Practical Insights

The NAM houses the most knowledgeable manufacturing experts. To help navigate change, they answer timely questions that move the public and affect manufacturers across America.

Workforce

MFG Day Inspires Future Creators to Explore Manufacturing

Every year, shop floors across the country open their doors to students, parents, teachers and community leaders to showcase modern manufacturing careers through MFG Day. Carolyn Lee is the Executive Director of The Manufacturing Institute, the workforce and education partner of the National Association of Manufacturers. Here she shares what MFG Day is, why it is so important to the future of the industry and how manufacturers can drive attendance to their MFG events.

What is MFG Day?

MFG Day is an initiative to raise awareness for the many opportunities in modern manufacturing. On MFG Day, manufacturers open their doors to open minds about well-paying, rewarding and productive careers that give the next generation the chance to create the future using tomorrow’s technologies today. 

When does it take place?

MFG Day begins on the first Friday of October but events extend throughout the month. Last year there were more than 3,000 MFG Day events hosted in 49 states as well as in Canada and Mexico. More than 325,000 students participated in MFG Day events.

 What happens at MFG Day events?

Participants get a chance to see what is really taking place on many shop floors. This isn’t your grandparents’ manufacturing industry. Artificial intelligence, 3D printing, and co-bots—robots that work alongside humans—are commonplace on shop floors. And augmented reality and virtual reality are now just reality for many modern manufacturers. All of this and more is available to those who attend an on-site or virtual MFG Day event.

Why is MFG Day especially important this year?

This is a critical moment for the manufacturing industry. The U.S. economy as a whole is facing an unprecedented challenge in response to the COVID-19 pandemic. Manufacturing is no exception, but the industry’s leadership in our nation’s response is showing the public how critical manufacturing is to our country. Manufacturers, the men and women who make things in America, are the ones making the test kits, personal protective equipment and daily items Americans need right now during this crisis. They are developing medicines and vaccines and the equipment needed to test and study treatments. Throughout our nation’s response effort—and during MFG Day in particular—we hope that more young people will see how creators respond when our country needs them most and choose to join in this effort by pursuing a career in modern manufacturing.

Do you have any advice for manufacturers who want to inspire more people to join the workforce?

Host a MFG Day event, and register it on CreatorsWanted.org, the new digital home for MFG Day, so people in your area can find it and attend! MFG Day is your opportunity to stand up and be counted, showcasing the reality of careers in our industry. Our country’s future is tied to the continued success of the manufacturing industry, and manufacturing’s success will be determined, as it always has, by its next generation of leaders. Join us in this critical effort to strengthen our industry into the future.

Policy and Legal

Manufacturers Fight COVID-19 But Face Legal Obstacles

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As COVID-19 affects communities nationwide, manufacturers are taking extraordinary steps to supply the products, including daily essentials and medical supplies, that Americans need. Unfortunately, outdated liability rules might expose these same manufacturers to litigation, creating added risk as they go above and beyond for the COVID-19 response. National Association of Manufacturers General Counsel Linda Kelly explains.

What’s the problem manufacturers face?

Our country needs manufacturers to produce food and critical goods so that most of us can shelter in place and slow the virus’ spread. Our sector has also stepped up in an unprecedented way. For example, NAM members have started to produce masks, gowns and other equipment for use on the front lines, and they didn’t wait around until they had perfect legal certainty before they acted to do the right thing. Some of our members have donated the equipment that they would use to local hospitals.

Unfortunately, even as manufacturers are making sacrifices and performing essential services, unprecedented regulatory uncertainty and rapid changes in the rules make it hard to know what actions could expose manufacturers to unfair litigation. Manufacturers always put the health and wellbeing of employees and families first. So manufacturers are stuck: they’re committed to doing the right thing, but they could also face lawsuits as a result.

What do manufacturers need to solve this problem? 

America’s manufacturers need sensible liability protections for the workplace so our essential workers can continue to combat COVID-19 and help the nation move toward recovery. In an unprecedented time of national need, America’s manufacturers have stepped up to aid those on the front lines with essential equipment and materials and to maintain our way of life. And our elected officials should protect those who, without being asked, did the right thing.

What should those protections look like?

The NAM has developed a list of proposed reforms: commonsense adjustments to help ensure we have enough food on the table, equipment for our hospitals and eventually vaccines and life-saving drugs for our world.

We need protections for the workplace so critical manufacturers can continue to operate. We need to extend Good Samaritan protections to cover those who donate equipment, or who may be producing protective gear or even ventilators and more complicated medical equipment for the first time. We need to bar suits for public nuisance against critical manufacturers, as well as shareholder suits that try to “Monday-morning quarterback” decisions manufacturers have to make every day in the face of tremendous regulatory uncertainty.

Who should these reforms apply to?

These are specific, narrow reforms. They should be limited to critical businesses that operate to serve our country during the crisis, and they should apply only during the emergency and for a “wind-down” period after the declared emergency ends. We need reforms that prevent abuse of our legal system, while at the same time holding any actual bad actors accountable.

This is an unprecedented situation—and we need regulatory certainty that meets the moment.

See the NAM’s pandemic liability policy recommendations.

Business Operations

CARES Act Offers Support for Manufacturers Affected by COVID-19

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On March 27, 2020, President Trump signed the Coronavirus Aid, Relief and Economic Security Act, or CARES Act. National Association of Manufacturers Director of Tax and Domestic Economic Policy Charles Crain explains its significance.

What is the CARES Act? 

The CARES Act is essentially a rescue vehicle for the economy. It’s not a long-term stimulus package, but rather a short-term emergency spending package to provide a specific injection of funds right now.

We’re facing a dramatic economic slowdown. Businesses don’t have the capital they need to operate because there’s not a lot of commerce going on. People are staying safe, staying inside and spending less money than they ordinarily would, and that has an impact on the economy generally and businesses specifically. The CARES Act is designed to provide capital for businesses and capital for families to weather the crisis.

How does the CARES Act help?

It does a number of different things. Because of the NAM’s leadership and advocacy, the CARES Act includes many of manufacturers’ priorities—priorities we first outlined in the NAM’s “COVID-19 Policy Action Plan Recommendations.”

First, the CARES Act offers almost $350 billion in loans to small businesses. The Small Business Administration Paycheck Protection Program provides loans up to $10 million, and as long as the loans are used to keep employees on payroll or on certain overhead costs like rent, mortgage interest or utilities, that loan will be forgiven.

Second, the CARES Act helps companies keep their employees, both through the PPP and through the Employee Retention Tax Credit, which allows eligible businesses that don’t use the PPP for payroll to claim a tax credit.

Third, the CARES Act allows for businesses to defer employer payroll taxes from March 27 until the end of this year, with half of it due at the end of 2021 and the other half at the end of 2022.

Fourth, it temporarily increases allowable interest deductions from 30% to 50% for 2019 and 2020, helping to provide critical liquidity for businesses.

Fifth, it sends money directly to American families in the form of relief checks up to $1,200 per qualifying individual and up to $500 per child, which helps employees and business owners alike.

How can manufacturers access the programs they need?

There’s a wide range of agencies involved in this effort and many are operating on different timelines. The Paycheck Protection Program, for example, has already begun—eligible businesses can now apply for loans directly with their local lender. For our members, the NAM provides important deadlines and points of access, as we have done with information about loans and tax provisions so far.

Where can manufacturers get more information?

The NAM regularly updates COVID-19 resources for manufacturers. Helpful links for small businesses are also available.

Business Operations

Manufacturers Make Cybersecurity Central to Industry Culture

As rapid technological innovation sweeps across the manufacturing industry, cybersecurity has become a top priority. David Brousell, Vice President and Executive Director of the Manufacturing Leadership Council—the world’s first member-driven, global business leadership network dedicated to senior executives in the manufacturing industry—explains the importance of cybersecurity and what manufacturers are doing to combat global threats in the digital age.

Why is cybersecurity important for modern manufacturing?

Manufacturers are using cutting-edge digital technology to a greater degree than ever before. We’re putting sensors in equipment, digitizing supply chains and gathering data from customers to better the customer experience, to name just a few examples. The number of electronic connections we’re making is enormous—and the more you electronically link products and processes, the more vulnerable they become to cyberattacks.

What are the impacts of cyberattacks?

When we talk about cybersecurity, we’re not just talking about people trying to steal intellectual property. We’re also talking about attacks that target business operations, which can actually bring business to a halt. Manufacturers need to be able to guard against these attacks across the board in order to do their own innovative, cutting-edge work and to deliver for customers in the United States and around the world. That’s why manufacturers must invest in developing solutions that can stand strong against even the most sophisticated assault.

What are some of the challenges manufacturers face in cybersecurity?

The number one challenge is the increase in attacks. We do a lot of survey work among manufacturers of the Manufacturing Leadership Council, and the overwhelming majority of survey participants say they’re expecting more attacks in the year ahead. Just keeping up with the sheer volume of attacks is a big issue for manufacturing companies—large and small alike. This isn’t just an issue for multibillion-dollar enterprises. Cybersecurity is everyone’s concern.

What are manufacturers doing in the cybersecurity space to keep their work secure?

We’re taking a variety of actions. We’re continuing to invest in technology. We’re training people to understand best behaviors and best practices. And we’re trying to protect more and more on a systems level. For example, some companies are housing their information in the cloud because they feel that there are greater protections in a cloud environment than in a system on their own premises.

Most importantly, though, companies are adopting cybersecurity as a cultural discipline and making cybersecurity part of their business’ DNA and culture. Over many decades, manufacturers have made physical safety a well-honed science. Now we have to raise cybersecurity up to that level of safety if we’re going to bring it under control. We talk about how safety is everybody’s business—and now cybersecurity has to become everybody’s business, too.

Policy and Legal

What a Yield Curve Inversion Means for the Economy

Last Wednesday, as yields on shorter-term bonds surpassed those of longer-term bonds, the U.S. economy briefly experienced an “inverted yield curve”. Historically, such an inversion has been a reliable predictor of recessions to come.

Chad Moutray, chief economist for the National Association of Manufacturers, explains the significance of the yield curve and whether manufacturers should worry that a recession is on the way.

What is a yield curve?

In its simplest terms, if I lend money to you over several years, I would expect to get receive a higher interest rate to compensate me for giving up access to my money for a longer time frame. In a healthy economy, interest rates should be upward-sloping as the length of maturities increases. 

What does it mean if a yield curve inverts?

An inverted yield curve means that the interest rate for short-term loans is higher than for longer maturities. This would imply that financial markets might be more pessimistic in its outlook.

An inverted yield curve can foreshadow a recession. The spread between 10-year and 2-year Treasury bonds is often seen as an important barometer. Since World War II, when this yield curve has inverted, the U.S. economy has entered a recession within the following 12 to 18 months.

The yield curve between 10-year and 2-year Treasury yields inverted last week. It’s positive now, but still close to inversion. The last time this spread inverted was June 2007, predating the start of the Great Recession by five months. 

Should manufacturers be worried? Does that mean that a recession is just around the corner?

There are warning signs that we are closely following. Broadly, the global economy is clearly slowing, as noted in our most recent monthly report, and financial markets have been highly volatile in recent weeks, exacerbated by trade uncertainties. As a result, businesses in the U.S. have become more hesitant in their spending and there are worries that the economic slowdown abroad could find its way to the U.S. Within the manufacturing industry, production is contracting both in the U.S. and abroad, and hiring has slowed in the sector.

However, a yield curve inversion does not necessarily mean that a recession is imminent. Yields may be influenced by other factors, and there are positive economic signs too. Consumer spending remains strong, and the labor market remains near 50-year lows. The U.S. economy should also grow 2.3 percent in 2019.

What can policymakers do to avoid an economic downturn?

Central banks around the world are easing monetary policies to stimulate growth, or to provide an “insurance policy” for the economy so economic recovery can be sustained. These trends have pushed 10-year Treasury yields to their lowest levels since October 2016.

Manufacturers remain optimistic about the future, but in order to keep growing, we need to address the workforce crisis and resolve trade uncertainties. Namely, passing the USMCA, reauthorizing the Ex-Im Bank and securing a bilateral trade agreement with China are necessary to ensure manufacturers in the U.S. can continue to grow.

Policy and Legal

Importing Prescription Drugs from Canada is a Serious Safety Risk

prescription drug pills

The Trump administration wants to allow Americans to import drugs from Canada as part of the President’s larger goal to lower prescription drug prices.

Robyn Boerstling, Vice President of Infrastructure, Innovation and Human Resources at the National Association of Manufacturers, explains the proposal and how drug importation affects manufacturers.

Why is drug importation coming up now?

This has been one of President Trump’s priorities since the 2016 campaign. More broadly, lowering prescription drug prices has been a top priority for manufacturers and policymakers for some time now, as health care costs continue to rise.

However, manufacturers in the U.S. think importing drugs from Canada poses a serious health risk, especially considering the counterfeit challenges we already face.

How does drug importation fit into the larger conversation on health care?

The NAM insists something must be done to address high health care costs. But it shouldn’t just be about the transaction at pharmacy counter. Any solution has to be holistic, addressing the systematic challenges without sacrificing competitiveness and free enterprise in the process.

How does drug importation affect manufacturers?

The biopharmaceutical industry has experienced tremendous growth recently, supporting 1,100 manufacturing plants across the U.S. and Puerto Rico and employing thousands of high-skilled employees. In fact, the biopharmaceutical industry was the top manufacturing sector for job postings in 2018, according to Burning Glass Technologies’ Labor Insights.

These companies are at the cutting edge of creating the cures of tomorrow, and America’s policies on drug prices should take into consideration both the desire to lower prescription drug prices and the opportunities and benefits provided by this sector. Moreover, other countries don’t guarantee the same standards as drugs made in the U.S—and we should not be looking outside our carefully managed supply chain as a source of our medicines.

Why is drug importation a threat for consumers?

Counterfeit and substandard drugs are a growing problem worldwide. The challenge is most acute in the developing world, impacting about 10 percent of the drug supply according to the World Health Organization. Fortunately, the U.S. has the safest drug distribution system in the world, but importing drugs from Canadian pharmacies would be a direct challenge to that proven model.

Would drug importation work in the United States?

If this plan led by the Trump administration is truly a way to lower costs, we have to ask: Are the savings guaranteed for the patient? The infrastructure that will be necessary to assure safety will be costly. It’s difficult to ignore the question, “Will importation actually reduce prescription drug expenditures?”

It’s worth noting, in 2004 when the Congressional Budget Office looked at this issue, significant long-term savings on prescription drug spending did not materialize, especially in a Canada-only importation scenario.

There is something broken when people have access to but cannot afford the drugs they need. If the United States can build the safest medical supply in the world, we can find ways to be more affordable to the people who need relief the most.

Practical Insights

Manufacturers Adapt to Lead in an Increasingly Digital Age

"You can’t make this transition to the digital era by yourself. You need to be with other companies, to learn from them."

David Brousell speaks at the 2019 Manufacturing Leadership Summit 2

In September 2018, the National Association of Manufacturers acquired the Manufacturing Leadership Council, an association for manufacturing executives that is dedicated to helping the industry transition to the digital era. Nearly one year later, the MLC wraps up its 15th Anniversary Manufacturing Leadership Summit and continues to provide its members with programs and services around digitization.

MLC’s Co-Founder, Vice President and Executive Director David R. Brousell shares the groundbreaking work of the organization and why it matters to manufacturers today.

What is the Manufacturing Leadership Council?

The MLC is designed to help senior manufacturing executives and emerging leaders define and shape a better future for themselves, their organizations and the industry at large by focusing on the intersection of critical business and technology issues that will drive growth today and in the future. We do live events like conferences; we do plant tours that enable members to see firsthand how different companies are implementing the latest digital technologies; and we publish in-depth articles that focus on best practices and cutting-edge ideas on the use of technologies and the leadership requirements of the digital age.

How is leadership changing in the digital age?

It’s changing in some very important ways. There’s a whole new layer of competency that has to be added to the traditional functions of leadership. We call this “digital acumen,” which has to do with understanding the potential of advanced technologies like analytics, artificial intelligence, collaborative robotics, 3D printing and other technologies. It’s not just improving efficiencies, but also offering new business models, ways of doing things and services.

This new era in manufacturing requires leaders to manage organizations that are flatter and more collaborative, with more and more employees having the benefit of information at their fingertips. Managing in prior years was around a top-down structure. That doesn’t cut it in the digital age.

What benefit do companies get from being a part of this group?

The MLC presents the opportunity to be part of a community that is collectively sharing ideas, insights and best practices to as the industry continues its radical transition. The truth is, you can’t do this alone as a company. You can’t make this transition to the digital era by yourself. You need to be with other companies, to learn from them, to learn what’s possible, to see what works and what may not work well in your company and to form that bond. It’s a tremendous learning experience.

What does the future look like for manufacturing—and how does the Manufacturing Leadership Council fit in?

The future looks very, very bright for manufacturing. We’re going to increase efficiency and produce products that satisfy personalized needs—everything from cars to medicine. We’re going to be able to have better quality and create jobs that are fulfilling, exciting and intellectually stimulating. The extent of innovation happening right now in manufacturing is mind-blowing.

But this is not an easy transition. The future offers tremendous opportunities, but only if we make the transition industry-wide. If we’re able to do that, not only will individual companies be more successful globally, but the U.S. manufacturing industry as a whole will continue to lead the world. There’s a lot at stake for manufacturers. That’s why the partnership between the Manufacturing Leadership Council and the NAM is so important.

Policy and Legal

Why the Ex-Im Bank is Critical for Manufacturers

The Ex-Im Bank helps U.S. manufacturers compete for deals around the world.

cargo unloaded at port of Los Angeles

In May, the U.S. Senate voted to confirm President Donald Trump’s nominees to the Export-Import Bank board. The board now has a quorum for the first time in four years, allowing it once again to consider deals larger than $10 million. Manufacturers’ attention now turns to securing congressional reauthorization of the Ex-Im Bank.

NAM President and CEO Jay Timmons explains what’s at stake.

The NAM is leading the fight for Ex-Im Bank reauthorization. Start with the basics. What does that mean?

Later this year, Congress will have to vote on whether to keep the Ex-Im Bank open and authorize it to continue helping manufacturers in the United States compete for deals around the world.

Why does the Ex-Im Bank matter so much to manufacturers?

It’s a vital tool to support manufacturing jobs in the United States. The Ex-Im Bank has supported 2.5 million jobs since 2000. Typically, more than 90 percent of the Ex-Im Bank’s transactions directly support small businesses.

And here’s something that’s really impressive — the Ex-Im Bank has generated $9.6 billion for taxpayers since 1992. It’s a government agency that makes money!

Other countries are running nearly 100 other export credit agencies. So, if we don’t have the Ex-Im Bank, we are at a big disadvantage.

You mention “export credit agencies.” You mean other countries have their own versions of the Ex-Im Bank?

Exactly. And they use those agencies to lure manufacturers to their countries, support their own manufacturers and steal manufacturing jobs away from the United States. That’s not going to change. So, we can “disarm” ourselves here in the United States and let other countries like China have the advantage. Or we can support the Ex-Im Bank.

So this all comes back to China?

Definitely. It helps level the playing field for manufacturers in the United States to compete with China, as well as other countries.

Two of China’s export credit agencies provided $45 billion in medium- and long-term investment support for projects around the world, more than the rest of the world combined. That’s what we have to compete against.

What can manufacturing workers or manufacturing supporters do to make a difference?

Contact your senators and representatives. Tell them to support the Ex-Im Bank and reauthorize it. Let them know that supporting the Ex-Im Bank is supporting American manufacturing workers.

Policy and Legal

Liquified Natural Gas Boom Impacts U.S. Manufacturers

U.S. Natural Gas Production Continues To Break Records

Cheniere Energy LNG export facility in Corpus Christi

Last month, the European Union announced that U.S. exports of liquified natural gas (LNG) to Europe had increased nearly 300% since 2016. This news came on the heels of a series of executive orders from President Trump designed to speed up energy infrastructure projects that enable manufacturers to carry natural gas to market.

Rachel Jones, the National Association of Manufacturers’ senior director of energy and resources policy, helps us break down what it all means.

Why is the U.S. experiencing a natural gas boom?

North America has more shale gas than any other place in the world. Technology is the other huge driver. The combination of horizontal drilling and hydraulic fracturing technologies is unlocking vast natural gas resources and changing the face of modern manufacturing in America.

This boom is set to keep growing. According to the Energy Information Administration, U.S. shale gas production is projected to more than double again over the next 25 years.

What is “liquified” natural gas (LNG)?

It’s really just natural gas that has been refrigerated until it turns into a liquid. When it comes out of the ground, natural gas is actually very thin and light. To make it easier to move around the world, it is turned into a liquid.

Why are investments in LNG export infrastructure so important for the U.S. manufacturing industry?

LNG terminals are massive infrastructure projects that create tens of thousands of jobs.

Golden Pass is a $10 billion investment in the Gulf Coast that will create jobs across the country for manufacturers who make compressors, heat exchangers, storage tanks, pipes, valves and other components of these state-of-the-art infrastructure projects. Golden Pass alone is projected to create 45,000 direct and indirect jobs during construction, plus several thousand more during operation. Cheniere’s Sabine Pass and Corpus Christi projects together represent an investment of approximately $30 billion in U.S. energy infrastructure. And the Driftwood project is poised to invest another $30 billion, creating nearly 50,000 direct and indirect jobs in at least 18 states.

How do President Trump’s recent executive orders promote LNG infrastructure development?

Manufacturers in the United States are ahead of their global competitors in the race to build the infrastructure needed to export LNG; however, an unnecessarily protracted regulatory process could cause a major disadvantage for these exporters.

In a big win for U.S. manufacturing workers, President Trump signed two long-anticipated executive orders intended to cut red tape and speed up the permitting process for energy infrastructure projects. These orders will promote badly-needed development of infrastructure to meet U.S. energy demand, create and support jobs for U.S. manufacturing workers, and provide reliable and affordable energy to U.S. consumers.

How does natural gas help manufacturers achieve sustainability goals? 

Climate Change is one of the biggest global challenges we face. Manufacturers understand this and are taking real action to protect our environment; natural gas is part of that story.

Modern natural-gas plants that replace aging power plants can mean an 80% reduction in carbon emissions. Further, because solar and wind can produce varying amounts of energy, having natural gas available on demand actually enables us to further invest in renewable resources.

Practical Insights

Future of Manufacturing Depends on Building Workforce

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In many ways, manufacturing has never been doing better. Record numbers of manufacturers are optimistic about the future. Many are growing, investing, and hiring. Yet, this success is also fueling a growing crisis: too many manufacturing jobs and not enough workers to fill them.

Carolyn Lee, executive director of The Manufacturing Institute (MI)—the education and workforce partner of the National Association of Manufacturers—helps explain manufacturing’s “skills gap” workforce crisis and what the MI is doing to help solve it.

Carolyn, just how bad is the problem currently?

There are more than half a million open jobs in manufacturing right now, and based on a study by The Manufacturing Institute and Deloitte, 2.4 million jobs could go unfilled and about $2.5 trillion worth of GDP could be at risk over the next decade if we don’t get this under control soon. So this is a problem for manufacturing, yes, but it’s also a problem for the economy overall.

What’s driving it?

There are three main drivers. Some don’t know these jobs exist, some don’t have the right skills to land them, and some just don’t see the point. That last challenge—the perception challenge—is particularly tricky. Many envision manufacturing jobs the way their grandparents remember them. But that really isn’t how modern manufacturing careers look today.

Well, how do they look?

Modern manufacturing careers are increasingly high-tech, high-skill, and high-pay. The possibilities in manufacturing will become even more exciting as Manufacturing 4.0 technology continues to revolutionize the industry. Tomorrow’s manufacturing jobs will increasingly rely upon irreplaceable human skills—things like creativity, critical thinking, design, innovation, engineering and finance—and, by the way, many of these careers don’t require a four-year degree or the debt that can come with it.

What is the Institute doing to address this challenge?

We have a variety of programs designed to excite, educate and empower the manufacturing workforce of today and tomorrow, with a particular focus in four key areas: women, veterans, youth and lifelong learning. We are empowering women already in the industry and giving them tools to inspire and mentor others (STEP Women’s Initiative), we are connecting transitioning service members and veterans to great careers in manufacturing plus arming them with the exact skills and qualifications needed to excel (Heroes MAKE America), we are helping excite the next generation by encouraging companies and educational institutions across the country to open their doors to the reality of modern manufacturing careers (MFG Day), and we are engaged in a variety of initiatives to help current manufacturing workers access training for newer technology-intensive jobs—among many other programs and initiatives.

What can others do to help be a part of the change the MI is trying to enact?

One thing I’d recommend, and something the Institute is working to facilitate, is for people to educate themselves, their families, and their friends on what jobs in manufacturing truly look like. It’s an exciting time to be a manufacturer and there are lots of great opportunities in the industry, so come join us.

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