News

Streamlining the nation’s permitting process, filling open manufacturing positions and reforming the U.S. immigration system—these are just a few of the actions the U.S. must take improve American lives and to bolster the economy, NAM President and CEO Jay Timmons said Tuesday.

America still works: Timmons was one of three panelists at “Building the Workforce of Tomorrow Today,” an event hosted by United For Infrastructure, a program of Accelerator for America Action. He told audience members that manufacturers have before them “a great opportunity.”

• “What really excites me the most is, when you look at [the] CHIPS and Science [Act], when you look at [the] Infrastructure Investment [and Jobs Act] and when you look at—hopefully—permitting reform, what you see is, America still works,” he said.
• “We have this moment in time where I think we have to prove again to the world that America is a beacon, it is a democracy that provides opportunities for everyone and allows individuals to succeed and to rise on that ladder of success. …. For manufacturers, this is a great opportunity.”

Workforce challenge: Timmons discussed the primary workforce challenge before the sector—a projected growth of unfilled jobs—and how the NAM is aiming to overcome it.

• “We have about 800,000 open jobs in the sector today and … we have to hire 4 million people before 2030,” he said, referring to the findings from a joint study by the NAM’s 501 workforce development and education affiliate, the Manufacturing Institute, and Deloitte.
• The NAM and MI are seeking to fill those jobs through the work of several initiatives, Timmons continued. These include perception-changing programs such as Creators Wanted, the Toyota-founded Federation for Advanced Manufacturing Education program (now operated by the MI), Women Make America and the promotion of second chance hiring (employment of individuals with previous, non-violent involvement in the criminal-justice system).

Education: The importance of reaching the next generation of manufacturers early cannot be overstated, Timmons told the audience.

• He talked about the high-tech donations—robotics, CNC machines and more—by manufacturers to schools such as Rankin Technical College in St. Louis, Missouri, and Palatine High School in Palatine, Illinois. This machinery is used in programs that aim to interest students in manufacturing careers.
• “I think we have obligation to” make this sort of investment, Timmons said. “I’m very proud of our manufacturers for stepping up to it.”

Immigration: Perhaps the most pressing issue before the U.S., however, is immigration, Timmons told the audience.

• “Today, more so than ever before, we have an economic reality that we have to address,” said Timmons, who referenced the NAM’s policy blueprint on immigration reform, “A Way Forward,” during his talk.
• “We have what, 13 million undocumented folks in this country? … We need to hold our officials accountable for coming up with a plan that is workable and humane and will actually help the economy.”

If you’re looking for a career with no “typical days,” Jillian Evanko would advise you to choose manufacturing.

Mixing it up: Every workday offers something new and exciting for Evanko, the president and CEO of Chart Industries, a global leader in the design, engineering and manufacture of process technologies and equipment for the clean energy and industrial gas markets.

• “Whether I have a customer meeting, an investor conference, a keynote speaking event, a panel session or meetings with my executive team, every single day looks different to me, which is what I love about my job,” said Evanko.

Business sense: It was a talent for business that led Evanko—a 2023 honoree of the Manufacturing Institute’s Women MAKE Awards, which recognize outstanding female talent in the manufacturing sector—to the industry.

• “Early in my career I worked for Honeywell and Dover Corporation in various financial and operational roles,” said Evanko, who holds a Master of Business Administration from the University of Notre Dame.
• Once she entered the field, she found that she genuinely enjoyed it—and she’s here to stay. “The fast-moving, exciting nature of the manufacturing industry is what keeps me in it,” she said. “There is always an opportunity to innovate or make a technological development, and you really get to see the impact of what you produce making a difference in everyday life.”

 A changing industry: Evanko has seen manufacturing evolve for the better since she got her start, especially for women employees.

• “In the past few years, I think the world has come to recognize that there is a direct correlation between diversity in manufacturing and increased innovation,” she said. “By diversifying a workforce, you gain access to new thoughts, ideas and perspectives.”
• “Since I’ve begun my career, I have seen more women enter the manufacturing industry, and even within my past five years at Chart, we are continuing to see more women taking on more senior roles, including operations and manufacturing roles.”

Growing company: In recent months, Evanko has been even busier than usual, as Chart Industries recently completed its acquisition of Howden, an air- and gas-handling products manufacturer and services provider.

• The acquisition, Chart’s largest to date, has doubled the size of the company’s engineering team. It “helps us expand into new geographies and gain access to new customers, and it provides us with a much more expansive Nexus of Clean™ offering,” she said, referring to the firm’s array of products and solutions for a more sustainable future.

The best, period: Evanko devotes much of her time to helping and educating others. One example of this is the way she provides her daughter’s Girl Scout troop with access to entrepreneurial speakers, as well as information about the world of manufacturing. She has developed a mantra that keeps her constantly striving for improvement:

• “I like to say that I don’t want to be the best female CEO, I want to be the best CEO,” she said. “For women in manufacturing looking to grow in their careers, aim to be the best you can be despite gender, age or background.”
• “Be confident in what you bring to the table and never underestimate your abilities,” she continued. “Listen to others and empower them to bring their ideas forward. And never underestimate the power of simply being kind.”

Title 42 has been a fixture in the news in recent days—but what is it and what does its recent end mean? We break it all down here.

What’s going on? Title 42, which went into effect March 2020, was a COVID-19-era policy that allowed the U.S. to expel migrants for health reasons. Under it, more than 2.6 million people were sent back to their home countries, according to The Washington Post (subscription).

• Now that Title 42 has concluded, authorities are only permitted to expel individuals using Title 8, pre-pandemic immigration rules, The New York Times (subscription)

What should we expect? Though an expected weekend “surge” in border crossings did not materialize—in fact, there was a 50% drop in the three days ending Monday, according to the Associated Press—“the number of crossings is still exorbitantly high, with U.S. Customs and Border Protection stopping more than 10,000 immigrants per day this week, the highest levels ever,” the Washington Examiner reports.

• And southern border communities remain on “high alert” for a potential near-term spike in migrant crossings, according to CNN.

How is the administration addressing the change? The Department of Homeland Security—which has issued a proposed rule on asylum—put out a six-pillar plan to address an influx of migrants at the southern border. The measures aim to:

• Increase resources, personnel, transportation and medical support and facilities;
• Bolster CBP processing efficiency;
• Move quickly to mitigate potential overcrowding of CBP stations and alleviate the burden on the surrounding border communities;
• Administer consequences for unlawful entry, including removal, detention and prosecution;
• Boost the capacity of nongovernmental organizations to take in migrants following processing by CBP, during the wait for results of their immigration removal proceedings;
• Target and disrupt the criminal organizations and smugglers that profit off vulnerable migrants and seek to move illegal drugs into the U.S.; and
• Collaborate with international and federal authorities to deter undocumented migration.

What’s Congress doing? The House passed a border package, the Secure the Border Act of 2023, the day Title 42 expired.

• The House measure—which the White House has said it would veto—“would mandate that Customs and Border Protection hire enough Border Patrol agents to maintain a staff of 22,000 and develop a plan to upgrade existing technology to make sure agents are well-equipped. It also would require the homeland security secretary to resume construction of the border wall,” according to NBC News.
• The Senate has two proposals to secure the border. One, by Sens. Thom Tillis (R-NC) and Kyrsten Sinema (I-AZ), would give the U.S. temporary authority to expel for two years migrants who try to enter illegally or without proper documents. The other, the Securing Our Border Act from Sen. Tim Scott (R-SC) and others, would fund “nonintrusive border inspections” and border-wall construction, as well as retention bonuses for CBP agents, and would end the current “catch and release” policy.

What’s the NAM doing? The NAM continues to advocate immigration reform through “A Way Forward,” its immediately implementable policy blueprint for legislators, meetings with key congressional leaders, member-story and news coverage (see here, here and here for a few examples), the Competing to Win Tour and more.

How can manufacturers recruit and retain employees amid a skills gap that leaves hundreds of thousands of manufacturing jobs unfilled every month? ALOM Technologies Corporation—a global supply chain management services and solutions provider based in Fremont, California—has an answer: focus aggressively on company culture.

The results are in and ALOM’s program is a remarkable success, leading to workforce and revenue growth for the company over the past few years. This achievement led ALOM to be named a finalist for the Manufacturing Leadership Awards, given every year by the Manufacturing Leadership Council (the NAM’s digital transformation division). Here’s a sneak peek into how they did it.

The program: After being named an essential business in 2020 due to its medical supply chain infrastructure, ALOM turbocharged its existing culture program, called DOING—which stands for Development, Opportunity, INclusion and Growth—to support staff recruitment and retention in a challenging labor market.

• The program had existed since 2018 and was based on ALOM’s longstanding cultivation of values-driven purpose. When the company expanded it during the pandemic, it enabled ALOM to build a higher performing team across multiple locations.

The details: ALOM has employed several strategies for reinforcing its cultural values, aiming to instill a sense of purpose and belonging in job candidates and veteran staff alike. These include:

• Showcasing their commitment to diversity, inclusion and sustainability both inside the organization and in recruitment efforts;
• Redefining the ALOM People Team mission and structure to emphasize staff development over compliance;
• Working to address employee wellness through stress and mental health education and resources; and
• Instituting a staff development online portal called ALOM University that empowers rapid onboarding, training and advancement.

The results: The program has been an extraordinary success, helping to increase ALOM’s workforce and strengthen the company’s bottom line at the same time. In 2021 alone, the company achieved:

• 70% workforce growth;
• 60% revenue growth;
• A 6% decrease in employee attrition for 2021, as compared to 2018; and
• A 65% reduction in recruitment days to fill open positions.

Looking ahead: ALOM isn’t done yet. This year, the company is working on a digital transformation effort, called DOING DX, designed to make all of ALOM’s tech systems and business processes more efficient and effective.

• It will focus on staff recruiting, performance management, supplier management and evaluation, team building, mentoring and much more.

The last word: “When I started ALOM 26 years ago, I was determined to build a supply chain company that did right by everyone,” said President and CEO Hannah Kain.

• “This has become the foundation of ALOM’s corporate culture. We believe in using the supply chain to help the world be a better place—for the environment and for every person, supplier and company. Experiencing our values in action instills a sense of pride and belonging in our staff that helps us attract, build and retain an exceptionally talented team.”

Get involved: Want to learn more about this successful workforce effort, as well as a whole host of other innovations by leading manufacturers? Join the MLC for its Rethink summit in Marco Island, Florida, on June 26–28. Sign up here.

As manufacturers confront an ever-expanding list of cybersecurity threats, the NAM is mustering the leading cybersecurity minds in the sector to fight back. Since March 2021, it has been gathering chief information security officers from a large range of companies to discuss their shared challenges and the strategies that have worked against them.

Recently, a group of these cyber leaders met at the NAM’s D.C. headquarters to exchange their latest updates. Here is a sneak peek inside this meeting, where the future of the industry’s cyber defenses was being shaped.

On the agenda: The discussion covered both IT and OT technology and the interdependence between the two that requires a careful but not restrictive cyber strategy.

• Beyond the technology itself, the CISOs also detailed how they present their progress to their boards, including their metrics for success.

Zeroing in: Cyber training for employees was a particular focus for the group, as manufacturers work to educate their workforces about these threats.

• Though most cyber training is directed at IT personnel, there are more and more plant floor workers who also use computers and must receive security training, the CISOs noted.
• It is best to embed training into the overall asset care process, recommended one leader, so it becomes a long-term priority.
• In addition, role-based training ensures all bases are covered, including contractors, according to another CISO.

Guest speaker: The meeting also featured an appearance from a congressional adviser on cybersecurity, who detailed what policymakers are planning.

• Emily Burdick, professional staff member to the majority on the House Homeland Security Subcommittee on Cybersecurity and Infrastructure Protection, explained how the subcommittee is working to oversee the Cybersecurity and Infrastructure Security Agency’s two roles: overseeing critical infrastructure and monitoring federal networks.

Government priorities: Congress is focusing on four key priorities for the year, Burdick said. These include:

• Monitoring CISA’s soon-to-be-proposed rule on cyber-incident reporting (on track for a Notice of Proposed Rulemaking in March 2024, with the final rule expected by September 2025); this proposed rule would require covered entities to report cyber incidents within 72 hours and needs clarification around “covered entities” and the timing of incident reporting;
• Measuring CISA’s effectiveness as a sector risk management agency and as the national risk coordinator;
• Improving private-sector partnerships through the Joint Cyber Defense Collaborative and other processes; and
• Strengthening the national cyber workforce.

What they’re saying: The CISOs in attendance told the NAM how much they valued these high-level discussions.

• “While we often cross paths with fellow CISOs at trade shows and other industry events, it is important for us to gather in small groups and share what we are experiencing in an intimate, off-the-record setting so we can speak openly and honestly about challenges and potential solutions,” said Beth Schulte, CISO of Louisiana-Pacific Corporation.
• “I was able to share some tips with the other CISOs based on my experience and came away with tangible actions and takeaways to both implement immediately and research further after hearing recommendations from peers,” she continued.

Get involved: The NAM’s CISO group is working on industry benchmarks that will be shared with other manufacturers, so the industry can raise its defenses across the board. These benchmarks will help other CISOs evaluate their own practices and keep their boards and executives informed about industry standards.

• If you’d like to weigh in on your company’s activities, please take the short survey here.

Where can you “race to the future” in a mobile, immersive manufacturing experience, try your hand at cutting-edge technology and get free career advice from top professionals? At a Creators Wanted stop, of course.

Participants at last week’s Creators Wanted stops in Marysville and Columbus, Ohio, did all this and more.

Two stops, one week: The Honda Heritage Center was the site of two days of educational fun last Wednesday and Thursday, after which the Creators Wanted Tour continued on to the COSI Science Festival in Columbus, Ohio’s largest STEM event, on Saturday.

• The stops were the 15th and 16th, respectively, on Creators Wanted’s nationwide tour, an initiative of the NAM and its 501(c)3 workforce development and education affiliate, the Manufacturing Institute.
• The tour aims to shore up the manufacturing workforce by 600,000 workers, increase the number of students enrolling in technical and vocational schools or reskilling programs by 25% and boost the positive perception of the industry among parents from 27% to 50%—all by 2025.
• Nearly 1,000 kids and adults came through the Creators Wanted immersive experience during its three days in Ohio, and 35,000 students and career mentors signed up to learn more about modern manufacturing careers, increasing the network to 1.2 million nationwide.

Sites to behold: More than 300 students from central Ohio schools toured the Honda Heritage Center on Wednesday and Thursday.

• Students learned about the American Honda Motor Company’s rich history of innovation, beginning in 1959, and toured the Honda Technical Development Center, where Honda associates advance their skills in high-tech manufacturing.
• Tour sponsor FactoryFix was on hand, too, helping students explore pathways to manufacturing careers through information handouts and in-person Q&As with company representatives.

Theme-park lines: At COSI, the Creators Wanted experience had the festival buzzing, with attendees lining up to take their turn. More than 675 kids and adults moved through the unit in just six hours.

• “We built this experience to excite future creators and their career mentors like parents,” said NAM Managing Vice President of Brand Strategy Chrys Kefalas, who was onsite with the tour. “I’m not sure anyone fully anticipated how much of an attraction we’d be with the immersive experience—it’s a huge draw.”

A big commitment: Tour-stop host Honda—which has been instrumental in the launch and continuation of Creators Wanted—announced that it will increase its overall commitment to the Creators Wanted campaign to $2.25 million through 2025.

• “Creators Wanted is a great opportunity to showcase what the modern manufacturing environment is like and what the career opportunities are,” said American Honda Motor Company Executive Vice President Bob Nelson. “And there are many career opportunities for everyone.”
• “Honda’s incredible support and leadership has empowered our innovative campaign to thrive—to inspire students, to positively affect parents and teachers and, now with Creators Connect, to change even more lives,” said NAM President and CEO and MI Chairman of the Board Jay Timmons.
• Sara Tracey, managing director of workforce services for the Ohio Manufacturers’ Association, which participated in the events, added, “There are so many opportunities [in manufacturing] for people, regardless of what their interests are.”

“Build the future”: At both the Honda Heritage Center and COSI, there was plenty for participants to do as well as see.

• Students, parents and other attendees from local communities got the chance to use some of the latest items produced by manufacturers. These included Honda’s virtual-reality paint simulator and Honda’s safety car interactive display, as well as the many hands-on manufacturing challenges in the Creators Wanted mobile experience.
• “Know that there is a place for you in manufacturing to put whatever your skills and interests and passions are to work to build the future,” said MI President and Executive Director Carolyn Lee.

A great place to work: Many Honda associates—eager to share their positive experiences—participated in the week’s events, too, and had great things to say about modern manufacturing careers while on the ground at COSI.

• “I don’t think people realize how complex a vehicle is,” said one participating Honda associate. “The work and the people behind it, and the effort it takes to bring it to market—I can’t express how much fun that really is.”
• Said another, “I like that every day is a little bit different.” 

Behind the scenes: Interested in seeing how the Creators Wanted activation at COSI unfolded? Check out the NAM’s Instagram story from this weekend here.

When Jennifer Hamann went to college, she intended to be a fashion merchandising major—but she soon realized that it wasn’t for her.

“At the time, fashion merchandising was a combination of business and home economics,” said Hamann. “When I found out I had to sew, I dropped out.”

Instead, she pivoted to finance, which set her on the path to her current position as executive vice president and chief financial officer at Union Pacific Railroad. She was recently honored by the Manufacturing Institute—the NAM’s 501(c)(3) workforce development and education affiliate—with a Women MAKE Award, recognizing outstanding women working in the manufacturing industry.

A flexible career: When Hamann reflects on her time at Union Pacific, she sees flexibility and a willingness to try new things as a consistent theme—as when she shifted from a position on the audit staff to a role in human resources.

• “The thing that I think is a great selling point about Union Pacific is that you can still get your paycheck from the same company, but you can make wholesale career changes over the course of your career,” said Hamann.
• “I’ve done that. … I’ve taken on roles that were totally different than what I had gone to school for, or what I started doing when I came to Union Pacific. And I think that’s a real benefit to businesses like ours.”

Serving with pride: According to Hamann, the 161-year-old company’s workforce takes a great deal of pride in what they do and prioritizes a team-centered environment.

• “There’s tremendous pride in the workforce,” said Hamann. “Our tagline is Building America, and that really is how we think of ourselves. Supporting so many parts of America’s economy and so many communities—that pride is a big deal.”

Pushing for diversity: Hamann was previously president and now serves as the executive adviser of Union Pacific’s employee resource group for women called LEAD (which stands for Lead, Educate, Achieve and Develop). The ERG is one of nine at the railroad that helps foster inclusion and cultural awareness by creating networks that develop Union Pacific’s workforce and its culture.

• “One of the focus areas we’ve had as a [LEAD] group over the last several years is really reaching out into our field locations,” said Hamann. “If women can see other women in some of those roles that have been traditionally held by men, that helps give them greater confidence, and it helps in our overall recruiting and retention efforts to bring people into those jobs.”

Building a future: Hamann is proud of the work Union Pacific is doing to attract a diverse workforce, including by offering free college tuition for employees and by stressing pay equity and retention.

• “Not only do I think Union Pacific is a great place to work, but we really want it to be a great place for more women going forward,” said Hamann. “When I think about the future, I’d love to see it be a future where the demographics of Union Pacific reflect the demographics of the country and the communities where we operate.”

The last word: “This is a company with a very supportive culture,” said Hamann. “We value diversity, equity and inclusion. We want people to succeed. We have opportunities to build your network. Give us a try and see what you think.”

More reading: View the full list of this year’s Women MAKE Award Honorees and Emerging Leaders here, and learn more here about the Women MAKE Mentorship Program to help inspire the next generation of female talent.

Yesterday, the U.S. Securities and Exchange Commission finalized a rule that requires new disclosures from companies conducting stock buybacks.

The background: Stock buybacks are a commonplace practice that allow companies to ensure that their cash reserves are being used effectively. Returning capital to shareholders benefits both the company and its investors by increasing shareholder returns, enhancing capital formation and ensuring efficient capital allocation.

• Over the past few years, however, policymakers and regulators have taken steps to discourage buybacks, and the SEC has now finalized a rule targeting them.

The burden: The SEC’s rule imposes several new burdens on manufacturers conducting buybacks:

• A requirement that companies disclose detailed buyback data from each day of a fiscal quarter—imposing significant costs and dramatically increasing the complexity of businesses’ quarterly filings
• A requirement that companies provide disclosures justifying their buybacks, which could further politicize these capital allocation decisions
• New disclosures related to companies’ stock buyback programs and transactions by company management and boards of directors

The pushback: The NAM spoke out against the SEC’s rule when it was proposed last year, detailing the harm it would do to manufacturers.

• In particular, the NAM called on the SEC to reverse its proposed next-day disclosure requirement, which would have mandated upward of 250 new SEC filings per year for many public companies.

The result: Thanks to the NAM’s advocacy, the SEC’s final rule left out the daily disclosure requirement—a significant victory for manufacturers.

• However, companies will still be required to track daily buyback activity to comply with the quarterly day-by-day reporting mandate.
• In addition, the final rule maintained the proposal’s burdensome requirement that companies describe the “objectives or rationales” for any stock buybacks as well as the “process or criteria” used to set buyback targets.

The next steps: Most domestic companies will be required to provide daily buyback data in their Q4 2023 filings, meaning that daily tracking will begin in October 2023 and be reported to the SEC in early 2024. Most foreign companies will be required to comply in their Q2 2024 filings.

The last word: “The NAM is disappointed that the SEC has chosen to unjustifiably punish manufacturers for returning capital to their shareholders,” said NAM Managing Vice President of Tax and Domestic Economic Policy Chris Netram. “Manufacturers, investors, retirement plans and the entire economy benefit when companies can efficiently allocate capital via share repurchases.”

Further reading: The SEC rule is not the only action targeting buybacks in the past few years. The Inflation Reduction Act included a new tax on buybacks—which the NAM also opposed. It is currently engaging with the IRS to minimize the harm done to manufacturers by the tax. Read more here.

Why would a company give away its “secret sauce” recipe for success? In Toyota’s case, the answer’s easy: because it’s the right thing to do, according to Jamie Bonini, president of the Toyota Production System Support Center, Inc.

How it all began: The TSSC, which last year celebrated its 30th anniversary, is a nonprofit organization founded by the auto manufacturer in 1992 to help other companies improve their manufacturing processes using the proprietary Toyota Production System.

• “In the early ’90s, companies would come visit our factory in Georgetown, Kentucky, for tours and asked, ‘How do you [manufacture] in the U.S. competitively?’ We said, ‘It’s TPS.’”
• TPS is Toyota’s lean-manufacturing system, based on the Japanese philosophies of jidoka (which can be roughly translated as “automation with a human touch”) and “Just-in-Time,” which refers to producing “only what is needed for the next process in a continuous flow.”
• Toyota said yes to the growing number of requests from outside the company to share TPS principles, and soon developed an entire center devoted to TPS teaching.

The substance: TSSC, which is subsidized by Toyota, provides companies with the training needed to implement TPS principles, which help boost efficiency, product quality and workplace safety—while reducing costs and lead times.

• “TPS emphasizes the elimination of waste, continuous improvement and respect for people,” Bonini said.

The meaning of lean: TSSC has many long-term clients, some of which have been with the nonprofit for most of its three decades. The reason: TPS isn’t a one-and-done, single-size system that can be superimposed on all organizations the same way, Bonini said.

• “‘Lean’ has come to mean different things to different people,” he continued. “But this is what we mean by a Toyota production system: an organization-wide culture of highly engaged people who are solving problems and innovating to drive performance.”
• “When we work with a company, [our solution is] customized; it’s highly situational. What we’re trying to build in an organization is a culture. And to build it, it has to be nurtured, fortified. That’s why we like these longer-term engagements.”

Who’s involved: TSSC has worked with a wide range of companies in many industries, as well as with nonprofits and even governments. This year, the TSSC is working with approximately 50 companies and organizations, about 30 of which are nonprofits.

• The nonprofits are not charged for the consultations. “It’s completely free for them, but they have got to put a lot of hard work into it,” Bonini said.
• Meanwhile, the companies are charged a fee that doesn’t cover all of Toyota’s costs. Toyota donates its time, labor and transportation expenditures, according to Bonini.

The working relationship: Given the bespoke nature of TSSC’s consultations with companies, the work varies from client to client. It may consist of monthly visits, onsite consulting for specific projects or regular remote check-ins and discussions.

• Whatever the client needs from TPS, it requires the TSSC team’s touch. “We have worked with companies that have studied lean manufacturing for many years, and six or nine months in, they’ll say, ‘Wow, Jamie, TPS is very different from what I read.’ You really need to experience it. It’s like learning to swim or ride a bicycle,” said Bonini.

Future plans: TSSC isn’t slowing down after 30 years. It recently began hosting TPS-focused Toyota plant tours, and it has big plans for them.

• It offers half-day tours, because “we want to make TPS very understandable in a short time,” Bonini said. However, TSSC is “also likely to develop an enhanced, two-day tour. On the second day, [tour participants] would talk to us about their particular business and structure and get tailored advice.”

The last word: “A lot of companies look at lean operations as installing a collection of tools: visual management, daily huddles,” Bonini said. “In fact, the tools are part of the system, not the system. Our goal is to help companies understand that the really important thing is the tool users.”

As a family-owned small business that works with giant, complex industries like aerospace and medical devices, Westminster Tool knows its ability to innovate is what sets it apart. The 25-year-old company makes complex injection mold systems, composite tooling and components—including devices used in medical transplants and high-performance plastic parts for military aircraft.

• “We’re constantly looking to improve ourselves,” said Westminster Tool Chief Financial Officer Colby Coombs. “We’re always looking to push technological advancements, bring products to market faster, improve quality and reduce cost.”

So when a harmful R&D tax change went into effect, it caused real problems for the Connecticut-based company.

The change: Until recently, businesses could deduct 100% of their R&D expenses in the same year they incurred the expenses. But since last year, the tax code has required businesses to spread their R&D deductions out over a period of five years, making it much more expensive upfront to invest in the kind of innovation at which Westminster Tool excels.

The impact: As a result of the policy shift, Westminster Tool has found itself paying significantly more in taxes—and having to scale back its ambitions.

• “The impact has been large,” said Coombs. “Because of this change, I had to reconsider a contract that was going to mean new jobs and diversification just based on the cash flow that I needed in order to pay the government.”
• “Ultimately, this law may prohibit me from hiring more people, training more people in new skills, investing in our community and bringing in new work stateside.”

The uncertainty: As a result of uncertainty, small businesses are being forced to hold off on investments they can no longer afford.

• “I am at the mercy of this law, waiting to see how it plays out before I can make any large-scale investment in our business,” said Coombs. “It is putting massive pressure on our ability to grow and be an employer of choice in our community.”

The urgency: Coombs also emphasized the international nature of the challenge. With so many global competitors—especially those based in China, which provides a super deduction for manufacturers—an inability to invest in R&D will hurt manufacturing in the U.S.

• “If Congress doesn’t do the right thing this year, this is going to be a job growth prohibitor or a job killer,” said Coombs. “We are trying to compete with international competitors that aren’t hamstrung by this problem. If Congress fails to fix this issue, it will drastically impact my ability to compete with the global powers in our industry.”

The small business effect: Coombs notes that small businesses in particular will be harmed by this change, since they don’t have the cash reserves to take on significant new expenses.

• “Small companies don’t have the balance sheets to handle this,” said Coombs. “We are doing the best we can to survive, to represent our state, to make advancements and offer the best job opportunities we can. This law is prohibiting me from doing what we’re striving to do.”

The last word: “Failure by Washington to reverse this change will put companies underwater and out of business,” said Coombs.

You can find more information and ways to take action at the NAM’s R&D Action Center.