Then there are the everyday obstacles in business, such as customers that keep pushing prices down.
"Our customers expect engineered products at commodity prices,'' West said. "They expect us to have an engineering staff and they don't want to pay for it.''
MacGuidwin's biggest concern is that the firms that buy H.A. King's vibration control products will move their manufacturing overseas. "If that goes away, then we're in trouble,'' he said. "In some cases, that's starting to happen.''
Tire manufacturers continue to see an influx of tire imports from lower-cost countries. Micali said tires imported in the U.S. have grown by 60 percent during the past five years and are projected to increase by another 37 million tires by 2011.
And auto suppliers-especially those supplying the traditional Big 3-still will have difficulties ahead, said Dan North, chief economist for Euler Hermes ACI, a global trade credit insurer. He noted Ford Motor Co. just posted its biggest loss ever and a number of large auto suppliers already are in dire financial straits.
"I don't see pressure letting up anywhere on the supply chain,'' North said.
Of course, no discussion about the cons of doing business in the U.S. can be complete without mention of health care costs. All the executives placed the continued escalation of these costs as one of the top problems they face.
"I don't know of a business out there that doesn't have issues trying to control medical benefit expenses,'' Yusa's Allgeier said. "It consumes a lot of time and effort to make sure you're controlling your costs.''
BRC's Meyer said one problem is the amount of waste in the health care system. Just as manufacturing had to become leaner, the health care system has to go through the same transformation.
"It's a big part of our sales dollar,'' Meyer said. "You just have to try to offset it in other areas. For the U.S., it's the No. 1 concern in trying to remain competitive against the rest of the world.''
A number of companies, such as Parker-Hannifin, are taking a proactive stance by offering wellness programs. Parker has weekly programs available to employees on health and fitness issues, covering such topics as making healthy choices, the company spokesman said. It also has an on-site gym with organized classes, and the facility gets plenty of use by employees.
With health care, he said all businesses can do is negotiate the best rates possible, control what they can directly and then give employees the tools needed to maintain a healthy lifestyle.
The need to evolve
Richard Balka knows the one thing his company-Home Rubber Co. in Trenton, N.J.-can't afford to do is stand still.
"The rubber industry in general is shrinking, as is the manufacturing base in the U.S.,'' said the owner and president of the 125-year-old company. "So if you're standing still, your business is shrinking. Even if you're able to maintain the customers you have, your business will shrink because some of their business is going away.''
Home Rubber last year bought custom mixer Ivanhoe Rubber Co. as one way to have something else to offer customers. Balka said companies that don't find other ways to sell to existing customers, find new customers-including through acquisitions or mergers-or create other efficiencies, ultimately will close their doors.
"It's an option for anybody,'' he said. "Morally it's not a very good option (for Home Rubber) because I feed or help to feed 45-50 families and would hate to see that happen. I didn't get into the business to do anything other than make it successful.''
West said Colonial Diversified, which has about 125 full-time employees, also is starting a small mixing operation and has begun buying and reselling components it doesn't manufacture in-house. In addition, the firm leases part of its building to a trucking company and a tooling business.
"We don't have to be a manufacturer,'' West said. "Whatever you were in the past, you may have to evolve or re-invent yourself.''
For the long term, that means Colonial might look for a joint venture partner or sell out to another company. "If we want to grow, I don't know that we have the expertise,'' he said.
Roadmap to success
Succeeding as a manufacturer in the U.S. may be difficult in reality, but the issues aren't really that complex, Meyer said. "First look at what it takes to be successful period-not just manufacturing in the U.S.,'' the BRC official said.
The keys are to control costs, stick to what you do best, do it better than your competitors and don't get caught up in the latest fad. BRC didn't rush to Mexico in the 1980s or China in the 1990s or now, he said, though the firm did study and analyze both options.
"It didn't make sense for us at the time, so we focused on what we do here,'' Meyer said. "Time will tell if that was a good or bad decision, but it's served us well to this point.''
Being successful doesn't just happen on the shop floor, the Parker spokesman said. It means eliminating waste, not keeping excess inventory, investing in technology and anticipating customer needs. "It must permeate the entire operation,'' he said. "It doesn't mean you're going to reduce the number of people or facilities.''
Micali said Michelin will continue to focus on cost reductions, productivity improvements and making high-value products that will allow the firm to compete against the best low-cost Asian plants, even when logistics and transportation fees are factored in. He projects the company will reach this parity by 2010.
"Profitable, competitive manufacturing is possible in the U.S. and across North America,'' he said.
Even a company like Hi-Tech Group, with its double-digit growth year after year, knows it gets tougher all the time.
"There's less business out there,'' Sherman said. "You've just got to be more competitive with a little more technology than the competitor. We've worked very hard at it. Not many companies can say they've grown that much for 20 years.''
Mike McNulty, Rubber & Plastics News staff, contributed to this report.
* * *
Everyone interviewed for this report agrees on one thing: it is imperative that the U.S. maintains a strong manufacturing base. Here's a sampling of their thoughts on the topic.
Buddy Pepp, Titan Industries president
"Everybody can't be a computer programmer or a telemarketer. We have to have a strong manufacturing base or we'll be a second-rate nation.''
Bill Sherman, Hi-Tech Group president and chief operating officer
"Yes, absolutely, or we will depend on other countries just like we do in oil. That bothers me. If the U.S. becomes a total service economy, that's not a good thing.''
Vincent Allgeier, vice president and general manager of Yusa Corp.'s research and development operation
"We cannot be a service economy. At some point you've got to have a national product.''
Mike Meyer, BRC Rubber & Plastics Inc. executive vice president
"If we want to retain strong national defense, we need to keep manufacturing. As a percentage, manufacturing is a small part of employment, but they are good paying jobs that demand technology and education.''
Keith MacGuidwin, H.A. King owner
"Those are jobs that generate decent income for employees. Service is wonderful, but if you're not producing anything, then what are you servicing?''
Richard Balka, Home Rubber Co. owner and president
"From a global economic standpoint, you could argue that no, we don't need to continue to manufacture. However, there's a certain stability that comes from manufacturing that we've obviously lost. A lot of major Northeast cities have successfully replaced their manufacturing base with a service base (including stock and financial markets). But there tends in my mind to be more of a fluctuation in the viability of those markets than there is in the viability of a strong manufacturer. Even when in decline, manufacturing has a more measured and trackable movement when it goes up and when it comes down, while the banking, dot-coms and stock markets can whip out of control either up or down at any point in time.''