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Policy and Legal

SEC Previews Climate Rules

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Securities and Exchange Commission Chairman Gary Gensler said that the agency will release proposed rules by the end of this year requiring that public companies disclose risks related to climate change, according to MarketWatch.

What they’ll cover: Chairman Gensler indicated that he wants climate disclosures to be “consistent and comparable” and provide decision-useful information to investors. He said staff is considering whether such disclosures would be included in companies’ 10-K filings, whether they would include Scope 1, Scope 2 and/or Scope 3 emissions and whether certain metrics would be required for specific industries.

The challenge: Many manufacturers already voluntarily disclose a significant amount of information about their climate efforts, but an overbroad mandate could impose new cost burdens on companies without providing useful information to shareholders.

What we’re doing: The NAM has consistently stood up for manufacturers, encouraging the SEC to adopt a principles-based approach rather than a uniform mandate. Back in June, the NAM laid out the manufacturing industry’s perspective for the SEC and provided a list of principles that should guide any eventual disclosure framework. As the process moves forward, the NAM will continue to engage with the SEC and advocate for manufacturers.

Learn more: For more information about our principles and the work the NAM has been doing in this area, check out this recent story.

Workforce

Get Ready for MFG Day 2021!

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We’re just two months away from MFG Day 2021! If you’re a manufacturer and you haven’t done so already, it’s time to start thinking about hosting an event.

Amplifying the “Creators Wanted” message, MFG Day—which officially falls on October 1 but will be celebrated throughout the rest of the month—is manufacturing’s biggest celebration of the year, a chance for parents, students and educators to step inside the industry and see everything it has to offer. It’s nothing less than our biggest annual opportunity to “solve the workforcedevelopment crisis,” as MI Senior Director of Student Engagement Julia Asoni put it during a recent webinar.

Here’s what you need to know.

The crisis: Manufacturers will need to hire 4 million workers between now and 2030 to account for growth and fill positions left open by retiring workers, according to a recent study by Deloitte and the MI. Yet the industry will struggle to fill just 2.1 million of those jobs.

  • “The solution is to inspire the next generation of manufacturers and educate students, parents, teachers and the public on the important role that manufacturers play in our lives,” Asoni said.

Making a difference: In 2019, more than 325,000 MFG Day participants took part in 3,000 events across North America, Asoni noted. Afterward, 72% said they now believed “manufacturing provides an interesting and rewarding career.”

  • MFG Day 2020 moved online due to the pandemic, but this year, it’s back in force and in person.

What can you do? Manufacturers that wish to host an event this MFG Day but don’t know where to start have come to the right place.

  • In-person options: Facility tours, open houses, community gatherings and expos, roundtable discussions and job fairs all make excellent events, Asoni said.
  • Go virtual: Virtual events can be successful, too. Consider Zoom, GoTo Meeting, Instagram Live, Facebook or a specific school platform (if working in partnership with a school). Interested in hosting a 3D-mapped, virtual experience for MFG Day? Contact NAM AVP of Strategic Partnerships Chris Schmitt at [email protected].
  • “What will participants do?” Engaging working employees during onsite tours is crucial, Asoni said. “Personal experience has the greatest impact on perception change, according to research.” So get creative when thinking through your visits and walk-throughs!
  • “Whom do we invite?” Reach out to local schools and community-based organizations, such as nearby Boys & Girls Clubs of America. BGCA can be contacted for partnership purposes at [email protected].
  • Learn more about MFG Day through our full page of MFG Day resources. And listen to prior best practices shared by MFG Day hosts on a webinar hosted last month.

Register your event: Be sure to register your MFG Day events by the end of August. This will help people find them and sign up.

Calls to action: MFG Day event hosts should each have their own calls to action—steps that attendees can take to keep engaging with manufacturing. This could be signing up for a company newsletter, following the company on social-media channels or attending another event, such as a career day.

  • This year, we’re launching a built-in call to action to engage students year-round. Stay tuned for more information in September!

Check it out: As MFG Day nears, keep checking in on CreatorsWanted.org. It will be updated and refreshed continually up to Oct. 1 with new MFG Day resources, along with updates on the broader Creators Wanted campaign to help inspire, educate and empower the next generation of manufacturing talent.

More support: Need a bit more help? Join us for some real-time Q&A during one of our upcoming MFG Day Office Hours.

Workforce

To the Moon and Then Mars: An Interview with a STEP Honoree

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Jennifer Boland-Masterson originally got excited about manufacturing because of the robots. The Indiana native later graduated from Purdue University with a degree in electrical engineering, then worked in the automotive and boat industries before joining Boeing. Today, she is Boeing’s director of operations, Space Launch System, and leads the team that is building NASA’s SLS rocket—the most powerful rocket in development today.

“The plan is to get us back to the moon, and then to Mars, and this rocket has the payload to make it happen,” says Boland-Masterson. “We’re building the next generation of the space program, and that’s my day-to-day.”

A manufacturing advocate: Boland-Masterson was recently selected by The Manufacturing Institute as a 2021 STEP Ahead Award Honoree—an honor given to women leaders who have excelled both within their companies and in the industry as a whole. She sees sharing stories as an important way of encouraging other young women to go into manufacturing and frequently attends science, technology, engineering and math events in her community to demystify the industry for young people and their parents.

  • “The earlier that girls and their parents understand that STEM events are not just for boys, and [the earlier] they see role models in the fields they aspire to be in, the better,” says Boland-Masterson. “It gives them that energy. They realize, hey, I can do that too.”

  • “It might look male-dominated, but the dynamics are changing,” she adds. “You’re seeing more diversity in these engineering, tech, science areas. It’s exciting to see that change.”

It takes a village—and some confidence: Boland-Masterson emphasizes the importance of teamwork and of being able to build a community among your friends and colleagues.

  • “Make sure you have a good support system,” she advises young people. “We can’t do it by ourselves. We have to have people we can ask for advice or help. Whether you’re a woman or a man, everyone needs that support system.”
  • “We all will have challenges, but that’s okay,” she adds. “You’re your number one fan, and when you believe in yourself, you can accomplish anything and everything you want.”

An unexpected journey: Even as someone who hoped to go into manufacturing from an early age, Boland-Masterson was surprised by the range of opportunities she encountered in the industry. Her work has turned out to be both international and interplanetary.

  • “I would never have imagined as a kid that I would be building a rocket that will carry astronauts into deep space,” says Boland-Masterson. “I would never have guessed. Growing up in Indiana, I thought I would stay in Indiana my whole life. But getting into manufacturing, I’ve had an opportunity to go across the country and around the world.”

And does she work with robots?: “Believe it or not, I don’t work with any robots,” Boland-Masterson says, laughing. “My day-to-day is all about human interaction. But I say keep an open mind and that will take you to wonderful, unexpected places.”

Policy and Legal

New Tax Bill Poses Threat to Manufacturers

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This week, the Senate’s top tax writer, Finance Committee Chairman Ron Wyden (D-OR), introduced the Small Business Tax Fairness Act, which would significantly limit the existing 20% deduction for manufacturers organized as “pass-through” entities.

The background: The 2017 tax reform law created a 20% deduction for business income earned through pass-through entities such as S-corporations or partnerships. The lower tax burden provides manufacturers with additional capital to hire workers, increase wages and expand operations.

  • The Small Business Tax Fairness Act, however, would essentially eliminate the pass-through deduction for all but the very smallest of companies by phasing out the deduction for taxpayers with income above $400,000 – completely eliminating it as income reaches $500,000.
  • Moreover, the bill would negatively impact family-owned businesses by denying the deduction for business held in trusts and estates.

The NAM’s view: As the vast majority of manufacturers are small and organized as pass-through entities, phasing out the deduction as proposed under the bill would ultimately hurt the men and women who make things in America.

  • The current-law provision links wages with the deduction: the more you pay your workers, the larger the benefit for the manufacturer. The proposal does away with this formula, which would break the important link between wages and the deduction.
  • Earlier this year, the NAM released a major tax study on the effects of proposed tax increases, including a repeal of the pass-through deduction. That study found that one million jobs would be lost in just the first two years if those increases were to be implemented.

The last word: “This pass-through deduction is a critical pro-growth tool enabling manufacturers to hire more workers and grow their operations,” said NAM’s Senior Director of Tax Policy David Eiselsberg. “Make no mistake, this legislation would amount to a major tax increase and effectively punish manufacturers that are doing the right thing by hiring workers and paying good wages with a higher tax bill.”

Business Operations

UL Helps Manufacturers Keep Their Air Healthy

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With the highly infectious Delta variant causing concern even among vaccinated people in the U.S., manufacturers are thinking about the quality of their air yet again.

Now they can benefit from additional expert advice. In a recent webinar, the NAM’s Leading Edge program hosted an expert from global safety company UL to discuss how manufacturers can keep their air (and their employees) safe. Here are some of his recommendations.

In their own category: “Manufacturing facilities … are unique, in many respects,” UL Director of Assets and Sustainability, Real Estate and Properties Sean McCrady said. “You have all of these activities where there’s going to be regulatory safeguards in place for worker protection that are likely going to [act as] guidance for IEQ [indoor environmental quality].”

  • In fact, many manufacturers worked quickly to improve their air quality when the pandemic started, the webinar’s moderator, NAM Director of Labor and Employment Policy Drew Schneider, noted. But though manufacturers may be ahead of the game on air quality, there’s more still to consider.

UL’s work: In response to the pandemic, UL developed what Fast Company magazine has called “LEED for the COVID-19 era”: its Verified Healthy Buildings program.

  • To date, hundreds of buildings, including the Walt Disney Concert Hall in Los Angeles and the Cira Centre in Philadelphia, have had their IAQ (indoor air quality) tested, along with water purity, ventilation efficacy and other environmental factors.
  • With UL’s guidance, building owners have made systemic changes, such as HVAC-system mold remediation, ventilation upgrades, air-filter unclogging and more.

So what can manufacturers do? “There’s a lot of opportunity to maintain that positive momentum” from behaviors that arose in response to COVID-19, McCrady said during the webinar.

  • For manufacturers, this includes extending the IAQ- and IEQ-safety measures in place on the facility floor to their administrative areas, which may not be as well-ventilated, McCrady advised.
  • “People know a lot more these days,” he said. They “want transparency” about their air quality.

Tips and tricks: McCrady offered additional advice for manufacturers:

  • “Number one is ventilation. You want to make sure you’re bringing in enough fresh air” from outside, as well as doing proper and routine maintenance of ventilation systems.
  • “Focus on source control,” McCrady added, referring to the elimination of individual sources of pollution. “And limit the migration of harmful contaminants”—for example, by carefully maintaining HVAC systems.
  • Lastly, it’s important to fit air filters properly. Filters that have gaps or are otherwise incorrectly installed “won’t work,” McCrady said.

Not a magic pill: While high-quality filtration, ventilation and purification can go a long way toward stopping the spread of disease (particularly airborne illnesses such as the coronavirus), people must take other precautionary measures, too, McCrady noted. These include getting vaccinated and washing hands frequently and thoroughly.

The final say: “The things that can and should be done aren’t new, they’re just kind of under a spotlight right now,” McCrady said. “Focus on the fundamentals.”

Interested in hearing more from UL? Register for our Leading Edge Growth Series: Preparing for the Future of Manufacturing.

Workforce

Creators Wanted Gets an Endorsement

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The NAM and The Manufacturing Institute’s Creators Wanted campaign got a resounding endorsement from The Dallas Morning News, which called the initiative “a smart approach that may be a harbinger of things to come” in a recent editorial (subscription).

Traveling attraction: “‘Creators Wanted’ . . . will visit schools and community gathering places around the country in coming months to attract future workers to that industry. Creators Wanted features a tractor-trailer-mounted escape room and ‘immersive experience’ designed to hold kids’ attention while also overcoming stereotypes that keep students from choosing careers in manufacturing.”

Filling a void:  As the editorial notes, Creators Wanted “aims to reduce the skills gap in the U.S. by 600,000 workers by 2025, and increase the number of students enrolling in technical/vocational schools or reselling programs by 25%.”

  • While the article focused on the activities of the campaign, the sustained initiatives of The Manufacturing Institute are also important to reaching these goals.

Sign of changing times: The NAM’s and MI’s focus on students is “smart,” says the editorial, in light of changing perceptions among youth about higher education. The pandemic and soaring tuition are causing young people to consider options besides college.

The last word: “Creators Wanted is a clever approach that teens will enjoy. We encourage parents and guidance counselors to consider it. But the larger point here is about the pipeline of workers needed to ensure our economy can continue to grow. NAM has taken the initiative to improve that pipeline, putting them ahead of the competition for now. We hope to see others join that race soon.”

Join in: Interested in supporting Creators Wanted? Contact Creators Wanted Finance Director Barret Kedzior at [email protected].

Policy and Legal

Charlotte Pipe and Foundry Keeps Promises to Employees

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Charlotte Pipe and Foundry Company is a 120-year-old, fifth-generation family-owned business—and it tries to treat its employees like family, too.

“We have a long tradition and history of taking care of our associates,” said Charlotte Pipe Vice President of Marketing Bradford Muller. “We haven’t had a layoff since the early 1980s. Even in the Great Recession, we kept people working as many hours as we could give them.”

When the 2017 tax reform law gave Charlotte Pipe more certainty, the company passed along the good fortune, supporting employees, adding new jobs and investing in the future of the business.

New bonuses: When the legislation passed, Charlotte Pipe gave every employee an additional bonus of $1,000. Over the past few years, it has continued to offer high wages and generous health benefits to its associates as well as contributing to the company’s 401(k) plan. Charlotte Pipe has also absorbed a large portion of the increases in the health care costs of its workers.

New jobs: Tax reform has also allowed Charlotte Pipe to bring on new workers. Since the law passed, the company has hired more than 200 associates as it increases production across the country.

New business: Charlotte Pipe is also investing in its future by building a new foundry, which will create new jobs in its surrounding community. In addition to making the company more efficient and effective, the new cutting-edge foundry will help it keep up with international competitors from places like China. Muller credits tax reform with making that investment possible.

  • “The certainty around tax reform and regulatory reform gave us the confidence to be able to proceed with this once-in-a-century, $350 million foundry,” said Muller. “It’s a huge financial commitment, and we needed policy certainty to be able to do that. That was one of the reasons we were able to launch that project.”

Ongoing investment: The foundry may be the biggest example of a capital investment, but it is by no means the only one. In fact, Charlotte Pipe reinvests most of its profits back into the business, allowing it to keep working, innovating and providing new jobs.

  • “We reinvest most of our profits into capital projects,” said Muller. “The more revenue we have, the more people we can hire, the more equipment we can buy and the more productive we can be.”

The last word: “When tax reform helps a business provide for its employees and create opportunity well into its second century, you know that reform is worth keeping,” said NAM President and CEO Jay Timmons. “Manufacturers like Charlotte Pipe are building on the foundation of tax reform, and their workers are prospering because of it. That’s why we need to protect against potentially harmful tax hikes.”

Workforce

How Manufacturers Can Retain Employees

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With manufacturers facing a skills gap that could result in 2.1 million unfilled jobs by 2030, retaining qualified and effective employees is critical. But how do manufacturing leaders keep great employees on staff? The Manufacturing Institute’s Center for Manufacturing Research and the American Psychological Association have some answers, collected in their recently published Manufacturing Engagement and Retention Study.

Why people stay: According to the study, the main reasons that employees remain at a company are enjoyment of the work (83%) and stability/job security (79%). Other contributors to satisfaction include the family friendliness of the employer and the way the job fits into their lifestyles outside of work.

  • The next generation, however, has slightly different motives: “Although fewer survey respondents overall (42%) identified training and career opportunities as reasons for staying, around two-thirds of those under age 25 said these were motivating factors in their decision to remain with their current employer (69% and 65%, respectively).”

Feeling good: Employees who felt valued by their companies had significant more motivation and job satisfaction.

  • Nearly all workers who said they felt valued by their employers (97%) described themselves as highly motivated and satisfied with their jobs. Nearly as many (96%) would recommend their company to others as a good place to work.
  • Meanwhile, among employees who did not feel valued by their employers, those numbers dropped to 45% and 25%, respectively.

Fair treatment: Workers who felt that their employers treated them fairly were also less likely to be stressed out on a typical workday (at only 16%). But among workers who said they were treated unfairly, 68% felt stressed on a regular basis.

  • Those who felt that they were treated fairly were also much less likely to say they intended to look for a new job within the next year—at just 2% versus 19% among those who felt they were treated unfairly.

Pandemic effects: The MI and APA conducted this study during the COVID-19 pandemic, which notably did not affect employees’ responses to a great degree. In fact, many felt more positive about their employers.

  • A majority of employees (58%) said the pandemic and their company’s response to it had not changed their view, and more than one-third (37%) had a more positive view of the company, compared to just 5% who viewed their employer more negatively.

 Find out more: Learn more about what motivates people to stay by reading the full study here.

Policy and Legal

What’s in Biden’s Executive Order on Competition?

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The Biden administration released an executive order last week that is intended to enhance competition. While agencies will still have to draft regulations in response to the EO, this plan could have a big and potentially negative impact on manufacturers in several sectors. Here’s what manufacturers need to know, according to the NAM’s policy experts.

Antitrust provisions: The EO directs the Federal Trade Commission and Department of Justice to reexamine previously completed mergers and review the guidelines for both horizontal and vertical mergers.

  • Why it matters: Business combinations help manufacturers streamline operations and boost efficiency. This directive could hinder pro-competitive mergers and ultimately harm consumers, says NAM Vice President of Tax and Domestic Economic Policy Chris Netram. The NAM has previously weighed in with the FTC on its vertical merger guidelines and its premerger notification rules, highlighting the importance of predictability in the merger approval process.

Other key points of interest: the EO also tells the agencies to crack down on noncompete agreements that keep workers from changing jobs easily, as well as on employers’ collaborations to reduce wages and benefits.

“Right to repair”: Another key target of the EO was the so-called “right to repair”—the ability of third parties to repair sophisticated equipment, like tractors, without involving the manufacturer.

  • Why it matters: The NAM has long argued that such repairs pose a danger to consumers and expose companies’ intellectual property to theft by competitors, Netram points out.

Health Care: The EO also covers certain practices in the health care and pharmaceutical industries. Manufacturers should be aware of the following moves:

  • Within 45 days, the Department of Health and Human Services is instructed to come up with a plan to address high drug prices. HHS is also directed to work on the importation of drugs from Canada.
  • Meanwhile, the FTC is tasked with banning “pay for delay” agreements—when industry players agree to delay the market entry of generics or biosimilars.
  • Why it matters: These moves could endanger America’s global leadership in the development of lifesaving treatments, argues NAM Vice President of Infrastructure, Innovation and Human Resources Policy Robyn Boerstling, by reducing the returns on and protections for innovation. This could potentially lead to fewer treatments being developed overall.

Technology: The EO addresses technology policy in a number of ways, most prominently urging the reinstatement of “net neutrality” rules imposed by the Obama administration.

  • Why it matters: The NAM urged the repeal of those rules back in 2017. As Boerstling puts it, “net neutrality” treats the new and dynamic technology of broadband as if it were indistinguishable from the telephone, and treats competition in communications technology as if it hadn’t changed since the mid-20th century.

Other key points: The EO also instructs the Federal Communications Commission to hold spectrum auctions that disallow excessive concentration, and to create new reporting requirements for broadband providers’ prices and subscription rates.

Transportation: Lastly, the EO addresses certain practices by railroads, airlines and other sectors in transportation. For example:

  • It urges the Surface Transportation Board to require railroad track owners to let competitors and passenger trains have right of way.
  • It asks the Federal Maritime Commission to target certain shipping practices—mainly relating to fees charged while goods wait in containers to be unloaded, or while the company has yet to return an emptied container.

The NAM says: NAM President and CEO Jay Timmons released a statement last week, saying, “Our sector is strong and growing, and our people are benefiting. Unfortunately, there are those who want to erode our competitive advantage with archaic tax policies. And some of the actions announced today are solutions in search of a problem; they threaten to undo our progress by undermining free markets and are premised on the false notion that our workers are not positioned for success.”

Read the NAM policy team’s full overview of the EO here.

Workforce

A Second Chance in Manufacturing Pays Dividends

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One of manufacturers’ top concerns is the insufficient number of skilled workers available to fill their open jobs. Yet right before us is an often-overlooked pool of millions of potentially strong employees: people with criminal records.

That’s why The Manufacturing Institute has partnered with Stand Together and the Charles Koch Institute to promote “second chance” hiring—to get these workers who need jobs into jobs that need them. Recently, the MI hosted its first webinar on the importance of this initiative and what manufacturers should know about it.

The data: One in three Americans has a criminal record, and yet this entire population is frequently discounted outright during employer job searches due to societal stigma and general misperceptions. During the webinar, the panelists shared some additional data:

  • Of the approximately 19 million Americans with felony convictions on their records, some 1 million are incarcerated and some have aged out of the workforce, said Jeff Korzenik, author of “Untapped Talent: How Second Chance Hiring Works for Your Business and the Community” and chief investment strategist for Fifth Third Bank. “But millions are of working age, [and] virtually all of them are unable to participate to the fullest extent of their possibility, of their talents, because of barriers.”

Talent shortage: 814,000 manufacturing jobs were unfilled as of May, according to the Bureau of Labor Statistics.

  • “Manufacturers continue to tell us that attracting and retaining workers remains one of their top challenges,” said MI Executive Director Carolyn Lee during the webinar.
  • 2.1 million manufacturing jobs could go unfilled by the end of the decade if current trends continue, according to a recent MI and Deloitte study, and that “could mean the loss of up to $1 trillion in lost economic impact for the U.S.”

Worth the work: Employers who identify and support a strong candidate with a criminal record “get an employee who is on average more engaged and more loyal” than other workers, said Korzenik, who called this method of hiring the “second chance model.” This can lead to higher retention rates, saving an organization on turnover costs, he added.

  • The model, which Korzenik developed, both identifies characteristics likely to lead to successful employment (strong character, soft and hard skills) and provides support processes (such as help with transportation to and from work) to help bridge gaps.

Living proof: Webinar panelist Cory Webb is a recent graduate of the Cuyahoga County, Ohio–based ACCESS to Manufacturing Careers, a program that trains both young people and people with criminal records for careers in manufacturing. He considers himself a testament to ACCESS’ success.

  • “I started this program because I thought it would be a great opportunity for me to gain a career in manufacturing and machine operating,” said Webb, now an auxiliary operator for program participant Jergens Inc. The initiative “did a pretty good job as far as getting me prepared … for machine operating,” he said.

Learn more: The MI has released a host of resources for manufacturers interested in second chance hiring. You can find them here.

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