Labor and Employment

Earlier this month, the MI released a new report outlining the top challenges women are facing and what workplace policies have the most impact to recruit and retain female talent.

On December 6, the MI hosted a webinar with industry leaders to explore specific examples of childcare and flexibility solutions. Panelists included Rose Lee, President and CEO of Cornerstone Building Brands, Aneesa Muthana, President, CEO and Co-Owner of Pioneer Services, Denise Rutherford, former Chief Corporate Affairs Officer and Senior Vice President, 3M (retired), C-Suite Executive and Board Director, and Denita Wilhoit, Vice President Corporate Shared Services at Toyota.

Key Takeaways

• Prioritizing a diverse workplace is key to attracting workers, improving productivity and employee retention and growing a company’s bottom line.
• Women represent a sizable talent pool that manufacturers cannot ignore. As it stands, women make up more than 29% of the manufacturing workforce. By raising the percentage of women in the manufacturing sector to 35% of total employment in the sector, there could be 800,000 more female manufacturing employees. This would be enough to fill every open job in the manufacturing sector today.
• Companies that have increased worker flexibility have seen a positive correlation with the ability to attract new employees and retain current staff. New policies have included part-time options, adjusted shift schedules and opportunities for remote work.
• Both men and women cite lack of childcare options/support to be an issue, though evidence suggests this is a larger issue for women. Workplace flexibility can aid in addressing this challenge, though some companies are exploring subsidized or onsite solutions.
• Providing job training/continuing education opportunities, developing employee resource groups and establishing mentorship programs also help with retention and recruitment. Implementing policies that can help advance and train a diversity of leaders shows a commitment to employee growth, making the company a more attractive place to stay—or join.

View the recording here and learn best practices on how to create more inclusive workplace environments.

How can companies provide workers with the flexibility and support they seek? This question has become increasingly pressing for manufacturers as they compete in a tight labor market, and many have come up with their own innovative answers.

Recently, the Manufacturing Institute—the workforce development and education partner of the NAM—hosted a panel with leaders from Toyota, Cornerstone Building Brands, Pioneer Service Inc. and 3M about the child care benefits they offer and how they are reconceiving flexibility.

Child care: The companies provide a variety of different services to their team members, according to the speakers, to account for varying needs.

• Toyota offers a comprehensive suite of services that includes onsite child care at select locations, emergency backup care, tutoring and counseling services.

Flexible options: Though these manufacturers run complex operations, they are increasingly empowering workers to shape their own days. For example:

• At Cornerstone, office workers come into the office one day a week on the same day. Hourly workers are also offered flexibility—they can take part-time shifts in nonstandard times.
• 3M’s “Work Your Way” program is a trust-based system that allows nonproduction employees to designate the way they want to work, whether that’s in person, remote or hybrid. 3M is considering expanding the program to individuals working in laboratories and on the production floor.
• Pioneer emphasizes cross-training to increase flexibility for all their workers. By training more employees on critical skills, employees can take time off or work more flexible schedules because they now have coverage.

Where to start: For other manufacturers looking to provide similar options to their own workers, the panelists had some practical advice.

• When setting up a child care program, Toyota Vice President of Corporate Shared Services Denita Wilhoit says, “You need to consider three points. Find a good partner who knows the area. Investigate what resources may be available in the state where you’re implementing the program. Be aware of the risks.”
• “Outsourcing your needs is an important avenue. Creating a resource center is key. Listen and talk to your employees, and engage them through employee resource groups,” said Denise Rutherford, former chief corporate affairs officer and senior vice president at 3M (retired).

The big picture: Implementing programs and services like these will have huge payoffs, not only for individual workers and companies but also for the industry as a whole.

• In a recent study released by the MI, women cited the lack of flexibility (63.1%) and the lack of child care support (49.2%) as their top challenges, according to company leaders.
• Meanwhile, women currently make up only 29% of the manufacturing workforce. If the industry increased that share to 35%, manufacturers could fill the 746,000 job vacancies open today, according to the study.

The last word: Conversations around child care and flexibility signal seismic shifts in the way manufacturers develop and support their workforce. As Rutherford noted, “There is a transformation afoot.”

In response to advocacy by the NAM and the Kentucky Association of Manufacturers, the Securities and Exchange Commission has granted privately held companies temporary relief from a punishing new rule interpretation that would have required them to expose confidential financial information to the public.

The background: In 2020, the SEC finalized a rule designed to increase disclosure obligations for companies issuing over-the-counter equity securities (“penny stocks”). The following year the SEC published a new interpretation of the rule, to take effect in January 2023, which broadened the disclosure requirement to include private companies issuing corporate bonds.

• Late last month, following an emergency petition for interim relief from the NAM and the KAM, the SEC granted a two-year stay of the new interpretation—so private companies will not face the new public disclosure obligations until January 2025.
• Corporate bonds can only be purchased by large institutional investors (which already have access to issuers’ financial information), not retail investors, so the risks of fraud that spurred the 2020 rule are nonexistent in this market.

A victory—for now: “This is a win for private and family-owned manufacturers raising capital for job-creating investments and planning for growth,” NAM Senior Director of Tax and Domestic Economic Policy Charles Crain said. 

Damaging effect: The NAM recently released a study showing the significant economic damage that would result from forcing private businesses to disclose confidential and proprietary financial information publicly. Among the key findings:

• The U.S. economy would lose 30,000 jobs per year in the early years after the new interpretation takes effect, rising to 50,000 lost jobs per year after five years and 100,000 lost jobs per year after a decade.
• Companies would face decreased liquidity and higher capital costs, including an increase in borrowing costs of up to 13%.

What we’re doing: The NAM and the KAM have filed a petition for rulemaking calling on the SEC to reverse course by clarifying—either by rule or exemptive order—that corporate bond issuers are not required to make public financial disclosures.

• The NAM and KAM have also asked Congress to protect manufacturers from the damage the new interpretation would cause.

The last word: “A two-year delay is a step in the right direction, but the SEC must act to permanently reverse this novel and misguided rule interpretation,” Crain said. “Especially at a time of rising interest rates, the bond market needs stability and manufacturers need low-cost and efficient access to capital.”

Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons released the following statement after President Biden signed H.J. Res. 100 into law, concluding the collective bargaining process between Class I railroads and all labor unions representing the freight rail workforce and eliminating the threat of a disastrous rail strike.

“Thanks to swift action from President Biden and his administration, and bipartisan cooperation in Congress, a holiday supply chain disaster has been averted.

“Earlier this year, manufacturers called for and supported the creation of the Presidential Emergency Board to rectify the stalemate between the unions and railways. But when it became clear they wouldn’t reach a negotiated resolution, we called on Congress to act, as a freight rail shutdown would have been devastating to the manufacturing industry, the U.S. economy and all American families.

“We thank President Biden, Secretaries Walsh and Buttigieg as well as manufacturing allies in Congress for listening to our industry and working quickly to avert this crisis.”

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.9 million men and women, contributes $2.77 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 58% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org

Another large labor union has voted to reject the rail deal brokered in part by the Biden administration, moving the industry closer to a strike, according to CNBC.

Split decision: Two of the largest railroad labor unions in the United States went separate ways during their contract ratification votes, which were announced on Monday. The Sheet Metal, Air, Rail and Transportation Workers – Transportation Division voted against the proposed agreement by a slim margin, while the Brotherhood of Locomotive Engineers and Trainmen voted to ratify it.

What it means: This latest action raises the likelihood of a rail work stoppage in early December. In total, 8 of 12 unions have now ratified the tentative agreement concluded in September while the rank-and-file membership of 4 unions have rejected it.

• Should one union choose to go on strike, the broad impact would cripple the national freight rail network.

The impact: The railroad industry and major shipping groups have found that a strike would likely cost around $2 billion per day, also according to CNBC. It would affect every major rail operator.

• “The American Chemistry Council, which represents companies including 3M, Dow, Dupont, BP, Exxon Mobil and Eli Lilly, said a rail strike would impact approximately $2.8 billion in chemicals cargo a week, and lead to a GDP decline and renewed inflation.”
• “Other industries, from agriculture to retail, have warned of the economic risks of a strike.”

Next steps: Negotiations will continue through a cooling-off period that runs until early December. If a deal is not reached by 12:01 a.m. EST on Dec. 5, a strike could occur. The NAM and others have urged Congress to take action under the Railway Labor Act and pass legislation that would avert a strike if railroads and rail unions cannot reach such a deal.

What we’re saying: “Manufacturers are disheartened by today’s news on the further unraveling of rail negotiations,” said NAM President and CEO Jay Timmons. “It’s clear that Congress, both Democrats and Republicans, must be prepared to work together immediately to avert a rail strike and prevent further damage to our supply chain.”

Manufacturers face a minefield of legal and compliance issues every day—and too often, in-house counsel are forced to navigate some of the biggest issues affecting the industry alone.

The NAM’s Legal Center sought to change that dynamic at the first-ever Manufacturing Legal Summit, which took place Nov. 15–16 in Washington, D.C., where in-house counsel from manufacturing companies across the nation had a unique opportunity to convene and learn about the latest pressing challenges across the legal and regulatory landscape.

“The summit offered real-world, practical advice that will help in-house manufacturing counsel deal with their legal and regulatory challenges,” said NAM Chief Legal Officer and Corporate Secretary Linda Kelly.

Kelly and NAM Deputy General Counsel for Litigation Erica Klenicki told us more.

Exploring issues: The summit covered a range of topics, including the following:

• National Labor Relations Board: A session led by NLRB board member John Ring and labor law experts from Fisher Phillips provided critical insights on the priorities and activities of an aggressively pro-labor NLRB, and how manufacturing employers can prepare for the many significant legal changes coming in the weeks, months and years ahead.
• Supply chain: A panel centered around supply chain challenges, featuring the perspectives of GE Appliances’ vice president and general counsel and including an array of experts from the law firm Foley & Lardner, covered issues like supply chain due diligence and drafting contracts to prepare for inevitable supply chain bottlenecks.
• ESG: A panel of experts from McDermott, Will & Emery that also included Brunswick Corp. Executive Vice President, General Counsel, Secretary and Chief Commercial Officer Chris Dekker explored how the ever-evolving concept of ESG is affecting both public and private companies—including what manufacturers should expect from the Securities and Exchange Commission’s forthcoming climate disclosure and human capital management rules.
• Supreme Court: Another session covered the impacts of last year’s Supreme Court decisions and the likely outcomes of this year’s cases on issues of importance to manufacturers and the general public alike.
• Product liability: This panel featured in-house counsel from Johnson & Johnson, The Sherwin-Williams Company and Toyota North America, along with experts from the law firm Shook, Hardy & Bacon, discussing recent efforts by the trial bar to circumvent the traditional limits of product liability law. The panelists laid out the types of bad-faith product lawsuits that manufacturers often face—and how manufacturers should approach them.
• Drugs in the workplace: Especially at a time of legal ambiguity around marijuana, it can be challenging for employers to make and enforce rules about drug use. This session led by workplace legal expert Matt Nieman of Jackson Lewis laid out helpful approaches to creating a modern drug-free workplace.
• Cybersecurity: As cyberattacks against manufacturers rise, it’s important for lawyers to understand their responsibilities around protecting confidential company information and preventing breaches. Thanks to the expertise of representatives from Miller Johnson, a member of the Meritas network, participants learned about these topics through the lens of an attorney’s ethical obligations.

Building relationships: In addition to practical and engaging content, the event also offered participants opportunities to connect with one another and with the NAM legal team.

• “One of the many goals was to build a network, and there was a lot of enthusiasm for that,” said Kelly. “The event also brought greater visibility to the work of the Legal Center and helped show the legal departments of member companies how the NAM can be an effective partner.”

Convening talent: More than 120 participants registered for the event, comprising in-house counsel representing large and small manufacturers from every industrial sector, as well as legal experts from top law firms across the country.

• “This is the first time this group was in a room together,” said Klenicki. “It’s a group that faces a lot of the same pressures, so having everyone in the room together thinking through these issues was extremely valuable.”

A representative reaction: “The event brought together a terrific collection of manufacturing CLOs and senior law department leaders to discuss legal issues of importance to manufacturers,” said Dekker. “The informative and timely content was presented primarily by panels that included outside attorneys and in-house counsel ensuring the advice was actionable and practical.”

An annual affair: The Manufacturing Legal Summit will return Nov. 7–8, 2023, in Washington, D.C.

• “Being in the nation’s capital, where law and policy unfold, hearing from experts on these issues—it’s an exciting experience,” said Klenicki.

Washington, D.C. – Today, the National Association of Manufacturers released the following statement calling for passage of the Respect for Marriage Act:

“Manufacturers know that individuals truly thrive in their careers when they can bring their authentic selves to work and feel confident that their families will be safe from discrimination or worse in the places they have chosen to live. The Respect for Marriage Act would ensure that the legal protections around which so many Americans, including manufacturing workers, have ordered their lives will not be suddenly rolled back. Codifying federal protections for interracial marriages and same-gender marriages with appropriate protections for religious liberty will help keep all families equal under the law and ensure that manufacturers can continue to hire and retain a diverse and talented workforce. It will deliver families and businesses the certainty they need and deserve.”

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.9 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org

Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons released the following statement as negotiators work to reach an agreement between Class I railroads and all labor unions representing the freight rail workforce. Several organizations have not yet ratified the deal tentatively agreed to by union leadership and rail industry representatives in September that delayed the possibility of a strike.

“Manufacturers are urging congressional leaders to be prepared to bring stability and predictability to the economy if a rail strike and shutdown occurs. We already face economic turmoil with rising costs, product shortages and high inflation. Any nationwide rail strike or shutdown will cause even more economic pain. Manufacturers urge all parties to work rapidly—for the good of the country—to conclude this collective bargaining process.”

Background: A rail strike could begin as soon as 12:01 a.m. EST on Saturday, Nov. 19. Currently, the majority of the unions representing the rail workers have agreed to extend that deadline to Friday, Dec. 9, though a unanimous decision to maintain the status quo is required for that extension.

On Thursday, Oct. 27, the NAM joined hundreds of other associations in calling on President Biden to ensure a swift resolution and reiterating support for the work of the Presidential Emergency Board, which has aided in the talks.

Currently, the American freight rail network accounts for nearly 40% of total freight volume, and a strike or delay in finalizing a long-term contract would have devastating impacts across surface supply chain networks and economic output.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.9 million men and women, contributes $2.77 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 58% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

With the possibility of a national rail strike looming in the near future, the NAM is working with association members, congressional leadership and the White House to urge all parties toward a final resolution. On Monday, the NAM held a members-only briefing with remarks from senior leadership of the Association of American Railroads and personnel involved in the ongoing collective bargaining process.

• NAM members in attendance had the opportunity to hear about the state of play directly from representatives of the rail industry, and the message was consistent with the NAM’s own: that the situation is critical, and that a lack of an agreement would be devastating for railroads, for manufacturers and for the wider U.S. economy.

The background: For nearly three years, railroads and their unions have been discussing the outlines of a new long-term contract.

• Two months ago, U.S. Class I railroads and the various labor unions composing the rail workforce agreed to a deal brokered in part through efforts led by the Biden administration that temporarily averted a strike, pending ratification votes by each union’s rank-and-file membership.
• Although more than half of the unions involved have now ratified the agreement, at least two unions have voted to reject it—raising the likelihood of a strike.

The situation: Seven unions have ratified the proposed agreement, two have rejected the deal, and three have yet to vote. As it stands now, the hard deadline for unanimous agreement by all unions is 12:01 a.m. on Saturday, Nov. 19, at which point a strike could be called.

The outlook: During the NAM’s event, the speakers acknowledged that Class I freight rail companies will have to begin making decisions about possible disruptions and metering rail service as soon as this weekend.

• Leading up to the Nov. 19 deadline, manufacturers may receive notifications that some products cannot be moved on certain rail lines.

Next steps: It will be critical for stakeholders to press Congress and the administration either to work with unions to extend the Nov. 19 deadline, or to intervene with legislation that puts in place an agreement like the one recommended in September by the Presidential Emergency Board.

What we’re saying: “Manufacturers are urging congressional leaders to be prepared to bring stability and predictability to the economy if a rail strike and shutdown occurs,” NAM President and CEO Jay Timmons said today.

• “We already face economic turmoil with rising costs, product shortages and high inflation. Any nationwide rail strike or shutdown will cause even more economic pain. Manufacturers urge all parties to work rapidly—for the good of the country—to conclude this collective bargaining process.”

Manufacturers continue to face an alarming workforce shortage—which could result in 2.1 million unfilled jobs by 2030, according to a study by The Manufacturing Institute and Deloitte.

The MI—the workforce development and education partner of the NAM—is working hard to fill that gap. MI President Carolyn Lee spoke at the Made in Connecticut: 2022 Manufacturing Summit last week about how manufacturers are taking on this critical issue and what lies ahead.

The challenge: “One of the biggest long-term issues our industry is confronting is the perception problem,” said Lee. “Many Americans—usually parents—cling to the belief that the manufacturing industry is not a place where people can find satisfying, well-paying lifelong careers. … Our industry needs to overcome this perception and grow the supply of young workers.”

Making progress: “That brings me back to good news: perceptions are changing,” said Lee. “Thanks to movements like MFG Day, and campaigns like the National Association of Manufacturers and The Manufacturing Institute’s ‘Creators Wanted’ campaign, which is touring the country right now, we are moving the needle.”

• “We’re showcasing modern manufacturing as we know it to be: exciting, rewarding, clean and high-tech,” said Lee. “Thanks to these efforts, the positive perception of manufacturing among adults in the past few years has grown from 27% to 40%.”

Promoting programs: Lee spoke about a range of programs offered by the MI that are designed to help build an expansive and inclusive manufacturing workforce. These programs include:

• Women MAKE America, formerly known as the STEP Ahead program, which supports women in manufacturing;
• Heroes MAKE America, which eases the transition to civilian careers for veterans and other members of the military community; and
• FAME, which was originally founded by Toyota before transitioning over to the MI in 2019, and which offers an “earn and learn” apprenticeship experience.

Pushing policy: Lee noted the importance of ensuring that government policy is aligned with the needs and realities of the manufacturing industry. She also highlighted elements of “Competing to Win”—the NAM’s policy blueprint for bolstering manufacturers’ competitiveness. Proposed policies include:

• Reorienting the education system and its funding around a skills and employer-involved model;
• Updating federal tax policy to encourage and reward companies that invest in upskilling their employees; and
• More federal investments in apprenticeship models.

The last word: “Our industry’s strength and competitiveness will be determined by the strength of our workforce,” said Lee. “After all, they are the creators who pioneer and produce lifechanging electronics or lifesaving medicines. They are innovating and building the machines that transform human mobility, improve quality of life or bolster our national defense.”

Learn more: Find out more about the MI’s vital work here.