Transportation and Infrastructure

Manufacturers spend years developing and delivering top-of-the-line vehicles for consumers. But as policymakers set new fuel standards and regulations for light vehicles, automakers are finding themselves caught in a tangled mess of policy-making that threatens manufacturers and consumers alike.

Too many regulators: A number of agencies and government bodies, along with the state of California, are each imposing their own fuel-efficiency standards and environmental regulations, forcing automakers to cope with the conflicts and contradictions.

• “Right now, we’re looking at multiple sets of standards,” said NAM Vice President of Domestic Policy Brandon Farris. “That includes the Department of Energy, the Environmental Protection Agency and the National Highway Traffic Safety Administration, as well as separate standards from California. Each has standards for vehicle emissions, and they’re not well-aligned.”

Brief timelines: In addition, all of these regulations come with their own timelines for compliance, which often don’t give manufacturers enough time to innovate, test and produce new vehicles.

• “The timelines are short,” said Farris. “One of the things we’re asking agencies to recognize is the manufacturing lead time that’s needed.”

Product mandates: In some cases, agencies are imposing mandates that will narrow the range of vehicles that automakers can produce. The EPA, for example, is calling for 67% of all new vehicles to be battery electric in 10 years, a requirement that would squeeze out other fuel-efficient models.

• “What that’s going to do is cut down on consumer choice,” said Farris. “There are conventional hybrids, plug-in hybrids, hydrogen fuel cell vehicles, battery electric vehicles and others that could all reduce emissions, but the EPA has cut out all of those and selected one kind of technology.”

NAM in action: The NAM is deeply involved in conversations with policymakers in the administration and Congress, working to give manufacturers the support they need.

• “We’re working with the agencies, we’re submitting regulatory comments, we’re raising this with the White House and Congress, and we’re working on potential legislation that may address this as well,” said Farris.

Our ask: According to Farris, the NAM is calling on policymakers to take four steps.

• Harmonize standards: With so many overlapping standards, manufacturers are left without clear guidance. Giving manufacturers a single standard would make it easier for automakers and consumers alike.
• Set realistic targets: Standards must be achievable to have a real and positive impact.
• Provide reasonable timeframes: From sourcing critical minerals to manufacturing new engines, automakers need the appropriate time to succeed.
• Protect consumer choice: Consumers should be able to choose between different kinds of vehicles to reduce emissions overall.

The bottom line: “We have shifting standards, standards that aren’t aligned and overlapping timelines,” said Farris. “If you’re a manufacturer trying to make a single automotive that consumers want right now, you’re shooting at a moving target.” 

Manufacturers spend years developing and delivering top-of-the-line vehicles for consumers. But as policymakers set new fuel standards and regulations for light vehicles, automakers are finding themselves caught in a tangled mess of policy-making that threatens manufacturers and consumers alike.

Too many regulators: A number of agencies and government bodies, along with the state of California, are each imposing their own fuel-efficiency standards and environmental regulations, forcing automakers to cope with the conflicts and contradictions.

• “Right now, we’re looking at multiple sets of standards,” said NAM Vice President of Domestic Policy Brandon Farris. “That includes the Department of Energy, the Environmental Protection Agency and the National Highway Traffic Safety Administration, as well as separate standards from California. Each has standards for vehicle emissions, and they’re not well-aligned.”

Brief timelines: In addition, all of these regulations come with their own timelines for compliance, which often don’t give manufacturers enough time to innovate, test and produce new vehicles.

• “The timelines are short,” said Farris. “One of the things we’re asking agencies to recognize is the manufacturing lead time that’s needed.”

Product mandates: In some cases, agencies are imposing mandates that will narrow the range of vehicles that automakers can produce. The EPA, for example, is calling for 67% of all new vehicles to be battery electric in 10 years, a requirement that would squeeze out other fuel-efficient models.

• “What that’s going to do is cut down on consumer choice,” said Farris. “There are conventional hybrids, plug-in hybrids, hydrogen fuel cell vehicles, battery electric vehicles and others that could all reduce emissions, but the EPA has cut out all of those and selected one kind of technology.”

Read the full story here.

Washington, D.C. – The National Association of Manufacturers, along with 71 leading business groups representing sectors across the economy, urged White House Chief of Staff Jeff Zients to help ensure that the Environmental Protection Agency maintains existing National Ambient Air Quality Standards for fine particulate matter (PM2.5).

“Manufacturers in America are committed to improving air quality and have been responsible for the development of new processes and technologies that have made our sector more sustainable,” said NAM President and CEO Jay Timmons. “The Biden administration’s proposal to make these standards even more stringent is putting manufacturing investment at risk across vast swaths of the country and will jeopardize nearly 1 million jobs. If the president and his agencies want the Bipartisan Infrastructure Law and the CHIPS and Science Act to succeed—and want to see manufacturing in America continue to grow—they should refrain from further changes to the standard, which is already among the most aggressive in the world.”

As the letter states:

A proposed discretionary revision to this standard, which is under review by the Office of Information and Regulatory Affairs, could put nearly 40% of the U.S. population in areas of nonattainment. Doing so would risk jobs and livelihoods by making it even more difficult to obtain permits for new factories, facilities and infrastructure to power economic growth. This proposal would also threaten successful implementation of the Infrastructure Investment and Jobs Act, the CHIPS and Science Act and the important clean energy provisions of the Inflation Reduction Act.

Our members have innovated and worked with regulators to lower PM2.5 concentrations significantly, and further progress is being made as part of the energy transition investments. The EPA recently reported that PM2.5 concentrations have declined by 42% since 2000, driven by major emissions reductions from both mobile sources and the power sector. As a result, America’s air is cleaner than ever.

A recent analysis conducted by Oxford Economics and commissioned by the National Association of Manufacturers found that the proposed standard would reduce GDP by nearly $200 billion and cost as many as 1 million jobs through 2031.

At 8 ug/m³, the lowest level considered by the EPA, more than 20% of all U.S. counties would be out of attainment and thrown into permitting gridlock.

To view the full letter, click here.

-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 13 million men and women, contributes $2.91 trillion to the U.S. economy annually and accounts for 53% 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.

The Federal Communications Commission voted late last week to advance a proposal that would reinstate Obama-era net neutrality rules, according to The New York Times (subscription).

What’s going on: “The commissioners at the Democratic-led agency voted 3 to 2 along party lines to kick off a monthslong process to bring back so-called net neutrality regulations.”

• In an NAM-supported move in 2018, the previous administration repealed net neutrality regulations put into place by President Obama in 2015, saying they stymied innovation.

Why it’s important: Last week’s proposal—which telecommunications companies have pledged to fight—“will ultimately enable the agency to categorize high-speed internet as a utility, like water or electricity. … The agency will then be able to police broadband providers for net neutrality violations.”

• That’s precisely why the proposal to restore the rules is problematic, critics say. A trade group representing telecom firms “wrote letters this week to the House and Senate Intelligence Committees warning of ‘mission creep’ by the F.C.C.”
• In 2017, then-FCC Chairman Ajit Pai said net neutrality laws amounted to “special interests [who] weren’t trying to solve a real problem but [were] instead looking for an excuse to achieve their longstanding goal of forcing the Internet under the federal government’s control.”

Government overreach: Indeed, the 2015 net neutrality rules—very similar to the ones now being advanced—were a prime example of agency overreach, said NAM Chief Legal Officer Linda Kelly in 2018.

• The 2015 FCC’s “heavy-handed approach … was neither appropriate nor necessary for the rapidly evolving, highly competitive broadband market,” Kelly said.
• Net neutrality laws also decrease investment in broadband, the NAM has told policymakers.

Up next: The FCC will take public comments on the proposed rules. The commission could vote to adopt new regulations as soon as early next year.

The last word: “Manufacturers are disappointed the FCC is moving forward with its proposal to regulate 21st-century broadband with rules designed for the era of the rotary phone,” said NAM Vice President of Domestic Policy Charles Crain. “Reinstating this misguided, overreaching policy of the past is a recipe for stymied innovation and outdated infrastructure.”

Hydrogen demand is likely to skyrocket in the next few decades—if permitting delays and other setbacks don’t stymie it, according to WSJ Pro (subscription).

What’s going on: “A new report from consulting firm McKinsey forecasts a fivefold rise in hydrogen demand to 600 million metric tons a year by 2050, if climate change is limited to 1.5 degree Celsius. On current trajectories, however, that supply could be between 175 million to 291 million metric tons a year if steps aren’t taken to speed up permitting and lower both equipment and investment costs, the report warned.”

• The report identified three major challenges to meeting the rising demand: increased costs, a slow permitting process and “lack of access to capital,” which can be attributed largely to higher interest rates.

Incentives abound: Government incentives for hydrogen are on the rise. Up to $300 billion has been made available worldwide for hydrogen-energy projects this year, a sixfold increase from 2021.

• Last week, the Energy Department announced $7 billion in subsidies to create seven clean-hydrogen “hubs” in the U.S.

More support required: More action from government is still needed—particularly when it comes to allowing hydrogen projects to proceed.

• “Faster permitting times are needed to bring more hydrogen projects online, as well as the renewable energy to power their electrolyzers, industry experts say. A recent report from the International Energy Agency said current project lead times are too long and can act as a barrier to clean hydrogen uptake.”

What we’re doing: Manufacturers have long been urging policymakers to fix the broken U.S. permitting system.

• The NAM recently laid out a multistep plan for Congress “to modernize and update our nation’s antiquated permitting system.”

The world must add or replace nearly 50 million miles of transmission lines in the next 17 years to allow countries to meet climate goals and achieve energy security, according to a new report by the International Energy Agency covered by CNBC.

What’s going on: The amount of transmission line needed—49.7 million miles—“is roughly equivalent to the total number of miles of electric grid that currently exists in the world, according to the IEA.”

• The undertaking “will require the annual investment in electric grids of more than $600 billion per year by 2030,” double current global investment levels in transmission lines.
• Countries must also make changes to the way they operate and regulate their grids.

Why it’s important: Investment in global transmission lines has not kept pace with the growing appetite for renewables, and without replacements and additions to transmission lines, power bottlenecks will become “ever larger.”

Growing gridlock—and demand: “There are currently 1,500 gigawatts of renewable clean energy projects in what the IEA calls ‘advanced stages of development’ that are waiting to get connected to the electric grid around the world.”

• Meanwhile, demand for electricity will only rise as more of the globe moves to electric power.
• But building new transmission lines takes time, owing to lengthy permitting processes—which is why the NAM has long advocated speeding the process in the U.S.

Our view: “The NAM has identified building additional transmission lines as a top priority for the next round of permit reform negotiations,” said NAM Vice President of Domestic Policy Brandon Farris.

• “We will continue to fight to break down barriers to building new projects, including manufacturing facilities, energy generation, transmission lines, bridges, roads and more.”

When Carrie Shapiro began her career as an engineering student at the Georgia Institute of Technology, she didn’t expect to work in manufacturing—but the moment she walked into a manufacturing facility near her school for an interview, she was hooked.

“I’ve had so many opportunities in manufacturing that I never wanted to leave,” said Shapiro. “From the very beginning, I was able to keep learning and growing and making better relationships.”

Today, Shapiro serves as the vice president of sourcing execution at Georgia-Pacific—a pulp and paper company—where she guides procurement and uses her expertise in supply chain operations to benefit the company’s 110 facilities. As a leader in the industry, she’s also focused on helping potential creators understand all that manufacturing has to offer.

A changing world: Shapiro’s role has been especially important over the past few years, as the COVID-19 pandemic and its aftermath forced companies to adjust their supply chains and react to shortages in real time. For Shapiro, that process required rethinking risks, using data effectively and focusing on achieving stability before optimization.

• “The mistake that we often make is we try to optimize something that’s not stable,” said Shapiro. “If you’ve got chaos in your supply chain, you have no business trying to optimize it. You have to stabilize first.”

A need for humans: As Shapiro notes, data has become more readily available than ever before, and new tools are helping organizations make smart adjustments in real time. Yet, human decision-making and critical thinking still have a vital role at the center of manufacturing.

• “Tools are great, software is great, tech is great—but it should be an enabler and not a magic wand,” said Shapiro. “You still have to know your process, understand your current state and know your capabilities across the supply chain to make effective decisions. Tools don’t absolve you from doing the real work of continuous improvement.”

Read the full story here.

A planned offshore wind farm whose developers are billing it as the largest in the world has produced electricity for the first time, according to CNBC.  

What’s going on: “Located in the North Sea, over 130 kilometers off England’s northeast coast, the Dogger Bank Wind Farm still has some way to go before it’s fully operational, but the installation and powering up of its first turbine is a major feat in itself. That’s because GE Vernova’s Haliade-X turbines stand 260 meters tall—that’s higher than San Francisco’s Golden Gate Bridge—and have blades measuring 107 meters.”

• Once the installation is complete, the ship will have 277 Haliade-X turbines.

Why it’s a game-changer: “Described by Dogger Bank as the ‘largest offshore jack-up installation vessel ever built,’ in many ways, it’s the pinnacle of an extensive supply chain involving numerous businesses and stakeholders.”

• Thanks to four legs that allow the vessel to lift itself above the water’s surface, the wind farm will be able to operate in depths of up to 80 meters—some 30 meters deeper than fixed-foundation wind farms.

Power producer: Once fully up and running, project developers say the Dogger Bank Wind Farm will have a capacity of 3.6 gigawatts, enough “to power as many as 6 million homes per year.”

• For the sake of comparison, the U.K.’s fully operational Hornsea 2—considered a major wind farm—has a capacity of just over 1.3 GW, according to another CNBC piece.

A complex project: The totality of the undertaking is “huge,” according to one source, and being made more complex “by the use of next-generation turbines and a next-generation installation vessel.”

• Given the immense size of the Haliade-X turbines, “we use a number of specially designed pieces of equipment to transport” them, a GE Offshore Wind spokesperson said.

The NAM’s view:  “Offshore wind can be an important part of an all-of-the-above energy strategy that helps meet energy security and decarbonization goals,” said NAM Vice President of Domestic Policy Brandon Farris. “Manufacturers keep leading the way with investments in the next generation of energy technologies—and the NAM will continue to advocate energy policies that provide manufacturers affordable, reliable energy.”  ​​​​​​​

The Bridge of the Americas in South-Central El Paso, Texas—one of the largest land ports for U.S.–Mexico trade—restarted commercial operations on a limited schedule yesterday, according to a notice from U.S. Customs and Border Protection.

• It’s a development that the NAM advocated, having engaged in continued talks with the Biden administration and relevant agencies since cargo movement was suspended last month.  

What’s going on: The port of entry reopened at 6:00 a.m. Tuesday and closed at 2:00 p.m., a schedule it will keep temporarily each week Monday through Friday.

• In recent weeks, large numbers of migrants have crossed the Texas–Mexico border, and the CBP stopped commercial movement along the Bridge of the Americas so federal customs agents could assist with the influx.

Why it’s important: “The temporary bridge closure and the Texas Department of Public Safety’s (DPS) enhanced safety truck inspections at El Paso’s two other truck ports of entry have drastically slowed cargo truck crossings in recent weeks between El Paso and Juárez, Mexico,” according to the El Paso Times on MSN.

• Last week, the value of goods in thousands of trucks backed up on the Mexican side of the border “had surpassed $1.5 billion,” according to a source cited by Reuters (subscription).
• Prior to the temporary closure, the bridge had been processing approximately 500 northbound trucks a day, according to the El Paso Times.

The NAM says: “Mexico is the largest trading partner of the U.S. and facilitating trade between the two countries is vital to manufacturers’ operations,” said NAM Director of Trade Facilitation Policy Ali Aafedt. “The NAM will continue to share the impacts of the disruption with the federal government and urge solutions to resolve the continuing backlog.” 
 

Since the onset of COVID-19 in 2020, supply chains have faced extraordinary challenges around the world. In the midst of shortages and disruptions, as well as global conflicts, how can manufacturers ensure that they receive the materials they need and deliver their products on time?

At a recent NAM event, attended by more than 75 executives from both manufacturing companies and association partners, Supply Chain Insights Founder Lora Cecere addressed the question of how the industry can build resiliency into the supply chain of the future. Here’s some useful advice from her keynote speech, called “Supply Chain Workshop: Connecting and Securing the Supply Chain for 2030.”

Defining resilience: As Cecere noted, in many cases manufacturers may have different ideas about what resilience represents—and it’s important to settle on a clear definition.

• “I define resilience as the ability to have the same cost quality and customer service given the level of demand and supply variability,” she said.

Differentiating supply chains: While most manufacturers talk about the supply chain as a unified system, Cecere encouraged participants to differentiate various kinds of supply chains from one another.

• “We have responsive supply chains that are all about time—things like flu vaccines and bathing suits,” which must be shipped during certain seasons, Cecere observed.
• “And then there’s the agile supply chain, which is very low volume and not predictable. We can’t measure that in the same way we measure the efficient supply chain, but we need to manage flow.”
• “We don’t have just one supply chain. We have multiple supply chains,” she emphasized.

Putting customers at the center: As businesses design and adjust their supply chains, customers can get lost in the equation, Cecere cautioned. In one exercise she has used in her research, she asks participants to draw a supply chain—and the results she’s received show how many manufacturers are leaving out an important piece of the puzzle.

• “Most people will start with a truck, smokestack, then a factory, a mill,” said Cecere. “But isn’t the supply chain really about the customer? And how do we align the customer from the customer’s customer to the supplier’s supplier? … The role of the supply chain is the delivery to the customer.”

Using data effectively: According to Cecere, about 80% of supply chain data is not used. She encourages manufacturers to look creatively at the wide range of data available to generate useful insights.

• “We’re not looking at all the data we have, and we’re not thinking hard enough about how we use it,” she said.

Developing purple unicorns: Cecere encouraged participants to develop teams of “purple unicorns”—people with strong supply chain domain knowledge who can also innovate—and allow them to test new ideas and learn from failure.

The last word: “Supply chain excellence is not functional excellence—it is the ability to drive outcomes,” said Cecere. “This cannot be about the lowest cost; this has to be about the best potential of flow for cost, quality, customer service and inventory.”

Learn more: For more information, check out the full presentation here.