Government Affairs in the Time of Crisis and Change - Ahead of the Curve - November 2023
In the motor vehicle industry, “transformation” has become an overused word. The industry must transform to manufacture zero-emission vehicles, the industry must transform the workforce, the industry must transform for automation. The list of future transformational events is significant.
Yet now, the industry is facing challenges that will map the future of manufacturing. The UAW strike comes at a time of 312 union worker strikes this year. Federal and state governments continue to create new and far-reaching labor, sustainability, and domestic content requirements for manufacturers. Republicans and Democrats are making economic engagement with China more difficult. And our industry faces the challenges of transformation.
During this time of serious challenges, your MEMA D.C. team is advocating on your behalf a wide range of issues.
MEMA sent a letter to President Biden outlining our concerns and recommending the federal government immediately initiate:
- A scalable, low-cost loan/grant program to ensure suppliers have enough capital on hand to sustain their business during this crisis.
- Establish an emergency training program enabling suppliers to retain their workforce during the strike and equipping them with new skills needed for future transformative manufacturing.
- Reduce the minimum project amount of the domestic manufacturing conversion grant program (IRA) from $50 million to $10 million to be more inclusive of the entire vehicle supply chain.
The MEMA team is in constant communication with Capitol Hill and the White House and will continue to keep you updated on the progress of all of these initiatives.
U.S. - MEXICO BORDER CROSSING SLOWDOWN RESOLVED
In September, commercial traffic between Mexico and Texas significantly slowed. This slowdown was caused by a widespread influx of refugees from Central America and secondary inspections of commercial vehicles by the state of Texas.
MEMA led an automotive and parts industry effort to reach out to the White House and a letter to the director of the Texas Department of Public Safety (DPS) on the continued commercial delays. At MEMA’s urging, the federal government reopened the Bridge of the Americas and Texas has eliminated the secondary inspections.
The Biden administration continues to review and explore changes to our economic policies with China. On August 9, 2023, President Joe Biden issued an Executive Order (E0) to prohibit U.S. investment in China, Hong Kong and Macao in semiconductors and electronics, quantum information technologies, and certain AI systems.
Throughout 2023, the Office of the U.S. Trade Representative (USTR) has reviewed the China Section 301 tariffs. USTR appears to be on track to announce the results of the four-year China Section 301 review by the end of the year. MEMA continues to stress at USTR and elsewhere in the Biden Administration that there be no tariff increases on motor vehicle parts and, ideally, tariff decreases. In addition, MEMA is pushing for a reinstitution of a tariff exclusion process.
MEMA D.C. is hearing increasing reports from MEMA members that some Chinese companies are engaged in Section 301 duty evasion practices. Specifically, they are making minimal investments in places like Malaysia, Thailand, and Vietnam, and announcing that they are exporting various products from those nations rather than from China, without any substantial transformation occurring and sometimes just changing shipping packaging in those nations.
Both the National Labor Relations Board (NLRB) and the Department of Labor (DOL) have been actively pursuing a pro-worker agenda. These actions can be done through executive action and regulatory authority.
At the NLRB, a Joint Employer Final Rule is expected that will dramatically expand who qualifies as a joint employer under the National Labor Relations Act. The proposed rule warns that employers need only "possess the authority to control" the terms and conditions of employment of another entity's workforce to be deemed a joint employer for the purposes of labor law. In addition, the NLBR issued an Ambush Elections Rule that includes ten provisions that drastically shorten the time between a union filing a petition for election and the holding of that election. Finally, the Cemex decision opens the door for card checks over secret ballot elections.
DOL and the Occupational Safety and Health Administration (OSHA) also have an aggressive regulatory agenda. DOL has proposed to increase the minimum salary threshold for overtime to $55,068 from the current level is $35,568. This amounts to nearly a 55% increase. The proposal also implements automatic threshold increases and will be updated every 3 years. OSHA has proposed a regulation that will allow union representatives to accompany OSHA inspectors on walkaround inspections at non-union workplaces. MEMA is working with other trade associations to oppose these rules.
WHAT SHOULD YOU DO?
Work with your MEMA D.C. team to advocate for the future of your business. Contact Carter Salwin to become engaged in our grassroots program and to participate in our Government Relations Committee. The future of manufacturing is in our hands.