Tilton, panelists debate free trade, fair taxation
Photo credit: Joe Wilssens
DETROIT -- Lynn Tilton, owner of several auto parts suppliers, said Tuesday on a panel the U.S. government must develop a manufacturing policy that promotes fair rather than free trade to rapidly add jobs. She also favored policies that impose tariffs on foreign companies that use subsidies in their home countries to dump products in the United States.
Her remarks came during a panel discussion at the 2011 Automotive News World Congress on industrial and manufacturing policy in the United States.
Her views ran counter to those of panelists Paul Ingrassia, a Pulitzer-prize winning journalist, and U.S. Rep. John Campbell, R-Calif., who advocated general tax cuts and free trade to try to reverse the country's manufacturing decline.
Tilton, a billionaire investor in distressed companies, said manufacturers that sell their products in the United States should make those products here.
“The truth is every other country is protecting their own,” said Tilton, whose private-equity firm Patriarch Partners bought Dura Automotive Systems last year. Patriarch owns or controls 74 companies with more than 120,000 employees.
The U.S. lost 6.4 million manufacturing jobs in the past decade and nearly lost hundreds of thousands more in 2009 until the U.S. government loaned General Motors and Chrysler Group more than $50 billion to keep them afloat.
An 'exception that proved the rule'
Ingrassia, who holds to more free-market principles, said the successful bailout was an “exception that proved the rule.”
He said recent U.S. subsidies to ethanol producers and a 1993 automaker consortium to promote alternative energies were largely wasted while free-market efforts, such as those taken by Toyota Motor Corp. to develop the popular Prius hybrids, proved a better path.
“The government is not good at picking winners,” Ingrassia said.
Campbell, a former auto dealer in California, said businesses need consistent tax policies to invest in plants and create jobs.
The recent federal extension of tax cuts for two years, instead of making them permanent, sends the wrong message to business owners who need to predict the costs they'll face over time, he said.
Panelist Joseph Anderson Jr., CEO of supplier TAG Holdings, is vice chairman of the Manufacturing Council of the U.S. Department of Commerce, which was created in 2004 to promote U.S. manufacturing and manufacturing exports. He said if the United States could get even a modest increase in the number of U.S. manufacturers that export, that it could put people back to work.
He said just 1 percent of U.S. manufacturing companies export and less than half of that small sub-set export to more than one country.
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