“If Taxes Go Up, I Have Fewer Choices,” Says Manufacturing CEO
Klaussner Home Furnishings has made three increases in its workers’ wages over the past 10 months, while also adding benefits. Yet, the company’s ability to invest in workers and add much-needed equipment may be in danger if Congress proceeds with proposed tax hikes, according to President and CEO Terry McNew. These increases could do real harm to manufacturers at a time when the economy is starting to recover from the pandemic.
Benefits for workers: McNew, who has led Klaussner for about a year and a half, explains that he’s working hard to take the company from the 19th century to the 21st century—“skipping over the 20th,” he says—by eliminating the use of piecework and ensuring that all current workers have full 40-hour workweeks.
- That transition included the wage increases mentioned above, as well as an expansion of benefits, such as a reduction in health insurance deductibles and the addition of mental and behavioral health benefits.
- “If taxes go up, I have fewer choices,” says McNew. “I’ll have even more limited resources” for raises and other benefits.
Facility expansion: McNew also credits tax reform with helping Klaussner improve its facilities and buy much-needed equipment.
- Late last year, the company installed new roofs, and it is currently in the market for new sewing machines. Its new CIO is looking to invest in enterprise resource planning and materials requirements planning software, which will cost about $5 million.
- McNew says these plans were made possible by a tax provision called full expensing, which allows companies to deduct the full cost of capital expenditures in a single year.
The economic context: McNew points out that manufacturers are dealing with a number of difficulties right now, including higher materials and shipping costs, which are amplifying their worries about potential tax changes.
- In light of all these factors, McNew says, “I told my executive staff we are not getting raises this year, but instead giving raises to employees.”
The last word: NAM President and CEO Jay Timmons said, “As we emerge from the economic catastrophe caused by COVID-19, American businesses are at a pivotal point in our nation’s history. Manufacturers like Klaussner are helping to lead the economic recovery in the wake of the pandemic. But increasing the tax burden on companies in America would mean fewer American jobs, lower wages and a smaller economy.”
Manufacturers Unveil Competitiveness Agenda Ahead of Midterm Elections
“Competing to Win” offers a path for bringing the country together around policies, shared values and a unified purpose
Washington, D.C. – Ahead of the midterm elections, the National Association of Manufacturers released its policy roadmap, “Competing to Win,” a comprehensive blueprint featuring immediate solutions for bolstering manufacturers’ competitiveness. It is also a roadmap for policymakers on the laws and regulations needed to strengthen the manufacturing industry in the months and years ahead.
With the country facing rising prices, snarled supply chains and geopolitical turmoil, manufacturers are outlining an actionable competitiveness agenda that Americans across the political spectrum can support. “Competing to Win” includes the policies manufacturers in America will need in place to continue driving the country forward.
“‘Competing to Win’ offers a path for bringing our country together around policies, shared values and a unified purpose,” said NAM President and CEO Jay Timmons. “The NAM is putting forward a plan filled with ideas that policymakers could pursue immediately, including solutions to urgent problems, such as energy security, immigration reform, supply chain disruptions, the ongoing workforce shortage and more. Manufacturers have shown incredible resilience through difficult times, employing more workers now than before the pandemic, but continued resilience is not guaranteed without the policies that are critical to the state of manufacturing in America.”
The NAM and its members will leverage “Competing to Win” to shape policy debates ahead of the midterm elections, in the remainder of the 117th Congress and at the start of the 118th Congress—including in direct engagement with lawmakers, for grassroots activity, across traditional and digital media and through events in key states and districts as we did following the initial rollout of the roadmap in 2016.
The document focuses on 12 areas of action, and all policies are rooted in the values that have made America exceptional and keep manufacturing strong: free enterprise, competitiveness, individual liberty and equal opportunity.
Learn more about how manufacturers are leading and about the industry’s competitiveness agenda at nam.org/competing-to-win.
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org