News

Pharmacy benefit managers are contributing to the skyrocketing cost of health care for manufacturers and must be reined in—and that’s why the NAM supports the bipartisan Delinking Revenue from Unfair Gouging (DRUG) Act, passed yesterday by the House Oversight and Accountability Committee.

What’s going on: PBMs, created in the 1960s with the intention of keeping prescription drugs affordable, are now doing the very opposite, the NAM informed the committee ahead of Tuesday’s markup.

• PBMs “increas[e] the price that health plan participants pay for medicines,” NAM Vice President of Domestic Policy Charles Crain said. “By applying upward pressure to list prices that dictate what patients pay at the pharmacy counter, pocketing manufacturer rebates and failing to provide an appropriate level of transparency about their business models, PBMs increase health care costs at the expense of manufacturers and manufacturing workers.”

• In addition to other reforms, the DRUG Act would require “delinking”—ensuring that PBMs charge a flat rate for their services rather than charging a percentage of a medication’s list price. This critical reform would “remov[e] PBMs’ incentive to put upward pressure on list prices in order to maximize their own profits,” Crain said.

Why it’s important: The NAM—whose advocacy, including a six-figure ad campaign, helped lead the DRUG Act to passage by the House Oversight Committee—“has long favored delinking PBM compensation from the list price of medications, including in the commercial market,” Crain continued.

• The NAM will continue to advocate for PBM reforms that “will benefit employers by making PBM contracts more straightforward, transparent and predictable—and will benefit workers by reducing the prices they pay out of pocket for their prescriptions.”

Manufacturing operations are meticulously scheduled and dependent on consistent in-person labor—so how can employers in the sector give workers the flexibility that many want?

With competition for workers remaining fierce, it’s a question that the Manufacturing Institute (the NAM’s workforce development and education affiliate) has started to tackle. Now, manufacturers looking into providing flexible options can consult a new MI whitepaper that draws on real companies’ experiences and decision-making processes. 

The new reality: Flexibility is a high priority for workers nowadays, as the MI’s own research shows.

• “Nearly 50% of manufacturing employees cite flexibility as a reason they stay with their employer, with 63.5% reporting that they would look for more flexibility in their next role if they were to leave their current company.”

Figuring it out: So how are manufacturers adjusting? According to a working group of 17 companies convened by the MI, many manufacturers have started by surveying their workers and talking through options with them.

• While feedback from current employees is often a prime motivator for companies considering flexible work arrangements, some manufacturers also pursue them to attract a wider pool of prospective workers—including parents of young children, who may put a premium on flexibility.

What’s on offer: As feedback from the working group showed, manufacturers are considering a wide range of creative options. The whitepaper cites several intriguing examples, which should give other manufacturers ideas for their own operations.

• One manufacturer in the group was trying out different shift options, remarking that they’re “exploring 4–9s and 4–10s primarily as well as adding a Sunday second shift and having folks on rotating shifts.”
• Other companies organized teams of “floaters.” At one firm, these employees work limited hours on different shifts and acquire a large variety of skills. While not full-time, such positions offer a viable option for workers in search of considerable flexibility.
• Shift swapping was another option under discussion, with one company allowing workers to swap up to a week at a time, so long as a supervisor approved.

How to get started: Check out the full whitepaper for more useful tips, including a toolkit to help companies start making these complex decisions on their own.

• Here is the recommended first step: “Identify the objectives that your company hopes to achieve in providing workplace flexibility by focusing on the challenges that you would like to solve, whether it’s increasing the number of applicants or reducing turnover and absenteeism. Establish your baseline by evaluating your company’s status on these metrics.”
• Manufacturing employers can learn more about effective approaches to flexibility for production employees at the MI’s upcoming workshop March 19–20 in Washington, D.C. Check out more details from the MI here. 

The last word: As one working group participant said, “At our company, we’ve seen what workplace flexibility means for our production workers. The change in company culture is so valuable.” 

The Biden administration is nearing the end of a lengthy review on whether to adjust or extend tariffs on a variety of goods and materials from China—and the NAM is working to make sure manufacturers’ voices are heard.

The background: Following a 2017 investigation into China’s trade practices, the Trump administration put in place a set of levies on imported goods from China—called Section 301 tariffs—intended to incentivize change in practices by China that were found by the Office of the U.S. Trade Representative to be “unreasonable or discriminatory.”

• These included policies and practices related to technology transfer, intellectual property and innovation.

The review: In May 2022, USTR initiated a legally required four-year review of the Section 301 tariffs that focused on tariff efficacy in changing Chinese discriminatory practices and the impact of the tariffs on the U.S. economy, workers and consumers, among other considerations.

• More than 18 months later, the review remains unfinished. The NAM is urging USTR to finish and publish it—and to take actions that reduce the burdens on manufacturers while maintaining appropriate leverage to incentivize China to adhere to bilateral and multilateral commitments.
• “Ideally, USTR will conclude the four-year review in the next few weeks and make the results public,” said NAM Senior Director of International Policy Ali Aafedt. “We would like to see the results reflect the 1,498 public submissions USTR received during the process and the reduction or removal of some of the tariffs that are harming manufacturers in the U.S. more than they’re creating leverage on China.”

The exclusions: There are 429 existing exclusions from the tariffs—including 77 COVID-19-related products and 352 reinstated exclusions—which are in effect through May 31.

• The NAM has also been pushing for a new process that allows manufacturers to ask the government to exclude specific products they need from the tariffs.
• “The NAM has been calling for a new, fair and transparent Section 301 tariff exclusion process that would allow all U.S. stakeholders an opportunity to seek relief or weigh in on the existing tariffs,” said Aafedt. “The last opportunity to petition USTR for relief from Section 301 tariffs was in 2020, and a new exclusion process will help to better align the tariffs with U.S. economic goals.”

The outlook: Reports such as this one from The Wall Street Journal indicate that the Biden administration will look to rebalance the tariffs, potentially reducing those that are not in the U.S. interest and raising tariffs on other items, including, potentially, on imports from China in the electric vehicle and battery sectors.

• “The NAM will continue to push for a more strategic approach,” said Aafedt.

If your company has interest in a specific existing exclusion, USTR is seeking feedback here by Feb. 21.

Manufacturers scored a major victory last night when the House passed a bipartisan tax package containing provisions critical to the industry.

What’s going on: The House voted 357–70 to pass the bipartisan Tax Relief for American Families and Workers Act. The bill includes three important manufacturing priorities:

• Restoring immediate R&D expensing for domestic research
• Reinstating full expensing (also known as 100% accelerated depreciation) for businesses’ capital investments
• Returning the U.S. to a pro-growth interest deductibility standard

What it means: The measure will enable manufacturers to invest in their businesses, create jobs and compete in the global marketplace.

• The bill is particularly important for small and medium-sized manufacturers, many of which experienced significant tax increases as a result of the expiration of these pro-growth provisions.
• “While it was once a paid expense, R&D is now a cost that many small businesses cannot afford,” said Carol Miller (R-WV), in a speech on the House floor last month.
• The overwhelming majority—89%—of respondents to the NAM’s Q4 2023 Manufacturers’ Outlook Survey said higher tax burdens on manufacturing would make it more difficult for them to hire, buy new equipment and expand their facilities. 

What’s next: It’s critical that the Senate now also pass the measure, the NAM said. 

• “Manufacturers thank [House Speaker Mike Johnson (R-LA)] and [House Ways and Means Committee Chairman Jason Smith (R-MO)] for their leadership in passing the Tax Relief for American Families and Workers Act—and the bipartisan work in the House and Senate to secure progress for America’s manufacturing workers,” said NAM President and CEO Jay Timmons in a social post Wednesday night. “Manufacturers are now counting on the Senate to act quickly to restore these provisions that are absolutely critical to strengthening America’s competitiveness and growth of manufacturing in America.”
• Added Ketchie President and Owner and NAM Small and Medium Manufacturers Group Chair Courtney Silver, “This just isn’t about numbers on my financial statements and my tax returns—this is about taking care of the people here [at Ketchie] and in communities across this country…. Let’s restore some common-sense tax provisions, and let’s support our American manufacturers across our country.”

Lubrizol, a specialty chemicals company, faced a challenge common to manufacturers in its sector: how do you test dozens or hundreds of new chemical formulations every year in a timely and cost-effective manner? The answer: better data analysis.

The Wickliffe, Ohio, company developed a virtual testing and data analytics system called Q.LIFE®, a solution so successful that the Innovation Research Interchange (the NAM’s innovation division) recognized it with the IRI Innovation Excellence Award for Digital and Technological Innovation. Here’s how they did it.

The problem: To develop its additives for engine oils, industrial lubricants, gasoline and other products, Lubrizol must run expensive tests that often took weeks if not months to complete.

• LIFE® changed the game, by providing more than 1,000 predictive models for different aspects of product development and deployment. For example, Q.LIFE® can help predict the outcome of those tests before they’re conducted, sometimes even eliminating the need to run a test in the first place.
• It also helps the company identify potential issues with raw materials before they end up in Lubrizol’s products.
• Last, as an added benefit, the system serves as an aid for training new employees on company processes.

Putting it to use: “Getting a handful of early adopters to start using it was key to making this a successful analytics system for years to come,” said Lubrizol Senior Manager of Data Science & Analytics Allison Rajakumar, one of the project’s pioneers.

• The team started by training a small group of employees in how to use Q.LIFE®. Those early users provided feedback on the system as it was being launched.
• As the use of the system grew, those employees acted as ambassadors for Q.LIFE® and trained other workers to use it, too.

Looking ahead: Lubrizol plans to expand Q.LIFE® to include more tools and to extend it to other areas of the business.

• The data science team is working with employees in other divisions, such as the company’s supply chain specialists, to develop models that will help optimize their processes as well.

Get involved: Has your company developed innovations to improve its operations and better serve its customers? If so, it might also be eligible for an IRI Innovation Excellence Award.

• Click here to learn more and start your nomination now. Submissions are due by Feb. 15.

They say all you need is love, but in fact, you need a lot of magnets, too. Computers, appliances, electric generators and cars are powered by permanent magnet motors. Yet, most of the permanent magnets that make our modern life possible rely on rare earth materials, which are expensive, unsustainable and typically mined and processed in China.

To fix this bottleneck, Minneapolis-based Niron Magnetics is producing a new kind of magnet that uses two abundant raw materials: iron and nitrogen. By taking rare earths out of the equation, Niron’s Clean Earth Magnets® provide superior cost and supply chain stability to the countless manufacturers that depend on reliable access to high-powered magnets.

Why it matters: According to Niron, the demand for rare earths for critical magnets is outstripping the supply, and the problem is only getting worse.

• “When you look at the amount of magnets that are needed over the next 10 years, it’s triple the amount that are available today,” said Niron Magnetics CEO Jonathan Rowntree.
• “There’s only enough rare earth materials to double the amount of rare earth magnets manufactured every year. So there’s going to be this big imbalance later this decade. We’re well positioned to [meet] the shortfall of permanent magnets using iron nitride technology.”

The value proposition: Niron’s technology has several exciting upsides, according to company leaders.

• First, it relies on materials that are far more abundant and accessible than rare earths.
• Second, the supply chains for components like nitrogen and iron salts are very stable—and not centered in China.
• Finally, the production of a kilo of rare earth magnets generates 2,000 kilos of waste, according to Niron. By contrast, the production of Niron’s rare earth–free magnets is much more environmentally friendly.
• “Depending on which part you look at, whether it’s water or waste or greenhouse gas emissions, our production process is between 70% and 90% more efficient than the current rare earth processes today,” said Rowntree. “We’re excited about solving the environmental burden from the energy transition.”

Next steps: Niron is planning its first large-scale production facility in the United States, a 10,000-ton facility that it hopes will be operational by 2027.

• While its leaders are still considering different locations for the plant, they anticipate that the facility will ultimately result in 680 to 700 full-time jobs, not including the construction and infrastructure roles needed to build it.

• “We’re growing very quickly here in terms of our capability,” said Rowntree. “We’ve doubled the number of employees this year, and we will likely double that number again over the next several years.”

The bottom line: “There’s a growing awareness of critical materials and the rare earth supply challenges, and the risks posed by U.S. reliance on China to supply those magnets. But there isn’t a lot of awareness around the fact that there is an alternative solution,” said Rowntree. “There is alternative technology that we’re aggressively scaling and that will be commercially available by the end of this year.”

Earlier this month, Congress unveiled the bipartisan Tax Relief for American Families and Workers Act—and now it’s time it passed the legislation, the NAM recently urged congressional leaders.

What’s going on: The bipartisan tax package—a compromise between House Ways and Means Committee Chairman Jason Smith (R-MO) and Senate Finance Committee Chairman Ron Wyden (D-OR)—would restore immediate R&D expensing for businesses, reinstate full expensing (also known as 100% accelerated depreciation) for businesses’ capital investments and return the U.S. to a pro-growth interest deductibility standard.

• Thanks to the NAM’s advocacy, the House Ways and Means Committee supported moving the legislation to the House floor by a bipartisan vote of 40–3.
• A vote on the House floor is expected tomorrow or Thursday, thanks in part to the NAM’s work.

Why it’s important: “All three of these tax policies have a long history of bipartisan support and are critical to strengthening America’s global competitiveness,” the NAM, along with more than 260 other businesses and allied groups, told House Speaker Mike Johnson (R-LA), House Minority Leader Hakeem Jeffries (D-NY), Senate Majority Leader Chuck Schumer (D-NY) and Senate Minority Leader Mitch McConnell (R-KY) earlier this month.

• The policies “have enabled U.S. businesses to innovate, create [well]-paying jobs, protect our national security and remain at the cutting edge of the global economy. Restoring these provisions will have a profound impact on business investment, economic growth and job creation.”

Small businesses: The policies are particularly crucial for small- and medium-sized manufacturers, said Courtney Silver, president and owner of precision machining company Ketchie Inc. group chair of NAM Small and Medium Manufacturers Group.

• The absence of these three tax “provisions directly impacts our ability to invest in new technology, to purchase equipment and to create jobs,” she said.
• “Nearly 90% of manufacturers share similar concerns about their higher tax burden, and if left unaddressed, our companies and our teams will have a harder time securing an edge over our global competitors. … Passing this law would give companies like ours the certainty needed to plan for growth and more investments.” 

What you can do: Your members of Congress need to continue to hear why it is imperative they support this tax package. Add your voice at the NAM’s Tax Action Center.

The Securities and Exchange Commission’s pending climate disclosure rule would place an enormous, untenable burden on manufacturers—and impose a disproportionate hardship on small businesses, NAM Vice President of Domestic Policy Charles Crain told lawmakers Thursday.

What’s going on: Crain gave testimony before the House Financial Services Subcommittee on Oversight and Investigations on the damaging effects of the SEC’s proposed climate rule, which would require businesses to reveal large amounts of convoluted (and often sensitive) climate-related data.

• The plan would force disclosure of so-called “Scope 3” emissions—those that come from companies’ supply chains—and institute new climate-related accounting requirements, among other mandates.

Why it’s a problem: If finalized, the rule would divert funds from manufacturing growth, including at small manufacturers.

• “Manufacturing pioneers groundbreaking technologies, including the innovations necessary to combat climate change,” Crain said. “The rule would impose tremendous costs on manufacturers of all sizes—while overwhelming investors with immaterial information. And the SEC hasn’t done the work to show that the rule’s benefits outweigh its costs, or that the rule is even within the SEC’s legal authority.”
• The proposed regulation would, by the agency’s own accounting, “raise the cost to businesses of complying with its overall disclosure rules to $10.2 billion from $3.9 billion, an additional cost of about $530,000 a year for a bigger business,” according to The Wall Street Journal (subscription).

Costs to manufacturers: Crain told lawmakers that the SEC’s analysis likely understates the true costs of the rule, in part because the agency did not consider the impacts on private businesses.

• “For the larger companies subject to [the Scope 3] requirement, the SEC has admitted that it cannot ‘fully and accurately quantify’ the costs,” Crain said. “But for the small businesses that are swept into large companies’ Scope 3 efforts, the SEC hasn’t even tried. The SEC’s proposal does not include any discussion of the Scope 3 costs that will fall on small and private businesses.”
• Crain warned lawmakers that these compliance costs would represent a “huge resource diversion” for small manufacturers.

Regulatory onslaught: Crain shared the NAM’s landmark Cost of Federal Regulations study with lawmakers, explaining that the SEC’s proposal would add to the $50,000-per-employee-per-year regulatory burden small manufacturers face.

• “The SEC’s climate rule is at the center of this regulatory onslaught,” Crain said.

NAM in the news: Bloomberg (subscription), Law360 and Pensions & Investments all covered the NAM’s testimony. 

For Pioneer Service President and Co-Owner Aneesa Muthana, having an engaged team is the key to solving the workforce retention puzzle. The Addison, Illinois–based, woman-owned company is among the many manufacturers that find retention, along with recruitment, to be top business challenges, as the NAM’s Manufacturers’ Outlook Survey shows. So how has Muthana gone about building such a team?

Where it all starts: For Muthana, meeting this challenge begins with upholding the company’s core values: integrity, diversity, leadership, outreach, stewardship, quality and learning.

• These words appear on the shop floor, and every job candidate who comes in for an interview receives a handout outlining their importance. “These are more than just pretty words on a wall,” said Muthana. “We chose these values as a team because they pinpoint our path to success, both financially and ethically.”
• “I give them a copy because I want them to understand the importance from the beginning,” said Muthana. “We want to plant the seed before they’re on our payroll that these are the expectations. Then it becomes fair to hold people accountable to them.”

Providing training opportunities: In keeping with its core values of stewardship and learning, Pioneer Service offers internal training opportunities for employees who express an interest.

• “We offer training to anyone who raises their hand, whether it be in safety or leadership,” said Muthana. “It can also be very technical training on the shop floor. We also provide GD&T training, including for our sales team.”
• GD&T, or geometric dimensioning and tolerancing, determines how parts fit together into an assembly to form a product.
• The benefit of having a salesperson learn about GD&T? “A salesperson would be able to look at a customer print confidently and feel comfortable talking to the customer without needing to have an engineer in the room,” Muthana pointed out.

Offering support: Pioneer Service established a chaplaincy program, which connects employees and their families undergoing hardships—such as caring for an elderly parent, grieving the loss of a loved one or dealing with a personal struggle—with a chaplain who can provide counseling and offer spiritual and emotional support. Muthana says that the chaplaincy program is open to any employee, regardless of religious background or preference.

• “The chaplain service is part of our team,” said Muthana. “We have one chaplain come in every week—one week a male and then the following week a female—who is available to meet with staff if needed.”
• Muthana says she used the service a few years ago when her son, who is in the military, came back from Afghanistan. Many of his friends did not.​​​​​​​
• “As a parent, you feel grateful that your child survived, but also guilty for feeling that way because a lot of his friends didn’t come home. The chaplain service provided me someone to talk to because I couldn’t talk to my family, and I couldn’t talk to my staff,” she recalls. “I developed a strong relationship with the chaplain that I feel never would have happened if I didn’t look out for my staff and implemented the service.”

Job shadowing: When Muthana goes to a speaking event or conference, she sometimes takes one or two of her staff with her so they’re able to benefit from attending. It’s also a way for her to get to know her staff on a more personal level, outside of the formal workplace setting.

The last word: Muthana shared some advice for companies struggling with workforce retention:

• “Having an engaged team and workers only happens with a people-first mentality,” said Muthana. “When you take care of them, you become successful because you have an engaged team that has your back.”
• “It’s harder to make a profit than ever. The only way that we’re going to be successful is by having an engaged team.”

Go deeper: The Manufacturing Institute (the NAM’s workforce development and education affiliate) has many resources to help employers retain and develop their teams.

• Start with this study to learn how to build positive company culture and engage employees, explore strategies in boosting retention and employee engagement, delve into tips on attracting and retaining talent in rural vs. urban settings and check out the MI’s recent white paper on flexibility approaches for manufacturing production workers, a key tool to improving the employee experience.
• Pioneer Service’s approach to workplace needs exemplifies the benefits of focusing on the holistic frontline employee experience, which include higher retention, less absenteeism and greater engagement, according to a study conducted by the MI and PwC.
• Learn more about Women MAKE America and the 35×30 campaign, the MI’s initiatives to increase the number of women in manufacturing, tapping into this population to address persistent workforce shortages. Military-affiliated talent and second chance populations are great sources, too.​​​​​​​

For three sisters in Kentucky, manufacturing is a family affair.

Emily Bastin, Heather Craven and Hannah Geneve are all working in maintenance roles supporting various shops at Toyota Motor Manufacturing Kentucky. Growing up, they had disparate interests—while Emily had taken robotics classes in middle school and Heather had always enjoyed working with her hands, Hannah switched to manufacturing only after working in customer service. Today, all three of them are building careers in manufacturing together.

How they got here: Emily, Heather and Hannah found their way into manufacturing through FAME—an initiative for current and aspiring manufacturing workers that was founded by Toyota in 2010 and is operated today by the Manufacturing Institute, the NAM’s workforce development and education affiliate.

• The FAME Advanced Manufacturing Technician program offers on-the-job training and classroom education that combine technical training with professional practices and lean learnings to create world-class technicians. The two-year AMT program leads to an associate degree and the FAME certificate.
• “They came to my school—the AMT program—and I was like, you know, let’s give this a shot,” said Emily. “I didn’t realize I would have that kind of potential. This was cool stuff.”

The family business: Emily was the first of the three sisters to graduate from FAME, and she has been helping her sisters as they work their way through the program. Both Hannah and Heather are enrolled in FAME while working at Toyota, and they expect to graduate in May 2025.

• “We’re all working in the same plant, and if they need anything from me, I’m there to be supportive,” said Emily.
• “With schoolwork, I try to help Heather, and she tries to help me,” said Hannah. “We all help where we can.”
• “It’s nice to have that sister love to lean on,” said Heather. “They understand the frustration of school and work, and it’s been a pleasure to work with them.”

Opportunities abound: The sisters advise others who might not have considered manufacturing as a career—especially women—to give the industry a second look, emphasizing the sheer diversity of jobs on offer.

• “Working in manufacturing doesn’t necessarily mean you’re working on a factory floor,” said Hannah. “There’s an administrative side, an HR side—there’s a lot more to manufacturing than people expect.”
• “I do see us being examples for women who might not normally see themselves in the field,” said Heather. “You want to see women come in and say, hey, I did it, and you can, too. It’s nice to see yourself reflected back.”

The community: It’s not just their family ties that keep the sisters in manufacturing. All three sisters have high praise for their fellow students and colleagues, and for the supportive culture they’ve encountered at Toyota.

• “The mentorship I got helped me gain my confidence while I was learning,” said Emily. “And even now, the teamwork that goes into everything, every day—it’s been a nice surprise.”
• “Everyone has been super nice, super helpful and super welcoming,” said Hannah. “When you start out, it can seem intimidating, but everyone’s willing to help you out. They really want you to succeed.”

The last word: “It’s nice to feel like you’re a part of that network—that family,” said Heather.

The MI’s 35×30 campaign aims to increase the share of women in manufacturing to 35% by 2030 and spotlights outstanding women in the industry like these sisters. To learn more about Women MAKE America and explore its many opportunities, including its new mentorship program, go here.

The Federation for Advanced Manufacturing Education provides global-best workforce development through strong technical training, integration of manufacturing core competencies, intensive professional practices and intentional hands-on experience to build the future of the modern manufacturing industry. Learn more here.