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NAM Outlook Survey shows improvements in expected growth, but lingering challenges

By | Economy, Shopfloor Economics, Shopfloor Main | No Comments

In the latest NAM Manufacturers’ Outlook Survey, sentiment appears to have stabilized after several quarters of declining assessments about the economic outlook, and the latest data appear to mostly back that assertion up, but with some caveats. Indeed, economic challenges continue in the sector, among them being concerns over rising health care costs and dampening perceived growth rates over the next 12 months despite some progress in this release. Large manufacturers were more upbeat about their company’s outlook this quarter, but small and medium-sized manufacturers experienced declines in their outlook in this survey. Overall, one could characterize manufacturers’ current economic outlook as cautiously encouraging, but still less-than-desired and highly varied by firm size and export sales growth expectations.

In this survey, 61.0 percent of manufacturers are either somewhat or very positive about their own company’s outlook, easing slightly from 61.7 percent who said the same thing in June. Yet, the outlook remained stronger than at the end of last year and the beginning of this year, marking some progress from earlier softness. At the same time, this marks the fifth consecutive quarter when positive responses about the outlook have fallen below the historic average of 73.0 percent. Read More

President Obama Has Crossed the Line

By | Shopfloor Main | No Comments

National Association of Manufacturers President and CEO Jay Timmons issued the following statement after the Obama administration moved to halt construction of the Dakota Access pipeline:

“The Obama administration just made the decision to put politics above jobs, trying to stall, obfuscate and scapegoat in order to block this job-creating energy infrastructure project. The administration has ignored the rule of law because it doesn’t like the court’s findings that the project can move forward.

“This sets a bad precedent that could threaten future infrastructure projects of all types. For manufacturers, this means the men and women supplying steel pipe, coatings, construction equipment, compressor motors, gauges and instruments, sand and gravel and other key components to the Dakota Access project are sitting idle, without work.

“We understand there are concerns, and above all, we want discussions about this project to be peaceful, productive and respectful. But it’s time for the administration to put its political agenda aside. It’s time to put people to work, including the many manufacturers who will build the components of this project. Let’s come together to move forward, create jobs, strengthen our economy and boost manufacturing.”

Sustainable Development Through Public-Private Partnerships

By | General, Shopfloor Main, Shopfloor Policy, Sustainability | No Comments

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This guest blog post is authored by William (Bill) Steers, general manager, communications and corporate responsibility for ArcelorMittal’s Americas region, which encompasses more than 50 steel production, mining and finishing facilities, and approximately 40,000 employees. He oversees the company’s corporate responsibility efforts across two continents as well as corporate communications, media relations and brand management. 

In 2014, ArcelorMittal launched a comprehensive new approach to ensuring the sustainability of our business and the contribution to society – our 10 sustainable development outcomes. The words we used to name this approach are important and specific – sustainable development outcomes. Sustainable development means, in short, meeting today’s needs without compromising future generations. At ArcelorMittal, we believe our company and the steel industry can rise to this challenge.

One of the many ways we contribute to sustainable development outcomes at ArcelorMittal is through public-private partnerships that build opportunities to be an active and welcome member of the communities where we operate. We recognize it is not enough for ArcelorMittal to be resilient and sustainable, the communities surrounding us must be as well. Our experience has shown that strong public-private partnerships can be instrumental in bringing together a variety of experienced, like minded partners to leverage collective resources around common goals for greater impact.

dscn0412Two strong initiatives that affirm ArcelorMittal’s commitment to public-private partnerships as a vehicle for community resilience and sustainability are Sustain Our Great Lakes and our evolving work with the Millennium Reservegreat-lakes-2

For some context, the Great Lakes are truly at the center of the ArcelorMittal business in North America. More than 70 percent of our employees in North America live and work in the Great Lakes region. Spanning the U.S./Canada border, these world-famous lakes provide drinking water to 35 million people and transport raw materials to steel plants responsible for around 20 million metric tons of steel each year.

In 2007, ArcelorMittal teamed up with the National Fish and Wildlife Foundation (NFWF), and several Federal agencies including the U.S. Environmental Protection Agency, to launch the Sustain Our Great Lakes. Addressing goals that will ultimately improve habitat and water quality across the basin, the SOGL program brings together public and private funding to make competitive grants for on-the-ground projects that sustain, restore and protect fish, wildlife and habitat in the Great Lakes basin. Since beginning the partnership we have contributed almost $6 million which has unlocked twenty times that amount in matched and grant funding. However the importance of the partnership goes far beyond the dollars we have contributed, the strong collaboration with partners, the ability to access and raise awareness among diverse stakeholder groups has allowed the partnership to substantially contribute to restoring approximately 33,000 acres and nearly 200 miles of marine and riparian habitat since our funding started.

July 14, 2016 Millennium Reserve press conference and announcement at ArcelorMittal in Riverdale, IL, on July 14, 2016, attended by David St. Pierre and Commissioner David J. Walsh, IL Rep Marcus Evans, Illinois Governor Bruce Rauner, Illinois Department of Natural Resources Director Wayne Rosenthal, Executive Director at South Suburban Mayors and Managers Association Edward Paesel, IDNR Suellen Burns, Marty Ozinga from Ozinga,

Millennium Reserve press conference and announcement at ArcelorMittal in Riverdale, IL, on July 14, 2016, attended by David St. Pierre and Commissioner David J. Walsh, IL Rep Marcus Evans, Illinois Governor Bruce Rauner, Illinois Department of Natural Resources Director Wayne Rosenthal, Executive Director at South Suburban Mayors and Managers Association Edward Paesel, IDNR Suellen Burns, Marty Ozinga from Ozinga.

A second exciting initiative is our participation with the Millennium Reserve. Our presence in the Calumet region brought us to the Millennium Reserve initiative at its inception. Since then, Millennium Reserve has been working to advance Sustainable Development initiatives that recognize and build on the nexus between economic development, stronger more resilient communities and the many environmental and ecological assets of the Calumet region

In the Calumet region of Illinois and Indiana, ArcelorMittal was a founding member of the Millennium Reserve– a public-private partnership formed in 2012 by then Illinois Governor Pat Quinn. The initiative brought together state and local government agencies, nonprofit organizations, and private companies to advance Sustainable Development initiatives that recognize and build on the nexus between economic development, stronger more resilient communities and the many environmental and ecological assets of the Calumet region.

Last year, I was honored to become Chair of the Millennium Reserve, and with the support of Illinois Governor Bruce Rauner, move this project to the next level. To advance this exciting work, we are strengthening the partnership to foster new level of collaboration in sustainable development for our region by expanding across the border, engaging stakeholders in Northwest Indiana and taking a regional approach to solving the area’s greatest challenges. Only through partnership and collaboration can we leverage our collective resources to advance the Calumet region as it transforms itself into an area recognized for its economic, environmental and cultural value.

Each of these public-private partnerships represents a sustainable development opportunity for ArcelorMittal and an opportunity to leverage knowledge and resources beyond our own.  Partnering within our communities, government agencies and like-minded NGOs, we build stronger relationships and better understanding of stakeholder expectations in our communities. This provides a unique opportunity to ensure our business strategies align with the expectations for sustainability and resilience found in our communities.

Politics’ Corrosive Effect on Jobs Has Gone Too Far

By | Economy, Energy, Presidents Blog, Shopfloor Main, Shopfloor Policy, Trade | No Comments

Lost in the news about today’s jobs numbers is politics’ corrosive effect on future labor reports and our nation’s standing in the world. Actions and debates underway in America today are erecting walls to long-term prosperity for millions of manufacturers. It’s wrong that this administration’s policies have caused health care costs to skyrocket, while policymakers use red tape to regulate many manufacturers out of business.

It’s unfortunate that critical energy infrastructure projects, such as the Dakota Access pipeline, are threatened, resulting in less energy independence and slower job growth. And it’s a failure of leadership when those seeking to serve us in elected office attack the very reasons we’re great, such as global trade and our free enterprise system.

Manufacturers—and all Americans—are looking for more than what we see on the campaign trail and by this administration. As we pause to celebrate Labor Day and the achievements of workers that made this country exceptional, policymakers should be reminded that we won’t settle for mediocrity. Americans deserve and expect leaders to partner with us to compete and win every day.

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ISM: Manufacturing Activity Unexpectedly Contracted in August for First Time Since February

By | Economy, Shopfloor Economics, Shopfloor Main | No Comments

The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) unexpectedly contracted in August for the first time since February. The composite index dropped from 52.6 in July to 49.4 in August. A couple of the sample responses cited a “flat” business environment for the month. Indeed, new orders (down from 56.9 to 49.1) and production (down from 55.4 to 49.6) both shifted from decent growth in July to decreased activity in August, with employment (down from 49.4 to 48.3) remaining in negative territory for the second straight month.

Overall, this is a disappointing result, as it temporary suspends the narrative that manufacturing was beginning to stabilize after weaknesses seen earlier in the year. Yet, more than anything, this report shows that the sector’s challenges continue to linger even as other data have been more promising. One positive take way was exports (unchanged at 52.5), which have expanded now for six straight months. Read More

Manufacturers Hope Reason Will Prevail in Latest Pipeline Battle

By | Energy, Shopfloor Main, Shopfloor Policy | No Comments

A few months ago, I testified before the Senate Energy and Natural Resources Committee on the importance of pipeline infrastructure to manufacturers. What struck me the most about this hearing is that, on an issue that has been so filled with partisanship and vitriol in recent years—see Keystone XL—every single member of the committee that day rose above the talking points and had a thoughtful, productive conversation about the opportunities and challenges confronting new pipelines. There were different points of view on how best to balance economic growth, energy security and public health and safety. However, every member of that panel recognized that, yes, we are going to need more pipelines to meet changing domestic supply and demand for energy.

That’s why I’m shaking my head today as I watch the same tired script unfold over the latest pipeline to begin construction, the Dakota Access Pipeline. Dakota Access will bring crude oil developed in North Dakota through South Dakota and Iowa into Illinois. The project enjoys the support of a wide range of labor unions, chambers of commerce, agricultural groups and economic development authorities. The project’s sponsors ran the gauntlet and secured every federal, state and local permit needed to begin construction; however, just as construction commenced, the lawsuits began, protests got heated, and now we’re rapidly moving toward another round of political theater over a pipeline project.

Manufacturers support the Dakota Access Pipeline. Dakota Access ensures long-term access to competitively priced oil for industrial uses and as an input good for many manufactured goods, such as petrochemicals, to process gas and transportation fuels and to power operations. Manufacturers also make up the supply chain for the project: between 32 and 37 percent of the cost of constructing an oil pipeline is directly for manufacturing inputs. The major types of manufactured goods used include equipment, line pipe, fittings, coatings and booster stations, including pumps. A report written by IHS Economics for the National Association of Manufacturers in early 2016 estimates that at least 66 different manufacturing subsectors (out of 86 total) benefited from the construction of crude oil pipelines by $10 million or more in 2015. Overall, construction and operation of crude oil pipelines will have meant $7.6 billion to manufacturing in 2015 and 2016 and led to the creation of 28,438 manufacturing jobs in 2016.

 

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There will always be protesters, and there will always be critics. It wouldn’t be America if there weren’t. Heck, I know a guy who once created a Twitter handle just so he could criticize the TV broadcast of the U.S. Open.

Ultimately, though, it’s the job of the regulators to listen to all the points in support and against and render a decision. That’s what happened here. North Dakota signed off. So did South Dakota. And Iowa. And Illinois. And the Army Corps of Engineers. The government got this one right; now it’s time to start building.

Delays in construction cause idled assembly lines, breached contracts and a domino effect that ripples up and down supply chains, injuring manufacturers every step of the way. We can’t let this happen. Here’s hoping that, much like that day in the Senate a few months ago, we can rise above the politics and let reason prevail.

Manufacturers Disappointed in Lack of Concrete Progress in U.S.–India Commercial Dialogue

By | Shopfloor Main, Shopfloor Policy, Trade | No Comments

The United States and India have much to gain by growing their commercial relationship given the relatively low levels of trade and investment that characterize a relationship that many agree is underperforming. This year’s second Strategic & Commercial Dialogue (S&CD) was an opportunity to move beyond the improved dialogue that has characterized the U.S.India relationship since Prime Minister Narendra Modi took office more than two years ago and into concrete action.

Unfortunately, the just-released U.S.India Joint Statement marking the conclusion of this year’s dialogue has little to cheer. The NAM and others had urged the two governments to use dialogue to drive concrete deliverables. Yet, this dialogues “outcomes,” if they can be so labeled, are heavy on cooperation, collaboration and further discussions, but no concrete movement on issues that matter to a wide swath of manufacturers in the United States. There was, for instance, no renunciation by India of its WTO-violative actions, such as increased information technology tariffs and discriminatory localization measures on solar energy and other manufactured goods. There were no concrete deliverables announced on the protection of intellectual property and little substance on innovation. And while India has moved up on the Innovation Index, India still is in the bottom half of the rankings, behind its key Asian competitors.

As the United States prepares for its next major dialogue with Indiathe Trade Policy Forumin October, manufacturers urge outcomes that will make a tangible difference for their ability to do business with India.

Learn more about the NAM’s stance on U.S.India trade relations here.

 

Administration Shoehorns Modern Problems into Antiquated Laws

By | Briefly Legal, Manufacturers’ Center for Legal Action, Shopfloor Legal, Shopfloor Main | No Comments

The federal government is now routinely using laws passed before the invention of the fax machine to control dynamic information systems like cloud computing and broadband access. These efforts to regulate and police the innovation economy will loosen constitutional privacy protections and chill technological innovation.

For example, relying on the Electronic Communications Privacy Act of 1986, the Department of Justice has recently sought to search Microsoft customers’ e-mails. Microsoft has pushed back, alleging that the Justice Department’s orders violate its customers’ privacy and infringe on its right to free speech. Many of these demands prohibit Microsoft from informing customers that their information is being investigated.

Most laws governing government searches were written before the widespread use of digital communications. At that time, if the government wanted to execute a search warrant to look through one’s files, notice was necessary since a search would require entering a home or office to access documents. Now that many Internet users store their information in the cloud, rather than locally on their computers, the government can bypass notification of the customer by directly contacting providers such as Microsoft. Therefore, simply because the location of information has changed, users now experience different legal protections. Microsoft argues this is unconstitutional because Fourth Amendment protections on the reasonableness of searches should not discriminate based on how a citizen stores his or her information.

The privacy and free speech implications of the government’s actions have significant consequences for the greater business community and the innovation economy. When the government treats those who store their information at home differently than those who use the cloud, individuals are less inclined to use this potentially transformative new technology to protect their privacy. When individuals forgo cloud-computing services, innovative manufacturers will lose customers.

The National Association of Manufacturers will continue its fight to uphold proper constitutional protections and promote balanced and reasonable resolution through the courts.

Talking Is Good, but United States and India Should Be Moving Beyond Just Words by Now

By | Shopfloor Main, Shopfloor Policy, Trade | No Comments

Top U.S. officials are setting travel plans now for the second-annual Strategic and Commercial Dialogue (S&CD), set for the week of August 28 in New Delhi. This year’s S&CD will be a litmus test for these dialogues, demonstrating whether they can show real progress on concrete issues impacting manufacturers in the United States or just produce more talk. Read More