Bringing back parts of a policy it dropped more than half a century ago, the National Labor Relations Board moved late last week to reinstate an abridged version of “card check,” according to Reuters (subscription).
What’s going on: In a “3-1 decision in a case involving building materials company Cemex Construction Materials,” the NLRB unveiled a new framework last Friday that revives the 1949 Joy Silk doctrine, which holds that “employers must bargain with unions unless they have a good-faith doubt that majority support exists.”
The background: The board had tossed out the doctrine in the early 1970s after the Supreme Court’s decision in NLRB v. Gissel Packing Co., in which the court held that “the NLRB could force employers to bargain with unions when they engage in misconduct so severe that any election would be tainted.”
- This new decision “could provide a major boost to unions by allowing them to represent workers in certain cases when a majority sign cards in support of unionizing, rather than going through the lengthy and often litigious election process.”
- Last week’s move also came a day after the board finalized a return to Obama-era regulations purportedly aimed at speeding up union elections.
Why it’s problematic: Card check—which the NAM has long opposed—is inherently unfair and insecure, and it strips employees of their right to secret ballots, said NAM Director of Infrastructure & Labor Policy Ben Siegrist.
- “The NLRB’s decision could create a glide path to force unionization on workers without the necessary safeguards of an election, and it runs counter to 50 years of precedent established by the Supreme Court,” he said. “Effectively, this action contradicts the rights all employees have in determining their own representation.”
As manufacturers continue to reel from supply chain disruptions, the NAM is calling for a swift resolution to forestall a potentially devastating United Auto Workers strike.
What’s going on: The UAW is negotiating a new labor agreement with important automotive manufacturers, as the current contract expires Sept. 14.
Why it’s important: The automotive manufacturing industry in the U.S. is one of the strongest and most productive in the world, and it significantly supports the health of the U.S. economy.
- A strike of 143,000 UAW members against Detroit’s “Big Three” auto manufacturers could mean an economic loss of $5.617 billion after just 10 full days, according to a new report by Anderson Economic Group.
- Nationwide, every $1 spent in the transportation-equipment sector causes another $1.59 to be spent elsewhere—for a total economic impact of $2.59, according to NAM calculations using 2021 IMPLAN data.
- In 2022, the total value-added in motor vehicles and parts in the U.S. was $171.6 billion, according to the Bureau of Economic Analysis.
State-level impact: In 2019, a 42-day auto-worker strike at one of the Detroit manufacturers “sent the state of Michigan into a one-quarter recession” and resulted in an economic loss of $4.2 billion, according to reporting by The Detroit News.
- As of 2021, the latest year for which this data is available, Michigan’s total output from motor vehicles, bodies and trailers, and parts manufacturing was $37.5 billion, accounting for 37% of total manufacturing output in the state, according to the BEA.
- At the same time, Michigan had 175,745 full- and part-time employees in the sector, or 28.7% of all manufacturing employees in the state.
- Meanwhile, the total output of Illinois’ auto sector accounted for 19.3% of the state’s total manufacturing output, while employment came to 23.6% of the state’s manufacturing employees.
Undermining manufacturing in the U.S.: “Manufacturers in America, especially in the automotive sector, operate in an integrated supply chain, which means that small and medium-sized manufacturers around the country—in union and non-union shops—would endure the consequences of a stoppage. As we continue to emerge from the global pandemic and work to get our economy on a sustainable track, a strike would be devastating for working families across our country,” said NAM President and CEO Jay Timmons.
- “President Biden has prioritized strengthening manufacturing in America, but that will be quickly undermined if a strike occurs. The administration should be encouraging a swift resolution to avoid ripple effects throughout the broader manufacturing economy and in communities from coast to coast.”
After a global pandemic and amid considerable economic strain, worker morale may not be everything a company hopes. So what can leaders do to boost communication and restore a sense of excitement and purpose?
The Innovation Research Interchange—the NAM’s innovation division—recently published a whitepaper on morale building, drawing on copious existing research as well as consultations with leaders in a range of industries (from aerospace to consumer goods). Here are some of its key recommendations.
Senior leaders in the trenches: The best way to understand company morale (or its absence) is to go looking for it. In one notable case, FM Global Chief Science Officer Lou Gritzo spent a day working in each company lab, so he could understand where communication and cooperation needed improvement.
- Thanks to this experiment, Gritzo was able to “open lines of communication up and down the organization,” according to the IRI, leading to both an improved flow of information and greater comfort among lab staff in making independent decisions.
- “For others looking to try their hand at being a (not so) undercover boss, [Gritzo] recommends setting out rules of the road in advance,” the IRI paper notes. “The goal is to create a dialogue, not make guarantees that things will change. The change comes from the relationships built.”
Support for midlevel managers: Many participants in the IRI’s roundtables and interviews agreed that midlevel managers have only become more crucial in recent years—which explains why these managers are often very stressed.
- Amid the pressures of the pandemic, companies began offering more support and coaching for middle managers, according to earlier IRI research.
- One organization studied by the IRI and its research partner, Babson College, brought in coaches to work with managers—but not just for one-off sessions. “The external coaches were brought in multiple times during a one-year period in order to observe leadership styles and gave feedback openly,” which led to improved communication and greater autonomy among the managers.
Everyone an innovator: Another way to boost morale is to make sure great ideas are always recognized, no matter who comes up with them.
- At ICL Group, leaders devised a novel way to encourage innovative thinking: “an online platform that allowed anyone at ICL Group to propose an idea, have it reviewed by management, voted on by frontline staff and assigned to the appropriate team for implementation.”
- The platform has proved very popular, according to one senior leader, who said, “Everybody has just been blown away by how many ideas people have entered and [how many employees] continue to do it.”
Read the whole thing: Check out many more useful details and expert advice in the full whitepaper, which you can find here.
Flashback to 2015: “Hamilton” debuted on Broadway, millennials surpassed baby boomers as the largest U.S. generation and the term “Industry 4.0” was gaining traction in manufacturing circles. It was also when the Manufacturing Leadership Council created a conceptual framework called “Manufacturing 4.0.”
So what is the difference between Industry 4.0 and Manufacturing 4.0? While the terms may not sound all that distinct from each other, Manufacturing 4.0 represents the MLC’s commitment to a far-sighted, holistic approach to manufacturing’s tech-enabled metamorphosis—one that has served it well in over the past eight years.
The background: The 4.0 movement started in Germany in 2011 when the German ministries for education, research, economic affairs and energy developed a strategic initiative that would push forward the digital transformation of industrial manufacturing.
- They named this initiative Industrie 4.0. It featured an action plan that combined policy initiatives, public–private funding, strategies for technology implementation and the identification of business drivers and barriers.
The difference: For the MLC and its members, Manufacturing 4.0 is made up of transformations in three different arenas: technology, organization and leadership.
- Contrast this with Industry 4.0, which covers only technology topics—specifically nine pillars of technological innovation, which include autonomous robots, big data, cloud computing, IoT, cybersecurity, systems integration, simulation, AR/VR and additive manufacturing.
- “MLC, of course, covers all of these technologies, but, importantly, adds the dimensions of organizational and leadership change as part of its perspective on manufacturing’s digital transformation,” says David R. Brousell, the MLC’s founder, vice president and executive director.
MLC in action: While the MLC does provide member resources that focus on specific technologies and their uses in manufacturing operations, it also covers topics such as how leaders can prepare their workforce for digital transformation, how organizations should be structured to make business decisions based on manufacturing data and how leaders can ensure they set their teams up for digital success.
- Additionally, the annual Manufacturing Leadership Awards recognize not only high-performing digital manufacturing projects but also outstanding individuals who demonstrate both technological understanding and strong personal leadership.
M4.0’s continued evolution: Today, the MLC continues to use Manufacturing 4.0 as the overarching framework for its member companies’ activities.
- Its influence is apparent in the MLC’s annual Critical Issues Agenda, a member-created list of key business drivers and enablers of digital manufacturing.
- The agenda covers technological advances like smart factories and data analytics, alongside the organizational ecosystems that put such advances into operation—from the leaders who direct them to the cultures that make them succeed.
The Future of M4.0: As the MLC gets ready to set its 2023–2024 Critical Issues Agenda, it will continue to take a holistic approach to the technological changes sweeping the industry by recognizing the importance of people in making those transformations happen.
Go deeper: You can learn more about Manufacturing 4.0 by downloading the MLC’s white paper, Manufacturing in 2030: The Next Phase of Digital Evolution; reading a recent report, The Future of Industrial AI in Manufacturing; or attending its Aug. 30 virtual Executive Interview, Shifting from Disruption to Growth.
Workforce challenges and the regulatory onslaught against manufacturers were some of the key topics covered during a recent NAM meeting with House Majority Whip Tom Emmer (R-MN) in Princeton, Minnesota.
What’s going on: Emmer met NAM leadership last Monday for a facility tour of heavy-gauge metal spinnings company Glenn Metalcraft, led by its president and CEO, Joe Glenn.
- On the walkthrough, Emmer got to see and hear the impact of the current legislative deluge hitting manufacturers.
- “My visit to Glenn Metalcraft demonstrated the need to address the regulatory state overwhelming manufacturers in the heartland,” Emmer said. “Small and medium-sized manufacturers are working hard to grow their businesses and increase compensation for employees, but those efforts are undermined by new regulations and the lack of permanent, competitive tax policies to promote research and development and capital investment.”
“Fighting to thrive”: Glenn spoke candidly about his and other manufacturers’ current struggles with the excessive mandates handed down by federal agencies.
- “Manufacturers across the country are fighting to thrive under the weight of an increasing number of unbalanced and often unfeasible regulations from agencies across the federal government—all amid an uncertain economic environment,” Glenn said before thanking Emmer for “giving us a voice.”
- The majority of manufacturers—more than 63%—say they now spend over 2,000 hours a year complying with federal mandates, according to the NAM’s Q2 2023 Manufacturers’ Outlook Survey.
Tax treatment of R&D: Emmer’s support of the American Innovation and R&D Competitiveness Act—which would permanently restore immediate research-and-development expensing for small businesses for 2022 and all subsequent years—has been instrumental in the legislation’s progress, NAM Managing Vice President of Communications and Public Affairs Jamie Hennigan told the whip. Now we just need to move the issue forward, he added.
- Glenn underscored the importance of full expensing when he told Emmer that it had helped his company open new facilities.
- Emmer agreed on the necessity of competitive tax provisions and said he, too, wanted to see them reinstated.
A persistent problem: NAM leaders and Glenn also addressed another ongoing challenge for manufacturers in their discussion with Emmer: the acute shortage of skilled workers.
- The difficulty of attracting and retaining skilled workers has consistently ranked among the top problems cited by manufacturers in the Outlook Survey, as Hennigan pointed out.
The last word: “Manufacturers have made it clear that the [Biden] administration’s regulatory agenda could easily derail manufacturing’s recent success,” NAM President and CEO Jay Timmons said in a statement after the visit.
- “Glenn Metalcraft and so many others are forced to make tough decisions as agencies issue unbalanced regulations that threaten our sector’s ability to grow and compete.”
- “The positive effects of tax reform, the Bipartisan Infrastructure Law and the CHIPS and Science Act are all being undermined by the growing regulatory burden, and I want to thank Whip Emmer for spotlighting this threat in his home state of Minnesota.”
With one of its key components—printed circuit boards—in short supply, Schweitzer Engineering Laboratories chose the proactive solution: it would begin making them itself. Now that its new factory is up and running, SEL is receiving unexpectedly keen interest from other companies, and considering ramping up production for outside sales.
Fixing a supply chain problem: The Pullman, Washington–based electric power system protection solution manufacturer began manufacturing PCBs at its new $100 million, 162,000-square-foot factory in Moscow, Idaho, back in March.
- “Printed circuit boards take electronic components and interconnect them so they can interact with each other,” SEL CEO David Whitehead said. “Without them, you can forget about AI, forget about your cell phones—they’re in just about any electronic device.”
- The Moscow factory is running at about 25% capacity. When it reaches full production later this year, it will be one of the top PCB manufacturers in the U.S., according to Whitehead.
Domestic and accessible: The PCB “is a critical component that goes into our devices,” Whitehead continued. “Now, instead of sourcing PCBs from around the U.S., we can produce them ourselves.”
- The Moscow facility—which only produces the circuit boards for SEL—has increased the company’s supply chain resiliency and sped up its output, Whitehead told us. “Now, in a handful of days after designing a printed circuit board for a product, our engineers are in their labs testing it. It’s a big win for us.”
- Nearly half of manufacturers in the U.S.—44.9%—cite supply chain hurdles as one of their top business challenges, according to the NAM’s Q2 2023 Manufacturers’ Outlook Survey.
Self-funded and viable: SEL funded 100% of the facility’s construction costs, and it will have paid for itself in two to three years, Whitehead said.
- “I think that’s really a big deal for not only taxpayers but the local community generally,” he said. State and local governments “can take the funds [they didn’t use on us] and invest” elsewhere.
A good neighbor: The Moscow plant—which features a fume scrubber system that exceeds Environmental Protection Agency standards for volatile organic compounds—also uses a “zero-liquid discharge water treatment system that recycles and reuses all the water used to manufacture the printed circuit boards,” Whitehead said.
- A comparable factory would use about 90,000 gallons of water each day of production, while SEL uses about 500 to 600 gallons—the equivalent of only a few households’ daily usage, according to Whitehead. Most of that is for worker needs (drinking water and restrooms).
- The company also reclaims and reuses metals, such as tin, silver and gold, that are used in the production process.
- “We are very environmentally conscious about how we produce these boards,” Whitehead said.
What’s next? Since the facility began production, SEL has gotten numerous inquiries from other manufacturers interested in buying the PCBs. The company is likely to oblige them soon.
- “This is our next opportunity,” Whitehead said of producing boards for other manufacturers. “We love being vertically integrated, building as much as we can close to where we’re going to use the products. … As we get better at it for our own consumption, I can see us expanding it.”
“There are good things coming from [the Biden] administration”—including the CHIPS and Science Act and historic infrastructure investment—but there are also several trends that spell trouble for manufacturing in the U.S., NAM President and CEO Jay Timmons said on CNBC’s “Squawk Box” on Monday.
A three-fold issue: “On the one hand we have a manufacturing strategy that Congress and the administration have been putting forward, which is … to prioritize growing manufacturing here in the United States,” Timmons told CNBC’s Andrew Ross Sorkin.
- “But … you’re compounding that with three things. One is the [number] of regulations coming down. … [Two is] slow permitting, which is making it difficult for manufacturers to build those facilities they’re willing to invest in. Thirdly, [in] some of the provisions that have been enacted, there’s been confusing guidance or no guidance when it comes to accessing the funds and credits that are available for manufacturing. All three of those things together are making it very difficult for manufacturers to compete and succeed in our global economy.”
- The NAM is engaging on approximately 100 different regulations coming from 30 different government agencies, Timmons added.
Make regulation smart, achievable: Manufacturers are in favor of reasonable regulations that enable them to succeed, Timmons continued. “We’re not saying ‘No regulation’; we’ve never said that. What we’re saying is, ‘Let’s make these regulations essential, smart and achievable.’”
- He cited the National Highway Traffic Safety Administration’s new Corporate Average Fuel Economy Standards—which the NAM has told the administration are unworkably stringent and will drive up costs for manufacturers—as well as the Environmental Protection Agency’s new standards for ambient air quality, which a NAM-commissioned study found would threaten billions in economic activity and cost hundreds of thousands of jobs.
NAM in action: The NAM recently joined forces with members of its Council of Manufacturing Associations and the Conference of State Manufacturing Associations to launch Manufacturers for Sensible Regulations, a coalition created to address the negative effects of these federal regulations.
Innovation isn’t just one of many priorities at transportation systems manufacturer Wabash—it’s at the center of everything. Instead of having a traditional R&D function in the product development department, the company has reorganized its hierarchy so that innovation is considered in every major decision, from hiring to investments and more.
“It’s not possible to have innovation siloed in the engineering world; that wouldn’t allow us to achieve the scale of innovation that customers need,” President and CEO Brent Yeagy said.
As the manufacturing supply chain becomes increasingly intricate in a complex world, Wabash is staying ahead of the game. In a recent interview, Yeagy explained how the company does it.
The big picture: This “full reimagining” of the company occurred in response to broad forces reshaping the manufacturing industry, said Yeagy.
- Within the past decade, e-commerce has totally disrupted the logistics model of the previous 30 years, he pointed out.
- Meanwhile, digital technology has enhanced the speed and precision of the industry, which has also increased the complexity of its logistics needs.
- On top of that, the pandemic altered manufacturers’ thinking about lean inventories, lead times and the domestic supply chain infrastructure, sparking a system-wide transformation that isn’t over yet.
- And that’s all before we get to the possibilities of artificial intelligence, autonomous vehicles, and new sources of clean energy—all of which could bring profound and unpredictable changes to the industry.
The response: Watching these changes unfold, Yeagy and his team knew they had to take dramatic steps to keep up.
- “We restructured the entire organization away from standalone divisions,” prioritizing collaboration instead, Yeagy said. This involved “aggregating R&D and business development,” which had previously been spread out over 11 different departments.
- This shift also reflected a change in the company’s philosophy. Innovation could no longer be incremental, Yeagy determined, but had to be audacious.
The internal system: Such advances are only possible if the company has a flexible, fast-moving core of innovators who are always looking for the next opportunity, Yeagy told us.
- Instead of creating an innovation strategy that “sits on a shelf” for a year or more, Wabash updates its strategy on a weekly or monthly basis.
- While the company’s R&D and corporate development teams have strict objectives, they can also challenge the strategic direction and introduce fresh ideas—such as new technologies that might give the company an edge.
- This system also requires the right people for the job. Team members must have not only the technical qualifications for the work, but also the capacity to trust, collaborate and be vulnerable when sharing ideas, Yeagy said.
The successes: The company’s new structure has led to industry-leading innovations like Wabash’s subscription model, which allows clients to “subscribe” to a certain level of fleet capacity, instead of managing a fleet of trucks themselves.
- Wabash manages the fleet and maintenance, Yeagy explained, guaranteeing a certain capacity every day to its customers, while offering a range of rental models to suit their needs.
- In another victory for its innovative corporate development team, Wabash found a swift solution when it discovered it didn’t have sufficient distribution capabilities for aftermarket parts. It created a joint venture with a competitor company that had ample warehouse space across the country—going from the idea stage to nationwide operations in a mere six months.
Military influence: Yeagy’s service in the Navy shaped his leadership throughout the company’s transformation, he told us.
- “The military is based on a mission orientation,” he explained. “If everyone understands where we are supposed to go and why, it allows them to be agile and overcome obstacles” in the field, where the unpredictable happens.
- “Officers live to complete the mission by taking care of their people, preparing them mentally, physically, operationally,” and then allowing them to operate on their own. “We have to do that too,” he concluded.
A word of advice: Yeagy advises manufacturing leaders that truly experimental teams require “a safe place to fail and learn how to be comfortable with failure.” He admits that “It’s very hard to take a manufacturing company that doesn’t want to fail, and to teach them,” so leaders must strive to be “immensely” empathetic. It’s clear from speaking to Yeagy that this is his top priority.
Ever wondered how best to contact your members of Congress? Or invite them on a tour of your facility? The NAM’s advocacy division, which helps manufacturers express their priorities to D.C. decision-makers, recently released a new and important resource: a suite of toolkits for different advocacy activities, including facility tours and more.
Congressional contact: There is an art to contacting Congress, as the NAM’s advocacy team will tell you. Their “Engaging Congress” toolkit provides simple, easy to remember rules for all types of communication, as well as sample letters and phone messages.
- By email: A few key tips include using a clear subject line, making sure that you identify yourself as a constituent and providing strong facts and data. And don’t forget to make it personal—the congressional office should understand that you yourself are harmed (or benefitted) by the policy in question.
- By phone: The advice for phone calls is similar—make sure you identify yourself as a constituent and a manufacturer, and that you have a clear request for the congressional staffer answering your call. Personal details matter in this format as well.
Lastly, consider attending a town hall or other event hosted by your members of Congress, where you can also voice your opinions and connect with their offices.
Facility visits: Another way to make an impact on your representatives is to invite them over to your place. Hosting a facility tour can seem daunting or complicated, but the NAM’s toolkit breaks it down into eight easy steps. This collection of advice from the experts includes the following:
- How to create a guest list, send invitations and coordinate with congressional office staff
- How to prepare for media participation and craft a CEO message
- How to organize the tour itself, from preparing the premises to greeting the lawmaker to providing safety equipment and more
- How to show the visitors around while dropping key talking points into the conversation
That’s only a snapshot of this helpful toolkit, which includes many hints that you may not ever have considered—such as designating a notetaker to join the tour and keep a record of it.
Become an ambassador: If you are interested in making advocacy one of your missions, consider becoming an NAM Ambassador. Ambassadors share their stories with the media and policymakers, take public positions on key manufacturing issues, publish op-eds, host elected officials at their facilities and much more.
Check it out: Explore the whole toolkit and learn how you can become an effective public advocate for your company, your industry and the American economy.
Discipline, reliability, a team-player mindset, leadership—manufacturers are looking for all these qualities in the talent they recruit. What if companies could tap into a population not only equipped with these skills but experienced in using them in high-stakes situations?
Well, the Manufacturing Institute—the workforce development and education affiliate of the NAM—has good news, if you haven’t heard it already: this population exists, and it’s military talent. Transitioning service members, veterans, National Guard members, reservists and military spouses have a wealth of skills and experience that translate easily into a manufacturing context.
So how can manufacturers reach these workers and make the best use of them? The MI recently convened both military and manufacturing leaders in Fayetteville, North Carolina, for its third Workforce Solution Series event, where they answered this question and offered a range of useful advice. Here are some of the highlights.
Generally speaking: Major General Eugene J. LeBoeuf, Deputy Commanding General, U.S. Army Reserve Command, highlighted the talents and skillsets that Army reservists can offer the manufacturing industry, including agility, a can-do attitude and a thorough grounding in engineering, logistics and mechatronics.
- With nearly 190,000 soldiers, the Army Reserve comprises much of the readiness force of the U.S. Army. Many of these reservists are underemployed or unemployed, which means they represent an opportunity for manufacturers.
- Manufacturers interested in hiring from this labor pool can partner with the Private Public Partnership Office, which connects companies with reservists at no cost.
Reaching military talent: Several panelists emphasized the importance of developing recruitment processes that encourage military talent to apply and interview for manufacturing jobs.
- “Make sure that the requirements you’re listing in your position descriptions are actually required. Do you really need someone to have a master’s degree to get the job done?” asked Rob Patton, vice president of Fayetteville Cumberland Economic Development Corporation.
- As a recently transitioned service member, James Goppert, HR business partner at WestRock, explained some of the challenges that military talent may face when entering the workforce. “Having to explain military skills and certifications to a civilian in an interview was strange. It would have been helpful to have someone on the other side who understood my experiences.”
Open to all possibilities: Jennifer Goodman, senior manager of talent initiatives at Coca-Cola Consolidated, drew on her experiences as a military spouse. “Military spouses are 92% women and have a 22% unemployment rate. That’s a huge labor pool that’s going underemployed or unemployed.”
- While relocation is often a concern for companies, Goodman points out that it does not have to be a disadvantage. “Think of manufacturers who have locations across the country. Maybe you can start a military spouse at one location and then move them to another. Or, if they’ve proven themselves after a few years, you could transition them to remote work.”
- “The benefits don’t stop with the one military spouse you hire,” she added. “We’re a very loyal community with great word of mouth and a larger referral network.”
The last word: “Don’t underestimate the value of an event like this Solution Series can have. You can take the information, energy and passion that you get from meeting with people who have the same goal of building a stronger economy and use it to power you forward,” said Nathan Huret, economic development director for Catawba County.
Learn more: To get started—or continue—with hiring military talent, check out the extensive resources of the MI’s Heroes MAKE America initiative, which prepares prospective military workers for new and rewarding careers in manufacturing.