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Federal Briefs:
R&D credit may be part of pension conference report
Congressional leaders are considering adding provisions to pending legislation on pension reform to assure the seamless extension of a strengthened R&D credit, which expired at the end of 2005. Pension conferees are moving forward on a final conference report, which may be completed as early as this week and the R&D credit extension may be part of the package. IMA members are urged to contact congressional leaders and pension conferees to urge immediate action on the expired R&D credit. Illinois Congresswomen Judy Biggert and Congressman Danny Davis are members of the House Education and the Workforce Committee with jurisdiction over the bill in the House. Along with House Speaker Dennis Hastert, they will play an important role in fashioning a final bill.
Legal reform advances from U.S. House committee
The House Judiciary Committee in Washington last week sent HR 3509, the "statute of repose" legal reform bill, to the full House by a vote of 21-12. A statute of repose is a time period beyond which a manufacturer is no longer held liable for alleged defects in their products, on the assumption that if it truly is a design flaw it would have shown up within that timeframe. Debate on the bill is expected on the House floor in the coming weeks. If successful, the bill will then move on to the Senate.
CEO pay vs. lowest-paid workers
While Congress continues its debate over raising the minimum wage, a new Economic Policy Institute (EPI) analysis provides some information. EPI President Lawrence Mishel compares what companies paid their CEOs in 2005 to what their minimum-wage workers are paid. With CEO pay up sharply and the minimum wage falling farther behind inflation, the average CEO's compensation outstripped minimum wage pay by a ratio of 821 to 1 last year. At the current federal minimum wage of $5.15 per hour, it took a full 52-weeks of work to earn what the average CEO earned
before lunch on the first day of the year.
The Economic Policy Institute is an independent, nonprofit, nonpartisan research institute based in Washington, D.C.
Immigration reform update
At the end of June, leaders of the Senate, key members of the business community, prominent representatives from religious based organizations, unions and immigrant advocates joined together to discuss the politics and policies underlying comprehensive immigration reform and stressed the importance of moving the debate forward. Congressional members who spoke at the press conference included Senators Kennedy (D-MA), McCain (R-AZ), Graham (R-SC), and Salazar (D-CO). Additional panel members included: Elizabeth C. Dickson, Advisor for Immigration Services, Ingersoll-Rand Company, representing the U.S. Chamber of Commerce; J. Traci Hong, Director of Immigration Programs, Asian American Justice Center; Tamar Jacoby, Senior Fellow, Manhattan Institute for Policy Research; Brendan Keegan, Executive Vice President, Human Resources, Marriott International, Inc.; Janet Murguía, President and CEO, National Council of La Raza; Grover Norquist, President, Americans for Tax Reform; Rev. Samuel Rodriguez, Jr., CEO, National Hispanic Christian Leadership Conference; and John Wilhelm, President, Hospitality Industries.
The Essential Worker Immigrant Coalition (EWIC) commends the leaders in Congress and the community for uniting to fight for our nation's economic stability, the U.S.'s national security and our country's values as a nation of immigrants. It is the business community's hope that the House and Senate will work towards agreement and continue to focus on the substance and reality of the situation.
"Now is the time for heavy lifting. We need to push with all our might to reach consensus on comprehensive immigration reform this year," said Laura Reiff, an immigration attorney and an EWIC co-chair.
"We recognize the complexity and controversies surrounding the many issues which are part of immigration reform. But it is important that Congress continue to tackle these challenges and move forward," said Randel Johnson, Vice President for Labor, Immigration, and Employee Benefits, U.S. Chamber of Commerce, and an EWIC co-chair.
"It is a disservice to our nation and to our economy to let the opportunity for reform slip by after so much has been invested in this debate. The business community will continue pushing to do what is right for our economy and security." said EWIC co-chair John Gay, Senior Vice President, Government Affairs and Public Policy of the National Restaurant Association.
The EWIC is a broad-based coalition of national businesses and trade associations from across the industry spectrum concerned with the shortage of both semi-skilled and unskilled ("essential worker") labor. EWIC supports policies that facilitate the employment of essential workers by U.S. companies that are unable to find American workers. Visit http://www.ewic.org for more information.
Report: US House poised to pass nexus tax bill
According to the Washington DC-based Tax Foundation, the U.S. House of Representatives is expected to vote this week on HR 1956, the Business Activity Tax Simplification Act of 2005. The bill forbids states from imposing a corporate tax (based on net income, gross receipts, net worth, etc.) on any corporation that has no physical presence (property or employees) in-state.
The Congressional Budget Office (CBO) released a revenue estimate of HR 1956 that says in the first year after passage, state tax revenues would drop by $1 billion and federal tax revenues would rise by $107 million. Opponents to the legislation say that because federal revenues are projected to rise after enactment, the bill as a whole must be considered a tax hike. But CBO's cost estimates say business taxpayers would pay lower taxes overall if the bill becomes law.
The legislation restricts states from imposing corporate taxes if the corporation lacks a physical presence in the state. Since companies that are physically present in a state are receiving the benefits of government services, many believe it appropriate to use such a nexus standard for imposing corporate taxes. Of course, if HR 1956 became law it would reduce some of the revenue that states have received from out-of-state companies. Such a reduction would also have the secondary impact of increasing federal revenues, since those state taxes would no longer be deducted on companies' federal returns. If the bill passes the House, it will advance to the Senate for further action.
Global Performance Management System large contributor to success at Deere & Company
People and their development key to sustainable growth, according to CEO Bob Lane.
What does the new chief executive officer of the 169-year-old John Deere & Company do to improve on the company's great heritage, products, and market share?
Since his appointment in 2000, Deere & Company CEO Bob Lane has supported efforts to link employee performance to the company's strategic objectives. He credits employee learning and development with contributing to the company's remarkable growth – 47,000 employees operating on six continents with sales and revenue of $21.93 billion in 2005. In the article "Raising the Bar at Deere & Company" in the April issue of Training + Development (T+D) magazine, published by the American Society for Training & Development (ASTD), Lane talked about the value of employee learning with ASTD president and CEO Tony Bingham, and vice president of content Pat Galagan.
To be competitive in the global environment, Deere & Company had to shift workforce skills for designing, building, selling, and servicing products that had become technologically sophisticated. According to CEO Lane, Deere & Company's growth is linked to the global management system's higher-level knowledge-sharing with employees regarding strategic objectives. "The only way we can sustain growth is with the high-octane fuel of employees who are linked to those objectives, together with senior leaders who support them," Lane said. "We see ourselves as restructuring the company in such a way that everyone — not just the leadership — knows what to do. Good decisions are made at all levels of the company because of knowledge and insight about what's going on," Lane explained.
Although it took about three years to become systemic, the new global performance management system has affected Deere's product building philosophy and pace. Now, rather than build evenly at factory levels and produce for anticipated sales, they try to build much closer to demand. "That's taken a lot of work, but as a result, we believe we have become much more resilient," Lane said. "If the business were to turn down, we won't be a big asset-laden operation that sinks. We'll respond much, much faster to market changes." Leaders are recognized not only for their ability to deliver results, but also for how they deliver them, Lane said. "We think we're distinctive in that we're known for how we deliver them." John Deere's director of global talent management and diversity, Rick McAnally, was one of the first to impart the importance of the global management system to the company. In the article, "John Deere Champions Workforce Development' in the April issue of T+D magazine, McAnally attests that the connection between employee learning and the company's enterprise-wide performance is clear and direct. "Bob (Lane) has been very deliberate in setting the strategy for the company, and driving strategy through aligned high-performance teamwork," he said.
The training function at Deere is not described as centralized or decentralized, but somewhere in between according to McAnally. In a global environment, he noted, it has been necessary to look at employee development differently. "We respect that training needs to be adapted to the audience, and put emphasis on translation and cultural adaptation, as well as meeting the audience's professional needs," McAnally said. "For example, at the new John Deere Technology Center in Pune, India, we are on-boarding application developers who will work in virtual teams with U.S. employees," explains McAnally. "Because of cultural differences, competition for talent, and the turnover rate in India, it is critical to have effective learning paths in place for new hires."
Deere & Company is currently expanding to build a consortium of learning campuses across divisions and around the globe bringing together different audiences, such as the company's equipment divisions and its dealers — through its corporate John Deere Learning Center or at training centers around the world. According to McAnally, the training function at Deere is all about taking advantage of Deere's strengths — leveraging the capability that Deere has, whether it's in the company marketing training groups with product training, or in the corporate learning center with leadership training in Europe, India, or elsewhere.
Visit the cutting-edge John Deere & Company website at http://www.deere.com. For more information about the ASTD or T+D magazine, visit www.astd.org.
United States, Cambodia sign Trade and Investment Framework Agreement
Deputy U.S. Trade Representative Karan Bhatia and Cambodian Minister of Commerce Cham Prasidh signed a Trade and Investment Framework Agreement (TIFA) July 14, 2006, that will help enhance trade and investment between the two countries and provide a forum to address bilateral trade issues.
"We welcome Cambodia into our family of TIFA partners in Southeast Asia," said Ambassador Bhatia. "We look forward to building our trade and investment relations under this dialogue, working more closely on regional and WTO issues, and helping Cambodia fully implement its WTO obligations."
Under the TIFA, the two countries will consider ways to expand and liberalize trade and investment between the United States and Cambodia. They also will discuss such issues as intellectual property rights, trade facilitation and customs, and implementation of Cambodia's World Trade Organization (WTO) commitments. In addition, the TIFA dialogue will provide a forum for closer cooperation on bilateral, regional and WTO issues.
The U.S.-Cambodia TIFA will advance President Bush's Enterprise for Association of Southeast Asian Nations (ASEAN) Initiative, which seeks to deepen U.S. economic and trade linkages with the commercially and strategically vital Southeast Asian region. The United States already has TIFAs with Brunei, Indonesia, and the Philippines and is negotiating a TIFA with ASEAN. In addition, the United States has a Free Trade Agreement (FTA) with Singapore and is negotiating FTAs with Malaysia and Thailand.
U.S. exports to Cambodia increased 18 percent to nearly $70 million in the past year and have increased steadily since Cambodia joined the WTO in October 2004. Major U.S. exports to Cambodia include automobiles, machinery, textile articles, and fats and oils. U.S. imports from Cambodia totaled $1.7 billion in 2005, comprised largely of knit and woven apparel and prepared meat and fish.
Cambodia is one of ten members of ASEAN, whose 570 million people purchased over $50 billion in U.S. goods last year. Two-way trade between the United States and ASEAN has grown dramatically over the past decade, and in 2005 totaled $150 billion, making ASEAN America's fourth-largest trading partner.
Lapham-Hickey Steel in Bedford Park hosts Topinka press conference
Illinois Treasurer and gubernatorial nominee Judy Baar Topinka held a news conference July 12th at the headquarters of IMA member company Lapham-Hickey Steel in Bedford Park. The event was held to publicly unveil Topinka's economic development plan for Illinois.
"We were honored that Treasurer Topinka chose to make this important announcement at Lapham-Hickey. Having a plan to reinvigorate employment in all sectors of the Illinois economy, and one that seeks ongoing input from both business and labor, could make a significant difference to everyone across Illinois," stated IMA Board member and company CEO William Hickey.
Topinka took time to meet and talk with Lapham-Hickey employees during the event which showcased the company, a distributor of finished steel products.
NAM: Administration's policies are stimulating economy
"It's time for Congress to finish the job," Timmons says.
The National Association of Manufacturers applauded a recent report that this year's deficit will come in 30 percent below projections and called on Congress to promote further pro-growth policies. "These numbers make it clear that reducing taxes stimulates the economy," said Jay Timmons, the NAM's senior vice president of policy and government relations. "Now it's time for Congress to finish the job by taking the next steps to reform the death tax and extend the R&D credit, and also pass a comprehensive energy plan.
"Because of the President's pro-growth policies, the U.S. economy is expanding," he said. "But manufacturers still face unnecessary burdens such as the death tax. It is time for the Senate to finish the job that the House started and permanently reform the death tax. While our end goal remains total elimination of this onerous tax, legislation passed in the House will provide significant tax relief and predictability for thousands of small to medium size manufacturers."
Congress also needs to take final action to enhance and extend the R&D credit, which expired at the end of 2005, increasing the cost of R&D for nearly 16,000 companies that use the credit. "About 60 percent of all private industrial R&D performed in the U.S. is done by manufacturers," Timmons said. "The R&D credit translates into new products and increased output. In fact, over the past decade (1994-2004) manufacturing productivity grew by 60 percent. This growth was due primarily to research and development.
Unemployment down in Illinois but total employment drops for second consecutive month
Illinois' unemployment rate fell a tenth of a point to 4.5 percent in June, slightly lower than the nation's 4.6 percent rate. It marks the first time in seven years that unemployment in Illinois was lower than the U.S. However, total employment in Illinois fell for the second consecutive month recording a loss of 2,400 jobs as government and other services payrolls shrank by over 7,000. Temporary service jobs led employment increases adding 3,600 workers.
Manufacturing employment continued its downward trend in June. An additional 400 workers were jettisoned from Illinois industry payrolls last month. The total number of workers in manufacturing now stands at 677,900. In the last twelve months, manufacturing has lost 10,600 jobs in Illinois. Since 2000, the state has lost 190,500 manufacturing jobs and now sits at historic lows.
In a related news story, the U.S. Census Bureau reported this week that the combined value of distributive trade sales and manufacturers' shipments for May was up 1.4 percent at $1,057.4 billion. The total business inventory to sales ratio, based on seasonally adjusted data, at the end of May was 1.25 down from the May 2005 ratio of 1.30.
Constellation NewEnergy Seminar: IMA Energy Program
Ameren territory PowerSeries Energy Seminar August 23, 2006
Noon-1pm (lunch buffet) 1-3pm (seminar)
Holiday Inn City Centre 500 Hamilton Blvd. Peoria
To RSVP, contact Janie Stanley
email: jstanley@ima-net.org phone: 217-522-1240 x3020
Webinar: August 29, 2006
Due to popular demand we have added a fourth Ameren territory PowerSeries energy seminar and webinar. The seminar, scheduled for August 23 in Peoria and the webinar, scheduled for August 29, will feature speaker Phil O'Conner, PhD, Vice President – Constellation NewEnergy, and former Illinois Commerce Commission Chairman. Topics will include the status of the upcoming electricity auction and how central and downstate businesses can choose their best electricity supply options. Bring your two most recent electricity bills or fax them to 217-522-2367 to get started on a complementary analysis.
Still time to complete IMA Compensation Survey — Deadline: July 31
Drawings for prizes among early entries in the IMA Comp Survey took place July 25th. The winner of the webinar is Heckmann Building Products. Free 2006 Compensation Reports will go to A1 Wire Technology, Inc., Chicago Extruded Metals, and Wahl Clipper Corp. Free Benefits Reports will go to American Shear Knife Co., Demoulin Bros. Co., Essex Electro Engineers, Lonza, Inc., and Remke Industries, Inc. Recipients of the IMA logo-Clock/Calculator are ACC Electronix, Duraco, Inc., Martin Engineering, Plymouth Tube Co., and Wrap-on Company, Inc.
The IMA's annual Compensation Survey is one of our most popular services for members. It is the only survey that is specific to Illinois manufacturers. The survey collects data on 177 manufacturing-related jobs in 10 job families. The Compensation Report, due out in August, will summarize the data you supply. This is a valuable tool for your company when you review budgets, set salaries and award bonuses.
IMA members who complete the 2006 Compensation Survey will have free online access to the Report and be entitled to purchase the printed Report at a discount.
The more participants who complete the Survey, the more accurate and valuable the data will be. Both IMA members and non-members may participate.
Time is running out!
The deadline for participating is July 31, 2006. Complete the survey today at http://compsurvey.ima-net.org. Use your IMA member number as your ID. Contact Janie Stanley at 217-522-1240, ext. 3020, or email: jstanley@ima-net.org if you need assistance.
DATES OF NOTE:
More events may be found at http://www.ima-net.org/calendar.cfm
August 2, 2006
Industrial Waste Management Grant Program
Executive Conference Room
1225 W. 22nd St., Ste. 104
Oak Brook 8:00 am–4:30 pm
Save up to $15,000 on solid waste disposal costs by attending this one-day seminar. Learn how to be part of the Industrial Waste Management Program, jointly sponsored by IMA and the Illinois Department of Commerce and Economic Opportunity. $75 per person. Online registration is available at
https://www.ima-net.org/iwm_seminar.cfm.
Contact: Judy Parker
Phone: 217-522-1240, ext 3036
Email: jparker@ima-net.org
September 28, 2006
A Primer on the National Labor Relations Act and the Labor Relations Board
Northern Illinois University
Naperville 8:30 am–12:30 pm
Presenter: Jim Spizzo, Vedder Price Kaufman & Kammholz, PC, Chicago. Our speaker will discuss the reach of the federal law and its application in your workplace. Practical advice and responses to your workplace problems will be a key focus of this interactive seminar.
Contact: Sara Liles
telephone: 217-522-1240, ext. 3042
email: sliles@ima-net.org
October 3, 2006
HR Forum–Springfield
(for Central and Southern Counties)
Springfield IMA Office, Conference Room, 220 East Adams Street 9:30–11:30 am
Presenter: Donna Rogers, SPHR. The HR Forum is designed for networking with other HR professionals in the manufacturing field. Discuss similarities and differences among peers as well as solutions. Finally, provide valuable feedback to the facilitator regarding HR related member services.
Contact: Donna Rogers
Phone: 217-522-1240, ext. 3007
Email: drogers@ima-net.org
SAVE THE DATE:
November 8, 2006
Sales and Use Tax Seminar
Northern Illinois University
Naperville 8:30 am–12:30 pm
Presenter: Joe Bigane, Senior Tax Partner in the Tax and Financial Services Division of Wolf & Company. This seminar is specific to manufacturers.
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