By: Rhett Buttle
For more than a century, the manufacturing industry has been pivotal to our country’s success bringing jobs to communities nationwide, making our supply chains stronger, and increasing American economic prosperity. While American manufacturing continues to recover from the pandemic, the federal government and businesses have put billions of dollars into manufacturing investments, shoring up this industry for the future.
The federal investments being implemented by the Biden Administration has taken action to ensure that the manufacturing industry in the United States is well-supported while also encouraging the country to Make More In America. Jay Timmons, President and CEO of the National Association of Manufacturers (NAM), has been at the forefront of conversations with the White House during his nearly 13 years in the role.
In addition to being a leader in manufacturing and workforce issues, Jay has been an active leader on democracy. Following the Capital Riots on January 6th, 2021, Jay publicly took a stand to encourage accountability and protect the dignity of elections. Additionally, Jay led the National Association of Manufacturers to stand with democracy and support Ukraine manufacturers.
I recently had the opportunity to sit down with Jay to discuss his thoughts on the current state of manufacturing, the economy, recent federal investments, and democracy. Below is our conversation, edited for clarity.
Rhett Buttle: Jay, you’re coming up on 13 years as the President and CEO of the NAM. What would you share about your takeaways during your tenure?
Jay Timmons: One of the biggest lessons I’ve learned on the job: the importance of defining your vision – and taking the time you need to make it clear. Part of that was laying out the vision with the staff and establishing a greater sense of culture. Once you’ve defined it, commit to it. You may occasionally have a misstep, but if you’re committed to a vision, you should find yourself on a positive trajectory.
The association has been well-positioned throughout the decade. And the NAM’s greatest test during my tenure has inarguably been the pandemic. Manufacturing in the U.S. had an incredible moment throughout the worst days of the pandemic, stepping up to lead and – especially in the case of the manufacturers who developed the vaccine – literally save the world.
The NAM responded by essentially transforming our association into a disaster relief agency. We worked to have manufacturers designated by government officials as essential and ensure they were allowed to remain open to make essential medical supplies and household necessities. In turn, we provided manufacturers with real-time updates and information from federal and state officials and agencies, coordinated the flow of personal protective equipment and other essential inputs and worked with policymakers to shape legislation around the pandemic response. In addition, we encouraged people to wear masks and follow healthy social distancing practices and, after the development and rollout of the Covid-19 vaccines, launched “This Is Our Shot,” a full-scale campaign to take aim at vaccine hesitancy, and supported manufacturers to help them get through the pandemic. All of this was about keeping our workers safe and facilities open.
We live in a new, post-pandemic world now and manufacturers ensured that we could reach this point.
Rhett Buttle: What are your thoughts on the state of manufacturing and the economy in the United States today?
Jay Timmons: Manufacturers are more trusted by the American people right now than most other institutions. You see that not just in polling numbers, but also in political discourse. Can you think of any politicians or elected officials who don’t want to take credit for the success and growth of manufacturing in the U.S.?
When politicians work to support manufacturing competitiveness, we get good policy. The Clinton, Obama, and both Bush administrations, laid the groundwork for strong trade agreements that grew our industry’s access to market around the world. The Trump administration presided over tax reform and helped streamline some regulations, while the Biden administration has helped deliver on priorities like infrastructure, the CHIPS and Science Act, and certain provisions of the Inflation Reduction Act that foster sustainability.
Even with the undercurrent of recession fears, there are a lot of reasons to be optimistic about our economy. U.S. economic growth since the pandemic has outpaced all other nations in the G7, France, Italy, the UK, Japan, Canada and Germany. Some of those economies are still smaller than they were in 2020 and compared to those same countries, the U.S. has seen the lowest inflation rate.
Manufacturers have a lot to do with that success. Our industry is bigger now in terms of employees than it has been in more than a decade. However, there are a lot of headwinds standing in the way of manufacturing’s moment.
One of the biggest challenges is the onslaught of unbalanced regulations at the federal level. Across dozens of agencies, we’re seeing wave after wave of red tape taking aim at manufacturing, and this level of regulatory uncertainty is chilling investment and curtailing job creation and wage growth. In the NAM’s Manufacturers’ Outlook Survey for quarter 2, two-thirds of manufacturers say they would purchase more equipment if the regulatory burden were not so high, 47% say they would increase compensation, and 43% would increase hiring. Around 63% of manufacturers also reported spending more than 2,000 hours per year complying with federal regulations. Newly released data from the NAM shows that the federal regulatory burden is now costing small manufacturers $50,000 per employee per year. The total cost of federal regulations, estimated at more than $3 trillion dollars, outpaced the economic output of the entire manufacturing sector.
This red tape comes with many unseen costs. In the worst-case scenarios, we’re seeing things like suppliers for essential inputs, such as semiconductors, being forced to build facilities in the EU instead of the U.S., due to regulatory and permitting challenges.
So, we’ve got all the ingredients we need for the industry to continue growing, leading the economy, creating abundant jobs, and improving quality of life for everyone. But self-imposed obstacles like the ongoing regulatory onslaught can mean we end up taking two steps back for every one step forward. That has to change.
Rhett Buttle: Under your leadership, NAM and your nonprofit workforce development and education affiliate the Manufacturing Institute (MI) have been leading important initiatives related to workforce development. What are some promising opportunities to respond to the evolving workforce needs in the manufacturing industry, particularly in light of technological advancements and changing skill requirements?
Jay Timmons: The modern manufacturing industry has a tremendous need to grow its skilled workforce now and for the foreseeable future. A study by Deloitte and the Manufacturing Institute reports that manufacturers will need to fill 4 million jobs by the end of this decade, 2.1 million of which could go unfilled if we don’t inspire more people to pursue modern manufacturing careers..
A lot of this is about building a workforce that will advance digitalization, or what we call Manufacturing 4.0. Manufacturers were early adapters of advanced technologies. On the modern shop floor, you’ll see 3-D printing, augmented reality, AI and machine learning, robots and co-bots, drones, and digital twins, to name just a few. All of these technologies are force multipliers that help make our teams more productive and our industry more impactful.
So now it’s up to industry to cultivate the next generation of manufacturing teams to fill these jobs. Part of that is education, including technical and vocational schools, community colleges, and other institutions that impart the skills needed – often without the debt that comes with typical four-year colleges. Another set of essential tools are the apprenticeships or earn-and-learn programs that help students acquire the skills they need to excel in modern manufacturing. The MI oversees one known as the Federation for Advanced Manufacturing Education (FAME), which was founded by Toyota and is managed today by the MI. Every year, FAME graduates transition into well-paying, diverse career pathways in critical skilled disciplines across the manufacturing industry and across the country.
Then there’s the NAM and MI’s Creators Wanted campaign, the manufacturing industry’s largest workforce campaign, which is designed to inspire, educate, and empower the next generation of manufacturing teams. Creators Wanted has built up a list of 1.6 million students and career mentors interested in learning about modern manufacturing careers, generating more than $5.35 million in positive earned media about manufacturing careers and bringing a first-of-its-kind manufacturing immersive experience to more than 10,000 students in-person. In addition to a traveling tour featuring demos of advanced manufacturing technology and an immersive mobile experience that tests students’ problem-solving skills, the campaign includes Creators Connect. Creators Connect is the first and only unified platform on which to search and explore career pathways, with hundreds of thousands of job openings and job training programs across the entire manufacturing sector.
Policymakers also have a big role to play in building the workforce, and one of the biggest ways they can help is to accomplish immigration reform. If lawmakers can come together to pass historic, essential priorities like the infrastructure bill and the CHIPS act, they can do the same for immigration reform. Our industry and economy cannot afford to operate in a closed-door immigration system, and the NAM has endeavored to lead the business community in calling for solutions to our broken immigration system.
Rhett Buttle: Recent federal investments through the Bipartisan Infrastructure Law and the CHIPS and Science Act have substantially impacted the manufacturing industry. What are the opportunities from this federal investment?
Jay Timmons: The Bipartisan Infrastructure Law was the kind of bipartisan approach that rises above politics, personality, and process. That’s how you build consensus and secure legislation that stands the test of time.
The NAM supported this legislation. It included many NAM priorities, including funding for roads, bridges, highways, and ports, but also other essential modernization projects, such as laying the groundwork for 5G across the nation. It also includes provisions that will help in the fight against climate change.
Manufacturers in the U.S. are already benefiting a great deal from the law. We’re hearing stories from members about orders doubling, higher sales, production increases, and new customers.
You could say much the same about the CHIPS and Science Act, which the NAM strongly supported and helped shape. When this legislation was coming together, the manufacturing industry and the entire economy were in the throes of serious supply chain disruption, particularly for semiconductors. Every manufacturer in America benefits from the CHIPS and Science Act, whether they make chips, make products that require chips, or are part of a supply chain disrupted by the semiconductor shortage. The legislation also provided funding for advanced technology development, supporting the STEM workforce, excavation of critical minerals, clean energy, and more.
But as I mentioned earlier, the regulatory onslaught is an obstacle to the successful implementation of these legislative achievements. The Biden administration is right to highlight the infrastructure bill and CHIPS as successes that help grow manufacturing in the U.S., but the president’s manufacturing legacy is at risk of being derailed by his administration’s regulatory agenda.
Rhett Buttle: After January 6, you spoke up against some challenges you saw under President Trump in the executive branch, why did you decide to do that?
Jay Timmons: Manufacturers in the U.S. work to advance the values of free enterprise, competitiveness, individual liberty, and equal opportunity. These values have made America exceptional and kept manufacturing strong and undergirding all of that is our democratic system of government.
Our industry cannot thrive and we cannot lead the world if our system of democracy and our institutions are threatened or undermined. Just as manufacturers have been the “arsenal of democracy” throughout history, we must always stand resolutely for freedom at home and around the world and continue to be a beacon for the world.
Rhett Buttle: What role do you see for the business community in conversations about democracy in our country?
Jay Timmons: It goes back to what I said about manufacturers being trusted. Manufacturers in the U.S. work to advance the values of free enterprise, competitiveness, individual liberty and equal opportunity. Around the world, those very values and democratic principles are under siege from regimes that reject free markets and refuse to respect an individual’s right to choose their own destiny. Even here at home, we’ve seen those who try to sow doubt about the value of our institutions and the system that makes our way of life possible.
Manufacturers in America know we cannot afford to let that happen. It is why we are working to strengthen partnerships between the U.S. and our allies and why the NAM board voted unanimously in favor of a resolution standing with the people of Ukraine in the wake of Russia’s invasion. It’s why we’ve worked with our allies in that country as they work to rebuild, and why President Zelenskyy delivered an address to the American business community at the NAM’s Spring board of directors meeting.
We must stand not only with the people of Ukraine but with all the free peoples of Europe. We must strengthen the transatlantic relationship, grow and commit to trade with our allies, and bolster our global institutions and systems. In other words, we must unleash the power of commerce to preserve, protect, and expand democracy.
Some question whether democracies can be resilient and thrive in the modern world. That’s why part of manufacturers’ job as business leaders is to help bolster our institutions in this time of uncertainty, to make the system rooted in freedom function even better and to demonstrate that it is superior, both practically and morally.
Our democratic, free enterprise system may not be perfect, but it has done more to improve the standard of living for humankind than any system in history. We know it has lifted people up from oppression and poverty, helping create solutions to life’s problems while allowing billions to build lives of their own choosing.
Rhett Buttle: What would you add?
Jay Timmons: Working closely with the women and men of the manufacturing industry every day really gives you an appreciation for their power to uplift and change things for the better. Manufacturing is truly a unifying force, rallying people around solutions to all kinds of problems, whether those are small-scale problems tied to quality-of-life or enormous societal issues, like climate change.
Political discourse needs to also rally people around solutions. Policymakers could stand to be more in tune with manufacturers’ approach to problem solving, and less focused on politics, personality, and process. The American people should demand action – from both parties – to ensure our country remains globally competitive and positioned to lead. Our government could be so much more impactful if policymakers leave rhetoric on the doorstep and focus first and foremost on being purveyors of solutions.
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