Robotic packaging manufacturer JLS Automation received some distinguished visitors earlier this month when Vice President Mike Pence, Labor Secretary Alex Acosta and three members of Congress toured its manufacturing facility in York, Pennsylvania along with JLS CEO Craig Souser, National Association of Manufacturers President and CEO Jay Timmons and local manufacturing leaders. The event focused on advancing the United States-Mexico-Canada Agreement (USMCA), which would promote trade between the three countries and is currently being considered in Congress.
At the event, Vice President Pence spoke about the importance of the deal for manufacturers in the United States, noting that Pennsylvania already exports more than $14 billion in goods and services to Canada and Mexico. The vice president also highlighted the impact this deal would have on the more than 2 million American manufacturing jobs that depend on exports to Canada and Mexico—including 42,000 jobs in Pennsylvania, as outlined in the NAM’s own USMCA state fact sheet. One in four Pennsylvania manufacturing firms export to North American partners, as the fact sheet further states, and more than 80 percent of them are small and medium-sized businesses.
Without a free trade agreement, Pennsylvania’s exports to North American free trade partners could face more than $1.5 billion in tariffs.
“It’s absolutely essential we get the USMCA passed by the Congress, and passed by the Congress this summer,” said Vice President Pence. “It’ll finally give American workers and farmers a level playing field that we need to be able to compete and win.”
The NAM has been vocal in its support of the USMCA, standing up for manufacturers like JLS Automation across the country that rely on trade in order to keep their businesses running.
“When we talk about growing international trade, we’re talking about something very, very local: strengthening our communities and supporting our families,” said Jay Timmons, NAM President and CEO. “That’s why JLS and manufacturers across the United States and the more than 12.8 million men and women who make things in America are calling on Congress to ratify the USMCA – and the sooner the better!”
At the event, JLS Automation CEO Craig Souser emphasized the importance of the Canadian market to his business—a family-run operation his father, Joseph L. Souser, founded—and urged lawmakers to pass the deal.
“We need to see our lawmakers in Washington help to expand our ability to penetrate this market with modern trade policies and pass the USMCA,” said Souser. “The administration has kept its promise to negotiate a new North American trade deal. So it’s time for the Congress and the Senate to do its part so that we can focus on what we do best: make world-class machines.”
A House of Representatives committee recently held a hearing on a bill designed to drive breakthrough innovations to tackle climate change—a priority that has the strong support of the National Association of Manufacturers and manufacturing businesses across the country.
The Clean Industrial Technology Act (CITA) would set up a Transformational Industrial Technology Program at the U.S. Department of Energy, and would drive new technologies aimed at increasing the technological and economic competitiveness of manufacturing in the United States. The program would also find pathways to net-zero greenhouse gas emissions and create a technical assistance program to help local communities and states evaluate and incentivize the adoption of technologies that reduce industrial greenhouse gases. The legislative hearing on the CITA was held by the House of Representatives Committee on Science, Space, and Technology. In the Senate, the NAM has been working closely with Sen. Sheldon Whitehouse (D-RI) on similar legislation.
“Manufacturers have always been about solutions,” said Rachel Jones, Senior Director of Energy and Resources Policy at the NAM. “We need real-world technologies to address our global climate problem, and legislation like the CITA provides a common sense opportunity to move our efforts forward. This bill takes a clear-eyed look at the unique challenges that different energy-intensive industries face as we all work toward ensuring a safer and more prosperous future.”
Manufacturers across the country are deeply involved in sustainability programs, leading the way for other industries in protecting our environment. Most manufacturing companies have already pioneered new technologies and implemented meaningful programs to reduce greenhouse gas emissions. With more than 12 million men and women employed by the industry in every state in the country, manufacturing businesses have a unique perspective on the challenges of our shared path forward and have consistently worked with Congress to promote bills like the CITA.
“Providing incentives for U.S. businesses, schools and laboratories to bring game-changing technologies into the commercial sector isn’t just good policy; it’s common sense,” said Jones. “Cooperative partnerships between industry, government and academia benefit all three sectors and the country as a whole.”
Manufacturers contributed 18 percent more value to the American economy over the past decade while reducing the carbon footprint of their products by 21 percent—demonstrating that productivity and sustainability are compatible with each other—and keeping the industry’s promise to promote sustainable solutions.
“Manufacturers are committed to reducing greenhouse gases and addressing climate change while preserving our global competitiveness,” said Jones. “This legislation is a great example of how we are working with policymakers to turn aspirations into reality in order to protect our environment and improve our world. Manufacturers applaud the House Science Committee and Sen. Whitehouse for their leadership.”
Washington, D.C. – The National Association of Manufacturers today officially unveiled a new strategic initiative dedicated to the development, deployment and advancement of carbon capture utilization and storage policies and technologies that will support the U.S. manufacturing sector, create jobs and improve the environment. CCUS technologies are critical to reducing carbon dioxide emissions, enhancing U.S. energy security and competitiveness and maintaining U.S. leadership in the development and deployment of new, transformational energy solutions.
The NAM initiative, known as the Energy Advance Center, is led by Executive Director Christopher Romans, formerly a senior government affairs manager with Mitsubishi Heavy Industries in Washington, D.C. Romans brings years of experience and technical capabilities in the CCUS sector.
EAC will lead a multi-faceted effort to educate policymakers and advocate at the federal and state levels on the technical, economic and regulatory issues impacting the widespread deployment of CCUS. EAC expects to further expand its efforts through additional strategic partnerships with other industrial sector groups that seek common sense carbon management policies that are economically and technically feasible.
The EAC will initially focus on the following targeted issues:
• Supporting CCUS incentives that encourage deployment;
• Identifying CCUS barriers and promoting common sense reform;
• Clarifying rules to accessing 45Q tax credits for CCUS projects;
• Promoting CCUS infrastructure development;
• Advocating reforms to the Class VI Underground Injection Control program to provide certainty to project developers and encourage wider use; and
• Support further CCUS research, development and deployment.
“The launch of the Energy Advance Center is yet another example of manufacturers keeping our promise to drive economic growth while building a future with cleaner air and water and a healthier environment,” said NAM Vice President of Energy and Resources Policy Ross Eisenberg. “CCUS is one of the most promising tools to address global climate change, and we’re dedicated to developing this technology here in the U.S.—and to ensuring America continues to lead on this issue. We are excited to launch this new platform and continue to show that strong economic growth and responsible environmental stewardship can go hand in hand.”
Members of the Energy Advance Center include BP, Chevron, ConocoPhillips, Denbury Resources, ExxonMobil, Kinder Morgan, Mitsubishi Heavy Industries America and Southern Company.
The National Association of Manufacturers (NAM) 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 impact 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.
Washington, D.C. – The National Association of Manufacturers today released the results of the Manufacturers’ Outlook Survey for the second quarter of 2019. In the field during the prospects of tariffs on Mexican goods and still unresolved threat of 232 auto tariffs, the survey shows a dip in manufacturers’ optimism amid trade uncertainties. A positive outlook for their business was registered by 79.8 percent of manufacturers in the second quarter, down from 89.5 percent in the first quarter.
“Clearly, optimism is still strong among manufacturers, but you can’t overlook the fact that trade uncertainties are causing concern for manufacturers,” said NAM Chief Economist Chad Moutray, who conducted the survey. “All things equal, I would expect these numbers to improve if we get the U.S.–Mexico–Canada Agreement across the finish line, strengthen our trading relationships by removing the threat of 232 auto tariffs and get a trade deal with China done.”
The inability to attract and retain a quality workforce remained manufacturers’ top business concern (68.8 percent) in the second quarter. The survey also found that a majority of manufacturers (56 percent) are concerned about trade uncertainties with regards to the USMCA, a U.S.-China trade agreement, looming 232 auto tariffs and the now-resolved threat of U.S. tariffs on Mexico. In addition, nearly half of manufacturers are concerned about increased raw material prices.
The Manufacturers’ Outlook Survey has surveyed the association’s membership of 14,000 large and small manufacturers on a quarterly basis since 1997 to gain insight into their economic outlook, hiring and investment decisions and business concerns. The NAM releases the results to the public each quarter. Further information on the survey is available here.
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.
Ketchie, a 71-year-old family-owned machine shop based in Concord, N.C., is thriving, thanks to the benefits of tax reform.
Company president Courtney Ketchie Silver is quick to note that tax reform made a transformative impact on its business.
“Because of tax reform, our customers are expanding,” Silver explained. “They’re investing in new equipment, they’re expanding their shopfloors. There’s a general level of confidence, and that’s resulting in increased demand for Ketchie’s products.”
In fact, 2018 turned out to be Ketchie’s best year yet in its seven-decade history. 2018 sales increased a whopping 25 percent year over year.
“Because of this huge demand, Ketchie was able to make a number of capital investments,” Silver said. Overall, Ketchie pumped nearly $500,000 into capital equipment last year, which will help the company continue to meet demand for years to come.
The increased investment led to a hiring boom as well. In 2018, Ketchie expanded its workforce by 20 percent, with all new hiring taking place on the shopfloor rather than in the back office. That sort of single-year growth “has never happened before,” explained Silver. “Employees are excited to see the company grow.”
Existing employees are also benefitting through pay raises and quarterly bonuses. In order to continue to develop their employees, the company has worked with the local community college and has been the recipient of grant funding from the state of North Carolina. Ketchie has also joined the North Carolina Manufacturing Institute to promote manufacturing and help match individuals and employers in the area.
“As we’ve seen for the past year and a half since its enactment, tax reform is giving businesses the ability to reinvest in and expand their operations, and manufacturers are leading the way in this effort,” said Chris Netram, NAM vice president of tax and domestic economic policy, said. “Manufacturers have reported record levels of optimism for nine consecutive quarters in our Manufacturers’ Outlook Survey, and, through increased spending and investment, that optimism is helping fuel our entire economy.”
“It’s such a change from 2008, 2009,” agreed Silver, referring to 2019’s booming economic climate. “For the first time since then, people are confident. And their actions are following that confidence. Overall, I have a positive outlook for the year.”
Last week, the U.S. House of Representatives’ Energy & Commerce Committee’s Subcommittee on Consumer Protection and Commerce held a legislative hearing on proposed improvements to the Consumer Product Safety Commission (CPSC), including one bill applauded by manufacturers across the country. H.R. 3169, known as the FASTER Act, would codify and strengthen the “fast-track” recall program, making it easier for companies to issue a voluntary recall if they determine that one of their products is unsafe.
Instituted by the CPSC nearly 25 years ago, the existing fast-track program is intended to provide companies with the ability to quickly recall a product if necessary, eliminating procedural steps like the CPSC staff’s technical evaluation of a product to determine if a defect exists that could harm consumers. That procedure, called a preliminary determination, can take several months. By streamlining the time-consuming review, manufacturers can quickly ensure the safety of consumers when they have already determined that a recall is necessary.
However, the fast track program has frequently been slowed down by bureaucratic Commission obstacles that have delayed even voluntary recalls by months.
“The CPSC’s fast-track program, once an award-winning agency program allowing for swift voluntary recalls, has become hampered by bureaucratic disagreements over non-substantive concerns, such as the wording of press releases and other hold-ups that create unnecessary hurdles to ensuring the safety of products on the market,” said Graham Owens, NAM Director of Legal and Regulatory Policy. “In other words, the program’s signature quality—that of being fast—seems to have been recalled itself.”
The bill Congress is considering would make the agency-created fast-track program permanent, while also clearly laying out how the process should work to prevent red tape from creeping back in. Meanwhile, the Commission would still have the power to make companies go through the long-form recall process on a case-by-case basis if it determines the expedited process was insufficient, ensuring that the Commission continues to hold regulatory authority.
“The FASTER Act would alleviate bureaucratic and non-substantive red tape by codifying the fast-track program into law—and by preventing the commission from delaying the posting of public notices of recall plans,” said Owens. “These simple steps would immediately speed up voluntary recalls to the benefit of consumers, manufacturers, and even the Commission itself.”
After fighting for many years to fix these administrative delays, manufacturers are hopeful that Congress will finally update the fast-track process.
“This hearing is a great start toward ensuring manufacturers are able to voluntarily recall products in an efficient and effective manner,” said Owens. “The FASTER Act, if passed, would improve the agency’s effectiveness in discharging its critical mission, and we commend the Subcommittee for focusing on common sense reforms. Manufacturers stand ready to work with Congress and the CPSC to achieve this laudable goal.”
Manufacturers scored a significant victory with the Treasury Department’s new proposed tax regulations, which would help implement the pro-growth intent of tax reform and save manufacturers from unintended U.S. tax on high-taxed foreign earnings.
Prior to passage of the Tax Cuts and Jobs Act of 2017, the high U.S. corporate tax rate discouraged companies from bringing their foreign earnings back to the United States. Tax reform moved the U.S. toward a territorial system, which allows businesses to bring foreign earnings back to the United States without an additional layer of U.S. tax. To make sure companies still paid some tax, however, the law also created a provision called Global Intangible Low-Taxed Income, essentially imposing a minimum 13.125 percent tax on foreign earnings.
While the move was intended to target low-taxed foreign income, the way the provision interacts with current international tax rules means that some manufacturers can be subject to U.S. tax on foreign earnings that are already taxed above 13.125 percent—effectively removing the upper limit that Congress envisioned and making the backstop largely meaningless. Manufacturers have repeatedly called on Treasury to integrate the Tax Cuts and Jobs Act and the existing tax system in a manner that achieves congressional intent.
“While there’s still work to be done, there’s no doubt that Treasury’s proposal is an important step in the right direction,” said NAM Vice President of Tax and Domestic Economic Policy Chris Netram.
“Congress intended to make it easier for manufacturers operating globally to reinvest their foreign earnings in jobs, in equipment and in infrastructure in the U.S.,” said Netram. “The proposed regulations provide much-needed certainty on the reach of this provision.”
This new proposed rule, coming after more than a year of hard-fought advocacy by the NAM, partially alleviates the burden through a high-tax exception companies can opt into. The elective high-tax exception offers companies with high-taxed foreign income the ability to avoid paying additional U.S. tax provided that the foreign tax rate is greater than 18.9 percent.
While higher than the intended 13.125 percent rate, the elective 18.9 percent rate still provides meaningful relief for manufacturers operating around the world, offering additional certainty and a chance to invest in further growth.
“This is an important positive development in moving closer to the intent of Congress and in allowing manufacturers to support their workers, grow their businesses and contribute to the American economy,” said Netram.
This week, the U.S. House of Representatives passed the American Dream and Promise Act. The legislation, which was introduced in March, offers a pathway to citizenship for unauthorized immigrants who were brought to the U.S. as children—collectively known as Dreamers—as well as immigrants under humanitarian protections, known as Temporary Protected Status.
Manufacturers in the United States have long been outspoken supporters of pragmatic, comprehensive immigration policies—and with a proposal for a pathway to citizenship for these immigrant populations under consideration in Congress, manufacturing leaders are pushing again for bipartisan comprehensive reform.
“Dreamers and Temporary Protected Status participants have become an integral part of our society and our workforce,” said National Association of Manufacturers President and CEO Jay Timmons in a letter to Congress. “They have the potential to offer so much more to our country if they can continue their pursuit of the American Dream.”
Manufacturers point to the importance of immigrants to the workforce, particularly in the manufacturing sector, which faces a significant skills gap. And they note that inconsistent administrative actions and unpredictable court decisions have created ongoing uncertainty and posed a serious challenge for these immigrants and businesses in need of new employees.
“Our workplaces reach their fullest potential and our communities and country are strongest when our nation’s immigration policy is clear and compassionate, and addresses economic, workforce and security needs,” said Timmons. “But today, our immigration system is failing to achieve those goals.”
In February, the NAM released its own immigration and border security proposal. The 16-page document, entitled “A Way Forward,” is a wide-ranging plan that includes border security and a permanent and compassionate solution for populations facing uncertainty, like the Dreamers. The plan includes priorities from both Democrats and Republicans and is designed to be pragmatic, comprehensive and achievable.
“If we act, we will have given those who deserve it a chance to be a productive and contributing part of our country,” said Timmons. “And we will have upheld the values that make this nation of immigrants exceptional: free enterprise, competitiveness, individual liberty and equal opportunity.”
Ferroloy, a Kansas-based small business that manufactures ductile and gray iron castings, was once on the verge of bankruptcy. But with the help of tax reform, they have doubled the size of their workforce and are in the process of dramatically expanding their facilities.
Mark Soucie, Ferroloy president and owner, bought the company back in 2017 when it had just 20 employees. The business was struggling to break even due to the collapse of the agricultural market, in which most of their customers were involved. Soucie and his team spent much of 2017 stabilizing Ferroloy. It became quickly evident, however, that the supercharged economy could deliver big gains.
“We could tell in early 2018 that activity was picking up, so we added a second shift and more than doubled our workforce by the end of the year,” Soucie explained.
“Now we are in the early stages of adding over 12,000 square feet to our facilities so that we can de-bottleneck the foundry, increase the size of the company’s machine shop and build an in-house pattern shop, which will allow the company to save money while also adding more jobs to their growing workforce,” Soucie said.
Soucie cited tax reform as a significant driver in allowing Ferroloy’s expansion plans to move faster than they otherwise would. More importantly, tax reform has ushered in the strongest economy in more than a decade, which is impacting Ferroloy by increasing demand for their products.
“To me, tax reform is an opportunity to level the playing field,” Soucie explained. “Large businesses have a significant competitive advantage due to scale and capability relative to smaller businesses. Over 50 percent of our working population is employed in small businesses. If you want small businesses to grow and prosper in this country, we need laws, like tax reform, that can drive economic growth and drive business.”
In Soucie’s eyes, keeping tax reform on the books is a no-brainer.
“I don’t understand why some people in Washington want to roll back something that allows small businesses to compete,” Soucie added. “Maybe it’s me being politically naïve, but economically, tax reform that allows small businesses to compete just makes sense.”
2018 was a record-setting year, as manufacturers reported the highest levels of optimism in the 20-year history of the NAM’s Manufacturers’ Outlook Survey.
“With tools like tax reform and regulatory certainty, manufacturing is thriving – and manufacturers are paying it forward,” Chris Netram, NAM vice president of tax and domestic economic policy, said. “Across the country, manufacturers small and large are hiring new employees, expanding operations, raising wages, improving benefits and more. Tax reform has fueled manufacturing, and the industry is propelling the American economy.”
In May, the U.S. Senate voted to confirm President Donald Trump’s nominees to the Export-Import Bank board. The board now has a quorum for the first time in four years, allowing it once again to consider deals larger than $10 million. Manufacturers’ attention now turns to securing congressional reauthorization of the Ex-Im Bank.
NAM President and CEO Jay Timmons explains what’s at stake.
The NAM is leading the fight for Ex-Im Bank reauthorization. Start with the basics. What does that mean?
Later this year, Congress will have to vote on whether to keep the Ex-Im Bank open and authorize it to continue helping manufacturers in the United States compete for deals around the world.
Why does the Ex-Im Bank matter so much to manufacturers?
It’s a vital tool to support manufacturing jobs in the United States. The Ex-Im Bank has supported 2.5 million jobs since 2000. Typically, more than 90 percent of the Ex-Im Bank’s transactions directly support small businesses.
And here’s something that’s really impressive — the Ex-Im Bank has generated $9.6 billion for taxpayers since 1992. It’s a government agency that makes money!
Other countries are running nearly 100 other export credit agencies. So, if we don’t have the Ex-Im Bank, we are at a big disadvantage.
You mention “export credit agencies.” You mean other countries have their own versions of the Ex-Im Bank?
Exactly. And they use those agencies to lure manufacturers to their countries, support their own manufacturers and steal manufacturing jobs away from the United States. That’s not going to change. So, we can “disarm” ourselves here in the United States and let other countries like China have the advantage. Or we can support the Ex-Im Bank.
So this all comes back to China?
Definitely. It helps level the playing field for manufacturers in the United States to compete with China, as well as other countries.
Two of China’s export credit agencies provided $45 billion in medium- and long-term investment support for projects around the world, more than the rest of the world combined. That’s what we have to compete against.
What can manufacturing workers or manufacturing supporters do to make a difference?
Contact your senators and representatives. Tell them to support the Ex-Im Bank and reauthorize it. Let them know that supporting the Ex-Im Bank is supporting American manufacturing workers.