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Business Operations

“A Catalyst for Change”: Nucor Is All in on Sustainability

Nucor is one of the cleanest steel companies in the world. Recently, the producer of low embodied carbon steel and steel products committed to further reducing emissions and increasing its global sustainability efforts by joining the United Nations’ 24/7 Carbon-free Energy Compact.

But that’s just the latest in a long list of sustainability initiatives from the company.

Lofty goals: Nucor has committed to a 35% reduction of its steel-mill greenhouse-gas intensity by 2030—no easy feat in the sector, said Nucor Executive Vice President of Business Services and General Counsel Greg Murphy.

  • “The levers that companies in this industry can pull depends on the geographic location you’re in, your access to materials and even the geology of the region in which you operate,” Murphy said. “We’re making steel out of recycled content and the fact that we start out with some of the lowest industry greenhouse-gas emissions levels on the planet gives us an advantage.”
  • Much of this advantage comes from the company’s use of electric arc furnaces to recycle scrap metal into new steel products, a process Nucor pioneered in the U.S.
  • However, EAFs consume large amounts of electricity, making cleaner energy sources an important part of the company’s efforts to reduce emissions. Approximately 40% of the electricity Nucor uses now comes from clean or renewable sources, according to Murphy.

Green upgrades: Nucor is looking at all corners of its operations for ways to reduce and improve.

  • The company is building a new rebar “micromill” (its third in the past five years) to make rebar for infrastructure and construction projects. Micromills eliminate the need for reheat furnaces, further reducing Nucor’s use of natural gas.
  • Nucor is also considering replacing charge and injection carbon—two solid-carbon sources used in its furnaces—“with recycled and wood components, which would significantly reduce emissions,” Murphy said.
  • In addition, the steel manufacturer is investing in ways to extract nonferrous materials, such as copper, from obsolete scrap. More reuse means a smaller carbon footprint, according to Murphy.
  • Finally, the company is exploring the use of carbon capture and sequestration at one of its facilities and is investing in alternative iron-making technologies that would enable it to produce carbon-free, high-quality iron.

Bringing in nuclear: Nucor takes an all-of-the-above approach to energy, which is what will allow it to fulfill the goals of the U.N. compact, according to Murphy.

  • “A fundamental premise of [the compact] is that access to affordable, clean energy is essential to the world’s sustainable future,” Murphy said. “That’s one of the things that really attracted us to it—this emphasis on not just providing renewable energy, but providing affordable, reliable and clean energy. That’s not only solar and wind, but also geothermal, hydroelectric and, critically, nuclear. We think that all of these forms of clean energy have a role to play.”
  • Last year, Nucor invested in NuScale Power, a company developing small modular nuclear reactors. The U.S. Nuclear Regulatory Commission recently approved the design and the first operational reactor is expected by the end of this decade.

The final word: “At the end of the day, the sustainability issue is not going to go away,” Murphy said. “It’s here to stay, and I think companies can either move in this direction kicking and dragging their feet, or they can do it with leadership. The developed world needs to lead the developing world. We need to be a catalyst for change.”

Policy and Legal

NAM Speaks Out Against New EPA Regulations

Manufacturers across the United States have long been leading the way on sustainability. From outpacing international competitors on emission reductions to making investments in clean technologies, the industry has implemented best practices for others to use and blazed a trail for them to follow.

NAM Director of Energy and Resources Policy Chris Morris emphasized manufacturers’ track record during a hearing before the Environmental Protection Agency last week, where he explained to policymakers that their proposed air quality rules would stifle rather than enhance manufacturers’ efforts. Here’s what he had to say.

A record of leadership: “Our industry has championed environmental stewardship at every turn, and our members have invested heavily in new processes and technologies that have made manufacturing in the U.S. cleaner and more sustainable than ever,” said Morris.

  • “This innovation in the manufacturing sector has played a key role in the reduction of air pollution we have seen over the last 50 years.”

Manufacturers’ impact: “Across the board, levels of major pollutants have declined dramatically, and we are outpacing our global competitors in air quality improvements,” said Morris.

  • “According to the EPA, the U.S. has reduced six common NAAQS pollutants, including PM2.5, by 78% between 1970 and 2020.”
  • “Additionally, EPA data shows that PM2.5 air quality has improved 44% since 2000. Manufacturers are committed to ensuring that progress continues.”

The challenge: New proposed regulations from the EPA would have a number of negative effects, Morris noted.

  • Tighter air quality standards would make permitting more difficult, raise compliance costs and make it harder for manufacturers in the United States to compete with companies abroad—especially at a time when manufacturers are concerned about the country’s economic outlook.

The path forward: Morris urged policymakers to ensure that current regulations are fully implemented before they propose new ones, and to work together with innovative manufacturers on smart solutions.

  • “The U.S. has some of the best environmental standards in the world, and American manufacturers are consistently reducing emissions, conserving critical resources, protecting biodiversity, limiting waste and providing safe products and solutions so others in our country can do the same,” said Morris.
  • “But in order to maintain our environmental leadership, we need better regulations.”

The last word: “In our view, environmental protection and a thriving economy are not mutually exclusive,” said Morris. “We can have both—but it requires working together toward a constructive solution. Manufacturers are committed to smart, strong environmental safeguards and improving the lives of all Americans so that no one—and no community—is left behind.”


Transcript: Ukrainian President Volodymyr Zelenskyy addresses the American business community

Official transcript of Ukrainian President Volodymyr Zelenskyy’s address to the American business community at the National Association of Manufacturers Board Meeting on Tuesday, Feb 28, in Boca Raton, Florida.

Jay Timmons, President and CEO, National Association of Manufacturers:

For more than a year now, the courage and resolve of President Volodymyr Zelenskyy of Ukraine has inspired and rallied the free world to support the cause of the Ukrainian people.

He has reminded us all that the system that makes our way of life possible cannot be taken for granted. Ukraine’s fight is our fight because this is far more than a war between two countries.

It is a battle between freedom and tyranny. So America, and the American business community, stands with Ukraine today, tomorrow, through the end of the war and as Ukrainians rebuild their country after Russia is defeated.

And today, the NAM Board of Directors is honored to welcome President Zelenskyy to speak with us live via video link.

As he shares this address—to manufacturers and to the American business community—we reaffirm this Board’s resolve from a year ago, “denouncing Russia’s invasion.”

We reaffirm our support for the “sanctions implemented against Russia” and for Ukraine’s “fight to preserve freedom and independence.”

And we reaffirm our “commitment … to safeguarding democracy and democratic institutions not only here at home, but also abroad.”

Ladies and gentlemen, his Excellency, President Volodymyr Zelenskyy of Ukraine. Mr. President, the floor is yours.

Volodymyr Zelenskyy, President of Ukraine:

Thank you so much!

Thank you, Mr. President [Timmons], thanks everybody!

Thank you for your kind words and support!

Ladies and Gentlemen!

I greet you from free Ukraine. Thank you for your attention and support of our struggle for freedom and independence.

I’m sure that none of you doubt that we will win despite. Ukraine is indeed the place where democracy will defeat tyranny. The united democracy — Ukrainian, American, all our allies and partners.

But what will our joint victory mean? This is not a purely ideological battle.

Yes, we will prove that democracy is stronger than tyranny.

When Russia loses, we will prove that terrorist states cannot overcome the power of a united democratic world.

And when we restore our territorial integrity, we will also restore the full power of international law, which is equally important for everyone in the world.

However, the battle is for much more, and there will be more winners in it.

The human nature is yet another battlefield where the confrontation continues right now.

In the world, will that creativity of the human mind be more successful in solving good or evil?

What will give more prospects, hard work or complicity in making money from the aggression?

This confrontation is going on right now. And that is why right now we are calling on all businesses to come to Ukraine and to leave the Russian market.

It is obvious that post-hostilities, reconstruction of Ukraine will give an extraordinary moral advantage to all businesses that will be in.

And it is also obvious that every business that is now helping the Russian tyranny in any way will not be able to avoid problems and their reputation crisis.

The American business has every opportunity to take on leadership positions both in the reconstruction of the Ukrainian economy and infrastructure, and in demonstrating to the world that human nature should serve worthy goals and that it produces, and will always produce, the best result.

The Ukrainian life will inevitably get a new start after this war.

We need to rebuild the energy system of Ukraine based on new security principles.

It is in Ukraine that we will combine green transformation with security transformation and create an example for the same transformation in other countries, such as to protect a specific country from any aggression against the energy industry.

And such that protects all humanity under that framework of a smart climate policy. For example, on the virtual power plants market, 7 out of 15 key companies are American.

This is the experience that Ukraine needs.

Ukraine is an opportunity that will give a historic impulse to the entire industry — solar power plants, wind power plants, small hydroelectric power plants, biomass burning plants.

Our modernized and centralized energy system is a project worth hundreds of billions of dollars and with the potential of replication for other nations.

We need to restore hundreds of thousands of industry, infrastructure and social facilities, residential buildings, whole cities’ industries.

This is a colossal task but realistic. Ukraine is interested in projects to create a full production cycle of titanium, lithium, aluminum and ferrous metals.

Ukrainian oil refineries, which were destroyed by Russia missile strikes, and the capacious domestic market provide the opportunity to restore this industry on a modern technological basis.

Machine building in Ukraine, agricultural processing in Ukraine, weapons production in Ukraine, including modern drones–IT in Ukraine, infrastructure and transport in Ukraine, a localization of business in Ukraine, convenient logistics with other markets from Ukraine, human capital of Ukraine.

All these are not just investment opportunities, not just industries and not just growth. This is a wide space for victories. Your victories, American business.

And I urge you to prepare for these victories now, to come to Ukraine now so that by the time we restore peace, your hard work has already yielded results.

And I believe that it will be soon. Thank you for your attention. I invite all of you to Ukraine. Glory to our brave soldiers. Glory to Ukraine.

Jay Timmons, President and CEO, National Association of Manufacturers:

Mr. President, your leadership is not only inspiring your people in face of the unspeakable, but also inspiring us. It is inspiring the world.

Manufacturers in America will continue to stand with Ukraine, and we will be there after Russia is defeated so that we can help you and your people build a stronger nation forever rooted in our shared democratic values.

And, I want the Board to know that at President Zelenskyy’s request, we will be sharing the video of his remarks with our members so that they too can hear his powerful words.


Policy and Legal

“Competing to Win” Comes to Louisiana

Few things are more quintessentially Louisianan than seafood and Tabasco sauce, and on the third stop of the NAM’s Competing to Win Tour on Thursday, NAM President and CEO Jay Timmons got to spend some time with both.

The first stop: Laitram LLC, the Harahan, Louisiana–based manufacturing leader in seafood and nuts processing equipment, played host to Timmons, Louisiana Rep. Garret Graves (recently tapped by House Speaker Kevin McCarthy as Elected Leadership Committee chair) and Louisiana Association of Business and Industry President and CEO Stephen Waguespack.

  • Laitram President and CEO Jay Lapeyre (who also serves as chairman of the Cato Institute Board of Directors) and his team led the group through a facility tour of Intralox, a subsidiary of Laitram specializing in conveyer belts and equipment that improve productivity, food safety and reliability in high-speed package sorting.
  • Timmons, Rep. Graves and Waguespack spoke with line employees across the facility, and Timmons was impressed by the company’s successes in employee retention: “Nearly everyone I met had been there a decade or more … One team member recently marked 46 years with the company,” he noted afterward.

Talking policy: Timmons moderated a roundtable discussion on manufacturing policy opportunities and challenges with Laitram’s senior staff, Rep. Graves and Waguespack after the tour.

  • Lapeyre and his team expressed concerns about pass-through tax rates, which impact Laitram given that it is an S-Corp. They also raised alarms about the recent phaseout of pro-growth tax deductions for research and development and bonus depreciation.
  • Trade emerged as a top priority for Laitram and its global enterprise, and Lapeyre also shared his perspective on the need for more regulatory certainty, particularly in the light of a potential new rule from the Federal Trade Commission limiting the use of noncompete agreements.
  • Meanwhile, Rep. Graves emphasized the continued importance of protecting tax reform and pointed to ongoing efforts in Congress to advance permitting reform.

The second stop: The NAM team then headed to Avery Island, about two hours outside of New Orleans, where they visited McIlhenny Company, the maker of the iconic red-and-green-bottled Tabasco pepper sauce.

  • Timmons was given a full tour of the 155-year-old company’s facilities, which included stops at the manufacturer’s barrel-aging warehouse, blending facility, bottling and packing plant and its onsite restaurant.
  • McIlhenny Chief Operating Officer Michael Terrell—a fourth-generation employee of the company—and Agricultural Manager Christian Brown—a sixth-generation employee—guided the tour around the facility, which showed off some of the manufacturer’s recent bottling-plant innovations. These included label readers, case packers and a packet line, as well as several sustainability initiatives.

The last word: As Timmons said at the outset of the competitiveness tour, “The story of manufacturing in America is one of resilience and defying the odds. All manufacturers ask is that in Washington, when it comes to policy, don’t stack those odds against us.”

Policy and Legal

Timmons to Congress: Permitting Reform Urgently Needed

NAM President and CEO Jay Timmons has been making the most of his time on the road during the Competing to Win Tour, delivering a strong message to congressional leaders about top manufacturing priorities. He did so again yesterday on permitting reform with congressional leaders in Washington:

  • “Some of the biggest obstacles preventing manufacturers—and therefore the entire American economy—from reaching our full potential are the permitting delays, red tape and complicated bureaucracy that have plagued us for decades,” he told the leadership of several House committees.

He went on to cite a number of different areas in which permitting reform is desperately needed, including . . .

Energy: Permitting reform is crucial to almost every sector of energy manufacturing, from oil and gas all the way to nuclear and clean energy technologies.

  • “For example,” Timmons noted, “the siting of and infrastructure for hydrogen power generation and transportation and for advanced, small modular and micro-nuclear reactors have progressed far too slowly.”
  • “Manufacturers depend on access to reliable and affordable energy to expand, which is why we support reforms that would foster transparent, streamlined and timely federal regulatory processes for the siting, permitting and licensing of energy delivery infrastructure of all types,” he continued.

Transportation: Manufacturers also need railroads, highways, airports and ports to run their operations and get their products out the door.

  • “Yet obtaining permit approvals for these projects often takes years, especially when reviews are piecemeal and duplicative,” Timmons pointed out. “[M]any companies are waiting on the sidelines because transportation infrastructure construction moves too slowly—or not at all.”
  • “To ensure the broad and beneficial impact of [the bipartisan Infrastructure Investment and Jobs Act of 2021] … it is critical to clear permit backlogs and ease processing timelines,” he said.

Resource development: Manufacturers prioritize sustainability, Timmons noted, but “restricting access to America’s abundant natural resources hinders our ability to strengthen domestic supply chains.”

  • “The inconsistent administration of critical mineral policies, for example, has limited our ability to use a wide range of resources that lie on and beneath federal lands—resources that are critical to producing everything from cars to medical devices,” he added.
  • “Streamlining resource permitting and leasing policies will help stabilize manufacturing supply chains, control costs for consumers, reduce our reliance on foreign countries and create jobs in the U.S.”

Environmental standards: Manufacturers have worked steadily to improve U.S. air quality, helping to “lead our country to the cleanest air in the modern world,” said Timmons.

  • “Unfortunately, when federal agencies continually revise standards before current standards are met and before states have implemented prior mandates, they create unpredictability”—which may mean that new manufacturing facilities get built in other countries instead, where they don’t face as rigorous standards.
  • However, if Congress makes regulations more predictable and consolidates review processes, the U.S. “can continue to build on its strong record of environmental stewardship by boosting domestic manufacturing, which is environmentally cleaner than international competitors,” Timmons concluded.

Congressional intent: Congress should make sure that permitting reform isn’t just passed, but also implemented as easily as possible, Timmons advocated.

  • It should conform to “on recent and future statutory streamlining efforts such as One Federal Decision,” while making sure federal agencies don’t duplicate each other’s efforts and waste time.

The last word: “Permitting affects every aspect of our lives—from our economic security to our national security,” said Timmons. “[I]f we seize this opportunity to lead, there is no limit to what manufacturers in the United States can accomplish—for the good of our people and for the good of the world.”


Competing to Win Tour Visits INCOG BioPharma

There’s no better way to see the power of manufacturing than by visiting a facility—which is why the NAM brought its Competing to Win Tour to INCOG BioPharma Services’ new state-of-the-art facility in Fishers, Indiana, yesterday.

A delegation including NAM President and CEO Jay Timmons, Sen. Todd Young (R-IN), Fishers Mayor Scott Fadness and INCOG BioPharma Services President and CEO Cory Lewis toured the company’s brand-new facility and discussed the importance of advanced manufacturing.

The tour: The NAM’s Competing to Win Tour is a nationwide event that highlights critical issues facing manufacturers in the United States.

  • Designed to raise awareness around manufacturing opportunities—and foster conversation between local manufacturers, employees, media, community leaders and elected officials—the Competing to Win Tour kicked off this year with the NAM State of Manufacturing Address from Timmons at Husco’s headquarters in Waukesha, Wisconsin.

The host: INCOG knows firsthand about the challenges and opportunities in modern manufacturing. Founded in 2020, the company is a contract development and manufacturing organization that provides a wide range of pharmaceutical services, including drug development, clinical trial manufacturing and commercial manufacturing.

  • In their new cutting-edge facility, which just opened last May, the company is creating sterile injectables and assembling devices to help their customers bring new drug products to market.

The panel: As part of the event, Timmons moderated a conversation between Sen. Young, Mayor Fadness and Lewis on the challenging environment facing manufacturers and the urgent need for solutions on issues like permitting reform, workforce development and tax policy.

  • Young highlighted crucial investment in semiconductor manufacturing, saying, “We’ve just passed what is really a historic piece of legislation called the CHIPS and Science Act that will invest in emerging technologies that will define the 21st-century economy.”
  • Meanwhile, Lewis discussed the importance of R&D to his company, in the context of a larger discussion about the R&D tax credit. He said, “My perspective is R&D is critical … there’s a lot of activity that happens on the R&D side, a lot of momentum that’s required to get that through.”
  • Mayor Fadness talked about the importance of introducing students to manufacturing early on, saying, “I think there are opportunities to really tie [in] those connections [to manufacturing] from K through 12. I think we need to start younger and tie them back to this facilities and leaders like Cory at INCOG.”
Policy and Legal

Timmons Gives NAM State of Manufacturing Address

Manufacturing has a leading role in the U.S. economy—but there is still a great deal more to do. That was the message at this year’s NAM State of Manufacturing Address from NAM President and CEO Jay Timmons.

Timmons spoke to a gathering of manufacturing team members and the media at Husco in Waukesha, Wisconsin. In his remarks, he laid out the NAM’s view of where the industry is and where it’s going.

The program: The event began with a message from Kurt Bauer, president and CEO of Wisconsin Manufacturers & Commerce, followed by an introduction from NAM board member Austin Ramirez, president and CEO of global engineering and manufacturing company Husco.

  • “Wisconsin manufacturers contribute to the vitality of our state through their innovation, productivity and commitment to customer satisfaction,” said Bauer. “While we face many challenges, we are also in the enviable position of controlling our destiny—as long as we work together to create a shared vision of prosperity and an action plan to achieve it.”
  • “We are here to shine a light on the amazing, life-changing work that manufacturers do every day,” said Ramirez. “We are the backbone of the American economy, and we are proud of it.”

The state of manufacturing: Timmons spoke about Russia’s invasion of Ukraine, the importance of the manufacturing industry’s support for the Ukrainian people and the larger struggle between freedom and tyranny.

  • “Despite everything happening around us, like the threat of a recession and global conflict, manufacturers are still leading the way forward,” said Timmons.
  • “And although our industry and our country will need to make audacious and sometimes uncomfortable changes to adapt to economic, political and global challenges … I’m confident in reporting that the state of manufacturing in America remains steadfast and resolute.”

Manufacturing solutions: Timmons cited a variety of manufacturing challenges, then detailed the NAM’s plans to fight for manufacturers across the United States.

  • Supporting immigration: “For so many manufacturers in America right now, there are more open jobs than there are people to fill them,” said Timmons. “One of the many ways we fill those jobs and keep our economy moving is welcoming immigrants into our workforce … just like we have in the past to build a stronger, more prosperous America.”
  • Promoting permitting reform: “Permitting reform means making it easier to get permission to build that new road or power plant, or for manufacturers to build new facilities,” said Timmons. “If Washington could just cut through the bureaucracy and streamline processes, like you do in your businesses every single day, we could do more for this country.”
  • Fighting for tax fixes: “The NAM is determined to get Congress to restore incentives for R&D and get our business tax rates and structure back on track to enable us to compete globally,” he said. “And then, let’s lock in competitive rates for small businesses … so that you can plan confidently for the future.”
  • Competing with China: “If we’re going to counter China, then we must hold China accountable for the trade commitments it has already made to the U.S.,” said Timmons. “And we have to forge ambitious, cutting-edge trade agreements with our allies. Other countries aren’t waiting around. So, let’s think big. And let’s be bold.”
  • Pushing back on new EPA rules: “We’re going to tell the EPA that manufacturers are already leading [in cleaning] our air,” said Timmons. “The government shouldn’t enact rules that, however well-intentioned, would make it more difficult to achieve our environmental goals, slow our economic growth and push us closer toward recession.”

The last word: “History shows us that as long as manufacturers lead the way, America and our democracy will remain that beacon of freedom and hope for people around the world,” said Timmons. “Manufacturers have been, and always will be, in word and deed, the arsenal of democracy. And working together, I know we will keep making this a manufacturing decade.”


WATCH: 2023 State of Manufacturing Address

Presented by Jay Timmons, President and CEO of the National Association of Manufacturers, the 2023 State of Manufacturing Address was given from Husco International in Waukesha, Wisconsin. Special remarks were given by Kurt Bauer, President and CEO, Wisconsin Manufacturers & Commerce. Special thanks to Husco President and CEO Austin Ramirez and his team for hosting this year’s address.

Read the official remarks here.

We’re hitting the road. This year’s NAM State of Manufacturing Address officially kicked off the 2023 leg of the NAM’s Competing to Win Tour. The tour will continue to spotlight the industry’s rapid transformation, while also focusing on manufacturing’s well-paying careers, diverse workforce and real-world solutions for the industry’s continued growth.

Upcoming stops: Waukesha and Pewaukee, Wisconsin (Tue, Feb 21); Fishers, Indiana (Wed, Feb 22); Harahan and Avery Island, Louisiana (Thurs, Feb 23)



The Next Step in Building the Manufacturing Workforce

As part of the Creators Wanted campaign, the NAM and the Manufacturing Institute have partnered with FactoryFix, a leading one-stop solution for manufacturing recruitment, to launch Creators Connect.

  • The digital career-resources platform aims to address the skills gap and misperceptions about the manufacturing industry, providing manufacturers with a powerful new tool to help build their workforces.

What it is: The platform, which is housed on and powered by FactoryFix, is free to use. It is the first and only unified platform where users can search and explore job openings, career pathways and job training programs across the entire manufacturing sector.

  • With more than 400,000 listed job openings, Creators Connect builds on the success of its parent initiative, Creators Wanted, the award-winning, national workforce and perception campaign of the NAM and its 501(c)3 workforce development and education partner, the MI.
  • Creators Wanted, which has an email network of more than 1 million students, job seekers and career influencers, aims to recruit 600,000 new manufacturing workers by 2025.
  • It is also working to boost the number of students enrolling in technical and vocational schools or reskilling programs by 25% and to increase the positive perception of the manufacturing industry among parents and career influencers.

Why it’s important: “Addressing the workforce crisis is among the top concerns for manufacturers across the country,” said NAM President and CEO and Manufacturing Institute Board Chair Jay Timmons.

  • “While we cannot fully solve this challenge without immigration reform, manufacturers are determined to lift up more people in the United States with the promise and reward of modern manufacturing careers—and Creators Wanted’s new digital career resources platform is another way that manufacturers are leading with solutions.”

What’s next: The platform will benefit from FactoryFix’s talent network of more than 650,000 manufacturing workers—and the NAM and FactoryFix are confident it will help fill much-needed manufacturing jobs.

  • Said FactoryFix CEO and Founder Patrick O’Rahilly: “As a one-stop recruiting solution for manufacturers to find qualified and engaged candidates, we’re looking forward to increasing our impact in addressing the labor shortage and helping more Americans create their future in modern manufacturing.”

Learn more about how to get the most out of Creators Connect by visiting the FAQ page here. Questions? Contact the Creators Wanted team here.

Policy and Legal

How a Tax Change Will Strangle a Small Manufacturer’s R&D

Marlin Steel Wire Products spent its first 30 years making bagel baskets. When Drew Greenblatt bought the custom wire and metal fabrication company in 1998, he thought it would be making bagel baskets for the next 30 years as well—but soon, international competition changed the math.

“Suddenly, China started manufacturing bagel baskets and shipping them to New York City for cheaper than I could get the steel,” said Greenblatt, Marlin’s president and owner. “But then, we got a phone call from an engineer at Boeing who needed an innovative, customizable basket. And that was the eureka moment.”

The shift: Greenblatt recognized that innovation would help him outcompete foreign companies that could manufacture products more cheaply.

  • “We realized we couldn’t thrive in a commodities market,” said Greenblatt. “We had to come up with novel ways to make a basket so that it would make no financial sense to buy from China or Mexico.”
  • “We wanted to be able to say to buyers, you must buy from the American innovative company, because we’re coming up with such slick ideas that our product blows the competition away.”

The growth: Today, Marlin Steel is nearly 30 times larger than it was when Greenblatt bought it and heavily invested in research and development.

  • “Today, Marlin is 15% degreed mechanical engineers,” said Greenblatt. “We have chemical engineers. We’re coming up with the most innovative racks and systems out there.”
  • “People are showing us their operations and asking us to reverse-engineer solutions that will work for them. And we’re doing it.”

However . . . A recent tax change threatens to throttle the company’s progress. Until about a year ago, businesses could deduct 100% of their R&D costs in the same year they incurred those expenses.

  • But since last year, a tax policy change now requires businesses to spread their R&D deductions out over a period of five years, making it much more expensive to invest in innovation.

The impact: “Our taxes will be $600,000 higher than they should have been this year—we’ll pay four and a half times more on taxes,” said Greenblatt.

  • “What that means is that it makes sense for us not to hire six more engineers. Not to buy three more press brakes [machines for bending metal parts] or hire people to work them. It’s incredibly shortsighted, a horrible policy screwup, and the ripple effects are massive.”

The scope: Greenblatt also emphasizes that the tax change will harm many small businesses.

  • “People tend to focus on the bigger companies and how it will hurt them—and it will hurt them—but it will also hurt the little guy,” said Greenblatt. “And the little guy is the job creator in America.”

The last word: “American innovation—that’s our secret sauce,” said Greenblatt. “That’s how we’re going to grow jobs and pay people well and give good benefits and steady employment without layoffs. That’s how we’re going to beat a recession. We need to have the coolest, most innovative products in the world. For us, innovation is key.”

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