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In Uncertain Times, The Manufacturing Sector Leads

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NAM CEO Jay Timmons Speaks at the 2020 CMA Winter Conference

At the Council of Manufacturing Associations Winter Leadership Conference last week, National Association of Manufacturers President and CEO Jay Timmons discussed the industry’s extraordinary achievements during uncertain economic and political times and the need for continued strong industry leadership in 2020.

In his remarks, Timmons described how 2019 was defined by major manufacturing achievements, including many that were considered unlikely.

Timmons also made the case that, while not all of the manufacturing industry’s victories were widely covered in mass media, they were numerous and necessary.

Timmons made note of the ongoing 2020 election and cast the manufacturing industry as a leader in complicated political environments. In the midst of the escalating campaign, Timmons laid out manufacturers’ vital role.

As manufacturers look to the future, Timmons discussed the need for new skilled workers and an engaged workforce that can help drive modern manufacturing and promote America’s manufacturing strength. He spoke about the Creators Wanted campaign—a unique and unprecedented effort from the NAM and The Manufacturing Institute to inspire a new generation to pursue careers in the industry.

Timmons closed by stating that manufacturers’ leadership will determine not only the achievements of this coming year, but also what the United States looks like and represents for years to come—and he called on manufacturing leaders to seize that opportunity.

Get more information about our Creators Wanted campaign.

Policy and Legal

Manufacturers Carry Policy Win Momentum Into 2020

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Aric Newhouse speaks on stage at the 2019 Fall Board Meeting

Aric Newhouse is the senior vice president of policy and government relations at the National Association of Manufacturers. Here he breaks down manufacturers’ biggest policy victories in 2019 and what is ahead for 2020.

Manufacturers saw many big achievements in the final weeks of 2019. What is the impact of these and was it a surprise?

The Democratic-led House of Representatives approved the U.S.-Mexico-Canada Agreement with a strong bipartisan vote of 385-41. The trade agreement still needs to be approved by the Republican-led Senate. This was a major accomplishment, especially considering that about two years ago many thought that the U.S. was on the verge of withdrawing from NAFTA and the entire North American trading relationship, which support 2 million manufacturing jobs, was at risk of crumbling.

On top of the USMCA, the Trump administration reached a “phase one” trade deal with China. This is another achievement many thought would be impossible. But now we have real, enforceable intellectual property protections in place in China and a foundation for a “phase two” deal.

Right before Congress left for the holidays, they passed a year-end government funding bill, which included a seven-year reauthorization of the Export-Import Bank and the repeal of the medical device tax, “Cadillac” tax and health insurance tax. Some of those taxes were poised to hit hard in 2020, so this comes as a big relief for manufacturers.

And was all this a surprise? I am sure it surprised many people that all of this got done in the middle of a contentious political moment. However, the NAM has spent a long time, in some cases years, laying the groundwork to make these wins possible, so we had some confidence that the agenda of manufacturers and their workers would win the day.

There was a time when USMCA passage was in doubt. How did you win over lawmakers?

The NAM, in close coordination with our members and with their incredible support and work, made clear to policymakers that the USMCA was not about politics but was about our growth, our exports and our people. Successfully doing so turned the discussion around the deal from skepticism to support and was critical to its passage. Granted, we did not get everything we wanted, but we achieved our number one goal: protecting our biggest trading relationship with a modernized trade agreement.

What is ahead for 2020?

Number one, we will get the USMCA passed in the Senate. We will provide support for a “phase two” trade deal with China that further levels the playing field, provides enforceable rules and secures relief from costly tariffs. And we will continue our advocacy on manufacturers’ other top priorities, including infrastructure investment, immigration and health care reform. We want to see more regulatory certainty from the federal agencies so that manufacturers can continue investing confidently in the future.

Policy and Legal

Tax Reform Helps Illinois Manufacturer Invest in Workforce and Equipment

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Thanks to tax reform, business looks bright for HM Manufacturing of Wauconda, Ill., a manufacturer of power transmission components.

“Tax reform has been a game-changer for small manufacturers like HM,” said HM President and CEO Nicole Wolter. “We’ve been able to invest in our employees, in our business and in our community.”

As a result of tax reform, Wolter has expanded her workforce and significantly increased pay and benefits for her workers.

“Across the board, we boosted wages by at least 25 percent,” said Wolter. “And we were able to give bonuses, too. It’s night and day from where we were in a decade ago, when wages were stagnant. I’m proud to say not a single person at HM is getting paid under $20 an hour now.”

“Our employees are hugely appreciative,” Wolter added. “They’re buying houses, they’re buying new cars, all because of this big pay bump. Between our new incentives, bonuses and benefits, word has spread and we get calls every day asking if we’re hiring.”

Staff size has grown 20 percent and, according to Wolter, she is now able to provide 100-percent employer-paid health care premiums and a 401(k) match. Tax reform has also made it possible for Wolter to make a $500,000 investment in capital equipment.

Beyond her business, Wolter has also been able to invest in the community to help build the workforce of the future.

“We’ve partnered with a local high school to get the next generation involved and excited about manufacturing,” Wolter said. “We’ve helped develop their manufacturing program to promote the manufacturing workforce of tomorrow. We’ve also given financial help and donated our older machines to their program.”

Local students are working at HM Manufacturing while they go to school through a new paid internship program. According to Wolter, interns earn $15 an hour.

“For years, manufacturers told Congress that if you pass tax reform, the industry would create jobs and reinvest in the American economy,” said National Association of Manufacturers Vice President of Tax and Domestic Economic Policy Chris Netram. “HM is leading by example, using the benefits of tax reform to invest in their community and improve the lives of the men and women who make things in America.”

“Make no mistake–everything we’ve done over the past two years is because of tax reform,” said Wolter.

Policy and Legal

What to Expect in 2020 on Legal Issues in Manufacturing

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The Manufacturers’ Center for Legal Action is the voice for manufacturers in the courts, fighting to advance policy objectives and advocate for strategic manufacturing interests. National Association of Manufacturers Senior Vice President, General Counsel and Corporate Secretary Linda Kelly leads the MCLA. Here she breaks down manufacturers’ biggest victories in 2019 and what is ahead for 2020.

What were the key legal issues for manufacturers this year?

Manufacturers face all sorts of issues in the courts. And even though only one company’s name may be on a case, the outcome can have profound effects across the entire industry on everything from project permitting to free speech.

This year, we filed amicus—or “friend of the court”—briefs in 74 cases. These address issues like regulatory overreach, product liability, labor and employment law, environmental issues, arbitration, class actions, free speech of manufacturers, ERISA, Alien Tort Statute, tax and international issues. If it matters to manufacturers, we’re on it.

We are also part of a dozen ongoing cases, including ones related to tax incentives, regulatory certainty and the manufacturing workforce. In the environmental space, the NAM has intervened in several cases to protect sensible pro-manufacturing regulatory reforms.

What legal wins did manufacturers accomplish in 2019?

We saw big wins this year invalidating the onerous Waters of the United States rule, preserving energy infrastructure projects, protecting Clean Air Act permitting reforms, securing manufacturers’ rights against government compelled speech, reversing overbroad collective bargaining interpretations by the National Labor Relations Board and more.

What does the invalidation of the 2015 Waters of the United States rule mean for manufacturers?

In two words: clarity and certainty. The 2015 rule was bafflingly unclear and uncertain. It left manufacturers to wonder whether wet areas on their property required a federal permit for any commercial activity there—at the risk of fines of $50,000 per day or more for the “wrong” interpretation. Two federal courts invalidated the rule in response to NAM litigation, which followed a NAM-led win in the U.S. Supreme Court in 2018 that allowed those cases to move forward. Soon thereafter, the EPA formally rescinded the rule.

What legal issues should manufacturers pay attention to in 2020?

Federal agencies will continue their regulatory reform efforts, and groups opposed to those reforms will continue to sue to block them. The MCLA stands ready to intervene in those cases or file briefs to provide the manufacturing perspective to the courts.

We are likely to see appellate court rulings next year interpreting whether making and selling energy products is a “public nuisance” for which companies can be held liable. We are confident the courts will apply the law fairly and reject these groundless lawsuits. But if a court finds in favor of the plaintiffs, we could see the U.S. Supreme Court again weigh in on the scope of public nuisance law.

Plaintiffs’ lawyers will keep trying to twist legal precedent to profit at the expense of manufacturers, and the MCLA will fight them every step of the way to benefit the people who make things in America.

Policy and Legal

Manufacturers Call for Swift Action on Data Privacy

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Manufacturing Workers With Computers

California’s new sweeping data privacy law will go into effect in the New Year, highlighting the need for Congress to act quickly on federal legislation to provide certainty for the manufacturing industry. While manufacturers work to comply with the California Consumer Privacy Act, the industry is also concerned that other states will pursue their own privacy legislation, creating a patchwork of laws. Complying with conflicting state privacy laws will be costly for manufacturers, but a national approach to data privacy will strengthen manufacturers and support consumers.

Congress recently examined various approaches to federal consumer data privacy legislation at a hearing before the Senate Committee on Commerce, Science & Transportation. Industry took the opportunity to call for swift action.

“U.S. privacy law has generally failed to keep pace with advances in technology and to provide Americans with the protections they want and need in this digital age,” said Julie Brill, Microsoft’s Corporate Vice President, Deputy General Counsel, and Chief Privacy Officer. “Today more than ever, there is an urgent need for a comprehensive U.S. privacy law that provides strong protections for all consumers in the United States within a framework that enables human ingenuity and American innovation to continue to thrive.”

Echoing Microsoft’s call, the National Association of Manufacturers underscored the need for congressional action to support manufacturers in a letter to the Committee. Manufacturers are developing innovative products and transforming the manufacturing process with the latest technologies, and data is an important source and by product of these breakthroughs. Manufacturers use data to improve efficiency, safeguard plant security and improve customer experience.

State-by-state privacy requirements would create burdensome regulations that hinder the development of new technologies and products. According to NAM’s Director of Innovation Policy Stephanie Hall, federal legislation would streamline the compliance picture for manufacturers while advancing individuals’ privacy and promoting U.S. industrial competitiveness.

“Manufacturers support a data privacy policy that provides flexibility for innovation, addresses domestic and global inconsistencies in privacy regulations and advances U.S. economic growth and technological leadership,” Hall said.  “Without clarity from federal law, uncertainty will continue for our industry, causing manufacturers to sort through conflicting state privacy laws across the country.”

The U.S. is facing a data-intensive future, and manufacturers are leading the development and application of emerging technologies, including automation and artificial intelligence. Congress must act quickly to pass comprehensive legislation that provides uniform privacy rules and helps prepare the U.S. for the next generation of innovative technologies.

Business Operations

General Mills Digs Into Greenhouse Gas Reduction Efforts

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General Mills volunteers sort potatoes for distribution at a food bank.

To advance its efforts as a leader in sustainability, General Mills set a goal to reduce absolute greenhouse gas emissions across its full value chain by 28 percent by 2025. To achieve this, the global food company identified three key opportunity areas: implementing sustainable agricultural processes, streamlining production operations and optimizing the consumer experience.

First, the company is addressing sustainability at its roots. General Mills’ work to reduce emissions across their full value chain starts at the farm level. The company works with suppliers and farmers to implement practices like regenerative agriculture, dairy management and reforestation.

Second, it is optimizing production operations—processes like mixing, cooking, toasting, freezing and packaging—that generate the bulk of production-related greenhouse gas emissions. The supply chain team significantly reduced this impact by consolidating some production operations and reducing the average emissions intensity of electricity the company purchased.

Finally, it’s improving the customer experience. On the consumer end, activities like shopping, preparing, eating and disposing of food products also generate greenhouse gas emissions. General Mills’ portfolio has shifted to more products that do not require cooking or refrigeration, which cuts down on related consumption emissions. Recycling was also emphasized on pack.

“The biggest way General Mills can impact climate change is within our supply chain,” said General Mills Chief Supply Chain and Global Business Solutions Officer John Church. “By using our global scale, we work to create value and reduce our footprint for the benefit of consumers, supplier partners, communities and the planet.”

Understanding food waste in landfills creates greenhouse gas emissions, the food company provides philanthropic support to leading nonprofits that make it possible for food companies, grocers, restaurants, distributors, trucking companies and other organizations to donate surplus food so it can be distributed to people in need, while bettering the environment.

“Over the past year, our global investments in food recovery technology with our nonprofit partners have enabled the recovery and redistribution of more than 4 billion pounds of surplus food and our food donations enabled 29 million meals for food-insecure people around the world,” Church said.

“Manufacturers are taking meaningful steps to lead sustainability efforts across the nation,” said Laura Berkey-Ames, NAM’s director of energy and resources policy. “General Mills’ efforts are an excellent example of manufacturers putting sustainability plans into action that make an immediate difference in the lives and communities of their customers.”

Policy and Legal

Eli Lilly and Company Invests in Medicine Innovation and New Jobs

These developments were made possible due to tax reform.

In part enabled by the recent tax reform law, Indiana-based pharmaceutical manufacturer Eli Lilly and Company (“Lilly”) is investing $400 million in its Lilly Technology Center campus in Indianapolis. In addition to serving the growing demand for its current medicines, the investment will provide manufacturing capacity for future medicines through innovations like technology upgrades and new automated facilities that use robotics and data analytics to improve efficiency.

“Tax reform was a part of our decision to make this investment in our company and our employees because it allowed us to keep dollars here and invest them in the United States,” said Lilly Senior Vice President and President of Manufacturing Operations Myles O’Neill.

The investment is expected to create approximately 100 new jobs, including operators, engineers, chemists and biologists, and projects spurred by this large-scale investment will provide hundreds of additional jobs for men and women who will support the implementation of this new investment.

“These investments support our manufacturing capabilities in Indianapolis, including additional capacity and technology upgrades to our active ingredient, syringe filling, device assembly and packaging operations,” O’Neill said. “All of these projects support Lilly’s investment in next-generation manufacturing and feature high levels of automation, robotics, new technologies and advanced data analytics.”

Lilly has invested over $5 billion in the United States since 2012, with the majority of this investment in its Indiana facilities and nearly $2 billion in the manufacturing of diabetes medicines. One of the largest employers in the Indianapolis area, the company employs more than 30,000 people and sells products in approximately 125 countries.

“Lilly’s investment is a demonstration of the extraordinary opportunity that tax relief has given companies and communities across the United States,” said National Association of Manufacturers Vice President, Tax and Domestic Economic Policy Chris Netram. “We have seen stories like this one from large and small manufacturers nationwide. That’s why we advocated for tax reform, and that’s why we’ll keep fighting for the kind of smart, responsible tax policies that benefit millions of manufacturing employees and support effective growth.”

Workforce

NAM Joins Ivanka Trump in Push for Manufacturing Workforce Development

Ivanka Trump and Jay Timmons at the FAME launch in Alabama

This week, National Association of Manufacturers President and CEO Jay Timmons joined Advisor to the President Ivanka Trump in Indianapolis for the fourth meeting of the American Workforce Policy Advisory Board. The Board—which is chaired by Ivanka Trump and Commerce Secretary Wilbur Ross, and includes Timmons as a member—was established to provide advice and recommendations on ways to encourage the private sector and educational institutions to combat the skills gap crisis. Areas of focus include demand-driven education, training and retraining, including through apprenticeships and work-based learning opportunities.

“Ivanka Trump’s support on this critical issue is vital, and we are fortunate to have her as a champion for the nearly 13 million men and women who make things in America,” said Timmons. “Manufacturers expect to need to fill 4.6 million jobs over the next decade, so the stakes could not be higher for our industry. That’s why we are proud to help drive the work of the American Workforce Policy Advisory Board alongside Ivanka Trump and Commerce Secretary Wilbur Ross, and it is why the NAM and The Manufacturing Institute are leading the Creators Wanted campaign to inspire a new generation to pursue promising modern manufacturing careers.”

Creators Wanted is a national effort, launched by NAM and The Manufacturing Institute, as part of a broader strategy to build the workforce of tomorrow. The campaign aims to cut the skills gap by 600,000 workers by 2025; increase by 25 percent the number of students enrolling in technical and vocational schools; increase by 25 percent the number of students enrolling in apprenticeships and reskilling programs; and raise to 50 percent—from 27 percent—the number of parents who would encourage their children to pursue a career in modern manufacturing.

A key part of Creators Wanted is a mobile manufacturing tour that will travel to at least 20 states, setting up at events such as state fairs, festivals, conventions, schools and gaming competitions. The experience will showcase the multiple pathways into manufacturing careers and provide resources for individuals to take the next steps to become manufacturers, grow in their careers and learn more about the industry.

Ivanka Trump has been active on raising awareness of the many pathways to well-paying and high-skilled manufacturing jobs. In July, Timmons and Manufacturing Institute Executive Director Carolyn Lee joined President Donald Trump and Ivanka Trump to sign the Pledge to America’s Workers, with manufacturers committing to provide training opportunities to 1,186,000 manufacturing workers over the next five years to address the industry’s skills gap crisis. Ivanka Trump also recently attended an event at Alabama Robotics Technology Park in Huntsville, Alabama, to support the NAM’s FAME program—an earn-and-learn apprenticeship that trains students of all ages and backgrounds, from recent high school graduates to experienced manufacturing employees looking to advance their careers. Originally developed and refined by Toyota, stewardship of the FAME program has recently transitioned to The Manufacturing Institute, the workforce and education partner of the National Association of Manufacturers.

“Ivanka Trump knows how critical manufacturers are to the future of this country, and clearly she is deeply invested in the work that they do every day,” said Timmons.

Workforce

Creators Wanted Campaign Helps Solve the Workforce Crisis

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The National Association of Manufacturers and The Manufacturing Institute, the workforce and education partner of the NAM, are embarking together on an ambitious mission to reshape the public’s perception of manufacturing. NAM Vice President of Brand Strategy Chrys Kefalas explains what the groundbreaking Creators Wanted campaign is about and how people can get involved.

What is the Creators Wanted campaign?

We know Generation Z and Millennials want authenticity and real experiences that speak to their values and aspirations. Modern manufacturing provides the chance to create the future, to be true to who you are and who you want to be. But emerging workers aren’t flocking to our careers or even to apprenticeships and educational pathways. We have a massive perception problem, and it’s exacerbating a workforce crisis.

Creators Wanted is an on-the-ground tour coming to at least 20 states in 2020, as well as a long-term campaign to get more emerging workers across the country to look at manufacturing careers as prizes to be had and not as consolation prizes. We’re taking a mobile manufacturing experience into communities so that people can see and experience for themselves how humans and exciting technology such as AI and 5G are coming together to make great careers and a better future. Creators Wanted is about building connections for people so they can become manufacturers, grow in their careers and even advocate for the industry. And it’s about scaling up bold workforce programs at the Institute to add more veterans, women, diverse communities and youth to manufacturers’ talent pipeline.

What will the campaign achieve?

Ultimately, our goal with Creators Wanted is to reshape how most Americans view modern manufacturing careers. More immediately, by 2025, Creators Wanted aims to reduce the skills gap in the United States by 600,000, increase the number of students enrolling in technical and vocational schools or reskilling programs by 25% and increase the positive perception of the industry among parents to 50% from 27%.

Why should students consider a career in manufacturing?

First, we have plenty of opportunity. About half a million jobs are open today, and by 2028, we’ll need to fill 4.6 million jobs. Second, modern manufacturing jobs pay well and are incredibly rewarding. Manufacturing jobs regularly pay more than $80,000 and provide the opportunity to climb much higher in your career, all without incurring massive college debt. You can be a part of teams that are doing exciting work and have a job with a clear purpose, where you know your contribution makes a difference.

How can I get involved in Creators Wanted?

Right now, we’re prioritizing fundraising for the campaign so we can get the Creators Wanted Tour to as many communities as possible and expand our workforce programs for veterans, women, diverse communities and youth. If you believe that America needs this campaign and needs to renew the promise of careers in manufacturing, we hope you’ll consider chipping in and supporting.

To learn more about getting involved, go to CreatorsWanted.org.

Policy and Legal

Small Manufacturers Highlight Ex-Im Bank’s Essential Role

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On Nov. 21, the President signed a stopgap funding bill. In addition to keeping the federal government funded through Dec. 20, the bill includes provisions to keep the Export-Import Bank of the United States open for another month while lawmakers debate its authorization moving forward. The Bank would have shuttered this week without congressional action, but what manufacturers ultimately need is a robust, long-term reauthorization of the Ex-Im Bank rather than repeated short-term extensions.

The House of Representatives recently passed a 10-year robust reauthorization of the Bank, and the Senate has introduced a bipartisan reauthorization bill that similarly extends the Bank’s charter for a decade. Both bills have received the NAM’s public support. Here’s why manufactures are urging Congress to act.

The Export-Import Bank is the “lender of last resort” for U.S. businesses competing for overseas contracts, supporting millions of American jobs since 2000. Without a fully functioning Ex-Im Bank, small and large manufacturers across the country could lose business opportunities that allow them to hire more workers and increase investment in their communities.

One such manufacturer, California-based energy equipment supplier FirmGreen, employs 11 workers and relies on the Ex-Im Bank to create a level playing field when competing for international business.

“Without the Ex-Im Bank to supply the necessary finances, potential clients have chosen to do business with South Korea, Europe and other countries with foreign agencies that could supply the finances,” said FirmGreen Chairman & CEO Steve Wilburn. “We lost many potential projects when Ex-Im was hobbled, and that’s had a direct impact on jobs.”

U.S. Bridge, an Ohio-based steel manufacturer with 75 employees, has relied on the Ex-Im Bank to develop strong trade relationships internationally and support jobs here at home. A third-generation family-owned business, U.S. Bridge highlights the important work of the agency in supporting small manufacturing companies.

“Ex-Im Bank has played a critical role in helping us make foreign sales in tough markets, doing everything possible to promote U.S. sales that support our manufacturing here. Without the Ex-Im Bank, we would have lost new opportunities and a critical trading relationship would be unsustainable,” said Richard Rogovin, Chairman of U.S. Bridge. “In addition to financial support, the staff is very knowledgeable about foreign trade, ready and willing to be helpful, and provides expertise that we could not afford to employ otherwise.”

“With more than 100 foreign export credit agencies seeking to help their industries at our expense, and more than 90% of the Ex-Im Bank’s transactions directly supporting small businesses, manufacturers see the bank as a key tool for maintaining a robust American workforce by helping manufacturers compete anywhere and everywhere,” said Linda Dempsey, Vice President of International Economic Affairs Policy at the National Association of Manufacturers.

Manufacturers are facing significant challenges—driven in part by global economic headwinds and trade uncertainty—and a long-term reauthorization of the Ex-Im Bank will strengthen America’s manufacturing industry. That’s why the NAM continues to call for a robust, long-term reauthorization.

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