By Scott Wilson
The Washington Post
ASHEVILLE, N.C._President Obama chose a factory in economically distressed Appalachia on Wednesday as the stage set to showcase his State of the Union proposals to strengthen American manufacturing, telling employees that "we still have a lot of work to do."
"And this is a job for everybody," Obama told the audience of workers and guests at the Linamr engine factory here. "It's not a Republican job or a Democratic job. It's all of our jobs."
Obama built Tuesday night's State of the Union address around a series of economic proposals that he believes would benefit an imperiled middle class. He chose North Carolina — whose voters voted for him in 2008 and for Republican opponent Mitt Romney last fall — to begin an outside-the-Beltway effort to underscore the urgency of his agenda.
His proposals, including a 25 percent hike in the minimum wage, are likely to meet fierce resistance in a divided Congress. House Speaker John Boehner, R-Ohio, and other Republicans signaled immediate opposition Wednesday to a higher minimum wage and other economic plans outlined by the president.
But Obama intends to use backdrops such as this one, with the real-life trappings of American manufacturing, to rally support for specific ideas at a time of deep economic uncertainty. "I need Congress to do its part," Obama said to applause. "We've got to stop with some of the politics we see in Washington sometimes that's focused on who's up and who's down."
His ideas to help boost American manufacturing, squeezed by cheaper competition in a global economy, center on spending new money on job training, ending tax breaks for companies that move manufacturing jobs to other countries, and urging businesses to look to the United States first to make investments in research and factories by lowering the effective tax rate paid by manufacturing companies.
His advisers say the proposals will not add to the deficit, only reallocate money already in the budget.
Obama's challenge to revive a struggling middle-class economy is a big one here and in other states where manufacturing jobs have migrated overseas or been replaced by technology.
In North Carolina, the unemployment rate is 9.2 percent, more than a point above the national average. State lawmakers said this week that they will cut unemployment benefits, given such costs' drag on public finances. Other states are doing the same.
According to the Bureau of Labor Statistics, only three job categories showed declines in Asheville's workforce over the past year: manufacturing; government; and the mining, logging and construction sector.
About 8 percent of Asheville's labor force works in manufacturing. Those jobs have declined by 2.2 percent over the past year, and only the logging, mining and construction sector lost more. Obama advisers say a weak fourth quarter nationally may have played a part in the local manufacturing decline.
Obama chose the Linamar factory in the Blue Ridge Mountains of western North Carolina as a parable for what he hopes will be America's manufacturing rebirth. His advisers say he is seeking to build on the 500,000 manufacturing jobs the national economy has created in the past three years, something they say few predicted.
Linamar, which is based in Canada, makes heavy engine parts and components, several of which dangled above the stage where Obama spoke Wednesday afternoon after shedding his suit jacket and rolling up his sleeves.
The White House said that in 2011 Linamar expanded its U.S. operations here using a closed Volvo Construction Equipment plant where 220 people had worked until it was shuttered the previous year. Since then, Linamar has hired 160 workers with plans to hire 40 more by the end of the year. The company has plants in China, Mexico and other countries competing for manufacturing jobs.
"When a major manufacturing plant closes, we often see vicious downward economic spirals in those communities," Gene Sperling, director of the National Economic Council, told reporters Wednesday before Obama's remarks.
Sperling said Obama's budget would include $6 billion in tax credits to help communities such as Asheville attract new manufacturing companies when previous ones move or close.
Those towns and cities would apply for the tax credits financed by the federal government, which could provide financial incentive for companies to move into shuttered factories. The fund did not exist when Linamar made its choice to move here.
He said Obama would also seek $113 million to create manufacturing community partnerships - essentially a clearinghouse in the Department of Commerce where economically suffering communities could more easily find out what federal policies are available to help them attract manufacturing businesses, as well as companies that may be interested in relocating.
"What's happening here is happening all around the country," Obama said, adding that the costs of doing business abroad are rising to the point where some companies are finding it cheaper to open plants in the United States.
But Obama warned that "not every job" lost overseas will be returning, and that the economy is increasingly reliant on technology.
He said better job training is essential, at local community colleges and at the three new manufacturing institutes he announced Tuesday that bring together private and public-sector agencies. He called on Congress to approve money to build a dozen more.
"I believe in manufacturing," Obama told the audience. "It makes American stronger."