Beyond the "fiscal cliff" -- We need a grand bargain | U.S. industrial outlook -- Sluggish growth ahead for industrial activity in 2013 | Manufacturing facts: The U.S. has a structural cost disadvantage
December 20, 2012
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MAPI Research and Insight
Beyond the "fiscal cliff" -- We need a grand bargain
Daniel J. Meckstroth, Ph.D., vice president and chief economist
The last few weeks have seen the opening bids in negotiations over a grand bargain to solve the short-term issue of the "fiscal cliff" and stabilize the long-term deficit-to-GDP ratio. The president wants half the entitlement cuts the Republicans prefer. Both sides, however, would cut the 10-year deficit by roughly the same amount. The president calls for $2 in revenue for every $1 in spending cuts and the Republicans are offering to agree on the opposite -- a $1 tax revenue increase for every $2 in spending cuts. Issues in Brief
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U.S. industrial outlook -- Sluggish growth ahead for industrial activity in 2013
Daniel J. Meckstroth, Ph.D., vice president and chief economist
Our forecast for 2013 is that 14 of the 24 industries for which our modeling allows a detailed forecast will grow, 4 industries will be flat and 6 will decline. We believe concerns over business prospects in Europe, the uncertainties about the U.S. fiscal cliff and federal deficit reduction negotiations and an increase in worrisome regulations have encouraged businesses to sit on the sidelines and wait to see what happens. We forecast that manufacturing production will increase 2% in 2013 and 3.2% in 2014, and then average 3.6% growth from 2015 to 2017. Economic Outlook
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Manufacturing facts: The U.S. has a structural cost disadvantage
This week's excerpt from The Facts About Modern Manufacturing: Since 2003, MAPI and The Manufacturing Institute have tracked the excess burden of structural costs -- corporate tax liability, employee benefits, tort litigation, regulatory compliance and energy -- of U.S. manufacturers relative to their counterparts in our nine largest trading partners. Taken together, 2011 structural costs were 20% higher than for our major competitors, up from 17.6% in 2008. Manufacturing Facts
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Update on the SEC Office of the Whistleblower
Leslie D. Miller, senior attorney
The Securities and Exchange Commission's Office of the Whistleblower (OWB) recently issued a report reviewing the activities of its initial year of operations. In addition, OWB Chief Sean McKessy has made public remarks indicating that the SEC has been tracking the conduct of employers whose employees have filed whistleblower complaints with the OWB. The OWB's activities should be of significant interest to companies that are subject to the jurisdiction of the SEC, because the office may often be processing whistleblower complaints of securities violations that companies have not become aware of through their internal reporting processes, especially hotlines. Issues in Brief
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MAPI in the News
Remy CEO cites change in company culture as reason for turnaround
Remy International was in bankruptcy five years ago, but now the Indiana-based maker of hybrid engine components is trading on the Nasdaq. CEO John Weber attributes the company's recovery to a growing demand for alternative-fuel and hybrid-powered vehicles, as well as a change in culture that included sacrifices such as pay cuts for all levels of employees. "We were able to say to people, 'If we make the right sacrifices, we can be proud of who we are five years from now or 10 years from now,' " said Weber, who is a member of MAPI's board of trustees. WIBC-FM (Indianapolis) (12/17)
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Belden acquires PPC for $515 million
Cable and networking products maker Belden acquired cable and telephone components maker PPC for $515.7 million. "PPC provides innovative products that enable our customers to profitably grow their business by delivering higher bandwidth and enhanced services, with fewer service calls. Belden and PPC will provide unique end-to-end solutions for these customers, and I am excited about the opportunity ahead of us," said Belden CEO and MAPI board of trustees member John Stroup. Separately, Sen. Chuck Schumer, D-N.Y., said he had received assurances from Belden that the company would retain PPC's 774 employees in DeWitt, N.Y. The Post-Standard (Syracuse, N.Y.) (12/11), The Post-Standard (Syracuse, N.Y.) (12/19)
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In the Industry
Kennametal announces new app for iPad
Kennametal's new "Kennametal Innovations" iPad application is now available from the iTunes App Store. The app includes charts, graphs, product and process animations, user-driven navigation and videos. The company said it plans to make the app available to Android users at a future date. (12/18)
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Robots extend their reach in manufacturing
Robots, previously reserved for only the largest manufacturers, have now advanced to the point they can be used in smaller-scale operations, and they're finding their way into a variety of tasks across industries. "In the past, automotive companies and other large manufacturers used robotics to do one thing or insert one part millions of times over the years," said Justin Percio, business manager for the automated welding segment of Lincoln Electric in Cleveland. "Today, robots are flexible enough to work on a large variety of parts or tasks cost-effectively." Area Development magazine (12/2012)
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Cooper to supply tires for new Pro Mazda IndyCar series
Cooper Tire & Rubber has agreed to be the presenting sponsor and to supply race tires for the Pro Mazda Championship through 2015. The IndyCar series will replace the Star Mazda Championship, which was ended after 22 years. "Cooper has provided excellent tires and service to our USF2000 Championship and they are a fantastic partner. I know our teams will benefit from this change, and we thank Cooper for now supporting the first two steps on the Mazda Road to Indy ladder," said the CEO of Andersen Promotions, the creator of the Pro Mazda Championship. (free registration) (12/14)
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Leadership and Strategy
How to transform sales channels to keep up with the revolution
Globalization has dramatically changed U.S. manufacturing, and the sales processes of the past no longer work, writes author and MPC Management President Mike Collins. Customers are demanding more from sales reps, and manufacturers have to be ready to deliver new services, he writes. IndustryWeek (12/12)
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Editor's Note
C-Suite Brief will not publish Dec. 27
MAPI's C-Suite Brief will not publish on Thursday, Dec. 27. Publication will resume on Thursday, Jan. 3. Enjoy your holidays!
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To be without some of the things you want is an indispensable part of happiness."
-- Bertrand Russell,
British philosopher, mathematician and historian
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The Manufacturers Alliance for Productivity and Innovation, founded in 1933 and located in Arlington, VA, contributes to the competitiveness of U.S. manufacturing by providing economic research, professional development and an independent, expert source of manufacturing information.
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