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President Trump Begins Work to Support Manufacturers on Day One

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Thank you, Mr. President. Manufacturers welcome the presidents swift move to provide no new burdens to the onslaught of regulations we have endured these past eight years. One after another, regulations—on everything from health care and energy to workplace conversations—have made keeping our doors open harder and harder.

Todays announcements are great first steps, and we hope this is a sign of more positive actions to come.

Eliminating a Deduction for Advertising Will Not Reduce Health Care Costs

By | General, Health Care, Shopfloor Economics, Shopfloor Policy | No Comments

During the current debate on legislation to repeal Obamacare, the Senate may have the opportunity to vote on a provision—introduced by Sen. Al Franken (D-MN)—that would eliminate the ability of companies to deduct advertising and promotional expenses related to prescription drugs. This is a misguided idea, and we urge senators to reject this proposal. Long recognized as a legitimate and necessary business expense, advertising plays a critical role in the competitiveness of manufacturers and the success of their products. Advertising plays a central role in driving market growth and innovation, which benefits both the manufacturer and the consumer. In doing so, advertising also helps drive prices down by spurring competition. In contrast, disallowing a deduction for direct-to-consumer advertising of prescription drugs increases the costs to pharmaceutical companies by denying a legitimate business expense and also unfairly targets a specific industry for discriminatory tax treatment.

Manufacturers: Faster Job Growth Requires Action on Nominees

By | Communications, General, Presidents Blog, Shopfloor Main | No Comments

National Association of Manufacturers (NAM) President and CEO Jay Timmons issued the following statement on the Bureau of Labor Statistics’ December employment data:

“Despite an increase in manufacturing employment in December, the sector lost 45,000 workers in 2016. That is unacceptable. To really accelerate job growth and fully reach our economic potential, manufacturers are looking to the incoming Trump administration to take bold actions, beginning on day one. To spur job creation right here in the United States, we want to see smart reforms on regulations, taxes, health care, energy and more. But to achieve that, we need a fully functioning government, so we are calling on the Senate to act swiftly on the president-elect’s Cabinet nominees. Unnecessary delays mean lost opportunities for manufacturers and the men and women who make things in America.”

“Manufacturers and the NAM appreciate the incoming administration’s willingness to listen to our concerns and seek our insights. If leaders on both sides of the aisle can come together, we can revitalize modern manufacturing in America—and lift our economy and country to new heights.”

 

 

CONTACT: Jennifer Drogus, (202) 637-3090

Virginia Is Building and Competing to Win

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Gov. Terry McAuliffe joined a roundtable of Virginia business and labor representatives to outline how critical infrastructure investment across the Commonwealth of Virginia spurs economic growth and job creation. Fresh off a trade mission to southeast Asia where he advocated on behalf of Virginia manufacturers and business to increase exports from the Commonwealth, the governor made clear that Virginia “can compete with China any day of the week now” because continued improvements to Virginia’s infrastructure make the state’s manufacturers more competitive.

Gov. McAuliffe also reiterated his support for energy infrastructure projects, such as the Atlantic Coast Pipeline. “If we weren’t bringing the gas through an environmentally safe pipeline, it would come in by truck or rail, and I would be the first to argue that is not a smart way to transport gas,” because it would be more costly for Virginia’s manufacturers. The governor argued that the Atlantic Coast Pipeline will be a major provider of cheap gas for businesses, allowing Virginia to manufacture more competitively priced products.

Gov. McAuliffe also stressed the importance of transportation infrastructure for manufacturing. For example, renewing the state’s contract with United Airlines at Dulles International Airport retained approximately 35,000 jobs in the state. The new, seven-year contract includes plans to upgrade the airport and add more United flights to its schedule. Support for infrastructure investment programs is overwhelming among Virginians; 89 percent said that infrastructure investment would have a “positive impact” on the state in a recent survey commissioned by the National Association Manufacturers (NAM).

Aubrey Lane, Virginia’s secretary of transportation, credited Gov. McAuliffe with reorienting Virginia’s approach to infrastructure to benefit the economy. “We’re fixing problems instead of building things just because we can build them” remarked Secretary Lane, who has overseen the Port of Virginia’s expansion and return to profitability. “Infrastructure is an investment, not an expense,” said the secretary. He concluded, “I don’t see how we can move the economy forward without that investment.”

Industry leaders expressed broad agreement with Gov. McAuliffe and Secretary Lane. Dorene Billingsley, the director of operations at AdvanSix, a specialty chemical manufacturing company, stressed that efficient infrastructure helps keep them competitive. A few delayed truck deliveries can cost the business hundreds of thousands of dollars, according to Billingsley. AdvanSix depends on every aspect of the state’s infrastructure and wouldn’t be in business without it. “We’re in Virginia, we plan to stay in Virginia, and we want to grow in Virginia,” she said.

John Dyer, vice president of manufacturing at Optical Cable Corp., said, “Our biggest concern for infrastructure is dependability…If a transformer 20 miles away goes out, we could lose $20,000 because of it.” He described infrastructure as an essential piece of the “jigsaw puzzle” of factors that must align perfectly for manufacturers to succeed.

Tom Bell, the secretary-treasurer for the Virginia State Building and Construction Trades Council, said that infrastructure investments provide benefits to the state’s labor force. “Economic development is also workforce development,” he said. “It’s vital to our industry.” New infrastructure projects will create training opportunities for the next generation of Virginia tradesmen, according to Bell.

Jim Burnette, president and co-founder of Alliance Engineering Inc., has decades of experience in designing, building and operating factories nationwide. In considering the location for a new factory, he considers access to infrastructure of utmost importance, saying, “Anything we can do to improve infrastructure is critically important.”

The roundtable discussion, a joint event co-hosted by the Virginia Manufacturers Association and the NAM, was another demonstration of the broad support infrastructure development enjoys across the Commonwealth of Virginia.

-NAM-

Sustainability in the Fabric of our Family Business

By | General, Shopfloor Main, Shopfloor Policy, Sustainability | No Comments

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By Mariel McAllister, Director of Public Relations, Leigh Fibers, Inc.

Leigh Fibers, based in Wellford, S.C., is a nearly 100-year-old family-owned business that uses sustainable product engineering to create branded products and specialty fibers that provide unique solutions to specific problems. Sustainability is literally embedded in the fabric of what we do every day. It is what has allowed us to be in business for generations, providing high-value products to consumers and serving as a bedrock of the Wellford community.

The company’s strong commitment to providing sustainable products and solutions led to its acquisition of ICE Recycling in 2014. ICE recycling2reprocesses post-industrial polymers, cardboard, paper and metals for companies throughout the Southeast and Mid-Atlantic. With the acquisition of ICE, we are able to serve as a sustainability force-multiplier by helping our customers achieve their sustainability goals. The company provides full zero to landfill services or individual waste stream management utilizing both on-site waste-stream management as well as off-site reprocessing services. In late 2015, SmartVista, a third sister company was founded to aid in the company’s commitment to providing technical and sustainable solutions for a diverse range of industries.

While Leigh has been in business for nearly a century, there are still hurdles to overcome in the recycling market. Leigh strives to educate manufacturers around the world about their waste and the value it would serve to a diverse range of end users. The company drives value through the entire process to benefit the waste generator in addition to the end user. Since the decline in commodity prices over the past few years, Leigh Fibers and ICE Recycling have the unique challenge of educating end users of the benefits they gain from using recycled materials. For our customers who decide to use recycled materials, we help them limit their environmental footprint, while still offering a quality product.

recycling1Leigh and ICE have built a unique infrastructure for handling waste streams that includes initial segregation of the waste, size reduction, repurposing and consolidation. Not only is Leigh the largest textile recycler in North America, but the company is seen as a solution provider among their suppliers and customers. Leigh Fibers offers guidance to their suppliers regarding equipment, packaging and recycling solutions, while ICE Recycling offers a turn-key recycling solution for industrial facilities that want to generate value from their waste streams or those committed to being land fill free.

Leigh Fibers was built on a foundation of providing sustainable solutions and products, which has allowed the company to divert more than 700 million tons of textile waste and byproducts from landfills over the past century.

November Jobs Report Shows Challenges Remain for Manufacturers

By | General, Shopfloor Economics, Shopfloor Main | No Comments

We have seen a steady stream of good economic numbers in the past few weeks, including today’s jobs numbers. First and foremost, the unemployment rate fell to 4.6 percent, its lowest level since August 2007. At the same time, nonfarm payrolls rose by 178,000, which was on par with the consensus estimate of around 180,000. Overall, this mirrors healthier figures for consumer spending and improved business sentiment in recent data, and these reports show that the U.S. economy has strengthened. This should help cement a Federal Reserve rate hike at their upcoming meeting on December 13-14.

Despite these positives, manufacturers have continued to struggle, as evidenced by the loss of 4,000 workers in November, with 60,000 fewer workers on net year-to-date. It was the fourth straight monthly decline for employment in the sector. Moving forward, manufacturing leaders are cautiously optimistic about demand and production for 2017, and we would expect that this increase in activity would lead to additional hiring.

With that said, it’s clear the incoming administration, which has touted manufacturing as a top priority, has its work cut out for it.  Manufacturers look forward to working with the next Administration and Congress to enact policies – from infrastructure, to comprehensive tax reform – that will help spur America’s manufacturing economy.  To this end, as an extension of the NAM’s Competing to Win policy platform, the NAM will be releasing individual policy white papers in the coming weeks.  Each white paper will focus on a specific policy priority that manufacturers urge the incoming presidential administration and Congress to focus on and will be send to the respective transition teams.

There are also things the current Congress/administration can do to help grow jobs including take action to restore the Ex-Im Bank to full functionality.  As long as Ex-Im cannot fully operate, manufacturers in the U.S. will continue to lose manufacturing jobs to our foreign competitors.

New York Fed: Manufacturers Reported a Slight Expansion in November

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The Empire State Manufacturing Survey said that manufacturing activity expanded somewhat in November, rebounding after three straight months of declines. The composite index of general business conditions increased from -6.8 in October to 1.5 in November. The stabilization in activity in the New York Federal Reserve Bank’s district stemmed from improvements in new orders (up from -5.6 to 3.1) and shipments (up from -0.6 to 8.5). Nearly one-third of respondents reported higher sales in November, up from 26.7 percent in October. That was an encouraging sign for a sector that has been significantly challenged over the past two years. Yet, it was not all good news. Employment continued to lag behind, with indices for the number of employees (down from -4.7 to -10.9) and the average employee workweek (down from -10.4 to -10.9) still in strong contraction territory. That suggests that firms remain quite cautious for now, even with better demand figures. Read More

NAM Podcast: Manufacturing a Sustainable Future

By | General, Shopfloor Main, Shopfloor Policy, Sustainability | No Comments

 

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Happy Sustainability Month! In the next installment of the Shopfloor podcast series, the National Association of Manufacturers Greg Bertelsen and Christian Science Monitors Deputy Energy and Environment Editor Zack Colman discuss how sustainability is shaping the world, politically and through business. Sustainability drives manufacturers and, through innovation, creates endless opportunity.

 

Collaborating for Supply Chain Sustainability

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This guest blog post is authored by Stewart Leeth, vice president of regulatory affairs and chief sustainability officer, Smithfield Foods, Inc.

Food production must increase significantly to feed our world’s growing population. To ensure nutritional security, protein production must also greatly increase, which will stretch natural resources, and, if not managed correctly, could cause environmental concerns. At Smithfield Foods, we have taken a leading role to develop sustainable operating practices to reduce our natural resource demand. These practices have been developed through our robust sustainability program, which is ingrained at every level of our vertically integrated business. Our sustainability program is organized by five pillars: Animal Care, Environment, Food Safety & Quality, Helping Communities and People. Each pillar is connected by the overarching concept of value creation for all our stakeholders.

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Our sustainability program delivers on our promise to produce good food the right way while providing an organized platform to focus on key sustainability areas. Since our program’s creation more than a decade ago, we have set new goals each year that build upon previous achievements and continue to drive progress across each of our sustainability pillars. As a company with innovation ingrained in our DNA, the success of these sustainability projects are often furthered by original thinking and unprecedented techniques, such as creating a new market for grain sorghum and finding industry-leading solutions to manure management.

Speaking of innovation, two years ago, Walmart tasked all suppliers with grain operations to discover new methods for reducing fertilizer runoff that can lead to air and water quality degradation. Building on Smithfield’s commitment to the environment, we eagerly accepted the challenge and joined the Environmental Defense Fund (EDF) to create a more sustainable grain supply chain. Through this unlikely collaboration, we developed a program to work hand-in-hand with grain farmers and foster on-farm conservation practices. We now offer grain farmers free agronomy advice and educational resources while motivating them to adopt fertilizer optimization practices. Although we are still in the early years of this program, we foresee a bright future. Many of our grain farmers have already drastically reduced fertilizer losses while saving money and improving crop yields. This strategy is also a huge potential cost savings for our company, as we can grow more grain locally and reduce transportation costs.

As we reached our one-year anniversary with EDF, we earned a best-in-class recognition at Walmart’s 2014 Sustainability Expo. Last year, more than 100,000 acres of land in the Southeast United States benefited from our fertilizer optimization practices, and we expect more than 450,000 acres of American smithfieldgro-program-progress-to-goalfarmlands will benefit as the program continues to expand. As a result of this program, we are on track to meet our 2018 goal to source at least 75 percent of grain from farms that use efficient fertilizer and soil health practices.

Our sustainability program continues to improve Smithfield’s overall performance and financial stability. This creates substantial value for our stakeholders and drives efficiency throughout our supply chain. Since 2004, our environmental programs alone have saved our operations more than $580 million. Together, with other industry members and manufacturers, unlikely collaborations and innovative programs will help answer food production and environmental questions for the next generation.

For more information about our sustainability program, visit smithfieldfoods.com/2015report. To learn more about our collaboration with the EDF, visit smithfieldfoods.com/environment.

Manufacturing Sustainability Inside and Out

By | General, Shopfloor Main, Shopfloor Policy, Sustainability | No Comments

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This guest blog post is authored by Rob Zimmerman, director of marketing, projects, specifications & sustainability for Kohler Company. 

Since 2008, Kohler has worked to reduce greenhouse gas (GHG) emissions and waste to landfill with a goal of reaching “net zero” (with offsets) by 2035. This has become a springboard for innovation throughout the company.

We use Life Cycle Inventory (LCI), a product modeling tool, to evaluate a product’s lifetime environmental impact. LCIs look at supplier operations, Kohler operations, consumer use and end-of-life.

kohler-highline-1-0Because up to 80 percent of a product’s lifetime environmental impact is locked in during early stage development, we incorporate Design for Environment (DfE) principles in each phase of new product development.

These principles help us take a step back and evaluate the environmental impact of a product from raw material extraction through manufacturing, packaging, use and to its ultimate end via recycling, repurposing or disposal. Our recently released Highline 1.0 is the result of 10 years of performance evaluations, design tweaks and discovery. Kohler engineers discovered a way to more precisely target the flow of water into the bowl so that only one gallon of water is needed per flush. Relatively small design adjustments to the tank, bowl and trapway have reduced water use by 38 percent compared to a traditional 1.6 gallon per flush toilet. We’ve also found opportunities to improve manufacturing sustainability in unexpected places.

In an LCI evaluation at our Reynosa, Mexico, facility, we discovered a way to reduce GHG emissions. In Reynosa, it’s common for daytime temperatures to reach 100 degrees Fahrenheit during the four-month warm season. When the facility’s electric cooling units were due for replacement, associates explored more sustainable options and learned the area has the world’s largest reservoir of natural gas.

The team seized the opportunity to replace electric air conditioners with natural gas cooling units. As a result, the Reynosa facility increased energy efficiency and is saving millions of pounds in GHG emissions annually, while also making the facility more comfortable for employees.

In another example, Kohler cast-iron engineers saved 6,200 tons of pouring-molten-ironiron from being melted each year. In production of one of our most popular bath tubs, molten iron is poured through “sprues” into the mold. Excess iron remains in the sprues, cools and solidifies. This excess iron is punched out to release the finished bathtub from the line. Our equipment required large sprues and, therefore, a large amount of extra iron, to function properly. The unused iron was eventually reused, but substantial energy was used in re-melting it.

Cast-iron engineers upgraded to new equipment that could function with sprues 20 pounds smaller than the original. This saves 80 pounds of iron per bathtub. Overall, the upgrade reduced iron-melting requirements by more than 13 percent, energy use for the transfer of molten iron by 20 percent and losses due to cracked bathtubs by nearly 50 percent.

These are just a few examples of how we’re making manufacturing changes that reduce our company’s environmental impact from product design to the end of the product’s useful life.