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AEM Applauds Legislation to Strengthen Manufacturing in AmericaAEM Applauds Legislation to Strengthen Manufacturing in America

Association of Equipment Manufacturers (AEM) president Dennis Slater today issued the following statement supporting introduction of legislation to strengthen manufacturing by U.S. Senator Gary Peters of Michigan:

“The Association of Equipment Manufacturers commends the introduction of the National Institute of Manufacturing Act to strengthen the manufacturing sector and ensure the future competitiveness of U.S. manufacturing in the global economy,” said Dennis Slater, president of AEM. “Equipment manufacturers represent twelve percent of the entire U.S. manufacturing sector and supports 2.8 million family-sustaining jobs across the country. We need a comprehensive, coordinated, and competent national effort in support of the manufacturing sector and its workforce. This legislation will reduce redundancies and improve efficiencies across existing federal manufacturing programs and ensure that the federal government is better positioned to respond to rapid changes in the global manufacturing landscape. Senator Gary Peters knows firsthand the challenges and opportunities facing equipment manufacturers, and he has been a steadfast advocate for the industry in the United State Senate. We applaud the Senator for his vision and leadership to ensure the federal government is better positioned to support the industry and urge all Democrat and Republican Senators to support this important legislation.”

“With a long and rich history of manufacturing hundreds of world class products in Winn, Michigan, we know first-hand the critical role that manufacturing plays as the engine that drives the economy by creating jobs, opportunity, and prosperity for Americans,” said John Foote, senior vice president at Morbark. “This has been especially true in our rural central Michigan area. We also recognize the need for a more far-reaching and strategic approach to ensure that the manufacturing sector and its workforce receives the resources and leadership they need to continue to innovate and manufacture in Michigan and across the United States. We would like to thank Senator Gary Peters for his steadfast leadership to strengthen the sector and ensure the future competitiveness of U.S. manufacturing in the global economy. Senator Peters has personally met with us in the past, listened to our needs and responded proactively. We hope that his colleagues in the United States Senate will support his legislation and work in a bipartisan and collaborative fashion to make America the best country in the world to manufacture.”

AEM was the first trade association to call for a comprehensive national strategy for manufacturing “to develop and implement a comprehensive national strategy for manufacturing to strengthen the economy, create new jobs and opportunities, and ensure the U.S. is the best place in the world for equipment manufacturers to innovate, manufacture, and do business.” Currently, there are 58 manufacturing-related programs across nearly a dozen federal agencies, making it unnecessarily difficult and expensive to carry out missions and impossible to estimate total federal investment in manufacturing. AEM believes a coordinated national effort would significantly increase efficiencies and collaboration across existing federal manufacturing programs, reduce wasteful spending and improve the ability and accountability of the federal government to respond to rapid changes in the global manufacturing landscape.

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AEM is the North American-based international trade group representing off-road equipment manufacturers and suppliers, with more than 1,000 companies and more than 200 product lines in the agriculture and construction-related industry sectors worldwide. The equipment manufacturing industry in the United States supports 2.8 million jobs and contributes roughly $288 billion to the economy every year.

AEM Hails USMCA Entering into Force

Dennis Slater, AEM President

Association of Equipment Manufacturers (AEM) president Dennis Slater issued the following statement as the United States-Mexico-Canada Agreement (USMCA) entered into force today:
“The USMCA entering into force today is great news for equipment manufacturers and our industry’s 2.8 million men and women working across the United States and Canada,” said Dennis Slater, president of AEM. “This marks the start of a new chapter for North American trade. USMCA expands agricultural market access, establishes rules for e-commerce, strengthens labor and environmental protections, and updates customs rules that will cut red tape and make it easier for U.S. manufacturers to sell to their Canadian and Mexican customers. We applaud President Trump, Vice President Pence, Senate Majority Leader McConnell, and House Speaker Pelosi to get this agreement to the finish line.” 
AEM was an ardent supporter of the USMCA since it was first proposed. The association actively advocated for our industry’s priorities with U.S. and Canadian government stakeholders, participated in the USMCA Coalition, co-hosted the Honorable Mike Pence, Vice President of the United States, at an equipment manufacturing facility in August 2019 to raise public support for the agreement, supported the work by Chairman Neal (D-Mass.) and the nine members of the House Democrats’ Trade Working Group, and ran an ongoing public education campaign on the various benefits of a ratified USMCA. 
The International Trade Commission reported last year that the implantation of the USMCA could add up to $68 billion to the U.S. economy and create 176,000 jobs

AEM is the North American-based international trade group representing off-road equipment manufacturers and suppliers, with more than 1,000 companies and more than 200 product lines in the agriculture and construction-related industry sectors worldwide. The equipment manufacturing industry supports 2.8 million jobs in the U.S. Equipment manufacturers also contribute $288 billion a year to the U.S. economy.

AEM: As COVID-19 Drags On, Equipment Manufacturers Continue to Face Significant Challenges

Executives say federal government has not done enough to support the industry

The COVID-19 pandemic continues to take a toll on an industry that represents 12 percent of the U.S. manufacturing sector, according to a new survey released today by the Association of Equipment Manufacturers (AEM). While equipment manufacturers are adjusting to the changing economic conditions, three quarters of U.S. equipment manufacturers say that the impact of the COVID-19 pandemic on the overall economy is still very negative. In addition, six out of 10 executives say that the federal government has not done enough to support the industry as it continues to face decreased demand and disrupted supply chains.

“The COVID-19 pandemic continues to negatively impact equipment manufacturers and the 2.8 million men and women of our industry,” said Dennis Slater, president of AEM. “We have seen some improvements to the operations and financial outlook for our member companies, but the industry still faces a long road back to normal. Even as our industry continues to help build, feed, and power our country, far too many of our member companies are running out of time.”

As the country navigates the ongoing COVID-19 pandemic, equipment manufacturers, suppliers, and distributors have largely remained open and continued to supply the equipment necessary to keep the country moving forward and help lead the recovery and renewal of the American economy. However, many equipment manufacturers are still struggling to keep workers on the job, with eight out of ten executives indicating that they will not be able to re-hire workers laid off earlier in the year.  

The second survey of presidents, CEOs, and owners of leading equipment manufacturers comes as more states are opening back up for business, and congressional leaders negotiate a fifth stimulus package. Slater continued, “While it is very encouraging that equipment manufacturers are adjusting to the new normal and re-opening all of their facilities, the impact of this unprecedented crisis is far from over and will be felt for a very long time. Equipment manufacturers have not received the support they need from the federal government, and it is therefore imperative that they take immediate and aggressive steps to support our industry.”

The survey was in the field from May 28 to June 15, 2020. The 102 respondents weighed in on the effects of the COVID-19 pandemic on the economy, the industry, their companies, supply chain and manufacturing operations, their financial expectations, as well as the challenges they continue to face and specific ways the federal government can keep equipment manufacturing strong and ensure the nation’s economic resilience.

The survey’s key findings include:

  • Three quarters of respondents said that the impact of the COVID-19 pandemic on the overall economy is still very negative, while just under half said that the impact on the industry is equally bad. 
  • One-third of respondents said they plan to lower their financial outlook by up to 30 percent over the next 30 days, while another one in eight respondents indicated they expect to reduce their outlook for the rest of the year by up to 30 percent.
  • Executives said that employee health and well-being, lack of new orders, and continued supply chain challenges are the three biggest issues they face as they re-open their facilities. 
  • The COVID-19 pandemic is taking its toll on the industry’s workforce. More than one-third of respondents said they have furloughed up to half of their employees, while roughly one in five of respondents indicated that they have laid off as many as 10 percent of their workforce. 
  • The road to recovery is lined with warning signs. For equipment manufacturers who have furloughed workers, nearly a third said they would not bring anyone back to work. For those who laid off workers, eight out of ten said they will not rehire them based on current market conditions and challenges.
  • More than eight out of 10 respondents said they would like to see a significant investment in infrastructure to help keep equipment manufacturers in business during the crisis and set the stage for the economic recovery.
  • Looking ahead, a clear majority of respondents said that the equipment manufacturing sector is not getting the support it needs from the federal government as it continues to navigate the various challenges caused by the COVID-19 pandemic.

The detailed findings are available in a memo prepared by AEM’s Market Intelligence Team.

AEM continues to lead the industry’s response to the COVID-19 pandemic, and is working closely with state and federal officials to help contain the spread of COVID-19, keep equipment manufacturing in America strong, and ensure the nation’s economic resilience. AEM has also called for bold action from Congress and federal agencies, including continued federal designation deeming equipment manufacturers and their employees, suppliers, and distributors as “essential” and additional support to ensure small and medium-sized equipment manufacturers have access to the cash they need to keep operations going. 

AEM is the North American-based international trade group representing off-road equipment manufacturers and suppliers, with more than 1,000 companies and more than 200 product lines in the agriculture and construction-related industry sectors worldwide. The equipment manufacturing industry in the United States supports 2.8 million jobs and contributes roughly $288 billion to the economy every year.

VOLVO CE Dealer Cowin Equipment Company Weighs in on Short-Term Outlook: ‘We’re Coming Back’

“All things considered, we’re confident we’re coming back out of it.”

The way Matt McGowan sees it, there’s really no overstating the impact the COVID-19 pandemic has on Cowin Equipment Company over the course of the past few months. No aspect of the organization went unaffected, forcing the Volvo CE dealer and Birmingham, Alabama-based company, which specializes in the distribution of heavy equipment for a variety of industries, to respond quickly and decisively.

But now, as summer gets under way and the United States continues to open up, McGowan – the company’s vice president of sales and marketing – can’t help but feel optimistic about what the future holds for equipment dealers, equipment manufacturers and the customers they serve.

“We definitely went through a slowdown period, but now we’re headed in the right direction,” he said. “It’s almost, at least activity-level-wise, back to where it once was. I’m not saying we’re quite there yet, but things have really picked up.”

For more information and resources on COVID-19, visit the COVID-19 section on the AEM website

SHORT-TERM SLOWDOWN

The consensus opinion regarding the effects of COVID-19-related lockdowns on Cowin’s operations: It could have been worse. According to McGowan, the company enjoyed a very strong January and February. Then, despite a significant drop-off in March, the company was still able to post a record-setting first quarter.

“There were pockets throughout the areas we cover that never slowed down,” he said. “No DOT (Department of Transportation) jobs were ever shut down by government mandate. So, we were really fortunate there, and that allowed us to pull out a pretty decent April.”

The most significant impact occurred when some OEMs that Cowin represents began shutting down in the wake of the pandemic’s emergence in the U.S. causing some temporary delays in parts shipments. And even when parts did arrive, company employees needed to take the necessary steps to disinfect items which took additional time.

“The last thing we wanted was technicians or customers maybe touching contaminated products,” said Stephen Searcy, Cowin’s vice president of product support. “So, we would disinfect on top of what the manufacturers were doing. It’s improved dramatically now, and people were understanding about it at the time. But it was still a big challenge for us, because our customers were still working.”

(ANYTHING BUT) BUSINESS AS USUAL

At no point has a Cowin store closed during the pandemic. With that being the case, said Searcy, there were times when it felt like the best course of action was to balance a “business as usual” approach to day-to-day operations while trying to react accordingly to what was happening across the country and around the world.

“Information was changing 24 hours a day,” he said. “I think back to our first memo, and it was dated the 28th of February. It basically said, ‘Here’s what’s going on and what we’re seeing developing. We’re not sure how this is going to affect us. But immediately we need to put these safeguards in place.’”

Whether it’s been encouraging the increased use of hand sanitizers and PPE, disinfecting shipments of parts, or rethinking how interactions occur with customers, Cowin leaders and their employees have quickly adopted measures to ensure everyone’s safety and well-being is the foremost priority. In addition, internal team communications have been sent several times per week in an effort to keep employees aware of developing news and how it impacts impact operations.

“It’s about how things affect employees personally, but also how it affects the company as a whole – and how we want everyone to do their jobs,” said Searcy. “Even now, we have reminders going out saying, ‘We want to stay on top of this.’ Because we want to maintain what we started months ago. We continue to reinforce things with our team, make them a part of what’s going on, and not leave them in the dark.”

Reinforcing new behaviors is a critically important task for Cowin leaders in these uncertain times. For example, there was initial worry on the part of some company salespeople regarding customer touchpoints. However, by promoting regular phone contact encouraging “tailgate lunches” – where takeout food is ordered and social distancing occurs – those concerns have largely been allayed for now.

“Customers have been great,” said McGowan. “They work with us, understand us, and recognize things are different than they were before.”

PROJECTING WHAT’S AHEAD

While it’s difficult to project what exactly the future holds for Cowin, its customers and its employees, guarded optimism appears to be the sentiment that rules the day for both the company’s parts business and its service business.

“From an inventory standpoint on the machine side, we were well stocked before the pandemic and orders placed before the pandemic only saw minimal delays,” said McGowan. “But during remote work, having parts in stock at the OEM level is great, however, when staffing levels were down to fulfill orders, that posed some challenges. Then, of course, machine availability for orders placed after the pandemic began could see more extended delays.”

As a result, he continued, company officials are trying to determine how quickly OEMs that had 2-6-week shutdowns can get up, running and – most importantly – back on track.

“I think it all depends on how fast they can get components from third-party vendors,” he said. “In reality though, we’re anticipating some new machine orders placed after the pandemic could be coming toward the end of the year.”

On the product support side, customers are anxious and want to work. However, some construction jobs that were anticipated just a few short months ago may be delayed indefinitely.

“People are a little bit tighter with their funds than what they were a couple of months ago, so it might take a few months, or even a year, for them to get back to the business level that they had before,” said Searcy.

“That being said, we’re seeing some signs that are positive. I just hope that continues to grow in the weeks and months to come,” he added.

To learn more about AEM’s efforts to support the equipment manufacturing industry, visit the COVID-19 section on the AEM website. If you have questions or need to get a hold of AEM staff, please e-mail our Response Team at responseteam@aem.org.

Subscribe to our AEM newslettersfor more AEM news and updates.

Jumpstarting the COVID-19 Recovery: Equipment Manufacturers and Infrastructure Play Key Roles

By Kate Fox Wood, AEM Senior Director, Government Relations

 Equipment manufacturers, now more than ever, are doubling down on efforts to communicate to lawmakers about the important role federal infrastructure investment should play as part of our national economic recovery from the coronavirus pandemic.

Kate Fox Wood

At the outset of the coronavirus pandemic in the United States, AEM sent a letter to President Trump and Congressional leadership urging them to include infrastructure investment in a government relief package. AEM supported an effort to provide additional emergency funds for state departments of transportation facing severe revenue shortfalls. AEM Chair Jeffrey Reed and CE Sector Board Chairman Rod Schrader wrote directly to U.S. Transportation Secretary Elaine Chao about the importance of her leadership in ensuring Congress follows through with infrastructure investment this year. AEM played a key role in the release of a national rural roads report issued by TRIP that has been shared widely with policymakers.

For more information and resources on COVID-19, visit the COVID-19 section on the AEM website

During dozens of calls with lawmakers in the U.S. Senate and U.S. House of Representatives, equipment manufacturers have reiterated their commitment to keep facilities open while keeping their employees safe, and acknowledged the important role they play in supporting the nation’s critical essential infrastructure workforce like construction, utilities, and agriculture.

Equipment manufacturers also continue to make a strong case for why infrastructure investment should be a key part of any COVID-19 economic recovery plan. There is a proven track record for predictable, long-term infrastructure investment in providing jobs and boosting economic activity.

Infrastructure investment ensures critical supply chain needs can continue to be met now and in future. We cannot assume that supply chain disruptions will not develop further down the recovery timeline. Our country must be ready to weather unforeseen headwinds. U.S. roads, highways, bridges, ports, waterways, utility systems, and broadband networks must be primed and ready to adapt. We need infrastructure legislation that is bipartisan. We need infrastructure legislation that includes a plan to train a workforce that maintains and operates these important networks. We need infrastructure legislation that embraces the use of smart technology. And we need infrastructure legislation that is fully funded and long-term.

As policymakers chart a path forward during these uncertain times in our nation’s history, one thing is clear: meaningful investment in infrastructure is as important as ever. Equipment manufacturers look forward to advancing this goal, and continuing to support industries that build, feed, and fuel the world.

To learn more about AEM’s efforts to support the equipment manufacturing industry, visit the COVID-19 section on the AEM website. If you have questions or need to get a hold of AEM staff, please e-mail our Response Team at responseteam@aem.org.

Subscribe to our AEM newslettersfor more AEM news and updates.