Vital auto supply line reopening as U.S. manufacturers unveil framework for economic recovery

Late Friday, the Mexican government announced that it would reopen its automotive factories, which it had earlier closed as “non-essential” businesses during the COVID-19 crisis. The news came on the heels of letter sent by over 300 members of the National Association of Manufacturers (NAM) to Mexican President Andrés Manuel López Obrador warning that shuttered automotive plants and other “essential manufacturing facilities” could imperil the entire North American supply chain.

“We are…deeply concerned about the health emergency decrees issued by Mexico’s Ministry of Health and state governments that have resulted in the forced or threatened shuttering of our companies’ essential manufacturing facilities, as well as those of our suppliers, imperiling our ability to deliver critical supplies and daily essentials to citizens in Mexico and across North America,” the April 22 letter stated.

NAM, which also last week unveiled a framework for reopening the U.S. economy, believes that the starting up of the automotive plants in Mexico will serve as a precedent for opening other manufacturers in that country whose products are likewise integral to the supply chain, and crucial in the fight against the pandemic.

In this country, NAM’s economic recovery plan, the “American Action Renewal Plan,” will give American workers and businesses the tools they need to lead us back to prosperity.
“Our industry has been on the front lines throughout this crisis, providing the equipment and products to keep our country safe, healthy and fed,” said NAM President and CEO Jay Timmons in announcing the plan last week

“The nation is counting on us to continue to play a leading role in this effort, and lawmakers must equip us with the tools we need,” added Timmons, who is a member of the White House’s COVID-19 Great American Economic Revival Industry Groups formed on April 14. “The NAM’s ‘American Renewal Action Plan’ is the path forward.”

Congress is already taking action on some of the recommendations in NAM’s plan, organized under three categories – Response, Recovery and Renewal. The recommendations are in line with earlier measures sought by NAM to boost the economy, one of which continues to have a positive impact. For instance, tax reform legislation, signed by President Trump in late 2017, has saved the day for many Pennsylvania-based manufacturers, including Rex Heath Treat with plants in Montgomery and Bedford counties.

“Without the benefit of tax reform, we might not be sitting in as good of a situation as we are,” Johnathan Rex, General Manager of the company, told NAM. “We’d be a lot leaner in our bank account, possibly needing to draw on a line of credit to make payroll otherwise. As we weather the effects of COVID-19, these benefits will help us. Our business has more time to maintain our critical infrastructure workforce should this current situation continue on.”

One recommendation under the “recovery” part of the plan has been sought for years by manufacturers and other businesses: “Strong and clear legal reforms that protect the essential manufacturers that must remain open to provide vital goods and those that retool their factories to make urgently needed equipment and supplies.”

Another, under “renewal,” seeks: “Historic investment in our nation’s infrastructure to boost the economy.”

PMA President and CEO, David N. Taylor, said that working with NAM has proved more valuable than ever in efforts to get the state’s economy moving again.

“NAM continues to be a great partner in manufacturers’ efforts to retool, provide critical supplies to our frontline health care workers, and keep their businesses alive through the pandemic,” Taylor said. “In Pennsylvania, unfortunately, that work has been made more difficult by Governor Wolf’s failure to include employers in his decision-making, which is going to make the road back to recovery steeper than it needed to be.”

Last Wednesday, the governor announced a green, yellow, red plan to reopen the states economy, beginning May 8. Overall, the governor said that a region or county will need to average fewer tan 50 new positive cases per 100,000 residents for 14 days in order to begin moving out from under his statewide lockdown.

On April 17, President Trump announced a three-phase plan for reopening the economy, with each phase lasting a minimum of 14 days. Many of the steps for reopening businesses will come from the Economic Revival task force that includes NAM’s Timmons.

“Throughout the past month, the NAM has provided the White House, FEMA, the Coronavirus Task Force, DHS and other agencies with our legislative solutions for economic stabilization and future growth, as well as a database of available PPE supply and connecting the supply chain with OEMs,” Timmons said when the task force was formed.

“As the nation prepares to move from relief to recovery and bringing our $22 trillion economy out of its ‘induced coma,’ I look forward to working with the Great American Economic Revival Industry Groups, including the 44 NAM member companies that were also named, to drive this next phase of American renewal, while putting the health and well-being of the American people first.”

At the same time, the economies of Canada, Mexico, and the United States have become increasingly integrated under the North American Free Trade Agreement and its improved successor, the U.S. Mexico Canada Agreement, signed by the president in January.

Domestic and international trade policy will be paramount to ensuring the health, safety, and well-being of all Americans.

“This is a time, more than ever, where we need to realize that trade is for allies,” said David N. Taylor. “Creators will respond, and it’s been proven throughout history that the United States and our allies will prevail. Now we need to ensure sound public policy at the state and federal level to allow us to do it again.”

 

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