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West Coast Port Slowdowns Are Hurting Manufacturers

Contract negotiations over West Coast ports labor contracts are quickly deteriorating without a clear solution and manufacturers are growing increasingly concerned about both domestic and global impacts of a possible shutdown. (continue reading…)

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Manufacturers are Making the Case for Transportation Infrastructure

Today the House voted to pass H.R. 5021, Highway and Transportation Funding Act of 2014. NAM sent a Key Vote letter in support of the legislation that will replenish the Highway Trust Fund and avoid the August low balance scenario that is threatening approximately 100,000 road, bridge and transit construction sites and 700,000 jobs across the country.

The legislation also authorizes an extension of critical federal highway and transit programs for eight months after the current authorization expires on September 30.

NAM worked with over 60 manufacturing associations around the nation to help echo the message to Congress that fixing the Highway Trust Fund cannot be left to chance and Congress must accomplish this before August recess. Manufacturers are leading the debate and urged Congress to make it this month’s priority to restore the Highway Trust Fund to a condition of solvency.

The White House hosted a timely meeting last week on infrastructure that included Vice President Biden and a diverse range of corporate leaders from manufacturing, construction, trucking and other industries.

NAM Board Chair and Caterpillar Chairman and CEO Doug Oberhelman and NAM member and BNSF Executive Chairman Matt Rose helped lead a conversation on globally competitive infrastructure with Transportation Secretary Anthony Foxx and White House National Economic Council Director Jeffrey Zients. Click here for Oberhelman’s op-ed, “Congress Must Move on Highway Trust Fund,” in The Hill.

NAM Member Chris Toomey, Senior Vice President of Procurement for global manufacturer BASF was among several other NAM members who traveled to Washington for this special session. Toomey encouraged participants to look at advocacy for better infrastructure as supportive of economic growth, citing growing manufacturing investments in the Gulf Coast that will require competitive infrastructure.

The Senate is expected to consider H.R. 5021 next week.

There is still much work to be done. Passing a fully funded, multi-year surface transportation is the next order of business for improving infrastructure. Manufacturers are making the case that investing in infrastructure supports competitiveness, growth and jobs.

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Fix the Fund

As the House and Senate wrap up their work in advance of a Fourth of July recess and Americans prepare for Independence Day celebrations, a looming crisis threatens work at 100,000 transportation construction sites and 700,000 jobs around the country. While summer construction projects can be inconvenient to travelers, modernizing our roads, bridges and transit systems is critically important to our safety, efficiency and global competitiveness.  It would be far worse if the construction work never took place or even ceased temporarily.

Unfortunately, the Highway Trust Fund (HTF) which supplies needed funding to states and localities is running on fumes and will no longer be able to meet its fiscal obligations to the states in August, further threatening jobs and continued economic recovery.  All at a time when our infrastructure continues to age and deteriorate, confirmed by a D+ grade from the American Society of Civil Engineers.  This is not a time to cut back or postpone for a later date to solve.

Congress only has a few weeks to replenish the fund when it returns from its break or work will stop at these 100,000 construction sites. It’s good news that leaders from the Senate Committee on Finance and House Committee on Ways and Means are coming together to start these important conversations about improving the fiscal health of the HTF. Manufacturers encourage the House and Senate to achieve bipartisan solutions that will improve the balance of the Highway Trust Fund as we seek a well-funded multiyear surface transportation authorization.

Manufacturers need competitive infrastructure to thrive in today’s global economy. Our infrastructure is out of date and resting on a legacy built by previous generations.  Manufacturers responded to an infrastructure survey conducted by the NAM and the Building America’s Future Educational Fund last year. Two-thirds doubt that our infrastructure is position to respond to the competitive demands of a growing economy.  Worse, 70 percent reported that roads are getting worse.

This issue goes far beyond state transportation departments and road builders. When construction is put on hold, manufacturing is on hold too.

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New Report Shows Impact of West Coast Port Shutdown

Manufacturers and retailers today banded together to impart the importance of keeping the West Coast ports open for business as the International Longshore and Warehouse Union (ILWU) and its employer group, the Pacific Maritime Association (PMA) negotiate a new labor contract that expires on Monday, June 30.

A new report commissioned by the National Association of Manufacturers (NAM) and the National Retail Federation (NRF) models the potential impact on U.S. employment, output  and income if port operations were to cease  for 5, 10 and 20 days at 30 West Coast ports along the continental United States. The results are sobering and if such disruptions occur as a result of a protracted dispute between the negotiating parties, the economic consequences would be significant and widespread.

Port Closure Full Report_v08-table1

The U.S. economy could lose as much as $2.5 billion per day if a prolonged West Coast port shutdown occurs. With a still-recovering economy and disappointing first quarter growth, the harm to the nation’s employment, GDP and consumer purchasing power would be felt from coast to coast.

Manufacturers need competitive and efficient ports to ship and receive critical commodities and finished products in order to keep businesses running and people employed. Cargo moving through West Coast ports represents an economic value of 12.5 percent of U.S.GDP.

The chain reactions of a prolonged dispute should offer pause to the ILWU and the PMA and the results of this new analysis should be reason enough to keep negotiating, without disruptions.

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Chairman Shuster Talks Transportation at NAM Shopfloor Event

This week the National Association of Manufacturers (NAM) hosted a Shopfloor briefing for congressional staff about the need to address key infrastructure issues that impact the manufacturing economy, starting with a bipartisan fix to the Highway Trust Fund before August recess and passing a well-funded multiyear surface authorization as the MAP-21 deadline approaches in September.

Shuster ShopfloorHouse Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) spoke passionately to those gathered at the NAM Shopfloor event about the importance of surface transportation investments to our global competitiveness and the need for a strong federal role to ensure connectivity across the nation, especially as the population grows. While timelines to pass a major surface transportation authorization package could change, successfully addressing the impending Highway Trust Fund shortfall is first and foremost on the mind of the Chairman.

Manufacturing executives including NAM Board Member Randy Mullett from Con-way, Inc. and Tom Manley from Terex Corporation joined NAM Director of Transportation and Infrastructure Policy Robyn Boerstling for a panel discussion about the nexus of transportation infrastructure and manufacturing. Speakers echoed that keeping the Highway Trust Fund financially solvent extends far beyond state transportation departments and road builders. Manufacturers like Terex are not only integral suppliers to the construction industry but also major exporters of heavy equipment to customers in Europe and beyond. Con-way provides critical trucking services to manufacturers – moving inputs and finished products around the United States. Mullett described the transportation network as a “system within systems.” He noted that a zero-sum approach to addressing the nation’s infrastructure challenges would harm the economy and the people who depend most on a functioning transportation network.

Manley reminded participants about the tragic bridge collapse in Minnesota as well as lessons learned from Hurricane Sandy. Americans should not have to experience another crisis for Congress to take action.

The Shopfloor came on the heels of a successful Manufacturing Summit that brought over 500 manufacturers to Capitol Hill last week where infrastructure was prominently featured among other key issues impacting manufacturing. To compete in the 21st-century, we have to invest and modernize our infrastructure with an eye toward economic growth, jobs and increased competitiveness.

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Administration Takes Important First Step in Transportation Authorization; Manufacturers Emphasize Need to Restore Trust Fund to Solvency Soon

The Obama Administration’s four-year, $302 billion Grow America Act sets the stage for the next surface transportation authorization as the balance of the Highway Trust Fund continues to decline and the current authorization, MAP-21 expires on September 30.

However, relying on tax reform to pay for this significant infrastructure investment is a risky endeavor. While the long-term approach to funding and the commitment to improve the environmental permitting and review process are appreciated by manufacturers who need significant transit, highway and bridge investments to keep operations efficient in the United States, efforts to return the Highway Trust Fund to a state of solvency before the end of August must remain a priority focus of Congress and the Administration in the coming weeks ahead.

The Administration has laid out a thoughtful blueprint that will enable states and localities to move forward with significant infrastructure projects that require multiyear funding.  While the details of the proposal need to be fully examined and assessed, the next few months will provide critical opportunities for important exchanges between Congress and stakeholders as September 30th nears. Manufacturers look forward to participating in these ongoing discussions.

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President Continues Commitment to Infrastructure; More Work Ahead and No Easy Solutions

The President has been a consistent advocate for increased investment in America’s infrastructure and we appreciate the President’s continued attention to the deteriorating condition of our roads, bridges, transit systems, airports, ports and inland waterways.  Like the President, manufacturers recognize that America’s infrastructure is resting on a legacy of past investments that have created great economic advantages and it is now time to reverse the deteriorating condition of our nation’s infrastructure.

This is not something that can be accomplished in a year, two years or even with a quick infusion of funding to supplement ongoing infrastructure investments. Manufacturers are eager for Congress and the Administration to work together to develop a long-term investment strategy that will make smart and strategic infrastructure investments designed to enhance our global competitiveness. While the NAM supports the President’s call to streamline environmental reviews and expedite infrastructure project delivery, the proposal to use savings from tax reform as a means to direct additional investments in infrastructure complicates efforts to overhaul our tax code and distracts from the goal of achieving a sustainable stream of funding for our nation’s surface transportation network.

Over the next few months, manufacturers encourage the President to engage in a robust conversation about long-term transportation funding by putting his Administration’s weight behind an effort to return the Highway Trust Fund to solvency and pass a traditional multiyear surface transportation authorization before September 30, 2014 when MAP-21 expires. These are priority issues for manufacturers and the surface transportation authorization currently offers the best and most efficient method for ensuring stable and continuous investments in roads, bridges and transit systems.

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Ask an Expert: What’s next after WRRDA?

The recent passage of the Water Resources Reform and Development Act (WRRDA) of 2013 (H.R. 3080) marked a significant victory for manufacturers. The long-overdue reauthorization invested in our nation’s 12,000 miles of inland and coastal waterways, which are responsible for transporting products and commodities valued at $185 billion per year. With WRRDA completed, our attention is focused on what is poised to be a significant year ahead for transportation policy.

Federal funding for highway and transit programs is set to expire Sept. 30, 2014. Congress passed the current authorization—the two-year, $105 billion Moving Ahead for Progress in the 21st Century Act (MAP-21)—after three years and ten short-term extensions of the previous funding bill. The NAM is working to ensure a robust, multi-year surface transportation reauthorization that builds on the bipartisan success of WRRDA. Manufacturers cannot afford the uncertainty that results from patchwork legislation.

Any transportation funding bill must, of course, address imminent Highway Trust Fund shortfalls. This could prove to be the biggest challenge in the reauthorization. Current predictions place the Highway Trust Fund on a path to insolvency sometime in 2015. The vast amount of investment needed for functional highway and transit programs is not something that states can shoulder on their own. If funding ceases, the entire manufacturing supply chain would be at risk. The Highway Trust Fund operates on user fees, and the NAM urges members of Congress to maintain that model as they negotiate a long-term fix.

Manufacturers are in agreement that their competitiveness hinges on sound infrastructure. A majority of manufacturers participating in a joint NAM/Building America’s Future survey said that U.S. infrastructure is in fair or poor shape, while roads in particular are getting even worse. U.S. infrastructure is not positioned to respond to the competitive demands of a growing economy. The NAM is hoping to change that through the next transportation bill. An investment in infrastructure is an investment in manufacturing.

Robyn Boerstling is the director of transportation and infrastructure policy at the National Association of Manufacturers.

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It’s All Connected: Inland Waterways Critical to Affordable and Reliable Energy

Headquartered at the confluence of the Ohio and Tennessee Rivers, Paducah, Kentucky is home to a vibrant barge and towboat industry. In 1948 George Crounse had the vision to build his first towboat with borrowed money from an aunt. Fast-forward 65-years, 35 towboats, 1100 barges and 350 employees later – Crounse Corporation is a leader in the pack and one of Paducah’s oldest and most prominent employers -  moving over  30 million tons of cargo throughout the U.S. river system, serving electric utilities and manufacturers throughout the Midwest region.

Coal is the lifeblood of Crounse – keeping utilities well supplied with coal from Pennsylvania, the Illinois basin, Appalachia and even the Powder River Basin.  And thanks to an abundant supply and growing overseas demand, coal is also finding its way on Crounse barges headed to export. Threats to eliminate coal power plants create economic uncertainty for manufacturers who rely on low cost electricity to remain competitive. Crounse towboat pilots, many of whom are third- and fourth-generation operators on the inland waterway system, also face the same uncertainty because their jobs are dependent on the transport of coal.

The nation’s river system is not only a livelihood for Crounse but its viability and health is deeply ingrained in Crounse culture. Employees participate annually in a river clean-up operation sponsored by the East Moline, IL-based Living Lands & Waters conservation group. Known for its “industrial strength” river cleanups around the nation, Living Lands & Waters brings the Paducah inland waterway community together and Crounse employees are proud to participate in these clean-up efforts.

Passing H.R. 3080, the Water Resources Reform and Development Act  of 2013(WRRDA) is a priority for Crounse CEO Stephen Little not just because it is several years overdue but unreliability on the river system is a growing threat to efficiently serve Crounse customers. “Many locks and dams have exceeded their capabilities and are operating well-beyond their intended design life,” Little said.

Steve sees big challenges ahead  – additional revenue is going to be needed for the Inland Waterway Trust Fund  in order to modernize and keep up with the demands of a 21st century economy. “One-hundred years ago inland navigation stopped for parts of the year. Lock and dam construction has transformed inland navigation and the regional economy in Paducah.”

Little says, “Crounse is just one small link in the economic chain” but for manufacturers, it’s a link that cannot be broken.

It’s All Connected is a blog series by manufacturers focused on the need for authorization of the Water Resources Development Act.

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It’s All Connected: Reform Essential Compenent of House Legislation

Reform is an essential component of H.R. 3080, the Water Resources Reform and Development Act (WRRDA) of 2013. Changing the way the Army Corps of Engineers delivers its civil works projects at the ports and along the inland waterways is critical to successfully expanding the nation’s economic potential. It’s also good stewardship to ensure taxpayer resources are used efficiently on important infrastructure projects.

As a nation, we need to be making investments in infrastructure because manufacturers are depending on highways, rails, inland waterways, ports and airports to receive raw materials and deliver finished products. According to a recent survey of NAM members, 65% do not believe that infrastructure, especially in their region, is positioned to respond to the competitive demands of a growing economy over the next 10-15 years and we need to address that gap now.

The bipartisan government funding bill, which passed Congress last week, contained a provision that prevented the shuttering of a key Army Corps waterway project known as the Olmsted Lock and Dam.  That project is in its second decade of construction. While not well understood, the provision kept an ongoing project on track and does not increase its funding. If the Olmsted Project were to have shut down this month, it could have cost the federal government additional millions of dollars in unrelated construction costs due to an unnecessary work stoppage.

While the Olmsted Project in Illinois has a long and complicated history, it is one of the reasons why the reforms contained in WRRDA are so important to those who depend on the inland waterways. Further, Olmsted should serve as a reminder that inland waterway users who pay millions every year into the Inland Waterway Trust Fund should not be expected to bear the financial burdens of over $2 billion in federal agency cost overruns.  Poor execution of this project has come at the expense of other inland waterway modernization efforts that are needed to keep manufacturers and other industries globally competitive.

In addition to measures that will improve project management and seek to prevent another Olmsted situation, new deadlines, concurrent reviews and streamlined environmental reviews will support a new process that that cuts red tape and saves time – taking years off a process that today can amount to 15 years or more for a water resource project.

The merits of infrastructure project review under the National Environmental Policy Act (NEPA) are not in question. What is in question is the lack of discipline and lack of consistency in the federal government’s approach to administering NEPA requirements.

H.R. 3080 seeks to address the government’s self-inflicted needless delays in reviewing critical water resource projects. Republicans and Democrats, especially House Transportation and Infrastructure Ranking Member Nick Rahall (D-WV) and Senate Environment and Public Works Chairman Barbara Boxer (D-CA) are to be commended for their leadership and support for improving a broken environmental review process that has become unpredictable and wasteful.

Environmental streamlining is a proven federal practice with roots in the 1998 transportation authorization which called for better coordination of the federal environmental review process under NEPA for highway and transit projects. More importantly, it works. The Federal Highway Administration (FHWA) recently found that environmental streamlining has cut the time to permit a highway project in half, from 73 months down to 37 months.

The most recent surface transportation authorization, MAP-21, institutionalized the successful practice of concurrent federal agency review with deadlines and best practices learned over the years to prevent endless bureaucratic delays without sacrificing the environment. WRRDA environmental streamlining language is modeled after provisions in MAP-21 and manufacturers appreciate this common-sense approach to modernizing our nation’s infrastructure.

It’s All Connected is a blog series by manufacturers focused on the need for authorization of the Water Resources Development Act.

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