Policy and Legal

Manufacturers need smart laws and effective policies. That’s why the NAM is standing up for manufacturers everywhere – from the halls of power where we advance important legislation, to the courts where we fight to defend our rights.

Policy and Legal

Manufacturers Score Victory in SEC Oversight of Proxy Firms

Manufacturers won a victory yesterday as the Securities and Exchange Commission (SEC) published new guidance regarding proxy advisory firms, outlining how institutional investors should monitor their use and setting the stage for more effective oversight of the proxy firm business.

Investment advisers and fund managers who oversee Americans’ retirement savings are empowered to have a voice in the policies of the companies in which the fund invests. These fund managers often turn for assistance to proxy firms to recommend votes on company policies. As a result, proxy advisory firms have enormous influence over the corporate governance policies of U.S. public companies, impacting the direction of businesses they have no stake in and the life savings of Main Street investors. Unfortunately, a lack of oversight means proxy advisory firms can operate with undisclosed conflicts of interest and inadequate transparency, implement one-size-fits-all decision-making, and make errors that impose significant costs and damaging policies on manufacturers and workers.

The SEC’s guidance clarifies how investment advisers can utilize these firms, representing a significant step toward vital investor protections. In particular, the guidance outlines the due diligence that fund managers have to undertake when relying on a proxy firm’s services and identifies factors, such as errors, conflicts of interest, and methodological weaknesses, that fund managers should be on the lookout for.

“This decision is a big win for manufacturers across the country,” said Charles Crain, Director of Tax and Domestic Economic Policy at the National Association of Manufacturers. “With this guidance, the SEC is providing a roadmap for asset managers to protect Main Street investors’ best interests and laying the groundwork for improved oversight of the proxy advisory industry—and a smarter, more informed environment for millions of manufacturers and middle-class Americans.”

The SEC’s guidance echoes specific requests made by the NAM in their March 5 comment letter, in which the organization called for more clarity around “how investment advisers can utilize independent third parties in order to ensure that proxy voting decisions are made in the best interests of the middle-class Americans whose retirement accounts are at stake.”

The NAM has also requested additional rules that would implement direct SEC oversight of proxy advisory firms. The SEC yesterday issued interpretive guidance that its proxy rules do apply to firms providing proxy advice, and manufacturers are optimistic that further reforms will be considered and addressed by the SEC in the coming months.

“This SEC announcement represents critical direction for investment advisers and demonstrates the SEC’s understanding of the fiduciary duty these money managers owe to Americans nationwide,” said Crain. “We’re thankful that yesterday’s guidance provides critical guardrails manufacturers have called for, and we look forward to continuing this conversation to ensure that proxy voting decisions are made in the best interests of Americans saving for a secure retirement.”

Press Releases

NAM Welcomes SEC Guidance as Major Win for Manufacturers

“The SEC Has Heeded Manufacturers’ Call”

Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons released the following statement on the SEC’s announced guidance on proxy advisory firms:

“The SEC has heeded manufacturers’ call and has taken concrete steps that will help protect the savings of Main Street investors. For too long, investment advisers have relied on unaccountable proxy advisory firms when making decisions about Americans’ retirement investments. Proxy firms often have agendas disconnected from companies’ success or Americans’ financial security, and their reports have been found to contain errors and conflicts of interest. That’s why the NAM urged the SEC to act, and manufacturers are encouraged that the commission has heard our recommendations and is working to implement these initial reforms. We look forward to building on these first steps to achieve even more progress.”

The NAM has been a leading voice in favor of SEC action to ensure proxy advisory firms work in the best interest of manufacturers and manufacturing workers. Over the past two years, the NAM has written several comment letters to the SEC urging reforms to the proxy process, supported legislation passed by the House to increase SEC oversight of proxy advisory firms and launched a six-figure ad campaign in conjunction with the U.S. Chamber of Commerce, including the website ProxyReforms.com, to highlight the issues that companies face in their interactions with proxy firms and provide a feedback portal for businesses to share their stories.


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 $2.38 trillion to the U.S. economy annually, has the largest economic multiplier of any major sector and accounts for more than three-quarters 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 Manufacturers or to follow us on Shopfloor, Twitter and Facebook, please visit www.nam.org.

Policy and Legal

Tax Reform Brings New Benefits, Investment to Maine Manufacturer

"We’re keeping a dime-on-a-dollar more of our earnings. And we’ve reinvested 100 percent of that back into the business.”

Hancock Lumber, a 171-year-old lumber company in Casco, Maine, accelerated its plans to grow and invest in its business thanks to tax reform, and its leadership is making sure employees are the first ones to benefit.

“It’s pretty straightforward,” said Hancock Lumber CEO Kevin Hancock. “As a result of tax reform, our cumulative tax rate fell from 38 percent to 28 percent. We’re keeping a dime-on-a-dollar more of our earnings. And we’ve reinvested 100 percent of that back into the business.”

A component of that reinvestment is providing its employees with additional benefits.

“The first priority of the company is, and always has been, the people who work here,” said Hancock. “In the twelve months following tax reform we increased our employees’ wages. We increased our 401k contribution. We increased our annual bonuses, we increased our holiday bonuses, and we picked up 100 percent of the cost of our annual health insurance increases.”

In addition to the immediate benefit to employees, thanks to the strong business climate, the company is planning for continued growth.

“We’ve been able to accelerate our reinvestment plans,” said Hancock. “Tax reform is allowing us to do in three years what might’ve taken us four to five years to do otherwise. That’s pretty significant.”

Because he’s used today’s tax savings to strengthen the company’s position for years to come, Hancock deems this a “significant long-term benefit.”

“Most importantly, this isn’t a one-time boost. Tax reform’s benefits will show up every single year in the future,” said Hancock. “It’s strengthening our future plans as much as our present plans. Simply put, any time a good company is able to keep more of its own money, good things happen.”

“As Congress developed the 2017 tax reform legislation, we made sure the unified voice of manufacturers was heard,” said Chris Netram, Vice President, Tax and Domestic Economic Policy at National Association of Manufacturers. “Now, with the pro-growth tools provided by that legislation, manufacturers across the country are able to invest more, hire more and pay more. Hancock Lumber’s commitment to its people and operations is a great example of what manufacturers small and large across the country are doing: keeping their promise to pay forward the benefits of tax reform.”

Policy and Legal

What a Yield Curve Inversion Means for the Economy

Last Wednesday, as yields on shorter-term bonds surpassed those of longer-term bonds, the U.S. economy briefly experienced an “inverted yield curve”. Historically, such an inversion has been a reliable predictor of recessions to come.

Chad Moutray, chief economist for the National Association of Manufacturers, explains the significance of the yield curve and whether manufacturers should worry that a recession is on the way.

What is a yield curve?

In its simplest terms, if I lend money to you over several years, I would expect to get receive a higher interest rate to compensate me for giving up access to my money for a longer time frame. In a healthy economy, interest rates should be upward-sloping as the length of maturities increases. 

What does it mean if a yield curve inverts?

An inverted yield curve means that the interest rate for short-term loans is higher than for longer maturities. This would imply that financial markets might be more pessimistic in its outlook.

An inverted yield curve can foreshadow a recession. The spread between 10-year and 2-year Treasury bonds is often seen as an important barometer. Since World War II, when this yield curve has inverted, the U.S. economy has entered a recession within the following 12 to 18 months.

The yield curve between 10-year and 2-year Treasury yields inverted last week. It’s positive now, but still close to inversion. The last time this spread inverted was June 2007, predating the start of the Great Recession by five months. 

Should manufacturers be worried? Does that mean that a recession is just around the corner?

There are warning signs that we are closely following. Broadly, the global economy is clearly slowing, as noted in our most recent monthly report, and financial markets have been highly volatile in recent weeks, exacerbated by trade uncertainties. As a result, businesses in the U.S. have become more hesitant in their spending and there are worries that the economic slowdown abroad could find its way to the U.S. Within the manufacturing industry, production is contracting both in the U.S. and abroad, and hiring has slowed in the sector.

However, a yield curve inversion does not necessarily mean that a recession is imminent. Yields may be influenced by other factors, and there are positive economic signs too. Consumer spending remains strong, and the labor market remains near 50-year lows. The U.S. economy should also grow 2.3 percent in 2019.

What can policymakers do to avoid an economic downturn?

Central banks around the world are easing monetary policies to stimulate growth, or to provide an “insurance policy” for the economy so economic recovery can be sustained. These trends have pushed 10-year Treasury yields to their lowest levels since October 2016.

Manufacturers remain optimistic about the future, but in order to keep growing, we need to address the workforce crisis and resolve trade uncertainties. Namely, passing the USMCA, reauthorizing the Ex-Im Bank and securing a bilateral trade agreement with China are necessary to ensure manufacturers in the U.S. can continue to grow.

Policy and Legal

Importing Prescription Drugs from Canada is a Serious Safety Risk

prescription drug pills

The Trump administration wants to allow Americans to import drugs from Canada as part of the President’s larger goal to lower prescription drug prices.

Robyn Boerstling, Vice President of Infrastructure, Innovation and Human Resources at the National Association of Manufacturers, explains the proposal and how drug importation affects manufacturers.

Why is drug importation coming up now?

This has been one of President Trump’s priorities since the 2016 campaign. More broadly, lowering prescription drug prices has been a top priority for manufacturers and policymakers for some time now, as health care costs continue to rise.

However, manufacturers in the U.S. think importing drugs from Canada poses a serious health risk, especially considering the counterfeit challenges we already face.

How does drug importation fit into the larger conversation on health care?

The NAM insists something must be done to address high health care costs. But it shouldn’t just be about the transaction at pharmacy counter. Any solution has to be holistic, addressing the systematic challenges without sacrificing competitiveness and free enterprise in the process.

How does drug importation affect manufacturers?

The biopharmaceutical industry has experienced tremendous growth recently, supporting 1,100 manufacturing plants across the U.S. and Puerto Rico and employing thousands of high-skilled employees. In fact, the biopharmaceutical industry was the top manufacturing sector for job postings in 2018, according to Burning Glass Technologies’ Labor Insights.

These companies are at the cutting edge of creating the cures of tomorrow, and America’s policies on drug prices should take into consideration both the desire to lower prescription drug prices and the opportunities and benefits provided by this sector. Moreover, other countries don’t guarantee the same standards as drugs made in the U.S—and we should not be looking outside our carefully managed supply chain as a source of our medicines.

Why is drug importation a threat for consumers?

Counterfeit and substandard drugs are a growing problem worldwide. The challenge is most acute in the developing world, impacting about 10 percent of the drug supply according to the World Health Organization. Fortunately, the U.S. has the safest drug distribution system in the world, but importing drugs from Canadian pharmacies would be a direct challenge to that proven model.

Would drug importation work in the United States?

If this plan led by the Trump administration is truly a way to lower costs, we have to ask: Are the savings guaranteed for the patient? The infrastructure that will be necessary to assure safety will be costly. It’s difficult to ignore the question, “Will importation actually reduce prescription drug expenditures?”

It’s worth noting, in 2004 when the Congressional Budget Office looked at this issue, significant long-term savings on prescription drug spending did not materialize, especially in a Canada-only importation scenario.

There is something broken when people have access to but cannot afford the drugs they need. If the United States can build the safest medical supply in the world, we can find ways to be more affordable to the people who need relief the most.

Policy and Legal

In Today’s Political Climate, Business Community Must Lead

Jay Timmons speaking at CMA conference

At the Council of Manufacturing Associations summer conference last week, National Association of Manufacturers President and CEO Jay Timmons called on the business community to lead in today’s political climate.

Timmons urged business leaders to show Americans the good that their companies are doing in communities, rejecting discrimination and bigotry and doubling down on free enterprise and individual liberties.

Read Timmons’ full remarks.

Press Releases

Wheeler Announces Proposed 401 Rule at NAM’s CMA Conference

“This Proposal Is a Win for Manufacturers”

Charleston, SC – National Association of Manufacturers President and CEO Jay Timmons released the following statement after EPA Administrator Andrew Wheeler announced an EPA proposal to clarify Section 401 of the Clean Water Act at the NAM’s Council of Manufacturing Associations’ Summer Leadership Conference in Charleston, South Carolina:

“The EPA’s efforts to modernize regulations and deliver regulatory certainty have contributed to strong manufacturing growth in recent years. This proposal is a win for manufacturers that would build on that success by offering much-needed clarity to states and manufacturers alike. Too often, the vaguely worded Section 401 has been used as an excuse to block critical infrastructure and trade projects. By setting clear guidelines, the EPA is empowering manufacturers to invest in our people and communities with confidence and to work with state leaders to protect our water and environment.

“We are grateful that Administrator Wheeler chose to announce this landmark proposal at the NAM’s Council of Manufacturing Associations’ Summer Leadership Conference. It demonstrates that by working together, government and business leaders can ensure economic growth and environmental stewardship go hand-in-hand.”

Section 401 of the Clean Water Act gives states an important role to play in ensuring water quality standards are not impaired by federally permitted projects. This proposal will give state and federal partners more clearly defined roles, responsibilities and consistent expectations in line with the statute and recent court decisions. The proposed rule seeks to protect waters by strengthening the Section 401 process.


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 $2.38 trillion to the U.S. economy annually, has the largest economic multiplier of any major sector and accounts for more than three-quarters 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 Manufacturers or to follow us on Shopfloor, Twitter and Facebook, please visit www.nam.org.

733 10th St. NW, Suite 700 • Washington, DC 20001 • (202) 637-3000

Policy and Legal

Counterfeit Goods Harm Manufacturers and Consumers

When almost anything can be ordered online, how do you know if the product you’re buying is legitimate? Counterfeit goods are increasingly prevalent, and third-party e-commerce sites are making it easier than ever for counterfeiters to distribute inauthentic products.

To help combat this, the National Association of Manufacturers submitted comments last week to the Department of Commerce, proposing solutions to this counterfeit goods problem that is detrimental to manufacturers and customers alike. These comments reflect the rising tide of counterfeit products available, from auto parts to toys, from medicines to electronics and more.

These sales don’t just hurt businesses or inconvenience customers. Fake products can be a health and safety hazard. For example, prescription drugs are commonly counterfeited—with potentially severe consequences.

“First and foremost, we are always concerned about patient safety and the harmful effects that illegitimate products have,” Eli Lilly Director of Global Public Policy Tim McGuire said. “There is significant risk associated with putting medications in your body that haven’t gone through the rigorous regulatory review and approval processes that include safety testing and quality inspections.”

Even if a manufacturer is aware that counterfeit products are being distributed, getting those products removed from websites and working to communicate to customers that they have purchased fake goods is no small task. The process of identifying counterfeit sellers requires constant monitoring of search engines, e-commerce sites and other methods of distribution, and the onus is on the maker rather than the retailer.

“The big challenge is that counterfeiters always come back, and there isn’t a good structure in place to permanently prevent them from operating,” said Whirlpool Corp. Legal Counsel Nathan Davis. “You take down a listing, they put up a new listing. You shut down one website, they launch another website. The existing consequences are not sufficient to stop them.”

And for small- and medium-sized companies, the resources needed to stop the sale of counterfeit products can be prohibitive. Napoleon gas grills are an example: Accessories to go with these are often counterfeited and marketed as acceptable for use with Napoleon’s products. Consumers then think the counterfeit product is covered by Napoleon’s warranty.

“We’re essentially underwriting counterfeit products,” Napoleon Technical Support Manager Dana Moroz said. “The credibility of our brand name is affected, and we end up having to warrant inferior products to sustain our name. To the consumer, it’s all a Napoleon product.”

The NAM’s public comments provide next steps for combating counterfeiting, including recommendations for the U.S. government, for brand owners, and for online marketplaces and websites.

“Winning the fight against counterfeiters requires everybody—not just manufacturers, but e-commerce platforms and search engines, customs agents and consumer safety advocates—to get serious,” said NAM Director of International Business Policy Ryan Ong. “Stopping the flow of these products means not just legal and policy changes, but smarter enforcement priorities, better coordination and information sharing and a serious commitment by all parties to do their part.”

Labor & Employment

Manufacturers Stand Up for Employee Freedoms

The U.S. House of Representatives held a hearing yesterday on a bill that could negatively impact American workers’ freedoms and lead to fewer jobs. Heavily backed by large labor unions throughout the drafting process, the Protecting the Right to Organize Act would give sweeping new powers to unions while putting constraints on individual employees, small and local businesses, entrepreneurs and consumers.

The legislation includes provisions that would strip away workers’ free choice in union elections and eliminate “right-to-work” protections for workers across the country. This would even include the 27 states that have already passed right-to-work laws—rolling back these states’ democratic decisions and forcing workers across the country to pay union fees out of their own pockets—even when they don’t support it. In addition, the legislation could interfere with attorney-client confidentiality and make it harder for businesses to secure important legal advice on matters involving complex labor law.

“This legislation has the potential to harm workers across the country—and presupposes that a sweeping federal law can better achieve fairness and prosperity for individual states, businesses and workers than decisions made by those entities themselves,” said Callie Harman, director of labor policy at the National Association of Manufacturers. “This is a legislative wish list for unions that would damage employees’ rights to privacy and association, limit businesses’ ability to grow and hire, and put in place policies that have already been rejected in the courts. Legislation like this threatens the very industries that benefit our communities and strengthen our country.”

Manufacturers nationwide are speaking out against the bill, saying that the legislation strips workers of essential rights and ignores the dangerous consequences for the United States economy. They warn that if the legislation were to be adopted, it would tilt the playing field in favor of union organizers and against workers and employers while increasing the authority of unelected bureaucrats in Washington at the expense American free enterprise.

“At a time when the manufacturing industry is showing record output and fueling a strong economy, these changes could upend progress and slam the brakes on our economic success,” said Harman. “Workers deserve the kind of opportunity that the manufacturing industry is making possible, and we will continue to fight for that freedom in the face of these challenges.”

Policy and Legal

Tax Reform Helps Create 170 Jobs in Ohio and Indiana

BWX Technologies, Inc. is growing its workforce thanks to tax reform.

BWXT worker

BWX Technologies, Inc., a supplier of nuclear components and fuel to the U.S. government, is hiring more than 170 new employees and further expanding its operations across three manufacturing facilities in Ohio and Indiana over the course of the next four years, investing approximately $210 million in these two states as a result of tax reform.

“Due to tax reform, we saw a favorable impact to our tax rate of about 8 to 10 percent,” said Rex Geveden, BWXT’s president and chief executive officer. “This has resulted in significant cash savings that we have used for various needs, including reinvestment of capital into our business and hiring additional employees for future growth.”

BWXT has been manufacturing naval nuclear components and reactors since the 1950s, when it designed and fabricated components for the USS Nautilus, the world’s first nuclear-powered submarine. Today, the company manufactures naval nuclear reactors for every new submarine and aircraft carrier in the U.S. Navy’s fleet. With this new investment, the company expects to fill a variety of different positions including engineers, machinists, quality assurance specialists and frontline supervisors to support the workforce growth.

“Manufacturers are keeping their promise to create jobs and invest right here in the United States,” said NAM Vice President of Tax and Domestic Economic Policy Chris Netram. “Thanks to tax reform, more individuals in Ohio and Indiana will have the opportunity to be a part of a growing industry. Moreover, BWXT’s investment will help it better accomplish its critical job of supporting our United States military, helping not only local communities but our country as a whole.”

BWXT isn’t just hiring workers to fulfill an immediate need. It’s also training young people and aspiring workers to help create a pipeline for BWXT and other employers that need skilled employees now and in the future. Through strategic partnerships with area schools in Ohio (K-12 and post-secondary), company leaders meet with students, parents, career counselors and faculty to discuss manufacturing jobs.

This provides an opportunity to talk about the well-paying careers and generous benefit packages, like education opportunities and tuition reimbursement—and the innovative nature of modern manufacturing. In Indiana, the company is building relationships with five of the area’s local technical schools to help students to learn about the exciting employment opportunities available to them and to provide training that enhances the skills of potential new employees.

“Manufacturers like BWXT aren’t just investing in the jobs of tomorrow—they’re helping young men and women across the country develop the skills they need to build a career in the manufacturing industry well into the future,” said Netram. “Businesses that make things in the United States pushed for tax reform in order to be able to invest in their communities and grow their operations, and BWXT’s announcement is another example of that promise fulfilled.”

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