May 3, 2010
Last week's economic news was overwhelmingly positive, with six of the seven major economic reports growing. (To read all of last week's indicators, see the Latest Economic Reports section below.)
May 3, 2010 – Today in Manufacturing.net
Commerce Department said consumer spending rose 0.6 percent in March, but personal incomes edged up just 0.3 percent, raising new worries about lackluster income growth... continue
May 3, 2010 – Today in Manufacturing.net
Economic stress dropped in March in nearly three-quarters of nation's 3,141 counties, according to The Associated Press' monthly analysis of conditions around the U.S... continue
May 3, 2010 – Today in Manufacturing.net
Private trade group says the U.S. manufacturing sector expanded at the fastest pace in nearly six years; as factories continue to lead the economy's rebound... continue
May 3, 2010 – Late Wire Manufacturing.net
Despite a small drop in April, economic outlook for nine Midwest and Plains states remains positive for the months ahead, according to a report released Monday ... continue
The automaker's recent problems were likely masked by multiple, unrelated technical problems.
Sudden and unexplained acceleration problems with Toyota vehicles have dominated the news recently. I suspect that when the source of this problem is finally found, it will follow my thesis on reliability: at least five and as many as ten things must interact to produce the failure of a well-designed system. Any one thing by itself will cause a problem but not a catastrophic event.
How does aligning holes in slices of Swiss cheese apply to the Toyota ( TM - news - people ) sudden-acceleration problem? From the news reports I have read, it appears that the acceleration problem is random and occurs in some vehicles while not in others. As an engineer I believe that there is a root cause of these failures, but it is being masked by interacting issues.
The Challenger shuttle launch failure in 1986 that killed seven astronauts and embarrassed the U.S. in front of the watching world triggered a 34-month intense investigation during which manned flight was halted. Ofttimes when technical people intensively work on these types of problems, they get lost in details and fail to see the big picture. They also talk in terms that are confusing to managers and executives.
Edward Tufte in his book Visual Explanations and Steve Fairfax of MTechnology make a very compelling case that the official investigation focused too much on the O-ring itself and overlooked a very simple but decisive factor. It was logical to look at the O-ring design because erosion ultimately did allow hot gasses to escape, causing the rocket to blow up. But the case (or slices of Swiss cheese) for O-ring erosion did not correlate with the actual data (i.e., the holes did not line up). When ambient outside temperatures below 40 degrees Fahrenheit were added to the analysis, previous O-ring failures lined up nearly exactly and it was possible to predict with a high degree of certainty that a rocket failure would occur any time the temperature in Cape Canaveral was less than 40 degrees, as it was on that cold day 24 years ago. It is truly tragic that this information was known but inadequately communicated before the decision to launch.
Toyota, and others with complex catastrophic or otherwise expensive failures, would do well to consider multiple, apparently unrelated interacting causes. My thesis is that in any well-designed system, at least five and as many as ten things must line up to produce a failure. Finding and isolating these interactions is what takes time and wisdom. Once the network of interaction is understood, changing any one thing will reduce the impact of a problem or eliminate the possibility of catastrophe.
Kenneth G. Brill is founder of the Uptime Institute.
UTAH PULLS OUT OF THE WCI
May 3, 2010 – Utah Association of Energy Users
Utah is the latest member of the Western Climate Initiative to signal its withdrawal from the regional cap-and-trade market.
"We recognize that we don't have the state authority that we need to actually implement a cap-and-trade program in 2012," said Dianne Nielson, energy adviser to Utah Gov. Gary Herbert (R).
Nielson wouldn't elaborate on why Utah would have signed up in the first place if it could not participate through passing authorizing legislation.
"It's just a matter of having the authorization, being able to develop the regulation that goes along with that at the agency level, and that's actually why we began working together to begin with," she said. "It's more than the authorization, but that's the beginning.”
In addition to Arizona, whose governor signed an executive order in February with-drawing from the cap-and-trade market, Montana, Washington and Oregon are also not anticipating a 2012 start date. That leaves California, British Columbia, Ontario and Quebec as the only original members of the seven-state, four-province agreement that are on track to take part as scheduled.
New Mexico is planning to present a proposed regulation to the state Environmental Improvement Board in June, with a hearing scheduled for September, but a lawsuit from utility and oil and gas companies might halt the proceedings.
The lawsuit contends that the EIB can-not regulate greenhouse gases without setting ambient air quality standards; a judge issued a preliminary ruling in the plaintiffs' favor last week.
Meanwhile, Arizona is cementing its non-participation with a bill that would expressly prohibit the state from implementing a cap-and-trade system without legislative approval.
Pat Cummins, project manager for the WCI, pointed out that even with the defection of the majority of WCI members; the market will still cover about 70 percent of the region's emissions.
Cummins said the group was structuring its allowance distribution to allow members to join later than 2012. "We've been operating under this assumption for a while now," he said. But California observers say less-than-full participation creates significant issues that have yet to be worked out.
A key issue is which jurisdiction will control the allowances that are required to cover electricity imported into the WCI region. If Oregon, for example, is not participating in cap and trade, California utilities will have to buy allowances to cover their electricity imports from Oregon -- and California will have to set its allowance cap higher to account for those imported emissions.
WCI has offered up the possibility of bilateral agreements between participating and non-participating states as a potential solution, wherein net importers of electricity would agree to take responsibility for the emissions -- and the potential auction revenue -- until the exporting state joins the market.
“Part of the reason WCI dropped that issue and left it to bilateral agreements is it was threatening to disband the WCI," said Obadiah Bartholomy, head of the Sacramento Municipal Utility District's climate change program. "It was a very contentious issue, so they agreed to not agree on the solution."
For California, which imports about half of its electricity, the question is significant. "Most other WCI states are not net importers, so it's really our problem," Bartholomy said.
Note: UMA supported a legislative resolution in the 2010 General Session calling for Utah to withdraw from the WCI.
May 3, 2010 – Utah Association of Energy Users
The expected unveiling of energy and climate change legisla-tion on April 26 in the Senate took an abrupt turn when Sen. Lindsey Graham, R-S.C., said he was abandoning it unless climate legislation moved ahead of immigration on the Sen-ate calendar.
When Senate Majority Leader Harry Reid, D-Nev., put im-migration on the agenda, Graham felt it jeopardized not just his credibil-ity but also his ability to get some Republican votes for the climate change bill in the Senate, according to Sen. Joseph Lieberman, I-Conn. "We're working really hard to get this back together," Lieberman said in an interview. The Connecticut lawmaker said that on April 25, Reid "explicitly" said he intends to give the energy and climate change bill Senate floor time this year, as soon as the bill is ready.
Sen. John Kerry, D-Mass. also voiced hope that Graham will re-turn to the joint climate change effort. The Utility Workers Union of Amer-ica voiced frustration with the last-minute collapse of the Kerry-Graham-Lieberman coalition over the immigration issue. "Our 50,000 members, most of whom work every day at the forefront of the carbon-based gen-eration of electricity, are truly angry that once again, partisan politics is delaying important national legislation," Utility Workers Union of America President Mike Langford said in an April 26 statement.
“We came to Washington this day to express our support for our nation's first true consensus-driven response to our greatest global chal-lenge, but like many others have again ended up with front row seats in this sad arena of dysfunction. This bill was developed with input from workers, business leaders, environmentalists, Republicans, Democrats, Independents and everyone else with a vested interest in its contents, which makes the fact that it is being held hostage to a separate issue all the more ridiculous," Langford added.
Scott Segal, a lawyer with Bracewell & Giuliani, a firm that repre-sents energy companies, suggested that there were problems with the Kerry-Graham-Lieberman bill even before immigration issues surfaced.
May 3, 2010 – Jay Timmons - NAM Capital Connection
Obstruction. Primary challenges. Legal challenges. Repeal. The weeks leading up to and following passage of the massive health care bill were filled with emotionally charged rhetoric on both sides of the political fence.
Well before this landmark legislative battle, the 2010 elections were expected to be tumultuous and difficult for the Democratic party, which holds majorities in the House and Senate as well as the White House. With victories in key governor races in New Jersey and Virginia and the unexpected come-from-behind win of Senator Scott Brown in Massachusetts, some believed Republicans had a credible opportunity to retake the House and make substantial gains in the Senate, if they could win over wary independents and solidify their standing among their base voters. Polling indicates the current political environment is reminiscent of 1994 and 2006, when there were major shifts in party control in Congress.
It is probably fair to say this legislative victory put the wind, or at least a breeze, back in the sails of Democratic candidates across the country. It certainly showed they could get something done, even if public polling reveals a majority of voters do not like the outcome or the manner in which they did it. However, a recent USA Today/Gallup poll shows Americans now hold President Obama responsible for the continued economic downswing (although the blame attributed to former President Bush remains consistently high). Overall, the public is less certain about the potential for a strong economic recovery and is voicing discontent equally with their representatives in both parties.
Ultimately, the elections in November will not be decided on one piece of legislation that passed Congress in March. Seven months from now, the focus of voters will still be on jobs and the economy. And they will be carefully watching how their elected representatives talk and act to address their well-founded worries and concerns.
Any messaging on health care by candidates of either party must address the impact on voters’ pocketbooks and what they intend to do to create and retain jobs in the United States. Manufacturers have significant concerns with the spending and tax provisions in the bill, which will increase the cost of doing business and threaten their ability to expand employment.
Manufacturers create jobs—nearly 12 million of them. But the current legislative and regulatory environment makes the job harder for manufacturing and business leaders who cannot make plans because of the uncertainty of what may happen in Washington.
With health care now behind them, members of Congress turn to new energy and climate legislation, financial regulation, a jobs bill focused on small businesses and several tax measures that will have a significant impact on the manufacturing sector.
To achieve economic growth in this country, we need a pro-business majority in Congress. Manufacturers must be ready to speak out on these issues and ensure our concerns are part of the dialogue. We need to change the policies in Washington so we can sharpen our competitive edge in the world economy and get Americans back to work.
May 3, 2010 – Smart Brief on Leadership
About a third of all innovation programs never get beyond the planning stages, writes Jeffrey Phillips, and it's almost always due to one of five key managerial failures. To innovate, he adds, you've got to have guts, clear goals and a willingness to do more than simply talk about how great your ideas are. Innovate on Purpose
SEMINAR ANNOUNCEMENT
Alcoholism and drug addiction cost U.S. businesses $120 billion annually due to absenteeism, diminished productivity, on-the-job injuries, and potential company liability. Moreover, nearly 75% of those who currently use illicit drugs are employed – some very possibly at your company. To help lower costs and combat these problems, many employers adopt drug testing policies. However, those charged with administering the policies often use a nonsensical approach and do not receive adequate training.
Learn a common-sense, practical approach to drug testing - and fill a critical training gap - by attending this information-packed seminar. Council staff and expert guest speaker, Paul Teynor, MD, MPH, a certified Medical Review Officer (MRO) at Intermountain MRO Services, will cover topics including:
· The importance of identifying and responding to drug abuse in the workplace
· The legal implications of drug abuse testing
· The collection, testing, and confirmation processes
· The signs and symptoms of drug abuse in the workplace
· The options available to employers when an employee tests positive
· The elements of an effective drug testing program & policy
Who should attend: Anyone who oversees or administers their company’s drug testing policy, including human resource professionals, safety personnel, and managers.
Certification: This program is approved for 3.5 general recertification hours toward PHR, SPHR, and GPHR recertification through HR Certification Institute.
Where: Radisson Hotel When: Wednesday, June 9, 2010
215 W South Temple, Salt Lake City, UT Seminar: 8:00 a.m. - 12:00 noon
Cost: $115 per Council member; $195 per non-member Registration & breakfast buffet: 7:15 - 8:00 a.m.
REGISTRATION INFORMATION:
Name________________________________________________
Name________________________________________________
Name________________________________________________
Company_____________________________________________
Address______________________________________________
City/State/Zip__________________________________________
Phone_____________________ Fax ______________________
E-mail Address(es) of person(s) to receive reminder:
__________________________________________________
__________________________________________________
__________________________________________________
PAYMENT METHOD: Cost: $115 per Council member -$195 per non-member
____Check Enclosed
____Bill Me
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Credit Card #________________________________
Expiration Date ______________________________
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Refund given if cancellation is received at least one week prior to seminar
Register for Drug Testing: A No-nonsense Approach by:
E-mail: info@ecutah.org
Mail: The Employers Council - 175 W 200 S, Suite 2005, Salt Lake City, UT 84101
Fax: 801-364-8915
Phone: 801-364-8479
May 3, 2010 – Today in Manufacturing.net
Slowing an industry that costs U.S. manufacturers $250 billion per year is an undertaking that has to be tackled bite by bite... continue
New legislation was introduced last week that seeks to scrutinize the classification of individuals as independent contractors versus employees. The Employee Misclassification Prevention Act will place additional burdens on employers who hire contractors and will strengthen penalties for instances of individuals being misclassified as contractors instead of employees.
LABOR LAW REFORM / NLRB ISSUES
· Organized labor leaders have once again demonstrated their commitment to use the newly constituted National Labor Relations Board (NLRB) to implement aspects of the jobs-killing Employee Free Choice Act (EFCA). In her efforts to succeed Andy Stern to become the president of the Service Employees International Union (SEIU), Anna Burger sent a memo to the group’s Board outlining her intent to implement for “quick snap union elections” and binding interest arbitration through the NLRB if elected president of the union. (Click here for more information.)
· Richard Trumka, President of the AFL-CIO, indicated last week that they are “working hard” to make the pending card check legislation law and are looking “at things to attach it to.” Meanwhile, President Obama spoke at a town hall event in Iowa where he reiterated his support for nominees to the NLRB in order to change our labor law system.
· In hearings on Capitol Hill this week Congress reviewed current workplace regulations and called for increased OSHA enforcement and penalties. In response, the National Association of Manufacturers (NAM) submitted a statement to the Senate HELP Committee. (Click here to view.)
· OSHA also announced a new enforcement program that significantly increases workplace safety penalties. This program lays out a new penalty scheme for OSHA inspectors that will triple the average penalties levied on employers for certain violations.
· More information on all of OSHA’s recent efforts is available at the LPI website.
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