Hancock Lumber, a 171-year-old lumber company in Casco, Maine, accelerated its plans to grow and invest in its business thanks to tax reform, and its leadership is making sure employees are the first ones to benefit.
“It’s pretty straightforward,” said Hancock Lumber CEO Kevin Hancock. “As a result of tax reform, our cumulative tax rate fell from 38 percent to 28 percent. We’re keeping a dime-on-a-dollar more of our earnings. And we’ve reinvested 100 percent of that back into the business.”
A component of that reinvestment is providing its employees with additional benefits.
“The first priority of the company is, and always has been, the people who work here,” said Hancock. “In the twelve months following tax reform we increased our employees’ wages. We increased our 401k contribution. We increased our annual bonuses, we increased our holiday bonuses, and we picked up 100 percent of the cost of our annual health insurance increases.”
In addition to the immediate benefit to employees, thanks to the strong business climate, the company is planning for continued growth.
“We’ve been able to accelerate our reinvestment plans,” said Hancock. “Tax reform is allowing us to do in three years what might’ve taken us four to five years to do otherwise. That’s pretty significant.”
Because he’s used today’s tax savings to strengthen the company’s position for years to come, Hancock deems this a “significant long-term benefit.”
“Most importantly, this isn’t a one-time boost. Tax reform’s benefits will show up every single year in the future,” said Hancock. “It’s strengthening our future plans as much as our present plans. Simply put, any time a good company is able to keep more of its own money, good things happen.”
“As Congress developed the 2017 tax reform legislation, we made sure the unified voice of manufacturers was heard,” said Chris Netram, Vice President, Tax and Domestic Economic Policy at National Association of Manufacturers. “Now, with the pro-growth tools provided by that legislation, manufacturers across the country are able to invest more, hire more and pay more. Hancock Lumber’s commitment to its people and operations is a great example of what manufacturers small and large across the country are doing: keeping their promise to pay forward the benefits of tax reform.”
At the Council of Manufacturing Associations summer conference last week, National Association of Manufacturers President and CEO Jay Timmons called on the business community to lead in today’s political climate.
At @namcma‘s summer conference, I had the pleasure of speaking with top business advocacy leaders. Our country feels more divided than united. Manufacturers have to be advocates for individual liberty and equal opportunity.
— Jay Timmons (@JayTimmonsNAM) August 12, 2019
Timmons urged business leaders to show Americans the good that their companies are doing in communities, rejecting discrimination and bigotry and doubling down on free enterprise and individual liberties.
The solution is not to go on the attack or get defensive, nor is it siding with one party over the other. There’s dangerous thinking on both sides of the aisle. We have to show Americans the good our companies do every day. We’re changing and saving lives.
— Jay Timmons (@JayTimmonsNAM) August 12, 2019
If we aren’t advocates for individual liberty and equal opportunity, Americans will be drawn to those voices that don’t share our values of free enterprise and competitiveness. We have to take the lead.
— Jay Timmons (@JayTimmonsNAM) August 12, 2019
When almost anything can be ordered online, how do you know if the product you’re buying is legitimate? Counterfeit goods are increasingly prevalent, and third-party e-commerce sites are making it easier than ever for counterfeiters to distribute inauthentic products.
To help combat this, the National Association of Manufacturers submitted comments last week to the Department of Commerce, proposing solutions to this counterfeit goods problem that is detrimental to manufacturers and customers alike. These comments reflect the rising tide of counterfeit products available, from auto parts to toys, from medicines to electronics and more.
These sales don’t just hurt businesses or inconvenience customers. Fake products can be a health and safety hazard. For example, prescription drugs are commonly counterfeited—with potentially severe consequences.
“First and foremost, we are always concerned about patient safety and the harmful effects that illegitimate products have,” Eli Lilly Director of Global Public Policy Tim McGuire said. “There is significant risk associated with putting medications in your body that haven’t gone through the rigorous regulatory review and approval processes that include safety testing and quality inspections.”
Even if a manufacturer is aware that counterfeit products are being distributed, getting those products removed from websites and working to communicate to customers that they have purchased fake goods is no small task. The process of identifying counterfeit sellers requires constant monitoring of search engines, e-commerce sites and other methods of distribution, and the onus is on the maker rather than the retailer.
“The big challenge is that counterfeiters always come back, and there isn’t a good structure in place to permanently prevent them from operating,” said Whirlpool Corp. Legal Counsel Nathan Davis. “You take down a listing, they put up a new listing. You shut down one website, they launch another website. The existing consequences are not sufficient to stop them.”
And for small- and medium-sized companies, the resources needed to stop the sale of counterfeit products can be prohibitive. Napoleon gas grills are an example: Accessories to go with these are often counterfeited and marketed as acceptable for use with Napoleon’s products. Consumers then think the counterfeit product is covered by Napoleon’s warranty.
“We’re essentially underwriting counterfeit products,” Napoleon Technical Support Manager Dana Moroz said. “The credibility of our brand name is affected, and we end up having to warrant inferior products to sustain our name. To the consumer, it’s all a Napoleon product.”
The NAM’s public comments provide next steps for combating counterfeiting, including recommendations for the U.S. government, for brand owners, and for online marketplaces and websites.
“Winning the fight against counterfeiters requires everybody—not just manufacturers, but e-commerce platforms and search engines, customs agents and consumer safety advocates—to get serious,” said NAM Director of International Business Policy Ryan Ong. “Stopping the flow of these products means not just legal and policy changes, but smarter enforcement priorities, better coordination and information sharing and a serious commitment by all parties to do their part.”
Right now, one-quarter of the manufacturing workforce is over 55 years old. Meanwhile, the manufacturing industry is struggling to attract enough younger workers with the right skills and qualifications. Facing a workforce crisis—with open jobs in manufacturing recently reaching an all-time high—manufacturers are finding that retaining older workers is not only a necessity but an asset.
The Manufacturing Institute’s Center for Manufacturing Research, in partnership with the Alfred P. Sloan Foundation, recently conducted a survey to discover how companies are addressing this shifting demographic challenges.
This workforce issue affects nearly all manufacturers, the study found. Ninety-seven percent of respondents reported that they fear losing institutional knowledge when these workers depart.
“Manufacturing is facing a demographic sea change—leaders in the industry know it, and many are proactively adapting to it,” said Chad Moutray, the Manufacturing Institute’s Center for Manufacturing Research director and the National Association of Manufacturers’ chief economist. “Given the current workforce crisis, other manufacturers should look to the successful initiatives being implemented in the industry and collectively expand on them to develop the workforce of tomorrow. The simple fact is that companies are very concerned about losing their top talent to retirement and are finding creative ways to keep them longer and to train younger workers.”
The study also examined the innovative approaches manufacturers can use to extend older workers’ productivity and help transfer institutional knowledge to the next generation. For example, manufacturers are implementing upskilling and training programs to address the challenges this demographic may experience. Sixty-nine percent of companies said they had on-the-job training programs, and 54 percent said they have internal technical training programs.
“Manufacturers are utilizing the expertise of their older workers, implementing policies and procedures to keep them longer and creating opportunities to pass on their knowledge and talents to the next generation,” said Carolyn Lee, the Manufacturing Institute’s executive director. “The reason for this is clear: unlocking the knowledge of today’s older manufacturing workers is critical to shaping tomorrow’s industry leaders.”
In a recent National Association of Manufacturers survey, 80 percent of manufacturers said they had a sustainability policy in place or were developing one. Freight railcar equipment designer and manufacturer The Greenbrier Companies is making strides through innovative sustainable design—from reducing railcar tare weight to efficiently building marine vessels.
“At Greenbrier, we pride ourselves on manufacturing among the most environmentally friendly forms of transportation while simultaneously improving our production processes and engineering designs,” said Jack Isselmann, Senior Vice President, External Affairs & Communications. “This promotes long-term sustainability across the transportation and shipping industries.”
These innovations present exciting opportunities for long-term progress. Greenbrier has introduced innovative railcar designs since 1985, beginning with the double-stack intermodal unit. Prior to its inception, the number of trailer-equivalent units per train maxed out at 120. With the ability to stack two units per railcar, that number quickly grew to over 200 units per train, saving space, time and money.
In addition, Greenbrier aims to make its operations more efficient by minimizing the weight and length of an individual railcar while simultaneously increasing its volume, allowing for more railcar units per train. Through a process called articulation—which reduces the weight of one railcar by making it share axles with another—Greenbrier is decreasing the space between railcars, ensuring that more may be included in trains and allowing for greater efficiency through a larger volume of transported products. Additionally, articulation increases braking efficiencies, which reduces fuel usage and greenhouse gas emissions.
“Manufacturers across the country are making operational changes that promote sustainability and prioritize our environment,” said Laura Berkey-Ames, Director of Resources and Energy Policy at the National Association of Manufacturers. “With 12 million employees throughout all 50 states, the manufacturing industry understands the positive impact our sustainability efforts can have—and we are committed to setting an example for other industries nationwide.”
For more information on Greenbrier’s approach to corporate responsibility, see its inaugural Environmental, Social and Governance report.
The U.S. House of Representatives held a hearing yesterday on a bill that could negatively impact American workers’ freedoms and lead to fewer jobs. Heavily backed by large labor unions throughout the drafting process, the Protecting the Right to Organize Act would give sweeping new powers to unions while putting constraints on individual employees, small and local businesses, entrepreneurs and consumers.
The legislation includes provisions that would strip away workers’ free choice in union elections and eliminate “right-to-work” protections for workers across the country. This would even include the 27 states that have already passed right-to-work laws—rolling back these states’ democratic decisions and forcing workers across the country to pay union fees out of their own pockets—even when they don’t support it. In addition, the legislation could interfere with attorney-client confidentiality and make it harder for businesses to secure important legal advice on matters involving complex labor law.
“This legislation has the potential to harm workers across the country—and presupposes that a sweeping federal law can better achieve fairness and prosperity for individual states, businesses and workers than decisions made by those entities themselves,” said Callie Harman, director of labor policy at the National Association of Manufacturers. “This is a legislative wish list for unions that would damage employees’ rights to privacy and association, limit businesses’ ability to grow and hire, and put in place policies that have already been rejected in the courts. Legislation like this threatens the very industries that benefit our communities and strengthen our country.”
Manufacturers nationwide are speaking out against the bill, saying that the legislation strips workers of essential rights and ignores the dangerous consequences for the United States economy. They warn that if the legislation were to be adopted, it would tilt the playing field in favor of union organizers and against workers and employers while increasing the authority of unelected bureaucrats in Washington at the expense American free enterprise.
“At a time when the manufacturing industry is showing record output and fueling a strong economy, these changes could upend progress and slam the brakes on our economic success,” said Harman. “Workers deserve the kind of opportunity that the manufacturing industry is making possible, and we will continue to fight for that freedom in the face of these challenges.”
BWX Technologies, Inc., a supplier of nuclear components and fuel to the U.S. government, is hiring more than 170 new employees and further expanding its operations across three manufacturing facilities in Ohio and Indiana over the course of the next four years, investing approximately $210 million in these two states as a result of tax reform.
“Due to tax reform, we saw a favorable impact to our tax rate of about 8 to 10 percent,” said Rex Geveden, BWXT’s president and chief executive officer. “This has resulted in significant cash savings that we have used for various needs, including reinvestment of capital into our business and hiring additional employees for future growth.”
BWXT has been manufacturing naval nuclear components and reactors since the 1950s, when it designed and fabricated components for the USS Nautilus, the world’s first nuclear-powered submarine. Today, the company manufactures naval nuclear reactors for every new submarine and aircraft carrier in the U.S. Navy’s fleet. With this new investment, the company expects to fill a variety of different positions including engineers, machinists, quality assurance specialists and frontline supervisors to support the workforce growth.
“Manufacturers are keeping their promise to create jobs and invest right here in the United States,” said NAM Vice President of Tax and Domestic Economic Policy Chris Netram. “Thanks to tax reform, more individuals in Ohio and Indiana will have the opportunity to be a part of a growing industry. Moreover, BWXT’s investment will help it better accomplish its critical job of supporting our United States military, helping not only local communities but our country as a whole.”
BWXT isn’t just hiring workers to fulfill an immediate need. It’s also training young people and aspiring workers to help create a pipeline for BWXT and other employers that need skilled employees now and in the future. Through strategic partnerships with area schools in Ohio (K-12 and post-secondary), company leaders meet with students, parents, career counselors and faculty to discuss manufacturing jobs.
This provides an opportunity to talk about the well-paying careers and generous benefit packages, like education opportunities and tuition reimbursement—and the innovative nature of modern manufacturing. In Indiana, the company is building relationships with five of the area’s local technical schools to help students to learn about the exciting employment opportunities available to them and to provide training that enhances the skills of potential new employees.
“Manufacturers like BWXT aren’t just investing in the jobs of tomorrow—they’re helping young men and women across the country develop the skills they need to build a career in the manufacturing industry well into the future,” said Netram. “Businesses that make things in the United States pushed for tax reform in order to be able to invest in their communities and grow their operations, and BWXT’s announcement is another example of that promise fulfilled.”
Manufacturers from all over the nation came to Washington, D.C., this week to express the urgent need for United States-Mexico-Canada Agreement (USMCA) passage at a series of events with key legislative decision-makers.
On Monday, a delegation of manufacturing leaders met with Vice President Mike Pence to highlight the importance of the USMCA to the U.S. manufacturing industry. Executives present included National Association of Manufacturers former Board Chair and Emerson CEO David Farr, Winton Machine Company CEO Lisa Winton, Kent Corporation CEO Gage Kent, General Motors CEO Mary Barra, Sukup Manufacturing Co. President Charles Sukup and HM Manufacturing President Nicole Wolter.
Manufacturing reps and USMCA stakeholders are in DC today to meet with @HouseGOP and @HouseDemocrats about USMCA. Canada and Mexico purchase 1/5 of the total value of the U.S.’ manufacturing output, supporting 2 million jobs. #USMCAnow https://t.co/ASCusR5MPx
— The NAM (@ShopFloorNAM) July 17, 2019
“The Trump administration continues to show its steadfast commitment to America’s manufacturing workers,” said Farr. “Manufacturers in Missouri and across the nation are keeping our promise to grow, invest and hire. This historic agreement will help us sustain this momentum. Congress must act now and ratify this agreement.”
On Wednesday, during the NAM’s “Trade Makes America” Capitol Hill fly-in, more than 130 manufacturing representatives and USMCA stakeholders engaged in more than 130 meetings with offices throughout the House of Representatives and the Senate to make the case for passage of the agreement as soon as possible. Beginning on last Wednesday’s USMCA “day of action,” thousands of manufacturers have contacted Congress by phone and mail to advocate for USMCA passage.
“There is increasing recognition from both sides of the aisle about the need to modernize North American trade rules,” said NAM vice president of international economic affairs policy Linda Dempsey. “As Congress considers the USMCA, it is vital that they hear from the men and women who make things in America, since they will be directly affected by their decision.”
Enjoyed speaking today with manufacturing representatives and USMCA stakeholders about how vital USMCA is. More than 2 million U.S. manufacturing jobs are supported by exports to Canada and Mexico, and manufacturers in every state need certainty. #USMCAnow https://t.co/Qa6rnaFdAY pic.twitter.com/19Pi6HX70K
— Jay Timmons (@JayTimmonsNAM) July 17, 2019
Canada and Mexico purchase more U.S.-manufactured goods than our next 11 trading partners combined despite representing less than 4 percent of the global economy. Moreover, exports to Canada and Mexico support 2 million American manufacturing jobs and 40,000 small– and medium-sized businesses. Comprehensive new NAM data shows the USMCA’s positive impacts in every state.
Already ratified by Mexico, the USMCA is designed to modernize and bolster free trade between North American nations, aiding workers, farmers, ranchers and businesses in each country. If ratified, the agreement will expand U.S. exports, improve intellectual property protections and enforcement and level the playing field for U.S. workers in every state.
Manufacturers have been steadfast in urging quick congressional passage of the USMCA to ensure their businesses across the country can continue to grow, compete globally and support millions of well-paying jobs.
In the eyes of manufacturers, the need to act to preserve our environment and protect our planet is beyond question. That’s why, for years, manufacturers across the country have taken steps to reduce pollution, invest in sustainable operations and protect the environment in their communities and across the globe.
Continuing in that effort, the National Association of Manufacturers unveiled a new strategic initiative designed to fight climate change, promote environmental sustainability and promote U.S. leadership in the development and deployment of new, transformational energy solutions. The recently announced Energy Advance Center will lead a multi-pronged effort to educate policymakers in Washington, D.C., and to advocate at the federal and state levels on the technical, economic and regulatory issues affecting the widespread deployment of technologies that help to capture harmful pollutants.
These methods and technologies, known collectively as Carbon Capture, Utilization, and Storage (CCUS), are critical to reducing carbon dioxide emissions, enhancing U.S. energy security and competitiveness and maintaining U.S. leadership in the development and deployment of new, transformational energy solutions. With a footprint that is not just national, but global in scope, manufacturers are dedicated to developing, deploying and advancing technologies that promote carbon capture utilization, which is designed to collect and store waste carbon dioxide to mitigate global warming.
“The launch of the Energy Advance Center (EAC) is yet another example of manufacturers keeping our promise to drive economic growth while building a future with cleaner air and water and a healthier environment,” said NAM Vice President of Energy and Resources Policy Ross Eisenberg. “CCUS is one of the most promising tools to address global climate change, and we’re dedicated to developing this technology here in the U.S.—and to ensuring America continues to lead on this issue.”
The NAM has previously supported wide-ranging, common sense solutions to support environmental protection, while also promoting economic growth. In addition to protecting and improving the environment, these technologies are expected to support the U.S. manufacturing sector and create jobs, demonstrating that productivity and sustainability are fully compatible with one another.
“We are excited to launch this new platform and continue to show that strong economic growth and responsible environmental stewardship can go hand in hand,” said Eisenberg.
EAC expects to expand its efforts through additional strategic partnerships with other industrial sector groups that are working to promote smart, effective carbon management policies, using NAM’s convening authority to collaborate on critical new programs and initiatives. And as manufacturers across the United States find new ways to improve their local and national environment, partnerships will become more useful and more effective.
“Manufacturers are leading the way on climate change,” said Eisenberg. “This new initiative is just the latest opportunity to expand opportunities for the 12 million men and women who make things in America while also creating a more sustainable future.”
Many Americans are traveling this Independence Day, and many manufacturers transport goods throughout the year via rail. According to the National Association of Manufacturers’ “Building to Win” infrastructure plan, private investments averaging $27 billion annually over the past five years would allow the sector to maintain and upgrade its track and equipment.
Rail traffic density has increased by about 200 percent over the past four decades while the size of the rail network has remained relatively the same. For freight rail investment and growth to continue, a balance between competing rail interests must be implemented to keep the freight moving on time. Like people, freight can be on a time constraint because the customer is always waiting.
Congress passed the Congressional Rail Passenger Service Act to revitalize U.S. passenger rail and create Amtrak in 1971. Two years later, Congress granted “preference” to passenger rail systems, meaning tenant passenger trains are dispatched first and given special privileges on the privately-owned track. In turn, Amtrak is required to pay “incremental costs” and on time “incentive payments.”
Amtrak is also entitled to financial penalty provisions for delays. A majority of passenger routes utilize private freight track that most frequently consists of a single track with sidings. Passenger trains have eminent domain on freight track, but they operate differently than freight trains. They travel at higher speeds and require more headway clearance. These differences complicate the national network, exacerbating congestion to the detriment of just-in-time manufacturers moving growing levels of freight.
“The economic conditions 50 years ago, a time known for unemployment, high inflation, high interest rates and high oil prices, provide a stark contract to today’s economic growth, framed by lower taxes, low unemployment, low interest rates and competitive energy costs,” said NAM Director of Infrastructure, Innovation and Human Resources Catie Kawchak. “Freight railroads have invested heavily in their networks and infrastructure as a result of increasing demand from manufacturers, retailers and other shippers. However, today’s network is constrained by passenger rail’s priority access.”
Modern freight rail systems are planning for even more demand from manufacturers and retailers to move freight on the nation’s rail network. The Federal Highway Administration predicts that total U.S. overall freight shipments will increase 37 percent between now and 2040. However, there’s one area where freight is constrained, and the future is stuck in a dated rail statute that provides priority access to freight rail’s longtime tenant, Amtrak.
“The strength of a freight network – trucking, rail and air cargo – supports our competitiveness and provides a needed capability for manufacturers to expand their reach,” said NAM Vice President of Infrastructure, Innovation and Human Resources Robyn Boerstling. “It’s a little-known fact that Amtrak trains have priority access to infrastructure owned and operated by private freight railroads. Striking the right balance between passenger and freight operations is critical.”