House Lawmakers Invest in Manufacturers’ Innovation. Will the Senate Do the Same?

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Last evening, the House passed the Revitalize American Manufacturing and Innovation Act (RAMI), a bill championed by Rep. Tom Reed (R-NY) and Rep. Joe Kennedy (D-MA) that has the potential to strengthen the technology leadership position that manufacturers have worked years to establish.

Manufacturers in the United States have always been the world’s leading innovators, as demonstrated by their investments and research and development and prolific patent portfolios. RAMI marks another important investment in a public-private innovation partnership that will help drive manufacturing and facilitate the longevity of our industry’s comeback. The legislation creates a network of innovation centers that brings together business, schools and the government in a joint effort to accelerate the transfer of advanced manufacturing technology and techniques into the commercial sector.

RAMI has been a top legislative priority for the NAM. Our policy teams have tirelessly advocated for the legislation in congressional meetings with key lawmakers. The NAM also designated legislative action on RAMI as a Key Vote. Now that the House has done its part and passed the bill, it is time for the Senate to follow suit.

There is reason to be optimistic. Sen. Sherrod Brown (D-OH) and Roy Blunt (R-MO), the bipartisan sponsors of a Senate version of RAMI, sat down with the NAM’s Member Focus magazine to discuss how their bill would contribute to the manufacturing comeback. “This legislation will particularly help small and medium-sized manufacturers by helping companies gain access to cutting-edge capabilities and equipment and by educating and training students and workers in advanced manufacturing skills,” Blunt told Member Focus.

As NAM President and CEO Jay Timmons wrote to lawmakers in July, “This legislation will accelerate the development of advanced manufacturing technologies and solidify the United States as the best place in the world to innovate.” The NAM will continue its push to advance RAMI until it becomes law.

The Worth of American Ingenuity

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Manufacturers in the United States are among the most prolific inventors and innovators in the world and the NAM supports policies at the federal level that encourage and stimulate innovation in all sectors of our economy. While Americans and federal policy makers generally understand there are risks associated with research and development, the enormity of the risk is often difficult to convey, but it is absorbed into every product.

The cost of innovation varies from sector to sector, but the drive for solving problems and improving what we have is priceless. It’s what built our nation into an economic workhorse and we ought to have the proper perspective on the value it brings to our lives every day. Manufacturers of all sizes and types strive to improve, build upon or replace the products we use to make our lives easier – in some cases they even make our lives possible. In the words of Thomas Edison, “There is always a better way.”

Manufacturers of automobiles are constantly looking for ways to make our cars more convenient, more enjoyable, more luxurious, more efficient – generally more of everything, including safer. All of those innovations come with a cost that runs into the millions and billions of dollars and sometimes they never make it to the market. Over time, the price of those innovations that do make it to the market declines and becomes part of the base cost of a vehicle. Thirty years ago, fuel-injection wasn’t viewed as necessary or practical for general use. Try finding a new car that isn’t fuel-injected now – you can’t, unless it’s an electric one.

Manufacturers of paints and other coatings are engaged in a constant and epic battle with chemistry, mineralogy, physics, biology and meteorology. Millions of dollars are spent by coatings companies to perfect the color, application and durability characteristics of all their products and we get to choose which of those features we want with each gallon of paint or stain we buy. Whether we realize it or not, that’s part of the reason we see a price differential between a gallon of flat white paint and a gallon of solid stain.

Manufacturers of medical devices, biologics, pharmaceuticals, agriculture, petroleum, and many other products also spend billions each year to improve upon or invent products and treatments that have never existed before – products that enrich our lives or make it possible to continue living at all. That’s why the NAM has a clear and unambiguous policy when it comes to innovation – we are for it. American ingenuity has always, always been worth the investment and it is firmly embedded in the American ethos.

Boeing ecoDemonstrator Aircraft Comes to Washington

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Today the Boeing Company brought the new ecoDemonstrator to Reagan National Airport in Washington. The eco Demonstrator program was started earlier this summer by Boeing, partnering with American Airlines, the FAA and other important partners.  The program uses an all new Boeing Next Generation 737-800 aircraft.

Boeing's ecoDemonstrator Visits Washington

Boeing's ecoDemonstrator at Reagan National Airport.

The goal of the ecoDemonstrator program is to help accelerate advancements and innovation in efficiency, noise, airspace modernization and to reduce the environmental footprint. The ecoDemonstrator that we had the opportunity to tour today has many unique features to help achieve these goals to lead to a sustainable future.

Perhaps the most unique feature on the aircraft is the regenerative fuel cell which converts hydrogen and oxygen gas to electricity and water. The aircraft also features an adaptive trailing edge on the wings that reduces airframe noise on takeoff and landing. To improve efficiency the aircraft has active engine vibration control which allows the engine to run at lower speeds and reduces vibration and noise in the cabin. The ecoDemonstrator even has recyclable carpet tiles that can be individually replaced instead of having to replace the entire carpet in the cabin.

Boeing is continuing test flights of the ecoDemonstrator to gain as much as data about these new features as possible. And hopefully in the future you will see these innovations when you are catching a flight on a future family vacation.

The ecoDemonstrator is another great example of how manufacturers are continuing to innovate to build better and more sustainable products.

Boeing Dreamliner Lands in Washington, D.C.

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A Boeing 787 Dreamliner touched down today at Ronald Reagan National Airport. The aircraft is in town for the Atlantic’s Innovation Summit that is being held this week at the airport.

A Boeing 787 Dreamliner arrives at Reagan National Airport

Boeing's 787 Dreamliner arrives at Reagan National Airport

The Dreamliner is the most advanced and efficient commercial jetliner ever produced. It is a great example of the innovations of modern manufacturing.

The aerospace industry continues to be essential to manufacturing  in the United States. Which is why its important for Washington to provide manufacturers with the tools necessary to compete globally so they can continue to innovate and create new products that can change the world, such as the Dreamliner.

How Sweet It Is: Three Hershey Company Facilities Achieve ‘Zero Waste to Landfill’

By | Energy, Innovation | No Comments

The Hershey Company recently announced that three of its manufacturing facilities in Pennsylvania have achieved “Zero-Waste-to-Landfill” (ZWL) status due to the company’s ongoing recycling and waste management efforts. According to the press release, ZWL means that manufacturing waste from these three facilities has been eliminated from landfill disposal.

Approximately 90 percent of this waste is recycled, and the remaining 10 percent is converted to energy at nearby waste-to-energy incinerators in Bainbridge, PA and Harrisburg, PA. This announcement underscores the company’s long-standing commitment to environmental sustainability. Founder Milton Hershey started the company’s first recycling center in Hershey in 1937, long before recycling and waste reduction were common practices.

Terence O’Day, Senior Vice President of Global Operations stated in the release, “We are proud of our role as stewards of the environment and of our progress in eliminating waste from our operations. We achieved ZWL at these facilities through a rigorous process of eliminating waste, recycling and converting waste to energy. Our employees understand the importance of sustainability across our company and are working together to reach our reduction goals.”

In addition to its recycling achievements, the company has also invested in solar panels to generate electricity at several facilities and made commitments to reduce its greenhouse gas emissions.

Alicia Meads is director of energy and resources policy, National Association of Manufacturers.

Bayer Corporation Opens Electric Vehicle Charging Station

By | Energy, Infrastructure, Innovation, Technology, Transportation | No Comments

Furthering its commitment to sustainability, NAM member Bayer Corporation last week opened an electric vehicle charging station for employees at its U.S. headquarters in Pittsburgh. The Bayer charging station is one of the 45 stations that will be built along Pennsylvania Interstate 376 as part of the “Energy 376 Corridor” project. The project’s goal is to create one of the most extensive charging station networks in the country. The station is located next to Bayer’s EcoCommercial Building Conference Center, which is a net-zero energy facility.

Dan Santmyer, Director of Operations at the Bayer Pittsburgh site, said in a press release, “the installation of the EV charging station is part of the company’s global commitment to sustainability. We are proud to provide our employees with the infrastructure that supports their efforts to drive, rent or purchase EV’s and reduce their personal footprint on the environment.”

Learn more about Bayer’s comprehensive sustainability program here.

Kennametal CEO Speaks in Washington on Importance of Manufacturing

By | Education and Training, Innovation | No Comments

Today NAM Board Member and Kennametal Inc. Chairman, President and CEO Carlos Cardoso spoke at the National Press Club to discuss manufacturing and the need to bridge the gap between how the public views manufacturing and the actual reality of manufacturing in the United States.  

Mr. Cardoso called on manufacturing leaders to help spread the message and share the success stories and the importance of educating young workers about manufacturing careers. 

Kennametal also released a poll which shows that Americans are not as aware that manufacturing is leading the economic recovery and don’t believe manufacturing jobs are available. The NAM and manufacturers like Kennametal are working to change that perception and better educate the public and our leaders in government about the critical role of manufacturing in our economy and the need for highly skilled workers.

One of the main goals of the NAM’s Manufacturing Renaissance: Four Goals for Economic Growth is to ensure that manufacturers in the U.S. have the workforce that the 21st-century manufacturing economy requires.

From the Kennametal press release:

“The U.S. manufacturing sector has been steadily growing and right now, 600,000 manufacturing jobs are available,” Cardoso said. “Most of these positions require specialized skills and education, and as manufacturers, we have a responsibility to educate people about these opportunities and build the manufacturing workforce of the future. At Kennametal, we take this seriously and are helping to deliver the promise of manufacturing today through our actions.”

Joining Mr. Cardoso today were representatives from Greater Latrobe High School which is a partner in the company’s Young Engineers Program. Students in this program get to learn first-hand about manufacturing by participating in hands-on projects and mentoring from Kennametal engineers. This program is just one of many educational initiatives by manufacturers throughout the country to help educate students on manufacturing jobs.

Westinghouse Nuclear Reactor an Important Step to New Sources of Energy

By | Energy, Innovation | One Comment

On December 22 the Nuclear Regulatory Commission (NRC) announced that it has certified Westinghouse Electric Company’s AP1000 reactor design. This is an improved reactor from every perspective including safety. It is the first time since the 1990s that NRC has approved a nuclear power plant design. This design will be used on two new power plants being built in the State of Georgia by Georgia Power, a Southern Company subsidiary.  NRC’s approval of this design will streamline the NRC licensing process and provide companies constructing nuclear power plants greater certainty. In addition, this will make it easier for Westinghouse, to market it reactor designs in a global economy. This in turn will create thousands of new jobs as our nuclear power plan industry will be renewed and the demand for supplies and parts will grow. It is estimated that 80 per cent of the components for the new Georgia plant will be made in the United States.

The Southern Company has made a significant investment in nuclear. They have already spent over $2 billion to get their project to this point and as the project moves forward it will mean thousands of new construction jobs and hundreds of permanent jobs when the plant is completed.

It is anticipated that the NRC will soon approve the first combined Construction and Operating License (COL) permit for a nuclear power plant in the United States. This will further streamline the licensing process and save millions of dollars and significantly reduce the construction to operation time frame. According to the NRC the last time a construction permit was issued to build a nuclear power plant was in 1978, 33 years ago. The last time the NRC issued an operating license was in 1996, 15 years ago. We are long overdue for a renaissance of nuclear power.  As manufactures use over a third of the energy produced in this country it heartening to see new sources of energy come on line that will help make our manufactures more competitive.

Dreamliner Makes First Commercial Flight

By | Innovation, Transportation | No Comments

Today was another historic day for the future of the avaition industry in the United States as the first Boeing 787 Dreamliner made its very first commercial flight. The All Nippon Airways flight was a charter flight from Narita to Hong Kong that last about four hours.

The Dreamliner is the most advanced and fuel efficient commercial jetliner ever produced.

Boeing 787 Dreamliner

Boeing 787 Dreamliner

The aerospace industry is extremely important to innovation and manufacturing in the United States. Yet companies like Boeing are continuing to face regulations and headwinds that make it difficult to compete in the global marketplace. The National Labor Relations Board’s complaint against Boeing is creating uncertainty throughout the economy for manufacturers and has put at risk thousands of jobs in the production of the Dreamliner.

Manufacturers are looking for policies out of Washington that will help them create jobs and foster innovations like the Dreamliner. More regulations just continue to dampen job creation and growth.

Additional media coverage of the Dreamliner’s first commercial flight:

A Bittersweet Anniversary for the U.S. Research and Development (R&D) Tax Credit

By | General, Innovation, Taxation | One Comment

The U.S. R&D tax credit, a proven tool for spurring innovation and creating jobs, has a bittersweet 30th anniversary on August 13. Bittersweet because the credit, the best R&D incentive in the world in the mid-1980s, is one of the weakest today.

This negative trend is bad for manufacturers and the economy, especially now that other countries aggressively court American manufacturers to move their domestic research by offering better and often permanent R&D tax incentives.  (To learn more about what other countries are offering, read this Deloitte survey of R&D tax incentives around the world.)

These countries have discovered the multiple spillover and societal benefits, like a higher standard of living, associated with the innovations derived from research. For sure, there has been a steady increase in the migration of domestic research offshore–the U.S. share of global R&D has dropped from 39 to 33 percent in less than a decade as more nations have entered the race to attract R&D dollars.

The credit’s power to spur innovation and create jobs hasn’t been helped by its history of lapses and retroactive extensions. Since its enactment in 1981, the credit has expired 14 times, including a one-year lapse in the mid-1990s that was never reversed—and the credit is set to expire once again at the end of this year.  The uncertainty caused by these stop-and-go credit extensions has had a damaging impact on companies’ future R&D budgets because companies cannot rely on the credit to exist for the duration of a research project, which typically spans 5 to 10 years for manufacturers.

R&D fuels innovations and technological advances that drive new product development and increased productivity—key factors necessary for growth in the manufacturing sector.  Many lawmakers are voicing repeated interest in creating a pro-manufacturing climate in the United States.  Now they can turn their words into action, specifically through enactment of H.R. 942, bipartisan legislation that would strengthen the alternative simplified research credit rate to 20 percent from its current 14 percent, and make it permanent.  There is a long history of bipartisan, bicameral congressional support as well as presidential support for a strengthened, permanent R&D tax credit.  Future anniversaries of the credit would be sweeter if the U.S. R&D tax credit’s incentive value is restored to a position of global leadership.

For more information about the R&D credit, visit the website of the R&D Credit Coalition.