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The “Big Three” carmakers are being forced to keep laying off workers as the United Auto Workers union continues its strike, according to CBS News.

What’s going on: To date since the strike began, General Motors, Ford and Stellantis have had to lay off a total of 4,835 employees.

• “While we are doing what we can to avoid layoffs, we have no choice but to reduce production of parts that would be destined for a plant that is on strike,” Ford Vice President for Americas Manufacturing and Labor Affairs Bryce Currie said in a statement this week, CBS reports. “Strike-related layoffs are an unfortunate result of the UAW’s strategy.”
• In addition, many auto suppliers have suspended the employment of hundreds of workers because of the strike.

Why it’s important: Economic losses to the auto industry through the first three weeks of the strike totaled approximately $5.5 billion, Michigan-based economic consultancy Anderson Economic Group estimates.

• That figure includes $2.68 billion in lost revenue for the carmakers, $579 million in direct wages for workers, supplier losses of $1.6 billion and dealer and customer losses of $1.26 billion.

The NAM’s take: “The strike is causing tremendous economic harm throughout the economy,” said NAM Vice President of Economic Policy Brandon Farris. “It isn’t just the automakers, but every employee that has been laid off and many of the small and medium manufacturers that supply them.”

• “Many of those manufacturers may never recover,” he continued. “The NAM strongly urges a quick resolution. The longer the strike lasts, the harder it will be to undo the drastic economic harm caused to employees and manufacturers.”

America’s aging population is one reason consumer spending has remained robust even as the Federal Reserve has raised interest rates, The Wall Street Journal (subscription) reports.

What’s going on: As of August, a record 17.7% of the U.S. population was 65 or older.

• Senior citizens, whose finances tend to be relatively robust, “accounted for 22% of spending last year, the highest share since records began in 1972 and up from 15% in 2010,” according to Labor Department data cited by the Journal. 

Why it’s important: “Our large share of older consumers provides a consumption base in times like today when job growth slows, interest rates rise and student-debt loan repayments begin again,” Susan Sterne, chief economist at Economic Analysis Associates, told the news outlet.

Longer lives, more spending: In addition to living longer, the elderly are more active than ever before, spending on traveling, hiking, cruises, e-bikes and more.

• “The average household led by someone age 65 and older spent 2.7% more last year than in 2021, adjusted for inflation, according to the Labor Department, compared with 0.7% for under-65 households.”

Recession buffer: Baby boomers have amassed more than $77 trillion in wealth, according to the Fed—and some economists say that money will help prevent an economic recession.
 

A proposed cybersecurity-labeling program for Internet of Things devices is a good idea for manufacturers and consumers alike—but it should be undertaken in the right way, the NAM recently told the Federal Communications Commission.

What’s going on: “The cybersecurity certification and labeling program—which is still in its proposal stage—is called Cyber Trust Mark and would be voluntary,” Government Technology reports.

• Participating companies would be able to utilize the cybersecurity label to signify that their products “meet certain cybersecurity criteria like ‘unique and strong default passwords, data protection, software updates and incident detection capabilities,’ and other features identified by the National Institute of Standards and Technology.”

What we’re saying: It is imperative that the FCC—which would oversee the initiative—keep manufacturers involved at all stages of development, NAM Vice President of Domestic Policy Charles Crain told the commission late last week.

• “To drive robust participation in the program and enhance cybersecurity protections for consumers, the NAM respectfully encourages the FCC to work closely with industry to finalize criteria and procedures that remain voluntary but, when implemented, prove workable for manufacturers and trusted by consumers,” he said.

​​​​​​​​​​​​​​​​​​​​​What should be done: There are six main actions the FCC should take to ensure the success of the program, Crain said.

• Collaborate with manufacturers as the program is being developed.
• Keep participation in the program voluntary.
• Ensure that the process of qualifying for and receiving a Cyber Trust Mark is “trusted, practical and flexible.”
• Make program criteria reflective of the varying degrees of risk that different products pose to consumers.
• Institute a legal safe harbor protecting manufacturers from liability.
• Educate consumers about the program and how they can protect themselves from cybersecurity threats.

The last word: “Manufacturers of IoT devices continue to take steps to enhance the cybersecurity measures implemented within these devices in order to secure them against threats and ensure that consumers are protected to the maximum extent possible,” Crain added.

• “The FCC’s proposed labeling program is thus an exciting opportunity for companies to show the progress they have made in this important arena, and for the industry to cohere around a set of practical, implementable best practices to protect the American people.”

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

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

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

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

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

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

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

U.S. producer prices for final demand goods and services rose more than expected last month, largely owing to higher energy costs, Reuters (subscription) reports.

What’s going on: “The producer price index for final demand rose 0.5% last month, the Labor Department said on Wednesday. Data for August was unrevised to show the PPI accelerating 0.7%.”

• Reuters-polled economists had expected the PPI to increase 0.3%.
• “In the 12 months through September, the PPI increased 2.2% after advancing 2.0% in August.”

Core PPI: Core producer prices—prices excluding food, energy and trade services components—rose 0.2%, the same increase seen in August.

• “In the 12 months through September, the … core PPI increased 2.8% after climbing 2.9% in August.”

Coming up: The Federal Reserve is expected to leave current interest rates unchanged when it meets Oct. 31 and Nov. 1, according to Reuters. 

Under the Toxic Substances Control Act, businesses must keep up with all of the requirements and restrictions relating to chemical substances. Although manufacturers fulfill their obligations with the utmost care, the Environmental Protection Agency isn’t keeping up its end of the bargain.

Dr. Alan Dyke is the chief technology officer at Boulder Scientific Company—a specialty chemical company based in Mead, Colorado—and a member of the Society of Chemical Manufacturers & Affiliates. In his opinion, the EPA must change its approach if manufacturers in the U.S. are to remain competitive.

The company: Serving clients in many sectors, from pharmaceuticals to defense and aerospace, Boulder Scientific makes a number of complex and unique catalysts and compounds. The company proudly keeps all their manufacturing processes inside the United States.

• “We work with an end user to produce materials inside America with the right level of safety and quality, and to make those materials available for them within American borders,” Dyke explained. “We don’t outsource any manufacturing outside the U.S.”

The challenge: The EPA continues to miss congressionally mandated deadlines to review and approve compounds, creating havoc in an industry dependent on clockwork efficiency.

• “We’ve encountered delays because of the time it takes to file a document, the variability of response times from the EPA and the sheer number of documents we have to file,” said Dyke.
• At the same time, the EPA is imposing more regulations on chemical manufacturers that are difficult to navigate or confusing.
• “To make one of our compounds might take 10 different chemical intermediates from the first raw materials through to the end product,” he explained. “Each one of those materials requires a filing for each one of those compounds. And if any one of those steps is not approved, it interrupts our delivery process.”

The impact: These problems don’t just affect chemical manufacturers; they also cause problems throughout the supply chain and for customers and end users, who are forced to wait through a series of unpredictable delays.

• “During the past two years, we’ve seen a level of frustration building at the end-user level,” said Dyke. “Customers are considering sourcing from other countries where the system is more predictable and they won’t have to face these delays.”

The NAM, members of the NAM’s Council of Manufacturing Associations and Conference of State Manufacturers Associations recently launched Manufacturers for Sensible Regulations, a coalition addressing the impact of the current regulatory onslaught coming from federal agencies. To learn more, and get involved, go here.
Read the full story here.
 

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

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

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

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

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

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

Learn more: To hear more from Cecere, attend “Manufacturing in 2030: The Coming Data Value Revolution,” an event of the NAM’s digital-transformation arm, the Manufacturing Leadership Council, Dec. 6-7 in Nashville, Tennessee. Register here.    

Read the full story here.
 

As United Auto Workers President Shawn Fain prepares to give an update on labor-contract negotiations this afternoon, the UAW’s three-week-old strike at plants across the Midwest is hurting auto suppliers, according to The Washington Post (subscription).

What’s going on: “More than 3,000 supplier employees have been affected so far, a Washington Post tally shows, while an industry association says nearly 30 percent of its supplier members have resorted to layoffs.”

• More than 60% of suppliers said they expected to begin layoffs this month. Others say these cuts could “broaden over time” if the strike continues
• The strike has reverberated beyond the automotive sector, too. U.S. Steel recently announced 300 temporary layoffs after it was forced to idle an Illinois furnace because of the walkouts.

Why it’s important: “The [strike’s] fallout shows the outsize role the auto industry plays in the U.S. economy, to which it contributes about 3 percent of gross domestic product.”

• What’s more, the widespread shuttering of smaller auto suppliers—which number in the thousands and are often the main source of employment in the areas where they operate—would make it harder for General Motors, Ford and Stellantis to resume normal operations after the strike.

Manufacturers say: “The longer the strike, the more likely thousands of citizens across Michigan will face layoffs, and not just UAW members,” John Walsh, president and CEO of the Michigan Manufacturers Association (an NAM state partner), wrote in The Detroit News (subscription).

• “Layoffs, in turn, will affect restaurants, stores and local businesses. The economic impact will be felt throughout our families and our communities.”

After months of slow growth, China’s economy is showing signs of picking up speed, “offering a glimmer of hope” for the U.S. and Europe, according to The Wall Street Journal (subscription).

What’s going on: “Factories in September reported their first expansion in activity since the spring, while railway and flight bookings point to a bumper week ahead for tourism as China takes a break to celebrate its weeklong National Day holiday.”

The big picture: While economists say it’s too early to call an economic turnaround—owing in large part to China’s continuing property-market slump—there are signals that things are improving.

• “An official gauge of activity in the nation’s manufacturing sector rose to 50.2 in September from 49.7 in August, China’s National Bureau of Statistics said Saturday, the first time since March that its purchasing managers index crept over the 50 mark that separates expansion from contraction.”
• Similar gauges for nonmanufacturing sectors and construction also expanded at a faster pace.
• With that said, the country’s manufacturing and overall economic growth are well below what was expected earlier in the year—particularly in the aftermath of last year’s “zero-COVID” policies. That has implications for both China and the global economy, according to NAM Chief Economist Chad Moutray.

What’s next: Many economists believe that to continue this growth, China needs more government stimulus. This could come in the form of household tax breaks, or cash or vouchers that consumers can spend directly. 
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An energy startup that just hit the $1 billion investment mark thinks it holds the key to finally producing large quantities of “green” hydrogen, according to The Wall Street Journal (subscription).

What’s going on: “Electric Hydrogen believes the secret to success is finding a better way to split a [water] molecule. … Splitting it to create green hydrogen requires devices called electrolyzers. They are expensive and consume vast amounts of renewable electricity to make a small amount of hydrogen, making most projects uneconomical. Electric Hydrogen says its electrolyzer can produce much more hydrogen.”

• The company says its method of hydrogen production combined with “the generous tax subsidies on offer” from last year’s Inflation Reduction Act could finally make green hydrogen a market-competitive energy source.

​​​​​​​Investors go all in: The company “recently raised $380 million from backers including BP, United Airlines, Microsoft and iron-ore producer Fortescue Metals,” helping it pass $1 billion in total investments.

Why it’s important: Green hydrogen “is one of the few options to eliminate emissions from trucks, planes, steel mills and chemical plants where renewable power and batteries alone can’t get the job done.”

• “Hydrogen is one of the few ways to move green power long distances. Potential demand is so great that the winner of the race for green hydrogen could dominate a market worth as much as $1 trillion in the coming decades.”

​​​​​​​ Cracking the code: While electrolyzers have been typically small devices used in the aerospace and chemical industries, Electric Hydrogen thinks it can make the devices both larger and more affordable “by starting from scratch and using new plate engineering focused on the performance of bigger electrolyzers.”

The NAM’s take: “Clean hydrogen is critical to decarbonizing hard-to-abate industries, and manufacturers are leading the way in developing and scaling it for widespread use,” said NAM Vice President of Domestic Policy Brandon Farris.

• “The NAM is working to ensure that the incentives available for clean hydrogen help create the right market incentives for producers—as well as manufacturers and other end users—to meaningfully contribute to decarbonization while boosting domestic job growth and global competitiveness.”