This year, hurricane season—which officially began June 1—arrived early, as it has every year since 2015. But while 2021’s inaugural Subtropical Storm Ana did not make landfall in the U.S. in late May, meteorologists are expecting the remainder of the year to be a busy time for hurricanes—and as manufacturers know all too well, that can mean trouble is ahead.
In addition to endangering lives, a strong hurricane can cause severe damage to individual companies and the U.S. economy as a whole. In fact, the Congressional Budget Office estimated in 2019 that expected annual losses from hurricane and storm-related damage came to $54 billion.
Always be prepared: Better planning for these yearly occurrences can help manufacturers mitigate the costs associated with storm-caused devastation—and go a long way toward keeping employees safe, too.
Offering resources: In partnership with disaster-relief organization SBP and product-philanthropy nonprofit Good360, the NAM’s Emergency Response Committee works year-round to provide members with access to disaster-preparedness resources and training in advance of natural disasters, and helps manufacturers activate to help their communities when one strikes
For example, in a recent webinar sponsored by the NAM’s ERC, Amanda Gallina, SBP community engagement manager, and Matt Woodruff, vice president of public and government affairs for Texas-based tank barge operator Kirby Corporation, laid out some suggestions for hurricane preparation.
For businesses: Woodruff provided some commonsense advice for employers:
- Ensure new employees understand the hurricane plan well ahead of hurricane season.
- Create a checklist of duties that must be performed, starting with the first day of hurricane season.
- Set up remote work sites for affected areas and employees.
- Provide support to the families of employees who live in affected areas to ensure their safety.
For individuals: Gallina offered advice for all individuals facing a hurricane:
- Collect hazard and emergency information from local and national sources like news and weather apps, NOAA Weather Radio and the Red Cross Emergency app.
- Make a household emergency plan, which should include stockpiling supplies, establishing communication methods and emergency contact numbers and creating an evacuation and sheltering plan.
- Identify and protect important documents by storing them in a fire- and water-proof box, while giving extra copies to a trusted attorney or friend. You can also use secure online cloud storage as another backup.
- Get the right insurance by identifying any gaps in coverage and asking your agent the right questions.
The last word: “We are grateful for the partnership with Good360 and SBP, which allows us to better support NAM members in times of need, but most importantly, provide valuable resources and thought leadership to build resiliency in advance of a disaster,” said NAM Chief Operating Officer Todd Boppell. “Advance planning is critical for successful businesses, and the thoughtful approach demonstrated by our partners resonates with the NAM’s vision to support manufacturing operations.”
To contact the NAM’s emergency response committee or to be added to its mailing list, email [email protected].
The NAM is joining with Meritas, a global legal alliance, to provide tailored, high-quality and affordable legal assistance to manufacturers across the country.
About the team: Meritas offers a network of 186 full-service, world-class law firms that have been vetted and approved by the organization. The firms are equipped to assist clients with issues from contracts and employment to environmental compliance and intellectual property.
How it works: If any members are facing legal issues, or simply want ongoing legal support for routine challenges, they can contact the NAM’s Manufacturers’ Compliance Institute, which will work with Meritas to identify exactly the right kind of legal professionals who can help. Meritas firms will then provide 30 minutes of free time to connect with the NAM member to figure out if a more formal engagement makes sense. NAM members can even connect with firms in other countries to work through issues that might arise abroad.
- Vetted firms: Meritas’ approved firms have all undergone a stringent vetting process to ensure they meet high standards. Instead of having to search for a reputable lawyer on their own, NAM members can trust that we will connect them with high-quality professionals who can meet their needs.
- Local knowledge: The Meritas network includes more than 7,500 lawyers serving 253 markets in the United States and around the world. This partnership will help manufacturers find assistance and representation from firms that have legal expertise in the relevant region, ensuring they have the best possible information as they move forward.
- Affordable rates: Meritas firms provide high-value services at competitive rates for small businesses and large companies alike. For small and medium-sized manufacturers, Meritas makes legal counsel accessible, helping companies avoid common pitfalls and overcome complex challenges. For larger companies, it delivers strong support at a lower price point than more expensive firms, helping to ensure competitiveness and a strong bottom line.
Why it matters: Finding high-quality, affordable legal counsel with relevant knowledge is extremely challenging. The NAM’s partnership with Meritas makes that process simpler, saving you time and money and strengthening your operations.
The last word: “The NAM’s partnership with Meritas gives manufacturers around the country a clear line into an outstanding network of legal assistance,” said NAM Vice President of Legal and Deputy General Counsel Patrick Hedren. “Whether you’re a small firm trying to avoid common legal challenges, a large company trying get more out of your legal team or an expanding manufacturer trying to navigate a new state or a new country, this partnership provides indispensable value and essential support.”
As India struggles with COVID-19, manufacturers across the United States have stepped up to offer assistance and material aid.
The situation: India is grappling with a dangerous and extremely transmissible form of COVID-19, even as the country has struggled to inoculate large swaths of its population. As a result, hospitals across the country are straining to fulfill critical needs, and the situation has become dire.
The support: Many manufacturers have announced that they will provide critical assistance to response efforts in India, including the following:
- Raytheon Technologies donated four mobile oxygen trucks, working with the Indian Red Cross to get them to Delhi.
- Deere donated $2.7 million to provide urgent medical resources and health care infrastructure, working with United Way Mumbai.
- Pfizer sent $70 million worth of COVID-19 treatment medicines directly to India/Indian government to help fight the disease.
- Lilly donated 400,000 tablets of key medicine used to treat severe COVID-19 patients—and made new voluntary agreements to ramp up local manufacturing and distribution in India.
- UPS donated $1 million to India to fight COVID-19.
- FedEx is donating critical supplies to India and has donated $4 million to help nonprofit organizations reach underserved communities get COVID-19 vaccines.
- Samsung is importing 1 million Low Dead Space (LDS) syringes, which minimize the amount of drug left in the syringes after an injection.
- Boeing created a $10 million emergency assistance package for India to support the country’s response to the recent surge in COVID-19 cases.
- LyondellBasell is donating $100,000 to the U.S. India Friendship Alliance to help the organization provide 250 oxygen concentrators to India’s hospitals and medical facilities.
In related news, the United States will donate 500 million doses of Pfizer’s COVID-19 vaccine to the world, according to Reuters (subscription). The donations will be distributed this year and over the first half of next year to 92 lower-income countries and the African Union, via the COVAX vaccine program spearheaded by the World Health Organization and the Global Alliance for Vaccines and Immunization. The White House has also pledged additional direct aid to India, which is detailed here.
- The NAM has praised these efforts to accelerate vaccinations in India and the rest of the world, calling them a “powerful, effective way to improve vaccine access,” while preserving critical IP protections that made that innovation possible.
What we’re saying: “Manufacturers are deeply committed to the fight against COVID-19 in our communities, including here in the United States, in India and around the world,” said NAM Director of International Business Policy Ryan Ong. “The NAM is working directly with members and with partners like Good360 and SBP to provide critical relief where it is mostly badly needed and to help us all respond and recover from COVID-19 as we work toward a better post-pandemic world.”
Hugo Hinojosa loved being in the military. He served 22 years in the U.S. Army, with time in eight different duty stations. His service gave him the opportunity to get a degree, travel the world, see different places and forge close-knit friendships that he says will last a lifetime. When it came time for him to transition out of the military, he was open to ideas—and during a career skills program briefing at Fort Hood’s Copeland Center, a presentation from Heroes MAKE America captured his attention.
Endless opportunities: After a career spent moving around the globe, Hinojosa was hoping to stay in his home state of Texas for the long term. During the presentation from a representative of Heroes MAKE America, he was struck by the breadth of roles the manufacturing industry offered.
- “When they came out and told me about opportunities and other jobs in the surrounding area, I said, wow, this might be for me,” said Hinojosa. “With the certifications the program offered, you could work anywhere in the industry. I wasn’t limiting myself to a certain, specific job. I could work anywhere, you name it. The opportunities are endless.”
A unique experience: Hinojosa began his time in the program in the midst of the COVID-19 pandemic, which meant that some elements had to be adjusted to fit the logistical reality. But participants still received plenty of engagement: classroom lessons were shifted to a virtual format, and students met with program managers two at a time for a few hours every week. While it required a fair amount of self-direction and motivation, Hinojosa said that the program supported him as he learned at his own pace.
A powerful network: Hinojosa found the networking aspect of the program to be especially valuable once he began looking for work.
- “Every time we would have potential employers in team meetings, I would search them on LinkedIn and connect with them,” said Hinojosa. “I said, I saw you today during class, I’d like to connect. I started building my own network from there.”
The right stuff: The work paid off. Hinojosa received several offers and ended up getting hired by WestRock Company through meetings that were set up by Heroes MAKE America. He began as a member of the company’s management trainee program and was quickly recruited to work as a business partner in the human resources department. He sees his new career as a natural extension of his time as a service member.
- “Everywhere I go, I’m a steward of the Army,” said Hinojosa. “I’m working in a place where the values are in line with what I was brought up with in the military—integrity, respect, accountability and excellence.”
Today, Hinojosa encourages other transitioning service members to see themselves in a manufacturing career—and most importantly, to recognize their own skills.
The last word: “Don’t sell yourself short,” said Hinojosa. “Believe in the skills the military has given you. You’ve been trained and given skills that will pay dividends out here in the manufacturing industry. And the work ethic that’s instilled from day one is going to show.”
Are you grappling with the fast pace of competition in manufacturing? Are you working to keep up with the massive amount of disruption brought on by artificial intelligence, advanced robotics and digital breakthroughs? Are you racing to create new competitive advantages by using the power of Manufacturing 4.0—the next wave of industrial progress based on digitization?
The NAM has you covered with Rethink: The Manufacturing Leadership Council Summit, on June 22–24.
What it is: Rethink is the premier conference on Manufacturing 4.0 for industry leaders as they continue to navigate disruption. Hosted by the Manufacturing Leadership Council—a member-driven, global business leadership network dedicated to senior executives in the manufacturing industry—the summit offers participants strategies and solutions that are designed to advance their operations and improve their competitiveness.
Why it matters: The COVID-19 pandemic supercharged some of the changes that were already occurring in the manufacturing industry. Across the past year, businesses have seen an even greater need for flexibility, agility and speed in operations, and many manufacturers have accelerated their adoption of digital technologies to achieve these goals.
What it includes: The summit will offer a wide range of informative conversations with next-generation leaders and experts. A few elements include the following:
- Case study sessions showcasing real-world examples of advanced manufacturing technologies in action—from efforts to transform legacy facilities into smart factories, to the role of analytics in digital transformation, to the growth of robotics in manufacturing and logistics. By hearing from manufacturing leaders who have taken on these challenges, executives can learn best practices and gain new ideas for their own companies.
- “Think tank” sessions that will allow participants to ask questions and share ideas about advanced manufacturing technology. These conversations will include discussions of topics like quantum computing, manufacturing execution systems, augmented and virtual reality, blockchain, edge computing and sustainability.
The big difference: Most importantly, Rethink gives participants the chance to learn from other manufacturing executives and experts. Many of the industry’s most forward-thinking leaders will collaborate at this summit to make manufacturing better and stronger.
Check it out: Click here for more information and to register for the summit.
Across the country, manufacturers are deeply involved in efforts to improve their climate stewardship and take action on a wide range of environmental, social and governance (ESG) issues. Manufacturers are leaders in everything from combatting climate change to enhancing diversity and inclusion in the workforce—and in ensuring that investors understand everything that goes into this critical work.
Recently, the Securities and Exchange Commission began considering a disclosure framework that could require companies to provide standardized information on their climate and ESG commitments. The agency has opened a comment period to receive public input on what the framework could include, and the NAM is making sure that manufacturers’ voices are heard.
NAM Senior Director of Tax and Domestic Economic Policy Charles Crain recently spoke to us about this issue, describing manufacturers’ priorities and concerns. Here’s what you need to know.
The challenge: Many companies already voluntarily disclose a great deal of information about their climate and ESG efforts—both because they are proud of the work they do, and because they believe it’s important for investors to have all the information available, Crain says. However, a one-size-fits-all SEC mandate could create more problems than it solves by imposing costly or overly broad requirements that do not provide useful information to shareholders.
Our move: This week, the NAM laid out the manufacturing industry’s perspective for the SEC, including a list of principles that should guide the agency’s decision-making. Those principles include the following:
- Materiality: The NAM believes that companies should be required to disclose information only if it is material to their business—that is, company-specific, relevant, useful information that would change a reasonable investor’s view of a company.
- Flexibility: Different items are material for different companies. Disclosures shouldn’t be one-size-fits all, but should instead include the kind of company-specific information that will reflect the diversity of risks and opportunities that businesses face and thus be useful to investors.
- Clarity and comparability: The current lack of standardization can create costs and uncertainty for both companies and investors. Within a flexible, materiality-driven framework, the SEC can enhance the clarity and comparability of climate and ESG information disclosed by businesses.
- Limiting company costs and liability: New SEC mandates shouldn’t overburden companies with high costs or a strict liability burden—both of which could result in limited or boilerplate reporting that isn’t useful to investors. Many of companies’ climate and ESG goals are aspirational and rely on evolving reporting methodologies, and the SEC shouldn’t disincentivize aggressive goal-setting on these issues.
- Appropriate scope and reasonable timelines: The data the SEC is describing isn’t just sitting on the shelf. In order to disclose climate and ESG information under a new framework, many companies could have to build out data collection infrastructure, go deep into the supply chain, and get information through standardized methodologies that may not currently exist. This process will be time-consuming and difficult, and the SEC will need to tailor any requirements accordingly and give companies time to adapt.
- Don’t reinvent the wheel: Many companies are already disclosing climate and ESG information based on existing methodologies, and there are plenty of third-party standards for reporting this data. Rather than starting from scratch, any SEC framework should align with existing practices that many companies are already using.
Next steps: The SEC will consider the NAM’s recommendations, along with other feedback, as it works toward a potential rule proposal—and the NAM will continue to engage with the SEC throughout the process.
Klaussner Home Furnishings has made three increases in its workers’ wages over the past 10 months, while also adding benefits. Yet, the company’s ability to invest in workers and add much-needed equipment may be in danger if Congress proceeds with proposed tax hikes, according to President and CEO Terry McNew. These increases could do real harm to manufacturers at a time when the economy is starting to recover from the pandemic.
Benefits for workers: McNew, who has led Klaussner for about a year and a half, explains that he’s working hard to take the company from the 19th century to the 21st century—“skipping over the 20th,” he says—by eliminating the use of piecework and ensuring that all current workers have full 40-hour workweeks.
- That transition included the wage increases mentioned above, as well as an expansion of benefits, such as a reduction in health insurance deductibles and the addition of mental and behavioral health benefits.
- “If taxes go up, I have fewer choices,” says McNew. “I’ll have even more limited resources” for raises and other benefits.
Facility expansion: McNew also credits tax reform with helping Klaussner improve its facilities and buy much-needed equipment.
- Late last year, the company installed new roofs, and it is currently in the market for new sewing machines. Its new CIO is looking to invest in enterprise resource planning and materials requirements planning software, which will cost about $5 million.
- McNew says these plans were made possible by a tax provision called full expensing, which allows companies to deduct the full cost of capital expenditures in a single year.
The economic context: McNew points out that manufacturers are dealing with a number of difficulties right now, including higher materials and shipping costs, which are amplifying their worries about potential tax changes.
- In light of all these factors, McNew says, “I told my executive staff we are not getting raises this year, but instead giving raises to employees.”
The last word: NAM President and CEO Jay Timmons said, “As we emerge from the economic catastrophe caused by COVID-19, American businesses are at a pivotal point in our nation’s history. Manufacturers like Klaussner are helping to lead the economic recovery in the wake of the pandemic. But increasing the tax burden on companies in America would mean fewer American jobs, lower wages and a smaller economy.”
Now that all American adults are eligible for vaccination and largely have easy access to vaccines, it’s even more important to convince those still on the fence about getting their shots. To help manufacturers convince their hesitating employees, The Manufacturing Institute has partnered, as a part of the “This Is Our Shot” project, with the Center for Public Interest Communications at the University of Florida on a research study about hesitancy and how manufacturers can overcome it.
The big idea: The study aimed to identify strategies that manufacturers can use to increase vaccine confidence among their teams, according to Matt Sheehan and Annie Neimand, managing director and research director, respectively, at the Center. It took a wide-ranging approach, applying social science to this public health problem and looking for evidence-based strategies that employers could put into practice right away.
Why it matters: According to the team, vaccine hesitancy can be driven by a range of factors, including a lack of access to vaccination opportunities, uncertainty about the process of getting inoculated or incorrect or confusing information. Those different motivations can be countered by different approaches, the researchers advise. Understanding where people are coming from makes it easier to give them the support they need.
What we learned: The study arrived at five steps that will help encourage manufacturing workers to get vaccinated:
- Communicate from a place of trust. To be effective, manufacturing leaders should communicate frequently and transparently about vaccination policies and vaccination rates within the facility. Vaccination goals, too, should be focused on the facility.
- Help remove barriers to getting the vaccine. Employers should make it easy to obtain the vaccine and make employees feel supported in their decision to get it. That may mean communicating in languages that their workforce uses, helping employees make vaccination appointments as needed and offering time off for employees to recover if they have significant side effects after the vaccine.
- Highlight trusted messengers. Lots of vaccine skeptics are also skeptical of outsiders, so employers should enlist trusted local authorities, civic leaders and peer influencers to disseminate information.
- Customize tactics to appeal to the community. There is no one-size-fits-all message, and it’s important to reach people who come from different backgrounds and have different ideologies. For some people, it’s important to talk about reaching herd immunity or protecting the most vulnerable in our communities. For others, it’s more effective to talk about the vaccines’ role in protecting their own families and loved ones, or even themselves.
- Address fears at an individual level. Reacting to hesitancy with negativity, or suggesting that all people who are concerned about vaccines are the same, will only increase hesitancy. Instead, listen to individual concerns, and guide people to a useful solution.
Point of emphasis: “It’s important that we listen more than we talk,” said Sheehan. “That’s what’s going to get us to the point where we reach some of these hesitant groups. We need to help solve problems rather than impart information…. If we can listen and hear and alleviate concerns and fix barriers, we’re going to see much more success.”
What’s next: The MI and the Center for Public Interest Communications are preparing to release additional research findings and a new communications guide later this month, to bolster manufacturers’ efforts to get the remainder of their teams and communities vaccinated. Stay up to date on all the latest “This Is Our Shot” project resources at NAM.org/ThisIsOurShot.
Spring is the season of SCOTUS, when the court releases its most important decisions for the year. This year, the NAM is awaiting decisions on a number of cases in which it participated as an amicus—a “friend of the court”—and has already received one significant victory: a ruling in favor of energy companies on a procedural issue regarding climate lawsuits.
We spoke to two of the NAM’s legal experts—Vice President of Legal and Deputy General Counsel Patrick Hedren and Senior Litigation Counsel Erica Klenicki—to get the overview of this busy season for the NAM’s Manufacturers’ Center for Legal Action.
Energy victory: The court ruled in favor of the energy companies in a suit brought against them by the city of Baltimore. As Hedren puts it, the case hinged on a “wonky procedural issue,” but the crux was this: where should nationwide issues be litigated, particularly if the federal government played some role?
- The energy companies and the NAM argued that climate change is just such a nationwide and even global issue and simply cannot be decided by state courts. The nature of the issue makes access to federal courts paramount.
- SCOTUS’s ruling didn’t address the underlying climate concerns, but it did provide easier access to federal courts for these types of disputes, say Hedren and Klenicki.
Class actions: The NAM is awaiting the Supreme Court’s decisions on several other cases in which it participated, including TransUnion LLC v. Ramirez, which deals with a key issue for large manufacturers and other companies: class-action lawsuits.
- As the NAM’s legal team notes, these cases are often brought by attorneys looking for a payday, even when the vast majority of the “class” in question, though technically affected, was not really injured.
- That’s what happened in this case. The class included people whom TransUnion mistakenly identified as potential matches for individuals on the Treasury Department’s terror watch list, which could have resulted in denials of loans.
- Though the lead plaintiff did allegedly suffer harm due to this error, most of the 8,000-plaintiff class were entirely unaware of the error. The company had fixed its mistake before those plaintiffs were harmed.
To put it simply, the rules for class actions are far from clear, say Hedren and Klenicki. The courts often award damages or settlement money to uninjured people who could not have brought a case on their own. And the only winner in this system is the plaintiffs’ bar. That’s why the NAM is asking SCOTUS to clarify the rules for bringing a class action and ensure that trial courts are applying rigorous standards before certifying a class.
Free speech: The NAM is also awaiting the court’s decision on Americans for Prosperity Foundation v. Becerra, a case concerning whether the government can force an organization to disclose the identities of its donors. While the NAM doesn’t have donors, it does have a keen interest in keeping its member list confidential. If all such lists had to be released, it would “chill free speech,” say Hedren and Klenicki.
Following suit(s): Lastly, the NAM team is asking the court to hear several other cases during its next term, including:
- Miller v. CH Robinson Worldwide, Inc. In this case, the plaintiff was injured by a truck belonging to a small company, yet was allowed to sue the freight broker that hired the trucking company, too—despite a federal law that preempts those kinds of suits. The NAM is asking SCOTUS to consider the case so it can put commonsense limitations on liability.
- City of Oakland, et al. v. Chevron Corp., et al.: This case is very similar to the energy case mentioned above.
The last word: Hedren explains why the NAM’s involvement in our nation’s highest court is so important: “The Supreme Court really values the manufacturing sector’s perspective, in part because bad decisions in a single lower court can have ripple effects across the whole economy. The NAM pays close attention to those cases that might really change—for better or worse—the way the sector operates, or that might open the door for crafty lawyers to abuse the court system. If we’re not out there fighting for better legal policy, we’ll face a legal system increasingly tilted in favor of game-playing and abuse.”
JLS Automation, a maker of robotic packaging systems in York, Pennsylvania, is growing fast—adding workers, expanding its facility and looking toward a bright future. According to Craig Souser, the company’s president and CEO, this growth was enabled in part by the tax reform law passed in 2017. Souser spoke to us recently about the strides that JLS has been making ever since—and noted that any changes to those tax policies could endanger the company’s continuing success.
Ramping up hiring: According to Souser, JLS hired 20 people already this year, which represents 20% growth in its workforce. The company also expects to hire another 20 people, further expanding its talent bench of high-skilled workers.
Providing bonuses: It’s important to JLS that employees feel connected to the work they are doing, and that means ensuring they have a piece of the profits. That’s why the company has a profit-sharing program that gives bonuses to its team, explains Souser.
- In the past three years alone, JLS has given workers two to three weeks’ pay in profit-sharing bonuses, and this year employees received additional thousand-dollar bonuses across the board. The company also offers other merit-based bonuses to qualifying employees, ensuring that good work gets noticed and rewarded.
Expanding facilities: The company’s hiring spree means it must expand its facilities, doubling the area where employees work and adding space for new capital equipment like an on-site crane and machining capability. According to Souser, the company is likely to spend as much or more on the expansion as it took to buy their current facility in the first place.
Investing in training: Souser also cites tax reform as a factor in the company’s decision to invest aggressively in training efforts.
- “We can be more investment-driven, allocate more money to any individual training program and hire better people to do training because of tax reform,” said Souser. “We always need to train our people, but we can do it faster and better because of tax reform. There’s no doubt about it.”
Strengthening communities: JLS is focused on developing the workforce of the future, especially within its own community. The company supports local initiatives like Give Local York, which promotes nonprofit organizations that serve York County, and established a scholarship to help students of color attend York College’s engineering program.
The road ahead: All these efforts were made possible in large part by tax reform, Souser stresses. However, if JLS is saddled with a higher tax burden, the company might struggle to maintain this level of expansion. In particular, Souser worries about an increase in the corporate tax rate, harmful changes to the estate tax and the rollback of full expensing (which allows companies to deduct the costs of their equipment purchases in one year, an important tax benefit).
- “We’re concerned about what we’re hearing on the tax side,” said Souser. “The full expensing provision has been huge. On tax, we like to be able to hire and retain people, and we like to be generous, and if profits get whacked, we can’t invest in them and their futures nearly as much.”
- “The long-term concern is about pulling back on estate tax relief,” he added. “We are a closely-held company, and that could cause liquidation or asset sales or staffing reductions. It would be potentially devastating to the company. You put all three of these provisions together, and there’s not much to like.”
The last word: “Business is the process of managing risk—and when risk is an unknown, it becomes hard to manage,” said Souser. “It’s difficult enough to deal with a whole variety of issues out there and to remain competitive in an environment where the majority of our competitors are global. When you see something as great as tax reform, the threat of it going away gives you pause.”