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Workforce

“The Right Thing to Do”: Toyota Provides Overnight Child Care

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For parents who work the night shift, the prospects for high-quality child care are usually dim. Not so for those who work at one of Toyota’s major U.S. manufacturing sites, however.

Toyota North America has been providing onsite, 24-hour-a-day care for employees’ children at its largest global site, in Georgetown, Kentucky, since 1993, and at its Princeton, Indiana, facility since 2003. The company subsidizes care to ensure affordability for all employees.

Not just a retention tool: “I’ve been asked, ‘Is this just a retention tool?’” said Toyota Group Manager for People and Property Services Myriah Sweeney, who oversees the auto manufacturer’s Family Care Services division, which includes child care. “The answer is no. Our employees take care of us, and we take care of them.”

  • This was especially true during the COVID-19 pandemic lockdowns, when nearly one in five working-age adults left the labor force to care for children.
  • Toyota’s care center stayed open and even offered in-person learning “pods” for school-age children.

The Toyota family: Employer-provided child care—particularly of the Toyota type, which is open overnight and on Saturdays and managed by the award-winning Bright Horizons Family Solutions Inc.—is a highly prized benefit.

  • “We hear from families all the time, ‘This is part of the reason I stay here,’” said Sweeney, who counts herself among that contingent. “We actually have some employees now that were kids in our center that we helped raise and are now teachers or are working at Toyota. It creates a sense of family.”
  • Toyota’s child care benefit has “touched approximately 10% of the workforce” over the past five years, Sweeney said.

 How it works: Toyota’s two care facilities, which “are open pretty much anytime Toyota is open,” cater to children as young as six weeks.

  • There are pick-up and drop-off points for local school bus routes, and center employees feed breakfast to early morning arrivals and dinner to overnight and late-stay attendees.
  • Care-center teachers also help with homework and get kids safely on and off buses.

Additional benefits: The vehicle maker’s Family Care Services extend beyond children to include tutoring and pet care company discounts, counseling services and informational help for employees who act as caregivers outside of work.

  • Toyota also gives every team member 15 days a year of “emergency backup care,” a company-subsidized program that allows employees to have vetted, qualified care providers come to their houses to look after elderly relatives or children “when things go haywire—the water main breaks or a babysitter calls in sick,” Sweeney said.

Next up: Toyota plans to expand the child care capacity at its Indiana plant, to the tune of an additional 75 to 80 spots, Sweeney said.

  • The company is also working with architectural firms in Mississippi to design a child care facility for its factory in that state, which is located in an area with few child care centers.

 The last word: Toyota’s interest in providing employees with support goes beyond wanting to maintain its workforce.

  • “We try to encompass everything that anybody would possibly need and help them with that,” Sweeney said. “It’s just the right thing to do.”
Policy and Legal

NAM to Congress: It’s Time to Act on China

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We can ensure that this is the “American century” that brings success to manufacturers and citizens alike—but only through swift action to fix our relationship with China and ensure that our manufacturers can compete on a level playing field—the NAM recently told members of the House of Representatives’ China Accountability Task Force.

What’s going on: To strengthen national security and our global competitiveness, we need a new approach to China, NAM Vice President of International Economic Affairs Ken Monahan told key Republican leaders of the task force.

  • The task force, established by House Republican Leader Kevin McCarthy (R- CA) and run by the lead Republican on the House Committee on Foreign Affairs, Rep. Michael McCaul (R-TX), includes 18 leading Republican members focused on tackling broad issues related to China.

The recommendations: According to Monahan, the U.S. approach should include:

  • A “national strategic vision [for] and bold investments” in domestic manufacturing;
  • Sound engagement with allies, particularly in the Indo-Pacific region;
  • “Assertive global leadership to ensure that the U.S.—not China—is writing the rules for the international system, including issues such as trade and climate”;
  • Consistent pressure applied directly and with allies to ensure China meets its trade and economic commitments;
  • Strategic use of “enforcement tools to target … areas of problematic Chinese trade behavior”;
  • Expanded efforts to combat Chinese intellectual property theft;
  • Targeted upgrades to national security frameworks; and
  • Stronger collaboration between manufacturers in the United States, Congress and the executive branch “to advance American values abroad.”

Why it’s important: Without such moves, troubling actions by China would likely only increase.

  • “For manufacturers, China has long been a hub for unfair industrial subsidies and government-fueled overcapacity in areas like steel and aluminum that distort global markets,” Monahan said.
  • “China continues to promote discriminatory industrial policies, forced technology transfer and intellectual property theft that harm manufacturers and workers in the U.S. Increasingly, China is also using global institutions and its economic influence to build alliances that challenge American interests, human rights and democratic values.”

NAM leadership: The NAM has called on political leaders of both parties, in the administration and on Capitol Hill, to develop and implement a clear, robust strategy to tackle China built on these core principles. NAM President and CEO Jay Timmons urged President Biden in March 2021 to take such action, repeating the call to senior administration officials in August 2021.

News

NAM Urges Changes to Climate Disclosures Rule

As the Securities and Exchange Commission considers a prescriptive rule that imposes significant and burdensome climate-related disclosure obligations on public companies, the NAM is pushing back. It is fighting for critical changes that will support manufacturers’ leadership on climate change.

The background: Manufacturers have long been leaders on climate solutions, working to create the technologies and processes needed to combat climate change while also providing material information about their climate-related efforts to investors.

  • But a recent rule proposed by the SEC would mandate that companies, large and small, report reams of complex climate-related information, even when that information may not have any impact on their financial performance or operations.

The rule: The proposed rule, which the SEC released in March, would require qualitative descriptions of companies’ climate-related risks and strategies as well as quantitative reporting of their greenhouse gas emissions and any climate-related impacts on their financial statements.

  • The result would be an unworkable framework that does not align with current practices—imposing an enormous burden on manufacturers across the country.
  • Additional information can be found about the rule here and about the NAM’s engagement with the SEC on climate disclosures here.

The response: The NAM has laid out a series of necessary changes that the SEC must make to reduce the compliance costs and liability risks associated with the rule’s requirements. Our recommendations will align the rule more closely with current climate reporting practices—decreasing burdens on public companies and increasing information utility for investors. Specifically, the NAM is calling on the SEC to:

  • Delay annual GHG emissions reporting, granting manufacturers time to collect and verify data for a midyear report (rather than the proposed February deadline).
  • Strike disclosure of Scope 3 emissions, which requires tracking emissions data through the supply chain. While some manufacturers are already working to understand these emissions, the data collection, estimation and reporting methodologies are still evolving. At a minimum, the SEC should provide more flexibility for companies subject to the Scope 3 requirement.
  • Rescind accounting changes that would require climate impact analyses of companies’ consolidated financial statements on a line-by-line basis.
  • Adjust the climate-related risk disclosures and Scope 1 and Scope 2 emissions reporting requirements to make the provisions less prescriptive and more aligned with existing company practices.
  • Fine-tune the guidelines for reporting on climate-related goals to avoid penalizing companies that set ambitious targets.
  • Remove requirements that companies disclose competitively sensitive information about the internal tools they use to understand and plan for climate risks, scenarios and activities.

The last word: “The SEC’s climate rule as written would be harmful for both large and small manufacturers and unhelpful for investors,” said NAM Senior Director of Tax and Domestic Economic Policy Charles Crain. “The NAM is committed to supporting our members in their efforts to combat climate change and inform investors about this critical work, and the recommendations we’ve offered present an important step toward that goal.”

Watch: NAM President & CEO Jay Timmons joined CNBC to discuss the impact of the proposed rule.

Business Operations

Ransomware Attacks Increasingly Targeting Manufacturers

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Think your business is safe from hackers? You could be wrong, according to the Manufacturing Leadership Council—the division of the NAM focused on digital transformation in manufacturing.

With the incidence of ransomware attacks against manufacturers on the rise, all businesses should be on guard against cyber extortion, advises Peter Vescuso, vice president of marketing at industrial cybersecurity provider Dragos and a member of the Manufacturing Leadership Council.

How it works: Ransomware schemes often target manufacturers by disabling their operations technology and blackmailing victims into paying to restore the functionality of their systems. Manufacturers that cannot afford to have production halted by hacks often have no choice but to pay the hackers’ ransom.

What we’re seeing: Industrial ransomware attacks increased significantly in 2021, with criminal groups specifically identifying manufacturers as vulnerable and profitable targets.

  • Last year, manufacturing accounted for 65% of industrial ransomware incidents, according to Dragos.
  • The top three manufacturing subsectors targeted by ransomware attacks were metal components (17%), automotive (8%) and plastics/technology (6%).
  • Manufacturers as a group were targeted six times as often as the second leading industrial sector, food and beverage.

Why it matters: Many manufacturers remain unprepared for ransomware attacks.

  • About 90% of manufacturers have limited visibility into their OT systems, according to Dragos.
  • 90% of manufacturers are also ill prepared with poor network perimeters, 80% have external connectivity exposure in their OT systems and 60% use shared credentials that make it easier for ransomware groups to infiltrate systems.

Who’s behind it: In 2021, ransomware groups Conti and Lockbit 2.0 caused 51% of all ransomware attacks, and 70% of their attacks targeted manufacturers.

  • These groups successfully developed malicious business models and used underground marketplaces to outsource operations to partners who then carried out the attacks.
  • Ransomware groups also fund research and development to stay ahead of the curve on security and infiltrate systems.

What’s next: “Ransomware trends are likely to continue shifting as groups reform and reprioritize and as law enforcement pursues them and takes them offline,” says Vescuso.

  • “As this evolution continues to evolve, Dragos analysts believe with a high degree of certainty that ransomware will continue to disrupt all industrial operations and OT environments through 2022, in manufacturing and beyond.”

Protect yourself: To protect against ransomware attacks, manufacturers must take the necessary steps to modernize and secure their IT and OT systems. Check out NAM Cyber Cover for information and risk management solutions.

Policy and Legal

NAM Pushes for Smart SEC Cyber Rule

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The U.S. Securities and Exchange Commission has proposed a rule that would impose new cybersecurity disclosure requirements on manufacturers—and the NAM is pushing to make those requirements work better.

The background: The SEC issued guidance in 2018 telling public companies what information about their cybersecurity protections they should provide to investors, but the SEC now feels that more disclosure is warranted.

The requirements: The SEC has proposed a rule that would require two different kinds of disclosures from public companies:

  • Cybersecurity incidents: If a manufacturer experiences a material cybersecurity incident like a breach or a hack, the company would have four days to make a public disclosure describing the nature of the incident, what systems were implicated and how the company is responding.
  • Governance and risk management: The proposed rule would require manufacturers to disclose the processes they use to identify and guard against cybersecurity risks, with information on their procedures and personnel.

The problem: SEC disclosures are public—and by requiring detailed disclosures about cybersecurity processes and incidents, the proposed rule could force manufacturers to provide a roadmap to potential hackers and cyber attackers.

  • At the same time, the inflexible four-day window for reporting cybersecurity incidents means that manufacturers would be required to disclose information about attacks even if an incident is ongoing or the subject of a law enforcement investigation.
  • This could potentially interfere with efforts to stop the attack, risking the exposure of sensitive information or implicating national security.

Our move: The NAM has urged the SEC to make commonsense adjustments to the rule in order to protect manufacturers from attacks and give companies the flexibility to respond to cybersecurity incidents appropriately.

  • Specifically, the NAM has called on the SEC to adopt a more principles-based approach to the proposed risk management disclosures, allow for greater flexibility with respect to incident reporting and coordinate with U.S. law enforcement and national security experts when finalizing the rule.

Our take: “A final rule that requires timely and accurate reports without instituting one-size-fits-all mandates will ensure that shareholders have access to useful information without exposing businesses, investors, and all Americans to increased risks,” said NAM Managing Vice President of Tax and Domestic Economic Policy Chris Netram. “The NAM strongly supports a flexible approach to cybersecurity reporting, and manufacturers respectfully encourage the SEC to promulgate a final rule that allows public companies to both inform and protect their shareholders.”

Business Operations

How Manufacturers Can Amp Up Their Cyber Protections

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Manufacturers are used to compliance requirements. These requirements are a part of daily life; from safety to quality, manufacturers must constantly track and adhere to rules that ensure their products and processes meet certain standards.

For manufacturers that work with the Department of Defense, that includes meeting Defense Federal Acquisition Regulation Supplement cybersecurity requirements, including the highly anticipated “cybersecurity maturity model certification.”

The basics: CMMC is the U.S. Defense Department’s proposed method for checking that their suppliers have strong enough cybersecurity protections to safeguard the Department’s information. Whether it’s a prime, subcontractor or sub-tier supplier, every company doing business with the Defense Department will need to comply with CMMC to receive a contract.

The big picture: All manufacturers should secure their businesses against cyberattacks, whether or not they are obligated to under DFARS or other requirements. According to the National Institute of Standards and Technology Manufacturing Extension Partnership Cybersecurity Services Lead Celia Paulsen, one of the most important—and most often neglected—steps manufacturers can take is simply to understand the structure and information flow within their own companies.

  • “A lot of companies don’t know how information flows in their companies and how their companies work,” said Paulsen. “Once you have that information, you’ll be able to scope out the rest of the compliance efforts.”
  • “In some cases, you might find that all of your controlled information can be limited to one computer. If so, great! Keep it separate and you won’t need to worry as much about the rest of the business,” she added.
  • “In other cases, you might find that there’s no easy way to cordon off CUI, and it might be cheaper to secure the whole business. That’s something you wouldn’t have known otherwise.”

All aspects of the business, from physical structures to software, should be considered when thinking about security. According to Paulsen, looking at your business from the outside-in can turn up problems that are easily fixed.

  • “Think of it as if you were looking to protect your house,” said Paulsen. “Begin by looking at the business physically – are there locks on the doors and windows? Do you have backup power?”
  • “Then look inside the house: Where are your jewels (i.e. computers) located? Are they protected from curious eyes? Are your home, guest and business networks separated?”
  • “Last, go to the software and data level. Do you have backups? What do you have in your computers that keeps sensitive information secure?”

Sensitive information doesn’t just flow through an individual manufacturer; it often travels up and down the supply chain, reaching other businesses that may not be taking the proper precautions.

  • It’s imperative for manufacturers to discuss these issues with their connecting businesses, Paulsen notes They should determine what requirements apply, whether access to sensitive information is needed for either business, and if so, how it can be protected.
  • “When you’re integrating IOT devices onto the shop floor or implementing AI or going to the cloud—anytime you’re purchasing something that is smart, or that has a chip—you need to consider the security of it,” said Paulsen.
  • “A lot of breaches happen because of supply chain attacks where the products aren’t developed with security in mind. That is key to a long-term strategy: making sure that whatever you buy, they’re considering security.

Learn More: NIST provides additional resources, including the Small Business Cybersecurity Corner, and the Manufacturing Extension Partnership.

NAM resources: Are you prepared in the event of a ransomware attack? Built specifically for manufacturers, NAM Cyber Cover was designed to provide risk mitigation and protection. Find out more at www.namcybercover.com.

Workforce

“It Changed a Lot in My Life”: Tyson Foods’ Workforce Programs

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If it hadn’t been for his cousin, Tagba Djato-Bougonou might never have found Tyson Foods.

In 2017, the engineer was working at a bank in Iowa, where he’d ultimately relocated after emigrating from Togo in West Africa. He was living with his cousin, who was working at Tyson Foods, when the cousin told him about Tyson’s 1+2 Maintenance Program.

“He told me about the good stuff that Tyson has and the 1+2 Maintenance Program and what I could achieve with it,” Djato-Bougonou recalls. “And I thought, ‘OK, I’m going to take a shot with that program.’”

  • Djato-Bougonou, who has an engineering background and a graduate degree from a U.S. university, was quickly hired on as part of the initiative.
  • 1+2 allows new hires to “earn while you learn” by splitting their workdays between a classroom and hands-on work in a Tyson facility. It gets its name from the one year of education and training participants do, followed by the two years they commit to working for the company.

The results speak for themselves: now a full-time project engineer in Tyson’s Fresh Meats department, Djato-Bougonou is also pursuing a Ph.D. in innovation and project management.

Tyson’s workforce initiatives are increasingly designed to find and reward employees like Djato-Bougonou, who come to Tyson with impressive professional backgrounds earned in other countries.

  • “We try to find candidates that, like Tagba, have a deep portfolio outside the U.S. and [whom] we can upskill, with some English and some recertification in the U.S.,” said Tyson Foods Workforce Development Trailblazer Anson Green, who leads economic opportunity efforts, including the in-plant career-development program Upward Pathways.
  • In many of the more rural communities that are home to Tyson plants, “there is no large labor pool to draw from,” Green said. Creating unique paths for non-native-born employees to fill skilled-worker roles is a strategy that has helped fill this void.

The success stories are numerous, including many team members who came to the company to apply for one job but, owing to education or work experience garnered internationally, were able to continue on a professional path they thought they’d had to give up.

  • One team member, formerly a nurse in her home country, is now developing her English skills and preparing for recertification in the U.S. to work at one of Tyson’s onsite health clinics, according to Green.
  • Another team member who now works at a Tyson Foods’ Arkansas plant was previously a legal aide in the Supreme Court of the Dominican Republic. With Tyson’s support, she is also developing her English skills and will be applying to work as a paralegal in the company’s corporate office in Northwest Arkansas.

The last word: For Djato-Bougonou and other Tyson team members who have benefited from an encouraging corporate leadership, the sky’s now the professional limit.

  • “I wanted to be part of things which can make a big difference in people’s lives,” Djato-Bougonou said, adding that with the 1+2 Program under his belt, he now feels empowered to do just that. “This program … gave me quite a lot of new skills. It changed a lot of things in my own life.”
Policy and Legal

NAM Takes Proxy Battle to Court

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The NAM Legal Center stood up for manufacturers in federal court this week, arguing that the Securities and Exchange Commission unlawfully suspended a rule governing proxy advisory firms.

A quick refresher: Proxy advisory firms advise institutional investors, like retirement fund managers, on how to vote on the policies of public companies in which the funds invest. This gives the firms significant power over public companies.

The fight: The NAM secured a significant victory in 2020 when the SEC finalized a rule increasing oversight of proxy advisory firms, which had long operated without SEC oversight.

  • Manufacturers strongly supported the 2020 rule, which was designed to increase transparency, highlight conflicts of interest and provide accurate and decision-useful information to investors.
  • At the beginning of the Biden administration, however, the SEC’s new leadership announced that it would not enforce the rule—without engaging in notice-and-comment rulemaking, a clear violation of administrative law.

Our move: Shortly after the SEC announced it wouldn’t enforce the 2020 rule, the NAM Legal Center filed a challenge to prevent the agency from abdicating its responsibilities. Put simply, a new administration cannot set aside lawfully promulgated rules that it happens to disagree with—and the NAM is standing up for that principle in court.

Our case: Arguing before the U.S. District Court for the Western District of Texas this week, the NAM made clear that the SEC acted unlawfully by suspending the compliance date of the proxy firm rule indefinitely without going through the required public notice-and-comment process to amend or repeal it.

  • The SEC, in turn, argued that the agency hasn’t technically suspended the rule, but rather that SEC staff has made a nonbinding and “informal” recommendation not to enforce it—an action that has the same effect as an official suspension and one which the SEC’s own lawyers have described as providing “relief” to proxy firms.

Our take: “The SEC is attempting to end-run its legal obligation to enforce this rule,” said NAM Deputy General Counsel for Litigation Erica Klenicki. “We are in court fighting for manufacturers and their investors across the United States, who deserve protection from the outsized influence of proxy firms and who depend on the SEC, and all federal agencies, to adhere to the rule of law.” 

Business Operations

Meet the Manufacturing Leadership Council

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How is digitization changing manufacturing? What can manufacturers do to stay competitive in a fast-shifting world? What does the future look like—and how can leaders prepare for success?

Those are the kinds of questions being asked and answered by the NAM’s Manufacturing Leadership Council—a member-driven global business leadership network focused on the intersection of manufacturing and technology. We spoke with David R. Brousell, MLC co-founder, vice president and executive director, who gave us more insight into what the MLC is, how it works and why it matters today more than ever.

An early start: The idea for the MLC was born nearly two decades ago, when manufacturers began turning to consumer technologies to strengthen their businesses.

  • The convergence of these technologies with traditional operational technologies on factory floors sparked an idea. Brousell, who was running a publication called “Managing Automation,” recognized the trend—which he called “Progressive Manufacturing”—and founded an annual conference for manufacturers to discuss new approaches and best practices for the future.
  • By 2008, that conference had given rise to a council designed to offer useful programming for manufacturers on the future of digitization. Ten years later, the council became a part of the NAM.
  • “We realized that digitization was not a tactical or small change—it was a fundamental change in the industry,” said Brousell. “It was clear that manufacturers needed an informational resource or organization to bring them together to deal with what we now call Manufacturing 4.0 in a systematic way.”

A systematic approach: Today, the MLC represents what Brousell calls “the digital transformation arm of the NAM,” helping manufacturers meet future needs and address ongoing trends—through changes in technology, organization and leadership.

  • “The transition to the digital model of manufacturing is only one part technical,” said Brousell. “The harder part is changing the organizational structure to be more collaborative and decentralized and making the leadership approach digital-first. We’re probably the only organization that has looked at it this way, in a systematic way, beyond technology alone.”

A critical focus: Every year, the MLC lays out a member-approved set of critical issues involved in the transition to Manufacturing 4.0 and offers resources and programming from thought leadership to plant tours to the Rethink Summit.

  • This year’s critical issues include topics like factories of the future; transformative technologies, including AI and machine learning; augmented reality and virtual reality; Manufacturing 4.0 cultures; and cybersecurity.

A broad view: Digitization isn’t just an issue for individual manufacturers. Because manufacturing is so vital to economic and societal growth, it’s also important to the future of the United States and the world.

  • “Manufacturing is one of the fundamental drivers of social and economic prosperity,” said Brousell. “Its growth will lead to a better life for people. No other industry can say that. And I believe that the countries whose companies are most successful in making the transition to the digital model are going to be the powers of this century. There’s a lot riding on this.”

Sign up: Come learn from leading manufacturers at the Rethink Summit, June 27–29, in Marco Island, Florida. It’s the premier event for senior operational executives and their teams as they continue to navigate disruption.

Business Operations

Why You Should Attend the IRI Annual Conference

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“I’ve attended the IRI Annual Conference many times,” says Dr. Martha Gardner, “and I have taken many things that I’ve learned back to my company.” Gardner is the executive quality leader for process improvement at GE Aviation. She plans to attend this year’s IRI Annual Conference in person.

What it is: The IRI Annual Conference is where innovation leaders of all industries come together to share key emerging trends, technologies, critical skills and best practices. This year’s agenda includes four tracks:

  • Strategic leadership practices for next-generation innovation managers
  • The future of work
  • Operationalizing sustainability strategies
  • Digitalization of business and industry

Relevant content: “One reason to go is certainly the content,” Gardner says. “I leave with best practices, information on building future-ready leaders and more. The content is really relevant for the things I’m thinking about right now.”

  • If possible, Gardner attends with multiple team members: “You can cover concurrent sessions. This year, there’s a breakout session on domestic supply chain resilience, which I will definitely attend. But there are other breakouts at the same time that will have useful nuggets for my company.”

Valuable networking: Connecting with peers is also a big reason Gardner attends. “I’m looking forward to the extra networking we get from being there in person,” she explains. “I’ve missed this during the virtual events of the past few years. There are people like me who have gone for several years, and there are always new people. I always get different points of view.”

Fresh perspective: Gardner believes the IRI Annual Conference is well worth her time away from the office: “It gives me perspective to think about the future and what I would like to drive differently in my organization. I use some of the takeaways to develop new strategies.”

How to participate: The 2022 IRI Annual Conference takes place June 7–9 in New Orleans. Innovation leaders from across companies and industries are welcome to attend. You do not need to be a member of the IRI to participate. Click here to view the agenda and to register.

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