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Automation isn’t just changing the manufacturing industry; it’s enabling human-centric progress in tackling the industry’s workforce crisis.

In action: As part of the Automation Fair in Chicago last week, more than 15,000 attendees got to see how manufacturers—and companies like Rockwell Automation—are providing solutions to the shortage, which 2.1 million unfilled jobs by 2030, according to research from the Manufacturing Institute (the workforce development and education partner of the 51�Թ���) and Deloitte.

• Rockwell Automation brought the , a project of the 51�Թ��� and the MI, to its Automation Fair, giving students, parents, educators and manufacturers the chance to see firsthand how digital transformation and new technologies are supporting careers and opportunities in modern manufacturing.
• The tour’s much-heralded immersive experience, along with displays and programs featuring experts from the MI and the Manufacturing Leadership Council (the digital transformation division of the 51�Թ���), gave attendees insight into the pathways and support available in the industry.
• FactoryFix, the official recruiting partner of Creators Wanted, was also on hand to showcase its manufacturing talent platform for job seekers—and manufacturers searching for a one-stop recruiting solution.

Changing perceptions: Creators Wanted aims to shrink the workforce gap by dispelling myths about automation and attracting the next generation to manufacturing jobs. It’s seeing impressive success, MI President Carolyn Lee said during a session at the event.

• “Today 40% of parents have a positive perception of manufacturing,” Lee said, citing a recent joint . “And what we’re finding is that parents see these are durable careers with great possibility and opportunity, and they’re encouraging their children to consider them.”

Digital help: “Digital is going to help manufacturers deal with their workforce issues because it’s going to not only help change the perception of the industry, but create new jobs going forward, particularly in math-intensive areas like data analytics and artificial intelligence,” said MLC Vice President and Executive Director David Brousell.

• Brousell cited the MLC’s “,” saying, “We have to think about digital transformation as human-centric digital transformation—because we’ve got to bring the technology and the people together simultaneously to have an effective transformation.”

Impressive results: Since it began just more than a year ago, the Creators Wanted Tour has seen more than 8,000 students pass through its immersive mobile experience, where more than 75% of attendees leave with a significantly improved view of manufacturing.

• More than 510,000 students and career mentors have also signed up to learn more about modern manufacturing careers.
• Creators Wanted has recruited successfully both mentors and mentees for the mentorship program of , an MI initiative that aims to close the gender gap in manufacturing.
• The Automation Fair offered more than 150 interactive sessions on the newest industrial solutions and best practices, and more than 200 companies exhibited across 200,000 square feet at Chicago’s McCormick Place.

Media mentions: The fair and Creators Wanted’s presence drew a slew of media coverage, including from “” with Adrienne Bankert, “” on WLS-AM, and suburban Chicago’s .

• In addition, the Daily Line published an on the future of manufacturing by 51�Թ��� President and CEO Jay Timmons and Rockwell Automation Chairman and CEO and 51�Թ��� Executive Committee member Blake Moret.

The last word: “As the world’s largest company dedicated to industrial automation and digital transformation, Rockwell is always looking toward the future of manufacturing,” Moret said. “Campaigns like Creators Wanted are critical to recruiting the best future talent to create a thriving workforce.”��

Another large labor union has voted to reject the rail deal brokered in part by the Biden administration, moving the industry closer to a strike, according to .

Split decision: Two of the largest railroad labor unions in the United States went separate ways during their contract ratification votes, which were announced on Monday. The Sheet Metal, Air, Rail and Transportation Workers – Transportation Division voted against the proposed agreement by a slim margin, while the Brotherhood of Locomotive Engineers and Trainmen voted to ratify it.

What it means: This latest action raises the likelihood of a rail work stoppage in early December. In total, 8 of 12 unions have now ratified the tentative agreement concluded in September while the rank-and-file membership of 4 unions have rejected it.

• Should one union choose to go on strike, the broad impact would cripple the national freight rail network.

The impact: The railroad industry and major shipping groups have found that a strike would likely cost around , also according to CNBC. It would affect every major rail operator.

• “The American Chemistry Council, which represents companies including 3M, Dow, Dupont, BP, Exxon Mobil and Eli Lilly, said a rail strike would impact approximately $2.8 billion in chemicals cargo a week, and lead to a GDP decline and renewed inflation.”
• “Other industries, from agriculture to retail, have warned of the economic risks of a strike.”

Next steps: Negotiations will continue through a cooling-off period that runs until early December. If a deal is not reached by 12:01 a.m. EST on Dec. 5, a strike could occur. The 51�Թ��� and others have urged Congress to take action under the Railway Labor Act and pass legislation that would avert a strike if railroads and rail unions cannot reach such a deal.

What we’re saying: “Manufacturers are disheartened by today’s news on the further unraveling of rail negotiations,” 51�Թ��� President and CEO Jay Timmons. “It’s clear that Congress, both Democrats and Republicans, must be prepared to work together immediately to avert a rail strike and prevent further damage to our supply chain.”

When asked how she got into cybersecurity, Nicole Darden Ford replies “cybersecurity kind of finds you.” The new chief information security officer at Rockwell Automation began her career in the military, where she first got into cybersecurity, then created a cybersecurity program for the U.S. Department of Agriculture before taking several leadership roles in the private sector.

Today, her advice for companies is surprisingly similar: cyberattacks will find you. As she puts it, “It’s not if, it’s when. And it’s not one time, it’s several.”

So how should manufacturers prepare for these threats? We spoke to Darden Ford recently about her recommendations, as well as Rockwell’s efforts to safeguard its own supply chain and provide services to other companies.

The current situation: “Manufacturers account for 65% of industrial ransomware last year. We’ve seen an unprecedented number of attacks, and we’ve seen attackers focus on OT,” Darden Ford says. She predicts the attacks on OT will only escalate.

• Meanwhile, many manufacturers have a clear strategy for IT, but they have not given as much thought to protecting their operational technology. Yet, as machines get more connected, their operations may become more vulnerable—especially as companies try to integrate legacy systems that weren’t “meant to be connected or patched.”
• In addition, “because we are so connected, there are third-party risks,” Darden Ford says. Small manufacturers may be more inviting targets for hackers than they realize, since their systems could provide a back door into the networks of their larger clients.
• On the plus side, manufacturers are getting smarter in building their defenses, she says. And that’s where Rockwell comes in.

Rockwell’s role: Rockwell aspires to become a “trusted advisor” to companies seeking cyber defenses, says Darden Ford. It already manufactured OT, so moving into cybersecurity for such equipment was a natural next step.

• Its partnerships with other firms, including Dragos, CrowdStrike, Cisco and others, allows Rockwell to offer bespoke cyber monitoring and other services to its clients.
• These services include penetration testing, threat detection and response and an OT “SOC”—i.e., a security operations center, which monitors threats to clients’ operations remotely.

How it works: “We have an OT cybersecurity roadmap—it starts with an assessment in your specific OT space, then walks through potential risks,” Darden Ford says. (See the end of this article for her detailed description of this roadmap.)

• The process includes building an “asset inventory, as you can’t protect what you don’t know.”
• “Then we talk about ways you can reduce your attack surface,” Darden Ford continues. “This is about segmentation. We help organizations divide their network into different domains. If you have ransomware or malware that propagates very quickly, then you have the opportunity to quarantine it.”
• In addition, the roadmap helps companies decide which tools and resources to use. For OT, you need to use very passive systems that don’t interfere with “getting the product out the door,” Darden Ford says.

After this process is complete, Rockwell’s SOC helps clients stay safe and hone their responses to real attacks.

• The SOC keeps eyes on a company’s operations remotely, notifies it of breaches within the plant network and helps it decide which threats to tackle. As Darden Ford says, the SOC stands in for the teams that companies would otherwise have to hire themselves.

On-site resources: Manufacturers can tap their existing staff to work on cyber defenses, including with offsite monitors. Darden Ford recommends drafting “the plant engineering team, along with the IT team,” who would have the knowledge and resources required.

A community effort: Large manufacturers should help educate small manufacturers on cyber issues, says Darden Ford.

• “We have a lot of suppliers, so to mitigate third-party risk, we provide more awareness about OT and advice about upping their cyber hygiene. We work closely with suppliers and do a lot of knowledge sharing,” she says.

Collaboration at the top: In addition, it’s also beneficial for CISOs and manufacturing leaders to consult their peers in what Darden Ford calls “mastermind sessions.”

• These conversations have provided her with “a lot of insights and data,” she says. She gets indispensable input on “strategies, frameworks, journeys and roadmaps,” as companies try to find their way through this cyber landscape together.

The bottom line: When asked what she says to companies that doubt the need for cyber protections, Darden Ford has a simple answer: “You wouldn’t drive your car without insurance—that’s what this is.”

• “What used to be optional is becoming mandatory,” she adds. “For small or midsize companies, you are still going to have to report” back to your large customers, many of whom require stringent protections of their suppliers. Those requirements will only get “more and more rigorous over time,” she warns.
• In other words, however you choose to do it, “you need a plan.”

The Roadmap

Darden Ford supplied us with her account of Rockwell’s cyber roadmap for its own suppliers, below. “The playbook aligns with the NIST framework, showing you step-by-step how to audit your current security state, identify gaps and take a proactive approach to mitigate risk,” she says. Here is her account of the key steps.

Step #1:��Discover��

• Know where you stand. Conduct a security and risk assessment—log all issues and review progress against findings.
• You can’t protect what you can’t see. You must gain a full understanding of what network assets you have on your plant floor and their current state. Start by conducting extensive network discovery and asset inventory.

��Step #2:��Remediate��

• Work with stakeholders to prioritize assets and organizational risk levels. Take the necessary steps to eliminate, upgrade or replace unneeded, unused or unsupported OT applications and infrastructure. This will look different for every organization based on what you discover in Step #1.

��Step #3: Isolate��

• Establish a perimeter by physically and logically segmenting your networks. Put up a firewall and establish internal and external cybersecurity policies to protect your OT assets. Set up an on-premises industrial data center to encapsulate critical applications inside the protected OT network.
• Secure endpoints with security software on plant floor assets.
• Enable third-party remote access. Third parties need access, but you must control the access and maintain visibility into what they’re doing in your network by enabling OT access controls.��

Step #4:��Monitor and Respond��

• Now that you have a solid foundation in place, the next step is to implement OT network monitoring to provide real-time OT cybersecurity, including malicious event/asset risk alerting, network diagnostics, AI learning and KPI dashboarding. The data only works for you if you are continuously viewing and reacting to it.
• Establish an OT SOC for 24/7 real-time alert monitoring​, acknowledgement and triage​. Cyberattacks aren’t limited to 9–5.
• Create an integrated IT/OT cyber event response team. Define event response and isolation protocols. IT/OT must have equal involvement and buy-in for these protocols to be successful. Execute tabletop exercises to simulate attacks and outcomes.

As innovation in manufacturing continues at breakneck speed, research and development is more important than ever—but it requires outstanding managers to make it all happen.

So how do these managers get the education and insights they need? The Innovation Research Interchange, a network of cross-industry innovators that the 51�Թ��� combined with earlier this year, has an answer: an executive management course called .

The gist: Co-hosted by the Kellogg School of Management at Northwestern University, the course provides a forum for strategic thinking, education and networking for technology leaders from around the world.

• In 2023, it will take place on May 13–19 on the Northwestern campus in Evanston, Illinois.

The details: The goal of this seven-day program is to develop midlevel managers into leaders for their companies, by covering topics including:

• Evaluating financial results;
• Segmentation, targeting and positioning;
• Growing and defending your brand;
• Legal and strategic investments;
• Building a better network; and
• Negotiating skills and strategic alliances;

Who’s involved: To get a sense of this event’s caliber, look no further than the attendees from the 2022 course.

• They hailed from a wide range of companies, including manufacturers such as Mars, Procter & Gamble, John Deere, Hershey, NatureWorks, Air Liquide, Kimberly-Clark Corporation, Sherwin-Williams and many, many more.

The reviews are in: Participants in the 2022 course were enthusiastic about what they learned and experienced.

• “[I’m] really super impressed with the program, soup to nuts,” said John Deere Manager for Global Strategic Communications & Culture Jacqueline Kiple. “One of my favorite aspects of the program was really getting a chance to think about our business a little bit differently … to take a step back and think about the higher-level impacts that affect decision-making in our respective organizations.”

• “What I really enjoyed about this course was first and foremost the esteemed professors. … [The course] gives you a really big view of all the information you need to really understand business and understand the decisions that are getting made,” said Sherwin-Williams Associate R&D Director Tony Rook. “It gives you that top-level view of how you add value to [your] organization.”

Get involved: Registration is now open for the 2023 course. You can find additional information and register .

This story can also be found within the 51�Թ���’s��R&D action center.

After a tax law change went into effect in 2022, manufacturers across the country found themselves facing new obstacles to investment in research and development. For Vermeer Corporation—a manufacturer of industrial and agricultural equipment based in Pella, Iowa—the change is causing real concern.

The background: Until the beginning of this year, businesses could deduct 100% of their R&D expenses in the same year they incurred the expenses. Starting in 2022, however, a change in the tax law required businesses to spread deductions over a five-year timeframe. That change is making investment more expensive and preventing some companies from putting their resources into critical innovation.

Constant innovation: As a company that makes a variety of diverse products for fields like agriculture, mining, utility construction, forestry and renewable energy, Vermeer is always working at the cutting-edge of new technology, and that requires significant investment in R&D.

• “Vermeer designs and builds specialized equipment—and it has to be innovative,” said Vermeer Corp. Senior Director of International Business Development and Government Affairs Daryl Bouwkamp. “We have to push that leading edge constantly. The history of Vermeer is a history of invention and innovation.”

Vital competition: According to Vermeer, R&D is also vital to the ability of manufacturers in the United States to compete with foreign companies.

• “We’re not the only company that’s innovating around the world,” said Vermeer Vice President of Finance Ryan Agre. “There’s pressure from companies in countries that are producing products like ours.”

Immediate impact: The new tax law has already had a serious effect, according to Agre.

• “It’s a material, meaningful impact,” said Agre. “It’s millions in additional tax that we will incur at Vermeer just next year—and that’s the one-year impact, so it’ll be even more significant over a five-year implementation period. We’re actively having to harvest cash elsewhere to offset this impending change.”

Pushing back on China: The U.S. tax law change also stands in stark contrast with policies from countries like China, according to Vermeer.

• “When you look at the generosity of foreign support, especially China’s, versus the United States, it’s so lopsided,” said Bouwkamp. “China is trying to drive behavior toward R&D—and that’s something we’re lacking.”

The big picture: Agre also noted that making R&D more expensive can make companies like Vermeer risk-averse—more likely to direct the investments they do make toward smaller or more incremental innovations, and less willing or able to invest in the kind of ambitious research that can offer truly transformative results.

• “We don’t know what we haven’t discovered yet,” said Agre. “We have a history of being innovative in new spaces, and that requires individuals to have funding and freedom of thought to go out and experiment. When you’re trying to create something that doesn’t exist today, you’re going to hit some home runs—but you’re also going to strike out a bit. When you need more certainty, you start cutting out uncertainty and making fewer investments in big ideas. That impacts not just Vermeer but the whole economy.”

Manufacturers continue to face an alarming workforce shortage—which could result in 2.1 million unfilled jobs by 2030, according to a study by The Manufacturing Institute and Deloitte.

The MI—the workforce development and education partner of the 51�Թ���—is working hard to fill that gap. MI President Carolyn Lee spoke at the last week about how manufacturers are taking on this critical issue and what lies ahead.

The challenge: “One of the biggest long-term issues our industry is confronting is the perception problem,” said Lee. “Many Americans—usually parents—cling to the belief that the manufacturing industry is not a place where people can find satisfying, well-paying lifelong careers. … Our industry needs to overcome this perception and grow the supply of young workers.”

Making progress: “That brings me back to good news: perceptions are changing,” said Lee. “Thanks to movements like , and campaigns like the 51�Թ��� and The Manufacturing Institute’s ‘’ campaign, which is touring the country right now, we are moving the needle.”

• “We’re showcasing modern manufacturing as we know it to be: exciting, rewarding, clean and high-tech,” said Lee. “Thanks to these efforts, the positive perception of manufacturing among adults in the past few years has grown from 27% to 40%.”

Promoting programs: Lee spoke about a range of programs offered by the MI that are designed to help build an expansive and inclusive manufacturing workforce. These programs include:

• , formerly known as the STEP Ahead program, which supports women in manufacturing;
• , which eases the transition to civilian careers for veterans and other members of the military community; and
• , which was originally founded by Toyota before transitioning over to the MI in 2019, and which offers an “earn and learn” apprenticeship experience.

Pushing policy: Lee noted the importance of ensuring that government policy is aligned with the needs and realities of the manufacturing industry. She also highlighted elements of “”—the 51�Թ���’s policy blueprint for bolstering manufacturers’ competitiveness. Proposed policies include:

• Reorienting the education system and its funding around a skills and employer-involved model;
• Updating federal tax policy to encourage and reward companies that invest in upskilling their employees; and
• More federal investments in apprenticeship models.

The last word: “Our industry’s strength and competitiveness will be determined by the strength of our workforce,” said Lee. “After all, they are the creators who pioneer and produce lifechanging electronics or lifesaving medicines. They are innovating and building the machines that transform human mobility, improve quality of life or bolster our national defense.”

Learn more: Find out more about the MI’s vital work .

This story can also be found within the 51�Թ���’s��R&D action center.

Manufacturing is an industry built on innovation—but with a recent change in tax law, manufacturers are encountering a new and major obstacle to the critical research and development investments they need to make in order to compete at home and around the world.

The background: Up until January 2022, a business could deduct 100% of their R&D expenses in the same year those expenses were incurred. But a change to the law that took effect this year now requires businesses to spread those deductions over a period of years, making investment in innovation more expensive.

The manufacturer: At Brewer Science—a Missouri-based manufacturer in the semiconductor industry—this issue has become an urgent challenge. The company is a top producer of materials needed to make semiconductor chips.

• In such a fast-moving industry, staying competitive requires nonstop innovation—and that demands constant investment in new products and processes. According to Brewer Science Executive Vice President Dan Brewer, a significant percentage of the company’s revenue goes back into R&D every year.
• “Semiconductors are everywhere, and new generations are constantly being created,” said Mr. Brewer. “The only way to compete abroad in our industry is to out-invent the competition.”

The impact: By making R&D investments more expensive, the tax code hinders manufacturers’ ability to make necessary expenditures not only on innovation, but also on other kinds of growth. Already, the harmful tax change has impacted Brewer Science’s bottom line and put a hitch in its plans for the future.

• Because the new law requires a deduction to be spread out over five years, companies are paying more in taxes than they were a year ago—a result that is causing them to reassess future investments.
• “We have a long list of new hires that we’re trying to bring on board and new projects we’d like to begin, and now we’re looking to make adjustments,” said Mr. Brewer. “Which projects can we put on hold? Which hires can we delay? It’s unfortunate that the same people who want investment in onshoring our industry are penalizing those that are already here.”

The ask: Brewer Science’s request is simple: return the tax treatment of R&D expenses to the way it was so that manufacturers are not penalized for pursuing the R&D that is necessary to spur economic growth and maintain America’s global leadership in innovation. There is still time to undo this for the current 2022 tax year, but time is quickly running out.

• “We’re not asking for a handout,” said Mr. Brewer. “We’re just asking Congress to allow us to immediately deduct these expenses as has been the case for nearly 70 years, since before Brewer Science was even a company.”

The big picture: Mr. Brewer is also quick to point out the widespread impact of this change, especially for smaller companies.

• “There are some companies that can’t make it five years without the ability to immediately deduct their R&D expenses,” he said.

Our move: The 51�Թ��� has been leading the charge to ensure the tax code continues to support innovation by allowing businesses to fully deduct their R&D expenses in the year in which they are incurred.

The last word: “Our industry moves extremely fast,” said Mr. Brewer. “We must invest aggressively in research and development to stay relevant and stay competitive.”

Even amid so much economic uncertainty, Cemen Tech is on track for a year of unprecedented growth. Leaders of the company, the world’s largest manufacturer of volumetric technology, attribute a good deal of its success to its loyal workforce.

Allegiance creator: Just what contributes to that worker loyalty? The answer may well be Cemen Tech’s unusual generosity.

• “We considered a number of new and different ways to continue to attract and retain good people,” Cemen Tech President and CEO Connor Deering said. “In September 2021, we made the decision to cover 100% of employee health insurance costs, the net effect of which is essentially our folks taking home more of the money they earn. That has really helped with retention.”
• The Indianola, Iowa–based company also raised wages across the board and began offering employees season tickets for local sports teams.��

A new approach: Full health insurance coverage made a difference when it came to attracting and keeping workers, but the volumetric concrete mixer manufacturer was still hitting another roadblock when it came to employment: finding people with the right qualifications. So, it set out to solve the problem in house.

• As part of a planned facility expansion, the company is setting aside space for the new “Cemen Tech University,” an innovative answer to the question of how to develop employees with highly desired, specialized skills. Classes are tentatively set to start in January 2023.
• The company is also working with area high schools and technical schools to forge partnerships in which students work for Cemen Tech part time, while still pursuing their diplomas or degrees.
• “This way, we train applicants for immediate success on the job, helping to ensure a strong fit between the employee and the company from the start,” Deering said. “It also gives us an opportunity to teach new hires about our organizational culture. … I believe [our education efforts] will help support an educated team member who’s connected to our culture, resulting in a happier, better and more long-term employee.”��

More incentives: Last March, Cemen Tech found a way to boost shift-worker attendance with a points-based rewards system.

• “We implemented an attendance bonus—if an employee stays within a certain number of points [for coming to work], they can earn an additional $90 a week,” said Cemen Tech Director of Human Resources Emily Lyons. “We have seen that help in terms of attracting and retaining employees and further incentivizing employees to achieve consistent attendance.”
• The company has also increased the referral bonus given to existing employees who bring in new hires, Lyons said.

Advice: Manufacturers looking to see similar growth to Cemen Tech, which is set to expand 65% this year, should consider implementing some of the firm’s ideas (if financially feasible). But companies should be prepared to incur some financial cost along the way.

• “Our growth has helped offset the profitability loss [from the increased benefits], but the reality is that our business is people,” Deering said. “If we don’t have people—good people—we’re not going anywhere. So, the fact that we’re little less profitable at the moment is OK, as long as we can continue to grow.”

While participants were having fun at this week’s Creators Wanted stop in Decatur, Illinois, the nationwide tour and its mobile experience were doing something, too: moving the needle on people’s perceptions of modern manufacturing.

What went on: Over the course of three days, more than 800 students from 13 area middle schools, high schools and community colleges poured into Richland Community College to learn about manufacturing careers. Also present were many educators and parents.

• Attendees “raced to the future” in the Creators Wanted mobile experience, solving various manufacturing-related challenges as they wound through the escape room.
• They heard panel talks from manufacturing leaders and team members and learned about some of the industry’s many perks, including great wages, flexible schedules, upward mobility, chances to earn and learn and more.
• Interactive activities, set up and run by manufacturers and the campaign’s recruiting partner, FactoryFix, were designed to —and display some of the real work done every day in modern manufacturing.
• This included virtual-reality paint and assembly training from Creators Wanted host sponsor Caterpillar, as well as a hazard-awareness simulator, a drink-making station and a laser-system exhibit from host sponsor ADM. Richland Community College took students on a tour through its state-of-the-art lab.

Generation inspired: Manufacturing leaders at ADM, Caterpillar and the Illinois Manufacturers’ Association, which together brought the tour to Decatur, got the chance to galvanize crowds.

• Said IMA President and CEO Mark Denzler: “Manufacturing makes the world a better place to live every day. Some of you are going to find the next cure for a disease. You’re going to build the next robot.”
• “For anyone who really is looking for a career that you can get into that is good-paying, that will provide you an opportunity to progress, consider manufacturing,” Caterpillar Group President of Resource Industries (and 51�Թ��� Executive Committee member) Denise Johnson told the crowd.
• Following the event, students were indeed inspired. “It kind of changed my mind on what I want to do in the future,”
• “It was amazing,” said another. “I’d think about doing this for a career.”

Shoring up the shortage: The lack of skilled workers has been a pain point for manufacturers for several years now—and it’s a problem Creators Wanted aims to fix.

• “Programs like Creators Wanted are crucial in narrowing the workforce shortage in manufacturing and also showcasing the many opportunities within the manufacturing industry,” said ADM Senior Vice President of Global Operations and 51�Թ��� board member Veronica Braker.��

The impact: The tour stop made a splash in regional media, garnering overwhelmingly positive coverage and print mentions and placements (see and ).

Meeting people where they are: “How do you get more young people interested in the field [of manufacturing]?” 25 News WEEK-TV anchor Erin Brown asked in a for the Peoria, Illinois, news station. “The answer could be more hands-on experiences with businesses like Caterpillar and ADM.”

“Fix it now.” If yesterday’s Port of Los Angeles virtual press conference had a single message, that was it.

51�Թ��� President and CEO Jay Timmons Port of Los Angeles Executive Director Gene Seroka for a question-and-answer session on the manufacturing supply chain and “Competing to Win,” the 51�Թ���’s agenda for bolstering manufacturing competitiveness.

Labor uncertainty: Timmons acknowledged the positive steps taken by leadership of the Port of LA over the past 12 months to improve the flow of goods, but he noted that workforce concerns continue to create supply chain uncertainty across shipping modes.

• “One of the biggest issues slowing down our domestic supply chains is the labor uncertainty tied to critical infrastructure,” Timmons said. “For example, there was the real danger of a crippling rail shutdown last month. The 51�Թ��� supported the administration’s efforts to reach an agreement to avert this, but negotiations are still ongoing, and there’s a deadline next month on Nov. 19.”
• The solution, Timmons said, lies with policymakers and industry, who “have to be vigilant about putting out these sparks before they turn into fires.”

Taxes: Timmons also discussed the need for a more favorable tax code, which plays a major role in the ability of manufacturers in the U.S. to compete, he said.

• “For example, a longstanding deduction for full and immediate expensing of research and development expenses is being phased out,” Timmons said. “Businesses will now have to amortize their R&D expenses over a number of years; that’s a huge disincentive that makes it costlier to conduct R&D within the U.S.—not to mention a potentially huge tax hike for small and medium-sized manufacturers at the end of the year.”
• China, meanwhile, allows manufacturers a 200% deduction for R&D expensing, giving that country a major advantage.

Workforce and immigration: Manufacturing is “in the middle of a workforce crisis,” Timmons said. Enacting new, better immigration policy and investing more in certain workforce programs can help solve it.

• Manufacturing has nearly 800,000 open jobs—and many of them could be filled if legislators would expand work-permit programs, Timmons said. “Clearly, we need border security, but we also need more avenues for people to come legally and to work.”
• There should be more federal investment in apprenticeship models, too, so that students can “earn while they learn” in manufacturing, he added.

All hands on deck: Congress must work to fix these issues “in a very bipartisan way,” Timmons said. “We hear all the time from elected officials, both Democrat and Republican, and even independent, that they want to be supportive of manufacturing.”

• “They understand that manufacturing is the lifeblood of any competitive economy … and we appreciate that. But we also need to make sure that in addition to saying good things about manufacturing, that elected officials are actually doing the things they need to do. That’s what [‘Competing to Win’] is all about.”