David Farr's Remarks at Business Leaders for Michigan CEO Summit

Remarks Prepared for Delivery
David Farr, Chairman and CEO, Emerson
Chair of the Board, National Association of Manufacturers
Business Leaders for Michigan CEO Summit – Keynote
November 9, 2017

Good afternoon. Thank you so much for that kind introduction and for the chance to address this Business Leaders summit. It is good to see friends and colleagues—and it is always great to be in Michigan. Thank you to Doug Rothwell—a friend of manufacturers and the NAM.

Many of you know me as the chairman and CEO of Emerson. We are headquartered in St. Louis, but have operations across the U.S. and world—and, in fact, not too far from here in Novi and north of Detroit in Sandusky. These ASCO Numatics operations employ about 300 men and women in Emerson Automation Solutions, our largest business platform (over $11 billion) producing technologies and products key to the industrial automation world.  

I am also here as the chair of the board of the National Association of Manufacturers—or NAM.

The NAM is the unified voice of manufacturers in the United States, from iconic global brands to family-owned small and medium-sized enterprises—14,000 member companies. We’re also proud to be partners with the Michigan Manufacturers Association, led by the great Chuck Hadden. The MMA is doing incredible work here in the state for all manufacturers.

At the NAM, we are the advocates for the more than 12 million men and women who manufacture products in America. You can imagine, there is a lot on our plate these days. The country is focused on manufacturing, and we are focused on making America stronger for all citizens. So, if you are not a member, you should consider being one! I could use the help and support!

Now, I have been in manufacturing my whole life. I grew up as a young boy going to the Corning Glass Works factories with my dad when I was just a kid in upstate New York and later when we moved to North Carolina and then England.

Our world has changed dramatically in my 36 years in manufacturing at Emerson, and the work we do has changed just as much.

Today, nothing gives me more pride than seeing Emerson employees achieve and accomplish things that have never been done before to make the world safer, cleaner, more efficient and more productive.

So I know this manufacturing industry well, but in all my years working in manufacturing, I cannot remember a moment like this: The revitalization of the U.S. manufacturing base to make us so much more globally competitive—an opportunity to win once again.

Our industry has been reshaped by the digital revolution—a transformation that requires an investment in education and training to give workers the right skill sets to take advantage of these new technologies. We all need these next-generation skills in our own companies, right now!

Manufacturing skills have moved from manual and pneumatic to automated and digital. Combined with the new ways we gather and use information, we are rethinking new and exciting manufacturing careers for people from all walks of life.

Despite what you hear, technology is actually “future-proofing” jobs and careers for Americans. The complaint for years was that technology was taking jobs away. Today, technology is fueling job creation as new “highly skilled” people are needed to harness this innovation and help all of us prosper and grow.

We are seeing positions created to design, engineer, manufacture, market, distribute, install and service automation technologies. And employees who are able to navigate changing, higher technology-based systems and services are in high demand and in short supply!

But here is a fact manufacturers do not talk enough about: About 350,000 manufacturing jobs are available right now—they are unfilled! Research by the NAM’s Manufacturing Institute and Deloitte tells us that over the next decade, modern manufacturing will have nearly 3.5 million job vacancies. We will not be able to compete and win if we don’t fix this talent issue.

The fix starts early by inspiring young men and women—and parents—about the possibilities in science, technology, engineering and math (STEM).

It is about showing them that manufacturing jobs are high-tech, hands on and by the way, rewarding and well-paying.

And that is the mission behind the NAM’s Creators Wanted campaign—having real people in manufacturing tell their story about their fulfilling careers. Take a look at what we are about:

VIDEO: Creators Wanted—Say Hello to the Future

That is just one installment in that series. You can see more at CreatorsWanted.org. And if your company wants to be featured like many others, including Emerson, in this positive, uplifting campaign, the NAM is ready to partner with you. Please ask, and please “raise your hand”!

But workforce development is just part of the picture—part of this incredible moment we manufacturers find ourselves in right now.

We also have a narrow window to deliver some major policy change for this great country.

The president’s efforts on streamlining regulations so far have been fantastic and beneficial.

The administration has started to look at all the costly and ineffective regulations that impact manufacturers, and they have committed to roll back two of those old regulations for each new one they issue. That means real discipline for federal agencies. We must keep the pressure and focus on this effort.

I am proud to say that when the White House wanted to know more about which regulations were hurting real manufacturers the most, they turned to the NAM, and I led an effort on behalf of the NAM to provide input from our members directly to the administration about which regulations needed a fresh look. The president trusts us—and his administration listens to our feedback. That is important for U.S. manufacturing. We have “several seats” at the table, and we use them for U.S. manufacturers.

People who do not have to deal with regulatory mess every day do not realize how much opportunity and potential we are wasting. And let me be clear—we all want clean air, safe roads and a fair economy. At the same time, manufacturers face more regulations than any other sector (nearly 300,000 of them), and we bear a disproportionate share of the cost. We have an obligation to fight for a more efficient system and process.

Bottom line: we need a modern regulatory system—streamlined, simpler, smarter. And the good news is that the president agrees and is taking real action.

Manufacturers also know that we cannot compete and win as a country if we have infrastructure that was built by the last generation—a huge problem!

As a nation, our infrastructure does not even rank in the top 10 in the world any more—that is so hard to take as an American! The American Society of Civil Engineers gives us a D+. I’m sure we all can remember taking D’s home to our parents and their “low-key” response!

It is so much harder to win if you are starting at a disadvantage like this!

It is an embarrassment—and it puts our families and our workers in danger, while making it harder to get our products to our customers on time and in good quality. None of that makes manufacturing stronger.

But in addition to all that—and that is a lot—we also have a once-in-a-generation chance to enact tax reform that will help our workers, our manufacturers, our whole country from a U.S. business perspective.

Leaders in the House, Senate and the Trump administration put out a framework for reform late last month. It was a bold step in the right direction for U.S. manufacturers. Then last week, the House put out real specifics and legislation. They have to work through it, but that first draft was a really powerful, really positive step forward. A huge win for the manufacturing industry—large, medium and small-sized companies.

Now, we, business leaders, have to help them. They could be voting next week. This is happening fast—and they need to stand strong, stand with manufacturing workers and their companies. Please let your representatives know you want bold change, bold action now to help U.S. manufacturers win!

It is not going to be easy, but manufacturers I talk with are enthusiastic about the prospect of reform. Last week’s rollout was an important step to get us to a place to iron out the details. But we cannot lose sight of the end goal. We cannot take the train off the tracks! No, it’s not perfect! But it is a huge step forward for U.S. manufacturing, and we must complete our task.

We have to put our own parochial interests aside—and think about what will lift up Americans. And that happens when manufacturers can win, as we have seen over hundreds of years.

Manufacturers are excited about getting their competitive edge back and not competing with their “hands tied behind their backs”! They are excited to expand their operations right here in America, hire new people and see their workers go home with bigger paychecks—and to support our communities like Detroit!

Die-Tech & Engineering, a 60-person manufacturing business here in Michigan and an NAM member, says they will “create more high-paying steady jobs” and have the freedom to invest in their business without having to make their decisions for tax reasons but real business economic reasons. They also say they will be more competitive with China and Europe for U.S.-based customers.

Jim Sheldon, who leads NAM member DT Engineering in my home state of Missouri, says that tax reform means more “security for [his] business and the employees.” He wants to be a role model, he says, and focus on the “well-being” of his workers and their future as DT Engineering prospers.

Ladies and gentlemen, we have to get this done. We cannot waste this opportunity to do good for the people of this great country. It is the time to help U.S. companies compete and win!

Today in America, the top corporate tax rate can exceed 39 percent when you add up the federal and state rates—the highest corporate statutory rate among the 35 industrialized nations of the OECD and more than 50 percent higher than the average rate. Emerson’s federal tax rate averaged 37.5 percent over the past 10 years!

A lot of people ask, “okay, so what”? I will tell you what: other countries are winning, and our workers and families are paying the price. They are taking American jobs and our prosperity.

Other countries have figured it out. They have lowered their tax rates. They have simplified their tax systems. They have given themselves a big advantage—a huge advantage—in the competition for jobs and business and growth.

America has some truly incredible advantages—unparalleled natural resources and an unbeatable, hard-working and dedicated workforce. But if we modernized our tax code for the modern economy, if we let our companies compete on a level playing field in the world, we could lift up more families, invest in more communities, unleash the power of this industry and improve the lives of all Americans.

If we had a better, more modern tax code, companies like Emerson could expand and hire more workers and help them get ahead right here in America.

So why are we writing rules and regulations that give other global competitors a leg up?

If you are defending the current tax code, then you have to defend a manufacturing worker in Michigan losing his or her job to a worker overseas.

If you are defending the current tax code, you have to defend years and years of mediocre economic growth, stagnant wages and entire communities losing hope for future prosperity.

If you are defending the current tax code, you are defending less innovation, fewer technological breakthroughs, less R&D and fewer lifesaving medical discoveries.


Manufacturers are encouraged by what we saw in the draft House bill. It’s not perfect, but it is much better than what we currently have in the U.S. tax code. In the final reform package, we want to see those lower tax rates for manufacturers of all sizes, small and large. We cannot leave small businesses behind. We all need tax relief, and small and medium-sized companies are an integral part of Emerson’s supply backbone.

The new system should stop double taxing U.S.-based companies when they bring overseas earnings back home. And it should incentivize investments in equipment, facilities and research and development, which keeps American companies innovative and competitive.  

As manufacturers, we need to stay focused on the goal: getting a bold tax reform bill to the president’s desk that will increase wages, improve opportunities to save for retirement and give Americans a fighting chance at having better lives. 

When you add up the small business provisions in the House bill, you’re looking at nearly a half-trillion dollars in tax relief over the next decade.

And a few days ago, Martin Feldstein, chairman of the Council of Economic Advisers under President Reagan, estimated that the corporate reforms would cause “annual national income to rise by $500 billion—equal to $3,500 a household.” It’s because the United States will be a magnet for investment—not just for U.S.-based companies but for foreign companies as well. I truly believe this as a global manufacturing leader.

This should be something that can bring us all together.

This is a chance to seize a new day. And U.S. manufacturers do not want to see it wasted. We truly need it, as does the U.S. economy. The past 10 years have seen less than 2 percent U.S. economic growth and 3+ percent U.S. government spending growth. This is a losing strategy for all Americans.

The NAM’s most recent Manufacturers’ Outlook Survey asked manufacturers what they would do if tax reform passed. Almost 65 percent of respondents say they would increase capital spending, 64 percent say they would expand their businesses, 57 percent say they would hire more workers and 52 percent report they would increase wages and benefits to grow and retain critical skills and personnel. We are not playing around here. Tax reform can be transformative to U.S. manufacturing.

So, if you agree with me, I am here to personally challenge you to do everything in your power to make the case for tax reform. If we fail, we will all share the blame. There is no force stronger than a unified manufacturing community. This is our time! Please communicate directly to your senators and congressmen and women!

Do not waste time. The House could vote next week. Talk to your congressional representatives. Write opinion pieces to news outlets and letters to the editor.

And engage with the NAM. You can text “ActOnTax” to 52886 to stay connected. We need real reform, real action now—not just talk! Thanks for doing this!

Ultimately, this is a question of values…because the tax code is a reflection of what we value as a country. Do we value the American manufacturing worker—and workers in all industries?

Do we want to give workers the best possible shot at making a good living and a good life? Do we want plentiful jobs for the next generation?

The current tax code says we do not, but I believe we do! As you can tell, I’m passionate about U.S. manufacturing. I have been involved my whole life, one way or another!

I believe we want to grow manufacturing here in the United States. I believe we want America to be the leader in 21st-century innovation, in medicine, in technology, in energy. I believe we want to reinvest in the promise of our people and this country. I do!

Our elected leaders have the chance to give them that confidence and to do good for our country by empowering all of us to do well and support ourselves!

Securing the future of modern manufacturing means having a tax code that lives up to the realities of the modern world. And I hope you are willing to speak out and take a stand—and show America that this is about far more than just more money for business; it is about increased economic prosperity and expanding the U.S. economic pie for all Americans—for all workers and their families!

It is about what we value as a nation. It is about helping all Americans have a better shot at a better life and a brighter future.

The Manufacturers’ Outlook Survey last quarter also found that manufacturers’ optimism is still incredibly high—the highest three-quarter average in the 20-year history of the survey.

There is no doubt manufacturing has had many challenging times, but that began to change one year and one day ago when America elected a president with an almost singular focus on our industry.

So, if we get tax reform done, and make progress on those other big issues…let me tell you, I do not think there is a limit to what we can accomplish as manufacturers, as a nation, as people.

Let’s get to work. Let’s seize this amazing moment—and make real progress for America.

Thank you so much for listening to my passion for manufacturing and this great country! I am happy to take some questions and have some fun! 

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