(FORTUNE Small Business) – In the battle over U.S. outsourcing, Tony Raimondo, CEO of Behlen Manufacturing, a small firm based in Columbus, Neb., has become a symbolic casualty. Raimondo, 64, was President Bush's nominee for a Commerce Department post that has been dubbed "manufacturing czar." But Raimondo's company--a maker of grain silos, hydraulic presses, and steel buildings, with $140 million in annual sales--operates a plant in China. Senator John Kerry, the presumptive Democratic nominee, seized on that bit of outsourcing to attack Raimondo as unfriendly to U.S. workers. Under pressure, Bush withdrew the nomination. FSB contributor Sheree R. Curry talked with Raimondo about the loaded "O-word."

How do you feel about Senator Kerry's characterization of you?

He does not understand outsourcing. Senator Kerry simply put together two political sound bites. One is that Behlen has a plant in China, and the other that there was a 17% layoff of Behlen employees. The two things were unrelated. In fact, our layoffs were much larger than that. Due to the recession in the U.S., we had 1,500 employees in 2000, and now we are right around 1,000. In three years we had major layoffs that are not related to our plant in China. If we had not set up that plant, we would be facing additional layoffs in the U.S.

Do you feel abandoned by President Bush?

No. When the senior Republicans notified the administration that they were very concerned that I was not an ideal candidate due to the plant in China, then I knew the odds were against me for Senate approval, and so I withdrew.

Under what circumstances do you think a U.S. company is justified in outsourcing production?

Foreign companies export into a nation until the market starts getting self-sufficient or until they cannot afford ocean freight. We exported for 20 years before opening our plant in China. At Behlen we had lost our largest customer to competitors inside China. It is important to know that what we manufacture in China stays in China. That's offshoring. Outsourcing is when a company brings a product back to the U.S.

So is one practice more legitimate than the other in your view?

Global, dynamic companies must fight any way they can. Some low-skill jobs are good offshore because U.S. innovation and productivity are our strengths. Outsourcing can save a firm's market share and jobs; it saves an entire company.

Had you become manufacturing czar, what would have been your first priority?

The first thing we have to do is take some steps to make our plants in the U.S. more competitive. If that's done, fewer will go offshore. The U.S. comes out of the starting gate with a 22% disadvantage vs. our seven largest trading partners because of the cost of health care, regulation, and energy.