When the U.S. House passed H.R. 658, the FAA Reauthorization and Reform Act, it also acted to prevent federal regulators from imposing unnecessarily burdensome and expensive rules on the shipping of lithium batteries as air cargo.

The important language contained in the bill: (continue reading…)

The National Association of Manufacturers today sent the U.S. House a “Key Vote” letter (text) on an issue of major competitive importance to the auto industry, medical device manufacturers, and other high-tech sectors of the economy. The letter urges Representatives to oppose Amendment 18, offered by Rep. Bob Filner (D-CA), to H.R. 658, the FAA Reauthorization and Reform Act of 2011. The House is currently debating the bill and the 30 (!) amendments approved for consideration.

The NAM supports language in Chairman John Mica’s (R-FL) Manager’s Amendment that would allow the Administrator of the Federal Aviation Administration (FAA) to bring U.S. regulations governing the air shipment of lithium batteries up to current international standards.

Conversely, the Filner amendment calls for an immediate halt to all air shipments of primary lithium batteries until new regulations can be promulgated by the FAA and others at the Department of Transportation (DOT). In the meantime, regulatory delays and outright bans on air shipments would cause massive supply chain disruptions and postpone the delivery of life-saving medical devices and critical defense communications equipment. Moreover, failure to harmonize DOT rules with international rules will ultimately cost U.S. jobs, create regulatory confusion and put us out of step with our global competitors.

Manufacturers support transportation safety and carefully follow safety protocols when shipping lithium batteries and products containing such batteries. The Filner amendment is unnecessary, excessively costly and damaging to our global competitiveness.

NAM Key Votes are identified by a committee made of representative manufacturers and are used to determine a member of Congress’ legislative support for manufacturing.

Earlier Shopfloor post on lithium battery regulations.

The Obama Administration believes in electric and hybrid vehicles, not just as a mode of transportation but also as an impetus for research and development, U.S. leadership in “clean energy,” and a new “green workforce.”

Prospects for the industry are promising. Crain’s Detroit Business reports “Powered by batteries: Holland area vies to be national hub for lithium-ion manufacturing,” describing the scene along a two-mile stretch of 48th Street in rural Holland (that’s western Michigan).

Battery Boulevard terminates in two new operations: The Johnson Controls-Saft Advanced Power Solutions Meadowbrook plant and  the LG Chem Ltd. factory, still under construction.  There’s Trans-Matic Manufacturing Co., which makes deep-drawn metal canisters, TUV SUD America, a supplier of battery testing equipment. Forty miles north, there’s the Swiss-German manufacturer, Fortu PowerCell Inc.

“It’s no longer what can be — we’re not just looking at cornfields now,” says Randy Thelen, president of Lakeshore Advantage in Zeeland, a grassroots organization credited with helping bring battery manufacturing to the Holland area. “We are looking at steel going up in the air and parking lots filled with people working at the plant, as well as contractors.”

Not bad for an industry that didn’t even exist three years ago in America — or anywhere else, for that matter.

“For all intents and purposes, the lithium-ion battery industry for transportation purposes did not exist globally anywhere three years ago,” said Eric Shreffler, sector development director of advanced energy storage for the Michigan Economic Development Corp.

Yes. Not bad at all.

So why, oh why, is the Executive Branch considering regulations that would make air shipment of lithium-ion batteries more slow and expensive, damaging the nascent U.S. industry’s global competitiveness and negating one of the Administration’s signature initiatives? (continue reading…)

Thanks to Rep. Howard Coble (R-NC) for highlighting one of the lesser-known examples of regulatory overreach to come from the Obama Administration, the proposed rules governing air shipment of lithium-ion batteries. Rep. Coble cited the regulations during the Feb. 10 floor debate on H.Res.72, requiring House committees to review federal regulations.

Rep. Coble was discussing the rules proposed in January 2010 by the Pipeline and Hazardous Materials Safety Administration and Federal Aviation Administration, “Hazardous Materials: Transportation of Lithium Batteries.” The docket is PHMSA-2009-0095. here.

The National Association of Manufacturers has been active in the debate over battery shipments, and NAM President Jay Timmons cited the proposed rules during his testimony last week before the House Oversight Committee. In March, 2010, the NAM submitted the association’s comments to the agencies.

Rep. Coble said in his floor statement:

We have all heard the expression, Keep It Simple, Stupid, the KISS formula. Our government needs to do a better job of adhering to this phrase.

In the transportation sector, there are numerous examples where the regulatory process is burdensome and impedes private enterprise.

The Department of Transportation has regulations pending that classify lithium cells and batteries as hazardous materials. If implemented, this could create an impediment in getting batteries to consumers, the military, and government agencies. As a result, this could jeopardize manufacturing jobs in my district, jobs we cannot afford to lose.

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This morning’s hearing by the House Oversight and Government Reform Committee, “Regulatory Impediments to Job Creation,” is much anticipated not just for its economic importance but also for its more political dynamic, i.e., House Republicans versus President Obama, the GOP’s drive to rationalize regulations as a strategy, the President reaching out to business, etc. Whichever dynamic produces a better, more commonsensical approach toward regulation (and reins in the expansionistic EPA) is OK by us.

In any case, the previews and other leans toward the political analysis.

• AP, “GOP invites business to vent about regulations” C’mon! Wasn’t there enough room in the headline for “whine” or “bitch?” It’s possible that business will not “vent,” but rather express well-considered, factual arguments to the committee.
• New York Times, resorting to the most hackneyed of all headline constructions, “Republicans Fire First Shots in the War over Regulation.”
• NPR, “Republican Hearing Focuses On Business Complaints“
• Washington Post, “Do regulations kill jobs? House report draws on businesses’ answers.“

And, a good one from National Review Online, The Corner, “The Burden of Regulation“:

Update: To watch streaming video of the hearing please click here.   (continue reading…)

Jay Timmons, president of the National Association of Manufacturers, testifies this morning before the House Oversight and Government Reform Committee at a hearing, “Regulatory Impediments To Job Creation.”

Timmons’ prepared statement has been posted online at the committee website, here. Among the topics he discusses are regulations from the Occupational Safety and Health Administration, the proposal from the Department of Transportation over air shipments of lithium batteries, the DOT’s rulemaking on hours of service, the Consumer Product Safety Commission’s product safety database, and, of course, the major EPA regulations that will retard economic growth.

One expects today’s hearing will include much discussion of the EPA’s power grab in attempting to regulate greenhouse gas emissions without statutory authority, but we hope the horrendous, anti-competitive proposals on ground-level ozone also gets attention. From Timmons’ prepared testimony:

The EPA has been embarked on a decades-long process to implement the Clean Air Act and its amendments. There is no doubt that enormous benefits have been brought to our nation from efforts to improve air quality. But the continued ratcheting down of emission limits produces diminishing returns at far higher marginal costs. This means that each new air rule will have a greater impact on job creation than those in the past.

Costs of pollution abatement are capital intensive. In a time of economic recovery where capital is extremely scarce, every dollar diverted from productive use creates additional pressure to reduce labor costs. And when commodities and other
manufacturing inputs are increasing in costs, even more pressure builds to squeeze labor costs. In this environment, it is very clear that unnecessary or cost-ineffective regulation will dampen economic growth and will continue to hold down job creation. For some firms it will be the final marginal straw that destroys the whole business.

That is why it is so shocking that the EPA decided to take a Bush Administration rule that was enormously costly, the National Ambient Air Quality Standard (NAAQS) for Ozone, and propose making it even more stringent and costly. One study by the Manufacturers Allliance/MAPI estimated the most stringent proposal would result in the loss of 7.3 million jobs by 2020 and add $1 trillion in new regulatory costs per year between 2020 and 2030. We have a short reprieve from this rule because the EPA has delayed its final proposal until July. But Congress must work with the EPA to stop the
agency from making a $1 trillion mistake.

The hearing begins at 9:30 a.m.

Below we have the announcement of a joint effort of the Michigan Manufacturers Association and the National Association of Manufacturers to put manufacturing and competitiveness issues on the front burner in the 2010 campaigns and beyond.

We hadn’t checked in with the state in a while, although Gov. Granholm crosses the radar every so often in Washington. Back what’s happening back in Michigan?

The Greater Lansing Business Monthly has an encouraging report, “Lansing Manufacturing on the Rebound”

There is good news to report on one of the key industries of the Lansing-area economy.  Manufacturing in the capital area is emerging from one of its worst downturns on record. Jobs this past June were up by 3,100 from a year ago and are averaging year-over-year gains of about 1,800 jobs for the first half of 2010. Employment topped 18,000 in June for the first time since 2008.

Our fortunes are tied to the auto industry of course, and the rebound is predominantly in this sector, especially at GM’s Lansing Delta Township plant. The higher volume Chevrolet Traverse is now made here and has replaced the Saturn Outlook. Some of the job additions include workers transferring from Spring Hill, Tenn.—and the plant is operating on three shifts while Lansing Grand River remains on one shift. Jobs at supplier plants have responded to this increased production by adding jobs.

Crain’s Detroit Business also reports an optimistic forecast, “University of Michigan economists predict reversal in job losses for five-county region.”

That’s good. Unfortunately, there’s a long way to go. Michigan’s unemployment rate in August was the second highest in the nation, at 13.1 percent better only than Nevada (14.4 percent).

Budget woes. There are budget woes. From AP, “Mich. governor signs budget bills into law“: “Lawmakers erased a projected $484 million deficit in the next budget. The deficit would have been far larger if it weren’t for extra federal help.” WJR’s Frank Beckmann is critical, “Budget again balanced with cowardly fixes.” The Jackson Citizen-Patriot editorializes, “Lansing falls short with budget again.”

Federal money, as per news release, “Stabenow, Levin Announce $450,000 for Oakland University’s Business Incubator in Sterling Heights.”

Manufacturing is certainly an issue in the gubernatorial campaigns. Democratic candidate Virg Bernero, the mayor of Lansing, is highlighting “advanced manufacturing” as he campaigns, “Bernero pushes manufacturing in Muskegon campaign stop.” The state NFIB and Michigan Manufacturers Assocation have endorsed the Republican candidate, businessman Rick Snyder.

Batteries…

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In our quick review of the remarks and commentary on the dedication of the Systems 123 lithium-ion battery plant in Livonia, Mich., on Monday (see post below), we find no mention of the costly and unnecessary regulations that the Pipeline and Hazardous Materials Safety Administration has proposed for air shipment of those batteries.

Now, no one wants to rain on a new plant’s parade, but the conflicting messages coming the Obama Administration would have been a useful area of inquiry for reporters. (See Monday post, “Lithium Batteries: Boosting with Subsidies, Draining with Regs.”)

A good query for Energy Secretary Chu might have been: The Administration believes global leadership in battery technology and manufacturing is critical for economic growth. Why, then, is the Administration also proposing shipping regulations that will make these batteries less competitive?

For more on the safety issues, we commend this Aug. 24 letter in USA Today from George A. Kerchner, Executive Director of the The Rechargeable Battery Association, “Batteries can be transported safely.” Excerpt:

Over the past decade, passengers have brought millions of lithium-ion batteries and millions of portable electronic devices — cellphones, laptop computers, portable DVD players, even medical defibrillators — on board an aircraft without incident. These batteries and products also have been transported by air safely when those shipments complied with existing hazardous materials regulations.

Of the 113 battery “incidents” cited by the Federal Aviation Administration (FAA), more than half did not involve lithium-ion or lithium-metal batteries. Many cases were due to shippers who failed to comply with existing hazardous materials regulations.

There also is a misperception about regulation of products carried onto aircraft by passengers. Hazardous materials regulations in fact do impose carry-on restrictions for small lithium-ion batteries. The regulations state that passengers may carry these batteries or equipment onboard the aircraft only if intended for personal use. The regulations also require each spare battery be individually protected to prevent short circuits. The passenger who brought 58 cellphones, batteries and chargers on the American Airlines flight appeared to be in violation of the rules.

Finally, FAA testing has demonstrated that fire suppression agents installed in transport category aircraft are effective in suppressing a lithium-ion battery fire, and testing by the UK Civil Aviation Authority has confirmed that any fire that might occur in a passenger cabin can readily be controlled.

The association has much more information on the issue at its website, www.prba.org.

President Obama and Vice President Biden have visited battery plants more than a half-dozen times, and given the political and taxpayer investment the Administration has made in the technology, it’s a safe bet there will be future visits. To the reporters covering those visits, please! Ask the question.

Monday was a big day in Livonia, Mich., as the lithium-battery manufacturer 123 Systems dedicated its new plant.

President Obama called in with a message to employees:

I met with David and some of the A123 team here at the White House back in April, and it’s incredibly exciting to see how far you guys have come since we announced these grants just over a year ago.  And this is important not just because of what you guys are doing at your plant, but all across America, because this is about the birth of an entire new industry in America — an industry that’s going to be central to the next generation of cars.  And it’s going to allow us to start exporting those cars, making them comfortable, convenient, and affordable.  It helps our manufacturing industry to thrive, and with it, that means our communities and our states and our country are going to thrive.

Energy Secretary Steven Chu was there, and he blogged at the event at WhiteHouse.gov, “Revitalizing American Manufacturing“:

At a difficult time for America’s workers and businesses, A123 Systems is leading the way to a brighter future. It is building factories in Livonia, Romulus, and Brownstown. It has already has hired 200 local workers since last August and it expects to hire more than 3,000 people by 2012. Today marks an important milestone for A123 Systems, as they open largest lithium-ion automotive battery production facility in North America. This will help make sure the cars of the future are built right here in America.This particular project is important because it has managed to link innovation in America to manufacturing in America, an essential connection that has been neglected in recent years.

• Detroit Free Press, “North America’s largest plant for lithium-ion auto batteries opens in Livonia“
• The Detroit News, “Granholm, Obama praise new Livonia battery plant“
• New York Times (blog), “A123 Opens Michigan Battery Plant, With Federal and State Aid“

Congratulations to Systems 123.

More mixed messages on lithium batteries from the Administration…

Associated Press, “Production of stimulus-aided car batteries revs up“:

WASHINGTON — The first wave of mass-produced advanced batteries funded by the Obama administration’s economic recovery program is starting to roll off assembly lines, setting the stage for new hybrid and electric vehicles.

So how will consumers respond?

Fending off criticism of the $787 billion stimulus program, the administration has cited the battery industry as one of the success stories. With new facilities coming online in the Midwest, battery manufacturers for the advanced vehicles are providing a test case for the government’s attempt to revive the economy.

One factor in how consumers will respond is price, obviously. So again we ask, why is it that the Administration wants to make it more expensive to ship lithium batteries?

In January, the Pipeline and Hazardous Materials Safety Administration proposed regulations in consultation with the Federal Aviation Administration, “Hazardous Materials: Transportation of Lithium Batteries.” The docket is PHMSA-2009-0095. here), which also noted a March 3 joint letter from the NAM and U.S. Chamber of Commerce: (continue reading…)