Keeping Our Promise: Tax Reform Has More Winners – H.B. Fuller Employees Get Bonuses, Ownership Stake and Better Health Coverage

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Minnesota-based adhesives manufacturer H.B. Fuller is investing its tax reform savings in the most important part of its company: its employees.

“Our business is a business of people,” said Kimberlee Sinclair, H.B. Fuller’s Director of Global Communications. “So we made a decision to invest our tax savings two ways: by investing in our employees and by accelerating our debt paydown to benefit our investors.”

“The employee-focused investment is particularly important because it demonstrates our commitment to creating a great place to work. When we figured out what our 2019 tax savings would be, we decided that, rather than give people a one-time cash bonus, we would do something that could permanently improve people’s lives,” Sinclair said. “And, the biggest impact would be improving the benefits our employees receive.”

As of January 2019, H.B. Fuller will reimburse 100 percent of individual health insurance premiums for every employee making under $50,000 a year and 50 percent of premiums for those making between $50,000 and $60,000—many of them the men and women on H.B. Fuller’s shop floors.

In addition, more H.B. Fuller employees than ever before will have a chance to gain an ownership stake in the company through the employee stock ownership program.

“We expanded our stock program to a significant number of employees at a more junior level,” said Sinclair. “This allows our employees to have a personal stake in our success.”

But the expanded benefits don’t stop there: H.B. Fuller also enhanced its incentive bonus program to enable more employees to take home more money in their paychecks.

“Now, more employees are eligible for the company’s performance-based bonuses,” said Sinclair. “A segment of our plant workers, for example, will now be eligible to receive quarterly performance bonuses, and tax reform helped us make it a reality.”

Promoting Cybersecurity Necessary for Manufacturing 4.0

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This week in Chicago, the National Association of Manufacturers hosted more than 100 cybersecurity leaders from manufacturing organizations small and large at a Leading Edge-sponsored Cybersecurity Executive Forum. The event provided an opportunity for CISOs, CIOs, CTOs and technical experts to share experiences and discuss best practices for boosting manufacturers’ cybersecurity posture. Through deep dives on the cyber-threat landscape in 2019 and the changes in the industry brought by Manufacturing 4.0, including automation and rapid technological innovation, it is clear that cybersecurity remains a top priority for operational experts across our sector. As such, getting cybersecurity policy right should remain a priority for policymakers committed to ensuring the success of manufacturing in the digital age.

We need to be clear-eyed about the challenges ahead in order to properly address them, and manufacturers are ready to lead. According to a recent survey by the Manufacturing Leadership Council, a division of the NAM, more than 60 percent of manufacturers expect cyber-attacks to increase in 2019. As manufacturers incorporate new, connected technologies into their processes, operations and products, these cybersecurity experts know the entry points for bad actors multiply. These challenges are heightened for manufacturers in particular given the lengthy lifecycles of manufacturing equipment and products. To remain competitive, manufacturers are incorporating big data into their operations, and to do so successfully, they must connect legacy equipment securely.

Awareness of the cybersecurity challenge has increased across the industry, and manufacturers are committed to progress and thinking about security at the outset as the industry transitions to Manufacturing 4.0. Manufacturers know safety—just step onto a shop floor and you’ll see hard hats, hazard warnings and processes engineered with employee and client wellbeing in mind. We must now ensure the same posture for the digital side of shop floors. At this week’s event, the VP of IT Security for Schneider Electric, a leader in this space, highlighted that cybersecurity is progressing across manufacturing because companies are working to expand this well-established culture of safety to create a culture of security.

As manufacturers do their part, policymakers can help by continuing to recognize the leadership across industry in cybersecurity and the benefit of public-private collaboration in the face of common cyber threats. They should also work to increase the cost on cyber criminals, improve the sharing of cyber threat information to industry and take steps to develop a cybersecurity workforce for the future. Continued industry-led advances in cybersecurity also depend on having the right policies in place on data privacy and security, including replacing the regulatory burden that comes from a patchwork of regulations on IoT, privacy and security at the international and state level with appropriate federal policies. The NAM will continue to work with policymakers to pursue policies that allow manufacturers large and small to realize the wealth of benefits from Manufacturing 4.0.

Colorado Drug Importation Proposal is Misleading

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As states continue down a path to address rising health care costs, not all solutions for consideration have proven track records and the public should know that pharmaceutical drug importation is not only unproven, its legality is very unclear. To elected leaders, drug importation is a seemingly simple solution, but it comes without a full understanding of the value of innovation led by pharmaceutical manufacturers in America and the required federal role in this proposal. To date, no Secretary of the U.S. Department of Health and Human Services has been willing to make a certification to permit drug importation. Why? Ultimately, the federal government is responsible for safeguarding Americans access to quality, safe prescription drugs
 
Canada does not have the same standards or long-established systems in place to protect patients to the same level we do here in the United States. The U.S. FDA recently issued a warning to one online operation for selling “unapproved, misbranded and unsafe imported drugs to unsuspecting Americans.” Counterfeiting is an issue that cannot be ignored. As Colorado continues the process to seek authorization to import Canadian prescription drugs, it undercuts health safety at the most basic levels. Colorado’s SB 5, like other state-led proposals, is a false promise to lower drug prices.
 
Manufacturers realize that rising health care costs are disruptive to families and businesses, and support efforts to increase access to affordable medicine. However, it cannot be at the expense of safety, quality or hard-fought intellectual property protections. The National Association of Manufacturers has and continues to oppose the importation of prescription drugs to ensure the protection of patients from lesser quality or counterfeit drugs.
 

President Trump Just Signed Two Executive Orders To Speed Up Energy Infrastructure Projects

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In a big win for U.S. manufacturing workers, President Trump signed two long-anticipated executive orders in Houston on Wednesday intended to cut red tape and speed up the permitting process for energy infrastructure projects. 

The first order takes aim at oft-overlooked laws and regulations that have plagued the permitting process for energy infrastructure projects. Chief among them are Clean Water Act water quality determinations known as “401 certifications” which have become political flash points for states and opposition groups in recent years. The order will also update regulations for the export of liquified natural gas (LNG), which have not been updated to keep pace with modern, state-of-the-art LNG export facilities. 

“Section 401 has been abused by states and project opponents, turning it into a tool of obstruction,” Ross Eisenberg, NAM Vice President of Energy and Resources, said. “This Executive Order will clarify the responsibilities of federal and state governments in administering Section 401 so that the statute is applied in a fair, uniform fashion.

The second order would clarify permitting for cross-border energy infrastructure and is intended to prevent future projects like the Keystone XL Pipeline from getting caught up in years of litigation, reviews, and delays. 

Together, these two executive orders will promote badly-needed development of infrastructure to meet U.S. energy demand, create and support jobs for U.S. manufacturing workers, and provide reliable and affordable energy to U.S. consumers.

“The NAM has consistently called for measures to accelerate the permitting process for new energy infrastructure for several years, and has actively called on the Trump Administration to improve the way federal and state agencies authorize these projects,” Eisenberg said. “Manufacturers need predictable permitting laws that tell us the rules of the road and how we can meet them.”

Modernizing and investing in America’s infrastructure is a top priority for manufacturers in the United States, who rely on critical infrastructure projects to connect with employees, work with suppliers, transport goods to market and increase productivity. When infrastructure fails to meet those needs, it negatively impacts growth.

The National Association of Manufacturers (NAM) continues to rally support for broad-based, jobs-creating investment in expansion and modernization, including advocating increased public and private infrastructure funding, developing an interstate system focused on moving goods to market, investing in ports and inland waterways, supporting efforts to reduce traffic congestion and modernizing drinking water and wastewater systems as well as modernizing information and telecommunications infrastructure. Learn more about the NAM’s plan at NAM.org/BuildingToWin.

Interview with a STEP Ahead Award Winner: Elaine Thibodeau

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Elaine Thibodeau is the platform leader, manufacturing surgical vision at Johnson & Johnson. Below is an interview conducted for the NAM’s morning newsletter, Input.

Input: Tell me a little bit about your background. How did you come to be interested in manufacturing?

Thibodeau: I always liked making things, building things. I used to make furniture for my Barbie Dolls with raisin boxes and pieces of wood, stuff lying around in the garage.

 I was good in math, and I had a couple of teachers that encouraged me, so I ended up in engineering. But when I graduated it wasn’t easy to find a job. After working for the Canadian government for a while I realized I wanted to work in private industry, and the same day that Johnson & Johnson offered me a job I had an offer from Continental Can. I said, “Well, I don’t know who Continental Can is, but I know who Johnson and Johnson is, so I’ll do that.”

I’ll have been with J&J for 30 years in June, which is hard to believe. I’ve made over-the-counter medications, did six years of marketing and sales, and then went back into supply chain. I’ve done orthopedics, diagnostics, cancer drug manufacturing, consumer medical devices. And when we purchased Abbott Medical Optics, I had the opportunity to become its manufacturing lead. I’ve been doing that for two years and love it.

Input: In terms of your early education, what do you think was most valuable in preparing you for a manufacturing career?

Thibodeau: My father was an electrician, and he used to take me along with him. He taught me a lot about troubleshooting and the dos and don’ts. I learned a lot from him.

And when I was a kid, I had building blocks and I liked to sew. I was always interested in putting things together. Later on, I had an excellent calculus teacher in high school—I used to ask him for extra homework. Manufacturing really brought together my crafty side and my love of science and math.

Input: At one point in your career, you had to take over a third-party plant while keeping the production of a cancer medication going. That sounds like a high-wire act. Can you tell me a little about that?

Thibodeau: The drug in question was on the shortage list, so we were under a lot of scrutiny—from the media and from the FDA. We made a deal with a supplier to take over a section of their plant because they were closing down their operations. We had to isolate it to create a clean environment, take on their employees, and negotiate with the FDA to make sure we were in the clear.  

And meanwhile, we had doctors telling us that due to the shortages we were asking them to play God with their patients. Some people would get medication, some wouldn’t. And that always stuck with me—it motivated me every day to do my job well.

Input: Let’s say you’re talking to a young person who hears this story and thinks: “I want to be able to do that someday.” How do you prepare early on in your career for challenges like that?

Thibodeau: It’s important to have opportunities to collaborate and get out of your comfort zone. I coach a lot of young people these days and say, “If the new job or the new project doesn’t scare you a little bit you’re probably going to be bored in six months.”

Input: Tell me a little about getting Puerto Rican manufacturing companies up and running after the hurricane.

Thibodeau: The personal stories of devastation are just heartbreaking—whether it’s property loss, or discovering a relative has died under terrible circumstances, or worrying about elderly parents. Plus, day-to-day life was just physically difficult—think about going five days without washing your hair. We had to take care of the people first, making sure they had what they needed to be safe, whether that was a generator or medicines or clothing or diapers.

Meanwhile, getting the plant back up and running was a great example of local collaboration. The site leader [at one J&J facility] works in an industrial park and joined forces with the other businesses there, making sure that everyone had gas and other essentials and that decisions made by one company didn’t cause problems for another. They treated each other as partners.

Input: What else can we do to inspire more young women to join the manufacturing industry?

Thibodeau: This is personal for me—I’ve got three nieces. I tried so hard, but not one of them went into engineering, though one is a scientist. I think we have to keep fighting the myth that a manufacturing career doesn’t marry well with having a family, and that it’s harder to do than some other jobs. We need to find opportunities to bring young women into our factories and give them early, positive experiences with the industry.

 

H-4 Spousal Work Authorization Faces Challenges on Multiple Fronts

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Manufacturers are making the case in support of these workers.

According to numbers released just yesterday, there are currently 477,000 open jobs in the manufacturing sector—and manufacturers could struggle to fill millions in coming years, according to a 2018 Skills Gap Study by Deloitte and the NAM’s education and workforce partner, the Manufacturing Institute. While manufacturers are generally optimistic about the outlook for their industry, thanks in part to things like tax reform and regulatory reform, workforce concerns are a real source of uncertainty.

More than 71% of manufacturers cite their inability to attract skilled workers as a top challenge. They know that their continued ability to realize the benefits of a pro-business environment demands a workforce up to the task, which is why they are working hard to recruit more Americans into the industry and it’s why they are competing with countries around the world to attract and retain talent that can help move our American economy forward.  

Yet, despite the global competition for talent, the Department of Homeland Security is considering a change that would rapidly remove 91,000 individuals from the workforce, negatively impact the H-1B visa program and reduce companies’ ability to recruit top talent moving forward. Such changes would come in the form of rescinding work authorization for H-4 spouses of certain H-1B employees awaiting permanent residency. The same H-4 Rule is also being challenged in court. Accordingly, this week the NAM, along with the U.S. Chamber of Commerce and the Information Technology Industry Council, filed an amicus brief in support of H-4 work permits in that court case.

Currently, thanks to a 2015 rule promulgated by DHS, the H-4 spouses of certain H-1B employees can obtain work permits in order to pursue careers, support their families and contribute to their communities. This is important because these H-1B employees are already approved for permanent residency and are awaiting green cards. Even after being approved, the wait time in the green card backlog can stretch years due to outdated per-country caps in the law and having a spouse eligible to work helps keep workforce talent here in the United States. Our brief makes the case that the H-4 Rule is within DHS’ authority to provide work authorizations for categories of individuals legally present in the United States. It also provides the court with a clear picture of what’s at stake to our economy, these workers and their employers if the H-4 Rule is eliminated.

According to a recent economic analysis of the H-4 Rule, H-4 spouses are highly educated and skilled, with 99-percent of the population possessing a college degree and almost sixty percent with a master’s degree. Two-thirds of H-4 spouses work in the STEM field, which are jobs critical for modern manufacturing. The 91,000 H-4 spouses with work permits contribute approximately $5.5 billion to U.S. gross domestic product each year. H-4 spouses contribute $1.9 billion to federal coffers each year, and state and local governments would lose approximately $530 million in tax revenue per year if H-4 work permits were revoked.

Rescinding the H-4 Rule would also result in significant hardship for these families. That same analysis of the H-4 population found that nearly 90% of these families made a major life decision based on the work authorization permitted by the H-4 Rule, including decisions to have children, purchase a home or invest in additional education. Furthermore, rescinding the H-4 Rule would have ripple effects on those who employ H-4 spouses, individuals employed by H-4 spouses who have started their own businesses, as well as companies who rely on H-1B workers who may decide to relocate to a country that allows their spouse to work.

The NAM is working to protect H-4 work permits while also advocating for broad reform to our broken immigration system. Protecting work permits for H-4 spouses and eliminating per-country caps that are contributing to today’s green card backlog are two aspects of immigration reform needed to boost manufacturers’ global competitiveness. The NAM recognizes and addresses these needs and others in our comprehensive immigration proposal, “A Way Forward.” Read more about that plan here.

The NAM Supports the Equality Act Before Congress

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Manufacturers believe that equal opportunity is a key pillar of our great democracy—one that allows every individual to pursue the American Dream based on his or her own talents and qualifications. That’s why manufacturers and the business community have made great strides in providing non-discrimination protections for our LGBT employees. There is still further to go, however, and manufacturers believe now is the right time for Congress to act to help our country get there.

On Tuesday, I testified before the House Committee on Education and Labor Subcommittee on Civil Rights and Human Services on behalf of the National Association of Manufacturers. In my testimony, I expressed manufacturers’ support for the Equality Act, which would amend the Civil Rights Act of 1964 to include explicit non-discrimination protections based on sexual orientation and gender identity. We believe a federal standard will help manufacturers better attract and retain a talented workforce, which is greatly needed as we face a major skills gap. Many states and hundreds of localities already explicitly protect residents from sexual orientation- and gender identity-based discrimination in the workplace—all with slightly different requirements and definitions. A uniform federal approach will help business by providing a clear basic level of non-discrimination protection across the states.

The Equality Act puts sexual orientation and gender identity on a level playing field with other sex-based non-discrimination protections. It also includes two important pragmatic features. First, it includes a basic applicability threshold of 15 or more employees to protect smaller firms from the red tape that applies to larger employers. Second, it includes a religious exemption allowing religious employers to maintain their religious values and teachings in making hiring decisions for specific positions that require it.

Manufacturers have been at the forefront in providing their employees with fair and meaningful protections against sexual orientation- and gender identity-based discrimination. Partly, this is because talented employees demand it. Partly, this is because employers understand the importance of creating an environment in which the very best people can succeed based on merit. And namely, this is because manufacturers believe that discrimination of any kind is antithetical to the values we work to uphold every day: free enterprise, competitiveness, individual liberty and equal opportunity. The Equality Act will protect those values and create a stronger, more welcoming workforce.

An Interview with a STEP Emerging Leader

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Laura Mahany is a plant manager at Air Liquide and one of the emerging leaders recognized by the 2019 STEP Ahead Awards. Below is in interview conducted for the NAM’s morning newsletter, Input.

Input: Tell me a little about your background. What got you interested in working for a manufacturer?

Mahany: I wanted to be an engineer because of my love for math and science. When I started doing internships in college, I realized I liked the more hands-on work of manufacturing—the direct interaction with the meat of a business. I liked how every day was different, fast paced, challenging.

Input: Which parts of your education were the most valuable to your current career?

Mahany: As a child I did academic competitions in math and science, which really pushed me to improve my skills. But back then, we didn’t have all these STEM clubs and other activities the way kids do now. In college, I was a part of a program for women in engineering that made the larger engineering program feel a little bit more approachable.  

Input: You’ve mentored underprivileged kids in math and science. What sort of things did you do to inspire them?

Mahany: Each time we would learn about something different, for example, we would build rollercoasters or make ice cream using liquid nitrogen. These were experiments—we would change something, then study how it affected the outcome. I think that really drove home the scientific concepts for the kids—they had to think through how things worked for themselves.

Input: You went through a pretty dramatic experience early on in your career. What was it like to be caught in Hurricane Harvey?

Mahany: The hurricane came on very fast, and there wasn’t a lot of preparation time. We only realized it would be an actual threat to our operations two days before the storm hit. I hadn’t lived through a hurricane before, so I didn’t know what to expect.

We evacuated during the hurricane itself, but once it passed, my team and I came back to something out of a zombie apocalypse. There was no one around, the street lights didn’t work, and there was debris everywhere. The local government hadn’t given the okay for people to return, but my particular plant is critical to the safety of the community because we produce nitrogen, which other industries need to prevent the release of dangerous chemicals. So we had to restore operations very quickly.

The phone lines were down. We didn’t have internet. Plus, the hurricane traveled up to Houston, where the company has a lot of resources and personnel, so no one could come down to help us. And on top of that, many of our employees were also dealing with damage to their own homes. We had to collaborate with other industries to get what we needed, like cooling water and electricity. Luckily, I had good relationships with people at other companies—it really made such cooperation possible.     

Input: When you talk to young women on college campuses about going into manufacturing, what do they tell you about their interests or concerns?

Mahany: A lot of them are interested in sustainability. They’re interested in being part of a grand solution. I’ve noticed companies looking to be more sustainable as well; the mindset of the industry seems to be shifting toward environmental consciousness.

Input: How do you talk to college students about whether manufacturing is the right choice for them?

Mahany: I usually talk about sitting at a desk all day. In manufacturing, you almost never do that. Many people, especially women, like more collaborative environments, and manufacturing always offers you opportunities to interact with operators, technicians or other people in the facility. That makes your work much more interesting and engaging.

Input: When you’ve been mentored by women further on in their careers, what have you found most valuable from those relationships?

Mahany: My female mentors have helped me maintain confidence in myself and my career—it really motivates me to see women in high-level roles accomplishing great things. But I’ve found my male mentors valuable as well—some of my best advocates have been men, and I believe that men should make a point of mentoring women.

Input: And lastly, what more could we do to inspire young people to go into manufacturing?

Mahany: I think we should be more transparent. We should increase awareness of what those careers look like and what they mean. When you talk to a child, they always know what a doctor does or a teacher does because they interact with those people. But it’s not very often that they get to interact with engineers or visit a manufacturing plant. Manufacturing is just a big word to them—we need to make it real.

NAM Fights Paperwork Ruling that Could Cost Manufacturers Millions

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The National Association of Manufacturers joined with other trade associations in filing an amicus brief against the abrupt implementation of an onerous Obama-era labor regulation. The rule would require employers to provide data that the government isn’t even capable of processing yet—at a cost of more than a billion dollars to businesses.

For decades, the Equal Employment Opportunity Commission (EEOC) has required employers to report annual workforce data using broad “job bands” to aggregate and monitor diversity in the workforce. A 2016 Obama-era regulation (that was later delayed pending further review) extends this required employer reporting, forcing businesses to also report pay data relating to race, sex and ethnicity to the EEOC as well. Now, following a ruling by a judge last month, employers have been told that not only do they have to start reporting this new separate band of information—but the pay data is due on September 30, leaving them insufficient time to collect that information.

Manufacturers will have to pick one payroll period’s worth of data from 2018 to report before the September deadline. As the amicus brief notes, collecting this sort of data proactively, a much easier task, would still require 18 months of lead time—doing so retroactively in less than six months is simply impractical. The NAM-submitted brief also notes the complexity of implementing such a change: “The EEO-1 Report requires 180 data points. The Revised EEO-1 Report, by contrast, would require employers to submit 3,660 data points for each employer location.” Moreover, “EEOC’s Revised EEO-1 Report exceeds $400 million in pure labor costs alone, and carries a total burden of $1.3 billion per year for all businesses employing 100 or more employees.”

There is no switch to flip that would allow employers to begin complying with this new regulation by the proposed deadline. What’s more, EEOC publicly admits it is “not capable of collecting” the data. The government also filed a response explaining that any collection without proper lead time and infrastructure will result in poor quality data. So, manufacturers are facing a regulation being implemented on an impractical timeline requiring them to collect data that has “never been organized or previously produced.” The NAM continues to fight against this burdensome regulation—made worse by an unrealistic timeline—that does nothing to guarantee equal pay for equal work.

For more information, contact Callie Harman, Director of Labor & Employment Policy (charman@nam.org) or Leland Frost, Associate General Counsel (lfrost@nam.org).

Future on Display at World’s Largest Manufacturing Fair

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From robots playing pingpong to virtual reality demonstrations, from the future of mobility to the future of food, the vast world of modern manufacturing was on full display at Hannover Messe 2019 in Germany this week.

I’ve been to the world’s largest industrial exhibition before, but I still left in awe of the rapid pace of innovation in our industry and the life-changing technologies that we will all witness in the coming years.

Now in its 72nd year, Hannover Messe is unlike anything we have in the United States. The annual fair is housed in more than two dozen exhibition halls that are two, three and four times the size of a football field.

This translates to miles and miles of displays of modern manufacturing production processes, including virtual reality, robotics, artificial intelligence and machine learning, among other amazing innovations that are part of Manufacturing 4.0, also known as the internet of things. Companies from around the world participated this year, and 200,000 visitors were expected to see the 6,500 exhibits.

Everything we witnessed is completely public, with little concern about the theft of intellectual property by China or other countries that do not share our adherence to the rule of law. So just imagine what manufacturers are developing back home in labs and facilities right now. The impressive technologies we saw at Hannover would likely seem outdated compared to what’s in development.

This year in Hannover, NAM Vice President of International Economic Affairs Linda Dempsey and I joined the delegation of the NAM’s Manufacturing Leadership Council. (Read more about Hannover Messe on the MLC’s thought leadership blog.)

The delegation of more than 20 MLC members attended the opening ceremonies with us, where German Chancellor Angela Merkel and Stefan Löfven, the prime minister of Sweden, the fair’s partner country for 2019, emphasized the power of open markets to improve the lives of people around the world.

While innovative technology is what draws attendees to the exhibition floor, what is also on display is manufacturers’ need for more people to join our industry. Technologies like artificial intelligence, robotics, augmented reality and more are changing the type of jobs people do in manufacturing (in most cases making those jobs safer, easier and less repetitive). But that doesn’t change the need for the human element. Programmers, coders, technicians, operators, welders, designers, marketers—you name it, we need it in modern manufacturing.

Today, there are nearly 500,000 open jobs in manufacturing in the U.S., and manufacturers will need to fill about 4.6 million over the next decade. To keep up with the rapid pace of innovation, we need to recruit more people for the high-paying jobs of modern manufacturing.

And anyone who doubts whether there’s an exciting future in manufacturing only needs to get a small glimpse of what we saw in Hannover.

 

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