Manufacturing in U.S. Can Revive If Unburdened by Legacy Issues: Tom Keene

U.S. manufacturing can rebound if plants are competitive and unburdened by “legacy issues,” according to John Casesa of Casesa & Co. and Maryann Keller, president of Maryann Keller & Associates LLC.

“Certainly the plants put up by Kia and Hyundai and hopefully Volkswagen in Tennessee and others have always demonstrated that they are more productive and more competitive in a cross-sense standpoint than GM and Chrysler, which is why we went through bankruptcies last year,” said Keller, whose automotive consulting firm is based in Stamford, Connecticut and who serves on the board of Casesa & Co. She spoke in a radio interview today with Tom Keene on “Bloomberg Surveillance.”

The Institute for Supply Management’s gauge of manufacturing rose to 56.3 in August from 55.5 a month earlier, the Tempe, Arizona-based group said today. Readings greater than 50 signal growth. Economists forecast the decline to 52.8, according to the median of 78 projections in a Bloomberg News survey. Estimates ranged from 49.9 to 56. China’s purchasing managers’ index rose to 51.7 from 51.2, exceeding forecasts, according to government data.

‘Growing Like a Weed’

“Even though China’s growing like a weed and the U.S. is not, manufacturing in the U.S., as Maryann pointed out, is actually very competitive now,” New York-based Casesa said. “It’s just that we had a lot of legacy problems -- health care, union issues, all that destroyed these companies.”

Retail deliveries of passenger cars, multipurpose and sport-utility vehicles in China jumped 59 percent to 977,300, the China Automotive Technology & Research Center said. The nation’s total vehicle sales rose 55.7 percent to 1.22 million units, according to the center. August U.S. auto sales were probably the slowest in 28 years, according to a survey by Bloomberg News.

“We have plenty of capacity in North America, less than we did before the recession, but it will be quite a few years before we’ll need to add net new capacity,” Casesa said.

To contact the reporters on this story: Mary Childs in New York at mchilds5@bloomberg.net; Tom Keene in New York at tkeene@bloomberg.net

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