What the COVID-19 Stimulus Packages Mean for Manufacturers

The Fabricator - for the original article go HERE.

Congress passed the Coronavirus Aid, Relief, and Economic Security Act to help private businesses during this economic slowdown. Perhaps the most anticipated part of the relief package is the $350 billion Paycheck Protection Program for small businesses with fewer than 500 employees.

The manufacturing community did not get everything it wanted in the Coronavirus Aid, Relief, and Economic Security (CARES) Act and is watching expectantly as Congress considers a follow-on stimulus bill. That next package may headline major infrastructure spending and additional tax concessions, but its passage, or even its development, by Congress is anything but certain.

The National Association of Manufacturers (NAM) had called for a $1.4 trillion COVID-19 Resiliency Fund. The CARES bill did not include such a fund but did provide $350 billion in the form of a Paycheck Protection Program, which is meant to help small businesses, and $454 billion in emergency lending to businesses, states, and cities through the U.S. Treasury’s Exchange Stabilization Fund. But that total is well short of the $1.4 trillion the NAM sought.

In accentuating the positive, NAM CEO Jay Timmons said, “The bill also takes key steps from the NAM plan by increasing the maximum amount of tax deductions for interest on business loans and by creating an incentive, through loan forgiveness, for small manufacturers to retain their employees during this crisis.”

In addition to the tax benefit on business loans, the CARES Act allows companies to take net operating losses (NOLs) earned in 2018, 2019, or 2020 and carry back those losses five years. The NOL limit of 80% of taxable income is suspended, so firms may use NOLs they have to fully offset their taxable income. The net interest deduction limitation, which currently limits businesses’ ability to deduct interest paid on their tax returns to 30% of earnings before interest, tax, depreciation, and amortization (EBITDA), has been expanded to 50% of EBITDA for 2019 and 2020.

However, the NAM wanted any bill to adopt a federal designation that deemed the manufacturing supply chain “essential.” That designation would be important with regard to state and federal laws allowing essential companies to remain open during the coronavirus emergency. The federal Department of Homeland Security (DHS) issued some guidance—which has no legal standing—on March 19, and it did include some manufacturers as part of its list of “essential critical infrastructure workers.”

The Precision Metalforming Association (PMA) said on March 20 that the guidance covers approximately 2,500 companies in its association and companies belonging to the National Tooling and Machining Association. The DHS guidance explicitly covers manufacturers making medical devices, food equipment, and packaging equipment, for example, but it makes no mention of metal fabricators that supply parts to industries such as automotive, appliances, railroads, energy, and many others.

The DHS later clarified in update guidance on March 29 that workers who support crucial supply chains and enable functions for critical infrastructure should be included in the grouping of essential personnel. “The industries they support represent, but are not limited to, medical and health care, telecommunications, information technology systems, defense, food and agriculture, transportation and logistics, energy, water and wastewater, law enforcement, and public works,” the guidance stated. But the 12 pages of detailed listings of “covered employees” in those industries included very few references to “manufacturers.”

Christie Carmigiano, PMA spokeswoman, argues the DHS guidance is by end product, not supplier. “PMA believes that focusing on the end product, while not a clear directive for the industry, does provide for maximum flexibility as governments cannot be expected to become experts in the manufacturing process as they will exclude critical industries, such as stampers who supply those critical products,” she said.

Many metalworking companies view the $350 billion Paycheck Protection Program for small businesses with fewer than 500 employees as the most important provision in the bill. The small-business loans, with a maturity of two years and a 1% interest rate, are available through any bank approved as a Small Business Administration lender. The loans can be as much as $10 million to cover payroll costs, mortgage, and rent payments and health care benefits for employees, including paid sick leave. In some cases, they also can cover interest on other debts.

The new loans apply to costs incurred retroactive to Feb. 15 through June 30. The CARES Act includes loan forgiveness for companies able to keep employees on payroll or continue paying bills throughout the coronavirus crisis. The amount of loan forgiveness will include payroll costs for individuals below $100,000 in annual income and mortgage and rent obligations, including interest and utility payments.

Both Democrats and Republicans in Congress have been talking about another stimulus package focusing on infrastructure, which manufacturing and construction companies have been clamoring for since President Donald Trump’s election in 2016. For example, the chair of the House Committee on Transportation and Infrastructure, Peter DeFazio, D-Ore., said the next step should be “a true stimulus that creates jobs and rebuilds our decaying infrastructure.”

Author Bio:
Mr. Barlas is a freelance writer in Washington, D.C. who covers issues inside the Beltway.

NTSB Considers Tire Registration Changes

Aftermarket Business World - January 2015 - for the original online version of this article go HERE.

The National Transportation Safety Board (NTSB) has picked up the issue of tire safety, and its concern could well lead to recommendations for regulatory changes affecting tire dealers.

The NTSB is investigating some 2014 tire blowout accidents that resulted in deaths, which were discussed at a meeting in Washington in early December. The meeting served as a forum for the Rubber Manufacturers Association (RMA), which represents tire manufacturers, to push a proposal that Congress change the tire registration law to require dealers to electronically register the TIN (tire identification number) with NHTSA at the point of sale.

If Congress doesn't act, a NTSB recommendation to the National Highway Traffic Safety Administration (NHTSA) could result in a regulatory change. The NTSB will be making recommendations of some sort in the near future.

Four serious accidents in 2014 resulting from disabled tires resulted in the NTSB two-day symposium on tire safety on December 9 and 10. The accidents occurred one week apart in February, in Florida and Louisiana, and resulted in multiple deaths in both instances. The NTSB has not released reports on those accidents yet.

In one case, a poorly maintained, 10-year old tire separated at high speeds. In the second, the separated tire had been the subject of a recall a year and a half earlier. NTSB staff members at the workshop cited two additional accidents in 2014 that are not the subject of investigations.

Kevin Rohlwing, senior vice president of training for the Tire Industry Association (TIA), believes more has to be done to prevent tire separation accidents. That includes improving the NHTSA tire registration/recall process and informing consumers about the need to register tires and maintain them. And the TIA is willing to do its part. However, Rohlwing emphasizes the entire burden for improving tire safety should not be laid on the back of dealers. He opposed requiring dealers to electronically register new tires.

Moreover, Roy Littlefield, TIA executive vice president, is miffed the RMA sprang its electronic registration proposal on the TIA. "We are incredibly disappointed that RMA supports a legislative solution to the problem of low tire registration rates rather than educational," he says.  "TIA has been working with RMA on a number of legislative issues like tire repair and used tires over the past few years, but there have been no discussions related to mandatory tire registration. We had talked about working together to educate and improve voluntary numbers, so it was a total shock to hear that they are proposing legislation over education."

The Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act was the last piece of tire safety legislation Congress passed. That was in 2000. The TREAD Act was passed because of problems with Firestone tires. The TREAD Act included directives to NHTSA to improve the endurance and resistance standards for tires, to improve the information labels on tires, and to require a warning system to indicate to drivers when a tire is significantly under inflated.

The tire registration system was established in 1970. It gives independent dealers who sell multiple brands of tires three options, all involving registration cards they are suppose to obtain from each of their manufacturers. The dealer can give the consumer the card, have them fill it out and return it to the dealer. Or the dealer can fill out the card and either mail it in, or register the information electronically with the dealer. In most instances, dealers go the first route. That has resulted in registration of no more than 20 percent of new tires, according to the RMA, a figure Rohlwing does not dispute, although the NHTSA has never sought data on that.

Tracy Norberg, general counsel and senior vice president for regulatory affairs at the RMA, points out that the return rate for tire registration cards is 100 percent by retailers in tire manufacturer-owned retail stores.

Rohlwing argues that while retailers can do better, consumer apathy is also a big part of the problem, and NHTSA could do more too, by making available lists of TINs associated with recalled tires that retailers could post in their shops, helping technicians identify recalled tires on cars which come in for service.

Author bio: 
Mr. Barlas, a freelance writer based in Washington, D.C., covers topics inside the Beltway.

New Silica Dust Proposal Would Have Big Impact on Foundries, Other Manufacturers

The Fabricator
October 2013

The Occupational Safety and Health Administration (OSHA) could impose new costs on metal casters and other manufacturers if it moves forward with new workplace exposure rules for crystalline silica, which gets into the air, in the case of foundries, when silica sand molds are broken in order to remove the  cast metal part. The OSHA lists foundry workers as numbering the highest among any general industry category for being exposed to levels of crystalline silica above the current permissible exposure limit (PEL). And only the concrete products sector has more total workers exposed to crystalline silica.

The proposed rule would replace a 40-year-old PEL of 100 micrograms with one set at 50 micrograms and an action level of 25 micrograms. The action level is the standard’s trigger for increased industrial hygiene monitoring and initiation of worker medical surveillance.

Groups such as the National Association of Manufacturers say no new standard is needed because there has been a 93 percent reduction in silicosis mortality from 1968 to 2002, according to the Centers for Disease Control and Prevention. Silicosis, an incurable sometimes fatal lung disease, is the major health effect caused by crystalline silica exposure.

The costs for all companies subject to the new standard, even those with admirably low current exposure limits, might be substantial given the exposure monitoring, medical monitoring and training costs. The OSHA estimates those to be $630 million for all sectors, total, on an annual, recurring basis. Amanda Wood, Director, Labor and Employment Policy, NAM, says industry estimates are $5 billion. Given the costs of compliance that all companies would face, Wood says the OSHA ought to focus on companies violating the current standard. 

The yawning difference between the OSHA and industry cost estimates may be because the OSHA says the  provisions of the proposed rule "are similar to industry consensus standards that many responsible employers have been using for years, and the technology to better protect workers is already widely available."