“Opportunities are like sunrises. If you wait too long, you miss them.”
William Arthur Ward
A philosophical change in the approach to managing the United States economy will arrive in Washington DC in January 2025. New leadership is focused on enhancing the role of the American manufacturing sector in the world economy. Domestic manufacturing creates jobs, economic growth, and enhances tax collections for federal, state, and municipal governments. Twenty years ago, 13.17% of United States GDP was generated from our manufacturing sector, however since 2019 the figure has consistently fallen below 11% (https://www.macrotrends.net/global-metrics/countries/USA/united-states/manufacturing-output). In 2023, the figure was 10.2% (https://www.nist.gov/el/applied-economics-office/manufacturing/manufacturing-economy/total-us-manufacturing), a continuation of a trajectory which would see the figure fall below 10% in this decade, if changes are not made to address a 21st century dynamic that saw a rise in foreign manufacturing and a decline in American made products as a percentage of the world economy. As comparison China had approximately 3% of the world’s manufacturing exports in 1995, today they have approximately 20% (https://cepr.org/voxeu/columns/china-worlds-sole-manufacturing-superpower-line-sketch-rise). Put in dollar terms, China exported $3.38 trillion dollars of products in 2023 (https://www.statista.com/statistics/263661/export-of-goods-from-china/) versus $2.02 trillion dollars for the United States. Personally, as an advocate for the United States manufacturing sector, I would like to see these figures reversed in the future.
Enhancing the productive capability and dollars generated from the United States manufacturing sector is a worthy federal government objective. The focus is anticipated to create opportunities and investment in the manufacturing sector that have not been seen in decades domestically. This positive tailwind originating out of Washington DC will generate opportunities for baby boomer manufacturing sector business owners to sell their companies in a robust marketplace and buyers of manufacturing companies to experience strong returns on their investments in the future.
One of the areas where America is at a competitive disadvantage against overseas manufacturing is in the cost of labor. A methodology for overcoming this imbalance while maintaining good paying jobs, at least in terms of access to the United States market, the largest and most important marketplace for goods & services in the world (https://www.worldometers.info/gdp/gdp-by-country/) is to impose tariffs on products manufactured overseas that are imported into the United States. Tariffs normalize the value, so that American made products have similar pricing for consumers domestically, while at the same time enhancing federal government revenue collection without taxing the citizenry directly. This has been true since George Washington was President and Alexander Hamilton proposed using tariffs to address national debt (https://www.smithsonianmag.com/sponsored/alexander-hamilton-debt-national-bank-two-parties-1789-american-history-great-courses-plus-180962954/).
In addition to leveling the global playing field for American manufacturing firms through the use of tariffs, something started in 2016 by President Trump and continued by President Biden as sound policy (https://www.npr.org/2024/05/10/1250670539/biden-china-tariffs-electric-vehicles) an enhanced manufacturing sector allows America to stay “best in class” through innovation like has been achieved by American car manufacturer Tesla versus its competition in the EV space (https://evadoption.com/ev-sales/evs-percent-of-vehicle-sales-by-brand/). America is also a global leader with Industry 4.0 (https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-are-industry-4-0-the-fourth-industrial-revolution-and-4ir) where our country’s world leading technology sector is integrating into the manufacturing process increasing automation and manufacturing efficiency, quality, and speed of production. This integration also enhances pay for workers in the sector and through growth of companies employment opportunities. IBA with its corporate headquarters in Bellevue, Washington in close proximity to corporate offices for Microsoft, Amazon, and Google has sold numerous businesses to individual parties and private equity firms staffed with people originating from these companies eager to pursue entrepreneurial dreams and enhance founder’s companies to achieve strong returns on investment and top line revenue growth. If as a business owner you wish to tap into this buyer pool, IBA would welcome the opportunity to facilitate the interaction. IBA’s internally managed Buyer Database Program, exclusively for the benefit of our clients, has a large group of vetted parties ready to engage and complete transactions. If you are looking for a manufacturing company to acquire, it is prudent to be part of this program as companies represented exclusively for sale by IBA frequently enter and exit the market with limited market exposure in the public domain.
Another active group of buyers seeking to purchase United States manufacturing companies are foreign corporations and individuals (https://hbr.org/2024/09/how-foreign-investment-is-boosting-u-s-manufacturing). These parties recognize that if they manufacture products using United States labor inside the country that they will not be subject to tariffs on the items sold in the country and have access to American based labor talent. International Business Associates (IBA), has international in our name and experience working with this group of buyers for fifty years in the Pacific Northwest. We also know the attorneys and accountants capable for structuring and papering these deals having sold businesses in the past to buyers from Canada, Japan, India, and a spectrum of other European, Asian, African, Latin & South American nations.
If you are a manufacturing company owner in Washington or Oregon thinking about selling your company in 2025, the members of our M&A team specializing in that sector of the economy would welcome the opportunity to meet with you, learn about your business, exit strategy objectives, and provide an overview of our services. All conversations with IBA are held in strict confidence. 100% of our fees are performance based. We do not wish to be paid unless we deliver a sale you find satisfactory.
Made in America once stood for quality around the world. It is time to return the nation to its rightful place as the globe’s best manufacturer of quality, innovative products. Let’s start with owning our home marketplace with domestically made items. To quote my friend, Graham Hollingsworth, who was an aerospace engineer at Boeing before becoming an entrepreneur who commonly said with a smile for many years, “If it isn’t Boeing I am not going.”. That type of sentiment needs to return to being part of the fabric of our nation and generate more songs like Toby Keith’s, Made in America (https://youtu.be/MaAF_3WMJGM?si=JdFX6hs1-B_O1qJa), conveying pride in what we build in the United States.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, legal, accounting, banking, and wealth management communities on subjects relevant to the purchase & sale of privately held companies and family businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.