The mold-making industry may get a boost, if somewhat symbolically, from legislation in Washington that would require defense industry contractors to use primarily U.S.-manufactured injection molds and machine tools.
The language is tucked into a massive, $400 billion military spending measure that passed the House last month. But the Bush administration opposes the plan, saying it could raise costs, and the language is not part of the Senate's version of the 2004 military budget.
The legislation took center stage at a July 9 hearing before the House Small Business Committee. Matt Coffey, president of the National Tooling and Machining Association in Fort Washington, Md., told the committee that the tooling industry is suffering and government procurement offers some respite.
He said in an interview after the hearing that defense and aerospace account for about 15 percent of mold and machine tool industry sales. The legislation has some symbolic value, he said, because it makes a case that toolmakers are important to national security.
``I don't want to overstate the impact,'' Coffey said. ``It will force the [Department of Defense] to pay attention to the industry.''
The tooling language is part of a larger debate on Capitol Hill on military procurement. The hearing, for example, also focused on expanding other requirements for the Pentagon to buy U.S. goods, and it examined whether the military has favored Russian titanium manufacturers over U.S. competitors. Titanium is used to make jet fighters.
Pentagon officials testifying at the hearing said the additional requirements could raise costs 20-30 percent in selected contracts.
``We would have to find the money for the premium we would have to pay for U.S.-made tools,'' said Suzanne Patrick, deputy undersecretary of defense for industrial policy.
``We have to be judicious with our resources.''
Putting more money into tooling and other programs would mean less money for research and development, and could spell job cuts elsewhere in the defense industry, she said.
The Pentagon does not want to start micromanaging contractors, and it does not want quality problems down the line with its war-fighting equipment if it starts to tell contractors where to buy their components, she said.
Pentagon officials also disputed the idea that overseas purchasing is a problem. A recent Defense Department study of eight weapons systems found that 98 percent of the contents were made in the United States, Patrick said.
But Coffey and others on the panel said the Pentagon is not looking at the health of industries that supply products to major defense contractors.
Olav Bradley, president of injection mold builder PM Mold Co. in Schaumburg, Ill., also testified before the committee. The American Mold Builders Association, which he represents, has lost 25 percent of its members from bankruptcies and mergers as the economy has declined in the past few years, he said.
The bill that passed the House requires that all military tooling be U.S.-made. But Small Business Committee Chairman Don Manzullo, R-Ill., said that House Armed Services Committee Chairman Duncan Hunter, R-Calif., plans to offer a compromise saying that new tools must be 70 percent U.S.-made, in hopes of winning Senate support.
Several panelists noted that the U.S. manufacturing industry has lost more than 2 million jobs in the past three years, and Manzullo repeatedly asked Patrick if the Defense Department understands that U.S. manufacturing is suffering.
But Pentagon officials wondered if manufacturers are expecting too much from military spending.
``I think there is an attempt today to solve all of the manufacturing industry's problems within the defense budget,'' Patrick said.