The Trucker.com trade publication is the only non-advocate website we’ve found that has reported on Secretary of Transportation Ray LaHood’s declaration before bicycle advocates last week of a “sea change” in federal policy: “This is the end of favoring motorized transportation at the expense of non-motorized.” (See Shopfloor post, “Embracing Bicycles at Expense of Freight, Jobs, Reality.”)

The Trucker report included many details about LaHood’s comments, “LaHood says DOT ending favoring motorized transportation over non-motorized,” starting by setting the scene:

LaHood’s surprise appearance at the bikers summit and his subsequent remarks drew praise from those in attendance, who reportedly swarmed the secretary “like a rock star” when he tried to leave.

To make sure he could be seen, LaHood hopped up on a desk in the Senate hearing room where the group was meeting.

The Trucker also noted the Secretary’s comments on his DOT blog, The Fast Lane.

Included in the report were comments from an unnamed DOT spokesman, who dodged the Trucker’s question (which we’ve bolded):

“Secretary LaHood believes the way we design our communities has a huge impact on our citizens’ economic, physical and social wellbeing,” a DOT spokesman said when asked if LaHood’s new directive meant that much-needed highway infrastructure needs might be sidetracked in favor of bike paths. “Many Americans live in neighborhoods without access to public transportation or sidewalks. By focusing on livability, we can help transform the way transportation serves the American people, and create safer, healthier communities that provide access to economic opportunities.”

The spokesman noted that LaHood presently is presiding over the “most ambitious infrastructure investment program in more than half a century, the Economic Recovery Act.”

So far, the spokesman said, the DOT has obligated $37.8 billion for 14,011 highway, road, transit, bridge and airport construction projects in 53 U.S. states and territories.

“Secretary LaHood has always said that rebuilding the nation’s infrastructure and the job creation that comes with that are among his primary goals,” the spokesman said.

When a Cabinet secretary announces a “sea change” in federal policy that expressly rejects the economic priority of freight transportation — 80 percent of which moves by truck — it warrants wide attention, not just from Congress as we suggested in our earlier post, but also from major, national media outlets.

The Restoring American Financial Stability Act of 2010 unveiled this afternoon by Senate Banking Committee Chair Chris Dodd (D-CT) raises more questions and concerns for U.S. manufacturers. For one, manufacturers are disappointed that the new proposal does not make it clear that only businesses that are “predominantly engaged” in financial activities are covered by the overall reform.

Even though the thrust of the reform measure is to restore responsibility and accountability in the nation’s financial system, broadly worded definitions in the bill arguably could pull some non-financial companies into the new regulatory regime. Covered companies are defined as those with “substantial” financial activities and the Federal Reserve Board gets to decide who falls into the definition. Manufacturers that engage in routine financial activities as a small part of their main business, e.g., a global manufacturer that manages a foreign exchange trading operation, an equipment manufacturer that provides financing for customers, are concerned that they could be pulled into the systemic risk regulatory regime, drawing needed capital from their businesses and imposing new administrative burdens.

On the derivatives front, manufacturers were pleased to see that the definition of a “major swap participant” excludes OTC derivatives used to hedge business risk. Unfortunately, because it is not clear that business end-users who do not pose risks to the financial system are excluded from the definition, some manufacturers are concerned they could be considered a major swap participant. Another concern for manufacturers are requirements that they post margin on bilateral, customized derivatives contracts. End-users like manufactures do not pose a threat to financial stability and should be able to continue to access OTC derivatives without tying up valuable working capital.

On a brighter note, there may be more changes on the derivatives provisions during the Committee’s markup session, which could happen as early as next week. In comments this afternoon, Sen. Dodd noted that Sens. Judd Gregg (R-NH) and Jack Reed (D-RI) are working on a revised derivatives section that the committee could vote on next week.

• Text of draft legislation
• Summary of draft legislation (13 pages)

Dorothy Coleman is vice president for tax and domestic economic policy at the National Association of Manufacturers.

Today’s Federal Reserve report that manufacturing production edged down 0.2 percent in February, following a very strong increase in January, continues to demonstrate that this will be a long and slow recovery.

New orders for machinery slowed down for a second consecutive month as output was likely pushed forward to late 2009 to take advantage of expiring business investment tax provisions. Second motor vehicle output contracted sharply. Outside of motor vehicles, manufacturing production was essentially flat, with half of the sectors posting modest increases and half posting modest declines. Overall, production edged up 0.1 percent.

Two-thirds of manufacturing production gains in February was in durable goods, which are more export-intensive than nondurable goods sectors. The increase in durable goods production signals that a rebound in the developing economies is continuing to provide support for U.S. manufacturing sectors. At the same time, production declines in manufacturing industries tied more to the domestic economy, such as nonmetallic minerals, furniture and chemicals, signals that the current recovery remains fragile.

Looking ahead, export-related activity is likely to continue to be the most durable part of the manufacturing recovery

Today we mark the anniversary of the imposition of retaliatory tariffs on a wide range of U.S. manufactured exports to Mexico. As a result of Congress yanking funding for a pilot program to demonstrate the safety of Mexican trucks operating in the United States –- and the program’s interim report showed they’re just as safe as U.S. trucks — $2.4 billion worth of U.S. exports to Mexico, ranging from grapes to dog food to refrigerators, have spent the last year facing high tariffs that have priced them far above similar products sold in Mexico by our competitors around the world.

This may not seem like an enormous issue, in the grand scheme of things, but it is real jobs that have been lost, real communities that in some cases have lost the major employer, and it is small and medium manufacturers (SMMs) who have been hit hard in particular. Over 95 percent of the firms that export to NAFTA are SMMs, and for many of them, loss of Mexico as an export market could be the difference between viability and closing up shop.

The National Association of Manufacturers has studied the impact of these tariffs, and found that about 16,000 U.S. manufacturing jobs have either been lost or are at risk of being lost as a result of their levy. Sixty-five percent of the targeted items are manufactured goods, including chemicals, paper and printed materials, household and personal care products, machinery, and processed food products.

There are three ways you can deal with these tariffs, and we’ve seen manufacturing in America try all three. You can shut down your U.S. production and move it to Mexico, Canada, or another country. That has happened. You can try and stick your Mexican distributors with the cost of the tariff. You can try to do that, but in many cases they’re just finding new suppliers from other countries, and the U.S. market share is dropping. Or, you can eat the tariffs as part of your cost of business. Adding a 20 percent tariff to your costs to try and preserve market share is, at best, a short-term solution that leads to loss of profits. Do it long enough, and you’ll be searching for alternate production lines in countries where they don’t face tariff retaliation. This takes the pain from the bottom line to the unemployment line, and it’s something many U.S. companies – after an entire year of facing such tariffs – are beginning to do. The situation is only going to grow worse in the coming months.

Bret Jacobsen in Forbes.com, “Everyday Higher Prices,” a commentary on the “high road” federal contracting standards:

It’s just the latest effort to increase costs on taxpayer projects in the name of pushing more money to labor unions.

Reports this week of the new proposal are raising eyebrows. Though details are sketchy, here’s the general idea: The Obama administration is attempting to alter the scoring system currently used to evaluate government contractors and suppliers.

The new system would provide additional points for so-called “high road” employers who pay wages and benefits above minimum standards. (Note that the new requirement is not about providing quality above minimal standards; employers simply have to pay more.) Thus, competition in bidding becomes a tangled race to see who can charge the most to cover higher labor costs.

The costs of this favor to Big Labor would be borne by the taxpayers, paying the direct costs of more expensive contracts and indirect costs from inefficiency.

The recent report from the White House Task Force on the Middle Class foreshadowed this major change in federal contracting. From page 23, the section entitled “Responsible Federal Contracting.”

The Federal Government spends over half a trillion dollars a year on contracts for goods and services, generating employment for tens of millions of workers. However, there are inadequate controls on the records of firms who get these contracts and on the quality of the jobs these contracts create.Ignoring these factors has negative implications, not only for the workers on these contracts, but for the quality and efficiency of services rendered. For these reasons, the Task Force has participated in a review process to identify ways to reform the procurement process to increase the quality of both the services procured and the jobs created under Federal contracts.

The Task Force recognizes that contracts should not be awarded to irresponsible sources with unsatisfactory records of business ethics, including noncompliance with labor and employment, tax, fraud, and consumer protection laws. We also recognize that substandard wages and benefits can have negative impacts on employees’ productivity and stability, which in turn can reduce the quality of performance on Federal contracts.

We expect to produce shortly some new recommendations to bring these ideas into practice.

• Associated Press, “‘Living wage’ could be factor in govt contracts”
• New York Times, “Plan to Seek Use of US Contracts as a Wage Lever“
• Bloomberg, “Plan to Seek Use of US Contracts as a Wage Lever“

The Labor Department reported today that the economy shed a modest 36,000 jobs in February, slightly higher than the 26,000 lost in January. Meanwhile the unemployment rate remained unchanged at 9.7 percent.

The absence of strong employment gains shows that manufacturers remain guarded in their outlook. After rising by 20,000 jobs in January, manufacturing employment remained essentially unchanged last month, with an increase of just 1,000 jobs. Of the 21 manufacturing industries, more than half (13) reported modest gains, totaling 19,300 jobs. These increases were largely offset by declines in seven industries, led by motor vehicle employment. Given the underwhelming report earlier this week on January factory orders, a more robust upturn in manufacturing output and employment in the coming few months is not likely in the cards.

Within the service sector, widespread — though generally modest — employment declines continued in February. Upturns in education and health service employment ( which has largely been immune from the recession) and temporary services more than offset moderate declines in most other service industries, signaling that employers still have a good deal of uncertainty about the underlying strength of the recovery and are hesitant to expand their payrolls.

From Reuters, “Manufacturers warn on wide US financial reform net“:

WASHINGTON, March 3 (Reuters) - A group of manufacturers and other non-banking firms on Thursday urged the U.S. Congress to prevent financial reforms from inadvertently sweeping in businesses outside the financial sector.

The Main Street Industry Alliance, a new lobbying coalition, said in a statement that certain reforms being proposed “could create unintended consequences … because the term ‘financial activities’ is so broad.”

On Feb. 26, the alliance sent a letter to Sens. Chris Dodd (D-CT) and Sen. Richard Shelby (R-AL) of the Senate Banking Committee outlining business’ concerns. From the letter:

We do not believe that it is the intent of Congress to impose a new regulatory regime on
companies that had nothing to do with the financial crisis of 2008. We strongly urge you to
ensure that any financial services reform legislation clarifies that companies that are not
predominantly engaged in financial services activity are not covered in the legislation. To do
otherwise could subject a wide range of non-financial American businesses to an array of new
regulations and capital requirements, create uncertainty, divert resources from economically
productive activities, and make these companies less competitive in the global marketplace.

Representatives from the following groups signed the letter: National Association of Manufacturers, U.S. Chamber of Commerce, Industrial Energy Consumers of America, National Petrochemical & Refiners Association, and The Fertilizer Institute.

From the Bureau of Labor Statistics, “Employment Situation Summary” for February 2010.

Nonfarm payroll employment was little changed (-36,000) in February, and the unemployment rate held at 9.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and information, while tem- porary help services added jobs. Severe winter weather

in parts of the country may have affected payroll employment and hours; however, it is not possible to quantify precisely the net impact of the winter storms on these measures.

And …

Employment in manufacturing was essentially unchanged in February. Small job gains in a number of component industries were offset by job losses in motor vehicles and parts and in chemicals.

Judging from all the news stories about weather-affected employment, thought the situation would have much worse. Good job of managing expectations, expectation managers!

Washington Post reports: “Job losses were surprisingly mild in February, the Labor Department said, as the employers cut 36,000 net jobs. Economists had expected worse losses due to the snowstorms last month. The unemployment rate was unchanged at 9.7 percent. The numbers suggest that while the job market is still weak, it is not worsening significantly.”

The photo above is K Street, Washington, looking west toward Farragut Square, 2:30 p.m., Wednesday, Feb. 10.

Today’s Commerce Department report on January factory orders falls short of expectations and indicates that the manufacturing recovery will likely slow down in coming months.

While overall orders increased by 1.7 percent in January, much of this was driven by aircraft orders, which are extremely volatile from month to month. Excluding transportation, orders edged up just 0.1 percent, the slowest gain in six months.

In addition, new orders of core capital equipment orders - a good indicator for business investment - fell 4.1 percent after two months of strong gains. This decline indicates that the surge in capital investment in the fourth quarter of last year was spurred by temporary factors such as expiring business investment tax credits. Looking ahead, continued growth in the first quarter is unlikely, as businesses remain cautious about the underlying strength of the emerging recovery.

The White House streamed the audio of Vice President Biden’s remarks Monday to the AFL-CIO’s Executive Council in Orlando, but we find no archived version or transcript. The AFL-CIO’s blog, usually eager to tout this sort of thing, offered just a brief report on the Veep’s most controversial pronouncements, “Biden to Executive Council: We Need A Middle Class.” Yikes!

Of the part of his remarks we heard, this was the relevant passage on the top issues of the day (from The Wall Street Journal):

In terms of the NLRB, we’re going to get it done. In the fight for EFCA, we’ve got to sit down and figure out where we go from here…. I think we’re going to get it done.

So, not much substance, nothing new. He spoke in vague terms about getting a Senate Republican to support the Employee Free Choice Act but moved on quickly to different topics.

Advocates for the recess appointment of SEIU attorney Craig Becker to the National Labor Relations Board must have been disappointed. The Vice President offered nothing along the lines of, “We need this man.”

In introducing Vice President Biden, the AFL-CIO’s Richard Trumka hailed the release of the White House’s Middle Class Task Force’s first report last week. Makes sense: Its content tracks closely with the political and policy lines of Big Labor, moreso than any other single document we’ve seen come from the White House.

• New York Times (blog), “Biden to Labor Leaders: Things Could Be Worse“
• The Associated Press, “Biden says he understands resentment over bailouts“