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Wisconsin Aluminum Foundry CEO Sachin Shivaram knew something had to change. It was 2021, and at one point that year, the turnover rate of new hires for his foundry’s finishing department reached 100%, hurting its on-time delivery rate to customers.

He was facing a business challenge that many manufacturers consistently cite as their number-one issue: workforce retention, along with recruitment.

Finding a solution: Tackling the issue required looking at all facets of WAF’s operations, including onboarding and training of new hires.

• “What we found was we weren’t giving employees the proper environment to train on a new job,” said Shivaram. “We were putting them on the shop floor and telling them to learn while you work.”
• This finding was underscored by a conversation Shivaram had with one of his employees, who had been with WAF for 25 years.
• “He said when he first joined, he had no idea what he was doing in the first six months,” said Shivaram. “He would clock in and just watched what other people were doing and tried to get by and be productive. He didn’t speak the language and just stuck it out. And I thought to myself, with that sort of confusion among new employees, they will just stop coming.”

Fast Forward grant: Recognizing that WAF needed to train new hires without burdening experienced employees or slowing down its operations, the company applied for a Fast Forward grant through the Wisconsin Department of Workforce Development in October 2021.

• Thanks in large part to the $194,000 it received, WAF created a training center where entry-level employees can learn foundry basics, gain finishing and production skills, improve their understanding of customer specifications and acclimate to the physical demands of the job.
• For employees whose first language is not English, the center provides full-time translators who speak Spanish or Hmong. The foundry also pays for English classes if employees want to take them.

The result? To date, WAF’s new hire turnover rate has dropped from 100% to 15%—an astonishing improvement.

Other benefits: For Shivaram, meeting the company’s retention challenge also means supporting employees “through their career cycle.”

WAF’s starting wage is roughly $25 an hour, plus a $1.25 shift premium. The foundry offers incentive plans, which give employees the opportunity to earn up to 5% additional pay. In addition, WAF pays $400 a month to anyone with young children to offset their expenses for child care—not just for formal day care but any child care expense.

• “We have about 100 parents on that program, and that is huge,” said Shivaram. “People consistently mention to me that is a reason why they stay with us.”

Education: Shivaram notes that for anyone who wants to go back to school, even if it’s not exactly related to their career path, WAF supports that and will pay for part of it.

Feedback: While WAF performs annual employee surveys across all departments to garner feedback, as well as formal check-ins, Shivaram says that informal engagement—whether it’s participating in a company-wide event, such as a golf outing or pizza party, having lunch with an employee or just catching up with someone while walking through the plant—is really what gives him a pulse on the foundry.

• “Informal engagement helps people feel valued because they feel like they have a connection with someone—a friendship even. That is hugely powerful,” he noted.

The last word: The Wisconsin Department of Workforce Development recently recognized WAF for its workforce retention efforts—particularly its retention of minorities and women, who had been underrepresented at the foundry.

• That’s no longer the case, Shivaram pointed out proudly—minorities now make up about 10% of WAF’s workforce, and the foundry now has 40 women on the shop floor.
• “Improved employee retention has had a direct impact on the success of our business and our customers. It’s nice to have someone validate that we’re on the right path,” he concluded.

Syzygy Plasmonics is out to disrupt the $1 trillion chemical-manufacturing value chain.

The Houston-based startup, which bills itself as a “deep decarbonization company,” builds fully electric chemical reactors that are powered by light rather than traditional combustion.

That difference, CEO Trevor Best told us, is what will lead to disruption.

The big picture: “Chemical manufacturing is a foundation of modern human society,” Best pointed out. “With petroleum, natural gas and air, [companies] are able to create a wide variety of critical products,” from fuels and fertilizers to textiles and pharmaceuticals.

• “But today, it’s difficult to abate carbon emissions in chemical manufacturing,” he added. “That’s the problem Syzygy is working to solve.”

The backstory: In 2016, Best and Syzygy co-founder Dr. Suman Khatiwada “were looking for something disruptive” to invest in, Best said. “We reviewed lots of publications from major universities, and one day we happened to read about something happening at Rice University. This [idea] just would not die. We could not find a reason why it wouldn’t work, but no one else saw it.”

• After three decades of research, Rice researchers Naomi Halas and Peter Nordlander had developed a new kind of photocatalyst—a material that uses light to speed a chemical reaction—capable of “substantially lower[ing] the temperatures required for industrial-scale hydrogen production,” according to the university.
• “We quickly realized no one had ever made an industrial chemical reactor that could do that,” Best continued. He and Khatiwada contacted the researchers and eventually purchased the rights to the technology.
• Soon after, Syzygy was born.

Breaking records: In 2018, Syzygy successfully duplicated the Rice researchers’ experiment with a microreactor—but the result wasn’t as efficient at creating hydrogen as Best and Khatiwada wanted.

• They continued to scale up their testing, and by 2022, thanks to an advanced, large-cell reactor, the technology could produce hydrogen at 75% efficiency, surpassing the efficiency of traditional industrial chemical reactors.
• “We’re now on par with best-in-class electrolyzers” in terms of hydrogen production, Best said.

Affordable and emissions-free: One of the best things about Syzygy’s reactor? It produces no emissions, a characteristic the company believes will help it reach its goal of removing one gigaton of carbon dioxide emissions from the atmosphere by 2040.

• Another selling point is that the reactor is made with low-cost, readily available materials. Earlier this year, Syzygy unveiled a six-foot-tall reactor—made of “low-cost steel and glass,” according to Best—at its industrial demonstration plant just outside Houston, where it runs every day.
• Capable of multiple types of chemical reactions, the reactor has drawn interest from multiple companies wanting to deploy the technology in their own operations. Syzygy already has signed several contracts.

Up next: The company plans to bring three separate reactions to market at once in the near future.

• In addition to being emissions-free, the three reactions cost less than their traditional-combustion-powered counterparts, by between 20% and 45%, according to Syzygy.

The last word: Syzygy doesn’t envision many limits in its future, said Best.

• “We see this thing going global,” Best said. “We’re talking to customers all over the world. … [In the beginning,] I thought I was crazy. This was a moonshot. But it has exceeded all our expectations.”

Manufacturers are working constantly to develop energy approaches that reduce emissions and promote sustainability—and hydrogen energy is an important part of that mix. But upcoming decisions from the U.S. Treasury Department may make it more difficult for manufacturers to achieve their goals.

That’s why the NAM has been advocating for guidance that implements a hydrogen tax credit in a manner that supports manufacturers’ investments in this technology.  

The background: Through the Inflation Reduction Act, Congress established this tax credit, called 45V, to incentivize companies to develop, produce and use clean hydrogen.

• “Hydrogen is the Swiss army knife of decarbonization—you can use it for nearly everything you can use natural gas for,” said NAM Vice President of Domestic Policy Brandon Farris. “And this credit can be the most significant tool across the globe to bring down the cost of clean hydrogen.”

The problem: As the U.S. Treasury Department finalizes rules around the use of the tax credit, their decisions may undercut manufacturers’ ability to take full advantage of it. Three provisions in particular are at the center of the NAM’s advocacy.

Additionality: The Treasury Department is considering a policy called “additionality,” which would mean that only hydrogen power created through the use of new renewable energy would be eligible for the credit.

• Meanwhile, clean hydrogen energy created with renewable energy that is already on the grid would not qualify—a real problem as our permitting system can often take half a decade or more to add additional clean power to the grid.
• “We have a lot of renewables on the grid already to spur the hydrogen industry. Using existing clean generation should qualify for the credit,” said Farris.

Time matching: Treasury may also impose a provision called “time matching,” which would mean companies would only receive the tax credit if they produce hydrogen energy at the exact same time that they are producing renewable energy.

• According to Farris, this rule misunderstands the energy production process. A company might only produce solar power for a few hours during the day when the sun is shining, for example, but it could still continue to produce clean hydrogen energy overnight using the grid. Yet under the time matching rule, they would be unable to claim a tax credit for the full amount.
• “This provision would create such tight restrictions that it would chill investment and innovation,” said Farris.

Carbon capture: According to the IRA, clean hydrogen created using natural gas with carbon capture also qualifies for the credit.

• However, the IRA also says taxpayers applying for the credits should have a mechanism to demonstrate that their feedstocks are lower in carbon intensity—yet has not specified what that mechanism will be.
• “Taxpayers applying for the credits should be able to prove that their feedstocks have less carbon,” said Farris. “The law says the less carbon they produce, the higher the credit they should receive. We’re just asking for a mechanism that allows taxpayers to prove it.”

The bottom line: Investments in clean hydrogen energy could be a game-changer for America’s energy future, but only if manufacturers have the opportunity to make them. That’s why the NAM has been urging the Treasury Department to create a flexible credit that rejects the additionality and time matching provisions and provides a mechanism that supports carbon capture.

• “Hydrogen is one of the most promising decarbonization technologies available,” said Farris. “If we can make these changes, we can achieve greater hydrogen production and more significant infrastructure investments and expedite decarbonization efforts across hard-to-abate sectors.”

Manufacturers have long sourced great talent from the military community, helping transitioning and former military members apply their skills to America’s most pressing manufacturing challenges.

Through the Manufacturing Readiness Project, the Manufacturing Institute is now making it even easier for military veterans to find excellent civilian careers—and for manufacturers to build an outstanding and talented workforce.

The project: The Manufacturing Readiness Project aims to make military experience comprehensible to civilian employers via a digital credentialing system.

• Military servicemembers are awarded digital badges—stored in digital wallets—based on their military occupation and the training they received, giving both them and future employers a clear way to understand how their military experience prepared them for a career in manufacturing.

The details: The badges include a range of certifications in areas like general safety, general quality and general maintenance.

• Each badge includes a number of additional micro-badges signifying levels and types of achievement. General safety, for example, includes micro-badges in fields like workplace safety, environmental inspections and emergency response.
• These badges are also aligned with more than 300 military occupation codes across all five branches of the military, thereby translating military experience into terms that civilian employers will recognize.

What it means: For the MI, the workforce development and education affiliate of the NAM, this project represents a critical opportunity to expand the military-to-manufacturing pipeline.

• Currently, the MI’s Heroes MAKE America program trains transitioning military personnel in manufacturing skills and works to connect veterans to opportunities in manufacturing.
• The Manufacturing Readiness Project will enhance this effort by providing an avenue for veterans and transitioning personnel to highlight their military experience and enter the MI’s military-to-manufacturing pathway.

Why it matters: This initiative is one of the first of its kind to combine the use of the newest labor market technology tools—Learning & Employment Records, digital badges and digital wallets—to help workers find employment.

• This project is designed to be scalable across military occupations and civilian industries, thus opening the door to a broader range of servicemembers, veterans and employers.

What to expect: The pilot launched on Nov. 13—and within the first few weeks, more than 400 total badges have been awarded to transitioning and former servicemembers.

• So far, the initiative has received vital support from a range of organizations, including Solutions for Information Design, Jobs for the Future, Hire Heroes USA, the Manufacturing Skill Standards Council and Walmart. Following the pilot, the MI looks forward to seeking even more partners across the industry.

Learn more: For more information about the Manufacturing Readiness Project and the MI’s Heroes MAKE America program, please contact [email protected].

So-called “right-to-repair” policies undo many of the federal and state laws designed to protect consumers and manufacturers—and they could result in “steep cost[s] to quality, performance, consumer safety, the environment and the broader U.S. economy,” according to a new NAM-commissioned study.

What’s going on: “The Economic Downsides of ‘Right-to-Repair,’” by Capital Policy Analytics’ Ike Brannon and Kerri Seyfert, finds that enacting right-to-repair laws could disrupt supply chains, leave manufacturers open to intellectual property theft, drive up costs for consumers and manufacturers and increase greenhouse emissions in the atmosphere.

• Right-to-repair policies, currently in place in more than 30 states, generally require manufacturers to make all tools, guides and parts required to repair their devices available to everyone, including independent repair outfits.
• A federal right-to-repair law “would ultimately alter how manufacturers operate their businesses, and there is no guarantee that consumers would benefit, as manufacturers would be forced to change the way their products perform,” according to the study.

Why it’s important: “There is a wide range of unintended and potentially harmful consequences that would arise if the most commonly introduced versions of ‘right-to-repair’ go into effect,” Brannon and Seyfert write.

• In addition to making product repair more difficult, such policies could drastically increase compliance costs for manufacturers and drive up prices for consumers.

Manufacturers have long sourced great talent from the military community, helping transitioning and former military members apply their skills to America’s most pressing manufacturing challenges.

Through the Manufacturing Readiness Project, the Manufacturing Institute, the workforce development and education affiliate of the NAM, is making it even easier for military veterans to find excellent civilian careers—and for manufacturers to build an outstanding and talented workforce.

The project: The Manufacturing Readiness Project aims to make military experience comprehensible to civilian employers via a digital credentialing system.

• Military servicemembers are awarded digital badges—stored in digital wallets—based on their military occupation and the training they received, giving both them and future employers a clear way to understand how their military experience prepared them for a job and a career in manufacturing.

The details: The badges include a range of certifications in areas like general safety, general quality and general maintenance.

• Each badge includes a number of additional micro-badges signifying levels and types of achievement. General safety, for example, includes micro-badges in fields like workplace safety, environmental inspections and emergency response.
• These badges are also aligned with more than 300 military occupation codes across all five branches of the military, thereby translating military experience into terms that civilian employers will recognize.

What it means: For the MI, this project represents a critical opportunity to expand the military-to-manufacturing pipeline.

Read the full story here.

Pharmacy benefit managers—companies that were first established to manage the cost of prescription drugs—are now driving up pharmaceutical prices for employers and patients, the NAM told the House Committee on Energy and Commerce this week.

What’s going on: While manufacturers remain committed to providing health benefits to their workers, PBMs are “[c]ontributing to the increasing costs of health care,” said NAM Vice President of Policy Chris Netram on Monday, ahead of the committee’s markup of 44 pieces of legislation.

• These measures included the Protecting Patients Against PBM Abuses Act and the Medicare PBM Accountability Act.

Why it’s important: PBMs operate with a virtual monopoly, as just a few of them now control up to 89% of the prescription drug market, Netram continued.

• PBMs operate with limited federal oversight and frequently steer business toward pharmacy networks owned by their parent firms.

What should be done: Congress should pass legislation aimed at changing the PBM model.

• “The complex formulas and opaque business practices of PBMs must come to an end,” the NAM wrote in a social post Tuesday. “Congress must address PBM reform to increase transparency, ensure pharmaceutical savings are passed to the plan sponsor and patients and delink PBM compensation from the list price of drugs.”

In related news: CVS Health “will move away from the complex formulas used to set the prices of the prescription drugs it sells, shifting to a simpler model that could upend how American pharmacies are paid,” The Wall Street Journal (subscription) reports.

The president of Connecticut-based outdoor lighting manufacturer Penn Globe recently oversaw the launch of a long-awaited passion project: the Manufacturing and Technical Community Hub, or MATCH, a New Haven, Connecticut–area nonprofit contract manufacturing organization and training program designed to fill job openings in the sector.

Seeing a need: “I am a manufacturer, and one of the things I saw missing from the various workforce training programs available was the manufacturers themselves,” LaFemina said. “They weren’t reaching [the participants] in these training programs. So I was a bit frustrated, but that frustration was good … because it led us to create a program with manufacturers training people for actual manufacturing jobs.”

• In 2021, LaFemina and MATCH co-founder Lindy Lee Gold, senior regional manager of the Connecticut Department of Economic and Community Development, secured funding from partners including Lee’s agency, the city of New Haven, the Connecticut Department of Labor and numerous nonprofits.
• This past June, after LaFemina—now MATCH board chair—and the rest of the organization’s board of directors signed a lease on a building, MATCH was born.

How it works: MATCH begins with a two-week, earn-as-you-learn program, offered in both English and Spanish.

• The organization offers training in everything from basic welding to CNC machining, allowing participants to choose the type of manufacturing that interests them most.
• Then, depending on the complexity of their chosen specialty, they may spend up to six additional weeks in paid, on-the-job training before being placed in jobs with local manufacturers.

Meeting the moment: Unlike job-training offerings that expect a certain level of familiarity with an industry, MATCH starts from scratch.

• “Some places say, ‘Let’s test you on something you know nothing about,’” LaFemina told us. “We want to meet the moment. … We’re asking you to come in, give us two weeks and we will pay you minimum wage for the time that you’re here learning.”
• “We’ll figure out what you like and what you’re good at, and as long as we have the workload to make things, you’ll have a job,” she continued.

Being accessible: MATCH also prides itself on seeking out potential employees, instead of waiting to be found.

• “We wanted a building in a specific neighborhood in New Haven,” LaFemina said. “It’s where the majority of the social agencies are, the immigration services, the reentry services. I’d been hearing for two years about how people have [training] programs but couldn’t get participants because [the program locations] were difficult to get to. This one isn’t.”

Family friendly: One of MATCH’s main goals is to reach parents, many of them women, who have left the workforce due to difficulty securing child care. The program’s core hours are 9:00 a.m. to 2:00 p.m., Monday through Friday, in sync with those of most schools.

• MATCH partners are already considering using the program’s New Haven facility as a training site for day care providers, to help alleviate the shortage of workers in that sector.
• In addition, the program’s first cohort of students came from the New Haven Healthy Start’s Fatherhood Involvement project, one of several local initiatives with which the organization has ongoing relationships.

What’s next: MATCH is on track to be financially self-sustaining in three to five years—and LaFemina predicts big growth after that.

• “I see multiple MATCHes down the road,” she said. “There’s already a call for more. My biggest goal is in a few years all of us older people, who leveraged our connections to make this happen, will turn it over to a younger group that will turn it into something even better than it already is.”

Cybersecurity threats are increasing, while budgets are getting tighter—so what are C-suites doing about it? The NAM, in partnership with PwC, recently conducted a survey of cyber leaders at manufacturing companies to reveal how they think about their operational security and where they aim to make progress.

Why they do it: When asked why their companies are reinforcing the security of their operational technology, cyber leaders showed that they are thinking deeply about their firms’ long-term development.

• Nearly 50% of respondents said they aimed to defend against ransomware—a smart response, given that 2022 saw almost double the number of ransomware attacks on industrial environments as 2021. Worse yet, 70% of those attacks targeted manufacturers.
• The second most popular answer, however, was the companies’ own internal roadmaps outlining their priorities and technology requirements. This shows how integrated cyber defenses are into companies’ long-term plans; they know that as their operations grow more sophisticated and complex, their cyber defenses have to do so as well.
• Last, cyber leaders also cited the evolution of “Manufacturing 4.0,” as they recognize that the rising sophistication of factories and “smart” technology increases attack surfaces and vectors, therefore requiring smarter and more extensive cybersecurity.

Another positive sign: One of the key indicators of success for cyber leaders is whether their IT teams—which traditionally handle cyber defenses—are in sync with their teams handling operational technology.

• On that score, the survey had good news: more than 30% of respondents said those teams were fully integrated at their companies, and almost 40% said they were partially integrated.

Reporting back: A cyber chief needs to keep the rest of the C-suite and the board informed, but not overwhelmed. So what do they tell other company leaders?

• Nearly 80% of respondents said they give updates on what you might expect: the deployment of technical controls or countermeasures to attacks, as well as progress in implementing their roadmaps.
• About 50% of respondents also said they give updates on security audits, and almost 40% provide reports on compliance with regulations.

In their own words: Several CISOs who reviewed these findings for the NAM explained the reasoning in greater detail:

• One CISO said that “getting into quantitative discussion with boards around risk is hard, so the easier route is to do implementation updates, which provide measurable results.”
• Another CISO said “it’s better to share about what is being done, including patches and roadmaps [than overloading boards with background information].”

Get involved: Are you interested in finding out firsthand how companies handle real cyber challenges? Tell your CISO about the Manufacturing Cybersecurity Advisory Council, a group of CISOs from around the industry who gather every other month for a confidential discussion moderated by the NAM’s COO, Todd Boppell.

• The meetings feature guest speakers, feedback on important issues and discussions of current trends, with a focus on how CISOs at large manufacturers should handle threats throughout the supply chain.

Weigh in: If you’d like to share your company’s own approach to operational technology security, you can take the NAM and PwC’s survey yourself! 

Further reading: Lastly, check out PwC’s list of tips for companies looking to beef up their cyber defenses.

In the third quarter of 2023, private-sector R&D spending fell by 1.2%, according to the Bureau of Economic Analysis. Since a harmful R&D amortization requirement took effect in 2022, R&D spending’s rate of growth has slowed dramatically, from 6.6% on average over the previous five years to less than 1% over the past 12 months.

• To protect well-paying R&D jobs and America’s competitiveness, Congress must restore immediate R&D expensing, manufacturers told Congress this week.

What’s going on: At a Monday briefing for staffers of the Main Street Caucus—a group of more than 70 Republican House members that advocates for small businesses—Westminster Tool Chief Financial Officer Colby Coombs talked about the harmful impact the R&D tax change has had on his injection-mold-making business.

• “We’re paying more than double what we made in cash profit last year to the IRS for federal income tax,” he said.
• “To put it differently, we paid just under an additional $27,000 per full-time employee in [our] tax bill this year. It is impossible to continue running your organization paying this amount in taxes [and] not being able to expense our research and development expenditures immediately.”

The background: For close to seven decades, the U.S. tax code allowed businesses to immediately deduct R&D expenses. But starting in 2022, it began requiring companies to amortize, or deduct, these costs over a period of years.

• Also in 2022, a stricter interest limitation—essentially a tax on investment—went into effect. According to a new analysis recently released by the NAM, the stricter limitation could cost nearly 900,000 jobs.
• Earlier this year, full expensing, which allows businesses to deduct the full cost of capital equipment purchases, began to phase down. It is set to fully phase out by 2027.

The effects: According to the Q2 2023 NAM Manufacturers’ Outlook Survey, 78% of manufacturers say the higher tax burden has decreased the funds available to expand core manufacturing activities in the U.S.

• The tax changes “forced us to cancel a major aviation contract this year that would’ve added five new jobs in our community,” Coombs continued. “Five jobs might not seem a lot, but that’s almost 17% of our workforce growth.”
• “We do what we love, which is make good products and make improvements for our country, [but] this is greatly handicapping our ability to continue to grow.”

NAM in action: The NAM has mounted an all-out campaign calling on lawmakers to reinstate immediate R&D expensing, pro-growth interest deductibility and full expensing (or 100% accelerated depreciation).

• Earlier this month, the NAM led more than 1,300 businesses and associations in calling for the measures’ reinstatement.
• It also launched the Restoring Pro-Growth Tax Policies Action Center, which provides background information on these priorities, as well as a digital engagement tool that helps manufacturers and industry advocates contact their senators and representatives.

The last word: Manufacturers are “absolutely vital … to continu[ing] to create good products that are safe and environmentally innovative to help our country,” Coombs said.

• “We need to be able to fully expense immediately, and we need to retroactively fix this [situation] so we can put our money into growing our workforce, purchasing new machines and improving our capabilities so we can compete at a global level.”