MEADVILLE — Area manufacturers say they don’t buy China’s claim that it will increase its currency’s value against the U.S. dollar — it’s something they’ve heard too many times before without any substantial action.

“It appears to be more of the same old stuff,” said Ralph Pontillo, president of the Manufacturer and Business Association, a 4,700 member industrial trade group based in Erie that represents business in Pennsylvania, Ohio and New York.

Over the weekend, China’s central bank said it would increase exchange rate flexibility between the yuan and the U.S. dollar. There was little change in the exchange rate Monday and the Dow Jones industrial average was flat on the news as most analysts predicted change would come slowly. The Chinese made the move a week before an international summit where a number of countries were expected to make currency reform an issue. American manufacturers have said China has purposely kept its currency undervalued by as much as 40 percent, making Chinese goods cheaper for U.S. consumers and making American products more expensive in China.

Although this weekend’s announcement was the first official acknowledgment it would increase the exchange rate, China has been promising for years to respond to critics, just as American politicians have pledged for years that they would bring about change.

The lip service combined with a lack of progress has left many American manufacturers cynical and skeptical about China’s recent announcement.

One of those manufacturers is Dennis Frampton, a past president of the northwestern Pennsylvania chapter of the National Tooling and Machining Association, a trade group, and president of C& J Industries, a Meadville manufacturing firm.

“I’m more of ‘I’ll believe it when I see it’,” Frampton said. “Basically, I don’t trust them (the Chinese),” he said.

For Crawford County, the Chinese/U.S. currency issue is crucial since there is heavier reliance on manufacturing here than in other sections of Pennsylvania or the nation.

About 20 percent of all jobs in the county are related to manufacturing, compared to about 12 percent for Pennsylvania and 11 percent nationally. Most local manufacturing jobs are in the tooling and machining industry, making tools, equipment and parts for major manufacturers.

In the recession that began in the fall of 2000, Crawford County lost an estimated 1,000 jobs in the tooling and machining industry and unfair competition from China was cited as an underlying factor.

Both Pontillo and Mark Hanaway, vice president of Tech Tool and Molded Plastics of Meadville, said the U.S. is going to have to change its tax laws, too, to be more competitive.

“If we’re going to be more competitive on a global basis we have to have more influence on the strength of the dollar,” Hanaway said.

Pontillo said American manufacturing isn’t going away — it’s just going somewhere else.

“The Chinese are hard at work building an industrial economy and they’ll do it at anyone’s expense,” said Pontillo. “As we’re portraying (U.S.) corporations as greedy and evil and pushing them off shore, China has open arms and is smiling, welcoming them.”

Pontillo said America’s influence is waning as China keeps buying up more of the U.S. debt, making China more influential in the U.S. economy.

“The only thing that prevents China from calling in its U.S. treasury investments is that if we go down, they go down, too.”

Pontillo said the U.S. government has to stop spending money it doesn’t have.

“Deficit spending has to stop, we’re becoming a debtor nation,” Pontillo said. “We’re going to owe more than we produce.”

The U.S. has to change what it can control and not expect the Chinese to do so, Hanaway said. “Until we change ourselves, we cannot live with the hope they’ll change for us.”



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For years, American manufacturers have said China has been subsidizing its industries and has purposely kept its currency undervalued as much as 40 percent, making Chinese goods cheaper for U.S. consumers and making American products more expensive in China.

The issue is critical for Crawford County, since there is heavier reliance here on manufacturing than in other sections of Pennsylvania or the nation.

About 20 percent of all jobs in the county are related to manufacturing, compared to about 12 percent for Pennsylvania and 11 percent nationally.

Most local manufacturing jobs are in the tooling and machining industry, making tools, equipment and parts for major manufacturers.

In the recession of 2000, Crawford County lost an estimated 1,000 jobs in the tooling and machining industry, and unfair competition from China was cited as an underlying factor.

Keith Gushard can be reached at 724-6370 or by e-mail at kgushard@meadvilletribune.com.