Policy and Legal

NAM to Congress: Advance R&D Tax Fix Now

a group of people sitting at a table

To restore a U.S. tax landscape that promotes manufacturing competitiveness, Congress should act quickly in advancing bicameral, bipartisan legislation that would ensure the tax code once again supports innovation.

That was the message from the NAM and several manufacturers to lawmakers last week.

What’s going on: The NAM and company leadership from manufacturers Westminster Tool and Brewer Science visited Capitol Hill last week to brief legislators on a harmful change to the tax treatment of research and development.

  • The briefing was held by the NAM-led R&D Coalition in cooperation with the offices of Reps. John Larson (D-CT) and Ron Estes (R-KS) and Sens. Maggie Hassan (D-NH) and Todd Young (R-IN).
  • Larson and Estes introduced the American Innovation and R&D Competitiveness Act in the House, while Sens. Hassan and Young introduced the American Innovation and Jobs Act in the Senate. These are the measures manufacturers are urging legislators to pass.

Why it matters: “We paid $26,679 per full-time employee in additional federal tax this past year” because of the change, Westminster Tool Chief Financial Officer Colby Coombs told lawmakers at the briefing.

  • “This increased federal tax on R&D forced us to cancel a major aviation contract that would have added … new jobs in our community and forgo a significant capital investment. Without fixing this issue, in 2023, we expect an additional tax bill of almost $18,000 per employee,” he continued.
  • Added Brewer Science Government Programs Director Doyle Edwards: “We have lost IP to China in the past, and fight[ing] that in the courts is a no-win situation. So the only way to win is to out-invent them. And that’s what we invest our money to do. However, with [the tax change] … we’re allowing China to actually catch up.”

The background: For nearly seven decades, manufacturers could deduct their R&D expenses fully in the year in which the costs were incurred. However, since the change last year, businesses must instead deduct these expenses over a period of years, making R&D more costly. 

Legislative fix: To protect manufacturers’ R&D, jobs and competitiveness, Congress should move immediately on bipartisan legislation to restore R&D expensing.

  • “R&D is the lifeblood of advanced technology development for our company, for our industry, but really for the nation,” Edwards continued. “And so our message is, we need your help. We need your leadership to resolve this policy issue.”

Take action: Learn more about what the NAM is doing to advocate for sound tax policy at our R&D action center.

How a Tax Change Will Strangle a Small Manufacturer’s R&D
NAM Pushes Back on Interest Deductibility
Sens. Hassan and Young Reintroduce Crucial R&D Legislation
Policy and Legal

NAM Leads Inaugural North American Manufacturing Conference

a man standing in front of a group of people posing for a photo

On Sept. 19–20, the NAM convened the inaugural North American Manufacturing Conference in Washington, D.C., along with its counterpart associations from Mexico and Canada, the Confederation of Industrial Chambers of Mexico and Canadian Manufacturers & Exporters.

What’s going on: The conference provided an opportunity for North American manufacturing executives and government representatives to share perspectives on the opportunities and challenges facing the sector across the region. At the conference, industry leaders discussed the need to:

Deepening ties: On Wednesday, the NAM, CONCAMIN and CME signed a memorandum of understanding that will serve as a roadmap for future cooperation between the three organizations and support close economic ties between the U.S., Mexico and Canada.

  • The memorandum calls for the organizations to share information about each one’s services and activities, and to work together to shape the continent’s future manufacturing agenda.
  • In addition to leaders from the NAM, CONCAMIN and CME, speakers at the event included U.S. Trade Representative Katherine Tai, ExxonMobil Senior Vice President Neil Chapman, Toyota Motor North America Executive Vice President – Product Support and Chief Quality Officer Chris Nielsen, Rep. Adrian Smith (R-NE), Bombardier Head of U.S. Strategy Tonya Sudduth, Energy Transfer Co-CEO Tom Long and Caterpillar Inc. Chief Technology Officer and Senior Vice President of Integrated Components and Solutions Division Karl Weiss.

Common principles: “Shared values, shared prosperity” was a central theme of the conference, echoing President Biden’s remarks at the U.N. General Assembly earlier this week.

  • “As president of the United States, I understand the duty my country has to lead in this critical moment; to work with countries in every region linking them in common cause; to join together with partners who share a common vision of the future of the world,” President Biden said in New York on Wednesday.
  • “There’s never been a greater need for us to stand together,” NAM President and CEO Jay Timmons said. “The world is caught between different political and economic systems. Our system here in North America enriches lives and lifts people up into freedom and prosperity, while other systems oppress their people and rob them of their liberty,” he continued, adding that the USMCA, of which the NAM is a longtime advocate, serves as a reminder “of what we can achieve when we work together.”

Strengthening the region: Throughout the conference, discussions focused on three components of a successful North American economy—growth, resilience and competitiveness—and the critical role manufacturers play in that system.

  • “Today, we live in a new reality,” CONCAMIN President José Antonio Abugaber Andonie said. “The commercial competition with China, the pandemic, the conflict in Ukraine … [all] place us before a second great industrial transformation in North America. … Some call it nearshoring, friend-shoring, ally-shoring or reshoring. No matter the name, the truth is that this phenomenon is modifying the structure of international industrial organization. North America is the epicenter of this transformation.”
  • Added CME President and CEO Dennis A. Darby: “Manufacturers are an important driver of economic development and prosperity. We are key players in the changes and challenges of the 21st century.”
Manufacturers Welcome Progress on USMCA Agreement
NAM Advances Manufacturing Priorities at USMCA Meeting in Mexico
Manufacturers Urge Reversal of Mexico’s Unfair Energy Policies
Business Operations

A Footwear Company Strives for Circularity

a group of people standing in front of a crowd

Within the footwear business, Okabashi is unique. The company, based in Buford, Georgia, is not only a family-owned company focused on sustainability, but also, according to the company’s leadership, producing part of the 1% of footwear still made in the United States.

For third-generation shoemaker Sara Irvani, this choice to build a sustainable and successful business in the U.S. was made possible only thanks to constant research and development.

The backstory: Irvani’s family started the company 40 years ago, and it always tried to reduce waste, both for the positive environmental impact as well as to improve its bottom line.

  • “By developing closed-loop manufacturing processes, we were able to reuse some of the materials that otherwise might have gone to waste,” said Irvani. “That helped us stay more competitive—and from there we’ve developed innovations in processes and systems and materials that build on that foundation.”

The process: Okabashi’s sustainable processes extend throughout the product lifecycle—from incorporating recycled or biological elements (like soy) that ensure products last longer to preventing disposable waste to recycling post-consumer shoes into new ones.

  • “When we look at sustainability of a product, we do it holistically—we look at what it’s made of, where it’s made, how it’s made, the lifecycle, the quality—and we’ve been able to innovate and develop so that our manufacturing process doesn’t create waste,” said Irvani.
  • “Without R&D, we would not only be creating the additional cost basis of throwing away all those scraps, but we would also not be able to eliminate waste that is by default landfill or ocean bound.”

The circular economy: In the traditional, linear economic model, inputs go into production, a product reaches a consumer, the consumer uses the product and eventually throws it away. In contrast, Okabashi is working to perfect a circular economic model for its products, said Irvani.

  • “If you are designing for circularity, you might use renewable and recycled resources, develop them into that same product with a level of quality that lasts longer, and when the customer is ready to move on, it can be remade into something else,” said Irvani. “That’s how the loop continues. When we talk about circularity, we’re creating that virtuous cycle.”

The homegrown production: Okabashi’s R&D efforts both help it stay in the United States by keeping costs down and require domestic production to work.

  • “To remake and recycle a product into something new, you need to have local production,” said Irvani. “You can’t be sending things halfway across the world to be unmade and remade and sent back. That’s why R&D locally and domestically is so important, to help produce circular systems.”

The local benefit: Irvani is quick to point out that money spent on R&D creates significant financial benefits for local communities.

  • “There’s a multiplier effect for commercially oriented R&D in terms of the jobs it can create and the impact on the local economy,” said Irvani. “You get a very strong return on investment for both the company and for the community.”

The global perspective: R&D is essential for U.S. companies competing with manufacturers abroad, Irvani added.

  • “For U.S. manufacturing broadly, R&D is critical to stay at the forefront of the innovation curve,” said Irvani. “Unless we’re proactively investing and developing new and better ways of doing things, we won’t be globally competitive.”

The last word: “It is imperative industry and retail move toward a circular-based economy,” said Irvani. “That’s not something that just happens or falls from the sky. Consumers are demanding it, and R&D is our pathway to that future.”

How Eastman Strives for a Circular Plastics Economy
“A Catalyst for Change”: Nucor Is All in on Sustainability
Fortune Brands Puts Sustainability Front and Center
Business Operations

Manufacturers Step into the Industrial Metaverse

What exactly is the industrial metaverse? While the term sounds like something straight out of a science fiction movie, it’s already being used by manufacturers in the here and now. Put simply, the industrial metaverse is a collection of technologies that can create an immersive virtual or virtual/physical industrial environment.

The metaverse will contain virtual replicas of everything from complete factories down to individual components and parts, powered by evolving digital technologies like AI and cloud computing. As the metaverse develops, users will be able to access it from any internet-connected device, such as a smartphone, laptop or tablet, or using virtual reality headsets.

According to a new report released by the Manufacturing Leadership Council, the NAM’s digital transformation division, and Deloitte, 92% of manufacturing executives say they are experimenting with or implementing at least one metaverse-related use case. On average, the surveyed executives say they are running more than six.

How is it used? Manufacturers are using industrial metaverse technologies in four common areas: production, supply chain oversight, customer service and talent management.

  • Production: Manufacturers are simulating key processes in order to evaluate them, creating virtual prototypes of processes or systems and creating simulated factories to optimize factory layout and setup.
  • Supply chain: Other manufacturers are using the metaverse to track products and raw materials and to collaborate with suppliers.
  • Customer service: Companies are also creating virtual showrooms and product demonstrations, which attendees can visit without leaving their own homes or offices.
  • Talent management: Lastly, other companies are experiment with using the metaverse for immersive training, virtual plant tours and virtual recruiting and onboarding.

What are the benefits? Executives report that each of these use cases comes with significant benefits, including cost reductions. Respondents also said metaverse applications have improved employee attraction and retention.

  • Immersive customer experiences and virtual aftermarket services, such as equipment service and maintenance, have also led to increased revenue, according to the survey.

The challenges: While the industrial metaverse offers many promising benefits, manufacturers are still finding some challenges, including:

  • The high cost of metaverse technology and the cybersecurity protections it requires;
  • A lack of employees with the right skills, along with the steep learning curve for those who must be trained; and,
  • Insufficient digital infrastructure and other resources.

The solution: The report suggests that manufacturers can find success in the metaverse by building a culture of innovation, establishing leadership support and starting small by investing in a digital technology foundation. 

The last word: All in all, manufacturing executives are confident that the industrial metaverse will transform their operations. Learning to understand and use the metaverse will soon be essential for companies seeking a competitive future.

Download the full report, “Exploring the Industrial Metaverse,” to learn more. 

Manufacturers Keep Pace with Technology Deployment
Case Studies for Success in the Factory
Hannover Fair Showcases Latest Innovations

Husco Cracks the Employee-Retention Code

For Husco—a family-owned manufacturer of hydraulic and electro-mechanical control systems—building a strong, cohesive culture is the key to retaining talent.

The Waukesha, Wisconsin, company is among the many manufacturers that find retention to be a top business challenge, as the NAM’s quarterly Manufacturers’ Outlook Survey shows. So how do they create this cohesion?

It all starts at the top: Angela Stemo, vice president of global human capital at Husco, says the company has always prioritized trust and communication between employees and their managers.

  • “Our retention has grown and strengthened because of the emphasis we place on our leaders having strong relationships with their employees—get to know who they are, find out what their interests are,” said Stemo.
  • The company also lays the groundwork for strong bonds between coworkers, which often flourish outside of work as well. “Once they feel connected to people within the organization, they’re going to want to stay,” explained Stemo. “They’ve built friendships, they’ve built connections, and they feel really tied to the organizational culture.”

How they do it: Husco conducts employee engagement surveys once a year and holds occasional in-person focus group discussions to get feedback from employees.

  • “As our organization becomes more diverse, we are offering surveys in more languages,” said Stemo. “We have a large Afghan population on our shop floor as well as many Burmese workers, so we’ve had our surveys translated into various languages for all employees to participate.”
  • “For us, we really try to listen to what people say and what their suggestions are,” said Stemo. “If it’s something feasible and we can implement it, we try to figure out how to do so.”

Career development and advancement: Stemo noted that workers have consistently mentioned career development and advancement in the focus groups and surveys. The company has responded by expanding its offerings:

  • Husco offers its workers 100% tuition reimbursement—whether for an associate’s, bachelor’s or master’s degree—and fully funded internal and external training.
  • The company also offers a “scholars program” that helps recent high school graduates complete a bachelor’s degree in mechanical engineering while working at Husco. Scholars receive full-time pay and benefits along with 100% tuition support.
  • “Husco emphasizes and truly supports lifelong, continuous learning,” said Stemo.

Internal programs: Within the company, Husco offers career development programs that feature rotations through different departments, such as quality, manufacturing and design. These rotations prepare workers for leadership positions, usually in engineering or manufacturing, said Stemo.

  • Husco provides the opportunity for employees to pursue external certifications in Six Sigma (green, yellow or black) and project management, as well as attend classes in negotiation, presentation and communication through a third party or university/college. If an employee has the desire and completes the appropriate request forms, the company approves it, said Stemo.

Patent awards: Husco also provides a monetary reward for ideas that contribute to new products, processes or anything else that might be patented.

  • “There is a staff engineer within each division who partners with various legal teams to apply for a patent award,” explained Stemo. “We recognize the award with a plaque and a patent award bonus.”

Other perks and support: Husco offers employees the flexibility of working one day a week from home and provides free health risk assessments, flu shots and on-site medical consulting. Through a corporate membership, the company also provides employees with day passes to visit the local zoo or museum for free.

Philanthropy: Philanthropy is central to Husco’s culture, and the company encourages its employees to get involved and help their communities. Husco supports employees’ philanthropic efforts through local outreach programs and volunteer opportunities.

  • Husco donates 10% of its profits to charitable organizations, putting a special emphasis on those that support K-12 education. The company also donates to colleges and universities, while providing scholarships for exceptional local students and the children of Husco employees.
  • “We match dollar to dollar employee donations to hundreds of different organizations,” noted Stemo. “Our philanthropic efforts are a big part of our culture and what makes employees ‘sticky.’”

The last word: Stemo shared some advice for companies struggling with workforce retention: there’s no substitute for good leaders.

  • “People leave bosses,” she said. “It may not be the final reason why someone leaves a company, but a lot of times, that’s the beginning of why someone starts looking for a job elsewhere or takes that recruiter call.”

Go deeper: The Manufacturing Institute—the NAM’s 501(c)3 workforce development and education affiliate—has many resources to help employers retain and develop their teams.

  • Start with this study on boosting retention and employee engagement, and register for an upcoming webinar on company culture.
  • Interested in labor data and key workforce insights? Sign up for the MI’s new monthly publication, Workforce in Focus.
  • For more on the latest trends and best practices in workforce development, sign up for the MI’s Workforce Summit on Oct. 16–18 in Atlanta. Click here for more information and to register.
“Mountaire Cares” Is More Than Just a Slogan
“It Changed a Lot in My Life”: Tyson Foods’ Workforce Programs
“You Guys Rock”: Creators Wanted Inspires Dallas/Fort Worth
Policy and Legal

NAM, KAM Bring Suit Against SEC

The NAM and the Kentucky Association of Manufacturers are hitting back against an attempt by the Securities and Exchange Commission to force privately held businesses to make public financial disclosures.

What’s going on: On Tuesday, the NAM and KAM filed suit in federal court challenging the SEC’s novel reinterpretation of its Rule 15c2-11.

  • The reinterpretation—on which the SEC has not granted companies the opportunity to comment—would require private firms to release confidential financial information publicly.

The background: Rule 15c2-11 requires disclosures to protect investors in publicly traded companies issuing so-called “penny stocks.” But the SEC has broadened the rule’s application to include privately held companies that issue corporate bonds to large institutional investors under an entirely different regulation, called Rule 144A.

  • Everyday investors can’t purchase corporate bonds issued under Rule 144A, so there is no reason to require public disclosures from these businesses.

Why it’s important: Expanding Rule 15c2-11 will mean higher borrowing costs and reduced liquidity in both the manufacturing industry and throughout the larger economy, according to a new EY report released by the NAM.

  • The reinterpretation would lead to job losses of more than 100,000 every year, according to the analysis.

Manufacturers speak out: “The SEC never allowed public comment on its novel reinterpretation of Rule 15c2-11, there is no conceivable benefit to the new standard and the SEC did not consider the impact that its about-face will have on privately held businesses,” said NAM Chief Legal Officer Linda Kelly. “The NAM Legal Center is filing suit to hold the SEC accountable and protect manufacturing growth, job creation and U.S. competitiveness.”

  • KAM President and CEO Frank Jemley added: “The SEC’s unlawful overreach threatens privately held manufacturers in Kentucky and across the country, so the Kentucky Association of Manufacturers is proud to join the NAM in this important litigation.”
Business Operations

How Novocure’s Anti-Cancer Device Extends Lives

Around 15,000 people are diagnosed every year in America with glioblastoma, a particularly aggressive form of brain cancer. At Novocure—a global oncology and medical device company with its North American flagship facility located in Portsmouth, New Hampshire—scientists and manufacturers have developed a device to revolutionize the way these tumors are treated.

The breakthrough: Novocure’s founder Yoram Palti developed an innovative treatment called Tumor Treating Fields therapy—an approach that uses electric fields to kill cancer cells while sparing healthy ones.

  • For adult glioblastoma patients, the device, called Optune®, consists of wearable, portable adhesive arrays and an electric generator that can be carried in a bag.
  • “Unhealthy cells and healthy cells have different properties,” said Frank Leonard, president, CNS Cancers U.S. at Novocure. “If you can create the right type of electric field, you can exert force and destroy cancer cells as they divide.”

Value added: Crucially, Tumor Treating Fields therapy is being studied together with other therapies, giving patients access to an optimal mix of treatments.

  • “You get the best of both worlds with a device intervention and a drug intervention,” said Leonard. “Patients can wear this device consistently while using Temozolomide, which is the current standard of care chemotherapy agent used to treat glioblastoma.”

Low risk: Unlike drug therapies, which can present a range of adverse effects, Optune® has few side effects beyond mild-to-moderate skin irritation beneath the transducer arrays. As a result, patients can receive the treatment continuously for extended periods of time to attack cancer cells.

  • “Typically, the limiting factor in treating cancer is dose-limiting toxicity—for example, you can only take one or two chemotherapies at the same time because they’re so toxic,” said Leonard.

Getting heard: The company’s device was featured in the award-winning short film “Rare Enough,” which tells the inspiring story of cancer survivor DJ Stewart and his journey in battling glioblastoma.

  • Stewart is a Kansas City–based skateboarder who was first diagnosed with glioblastoma in 2019. Thanks, in part, to Tumor Treating Fields therapy, his life expectancy—once only 13 months—has been prolonged significantly. DJ now serves as a community outreach coordinator for the Head for the Cure Foundation.

Next steps: Novocure believes that Tumor Treating Fields therapy holds significant promise for other types of cancer as well. The company is developing additional wearable devices that could treat countless patients around the world.

  • Lung cancer trials have shown promising results recently, and the company expects to learn more in the coming months from clinical trials involving ovarian cancer, metastases from lung cancer and pancreatic cancer.
  • “We started working first in one of the rarer, yet most aggressive, forms of cancer. There are around 15,000 patients diagnosed with glioblastoma in the U.S. each year,” said Leonard. “But pre-clinical data suggests that Tumor Treating Fields can work with all different tumor types.”

A look to the future: Wearable anti-cancer devices offer an exciting new frontier in the fight against life-threatening diseases, and an important field where manufacturers can make an enormous difference.

  • “In these really aggressive cancers, we still are making advances—and advanced devices that require sophisticated engineering and complex global manufacturing have a role to play,” said Leonard. “There’s a lot the manufacturing industry can do to improve the outcomes of patients, and they should be recognized for that work.”
AI Helps Detect Breast Cancer
Gene Therapy Delivers Promising Results
How a Tax Change Could Set Back Cancer Treatment
Business Operations

PALIoT Takes on Supply Chain Challenges

Supply chain problems, PALIoT Solutions is coming for you.

This fall, the New-York-state-based startup, whose name derives from a combination of “pallet” and “IoT,” will begin production of its smart shipping pallets. According to company leaders, these products will do nothing less than revolutionize the way food and goods are transported. 

From vision to reality: PALIoT cofounders Paul Barry and Richard MacDonald envisioned pallets “whose positive impact on the environment keeps increasing as more of them are manufactured and deployed,” according to the firm’s website.

  • To accomplish this feat, the pallets had to be both far lighter and more durable than typical pallets, which are made of wood and nails.
  • After significant research and development, Barry and MacDonald came up with the solution: a polyurea-coated, engineered-plywood pallet that was 20 pounds lighter than its traditional peers and contained a proprietary sensor capable of instant communication with the cloud, making inventory tracking a cinch.

The “secret sauce”: “The ‘secret sauce’ is essentially a smart mesh network,” said Barry, who hails from Ireland and has an electrical engineering and investment banking background. “The PALIoT pallets in a shipment will all talk to each other, say, ‘Hey, I’m here.’ And [after shipping,] because they know they’ve been on a truck, they know they have to report all that valuable inventory and environmental data back to the cloud.”

  • PALIoT, which will rent its pallets to customers using a per-pallet, pooling model (with an optional subscription service), acquired exclusive global use of the mist® Mesh Networking protocol. This ensures that communication is highly secure and battery sensitive at all times.
  • The company estimates it will initially produce between 650,000 and 700,000 pallets a year in the first phase of the launch.

Savings for all: PALIoT’s groundbreaking sensors promise to save buyers both resources and money.

  • “Food producers see tens of millions of dollars a year in food waste,” Barry said. With PALIoT technology, those producers will be able to track their perishable food shipments’ temperature and humidity conditions, viewing that information in the cloud so handlers can take swift action to cut down on spoilage.
  • And because real-time asset protection is a PALIoT priority, the pallets will help companies cut down on theft and losses. As Barry put it, “If a pallet gets stolen, we will know where and when.”

A “smart” solution: Typical asset-embedded IoT sensors fail long before the assets themselves, making them impractical for longer-term use. Not so with PALIoT’s pallets, which can be used for a decade before they will need to be “retired and recycled,” according to Barry. 

  • “How can you justify having an expensive piece of hardware with a battery that needs replacing every few years?” he continued. “Using a combination of communications technologies, we’ve been able to solve the key problems of battery life and cost for large-scale asset-pooling companies.”

What’s next: Having recently relocated its manufacturing operations from Colorado to just outside Rochester, New York, PALIoT has its sights set on doing business with the dairy farms of the Northeast. It also plans to expand its manufacturing footprint across the U.S.

  • “Demand is not the issue,” Barry told us. ”People just want a better solution, and we think this is it.”
AB InBev Uses Smart Manufacturing for Award-Winning Results
Case Studies for Success in the Factory
ABB: Motoring Toward Greater Energy Efficiency
Policy and Legal

NLRB Revives Troubling “Card Check” Process

Bringing back parts of a policy it dropped more than half a century ago, the National Labor Relations Board moved late last week to reinstate an abridged version of “card check,” according to Reuters (subscription).

What’s going on: In a “3-1 decision in a case involving building materials company Cemex Construction Materials,” the NLRB unveiled a new framework last Friday that revives the 1949 Joy Silk doctrine, which holds that “employers must bargain with unions unless they have a good-faith doubt that majority support exists.”

The background: The board had tossed out the doctrine in the early 1970s after the Supreme Court’s decision in NLRB v. Gissel Packing Co., in which the court held that “the NLRB could force employers to bargain with unions when they engage in misconduct so severe that any election would be tainted.”

  • This new decision “could provide a major boost to unions by allowing them to represent workers in certain cases when a majority sign cards in support of unionizing, rather than going through the lengthy and often litigious election process.”
  • Last week’s move also came a day after the board finalized a return to Obama-era regulations purportedly aimed at speeding up union elections.

Why it’s problematic: Card check—which the NAM has long opposed—is inherently unfair and insecure, and it strips employees of their right to secret ballots, said NAM Director of Infrastructure & Labor Policy Ben Siegrist.

  • “The NLRB’s decision could create a glide path to force unionization on workers without the necessary safeguards of an election, and it runs counter to 50 years of precedent established by the Supreme Court,” he said. “Effectively, this action contradicts the rights all employees have in determining their own representation.”
“Fix it Now”: Timmons on Taxes, Immigration and the Workforce
NAM Pushes Back on PRO Act
“Competing to Win” Comes to Louisiana
Policy and Legal

NAM: Auto Worker Strike Would Harm Economy

As manufacturers continue to reel from supply chain disruptions, the NAM is calling for a swift resolution to forestall a potentially devastating United Auto Workers strike.

What’s going on: The UAW is negotiating a new labor agreement with important automotive manufacturers, as the current contract expires Sept. 14.

Why it’s important: The automotive manufacturing industry in the U.S. is one of the strongest and most productive in the world, and it significantly supports the health of the U.S. economy.

  • A strike of 143,000 UAW members against Detroit’s “Big Three” auto manufacturers could mean an economic loss of $5.617 billion after just 10 full days, according to a new report by Anderson Economic Group.
  • Nationwide, every $1 spent in the transportation-equipment sector causes another $1.59 to be spent elsewhere—for a total economic impact of $2.59, according to NAM calculations using 2021 IMPLAN data.
  • In 2022, the total value-added in motor vehicles and parts in the U.S. was $171.6 billion, according to the Bureau of Economic Analysis.

State-level impact: In 2019, a 42-day auto-worker strike at one of the Detroit manufacturers “sent the state of Michigan into a one-quarter recession” and resulted in an economic loss of $4.2 billion, according to reporting by The Detroit News.

  • As of 2021, the latest year for which this data is available, Michigan’s total output from motor vehicles, bodies and trailers, and parts manufacturing was $37.5 billion, accounting for 37% of total manufacturing output in the state, according to the BEA.
  • At the same time, Michigan had 175,745 full- and part-time employees in the sector, or 28.7% of all manufacturing employees in the state.
  • Meanwhile, the total output of Illinois’ auto sector accounted for 19.3% of the state’s total manufacturing output, while employment came to 23.6% of the state’s manufacturing employees.

Undermining manufacturing in the U.S.: “Manufacturers in America, especially in the automotive sector, operate in an integrated supply chain, which means that small and medium-sized manufacturers around the country—in union and non-union shops—would endure the consequences of a stoppage. As we continue to emerge from the global pandemic and work to get our economy on a sustainable track, a strike would be devastating for working families across our country,” said NAM President and CEO Jay Timmons.

  • “President Biden has prioritized strengthening manufacturing in America, but that will be quickly undermined if a strike occurs. The administration should be encouraging a swift resolution to avoid ripple effects throughout the broader manufacturing economy and in communities from coast to coast.”
‘Manufacturing Opportunity Awaits’: Creators Wanted Arrives in Charlotte
“Fix it Now”: Timmons on Taxes, Immigration and the Workforce
“Still a Beacon”: Timmons Discusses Permitting, Immigration and More
View More