Climate bill bad for Ohio manufacturing

By DAVID W. JOHNSON

Ohio is at a critical crossroad. It has lost hundreds of thousands of manufacturing jobs, taking its unemployment rate to a 25-year high. The combined effect of these job losses has negatively impacted virtually every corner of the state, not only in the hardships it has caused families, but in greatly diminished tax revenues to our municipal, county and state governments. Had it not been for federal stimulus funds, the state itself would have faced a multi-billion dollar deficit, requiring draconian cuts in spending and/or huge increases in taxes — or a combination of both.

Faced with such a dire economic environment as this, we ought to be exploring every avenue imaginable to restore incentives for industry to remain in business in the short term and to be competitive globally in the longer term. Uppermost among these avenues, frankly, should be the development of new, affordable energy sources. While wind, solar and biofuels seem to be the flavor of the day, they are hardly sources of energy that will sustain major industrial states like Ohio. What we need is the development of clean coal technologies, expanded nuclear power, more pipelines for natural gas and yes increased capacity for oil refinement, be it crude or new technology shale oil.

Now comes the rub: rather than incentivize the development of these critical sources of energy, a bill being considered by Congress may go in the opposite direction and actually penalize those that are generating the energy so vital to America’s (and Ohio’s) industrial economy. That’s right, the Waxman-Markey bill now under consideration by the Congress proposes enormous new taxes, fees and regulations upon our already beleaguered industrial base at precisely the point in time that we can least afford it.

Family business

For nearly 100 years now, three generations of my family have been mining Ohio clays and manufacturing high grade ceramic tiles and paving bricks in rural northeast Ohio. Long before there were land reclamation laws, we reclaimed the lands that we mined, turning them into pristine farm land upon which champion cattle grazed. Over the course of our existence, we poured millions of dollars into payroll, health care, pensions and outstanding employee benefits. We did all of this because we cared.

Though we have invested millions of dollars in the latest technologies available for efficiently producing our products, in recent years the onslaught of cheap foreign imports, now comprising 80 percent of the U.S. market, have made it increasingly more difficult for us to compete. This has caused us to close two of four factories, 16 distribution centers and lay off some 450 employees, permanently. Yet we persist. Despite even the current national economic downturn, we are still mining clay and producing and shipping tile to all corners of the world ... even to China, the single largest tile producing nation in the world.

Our future and that of all manufacturers in Ohio, however, hinges upon whether or not we can continue to produce our products on a globally competitive basis. With energy ranking among the most important cost variables we have, obviously we are concerned about the Waxman-Markey bill and/or any other so called climate legislation that raises the costs of energy, impedes the development of new, affordable energy sources and/or chokes off investment in the same. Ohio’s congressional delegation has simply got to heed this message or face an even more ominous outcome than we are experiencing in these dark days of the Great Recession of 2009.

X Johnson is CEO of Summitville Tiles, Inc.; past chairman of the Ohio Manufacturer’s Association and a board member of the Ohio Business Alliance for Higher Education and the Economy. He is also chairman of the Republican Party of Columbiana County.