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The Environmental Protection Agency is considering a rule that would change the way power plants operate in America—but without significant adjustments, it could have devastating consequences.

The background: Right now, about 60% of America’s power generation comes from a combination of coal and natural gas.

• The EPA’s proposed rule would require coal and natural gas–fired power plants to deploy either carbon capture technology or hydrogen power within 10 years to lower emissions.
• If unable to deploy these technologies at the scale required in that timeframe, these power plants would be forced to shut down.

The problem: While carbon capture and hydrogen power technologies are vital to decarbonization, the required scale and timeline make implementing this rule difficult.

• “Carbon capture and hydrogen are tremendously promising—and manufacturers are leading the way in developing these technologies. But neither have been deployed at the scale needed to support 60% of our entire power generation within a short timeframe,” said 51�Թ��� Vice President of Domestic Policy Brandon Farris.

The timeline: The EPA’s proposed 10-year timeline leaves little room for flexibility when it comes to implementing the order. According to Farris, environmental impact studies alone could take more than four years.

• “We’re talking about 10 years to essentially retrofit more than half of our power generation,” said Farris. “You would need this permitted, installed and operational within those 10 years, which would be difficult even if the technology was available today at scale.”

The impact: The rule would require plants that do not meet the new standard in 10 years to shut down entirely. As a result, many plants would have to shift resources immediately to plan for a likely shutdown.

• “The big hammer is these plants having to shut down in 10 years if these technologies are not installed,” said Farris.
• “So you’ll see a lot of money spent and not a lot of progress made because this technology isn’t ready at scale, and we have only a few years to permit, install and operate.”

The next steps: The 51�Թ��� has submitted on the rule, and the EPA is working on a final version now.

• “We’ve emphasized that the timeline is not workable,” said Farris. “You would need to have a longer off-ramp and a way to ensure that the technologies required are proven at scale.”

The 51�Թ��� secured a critical win Monday when the Securities and Exchange Commission issued an order reversing course on a novel rule interpretation that would have forced private companies to disclose proprietary financial information publicly, (subscription) reports.

What’s going on: In 2021, the SEC adopted a novel reinterpretation of SEC Rule 15c2-11, imposing the rule’s public disclosure requirements on private companies that raise capital via corporate bond issuances under SEC Rule 144A—without giving manufacturers the opportunity to provide comment on the damaging impacts of such a consequential change.

• The 51�Թ��� and the Kentucky Association of Manufacturers pursued multipronged litigation and advocacy efforts arguing to the Commission and to the courts that the SEC’s actions were both procedurally improper and substantively indefensible.
• Rule 15c2-11 requires public disclosures for the protection of everyday investors in publicly traded companies that issue so-called “penny stocks.”
• But in 2020, the SEC expanded the rule to apply to privately held companies issuing corporate bonds to large institutional investors under Rule 144A.
• For decades prior, Rule 144A permitted trades in private companies’ fixed-incomes securities without public disclosure of the issuers’ financial information. Indeed, the SEC’s entire purpose for adopting Rule 144A was to allow companies to access the debt markets without public disclosure of their financial and business-strategy information.

51�Թ��� in the news: The SEC took the rare step of reversing its position on Monday, that “it is appropriate in the public interest and consistent with the protection of investors” to exempt Rule 144A fixed-income securities from the requirements of Rule 15c2-11.

• “The order comes after industry groups petitioned the agency to provide relief to certain corporate debt issuers. The 51�Թ��� and the Kentucky Association of Manufacturers, which sought such relief in November 2022, also sued the agency in September, arguing that the SEC’s policy was enacted without public input and could harm job-creation efforts, given how many private companies rely on 144A bonds,” Law360 reports.
• (subscription) also covered the news.

Why it’s important: Expansion of Rule 15c2-11 would have meant higher borrowing costs and less liquidity in the market—and resulted in more than 100,000 job losses a year, according to recent prepared on behalf of the 51�Թ���.

Our take: The SEC’s action not only restores private companies’ ability to access the debt markets, but also exemplifies why the 51�Թ��� litigates—as a last line of defense, to force an agency’s hand.

• “This order from the SEC is a landmark victory for manufacturers and a powerful affirmation of the 51�Թ��� Legal Center’s ability to rein in regulatory overreach,” 51�Թ��� Chief Legal Officer Linda Kelly Tuesday. “We are thrilled that the Commission has reversed course on this unlawful attempt to impose a novel, onerous and wholly unjustified regulatory mandate on private companies.”
• Added KAM President and CEO Frank Jemley: “We applaud the SEC’s decision to withdraw its ill-conceived proposal. American business and free enterprise are best served when government respects the boundaries of its authority, which the SEC clearly did not do in this matter.”

For two decades, the Manufacturing Leadership Awards have recognized outstanding manufacturing companies and their leaders for their groundbreaking use of advanced manufacturing technology. What started out in 2005 as a modest 50-person gathering in New Orleans has evolved into one of the industry’s most exciting celebrations.

This past June, the honored an impressive 163 projects and leaders, in front of an electrified crowd of 450 guests. The program’s growth is a testament to the momentum of technologies and their success in creating performance improvements and boosting competitiveness.

With more manufacturers adopting digital and data-driven methods every day, there is still much to celebrate. The program’s 20th season is now , with expectations running high for another amazing show in 2024.��

A proud heritage: Past winners from the Manufacturing Leadership Awards include companies and leaders from nearly every industry, from 10-person shops to multinational enterprises, located all around the world.

• Each entry is reviewed by a judging panel made up of industry experts with extensive experience in technology transformation. The top-scoring projects are selected as category finalists, and the category winners are revealed at the awards gala.
• Finalists and winners report that the awards have helped them gain new customers, boosted employee morale and team camaraderie and encouraged their executive leadership to continue investing in digital technology initiatives.
• Since the program’s inception, more than 1,000 leaders and projects have been honored for their achievements.

A wide range of candidates: The awards program welcomes submissions from small and medium-sized enterprises, as judges look for the overall level of impact that projects have had on a company’s operations—not the dollar amount of their investments.

• If technology has measurably helped a company improve its operational performance, upskill employees or enter new business markets, those projects are excellent candidates for award nominations.

The categories: Over the years, the awards have encompassed an evolving list of categories, currently at .

• Project categories include AI and Machine Learning, Collaborative Ecosystems, Digital Network Connectivity, Digital Supply Chains, Engineering and Production Leadership, Enterprise Integration and Technology, Operational Excellence, Sustainability and the Circular Economy, and Transformational Business Cultures.
• Individual categories include Digital Transformation Leadership, for established manufacturing operations executives who lead Manufacturing 4.0 initiatives, and Next-Generation Leadership, for up-and-coming operations leaders aged 30 or younger.

Get involved: All manufacturers in any location and of any organizational size are eligible and encouraged to apply. Program details, rules and instructions for how to submit a nomination are available on the . Entries are due Jan. 17, 2024.

Permanent restoration of R&D expensing is a top priority for manufacturers in Minnesota and the U.S. in general. That’s why Rep. Pete Stauber (R-MN) plans to sign onto the American Innovation and R&D Competitiveness Act as a cosponsor, he recently told the 51�Թ���.

What’s going on: Rep. Stauber discussed the importance of competitive R&D tax policy, along with the regulatory onslaught targeting manufacturers and the need for permitting reform, during a recent 51�Թ���-organized facility tour of Clow Stamping Co. in Merrifield, Minnesota.

• “Full expensing for R&D costs in the year in which they are incurred is essential for innovation and competition,” Rep. Stauber told the group, which included Pequot Tool & Manufacturing CEO Karlo Goerges in addition to 51�Թ��� representatives and Clow Stamping leadership. “It’s imperative that it be reinstated as soon as possible.”
• The American Innovation and R&D Competitiveness Act would restore immediate R&D expensing permanently for small businesses.
• “Full R&D expensing was instrumental in our growth until the law changed last year,” said Clow Stamping owner Reg Clow. “It’s definitely having an impact on us. Our expenses have gone way up.”

Workforce woes: Clow is nearing the end of a $20 million facility expansion that will add 107,000 square feet of floor space and at least 60 jobs—but finding enough workers to fill those jobs won’t be easy.

• By implementing automation in its shipping and receiving departments, the company will be able to both increase its shipping output without additional workers and channel its current hiring efforts toward filling open positions with the production departments, Clow said.
• This is a short-term solution, however, and manufacturers like Clow Stamping need policymakers’ help to ensure the industry has enough skilled workers for the decades to come.
• During the facility visit, the group discussed the importance of educating younger generations about the many opportunities available in manufacturing, via initiatives like . This award-winning perception campaign undertaken by the 51�Թ��� and its 501(c)3 workforce development and education affiliate, the Manufacturing Institute, aims to recruit 600,000 new manufacturing workers by 2025.

The last word: “Manufacturers account for more than 55% of all private-sector R&D spending in the United States,” said 51�Թ��� Managing Vice President of Policy Chris Netram.

• “Policies that encourage this innovation will allow the industry to continue to drive our economy forward. The 51�Թ��� thanks Rep. Stauber for his support of the American Innovation and R&D Competitiveness Act and calls on Congress to swiftly pass this bill.”

Last week, Saint Paul College in St. Paul, Minnesota, which boasts a student body that is 65% people of color, became the 19th stop of 20 for the Creators Wanted Tour, a joint project of the 51�Թ��� and the Manufacturing Institute, the workforce development and education affiliate of the 51�Թ���.

Over three days, with Union Pacific as the lead sponsor, the stop drew more than 600 visitors, from students to educators. Meanwhile, 42,000 online signups in Minnesota helped the campaign surpass 1.5 million nationwide from students and career mentors interested in modern manufacturing careers.

Twin Cities kickoff: Union Pacific Executive Vice President of Marketing and Sales Kenny Rocker gave the keynote address at the , emphasizing the reward of manufacturing careers. He was joined by MI President and Executive Director Carolyn Lee, Saint Paul College President Dr. Dee Dee Peaslee, Minnesota Chamber of Commerce President and CEO Doug Loon and Trane Technologies Vice President of Product Management Dave Molin.

• “When I talk about opportunities, I’m talking about really good-paying jobs … At Union Pacific, we’re talking jobs that are … averaging over $100,000 a year, and that’s without benefits, and so you just really have an opportunity to make an impact from that perspective,” said Rocker.

• “At Trane Technologies, our vision is to boldly challenge what’s possible for a sustainable world,” added Molin. “It is the engine of our company, and we live it every day. And to do that, we need bright minds and the best minds in the world. We need diverse thinkers, we need creators, and our doors are open to everyone.”

• Notably, leaders from key government business and workforce partner organizations attended the kickoff, including the Minnesota State Advanced Manufacturing Center of Excellence, Minnesota Black Chamber of Commerce, Minnesota Parent Union and St. Paul Area Chamber, representatives from the offices of U.S. Reps. Brad Finstad (R-MN-1), Angie Craig (D-MN-2), Dean Phillips (D-MN-3), Betty McCollum (D-MN-4) and Michelle Fischbach (R-MN-7), Mayor of South St. Paul Jimmy Francis and State Reps. Jon Koznick (R), Emma Greenman (D) and Samantha Sencer-Mura (D).

Experience and exploration: Students delved deep into immersive activities, from solving manufacturing-related puzzles in the Creators Wanted mobile experience to virtually navigating a locomotive through Union Pacific’s simulators. Equally captivating was the sight of the actual railroad track, which was complemented by insightful career anecdotes from Union Pacific professionals.

• Eighty-seven percent of students surveyed reported a significantly improved view of modern manufacturing careers after completing the immersive experience.

Live Q&A sessions: The stop also offered structured opportunities for students to learn about manufacturing organizations’ support for the next generation of talent, along with the importance of mentorship and personal development in shaping successful careers.

• The , featuring two Union Pacific senior managers—Amy Bang, Sr. manager of diversity and inclusion, and Ken Kuwamura, Jr., manager of talent acquisition—and Saint Paul College instructors, zeroed in on the crucial roles of mentorship, diversity and .
• The , with Jake Yernberg, automotive instructor, Saint Paul College; Caitlin Bundy, manager of corporate sustainability, Union Pacific; and Preeti Subramanian, senior product manager, Trane Technologies, accentuated the pivotal role of manufacturing in tackling global challenges. Panelists pointed out the advantages of the manufacturing sector, citing competitive pay and the sector’s potential in , such as sustainability and climate change.

Interactive Learning: Everfi^®, Ecolab and Schwan’s joined Union Pacific in bringing in representatives to give students career advice—and offer activities to spark their curiosity.

• Everfi^® showcased a new digital education program, “Future Creators,” co-developed with the MI and Union Pacific, to give middle and high school students a peek into STEM careers.
• Saint Paul College also took students on a tour of its robust Trades and Technical Education program.

Beyond the Tour: The Twin Cities event is a part of Union Pacific’s overarching initiative, which aims to inspire more women and youth to pursue modern industrial careers, and the sustained drive to enhance perceptions of manufacturing careers in the United States and empower more people to create the future.

The last word: “I want all of you out here, the students, to have an opportunity to go out there and win and compete and further your careers and do well in life,” said Rocker, echoing a theme the Creators Wanted Tour has promoted since its inception: manufacturers and manufacturing care about students and their future.��

Next up: The pioneering Creators Wanted Tour concludes next month, Oct. 17–21, at the in Circleville, Ohio.��

To restore a U.S. tax landscape that promotes manufacturing competitiveness, Congress should act quickly in advancing bicameral, bipartisan legislation that would ensure the tax code once again supports innovation.

That was the message from the 51�Թ��� and several manufacturers to lawmakers last week.

What’s going on: The 51�Թ��� and company leadership from manufacturers Westminster Tool and Brewer Science visited Capitol Hill last week to brief legislators on a harmful change to the tax treatment of research and development.

• The briefing was held by the 51�Թ���-led R&D Coalition in cooperation with the offices of Reps. John Larson (D-CT) and Ron Estes (R-KS) and Sens. Maggie Hassan (D-NH) and Todd Young (R-IN).
• Larson and Estes introduced the American Innovation and R&D Competitiveness Act in the House, while Sens. Hassan and Young introduced the American Innovation and Jobs Act in the Senate. These are the measures manufacturers are urging legislators to pass.

Why it matters: “We paid $26,679 per full-time employee in additional federal tax this past year” because of the change, Westminster Tool Chief Financial Officer Colby Coombs told lawmakers at the briefing.

• “This increased federal tax on R&D forced us to cancel a major aviation contract that would have added … new jobs in our community and forgo a significant capital investment. Without fixing this issue, in 2023, we expect an additional tax bill of almost $18,000 per employee,” he continued.
• Added Brewer Science Government Programs Director Doyle Edwards: “We have lost IP to China in the past, and fight[ing] that in the courts is a no-win situation. So the only way to win is to out-invent them. And that’s what we invest our money to do. However, with [the tax change] … we’re allowing China to actually catch up.”

The background: For nearly seven decades, manufacturers could deduct their R&D expenses fully in the year in which the costs were incurred. However, since the change last year, businesses must instead deduct these expenses over a period of years, making R&D more costly.��

Legislative fix: To protect manufacturers’ R&D, jobs and competitiveness, Congress should move immediately on bipartisan legislation to restore R&D expensing.

• “R&D is the lifeblood of advanced technology development for our company, for our industry, but really for the nation,” Edwards continued. “And so our message is, we need your help. We need your leadership to resolve this policy issue.”

Take action: Learn more about what the 51�Թ��� is doing to advocate for sound tax policy at our R&D action center.

Within the footwear business, Okabashi is unique. The company, based in Buford, Georgia, is not only a family-owned company focused on sustainability, but also, according to the company’s leadership, producing part of the 1% of footwear still made in the United States.

For third-generation shoemaker Sara Irvani, this choice to build a sustainable and successful business in the U.S. was made possible only thanks to constant research and development.

The backstory: Irvani’s family started the company 40 years ago, and it always tried to reduce waste, both for the positive environmental impact as well as to improve its bottom line.

• “By developing closed-loop manufacturing processes, we were able to reuse some of the materials that otherwise might have gone to waste,” said Irvani. “That helped us stay more competitive—and from there we’ve developed innovations in processes and systems and materials that build on that foundation.”

The process: Okabashi’s sustainable processes extend throughout the product lifecycle—from incorporating recycled or biological elements (like soy) that ensure products last longer to preventing disposable waste to recycling post-consumer shoes into new ones.

• “When we look at sustainability of a product, we do it holistically—we look at what it’s made of, where it’s made, how it’s made, the lifecycle, the quality—and we’ve been able to innovate and develop so that our manufacturing process doesn’t create waste,” said Irvani.
• “Without R&D, we would not only be creating the additional cost basis of throwing away all those scraps, but we would also not be able to eliminate waste that is by default landfill or ocean bound.”

The circular economy: In the traditional, linear economic model, inputs go into production, a product reaches a consumer, the consumer uses the product and eventually throws it away. In contrast, Okabashi is working to perfect a circular economic model for its products, said Irvani.

• “If you are designing for circularity, you might use renewable and recycled resources, develop them into that same product with a level of quality that lasts longer, and when the customer is ready to move on, it can be remade into something else,” said Irvani. “That’s how the loop continues. When we talk about circularity, we’re creating that virtuous cycle.”

The homegrown production: Okabashi’s R&D efforts both help it stay in the United States by keeping costs down and require domestic production to work.

• “To remake and recycle a product into something new, you need to have local production,” said Irvani. “You can’t be sending things halfway across the world to be unmade and remade and sent back. That’s why R&D locally and domestically is so important, to help produce circular systems.”

The local benefit: Irvani is quick to point out that money spent on R&D creates significant financial benefits for local communities.

• “There’s a multiplier effect for commercially oriented R&D in terms of the jobs it can create and the impact on the local economy,” said Irvani. “You get a very strong return on investment for both the company and for the community.”

The global perspective: R&D is essential for U.S. companies competing with manufacturers abroad, Irvani added.

• “For U.S. manufacturing broadly, R&D is critical to stay at the forefront of the innovation curve,” said Irvani. “Unless we’re proactively investing and developing new and better ways of doing things, we won’t be globally competitive.”

The last word: “It is imperative industry and retail move toward a circular-based economy,” said Irvani. “That’s not something that just happens or falls from the sky. Consumers are demanding it, and R&D is our pathway to that future.”

The 51�Թ��� and the Kentucky Association of Manufacturers are hitting back against an attempt by the Securities and Exchange Commission to force privately held businesses to make public financial disclosures.

What’s going on: On Tuesday, the 51�Թ��� and KAM filed suit in federal court challenging the SEC’s novel reinterpretation of its Rule 15c2-11.

• The reinterpretation—on which the SEC has not granted companies the opportunity to comment—would require private firms to release confidential financial information publicly.

The background: Rule 15c2-11 requires disclosures to protect investors in publicly traded companies issuing so-called “penny stocks.” But the SEC has broadened the rule’s application to include privately held companies that issue corporate bonds to large institutional investors under an entirely different regulation, called Rule 144A.

• Everyday investors can’t purchase corporate bonds issued under Rule 144A, so there is no reason to require public disclosures from these businesses.

Why it’s important: Expanding Rule 15c2-11 will mean higher borrowing costs and reduced liquidity in both the manufacturing industry and throughout the larger economy, according to a new released by the 51�Թ���.

• The reinterpretation would lead to job losses of more than 100,000 every year, according to the analysis.

Manufacturers speak out: “The SEC never allowed public comment on its novel reinterpretation of Rule 15c2-11, there is no conceivable benefit to the new standard and the SEC did not consider the impact that its about-face will have on privately held businesses,” 51�Թ��� Chief Legal Officer Linda Kelly. “The 51�Թ��� Legal Center is filing suit to hold the SEC accountable and protect manufacturing growth, job creation and U.S. competitiveness.”

• KAM President and CEO Frank Jemley added: “The SEC’s unlawful overreach threatens privately held manufacturers in Kentucky and across the country, so the Kentucky Association of Manufacturers is proud to join the 51�Թ��� in this important litigation.”

Bringing back parts of a policy it dropped more than half a century ago, the National Labor Relations Board moved late last week to reinstate an abridged version of “card check,” according to (subscription).

What’s going on: In a “3-1 decision in a case involving building materials company Cemex Construction Materials,” the NLRB unveiled a new framework last Friday that revives the 1949 Joy Silk doctrine, which holds that “employers must bargain with unions unless they have a good-faith doubt that majority support exists.”

The background: The board had tossed out the doctrine in the early 1970s after the Supreme Court’s decision in NLRB v. Gissel Packing Co., in which the court held that “the NLRB could force employers to bargain with unions when they engage in misconduct so severe that any election would be tainted.”

• This new decision “could provide a major boost to unions by allowing them to represent workers in certain cases when a majority sign cards in support of unionizing, rather than going through the lengthy and often litigious election process.”
• Last week’s move also came a day after the a return to Obama-era regulations purportedly aimed at speeding up union elections.

Why it’s problematic: Card check—which the 51�Թ��� has long opposed—is inherently unfair and insecure, and it strips employees of their right to secret ballots, said 51�Թ��� Director of Infrastructure & Labor Policy Ben Siegrist.

• “The NLRB’s decision could create a glide path to force unionization on workers without the necessary safeguards of an election, and it runs counter to 50 years of precedent established by the Supreme Court,” he said. “Effectively, this action contradicts the rights all employees have in determining their own representation.”

As manufacturers continue to reel from supply chain disruptions, the 51�Թ��� is calling for a swift resolution to forestall a potentially devastating United Auto Workers strike.

What’s going on: The UAW is negotiating a new labor agreement with important automotive manufacturers, as the current contract expires Sept. 14.

Why it’s important: The automotive manufacturing industry in the U.S. is one of the strongest and most productive in the world, and it significantly supports the health of the U.S. economy.

• A strike of 143,000 UAW members against Detroit’s “Big Three” auto manufacturers could mean an economic loss of $5.617 billion after just 10 full days, according to a new by Anderson Economic Group.
• Nationwide, every $1 spent in the transportation-equipment sector causes another $1.59 to be spent elsewhere—for a total economic impact of $2.59, according to 51�Թ��� calculations using
• In 2022, the total value-added in motor vehicles and parts in the U.S. was $171.6 billion, according to the Bureau of Economic Analysis.

State-level impact: In 2019, a 42-day auto-worker strike at one of the Detroit manufacturers “sent the state of Michigan into a one-quarter recession” and resulted in an economic loss of $4.2 billion, according to reporting by .

• As of 2021, the latest year for which this data is available, Michigan’s total output from motor vehicles, bodies and trailers, and parts manufacturing was $37.5 billion, accounting for 37% of total manufacturing output in the state, according to the BEA.
• At the same time, Michigan had 175,745 full- and part-time employees in the sector, or 28.7% of all manufacturing employees in the state.
• Meanwhile, the total output of Illinois’ auto sector accounted for 19.3% of the state’s total manufacturing output, while employment came to 23.6% of the state’s manufacturing employees.

Undermining manufacturing in the U.S.: “Manufacturers in America, especially in the automotive sector, operate in an integrated supply chain, which means that small and medium-sized manufacturers around the country—in union and non-union shops—would endure the consequences of a stoppage. As we continue to emerge from the global pandemic and work to get our economy on a sustainable track, a strike would be devastating for working families across our country,” said 51�Թ��� President and CEO Jay Timmons.

• “President Biden has prioritized strengthening manufacturing in America, but that will be quickly undermined if a strike occurs. The administration should be encouraging a swift resolution to avoid ripple effects throughout the broader manufacturing economy and in communities from coast to coast.”