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Generative AI tools like ChatGPT and Midjourney have grabbed headlines, but artificial intelligence–driven innovations like digital twins, computer vision and robotics are also transforming manufacturing in America.

Last week, the NAM briefed congressional staff from the House Task Force on AI to help educate policymakers on the role manufacturers are playing as both developers and deployers of AI technologies. The briefing follows the publication of the NAM’s first-of-its-kind white paper on the ways manufacturers are using AI.

The briefing featured a panel discussion among AI experts from major manufacturers, as well as the AI leads from the NAM and the Manufacturing Leadership Council.

Faster breakthroughs: AI is accelerating research and development at manufacturing companies, the panelists reported, allowing them to create or improve products in record time.

• For example, pharmaceutical companies are using AI to develop and test new lifesaving drugs, while automakers are using it to improve vehicle components.

Increased safety: AI is helping to prevent accidental collisions on the shop floor and enhancing equipment that makes tasks safer, such as robotic exoskeletons that collect and learn from data on the wearers’ movements and environment.

• In addition, companies are using AI to better understand and monitor product performance, helping reduce maintenance costs and avoid dangerous malfunctions.

Augmenting human labor: Manufacturers often use AI technology to complement and augment the work of humans, according to the panelists.

• Human operators still make decisions and oversee operations, but AI has helped improve the reliability of manufacturers’ processes as well as the quality, delivery and safety of their products.
• This combination of human ingenuity and AI enhances efficiency while still prioritizing human experience.

Policy recommendations: Panelists discussed what Congress can do to support AI-driven growth in the manufacturing sector, including:

• Modernizing compliance requirements to support AI development and adoption, especially for small manufacturers most affected by regulations;
• Ensuring that the regulatory environment helps the U.S. maintain global leadership in AI innovation, including by adjusting rules based on context and risk; and
• Creating or supporting initiatives to train workers in AI-related skills, including by providing the data needed to develop these programs.

The last word: “The future of manufacturing is inseparable from the future of AI,” said NAM Senior Director of Technology Policy Franck Journoud.

• “It is crucial that policymakers hear directly from manufacturers that are leading the development and adoption of this transformative technology. The NAM is thankful to have had an opportunity to share this world-class expertise, and we are committed to working with Congress to ensure the U.S. remains a global leader in AI innovation.”

Congress should preserve tax reform’s changes to the estate tax, protecting family-owned manufacturers from tax increases scheduled for the end of 2025, according to a new explainer published by the NAM as part of its “Manufacturing Wins” tax campaign.

The background: In 2017, tax reform doubled the value of assets that could be exempt from the estate tax, a levy imposed on family businesses upon the death of their owners, when proprietorship passes to the next generation.

What’s going on: This valuation threshold is scheduled to be cut in half at the end of 2025, subjecting more assets of family-owned manufacturers to taxation and increasing these companies’ tax liability.

Why it’s important: A bigger tax burden would threaten the continued existence of family-owned companies and make it more difficult to pass family businesses on to the next generation.

• These firms could be forced to liquidate operation-critical assets, such as facilities and equipment, in order to pay the estate tax.
• An increased estate tax bill could mean that family-owned manufacturers are forced to take on debt, limit operations, reduce employee headcount or close entirely following the death of a loved one.

What else is at risk: Some legislators have floated the idea of repealing or limiting stepped-up basis, which stops a business owner’s heirs from being forced to pay capital gains taxes on asset appreciation that took place while the owner was alive.

What must be done: “Congress must preserve tax reform’s increased estate tax exemption threshold and maintain stepped-up basis,” said NAM Vice President of Domestic Policy Charles Crain.

• “Protecting family-owned manufacturers from the estate tax will prevent these small businesses from incurring costly and damaging tax bills that threaten their viability following the death of a loved one.”

The Environmental Protection Agency’s final formaldehyde analysis—issued in August and set to inform future regulations—risks “creat[ing] an unachievable standard and a de facto ban” on an essential manufacturing material, the NAM said.

What’s going on: On Aug. 20, the EPA’s research office issued its conclusions about the “amount of the chemical that could be harmful” to humans, saying that “[s]mall amounts … can increase people’s risk of [health] problems” (Bloomberg Law, subscription).

• Though the report itself does not mandate any new restrictions on the industry, the EPA is likely to use the findings to take the next step in the regulatory process—a final risk evaluation—by the end of 2024 (The Hill).
• The assessment maintains the formaldehyde threshold of 11 parts per billion proposed by the agency in 2022. That’s 30 times lower than Europe’s recently updated worker-exposure limit of 300 parts per billion and “lower than what can be found in homes or even background levels for outdoor air,” the NAM told the EPA.

Why it’s a problem: Formaldehyde is used widely across industries to produce numerous everyday items, including plastics, lubricants, automotive parts, fertilizers, adhesives and more.

• The final analysis, which was released without review by the EPA’s own Science Advisory Committee on Chemicals, fails to account for “the highly developed safety procedures, protocols and [personal protective equipment] used throughout [the manufacturing] industry.”
• A severe restriction on the allowable workplace threshold of formaldehyde “could wreak havoc on domestic supply chains,” according to the NAM.

What should be done: The EPA should reissue its risk evaluation to give the SACC an opportunity to review it and provide comments—“and allow for additional public comment after the SACC review is complete,” the NAM concluded.

Manufacturers are counting on Congress to preserve tax reforms that acted as “a shot in the arm” but are now at risk of expiring, Sukup Manufacturing Co. President and CEO Steve Sukup told the House Ways and Means Committee recently.

What’s going on: The committee held a field hearing at the Iowa State Fair in Des Moines last month to hear from local companies about the impact of the 2017 Tax Cuts and Jobs Act on their businesses.

• At Sukup—the world’s largest family-owned and -operated maker of grain storage, drying and handling equipment—tax reform is credited as the single biggest driver of growth in recent years.
• “Sukup has grown over the past several decades, but nothing compares to when the Tax Cuts and Jobs Act was signed into law,” Sukup told committee members. “For example, thanks to the lowering of the corporate rate to 21%, Sukup grew our workforce by a third, adding roughly 200 well-paying manufacturing jobs to our community.”

A business boon: The 61-year-old company was able to make several key investments thanks to tax reform.

• Among these is Sukup’s Safe T Homes, quick-assembly houses made from the company’s grain bins and created after the 2010 earthquake in Haiti to provide people with much-needed shelter. One of the homes was on display at the fairgrounds.
• Another undertaking made possible by tax reform was the world’s largest free-span grain bin, two corn storage containers made for an ethanol plant in Mason City, Iowa. Each bin has a record-breaking capacity of 2.2 million bushels.
• Tax reform’s accelerated depreciation schedule allowed the business to go “from roughly $5 million in capital spending to almost $15 million,” Sukup told committee members.

What’s in jeopardy: The expiration of key tax provisions in 2022 and 2023—with more tax increases scheduled for the end of next year—has made it far more difficult for Sukup to put money back into the business.

• For example, tax reform’s pro-growth interest deductibility standard expired in 2022, making debt financing more expensive. “An accountant once told me, if you don’t have debt, that means you’re not coming up with new ideas,” Sukup said. “Many manufacturers like us borrow funds to finance essential long-term investments,” which are now more costly.
• Sukup is also monitoring looming changes to the estate tax. He called on Congress to protect family-owned manufacturers from the estate tax “so that I can ensure the third and fourth generations of Sukups can continue in our family business.”

Keep it going: Sukup ended his testimony by reiterating the advantages tax reform brought to his business and emphasizing the need for Congress to preserve tax reform in full.

• “Because of these policies, we’ve been able to not only maintain our business, but to provide a great living, health benefits and soon expanded child care for our employees and the community—even as we aid those in need around the globe,” he concluded.
• “I urge you to help us keep that growth streak going. Maintaining the 21% corporate rate, as well as the tax provisions I just described, is so important to manufacturers everywhere.”

The NAM has launched a new wave of ads in D.C. and nine states, extending its seven-figure campaign urging policymakers to reign in pharmacy benefit managers, underregulated middlemen who drive up the costs of prescription medications for manufacturers and manufacturing workers.

A quick refresher: PBMs sit in the middle of the health care industry, negotiating with employer health plans, insurers, biopharmaceutical manufacturers, pharmacies and other players to determine what prescriptions employees can access and what they pay for them. While their job is ostensibly to reduce the costs of medicines, often they do the exact opposite.

• PBMs have been found to steer patients toward pricier options, inflict steep mark-ups and hidden fees and even pocket large portions of the rebates that biopharmaceutical manufacturers intend for American workers and their families.

NAM in action: The NAM has been a staunch voice supporting PBM reform on Capitol Hill, recently laying out manufacturers’ concerns for the House Committee on Oversight and Accountability.

• The committee conducted its third hearing on PBM overreach in July, when it also released a highly critical report on PBMs that echoed many of the NAM’s concerns.
• In addition, the NAM is supporting several key measures to increase oversight of PBMs’ business models and reform their pricing strategies, including the DRUG Act and the PBM transparency provisions in the Lower Costs, More Transparency Act.

What Congress should do: The NAM is advocating for three major reforms to the PBM system, including:

• Increasing transparency in PBMs’ business models, including how their compensation influences health care decisions and how their policies dictate a medicine’s cost and formulary placement;
• Rebate pass-through, which will ensure health care savings are passed directly to manufacturers and their workers rather than being pocketed by PBMs; and
• Delinking PBMs’ compensation from a medicine’s list price, removing their incentive to put upward pressure on list prices to maximize their own profits.

Benefits for all: The NAM is calling on Congress to enact these reforms in the commercial insurance market, not just in government programs like Medicare and Medicaid, so that all Americans can enjoy lower-cost health care benefits.

What to watch: The NAM is calling on Congress to act on this issue during the lame-duck session following the election.

Rep. Earl L. “Buddy” Carter (R-GA), a staunch advocate for health care reform and a community pharmacist by profession, visited RYAM’s manufacturing facility in Jesup, Georgia, in August to discuss manufacturers’ health care and tax policy priorities.

During the visit, Rep. Carter emphasized the critical need for pharmacy benefit manager reform as well as tax policies that support manufacturers’ growth and competitiveness.

The visit: Clay Bethea, RYAM’s Jesup plant general manager and vice president of U.S. wood procurement, led Rep. Carter on a tour of the cellulose specialties manufacturer’s facility, where he observed how pulp is dried and finished into sheets and rolls. Bethea highlighted the significant challenges the company faces due to rising costs in health care, particularly those driven by PBMs, and the looming expiration of key tax provisions in 2025.

• “We are proud to be a part of this community, creating jobs and driving economic growth,” Bethea said. “However, the rising costs of health care, particularly due to PBMs, and the uncertainty around critical tax provisions like R&D expensing and accelerated depreciation, are growing concerns for both our business and our employees. Reforming PBMs and maintaining tax policies that allow us to invest for the future are crucial to our ability to remain competitive globally.”

PBM reform: Rep. Carter has long been vocal about the need to hold PBMs accountable for their role in inflating health care costs.

• “PBMs have become powerful middlemen, often driving up drug prices while squeezing independent pharmacies out of the market,” Rep. Carter said during the tour. “It’s time for Congress to bring transparency and fairness back to the system.”
• Carter has introduced and supported several pieces of legislation designed to reform PBM practices, including a bill aimed at delinking PBM compensation from drug prices, improving PBM payments to pharmacies and increasing transparency.

Tax challenges: In addition to health care, Rep. Carter addressed the pressing issue of preserving tax reform.

• “The expiration of accelerated depreciation, R&D expensing and favorable tax rates could significantly hamper the manufacturing industry’s ability to grow and remain competitive globally,” Rep. Carter warned.
• “These tax provisions have been crucial for manufacturers like RYAM, enabling them to make significant investments in their operations and workforce. Losing them would not only impact these companies’ ability to innovate but also jeopardize jobs and economic growth in communities across the country.”

NAM in action: The NAM has long advocated for both PBM reform and the preservation of essential tax policies that drive the manufacturing industry.

• “PBMs are a significant driver of the rising costs of health care, and reform is essential to ensure that manufacturers can provide affordable benefits to their workers,” said NAM Vice President of Domestic Policy Charles Crain.
• “Congress also needs to act with urgency to prevent devastating tax increases scheduled for next year that will impact manufacturers across the country.”

The state-level view: Lloyd Avram, president and CEO of the Georgia Association of Manufacturers, echoed Rep. Carter’s concerns.

• “Manufacturers across Georgia are facing unsustainable health care expenses, and the uncertainty surrounding federal tax provisions only adds to the challenges,” Avram said. “Action on PBM reform and tax policy is essential to helping our industry remain competitive and continue providing good jobs in our communities.”

The bottom line: “Reducing health care costs and increasing transparency in the PBM system are crucial steps in lowering the overall cost of doing business in the U.S.,” said Rep. Carter. “However, to truly compete in the global economy, it’s important that we preserve the policies that have empowered manufacturers to innovate, expand and sustain jobs. Otherwise, the U.S. risks becoming a less attractive place for manufacturing investment, ultimately threatening our economic leadership on the world stage.”

The NAM has a new chief economist.

Victoria Bloom, who was most recently the economist for the Senate Commerce, Science and Transportation Committee minority staff, joined the NAM and its 501(c)3 workforce development and education affiliate, the Manufacturing Institute, this summer. She had worked on Capitol Hill since 2017.
 
Our view: “Manufacturing in the U.S. is a life-changing force for good, providing well-paying jobs and career opportunities and products that improve the quality of life for everyone,” NAM President and CEO Jay Timmons said. “Victoria will help us tell this story with compelling data, which will demonstrate the real impact of policy decisions and illustrate the modern manufacturing resurgence.”

• Added MI President and Executive Director Carolyn Lee: “With the addition of Victoria to the MI team as the head of research, we look forward to expanding our portfolio of studies on the key workforce and competitiveness issues facing manufacturers.”

Legislative chops:  Bloom, who holds a bachelor’s degree in economics from Louisiana State University and a master’s degree from George Mason University, previously worked for Sen. David Perdue (R-GA) and Rep. Gary Palmer (R-AL), in addition to her work on the Senate Commerce Committee.

• As Senate Commerce Committee economist, she served as lead economic and budgetary adviser to Ranking Member Ted Cruz (R-TX) and the minority committee staff. 

Glad to be here:  “After years of working on Capitol Hill and lending my economic expertise to policy debates, I am excited to focus my efforts on the 13 million people who make things in America,” Bloom said.

 The Interior Department is seeking to close hundreds of thousands of acres of land in Wyoming to traditional and renewable energy development, a plan that would cut crucial natural resource development off at the knees (POLITICO Pro, subscription).

What’s going on: Though the Bureau of Land Management’s plan, released Thursday, scales back from previous iterations the acreage recommended for conservation, it still considerably “throttles back how much of the federally administered area’s 3.6 million acres is in play for different forms of energy development.”

• The final announcement, part of the BLM’s proposed Resource Management Plan for the Rock Springs Field Office, is tantamount to “pushing Wyoming off an economic cliff with nothing more than a tattered parachute,” said John Barrasso (R-WY), ranking member of the Senate Committee on Energy and Natural Resources. “This plan isn’t designed to manage Wyoming’s natural resources. It is designed to suffocate them. … [It] directly jeopardizes Wyoming’s economy and our way of life.”

What it would do: If approved, the blueprint would replace its 27-year-old predecessor document and prohibit drilling on nearly 1.08 million acres—almost twice the number currently off-limits to new oil leases.

• It would “also [exclude] 494,350 acres from wind and solar power development and [close] 536,018 acres for geothermal power projects.”

Why it’s important: The plan could reduce economic activity in Wyoming’s oil and gas sector by some $907 million each year and cost the state nearly 3,000 jobs, according to estimates by several energy groups (Cowboy State Daily).

The NAM says: “This latest move by the Interior Department undermines U.S. energy security by needlessly restricting access to available domestic sources of critical natural resources as part of an all-of-the-above energy future,” said NAM Director of Energy and Resources Policy Michael Davin. “We urge the agency to reexamine and revise its plan.”

Many people imagine that a job in manufacturing requires working on a shop floor to create products. Joseph Fields—a human resources professional at MGX Equipment Services—knows that isn’t the case.

“Working in MGX, there’s cranes and welding and engineering—but there’s also HR, and finance, and payroll, and employee health and safety,” said Fields. “There are lots of opportunities you can lean into.”

The background: Fields spent eight years as a yeoman in the U.S. Navy before he transitioned into a civilian role in 2000. Over the course of the next two decades, he worked in human resources at a variety of companies. However, he was laid off in October 2023 after a six-year stint when his employer downsized.

• A few days later, he attended a virtual career fair sponsored by Heroes MAKE America—a Manufacturing Institute program that builds connections between the military community and the manufacturing industry—and found his new role.

• “I wasn’t planning to go to the HMA career fair, because I had zero experience with manufacturing,” said Fields. “But I saw it on LinkedIn, and at the time, I hadn’t interviewed with anyone in six years. I figured this would be a good opportunity to talk about myself and get some feedback.”

The result: Fields didn’t just get feedback, he was offered a job with MGX, one of the manufacturers in attendance.

• “I met with lots of great companies, including a manager at MGX, and we had a great conversation,” said Fields. “She called me the next day and asked if I was interested in an HR position. They offered it to me the week after Thanksgiving.”
• “We are very thankful we found Joseph through Heroes Make America. He attended our virtual career fair and visited our breakout room. After listening to our presentation a few times, he still stayed in our room,” said MGX Director of HR Ashley Barkdoll. “I could tell he would be a great fit for our team after having a few conversations with him.”

The program: Heroes MAKE America provides integrated certification, career-readiness training and job-searching support in partnership with local technical and community colleges to prepare transitioning service members, veterans, National Guard members, reservists and military spouses for rewarding careers in the manufacturing and supply chain industries.

• Heroes also offers virtual and on-site career fairs—like the one where Fields found his new position—for members of the broader military community.

The other side: Today, Fields is paying it forward by working with Heroes MAKE America to find veterans and others with military affiliations to interview with MGX. He’s especially grateful for the support that Heroes gives to graduates and other job seekers throughout the hiring process.

• “I like that Heroes MAKE America not only promotes organizations that focus on veteran hiring, but also that they do the follow-up to make sure people get hired,” said Fields.

Advice to veterans: Fields wants other veterans to know that manufacturing offers a broad range of opportunities, with something for everyone—and that Heroes MAKE America can help them find it.

• “It’s not about finding a manufacturing job; it’s about finding a job in a manufacturing company,” said Fields. “There are so many different kinds of roles and opportunities.”
• “If you’re unsure about finding a job in manufacturing, attending the virtual career fair is a great option to meet with companies to see what they have to offer, even if you think this industry isn’t something that you would normally consider,” added Barkdoll.

Advice to manufacturers: Fields encourages other employers to connect with the Heroes MAKE America program and see everything that a veteran brings to the table.

• “Some of us may not have hands-on experience for the position you’re trying to fill, but we’re trainable,” said Fields. “So ask yourself: Can I train up for this position?”

The last word: “Take a chance on a veteran,” said Fields. “You’ll get a great employee out of it.”

The Federal Trade Commission does not have the authority to enact the sweeping noncompete ban it finalized in April, a federal judge ruled Tuesday (The Wall Street Journal, subscription).

What’s going on: “U.S. District Judge Ada Brown ruled that the commission’s authority to police unfair methods of competition couldn’t be used to issue substantive regulations that ban an entire category of conduct. ‘The role of an administrative agency is to do as told by Congress, not to do what the agency thinks it should do,’” she wrote, adding that the ban was “unreasonably overbroad without a reasonable explanation.”

• The rule—which had already caused companies’ costs to increase in anticipation of the Sept. 4 effective date—sought to prohibit noncompete agreements between employers and their employees.

The NAM’s role: In May, the NAM’s Legal Center filed an amicus brief asking Brown’s court to stay the rule on the grounds that a ban on noncompete agreements would “hamstring innovation in the manufacturing sector and damage the competitiveness of American industry.”

• Brown issued a limited stay in July. Her ruling this week—echoing the NAM’s argument that the rule is  “not reasonably explained”—prohibits enforcement of the FTC rule nationwide.
• “The NAM expressed concerns throughout the rulemaking process, and a 2023 NAM survey showed that a broad noncompete ban would disrupt most manufacturing operations in the U.S.,” NAM Director of Transportation, Infrastructure and Labor Policy Max Hyman said following Brown’s ruling this week.

What’s next: The FTC is considering an appeal of the decision, a spokeswoman told the Journal.

• But “[i]f lower courts remain split as the litigation moves through the legal system, the matter might ultimately fall to … [the] Supreme Court, [which] has taken a dim view of government agencies invoking new regulatory powers from long-ago statutes.”

This post has been edited.