Manufacturing summit: Focus on energy issues, taxes

Home Inside FCNews Manufacturing summit: Focus on energy issues, taxes

DALTON—A manufacturing summit held here recently at the Northwest Georgia Trade and Convention Center not only attracted some top business leaders but also some of the top political leaders from Georgia and Tennessee with the focus of the conference landing squarely on energy issues and taxes.

According to a report in the Dalton Citizen, one of the summit’s most vocal participants was oil tycoon T. Boone Pickens, who pitched his plan to wean the U.S. off foreign oil. “We’re depending on oil from people who don’t like us,” he said, referring to members of OPEC, such as Iran, Libya and Venezuela. “The U.S. uses 20 million barrels of oil a day, producing 7 million of those barrels and importing the other 13 million, with 5 million coming from OPEC.”

Pickens said the U.S. can cut its oil use by 2.5 million barrels a day, half what it imports from OPEC, by changing its commercial trucking fleet from diesel to natural gas. But he said the federal government needs to subsidize that transition and urged those attending the conference to support a bill currently in the U.S. House of Representatives that would provide $5 billion in tax credits over five years to support the switch.

Louis Fordham, corporate vice president of operations and resources for J&J Invision, also attended the summit. “We are truly in a global economy and, as manufacturers, we had better not take anything for granted. Being dependent upon any one resource, one raw material or one distribution channel puts any organization at great risk. R&D will be critical to the future of the industry.”

According to Fordham, it’s critical the public and private sectors figure out how to better work together toward the mutual good of the U.S. “Events like this can give our leaders in government and industry the chance to begin talking about win-win opportunities. Business and industry leadership has the ability to come together and create momentum to help our elected officials create real solutions. We need fewer people telling us about all our problems and more people figuring out real solutions.

“The U.S. is still one of the best places to live, to conduct business, to work and to prosper,” he added. “The summit reinforced to me that even though the challenges we face are serious, we have the ability to overcome most any obstacle we face.

“Our greatest threat is our inability to put aside our personal preferences and come together for the good of the whole,” explained Fordham. “That is our greatest obstacle. All aspects of ‘utilities’ will have a major impact on manufacturing across the U.S.—oil, electricity, natural gas, water, etc. The better our infrastructure can be developed, the less dependent the U.S. will be on other countries. The one thing I agree strongly with Mr. Pickett about is, the U.S. needs a short and long-term energy plan”

Frank Hurd, vice president and COO of the Carpet & Rug Institute (CRI), thought the summit was very well planned and put together. “The energy issue T. Boone Pickens focused on is a very critical one for the industry, as energy is a valuable feedstock in the production of carpet. Another point addressed at the summit, the housing market, is also one of the major areas of concern from an industry standpoint because until we start building and selling existing homes back to the pre-2006 level, the industry is going to have a tough go of it, and that’s the entire industry, not just carpet.”

Tom Fanning, chairman and CEO of the Southern Co., said things are looking up for manufacturing in the Southeast. The Southern Co. is one of the nation’s largest providers of electricity. Fanning said the company’s electrical sales to industrial customers rose 7.8% last year, indicating that industrial production is ramping back up. He noted industrial sales rose another 6.7% in the first quarter of this year.

But he also noted that commercial and residential sales are still basically flat, and the economic recovery so far doesn’t seem to have shown strong job growth. “The nation has to rely on a full portfolio of energy resources—including coal, nuclear, natural gas and renewables such as solar and wind— to meet its energy needs. But renewables will remain largely a niche resource, especially in the Southeast, which has less wind and sunlight than other parts of the country. Increasing federal regulations are increasing the costs of coal-fired power plants.”

Fanning wasn’t alone in that assessment, as several speakers complained that federal policies are driving up the price of energy and increasing the costs of manufacturing in the U.S.

Fanning’s words and sentiments impressed Hurd, who said, “to have him lay out what some of the difficulties and challenges are being faced today by the energy industry was really something special.”

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