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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Manufacturers Highlight Infrastructure at Congressional Hearing

U.S. surface transportation is failing to keep pace with the global marketplace, and it’s time to develop federal surface transportation reauthorization legislation that enhances our nation’s infrastructure system and enables manufacturers to compete globally. That was the message today from Caterpillar Group President Stu Levenick.

Levenick, who was testifying at a House Transportation and Infrastructure Committee hearing on building the foundation for the next Surface Transportation Reauthorization, focused on manufacturers’ need for expansion and modernization of our nation’s transportation network:

“Whether the export opportunities are in our hemisphere or on the other side of the world, the goods we seek to sell must travel through a multi-modal transportation system that includes roads, rail, water and air. America needs a multi-year surface transportation reauthorization so that we can begin to rebuild our infrastructure and get back on the road to competitiveness.”

This past September, the NAM released a survey of more than 400 manufacturers, which found a majority believe American infrastructure is in fair or poor shape, while roads in particular are getting worse. In his testimony, Levenick addressed how the current state of our infrastructure compares to our global competitors:

“While other parts of the world are integrating and modernizing their infrastructure to meet the economic challenges of the 21st century, we are failing to act comprehensively and decisively.”

Manufacturers will continue to rally support for broad-based, jobs-creating investment in upgrades, expansion and modernization of our nation’s transportation network.

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Cables from Canada: NAM Sister Organization Visits Headquarters

Jay Timmons and Jay Myers, president and CEO of the Canadian Manufacturers and Exporters (CME) meet at NAM Headquarters on November 21, 2013 to discuss the Keystone XL pipeline and North American manufacturing issues.

Jay Timmons and Jay Myers, president and CEO of the Canadian Manufacturers and Exporters (CME) meet at NAM Headquarters on November 21, 2013 to discuss the Keystone XL pipeline and North American manufacturing issues.

Yesterday, Canadian Manufacturers & Exporters (CME) President and CEO Jay Myers visited the National Association of Manufacturers (NAM) headquarters in Washington, DC. CME is NAM’s Canadian sister organization and close partner in promoting the manufacturing agenda across both borders. The NAM Communications office sat down for a brief Q&A with Mr. Myers. Here are a few excerpts from the discussion.

NAM Communications: Can you tell us about the CME and its membership?

Mr. Myers: We are Canada’s largest industry trade association, representing over 10,000 members across Canada. We are Canada’s counterpart to the NAM and our job is to represent the interests of manufacturers operating in Canada, of course many of the companies are headquartered in the United States, which is one reason why we work so close with the NAM.

NAM Communications: Can you tell us about how the CME and the NAM work together in both countries?

Mr. Myers: We’ve had a long-standing relationship with the NAM that continues to grow closer and closer as we deal with energy issues, cross border issues, regulatory cooperation issues, and trade policy. It used to be that the NAM and CME were talking about how to build a free trade environment between the United States and Canada, and now it’s about how we take that great model that we developed here with NAFTA and apply to it grow business around the world, get access to new markets, and make sure we’ve got a competitive energy infrastructure base here in North America.

NAM Communications: What does the Keystone project mean to Canadian manufacturers and to the Canadian economy in General?

Mr. Myers: Keystone is a very strategic issue for the Canadian economy. It’s about the ability to supply oil from Western Canada to not only one of the world’s largest markets, but also to the refineries that have been set up to handle that market on the Gulf Coast. Without Keystone, the oil coming out of Western Canada is kept from entering this major market, and there are really only two other alternatives. In Canada, because we need access to international markets, pipelines will be built east and west. If pipelines are going to the Pacific, the oil may possibly go the West Coast of the United States, but more likely to China. Likewise, pipelines are being built to Eastern Canada, and that oil is going to Europe.  Unfortunately, this issue has become politicized. Clearly, if Keystone is turned down, it’s going to be very difficult to go ahead with any major north-south pipeline. Again, it’s a very important strategic issue for the Canadian economy. I don’t think people truly appreciate the chill that turning down Keystone will put on the Canadian’s economic relationship with the United States. For investment generally, it’s going to be very important that we see that pipeline succeed.

Approval and construction of the Keystone pipeline is a priority for manufacturers, and Mr. Myer’s comments illustrate exactly why this project goes beyond energy security and new jobs. It’s about fostering an environment in which economic growth and continued global competition can take place. As noted by Mr. Myers, denial of the Keystone pipeline would do just the opposite by chilling Canadian and U.S. economic relations.

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Timmons Highlights Manufacturing Priorities on Infrastructure Panel

Today, NAM President and CEO Jay Timmons joined other business leaders at the Infrastructure for the Future Summit, an event sponsored by NAM member company Volvo and the American Highway Users Alliance, which focused on the looming issues facing the nation’s infrastructure and specific challenges that threaten our economy.


Jay Timmons speaks on a panel at the the Infrastructure for the Future Summit. Photo by David Bohrer/NAM.

During a panel discussion with leaders from the American Association of State Highway & Transportation, the National Retail Federation, and Cowan Systems, Timmons highlighted the importance of infrastructure to manufacturers’ ability to grow and compete, noting that “infrastructure matters to manufacturers. I hear concerns about the state of our infrastructure from NAM members constantly and consistently, regardless of their size or sector. From the world’s largest multinationals to family businesses up and down Main Streets all across America, everyone recognizes that our aging infrastructure is a competitiveness problem.”

Timmons also highlighted the importance of the federal government’s role in funding the national infrastructure, noting a recent NAM poll of manufacturing that found that 67 percent of manufacturers say that infrastructure is so important that all options to fund it should be on the table, and over 66 percent doubt that it is positioned to respond to the competitive demands of a growing economy.

Timmons concluded by reiterating the NAM’s intention to push for a return to a “fully funded, multiyear reauthorization that, offers certainty and support for infrastructure projects that improve safety, facilitate trade and create jobs. The road ahead is long, but manufactures are confident we will succeed.”

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LNG, Coal Terminals Will Boost Exports and Infrastructure Investments

Last week President Obama traveled to the Port of New Orleans to talk about the need to upgrade our infrastructure as part of his goal to double U.S. exports by 2015.

Although government investment in upgrading, expanding and modernizing our nation’s transportation network is critical, often lost in this conversation are the numerous ongoing efforts in the private sector to build the infrastructure necessary to increase exports.

Two examples of large-scale projects are liquefied natural gas (LNG) and coal export terminals, multi-billion dollar projects that will have a huge impact on not only the local economies but also the national manufacturing economy.

Currently, there are four LNG terminals that have been approved by the Department of Energy, with another twenty or so applications pending.  There are three coal export projects in the Pacific Northwest that are ready to be built, but are waiting for approval on federal, state and local permits.

Manufacturers are frustrated with the delays in considering applications for these projects, and agree with the President’s comments last week when he noted that “the first thing we should do is stop doing things that undermine our business and our economy. It is like the gears of our economy, every time they are just about to take off, someone taps the brakes and says, ‘Not so fast.’”

In order to get our economy moving at full speed we need to appropriately invest in our infrastructure and a big part of that is allowing the private sector to move forward with these projects.

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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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An Opportunity for Manufacturers and Exporters in the Pacific Northwest

A big debate on energy exports is playing out in the Pacific Northwest. Passions are running high on both sides, no doubt fueled in part by meticulously brewed cups of java.

NAM President and CEO Jay Timmons recently waded into the debate. In remarks to business community leaders in Portland and later in Seattle, he made a strong case in support of building the infrastructure necessary to move goods and commodities, such as coal and natural gas, to markets abroad. He said:

Building, modernizing and expanding export terminals makes sense. In a still sluggish economy, expansion will create over 10,000 jobs in the Pacific Northwest and throughout the entire manufacturing economy in America. Expansion means more private investment in export infrastructure—not just for commodities like coal and liquefied natural gas—but for agriculture and manufactured products. It’s a winning proposition.

Currently, plans to modernize export terminals in Washington and Oregon are  effectively on hold. Approval of these projects takes the consent of seemingly every level of government, giving opponents plenty of opportunities to stall. All the while, the Pacific Northwest is missing out on the increased economic activity the export terminals would make possible.

The debate over energy exports isn’t isolated to the Pacific Northwest. Similar debates are taking place across the country, particularly on the issue of natural gas exports. The United States has abundant supplies of natural gas, which are now being developed thanks to advancements in hydraulic fracturing. By exporting energy, whether coal or natural gas, the United States can enhance its global economic leadership, boost economic growth and create high-wage jobs.

“Other growing global economies need energy,” Timmons remarked during his trip to the Pacific Northwest. “Why shouldn’t it be from America?”

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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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It’s all connected: Inland Waterways Crucial to US Agriculture

Fertilizer plays an important role in the nation’s food supply chain because farmers depend on fertilizer to nourish the soil and their crops. For Deerfield, Illinois-based CF Industries, a global leader in fertilizer manufacturing and distribution, the inland waterways system is critical to the company and its farmer customers.  The competitiveness of manufacturing and agriculture depends on a modern and efficient inland waterway system that moves products and commodities valued at $185 billion annually.

Moving the fertilizer from the shop floor to farmers across the country is no easy task. U.S. farmers must have the fertilizer on a timely basis for the unpredictable spring and fall planting seasons. The nation’s 12,000 miles of commercially navigable inland and coastal waterways play an important role in its delivery. About half of the fertilizer needed for spring planting by U.S. farmers travels upriver on the Mississippi and its tributaries. Many of these crops, including corn and wheat, end up filling those same barges when headed downriver to market for domestic and international consumption.

Unfortunately, there was trouble on the Mississippi last year—a low-water crisis that led to restricted river access for barge shippers. In November and December, CF Industries and other companies in the fertilizer industry were forced to light-load barges to ensure safe river navigation, which in turn made it challenging to move the necessary fertilizer to Midwestern farmers in advance of the spring planting season. Thanks to a coordinated industry effort that educated Congress and the Obama Administration on measures that needed to be taken to improve conditions along the river, CF Industries was able to make the best of the situation and ensure that farmers still received fertilizer in a timely and efficient manner. However, the uncertainty over two months pointed to the need for a long-term strategy that modernizes our nation’s inland waterways, not short-term fixes.

For CF Industries, passing H.R. 3080, the Water Resources Reform and Development Act of 2013 (WRRDA) is key to improving the certainty of inland waterway transport. Adequate investment and recapitalization of inland waterways infrastructure will keep locks and dams operational for many years to come. With more than half of the locks exceeding their design life, Congress cannot afford to wait much longer. “We simply cannot sustain the status quo,” said Alicia Meads, CF Industries’ manager of legislative affairs, at a National Association of Manufacturers Shopfloor briefing for transportation lawmakers on Capitol Hill earlier this year.

Modern lock and dam infrastructure is essential to ensuring that American farmers have access to the fertilizer they need to grow their crops and feed our nation’s families. CF Industries will continue to advocate for passage of WRRDA until it becomes law because our food supply chain depends on it.

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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