The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.By Carlos M. Cardoso, chairman and CEO of Kennametal, a Latrobe, Pa.-based manufacturer of industrial tools NEW YORK ( TheStreet) -- U.S. manufacturing is not dead. It's not disappearing. In fact, it's quietly leading the recovery of the U.S. economy, albeit slowly at this point. To build upon this economic momentum, the U.S. must continue making things, plain and simple. First, the facts. The U.S. is the world's largest manufacturing economy, producing 21% of global manufactured products. China is second at 15%, and Japan is third at 12%. U.S. manufacturing produces $1.6 trillion of value each year, or 11.2% of U.S. GDP. If it were a country, the U.S. manufacturing sector would be the ninth largest economy in the world. The quantity of manufactured goods produced in the U.S. has kept a steady pace with overall economic growth since 1947: both GDP and manufacturing have grown by about seven times. Legislators and policymakers across the country are already taking notice of manufacturing's role in the recovery. There is no question that industry needs to partner with, not rely upon, the government to tackle important issues that will help make U.S. manufacturing more competitive. President Obama is set to unveil a national jobs plan in the coming weeks and we hope to find in the pages of his strategy solutions to help us work together to advance our competitive edge and to continue to lead the American recovery. Support at a national level is critical to the creation of the good jobs that define and support a strong middle class. Integral to that support should be policies that will advance innovation, promote exports, address our challenging tax codes and evaluate unduly burdensome or redundant regulation. The results will be more well-paying careers for American workers and solid, sustainable companies for the future economic health of our country. When it comes to the creation of manufacturing jobs, Washington won't be starting from scratch. Today, manufacturing supports an estimated 18.6 million jobs in the U.S., and nearly 12 million Americans (or 9% of the workforce) are employed directly in manufacturing.
These are well-paying jobs. In 2009, the average U.S. manufacturing worker earned $74,447 annually, including pay and benefits, compared with the average nonmanufacturing worker, who earned $63,122 annually. This wouldn't be the first time Washington has discussed a national commitment to manufacturing. In fact, there are many bills already introduced in Congress to bolster this sector. However, there is one simple measure that policymakers could take to make manufacturers more competitive: Reduce the corporate tax rate to 25% or lower without imposing offsetting tax increases. In recent years, nearly 60 countries have cut their corporate taxes to encourage economic growth. At the same time, the combined U.S. statutory corporate tax rate has stayed at almost 40%. By standing still, the U.S. is falling behind. Manufacturers are encouraged by the bipartisan interest in lowering the corporate tax, and we want to work with government to determine the best way to implement a tax code that encourages growth. Just as positive is White House support for an expanded Skills for America's Future program that will help 500,000 community college students "get industry-accepted credentials for manufacturing jobs that companies across America are looking to fill," as President Obama announced in early June. In getting behind the manufacturing sector, our nation could enjoy some significant job growth benefits, resulting from support for making the R&D tax credit permanent. By making the R&D tax credit permanent, technological innovations will generate efficiencies and advances for other industries. Well-paying jobs will be created. And, perhaps most importantly, seeing more Americans build and export our products will strengthen the economy. Our nation's manufacturing must continue to be a point of national pride. It's something our leaders in Washington must continue to support. Manufacturers from coast to coast are already working together to advance the industry's collective ability to positively impact the economy. In this collaborative spirit, my company, Kennametal, and the American Machine Tool Distributors' Association are joining the Society of Manufacturing Engineers and other industry leaders for an unprecedented manufacturing summit on Sept. 12 to 14 in Las Vegas.
At the Interactive Manufacturing Experience (imX), we will share new technologies, exchange best practices and forge new relationships. We'll collectively work to determine solutions to challenges like the pending shortage of skilled manufacturing workers. In short, we will collaborate to propel our industry, and our nation, forward. As the president prepares to outline a national jobs plan, we trust that he and other leaders in Washington will recognize the importance of the U.S.'s manufacturing base. We hope they will commit to working with the industry to enable our nation's manufacturers to create more jobs and continue to drive the economic recovery.