Dick, I have spent a lifetime working in consumer goods; hardware and housewares. A few points you may find interesting.

China is about 15 times larger than Germany in population and their economy is growing by leaps and bounds. Germany has tailed off and is at best, stale as is most of Europe.

China's growth has come directly at our expense as well as at the expense of various European countries. Here is how it works for us.

Freeport, Illinois is a good example of a town that has been economically destroyed by FREE TRADE. The county had a Kelly Springfield Tire factory, a 3M micro switch maker, Newell/Rubbermaid plant where drapery hardware and window shades were made and a couple of smaller companies.

Kelly Springfield was the largest employer and its union made demands on the company they could not agree to and stay competitive. They informed the union that unless they could accept their "final offer" they would have to move their production to Mexico. The union refused and at midnight on the final day Kelly began dismantling equipment and moved it into a warehouse until they could get their plant in Mexico built. Job loss about 2,000.

The second largest, Micro Switch gradually began moving more and more of its manufacturing offshore until they were left with a skeleton crew. Job loss about 1,000

Newell was the third largest employer and it eventually became impossible to make curtain rods and window shades at a competitive cost. Their two plants were shut down and moved to China and Mexico. Loss of jobs in that operation was about 650.

The county has about 50-60,000 people and they have lost most of their factory employment. That county is today in the midst of a real recession, bordering on depression. And there is no hope of seeing it recover. Who will go into the town and set up a plant? They have lost close to 4,000 jobs and that represents about 10,000 directly affected not counting all those who ran businesses in town that depended on those 10,000 having a payroll every Friday. Imagine how this hit restaurants, beauty shops and drug stores around town.

Manitowoc, Wisconsin is a similar story. One of their largest employers was Newell/Rubbermaid's cookware manufacturing plant. When it became impossible to continue making cookware there and remain competitive they moved their operations to Mexico, Brazil and China. That was a loss of about 2,000 jobs in a county of 45,000. However each employee supports about 2.5 people so 2,000 jobs represents 5,000 people. In addition they have also lost two other companies.

I served as President of the Newell divisions in both those towns and I know a lot of those people who no longer have a paycheck on Friday afternoons. I was part of the decision making process and my wife and I actually moved to Taiwan to set up operations in Asia for the entire Newell/Rubbermaid corporation. This is why you hear so much from me about my experiences in Asia. In retrospect we HAD NO CHOICE. We could no longer compete and had we not gone offshore we would have gone out of business. When your competitors start importing you are faced with either matching them or shutting down.

How can this be reversed? Much of it cannot be reversed but additional movement can be stopped and some of what has gone overseas can be brought back by simply putting into effect a set of FAIR TRADE rules, i.e. when a country charges us high tariffs on our goods we must reciprocate by charging similar tariffs against their goods.

Americans love a challenge but when labor is 80% cheaper in China than it is in the USA the challenge becomes very iffy. And when China charges 50% tariffs on many of our products and we charge 0% to 5% on theirs we are shooting ourselves in the foot. There is simply no way for our industrial management or our workers to compete against such unbalanced circumstances.

George Bush 41 was responsible for a huge part of this when he talked Reagan into granting China Most Favored Nation status in 1986 and no one has tried to correct it. We are headed toward a set of circumstances that may well be uncorrectable within another five years. It is that bad.

I can take you across this nation and name towns and companies by the hundreds that are experiencing the SAME THINGS Freeport, Ill and Manitowoc, Wis have seen happen to their towns. Imagine trying to sell a house in one of those towns and try to imagine anyone wanting to open a new business in either town. Professionals are suffering because their customers/clients can no longer pay them. When the factory payrolls leave town everyone is affected. It is similar to a drought hitting a small farming community. When the crops die in the field everyone in the county suffers.
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A people who value Privilege over Principal soon loses both - Ike


BILL FALLIN