“The NAM applauds Congresswoman Walters for taking this positive step forward for employees and their work-life responsibilities.”
By Chris Muhlenkamp, Allegion Senior Vice President of Global Operations & Integrated Supply Chain
October marks Manufacturing Month, an opportunity for manufacturers across the country to highlight modern-day manufacturing, the many diverse sectors within our industry and the opportunities and challenges we’re facing. With a widening manufacturing skills gap, it’s more important than ever that we use this month’s momentum to continue pushing for recognition of our vibrant industry in 2018 and beyond.
Consider this: Deloitte and The Manufacturing Institute recently reported that, over the next decade, nearly 3.5 million manufacturing jobs will likely need to be filled. However, in that same report, it’s predicted that nearly 2 million of those jobs will go unfilled because of the growing manufacturing skills gap. Linked to a lack of STEM (science, technology, engineering and mathematics) skills among workers and fueled by a decline of technical education programs in high schools, closing the skills gap is imperative to the success of manufacturing in the United States and millions of American workers.
As someone who has worked in the manufacturing industry for 40 years, I believe manufacturing has a bright future. Manufacturers are innovators, and we continue to see the invention of new technologies and processes that result in shorter delivery cycle times and higher-quality products for our customers. As a result, it is critical to have employees who have the desire, knowledge, expertise and capability to run, manage and maintain such investments.
Informing and inspiring the next generation of manufacturers will require a good deal of work within our communities, but it’s a worthy cause. At Allegion, we’re committed to investing in our manufacturing processes and equipment, our people and the communities in which we work to further advance the manufacturing competency.
However, to get to where we want to be, we also need government leaders at all levels to work with us, prioritizing more resources in STEM education and supporting initiatives such as trade apprenticeships and tuition reimbursement programs. Manufacturing Month only underscores the need for our nation’s leaders to continue delivering on manufacturing priorities to boost the economy and bolster our workforce. Together, we can combat the skills gap and invest in the future of the country’s workforce and the communities we serve.
Rules relating to investment overseas and the investor-state dispute settlement (ISDS) are back in the news. This morning, I had the opportunity to join several experts to explain some basics that seem to get lost in debate that seems to suggest that the sky will fall any day now:
1. Businesses invest at home and abroad to reach customers and participate in international projects. Most investment by U.S. companies is in fact domestic, helping companies reach customers here in the United States, the largest consumer market in the world. But 95 percent of the world’s consumers and more than 80 percent of global purchasing power is outside the United States. And that is why U.S. businesses invest not just here at home but in overseas markets to reach foreign customers. Indeed, investing close to your customers (as foreign companies do here in the United States) is often the best way to make a sale, including through activities to set up dedicated distribution networks and to tailor products to local consumer tastes.
In some areas, such as energy, natural resources or foreign infrastructure development, foreign investment is the primary way American manufacturers can participate and grow opportunities because that is where the resources and activities must take place.
The actual data collected by the Commerce Department’s Bureau of Economic Analysis confirms this basic, but often overlooked, fact: Year after year, decade after decade, the vast majority of sales by U.S. foreign affiliates—more than 90 percent—are made to foreign customers not returned to the United States.
2. The United States, its workers and businesses benefit enormously from U.S. investment overseas. U.S. companies that invest overseas are outsized participants in the U.S. economy and are stronger because of their access to foreign markets that help grow economies of scale and boost U.S. activity and wages here at home. The facts are clear. U.S. companies that invest overseas are America’s:
- Largest exporters, exporting 47 percent of all U.S.-manufactured goods sold overseas ($660 billion in 2014);
- Biggest producers, accounting for $1.363 trillion or nearly 65 percent of all U.S. private-sector value-added manufacturing output in 2014;
- Most important innovators, expending nearly $269 billion on research and development in the United States in 2014 (of that, 68 percent (or $183 billion) was expended by manufacturers in the United States);
- Largest investors in capital expansion, expending $713.5 billion or 24 percent of all investment in new property, plants and capital equipment in the United States in 2014; and
- Highest-paying employers, paying U.S. manufacturing workers on average $96,030, or about 18 percent more than average U.S. manufacturing wages in 2014.
3. Having strong legal protections, backed up by ISDS, helps America win in a highly competitive global economy. For more than 30 years, U.S. administrations and Congress have strongly supported a pro-investment and pro-ISDS policy because it helps America, its businesses and its workers win. The investment rules—taken right out of the U.S. Constitution and other baseline U.S. laws for the protection of private property against discriminatory, unfair, expropriatory government action—set the basic rules to combat against foreign government market-distorting activities. For example, prohibitions on government forced localization measures and incentives (e.g., government mandates to buy local products or transfer technology in exchange for allowing an investment) help ensure that U.S. investment overseas can continue to support the growth of U.S. exports and jobs. And when governments violate these basic rules, ISDS is critical so that companies have access to a neutral venue to seek compensation.
4. The same anti-ISDS critiques have been leveled for decades, and the sky has not yet fallen. Those opposed to ISDS have been rehashing the same tired, false and discredited critiques for years, and they continue to be rejected by policymakers, including most recently in 2015 when a bipartisan majority strongly rejected Sen. Elizabeth Warren’s (D-MA) amendment to eliminate ISDS from Trade Promotion Authority; Consider the main critiques:
- Types of cases: The vast majority of cases are about individual permit authorizations and the treatment of individual investors, not broad public interest regulation.
- Types of claimants: Most claimants are individuals and small and medium businesses.
- Impact on government regulation: ISDS panels can only order compensation, not a change in government policy. And not one case has ever found a violation of the investment rules through a nondiscriminatory, broadly applied public interest regulation.
- Number of cases: Less than 20 cases have been filed against the United States in more than 20 years, even though the United States is the largest destination for foreign investment. Loud claims that the Korea–U.S. trade agreement would lead to hundreds of cases against the United States, for example, have continued to fall flat; not one case has been brought against the United States in the five years that agreement has been in force. Contrast that experience to the tens of thousands of cases filed in U.S. Federal Claims court every year on similar property claims.
- Alternatives: Political risk insurance is a highly limited approach, far too expensive for small business and does not even begin to combat the broader investment rules that are vital to discipline foreign government market-distorting forced localization and other measures. When official government risk insurance is used, it would be the U.S. taxpayer, not the foreign government, bearing the cost of a foreign government seizure of America’s own property.
- ISDS arbitrators: Arbitrators are chosen collectively by both sides in a dispute, are respected experts and held to strict ethical standards. If there is a bias, it is in favor of governments that win the vast majority of cases.
And as for letters, let us take a look at some from those who are experts in this field. Take a moment to look at this letter from academics whose actual expertise is in international law, arbitration and dispute settlement that strongly support the ISDS system. Or consider this statement of the International Bar Association, the world’s leading organization of international legal practitioners, bar associations and law societies, that felt the need to correct the record on ISDS because “erroneous information is subverting debate.”
As more than a hundred business groups representing millions of small, medium and large companies across every sector of the economy recently explained, investment rules and ISDS are very much in America’s interest as we all seek to grow manufacturing, well-paying jobs and U.S. competitiveness in the global economy.
Earlier this month, the National Association of Manufacturers, The Manufacturing Institute and Arconic Foundation hosted a STEP Forward Google Hangout, where an expert panel focused on how to attract and retain women in the manufacturing industry. STEP Forward is the Institute’s initiative to empower women in manufacturing and inspire the next generation of female talent to pursue careers in the industry. During this live virtual session, the panelists told their own stories and shared best practices covering a range of topics like the importance of getting men involved in the conversation, showcasing females in leadership positions and exposing young women and parents to modern manufacturing careers.
Manufacturers across the country are struggling to fill open positions. And one critical barrier to filling these jobs is that too often women aren’t seeing that there is a place for them in today’s manufacturing. Many outstanding women leaders are making huge strides in impacting this industry and are demonstrating what modern manufacturing offers—rewarding and fulfilling careers with limitless opportunity for growth. Today’s manufacturing employees are building and designing the future, and women in manufacturing serve as ambassadors to move this industry forward.
Research shows women are more likely to look for careers that offer personal and intellectual growth. In fact, women ranked opportunities for challenging and interesting assignments as a top priority when considering their career. Modern manufacturing provides women with opportunity for advancement and long-lasting careers in a range of sectors. On the STEP Forward Google Hangout, the panelists expressed how rewarding it is to be a maker and create products that Americans use every day to increase our standards of living.
Knowing the importance of a diverse workforce, the Institute is promoting the role of women in manufacturing through the larger STEP Ahead initiative, which serves to mentor and recognize women in this critical sector while also leading research efforts tackling this important topic. STEP Ahead honorees and emerging leaders are motivating women to choose careers in manufacturing, and over the past five years, those awarded have impacted more than 300,000 individuals, from peers in the industry to school-aged children.
Manufacturers today must collaborate and work together to diversify the current and future workforce. Showcasing the reality of manufacturing to young women is a huge step toward bridging the skills gap and allowing the industry to reach its full potential. Watch the STEP Forward Google Hangout to hear the insightful discussion on exposing women and the next generation to the opportunities available in manufacturing and continue to follow the conversation at #MFGwomen.