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Policy and Legal

Manufacturers Push For Fast-Track Recall Legislation

capitol building Washington DC

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.”

Policy and Legal

Treasury Rule Bodes Well for Manufacturers

The proposed regulations provide much-needed certainty.

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.

Workforce

Heroes MAKE America Student Goes from the Army to Mars

An Army veteran's skills translate seamlessly in the manufacturing industry.

Thomas Schlieper participates in a Heroes MAKE America tour.
Thomas Schlieper, third from left, participates in a Heroes MAKE America facility tour.

As a production scheduler for Mars, Incorporated, Thomas Schlieper has a hand in sending sweet treats all over the world.

In some ways, it’s very different from his former career. As a teenager, Schlieper joined the Army National Guard because it offered benefits like tuition assistance and scholarships that would help him go to college. When he finished school, he worked in his hometown and eventually decided to go into active service in the U.S. Army. That career spanned two decades and helped lead him to the manufacturing job he enjoys today.

While Schlieper served as an Army senior supply specialist, he enrolled in the Manufacturing Institute’s Heroes MAKE America program, which aims to connect manufacturers with highly qualified candidates and offer transitioning service members manufacturing-related training and support, thus creating a pipeline between the military and manufacturing. Through this U.S. Department of Defense-approved program, he toured the Mars production facility in Topeka, Kansas. Mars recognized his logistics experience and offered him a production scheduler position, which he accepted in February 2019.

“I served 20 years as a logistics guy,” he said. “Ordering supplies, making sure soldiers in the Army had what they needed. The leadership skills I learned in the Army helped me adapt to this new role.”

Schlieper recalls the stress he felt during his first day on the job at Mars, when he wondered whether he was up to the challenges of his new role—and the moment when it all clicked.

“My first couple days there, after I did the orientation, I was overwhelmed,” he said. “I thought, am I getting over my head? I was just a soldier, and now I’m something different.”

He was shadowing another employee when he suddenly realized that the system he would be using as a production scheduler at Mars was exactly the same system he used every day when ordering supplies and managing logistics in the Army.

“I looked at the system, and I was totally relieved,” said Schlieper. “All that stress went away, and I was like, I know this. I can do this.”

Today, Schlieper is deeply immersed in his new industry. He feels it’s a good fit for former members of the military, who will have an easier learning curve as a result of their training.

“Before I retired, some people I knew thought manufacturing jobs were jobs nobody wanted,” he says. “But that’s really not the case. It’s completely different. It’s a whole new world.”

Learn more about the Manufacturing Institute’s Heroes MAKE America program.

Policy and Legal

Manufacturers Speak Out for Dreamers

Manufacturing leaders are pushing for bipartisan comprehensive reform.

Jay Timmons on Fox Business talks about the NAM's A Way Forward immigration plan.

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.”

News

Kansas Manufacturer Doubles Its Workforce

"We need laws, like tax reform, that can drive economic growth and drive business.”

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Ferroloy worker uses equipment.

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.”

Business Operations

PepsiCo Invests in School Recycling Programs

Participating schools have collected more than 320 million plastic bottles and aluminum cans.

Children at a school hold up "Please Recycle" t-shirts at a PepsiCo Recycle Rally event.

With more than 100,000 employees in the U.S., PepsiCo makes an impact through sustainability initiatives that reach far beyond the brand’s products. Through its Recycle Rally program, PepsiCo offers more than 250 free online resources to students, faculty and school staff members across the country with the goal of increasing recycling rates at schools. Via those resources, Recycle Rally helps schools set recycling goals, track progress toward those goals, earn rewards and compete in contests for cash prizes.

Nearly 6,000 schools have participated in Recycle Rally over the past nine years, collecting more than 320 million plastic bottles and aluminum cans. In 2018, PepsiCo began open-sourcing all of their Recycle Rally resources to the general public which has enabled local communities to take advantage of the Recycle Rally tools, including how to start a green team and host a recycling collection drive. And by encouraging recycling, parents of children in the Recycle Rally program reported not only bringing their containers to the school drop off-site, but also increasing recycling of other materials in their homes.

PepsiCo hasn’t stopped there. In 2018, PepsiCo made a $10 million investment in The Recycling Partnership (TRP) to launch “All In On Recycling,” an industry-wide challenge to raise $25 million to improve recycling for 25 million families. By providing curbside carts to single-family homes, creating infrastructure to collect recyclables from multi-family housing and offering recycling education and operations, PepsiCo’s investment helps to simplify recycling and create stronger, cleaner communities. In Iowa City, for example, PepsiCo’s TRP investment will support the delivery of recycling carts to every household served by their recycling program—expanding curbside recycling to 16,000 households—along with a customized public education campaign designed to help residents recycle better.

“Recycling is an essential part of PepsiCo’s long-term approach to sustainable packaging for our food and beverage products,” said David Lapp, PepsiCo Beverages North America chief supply chain officer. “We work to support recycling wherever we do business, and as a U.S.-based company with significant operations, sales and local presence in cities and towns across the country, we have a special responsibility to do our part for U.S. recycling.”

As part of PepsiCo’s sustainability agenda, the company aims to build a world where plastics never need to become waste. In less than a decade, PepsiCo’s recycling efforts—through partnerships, pilots, large-scale programs and packaging innovation—have helped recycle more than 425 million bottles and cans.

“Sustainability is a real priority for the manufacturing industry as a whole,” said Laura Berkey-Ames, the National Association of Manufacturers’ director of energy and resources policy. “Companies like PepsiCo are doing outstanding work and making critical progress that should serve as an example for other industries looking to be proactive on the issue.”

Policy and Legal

Latest Move on Tariffs a ‘Molotov Cocktail’ of Policy

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National Association of Manufacturers President and CEO Jay Timmons warned today of the grave consequences of the administration’s plan to levy tariffs on Mexico, and ultimately manufacturing workers, to stem migration from Central America.

Saying that intertwining trade, tariffs and immigration creates a Molotov cocktail of policy, Timmons urged Congress and the administration to work together to find a comprehensive legislative solution on immigration, which manufacturers have offered in A Way Forward.

Click here to read Timmons’ full response.

News

Bosch Pledges Carbon Neutrality by 2020

Bosch intends to achieve its carbon neutral goal through a four-pronged approach.

Two Bosch manufacturing workers look at a powercell.

Since Bosch first established a presence in North America in 1906, the company has been a manufacturing leader in the United States. With 410,000 employees worldwide—and 35,400 in North America—Bosch is keenly aware of their global impact and responsibility. Today, it’s leading on climate action and setting an aggressive target for a bold new initiative: On May 9, Bosch announced that the company will be carbon neutral by 2020.

“Climate action needs to be seen not just as a long-term aspiration—it needs to happen here and now,” said Dr. Volkmar Denner, chairman of the board of management of Robert Bosch GmbH. “As an innovation leader, we want to deliver technological solutions to ecological problems.”

As one of the largest privately-held companies and automotive suppliers in the world, Bosch is well-positioned to make an impact, both through its actions and as a model to other companies. With 400 locations across the globe, Bosch intends to achieve its carbon neutral goal through a four-pronged approach: increasing energy efficiency, expanding proportion of renewables, buying more green power and offsetting carbon emissions. By reaching this goal, Bosch will prevent 3.3 million tons of carbon emissions by 2020—and will be the first major industrial company to reach the carbon-neutral benchmark.

“Our commitment to reducing carbon emissions and climate action is not guided by short-term financial considerations,” said Prof. Stefan Asenkerschbaumer, CFO and deputy chairman of the Bosch board of management, “but takes a much longer-term view.”

As an engineering company, Bosch sees its work in terms of long-range objectives and seeks to understand how even small changes, taken together, can have a significant effect over time. This focus on long-range planning makes it easier to weather fluctuations in the economy and day-to-day business challenges with an eye on achieving larger objectives.

Bosch’s work uses tools that include low pollutant power train technology and artificial intelligence that predictively controls exhaust gas treatment. While most Americans are aware of Bosch through its leadership in consumer goods—from dishwashers to power tools—the company is also a force in sectors like mobility solutions, building technology and industrial equipment. And it is implementing a sustainable model across the board.

“Companies across the manufacturing sector are taking proactive steps to reduce emissions, improve the environment and address climate change,” said Laura Berkey-Ames, National Association of Manufacturers’ director of energy and resources policy. “Bosch’s work is an exciting part of that effort and will help inspire companies in other industries to do their part.”

Workforce

STEP Award Winner Leads Teams, Saves Lives

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Elaine Thibodeau accepts award at 2019 STEP Ahead Awards

As the North America Deliver Operations Lead at Johnson & Johnson, Elaine Thibodeau’s work helps ensure quality, continuity, preparedness and resiliency across the supply chain. She also serves as an advocate for women in the manufacturing industry and a voice of encouragement for millions of young women and girls who might enter the industry one day.

“I think we need to keep fighting the myth that a manufacturing career doesn’t marry well with having a family,” Thibodeau said. “We need to find opportunities to bring young women into our factories and give them early, positive experiences with the industry.”

Her 30 years of experience at Johnson & Johnson includes time in orthopedics, diagnostics, pharmaceutical manufacturing and consumer medical devices – roles that have come with all sorts of challenges. Earlier in her career, Thibodeau led a team that was tasked with taking over a third-party plant to continue producing an oncology medication that was on the FDAs drug shortage list. By making a deal with a supplier to take over a section of their plant, she kept production running.

Doctors in an advocacy group told Thibodeau how essential the medication was for their patients and how shortages caused them to make difficult decisions. “That always stuck with me – it motivated me every day to do my job well,” she said.

At times, Thibodeau faced immense challenges. After Hurricane Maria devastated Puerto Rico, she worked to get manufacturing up and running, bringing jobs back to the community that was deeply affected and providing vital products to enable employees to take care of themselves.

“Day-to-day life was just physically difficult,” she said. “We had to take care of the people first, making sure they had what they needed to be safe, whether that was a generator or medicines or water or diapers.” In collaboration with site leaders and other businesses in the area, she helped to rebuild the industry and begin the process of renewal.

Thibodeau’s interest in manufacturing began at a young age. As a young girl, she built furniture for her dolls with raisin boxes and pieces of wood she found in her family’s garage. When her father, an electrician, went to work, she would tag along, learning how to trouble shoot, which is a skill that has proven valuable.

“I had building blocks and I liked to sew,” Elaine remembered. “I was always interested in putting things together.” An enthusiasm for math and some encouraging teachers led her to an engineering degree, and after a few years, she was offered her first role at Johnson & Johnson – beginning an exciting career that continues to draw her out of her comfort zone.

“If the new job or the new project doesn’t scare you a little bit,” she said, “you’re probably going to be bored in six months.”

Elaine Thibodeau won a 2019 Manufacturing Institute STEP Ahead Award. This profile was adapted from an original interview for the Input, the NAM’s members-only e-newsletter.

Policy and Legal

As House Moves On DACA, NAM Reaffirms Support For Congressional Action

Congress must come together and pass a comprehensive, bipartisan immigration overhaul.

The National Association of Manufacturers (NAM) sent a letter to Congress Thursday signed by dozens of manufacturing leaders across the country urging a bipartisan overhaul of the current immigration system and requesting Congress assure a safe future for Dreamers and participants in the Temporary Protected Status (TPS) program.

On Wednesday, the House Judiciary Committee completed a markup of legislation to address two immigration populations currently facing uncertainty. One bill would provide permanent relief from deportation for Deferred Action for Childhood Arrivals as well as a conditional permanent resident status and another for TPS recipients that includes a path forward to legally remain in the United States.

The full House is expected to vote on this legislation in June.

“Dreamers, including participants in the Deferred Action for Childhood Arrival program, and participants in the Temporary Protected Status program continue to face uncertainty under our broken immigration system,” the letter from the NAM reads. “Congress needs to send a strong signal that we welcome their talents, contributions of hard work, desire for education, and if serving, support their willingness to wear the uniform of the armed forces.”

Earlier this year, the NAM released “A Way Forward,” a plan for comprehensive immigration reform that bolsters border security while strengthening the economy and providing certainty for those immigrants who are anxious about their future.

“Manufacturers are in the business of building solutions, and ‘A Way Forward’ is manufacturers’ commitment to fix our immigration system once and for all—one we believe can bridge the partisan divide on long-lasting immigration issues, as well as time-sensitive challenges that continue to arise,” NAM Vice President of Infrastructure, Innovation and Human Resources Robyn Boerstling said. “Our plan proposes seven core areas of action for Congress and the administration to take that will bolster national security, show compassion to those seeking a better life and strengthen the American workforce.”

The solution to the challenges facing our immigration system won’t come easily, but the path toward it is clear: Congress must come together and pass a comprehensive, bipartisan immigration overhaul. ‘A Way Forward’ provides a roadmap for how to accomplish that goal.

“America is indeed a nation of immigrants, but America has also become a nation with a broken immigration system,” NAM President and CEO Jay Timmons said in a letter earlier this year. “Manufacturers believe our leaders not only have an obligation to fix this system but also a historic opportunity to do so at a moment when Americans’ attention is focused on the issue like almost none other.

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