Workforce

How Manufacturers Are Investing in Their Future Workforce

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How are manufacturers developing a workforce for a fast-changing industry in a fast-changing decade? Recently, Manufacturing Institute President Carolyn Lee sat down with leaders at Union Pacific Railroad and the Caterpillar Foundation to find out.

Union Pacific Senior Vice President of Corporate Relations and Chief Administrative Officer Scott Moore discussed his company’s efforts to recruit more women and young people to the manufacturing industry. Caterpillar Foundation President Asha Varghese weighed in on Caterpillar Foundation’s efforts to support training opportunities for the military community and introduce high school students to innovative manufacturing careers.

What Union Pacific is up to: The Union Pacific and MI partnership is centered around a program called Careers on Track. This three-year, $3 million initiative is aimed at changing perceptions of the rail industry and encouraging women and youth to pursue careers in the field.

  • As part of Careers on Track, Union Pacific and the MI developed Future Creators, a digital STEM curriculum focused on transportation, distribution and logistics.
  • Future Creators has been used in more than 24,000 middle schools across the country with 80% of students increasing their knowledge of STEM careers.

How they’re doing it: The MI and Union Pacific created a 3D digital experience of a Union Pacific yard and locomotive that is designed to help women and young people explore technical fields interactively.

  • Their other outreach efforts include 30-second PSA-style videos that showcase female employees and their stories to highlight career paths at Union Pacific and events hosted through the MI’s STEP Women’s Initiative.
  • Union Pacific has reached more than 250,000 women through this content, demonstrating what women just like them can achieve in the manufacturing industry.

Union Pacific says: “We’ve always known diversity is key at Union Pacific, and to achieve that, there are deliberate things we need to do,” said Moore. “We’re going to have to reach people. Around 90% of our workforce is union, primarily in the field, across 23 states and 7,000 communities. We have to get in those communities—and The Manufacturing Institute gave us the tools to do that well.”

What Caterpillar is doing: The Caterpillar Foundation’s partnership with the MI is investing in workforce readiness and building an empowered and skilled manufacturing workforce.

  • This partnership is expanding the MI’s Heroes MAKE America program, which provides certification and career-readiness training to transitioning service members, veterans, military spouses and others who work in or with the armed services.
  • One of the partnership’s first efforts was to create a fully virtual program to further Heroes’ reach regardless of physical location.
  • The first 100% virtual Certified Production Technician training program was launched in late 2021, in partnership with Texas State Technical College and TRANSFRVR.

In addition, the Caterpillar Foundation is also working with the MI’s FAME program—a 21-month apprenticeship program founded by Toyota that grants certifications and prepares young people for high-skilled jobs in the manufacturing workforce.

  • Most recently, the MI and the Caterpillar Foundation created a new FAME chapter in Seguin, Texas.

Caterpillar says: “Caterpillar Foundation focuses on resilient communities, and we understand the importance of investing in local communities in order to ensure that we’re providing them with the right resources, with the right services and with the right skills for employability,” said Varghese. “What really attracted us to the MI is first and foremost that strategic alignment…focusing on that untapped talent.”

The last word: “As a nonprofit, the MI depends on the investments of corporate and philanthropic leaders to tackle the workforce crisis in manufacturing with innovative, exciting workforce solutions,” said Lee. “The MI’s work has expanded to include a full collection of initiatives that not only train individuals for rewarding careers but also provide the thought leadership, best practices and learning networks that manufacturers need to address their workforce issues.”

Press Releases

Successful Indo-Pacific Framework Critical for Manufacturers

Washington, D.C. – Following the Biden administration’s announcement on the launch of the Indo-Pacific Economic Framework for Prosperity, National Association of Manufacturers Vice President of International Economic Affairs Ken Monahan released the following statement:

“NAM President and CEO Jay Timmons pressed the administration on critical components to the IPEF earlier this year, and manufacturers are encouraged that the framework will address key manufacturing priorities we have outlined in areas such as digital economy, resilient supply chains and transparency and good governance. These priorities are essential for manufacturing businesses and workers for a region that represents more than two-fifths of total U.S. manufacturing trade and is a market for U.S. exports that support nearly 2 million American jobs.

“As discussions continue, we’re looking for U.S. leaders to support manufacturing jobs by taking an approach that opens markets, strengthens U.S. innovation and technology leadership, raises global standards and establishes best-in-class trade rules.”

Background: NAM President and CEO Jay Timmons stressed in a February letter to senior administration officials that high-standards trade with the Indo-Pacific is critical to manufacturers’ success and global competitiveness. Additionally, the NAM submitted  comments on the IPEF in April to the Office of the U.S. Trade Representative.

-NAM-

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 12.7 million men and women, contributes $2.71 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.

Policy and Legal

Increased Production, Not Regulations, Will Lower Gas Prices

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Policymakers can help alleviate the pain Americans are feeling at the pump and elsewhere—but by increasing domestic energy production, not through ill-conceived legislation, the NAM told U.S. House leadership this week.

Missing the mark: On Thursday, the House narrowly approved a measure that “gives the President the power to issue a declaration making it unlawful for energy companies to increase prices that are ‘unconsciously excessive,’ and authorizes the FTC to enforce those violating the act,” according to CNN.

  • “[M]anufacturers oppose H.R. 7688, the Consumer Fuel Price Gouging Prevention Act; it misses the mark,” NAM Vice President of Energy and Resources Policy Rachel Jones wrote to the House leaders on Thursday. She added that price gouging is already illegal in most states and comes under Federal Trade Commission investigation.
  • The new measure “does nothing to address the real drivers of rising energy costs and only adds additional regulatory red tape that could drive prices even higher,” Jones continued.

What will work: Instead, legislators should focus on increasing production of energy here at home, which will lower inflation and pump prices, as well as make the U.S. more competitive globally, Jones wrote.

“That starts with opening our diverse resources on federal lands, approving responsible exploration and production, supporting sustainable permitting and quickly building out more energy infrastructure.”

Business Operations

How Manufacturers Compete in the Labor Market

Manufacturing companies are increasing wages to stay competitive in attracting and retaining workers, according to a new study conducted by The Manufacturing Institute and Colonial Life.

Tight labor market: Of the survey respondents, 93% had unfilled positions in their companies that they were struggling to find qualified applicants for.

  • Nearly 90% said they have increased compensation and incentives to pursue and retain employees.
  • Seventy-three percent of respondents felt that increasing compensation helped their company stay competitive.

The big picture: Average hourly earnings for production and nonsupervisory workers in manufacturing climbed to $24.78 in March, up 5.5% from one year ago.

  • Despite significant wage increases, the labor force participation rate was below pre-pandemic levels at just 62.2% in April.

Other benefits: Hourly wages and salaries were most important for attracting and retaining workers, but other benefits were also effective.

  • Manufacturing companies have also attracted employees with health, dental and vision insurance, bonuses and/or additional income opportunities, paid vacation and sick time, contributions to a 401(k) or retirement plan and flexible work hours.

What the MI is saying: “We continue to see record growth in wages, and many of the companies we spoke with are offering even more generous benefits packages to try and differentiate themselves from other sectors struggling to find talent in a tight labor market,” said MI President Carolyn Lee.

  • “We’re averaging more than 800,000 open jobs in manufacturing a month, and the MI is focused on equipping manufacturers with tools and strategies to overcome this challenge so we can reach our full potential.”

Learn more: Looking for retention strategies you can use right away? The MI will be hosting a retention workshop on June 7–8. Find out more and register here.

Policy and Legal

NAM Drives Conversation on Innovation and Competition

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The NAM is urging Congress to bolster American innovation and make the U.S. more competitive with China.

The big picture: NAM Senior Vice President of Policy and Government Relations Aric Newhouse wrote to Congress, “we urge the completion of a strong, bipartisan agreement that strengthens domestic manufacturing, increases our global competitiveness and provides opportunities for the more than 12.7 million people who make things in America.” The NAM’s recommendations include the following:

  • Semiconductor manufacturing: Newhouse emphasized the NAM’s support for the $52 billion provided to bolster domestic semiconductor manufacturing in both the Senate’s United States Innovation and Competition Act (USICA) and the House’s America COMPETES Act.
  • Supply chain resilience: 88.1% of manufacturers report supply chain issues as their primary business challenge, which is why the NAM supports the creation of the Manufacturing Security and Resilience Program and the $45 billion investment to support supply chain resilience included in the America COMPETES Act.
  • Shipping: The Ocean Shipping Reform Act, which has passed both chambers of Congress in some form, is aimed at increasing port efficiency, reducing shipping delays and decreasing transportation costs through the improvement of ocean shipping standards and implementation of better oversight mechanisms.
  • R&D: The NAM recommends reversing a new provision in the tax code that requires companies to deduct research and development expenses over a period of years rather than the year the costs are incurred—a provision that effectively makes R&D and innovation more expensive and more difficult for American companies.
  • Eliminating card check: “Manufacturers are strongly opposed to the labor and card check provisions included in the America COMPETES Act,” wrote Newhouse. “Implementing ill-considered labor and card check provisions would upend decades of labor precedent with an anti-competitive, anti-democratic process that abolishes the secret ballot and eliminates appropriate oversight.”

Other recommendations: Newhouse also expressed the NAM’s support for policies that reduce emissions and promote sustainability to make the U.S. a global leader in energy efficiency. The letter recommends the reauthorization of the Miscellaneous Tariff Bill, the implementation of strong anti-counterfeiting legislation to protect consumers and small businesses and federal investment to improve the domestic critical mineral supply chain.

Take action on these issues and more at Manufacturers United

News

Manufacturing Supply Disruptions Could Last into 2023

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Supply chain disruption could continue for more than another year, according to the newest Resilient M4.0 Supply Chain survey conducted by the NAM’s Manufacturing Leadership Council. The MLC is the digital transformation arm of the NAM.

What’s the holdup? A combination of factors is causing fundamental shifts in supply chain approaches across the industry. These include pandemic lockdowns, blocked shipping lanes, container scarcity, material and component shortages, extreme weather events, rising prices and military conflict.

What manufacturers are doing about it: Supply chain organizations are reassessing traditional supply chain strategies, reducing network complexity and integrating key functions.

  • They are also redesigning processes and harnessing the power of digital tools to transform their supply chain ecosystems.

Universal disruption: Even supply chain structures with some local or regional networks have been affected by recent events, according to the MLC’s survey.

  • Ninety percent of respondents reported suffering either significant (52.5%) or partial (39%) disruption in the past two years. Just 0.5% said they had seen no disruption

Improving resilience: While many manufacturers have taken action to reduce supply vulnerabilities, 73% of companies said their current supply chains are not fully protected, and 12% said they believe their supply chains lack resilience.

Integrated supply chains: While today just 19% of companies said their supply chain structures are fully integrated, this proportion is set to more than double (to 47%) within the next two years.

  • The number of companies that remain dependent on siloed operations is set to fall from 14% to 4% over the same period.

Digital opportunities: The race to fully digitize more supply chain operations is picking up speed.

  • In nearly every supply chain function, companies said they are planning significant increases in digital adoption in the next two years to streamline their supply chain organizations.

Obstacles to progress: Many obstacles to future supply chain development involve issues with industry partners. Among the challenges cited by manufacturers in the survey were the following:

  • Differences in digital maturity among partners (54%)
  • A lack of common data platforms (53%)
  • Problems transforming traditional supply chain processes (29%)
  • Upgrading legacy equipment (26%)
  • A lack of skilled employees (22%)

Review the data: Click here to review the data in detail and read manufacturer responses to survey questions.

Policy and Legal

NAM Mobilizes on SEC Climate Rule

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As the U.S. Securities and Exchange Commission works to finalize a new rule requiring climate disclosures by public companies, the NAM is mobilizing to defend manufacturers.

The background: Manufacturers have long been leaders on climate solutions, working to create the products and technologies necessary to face the challenge of climate change.

  • Manufacturers also regularly provide climate-related information to their investors, including via corporate sustainability reports, third-party reporting frameworks and SEC filings.
  • At the beginning of the Biden administration, however, the SEC made clear that it was interested in creating a rule to enhance and standardize these disclosures.
  • In the months since, the commission has taken steps toward that goal—and the NAM has stepped up to protect manufacturers.

In March 2021, the SEC issued a request for information on climate disclosures. The NAM responded, urging the SEC to adopt a flexible, principles-based framework that allows companies to provide investors with material information about climate risks in a consistent and comparable manner.

In September, the SEC’s Division of Corporation Finance issued new guidance calling into question companies’ existing climate disclosure practices—including the common practice of supplementing SEC filings with a sustainability or corporate social responsibility report.

  • The NAM pushed back against the guidance, cautioning the division against setting new standards without a formal rulemaking process.

In October, the division released guidance drastically limiting the ability of companies to exclude climate-related shareholder proposals from the annual proxy ballot—even if those proposals are unrelated to a business’s operations.

  • The NAM pushed back, emphasizing the importance of company-specific decisions for protecting manufacturers and their long-term shareholders.

The new rule: The SEC released a proposed rule in March that would significantly expand public companies’ climate disclosure obligations.

  • First, the rule would require qualitative descriptions of companies’ climate-related risks and any efforts to respond to those risks.
  • It also would require quantitative reporting of companies’ greenhouse gas emissions and institute a new mandate that companies conduct quantitative climate impact analysis within their consolidated financial statements.
  • You can read more about the specifics of the rule here.

NAM in action: The NAM has spent the past several months connecting with manufacturers across the country to understand the real-world impact of the SEC’s proposal.

  • Through a range of webinars, listening sessions and roundtables, we have been able to explain the proposed rule, gather vital feedback and map out the way forward.

What’s next: The NAM intends to provide comments to the SEC in June, highlighting provisions within the proposed rule that are impractical, costly, overly prescriptive, confusing for investors or not reflective of current climate disclosure practices.

  • The NAM will call on the SEC to make targeted changes to its proposal to increase flexibility, focus on material information for investors and reduce costs, burdens and liability for companies.

What we’re saying: “Manufacturers are the leaders in America’s fight against climate change—and in order to continue that work, we need climate disclosure practices that support sustainability, rather than increasing costs for companies and confusing investors,” said NAM Senior Director of Tax and Domestic Economic Policy Charles Crain.

  • “Any SEC climate disclosures rule needs to be less prescriptive, more flexible and solely focused on materiality in order to accurately reflect current practices.”
  • “The bottom line is that a climate disclosures rule can’t just sound good; it has to actually work in the real world.”
Policy and Legal

U.S. and Allies Announce New Sanctions on Russia

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The U.S. and its allies continue to apply sanctions and other measures against Russia in response to the country’s war in Ukraine. The sanctions specifically target Russian oil, corporate services within Russia and Russian manufacturing.

New U.S. sanctions: Recently, the U.S. announced new actions designed to punish Russia. The new sanctions will take effect in a variety of areas, including: 

  • Industry: The US announced new sanctions on wood products, industrial engines, boilers, motors, fans and ventilation equipment, bulldozers and other items with industrial uses.
  • Visas: The U.S. has placed visa restrictions on 2,600 Russian and Belarusian officials and created a new policy that restricts visas for Russian military officials and authorities.
  • Nuclear licenses: The U.S. Nuclear Regulatory Commission suspended licenses for exports of nuclear material to Russia.
  • Key services: The U.S. cut off Russian access to U.S. accounting, management consulting and trust and corporate formation services.

 U.S. allies and partners have also imposed additional sanctions:

  • G7 countries: The G7 committed to phasing out or banning Russian oil imports while also working together to ensure that global energy supply remains stable.
  • European Union: As part of its sixth package of sanctions against Russia, the EU will phase out Russian crude oil within six months and refined oil products by the end of 2022. The EU also committed to removing Sberbank and two other Russian banks from the SWIFT system and banning the use of European accounting and consulting services by Russian companies.
  • United Kingdom: The UK announced new sanctions on Russia and Belarus targeting 1.7 billion euros worth of trade. Among the specific targets are Russia’s manufacturing and heavy machinery industries.

The NAM’s actions: On Friday, representatives from the U.S. Department of Commerce joined the NAM’s weekly Trade Forum for a discussion with NAM member companies on the U.S. response to Russia’s unlawful invasion of Ukraine. The discussion focused on the implications for U.S. exporters and other businesses, as well as U.S. government resources that can help NAM members stay informed.

  • “Last week’s special meeting with the Commerce Department was a vital opportunity for manufacturers to underscore our support for efforts by the Biden administration and bipartisan congressional leaders to hold Russia accountable and bring peace to Ukraine,” said Ken Monahan, Vice President of International Economic Affairs.
  • “As the NAM Board of Directors declared in a resolution approved unanimously on March 8, manufacturers stand with the people of Ukraine, and our industry is committed to sustaining and safeguarding democracy and democratic institutions not only here at home, but also abroad.”
Policy and Legal

“A Win-Win-Win”: How Tax Reform Transformed Pivot Manufacturing

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Today, Pivot Manufacturing is a far cry from the shop it was just five years ago.

Starting small: “For the first 15 or so years of our existence, we were a company that did small-run prototypes, R&D work,” said company co-owner Steve Macias of his Phoenix machining and mechanical assembly services firm, which he started in 2000 with longtime friend Jack Cuddihy.

  • “We wanted to get into production because that’s how you grow a company in this industry,” said Macias. “But our equipment didn’t lend itself to that work, and we couldn’t [afford new equipment].”

The transformation: That all changed in 2017 with the passage of tax reform legislation. “We had already started thinking, ‘We’re going to have to change something.’ We didn’t want to be a little R&D shop forever,” Macias recalled.

  • Thanks in great part to full expensing—a key pro-growth incentive in the new law that reduces after-tax costs by providing a 100% deduction for machinery purchases—Pivot was able to invest in the new equipment it needed to take on the more lucrative production orders.
  • “It really has been transformative,” Macias said of the 2017 legislation.

Five years on: For the past five years, the bulk of Pivot’s work has been with government contractors, including Raytheon and General Dynamics. These days, the average age of the manufacturer’s machines is 2.5 years; before tax reform, that number was 14.

  • “We were able to sell our old equipment, buy new high-speed CNC mills and start bidding jobs—and we got them,” Macias said. “Every year since, we’ve bought two or three machines. Our accountant was telling us, ‘If you guys can [keep] filling these machines up, keep doing it.’”

Growth mode: Pivot’s exceptional growth has enabled it to raise wages and increase benefits. The manufacturer pays its machinists above the going rate, Macias said, and offers its employees medical, dental and vision coverage in addition to a matching 401(k) program.

  • The shop has added talent since 2017, too, growing from around a dozen employees to 19 today.
  • In addition, the growth has enabled the firm to give back to the community. “Before [tax reform], we might write a couple of $500 checks,” Macias said. “Last year, we probably donated $10,000…to seven or eight charitable groups.”

What’s next: Pivot has been so successful in recent years that Macias and Cuddihy are in talks to purchase the building that houses their facility so they can expand even further.

  • The purchase could enable the company, which is already on track in 2022 to double its 2016 numbers, to more than double its current revenue.

The final say: “Tax reform was a catalyst,” Macias said. “Before, we knew what we had to do, but the law was what pushed us … to take a leap of faith. It’s been a win-win-win.”

Press Releases

Manufacturers: Lawmakers Must Prioritize Provisions That Will Streamline Essential Domestic Supply Chains and the Production of Key Inputs

Washington, D.C. – Following today’s Senate–House conference committee meeting on the China competition legislation, National Association of Manufacturers President and CEO Jay Timmons released the following statement:

“Manufacturers are encouraged by efforts in Congress to reach a strong, bipartisan agreement that strengthens domestic manufacturing, increases our global competitiveness and provides new opportunities for the more than 12 million people who make things in America. The first meeting of the conference committee to finalize legislation reconciling the United States Innovation and Competition Act and the America COMPETES Act is an important step toward overcoming ongoing supply chain disruptions, countering inflation and supporting U.S. manufacturing in the face of major global competitors, namely China.

“Lawmakers must prioritize provisions that will streamline essential domestic supply chains and the production of key inputs, such as an investment of $52 billion to bolster domestic semiconductor manufacturing, the creation of a fund to strengthen supply chain resiliency and inclusion of the Ocean Shipping Reform Act. Manufacturers also support policies to advance and grow U.S. international trade and provisions that strengthen U.S. energy innovation leadership. The conference committee should also avoid labor provisions that would harm American manufacturers and workers alike as we look to fill more than 800,000 jobs in the sector.”

-NAM-

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 12.7 million men and women, contributes $2.71 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.

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