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Spring 2010 OCMA News and Tour |
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Spring 2010 OCMA News and Tour |
Surviving the Next 995 Days of the Obama Administration Last year’s edition of the Spring OCMA News discussed the change that threatened U. S. manufacturing generally and Ohio metal casting industry specifically. At that time, the Democrat- controlled Congress was considering major legislative proposals that promised radical change. These major issues, outlined below, presented the Obama Administration’s vision of what was needed to stimulate the economy, revitalize the American Middle Class, provide universal health care, and protect the world from climate change. We thought it would be useful to revisit these issues after one year to gauge the impact of the changes and measure the likelihood of additional changes. Last year’s major priority issues that threatened our industry:
1. Employee Free Choice Act or "card check"; Employee Free Choice Act or "card check" This is an incredibly dangerous proposal and fortunately little or no progress has been made towards radically changing the procedure for determining collective bargaining rights for private employees in America. The Employee Free Choice Act (EFCA) would replace the present secret ballot elections system established in 1933 and replace it with a "card check" system that allows a union to win the right to represent a group of employees by merely obtaining a majority of employee signatures. No secret ballot election would be held. The legislation also requires the use of mandatory binding arbitration of a first contract if the union and employer do not reach agreement within the ridiculously short period of 120 days from the recognition of the union. Neither the employer nor the employee would have the ability to reject or accept the imposed contract. Although the prospects for passage of this radical legislation diminishes with each day that we edge closer to November 2nd, the threat of significant changes in U. S. labor regulations still exists. President Obama’s recess appointment of former SEIU general counsel Craig Becker has “muddied the waters” significantly. Becker has stated that the NLRB can implement aspects of the EFCA through regulatory actions without any Congressional oversight. We must continue to monitor any developments in this area and stand ready to respond to possible threats. Climate Change: Waxman-Markey HR 2454, The American Power Act, and USEPA Regulation of Green House Gases
The prospects of climate change legislation have undergone so many revivals it should be nicknamed the “Lazarus option”. The Waxman-Markey measure barely passed the House by less than ten votes and was declared “dead on arrival” when it reached the Senate. The election of Scott Brown (R-MA) in November seemed to place another nail in its proverbial coffin. However, just this past week, Senators John Kerry and Joe Lieberman introduced the American Power Act, a comprehensive energy and climate change bill that they contend can be passed before the end of 2010! Finally, the Lisa Jackson-led USEPA has moved forward on its promise to regulate greenhouse gases (GHGs) under the Clean Air Act, scaring many conservative business leaders into supporting some type of legislation rather than subjecting their companies to climate change regulation by the USEPA. The American Clean Energy and Security Act of 2009 (ACES), introduced by Reps. Henry Waxman (D-CA) and Ed Markey (D-MA), would set a cap on green house gases (GHG) and call for reduction in carbon emissions of 83% below 2005 levels by 2050. It would establish a "cap and trade" mechanism whereby facilities emitting more than 25,000 metric tons of carbon dioxide equivalent in 2008 would be required to reduce emissions or purchase emission allowances to meet the carbon cap. Finally, ACES would impose on retail electricity suppliers a requirement that 25% of their electricity sold must be generated from renewable resources such as wind, biomass, solar, and geothermal. The bill does not treat nuclear generation as renewable and provides no incentives to promote nuclear energy.
The American Power Act has many similarities with the Waxman-Markey legislation including the reduction of carbon emissions by 83% below 2005 levels by 2050. However, the proposal has a less comprehensive “cap and trade” program that would only target utilities beginning in 2012 and heavy industrial users (more than 25,000 tons/yr) beginning in 2016. Unlike Waxman-Markey, the proposal provides financial incentives for nuclear plant construction, research in coal technology that captures GHG emissions, and improvements for transportation infrastructure. The bill also encourages offshore oil and gas drilling. Importantly, the bill would prohibit the USEPA from regulating GHG emissions under the Clean Air Act. Under both bills, most Ohio foundries would not be "covered facilities" however; all Ohio metal casters would be affected by the anticipated increase in both natural gas and electricity costs.
The AFS Washington Office has been in contact with key figures in the debate to advocate for inclusion of ferrous and non-ferrous metal casters in the energy rebate provisions for Energy-Intensive-and Trade-Exposed (EITE) industries. Under these provisions, metal casters would receive rebates for compliance and increased energy costs under climate legislation. With bitter irony, on December 7, 2009, USEPA announced that it had found that greenhouse gases (GHGs) threaten the public health and welfare of the American people and therefore the USEPA would regulate GHGs under the Clean Air Act. The USEPA action followed a U. S. Supreme Court decision in Massachusetts v. EPA that concluded that greenhouse gases could be regulated under the Clean Air Act if they threatened the public health and welfare of the American public. This month the USEPA announced that only facilities holding PSD and Title V permits emitting more than 75,000 tons of GHGs per year would be subject to requirements for GHG emissions. However, USEPA went on to state that it plans to address smaller sources of GHG emissions in a separate rulemaking starting in July 2012. Given the few number of months remaining before the November elections, it is hard to fathom the Senate passing either the Waxman-Markey or the Kerry-Lieberman proposals this year. However, Senate Majority Leader Harry Reid (D-NV) has indicated that he will move the climate change debate in front of immigration reform legislation so who knows! What we do know is this legislation or the regulation of GHGs by USEPA threatens manufacturing and Ohio metal casting. We will monitor developments and alert you to any opportunities to make your voices heard by our Senators. Fortunately, Senators Voinovich and Brown are cognizant of the potential impact of this legislation on our industry and have been working with us to minimize its impact if it is ultimately enacted. Health Care Reform What can you say about health care reform? Despite extensive reservations by a large majority of the American electorate, the Democratic Congress shoved this legislation through and onto the President’s desk. All the talk of health care reform reducing costs has been replaced with how much the addition of more than 30 million individuals covered by government subsidized health insurance will add to deficits at both the state and federal level. The taxes and some health care reforms take effect this year, but the majority of the provisions of the bill do not take effect until 2013-2014. Depending upon the results in November elections, much of the bill may never be implemented. We shall see.
Family Medical/Sick Leave It is said that every cloud has a silver lining and perhaps the silver lining of the Great Recession was that this Congress has seriously considered none of the ridiculous proposals to provide additional family medical and/or sick leave. Importantly, if the makeup of Congress turns more conservative after the November elections, perhaps these proposals will find their appropriate place in the junk heap of history. In case you may have forgotten what the proposals were, let’s refresh your memory. The Healthy Families Act would provide for seven (7) days of sick leave for all employees. Part-time employees would receive pro-rated leave. The apogee of this madness is demonstrated by a provision in the proposed legislation that would allow the leave to be taken in one-minute increments! The leave must be made available for employees to care for sick family members or those "with a family-like connection". The legislation would restrict or prohibit "paid time-off banks and present benefits would be locked in and the seven sick days would be in addition to current benefits. There are also two bills that have been introduced to expand or enhance the present FMLA. HR 824 the "FMLA Enhancement Act of 2009" would extend coverage to employers with 25 or more employees (it is presently 50 or more). The proposed legislation would also expand the leave entitlement to include family and personal needs such as "participation in school activities" and "routine family medical care". HR 1723, the "Family Leave Insurance Act" would provide for twelve weeks of paid leave. The benefits would be paid from a federal trust fund to which both employers and employees would contribute. The bill would also expand FMLA coverage to include domestic partners, grandparents, and siblings. We will continue to monitor any developments in this area and communicate what action, if any, is needed to stop this madness. OCMA Annual Foundry Tour On Thursday, April 29, 2010, 60 representatives of OCMA member companies
participated in a tour of the Burnham Foundry LLC in Zanesville. The
green sand foundry is a leading supplier of boiler castings with over
80 years of production. The foundry melts with a modern cupola and
pours both gray and ductile iron from 10 to 500 lbs. It has three molding
lines; a 2070B Disamatic, Airset Molding, and an Osborne cope & drag.
Burnham Foundry LLC also makes castings for the automotive and stadium
seating industries. OCMA Trustee Jeremiah Clegg hosted the tour. He was assisted by tour
guides, Art Boehme, Dave Jones, and Mark Steil.
The Ohio delegation was number one again at this year's AFS/NADCA Government Affairs Conference (GAC) in Washington, DC, on May 5-7, 2010. Despite the continued economic malaise, OCMA members stepped up when they were needed most. All OCMA members should be proud of our record of dedication and support of the effort to educate our national leaders about the importance of the metal casting industry. Importantly, the Ohio delegation had a number of “rookies” this year and the “new blood” was very refreshing. We trust they found the experience worthwhile and the camaraderie enjoyable. This year's conference was highlighted by a presentation by Professor Peter Morici, University of Maryland, School of Business, and frequent commenter on CNBC, CNN, and MSNBC. Dr. Morici provided an insightful and irreverent analysis of the credit crunch and subsequent deep recession. Sheila R. Ronis, Walsh College and Project for National Security Reform presented an informative study about the defense capabilities of the U. S. Armed Forces and how purchasing castings and other components from untrustworthy countries including China has compromised their defensive readiness. Jonathan L Snare, Morgan, Snare, & Bockius, warned participants about the “new” OSHA led by an ideologue, Dr. David Michaels, who only believes in enforcement, fines and civil and criminal charges. Finally, Robert Glenn, Crowell & Moring, who was involved in the battle to stop a more restrictive crystalline silica regulation in 1999, warned the audience that the “new” OSHA was anticipating a rulemaking in 2010-2011 to finally bring about the more restrictive standard. As always, the most important task of the Ohio delegation was reserved for lobbying on Capitol Hill on May 6, 2010. At 11:00 AM Ohio members met with Senator Sherrod Brown and his top climate change expert, Joe Shultz. Senator Brown was very receptive to concerns voiced by OCMA members about the state of the economy, increased regulation, and potential climate change legislation. He thanked OCMA for its support of his legislative proposal to prevent economic stimulus spending for renewable energy projects, primarily wind farms that did not utilize domestic producers. He indicated that he would not be supporting any climate change legislation that did not provide significant protection for manufacturers in Ohio and the Midwest. He also promised to continue to work with us to accomplish that task. After meeting with Senator George Voinovich staff, OCMA delegates crossed over to the House side of Capitol Hill and visited the offices of Rep. Zack Space, Rep. Mary Jo Kilroy, Rep. Charlie Wilson, Rep. Steve Driehaus, Rep. Tim Ryan, and Rep. John Boehner. Delegates met with Congressmen Jim Jordan, Patrick Tiberi, and Congresswoman Jean Schmidt. Kudos to OCMA Trustee John C. Vaught who journeyed to the steps of the Capitol to meet with Rep. John Boccieri. In general Ohio Congressional representatives were much more sympathetic to the concerns of Ohio metal casters than they were in recent years. Even the Democratic representatives were less sure of the wisdom of some of the actions taken to stimulate the economy and they were asking for our recommendations. What they heard loud and clear from the delegation is that more regulation and more taxation are the last things we need to try to turn around this economy.
The AFS/NADCA GAC presents an opportunity to remind our Congressional delegation of the importance of metal casting to the manufacturing base in Ohio's economy. We were successful in recruiting the largest GAC delegation this year and we look forward to a better economy and a larger Ohio delegation next year. Copies of the presentations can be viewed at: http://www.metalcastinggov.com/2010gacpresentations.asp Environmental Update GHG Tailoring Rule A year ago, US Environmental Protection Agency (USEPA) issued it’s finding that greenhouse gas (GHG) emissions pose a danger to the public's health and welfare. This determination set the stage for sweeping regulations affecting any facility or institution that is responsible for greenhouse gas emissions (GHGs). The USEPA determination along with the US Supreme Court decision that ordered the agency to examine whether emissions linked to climate change should be curbed under the Clean Air Act (CAA) represented a major shift in the federal government's approach to climate change. Under the CAA, facilities emitting more than 100 tons per year (28 specified categories of sources such as power plants and refineries) and 250 tons per year of any regulated pollutant for all other sources. At these thresholds, millions of permits would be required under the CAA. However, in September 2009, USEPA released a proposal that would only require large industrial facilities that emit 25,000 tons per year of GHGs to obtain construction and operating permits covering these emissions. USEPA received many comments about this so-called “tailoring rule” and on May 13, 2010 issued a final rule raising this limit to 75,000 tons of GHGs that would generally only apply to large industrial facilities such as power plants and refineries. USEPA has been challenged for its decision to “tailor” their proposed and final regulations to the resources generally available for permitting and enforcement. Several lawsuits have been filed claiming that the statutory language of the CAA is very clear and that is does not allow this discretion on the part of USEPA. It is easy to understand why the USEPA is attempting to circumvent the statutory language once the facts are known. If states were required to issue permits under USEPA authority according to the 100/250 ton per year threshold, Prevention of Significant Deterioration (PSD) reviews would increase from about 280 per year to over 40,000; facilities requiring Title V operating permits would increase from less than 15,000 to over 6,000,000; and 14,700 existing Title V permits would require addition of greenhouse gas terms! Senator George Voinovich is circulating a proposal among his Senate colleagues that would impose broad limits on federal and state authority to limit GHGs. The amendment would broadly pre-exempt states and federal agencies from regulating GHGs outside the authority of a climate change bill. It would block USEPA and states from regulating GHGs except in certain circumstances where they directly affect public health or to protect the stratospheric ozone layer. Attorneys who specialize in air regulations say the measure would also limit federal programs like the Endangered Species Act, the Clean Water Act and the National Environmental Policy Act and would prevent public nuisance litigation related to climate change. Additionally, the measure would give the Transportation secretary exclusive jurisdiction to regulate automobiles’ GHGs. Start-up, Shut-down, and Malfunction (SSM) rule vacateur The U. S. Supreme Court denied certiorari to the American Chemistry Council (ACC) in ACC’s effort to obtain Supreme Court review of the U. S. Court of Appeals for the D. C. Circuit’s decision in Sierra Club v. American Chemistry Council et al. The Supreme Court denial of certiorari effectively puts an end to all litigation. If industry wants to have the rule reinstated, a legislative change amending the Clean Air Act (CAA) would be required. USEPA will now begin the process of writing a SSM rule. OCMA will monitor this situation and keep you informed of any new developments. OCMA goes to Washington After a long day of preparation for the next day's meetings on Capitol Hill, the members of the Ohio delegation took a few moments to have their photo taken. The OCMA delegation met with their Congressional leaders & staff in thirteen (13) separate meetings during their day on the Hill.
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