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State of Manufacturing: Strong, But Not Guaranteed

a group of people standing in front of a crowd

What’s the state of manufacturing in the U.S.? Strong and resilient—but under threat.

That was the message delivered by NAM President and CEO Jay Timmons and other speakers at the NAM’s 2024 State of Manufacturing Address at RCO Engineering in Roseville, Michigan, on Thursday.

  • Attending the address were nearly 100 RCO Engineering team members—some of whom are second- or even third-generation manufacturing workers—as well as local education leaders, including Macomb Community College President James O. Sawyer IV and Macomb Intermediate School District Superintendent Michael R. DeVault.
  • The address was the keystone event of this week’s launch of the 2024 Competing to Win Tour, an opportunity to visit local manufacturers and report on where the industry stands at the start of 2024. 

A place of strength: “The state of the manufacturing industry depends on the people in it,” Timmons said in remarks covered by POLITICO Influence (subscription). “And we are now 13 million strong—the largest in more than 15 years. If we can continue on this trajectory, this resurgence, imagine what the state of manufacturing might look like in 2030.”

  • Johnson & Johnson Executive Vice President and Chief Technical Operations & Risk Officer and NAM Board Chair Kathy Wengel echoed that sentiment in her opening remarks. “Manufacturers are improving the quality of life for everyone. … Together, we can lead the way.”
  • And Michigan Manufacturers Association President and CEO John Walsh told the audience at RCO Engineering, “You are making parts here that are going everywhere. It’s a phenomenal story for us in Michigan. It not only helps you as employees here, but it helps your families, it helps your communities. It builds our state. It builds our nation.”
  • “Manufacturing … is an industry that is vital to our economic competitiveness,” said Macomb County Executive Mark Hackel. “In Macomb County, we’re not just witnessing the growth of manufacturing; we’re actively contributing to it. What we are doing here is creating an environment where innovation thrives and where manufacturers can grow as well as compete.”
  • RCO Engineering General Manager Jeff Simek agreed. “The manufacturing brand is coming back, and it’s coming back alive—and you guys are a big, huge piece of that,” he said to loud applause. 

Fork in the road: But continued manufacturing strength isn’t guaranteed, Timmons said. Rather, it’s in large part contingent on sound policy decisions by U.S. leaders.

  • “We will head in the wrong direction if Congress lets taxes go up on small businesses when rates expire next year,” Timmons said. “Or if they hit you with even more regulations—regulations even harsher than ones they have in Europe. Or if they fail to solve the immigration crisis because they put politics over good policy. Or choose trade barriers rather than trade agreements, or … abandon our allies overseas and put our national security at risk.”
  • The recent regulatory onslaught by federal agencies—which Timmons discussed with Fox Business earlier this week—must stop and be replaced with sensible rulemaking done in cooperation with manufacturers, he said.
  • He cited the Environmental Protection Agency’s recently finalized, overly stringent standard for particulate matter and the Biden administration’s decision to freeze liquefied natural gas export permits. This “forc[es] our allies, like Europe and Japan, to buy dirtier energy from countries we can’t trust, potentially enriching the likes of Russia … undercut[ting] our most basic national security objectives,” Timmons said.

No new taxes: The NAM’s message to Congress on taxes is simple: “No new taxes on manufacturers in America,” Timmons said. 

  • “And while we’re at it, Congress should bring back some of the tax policies that made it easier for manufacturers to invest in the future.”

On immigration: The U.S. needs a common-sense solution to immigration, and it needs it now, Timmons said.

  • While manufacturers may not like every piece of the bipartisan border deal that was recently killed in the Senate, “here was my test: Does it make us more secure than we are today? Yes. Does it make our workforce stronger than it is today? Yes. And does it help our allies overseas? Yes,” said Timmons.

Come what may: No matter what the November elections bring, manufacturers will continue to do the jobs so many people depend on them to do, Timmons concluded.

  • “Our commitment is to work with anyone, and I truly mean anyone, who will put policy—policy that supports people—ahead of politics, personality or process. We will stand with you if you stand with us in advancing the values that have made America exceptional and keep manufacturing strong.” 
Workforce

Primary Goals: NAM Hits the Road in 2024

a group of people standing in front of a building

As candidates look to claim the support of manufacturers in 2024, the NAM launched its year-long 2024 Competing to Win Tour in South Carolina, days ahead of the South Carolina GOP primary.

  • The tour spotlights the issues critical to winning not just manufacturers’ votes but also more manufacturing in the U.S.

Why it’s important: “We came to South Carolina to showcase the people and stories behind our industry and to translate their perspectives into action that will make our industry and country stronger,” said Johnson & Johnson Executive Vice President and Chief Technical Operations & Risk Officer and NAM Board Chair Kathy Wengel, who joined NAM President and CEO Jay Timmons, South Carolina Chamber of Commerce President and CEO Bob Morgan and South Carolina Manufacturers Alliance President and CEO Sara Hazzard on the first day of the tour.

  • “Building these strong relationships beyond Washington, D.C., in the cities and states driving our sector deepens our understanding of regional challenges and reinforces the NAM as the leading voice representing all manufacturers, large and small,” Wengel added.

The launch: The tour began at Milliken & Company’s headquarters in Spartanburg on Wednesday, a poignant reminder of the importance of just one global technology-based manufacturer to lives, innovation and progress.

a group of people standing in a room

  • The company’s 3,200 associates in the Palmetto State, as well as its broader U.S. and global team, make everything from safety gear and wound dressings and bandages to eco-conscious materials and technological innovations, such as digital printing, flooring, sustainable coating additives and more.
  • “The average person touches about 30 to 50 [Milliken products] a day,” said Milliken President and CEO Halsey Cook.
  • “Milliken embodies what we believe: manufacturing makes a positive difference. Their commitment to sustainability, ethics (named a World’s Most Ethical Company 17 years running) and a people-first workplace create a ripple effect,” said Timmons. “It’s why we need everyone supporting the success of manufacturers in South Carolina and the United States—to empower companies just like Milliken and help us grow more of them right here in America,” Morgan emphasized.
  • “Milliken is a remarkable brand ambassador for the entire manufacturing industry in the United States,” summed up NAM Managing Vice President of Brand Strategy Chrys Kefalas. “As Michael Brown, Milliken’s executive vice president of operations, conveyed to us, the company is showing that digital transformation and artificial intelligence can be a force for good, helping its people leverage data analytics, for example, accelerating innovation and making modern manufacturing even more exciting for the next generation to be a part of.”

A boom story: Springs Creative Products Group CEO Derick Close, who heads several small enterprises in South Carolina, brought the NAM tour to Fort Lawn, South Carolina, where state-private partnerships and sound competitiveness policies have led to a boom in manufacturing investment and jobs.

  • According to Close, recent investments in the community exceed $2.5 billion and stand to add 1,500 new jobs.
  • Close, who is an economic development champion for South Carolina, took time to brief the group on how the area is ground zero as well in the story of the revival—and revolution—happening for the U.S. textile manufacturing sector, showing that U.S.-based textile manufacturers can compete against the rest of the world at quality, speed and price, so long as misguided policies don’t impede current advances. Springs Creative’s digital printing facility, which the NAM toured, is just one example. Springs Creative produces fabrics for such companies as Disney, Tempur-Pedic and Walmart.
  • An added highlight of Close’s showcase was a tour of the new 1.5-million-square-foot, $423 million E. & J. Gallo wine and spirits production and distribution center—a testament to U.S. ingenuity and the more than 275 jobs it’s already created (with more on the way) to produce the best-selling spirit in the U.S. 

The message: The discussions at Milliken and Springs Creative focused on the need for policies that support manufacturing’s growth, from R&D incentives and competitive taxes to sensible regulations, resilient supply chains and permitting reform, to workforce development, including immigration reform, and energy policy.

The platforms: As newsrooms dwindle, the NAM is stepping into the breach, using its platforms, like NAM.org, social media and its email newsletters, including Input, to amplify manufacturing’s narrative. It’s a bid to ensure that as policymakers and candidates court manufacturers, they’re armed with real stories and concrete policy needs from the ground.

Looking ahead: The tour will continue across the United States, gathering insights and stories to bolster the NAM’s advocacy efforts. Next up: the Competing to Win Tour brings the NAM State of Manufacturing Address to Roseville, Michigan, as well as to Sanders Chocolate and Triumph Gear Systems in Macomb County on Thursday.

Press Releases

NAM CEO Timmons Delivers 2024 State of Manufacturing Address

Washington, D.C. Today, the National Association of Manufacturers President and CEO Jay Timmons delivered the 2024 State of Manufacturing Address from RCO Engineering, Roseville, Michigan.

Remarks Prepared for Delivery:

Good morning! Thank you to everyone across the country for joining us.

We’re here at the facilities of RCO Engineering, in Macomb County, Michigan.

Like John [Walsh] said, you’re part of a tradition today. Every year, we travel the country to deliver the NAM’s State of Manufacturing Address.

We reflect on everything manufacturers are accomplishing, all the good we’re doing for the world—and how we’re driving the American economy forward.

Manufacturing represents more than 10% of the U.S. economy, or $2.9 trillion, and 16% of the economy here in Michigan. But manufacturing’s impact on our country and on the world is incalculable.

Think about all you have accomplished—and all that our diverse industry has accomplished this past year.

  • From deploying cutting-edge digital technologies in factories and plants…
  • …to developing treatments that slow the progression of debilitating illnesses like Alzheimer’s…
  • …and strengthening our supply chains closer to home.

Next-generation electric vehicles, for example, will be powered by inputs like the industrial batteries that will be built at UL’s Advanced Battery Laboratory, which broke ground last year here in Michigan.

That’s just a small sample of accomplishments worth celebrating.

At the heart of our achievements are incredible manufacturing teams—like RCO Engineering.

You celebrated your 50th anniversary last year. Your company has had an amazing story, growing and adapting with the times, broadening your capabilities to include aerospace design.

Resilience, adaptability, constantly refining and strengthening the commitment to the communities you serve—that’s why manufacturers in the U.S. are the best in the business.

***

You know, I caught a headline recently that read, “U.S. Winning World Economic War.”

The point was this: Our economy “grew faster than any other large, advanced economy last year—by a wide margin—and is on track to do so again in 2024.”

Now, it doesn’t always feel like we’re winning. But, the numbers show we are in many ways. And why are we winning? Well, that’s easy. You. You. Manufacturers in America.

The state of the manufacturing industry depends on the people in it. And we are now 13 million strong—the largest in more than 15 years.

If we can continue on this trajectory, this resurgence, imagine what the state of manufacturing might look like in 2030—at the end of the decade.

Artificial intelligence may unlock new superpowers for American workers. We might reach a point where no other country can keep up with our productivity or the pace of innovation. Manufacturing investment could flock to our shores even faster.

But, here’s the important part: That’s not guaranteed.

In the past few weeks, Washington, D.C., has made a few good decisions, but it has also made some major unforced errors. Leaders in both parties are on the verge of making more. That’s part of the reason that only 66% of manufacturers right now have a positive outlook for their companies.

So that economic “war” we’re winning? We could see the tide turn.

We will head in the wrong direction…

…if Congress lets taxes go up on small businesses when rates expire next year…

…or if they hit you with even more regulations—regulations even harsher than ones they have in Europe…

…or if they fail to solve the immigration crisis because they put politics over good policy…

…or if they choose trade barriers rather than trade agreements…

…or if they abandon our allies overseas and put our national security at risk.

Yes, there are reasons to be optimistic, but there are big decisions we have to get right if we want to achieve our full potential.

That … that is why I can report that the state of manufacturing in America today remains strong and resilient but under threat.

This is an election year, and your voices need to be heard clearly.

But we’re not here to endorse a candidate. No. We are here to hold all candidates and leaders accountable. Because it takes leadership from both parties to ensure manufacturers have the optimal conditions to thrive.

The industry’s growth has gotten a boost from transformative decisions across many presidential administrations:

  • Trade agreements under Presidents Bush and Obama that let us sell more American products overseas
  • Historic tax reform and regulatory certainty under the Trump administration
  • And the landmark infrastructure bill, the CHIPS and Science Act and more under the current administration

That’s the kind of leadership we want.

In his State of the Union Address next month, President Biden will probably take some credit for what manufacturers have achieved. That’s fair.

I know he deeply cares about manufacturing. As he often says on the road, “This nation used to lead the world in manufacturing, and we’re going to do it again.”

But what he won’t tell you is that his federal agencies are, at this very moment, working to undermine his manufacturing legacy—those agencies are undermining your success.

In fact, just two weeks ago, they announced one big regulation that could wipe out up to 1 million jobs.

It’s referred to as National Ambient Air Quality Standards or PM 2.5. It’s not the name that matters. It’s the consequences. It’s stricter than rules they have even in Europe. And in vast portions of the country, we will barely be able to build new manufacturing facilities as a result.

Michigan would be one of the states hit hardest. And if new manufacturing investments dry up, that spills over to the rest of the state economy.

It affects the family trying to sell their home, the teacher hoping for new investments in schools, the students looking for job opportunities here in the state.

And to what end? You cannot solve the world’s environmental challenges by driving manufacturing investment away from the United States to countries with lower standards.

The Biden administration also won’t solve climate change by pausing approvals of exports of American liquified natural gas, which they announced they would do last month.

Instead, they are forcing our allies, like Europe and Japan, to buy dirtier energy from countries we can’t trust, potentially enriching the likes of Russia. Russian natural gas, by the way, has substantially more emissions potential than the liquified natural gas we produce in the U.S. So, we’re also making it harder to achieve our climate goals. And it undercuts our most basic national security objectives.

Can we agree that makes no sense?

Look, the regulatory onslaught is real. It’s a hidden tax. The average American may not feel it yet. But if there isn’t a course correction, they will.

So here’s our message to federal agencies: Stop the onslaught. Work with manufacturers so that regulations are sensible.

And here’s our message on taxes: No new taxes on manufacturers in America.

Remember the 2017 tax reforms? They were rocket fuel for our industry. We kept our promises to raise wages, hire workers and invest in our communities. We would not be outpacing other countries without them.

But many of the competitive rates and the pro-growth deductions we won in 2017 are expiring in 2025. Some already have.

Can we agree that it is economic malpractice to let taxes go up on innovators and on America’s small businesses? Why should you have to work even harder to compete with China?

One of our member companies shared with us the difference tax policy makes. Valley Forge & Bolt is a small, Arizona–based manufacturer of machine parts. We’ll be with them tomorrow, in fact.

After the 2017 tax cuts, the company hired more employees, expanded benefits, replaced aging equipment and invested in technologies that improve productivity. The result? The company had the best sales year in its history. But, as they warned us, if the government raises taxes, there will be tradeoffs.

So the path is clear: no new taxes on manufacturers. And while we’re at it, Congress should bring back some of the tax policies that made it easier for manufacturers to invest in the future.

Right now, our entire industry is waiting on the U.S. Senate to pass a bipartisan tax bill that restores expired or phasing-out tax incentives for investments in R&D, new facilities and equipment.

These provisions, especially on R&D, have been a force multiplier for you here at RCO. It’s just common sense that the tax code should encourage these kinds of investments.

Common sense. We know that’s in short supply in D.C. And where is that most obvious? Immigration policy.

Can we all agree that what’s happening at the border is unacceptable?

And can’t we all agree that legal immigration is a net positive for our economy and our country?

And if we can agree on that, then shouldn’t we be able to support a bipartisan border security and national security bill—one supported by the border patrol union for that matter?

We didn’t like every piece of that Senate bill either. But here was my test: Does it make us more secure than we are today? Yes. Does it make our workforce stronger than it is today? Yes. And does it help our allies overseas? Yes.

I don’t care if you’re a Democratic or Republican member of Congress: If your answer is do nothing—on immigration or on national security—then you need to explain to the overwhelmed border communities why you are not sending help.

You need to explain to manufacturers with more than 600,000 open jobs why you won’t improve the visa program so they can find talent to fill more of those positions.

And, you need to explain your decision to Ukrainian soldiers, who left their families for two years to fight on the front lines against our adversary—against a country that is working every day to see the U.S. fail. You need to tell them why the land of the free should abandon the brave people defending democracy.

I have to tell you, I am flat out of patience, and I know you are too. I’m sick of the games, and the shifting goal posts, and the “leaders” who don’t respect you enough to give you a straight answer from the start.

So, here’s what we’re going to do. From now through the election—and then every day after that—we’re going to hold our leaders accountable.

You want to support manufacturing? Here’s our roadmap. It’s called “Competing to Win.”

It’s common sense. It’s consistent. It will make manufacturers in the U.S. even more globally competitive. And we will make sure policymakers know about this agenda and what’s at stake.

And they need to hear that from you—at town halls, at chance meetings, on social media.

Here in Michigan, you will be in the spotlight this election season, so grab the microphone.

Ask them, where are the trade deals we need?

Will they commit on the spot not to raise taxes on manufacturers in America?

Can they get to “yes” on an immigration solution?

Will they support the growth and upskilling of the manufacturing workforce?

Our commitment is to work with anyone, and I truly mean anyone, who will put policy—policy that supports people—ahead of politics, personality or process.

We will stand with you if you stand with us in advancing the values that have made America exceptional and keep manufacturing strong.

Free enterprise.

Competitiveness.

Individual liberty.

Equal opportunity.

Because here’s what I know: Manufacturers are building an incredible future for our country and our world.

The world needs us. The world needs you. Manufacturing teams like you make life better for everyone.

That’s our job, and we’re going to do it no matter how one election turns out.

People are counting on us, and Washington should either get on board or get out of our way.

We see beyond the horizon, so we refuse to let short-term thinking take us down the wrong path.

We are standing at a crossroads. We know the right path, and we’re going to lead the way.

Thank you so much for your welcome—and for your leadership.

-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 nearly 13 million men and women, contributes $2.85 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.

Press Releases

NAM Leadership Kicks Off Competing to Win Tour in South Carolina

Washington, D.C. Today, the National Association of Manufacturers kicked off its 2024 Competing to Win Tour in South Carolina. NAM President and CEO Jay Timmons and NAM Board Chair and Johnson & Johnson Executive Vice President and Chief Technical Operations & Risk Officer Kathy Wengel visited Milliken & Company and Springs Creative Products Group to hear from team members on the shop floor on the issues impacting their businesses.

“Manufacturers are fueling the U.S. economy and driving innovation to create a better future for everyone. We’re here in South Carolina to showcase the people and stories behind our industry, and to translate their perspectives into action that will make our industry and country stronger. Building these strong relationships beyond Washington, D.C., in the cities and states driving our sector deepens our understanding of regional challenges and reinforces the NAM as the leading voice representing all manufacturers, large and small,” said Wengel.

Tomorrow, Timmons will deliver the 2024 NAM State of Manufacturing Address, in which he will provide the industry’s assessment of manufacturing in the United States, as candidates from all sides work to claim the manufacturing vote in the 2024 election.

“For more than a decade, the annual NAM State of Manufacturing Address has focused the nation’s attention on the industry that is the backbone of the American economy, and we are on this tour to hear from the people making decisions on how to grow their businesses every day. Lawmakers from all parties want to claim they stand with manufacturers, but we judge them not by their words but by their deeds. So manufacturers across America have a message for Washington: we are here to hold all candidates and leaders accountable. It takes leadership from both parties to ensure manufacturers have the conditions to thrive and invest in communities across the country. If they fail to act, they will fail the 13 million people who make things in America,” said Timmons.

Timmons will also highlight the challenges facing manufacturers in America and the urgent need to enact a competitiveness agenda that addresses pressing issues, including the looming tax hikes on small manufacturers, the need to expand trading opportunities, the regulatory onslaught from federal agencies, the failure of Congress to address immigration reform and the threats to our energy security and supply chains.

-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 nearly 13 million men and women, contributes $2.85 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.

Policy and Legal

NAM to House: Overturn Air Standard

a man wearing a suit and tie

The Environmental Protection Agency’s recently finalized standard for particulate matter (PM2.5) will hamstring U.S. economic growth, job creation and competitiveness—and it must be reversed, the NAM told the House Thursday.

What’s going on: “The EPA’s unworkable PM2.5 standard … of 9 [micrograms per cubic meter of air] is in line with background levels of particulate matter in many parts of the country,” NAM Managing Vice President of Policy Chris Netram told committee members during “Safeguarding American Prosperity and People’s Livelihoods: Legislation to Modernize Air Quality Standards,” a hearing of the House Energy and Commerce Subcommittee on Environment, Manufacturing and Critical Materials.

  • “In other words, the standard is now so low that companies will be expected to reduce their emissions below what naturally occurs.”
  • The result of an overly stringent National Ambient Air Quality Standards level: Large swaths of the U.S. will be forced into “nonattainment” status, making permitting for critical infrastructure nearly impossible and all but guaranteeing job cuts, not growth, Netram said in his testimony, which Bloomberg (subscription) covered.

Why it’s important: A particulate matter standard of 8 micrograms per cubic meter of air—only slightly below the newly finalized level—would result in a loss of up to $200 billion in economic activity and almost 1 million jobs, according to a recent NAM study.

  • As far as global competitiveness is concerned, the new limit effectively cuts America off at the knees, Netram continued. “Europe’s current PM standard is 25; China’s is 35. If we want the next manufacturing dollar to be spent in America rather than abroad, a standard of 9 is simply not feasible.”

What should be done: Lawmakers should introduce a Congressional Review Act resolution to overturn the new standard as soon as possible, Netram urged. The NAM also highlighted key NAAQS reform policies Congress is considering:

  • Extend the EPA review period to 10 years.
  • Allow the EPA to count wildfire mitigation as exceptional “rather than holding manufacturers accountable for PM they can’t control.”
  • Require the EPA to consider the economic effects of a tightened standard.
Policy and Legal

NAM: Regulatory Onslaught Disproportionately Hits Small Manufacturers

a group of people sitting at a table

Small businesses are a critical part of both manufacturing and the U.S. economy at large, but the federal government’s costly regulatory onslaught is putting their continued existence at risk, the NAM told House lawmakers Wednesday.

What’s going on: “In the manufacturing sector, the majority of firms are small,” NAM Vice President of Domestic Policy Brandon Farris told the House Committee on Small Business during the hearing “Burdensome Regulations: Examining the Impact of EPA Regulations on Main Street.”

  • “These firms are the backbone of the manufacturing supply chain, often producing key components for larger firms … [but] manufacturing faces significant headwinds in the form of the cost, complexity and uncertainty associated with overreaching and burdensome federal regulations.”

Why it’s important: The seemingly endless conveyor belt of new federal rules for the industry is costing manufacturers “shocking” amounts, disproportionately imperiling manufacturers—small ones in particular, Farris continued.

He cited NAM data finding that:

  • The federal cost of regulations for manufacturers in 2022 was roughly $350 billion, a 25% increase from 2012; and
  • The average manufacturer in the U.S. pays $29,100 per employee per year to comply with federal rules, while for the average small manufacturer, that price is $50,100.

Where it’s coming from: Farris cited other recent examples of onerous federal rulemaking, including:

  • The Environmental Protection Agency’s recently finalized update to the National Ambient Air Quality Standard from 12 micrograms per cubic meter of air to 9 micrograms, a level approaching naturally occurring levels in many parts of the U.S., according to Farris, and one that “will make manufacturing in the U.S. less competitive globally”;
  • The Department of Energy’s recent freeze of liquefied natural gas export permits, which, given increased European reliance on U.S. LNG since the start of Russia’s war in Ukraine, risks “leav[ing] our allies [and] our manufacturers in the cold”; and
  • The Securities and Exchange Commission’s proposed climate disclosure rule, which “would increase manufacturers’ compliance costs dramatically, divert resources from job creation and growth, expose companies to increased liability, reveal proprietary and confidential information and ensnare wide swaths of the manufacturing supply chain.”

What must be done: Manufacturers aren’t asking legislators to cut corners, Farris said.

  • Rather, they are seeking “regulatory certainty that can guide investment decisions and ensure that this country’s economic competitiveness is not outpaced or outflanked or overtaken by nations that do not share our values.” 

To learn more about the high cost of overregulation, visit Manufacturers for Sensible Regulations, a coalition created by the NAM and members of the NAM’s Council of Manufacturing Associations and Conference of State Manufacturers Associations that’s intended to address the recent regulatory onslaught from federal agencies. 

Policy and Legal

U.S. “Very Concerned” About Critical Minerals

The Biden administration is “very concerned” about U.S. reliance on China for critical minerals, U.S. Energy Secretary Jennifer Granholm said Wednesday, according to CNBC.

What’s going on: China’s dominance in the world’s critical minerals supply chain is “one of the pieces of the supply chain that we’re very concerned about in the United States,” Granholm told the news outlet on the sidelines of the International Energy Agency’s 2024 Ministerial Meeting in Paris.

  • China produces approximately 60% of all rare earth elements, which are critical to alternative-energy technologies, such as electric vehicles.

Why it’s important: “As part of a rapid uptick in demand for critical minerals, the IEA has warned that today’s supply falls short of what is needed to transform the energy sector,” according to the article.

What the administration is doing: Both production and processing of critical minerals “have to be addressed,” Granholm said.

  • “And that’s why we are working very closely to ensure that we have identified which raw materials [or] critical minerals we need to be able to do our transition to a clean energy economy.”

The NAM says: “Other countries are taking all possible measures to develop domestic sources of critical minerals, and it should be a wake-up call to the U.S. that we need to be doing the same,” said NAM Vice President of Domestic Policy Brandon Farris. “We also need to reform our broken permitting system to get these projects operational as soon as possible.”

Business Operations

Trend of the Week: Sustainability Under Scrutiny

Manufacturers have long prioritized sustainability in their operations, but 2024 will bring new attention to the industry’s efforts. As we continue to explore the major manufacturing trends that will shape the industry this year, here’s what you need to know about this key development.

What manufacturers should do: Manufacturers looking to create strong sustainability plans to meet the expectations of regulators, boards and consumers should start by taking these steps, according to the NAM’s experts.

  • Craft an overall organizational sustainability plan with metrics and reporting.
  • Make changes and upgrades to support energy and resource efficiency, as well as reduce waste and emissions.
  • Focus on sustainable products and packaging in addition to sustainable processes.
  • Improve product reclamation or recycling in the circular economy.

Expert opinion: According to UL Solutions, company boards have a particularly key role to play in developing sustainability plans.

  • “Boards of directors are bound by their fiduciary responsibilities to shareholders, but savvy directors also recognize that environmental and other ESG-linked risks and opportunities are vital to the long-term health of their organizations,” UL notes.

Resources for you: Check out these NAM resources to learn more about sustainability and compliance:

  • NAM Energy will connect you with an adviser to create an energy management strategy that will help you cut costs and reduce your environmental impact.
  • This podcast from Milliken & Company’s director of research, compliance and sustainability is an excellent case study for manufacturers seeking to remove or remediate PFAS chemicals.
  • Dig into the NAM’s extensive collection of policy explainers, on everything from the Environmental Protection Agency’s regulation of particulates to the Securities and Exchange Commission’s regulation of climate disclosures.

Read the full 2024 trends report here. 

Business Operations

Timmons Talks Trade, Tariffs, Democracy in Washington, D.C.

a group of people standing in a room

U.S. competitiveness on the world stage, trade agreements, intellectual property, democracy and regulatory certainty—these were just some of the topics NAM President and CEO Jay Timmons covered in a Tuesday interview with POLITICO’s Doug Palmer during the 2024 Washington International Trade Conference.

  • The meeting was attended by senior U.S. trade officials and foreign ambassadors and hosted by the Washington International Trade Association in Washington, D.C.

Safeguarding IP: With the World Trade Organization’s 13th Ministerial Conference coming up later this month, Timmons discussed the damage that would result from one of the meeting’s expected agenda items: an expansion of a 2022 TRIPS waiver on IP rights to include COVID-19 therapeutics and diagnostics.

  • “Intellectual property is truly the lifeblood of manufacturing,” said Timmons, who met with WTO Director-General Dr. Ngozi Okonjo-Iweala and WTO Deputy Director General Angela Ellard in Geneva last March to discuss the waiver.
  • Manufacturers “work hard, and it’s always been kind of a given from the U.S. perspective that intellectual property protections would be front and center. … Obviously, we want to facilitate the growth of manufacturing in other areas of the world, too. But … [it] is a giant leap too far if therapeutics and diagnostics are included in the waiver.”
  • American agreement to the expanded waiver, Timmons said, would be tantamount to the federal government telling manufacturers in the U.S., “By the way, we want you to invest in developing more innovations here in this country if we’re just going to turn around and give them away.”

 Trade and tariffs: If the U.S. wants to remain competitive, we must negotiate a trade agreement now—and pass the Miscellaneous Tariff Bill, Timmons told Palmer.

  • “Trade is really the recipe for peace and the recipe for working together harmoniously,” he said. “We’d like to see more trade agreements. We haven’t seen one negotiated here in the United States for over 10 years—and the rest of the world, quite frankly, is eating our lunch when it comes to negotiating these agreements.”
  • The U.S., which has been operating without an MTB for more than three years, “need[s] MTB to not just meet our economic goals and not just feed the supply chains of manufacturers, but also to meet our national security objectives.”

Democracy vs. autocracy: Timmons—who last July led the American business community delegation to Cancun, Mexico, for meetings ahead of the third U.S.–Mexico–Canada Agreement “Free Trade Commission”—stressed the importance of the USMCA to underpinning democratic values worldwide.

  • “This agreement is incredibly important to our national security, and it is important to our place in the world,” Timmons continued. “We need to expand the relationship, whether it’s trade or other relationships here in North America, and we need to embrace the relationships and our allies around the world—in Europe and Australia and New Zealand and Japan and other areas—because we are facing a choice … between free market economies and democracies and command economies and autocracies, and I want to strengthen the former, not allow the latter to bloom.”

Other needs: Timmons talked about other manufacturing priorities for the current administration and the next.

  • “We need regulatory certainty that gives business leaders the ability to plan for the future,” he said. “We [also] need to invest in workforce incentives. All of those and infrastructure, which we have done, and we continue to do. You can’t just open up the trading system and not expect capital to flow outside of our borders if you don’t have the right policies internally.”

NAM in the news: Read POLITICO Pro’s coverage of the conference and Timmons’ interview here and here.

Policy and Legal

Rinnai Fights for Efficient Water Heaters

For nearly 50 years, Rinnai America Corporation has been selling innovative products in the United States. But as the Department of Energy prepares to unveil new rules in April, the water heater manufacturer is bracing for a big—and unnecessary—setback to its operations.

The background: There are a lot of water heater options on the market, and consumers must make a few key choices.

  • First, they can choose between electric and gas heaters.
  • Second, if they choose a gas heater, they can select one with a tank or one without.
  • Finally, even tankless gas heaters come in two forms: condensing or noncondensing. Condensing heaters are used generally in colder environments, while noncondensing units are better for warmer climates.

The rule: The Department of Energy has proposed regulations on gas water heaters that would go into effect in 2029.

  • However, the proposed efficiency requirements for tankless gas water heaters are so strict that noncondensing tankless units would not qualify—removing a cost-effective option from the market, and one that is in fact comparatively efficient.
  • “The DOE is not taking into consideration what is best for the consumer, best for the industry and best for the environment overall,” said Frank Windsor, president of Rinnai America Corporation. “This is a shortsighted decision that doesn’t take into account the ramifications.”

The consumer impact: The DOE’s rule would restrict consumer choice severely by creating a de facto ban on noncondensing tankless heaters.

  • “Consumers are getting hurt,” said Windsor. “Around 20% of consumers want tankless options”—including noncondensing tankless heaters. 

The industry effect: Rinnai invested $70 million in 2022 in a new Georgia facility that makes noncondensing tankless gas heaters.

  • “We built this new facility to make tankless water heaters that give consumers significant energy efficiency at a low price—and now the DOE is saying that, by 2029, you can’t make noncondensing units anymore,” said Windsor.
  • “We’ve got close to 200 people working for us in Griffin, Georgia, so it impacts a lot of people.”

The innovation loss: According to Windsor, the rule is also counterproductive because it forces companies like Rinnai to reallocate funds that otherwise could go toward product innovation.

  • “We’re going to have to spend money to retool that plant, and then we’ll get taxed on the capital for the plant that we can’t use anymore—and that’s all money that we would’ve spent on product innovation,” said Windsor.

The last word: “Why would you eliminate the availability of a cost-effective, efficient product and force the consumer to buy a more expensive option?” asked Windsor.

Learn more about the high costs of regulations, and the extreme burden on small manufacturers, in this recent NAM study. And check out Manufacturers for Sensible Regulations, a coalition created by the NAM and members of the NAM’s Council of Manufacturing Associations and Conference of State Manufacturers Associations, which is intended to address the regulatory onslaught coming from federal agencies in recent years.

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