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Policy and Legal

What to Expect on Trade Policy in 2021

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There’s a new administration in town, and the NAM also has a new trade policy leader—who is already out promoting manufacturers’ agenda. Ken Monahan became the NAM’s Vice President of International Economic Affairs in January after nearly six years at the organization, and he is perfectly equipped to represent the industry on these crucial issues.

Monahan recently spoke to us about the organization’s priorities for the year ahead. Here’s what you need to know.

The big picture: “The NAM’s priority is to stand up for manufacturers and manufacturing workers in the United States by ensuring that our trading partners hold up their end of the bargain, while also working to open markets for American-made exports and promote U.S. supply chains,” says Monahan.

USMCA and Trade Enforcement: The NAM achieved a victory when Congress passed the United States-Mexico-Canada Agreement, but although the agreement is already being implemented, the NAM’s work is not yet finished. The focus now turns to ensuring that Mexico and Canada follow through on their USMCA commitments, while also holding other U.S. partners accountable as well.

  • “Manufacturers continue to face trade barriers and other measures in countries with which the United States has trade agreements, notably in Mexico,” said Monahan. “We stand ready to work with the Biden administration and Congress to ensure that U.S. trade agreement partners treat our industry fairly, which will support manufacturers and manufacturing jobs here in America through an increase in exports.”

China: Given the rise of China, U.S. ties to the country and the size of the Chinese market, we need a strong strategy going forward. The United States must put consistent, targeted pressure on China – directly and with allies – to reverse its illegal subsidies, intellectual property theft and discriminatory industrial policies, says Monahan.

  • “We must work with allies to set a clear, strong strategy on China, leveraging our strengths to halt problematic Chinese behaviors and level the playing field for manufacturers,” said Monahan. “We need strong American leadership to ensure that the United States – and not China – is writing the rules of global trade to benefit manufacturers and employees in America.”

Opening New Markets: Beyond China, it is vital that U.S. policymakers work to open new markets and ensure that the rules-based global trading system allows manufacturers to confront challenges in markets around the world, says Monahan.

  • “We need to revitalize the rules-based international trading system and pursue new trade agreements to reverse unfair barriers, enhance the role of free market forces, promote respect for the rule of law and propel manufacturing innovation around the world,” said Monahan. “This is all the more important given that our competitors are pursuing their own deals with countries with which the United States does not have trade agreements.”

The bottom line: “As we engage with the Biden administration and legislators of both parties to promote a trade policy that opens markets for American-made exports and promotes U.S. supply chains, we must put a spotlight on the American manufacturing employees whose jobs depend on trade,” said Monahan. “We want to tell their stories. We want to share at every opportunity how trade is lifting up these employees and their communities. That’s our focus, and we’re excited to get to work alongside the NAM’s members.”

Policy and Legal

NAM Presses FCC for Broadband Support

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As President Biden pushes for a majority of elementary schools to be open five days a week by the end of his first 100 days in office, the Federal Communications Commission is engaged in an important effort to ensure students learning remotely are still connected to their classrooms.

The big shift: The FCC is updating the E-Rate program, which supports broadband access for schools and libraries, to allow funds to be used for at-home learning—and the NAM has advocated for this change.

Why it matters: While President Biden is aiming to send more kids back to school soon, it’s clear that they need more assistance while they are still at home. In addition, high school students may stay home for longer than elementary school kids (due to higher risks of contagion among older students) and thus require longer-term support.

Our view: “Ensuring the FCC’s current programs for schools and libraries are adapting to meet these new remote needs is of critical importance, and the cost of not responding to the changing environment is high,” said NAM Director of Innovation Policy Stephanie Hall in a comment letter to the FCC. “The FCC should coordinate with the Department of Education on necessary revisions to the E-Rate program or to build consensus on new alternatives that can close the digital divide.”

In related news, the FCC held a roundtable last Friday to discuss how to quickly implement the Emergency Broadband Benefit Program—another important initiative for manufacturing communities. Established late last year, the initiative allocates $3.2 billion for discounts on internet service for people who are struggling financially during the COVID-19 pandemic.

  • What it includes: The program offers up to $50 per month for eligible consumers and up to $75 per month for eligible consumers on Tribal Lands. Some eligible participants can also receive discounts on personal computers or laptops.

The last word: As Hall says, “Manufacturers recognize that enhanced broadband investment and the growth of next generation wireless networks are critical both for the current challenges in COVID-19 and to support continued U.S. technological leadership.”

Business Operations

What Manufacturers Should Know About Vaccines

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As we wait to get our shots, many people still have questions. Does it matter which vaccine I get? What safety precautions should I continue to take? We talked to highly cited infectious disease expert Dr. Aaron Richterman of Penn Medicine to get some answers to these very real concerns.

Which vaccine? As Richterman tells us, the priority for vaccines is preventing bad outcomes—death and severe illness. And the good news? “The really, really good news is that all of these vaccines that have been tested so far—all of them—prevent severe outcomes.” That list includes vaccines made by Pfizer, Moderna, Johnson & Johnson, AstraZeneca and Novavax. (Only Pfizer and Moderna are approved in the U.S. so far, while the J&J vaccine is expected to be approved soon.)

  • And the clincher? “When you put all the trials together [including the Russian vaccine trial], there are somewhere around 80,000 to 90,000 people total who have received the vaccine, and none of them have required hospitalization—and none have died,” says Richterman.

Let’s talk specifics: What about the different numbers we’ve been seeing? As Richterman points out, we’re all used to seeing different headline numbers—95% effective, or 72%, and so forth. But what does that really mean?

  • What those numbers represent is the “reduction in any symptomatic illness at all,” he explains. But the main thing we should be concerned about is the prevention of severe illness or death—which all the vaccines do extremely well.

When should I get it? As soon as possible, says Richterman. “At this point in time, and probably for the next four to six months in this country, the benefit of getting the first vaccine available to you is going to outweigh any potential benefit from waiting for the next one.” If you are offered an FDA-approved vaccine now, he says: “take it.”

What you should know: Here are some key facts to keep in mind as you read media coverage of vaccinations, says Richterman.

  • Quality: “The quality of evidence underpinning the data for these vaccines […] is grade A plus, top of the line.”
  • Safety: “These are extremely safe vaccines, among the safest out there. Some people will have temporary side effects, but they are very safe.”
  • Prevention of severe outcomes: These vaccines prevent severe outcomes to a “tremendous” degree, Richterman stresses. “If these vaccines can take COVID-19 down to something asymptomatic, or something more like a cold, that’s a big win.”

And lastly, do you have to wear masks and socially distance after being vaccinated? “Especially right now, when there’s a lot of community transmission,” Richterman says, “and we’re still learning about new variants, it’s a good idea to keep things as safe as possible.” However, “people should be informed that the vaccine reduces their risk and the risk for those around them.”

Further reading/viewing: Check out the NAM’s project to increase vaccine acceptance, This Is Our Shot, as well as its continued efforts to promote the use of face coverings.

Business Operations

Caterpillar Powers COVID-19 Relief Efforts

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Manufacturers have pitched in remarkably to help us all through COVID-19—by making things you might expect to be essential (masks, gowns) and things you might not (wire racks, foam). One major manufacturer, Caterpillar, has contributed to the relief efforts in a wide variety of ways across the country and around the world. Here are some of its contributions.

Heating hospital tents: Caterpillar generators made a key appearance in Atlanta during the worst of the 2020 spring surge. Local hospitals set up testing sites outdoors so they could admit only confirmed COVID-19 cases, thus keeping noninfected patients safer from exposure. But to do that, they needed power.

Cat® Dealer Yancey Power Systems provided exactly the power they needed, after thoroughly evaluating the sites, making a detailed plan for servicing them safely and creating an easy set-up process.

Helping to make face shields: A Peoria manufacturer of face shields was missing a critical component—and local hospitals desperately needed those shields. The manufacturer called a Caterpillar distribution center at about 9:00 one morning and had what it needed just an hour later.

Donating materials: And speaking of face shields, a Caterpillar facility in Brazil donated production materials for face shields to local manufacturers, so that doctors in their hard-hit region would be better protected.

Feeding people: The Caterpillar team in Seguin, Texas, hosted two huge food distribution events in 2020. The event in May provided more than 700 families with enough food for two weeks, while in December, the Caterpillar Seguin team and the local food bank provided food to 955 families from 10 different counties.

Powering tugboats: Remember the rousing scene in March when the USNS Comfort, a Navy hospital ship, sailed into New York Harbor? You may not recall the two tugboats that helped it dock, but they were essential. And inside those tugboats were two Caterpillar engines, which ensured the boats could serve their city when it needed them.

Providing support: The Caterpillar Foundation also committed $10 million to support global and local COVID-19 response activities. Together with the incredible outpouring of support from employees and retirees through the Foundation’s special 2:1 match, these contributions have helped keep communities safe and strong.

The last word: “Our employees, dealers and customers around the globe are doing what they can to help fight the spread of COVID-19 and ensure essential work continues,” says Kathryn Karol, Caterpillar vice president of global government and corporate affairs. “They truly embody our values in action, finding ways to help each other and their communities during these difficult days.”

Workforce

Diversity and Inclusion: What You Need to Know

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If you’re a manufacturer looking to begin—or improve—your diversity and inclusion efforts, you’ll need some expert advice. That’s why The Manufacturing Institute—the workforce development and education partner of the National Association of Manufacturers—hosted a virtual summit recently on D&I development, drawing together a variety of experts in one comprehensive event. Now you can watch the event online, and to get you started, we’ll give you a quick overview.

Why it matters: Manufacturing workers are deeply diverse in all sorts of ways: age, gender, race and ethnicity, ability and sexual orientation—not to mention education, life experience and socioeconomic background. To be competitive, businesses must be able to connect with the skills and experiences of a wide range of communities.

The main events: The first day of the summit was broken down into several “dimensions” of D&I, each with its own panel of experts:

  • Race Dimension: Representatives from HBCU Connect, Pfizer and Ingredion discussed how leaders can promote racial equity in their companies and communities—including by setting measurable hiring goals and increasing internal candidate development.
  • Ability Dimension: Panelists from Autism Speaks, Stanley Black & Decker and Lee Container Corporation discussed their work with manufacturers to create 1 million employment and leadership opportunities by 2025 for people with autism and intellectual and/or developmental differences. The panelists highlighted data showing how neuro-diverse individuals strengthen the workforce overall.
  • Sexual Orientation Dimension: Representatives of Out Leadership and Dow spoke about how manufacturers can stand up for LGBT+ equality and D&I overall. They recommended supporting LGBT+ equality by being vocal allies and signing on to court cases that protect LGBT+ rights. They also talked about why bringing your whole self to the workplace is critical.
  • Military Dimension: Panelists from the MI, Fender Musical Instruments Corporation and Johnson & Johnson discussed how manufacturers can connect directly to transitioning service members, veterans, the National Guard, reservists and active-duty military spouses, including through programs like the MI’s Heroes MAKE America—an integrated training, certification and career-readiness initiative.
  • Gender Dimension: Panelists from the MI, Fresenius Medical Care North America and BASF Corporation discussed the steps companies can take to support women in manufacturing—such as creating supportive women-led networks within their businesses and ensuring uniforms are available in female sizes. They also noted the critical progress made so far by programs like the MI’s STEP Women’s Initiative and through local employee resource groups.
  • Age Dimension: With one-quarter of the manufacturing workforce over 55 years old, manufacturers must adapt to the needs of older workers. Panelists from AARP, ALOM and Winton Machine Company discussed the importance of two-way learning and how creating mentor–mentee relationships between younger and older employees can build a stronger workforce.

And that’s not all. . . Day Two featured an executive panel titled “Voices from Leadership,” with leaders from the MI, Arconic, Intel Corporation and Deloitte. It also included a goals-oriented panel called “Building D&I Into Team and Individual Goals,” featuring speakers from the MI, BP America, Trane Technologies and Covestro, which focused on how to put this work into practice.

The last word: “We need to close the racial inequities and the gaps that we have in our society because it is the right thing to do, but it is also the economic imperative for our sector,” said MI Executive Director Carolyn Lee. “We need more people—and the workforce of the future is going to look different than the workforce of today.”

Workforce

The NAM and PTC Launch the “Makers Series”

The NAM’s creative shop, always on the cutting edge, is bringing you something new: a collaboration with PTC to showcase the digital transformation in manufacturing. Today, the NAM and PTC are launching a series of co-branded videos to show both manufacturers and the public what the future will look like.

Watch: Before we go any further, take a few minutes to watch the first video in this series. In it, robotics company Hirebotics talks about how PTC’s Onshape cloud-based system allows it to design innovative welding robots that can be directed by a smartphone—and hired out to whatever company needs them.

The background: Over the past year, PTC has become a more visible presence to NAM members as a national sponsor of the association, expanding the NAM’s support of manufacturers in the United States and helping companies capitalize on digital technologies.

But the origins of this collaboration go back further than that. This sponsorship is a continuation of NAM President and CEO Jay Timmons’ “2020 Vision,” which he outlined back in 2015. Timmons envisioned turning the NAM into a “one-stop shop” for manufacturers—in advocacy, workforce development, legal action, news and more. Now, with PTC’s help, the NAM is giving voice (and visuals) to the industry’s future in more ways.

And there’s more . . . This series isn’t the only product of the collaboration—PTC President and CEO Jim Heppelmann has lent his expertise to the NAM’s board meetings and Leading Edge events, most recently giving a keynote address at the virtual Leading Edge Supply Chain Forum. Those of you interested in the business implications of the internet of things, augmented reality and the emergence of SaaS-based industrial solutions won’t want to miss his appearances in the future.

PTC says: Mike DiTullio, PTC’s president of SaaS business and an NAM board member, said of the partnership, “By partnering with the NAM on the Makers Series, we hope to inspire manufacturers with stories of how software is empowering manufacturers to transform and drive outcomes never thought imaginable. We are proud to be a member of the NAM, and even more proud to support the manufacturers of America.”

The NAM says: Timmons said of the partnership, “Through the Makers Series, PTC is providing powerful thought leadership, showcasing the incredible technologies that define modern manufacturing. We’re grateful that they are sharing their expertise and sponsoring this exciting initiative. They have created a model that demonstrates what the NAM is capable of producing alongside our members.”

Policy and Legal

Lawmakers Push for Retroactive Tax Increase

Key members of Congress are seeking to include a significant rollback of net operating loss relief in a COVID-19 relief bill, according to Politico (subscription).

What it is: When a company’s deductible expenses are greater than its revenues, it results in a net operating loss. Under the CARES Act, companies with losses from 2018, 2019 and 2020 can carry these losses back for the five previous years and have the losses offset up to 100% of taxable income, providing critical liquidity through tax refunds.

  • Some members of Congress now want to limit carrybacks of businesses’ 2020 losses to only two prior tax years, while also limiting the amount of relief for pass-throughs.

Why it matters: The provision provides important liquidity support, especially for small and medium-sized manufacturers. Eliminating or reducing it could make it more challenging for manufacturers to keep workers on the payroll and stay in business, says NAM Senior Director of Tax Policy David Eiselsberg. Ultimately, it would amount to a major retroactive tax increase on businesses and workers that are critical to our pandemic response.

Blast from the past: As President Barack Obama said in a 2009 interview with MSNBC’s Chuck Todd, “The last thing you want to do is raise taxes in the middle of a recession.”

A more recent statement: Treasury Secretary Janet Yellen said during her confirmation hearing that the Biden administration’s “focus right now is not on tax increases; it’s on programs to help us through the pandemic.”

The NAM says: “Net operating loss relief is a vital tool for manufacturers that are working hard to stay in business and support their employees across the country,” said Eiselsberg. “Undoing this critical liquidity support would not only hurt the ability of businesses to get through the pandemic but would also result in a retroactive tax increase on a sector that is key to America’s success.”

Workforce

Manufacturing Institute Partnership Enhances Railroad’s Hiring Reach

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Union Pacific is seeking a more diverse workforce as it strives to continue “building America,” as it says. To do so, it is partnering with The Manufacturing Institute, the NAM’s workforce development and education partner, on a $3 million three-year joint initiative. Beth Whited, who serves as executive vice president and chief human resource officer at Union Pacific, recently told us more about these ambitious plans.

The details: The initiative, called Careers on Track, will work to inspire more women and youth to pursue modern industry careers. The funding supports workforce development and career solutions that will include:

  • A new digital STEM curriculum;
  • A virtual STEM experience—in which participants can “choose their own adventure” while exploring interactive 3D models of a real facility, locomotive and more;
  • A STEM micro-grant program for young people; and
  • A digital campaign showcasing industry career opportunities for underserved women in select regions.

Ultimately, Union Pacific intends to double the number of women in the UP workforce within the next 10 years.

Why partnerships matter: “These types of partnerships are important for us because they broaden our reach,” says Whited. “We run pilot programs of our own, but it’s difficult for us to make those available in every school in our served territory. With the MI’s broad reach and established programs, we can reach more women and youth than we could on our own.”

The scope: Whited likes to remind people that nearly everything in their homes moves by rail at some point, whether as a raw material or as a finished product. That also means there is a wide range of jobs involved, from skilled roles in transportation and manufacturing to civil, electrical and computer engineering—jobs that involve designing more fuel-efficient locomotives or building the freight cars of the future.

The tech: “People who don’t know much about railroads are always surprised by the level of high tech that’s employed,” says Whited. “Railroads have been around for 160 years plus, and so people think about it as old technology, but it absolutely isn’t.

  • “You’ve got unbelievable signaling systems run everything safely, next-level optimization tools that determine how and when trains run, sophisticated technology in the 4,500 horsepower locomotives that we use to haul freight and so much more. The level of tech and advanced analytics and machine technology is usually quite startling to people.”

The pitch: Whited has advice for women who are unsure about working in a traditionally male-dominated field. “I would tell people to challenge their own thinking,” says Whited. “There aren’t jobs that are for men and jobs that are for women; there are jobs—and these are great jobs with great benefits that will help you fulfill your goals and give you a sense of pride. Come try it.”

The last word: As MI Executive Director Carolyn Lee said about this partnership, “There are nearly 500,000 job openings right now in manufacturing and millions more expected over the next decade. Closing the gender gap and building awareness with young people are critical to meeting this incredible need.”

Business Operations

How an Analytics Company Keeps Hospitals Running

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Behind every hospital bed, doctor, ventilator, mask and the millions of other components that make up a hospital is the same thing: a prediction. How much will we need, and where, and when? Analytics make those predictions as precise as possible—and that’s never been more essential than during COVID-19.

Analytics software company SAS understood the problem better than almost anyone. And not long after the pandemic started, it partnered with the Cleveland Clinic to create an innovative dashboard that would help hospitals optimize their resources and keep saving lives.

How it started: On March 17, the Cleveland Clinic asked SAS to create models that could predict the spread of COVID-19. They wanted to understand the strain that COVID-19 might put on the hospital, and by extension, its resources—from ventilators to PPE to dialysis machines to their doctors’ time.

Why it’s different: While plenty of organizations around the world were building epidemiology curves to track the course of the virus, SAS and the Cleveland Clinic built a framework that offers more. The collaborative team came up with a range of scenarios based on varying inputs like virus transmissibility and social distancing. With SAS vetting the math behind the models, the Cleveland Clinic identified which curve it was on at a given time and developed action plans in advance.

How it worked: The models helped the Cleveland Clinic identify markers for potential surge scenarios and recognize when the actual severity of the outbreak would fall short of some projections. That means it did not have to cancel planned events like routine surgeries and treatments and was able to continue treating non-COVID-19 patients.

  • “One of the challenges of this pandemic is the public health cost of dislodging patients with cancer or chronic disease to make room for COVID-19 patients,” said Dr. Steve Bennett, director of the global government practice at SAS. “These models can tell you that you may not need the surge capacity; you can keep doing the sorts of standard work that you’re doing. That has a valuable public health benefit.”

Sharing the wealth: SAS didn’t want to keep such a potentially valuable tool to themselves—so the team made their code publicly available on software development site GitHub. Other hospitals and public health agencies have adapted it, given feedback and made it their own, thus contributing to innovation and effective response.

  • “Cleveland Clinic is very advanced in analytics—but at the same time, they really wanted to help smaller organizations and smaller clinic hospitals that may not have big data science teams,” said Natalia Summerville, senior manager at SAS. “That’s why they allowed us to make everything publicly available, which was amazing.”

What’s next: The technology has applications even beyond the current crisis. “SAS aspires to be the platform of the future,” said Dan Abramson, executive director of U.S. manufacturing at SAS (and an NAM board member). “It’s got capabilities in modeling and AI and data management and visualization. So, the knowledge we gain from projects like these can be a launching point for pretty much any business problem or challenge.”

The last word: “The collaboration worked,” said Andrew Williams, principal analytical solutions architect at SAS. “The analyst community has always spoken very highly of our technology and analytic capabilities in AI, machine learning and optimization—and I think what we’ve shown here is that we can apply them to critical use cases across the board and across industries.”

Workforce

Creators Wanted Kicks Off Virtual Campaign

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Creators Wanted, the pioneering workforce initiative from the NAM and MI, is adapting to the changing environment to continue its critical work to reduce the skills gap and end misperceptions about modern manufacturing.

What’s happening:
We’ve gone virtual! The NAM and MI are still doing the Creators Wanted Tour, but they have exchanged in-person experiences for virtual ones (at least for now). The upside: these events will now be accessible to many more people.

What’s the plan: We’re kicking off our first virtual event on Tuesday, Feb. 2, at 10:00 a.m. EST. It will give you a sneak preview of what to expect during our Creators Wanted virtual events this year. (Click here for more information and to register.) After that, the NAM and MI will be making their way across the country, with virtual events aimed at different geographical areas.

What’s new and important:

  • The NAM—with the MI’s support and leadership—has launched the Pledge for Action. It’s a commitment by manufacturers to take real, tangible steps to reflect the diversity of the U.S. workforce over the next decade. Taking the Pledge and supporting Creators Wanted are great ways for manufacturers to help close the opportunity gap.
  • We’re collecting stories of creators around the country! Tell us about an amazing creator you know by visiting creatorswanted.org/shareyourstory.

Who’s it for: “Everyone! Well, we wouldn’t mind if everyone heard our message,” said NAM Vice President of Brand Strategy Chrys Kefalas. “But the NAM and MI specifically want to reach out to people who are ready to explore a career in manufacturing now. Maybe they’ve lost a job in the pandemic and are looking for a new career, or perhaps they’re already involved in manufacturing but want to gain the skills that will take them to the next level.”

  • The NAM and MI also want to reach veterans and people who are underrepresented in manufacturing, including women, Black people and all communities of color.
  • And, of course, the initiative intends to connect with young people, the next generation of creators.

Picking up where we left off: “The NAM and MI set big goals with Creators Wanted in 2020—to improve perceptions of manufacturing, reduce the skills gap and get more people into manufacturing career paths,” said Kefalas. “On Feb. 2, we will demonstrate that we can hit these goals with a new combination of virtual events, digital experiences and eventually in-person activations.”

But that’s not all… “The event will cover how we’re going to expand our impact, as well as exceed sponsor expectations. You won’t want to miss it.”

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