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Policy and Legal

NAM Hosts Inaugural Manufacturing Legal Summit

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Manufacturers face a minefield of legal and compliance issues every day—and too often, in-house counsel are forced to navigate some of the biggest issues affecting the industry alone.

The NAM’s Legal Center sought to change that dynamic at the first-ever Manufacturing Legal Summit, which took place Nov. 15–16 in Washington, D.C., where in-house counsel from manufacturing companies across the nation had a unique opportunity to convene and learn about the latest pressing challenges across the legal and regulatory landscape.

“The summit offered real-world, practical advice that will help in-house manufacturing counsel deal with their legal and regulatory challenges,” said NAM Chief Legal Officer and Corporate Secretary Linda Kelly.

Kelly and NAM Deputy General Counsel for Litigation Erica Klenicki told us more.

Exploring issues: The summit covered a range of topics, including the following:

  • National Labor Relations Board: A session led by NLRB board member John Ring and labor law experts from Fisher Phillips provided critical insights on the priorities and activities of an aggressively pro-labor NLRB, and how manufacturing employers can prepare for the many significant legal changes coming in the weeks, months and years ahead.
  • Supply chain: A panel centered around supply chain challenges, featuring the perspectives of GE Appliances’ vice president and general counsel and including an array of experts from the law firm Foley & Lardner, covered issues like supply chain due diligence and drafting contracts to prepare for inevitable supply chain bottlenecks.
  • ESG: A panel of experts from McDermott, Will & Emery that also included Brunswick Corp. Executive Vice President, General Counsel, Secretary and Chief Commercial Officer Chris Dekker explored how the ever-evolving concept of ESG is affecting both public and private companies—including what manufacturers should expect from the Securities and Exchange Commission’s forthcoming climate disclosure and human capital management rules.
  • Supreme Court: Another session covered the impacts of last year’s Supreme Court decisions and the likely outcomes of this year’s cases on issues of importance to manufacturers and the general public alike.
  • Product liability: This panel featured in-house counsel from Johnson & Johnson, The Sherwin-Williams Company and Toyota North America, along with experts from the law firm Shook, Hardy & Bacon, discussing recent efforts by the trial bar to circumvent the traditional limits of product liability law. The panelists laid out the types of bad-faith product lawsuits that manufacturers often face—and how manufacturers should approach them.
  • Drugs in the workplace: Especially at a time of legal ambiguity around marijuana, it can be challenging for employers to make and enforce rules about drug use. This session led by workplace legal expert Matt Nieman of Jackson Lewis laid out helpful approaches to creating a modern drug-free workplace.
  • Cybersecurity: As cyberattacks against manufacturers rise, it’s important for lawyers to understand their responsibilities around protecting confidential company information and preventing breaches. Thanks to the expertise of representatives from Miller Johnson, a member of the Meritas network, participants learned about these topics through the lens of an attorney’s ethical obligations.

Building relationships: In addition to practical and engaging content, the event also offered participants opportunities to connect with one another and with the NAM legal team.

  • “One of the many goals was to build a network, and there was a lot of enthusiasm for that,” said Kelly. “The event also brought greater visibility to the work of the Legal Center and helped show the legal departments of member companies how the NAM can be an effective partner.”

Convening talent: More than 120 participants registered for the event, comprising in-house counsel representing large and small manufacturers from every industrial sector, as well as legal experts from top law firms across the country.

  • “This is the first time this group was in a room together,” said Klenicki. “It’s a group that faces a lot of the same pressures, so having everyone in the room together thinking through these issues was extremely valuable.”

A representative reaction: “The event brought together a terrific collection of manufacturing CLOs and senior law department leaders to discuss legal issues of importance to manufacturers,” said Dekker. “The informative and timely content was presented primarily by panels that included outside attorneys and in-house counsel ensuring the advice was actionable and practical.”

An annual affair: The Manufacturing Legal Summit will return Nov. 7–8, 2023, in Washington, D.C.

  • “Being in the nation’s capital, where law and policy unfold, hearing from experts on these issues—it’s an exciting experience,” said Klenicki.
Business Operations

Talking Cybersecurity with NAM COO Todd Boppell

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What should manufacturers know about cybersecurity threats? NAM COO Todd Boppell recently appeared on Mandiant’s “Defender’s Advantage Podcast” to explain how cyber criminals are targeting manufacturers today and what companies can do to protect themselves. Here’s some of his advice.

The threat today: While cyberthreats are nothing new, in recent years there has been a sea change, Boppell said.

  • “I think what’s really changed in the past five years, especially—it probably started in the past 10, but it’s massively accelerated—is that cybercrime as a business model is on the rise,” he said.
  • “A lot of the bad guys, whether their motivations are political or purely economic, have realized that ransomware and other forms of pure disruption are sometimes just as helpful or just as lucrative as stealing any sort of intellectual property.”

Manufacturing as a target: Manufacturers get victimized by ransomware attacks “because manufacturing is one of the least tolerant industries of any sort of downtime,” Boppell continued.

  • “Over the past five years, manufacturing was always in the top three [sectors targeted by cyber criminals], typically with medical and financial services … but really over the past 18 to 24 months, all the data I have seen says that manufacturing has jumped to number one and has stayed there.”

What small businesses need to know: Small businesses may believe that they are beneath notice for cyber criminals, but that’s not the case, said Boppell.

  • Once they come to terms with that depressing reality, small companies should take a look at their staff and operations, he said. “Do they have the talent on staff to understand what they should do, what their risks are, which systems they currently have that need to be addressed? Do they understand all the acronyms at play? Do they understand the different threat vectors?”
  • And last, once the company generally knows what it’s doing and perhaps has some IT support, it should consider its budget, and how it can “get the most bang for its buck.”

What large businesses need to know: “Larger companies want to be helpful, and they want to help secure their supply chain partners, because it is absolutely in their best interests. … However, they are unbelievably busy just protecting their own boundaries and just worrying about all the attacks they’re facing,” Boppell said.

  • “And of course, it’s always a little bit frustrating for smaller companies to have a larger company try to tell them what to do … so you have to really manage those relationships and figure out the right way to go in and help.”

The most important thing: “The number-one thing I’m trying to get through, and the number-one myth I want to dispel, is that a lot of small manufacturers believe that … they have no IP to protect,” said Boppell. “Maybe they make screws and fasteners, or maybe they make mattresses or whatever. … They feel like cyber is not a big deal for them.”

  • “What we’ve seen with ransomware is that’s absolutely not true. Their ransomware risk is just as high as anyone else’s because they can’t tolerate downtime. And if they haven’t taken the steps to secure their networks and their equipment, then they’re going to be even more prone to falling victim to ransomware.”

Listen to the whole thing: You can find the entire interview with Boppell here.

Protect yourself: Interested in safeguarding your company? NAM Cyber Cover was designed specifically to give manufacturers and their supply chains enhanced risk mitigation and protection. Find out more here, and check out this webinar on the state of cybersecurity for manufacturers.

Business Operations

Fostering a Diverse, Inclusive Culture at Smithfield

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When it comes to diversity and inclusion, Smithfield Foods puts its commitments into action.

The world’s largest pork processor has committed to measurable increases—of 35% and 30%, respectively—in the hiring and promotion of women and individuals in underrepresented groups. And it’s pledged to do it all by 2030.

Bridging a gap: In September 2020, the Virginia-headquartered manufacturer launched its Operations Leadership Program, created to develop a strong pipeline of diverse talent to fill future management roles.

  • “We lead with data. And our data shows there’s a gap in diverse representation between production and management,” said Smithfield Foods Manager of Diversity, Equity & Inclusion Jessica Jones. “The OLP provided us an opportunity to track data on team members, their promotion opportunities, how they’re elevating within the company with a commitment to monitor year-over-year data three years after program completion for each cohort.”
  • In just over two years, the program, which garners participants through applications, has seen 132 graduates and nearly 50 promotions.

Providing encouragement: Ironically, many of the same employees the OLP was designed to help were initially reluctant to apply, Jones said.

  • “We did focus groups and what we realized is, those who weren’t applying were women and people of color,” she said. “They shared, ‘I don’t think it’s for me,’ and when we heard that, we realized it meant, ‘I never saw myself going higher than my current opportunity.’”
  • Smithfield’s leadership began to strategically target their communications to specifically focus on these employees and encourage them to consider the program. “That’s when we started to see the uptick in more women and people of color applying,” Jones said.

Other D&I initiatives: To reach its lofty 2030 diversity and inclusion goals, Smithfield has deployed other programs, too, including the following:

  • Smithfield’s Farmer Diversity Program, which aims to increase the number of Black and minority hog farmers in the company’s supply chain;
  • A Future Leaders Program that gives scholarships and career opportunities to rising high school seniors through summer internships to increase diversity in leadership;
  • An expansion of the Smithfield Foods Scholarship Program for eligible dependents of Smithfield employees so that it includes historically Black colleges and universities; and,
  • A supply-chain initiative in which the company has committed to increasing its production-facility spend with minority-owned businesses by 14% by 2025.

The company has also signed NAM’s Pledge for Action, in which manufacturers commit to 50,000 specific actions to increase diversity and inclusion. 

The last word: “I have seen this company change and evolve in such a wonderful way,” Jones said. “We now have opportunities to elevate and expose our employee base to Smithfield’s leadership—making sure they have a touch point, a way to connect. Our leadership wants to know how they are doing, prevalent challenges and support needed. The change has been so encouraging.”

Policy and Legal

The NAM Outlines Post-Election Priorities

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Though some midterm races remain uncalled, the NAM is preparing the next phase of its competitiveness agenda. Last Thursday, it offered members a breakdown of the election results so far and what they mean for manufacturing policies and priorities in the United States.

The briefing: Hosted by NAM Vice President of Government Relations Jordan Stoick, the conversation provided members with an overview of the NAM’s key issue areas, presented by several of the NAM’s policy experts.

  • Tax: According to NAM Managing Vice President of Tax and Domestic Economic Policy Chris Netram, the NAM is pushing Congress to approve key tax incentives for manufacturers in a year-end package, including the reversal of a harmful change in the treatment of R&D expenses that took effect earlier this year and an extension of 100% bonus depreciation. Beyond the lame-duck session, the NAM will be fighting to make tax reform permanent, he added.
  • Trade: According to NAM Vice President of International Economic Affairs Policy Ken Monahan, the NAM will be advocating reauthorization of the Miscellaneous Tariff Bill. Going forward, priorities will include guarding against the TRIPS waiver at the World Trade Organization (which would harm manufacturers’ intellectual property rights), defusing regulatory and market access challenges in Mexico and promoting a robust market-opening agenda overall.
  • Energy: NAM Vice President of Energy and Resources Policy Rachel Jones said energy security is likely to remain a key focus of policymakers. She highlighted permitting reform as a possible area for bipartisan progress and noted that implementation of new climate incentives and programs will likely come with heightened oversight from the new Congress next year.
  • Infrastructure: NAM Vice President of Infrastructure, Innovation and Human Resources Policy Robyn Boerstling noted that supply chain challenges are the most difficult issue facing manufacturers at the moment. She also provided an update on rail negotiations, addressed the National Labor Relations Board’s robust pro-labor agenda and spoke out in favor of the NAM’s commonsense immigration approach, among other issues.

The outlook: “The good news is that regardless of the outcome, the NAM remains uniquely positioned to continue to effectively advocate on your behalf with the Biden administration and with both parties, whoever’s in control on Capitol Hill,” said Stoick.

  • “We’ve worked successfully with the administration and the current Congress over the past two years to achieve important policy wins on things like infrastructure and the CHIPS semiconductor and competition bill. And we’ve been successful at pushing back on harmful policies and overreach, including stopping what should be considered some of the worst parts of the tax increases that were proposed over the past two years.”
Business Operations

“Cybersecurity Finds You”: An Interview with Rockwell Automation’s CISO

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When asked how she got into cybersecurity, Nicole Darden Ford replies “cybersecurity kind of finds you.” The new chief information security officer at Rockwell Automation began her career in the military, where she first got into cybersecurity, then created a cybersecurity program for the U.S. Department of Agriculture before taking several leadership roles in the private sector.

Today, her advice for companies is surprisingly similar: cyberattacks will find you. As she puts it, “It’s not if, it’s when. And it’s not one time, it’s several.”

So how should manufacturers prepare for these threats? We spoke to Darden Ford recently about her recommendations, as well as Rockwell’s efforts to safeguard its own supply chain and provide services to other companies.

The current situation: “Manufacturers account for 65% of industrial ransomware last year. We’ve seen an unprecedented number of attacks, and we’ve seen attackers focus on OT,” Darden Ford says. She predicts the attacks on OT will only escalate.

  • Meanwhile, many manufacturers have a clear strategy for IT, but they have not given as much thought to protecting their operational technology. Yet, as machines get more connected, their operations may become more vulnerable—especially as companies try to integrate legacy systems that weren’t “meant to be connected or patched.”
  • In addition, “because we are so connected, there are third-party risks,” Darden Ford says. Small manufacturers may be more inviting targets for hackers than they realize, since their systems could provide a back door into the networks of their larger clients.
  • On the plus side, manufacturers are getting smarter in building their defenses, she says. And that’s where Rockwell comes in.

Rockwell’s role: Rockwell aspires to become a “trusted advisor” to companies seeking cyber defenses, says Darden Ford. It already manufactured OT, so moving into cybersecurity for such equipment was a natural next step.

  • Its partnerships with other firms, including Dragos, CrowdStrike, Cisco and others, allows Rockwell to offer bespoke cyber monitoring and other services to its clients.
  • These services include penetration testing, threat detection and response and an OT “SOC”—i.e., a security operations center, which monitors threats to clients’ operations remotely.

How it works: “We have an OT cybersecurity roadmap—it starts with an assessment in your specific OT space, then walks through potential risks,” Darden Ford says. (See the end of this article for her detailed description of this roadmap.)

  • The process includes building an “asset inventory, as you can’t protect what you don’t know.”
  • “Then we talk about ways you can reduce your attack surface,” Darden Ford continues. “This is about segmentation. We help organizations divide their network into different domains. If you have ransomware or malware that propagates very quickly, then you have the opportunity to quarantine it.”
  • In addition, the roadmap helps companies decide which tools and resources to use. For OT, you need to use very passive systems that don’t interfere with “getting the product out the door,” Darden Ford says.

After this process is complete, Rockwell’s SOC helps clients stay safe and hone their responses to real attacks.

  • The SOC keeps eyes on a company’s operations remotely, notifies it of breaches within the plant network and helps it decide which threats to tackle. As Darden Ford says, the SOC stands in for the teams that companies would otherwise have to hire themselves.

On-site resources: Manufacturers can tap their existing staff to work on cyber defenses, including with offsite monitors. Darden Ford recommends drafting “the plant engineering team, along with the IT team,” who would have the knowledge and resources required.

A community effort: Large manufacturers should help educate small manufacturers on cyber issues, says Darden Ford.

  • “We have a lot of suppliers, so to mitigate third-party risk, we provide more awareness about OT and advice about upping their cyber hygiene. We work closely with suppliers and do a lot of knowledge sharing,” she says.

Collaboration at the top: In addition, it’s also beneficial for CISOs and manufacturing leaders to consult their peers in what Darden Ford calls “mastermind sessions.”

  • These conversations have provided her with “a lot of insights and data,” she says. She gets indispensable input on “strategies, frameworks, journeys and roadmaps,” as companies try to find their way through this cyber landscape together.

The bottom line: When asked what she says to companies that doubt the need for cyber protections, Darden Ford has a simple answer: “You wouldn’t drive your car without insurance—that’s what this is.”

  • “What used to be optional is becoming mandatory,” she adds. “For small or midsize companies, you are still going to have to report” back to your large customers, many of whom require stringent protections of their suppliers. Those requirements will only get “more and more rigorous over time,” she warns.
  • In other words, however you choose to do it, “you need a plan.”

 

The Roadmap

Darden Ford supplied us with her account of Rockwell’s cyber roadmap for its own suppliers, below. “The playbook aligns with the NIST framework, showing you step-by-step how to audit your current security state, identify gaps and take a proactive approach to mitigate risk,” she says. Here is her account of the key steps.

Step #1: Discover 

  • Know where you stand. Conduct a security and risk assessment—log all issues and review progress against findings.
  • You can’t protect what you can’t see. You must gain a full understanding of what network assets you have on your plant floor and their current state. Start by conducting extensive network discovery and asset inventory.

 Step #2: Remediate 

  • Work with stakeholders to prioritize assets and organizational risk levels. Take the necessary steps to eliminate, upgrade or replace unneeded, unused or unsupported OT applications and infrastructure. This will look different for every organization based on what you discover in Step #1.

 Step #3: Isolate 

  • Establish a perimeter by physically and logically segmenting your networks. Put up a firewall and establish internal and external cybersecurity policies to protect your OT assets. Set up an on-premises industrial data center to encapsulate critical applications inside the protected OT network.
  • Secure endpoints with security software on plant floor assets.
  • Enable third-party remote access. Third parties need access, but you must control the access and maintain visibility into what they’re doing in your network by enabling OT access controls. 

Step #4: Monitor and Respond 

  • Now that you have a solid foundation in place, the next step is to implement OT network monitoring to provide real-time OT cybersecurity, including malicious event/asset risk alerting, network diagnostics, AI learning and KPI dashboarding. The data only works for you if you are continuously viewing and reacting to it.
  • Establish an OT SOC for 24/7 real-time alert monitoring​, acknowledgement and triage​. Cyberattacks aren’t limited to 9–5.
  • Create an integrated IT/OT cyber event response team. Define event response and isolation protocols. IT/OT must have equal involvement and buy-in for these protocols to be successful. Execute tabletop exercises to simulate attacks and outcomes.
Workforce

Caterpillar Foundation Helps Veterans Find Manufacturing Careers

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On Veterans Day, we honor the service members who safeguard our country, many of whom will go on to contribute their skills and experiences to civilian industries. Manufacturing is one beneficiary, with many veterans finding that the high-tech, mission-focused industry is an excellent home for their talents.

But how do transitioning service members and veterans find their new career paths? The Caterpillar Foundation is helping America’s heroes become tomorrow’s manufacturing leaders through its support of the Manufacturing Institute’s Heroes MAKE America initiative.

HMA provides integrated certification and career-readiness training in partnership with local community colleges to prepare transitioning service members, veterans, National Guard members, reservists and military spouses for rewarding careers in the manufacturing and supply chain industries.

Virtual training: The Caterpillar Foundation’s support began in 2021 and has helped HMA develop and launch its first 100% virtual training offering in partnership with Texas State Technical College—an exciting option for individuals across the country who might not be able to attend an in-person course.

  • The program uses innovative solutions like virtual reality technology, provided by Transfr VR, in order to add a “hands-on” aspect to the students’ training for their Production Technician and OSHA 10 certifications.
  • “Heroes MAKE America was great,” said Benjamin Novak, a graduate of Heroes MAKE America’s virtual training program. “The virtual self-paced program allowed me to balance class, transitioning and family life. Getting an opportunity to connect and speak with companies directly was a huge opportunity as well.”

New programs: Additionally, thanks to the foundation’s grant, Heroes MAKE America launched two new in-person training paths: a Mechatronics training program at Fort Hood, Texas, also in partnership with Texas State Technical College, and a Certified Logistics Technician training program at Fort Stewart/Hunter Army Airfield, Georgia, in partnership with Savannah Technical College.

  • Together, the three new training offerings (the two mentioned above and the virtual option) have graduated 133 participants as of November 2022, with another 40 participants expected to graduate in December.
  • “Heroes MAKE America is a great program that wants to see veterans succeed,” said Anna Rabago, a graduate of the Mechatronics training at Fort Hood, Texas. “They helped mold me into a great candidate for manufacturing while earning seven manufacturing certifications. The instructors are subject-matter experts in their field and are willing to work early or late evenings to benefit the soldiers.”

An impressive year: The HMA program is on track to graduate 303 members of the military community across all 6 training sites in 2022, bringing the total number of graduates since the 2018 inception of HMA to 957. The training sites include Fort Hood, Texas; Fort Stewart/Hunter Army Airfield, Georgia; Fort Riley, Kansas; Fort Campbell, Kentucky; Fort Bragg, North Carolina; and the 100% virtual option.

The last word: “HMA provided me with all the tools that I needed to thrive as a civilian,” said Tillman Harris, a graduate of the Production Technician training at Fort Bragg, North Carolina. “They provided industry training, résumé assistance, interview prep and much more. Trust in yourself and have confidence in everything you do. HMA is a program that cares about us and wants us to succeed.”

Learn more: Find out more about Heroes MAKE America here.

Workforce

Cornerstone Building Brands Creates a Diverse, Inclusive Workplace

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To Carol Enneking, creating a diverse and inclusive workplace is less of a race to a finish line than an ongoing expedition that never really ends.

A journey: “Realizing a workplace culture where DE&I is not just prioritized but celebrated was a critical aspiration,” said Enneking, Cornerstone Building Brands’ vice president of talent management, learning and diversity. “It’s a journey to get there, but not a destination where you will ever arrive to stay. You expect your workplace to evolve as highly diverse and inclusive, but you can always do more,” she said.

Taking action: Cornerstone Building Brands, a leading manufacturer of exterior commercial and residential building products, has been taking decisive actions to increase diversity and inclusion since the company’s inception in 2018. Extra focus has been given to its DE&I strategy since 2020, shortly after the murder of George Floyd, when the company began activating its DE&I commitment with employees.

  • “I spent a great deal of time on this in 2020,” Enneking said. “We had a group of executives that mobilized to provide a [company] response. It was a bit of a new frontier for us, especially as a new company, deciding to speak up and send a message about this. We worked hard to set the right tone.”
  • It also became clear that a more focused DE&I approach would help the company in these situations and in the day-to-day creation of an inclusive culture.
  • Now, the business has a DE&I team at the ready to drive their strategy forward: its DE&I Council, which meets monthly and focuses on strategic alignment; communications; coaching and training; and metrics and governance.

More diversity in management: Cornerstone Building Brands aspires to build a more diverse and inclusive organization that reflects the diversity of the communities where it operates. It is also focused on increasing the number of diverse employees in Cornerstone Building Brands’ management teams.

  • “We have a very diverse frontline population,” Enneking said. “It’s close to 50% frontline employees of color and about 28% women, but we see those numbers decrease in management. The challenge is to bring that same representation into the management.”
  • To engage employees in creating an inclusive culture, the DE&I Council disseminated a survey that led to the creation of four distinct employee resource groups: Women!, Patriots, Pride and Unity. All meet regularly to learn together, plan events, address specific employee concerns and foster mentoring opportunities.
  • Another way forward has been the company’s 2021 signing of the NAM’s Pledge for Action, in which “manufacturers commit to taking 50,000 tangible actions to increase equity and parity for underrepresented communities, creating 300,000 pathways to job opportunities for Black people and all people of color.” In the first year after signing this pledge, Cornerstone Building Brands took 44 tangible actions toward achieving its commitment to the pledge and its broader DE&I goals.

How far they’ve come: All of Cornerstone Building Brands job descriptions now contain a DE&I statement that highlights its commitment, and the company recently published its first environmental, social and governance report, which included DE&I initiative details.

  • Cornerstone Building Brands has worked to ensure that its “recruitment processes are bringing in diverse candidates” and that there is pay-scale parity, particularly in direct manufacturing roles, Enneking said.
  • The company also has a reporting mechanism in place for all employees to make leadership aware of potential inclusivity violations or other issues.
  • In addition, the manufacturer has instituted manager and employee DE&I learning modules, which comprise unconscious bias and inclusive leadership training led by professional facilitators, as well as accountability measures.

Making an impact: The work has started to pay off, said Enneking, who added that “there has been an increase” in diverse representation among Cornerstone Building Brands’ management. President and CEO Rose Lee, the first Korean American woman to head a Fortune 1000 company, was recently named a Pinnacle Award recipient by the Asian American Business Development Center. The company also recently hired two new female business unit presidents.

  • The company has also broadened its search parameters in recruiting, Enneking said. “Diversity has many facets, many of which are not visible. We value diversity of thought and perspectives and are more willing to bring in people who may not have been in [our industry] all their lives but who can learn quickly and have transferable skills. In fact, those hires usually bring us a lot of ideas that we didn’t have. Sometimes you need to look outside to get those.”
Policy and Legal

What’s Up With the Rail Negotiations?

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With the possibility of a national rail strike looming in the near future, the NAM is working with association members, congressional leadership and the White House to urge all parties toward a final resolution. On Monday, the NAM held a members-only briefing with remarks from senior leadership of the Association of American Railroads and personnel involved in the ongoing collective bargaining process.

  • NAM members in attendance had the opportunity to hear about the state of play directly from representatives of the rail industry, and the message was consistent with the NAM’s own: that the situation is critical, and that a lack of an agreement would be devastating for railroads, for manufacturers and for the wider U.S. economy.

The background: For nearly three years, railroads and their unions have been discussing the outlines of a new long-term contract.

  • Two months ago, U.S. Class I railroads and the various labor unions composing the rail workforce agreed to a deal brokered in part through efforts led by the Biden administration that temporarily averted a strike, pending ratification votes by each union’s rank-and-file membership.
  • Although more than half of the unions involved have now ratified the agreement, at least two unions have voted to reject it—raising the likelihood of a strike.

The situation: Seven unions have ratified the proposed agreement, two have rejected the deal, and three have yet to vote. As it stands now, the hard deadline for unanimous agreement by all unions is 12:01 a.m. on Saturday, Nov. 19, at which point a strike could be called.

The outlook: During the NAM’s event, the speakers acknowledged that Class I freight rail companies will have to begin making decisions about possible disruptions and metering rail service as soon as this weekend.

  • Leading up to the Nov. 19 deadline, manufacturers may receive notifications that some products cannot be moved on certain rail lines.

Next steps: It will be critical for stakeholders to press Congress and the administration either to work with unions to extend the Nov. 19 deadline, or to intervene with legislation that puts in place an agreement like the one recommended in September by the Presidential Emergency Board.

What we’re saying: “Manufacturers are urging congressional leaders to be prepared to bring stability and predictability to the economy if a rail strike and shutdown occurs,” NAM President and CEO Jay Timmons said today.

  • “We already face economic turmoil with rising costs, product shortages and high inflation. Any nationwide rail strike or shutdown will cause even more economic pain. Manufacturers urge all parties to work rapidly—for the good of the country—to conclude this collective bargaining process.”
Policy and Legal

NAM Guides Treasury, IRS on Climate Incentives

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The Treasury Department and the IRS can help the U.S. meet its climate goals—if both agencies “can leverage private sector ingenuity, expertise and capital” both transparently and inclusively, the NAM told Treasury late last week.

What’s going on: This year’s reconciliation legislation contains advanced manufacturing, clean energy and climate incentives to invest $369 billion in actions that will address climate change, including $270 billion via direct tax incentives.

  • These measures can be successful if “Treasury and the IRS quickly address the critical details of how each of these incentives will work in tandem with clean energy and advanced manufacturing projects that have already begun and those that have yet to be conceived,” NAM Vice President of Energy and Resources Policy Rachel Jones told the agencies.
  • Treasury must also work to ensure the incentives are used “in a way that quickly brings new private capital to bear” while keeping projects on schedule.

Manufacturers’ input needed: Engagement with manufacturers should help the agencies develop their rulemaking, Jones said.

  • “To meet our shared goals, including achieving meaningful emissions reductions, Treasury and the IRS should maintain an open line of communication with the NAM’s members of all sizes and sectors,” she said.
  • “Without thoughtful engagement with manufacturers, the clean energy and climate incentives could have the opposite of intended results, and in some cases projects could stall, communities will face further disappointment, energy security will be jeopardized and climate goals will go unmet.”

What’s not needed: “It would be shortsighted to implement guidance and rules that exclude or indirectly penalize manufacturers that are already making significant capital investments in clean energy projects,” Jones said.

Teamwork—and plain language: The NAM also urged Treasury and the IRS to make clear their definitions and qualifications when it comes to clean energy and climate tax credits.

  • Jones recommended cooperation across the “entire federal family” to combat climate change—from the Nuclear Regulatory Commission to the Department of Defense to the Federal Energy Regulatory Commission and many more.

NAM about town … The NAM participated in a Treasury roundtable yesterday where it shared the specific concerns and constructive input from manufacturers more directly.

Business Operations

How Managers Can Produce Top-Notch R&D

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As innovation in manufacturing continues at breakneck speed, research and development is more important than ever—but it requires outstanding managers to make it all happen.

So how do these managers get the education and insights they need? The Innovation Research Interchange, a network of cross-industry innovators that the NAM combined with earlier this year, has an answer: an executive management course called Shaping Innovation Leaders.

The gist: Co-hosted by the Kellogg School of Management at Northwestern University, the course provides a forum for strategic thinking, education and networking for technology leaders from around the world.

  • In 2023, it will take place on May 13–19 on the Northwestern campus in Evanston, Illinois.

The details: The goal of this seven-day program is to develop midlevel managers into leaders for their companies, by covering topics including:

  • Evaluating financial results;
  • Segmentation, targeting and positioning;
  • Growing and defending your brand;
  • Legal and strategic investments;
  • Building a better network; and
  • Negotiating skills and strategic alliances;

Who’s involved: To get a sense of this event’s caliber, look no further than the attendees from the 2022 course.

  • They hailed from a wide range of companies, including manufacturers such as Mars, Procter & Gamble, John Deere, Hershey, NatureWorks, Air Liquide, Kimberly-Clark Corporation, Sherwin-Williams and many, many more.

The reviews are in: Participants in the 2022 course were enthusiastic about what they learned and experienced.

  • “[I’m] really super impressed with the program, soup to nuts,” said John Deere Manager for Global Strategic Communications & Culture Jacqueline Kiple. “One of my favorite aspects of the program was really getting a chance to think about our business a little bit differently … to take a step back and think about the higher-level impacts that affect decision-making in our respective organizations.”
  • “What I really enjoyed about this course was first and foremost the esteemed professors. … [The course] gives you a really big view of all the information you need to really understand business and understand the decisions that are getting made,” said Sherwin-Williams Associate R&D Director Tony Rook. “It gives you that top-level view of how you add value to [your] organization.”

Get involved: Registration is now open for the 2023 course. You can find additional information and register here.

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