"Riley Factor"

This article was featured in the November 2006 issue of Business Matters, the Chamber's monthly print newsletter.  This month’s “Riley Factor” is from Chamber President & CEO Ellen Horan.

LEGISLATIVE MATTERS WITH ELLEN HORAN

For the past three years, I have had the pleasure of serving on the Board of Directors of the National Association of Manufacturers.  Like the US Chamber of Commerce, we rely on these groups to advocate for business before Congress and the Administration.  They do an impressive job and we here at the Greater Reading Chamber of Commerce and Industry are pleased to be your conduit to these entities, and theirs to you.

The Hot Topics at this recent meeting were: China, Acceleration of the Cost of Doing Business in US, Workforce, Healthcare and Energy

 China – Lively and thoughtful debate ensued over a resolution to support HR 1498 (Ryan- Hunter currency manipulation bill).  The bill would essentially permit companies and industries to file countervailing duty cases with the Department of Commerce against imports from China on the grounds that China’s currency policy is an improper subsidy.  DOC could then impose a duty on the imports equal to the amount of subsidy.  Supporters claimed this is much needed “stick” to use in negotiations with China while opponents argued it would not be WTO-legal and would be a protectionist move with many potential unintended consequences on diplomatic relations. 

NAM invited Treasury Secretary Paulson to speak with the Board the day before the vote.  He said that US-China relations are the most important economic bi-lateral relationship in the world today.  As the President’s number one economic advisor he indicated that China currency is at the top of his agenda.  He has already attended a diplomatic session in China during his brief tenure that has dealt with broad strategic issues.  Both Presidents have committed to ongoing discussions and open access to all key personnel.

That being said, he cautioned that there is no “low hanging fruit” and that change happens slowly.  When asked if his efforts would be helped by the “stick” behind him with legislation like the Ryan-Hunter bill, he said no.  Things happen behind closed doors, not when a lot of noise is being made. 

The vote by the NAM to support Ryan- Hunter was NOT approved by a vote of 25 to 55. 

Cost of Doing Business Accelerating – In 2003, the NAM had done an economic study comparing manufacturing costs in the US with our nine largest trading partners which determined that US manufacturers pay 22.4 percent more in structural non-production costs.   The study has just been updated and the cost differential has skyrocketed to 31.7 percent just 3 years later.  Key drivers in the acceleration are corporate taxes, benefits and energy.  Other nations have lowered their corporate tax rates while the US rates have remained unchanged.  The non-renewal of the Research Tax credit also contributed to the increase.  Healthcare costs and under funded defined benefit plans claim the second highest cost differential.  Regulatory compliance costs and torts follow on the list.  We used to have an advantage when it came to natural gas, but we are now at a slight disadvantage.

Workforce – the labor market is tightening rather quickly, coupled with wage escalation this time around.  (This mirrors what we are hearing at our Roundtable meetings).  Congress will not deal with immigration until after the election and key leaders have made it clear their focus will be on border control, not an overhaul.

The Manufacturing Institute within NAM has endorsed the recently released certification developed by Manufacturing Skill Standards Council.  Certification covers four key competency areas:  Manufacturing Process and Production, Quality and Continuous Improvement, Maintenance Awareness and Safety.  Each area has a separate assessment.  In addition to the core competency areas there is an assessment on employability skills and basic academic skills.  A participant that passes the assessment in each area would achieve a Production Technician Certification. 

Healthcare – White House advisor on Health Julie Goon said that their priority is to utilize the government’s 40% market share on healthcare expenditures (Federal and State Medicare and Medicaid) to leverage the establishment of interoperable standards in the industry to drive Healthcare IT productivity. 

Some business best practice discussion included IBM rolling out personal health records for all employees and the Iowa Business Council has conducted and instructed hospital staff on lean events.  One project involved reducing cycle time /wait time in the ER.  Another company offered six sigma black belts to their local hospital for a project.