July 27, 2011

UMA MEMBER COMPANIES IN THE NEWS:

STEELMAKERS: SLOW ECONOMY WILL HURT 3Q SALES

Today in Manufacturing
AK Steel, U.S. Steel and Nucor cited factors ranging from softer demand, higher costs and lower steel prices to rising supplies that could pressure prices and margins ... continue

BOEING 2Q PROFIT BEATS EXPECTATIONS

Today in Manufacturing
The plane maker says its second-quarter profit rose almost 20 percent as it delivered more commercial airplanes ... continue

ATK SELECTED AS A MAJOR SUBCONTRACTOR FOR INTERMEDIATE-RANGE BALLISTIC MISSILE TARGET ROCKETS

PR Newswire
ATK has received a $48 million major subcontractor award from Orbital Sciences Corporation to provide commercial solid rocket motors for the Missile Defense Agency Intermediate Range Ballistic Missile target rocket program. With follow-on options ATK believes the contract has a potential value of up to $90 million. Orbital is the prime contractor for the IRBM program.
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BIG-D PROJECTS WIN 2010 AIA UTAH DESIGN AWARDS

Business Wire
Two Big-D Construction projects were recently awarded 2010 AIA Utah Design Awards.
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MANUFACTURERS URGE OBAMA ADMINISTRATION, EPA TO ABANDON SETTING NEW OZONE STANDARDS

National Association of Manufacturers
In a press release, the National Association of Manufacturers offered a statement from President and CEO Jay Timmons regarding the Environmental Protection Agency's announcement that it will miss its July 29 deadline on proposed ozone standards. "Manufacturers hope today's announcement is a sign that the Administration is listening to our concerns and will hold off on issuing this harsh, costly standard. By moving forward with raising the standards on ozone levels, the EPA is only adding economic turmoil to the nation's struggling job market." Timmons said, "The proposed ozone standard could result in millions of lost jobs and nearly $1 trillion per year in compliance costs." Timmons added, "Manufacturers urge the White House and the EPA to abandon setting a new ozone standard before it is statutorily required and to thoroughly analyze the achievability and economic impact that other regulations will have on manufacturers and their ability to compete in today's global marketplace."

MANUFACTURERS URGE HOUSE OF REPRESENTATIVES TO PASS THE PROTECTING JOBS FROM GOVERNMENT INTERFERENCE ACT.

National Association of Manufacturers
In a press release, the National Association of Manufacturers offered a statement from President and CEO Jay Timmons offered a statement urging the House of Representatives to pass the Protecting Jobs from Government Interference Act (HR 2587). "Manufacturers call on members of Congress to vote for jobs and help rein in the National Labor Relations Board's (NLRB) agenda by supporting the Protecting Jobs from Government Interference Act. The NLRB's actions are causing uncertainty among manufacturers who want to invest in America and hire workers in the US." Timmons said, "While this legislation would prohibit the NLRB from ordering job creators to close, relocate, or transfer facilities, manufacturers are also concerned about a number of other aggressive maneuvers by the NLRB. The Specialty Healthcare case would allow union organizers to set up costly, time-consuming micro-unions, and the 'quick snap elections' rule would effectively deny employees the ability to make fully informed decisions about whether to join a union." Timmons added, "Manufacturers and their employees can't afford more job-killing proposals from the NLRB. Congress must tie the hands of the Administration's NLRB to prevent it from continuing to cause harm to America's job creators."

FEDS NEAR DEAL ON FUEL ECONOMY

AP
Officials say recent changes to make it easier for light trucks to become more fuel efficient have lowered the proposal to 54.5 miles per gallon by 2025 ... continue

DURABLE GOODS ORDERS FALL IN JUNE

Today in Manufacturing
Orders for durable goods fell 2.1 percent, with the weakness led by a big drop in orders for commercial aircraft, the Commerce Department said ... continue

RESTORING THE IDEAL OF LIMITED FEDERAL GOVERNMENT

Richard S. Davis
The debt/deficit/default debacle dominates everything right now. It also tells us something about the current condition of federal-state relations. The states -- once celebrated as "laboratories of democracy" by defenders of American federalism -- now resemble insecure dependents of a faithless uncle. Billions of dollars of federal aid greased the states' slide from sovereign to beholden. The recession accelerated the descent, leaving states unable to shake free without enduring and inflicting unacceptable hardship on their citizens.

Forget "too big to fail." The federal government has become too big to succeed and too involved in activities properly handled by the states. Consequently, when the feds confront deficit reduction, the states fear they'll be among the first dominos to topple.

A report released last December by the National Association of State Budget Officers (NASBO) documents federal dominance. In 2008, before the stimulus act, federal funds accounted for about 26 percent of total state spending. With the stimulus, that share rose to nearly 35 percent in 2010, returning to pre-stimulus levels next year, long before state revenues recover. Remarkably and unreliably, a federal government borrowing more than 40 percent of the money it spends will pay for more than one-quarter of state spending.

Dependence on federal aid increases state budget risk. Most federal funding for states -- 43 percent according to NASBO -- is tied to Medicaid, the Sixties-era state-federal partnership providing health care for low income people. The feds pumped up Medicaid support in the stimulus package, but hamstrung states with "maintenance of effort" requirements that require elevated spending until 2014.

Medicaid cost control necessarily emerges as a central factor in deficit reduction talks. The prospect generates bipartisan apprehension from the nation's governors. Gov. Chris Gregoire, as outgoing chair of the National Governors Association, wrote the president and congressional leaders urging them "not to continue to mandate Medicaid program requirements upon states without … adequate federal funding or federal law flexibility..."

As the letter suggests, the federal government is always the senior partner in any joint venture. Following the inevitable path of all entitlements, Medicaid grew over the years with steady increases in benefits and expanded eligibility, some driven by federal requirement and others tied to the lure of matching funds. According to the Congressional Budget Office, in 1975 Medicaid (including state spending) amounted to less than 1 percent of the nation's economy. By 2008 it claimed an astonishing 2.5 percent.

Medicaid so ensnares states in the federal web that 26 attorneys general, including Washington Attorney General Rob McKenna, have made it a factor in their lawsuit challenging the 2010 federal health care law. Saying provisions of the act that add to states' Medicaid costs represent "an unprecedented encroachment" on state sovereignty, the states note that they cannot easily back away from the program:

"Plaintiffs cannot effectively withdraw … because Medicaid has, over the more than four decades of its existence, become customary and necessary for citizens throughout the United States … and because individual enrollment in …[these] programs, which presently cover tens of millions of residents, can only be accomplished by their continued participation in Medicaid."

Last month, in federal appeals court in Atlanta, Judge Joel Dubina called the states' argument "pretty powerful."

The lawyer representing the federal government countered, "They knew the terms of the deal going in."

If only.

Regardless of how the U.S. Supreme Court resolves the matter, the relentless expansion of the federal government, under Republicans and Democrats alike, cannot continue. Trillions of dollars in deficit spending must be stemmed. State and local governments will not be spared. In addition to the Medicaid expansion, Congress and presidents have steadily increased federal funding for education, unemployment, transportation and more -- all with policy strings attached.

The strings will not be sliced swiftly. More likely, they'll unravel as costs and consequences become clear. Trends that cannot be sustained eventually end. So it is with the relentless, debt-financed growth in federal spending.

Ideally, severing the strings binding them so tightly to national policies will stimulate more innovation and accountability in the states. The dysfunction on display this week in D.C. confirms the wisdom of limited federal government. With the eager complicity of state officials, those limits have been overstepped. Now, it's time to restore balance.

Richard S. Davis, president of the Washington Research Council, writes on public policy, economics and politics. His email address is rsdavis@simeonpartners.com.
© 2011 The Daily Herald Co., Everett, WA

DURABLE GOODS ORDERS DOWN 2.1%

Quick Manufacturing News
Transportation equipment had the largest decrease, $4.2 billion or 8.5% to $45.4 billion. Click to continue

SUPPLIER DIVERSITY MUST BECOME A STRATEGIC PRIORITY

Quick Manufacturing News
U.S. companies must make supplier diversity a strategic priority and stop viewing it as simply a corporate citizenship obligation, according James Lowry, senior advisor of Boston Consulting Group and co-author (with Dartmouth's Leonard Greenhalgh) of a new book, Minority Business Success: Refocusing on the American Dream. Click to continue

SHOULD COMPANIES WAIT FOR THE COURTS TO OVERTURN HEALTH CARE REFORM?

Quick Manufacturing News
With so many variables in play with regard to lawsuits challenging health care reform, companies need to focus on what they can control rather than waiting for an uncertain outcome from the courts. Mark Lutes, a member of the health care and life sciences practice at law firm EpsteinBeckerGreen suggests companies keep their attention focused on controlling health care costs through wellness and other initiatives while also improving quality of care through new performance arrangements with health care provider systems. Click to continue

EMPLOYERS CAN RETAIN WORKING MOTHERS BY OFFERING MORE WORK SCHEDULE AUTONOMY

Quick Manufacturing News
Yet another study suggests that flexible work schedules can improve an employee's morale or sense of work-life balance. In this latest analysis, researchers reveal that employers are more likely to retain female employees who have just given birth by offering them greater flexibility and control in their work schedules. Click to continue