Jay Timmons, CEO of the National Association of Manufacturers, emphasized the significance of the bill for small manufacturers and the supply chain, warning that without it, job losses and economic setbacks could have been severe. He also noted that maintaining the current corporate tax rate is a quiet but critical win for encouraging domestic investment.

While concerns remain about the projected $3 trillion increase in national debt, Timmons argues that growth-driven policies will spur investment, job creation, and increased tax revenue, offering long-term certainty and momentum for U.S. manufacturers.

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CNH Industrial (Case IH, New Holland) and AGCO (Fendt, Massey Ferguson) temporarily halted U.S. imports from European plants to assess the tariff impact. Both have since resumed limited shipments. John Deere, which manufactures 84% of its equipment in North America, hasn’t made changes but may face international headwinds due to reciprocal tariffs.

For shortline manufacturers, the picture is just as complex. Many rely on imported components or export specialized equipment globally — making them vulnerable to delays, rising input costs, and shifting demand. Even without headline-grabbing announcements, many in our space are adjusting production, pricing, and supply chain strategies behind the scenes. Small-to-medium sized manufacturers may be particularly at risk, with their thinner margins and more limited access to alternate markets. Shortliners often have to be nimble, but rising tariffs can significantly disrupt this agility.

While major manufacturers have the financial backing to weather these tariff changes, shortline manufacturers may struggle with increased overhead costs and squeezed profit margins. Some have expressed concerns about the long-term sustainability of absorbing these added costs without passing them along to farmers — or if market conditions make it difficult to do so.

In response, some shortliners are exploring new business strategies to mitigate risks, including diversifying suppliers or relocating production to regions with more favorable tariff conditions. Others are forming alliances to pool resources and negotiate better rates for imported materials, aiming to maintain competitive pricing.

Claas, which has significant EU operations but builds combines in Nebraska, will continue delivering presold U.S. units while reducing stock-machine production. The company is considering expanded production in North America to avoid future trade disruptions — a strategy some shortliners are exploring as well.

Johan “Kip” Eideberg of the Association of Equipment Manufacturers said the group supports the President’s goal to strengthen U.S. manufacturing but warned about the risks of disrupting a global supply chain.

“We want to build more equipment here in America,” Eideberg said. “But we also depend on critical inputs from around the world. If those get more expensive, it affects the entire chain — including farmers and rural manufacturers.”

As the 90-day tariff pause plays out, shortline manufacturers — like their larger counterparts — are watching closely, adapting fast, and staying focused on the farmers they serve.

Source:
Adapted from reporting by Matthew J. Grassi, with added context for shortline manufacturers.

According to the statewide business group, manufacturing employment has grown 5.7% in Missouri since the start of the COVID-19 pandemic. Economic recovery varies by location. Joplin and Springfield have seen strong employment growth since 2020, and Kansas City, Jefferson City and Columbia have made a big comeback over the past year. St. Joseph and St. Louis still lag behind.

Ted Abernathy, with Economic Leadership LLC, said Missouri has a lot going for its manufacturing industry.

“For you guys, transportation equipment chemicals, which include biopharmaceuticals and food and beverage, have always been leaders. You are rated as a top 10 lowest cost-of-doing-business state in America, so you have a big advantage there,” he said.

Abernathy said new areas Missouri could expand on are manufacturing in agriculture machinery and products, as well as medical devices.

According to Abernathy, Missouri has high-value and high-skill manufacturing.

“And those are the ones that are growing,” he said. “It’s easy to offshore, low-skill, low-cost manufacturing, but the more complex the manufacturing, whether you’re building cars or biopharmaceuticals or airplanes, those are complicated and demand for them has continued to rise worldwide.”

Abernathy said the state’s refocus on infrastructure has been key.

“You don’t grow manufacturing jobs if you can’t move goods. And so, the focus on manufacturing infrastructure, roads, bridges, ports, airports, all of those things has been really important and they’ll have to be sustained because we’re more sophisticated these days in moving infrastructure,” according to Abernathy.

Abernathy said exposing children and adults to opportunities that manufacturing provides is key because he says America’s biggest challenge is attracting young people to fill those jobs.

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From product design and development to final delivery, AI is already being utilized in modern manufacturing factories to streamline production. AI techniques are being employed today to identify defects and other product issues, enable predictive equipment maintenance, and facilitate shipping and tracking, among other applications. Yet integrating AI into an existing operation is no small feat, and many manufacturers need help knowing where to start.

Following are six steps that manufacturers can take to navigate the AI journey.

Identify the top challenges you’re facing. It’s critical to be selective in defining the scope of your AI project, starting with a “wish list” of problems or challenges to resolve. This process could look like identifying the data that needs to be collected, relevant software and algorithms, and metrics for tracking project success. Goals should be focused, measurable and aligned with larger needs across the organization.

Thoroughly assess your data. Make sure you have access to high-quality data that can be cleaned and structured for AI purposes. It’s essential that the data accurately represents the real-world manufacturing process. While it’s easy for humans to disregard implausible values, flawed data can easily skew AI models. Complete data visualization is also key — by visualizing the data, you can obtain immediate insights into how to proceed, without the need for additional algorithms.

Develop a strategy. Thoroughly understand your existing infrastructure and your organization’s direction. Consider how you will deploy your AI models — in the cloud, on-premises, or in an air-gapped environment — and plan how to monitor and track the AI models’ success once they’re deployed. The lifecycle of AI models includes ensuring that they continue to perform as expected, and consistently addressing any issues that might arise after deployment.

Select your platform and software. Sensor data can quickly surpass the processing capabilities of a single machine. With this in mind, it’s important to have platforms, tools and repositories to handle larger volumes of real-time data processing. Consult with your AI building teams, which often include data scientists, data engineers, machine-learning engineers, software engineers and developers. These individuals can determine the most suitable tools for your organization’s use cases.

Ensure compliance, security and governance. Security considerations are paramount, and while open-source software offers the innovation of a broader community, it can also introduce increased security risks from vulnerabilities within software packages. Specifically, look for platforms that include user access controls and reporting on common vulnerabilities and exposures (CVEs), as well as a platform that creates an association between CVEs and software packages used by your teams in development or deployment.

Take a tailored approach. Manufacturing encompasses a large range of enterprises, spanning mass customization with computer-controlled machines, fully customized work, high-volume mass production with cost constraints, high-precision and low-volume production for specialized applications, and various combinations. A one-size-fits-all approach doesn’t apply here, so carefully considering your particular manufacturing type’s specific needs and goals is critical to effectively applying AI to address those needs.

When approaching AI implementation, carefully consider the diverse ways that AI can enhance efficiency and reduce costs. By diligently following each step, you’ll be well-equipped to make informed decisions about technology implementation, and fully reap the benefits of automation in your manufacturing operations.

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The increased discussion of onshoring has translated into a measurable boost for the U.S. manufacturing industry. That has led to $94.3B in annual manufacturing construction spending this year, according to data from the U.S. Census Bureau. That total is the highest since at least 2002. The bureau’s latest report notes that the value of manufacturing construction put in place in May is up 26.3% from May 2021.

Over the last year, construction on new manufacturing facilities has increased by 116%, far outpacing the overall 10% increase for all construction projects, according to Dodge Construction Network data reported by Bloomberg. 

1. Rethink supply chain dependencies. There are limits to globalization. This has been a warning shot. We need to focus on supply chain resilience and establish a more robust network of strategic suppliers. Bottom line, manufacturers might consider reshoring or near-shoring critical parts and equipment. The reliance on an Asian supply base is not sustainable.

2. Embrace omni-channel strategies. Many manufacturers have already prepared their e-commerce strategies. Most, though, delegate this activity to their distributors. Get your website cart ready and get ready to activate the cart functionality. You cannot just rely on your distributors to conduct touchless interactions. Prepare to control your e-commerce future.

3. Think D2C model. Selling direct online and establishing a direct-to-consumer model are not the same as selling on an e-commerce platform.
A D2C business model is a radical change in marketing, supply chains, and other support activities. It should not be perceived as an opportunistic change to address a portion of the business through a website or a marketplace.

4. Launch usage-based and subscription-based business models. If you are selling equipment or solutions requiring customer’s capital expenditure (CapEx), accelerate the development of consumption-based pricing offers to ease the reliance on CapEx. Now is the time to take leadership in your market as long as your cash situation allows for it.

5. Refocus on profitable growth and cash flow. As the economy resets over the next quarter or two, refocus your strategy away from unsustainable growth and more on profitable growth. That means making priorities in allocating cash to attractive opportunities and focusing on differentiated innovation development.

6. Discontinue cash-draining activities. Right now, everyone is focusing on cash flow protection to pass this storm. It is an amazing opportunity to revisit cash-draining activities. It is a great time to discontinue pet projects and programs that distract the organization’s attention from core operations. By doing this, you can also reduce the amount of unnecessary complexity that might slow down the organizational bandwidth.

7. Revisit and reset business rules. This is a great time to reset your business rules and kill the high cost-drivers in your cost-to-serve analysis. Maybe you can change your delivery conditions. Or you could consider canceling allowances or legacy favors that were in place for many years. The focus here is to optimize costs and protect cash flow.

8. Scratch your asset plan and start over. This pandemic is challenging all the strategic assumptions, perhaps for the next 12 to 18 months. As CapEx budgets shrink, your short-term focus should be on critical maintenance needs and supporting short-term recovery. Your long-range asset investment plans are going to be challenged.

This crisis is not a demand crisis or an economic crisis. It is a surprising turn of events that could not be anticipated. It is a wake-up call for all manufacturing companies, and I believe it will change our mindset. We need to refocus our attention on cash and profitable growth. This test of our readiness level must challenge the status quo. Make the necessary preparation for the next crisis and avoid going back to the old routine.

Stephan M. Liozu, Ph.D. is chief value officer at Thales Group and founder of Value Innoruption Advisors, a consulting boutique specializing in value-based pricing, digital pricing, and industrial pricing. He is the author of nine pricing books and is a frequent keynote speaker at industrial and digital conferences.

Copyrighted 2020. Informa. 

Take a look at the Top Seven’s numbers:

• The percentage of the workforce employed in manufacturing;
• Total manufacturing output in 2017;
• The average annual compensation in that same year.

7) Michigan. Percent of workforce is just over 14. Total output was $96.2 billion. Average compensation was $79,320.

6) Pennsylvania. Percent of workforce is about 9.5. Total output was $87.7 billion. Average compensation was $73,731.

5) New York. Percent of workforce is about 4.5. Total output was $73 billion. Average compensation was $76,269.

4) Ohio. Percent of workforce is about 13. Total output was $108 billion. Average compensation was $74,680.

3) Illinois. Percent of workforce is about 9.5. Total output was about $104 billion. Average compensation was $87,394.

2) Texas. Percent of workforce is about 7. Total output was about $226 billion. Average compensation was $85,051.

1) California. Percent of workforce is about 7.7. Total output was about $300.3 billion. Average compensation was $105,241.

Source: Industry Week