Honoring Ron Bullock, a Manufacturing Champion

By | General, Presidents Blog, Shopfloor Main | No Comments

On behalf of the National Association of Manufacturers (NAM), I send my deepest condolences to the family and loved ones of Ron Bullock, owner and chairman of Bison Gear & Engineering.

Beyond his leadership at Bison, Ron was committed to advancing the cause of manufacturing in the United States. I was proud to work alongside him at the NAM and The Manufacturing Institute in our efforts to strengthen the manufacturing workforce. As former chairman of the Institute, a member of the NAM Board of Directors and a member of our Workforce and Competitiveness Task Force, Ron gave generously of his time and energy to work selflessly to expand opportunity for all. Our industry is stronger thanks to Ron, and I know many lives have been changed for the better in Illinois and across the country, thanks to his support of our industry and his community. He will be missed at Bison, and we will miss him at the NAM.

Bison

Manufacturers Hear from President’s Top Economic Adviser

By | Economy, Events, Manufacturing Summit, Presidents Blog, Shopfloor Main | No Comments

Manufacturers blanketed Capitol Hill yesterday during the first day of the National Association of Manufacturers’ (NAM) 2016 Manufacturing Summit, and members of Congress and their staff heard from nearly 500 Summit participants. Before heading back to Capitol Hill, we kicked off day two by hearing from President Obama’s top economic adviser, Jeff Zients.

Zients is the director of the National Economic Council and assistant to the president for economic policy. In his remarks to Summit attendees, he offered his perspective on two of our top priorities: the Trans-Pacific Partnership (TPP) and the Export-Import (Ex-Im) Bank board nominations.

Zients addresses attendees at the NAM’s 2016 Manufacturing Summit. Photo by David Bohrer, NAM.

Zients addresses attendees at the NAM’s 2016 Manufacturing Summit. Photo by David Bohrer, NAM.

He reiterated many of our arguments about why manufacturers need TPP:

  • Ninety-five percent of the world’s consumers are outside our borders, and Asia alone will have a middle class of 3.2 billion people over the next decade.
  • TPP will improve the global competitiveness of manufacturers in the United States as well as our ability to increase sales to markets in the Asia-Pacific region.
  • TPP will deepen our partnerships with our allies.
  • The United States should be writing the rules of the global economy. If we don’t, China will.

These are just some of the reasons why manufacturers of all sizes from across the country are storming Capitol Hill this week to continue our push for TPP and why the Obama administration must work closely with Congress to forge the path forward so we pass TPP this year.

On the Ex-Im Bank, Zients rightly argued that we can expand exports for manufacturers in the United States if we get the agency back up to full strength. That means the Senate needs to confirm a nominee to the Ex-Im Bank’s board so it can once again be fully functional.

During the Manufacturing Summit, NAM President and CEO Jay Timmons and Zients discuss critical issues facing manufacturers. Photo by David Bohrer, NAM.

During the Manufacturing Summit, NAM President and CEO Jay Timmons and Zients discuss critical issues facing manufacturers. Photo by David Bohrer, NAM.

While the NAM won’t always agree with the administration on all issues, we appreciate its efforts to expand export opportunities for manufacturers in the United States. Of course, more work needs to be done, which is why manufacturers will continue speaking out today—and every day—until our leaders act.

Timmons: May Jobs Numbers “Pathetic”

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

Timmons Statement on Jobs Numbers

National Association of Manufacturers President and CEO Jay Timmons issued the following statement on the disappointing Bureau of Labor Statistics’ jobs report, which showed the slowest monthly jobs gain since September 2010:

“The latest jobs report is pathetic. It is a vivid example of why we need the Trans-Pacific Partnership (TPP) now. The report is a wakeup call for anyone who thinks we are on solid economic ground. Policymakers in Washington can’t fix every problem, but they can certainly take action to give manufacturing—and the larger economy—a boost. The TPP will allow manufacturers to sell products we make here in the United States to millions of new customers overseas, and we will hire people to make those products. Congress and the Obama administration need to work together to get this deal done.

“Manufacturers, and almost all employers for that matter, are holding back on hiring because they lack confidence in the ability of Congress and the administration to put aside partisan differences to do what is in the best interest of America’s future. In May, we also saw too few Americans go back to work—and too many give up and leave the workforce altogether because they have given up on the American Dream.

“Pro-growth trade policy, coupled with comprehensive tax reform, regulatory reform and other items on manufacturers’ agenda will empower our country to compete and win in the global economy—creating jobs and providing inspiration for those who clearly need it.

“The presidential candidates and all candidates for the House and Senate need to explain exactly what they will do to enact these commonsense economic measures outlined in ‘Competing to Win.’ Getting this agenda accomplished is the only way to reverse the malaise we are experiencing in our country and put us on the road to success again.”

Read the original press release here.

ISM

ISM: Manufacturing Activity Expanded for Third Straight Month in May

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

The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) expanded for the third straight month. The composite index rose from 50.8 in April to 51.3 in May. This was stronger than anticipated, with a consensus estimate of 50.5. New orders (down from 55.8 to 55.7) continued to grow at a decent pace, albeit with an ever-so-slight easing for the month. The expansions for production (down from 54.2 to 52.6) and exports (unchanged at 52.5) were both modest, with the former slowing somewhat from the prior release. In general, this data provides another piece of evidence of stabilization in the manufacturing sector, with better economic conditions following significant weaknesses at the end of last year and the beginning of this year. Read More

Court Expedites Land Use Jurisdictional Challenges

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

If you are injured, the Supreme Court usually finds a way to allow you into a courtroom to air your grievances. Then it’s up to you to convince a judge or jury that the law provides a remedy.

Today’s unanimous decision from the Supreme Court in the Hawkes Co. case is an important reminder that the courts are open if your legal rights are impaired by the government. The courts serve a critical role in our tripartite system of democracy, providing checks and balances that are essential to prevent overreach by Congress and the executive branch. The decision gives a property owner the right to go to court after an agencyin this case the U.S. Army Corps of Engineers (Corps)decides that your property is under its regulatory authority. Corps or Environmental Protection Agency (EPA) decisions that your property is within their jurisdiction subject you to liability under the Clean Water Act, and you now have the right to challenge those decisions in court.

This ruling is important to ensure that such agency decisions are not arbitrary and capricious, or do not otherwise exceed an agency’s statutory authority. But legal challenges themselves are very expensive and time-consuming. It is far better that the agency get its jurisdictional determinations right from the beginning, under clear direction from Congress and with the proper application of its delegated authority.

Unfortunately, the Clean Water Act is anything but clear about the Corps’ jurisdiction, and the Manufacturers’ Center for Legal Action is in the middle of a long legal battle to clarify the meaning of the statute. That fight is over the administration’s latest interpretation of federal jurisdiction over “waters of the United States,” and we hope to provide further arguments to property owners when they think the government has reached too far. At the end of the day, we look forward to a final decision from the Supreme Court on how far the Corps’ and EPA’s jurisdiction goes, so that everyone, including individual landowners like the Hawkes Co., will better know where permits are required and whether they need to head back to the courtroom to vindicate their rights.

GDP

Real GDP Growth in the First Quarter Improved to 0.8 Percent, but Still a Disappointing Start to Year

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

The Bureau of Economic Analysis said that the U.S. economy grew by 0.8 percent in the first quarter of 2016, up from the prior estimate of 0.5 percent. The revision stemmed from better fixed investment, inventories and net exports data. Nonetheless, it is clear that the economy remained challenged, with the improvements in these categories reducing the pace to which each was a drag on real GDP growth. Overall, U.S. economic growth has been disappointing through the first three months of 2016, extending the sluggishness seen at the end of 2015. Indeed, the underlying story remained the same as noted in the prior release. Consumers and businesses were cautious in the first quarter, dampening real GDP growth, and the strong U.S. dollar and struggling economies abroad meant that net exports subtracted from growth in the quarter.

We have become accustomed to having a bad first quarter following by a strong rebound in the second quarter. In 2015, for instance, first and second quarter real GDP growth was 0.6 percent and 3.9 percent, respectively. I continue to expect a rebound in the current quarter, as well, with my forecast for second quarter 2016 growth currently at 2.5 percent. For 2016 as a whole, I am predicting 2.0 percent growth. Read More

WRDA Progress Continues Ahead of Deadline: Manufacturers Support the Momentum

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

The House Transportation and Infrastructure Committee recently released H.R. 5303, the Water Resources Development Act of 2016. The House legislation includes authorizations for key civil works missions of the U.S. Army Corps of Engineers, including inland waterway navigation and port dredginginfrastructure investments that are vital to manufacturers and our competitiveness. The bill also aims to ensure continued investment in harbors and includes a provision that ensures the ad valorem duties collected on imports going into the Harbor Maintenance Trust Fund (HMTF) would be fully utilized for maintenance of ports and harbors beginning in 2027, essentially creating a firewall to protect funds.

Most importantly, this bipartisan legislation shows support in Congress to return to a regular two-year WRDA process. Holding a hearing just last week to discuss the bipartisan support for the authorization of 28 Army Corps projects, the committee is anticipated to move swiftly and hold a markup for the legislation this Wednesday at 10:00 a.m. Senate counterparts in the Environment and Public Works Committee already introduced legislation in April, S. 2848, which has passed out of committee and is awaiting floor time. Though there are significant differences between the House and Senate bills, there is wide agreement on the need to accomplish WRDA legislation this year.

Unlike the House proposal, the Senate WRDA bill authorizes additional drinking water and wastewater resources and provides a vehicle to address the Flint crisis. Senators also included a new program to increase grant funds for drinking water infrastructure through the offering of an optional 3 cent label for manufactured products that in turn generates income for a strictly voluntary Water Infrastructure Investment Trust Fund, a provision manufacturers are concerned will be taken out of context in time and evolve to a mandatory tax.

Manufacturers praise this early authorization effort, well in advance of the September 30 legislative deadline. Too frequently, Congress has leaned on short-term authorizations and extensions for infrastructure, creating a stop-start dynamic that makes it difficult to pursue large projects of regional and national significance. Manufacturers are optimistic that Congress will continue to work in a bipartisan way to advance key infrastructure priorities.

ITC Report Barely Scratches the Surface of TPP’s Impact

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However you analyze yesterday’s report released by the U.S. International Trade Commission (ITC), the fact remains: the global economy requires American leadership and know-how to make it easier to create jobs at home and open up markets abroad. Whether it’s electronics manufacturer Texas Instruments, with multiple facilities employing thousands all over the United States and selling its innovative technologies worldwide, or it’s Wisconsin-based Darley with 127 employees, selling fire trucks to more than 100 countries, including China, Australia, Peru, New Zealand, Vietnam, Singapore, Japan, Nigeria and Brazil, we need free trade agreements like the Trans-Pacific Partnership (TPP) so that manufacturers of all sizes can continue to compete and win.

Manufacturers need their products sold to more markets, so we can grow more jobs in America. They need their inventions and innovations protected. The TPP will protect and sell American-made goods—and that’s why manufacturers support swift approval of this critical trade agreement. Read More

Pipeline Permitting and the Limits of Executive Power

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

The tortured, roundabout, drawn-out process that led last fall to the final disapproval of the Keystone XL pipeline project was equal parts astonishing and frustrating.  After a seven-year process, in the wake of determinations clearly to the contrary by the State Department, and in the face of unambiguous Congressional support, the Administration finally disapproved of the pipeline, finding that it was not in the national interest to approve the project.  Supporters of the pipeline wondered how it could be possible that the Executive branch could have such sweeping authority to kill a private commercial project that enjoyed strong bipartisan Congressional support and which the Administration had previously supported.  The decision clearly appeared to be one based on politics, but was it also one based on legitimate Constitutional authority?   In a brief recently filed by the Manufacturers’ Center for Legal Action in the US District Court for the Southern District of Texas, we join TransCanada in arguing that it was not.

In our amicus brief in TransCanada v. Kerry, we argue that the State Department’s prohibition of the pipeline violated the Constitutional separation of powers.  The Constitution explicitly grants to Congress the authority to regulate foreign commerce.  A cross-border pipeline clearly falls in the domain of foreign commerce.  While the Executive branch possesses the implied authority to regulate foreign affairs, which is oftentimes exercised collaboratively with Congress, and has relied upon that authority in this case, it does not have the authority to usurp the power of Congress to regulate commerce, particularly when Congress has clearly and repeatedly acted to demonstrate its support for construction of the pipeline.

While the President has noted that the pipeline crosses an international border, thereby implicating foreign affairs interests that fall within the realm of the implied power of the Executive, the justification offered for regulating the pipeline has nothing to do with border crossing, relations with Canada, or national security.  Rather, the President encroached on Congressional authority to regulate commerce in this case to create a helpful bargaining chip in the unrelated matter of the Paris Climate Change talks.  While this may be a legitimate political concern, it is not a permissible exercise of the foreign affairs power.

Stay tuned as this case progresses through the courts.  Not only are the specifics of the case very important, but in this era of heightened Executive branch power, the underlying separation of powers principles are equally so.

#TruthOnTheTrail: Trade Realities That Campaigns Need to Consider

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

trade-truth-05

Trade continues to be a key topic in the campaigns of both major parties. Unfortunately, the most oft-repeated claims are flat-out wrong and portend a dangerous path of retreat from the strong trade approach that has long been a powerful positive force for American workers, consumers and families. With World Trade Week officially under way, let’s look again at how trade drives the U.S. economy, raises standards of living for American families and grows manufacturing in the United States by dispelling some of the top trade myths.

  1. Free Trade Agreements. If candidates want to take aim at free trade agreements (FTAs), why not go after the hundreds of trade agreements being negotiated without the United States that exclude and disadvantage manufacturers in the United States? U.S. exporters face higher tariffs and barriers than most of the world’s exporters in other countries (ranking 130 out of 132) because the United States has too few, not too many, trade agreements. FTAs are huge market boosters for manufacturing in the United States because they promote fair trade by leveling the playing field. That’s why moving forward on the Trans-Pacific Partnership (TPP) is so important to manufacturers in the United States.
  1. NAFTA. The criticism of the North American Free Trade Agreement (NAFTA) is an enduring but deeply flawed myth. The United States implemented NAFTA in 1994 and then experienced four years of economic growth and the creation of more than 800,000 manufacturing jobs. The recession in the late 1990s had a negative effect on the U.S. economy and jobs, but if anything, NAFTA helped the United States endure that downturn more successfully and has been critical to sustaining and growing the U.S. manufacturing sector, which then faced even stronger challenges from Asian emerging economies.
  1. China. It is easy for candidates to go after China as a major villain in the trade stories they like to tell. China is not easy, but it is not a one-sided picture. Yes, China has grown its manufacturing industry heavily over the past 20 years and is now the largest foreign supplier of manufactured goods to the United States. To reach this level, China engaged in a number of unfair trade practices, government subsidization and discriminatory policies. No debate there. At the same time, China also became the third-largest market for U.S.-manufactured goods, from the seventh-largest purchaser in 2002, the year after China joined the World Trade Organization, with U.S. exports growing more than 350 percent to $89 billion. There’s a long way to go in creating a fairer and more reciprocal U.S.China commercial relationship, but it’s a lot more complicated than the campaign promise of putting on new border taxes on Chinese imports, which we all know would be contrary to U.S. international commitments and would likely result in even stronger retaliation against U.S. exports to China. And just a reminder, the TPP does NOT include China.
  1. Trade Deficits. When we buy more imports than sell exports, that’s considered a trade deficit, which is used by candidates as a negative report card on U.S. trade. However, our economy is much more complicated than simple subtraction. Oftentimes, when the U.S. trade deficit is rising, the U.S. unemployment rate is declining and U.S. manufacturing production is growing. Also, the critics conveniently ignore when we do have a surplus, such as the fact that our country sells more manufactured goods overall to our FTA partners than we purchase from them. U.S. manufacturing output and exports have quadrupled over the past quarter century. Trade, boosted by trade agreements, is helping to fuel our economy.

Trade and manufacturing go hand in hand. The United States manufactures more today than we have in our entire history. Trade and trade agreements have opened the door to new global opportunities for manufacturers big and small throughout America, helping to sustain and grow jobs for millions of Americans. Let’s continue to make sure manufacturers and America can continue to grow.