News

The year may be winding down, but Rep. Joe Morelle (D-NY) is only ramping up his efforts to reinstate a pro-growth tax provision that helps manufacturers debt finance job-creating projects.
 
What’s going on: As part of its “Manufacturing Wins” campaign, the NAM recently interviewed Rep. Morelle about what his congressional colleagues and he are doing to prevent “Tax Armageddon”—the end-of-2025 expiration of several important tax measures—and restore some vital, already expired tax provisions.

• Among the already expired provisions is tax reform’s standard for interest deductibility, which dictates how much interest on business loans manufacturers can write off. Tax reform capped companies’ interest deductions at 30% of their earnings before interest, tax, depreciation and amortization (EBITDA), but as of 2022, a more restrictive standard has been in place, based on companies’ earnings before interest and tax (EBIT).

What he’s doing about it: Rep. Morelle has introduced the American Investment in Manufacturing Act, “which aims to restore the deductible business interest cap to pre-2022 levels, encouraging vital domestic investment while mitigating the pressures of rising interest.”

• Rep. Morelle also noted that earlier this year he “had the privilege of voting to advance the Tax Relief for American Families and Workers Act in the House of Representatives,” bipartisan legislation that incorporates the AIM Act and would “reinstate the EBITDA deduction standard.”  

Why it’s important: Rep. Morelle explained that the U.S. “stands alone among OECD countries in applying an EBIT-based limitation, placing our industries at a competitive disadvantage.”

• “A return to the full EBITDA deduction would significantly enhance U.S. competitiveness and bolster economic prosperity,” he said.

Manufacturing critical: Rep. Morelle is working to “safeguard tax policies that support and strengthen American manufacturing.” With respect to interest deductibility, Rep. Morelle said that reinstating an EBITDA-based standard “is essential to addressing the current tax code’s disproportionate burden on our manufacturing sector, which relies on loans for substantial investments in critical infrastructure and equipment.”

Read the full interview with Rep. Morelle here.

Oakland County, Michigan, is a powerhouse for American industry. With its concentration of Tier 1 auto suppliers, this district doesn’t just manufacture cars; it helps fuel the nation’s economy.

• “It truly is the county that keeps the world on wheels,” said Rep. Haley Stevens (D-MI), who was born and raised in Rochester Hills and represents Michigan’s 11th Congressional District in the House of Representatives.
• Rep. Stevens sits on the House Committee on Education and the Workforce, the Science, Space and Technology Committee, where she serves as the ranking member of the Research and Technology Subcommittee, and the Select Committee on Strategic Competition with the Chinese Communist Party. She also co-chairs the Manufacturing Caucus and is a member of the Democratic Manufacturing Group. She understands the vital role this region plays in the national economy and has made it her mission to support and strengthen its manufacturing base.

Personal connection: Rep. Stevens’ journey with manufacturing began early in her career when she served as chief of staff on the U.S. Auto Rescue Task Force under the Obama administration to address the automotive industry crisis in 2008.

• “We were able to secure the auto industry and make sure that automobiles were going to be made in Michigan for generations to come,” she said. “It was a team effort between the federal government, the administration, our union laborers and state and local stakeholders.”
• “It was gratifying to work on an initiative that made life better for so many in the communities I grew up in.”

For Rep. Stevens, the experience has served as a guiding star for her approach to crafting legislation that benefits manufacturers, workers and communities alike.

CHIPS and Science Act: One of Rep. Stevens’ crowning achievements in Congress is her work on the CHIPS and Science Act. This legislation has sparked nearly $400 billion in semiconductor-related investments, from new fabs to supply chain capabilities.

• “I fully believe the legacy of the CHIPS and Science Act can be summarized by a simple fact: the United States is on track to produce 20% of the world’s cutting-edge chips, including those powering the AI economy, right here in America by 2030, up from 0% at the start of this decade,” she said.
• But for Rep. Stevens, this wasn’t just about numbers; it was about securing America’s competitive edge in a rapidly evolving global market.

Building the workforce of tomorrow: Rep. Stevens knew that investments in technology alone wouldn’t be enough. That’s why she spearheaded the CHIPPING In Act of 2022, a crucial part of the CHIPS and Science legislation, to ensure that American workers are trained and ready to fill the jobs created by this tech boom. For her, it’s not just about creating jobs—it’s about building careers and futures in communities like the one she represents.

Message to the next generation: Rep. Stevens wants students to know that the best of manufacturing is yet to come. She encourages students to seek out training opportunities, whether at high schools, community colleges or universities, because well-paying jobs are waiting to be filled.

• “Whether you’re interested in hands-on work or designing the next big thing, there’s a place for you in this sector,” she said.

A bipartisan approach: Rep. Stevens understands that true progress often requires collaboration. Asked by the NAM who she would partner with if she were to start a manufacturing company, the representative said it would be Rep. Mike Gallagher (R-WI), who is known for his work on defense issues.

• She notes that together they would build a parts supplier company that leverages digital technology and remanufacturing principles to serve aerospace, defense and automotive industries—a reflection of her forward-thinking and bipartisan approach to solving America’s manufacturing challenges.

What’s next: As Rep. Stevens looks to the future, she is committed to one overarching goal: securing the future of American manufacturing.

• “As we’ve seen over the past few years, outsourcing manufacturing doesn’t work out and isn’t in our best interest,” she points out. “Whether making vehicles or medical supplies, we need to make sure we have the capacity to do that here in the United States.”
• “If we can shore up American manufacturing, I think that would be a pretty good legacy—hopefully I’ve got years ahead of me to make that happen.”

Only at the NAM: Shop Talk is a new series that aims to help you get to know the personal connections, insights and priorities for policymakers who impact our industry.

Congress allowed a pro-growth standard for interest deductibility to lapse in 2022—and manufacturers are already feeling the effects, according to a new NAM explainer.  
 
What’s going on: Thanks to 2017 tax reform, from 2018 to 2021 manufacturers were allowed to deduct interest on business loans up to a cap of 30% of their earnings before interest, tax, depreciation and amortization (EBITDA). As of 2022, however, manufacturers’ interest deductions are capped at 30% of their earnings before interest and tax (EBIT).

• The result: a lower cap on how much interest companies can deduct, which means manufacturers effectively pay more to finance vital investments.   

How it works: “The difference between a company’s EBITDA and EBIT are its depreciation and amortization expenses,” according to the explainer, part of the NAM’s “Manufacturing Wins” campaign.

• “Manufacturers make significant long-term investments in depreciable assets (such as equipment and machinery) and intangible assets subject to amortization (such as intellectual property), so these businesses experience a substantial delta between their EBITDA and EBIT—and thus face a much stricter interest deductibility limit under an EBIT-based standard.”

Why it’s a problem: The more stringent cap has a disproportionate impact on manufacturers, with 77% of the impact falling on manufacturing and related industries—limiting manufacturers’ ability to expand their businesses.

• Also, of the 35 countries with an earnings-based interest limitation, the U.S. is the only one that uses an EBIT-based standard, putting America at a competitive disadvantage in attracting new investment.  

What we need: “Congress must act to restore a pro-growth, EBITDA-based interest deductibility standard,” said NAM Vice President of Domestic Policy Charles Crain. “Reversing the EBIT-based restriction will ensure that manufacturers can avoid increased financing costs and reduced liquidity—enabling capital investments throughout the industry.”

In the NAM’s new “Forge Your Path” series, which aims to provide exclusive insights and inspirational leadership perspectives for small and medium-sized manufacturers, HORST Engineering President and CEO Scott Livingston shares what makes his leadership style successful, the accomplishments he’s the most proud of, where he see his company in the next five years and more.

Q: What is one lesson or insight you’ve gained in leadership that you haven’t widely shared before but that has been a key part of your and/or your company’s success? How did you come to this realization, and how has it impacted your leadership?

Livingston: “My leadership approach is borne out of my experience with family business. It’s hard to explain how much knowledge you absorb when you grow up in an entrepreneurial family. You soak in the knowledge without even realizing it. When people ask me why our family is high functioning and harmonious, I cite the humility of my father as one of the keys. He was fortunate to experience the transition from Generation 1 to Generation 2 as the successor and that informed him when it came time for our transition from Generation 2 to Generation 3.

My leadership approach is a blend of styles learned from my grandfather, father, uncle and mother. I worked with all of them, plus many fantastic nonfamily team members and was able to develop my own approach. Twenty-four years ago, our family business consultants helped me understand an important lesson. My grandfather put business in front of family and then ranked his personal well-being last. My parents and uncle put family first, then the business and their personal well-being last. These are generational differences, but I learned early on that if I focused on my personal success, that would translate to family success, which would result in business success. In my opinion, that is a better order.”

Q: Can you share a quote or mantra that defines your approach to leadership? How has this mantra influenced your decision-making and leadership?

Livingston: “‘Unless someone like you cares a whole awful lot, nothing is going to get better. It’s not.’― Dr. Seuss, ‘The Lorax.’ I keep several copies of ‘The Lorax’ in my office and around the factory. I believe that any business, including manufacturing, has the potential to create unintended environmental side effects, making it challenging to achieve true sustainability. However, you can lead a responsible business. This ethic was espoused by Yvon Chouinard of Patagonia, but Dr. Seuss summed it up. I apply the mantra to my conservation- and environmental-oriented mindset, but also to my broader philosophy about business and leadership. The idea is embedded in HORST Engineering’s core purpose that includes the phrase ‘we help people fly safely,’ as well as in our core values.”

Q: What accomplishments at your organization are you the most proud of and why?

Livingston: “I’m proud of our family business ownership model that has lasted three generations. Our values are built into the DNA of the culture. I’m proud of the people who have been promoted to positions with more responsibility because they are making an impact. I’m most proud of our incredibly high quality. We are constantly striving for zero defects. That is a lot harder to achieve than most realize. We manufacture some of the most precise small parts from the most difficult materials, in quantities so low that it would seem impossible to succeed. We still find a way.”

Q: Where do you see your company in the next five years, and what are you hoping to achieve?

Livingston: “We have much to accomplish. We emerged from the COVID-19 pandemic with a renewed focus on process improvement and diversification. We were booming in 2019, launched a factory expansion and then the aerospace industry got hammered by the pandemic-induced recession, inflation and supply chain challenges. Thankfully, we are well-positioned with a new factory completed in 2021 that has room for growth. We are investing heavily in people development, innovation and industry diversification. Aerospace and defense will remain the mainstay of our part offerings, but success will be achieved when we balance that with business from other mission-critical industries. Even though our product portfolio is a crazy mix of low-volume parts, we will find ways to automate and streamline. Also, in five years, we will be doing career pathing while graduating people from our own training programs. This includes critical roles like CNC machinists and quality inspectors. We will build a company that is more resilient to future down cycles, which are sure to come.”

Q: What are the past three books that you’ve read or podcasts that you’ve listened to that you would recommend to your peers and why?

Livingston: “I absorb a lot of content from all angles on a variety of topics. Books I’ve read or listened to recently are ‘Titan,’ ‘The Boys in the Boat’ and ‘Unreasonable Hospitality.’ ‘Titan’ is the fascinating life history of John D. Rockefeller and Standard Oil. My brother-in-law, who is a rower, lent his copy of ‘The Boys in the Boat’ to me. It’s about the 1936 Olympic gold medal–winning crew from the University of Washington. The Great Depression–era history was fascinating, and the human story was amazing. I’ve had a long endurance sports career and draw inspiration from stories like this. ‘Unreasonable Hospitality’ taught me some wonderful business lessons related to people management and customer service.

I listen to a lot of podcasts, mostly on my commutes (by bike) to work. Three highlights include ‘The Rich Roll Podcast,’ the ‘Consummate Athlete Podcast’ and the ‘Check 6 Podcast.’ The first is about many things, but you could generally refer to it as ‘personal development.’ The second is specific to endurance sports, particularly running and cycling. The third is one of my favorite aerospace industry shows. Oh, and I just listened to a multi-podcast series on Freakonomics Radio about the insane cost of higher education and the college admissions process. Our oldest child is a high school senior and in the middle of this process, and I found the topic to be super-interesting.”

The Conference Board Leading Economic Index for the U.S. fell 0.5% to 99.7 in September, following a 0.3% decline in August. Over the past six months (March to September 2024), the LEI has decreased 2.6%, which is worse than the 2.2% decline in the prior six months (September 2023 to March 2024). Weakness in new factory orders continued to be a significant drag on the index.

In addition, the yield curve remained inverted, building permits declined and consumers had a tepid outlook on future business conditions. Although the LEI signaled a recession is likely imminent or underway again in September, the index has been a poor predictor of recessions in the past few years. While it has been inaccurate in forecasting where the overall economy is going, the index includes several manufacturing-specific components that illustrate the recent weakness in the manufacturing sector.

Meanwhile, the Coincident Economic Index inched up 0.1% in September to 112.9 and rose 0.9% over the past six months. On the other hand, the Lagging Economic Index declined 0.3% in September to 118.9 and contracted 0.2% over the past six months.

Existing home sales dropped 1.0% in September and fell 3.5% from September 2023. Housing inventory rose to 1.39 million units, reflecting a 1.5% increase from August and a 23.0% boost from last year. The median existing home price was $404,500, up 3.0% from last year, with all four U.S. regions reporting price increases.

Single-family home sales edged down 0.6% from August, with the median price increasing 2.9% from September 2023 to $409,000. Condo and co-op sales dropped a more significant 5.1% in September and were down 14.0% from the previous year, with the median price up 2.2% from the prior year to $361,600.

Homes were typically on the market for 28 days in September, up from 26 days in August and 21 days in September 2023. First-time buyers made up 26% of sales, matching the all-time low from the previous month and down from 27% in September 2023. All-cash sales accounted for 30% of transactions in September, up from 26% in August. Meanwhile, investors or second-home buyers represented 16% of homes purchased in September, down from 19% in August. Distressed sales represented 2% of sales in September, just slightly above the rate of 1% the prior month.

The S&P Global Flash U.S. Manufacturing PMI rose from 47.3 in September to 47.8 in October, signaling a deterioration in business conditions for the fourth consecutive month but at the slowest rate since August. The largest negative contribution to the PMI came from new orders, which fell for the fourth straight month but at a slower rate than the prior month.

Suppliers’ delivery times lengthened for the first time in three months, due to freight-related congestion and weather-related disruptions. Manufacturing input cost growth cooled to a seven-month low thanks to lower fuel prices, reduced buying and competition among suppliers. Inventories fell at the sharpest rate in 14 months. Production and employment also fell but at reduced rates from September. While business conditions improved slightly in October, future optimism in manufacturing hit a nine-month high.

Manufacturing activity in the Fifth District remained sluggish in October. The Fifth Federal Reserve District consists of Virginia, Maryland, the Carolinas, the District of Columbia and most of West Virginia. Although it remained negative, the composite manufacturing index improved from -21 in September to -14 in October. Among its components, shipments increased from -18 to -8, new orders rose from -23 to -17 and employment improved from -22 to -17. The vendor lead time index increased from -4 in September to 6 in October, and firms continued to report declining backlogs. Companies also grew slightly less pessimistic about local business conditions, but the index remained in negative territory. The average growth rate of prices paid decreased in October, while the rate of prices received increased slightly.

Expectations for future shipments and new orders both increased further into positive territory, suggesting that firms still anticipate improvement in these areas over the next six months. Expectations for backlogs improved and became positive. Meanwhile the outlook for future local business conditions improved dramatically, rising from -6 to 21. Firms continue to exhibit a more cautious approach to equipment and software spending, as expectations remained negative. Similarly, spending on capital expenditures declined further into negative territory. In sum, businesses in the Fifth District remain optimistic about consumer demand improving in the near future but remain cautious about their own expenditures.

Manufacturer sentiment fell in the third quarter of this year, according to the NAM’s Q3 2024 Manufacturers’ Outlook Survey, out Wednesday.

What’s going on: Results of the survey, which was conducted Sept. 5–20, reflect “preelection uncertainty,” NAM President and CEO Jay Timmons said—but also larger economic concerns.

• “The good news is that there is something we can do about it,” said Timmons. “We will work with lawmakers from both parties to halt the looming tax increases in 2025; address the risk of higher tariffs; restore balance to regulations; achieve permitting and energy security; and ease labor shortages and supply chain disruptions.”

Key findings: Notable data points from the survey include the following:

• Some 62.9% of respondents reported feeling either somewhat or very positive about their business’s outlook, a decline from 71.9% in Q2.
• A weaker domestic economy was the top business challenge for those surveyed, with 68.4% of respondents citing it.
• Nearly nine out of 10 manufacturers surveyed agreed that Congress should act before the end of 2025 to prevent scheduled tax increases on manufacturers.
• The overwhelming majority—92.3%—said the corporate tax rate should remain at or below 21%, with more than 71% saying a higher rate would have a negative impact on their businesses.
• More than 72% said they support congressional action to lower health care costs through the reform of pharmacy benefit managers.

The last word: “When policymakers take action to create a more competitive business climate for manufacturers, we can sustain America’s manufacturing resurgence—and strengthen our can-do spirit,” Timmons said.

• “This administration and Congress—and the next administration and Congress—should take this to heart, put aside politics, personality and process and focus on the right policies to strengthen the foundation of the American economy.”

In a politically divided time, the NAM set out to answer an important question: Can businesses build trust, brighten views about America’s creators and rekindle belief in the American Dream? The answer, tested over three-and-a-half days at the Circleville Pumpkin Show in Ohio: “Yes, they can—and we probably should,” said NAM Managing Vice President of Brand Strategy Chrys Kefalas.

Why it matters: Declining American pride is more than just a cultural shift—it’s a business problem. “When people lose faith in the American Dream, they lose faith in manufacturers and the business community’s ability to drive progress, leading to skepticism, division and fewer supporters of the environment that manufacturers and businesses need to succeed,” said Kefalas.

• This challenge comes at a pivotal moment: America’s 250th anniversary—its Semiquincentennial—arrives in 2026. This milestone offers a once-in-a-generation opportunity to reignite pride and belief in the country’s future.

What we built: With funding from Stand Together Trust, the NAM and its partners developed the Route 250 Diner, a pop-up experience that combined stories about community creators, snack giveaways, career resources and service opportunities. It brought together businesses, trade groups and civic organizations to see if they could elevate creators locally and nationally while inspiring civic pride and acts of service.

The results: Nearly 4,700 visitors of many ages and political affiliations pledged to undertake service opportunities and shared overwhelmingly positive feedback. Some even contributed cash to survey boxes as a gesture of gratitude. The concept clearly resonated.

• “We need more of this,” “Love this” and “I hope y’all be back” were frequent refrains among survey respondents. “I believe that how towns like Circleville go, so goes America,” said Circleville Mayor Michelle Blanton. “What resonates here can inspire communities across the country.”

Leading brands take part: The concept won early supporters like Snap-on, Johnson & Johnson and The J.M. Smucker Company, as well as growing enterprises like Seaman Corporation and Centrus Energy. The Honda–LG Energy Solution battery plant joint venture team participated on-site, highlighting the 2,200 job opportunities at the new plant in Fayette County, Ohio.

• The National Restaurant Association and the International Franchise Association, which represent two vital sectors of the American economy, joined the effort, as well as state business groups The Ohio Manufacturers’ Association and the Ohio Restaurant & Hospitality Alliance.

Support: The NAM set out to complement national and state efforts to celebrate America’s 250th anniversary and promote civic education. The concept enjoyed the participation of the congressionally chartered, nonpartisan U.S. Semiquincentennial Commission (America 250), state-chartered America 250-Ohio, the Bill of Rights Institute and the Edward M. Kennedy Institute. 

What they’re saying: Gov. Mike DeWine (R-OH) highlighted the initiative on social media, focusing on advancing participants’ career aspirations. “Empowered individuals and driving positive change in their communities are vital to America’s next 250 years,” said Stand Together Vice President Sarah Cross, stressing another key point of the activation.

• NAM President and CEO Jay Timmons: “By strengthening civic pride, inspiring acts of service and deepening our connections to our communities, we can ensure that manufacturers and enterprises across the nation shape a brighter future for America.”
• America250 Chair Rosie Rios: “The Route 250 Initiative is an important celebration of America’s creators and makers who play a vital role in strengthening our communities through meaningful acts of service as we approach America’s 250th anniversary in 2026.”
• National Restaurant Association President and CEO Michelle Korsmo: “The Route 250 Initiative reminds us that in every community, there are people creating opportunities for themselves and others—and that’s something worth celebrating as we help more people learn how to make America’s next 250 years better than our first.”
• Bill of Rights Institute President and CEO David Bobb: “By engaging in meaningful, constructive dialogue and celebrating the individuals who by their hands, hearts and minds are creating a better future, we can inspire a renewed commitment to those enduring ideals.”
• America 250-Ohio Executive Director Todd Kleismit: “By sharing stories of creators and community heroes and inviting us all to learn what we’re doing to serve our community, we’re not just celebrating the past—we’re inviting people to see themselves in America’s future.”
• The Ohio Manufacturers’ Association President Ryan Augsburger: “As we look ahead to America’s 250th anniversary, Ohio manufacturers will continue to lead the way. This diner and the Route 250 Initiative give us the chance to reflect on our past while also inspiring the next generation to shape the future—one innovation, one community, one creator at a time.”
• Ohio Restaurant & Hospitality Alliance Managing Director of External Affairs and Government Relations Tod Bowen: “As we look ahead to America’s 250th anniversary in 2026, we’re reminded of the importance of spaces like this. The diner invites us all to reflect on how we’re contributing to our communities and how, by coming together, we can make the next 250 years even better.”

The big takeaway: “At the heart of this proof of concept is a message: manufacturers, creators and communities all play essential roles in writing the next chapter of America’s story,” said Timmons. “This is a model, showing how civic pride, community service and the power of industry can renew belief in the American Dream.”

• “Some argue that no single narrative can unite the American people, but the Route 250 Diner and manufacturing’s story in America prove otherwise,” Kefalas added. “The question isn’t if we can find a unifying narrative—it’s who will step up to lead it, and that’s why we tried to show the way forward.”

What’s next: The NAM will evaluate the full results of the proof of concept with its partners and other key stakeholders, continuing to look for ways of using America’s 250th anniversary to strengthen the industry and the country.

In the news: POLITICO Influence covered the launch announcement, and The Scioto Post of Pickaway County, Ohio, previewed the experience.

More: Watch highlights of the grand opening event.