Investing in Conservation

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A healthy environment is an essential foundation for a strong country—and a vibrant economy. Union Pacific’s vision of Building America involves protecting and strengthening this foundation.

Railroads are one of the most fuel efficient means of transportation, and on average, Union Pacific moves a ton of freight 465 miles on a single gallon of diesel fuel. Moving freight on trains also reduces traffic gridlock on America’s overtaxed highways and carbon emissions from idling vehicles.

While Union Pacific moves freight in an environmentally responsible way, it realizes the importance of not being complacent about its own operational impact. As the world seeks to improve sustainability, Union Pacific is doing its part to reduce its carbon footprint, finding ways to conserve fuel, water and energy.

In 2017, Union Pacific’s utility conservation projects reduced energy consumption by 3.8 million kWh, enough to annually power more than 400 U.S. homes. Many projects were employee-driven solutions, such as locating leaks in underground air compressor lines, installing automatic control devices on locomotive part washers and testing new solar yard lighting. These solutions also provide guidance for future initiatives.

An effort to replace outdated and inefficient air compressors is responsible for roughly half of Union Pacific’s 2017 energy consumption savings. Compressors represent about 20 percent of the company’s electricity usage. They support critical functions, including yard and single-car air brake tests, and operating maintenance tools, locomotive sanding systems and wastewater treatment pumps.

A cross-functional team developed the compressor system currently being installed, which is between 30 and 90 percent more energy efficient. The percent varies depending on the age and length of underground pipes, as well as whether the original system was the right size for the facility. New compressors require less maintenance, while increasing equipment life and eliminating downtime during repairs. They can be relocated to support operational changes.

Union Pacific installed 10 of these systems last year, resulting in increased efficiency and reliability for its customers. New units continue to be installed this year.

One of the new air compressors in Union Pacific’s Bailey Yard in North Platte, Nebraska.

Union Pacific’s goal is to be a leader in moving goods in an environmentally responsible manner, positively impacting its employees, communities, customers and shareholders. Reducing energy consumption is just one way the company is investing in conservation. This year, Union Pacific also is testing and growing its switching fleet with low power and low emission locomotives and exploring ways to eliminate unnecessary water use, as well as identifying ways to conserve.

Curbelo Bill Reignites Important Congressional Dialogue on Climate Change

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This week saw the introduction of the Market Choice Act, offered by Reps. Carlos Curbelo (R-FL) and Brian Fitzpatrick (R-PA), which would curb greenhouse gas (GHG) emissions through a $24/ton tax on carbon levied at the point of fossil fuel production (for energy emissions) and at the manufacturing facility (for process emissions). The bill also repeals the federal gas tax and uses 70 percent of the revenues from the new carbon tax to replenish the Highway Trust Fund. Finally, it imposes a border tax adjustment on imported goods to compensate for increased domestic production costs resulting from the carbon tax, and it places a moratorium through at least 2025 on Clean Air Act GHG regulations from stationary sources covered by the tax.

Reps. Curbelo and Fitzpatrick are to be applauded for their willingness to start a meaningful conversation on climate policy. The reality that the last time a comprehensive climate bill was debated in earnest was 2009 tells a tale. A lot has happened since then in terms of how we produce and use energy and how we can reduce our carbon footprint. The manufacturing sector, for instance, has reduced our GHG emissions 10 percent over the past decade while increasing our value to the economy by 19 percent.

Given the enormous complexity of the issues involved and their potential impact on manufacturing families, Congress would do well to take a measured, comprehensive approach to this proposal. Bold ideas to drive positive change are always welcome. However, bold action can sometimes have unintended consequences. Now is not the time to act without thinking—the stakes for manufacturers and their employees are simply too high. ‎

Individually, these proposals are game-changing. Collectively, we need to make sure they are not game-ending.

Manufacturers Added 36,000 Workers in June

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The Bureau of Labor Statistics reported that manufacturers added 36,000 workers in June, the industry’s fastest pace of job growth since December. More importantly, it was the ninth consecutive month with robust hiring growth in the sector, with an average 27,111 jobs added per month over that time frame. As such, the latest jobs numbers confirm that the labor market has tightened significantly. Since the end of the Great Recession, manufacturing employment has risen by 1,260,000 workers, with 12,713,000 employees in the sector in this report. That is the highest level of manufacturing employment since December 2008.

Today’s report is more proof that the economy is still roaring following pro-growth tax and regulatory reform. Manufacturers have now added 155,000 total jobs in just the six months since tax reform was enacted—a marked increase in the pace of job creation compared to previous years. To keep this robust growth going long-term, manufacturers need certainty, and that will depend heavily on having sound trade policy and making temporary portions of the new tax code permanent. These numbers also help to cement more Federal Reserve rate action, largely based on improvements in the overall economy and labor market, with two more federal funds rate hikes expected in 2018.

Meanwhile, nonfarm payrolls rose at a healthy pace, up 213,000 in June, extending the gain of 244,000 seen in May and better than the consensus estimate of around 185,000. In addition, the unemployment rate ticked up from 3.8 percent in May, its lowest level since April 2000, to 4.0 percent in June. The higher unemployment rate, though, was largely a function of an increased participation rate, up from 62.7 percent to 62.9 percent. This suggests that more Americans are entering the labor market, which is encouraging. In a similar way, the so-called “real” unemployment rate, which includes discouraged, other “marginally attached” workers, edged up from 7.6 percent to 7.8 percent.

Turning to income growth, average weekly earnings for production and nonsupervisory employees in the manufacturing sector rose from $899.64 in May to $902.16 in June. That translated into a modest 3.0 percent increase over the past 12 months, up from $875.70 in June 2017.

In June, durable and nondurable goods manufacturers added 32,000 and 4,000 employees, respectively. The largest increases were in the transportation equipment (up 12,500, including 12,000 from motor vehicles and parts), fabricated metal products (up 7,100), computer and electronic products (up 5,100), food manufacturing (up 4,400), machinery (up 4,400), primary metals (up 2,900) and chemicals (up 1,900) segments. In contrast, there was declining employment in several segments in June, including apparel (down 1,800), miscellaneous nondurable goods (down 1,300), furniture and related products (down 800), miscellaneous durable goods (down 800), printing and related support activities (down 700) and textile product mills (down 300).

KEEPING OUR PROMISE: Tax Reform Delivers for Jamison Door Employees and Ensures the Company’s Continued Growth

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Employees at Jamison Door Company in Hagerstown, Maryland, are feeling the benefits of tax reform in a major way—receiving two special cash bonuses, thanks to increased competitiveness under the tax law.

Jamison Door, which manufactures temperature-controlled doors, has been a family-owned business since 1906. The company’s commitment to the men and women on its shop floor means that every single employee is sharing in the benefits of tax reform.

Jamison’s 120 employees received two bonuses, each equivalent to one week’s salary—first in August, in anticipation of tax reform, and again in February, after the new law took effect.

That is just the beginning: this year, Jamison plans to do even more, offering another raise to its employees.

Jamison Door is also taking advantage of tax reform and using its tax savings to reinvest in its business. That means growing its facilities, investing in new technology and creating skilled jobs in the Hagerstown plant.

Over the next year, Jamison is adding more than 50,000 square feet in new manufacturing space.

“Right now, we’re in the process of adding a significant-sized facility to add different product lines,” added Chairman and CEO John Williams, referencing his company’s plan to expand a product line of high-speed roll-up doors. “It’s a 400 percent increase in plant size.”

“We are spending about $1.5 million on new state-of-the-art equipment in our main plant, which makes foamed-in-place cold storage doors, and more than $3.5 million on the new plant for high-speed roll-up doors. These are significant investments for a company our size, and we feel comfortable making these investments because of the favorable business climate and the benefits of the lower tax rates.”

Expanding the company’s facilities also means Jamison will need more workers, and it plans to increase hiring dramatically. Over the next three years, Jamison plans to increase its workforce by more than 115 percent.

“Tax reform has absolutely made it more feasible to undertake these projects,” explained Williams. “Tax reform is necessary for us to keep expanding and to keep our business strong.”

Keeping Our Promise: Tax Reform “Slam Dunk” Means Bonuses, New Jobs for Wilmington, N.C.’s, Atlantic Packaging

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The “slam dunk” tax reform bill is leading to big bonuses, new jobs and a huge nationwide investment says the team at Wilmington, North Carolina’s, Atlantic Packaging.

The 75-year-old family-owned business specializes in commercial packaging for some of the biggest companies in the country. Thanks to tax reform, they’re making sure to pass along the savings to their employees, who Wes Carter, president of Atlantic Packaging, describes as their “number-one asset.”

Immediately after tax reform passed, “we decided to hand out bonuses right away,” said Carter. “We knew this is a once-in-a-generation opportunity. The culture of our company is all about our people. We think that the quality of our people is what differentiates us in the marketplace and makes us a unique supplier. For us, handing out bonuses was an investment in our most valuable resource: our people. Companies create culture by having happy, dedicated employees, who want to have a long-term career at a quality organization. Giving bonuses didn’t even take any debate—we all knew it was the right thing to do.”

As a result of tax reform, Atlantic Packaging employees will be joined by many new coworkers—because tax reform has allowed the company to add jobs, grow the number of facilities and take their company nationwide.

“Tax dollars will help us grow our business,” Carter said. “Atlantic is positioned to become a national company, enhancing our ability to service our clients across North America. Tax reform will help us open new facilities and hire new employees nationwide.”

That’s exactly what Atlantic Packaging is doing. A new $10 million packaging center in Charlotte opened last fall and is now the most advanced package testing facility in the world. Carter also plans to invest in new equipment that will increase productivity and efficiency, including new printing presses and die-cutters for Atlantic’s manufacturing operations.

“All of that takes cash,” said Carter. “We’re able to make these investments, in part, because of tax reform.”

The increased number of facilities means that Atlantic Packaging plans to add up to 20 to 30 jobs a year for the foreseeable future as demand continues to increase. In 2018 alone, the company already has created 25 new jobs and completed a strategic acquisition in the Northeast.

Carter told the National Association of Manufacturers, “We’ve hired sales and sales support people in Kansas City, in Los Angeles, Dallas, Texas and in Portland, Oregon. We opened a new facility in Memphis, Tennessee and in Greenville, South Carolina. Certainly, tax reform has given us the additional confidence to push ahead with these strategic moves.”

“I know tax reform became a partisan issue in Washington, but to me, it was pretty plain and simple,” said Carter. “Because we are all operating in a global economy, U.S. companies need a fair and competitive tax code to remain healthy and vibrant. To me, tax reform was a slam dunk. It’s already proving itself by bringing jobs and major corporate investment back to the United States. The future for American manufacturing is really bright, and that’s the first time in my career I can say that. I’ve never seen so much confidence in the marketplace.”

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