Tag: manufacturing

Remembering David Olson

David Olson, President of the Minnesota Chamber of Commerce

David Olson, President of the Minnesota Chamber of Commerce

Manufacturers lost a great leader. Minnesota Chamber of Commerce President David Olson will be missed greatly by manufacturers, his fellow NAM Board Members and many more across the country.

David left us after a life not long enough, but long enough for joy and love and laughter and good times – and long enough to leave a lasting footprint on the business community, his state and his country.

He inspired all of us and will be remembered by the countless individuals whose lives he made better. David always had colorful stories to tell, laughs to laugh, words to write, legislators to buttonhole, lobbies to walk and battles to fight. He passionately led the business community in Minnesota for decades with great optimism and strong faith. As a champion for economic growth, he provided pragmatic solutions that transcended party politics.

What most of us remember best is not specifically what David did or said, but how he did it – as a unique, wonderful, patriotic and highly intelligent human being. He connected with each of us in some unusual way to get a job done. Through his words and actions, he made us proud and proud to know him.

He was the epitome of hardworking Minnesotan values and a leader among his peers. I was fortunate enough to count him as my friend.

In an industry that seems to grow more homogenized every day, David had very much his own voice. His lifetime of dedication serves as a monument to the exemplary man he was.  His integrity and hard work will encourage those who knew him and will continue to benefit those who make Minnesota their home for years to come.  Among the best things David has left behind is his shining example.

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Manufacturers Will Not Give Up on Comprehensive Immigration Reform

The House won’t vote on comprehensive immigration reform this year—that’s the recent word from Speaker Boehner. Manufacturers are disappointed. With each day that passes, Congress misses an opportunity to take an important step forward for our economy and country.

Immigration reform is a priority for manufacturers. With some 80 percent of employers reporting a shortage of skilled workers, reform can provide a bridge so employers can begin to close the skills gap as we simultaneously undertake efforts to improve education and training efforts. And, in addition to the practical considerations, immigration reform is simply the right thing to do.

Of course, while manufacturers are frustrated by the inaction on reform, we’re not giving up. It’s not a matter of if immigration reform will happen; it’s a matter of when. Our country is better than our current, broken immigration system. That’s why manufacturers are committed to advancing immigration reform done right—a comprehensive solution that includes a pathway to citizenship and ensure that those who seek it aren’t denied the American Dream.

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NAM Backs Boeing after Misguided Decision by NLRB Judge

Individual cases before the National Labor Relations Board (NLRB) rarely get noticed by anyone other than labor or employment lawyers, but that doesn’t mean they aren’t worth watching. These decisions have broad implications for all employers, not just the one involved directly in the case.

Recently, an NLRB administrative law judge (ALJ) issued a decision that, if allowed to stand, would have significant implications for manufacturers and their intellectual property. The judge concluded that Boeing’s prohibition of cameras—a policy that has been in place for 35 years—constitutes an unfair labor practice because Boeing has no credible business need to protect its manufacturing process. Of course, as technology has developed, the rule has captured additional devices, and today smartphones fall under the ban.

Boeing has good reason to be cautious about allowing unfettered photographic access to its shop floor. For one, its competitors and some foreign governments would love to get their hands on Boeing’s proprietary information. The ALJ would make that easy for corporate spies—just go to an employee’s Facebook page and study photos from inside Boeing. In addition, many of Boeing’s products are subject to strict export controls. Making photos of these products or processes public could violate federal law.

The NLRB’s decision puts Boeing in a tough spot, creating a problem where none existed. And, besides, NLRB lawyers shouldn’t be in the business of creating new rights for employees in the first place.

Because of the dangerous precedent this case could set for future disputes before the NLRB, the NAM filed a brief highlighting this overreach and the impact it would have on businesses, particularly manufacturers. For more information about the case, click here.

Patrick Forrest is Vice President and Deputy General Counsel at the NAM. He also serves as part of the Manufacturers’ Center for Legal Action, the leading voice of manufacturers in the courts. To read more about the Manufacturers’ Center for Legal Action, please click here.
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AT&T Chief Talks Growth in Washington

Randall Stephenson, chairman and CEO of AT&T, appeared the Economic Club of Washington, DC, on June 17 to talk about the key ingredients for economic growth in the United States.

In a wide-ranging policy discussion, the head of the telecommunications giant honed in issues like immigration reform and tax reform as opportunities to drive and attract investment. Stephenson also highlighted the need for strong trade policies and the importance of free trade agreements. Currently, the United States’ ability to negotiate new agreements and complete pending ones is hindered by the lack of Trade Promotion Authority, which helps streamline the negotiation process.

Stephenson’s remarks send a powerful message from the business community about the necessity of engaging with Washington. Policymakers, whether on Capitol Hill or in the executive branch, need to hear from America’s job creators—because like it or not, what happens in Washington matters to businesses. We need to be at the table for these important discussions.

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Personal Spending Slowed in September even as Income Growth was Strong

The Bureau of Economic Analysis said that personal spending growth weakened somewhat in September, even as personal incomes grew. Consumers purchased 0.2 percent more in September, down from the 0.3 percent rate of August. On a year-over-year basis, the pace of personal spending growth has decelerated from 3.3 percent in June to 2.7 percent in September, suggesting some degree of hesitance on the part of Americans to increase their overall spending.

This was particularly true for durable goods products, which spending in this category essentially flat in the third quarter, according to this data. For the month, spending on durable goods was down 1.3 percent in September, rebounding from a 1.4 percent increase in August. In contrast, nondurable goods spending in the third quarter was up 1.3 percent, with a 0.6 percent gain in September.

Meanwhile, personal income growth remained strong, up 0.5 percent in both August and September. Over the course of the past 12 months, incomes have risen 3.7 percent, but in the third quarter, the annual pace accelerated to 4.45 percent, a sign of renewed strength.

Manufacturing sector wages and salaries edged higher for the month, up from $754.3 billion to $754.6 billion. This figure has grown slow-but-steady, reflecting upward movement from averages of $707.1 billion and $735.4 billion in 2011 and 2012, respectively.  Total wages and salaries were up 0.5 percent and 0.4 percent over the past two months.

With growth in personal income outstripping personal spending in each of the past three months, the savings rate has moved higher. It has grown from 4.4 percent in June to 4.9 percent in September. This was the highest savings rate of 2013 so far, approaching the average of 5.3 percent for January to November of 2012. (I omitted December due to accelerated payouts skewing the data in the lead-up to the fiscal cliff deal.)

These data also show that inflationary pressures remain modest. Similar to the recent consumer price index report, price gains for consumer items have risen in an acceptable range. Year-over-year growth in prices for core personal consumption expenditures was 1.2 percent in September, the same as in August and roughly unchanged for the past six months. This keeps prices below the 2 percent growth threshold established by the Federal Reserve Board, with minimal inflationary pressures for now.

Chad Moutray is the chief economist, National Association of Manufacturers.

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An Opportunity for Manufacturers and Exporters in the Pacific Northwest

A big debate on energy exports is playing out in the Pacific Northwest. Passions are running high on both sides, no doubt fueled in part by meticulously brewed cups of java.

NAM President and CEO Jay Timmons recently waded into the debate. In remarks to business community leaders in Portland and later in Seattle, he made a strong case in support of building the infrastructure necessary to move goods and commodities, such as coal and natural gas, to markets abroad. He said:

Building, modernizing and expanding export terminals makes sense. In a still sluggish economy, expansion will create over 10,000 jobs in the Pacific Northwest and throughout the entire manufacturing economy in America. Expansion means more private investment in export infrastructure—not just for commodities like coal and liquefied natural gas—but for agriculture and manufactured products. It’s a winning proposition.

Currently, plans to modernize export terminals in Washington and Oregon are  effectively on hold. Approval of these projects takes the consent of seemingly every level of government, giving opponents plenty of opportunities to stall. All the while, the Pacific Northwest is missing out on the increased economic activity the export terminals would make possible.

The debate over energy exports isn’t isolated to the Pacific Northwest. Similar debates are taking place across the country, particularly on the issue of natural gas exports. The United States has abundant supplies of natural gas, which are now being developed thanks to advancements in hydraulic fracturing. By exporting energy, whether coal or natural gas, the United States can enhance its global economic leadership, boost economic growth and create high-wage jobs.

“Other growing global economies need energy,” Timmons remarked during his trip to the Pacific Northwest. “Why shouldn’t it be from America?”

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Veterans are Strengthening the Manufacturing Workforce

Veterans enter the civilian workforce every day.  Unfortunately, there are more veterans than open jobs—as a roughly 8 percent unemployment rate among veterans indicates.

After bravely serving our country, veterans deserve a hero’s welcome. They also deserve a good job, and manufacturers are stepping up to make that happen. Across the country, manufacturers are looking for ways to introduce veterans to manufacturing and get them to work.

Take Hoerbiger Corporation of America. When the Florida-based manufacturer saw a need for skilled machinists, it saw veterans as a natural fit.  As the Sun-Sentinel reports,

 [E]arlier this year the company developed a training program to fill the gap and began recruiting veterans.

They tend to exhibit “maturity, discipline, tenacity and an ability to get the job done,” said David Gonzalez, the company’s human resources manager. He recruited veterans in May at the Paychecks for Patriots job fair in Dania Beach.

The result: Seven of the 12 machinists put through the program are military veterans.

To help train these individuals, Hoerbiger turned to another manufacturer and a cutting-edge educational system.

Hoerbiger trained the group with the help of new machine simulation software by Machining Training Solutions, a Longwood, Fla., company operated by Al Stimac, president of the Manufacturers Association of Florida. Ten to 12 workers can be trained at a time with the interactive software.

“My whole concept was to train using the methods that students are used to, such as today an iPad or a computer. The learning curve is reduced drastically,” Stimac said.

There are similar stories across the country. The National Association of Manufacturers through the Manufacturing Institute is working with a number of manufacturers are part of the Get Skills to Work program.  This initiative matches the skills veterans received in the military to skills coveted by manufacturers. If veterans need to learn new skills, the Institute and its partners can help them earn those credentials through partnerships with community colleges and other educational institutions.

Manufacturers are helping veterans transition from the military in other ways as well. In addition to its efforts to recruit veterans to its workforce, Whirlpool Corporation recently became the official appliance sponsor of Homes for Our Troops, a non-profit initiative dedicated to building homes for severely injured veterans.

It’s the least manufacturers can do for the men and women who make great sacrifices to safeguard our freedom.

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Boeing Introduces a New Member to the Dreamliner Family

NAM Member Company, Boeing, introduced its second member of the Dreamliner family today.  The first flight of the new, innovative 787-9 successfully took place today at 1:30pm EST.

Boeing has always had a reputation for manufacturing advancements in air travel and they have done it again today with their new plane manufactured in Everett, WA.  The new 787-9 will carry more passengers, cargo, and has the ability to travel further than any other 787.  It is a more capable and efficient airplane than those that came before it.  The entire Boeing team, from the designers, engineers, executives and the men and women on the shop floor deserve a round of applause for taking air travel to the next level.

The NAM congratulates Boeing on delivering another state-of-the-art and efficient means of travel to customers around the world.

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Manufacturing Construction Spending Declined in June

The Census Bureau said that overall construction spending fell 0.6 percent in June, with weaknesses in both the residential and nonresidential sectors. Despite a very healthy gain in residential activity of 17.6 percent over the past 12 months, it was 0.1 percent lower in June. This somewhat mirrors earlier findings on lower housing starts and permits — a decrease possibly influenced by higher mortgage rates. That report suggested that the decline in new residential construction activity was primarily in the multi-family units segment.

Meanwhile, the level of manufacturing construction projects decreased from $45.9 billion in May to $45.1 billion in June. This was off from $49.5 billion in December, suggesting a drop of 8.9 percent year-to-date. The December figure was a bit of an outlier, though, and the year-over-year decline was a more modest 1.9 percent. Either way, it is clear that there has been a pulling back in construction investment in the first half of 2013.

For the larger private, nonresidential sector, spending declined 0.9 percent for the month, with year-over-year growth of 1.4 percent. The largest monthly increases were in the power, communications, and transportation sectors. In contrast, religious, educational, amusement and recreation, and lodging entities reduced their construction spending in June.

In terms of public construction projects, there were decreases of 1.1 percent for the month, or 9.3 percent lower year-over-year. There was lower spending found in the conservation and development, water supply, sewage and waste disposal, and public safety. These were somewhat counteracted by increases in power, office, health care, and commercial developments, among others.

Chad Moutray is the chief economist, National Association of Manufacturers.

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Business Economists Note Slowing in the Second Quarter, Cautious Optimism Ahead

The National Association for Business Economics (NABE) released its latest Industry Survey, which found that sales and earnings decelerated somewhat in the second quarter. A net percentage of 20 percent said that their sales were rising in the second quarter, down from 47 percent in the first quarter. This brings it back to levels seen in the third and fourth quarters of 2012. In the goods-producing sector (which includes manufacturing), 43 percent of respondents said that their sales were increasing in the second quarter, down from 73 percent who said the same thing in the first quarter.

These data mirror other indicators which have found softness in the second quarter. Timothy Gill, the Chair of the NABE Industry Survey Committee and the Vice President of Business Information & Statistics for the Aluminum Association, an NAM member, said that these results “possibly [reflected] increased headwinds from a weak global economic environment and tighter domestic fiscal policy in the latest period.”

The slowing pace of sales growth has impacted profit margins. In the goods-producing industries, 29 percent of respondents said that their profits had declined over the past three months, with half of them reporting no change. That represents deterioration in profits from the first quarter, where no one in the goods-producing sectors had declining sales (relative to the fourth quarter of 2012). In the larger economy, the results were similar, with the net percentage of those reporting higher profits down from 16 percent in the first quarter to -3 percent in the second.

The news on employment was more positive. Overall, there was a pickup in hiring observed in this latest survey. While 60 percent of respondents said that they had not changed their employment levels, 29 percent noted an increase in hiring in the second quarter. That is up from 22 percent reporting increased hiring in the first quarter. This carried through to the goods-producing sectors, as well, with 29 percent of those taking the survey suggesting that they had hired new workers in the second quarter, up from 18 percent three months ago. Here, it is important to note that goods-producing industries include construction and mining, both of which have seen employment gains of late, in contrast to manufacturing.

In terms of forecasts, business economists surveyed tend to be cautiously optimistic about the next 12 months. Seventy percent think that real GDP will grow 2.1 percent to 3.0 percent between the second quarter of 2012 and the second quarter of 2013. That is up from 60 percent who said the same in the last survey and 47 percent six months ago. As such, expectations about the future economic environment have been upgraded overall.

With that said, several other economic forecasts for 2014, including the one from the Federal Reserve, predict real GDP growth rates of 3.0 percent or more, and as such, these numbers appear to be slightly more subdued. Nearly one-fifth of the respondents felt that growth would be from 1.1 percent to 2.0 percent, for instance; although, that was down from 26 percent who said the same thing three months ago.

Chad Moutray is the chief economist, National Association of Manufacturers. He is a former board member of NABE.

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