Advance Regulatory Policies to Encourage a 21st Century Rail Network

By | Infrastructure, Innovation, Shopfloor Main, Shopfloor Policy, Technology, Transportation | No Comments

Since their inception, railroads have paved the way for American industrialization, safely transporting freight across the country with an efficiency and speed never before imagined possible. The American rail network has driven some of our most consequential economic developments, using that innovation to improve millions of lives. Now, groundbreaking advances in automation and analytics are opening yet another exciting frontier for rail—one that, with the right approach from D.C. policymakers, and the Federal Railroad Administration (FRA) in particular, can once again redefine the world of transportation.

To craft a technology-friendly regulatory strategy, FRA need simply look to its peer agencies in the automotive sector. The recent flurry of innovation in autonomous vehicle technology is progressing thanks in large part to the U.S. Department of Transportation’s (DOT) “light touch” regulatory approach toward testing and deploying these new technologies. Despite the fact that all real-world testing carries some initial risk, DOT has not allowed misconceptions to stand in the way of progress and the long-term safety benefits of autonomous vehicles. The same approach that is working there will work for rail as well.

While rare, one-third of train accidents are caused by human error, many of which will be eliminated by integrating automated processes into rail operations. Further, the deployment of autonomous technology is easier in the rail industry given that railroads operate on separate fixed tracks. In a world where DOT has vigorously supported the automation of millions of interacting cars and trucks, FRA’s support for similar—and simpler—opportunities to automate many different aspects of rail operations is an attractive and less controversial way to facilitate analogous rail-safety benefits.

Encouragingly, FRA made progress last April when it issued a request for information on automation in the rail industry. In response, Norfolk Southern provided substantive insights into the many technologies available to automate various aspects of our network—from locomotives and dispatch, to yard operations and inspections. We look forward to the next steps and urge FRA to promote the safety benefits of such technologies by issuing guidance that encourages railroads and third-party technology vendors to pursue innovation.

At Norfolk Southern, we are firmly committed to developing high-tech tools that will undeniably improve the safety and efficiency of our operations. Indeed, automated and predictive technologies can help open a new world of operational improvements, and we are working hard every day to realize these benefits and reimagine a safer, more reliable future for freight transportation. Yet we simply cannot unlock the full potential of this new technology without a 21st century regulatory environment that facilitates private innovation.

Just as it has throughout our country’s history, the rail industry is leveraging technology to surge towards transportation’s new technological horizon. By following the lead of other DOT agencies and regulating in a flexible, outcome-based manner, FRA can accelerate this technological progress, helping to dynamically transform the freight-rail industry and creating a safer system and a more efficient transportation network for 21st century manufacturers

NAM Supports Bill to Codify Workplace Equality for LGBTQ Employees

By | Shopfloor Main, Shopfloor Policy | No Comments

Today the Equality Act—bipartisan legislation that would, among other things, protect LGBTQ individuals from discrimination in the workplace—was introduced in the House and Senate. The National Association of Manufacturers has long opposed discrimination based on an employee’s sexual orientation or gender identity. Today we joined with more than 40 other industry associations—representing a truly stunning breadth of the American economy—in supporting the Equality Act.

Manufacturers have led the way in providing their employees with fair and meaningful protections against sexual orientation- and gender identity-based discrimination. The reason for this is simple: talented employees demand it, and employers understand the importance of creating an environment in which the very best people can succeed based on merit. At the same time, manufacturers know that discrimination in any form is antithetical to the values that we work to uphold every day: equality of opportunity, individual liberty, free enterprise, and competitiveness.

The bill’s basic approach of including protections based on sexual orientation and gender identity under the existing framework of the Civil Rights Act is sensible. By making these protections consistent with those for other protected classes, it takes advantage of decades of judicial precedent to provide as much clarity as possible to the businesses who must ultimately comply. The Civil Rights Act also provides long-established protections for religious organizations, and it limits its reach to employers with 15 or more employees.

The Equality Act creates a clear federal standard that matches the sentiments manufacturers already share: gender identity and sexual orientation have no impact on an employee’s abilities and discrimination is not welcome on the manufacturing floor. This legislation will no doubt see twists and turns as it works its way through Congress. We welcome this process, which will undoubtedly include a robust debate. We look forward to working with Congress as this important legislation moves forward.

Old Ideas on So-Called “Net Neutrality” Resurface in the New Congress

By | Culture and Entertainment, Economy, Regulations, Shopfloor Main, Shopfloor Policy, Technology | No Comments

Senator Ed Markey and Representative Mike Doyle recently introduced the Save the Internet Act in the Senate and House (S. 682 and H.R. 1644 respectively). The bills resurrect some old ideas on regulating the internet in the name of so-called “net neutrality”. Today, the House Energy and Commerce Committee held a hearing entitled “Legislating to Safeguard the Free and Open Internet” where they considered this legislation.

Manufacturers agree that Congress, rather than the Federal Communications Commission, should act to establish a predictable legislative framework for a free and open internet, but the bill the committee considered today is not the way to do so. The Save the Internet Act would repeal the FCC’s most recent action that replaced heavy-handed, Obama-era regulations with sensible regulations designed for the internet of today. And, rather than provide new ideas to bring our nation’s communications law into the 21st century, the bills would then reinstate those earlier overly-burdensome regulations classifying the internet as a utility under Title II of the Communications Act of 1934.

Title II regulations are not the correct way to achieve an open internet. They ignore the competitive landscape of the marketplace and, based on a law enacted before color television much less the internet, fail to account for the internet as it exists today. They would have the unintended effect of harming consumers and industry by injecting further regulatory uncertainty into the shifting federal approach to broadband, potentially stymying private sector capital investments. The FCC’s most recent actions only went into effect last summer, and the sensationalized predictions that they would signal the end to an open internet were not accurate.

Manufacturers depend on a reliable telecommunications infrastructure to connect and enable manufacturing technologies. While the legislation the House committee considered today would unquestionably be a step backwards, the National Association of Manufacturers encourages Congress to consider forward-thinking legislative solutions for our nation’s broadband future—solutions that apply fairly across the internet ecosystem and provide the certainty necessary for our industry’s continued innovation.

Energy Efficiency Legislation Paves the Way for Smart and Sustainable Manufacturing

By | Energy, Environment, Shopfloor Main, Shopfloor Policy, Sustainability | No Comments

This week, Senators Jeanne Shaheen from New Hampshire and Lamar Alexander from Tennessee introduced the Smart Manufacturing Leadership Act (S. 715), a bipartisan bill that would support manufacturers—particularly small- and medium-sized manufacturers—in adopting advanced technologies to increase their sustainability by improving the energy efficiency and productivity of their facilities and operations. Representatives Peter Welch from Vermont and Tom Reed from New York also introduced companion bipartisan legislation (H.R. 1633) in the House. The National Association of Manufacturers has been a longstanding proponent of The Smart Manufacturing Leadership Act and looks forward to working with Congress as these measures moves forward.

The legislation would leverage existing Department of Energy programs and resources at the National Labs to ensure that advanced technologies are being considered to reduce energy consumption. Additionally, the measure would establish a competitive grant program for states to assist small- and medium-sized manufacturers in implementing smart manufacturing practices. Manufacturers have taken the lead in making energy efficiency a priority and remain committed to reducing their energy intensity while producing more energy efficient products. Manufacturers already implement energy efficiency solutions to reduce their costs, become more competitive and help lessen environmental impacts. The industry continues to lead the way in deploying sensible efficiency and waste reduction measures and embracing the importance of utilizing state-of-the-art energy efficient technologies. In fact, manufacturers contributed 19 percent more value to the American economy over the past decade while reducing greenhouse gas emissions by 10 percent.

Manufacturers are committed to increasing their productivity, expanding their businesses and doing so in a way that is sensible, smart and sustainable. During the 115th Congress, the NAM supported the Smart Manufacturing Leadership Act, and we applaud Senators Shaheen and Alexander and Representatives Welch and Reed for reintroducing the bill this Congress. Their leadership continues to demonstrate a strong commitment to policies that promote energy efficiency to improve manufacturing and benefit the environment—and we will urge Congress and the administration to enact this legislation into law.

Don’t Panic About The February Jobs Report. Manufacturing Still Has 428,000 Open Jobs To Fill.

By | Shopfloor Main, Shopfloor Policy | No Comments

Manufacturers added just 4,000 workers in February, the industry’s slowest monthly pace of job growth since July 2017 and pulling back from a gain of 21,000 jobs in January. The overall nonfarm payroll data were also disappointing, from a solid increase of 311,000 in January to 20,000 in February. Weather might have negatively impacted employment growth in the month, and economists were largely expecting a pullback after the strong figure in January (especially in the aftermath of the partial government shutdown). The consensus estimate was for around 180,000 jobs created, though, not the 20,000 the Bureau of Labor Statistics reported. I would not be surprised to see an upward revision in the next release or, at a minimum, a sharp rebound.

With that in mind, it is important to not read too much into these data, as the labor market continues to be strong overall. The U.S. economy has generated a robust 209,080 jobs, on average, each month over the past 12 months, with manufacturers hiring more than 20,000 workers per month, on average, since February 2017. In addition, the unemployment rate dropped from 4.0 percent in January to 3.8 percent in February, continuing to be near 50-year lows. In addition, the so-called “real unemployment rate” declined from 8.1 percent to 7.3 percent in this report, a rate not seen since March 2001. There were 12,834,000 manufacturing workers in February—the most workers in the sector since December 2008—with almost 1.4 million employees added since the end of the Great Recession.

Manufacturers are experiencing a tight labor market that is not expected to go away anytime soon, as businesses face concerns about finding the skilled workers they’ll need to continue growing. In the most recent NAM Manufacturers’ Outlook Survey (released earlier this week), 9 in 10 manufacturers expressed a positive outlook for their business—hitting nine consecutive quarters of record optimism—but the inability to attract and retain workers continues to be the top concern for the sixth consecutive quarter. There are nearly half a million available manufacturing jobs in the United States.

And according to a study from Deloitte and The Manufacturing Institute—the education and workforce partner of the NAM—manufacturers will need to fill 4.6 million jobs over the next decade. That’s why the NAM is working hard, in conjunction with the Trump administration through its American Workforce Policy Advisory Board, to develop cutting-edge solutions to address this workforce shortage. Our country’s continuing economic prosperity will depend on developing the tomorrow’s workforce today, and manufacturers are committed to leading the way toward that end.

Why the NAM Urges the Senate to Get the Ex-Im Bank Back Up and Running

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Securing a level playing field internationally is vital to manufacturers in the United States, which already export about half their production, supporting millions of workers across the country. While there’s been a lot of focus on foreign barriers that impede U.S. exports, one of the most concerning problems is of our own making: the Senate’s failure to confirm nominees to the Board of Directors of the U.S. Export-Import Bank. The U.S. Ex-Im Bank is a federal agency that provides loans and other tools to aid businesses in the U.S. seeking to export their products to foreign markets. Without these nominees, the Ex-Im Bank cannot even consider major deals over $10 million or even act on the reforms that Congress set out it when it last reauthorized the bank in 2015.

With the Ex-Im Bank severely weakened, manufacturers in the United States are losing sales to foreign competitors who are backed up by nearly 100 other export credit agencies around the world. Indeed, virtually every major country, from Canada to China and the UK to Ukraine, provides export financing tools that are being used to the detriment of manufacturers and workers in America. For example, China’s two Export Credit Agencies routinely help their companies out-muscle their U.S. rivals. Last year, China provided $45 billion in medium- and long-term investment support for projects around the world, more than the rest of the world combined.

While foreign countries are expanding their use of export credit, the United States has been essentially sitting on the sidelines since 2015, undermining U.S. manufacturing companies big and small and manufacturing workers across the nation. According to the National Association of Manufacturer’s estimates, manufacturers lost at least $119 billion in manufacturing output, translating into 80,000 fewer manufacturing jobs in 2016 and 2017 as a result of an inactive Bank.

This week, the NAM urgently called on the Senate leadership to come together in a bipartisan manner and vote to confirm well-qualified Ex-Im Board of Directors nominees that the Senate Banking Committee approved last week on a broad, bipartisan basis. That’s a positive step forward—and a sign that senators from both parties are ready to work together to get the Ex-Im Bank back up and running.  Now the full Senate must commit to the businesses and workers that rely on the Bank by confirming these nominees as soon as possible. The cost of inaction is already too great.

Time For A Bipartisan Approach to Overcome Biggest Infrastructure Bill Challenge: How To Fund It

By | Shopfloor Main, Shopfloor Policy | No Comments

Lawmakers from both political parties can agree that we need better infrastructure. To achieve that goal, however, Congress must take a bipartisan approach to overcome the biggest challenge of passing an infrastructure bill—how to fund it.

Yesterday’s U.S. House of Representatives Ways and Means Committee Hearing “Our Nation’s Crumbling Infrastructure and the Need for Immediate Action” was a step toward that end that asked the hard questions about funding. Witnesses representing both business and organized labor agreed that the time is now to modernize the user fees that fund our infrastructure. The National Association of Manufacturers believes that this funding mechanism will be a key component to an infrastructure package, and the NAM-led Infrastructure Working Group brought 150 diverse trade association together with the same message in February.

How Congress proceeds with an infrastructure package will have broad economic implications. According to the NAM Outlook Survey released earlier this week, manufacturers have recorded nine consecutive quarters of record optimism, thanks in part to pro-growth policies—and tax reform in particular. Tax reform has already helped manufacturers invest more, hire more and pay workers more. Yet, as this quarter’s survey also showed, rolling back tax reform—as some have previously suggested to pay for infrastructure—would have the opposite impact. No one wants that. To keep the momentum for manufacturing and our economy going, we need to keep moving forward on all fronts. That means doing infrastructure the right way, and last week the NAM released manufacturers’ blueprint for how to get there.

Our “Building to Win” plan envisions robust investments to repair and reinvigorate the infrastructure that makes the American Dream possible. Our plan calls for and outlines potential solutions to recurring funding shortages, such as indexing or increasing the federal fuel tax as well as introducing a vehicle mile traveled fees. “Building to Win” is based off a principle that forms the bedrock of our infrastructure system—namely that transportation networks should be funded through user fees paid by the companies and individuals who typically use and benefit from them.

Tuesday, while speaking at the NAM Spring 2019 Board of Directors Meeting, Vice President Mike Pence said “This president and our administration are absolutely committed to rebuilding the infrastructure of America. It is time for a major bill from the Congress to rebuild the roads and bridges and ports and highways of America.” And yesterday, Ways and Means Committee Chairman Richard Neal (D-MA), agreed, saying, “We have a real opportunity to do something really big.” Manufacturers agree—in fact, the NAM Outlook Survey showed a large majority of manufacturers saying that passage of a major infrastructure bill would positively impact their company’s business plans and outlook. Now what’s needed is for both parties in Washington to come together to get infrastructure done in a smart, bipartisan way that keeps manufacturing’s optimism strong and our country’s economy moving forward. We’ll continue working with members of both parties to get that done.

NAM Calls on Treasury to Modify Proposed Regulations That Would Make It More Costly to Buy Machinery and Equipment

By | Shopfloor Policy, Taxation | No Comments

Thanks in part to tax reform, optimism among manufacturers has hit record levels, manufacturing job growth reached its best pace in decades and manufacturing output hit an all-time high in the third quarter of last year. In short, manufacturers are keeping their promise to create jobs, raise wages and boost investment following tax reform.

Yet recently proposed Treasury regulations, if finalized without modification, would make it costlier to invest for growth in the U.S. In comments submitted this week, the National Association of Manufacturers highlighted the harm facing manufacturers and called on Treasury to change its rule.

The proposed rule implements new limits on the ability of businesses to deduct interest on their debts. For tax years beginning in 2018 through 2021, the tax reform bill limited interest deductions to 30 percent of a company’s earnings before interest, tax, depreciation and amortization (EBITDA). Beginning in 2022, an EBIT standard takes effect, further limiting available interest deductions for capital-intensive industries by excluding depreciation and amortization from the base upon which allowable deductions are calculated.

Treasury’s proposed regulations would effectively impose the stricter EBIT today – four years earlier than expected. Doing so would disproportionately harm manufacturing by making it more expensive to finance capital equipment purchases. Moreover, the proposed rule acts as a disincentive to utilizing full expensing (also known as bonus depreciation), a key pro-growth incentive in tax reform which reduces after-tax costs by providing a 100 percent deduction for the purchase of equipment and machinery. Given that for every one dollar spent in manufacturing, nearly two dollars is added to the economy, this proposed regulation would hurt manufacturers and slow our country’s economic growth.

Protecting the interest deduction is important for manufacturers, and that’s why the NAM is engaging with Treasury, and why it successfully fought during tax reform to ensure that manufacturers would not immediately be subject to the stricter limitation.

It’s clear that Congress intended to provide manufacturers a larger EBITDA base for interest deductions for the next several years. Accelerating a stricter limitation that harms manufacturers is inconsistent with Congressional intent and would make it more difficult for manufacturers to continue to fulfill their promise to increase hiring, invest in the U.S. and continue to raise wages.

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.

 

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