than 350 plastics industry executives who packed McCormick Place June 25 to debate how to respond to what the U.S. manufacturing industry sees as manufacturing threats from China.
She said she feels a tug to establish manufacturing in China, and understands why some of the panelists, including representatives from GE Plastics and Delphi Connection Systems, would be following customers and setting up plants there.
Judging by the questions, it was clear that Beauregard was not the only official in the room struggling to figure out how to deal with China.
Larry Sippy, chairman of the National Tooling & Machining Association in Fort Washington, Md., and president of Sipco Molding Technologies in Meadville, Pa., drew applause when he said big changes are needed in U.S. government policies.
``We want our government to quit giving away our competitive advantage by supporting a strong dollar, letting less-developed countries off the hook on international trade agreements, allowing other governments to peg their currency to the dollar and imposing costs on small and medium-size companies with taxes and regulations,'' he said.
Sippy said the U.S. government favors multinational companies in its trade policies, and said if the government does not want to help small manufacturers, it should be ``considered hostile.''
But other panelists were not advocating that strong approach. Scott Otteman, director of international trade policy for the National Association of Manufacturers in Washington, said NAM would not characterize the Bush administration as hostile. NAM favors fair trade, but Otteman acknowledged that can be very difficult to define for its diverse membership.
NAM pushes a weaker U.S. dollar and argues that China manipulates its currency and keeps it artificially low, positions echoed by the Society of the Plastics Industry Inc.
Washington-based SPI, which sponsored the event along with Injection Molding Magazine, urged attendees to sign its ``Plastics Manufacturing Matters'' petition that it will submit to Congress. Petitions are available at SPI's booths outside the North Hall and at the IMM booth (S2670).
The energetic debate included several audience members questioning GE Plastics' top China executive, alleging that the resin industry sells material for much less in that country than in the United States.
Mark Wall, GE Plastics greater China president, said prices in the world markets are close to parity.
He told the questioner that ``it is not true what you are saying,'' and said he could back up his position with data.
SPI President Donald Duncan arose from the audience to say that price spikes in natural gas in the United States are making resin more expensive in North America, and said Washington needs an energy policy that encourages more natural gas production.
Keynote speaker David Friedman, a San Francisco lawyer, newspaper columnist and a fellow at the New America Foundation, said manufacturers need to resolve their debates and settle on a few policy options to present to Washington, just as the agriculture industry does.
Several panelists said their companies were looking to expand operations in China.
According to Wall, GE plans to build two more compounding plants in China soon; automotive supplier Delphi said it will make more investments; and a Milacron Inc. executive said his company is likely to make machinery in China in the foreseeable future.
While some audience members questioned how small companies could navigate China, Wall said that for GE, China ``is the largest opportunity in the world for our business.''
He stressed that those who are worried about legitimate risks such as protection of intellectual property rights cannot afford to let such fears dissuade them from tapping into that massive market.
``It has been very, very rewarding,'' Wall said.
Similarly, panel moderator James Buonomo, Nypro Inc.'s vice president of China and India relations, told the audience that Nypro was a $20 million company when it made its first modest foray into Asia in the late 1970s.
He said it was not until 1994 that Asia became a significant part of Nypro's plans.
``If we can do it, you can do it. Start now, don't wait,'' he suggested.