Federal Reserve Left Interest Rates Unchanged at Its September Meeting

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

The Federal Open Market Committee (FOMC) left short-term interest rates unchanged at the conclusion of its September 20–21 meeting, as expected. Indeed, in the latest NAM Manufacturers’ Outlook Survey, 45.5 percent of respondents felt that the Federal Reserve would wait until its December 13–14 meeting, mirroring consensus expectations. (The FOMC does have another meeting scheduled for November 1–2, but they are unlikely to act just a few days before the U.S. General Election.) The press release sets up a possible rate hike later this year, with the following language: “The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives.” Recent softness in a number of economic measures were enough for the FOMC to hit the pause button, at least for now. Read More


Manufacturing Production Data for August Were Disappointing

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

According to the Federal Reserve, manufacturing production fell by 0.4 percent in August. After two straight months of gains, this news was disappointing, even as it mirrored weaknesses found in other economic indicators in August. Moreover, manufacturing production has declined over the past 12 months, the first year-over-year decline since December. In addition, manufacturing capacity utilization decreased from 75.2 percent to 74.8 percent, a three-month low. As such, this report highlights the tremendous challenges in the sector. Nonetheless, manufacturers continue to be cautiously hopeful for increased activity over the coming months, as noted in our latest survey.

The current softness, though, means that policymakers need to focus more on priorities that will grow the economy and increase competitiveness. It also suggests that the Federal Reserve is likely to wait to raise rates. Along those lines, 45.5 percent of respondents to our survey felt that the Federal Open Market Committee would hike rates in December.

Read More

Rhode Island Lawsuit Targets Deep Pockets, Not Justice

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

A bedrock principle of tort law in this country is that the party who causes the damage is the one who should be liable for fixing the damage. Even under a standard of “strict liability” where a defendant is liable without a finding of fault, courts require a showing that the damage in question was actually caused by the defendant at the table.

A lawsuit recently filed in Rhode Island, led by the state’s Attorney General and staffed by hired-gun private plaintiff’s lawyers who stand to make a mint if the lawsuit is successful, seeks to break from this foundational principle. That should be of concern to any manufacturer that could become the target of creative plaintiffs’ lawyer lawsuits—which is to say, to every manufacturer.

The lawsuit involves the gasoline oxygenate MTBE, which was for a time blended with motor fuel in order to meet federal emissions standards. The problem with MTBE is that it is highly water soluble, and if underground storage tanks containing gasoline leak, the MTBE stored in them can contaminate groundwater. Of course, the owners of these tanks, if they can be identified, have always been, and continue to be, responsible for cleaning up such leaks. On top of that, Congress created a special trust fund to pay for cleanups when the owner or cause is unknown, or where the owner may not have the wherewithal to pay. The fund, which has been around since the mid-1980s, is paid for by a tax levied on the petroleum industry on every gallon of fuel sold.

Unfortunately, many of the states where MTBE was most heavily used are also states that have suffered poor economic growth and have faced major budget challenges in recent years. This has led many of these states, including Rhode Island, to raid their cleanup funds for other state budget priorities, thus creating the need to find alternative sources of funds to handle these cleanups. Cue the trial bar, who have shopped MTBE lawsuits to several state Attorneys General and have found fertile hunting ground in the cash-strapped northeastern states.

The Rhode Island legal filing includes a smorgasbord of legal theories intended to bypass the inconvenient need to show that the defendants in the case actually caused the damage the lawsuit seeks to remedy. The case seeks to pin liability on any company that sold reformulated fuel in the state—regardless of whose actions or whose storage tanks actually caused contamination. It is remarkably a sanction based on simply doing business in the state of Rhode Island, which the state seeks to allocate according to the market share held by industry participants during the relevant time period. Beyond the tort law implications of this case, it is remarkable that a state so badly in need of economic investment would target an industry simply for doing business there.

No matter how much money defendants have paid into the state fund to cover such cleanups and regardless of the extensive efforts they may have already gone through to prevent leaks and to remediate those that occurred under their watch, the companies are targeted in this lawsuit because they are perceived as most able to pay. This is a case about targeting deep pockets, not about remedying past wrongs, and certainly not about justice.

Key Workforce Development Bill Passes House; Now Time for Senate Vote

By | Human Resources, Shopfloor Main, Shopfloor Policy | No Comments

Today the House approved H.R. 5587, the Strengthening Career and Technical Education for the 21st Century Act (aka Perkins Act), sponsored by Reps. Glenn Thompson (R-PA) and Katherine Clark (D-MA). The Perkins Act aims to increase the quality of technical education through promotions of Career and Technical Education programs at the high school and college levels.

The NAM sent a key-vote letter to support this reauthorization, which updated past efforts to match the needs of employers and focus on in-demand occupations. It strengthens the use of industry-recognized credentials in educational programs to align with employers’ needs, putting it in harmony with the Workforce Innovation and Opportunity Act. It also promotes work-based learning and allows funds to be used toward the purchase of needed manufacturing equipment as well as certification exams upon completion of training.

The NAM led a significant push by manufacturers to see this legislation move forward. A support letter was signed by nearly 500 member companies, affiliate organizations and other supporters showing the strong base of approval for this important legislation. In addition, many manufacturers and friends of manufacturing reached out directly to their members urging support.

The ability of manufacturers to succeed in the highly competitive global marketplace depends on access to an educated, diverse, inclusive, flexible and knowledge-based workforce. American employees, in turn, need the education and skills to participate in a high-performance workforce for the robust and dynamic U.S. manufacturing economy. Skills gap surveys conducted by the NAM consistently underscore how a vast majority of American manufacturers are facing a serious shortage of qualified employees, which is taking an increasingly negative toll on American manufacturers’ ability to be innovative and productive. Reauthorization of the Perkins Act is a strong step toward addressing that gap.

The NAM looks forward to working with the Senate in the coming weeks to ensure that the Perkins Act is reauthorized before the end of the year.


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

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 has 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 societyour 10 sustainable development outcomes. The words we used to name this approach are important and specificsustainable 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 publicprivate 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 publicprivate 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 publicprivate 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 and several federal agencies, including the U.S. Environmental Protection Agency, to launch the Sustain Our Great Lakes (SOGL). 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 20 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 and 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, Ill., on July 14, 2016, attended by David St. Pierre and Commissioner David J. Walsh, Illinois Rep. Marcus Evans, Illinois Gov. Bruce Rauner, Illinois Department of Natural Resources Director Wayne Rosenthal, Executive Director at South Suburban Mayors and Managers Association Edward Paesel, IDNR Suellen Burns and 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 Reservea publicprivate partnership formed in 2012 by then-Illinois Gov. 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 Gov. Bruce Rauner, move this project to the next level. To advance this exciting work, we are strengthening the partnership to foster a 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 publicprivate 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.


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