Policy and Legal

The Securities and Exchange Commission’s executive compensation reporting requirements are needlessly complex and costly for manufacturers—and reforming them would be a boon to the industry, the NAM told the SEC this week.

What’s going on: The NAM laid out a series of recommendations for making the reporting requirements more workable for publicly traded companies while still providing investors with useful, material information.

• “Neither Main Street investors nor companies are well served by rules that have directed issuers to provide an expanding array of footnoted tables, retain outside consultants to perform ‘compensation actually paid’ calculations that often are confusing to investors, and churn out pay-related disclosures that often exceed 20 or 30 pages,” the NAM told the SEC.
• This week’s suggestions build on ones the NAM made in June.

What should be done: The SEC can benefit both manufacturers and investors by taking several specific steps, the NAM said, including:

• Replacing unduly burdensome mandates with “principles-based disclosure designed for the reasonable investor”;
• Simplifying the 2022 “pay versus performance” rule;
• Giving meaningful disclosure relief to smaller firms;
• Addressing the outsized impact that proxy advisory firms have on compensation decisions;
• Updating perk disclosure rules to reflect changes since 2006, including by ensuring company executives can access needed security protections; and
• Suspending enforcement of the 2022 “clawback” rule until the rule is made less burdensome to companies.

The final word: By making these changes to its executive compensation reporting requirements, the SEC “can ensure manufacturers can recruit and retain leaders that will grow the business, create more jobs and contribute to our overall economic growth,” said NAM Managing Vice President of Policy Charles Crain.

Manufacturers are leading the charge on artificial intelligence—but unlocking its full potential depends on training workers to use AI technologies and expanding the talent pipeline. By embracing AI and equipping people with the right skills, the industry can help fill hundreds of thousands of open jobs, the NAM told Axios in a recent interview (subscription).

What’s going on: NAM President and CEO Jay Timmons and Manufacturing Institute President and Executive Director Carolyn Lee spoke with Axios’ Ben Berkowitz about the current “glittering need” for manufacturing employees and how the sector can attract, train and keep team members. (The MI is the NAM’s 501(c)3 workforce development and education affiliate.)

• “These are high-tech, 21st-century, well-paying, rewarding roles,” Timmons said. “Some require advanced degrees, some a four-year degree and some just a high school diploma.”

Why it’s important: Manufacturing has been averaging about 450,000 open positions every month for the past year, Timmons continued.

• “Looking ahead, if we don’t act now, we’re facing about 2 million unfilled manufacturing jobs by 2033,” he told Berkowitz, citing a recent study by the MI and Deloitte.

What must be done: The answer? Training and partnerships—the right kind, Lee said.

• “Manufacturers … recognize that we need new forms of training and that schools—K–12, higher ed and postsecondary institutions—need to integrate AI into their curriculums. And we are seeing that happen in parts of the country.”
• The MI is working with companies to create programs to train both the current and future generations of workers.
• “The reality is, today’s AI will be surpassed quickly,” Lee continued. “So we need people who are ready now—with skills like prompting, systems thinking and the ability to work alongside AI.”

Misperceptions: Though it pays well and offers exciting, cutting-edge career opportunities, manufacturing still suffers from outdated perceptions among the general populace, according to Timmons and Lee. But that can be fixed, they said.

• The FAME USA apprenticeship-style program, founded by Toyota and now operated by the MI, has chapters in 16 states, Lee told Berkowitz.
• “[W]hen we go out to recruit for these roles, the interest is huge—because students realize they’re learning high-demand, cutting-edge skills in a job with long-term security and strong pay,” she said, adding that a 2020 study found that members of the original FAME class in Kentucky were earning an average salary of $95,000 within five years of completing the program.
• “When Jay and I go out and talk to students—especially during Manufacturing Day events—once they hear the pay potential and understand the work, interest skyrockets.”

Not on the sidelines: When it comes to AI, manufacturers aren’t simply watching events unfold, the NAM and MI told Axios.

• “We’re helping shape the future of AI,” Timmons said. “We’re using [AI] tools to expand capacity, drive investment, create jobs and grow wages right here in the U.S.”

A lookback: According to the latest report from the Manufacturing Leadership Council—the digital transformation division of the NAM—51% of manufacturers stated they already use AI, but 82% cite a lack of AI-ready skills as the top workforce challenge. The NAM recently proposed a series of policy recommendations for policymakers to drive AI development and adoption in manufacturing, which includes a recommendation on developing the manufacturing workforce of the AI age by supporting training programs and career and technical education institutions.

Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons released the following statement in response to today’s White House announcement seeking to impose price controls on biopharmaceutical manufacturers:

“Manufacturers support the Trump administration’s commitment to lowering health care costs and ensuring American patients can access life-saving medicines. But European-style price controls will stifle innovation—undermining R&D and limiting future access to breakthrough treatments. 

“Manufacturers are working to reduce health care costs across the industry—for companies and for workers. That’s why the NAM supported expansions of telehealth coverage and increases to HSA amounts in H.R. 1, and it’s why policymakers should target the real drivers of cost—pharmacy benefit managers, and abuse of the 340B program—instead of imposing mandates on innovators.

“Manufacturers and manufacturing workers are facing rising health care costs because of underregulated middlemen like PBMs and the 340B program, both of which have increased prices for patients without producing a single treatment. Rather than punishing the innovators who develop life-saving and life-changing medicines, policymakers should focus on the real inefficiencies and distortions in the system.

“Manufacturers have long championed patient-first solutions that lower costs, strengthen American competitiveness and drive innovation. As we have underscored, there is a better way forward. Manufacturers remain committed to working with the administration and Congress on solutions that bring down prices while preserving our global leadership in innovation.”

-NAM-

Alongside the president’s AI Action Plan and subsequent directive encouraging the buildout of AI data centers, President Trump signed another executive order aimed at exporting American AI technology.

• The NAM is seeking manufacturers’ opinions on how this EO should be implemented.

The big picture: The goal of the EO is to “preserve and extend American leadership in AI and decrease international dependence on AI technologies developed by our adversaries by supporting the global deployment of United States–origin AI technologies.”

• It orders the creation of an American AI Exports Program, which allows AI companies to seek federal support in competing for business deals abroad.
• An interagency body called the Economic Diplomacy Action Group, chaired by the Secretary of State, will help facilitate foreign commercial deals, using both diplomacy and financing tools.

Full-stack: Most notably, the EO mandates that any “consortium” seeking federal support must be exporting “full-stack AI technology packages,” not just individual products or services (hence the assumption that many companies will band together to make one proposal).

• “AI-optimized computer hardware (e.g., chips, servers and accelerators), data center storage, cloud services and networking, as well as a description of whether and to what extent such items are manufactured in the United States”
• “Data pipelines and labeling systems”
• “AI models and systems”
• “Measures to ensure the security and cybersecurity of AI models and systems”
• “AI applications for specific use cases (e.g., software engineering, education, health care, agriculture or transportation)”

Preference for U.S. sources: The EO says that proposals whose hardware, storage, cloud and networking components are “manufactured in the United States” will receive preferential treatment, though this is not a hard requirement.

• However, other components of the “stack,” from data pipelines to cybersecurity, don’t carry this proviso.

Feedback wanted: Please contact NAM Senior Director of Technology Policy Franck Journoud ([email protected]) or NAM Manager of International Policy Ellie Leontis ([email protected]) to provide your thoughts on this EO.

Environmental Protection Agency Administrator Lee Zeldin on Tuesday announced that the agency is proposing to rescind its 2009 “endangerment finding” that concluded that greenhouse gas emissions endanger public health and welfare. The finding underpins most U.S. regulations to address climate change.

• The proposed rule, if finalized, would result in there being no greenhouse gas standards for any vehicle of any model year.

The background: The EPA administrator is proposing to withdraw the finding by asserting the EPA lacks the authority under Section 202 of the Clean Air Act to do so, that the Supreme Court case that precipitated the finding has been superseded by recent court cases, such as West Virginia v. EPA and Loper Bright Enterprises v. Raimondo, and that the EPA is acting in accordance with President Trump’s “ Unleashing American Energy” Executive Order, which called for a reexamination of the 2009 standard, among other actions.

• The EPA is basing this announcement on an updated study of climate science by the Department of Energy.
• In a press release, the EPA claimed that this endangerment finding “has been used to justify more than $1 trillion in regulations. …”

Other actions: As part of the EPA’s announcement, the agency is also proposing to rescind the Biden administration’s vehicle tailpipe regulations for light, medium- and heavy-duty vehicles.

• Additionally, the EPA announced last month that it plans to repeal the previous administration’s power plant regulations, a move that “is a critical and welcome step toward rebalanced regulations and American energy dominance,” NAM President and CEO Jay Timmons said at the time.

Feedback needed: Once the proposed rule is published in the Federal Register, the 45-day public comment period will begin. The NAM will be submitting comments on this proposed action and is seeking feedback from NAM members.

• Please contact NAM Director of Energy and Resources Policy Michael Davin ([email protected]) or NAM Vice President of Domestic Policy Chris Phalen ([email protected]) to provide your thoughts.

President Trump imposed a Section 232 tariff of 50% on semifinished copper and certain derivatives by presidential proclamation yesterday.

The reasoning: The proclamation cites Commerce Department findings that foreign competitors have used “state subsidies and overproduction” to outcompete domestic U.S. suppliers and that dependence on foreign sources has created “strategic vulnerabilities and jeopardizes the U.S. defense industrial base.”

What’s in scope: This proclamation does not list specific products, but a White House fact sheet describes the scope broadly as:

• Semifinished copper products like copper pipes, wires and sheets; and
• Copper-intensive derivative products like pipe fittings, cables and electrical components.

What’s not in scope: According to the White House fact sheet, copper input materials such as copper ores, concentrates, mattes, cathodes and anodes and copper scrap are not subject to 232 “or reciprocal tariffs.” Customs and Border Protection guidance will be critical to understanding this aspect of the proclamation.

Timing: The tariff goes into effect on Friday, Aug. 1.

Going forward: The proclamation directs the Commerce Secretary to establish a process within 90 days to consider adding derivative copper products to the scope of the tariff, similar to the process established for aluminum and steel.

• The Department of Commerce will also monitor imports of copper and derivatives going forward and will “from time to time” inform the president of further necessary action.

Domestic use: This proclamation invokes the Domestic Production Act to authorize the Commerce Secretary to require a certain percentage of U.S.-produced inputs be sold in the U.S. According to the fact sheet, this includes requirements that:

• 25% of high-quality copper scrap produced in the U.S. be sold in the U.S. to “improve access to this important feedstock for domestic fabricators and secondary refiners”; and
• 25% of copper input materials produced in the U.S. be sold in the U.S. by 2027, increasing to 30% in 2028 and 40% in 2029.

Brazil: Meanwhile, the president also released an executive order yesterday imposing an increased International Emergency Economic Powers Act tariff on imports from Brazil, citing concerns about violations of free expression rights and human rights in that country, as well as the “political persecution” of Brazil’s former president.

50%: The July 30 EO imposes an additional 40% tariff to be stacked with the 10% IEEPA “reciprocal” tariff issued on April 2, bringing the IEEPA tariff to 50%.

• This adjustment will go into effect seven days after the EO (not including the day itself).

Exemptions and adjustments: The EO includes a list of products not subject to this increase and also states that if a Section 232 tariff applies to the goods, the IEEPA tariff will not apply.

Going forward: As previewed in the president’s letter, the EO states that should Brazil retaliate, the U.S. tariff will be increased by the same amount.

• This EO directs the Secretary of State to monitor and recommend any additional actions under IEEPA.

The NAM is urging the EPA to move forward with a proposed rulemaking that would allow the Railroad Commission of Texas “to issue and enforce compliance with [Underground Injection Control] Class VI permits for injection wells used for geologic carbon sequestration.”

• Due to manufacturers’ concern for environmental stewardship, the NAM is a strong proponent of measures that will mitigate emissions, NAM Vice President of Domestic Policy Chris Phalen told the agency.
• “Manufacturers view clean energy solutions, such as carbon capture and sequestration/storage technologies, as important parts of our country’s energy present and future, and manufacturers are leading the charge in developing them and scaling them up for widespread use.”

A quick review: The CCS process is made up of three steps: capturing the carbon dioxide; transporting by pipeline, road or ship; and injecting it far below ground for permanent storage.

• “Industries across the United States are investing substantially in CCS to decarbonize their operations and produce more sustainable products. In Texas, these projects have the potential to contribute $1.5 billion to the Texas economy and create 7,500 full-time, high-paying jobs,” the NAM noted.

State empowerment: Allowing states to permit permanent sequestration via the EPA’s Class VI injection well program would be a huge step forward for CCS across the country, as states are far more aware of their own geologies than is the federal government.

• State primacy in permitting would represent a victory for the Trump administration’s (and the NAM’s) push to streamline permitting across the federal government and jumpstart much-needed energy, infrastructure and related projects.

The last word: “Granting state primacy to Texas and other states will help create jobs, grow investment in manufacturing and pave the way for energy solutions that will support the United States’ 21st-century economy,” concluded Phalen.

To secure the stable, diversified critical materials supply chains that the U.S. needs to remain globally competitive and achieve energy dominance, changes must be made to the 2026 Energy Critical Materials Assessment, the NAM said today.

What’s going on: “Manufacturers in America utilize critical materials and minerals extensively, deploying them in a wide array of manufactured products throughout the U.S. economy,” NAM Vice President of Domestic Policy Chris Phalen told the Department of Energy in response to a request for information seeking public input on the assessment.

• The NAM recommended the DOE take certain steps regarding the assessment, including adding certain materials to its list and ensuring others remain on it. It also urged the DOE to collaborate with other agencies and Congress to “streamline permitting processes to ensure greater domestic access to these materials.”

Other actions: The NAM also urged the DOE to:

• Maintain “the critical materials that are currently listed within the DOE’s Energy Critical Materials Assessment,” including aluminum, cobalt, copper, electrical steel, lithium and graphite;
• Add iron nitride and zirconium to the assessment;
• Remove permitting barriers that are “restricting the United States from being able to mine, process and access domestic resources, modernize infrastructure and shore up supply chains”;
• Offer financial tools—including investment tax credits, production tax credits and grants—to help “de-risk technological advancement”;
• Align the DOE’s critical materials list with the U.S. Geological Survey’s separate critical minerals list; and
• Add fluorine to the USGS list.

The final say: These recommendations will “ensure [that] manufacturers of all sizes and in all segments of the industry have access to the materials necessary for modern, innovative manufactured products,” Phalen continued.

• They will also allow manufacturers to do what they “do best—put more Americans to work, more factories into motion, more innovation into the marketplace and more investments into our communities while strengthening the hand of the United States on the world stage.”

The federal government has agreed to fast-track some power project requests by U.S. grid operators, potentially staving off electricity shortfalls from an overloaded grid (POLITICO Pro, subscription).

What’s going on: Last week, the Federal Energy Regulatory Commission issued unanimous orders “conditionally authorizing requests from the Midcontinent Independent System Operator (MISO) and Southwest Power Pool (SPP).”

• The move follows a similar approval for an expedited interconnection process for PJM Interconnection, the largest power grid in the U.S.
• It also comes just months after FERC rejected a similar request from MISO.

Why it’s important: The MISO and SPP plans seek to get new projects online quickly as some traditional power plants are closed “and replacements are stuck awaiting studies for approval to plug into the bulk power grid.”

• Utilities have signaled that they need more generation to account for growing power appetite, much of it stemming from the rapid construction of capacity-hungry data centers.

What’s new this time: Although FERC said in May that MISO’s expedited resource adequacy study process was too broad and therefore risked worsening the “existing interconnection queue delays,” the revised proposal, submitted in June, caps at 68 the number of ERAS endeavors in coming years.

• The revised proposal also adds new eligibility requirements.
• And “projects seeking expedited grid studies must have approval of the appropriate local regulator, control the site for the project and have a contracted buyer as well as pay a $100,000 application fee and meet other conditions.”

Two manufacturing leaders testified at House Ways and Means Committee field hearings in Nevada and California this past weekend.

• Click Bond Director of Manufacturing Austin Robinson testified on Friday in Las Vegas, focusing on the impacts of the One Big Beautiful Bill’s tax provisions for the manufacturing workforce.
• On Saturday, Robinson Helicopter Company Vice President of Business Development Will Fulton testified alongside NAM President and CEO Jay Timmons at the Ronald Reagan Presidential Library, where they discussed the impacts of the tax provisions for manufacturers. (In case you missed it, here is our article from yesterday on Timmons’ testimony.).

Click Bond: Austin has spent his career in manufacturing. He now manages the 80% of employees who make up the manufacturing workforce at Click Bond, which designs, manufactures and supports adhesive bonded fasteners that are used in space, aviation, marine and other applications, both civil and defense.

• After Austin thanked policymakers for passing the One Big Beautiful Bill Act, he explained what it means for his company. “2017 tax reform was tremendously impactful for both our business and our workers,” he said. “It allowed us to increase wages, scale up our engineering and development workforce, invest in next-generation equipment and create a new employee academic assistance program.”
• “[By] making permanent a pro-growth tax code, the One Big Beautiful Bill will empower us to continue and expand these investments, to purchase more equipment and conduct more research and to further increase pay and benefits for our employees.”

Investing in workers: Austin emphasized that the bill will allow manufacturers to keep investing in workers, building on the pay increases Click Bond was able to provide to their hourly employees following the Tax Cuts and Jobs Act.

• “My first employer paid for my education, and I am proud to say that Click Bond does the same for any employees who want to go back to school and develop their skill,” he said. “Our workforce at Click Bond is the most precious resource, and that is reflected in the investments that we make in them. Those investments are actually enabled by a pro-growth tax policy.”

Robinson Helicopter: Will also thanked policymakers for this legislation.

• Robinson “specializes in helicopter design, assembly, inspection, flight testing, manufacturing and production. … Our Torrance, California, manufacturing facility is the world’s leading commercial helicopter manufacturer, period,” he told policymakers.
• “The One Big Beautiful Bill Act supports [Robinson] by driving our ability to accelerate domestic investment expansion and growth. … This legislation helps accelerate our ambitions into a more near-term reality.”

R&D support: “These tax provisions help us to invest both in the design of new technology and its production processes,” Will added. “We recently launched our newest helicopter, the R88, which offers more robust first responder capabilities.”

• “Our R&D efforts for the R88 include the ability to fit that helicopter with more advanced technology and equipment for firefighting, disaster response and emergency medical services. That helicopter will act as an operational control center to a fleet of fire surveillance drones to better scan for any signs of ignition, ensure faster response times and expand the capacity of fire departments to contain fires earlier.”
• “Thanks to your leadership, Congress and the administration have empowered Robinson Helicopter to create jobs, invest in equipment, innovate through R&D and drive economic growth faster,” he concluded.