The Arizona Manufacturers Council on Tuesday hosted the Manufacturer of the Year Awards and Summit. Jay Timmons, president and CEO of the National Association of Manufacturers, delivered the keynote address and later spoke with the Chamber Business News to discuss several issues affecting the manufacturing sector in Arizona and nationally.
The answers have been edited slightly for clarity and length.
CBN: You discussed in your remarks the NAM, the Arizona Chamber, and the Arizona Manufacturers Council’s work together opposing elements of the so-called Inflation Reduction Act. Why is it important for a national organization like the NAM to partner with state affiliates?
Jay Timmons: State affiliates and the folks who run them know their elected officials better than anybody. They’re on the ground, they’re in their communities, and they are the respected voices of local businesses in the state, so having that partnership is, frankly, critical for us to get anything done in Washington.
CBN: You discussed USMCA and its importance in your remarks and you stressed why adhering to the agreement is important. Talk about why it is important to adhere to the letter and the spirit of a free trade agreement like USMCA.
Timmons: To maximize potential benefits for both sides. That’s the goal of a free trade agreement, that it’s going to be a win-win, so Americans have access to markets that we may not have had access to before, and that the same is true for whoever our trading partner is as well. That leads to a stronger economy, more jobs, and more opportunity.
CBN: Wage growth and employment are high, but so are interest rates. Are you concerned about an overheated economy?
Timmons: Yes. I think the Fed is doing what the Fed needs to do. The question is, are we going to have a soft landing or are we going to land with a thud? Manufacturers want to make sure that we are paying attention to all the fundamentals and that the Fed is paying attention to all the fundamentals and lands this plane as gently as we possibly can.
Our members generally have a very optimistic view of the future. Yes, they think that there might be a recession coming up, but there is no consensus on whether it will be a short or long recession and how hard it’s going to be. We hope, obviously, that it will be as short as possible to help the economy cool and get us back on some normal economic footing.
CBN: We’ve been hearing a lot about supply chain issues lately. We thought we had averted a rail workers strike, but now it seems more uncertain. Do you have any comment on what’s going on from a logistics perspective?
Timmons: If (a strike) does happen, it will be an enormous crisis for manufacturers and consumers. We don’t need any forced errors. You have the Biden Administration, the most pro-labor administration that I have ever experienced in my lifetime, saying this is a good deal. So, if they’re saying that, I’m not sure what the unions are holding out for.
Look, I don’t know all the details, all I know is the politics and if the politics say that you have the most pro-union administration weighing in and saying this is a good deal, you might want to take it.
CBN: How are labor shortages impacting the manufacturing sector and how have manufacturers responded?
Timmons: Over the last year, we have an average every month of 800,000 job openings in the sector. That is up from about 500,000 pre-pandemic and the lowest we have seen is about 300,000 during the pandemic. We’ve always had many openings in the sector, but we just can’t find people to fill the jobs. Our Manufacturing Institute has many programs to try to attract women, to try to attract veterans, they have apprenticeship programs.
But Creators Wanted is targeted specifically to inspire the next generation. It’s a road tour with a triple-wide trailer that is an escape room concept that shows young people some of the skills, both hard skills and soft skills, that they need in the sector.
When these kids walk through it, they may be shuffling their feet in the beginning before they go in, thinking, “Why am I here? Oh, well, at least I’m not in school.” They come out and they’re just electrified. You see the excitement on their faces and they say, “This could be for me.”
We then explain what jobs might be available in the sector. Some don’t require any further education out of high school, some might require some technical training and some might be requiring a four-year degree or an advanced degree, but there is something for everybody in manufacturing and our job is to make sure that young people know what is available.