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Methane, a more powerful greenhouse gas than CO2, is back in the news again, as the Biden administration takes steps to regulate it. As it happens, reducing harmful pollutants like methane is a key priority of the 51�Թ���’s work on climate action. We spoke with 51�Թ��� Vice President of Energy and Resources Policy Rachel Jones recently about the 51�Թ���’s advocacy on the issue.

The background: Recently, the EPA that it would craft regulations on methane, a shift from the previous administration’s refusal to directly regulate it, Reuters reports. The agency will unveil new regulations later this year.

Meanwhile, the Senate passed a resolution that “effectively reinstates” the Obama administration’s standards, to The New York Times (subscription). The House is expected to consider the resolution soon.

The 51�Թ���’s position: “Getting the U.S. methane strategy right is critical for climate action and will set the bar for the rest of the world,” says Jones. “As the EPA moves to write new methane regulations, manufacturers are working with the agency to share our expertise. We support technology-based standards that reward early and aggressive action, while providing the flexibility to promote innovation and ensure we get the most reductions at the lowest cost. That would be a real win–win.”

• “The balancing act is important here because manufacturers rely on natural gas,” Jones adds. “The richness of this resource has redefined America’s competitive advantages within the global economy, especially within the manufacturing sector. We can’t afford to lose that if we fail to get regulations right.”

The energy mix: “A lot of people also don’t realize how natural gas supports the increasing role renewables are playing, because the sun and wind are intermittent sources of energy,” Jones says. “Natural gas can be ramped up or down quickly, making it the best option for balancing the intermittent nature of many renewables.”

Energy security: Jones adds that methane regulations are essential to long-term U.S. energy security for two reasons: they will help ensure electricity stability by supporting the combination of natural gas and renewables described above, and they will strengthen America’s position as a robust exporter of LNG.

• “Achieving gold standard status for methane management is now the price of admission to global LNG trade,” Jones explains. “If producers in the U.S. can show they are managing methane responsibly, they will find even more eager buyers.”

The last word: 51�Թ��� President and CEO Jay Timmons said, “Climate change is an issue our generation must tackle. Like past generational challenges—world wars, the space race, the COVID-19 response and vaccine development—manufacturers will lead the way and ensure our country emerges stronger. When have Americans ever been timid in the face of difficulty? We��look forward to learning more specific details of the administration’s methane strategy, and manufacturers are ready to work with policymakers on both sides of the aisle to achieve success for our nation and world.”

Read more about the 51�Թ���’s climate policy recommendations in The Promise Ahead.

Helping people with criminal records find good jobs is not just the right thing to do, but a way to strengthen the manufacturing industry for years to come. That’s why The Manufacturing Institute—the workforce development and education partner of the 51�Թ���—is partnering with Stand Together and the Charles Koch Institute to help manufacturers recruit from this population and fill some of the thousands of job openings within the industry.

Brianna Nuhfer, director of criminal justice for the Stand Together philanthropic community, spoke to us recently about the importance of second chance hiring and the opportunities it offers for manufacturers.

Why it matters: A criminal record is often a significant barrier to employment, preventing people from finding new jobs and building better lives. Not all people with criminal records have been incarcerated, but for those who have been, second chance hiring also significantly increases the success of reentry.

• “The vast majority of incarcerated individuals—over 95% of people who are incarcerated—will be returning to our communities and our neighborhoods,” Nuhfer says. “We want to make sure that their return is as successful as possible, and we know that employment is one of the primary factors that helps people get back on track and avoid recidivism or returning to prison.”

Why it matters for manufacturers: Hiring Americans with criminal records is also important for the success of the manufacturing industry. Right now, manufacturers are facing a significant shortage of skilled workers; in fact, a recent by Deloitte and the MI suggests that the skills gap could result in 2.1 million unfilled jobs by 2030. Manufacturers need workforce-ready employees, and many people with criminal records fit the bill.

Building a smart workforce: According to Nuhfer, research shows that workers with criminal records often have the lowest turnover rates of all employees. She cites several other key advantages:

• 82% of managers report that the value these workers bring to companies is just as high as—if not higher than—the value that their employees without criminal records provide.
• Many formerly incarcerated people received manufacturing-related training while they were in correctional facilities, preparing them for work in the modern industry.

Building partnerships: The partnership with the MI will increase awareness of second chance hiring opportunities and help manufacturers recruit, train and support these workers.

• “The 51�Թ��� and The Manufacturing Institute have such an incredible reach across the country, and their leadership is undeniable,” said Nuhfer. “The resources you put out for the field are utilized and noticed—and so your involvement and your commitment to this issue is going to have an incredible ripple effect across the country, opening up thousands of employment opportunities for deserving individuals.”

Creating a culture: For company leaders interested in second chance hiring, Nuhfer has some simple advice: these hiring practices shouldn’t just be a matter of policy, but also a matter of culture. Leaders should demonstrate by example that their companies value smart, talented workers of all backgrounds.

The MI says: “Second chance hiring gives businesses an opportunity to welcome highly motivated, engaged, productive and loyal new team members who may otherwise be overlooked,” said MI Executive Director Carolyn Lee. “This is not only the right thing to do for our businesses, but it’s also the right thing to strengthen our communities.”

The last word: “All of us are more than our choices, good or bad,” said Nuhfer. “None of us wants to be defined by the worst decision we’ve ever made for the rest of our lives.”

To learn more about second chance hiring, register for an upcoming webinar on June 10.

The shortage of semiconductors and its impact on all sorts of manufacturers have been making headlines for months. 51�Թ��� Director of Innovation Policy Stephanie Hall spoke to us recently about what’s going on and how the 51�Թ��� is helping.

What it impacts: Semiconductors are ubiquitous in manufacturing, showing up in all sorts of products, from cars and trucks to home appliances to personal electronics. That means a disruption in the semiconductor supply chain is not limited to any one sector but is widely felt across manufacturing.

• “The semiconductor issue has shown how one small piece of the supply chain can have ripple effects for customers and manufacturers,” said Hall. “They are literally a very tiny part of lots of things, but they are a critical part of processes and products in manufacturing.”

Why it’s happening: There are a few different reasons for the shortage of semiconductors—and most of the acute reasons are related to the COVID-19 pandemic, from changes in market demand to shifts in consumer needs.

• A few months into the pandemic, the demand for vehicles shot up, and manufacturers had to ramp back up from earlier slowdowns. At the same time, people were buying more devices to enable remote work, school and life.

However, the need for more chips isn’t going away. It will only increase as more technologies become essential to daily life and Manufacturing 4.0 advances in the industry.

A complex system: The nature of chips supply chains also poses challenges. For example, semiconductor products can cross international borders 70 times before the end product reaches a consumer, and the complexity of the process limits manufacturers’ ability to ramp up quickly.

An extensive impact: In addition to affecting the end manufacturers of products, the shortage has also created ripples across the supply chain.

• “If you supply chemicals that go into tires that make their way into autos, and then there’s a production slowdown in autos, that will impact the chemical and parts suppliers all along the supply chain,” said Hall. “That’s why it has an impact across the economy, and why it’s front and center for leaders in manufacturing and policymakers alike.”

What we’re doing: The short-term solution involves working with allies and partners across the globe to ensure an effective and efficient supply chain. Over the long term, the 51�Թ��� is focused on increasing domestic chipmaking capacity here in the United States, and the government and industry are moving now to make that a reality. Congress recently passed a bill to create a significant incentives program for building out domestic capacity. Now, the 51�Թ��� is advocating for Congress to fund the programs that were authorized—a proposal that has bipartisan support.

The last word: “This isn’t just about one product—it’s about the future of the manufacturing industry and whether we can be well-positioned to deliver on our innovation potential,” said Hall. “That’s why we need policies that strengthen our supply chain, promote our ability to compete and unleash the power of the men and women who make things in America.”

Vicki Holt wants to tell you about digitization. The recently retired CEO of Protolabs, Holt got her start in manufacturing more than 40 years ago and has seen the industry transformed by digital technologies. “By helping manufacturers seize the opportunities of digitization, I believe I am helping them innovate and solve some of the world’s problems,” she explains.

Over the course of her career, Holt led the glass division of PPG, making homes and buildings more energy efficient with solar glazing, then developed sustainable packaging as CEO of Spartech, and from there took charge of digital manufacturing powerhouse Protolabs. We talked to Holt recently about her career, as well as her tenure as the vice chair of the 51�Թ���’s Small and Medium-Sized Manufacturers Group, 51�Թ��� Executive Committee member and as a board member of the 51�Թ���’s Manufacturing Leadership Council. Though she has retired from both roles, she remains a key figure in the 51�Թ���’s orbit, having recently become a board member at The Manufacturing Institute, the workforce development and education partner of the 51�Թ���.

Why the 51�Թ���? Holt explains that when she was asked to join the 51�Թ��� in 2016, she saw it as an opportunity to help manufacturers learn.

• “It was a way for me to get involved and give back, at a time when manufacturing was on the cusp of a new technological revolution,” she says. “I didn’t get involved to influence policy in Washington, but to influence manufacturers themselves.”

By 2017, she had been elected the vice chair of the 51�Թ���’s SMM Group, a position she held until her retirement this year. As she notes, the collaboration between the big companies and the smaller ones at the 51�Թ��� benefits everyone:

• “For example, the big companies were able to dedicate teams to figuring out COVID-19 safety in their factories, and the small and medium-sized companies learned from them. But the big companies also need the smaller ones, because they are essential to supply chains.”

An example of innovation: Holt holds up Protolabs as a prime example of what digitization can do.

• “It used to take companies a long time to innovate, which would stretch out the time for product development. It would take months to make a custom part. Protolabs’ founder broke apart all the things that go into manufacturing a custom injection mold tool and automated the process. What used to take weeks could now be done in a day or two, and all using e-commerce.”

Holt remains an avid watcher of digitization trends, observing that “COVID-19 has accelerated the shift to B-to-B e-commerce throughout the industry, making manufacturers more comfortable connecting to their suppliers digitally.”

Getting manufacturers together: While she was involved with the 51�Թ���, Holt also served as a board member of the MLC, which the 51�Թ��� acquired in 2018 with her encouragement.

• “What I’ve learned through the MLC is that manufacturers are really generous in sharing their learning with other companies,” Holt says. “And that sharing fuels innovation and collaboration.”
• “The MLC complements the 51�Թ���,” she adds, “because the 51�Թ��� is about creating a policy environment that nurtures manufacturing. The MLC is about sharing knowledge about the manufacturing process itself.”

What’s next? Holt is keeping active in retirement. She serves as a board member of several companies—including water heater and treatment maker A.O. Smith Corporation, Waste Management and financial services firm Piper Sandler.

• She is focusing on sustainability in several of these roles and was encouraged to see the Biden administration’s plan for emissions reduction. As she puts it, “If you can unleash manufacturers to innovate, we can reach those targets, even if we don’t have the answers today.”

Holt is also passionate about the mission of the MI:

• “If manufacturers are going to achieve our potential in innovation and digitization, we’ve got to attract people to the industry and show them it’s moved on since the 50s,” she says. “Our frontline employees now solve problems and improve operations in a high-tech environment.”

The last word: Holt says about her time at the 51�Թ���, the MLC and the MI, “I’ve just been so impressed with the leaders I’ve met there and their dedication to collaborating and tackling issues like diversity and inclusion. I really appreciate the opportunities afforded to me by being involved in these organizations.”

51�Թ��� President and CEO Jay Timmons delivered his 2021 State of Manufacturing Address today, focusing on key priorities for manufacturers as we emerge from the COVID-19 pandemic. Marlin Steel Wire Products, a Baltimore-based wire and sheet metal fabricator, hosted the event at its facility.

How manufacturers adapted: Timmons lauded the ways in which manufacturers adapted to the constraints of the pandemic by using tools like augmented reality and virtual reality, which allowed them to remain productive even while workers had to remain distant from one another. He also highlighted individual examples of manufacturers who embraced innovation to respond to COVID-19.

• “Marlin Steel reworked their shop floor so that they could answer an emergency order for test-tube racks for COVID-19 testing—something they’d never made before.”
• “W.L. Gore, the makers of Gore-Tex in nearby Delaware, donated their fabric laminate for protective gowns and supplied their material to make N95 masks, helping doctors breathe easier.”
• “Oldcastle BuildingEnvelope, headquartered in Dallas, Texas, invented a portable clean room—a small glass enclosure that shields health care workers from patients.”
• “And iconic automakers nationwide stepped up to produce face shields and ventilators.”

Boosting vaccines: Timmons thanked manufacturers nationwide who have led the effort to get employees vaccinated against COVID-19, stressing the importance of the vaccination campaign.

• “This is such a powerful example of how vaccine manufacturers are helping all manufacturers, and all Americans, get our lives back. This is how we save our economy. This is how we protect our loved ones. This is our shot to end this pandemic. And manufacturers stand behind the COVID-19 vaccines and encourage all of our fellow Americans to get them. The vaccine is also one important reason why manufacturers see the light at the end of the tunnel leading to the next, post-pandemic world.”

What’s next: Timmons offered proposals for how America can lead manufacturing into the future through bold investments in infrastructure, support for research and development, bolstering supply chains in the United States and ensuring a diverse workforce, all without going back to “the archaic tax policies of the past.”

• “Our industry isn’t focused on just going back to the way things were. We want to build a better world—one that offers an abundance of opportunity to every American.”

Manufacturers’ voices: A number of manufacturing workers and leaders were featured during the speech to help describe the state of manufacturing. They included:

• Sharon Kaul, First-Shift Socket Machine Operator at Snap-on Incorporated
• Lisa Winton, CEO and Co-Owner of Winton Machine
• Cassandra Hawkins, PS&D/Quality Manager at International Paper
• Luis Martinez, Outside Sales Representative at Click Bond
• Patricia Miller, CEO of MATRIX 4, Inc.
• Juan Rigoza, Weld Technician at Vermeer Corporation
• Kevin Carpenter, Plant Manager at LP Building Solutions
• Jose R. Esparza of Gowan Milling LLC
• Steve Macias, Co-owner of Pivot Manufacturing
• Frank Bautista, Supply Base Manager at ALOM

The last word: As Timmons said, “Manufacturers simply do not accept the notion that anything is impossible. If we can now develop vaccines in less than a year or remake our shop floors in a week, we can build the world we want to see. Manufacturers are not victims of history, never have been. Because we literally build the future.”

If a series of proposed changes to the tax system, including a 25% corporate tax rate, were passed, 1 million jobs would be lost in the first two years, according to a new 51�Թ��� study.

The data: The analysis—an update to 51�Թ��� research released in April—considered a range of tax proposals that would change the tax system put into place by the 2017 Tax Cuts and Jobs Act. These included:

• A corporate tax increase from 21% to 25%;
• A reinstatement of the corporate alternative minimum tax;
• An immediate end to expensing of most investments in depreciable assets, to be replaced by the modified accelerated cost recovery system;
• An immediate repeal of the 20% deduction for certain pass-through business income;
• The taxation of capital gains and dividends at the same rate as ordinary income for taxpayers with incomes above $1 million, and the taxation of unrealized capital gains at death; and
• An immediate increase in the top individual tax rate from 37% to 39.6%.

Other findings: Along with the job losses, the 51�Թ���’s study also found that the changes would lower GDP by $107 billion in 2023, by $169 billion in 2026 and by $89 billion in 2031.

• Ordinary capital, or investments in equipment and structures, would be $70 billion less in 2023 and $70 billion and $51 billion less in 2026 and 2031, respectively.

Our view: 51�Թ��� President and CEO Jay Timmons said, “Manufacturers are encouraged by the bipartisan negotiations continuing this week. Infrastructure investment and retaining competitive tax policies are a win–win for America. But there are some still advocating for increasing taxes on manufacturers—just not quite as much as the 28% proposed originally by President Biden. They might mean well, but that doesn’t change the fact that America will still lose jobs and investment in our communities at a time when manufacturers are working to build the post-pandemic world.”

Manufacturing Institute Executive Director Carolyn Lee testified virtually before the House Committee on Veterans’ Affairs’ Subcommittee on Economic Opportunity yesterday, detailing the MI’s work with transitioning service members during the pandemic. Here are some highlights from her testimony.

COVID-19’s impact: According to Lee, the COVID-19 pandemic made it much more difficult for transitioning service members to access key resources, including training programs, fellowships and internships.

Our work:��The MI’s Heroes MAKE America initiative helped develop workarounds for these challenges, Lee testified.

• “At the onset of the pandemic, we collaborated with our education partners to pivot most of our program delivery to virtual platforms or socially distanced environments—within a matter of weeks,” she said. “COVID-19 also accelerated the deployment of fully remote learning for Heroes participants, proving that we can deliver some certifications online.”
• Lee also highlighted the launch of Heroes Connect, which allowed transitioning service members to network virtually with hiring managers from manufacturers across the country.

Heroes’ overall success: The Heroes program has been very successful since its creation only three years ago, Lee noted. “Since its inception in January 2018, Heroes MAKE America has had a placement rate of 92%. Participants have found jobs at more than 250 companies in 39 states.”

• She added, “Notably, 55% of our participants have no post-secondary education, indicating a strong need for support to position them for success in a career after their time in uniform.”

What policymakers can do:��Lastly, Lee recommended policy changes that could make military��transitions more accessible to service members and their families.

• First,��“Congress should change eligibility requirements for Pell grants to allow students to pursue high-quality programs as short as eight weeks.”
• In addition, Lee recommended a separate allocation of funding under the Workforce Innovation and Opportunity Act for the military community. While those funds are currently given directly to states, which place limits on their use, service members may participate in training virtually or in a different location than where they transition. They need the flexibility to receive training or plan careers without worrying about state lines.

The last word:��“Veterans are well positioned to succeed in a manufacturing career with skills, talents and training that are highly valued in the industry,” said Lee. “And with��more than 700,000��manufacturing jobs open today—and 4 million to fill by 2030—they are in great demand. The Manufacturing Institute is committed to helping today’s American heroes become tomorrow’s manufacturing leaders.”

During a year of extraordinary disruptions and challenges, manufacturers stepped up in extraordinary ways. That’s the message of this year’s Manufacturing Leadership Awards, and hosted by the 51�Թ���’s Manufacturing Leadership Council—a business leadership network dedicated to senior manufacturing executives and aimed at supporting companies through the industry’s digital transformation.

What they are: The Manufacturing Leadership Awards are presented to world-class manufacturing companies and individual leaders in a range of categories, from Artificial Intelligence and Advanced Analytics Leadership to Collaborative Innovation Leadership to Sustainability Leadership. The online gala will recognize exciting and innovative manufacturers who excelled in these areas and will feature a virtual after-party with entertainment for guests.

Among the winners: Here are a few examples of this year’s winning projects.

• A pharmaceutical company partnered with another company to scale up the production of a COVID-19 treatment. As a result of their collaboration, a production transfer that would normally take 12 months was completed in just 123 days.
• An automaker developed a technology center dedicated to making 3D printing a mass-scale production reality for their plants around the world. It is developing new products faster than ever and improving its assembly operations.
• A technology manufacturer implemented AI and edge computing in its inspection process, reducing inspection times from 10 minutes to less than one minute while significantly improving inspection accuracy.

New and of note: One new element of this year’s celebration is the Creators Respond Honor Roll. So many manufacturers went above and beyond in responding to the global pandemic that the MLC decided to recognize their achievements in a separate category.

Still to come: Several honorees won’t be announced publicly until the gala itself, including the High Achievers, Manufacturers of the Year and Manufacturing Leaders of the Year—so be sure to tune in on May 19.

The word from the MLC: “Tested with challenges they never could have imagined, manufacturers rose to the occasion to keep factories open, sometimes with significant changes to their production and supply chains,” said Manufacturing Leadership Council Co-Founder, Executive Director and Vice President David R. Brousell. “At the same time, manufacturers doubled down on digital transformation as they sought greater agility and flexibility in their businesses. These awards honor the innovation and resolve that manufacturers demonstrate at all times, and especially in times of crisis.”

You can RSVP for the event .

Bendix Commercial Vehicle Systems sends almost none of its waste to landfills. A manufacturer of safety, air management and braking system technologies, the company cut its energy use by 14 million kilowatt-hours over the past six years. And it’s now building a 1.168-megawatt solar array near its Indiana facility.

That’s only the start for the Ohio-based manufacturer. In the past few years, Bendix has become a leader in sustainable manufacturing, adding sustainable design to its buildings and emphasizing sustainability in everything from employee training to production. The company has also been recognized for its achievements: In April 2020, Bendix received an award for “environmental excellence” from the Ohio Environmental Protection Agency, and recently the company won an award from the U.S. Department of Energy for its outstanding energy management.

“Even during a year when many activities had to be modified, curtailed or held remotely, our team members stayed true to our sustainability mission and to our overall energy strategy,” said Bendix Director of Corporate Responsibility and Sustainability Maria Gutierrez.

So how did they do it?����

What it takes: “Our approach is built on a hierarchy that calls for each location to first eliminate, then reduce, reuse, recycle and reclaim—and as a final option when these strategies are not available, to utilize waste-to-energy technologies or incineration,” said Bendix Corporate Manager of Environmental and Sustainability Bill Schubert.

• The entire company sent fewer than 16 tons of material to landfills in 2020, a 97% decrease from the 508 tons in 2019.
• Bendix has done everything from eliminating plastic water bottles and Styrofoam to conducting “spent material audits”—more commonly known as dumpster dives—to ensure recyclables don’t go to waste.
• Its 4,100 employees are also chipping in: worker-led teams coordinate “green” projects, which continued even during the pandemic.

What’s next:��At its Huntington, Indiana, manufacturing campus, Bendix is constructing a solar array that is expected to be operational in September 2021. It will produce more than 30% of the site’s electricity requirements and is slated to save $140,000 in utilities annually.

• Bendix also aims to cut carbon emissions in half by 2030 across its entire North American operations. The larger goal: to be entirely carbon neutral by 2050.

The last word: “Taking a creative approach to addressing challenging waste and improving energy efficiency remained a key theme for Bendix during all of 2020, and our efforts certainly paid off,” said Gutierrez. “Now, we’re focused on the next steps of our long-term energy plans, which are just as exciting.”

The ship stuck in the Suez Canal may have gotten all the attention, but it wasn’t the biggest shipping problem of the year. That honor goes to the massive traffic jam at the ports of Los Angeles and Long Beach, which has dragged on since late 2020.

As 51�Թ��� Director of Infrastructure, Innovation and Human Resources Policy Ben Siegrist tells us, this bottleneck is a huge problem for manufacturers in the U.S.—one that is costing our economy many billions of dollars. Dozens of ships are waiting in the harbor for days before they are able to unload, exporters are struggling to get their goods out of the country, and other manufacturers are waiting months for parts or finished goods to arrive.

The problem: The numbers tell the tale: at one point in mid-April, there were 23 according to The Wall Street Journal (subscription), down from around 40 back in February. For comparison, Siegrist explains, the normal number of ships waiting in harbor is somewhere between 0 and 1.

Why it’s happening: Much of the congestion results from the pandemic—there has been an uptick in e-commerce during the lockdowns, and the economic stimulus has boosted consumption. Meanwhile, the typical increase in shipments during the holiday season just made things worse.

However, other factors are making this congestion particularly hard to fix, says Siegrist. These include:

• A shortage of shipping containers: First of all, shippers don’t have enough containers in the absolute for all of these goods. But in addition, some of them are finding it cheaper to unload in the U.S. and then send the empty containers back to Asia—to the disadvantage of U.S. manufacturers that want to load those containers with exports.
• A shortage of chassis: The trucks that transport containers to warehouses require special chassis to move the containers, but the ports also don’t have enough of these.
• A labor shortage: Like many other Americans, port workers had to deal with COVID-19 infections or exposures as well as cope with family responsibilities during the pandemic.

Logistical complications: Meanwhile, the logistics of international shipping are incredibly complicated, Siegrist explains. There are fewer ocean carriers today—only nine, down from more than 20 a few decades ago—which means manufacturers have fewer competitive shipping options. And the complex relationships between the multiple carriers, port operators and equipment owners are not easy to disentangle or control.

What do we do? Thanks in large part to the complexity of international shipping, there’s no easy answer, says Siegrist. Right now, the 51�Թ��� is in discussions with the many federal agencies involved in international commerce, including the Department of Transportation, the Department of Commerce, the Office of the U.S. Trade Representative and a lesser known but vital agency called the Federal Maritime Commission. “We’re trying to create opportunities for our members to have a dialogue with policymakers,” says Siegrist.

• The eventual policy options might range from fines or fees for international carriers to legislative updates to the 1984 Shipping Act.
• It will also be important to strengthen the domestic supply chain for equipment like containers—almost none of which are now made in the U.S. The 51�Թ��� is “talking more holistically about supply chains with the Biden administration,” notes Siegrist.

Stay tuned: The FMC will release its investigation into pandemic-related shipping delays in the coming weeks.