DETROIT — Jay Timmons and the National Association of Manufacturers are wrapping up their week on the road, six cities and thousands of frequent flyer miles packed into eight days. The long work needed to accomplish progress for American manufacturers over the next four or eight years, though, is just starting.
Timmons, now in his seventh year as NAM president and CEO, fielded some questions from the Detroit Economic Club and reporters after an address last week.
What do you feel would be the best play for the new Presidential administration on corporate tax reductions and changes to tariffs?
I think that we have an excellent opportunity to move comprehensive tax reform forward in this Congress, some time this year. We have a House blueprint that references a border adjustability tax, and that’s in the House plan. The Senate has its own ideas, and the president is going to weigh in; he said his plan would be offered in the next couple of weeks.
Frankly, we have to see what the final product is going to look like. Between taxes and regulations, we have a 12% to 24% cost differential, cost premium, just to manufacture in this country. If we can reduce those costs — by tax reform, by regulatory reform, create more investment in jobs here — our goal, at the end of the day, is for every new investment to be invested in the United States so that we can build jobs right here.
How hopeful are you that congressional agreement will surface?
There has been a lot of consternation about the Affordable Care Act — before and after it was enacted, in the campaign, and certainly now — but I don’t care about process. I’m not a process guy. I just want results, and I think what everybody here wants and what I hear manufacturers saying, is first and foremost, “Let me continue to provide the best health care benefits of any sector in this economy.”
There are a lot of good proposals out there to do exactly that. There are some great things that exist now with ACA, and hopefully the best parts of that will be preserved. I think that competition is a key to success when it comes to when it comes to reducing costs. And, for whatever reason, we’ve had this tripwire, this hurdle, of letting insurance companies compete across state lines. Let’s break down those barriers. Let’s get it done, let’s let the market flourish and drive down the cost of health care.
Would you say NAFTA has been good or bad for American manufacturing?
Let’s rewind just a little bit, because both presidential candidates said they would pull us out of the Trans-Pacific Partnership. That’s been done. With all candor, the NAM supported the TPP, because it’s in our DNA. We were founded in 1895 to export markets overseas and we’ve doing just that the last 122 years. We understand that if we make products here in the United States, yeah, we want to sell them to Americans, but we also know that 95% of the world’s consumers live outside the United States. That’s a really important fact as we look to grow manufacturing in this country. Our products are the ones everybody wants, so let’s manufacture them and figure out a way to sell them abroad.
So TPP is done, but this president has indicated he wants to engage in bilateral, country-to-country, trade, and we’re hopeful that that occurs. Let’s see what we can do to sell our goods to other countries and, at the same time, ensure our economy becomes stronger at the same time. NAFTA, specifically, is 25 years old. … I think it’s perfectly appropriate to open up an agreement, 25 years later, and make sure it’s relevant for today and for the future. Hopefully, what will be preserved there is our ability to understand we do live in a worldwide economy, that supply chains are absolutely crucial to manufacturing the final product here in the United States and jobs are dependent on that. That’s the message we’re taking to the administration.
From our standpoint, we want to make sure the president understands the supply chain and how manufacturers benefit from that supply chain. I think this is his goal: if we do everything right on reducing the overall cost of business — taxes and regulations, in particular — every new investment, every new dollar will be invested in the United States. I think that’s our ultimate, long-term goal.
What specific policy recommendations are you advocating for in discussions with this administration? What are they on board with? What have they pushed back against? And when do expect any meaningful policy to be passed?
The big three: tax reform, regulatory reform and infrastructure investment. Those are the three where we definitely have strong shared priorities. … I think this administration is looking for a way to simplify and consolidate the regulatory burden on manufacturers. Also, with regulations, and this will be an important thing for Congress, we need a different process. Today, whether the pendulum swings to the left or the right, the agencies get busy regulating, and we can’t operate in that type of an environment. Investments are made by looking 18 months, 24 months, 36 months ahead. Without that kind of understanding, we’re not going to be successful. We need voices to speak out, and to speak loudly, on that subject.
How optimistic are you about those big three issues?
I think they all can be this Congress. I think infrastructure is next year. I think tax reform and regulatory reform are in the next six to nine months. You just have to look at the dynamics in Washington right now. You haven’t had a president who is so focused and so determined to use his political capital to get these things done. Whether you supported him or not, whether you voted for him or not, I don’t think anybody can deny that this guy really cares about manufacturing and manufacturing jobs here in this country.
Best case for NAM, what else gets done by the end of 2017?
I think tax reform, regulatory reform and the beginning of the discussion on infrastructure and the priorities there, and also a discussion on what the pay-fors are going to be and how we get the American people engaged in this conversation so that when that difficult vote happens to pay for all this, the American people are behind it. That has to start by the end of the year. Obviously, we’d like some certainty on regulations that are already on the books and to know if there are changes in the making. I would say we’d also like some certainty on where the administration is headed — and (Commerce) Secretary (Wilbur) Ross, who seems to be charged with this — in terms of new opportunities for trade agreements to be negotiated. There’s a lot to do in a year.
How could the tighter immigration policies affect the labor market?
I think the immigration policy has become one of the most difficult subjects we’ve experienced. There are very passionate opinions when it comes to immigration. If we all take a breath and a step back, we realize we are a nation of immigrants. Immigration has made us strong, it has enabled us to become a wonderfully diverse country where we all benefit from each other’s experiences. Having said that, there is absolutely a desire, a need and an urgency to make sure that our national security is foremost in mind. I think you can respect both of those objectives. I think you can have an immigration system that brings in the best, … and as changes have occurred in the Department of Homeland Security, there are families terrified they’ll be split up. That’s not who we are as a country.
What this all calls for is the need to focus on comprehensive immigration reform. Without that, we’re simply flailing along, trying to enforce outdated laws and, honestly, terrifying 13 million people who are here in an undocumented status. At the same time, if we’re not careful with how we implement some of these new goals, we’re leaving our own workers outside of the country, unable to get back. That is not acceptable, either. We have to have a robust and thoughtful conversation about this, we have to keep our emotions in check, and we have to think about what will be best for the country.
Finally, the NAM video used to promote this tour used audio from a 1987 Ronald Reagan speech at a Harley-Davidson plant. Is there any significance to that speech?
They know how much I like Reagan. … Any time people hear Reagan’s voice, they understand that was somebody who was committed to the success of American manufacturing, was committed to a strong America, was committed to many of the values and priorities we espouse and advocate for at the NAM. It’s a natural connection.