Q&A: What The GOP Tax Plan Means For Distributors…

Q&A: What The GOP Tax Plan Means For Distributors…

Nov 6, 2017

“Q&A: What The GOP Tax Plan Means For Distributors & Manufacturers” By Mike Hockett, Manufacturing.net In late September, President Donald Trump and congressional Republicans unveiled an outline of a proposed tax plan that Trump has boasted as the largest in U.S. history. On Sept. 29, Trump provided the broad strokes of that plan in a speech to the National Association of Manufacturers in Washington D.C., with the $6 trillion plan including significant tax cuts for corporations, simplified tax brackets and nearly double the standard deduction used by most tax filers. However, the finer details of the plan are still largely unknown by the general public. Aside from a 2015-2016 industrial recession, industrial distributors and suppliers have often cited tax burdens and regulations as hurdles to business growth, so those companies would be wise to keep tabs on what a new tax plan would involve for them. ID recently spoke with Jim Brandenburg, Tax Partner at Sikich LLP, about what Trump’s tax plan means for manufacturing, especially for distributors. Brandenburg’s extensive knowledge of tax legislation and experience working with distributors and manufacturers give him a unique perspective discussing current tax impacts and what future implications could be of the proposed tax plan. ID: From what you’re hearing, what are distributors and manufacturers’ biggest criticisms/pain points with the current tax structure/regulations? Jim Brandenburg: High tax rates and uncertainty regarding tax policy and various tax provisions are ongoing pain points for manufacturers and distributors. Uncertainty stems from the fact that many benefits that enable a company to reduce their annual tax burden are not permanent, which hinders a company’s ability to plan too far into the future. For example, under current law, bonus depreciation, which allows companies to immediately deduct the cost of newly purchased assets (e.g., machinery and equipment), is set to be reduced in 2018, reduced again in 2019 and then expire in 2020.  The tax reform debate creates additional uncertainty and leaves companies in a holding pattern as they wait and see whether any legislation will pass at all and, if so, what form the final legislation will take. However, manufacturers and distributors have long sought lower tax rates and would welcome the decrease in the corporate and small business pass-through...

U.S. Reshoring: A Collaborative Challenge

U.S. Reshoring: A Collaborative Challenge

Oct 23, 2017

Feature in Design-2-Part Magazine Manufacturing Experts Answer 5 Questions on How to Turn the Tide FAIRPORT HARBOR, Ohio—North America’s $137 billion metalforming industry is driven by the production of myriad precision metal products using stamping, fabricating, spinning, slide forming, and roll forming technologies, as well as vital value-added processes. In recent decades, approximately 3-to-4 million U.S. manufacturing jobs were lost to offshoring. The tide seems to be turning modestly in recent years as companies return U.S. production, or sourcing, from offshore. In comparison to 2000-2003, when the United States lost about 220,000 manufacturing jobs per year (net) to offshoring, 2016 achieved a net gain of 27,000. Progressively bridging this gap presents huge collaborative opportunities and challenges for all manufacturers, associations, employees, communities, and the U.S. government itself. The following Q&A explores factors that are key to the collective goal of gaining momentum in successfully returning the manufacturing of parts and products to the United States from offshore. Authors of the Q&A are two men with a vested interest in the subject of reshoring: John Stoneback, president of JM Performance Products, Inc., of Fairport Harbor, Ohio; and Harry Moser, president of the Reshoring Initiative, based in Kildeer, Illinois. JM Performance Products, Inc. has been manufacturing CNC mill spindle optimization products since 2009. The company’s Patented High Torque Retention Knobs overcome a critical “loose-tool” design flaw inherent in CNC v-flange tooling that was responsible for costly, industry-wide issues with CNC milling and boring that negatively impacted production costs, cycle time, and tooling costs. An essential element of the patented design is a knob that is longer and reaches a little deeper into the holder’s threaded bore. As a result, all thread engagement occurs in a region of the tool holder where the diameter is large, and where there is correspondingly more material to resist deformation. The Reshoring Initiative, founded in early 2010, takes action by helping manufacturers realize that local production, in many cases, reduces their total cost of ownership of purchased parts and tooling. The Reshoring Initiative also trains suppliers in how to effectively meet the needs of their local customers, giving suppliers the tools to sell against lower priced offshore competitors. The Initiative is...

Hankook Tire opens its first US manufacturing plant

Hankook Tire opens its first US manufacturing plant

Oct 19, 2017

By Traction News Staff Hankook Tire held its grand opening ceremony for its first manufacturing facility in the U.S., underscoring its commitment to technology, innovation and growth in North America. The development of the Tennessee Plant is integral to Hankook’s strategic vision of becoming a top-tier tire brand, while providing high-quality, made-in-USA products to its customers. The grand opening celebration took place at the facility in Clarksville, Tenn., and was attended by State of Tennessee Governor Bill Haslam, United States Representative Marsha Blackburn, Korean Consul General Seong-jin Kim, and several other prominent state and local officials. The Tennessee Plant is Hankook’s eighth plant worldwide and joins a global footprint of state-of-the-art manufacturing that serves customers globally. The plant’s first phase will produce 5.5 million units annually, enabling Hankook to more efficiently provide tire dealers and consumers with high-quality tires and industry-leading services to meet the demands of the American market, while supporting existing and future Original Equipment (OE) partners. The plant has already brought nearly 1,000 jobs to the local economy, a total that is expected to climb to 1,800 as infrastructure expands. In addition, Hankook moved its American headquarters to Nashville last year and has hired more than 100 local employees to oversee operations there. “The new Tennessee Plant signifies Hankook Tire’s growing business in the United States and continued journey toward being a global leader in the tire industry,” said Seung Hwa Suh, Global CEO of Hankook Tire. “Our investment in the U.S. is part of our ongoing commitment to innovation, state-of-the-art technology and service for our customers. This high-tech, sustainable facility will enable Hankook to execute every phase of business in the U.S., from R&D to production and sales.” Hankook incorporated sustainable design and construction practices into development of the 1.5 million square foot facility, which sits on 469 acres. Leveraging top-tier technology and highly automated processes, the Tennessee Plant will produce Passenger Car Radial (PCR) and Light Truck Radial (LTR) tires from Hankook’s extensive North American lineup, including the KINERGY PT, a premium touring all-season tire and Hankook’s first tire made in the U.S. “Hankook Tire’s new plant brings tremendous economic growth and opportunity for Tennesseans,” said Tennessee Governor Bill Haslam....

Manufacturing jobs booming, but may be harder to fill

Manufacturing jobs booming, but may be harder to fill

Oct 6, 2017

By Suzanne O’Halloran, Fox Business When South Korean appliance giant LG broke ground for a new one-million-square foot washing machine factory in Clarksville, Tenn. in August, Commerce Secretary Wilbur Ross was side-by-side with LG North American President and CEO William Cho cheering a project that is expected to create 600 jobs and perhaps many more in the years ahead. “Our Clarksville factory has great potential to expand to produce other products beyond just washing machines,” said William Cho President & CEO LG North America during an interview with FOX Business. “We have 310 acres…and our new washing machine facility will occupy just one-quarter of that when it opens in early 2019. The other three-quarters will have potential to extend additional LG home appliances.”   The plant, LG’s largest in the U.S., is set to open in the first quarter of 2019 and will add 600 well-paying jobs manufacturing jobs to the U.S. pipeline with potential for more. Cho says the company will focus some of its recruiting and hiring efforts on nearby Fort Campbell to tap what he describes as military veterans that are “skilled workers”.  Additionally, the company also announced plans to open an electric vehicle component factory in Michigan, creating an additional 300 new jobs, and is building its North American headquarters in Englewood, New Jersey which should double local employment to 1,000 jobs. LG joins a growing list of global companies coming to the U.S. to open factories to the delight of President Donald Trump. Earlier this year Foxconn, the Taiwanese Apple (AAPL) supplier, announced plans for a Wisconsin plant that is expected to create 3,000 new jobs, while Toyota (TM) and Mazda announced a joint-venture plan to build a $1.6 billion U.S. assembly plant promising 4,000 new jobs starting in 2021. These future factories may help continue the U.S. manufacturing sector’s momentum as the country makes more goods, but its job growth may not carry the same momentum. “Job growth may not be staggering, but we could staunch the bleeding.  Could we boost manufacturing output, produce more stuff? Yes,” former White House director of economic policy under George H.W. Bush Todd Buchholz tells FOX Business. Automation and technology is also creating a...

Regulation’s Impact on Manufacturing

Regulation’s Impact on Manufacturing

Sep 8, 2017

By Stephen Gray, Area Development The volume of rules and policies with which manufacturers need to comply is onerous — cutting into their competitiveness and growth opportunities. The U.S. manufacturing industry is a force to be reckoned with. From its emergence during the Industrial Revolution in 1820, the sector has experienced repeated blows from the Great Depression to the Great Recession more recently. Despite these setbacks coupled with a highly evolving global industry, U.S. manufacturing has shown its resilience. Modern manufacturing is thriving across America. The fact remains that manufacturing has much more potential, if certain hurdles weren’t in the way. Among the top challenges manufacturers face are regulatory concerns, an inequitable tax system when compared with certain other countries, and, in some cases, unfair subsidies provided to certain industries by foreign governments. Manufacturers recognize that a safe working atmosphere and healthy environment are ensured through regulation. But, the complexity of regulations often results in duplicative, poorly designed and thus ineffective rules adding an unnecessary burden to manufacturing operations. Since 1981, the federal government has issued at least one manufacturing-related regulation each week. The National Association of Manufacturers (NAM) has found that the industrial sector faces a staggering 297,696 restrictions on their operations from federal regulations. Is the federal government overstepping its intended power? Rules and policy within reason are valuable, but will the U.S. economy begin to falter if the rate of regulation continues to rise? Notably, no regulations have been eliminated. With the sheer volume of new rules and policies to keep up with, manufacturers are not able to focus on competitiveness and growth opportunities, factors that feed into a prosperous economy. The Burden Manufacturing Faces The Environmental Protection Agency (EPA) has issued the majority of rules that impact industrial productions across the United States. While environmental issues are vital to the future of humanity, some flaws exist that counter the real benefits. American companies and associations, including U.S. Steel Corporation and the American Petroleum Institute, have openly voiced how regulatory burdens prevent building and expansion opportunities. Valero Energy Corporation, which is a member of the American Fuels and Petrochemicals Manufacturers Association, has pointed out that its manufacturing operations are “significantly impacted by the inefficiencies of...