Glencoe’s Sirkin has President’s ear on economy

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Atlanta Mayor Kasim Reed speaks as Hal Sirkin, Senior Partner at Boston Consulting Group and Glencoe resident, listens during a panel discussion in the Eisenhower Executive Office Building Jan. 11 in Washington, DC. Business leaders and members of the Oba

Updated: February 2, 2012 4:23PM

Hal Sirkin has done the math, and he sees the future. And it’s better.

“Wages are rising very high in China, 15 to 20 percent a year, and I’ve done the arithmetic,” said Sirkin. The business operations expert from Glencoe was seen on many of your local and national television channels meeting with President Obama and other business leaders on outsourcing. “The spread between the cost of production in China and the United States is narrowing very rapidly.

“Some time in 2015 or a little bit beyond — taking into account the costs of transportation and the risks of intellectual property being (stolen) — for certain categories of goods, the cost will be the same here as it is in China.”

Sirkin was the lead speaker at Jan. 11’s Insourcing American Jobs forum that brought business mavens to the White House, and he sees the point of the summit and of policy in general is to let folks know that manufacturing is not dead in America.

But isn’t it?

Everybody seems to think so, but it’s a myth, Sirkin says.

“The U.S. manufactures 75 percent of what we consume, which is still an incredibly high number,” he said in a post-summit interview Saturday.

If we’re on the way to overtaking China, shouldn’t there be signs along the way? Shouldn’t we be seeing ships turning around in the Pacific?

Glad you asked, Sirkin says.

“Master Lock, in Milwaukee, just brought jobs back,” he said. “NCR (an Ohio-based company) has put a plant in Columbus, Georgia. Coleman has moved some of the cooler manufacturing back to the Untied States ...

“Chesapeake Bay Candle, that’s a story. It was founded by a woman from mainland China, and she started by having the candles made in China,” he said. After trying Vietnam, too, “She’s now built some plants in Maryland.”

He went on and on with the reverse outsourcing examples, and says that in talking with the President, he can tell that Obama gets it.

He just wants everybody else to, too.

“If people do the math, it’s oftentimes cheaper and more effective in the U.S.,” Sirkin said.

As he spoke, crowds thronging the Detroit auto show in its final weekend seemed to add weight to his opinion, and not just about China. Attendance was the highest since 2005, and the crowds were deepest around the American brands.

It may be a reflection of what’s going on in the American and international car-sales marketplaces. As Toyota and Honda sales here dropped 7 percent in 2011, GM went up 13 percent, Ford rose 17 percent and Chrysler, 26 percent. Though Volkswagen, Hyundai and Nissan were all up, too, General Motors has just retaken its place as the largest-selling car manufacturer in the world from Toyota, which had wrenched it away in 2008.

GM sold more Chevys in 2011 than it ever has, and a total of 9 million cars worldwide. About 2.5 million of those were sold here, leading the pack (but that’s compared to 4.5 million in 2005).

Even if production continues to increase in the United States, will the people doing the producing get their share of the profits? Or will U.S. manufacturing look more and more like Third World commerce to the people who turn the wrenches?

Sirkin maintains that the new jobs, requiring skills beyond entry-level, are for good money, but “may not be the $40- $50-an-hour jobs we used to hear about, because the U.S. has gotten much more productive. But we’re not talking about the minimum-wage, eight- , nine-dollar-an-hour jobs, either.”

Sirkin, 52, travels the world for the Boston Consulting Group, where he’s the global leader of the company’s operations practice, a senior partner and managing director. He tries to gain understanding for Boston Consulting in a role that’s not directly monetized, and considers himself fortunate to have the opportunity.

“It’s a wonderful thing to be able to get a window on the world that’s constantly changing, and to hopefully get a little ahead of it and predict what happens,” he said.

He writes about what he sees monthly for Bloomberg BusinessWeek. The political independent said he could tell, in on- and off-the-record conversations with Obama, that the President has read what he’s written.

“It was clearly received by President Obama,” he said of his theoretical playbook. “He understood it and is acting upon it. It’s very humbling.”

Obama has signed into law two incentives to encourage purchase of manufacturing equipment for U.S. use, and has asked for various tax reforms to be created or extended to promote hiring, balance corporate tax policy, and open international markets. The White House claims over the last 12 months, exports have risen 16.3 percent compared to 2009.

“In the end, I think he is very, very bright,” Sirkin said of Obama. “He’s clearly on top of this, and I think he’s got a very good grasp of what is going on.”

Sirkin has a pretty bright household, too. He’s the holder of business degrees from the Wharton School and the University of Chicago. His wife Eileen has a Chicago PhD in molecular genetics, and works at the Chicago Botanic Garden on sea grass planting as a strategy to slow beach erosion. Their two kids are District 35 and New Trier graduates, with a daughter working as an editor in Boston, and a son studying history and Portuguese in college.

The couple met in Hyde Park, and has now lived 25 years in Glencoe.

“It’s like living in a small town in the middle of 7 million people,” Sirkin said.

Glencoe is a town that’s shrinking slightly due to economic stress, but Sirkin says that won’t last forever.

“I think we’ve done the bottoming-out, and we’re on the way up.”