September 20, 2010
Following moderately good news the prior week, last week's economic reports again were modestly on the positive side, with five of the nine major indicators improving. (To see all of last week's reports, see the Latest Economic Reports section below.) At the same time, last week's reports do not signal that the economic recovery is gaining steam.
September 20, 2010 – Quick Manufacturing News
As EPA invokes law to reduce emissions, industry readies for a fight. Click to continue
Finance Chairman Introduces Job Creation and Tax Cuts Act to Cut Taxes for Families, Employers, Close Tax Loopholes for Wealthy Investment Fund Managers and Corporations
Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.) today introduced fully paid-for legislation to create jobs and extend critical tax cuts for individuals, families and employers, while closing tax loopholes for wealthy investment fund managers and large corporations. The bill would cut taxes for families paying college tuition, state and local taxes, and property taxes. It would cut taxes for employers to spur research and development and investment, freeing up cash to expand and hire new workers. And the legislation would bolster career training programs and provide wage assistance to help employers hire workers to help our economy grow.
“This bill helps our economy grow by investing in our infrastructure and cutting taxes for employers. For the families and small businesses in Montana and across the country struggling to make ends meet, this bill provides tax cuts to keep more money in their pockets and the career training programs to get a fresh start,” said Baucus. “American workers, families and small businesses need this relief and this certainty as our economy continues to recover.”
The legislation includes provisions from the American Jobs and Closing Tax Loopholes Act (also known as the tax extenders bill). Baucus has been working for months to pass these tax cuts, which Republicans have blocked from moving forward on the Senate floor since May. Provisions included in the Job Creation and Tax Cuts Act would:
- Provide tax relief to businesses and state and local governments to help them invest and create jobs;
- Provide important tax cuts to put money back in the pockets of working families;
- Provide wage assistance to help employers hire workers;
- Extend career training programs for Americans who are looking for work;
- Ensure continued access to services for seniors, military service members and Americans with disabilities who rely on Medicare; and
- Close tax loopholes for wealthy investment fund managers and large corporations.
Legislative text, a summary of the changes made from the modified substitute amendment to the American Jobs and Closing Tax Loopholes Act introduced on June 23, 2010, and a detailed summary of the Job Creation and Tax Cuts Act are attached.
BOEING TO INCREASE 737 PRODUCTION
September 20, 2010 – Today in Manufacturing.net
Plane maker said it will increase production of its workhorse 737 to 38 per month by the second quarter of 2013 because of strong customer demand ... continue
CONGRESS DEMANDS STRONGER STANCE ON CHINA TRADE
September 20, 2010 – Today in Manufacturing.net
Obama administration is under pressure from Congress to take a tougher stand with China over trade practices that they say have cost Americans millions of jobs ... continue
CONSUMER PRICES RISE, INFLATION FLAT IN AUGUST
September 20, 2010 – Today in Manufacturing.net
Labor Department said consumer prices edged up 0.3 percent, matching the July increase, and core inflation showed no increase in August ... continue
EPA PUSHES FORWARD ON AIR QUALITY REGULATIONS; NEW STUDIES SHOW EPA’S ACTIONS WILL COST JOBS
September 20, 2010 – Manufacturers Alliance
The National Association of Manufacturers (NAM) Vice President of Energy and Resources Policy Keith McCoy issued the following statement today regarding the Environmental Protection Agency’s (EPA) continued push to impose costly and unattainable regulations on industry:
“EPA’s drive to put costly new burdens on manufacturers continues to create uncertainty and harm manufacturers’ ability to compete in a global economy. Two of the EPA’s more recent regulatory actions include proposing lowering ozone limits and putting stricter emission standards on industrial boilers. According to two new studies, the EPA’s current path and proposals will add costly new burdens to manufacturers and destroy millions of jobs.
Today the Manufacturers Alliance/MAPI released a study showing the EPA’s proposed ozone standards would cost 7.3 million jobs by 2020 and add $1 trillion in new regulatory costs per year between 2020 and 2030. And, while the EPA has publicly acknowledged that its own research shows there is no basis for proposing changing the ozone standards, the Agency continues to move ahead.
In addition, the Council of Industrial Boiler Owners (CIBO) today released a study that shows the EPA’s proposed rules to restrict emission limits on industrial and commercial boilers and process heaters could put 300,000 jobs at risk. The CIBO study also concludes that every $1 billion spent on compliance would jeopardize 16,000 jobs.
Our nation’s unemployment rate is 9.6 percent. We need more jobs, but the EPA is moving forward with regulations that will crush economic growth and manufacturers’ ability to hire. The NAM and the 18 million people who make up the manufacturing economy will continue to urge the EPA not to move forward with these job-killing proposals.”
EPA REJECTION OF TEXAS FLEXIBLE AIR PERMITS SYSTEM DRAWS NAM COURT CHALLENGE
September 20, 2010 – NAM Capital Briefing
On September 13, the NAM and five other business associations asked the U.S. Court of Appeals for the Fifth Circuit to review the Environmental Protection Agency’s (EPA) recent decision to disapprove revisions to a Texas Clean Air Act implementation plan that relates to the state’s Flexible Permits Program. The Texas plan was submitted to the EPA for approval in 1994 and has been revised several times since then. After a recent notice-and-comment period, the EPA decided the Texas plan did not meet its requirements, and the NAM has sought judicial review of this action. The Texas program allows operators of facilities that generate air emissions flexibility in managing their operations, in some cases allowing plants to exceed pollution limits from individual emission sources as long as the facility as a whole remains below an overall emissions cap. See NAM v. EPA (5th Cir.).
GREAT SALT LAKE MINERALS COMPANY TURNS 40
September 20, 2010 – Standard Examiner
(GSL has been a UMA Member for many years – Congratulations)
OGDEN -- Mark Reynolds stood amid a sea of white that glittered to the horizon. He reached down and picked up a thimble-size lump of that white.
It's mostly potassium, he said, with salt and magnesium mixed in. "It tastes pretty bad," he admitted. "We call it 'bitter.' That's the magnesium."
Reynolds was standing in one of 47,000 acres of evaporation ponds west of Great Salt Lake Minerals refining facility on the shore of the lake. His full title is Sulfate of Potash Expansion and Capacity Manager and, even though he has worked only two years for GSL, he sees it as family.
His dad, Max Reynolds, was the general manager of the company for years.
"One Sunday my dad said, 'You want to take a ride?' We drove out onto the ponds and a 200-foot section of the dike had slid. The Great Salt Lake was flowing into the ponds."
That was May 5, 1983. After 13 years in operation, Great Salt Lake Minerals faced a crisis. Two years of heavy rains and snow runoff had raised the lake to heights not seen in 95 years. Utah had cut a hole in the Southern Pacific Railroad causeway to let water from the lake's higher south branch flow into the north. GSL opposed the breach because it would threaten its dikes, but the state went ahead.
GSL's ponds flooded, washing out two years of work. That's how long it takes evaporation to convert lake brine to finished product.
More than 300 people worked at GSL then. "They had voluntary layoffs and reduced time. It was a very difficult time," Reynolds said.
The parent company at the time -- Gulf Sulphur, a mining company -- wanted to close down GSL, but "my dad and Peter Behrens (the company president) told them no. They said we'll get insurance money, we'll rebuild."
Great Salt Lake Minerals, now owned by Compass Minerals, Kansas, celebrates its 40th anniversary this year. The company really got its start 45 years ago when Lithium Corporation of America started testing lake water for lithium, a rare metal used in batteries.
Lithium was found, but recovering it was not economical. Dave Hyams, GSL spokesman, said German industrialists behind Lithium Corporation of America saw all the potassium sulfate and magnesium chloride they were getting, pretty much for free, and "decided this sucker might work." The first ponds went in in 1967.
The company opened a $10 million refining facility in 1968. Its first shipment, the event celebrated this year, went out in 1970.
GSL makes three chemical products: Salt, potassium sulfate, also called sulfate of potash, and magnesium chloride. Most production work is done by the sun, with final processing of the potash and magnesium chloride in a refinery.
Production is simple: Lake brine is put into a pond and the water allowed to evaporate. As the water dries out, salt crystals form.
When most of the salt crystallizes out, the remaining brine is moved to another pond and allowed to evaporate more until potassium sulfate crystallizes.
After that, the remaining brine contains magnesium chloride. The salt is sold for snow removal and water softeners and the magnesium chloride is used for road dust control.
The potassium sulfate is what the company brags about the most, because it is a big component of fertilizer.
"They started harvesting it and producing it about the time farmers and the university extension services started realizing potassium sulfate would be better for crops with roots," Hyams said, "and as farms changed over the last 40 years and yield became more important, the market just grew because we are the only American supplier."
Among other things, both Hyams and Reynolds stressed, is that GSL's product is organic and can be used to grow organic crops. It comes directly from the lake and has nothing added, "and while organic isn't a huge number, it's a significant segment and a very forward-looking segment," Hyams said.
As demand grew, GSL expanded.
In the early 1990s, Hyams said, company President Peter Behrens got state approval to set up evaporation ponds in the west shore of the lake's west arm north of the causeway. So little new water flows into that arm that salt concentrations are much higher.
The problem was how to get brine from those ponds to the refinery. Reynolds said company lore has it that "Behrens went away for a week and came back with some plans and said 'do it this way.'âÇ"
His idea was to dig an underwater trench across the floor of the lake's northwest arm, from the ponds to the tip of the southern Promontory Mountains. Concentrated brine from the evaporation ponds would flow downhill through that trench. The brine's density would prevent it from mixing with the lake water above. From Promontory Point it is pumped to the company's ponds near the refinery.
The brine takes 21 days to flow seven miles, Hyams said. Behren's solution to the problem was such a clever way to take advantage of the physics of salt water and the geography of Great Salt Lake that, he said, "there's nothing like it in the world."
For the last two years, the company has been improving and expanding its refinery to increase production, which now is 350,000 tons of potassium sulfate (potash), 600,000 tons of magnesium chloride, and 2 million tons of salt a year.
But to do so, it has to build more evaporation ponds. GSL has 47,000 acres of ponds. The company is applying to Utah for rights to another 91,000 acres.
That expansion worries environmentalists. They are concerned overuse will severely damage Great Salt Lake's environmental quality and threaten bird populations. A consortium of lake advocacy groups, led by Friends of Great Salt Lake, has filed several legal actions seeking to block the application.
Hyams admits those actions could drag on for years. "We're still working with the Corps (of Engineers) and the EPA and the state agencies. It's a very complicated proposal. The environmental impact statement is not even completed as a draft yet."
While all that happens, the company, which contributes $65 million a year to the local economy and employs 350 people, will keep doing what it does.
Summer is the peak evaporation period, and autumn is harvest time.
On Wednesday, Reynolds stood on one of the dried-out evaporation ponds where the drying potassium sulfate is plowed into hedgerows waiting to be loaded onto an endless stream of trucks flowing past.
Around him, the potassium, mixed with salt, seemed to extend as far as the eye could see, a sea of white that looks like snow but is only slightly cool to the touch, damp to stand on and bitter to taste.
"Can you imagine the vision?" he said. "To stand here amid mud flats and see the possibility of all this?"
Although, actually, they didn't. Those original guys were looking for lithium, the one thing they ended up not wanting.
HIGHER IMPORTS WIDEN BROADEST GAUGE OF TRADE GAP
September 20, 2010 – Today in Manufacturing.net
Americans' appetites for imported goods, especially cars and computers, lifted the broadest measure of the U.S. trade deficit to its highest point since late 2008 ... continue
IMMIGRATION PROVISIONS TO BE ATTACHED TO DEFENSE BILL
September 20, 2010 – NAM Capital Briefing
Majority Leader Reid has announced that the DREAM Act, the immigration bill that provides amnesty for children whose parents brought them to the United States, will be attached to the Department of Defense authorization bill. The bill is scheduled for a vote next week. Consideration of the DREAM Act signals that congressional action on immigration reform may take a piecemeal approach rather than a comprehensive one. Details: Christine Scullion, (202) 637-3133.
MANUFACTURING IS GROWING FASTER THAN THE ECONOMY
September 20, 2010 – Quick Manufacturing News
The pace of recovery in the general economy has slowed, but the deceleration is less visible in the manufacturing sector, according to a quarterly report from the Manufacturers Alliance/MAPI. Click to continue
NAM KEY VOTES AGAINST EXPANDED REPORTING REQUIREMENTS
September 20, 2010 – NAM Capital Briefing
During debate on the small business bill (H.R. 5297), the two Senators offered competing versions of amendments addressing onerous 1099 filing requirements. As part of the health care reform bill, Congress enacted new reporting rules that would require businesses to file 1099 forms with the IRS for virtually every purchase over $600 – putting in place a massive new paperwork burden on small and medium-sized manufacturers. Sen. Johanns (R-NE) offered an NAM-supported amendment that would have repealed the provision altogether. Unfortunately, that amendment failed by a vote of 46-52. Senator Nelson (D-FL) offered a competing amendment that would have kept the reporting requirement in place but modified it slightly by carving out businesses with less than 25 employees and increasing the threshold. However, the amendment was offset with tax increases on oil and gas companies. The NAM key-voted against the Nelson amendment, which failed by a vote of 56-42. Details: Dena Battle, (202) 637-3079.
NAM URGES ACTION AGAINST EPA’S REGULATORY AGENDA
September 20, 2010 – NAM Capital Briefing
This week, the NAM filed a motion in federal appeals court for partial stay against the Environmental Protection Agency’s (EPA) planned regulation of greenhouse gas emissions from stationary sources – also known as the “tailoring rule.”
Slated to take effect on January 2, 2011, the tailoring rule will initially apply to power plants and the nation’s largest industrial and commercial facilities. However, the EPA is planning to conduct a new rulemaking process to expand to smaller emitters of greenhouse gases – eventually growing to include a large cross-section of the economy.
These regulations will impact manufacturers across the United States. The EPA's overreach in imposing this unprecedented regulatory regime – which was never authorized by Congress – will severely damage U.S. competitiveness, destroy jobs, hinder manufacturers' ability to expand their businesses and ultimately undermine economic recovery.
“Our nation continues to face an unemployment rate of 9.6 percent. If the EPA is allowed to continue forward with an overreaching agenda that puts additional and unnecessary burdens on manufacturers and drives up energy costs, it will cause economic harm and instill even more uncertainty into our already fragile economy,” said NAM President John Engler.
The NAM hopes this judicial action will force the EPA to consider the full economic impact of these rules. On the legislative front, Sen. Rockefeller (D-WV) is seeking a Senate vote this year on his bill that would impose a two-year delay on EPA rules for stationary sources. Rep. Rahall (D-WV) has floated a companion plan in the House, which is co-sponsored by Rep. Boucher (D-VA).
Meanwhile, the EPA continues its drive to impose costly new burdens on manufacturers – creating uncertainty and harming our ability to compete in the global economy. New studies show that two of the EPA’s more recent regulatory proposals – to lower ozone limits and place more emission standards on industrial boilers – will increase costs for manufacturers and destroy millions of jobs.
Ozone StandardOn September 15, the Manufacturers Alliance/MAPI released a study showing the EPA’s proposed ozone standards would cost 7.3 million jobs by 2020 and add $1 trillion in new regulatory costs per year between 2020 and 2030. While the EPA has publicly acknowledged that its own research shows there is no basis for proposing changing the ozone standards, the Agency continues to move ahead.
Back in March, the NAM submitted comments to the EPA urging federal regulators to abandon plans to tighten the 2008 air quality standard for ozone. Less than two years following promulgation of the 2008 standard, the EPA proposes to “reconsider” the ozone standard to a range that could triple the number of counties that would be required to implement expensive controls -- further undermining competitiveness and diverting resources from investments in technological innovation. The NAM was joined by a group of 24 state manufacturing associations who signed a joint letter opposing stricter regulation.
Boiler MACT StandardIn addition, the Council of Industrial Boiler Owners (CIBO) released a study on September 15 showing that the EPA’s proposed rules to restrict emission limits on industrial and commercial boilers and process heaters could put 300,000 jobs at risk. The CIBO study also concludes that every $1 billion spent on compliance would jeopardize 16,000 jobs. The EPA published these air emission standards for boilers, including “Maximum Achievable Control Technology” (boiler MACT standards) in June 2010.
The NAM and several other trade associations joined the CIBO at a briefing for key U.S. Senate staff on this critical manufacturing issue. The NAM stated that this proposed rule is another example of EPA overreach as manufacturers are attempting to fully recover from the steepest economic downturn since the 1930s and bring back the 2.2 million jobs lost during the recession.
The NAM also filed formal comments with the EPA on August 23 to outline manufacturers’ concerns with the MACT standards. Although the NAM supports certain aspects of the proposed rules, manufacturers remain fundamentally concerned that the EPA has proposed standards that are not actually “achievable” or “achieved in practice” by existing or new “sources,” as expressly required by the Clean Air Act.
The new rule also has caught the attention of lawmakers. In a letter to EPA Administrator Lisa Jackson, more than 100 members of Congress expressed their opposition to the new boiler
MACT standards. They note that the new regulations “could impose tens of billions of dollars in capital costs at thousands of facilities across the country.”
Manufacturers need to focus on creating jobs and staying competitive in the global marketplace, but the EPA is moving forward with regulations that will crush economic growth and manufacturers’ ability to hire. The NAM and the 18 million people who make up the manufacturing economy will continue to urge the EPA not to move forward with these job-killing proposals.{Back to top}
OBAMA LAYS OUT PLAN TO MEET EXPORT TARGET
September 20, 2010 – Today in Manufacturing.net
President says this year's 18 percent rise in exports underscores importance of selling goods and services abroad to create jobs and strengthen the American economy ... continue
OECD SEES SLUGGISH GROWTH AHEAD FOR U.S.
September 20, 2010 – Today in Manufacturing.net
U.S. economy will grow less than previously forecast, as sluggish demand hampers efforts to recover from worst downturn since Great Depression ... continue
PRESIDENT OBAMA INSISTS EXPORT TARGET IS REACHABLE
September 20, 2010 – Quick Manufacturing News
Exports were up in the first four months of the year almost 18% from last year. Click to continue
OBAMA: RECESSION IS STILL PAINFUL
September 20, 2010 – Today in Manufacturing.net
Group of economists said U.S. recession is over, but Obama acknowledged that the pain is 'still very real' for millions of Americans who are struggling ... continue
SENATE TO MOVE OSHA BILL FORWARD
September 20, 2010 – NAM Capital Briefing
Before the Senate adjourned for the August congressional recess, Sen. Rockefeller (D-WV) introduced a companion version of the Miner Safety and Health Act (S. 3671). As its name suggests, the Act is aimed at revamping mine safety laws. However, it also includes several of the most onerous provisions of the Protecting America’s Workers Act (H.R. 2067). If passed, this legislation would significantly raise the fines for alleged violations and implement vague new criminal penalties on company officers without defining how the responsibility for violations would be determined. In addition, the bills would require manufacturers to shut down operations and immediately make corrective actions based on allegations of hazardous violations by a regional Occupational Safety and Health Administration (OSHA) inspector prior to being able to appeal the inspector’s decision. Despite increasing the burdens on manufacturers, the legislation provides no support or assistance for employers to help them implement better safety programs or better understand their obligations. Click here to contact your members of Congress and urge them to oppose this misguided proposal.
SMALL BUSINESS BILL WITH BONUS DEPRECIATION CLEARS SENATE
September 20, 2010 – NAM Capital Briefing
On September 16, the Senate passed by a vote of 61-38 small business bill H.R. 5297, which includes an NAM-advocated extension of bonus depreciation for 2010. Specifically, this provision allows faster capital cost recovery of business investments by permitting businesses to immediately write-off in the first year 50 percent of the cost of depreciable property purchased and placed in service in 2010. Also included is an NAM-supported provision to increase Section 179 expensing. Although the House passed a different version of this bill earlier, which did not include an extension of bonus depreciation, reports are that the House will pass the Senate version in the next couple of weeks. The President recently voiced public support for the bill and is expected to sign it into law soon after final action by Congress.
TELL CONGRESS TO OPPOSE HIGHER TAXES FOR SMALL AND MEDIUM MANUFACTURERS
September 20, 2010 – NAM Capital Briefing
Without congressional action, individual tax rates will skyrocket to pre-2001 levels beginning January 1, 2011. The Administration and congressional leaders are advocating extending lower rates only for the bottom three tax brackets – while letting the top rate revert to almost 40 percent.
Over 70 percent of all manufacturers are organized as ”S” corporations or other flow-through entities and pay income taxes at the individual rate. The average taxable income for these companies is $570,000, meaning many of these businesses will be hit with the higher rates.
The uncertainty associated with increased taxes and higher costs is keeping small business from hiring and expanding. In fact, according to an RSM McGladrey survey of small and medium-sized manufacturers, 87 percent are concerned about the top rates increasing – with 61 percent claiming they are very concerned.
Click here to contact your member of Congress and tell them to oppose higher tax rates for small manufacturers.
TEXAS WANTS COURT TO BLOCK GREENHOUSE GAS RULES
September 20, 2010 – Today in Manufacturing.net
State asked a federal court to block new Environmental Protection Agency greenhouse gas rules, arguing they threaten jobs and are based on questionable science ... continue
VOTE ON PAYCHECK FAIRNESS BILL EXPECTED BEFORE ELECTION
September 20, 2010 – NAM Capital Briefing
On September 13, Senate Majority Leader Reid (D-NV) re-introduced the long-pending Paycheck Fairness Act (S. 3772) and indicated his intent to call a vote on the measure before the Senate adjourns for the mid-term elections. Under the guise of creating gender pay equity, the Paycheck Fairness Act would significantly expand the ability of trial lawyers to sue manufacturers for legitimate pay practices while doing little to prevent actual illegal acts of pay discrimination. This legislation would create a complex system of litigation for allegations of gender discrimination and would force employers to second-guess almost every pay decision they make. This bill also would allow the government to collect data from private-sector businesses and could potentially make employee salaries public. Click here to contact your senators to urge them to oppose the proposal. Details: Keith Smith, (202) 637-3045.
WHITE HOUSE DEFENDS STIMULUS
September 20, 2010 – Today in Manufacturing.net
Washington pushes back against criticism of its $814 billion stimulus program and highlights 100 projects it says are creating jobs and growing the economy ... continue
WHOLESALE PRICES RISE ON HIGHER ENERGY COSTS
September 20, 2010 – Today in Manufacturing.net
Labor Department's Producer Price Index rose last month for second straight month as cost of energy climbed enough to offset an unexpected drop in food prices ... continue
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