News & Insights

Manufacturers were among the select businesses invited to participate in last Wednesday’s Small Business Week showcase on Capitol Hill, and two in particular—Marlin Steel in Baltimore and its affiliated entity, Madsen Steel Wire Products, in Michigan and Indiana—made use of the time with lawmakers to advocate for some manufacturing-critical priorities.

What’s going on: Republicans on the House Small Business Committee hosted the event to shine a spotlight on the work of job creators throughout the country and draw attention to the federal government’s costly regulatory onslaught (Washington Examiner).

• Marlin Steel and Madsen Steel President and Owner and NAM board member Drew Greenblatt manned a booth with his family at the showcase displaying several products—such as metal baskets and racks—manufactured at his family-owned custom wire and steel products businesses.
• Greenblatt and others invited to the event had the opportunity to meet and speak with House Republican leaders, including Speaker Mike Johnson (R-LA), Majority Whip Tom Emmer (R-MN), Small Business Committee Chairman Roger Williams (R-TX) and Rep. Tim Walberg (R-MI).

The background: Marlin Steel, Madsen Steel and many other manufacturers thrived under a pro-growth tax provision in the Tax Cuts and Jobs Act of 2017 that allowed businesses to deduct 100% of their R&D costs in the year the costs were incurred.

• But in 2022 and 2023, that policy and two others—enhanced interest deductibility and 100% accelerated depreciation—expired.
• Ever since, manufacturers’ tax bills have increased, as companies, including Marlin Steel, have been required to amortize their R&D costs over five years, making innovation-crucial investments much more costly.
• “We want to grow jobs in our Indiana and Michigan factories, but we also need to give our talent the extraordinary tools needed to compete with China,” Greenblatt said. “We need immediate expensing to cover these huge investments. We put in $5 million but now have to pause investment. We need Congress and the president to act to allow us to hire more factory workers faster.” 

Why it’s important: The showcase gave Greenblatt an opportunity to hammer home to lawmakers the importance to manufacturing of reinstating the expired tax provisions—and the need to act quickly to ensure that an additional suite of pro-growth tax measures, set to expire at the end of 2025, is extended.

• Another issue top of mind for Greenblatt and manufacturers everywhere is the flurry of regulations being handed down by federal agencies.
• In 2022, the cost of federal regulations to manufacturers was approximately $350 billion, a 35% increase from a decade earlier, according to an NAM study.
• Small manufacturers spend more than $50,000 per employee per year to comply with federal regulations. 

Stop the struggle: “As a small business owner myself, I know all too well the many struggles small businesses face when trying to compete in the marketplace,” Chairman Williams said. “It is my hope that this … showcase serve[s] as an opportunity for more to learn about how invaluable Main Street is to our economy and our country.”

Related: Last week, the NAM unveiled videos on social media from other leading small and medium-sized manufacturers, adding their voices to key competitiveness priorities, featuring NAM board members Patricia Miller, CEO and founder of M4 Factory, Charles Sukup, chairman and treasurer, Sukup Manufacturing Co., and Nicole Wolter, president and CEO, HM Manufacturing.

Washington, D.C. – The National Association of Manufacturers released a first-of-its-kind report, “Working Smarter: How Manufacturers Are Using Artificial Intelligence,” detailing use cases for artificial intelligence in manufacturing and case studies of how manufacturers are already implementing AI technologies to strengthen America’s workforce, advance innovation and improve the quality of life for everyone.

The report provides an overview of insights from leading manufacturers, including Johnson & Johnson, Schneider Electric and Hitachi, on how AI can improve efficiency, product development, safety, predictive maintenance and supply chain logistics. The report also outlines a series of recommendations on how policymakers can help support the safe, responsible development of AI while promoting innovation and growth.

“So much of the media and policymaking conversation is focused on generative AI, but AI is far more than that for modern manufacturers,” said NAM President and CEO Jay Timmons. “It’s infused increasingly throughout the shop floor, research and development and beyond. Manufacturers are leading the way in the use and development of new AI technologies. From developing more effective clinical trials and improving workplace safety to strengthening supply chain resiliency and supporting workforce training for employees, AI is unlocking new opportunities to strengthen our modern manufacturing workforce and improve the lives of all Americans. Congress and the Biden administration can support manufacturers’ adoption of AI by enacting strong data privacy protections, investing in workforce training and providing regulatory certainty.”

“All possible futures for modern manufacturing in the U.S. involve AI,” said Johnson & Johnson Executive Vice President and Chief Technical Operations & Risk Officer and NAM Board Chair Kathy Wengel. “Given the importance of this generational technology, policymakers must develop sensible, carefully thought-out frameworks for various AI applications—and they should lean on manufacturers’ years of experience to engineer those frameworks. We need a policy environment that supports innovation and growth in manufacturing AI, because it will bolster U.S. competitiveness and leadership in this critical emerging field.”

Policy recommendations include the following:

• Invest in R&D and career technical education institutions that train the modern manufacturing workforce.
• Enact federal privacy legislation that advances individuals’ privacy and provides legal clarity that supports continued innovation and competitiveness.
• Employ a risk-based approach that tailors any new AI regulations—only if new regulations are necessary—to specific use cases and minimizes compliance burdens.
• Ensure that regulatory frameworks are aligned globally to maintain U.S. global leadership. The more disparate the approach to AI around the world, the more time, energy and investment companies will need to spend navigating misalignments.

Learn more 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 nearly 13 million men and women, contributes $2.89 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 EPA’s overly stringent final rule on particulate matter puts continued U.S. innovation and economic growth in jeopardy, the NAM and allied groups told congressional leaders Monday.

What’s going on: In March, the EPA lowered the standard for particulate matter, or PM2.5, in its National Ambient Air Quality Standards rule by 25%, down from 12 micrograms per cubic meter of air to nine.

• This week, the NAM, along with 58 allied organizations, urged key House and Senate members to act soon to “stop this harmful rule before it takes effect.”

​​​​​​​Why it’s important: The probable negative effects of allowing the change include “making it more difficult to create jobs, build cutting-edge factories and lead the world in the development of products that will shape modern life in the decades ahead,” the groups said.

• Compliance costs could exceed $1.8 billion, according to the agency’s own estimates.
• The lowered limit also puts the U.S. at a great disadvantage to global competitors, which “have adopted standards that are less stringent than the EPA rule and are phased in over a much longer time frame.”

What needs to happen: Congress should pass a resolution of disapproval regarding the new standard immediately.

In advance of a Senate hearing on health care costs, the NAM is ensuring that senators understand the importance of biopharmaceutical innovation to patients and the U.S. economy—and the damaging impact of policies that hinder drug development.

What’s happening: The Senate Armed Services Committee will hold a subcommittee hearing today on whether harmful policies like price controls, compulsory licensing and weaker intellectual property protections for new medicines could reduce servicemembers’ health care costs.

NAM pushes back: The NAM is highlighting the extraordinary investment—in both time and capital—that it takes to bring a lifesaving treatment to market. According to the NAM:

• The average cost of developing a new drug was $2.3 billion as of 2022;
• Across the industry, biopharmaceutical manufacturers spent $139 billion on R&D in just 2022 alone;
• It can take 10 to 15 years for a breakthrough scientific discovery to move through early-stage research, clinical trials, Food and Drug Administration approval and manufacturing; and
• Only 12% of investigational drugs that enter a Phase I clinical trial ultimately receive FDA approval—to say nothing of the hundreds of discoveries that never make it into clinical trials.

Lifesaving impact: In 2023, the FDA approved a record-breaking 71 new medicines that will improve the lives of patients.

• The biopharmaceutical industry behind these breakthroughs is also stimulating the U.S. economy: Biopharmaceutical manufacturers accounted for $355 billion in value-added output to the U.S. economy in 2021 and directly employed 291,000 workers in the U.S.

Innovation under threat: In recent years, biopharmaceutical manufacturers have been subject to harmful policies that will limit innovation and slow efforts to develop lifesaving medicines.

• The Medicare Drug Price Negotiation Program subjects life-changing biopharmaceutical innovations to government price controls, while the Biden administration’s “march-in” proposal undermines innovators’ IP rights. These policies make it riskier and more costly for manufacturers to invest in groundbreaking research.
• What’s more, the prices Americans pay for medicines are influenced heavily by middlemen, such as pharmacy benefit managers rather than biopharma companies. In 2020, more than half of every dollar spent on brand medicines went to PBMs and others in the health care system—not the medicine’s manufacturer.

The final word: “The costs of manufacturing a medicine include potentially decades of research and billions of dollars of investment,” said NAM Vice President of Domestic Policy Charles Crain. “Congress must avoid adopting policies that will stymie this lifesaving innovation.”

Following a steady drumbeat of advocacy by the NAM, the House Committee on Ways and Means has formed tax working groups dedicated to finding legislative solutions to the scheduled expiration of pro-growth tax policies at the end of 2025.

What’s going on: Each of the 10 working groups will focus on an area of the economy that will be affected by the sunsetting of certain measures in the Tax Cuts and Jobs Act.

• Ways and Means Committee Vice Chairman Vern Buchanan (R-FL) was selected to lead the American Manufacturing tax working group.
• The members of Congress assigned to this team will examine the effects of pro-growth tax policies on the manufacturing sector.

Why it’s important: “Tax reform was rocket fuel for manufacturers: 2018, the first year the Tax Cuts and Jobs Act was in effect, was the best year for manufacturing job creation in the previous 21 years,” said NAM Managing Vice President of Policy Chris Netram. “But those gains are at risk as key tax provisions expire, making it more difficult for companies throughout the supply chain to hire, invest and grow. Congress must build on the promise of tax reform to ensure that manufacturing in America remains strong.”

• Earlier this month, Husco President and CEO and NAM Executive Committee member Austin Ramirez testified before the House Ways and Means Committee about the TCJA’s positive effect on manufacturing growth and the need for Congress to preserve the pro-growth business provisions of that legislation.
• Their expiration “mean[s] that pass-through businesses like Husco will have more of our income subject to a higher rate of tax,” Ramirez said. “At the same time, the pass-through deduction will expire completely, doubling down on the tax hikes that we face. … [A]llowing tax reform to sunset will undermine much of the progress we’ve made since 2017.”

What we’re doing: The NAM will be engaging with each of the tax working groups over the next several months to ensure that manufacturing-critical tax provisions are extended and reinstated.

• To get involved, reach out to NAM Senior Director of Tax Policy Alex Monié.

The Innovation Research Interchange has announced the finalists for this year’s IRI Innovation Excellence Awards.

What’s going on: The honors given by the IRI—the NAM’s innovation arm—pay tribute to organizations and individuals whose outstanding vision and tireless pursuit of excellence are having a positive impact on lives today and shaping the industries of tomorrow. Honorees come from companies of all sizes and industries.

The categories: Awards are given in five categories, three to companies and two to individuals. They are as follows:

• IRI Innovation Leadership Award (individual)
• IRI Promising Young Innovation Professional Award (individual)
• IRI Excellence Award for Innovation in Sustainability (company)
• IRI Excellence Award for Outstanding Innovative Culture (company)
• IRI Excellence Award for Digital and Technological Innovation (company)

Who participates: Each year, nominees comprise innovators who are leveraging technology to enhance operational performance at their companies or sustainability and fostering a collaborative workplace culture that celebrates innovation.

• High-performing leaders who drive sustainability initiatives are also recognized, and consultants and university partners working on exciting innovation projects with a company are eligible for nomination, too.

Why they’re important: In addition to building team unity and encouraging executive leadership to invest further in innovation, the awards give companies the chance to revisit the successes, challenges and lessons learned throughout their innovative projects.

• Selection as a finalist shows customers, prospects and partners that a company or individual is at the forefront of innovation.

Attend the celebration: Winners will be announced May 16 during the Innovation Celebration and Reception at the Innovators Summit in Boston. Celebration admission is included with summit registration.

About the IRI: The IRI offers insights, case studies, research, benchmarks and strategic connections—all built around a set of innovation growth drivers as determined by members annually. Learn more about the IRI here.

Washington, D.C. – Following the release of the Environmental Protection Agency’s new regulations on greenhouse gas emissions standards for certain power plants, National Association of Manufacturers President and CEO Jay Timmons released the following statement:

“Manufacturers appreciate the EPA removing existing gas plants from its new regulation, following manufacturers’ warnings about the initial proposal. However, the rest of the rule causes serious concern because Congress and the president have not enacted permitting reform—making it impossible to achieve the EPA’s highly aspirational mandates. We call on Congress to get serious by enacting significant and meaningful permitting reform this year. That is essential to ramping up the use of renewables, carbon capture, hydrogen and nuclear, for example, to meet future demand.

“The final rule threatens grid reliability because of the unrealistic timeline for power plants to adopt technologies within the next 10 years that have yet to even be proven at scale. Our nation should be doing everything possible to make sure our families, businesses and manufacturers have a modern, strong and reliable electrical grid, especially at a time when global turmoil threatens our energy security. This new rule does the opposite, creating a threat to our national and economic security that literally could leave Americans in the dark and factories offline. In short, the EPA is rolling the dice with Americans’ electricity and therefore with President Biden’s manufacturing legacy.

“Our industry has made transformational investments in these technologies and clean energy solutions, and we are leading the way in their deployment. The EPA should be partnering with us—not undermining this progress. We will continue to press the administration to achieve a more balanced regulatory framework to help reach our climate goals.”

-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 $2.89 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 Trade Commission’s vote this week to prohibit noncompete agreements between employers and their employees threatens manufacturing in the U.S., the NAM said Tuesday.

What’s going on: In a 3–2 vote Tuesday, commissioners finalized a rule that, like a draft version circulated last year, “would deem practically any noncompete clauses for paid staff, independent contractors and unpaid workers to be an unfair method of competition rendered unenforceable, and [would require] employers to tell current and former employees they’ve stopped enforcing them” (Law360, subscription).

• The final rule is set to go into effect 120 days after it is published in the Federal Register, but lawsuits have been filed against it already, and additional legal action is expected.

What’s changed: One change made to the final rule following the receipt of more than 26,000 comments on it allows existing noncompete agreements with senior-level executives to remain in effect.

• Another difference between the rule’s prior iteration and the final is to the ban’s sole exception. The draft “permitted noncompetes for individuals selling their business or a substantial stake of at least 25%.” That threshold is not in the final version.

Why it’s problematic: The rule “is unprecedented and threatens manufacturers’ ability to attract and retain talent,” said NAM Managing Vice President of Policy Chris Netram.

• “In addition, [it] puts at risk the security of intellectual property and trade secrets—anathema to an industry that accounts for 53% of all private-sector R&D.”
• A noncompete ban would disrupt the majority of U.S. manufacturing operations, a 2023 NAM survey found.

What’s next: The NAM is considering all options in response to the final rule and is in active discussion with congressional leadership and the relevant committees of jurisdiction.

A new final overtime rule from the U.S. Department of Labor will reduce flexibility for employees and could force manufacturers to make difficult choices about their workforces, the NAM said Tuesday.

What’s going on: The new regulation “changes the salary threshold used to determine whether a worker is exempt from overtime pay” so that, beginning Jan. 1, 2025, most employees earning less than $58,656 will be owed time-and-a-half wages for hours worked over 40 in a single workweek (Bloomberg Law, subscription).

• The current salary threshold is $35,568.
• The new rule will go into effect July 1, following publication in the Federal Register.

Why it’s problematic: The change promises to present significant challenges to employers and employees alike.

• “Quarter after quarter, manufacturers cite workforce issues, such as attracting and retaining skilled employees, as their biggest business challenge,” said NAM Managing Vice President of Policy Chris Netram. The “rule places new constraints on employers, reduces flexibility for the workers who will be reclassified and may force companies to make painful choices that limit both job creation and growth opportunities available to employees.”

What’s next: The NAM is weighing all actions to protect manufacturers across the country.
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As government regulation of per- and polyfluoroalkyl substances ramps up worldwide, Thermo Fisher Scientific is seeing a boom in its PFAS testing business.

“We’ve seen an increase in demand from a number of countries in the Americas and in Europe,” said Toby Astill, director of environmental and food safety in chromatography and mass spectrometry at the life sciences giant. “Those regions are driving more discussions around current and future regulations than other regions.”

• In recent weeks, the Environmental Protection Agency has issued several final rules concerning PFAS. These include the first-ever national regulation limiting PFAS in drinking water to near-zero levels and, just last week, the designation of two PFAS chemicals as hazardous substances under the Superfund law.

Writing is on the wall: Thermo Fisher foresaw the need for comprehensive PFAS analysis early on. That’s why it’s been offering clients a full suite of testing capabilities for more than a decade.

• Commonly called “forever chemicals” because they do not break down easily in the environment, PFAS were used widely in everyday products starting in the 1940s, owing to their ability to put out fires and resist grease, corrosion and stains in addition to countless other consumer and industrial applications.
• Using chromatography—“technology that allows lab users to separate and analyze the different components in samples,” according to Astill—Thermo Fisher can “confirm the presence of a specific substance and determine how much is there.”
• The tech is not limited to PFAS, however; it can also detect, down to parts per trillion, the presence of pesticides, heavy metals and other substances, Astill said. And it works on samples of almost anything, including food packaging, water and even air.

Aiding compliance: In coming years, manufacturers may need to analyze their PFAS exposure comprehensively to remain compliant with Toxic Substances Control Act and other international regulations, including those from the EPA, Astill said.

• In 2021, the EPA released its PFAS Strategic Roadmap, addressing the entire lifecycle of PFAS.
• Early last year, the agency proposed the first federal limits on PFAS, instituting maximum allowable levels for six substances in drinking water.
• In January, it finalized an “inactive PFAS” rule, mandating that any company wishing to manufacture or import PFAS chemicals that haven’t been made in years must first get approval from the EPA.
• That’s where testing comes in. “Manufacturers will want to figure out their [level of] PFAS exposure—whether it’s from their supply chains or the products they’re making,” Astill went on. “Because we see an evolving regulatory landscape, manufacturers need to have a baseline of where they are today, in 2024. That way they’re more prepared for regulatory compliance, and if needed, can review data retrospectively to understand trends. In fact, in October 2023, the EPA issued a mandatory one-time reporting rule on most PFAS manufactured or imported into the U.S. since 2011.”
• This February, the EPA proposed two regulations under the Resource Conservation and Recovery Act that added nine PFAS to the list of RCRA hazardous constituents with superfund implications. 

Smart legislation: Thermo Fisher recognizes that we still have much to learn about PFAS chemicals, including whether many of them are harmful in the first place and whether there are practicable alternatives. In light of the many unknowns, the company recommends that legislators take a judicious approach to their regulation.

• “We don’t yet know everything about PFAS or all the PFAS” in existence, said Astill. “We need longer-term studies so we understand what we need to regulate and what we need to measure—be it in manufacturing materials or water—before we start regulating more.”
• Forthcoming regulations should also take into account the difficulty and expense of implementing PFAS remediation solutions, she added. “Legislators and regulators should consider the fact that this is not an easy feat for companies.”

Working on an alternative: While Thermo Fisher is not involved directly in inventing alternatives to PFAS, it is working actively with organizations that are doing just that, and it’s optimistic about the outcomes.

• “It’s [been] very difficult to find something with equal properties that is less of a potential health and environmental issue,” Astill said. “But what we have is a lot of intelligent global groups collaborating to share testing data and understand what potential replacement materials make sense—and that’s a tremendous opportunity.”