As Director of Technology and Industry Research for PMPA, Miles brings 38 years of hands-on experience in areas of manufacturing, quality and steelmaking. He helps answer "HOW?","WITH WHAT?" and "REALLY?"
Withdrawing proposal for a Factoryless Goods Producer Classification in NAICS 2017.
In a resounding victory for actual manufacturers—the people that make things—the Office of Management and Business reported on August 8 that the proposal to create a “Factoryless Goods Producer” classification for the NAICS 2017 has been withdrawn.
PMPA has been on the forefront of challenging the classification, which would have created a class of phantom manufactures that did not actually manufacture goods, but rather purchased finished goods for resale, and possibly from foreign sources.
On May 22, the administration announced the U.S. Census Bureau was considering a proposal to count a business as a manufacturer, even if they outsource all of the transformation steps traditionally considered production activities, or manufacturing. The proposal would have counted some activities outsourced overseas as U.S. manufacturing and included financiers and others as manufacturers even though they never visit a shop floor.
Among PMPA’s objections to the scheme were the following:
NAICS is based on the primary activity of an establishment
NAICS is for classifying domestic activities only
If manufacturing processes are not actually required for a “manufacturing” classification, the statistics produced by such a distorted definition are virtually useless
“This is an important victory for U.S. businesses, and we applaud the administration for recognizing the flawed thinking behind this proposal,” says Mike Kobylka, executive director of PMPA. “This proposal would have created a class of phantom manufacturers. The NAICS classification system has never and should never take into account foreign sourced production processes.”
More than fools gold, iron pyrite can prevent steel from being hot worked by inducing "hot shortness."
Manganese ties up sulfur before it can chemically combine with iron to form iron pyrite. Iron pyrite occurs at grain boundaries and leads to hot shortness (brittle behavior) at rolling temperatures.
Several people found PMPAspeakingofprecision.com blog with the search term “Carbon Steel Without Manganese.” So we’ll take this opportunity to address this. We have already written “5 Facts about Manganese in Steel,” which explains the contributions of manganese to a steel’s properties. But let’s answer the question, “Is there a carbon steel without manganese?” The answer is no, and primary reason is because of iron pyrite.
There are always small amounts of sulfur in steel, and sulfur combines with the iron in the steel to form iron pyrite. Iron pyrite is also known as iron sulfide, though a more descriptive name might be iron persulfide.
Regardless, the iron pyrite material is formed as sulfur in the melt reacts with iron, segregates at grain boundaries and causes intergranular brittleness at rolling temperatures. This causes it to break, rather than behave in a ductile fashion and reduce under the pressure of the rolls.
By adding manganese to the melt, manganese preferentially ties up the available sulfur, forming manganese sulfides. This prevents the formation of iron pyrites in the grain boundaries, preserving the ductility of the steel at rolling temperatures. That is why every steel that we have encountered contains enough manganese to react with the sulfur in the melt.
Steel without manganese? I’ve never encountered it. And that is a good thing.
When these workers leave, we will need skills to replace them. What is your plan?
Openings for skilled workers as older workers retire are seen as the biggest challenge facing manufacturers in this economic policy report from Connexus Indiana and CBER Muncie.
“The most significant challenge facing Indiana’s manufacturing firms is the very high percentage of workers nearing retirement age (more than 1 in 6 workers over the next 10 years).”- CBER Manufacturing and Labor Market Frictions, Connexus Indiana, CBER Muncie Indiana.
“Since 1998, the share of manufacturing workers age 55 to 64 has grown from 9.8 percent to 16.8 percent, which is a 71-percent increase in share in less than a generation’s time. This rapid growth is because of the movement of the baby boom generation into near-retirement and retirement years. Although this transition is occurring across the economy, it is larger and growing more rapidly in manufacturing.”
And it is not just in Indiana. This trend can be seen nationwide. Skilled workforce: our greatest challenge.
If they don't manufacture anything, why should we call them manufacturers?
How can you call yourself a manufacturer if you don’t manufacture anything? The Economic Classification Policy Committee (ECPC) of the Census Bureau is considering changing the definition of manufacturing to include “Factoryless Goods Producers” (FGPs) as part of an update to the North American Industry Classification System (NAICS) 2017.
They say “A factoryless goods producer (FGP) establishment outsources all of the transformation steps traditionally considered manufacturing (for example, the actual physical chemical or mechanical transformation of inputs into new outputs), but undertakes all of the entrepreneurial steps and arranges for all required capital, labor and material inputs required to make a good.” Factoryless Goods Producer Fact Sheet
Buying stuff from other manufacturers isn’t manufacturing—it’s wholesale trade. If an establishment doesn’t actually manufacture something, why should it be classified as a manufacturer? If a company doesn’t have a factory and means of transforming inputs into goods, why should that be classified as manufacturing? If a firm doesn’t employ workers to transform inputs into finished goods, why is that manufacturing?
Type in “NAICS for 2017″ in quotes in the search box labeled "Rules, Comments, Adjudications or Supporting Documents."
Click “Comment Now!”
Follow instructions for submitting your comments.
There are many reasons to oppose the creation of a type of manufacturer called a factoryless goods producer. I put a bunch of them in my comments. But you only have to ask one logical question: How can you call yourself a manufacturer if you don’t manufacture anything?
And how does that help create statistics we can use if “manufacturer” no longer means “a company that manufactures?”