Congress Must Act Now To Stop Burdensome Health Care Taxes From Taking Effect

By | General, Shopfloor Main | No Comments

Rising health care costs continue to burden manufacturing workers and American families. Unfortunately, three health care taxes are set to add even more costs to health care budgets across the country.

In 10 months, the medical device tax and the health insurance tax will go into effect. The Cadillac Tax, a 40 percent tax on “high-quality” employer-sponsored health plans, will come into full force in 2022. Regrettably, more and more employer-sponsored plans will be considered “high-quality” and taxed at the 40 percent rate because of the design of the tax, which will increase the financial burden on American families and manufacturing workers.

But it doesn’t have to be this way. Congress can act now to prevent these taxes from increasing health care costs—and manufacturers are urging it do so.

Companies are already facing hard decisions between setting aside funds to pay for the looming medical device tax bill or hiring potential new employees, investing in research and development or expanding operations. We already know the impact of the 2.3 percent excise tax on medical technologies because it went into effect for the two-year period of 2013 and 2014. During this time, tens of millions of dollars were diverted—either canceled or delayed—from innovative new research and almost 29,000 jobs were lost, according the U.S. Department of Commerce. Congress cannot allow this to happen again.

With the clock ticking on health care taxes, companies have already started preparing, and Congress must unite to address these health care taxes in advance of the looming deadlines. Today, a bipartisan group of 20 senators worked together to advance efforts to achieve full repeal of the medical device tax by introducing the Protect Medical Innovation Act of 2019. The National Association of Manufacturers key-voted similar legislation in the 115th Congress, which passed the U.S. House of Representatives with an overwhelming bipartisan vote of 283-132.

Manufacturers urge the House to introduce companion legislation and for Republicans and Democrats to expeditiously advance legislation to address the health care taxes that are fast approaching.


President Trump Just Held a White House Meeting About the Manufacturing Workforce Crisis…

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Job creation in the modern manufacturing industry is surging, but employers are struggling to find enough workers with the right set of skills. This workforce crisis has caused nearly half a million open manufacturing jobs to remain unfilled, and the Manufacturing Institute’s 2018 Skills Gap Study found that number is expected to swell to 2.4 million within the next decade.

Manufacturers aren’t sitting on the sidelines, and neither is the White House. 

Yesterday, President Trump, Ivanka Trump, and Secretary of Commerce Wilbur Ross sat down with business leaders, educators, and policy makers on the American Workforce Policy Advisory Board to discuss the depth of the workforce crisis, how it is negatively impacting economic growth, and pro-active solutions to up-skill America’s workforce:

Last month, the Bureau of Labor Statistics said U.S. job openings reached a record high in December at 7.3 million. The White House says the job openings present “a mismatch between the skills needed and those being taught, requiring immediate attention to help more Americans enter the workforce.”

The advisory board members will work “to develop and implement a strategy to revamp the American workforce to better meet the challenges of the 21st century,” the White House said.

NAM President and CEO Jay Timmons, as a member of the board, participated in the White House meeting, and shared a few words with President Trump about manufacturing’s historic optimism and growth, and how the workforce crisis is acutely threatening the industry. 


Timmons cited the results of our latest Manufacturers’ Outlook Survey, which showed optimism in the industry at historic highs for the ninth consecutive quarter: 

JAY TIMMONS: I had the great fortune yesterday of being able to announce the results of our first quarter 2019 Survey of Manufacturers with the Vice President present at our Board of Directors meeting. And as you know, that survey has been going on for 20 years. I was able to announce that we have had nine consecutive quarters of record optimism — 


JAY TIMMONS: — for manufacturers. 91.8 percent. And that’s no accident. That is because of the tools we’ve been given to invest, to hire, to raise wages on benefits through tax reform, through regulatory certainty. And that’s created a bit of a challenge for us because now we have 428,000 jobs open in manufacturing. Our Manufacturing Institute predicts that that number will increase to 2.4 million in the next 10 years. So this Board, this Advisory Board, it’s perfect timing. 

THE PRESIDENT:  Thank you, Jay.  And if you remember from past years, others said that manufacturing was not going to happen; those jobs were never coming back.  And they are coming back.  We have 600,000 —

MR. TIMMONS:  Well, they’re coming roaring back.

“Thank you for taking this on,” Timmons said. “It really is going to matter for America’s future. It’s going to matter for our success in the global economy.”

It will take collaboration from manufacturing leaders, policy makers, educators, and communities to tackle the workforce crisis and guarantee further growth in the modern manufacturing industry. Yesterday’s meeting was an encouraging sign that we’re headed in the right direction. 

House to Examine Fluorinated Chemicals

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This morning, the House Oversight and Government Reform Committee is holding a hearing to examine PFAS, a class of fluorinated chemicals that have been used throughout manufacturing since the 1940s due to their unique fat and water repelling properties.

Certain PFAS chemicals were phased out in the early 2000s and are no longer manufactured in the U.S., but more modern versions of these chemicals are still used. These more modern chemicals have a range of different uses for manufacturers (like firefighting foams or electronics manufacturing) and consumers (like nonstick products), and it is important that lingering concerns over their use are examined and addressed. That’s why manufacturers supported recent steps announced by the EPA to do just that and it’s why we will work with the agency to obtain the data and information it needs. Relatedly, rather than turn to overly broad legislation like the recently-introduced “PFAS Action Act of 2019,” which would designate all PFAS chemicals as hazardous, we urge Congress to take a judicious and science-based approach and we look forward to working with lawmakers as they do so.

For manufacturers, our top priority is ensuring that our products are safe for their intended use. We support efforts to determine the safety of PFAS and to increase the level of federal regulation of these chemicals. We are concerned that the PFAS Action Act of 2019 goes a step too far by declaring as hazardous thousands of chemicals for which science either does not exist or is not complete. That is a dangerous precedent that could lead to a number of problems for other chemicals. We think there are better ways for Congress to address concerns over PFAS. For instance, Congress could set a firm deadline for EPA to complete its scientific evaluation of these chemicals and to set standards for their safety. It could increase the number of PFAS chemicals EPA regulates. And it could provide EPA and states more resources to carry out these scientific reviews.

It’s clear Congress is just getting started. We’ll be a constructive voice at the table supporting a solution for consumers and manufacturers that assures the safety of the products we all use.

Shaping a Sustainable World with Novelis

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At Novelis, sustainability is core to our business – from how we operate within our company to how we partner with our stakeholders across the aluminum value chain. Together, we see tremendous opportunity in continuing to expand the use of lightweight, infinitely recyclable aluminum to meet today’s demanding performance standards while reducing energy use. We collaborate with our customers around the world to develop innovative solutions to lightweight vehicles, improve packaging to better protect beverages and construct buildings that are more energy efficient and beautiful to enjoy.

Novelis is the leading buyer and recycler of used beverage cans (UBCs) globally, recycling more than 65 billion UBCs each year. Aluminum beverage cans and bottles are the model of sustainable packaging and, with an average “can-to-can” lifecycle of just a couple of months, a can that is recycled today can be back on store shelves in just sixty days.

In addition to serving the beverage can industry, Novelis is a lead supplier to many of the largest automotive manufacturers in the world. Together, we created the first, and largest, closed-loop recycling systems, which allow us to take back as much of our customers’ aluminum scrap as possible, turning it back into the same product again. Closing the loop preserves the value of the alloy, reduces recycling and transportation costs, minimizes environmental impact and establishes a secure supply chain. Through collaboration with our customer, Jaguar Land Rover (JLR), we created the first closed-loop system in Europe with a dedicated railway service to efficiently deliver material between Novelis and JLR’s manufacturing sites. Building on the success of this model, we worked with Ford Motor Company to create the world’s largest closed-loop recycling system in North America.

Across all of our value streams, Novelis has made significant progress toward increasing the use of recycled aluminum and minimizing the use of natural resources. Recycling aluminum produces 95 percent fewer greenhouse gas (GHG) emissions and requires 95 percent less energy than primary aluminum production, enabling Novelis to achieve lower GHG emissions despite increasing global production capacity. Last year, Novelis achieved an average of 57 percent recycled aluminum inputs, an increase of 25 percentage points from the baseline averages of fiscal years 2007-2009. Novelis also reduced its GHG emissions by 25 percent for the same baseline years, achieved a 28 percent reduction in water intensity and a 24 percent reduction in energy intensity.

By leveraging and investing in our own sustainability efforts, we are able to preserve precious natural resources and help our customers meet their evolving sustainability goals.

To learn more about Novelis’ sustainability efforts, click here.

Flawed Importation Proposals Continue to Offer False Promises

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The Utah State Legislature is considering a flawed and unproven drug proposal that would authorize the state to apply for federal approval to import prescription drugs from Canada. Utah is the latest state to consider such a bill, which is really a price control plan in disguise—offering no guarantees of safety or the quality of the imported medicines. Canada does not have the same standards or long-established mechanism in place to protect patients as we do here in the United States. Moreover, the U.S. Department of Health and Human Services has never certified nor authorized the importation of drugs from Canada. At this point in time, it has never been declared safe for American consumers and patients.
With  House Bill 267, the Prescription Drug Importation Program, moving through the committee process, the false promises of the bill should not be ignored, and manufacturers cannot stand by HB 267. Consumer safety should be a paramount public policy concern, and manufacturers urge the Utah legislature to take this proposal off the table. Importation and re-importation could expose consumers to counterfeit and adulterated therapies because Canada does not make product safety guarantees to the U.S.
Manufacturers understand the need for competition, affordable medicines and a healthy workforce. However, Utah’s drug importation proposal, if it passes the legislature and if it’s signed by the governor, and if the program is eventually approved by HHS, a needless risk to public health would be presented. It is imperative to maintain important strides in consumer protection and safeguard the reputation of quality drugs approved by the FDA for marketing  the United States. The National Association of Manufacturers has long opposed the importation of prescription drugs, and we will continue advocating for patient safety to remain the driving factor determining prescription drug laws. Lives depend on the protections we have built here as nation—not state by state.

NAM Testimony: The U.S. Must Protect Manufacturers’ Intellectual Property

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Innovation and intellectual property are the backbone of the manufacturing industry, and America is a global leader on these issues. In 2015, value-added from IP was nearly 40 percent of total U.S. gross domestic product. And according to the latest data, the U.S. is responsible for more than one-quarter of all research and development conducted globally. This leadership also puts our businesses and ideas in the crosshairs of bad actors that would rather cheat than compete.

That’s why I testified today on behalf of the National Association of Manufacturers before the Special 301 Subcommittee of the Trade Policy Staff Committee on the need to protect manufacturers’ innovation and intellectual property rights. I also highlighted from our written submission countries the NAM believes should receive Priority Watch List and Watch List designations for their market-distorting actions that harm innovative manufacturers – including top priority countries such as Canada, China, Chile, Colombia, India, Indonesia and Russia, and additional countries of concern such as Argentina, Australia, Brazil, Japan, Korea and South Africa.

My testimony focused specifically on three main threats facing manufacturers’ IP and the global context that makes this a critical opportunity for setting new precedents moving forward. First, our competitors are using international organizations (like the World Health Organization and others) to weaken IP protections. Second, and similarly, foreign countries have expanded their use of unbounded compulsory licensing and other limitations that harm innovation as protectionist excuses to promote or protect local manufacturing or to damage U.S. interests. Finally, rampant counterfeiting and piracy has stolen the successes of innovators and undercut manufacturers across industries.

These are only three leading threats facing our IP—there are plenty more putting manufacturers’ innovation and U.S. jobs at risk. That’s why the U.S. has spent decades building a strong domestic legal framework to protect and enforce manufacturers’ IP and pushing for stronger global protection and enforcement of IP rights, but, as I said during my testimony, we must do more. We must strategically use Special 301-related tools available, such as country classifications, out-of-cycle reviews, results-oriented action plans and existing legislative authorities to protect manufacturers’ innovative products and ideas—and we should use this critical moment to set new precedents moving forward.

As Congress moves to consider the U.S.-Mexico-Canada agreement and the administration seeks new bilateral trade deals with the UK, China, Japan and others—must not waste this opportunity. The USMCA, for example, includes best-in-class IP rules to protect the full range of U.S. manufacturing inventions and innovations from foreign theft or misappropriation.

On behalf of the NAM, I urged the administration to seize this moment and to create a fairer and more enforceable trade network that promotes and protects American innovation. That starts with protecting our trade secrets and IP.

The Time is Now for a Robust, Enforceable China Deal that Benefits Manufacturers

By | General, Shopfloor Policy, Trade | No Comments

U.S.-China trade relations are an especially hot topic this week, which is underscored by U.S. Trade Representative Robert Lighthizer testifying this morning at the House Ways & Means Committee on efforts to address critical trade concerns with China. Today’s hearing follows welcome news over the weekend from President Donald Trump that he would delay scheduled tariff increases given “substantial progress” in negotiations and start planning for a summit with Chinese President Xi Jinping in the coming weeks. Yet the work remains unfinished. As Ambassador Lighthizer meets with members of the committee to discuss the status of these talks, manufacturers are redoubling their call for the two sides to negotiate a robust deal, with a rules-based agreement that includes binding, enforceable statutes to halt unfair Chinese trade practices once and for all.

Manufacturers large and small — and policymakers from both political parties — recognize that now is a pivotal moment in U.S.-China trade relations, with a major opportunity to reset that relationship to address a wide range of longstanding issues. China is a critical market for U.S. exports: manufacturers in the United States sell more of what they make to China than to any other country outside of North America—they also rely on China for imports to help grow manufacturing opportunities for workers here in the United States. This two-way trade has clear benefits, yet for too long, China has reaped the rewards of unfair trade practices, from intellectual property theft and discriminatory industrial policies to market access barriers and excess capacity.

The National Association of Manufacturers has led the charge calling for President Trump to negotiate lasting solutions that help manufacturers compete on a level playing field. Last year, NAM President and CEO Jay Timmons wrote to President Trump urging a comprehensive, innovative bilateral trade agreement to address unfair Chinese trade policies, and manufacturers followed up later in the year with detailed negotiating priorities. Leaders in Congress have joined with the NAM in the intervening months calling for a strong deal with China. Such a meaningful outcome would also alleviate pressure for Section 301 tariffs that have caused both operational disruption and significant uncertainty for many manufacturers in ways that have impacted their competitiveness and ability to manufacture in the United States.

Since January, the two sides have had four rounds of intensive negotiations, including nearly continuous negotiations for the past three weeks. Manufacturers applaud these efforts and welcome reports that these negotiations have covered a full set of manufacturing-priority issues, seeking not just product purchases but tangible policy changes and clear enforcement mechanisms that are badly needed. Getting this work across the finish line is critical. The time is now. The opportunity is clear. Manufacturers need to see a binding, enforceable trade deal that fixes longstanding trade distortions.


The Future is Bright When We Lead With Innovation

By | General, Health Care | No Comments

Tomorrow, the Senate Finance Committee will hold a hearing on the cost of medicine. No doubt, this is an issue that is impacting millions of Americans and it’s good that Congress is continuing its discussion of lowering health care costs. Manufacturers urge Congress to focus on solutions that are market-based and that recognize the unique global leadership role biopharmaceutical manufacturers in America play. Why? More new medicines are created in the United States than every other single country in the world—combined. America’s biopharmaceutical manufacturers have come up with cures for the uncurable, they’ve worked to eradicate entire diseases from the face of the planet, they’ve brought hope to millions and they continue to overcome nearly every impossibility placed before them. The fact that our country far outpaces every other country in the discovery of new cures is no coincidence.  While the system we have can certainly use improvements—such as better aligned incentives that promote value to both patients and their employers who sponsor health insurance—Congress should take care not to do so at the expense of the development of the best-in-class treatments of tomorrow that can bring hope and healing to so many more who are suffering today.

In addition to leading the way on innovative new cures, biopharmaceutical manufacturers are also leaders in research and development (investing more in R&D than any other industry) and employment in the STEM fields. Jobs in this sector of manufacturing are extremely well-paying, with an average annual salary of $80,458.

Chronic conditions like diabetes, heart disease, asthma and others continue to increase health care costs. Medicines and new treatments are the way to stabilize these conditions so that people can remain healthy and productive. With this in mind, manufacturers look forward to tomorrow’s hearing and we look forward to working with policymakers on solutions on the cost of medicine that are market-based, pro-innovation, and reject the kind of socialist ideas that could destroy our country’s global leadership in developing the cures of tomorrow.


Jabil Drives Sustainable Solutions in Smart Packaging

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Plastic is foundational to modern society, as it is used in everything from medicine to transportation to consumer goods and packaging. More than 300 million metric tons of plastics were produced worldwide in 2015. Yet, less than 9 percent of the plastic we use every day is recycled; most of it ends up occupying landfills or polluting the ocean.  The enormity of this situation is undeniable.

Jabil Packaging Solutions (JPS) recognizes it has an important role in the fight against plastic pollution, and is driving advancements in smart packaging with better, easier ways to reduce, reuse and recycle and drive toward a circular economy. When our JPS site in Atlanta began working with a new customer, we took at look at their processes and we made them more sustainable.

For years the customer had been receiving its packaging product in cardboard boxes which then had to be cut, broken down and compacted. JPS switched to reusable plastic totes and lids, which is not only more sustainable, it paid for itself after 6.5 turns – less than 10-percent of its lifecycle. In partnership with the customer, JPS also reduced the size of the product, making it 22-percent lighter and saving 3,000,000 pounds of plastic a year.

And one of our healthcare facilities has initiated a “waste rebirth” solution where more than 20 types of plastic manufacturing waste have been repurposed to create chairs for schools and art supplies for local charities. This effort has enabled the facility to achieve an impressive 96 percent recycling rate with zero waste produced onsite going to landfill.

JPS is taking this issue seriously. We understand change is inevitable; the linear packaging lifecycle is inefficient and harmful to the environment, and we must adapt to the idea of a circular economy that benefits both the economy and businesses. JPS is innovating for a circular economy, engaging new solutions that will drive greater sustainability.

Our work supports the many brands we call customers. To achieve the vision of a more efficient and environmentally friendly future, JPS partners with customers, offering innovative solutions to achieve their sustainability goals. For example, Keurig Green Mountain pledged to make 100 percent of its K-Cup® pods recyclable by 2020. Through innovative product designs and advanced production technologies, Keurig is meeting its sustainability and performance goals while giving consumers the eco-friendly product they demand.

We applaud the amount of deliberate effort it takes to examine entire product lifecycles and rethink how products should be designed, made, delivered and reused. Jabil is committed to helping our customers move toward a restorative, regenerative circular economy by preserving natural resources, designing for recycling and reducing environmental impacts.

We continually partner with customers to select sustainable materials that meet their product requirements. Each material used for is tested and qualified to provide customers with durable products made from sustainable materials. Initiating continually viable solutions requires time and consistent effort that our teams across Jabil are focused on every day.

While it will require time and consistent effort to bring innovative new solutions forward on the sustainability front, we regard this action toward sustainability as an invaluable investment in the future. We are improving business, preserving the earth and enabling a higher quality of life for future generations.

We believe that the key to developing long-term solutions is to engage our customers as partners on the journey to sustainability. By combining different resources, expertise and capabilities, we can create solutions that will contribute to solving global environmental challenges, help our customers and partners meet environmental goals and deliver new and exciting products to a market the craves it.