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The Cutting Edge – February 2018


The end of January saw the sixth round of negotiations for the modernizations of NAFTA. The hope going into this round of talks, the longest yet, was that the players would finally tackle some of the more contentious issues that are far from resolved. Canada promised to enter the talks with new ideas for creative solutions while Mexico showed signs that it may be willing to compromise on some of its most important issues, such as automotive regulations within the deal.

This sixth round of negotiations still fell short of reaching any landmark decisions or compromises. U.S. Trade Representative Robert Lighthizer said to reporters in Montreal, “[W]e finally began to discuss some of the core issues. So this round was a step forward, but we are progressing very slowly.” Members of all three delegations seemed to walk away with the same cautious optimism about the trajectory of future negotiations, all recognizing that there is progress in the right direction but that some of the biggest obstacles remain.

NAFTA Roundup

U.S. Turns Up the Hear in Pivotal New Phase of Nafta Talks

Trade Experts Expect to See a ‘Zombie’ NAFTA

Business Groups in US, Canada, Mexico Fear Breakup of Manufacturing Supply Chain without NAFTA

U.S. rejects proposals to unblock NAFTA, will seek ‘breakthrough’

Listen in to hear NAM’s Linda Dempsey defend ISDS

Tax Reform

Since the Dec. 22nd signing of the Tax Cuts and Jobs Act, numerous American manufacturers have announced plans to share the benefits of tax reform with employees and reinvest additional savings into expansion and updated infrastructure. The manufacturing industry makes up a significant percentage of the myriad of companies participating in tax savings bonuses, wage increases, extended benefits, raised retirement contributions and increased capital expenditures. An estimated 3.5 million Americans will receive or have already received a tax reform bonus, primarily due to the lowered corporate rate and full expensing on short-lived capital investments introduced under the new legislation. The list of manufacturers and businesses taking advantage of this burgeoning investment opportunity is continually growing. These are just a few notable examples:

  • Pivot Manufacturing, here in Arizona is now able to purchase machines and equipment that were put off for many years.
  • Nationally, Fiat Chrysler, announced that it will in
  • vest $1 billion in the United States, adding 2,500 new jobs to produce Ram trucks in Michigan.
  • Likewise, Apple is investing $30 billion in new capital expenditures and hiring 20,000 new employees for a new support center.
  • Boeing announced that it will invest $100 million in infrastructure alone. Boeing employs over 140,000 people worldwide, of which there are over 3,700 employees in Arizona.

Tax Roundup

U.S. economy to grow 2.7 percent in 2018, boosted by Trump tax overhaul

Tax reform windfall: These companies are hiking pay, delivering bonuses

Pfizer Plans $5 Billion Boost in U.S. Manufacturing From Tax Law Changes

In the News

Around the Nation:

IndustryWeek: Has US Manufacturing Been Unleashed?

“This legislation represents historic progress for manufacturers and for all Americans,” Jay Timmons, president and CEO of the National Association of Manufacturers, said in response to passage of the tax reform bill, which lowered the U.S. corporate tax rate from 35% to 21%. With the new bill, Timmons promised, manufacturers will “increase capital spending, expand their businesses and hire more workers…” — and “nearly half will increase employee wages and benefits.”

Tax reform is just one of a series of policy changes the Trump administration and the Republican-led Congress are seeking that business groups have lobbied for in recent years. The president has already started to push back against regulations.

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Rutgers University: Faster, Cheaper, Nano-Based Manufacturing

Engineers at Rutgers University-New Brunswick and Oregon State University are developing a new method of processing nanomaterials that could lead to faster and cheaper manufacturing of flexible thin film devices — from touch screens to window coatings, according to a new study.

The “intense pulsed light sintering” method uses high-energy light over an area nearly 7,000 times larger than a laser to fuse nanomaterials in seconds. Nanomaterials are materials characterized by their tiny size, measured in nanometers. A nanometer is one millionth of a millimeter, or about 100,000 times smaller than the diameter of a human hair.

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WATCH: Why NAM CEO Timmons is Optimistic About Manufacturing Jobs

WATCH: Fluor CEO Says ‘Regulatory Morass’ Is Impacting Infrastructure

Around the State:

AZCentral: Nikola Motor Co. to bring 2,000 jobs, $1 billion investment to Arizona

A maker of zero-emissions commercial trucks said it will establish its manufacturing operations and move its headquarters to metro Phoenix, bringing 2,000 jobs here.
Nikola Motor Co. announced it will establish operations in Buckeye, jump-starting the development of the Douglas Ranch section on the north side of the city. Gov. Doug Ducey called it a “huge announcement” that will include a $1-billion capital investment, with 4,000 construction jobs, too.

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Phoenix Business Journal: New life for a shuttered Surprise manufacturing plant

A California company has bought a shuttered manufacturing building in Surprise and will expand its operations there.
The 51,000-square-foot building at Peoria Avenue and Litchfield Road in Surprise previously was home to plastics manufacturer Brentwood Industries.

The property was bought by Z&E Holdings Group LLC an arm Global Trading Marketing Inc. for $4.5 million.

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AZCentral: Company wants to turn Fountain Hills into watchmaking capital of the United States

Move over, Switzerland: Fountain Hills appears ready to become a new hub for watch manufacturing.
Large-scale watchmaking has all but died out in the United States, but that could start to change with a new venture involving high-school students and adult workers in the East Valley, a small local company and one of India’s giant conglomerates.

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The Arizona Manufacturers Council is the voice of Arizona manufacturing. We are a community of makers dedicated to creating the innovations that safeguard and improve people’s lives and to providing the jobs that anchor Arizona’s economy. We are the official state affiliate of the National Association of Manufacturers and we aim to promote and enhance a positive business climate for manufacturing and related industries that operate within Arizona.