A full slate at ABC 2018 - Trade Only Today

A full slate at ABC 2018

Workforce, tariffs and more top industry agendas in Washington, D.C.
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The attendees gathered on the steps of the Capitol building before convening on day two.

The attendees gathered on the steps of the Capitol building before convening on day two.

WASHINGTON, D.C. — The boating and fishing industries converged on Capitol Hill from May 9-11 for the American Boating Congress and the Center Focus on Washington, concurrent events that were packed with high-profile speakers and workshops as well as meetings on Capitol Hill.

U.S. Interior Secretary Ryan Zinke, Environmental Protection Agency Administrator Scott Pruitt, “Fox News Sunday” host Chris Wallace and members of Congress were among those discussing workforce shortages, saltwater fishing regulations, aluminum tariffs and ethanol blends in fuel supplies.

There was a bit of levity too.

“Boating is not about race or gender or background; it’s about the length of your boat,” said U.S. Rep. Joyce Beatty, D-Ohio, drawing laughs from the few hundred attendees as she shared experiences of being aboard her family’s 70-foot Viking.

Heavyweight lineup

Zinke named Correct Craft CEO Bill Yeargin as a board member of the newly-developed Made in America Outdoor Recreation Advisory Committee, which was established November 8, and outlined the Interior Department’s vision for developing public-private partnerships at national parks.

“Public-private partnerships are what the park system does,” Zinke said. “Rangers don’t flip burgers. They don’t run hotels. Public-private partnerships have for long been in existence on public lands. There are some areas where I think we can get better. I think for running a dock system, there’s no reason why we can’t partner with a local boating entity.”

There is an $11.7 billion backlog of maintenance at public parks, he said.

“It’s tough for me to build new facilities when we’re tasked with maintaining the old,” Zinke said.

Many campgrounds, for instance, are designed to accommodate a station wagon and a tent, not today’s RVs and campers.

“A lot of our ramps and launching facilities aren’t configured for how people boat today,” Zinke added. “There’s a lot that can be done by boating advocates in public-private partnership that’s consistent with the mission. It’s not a free-for-all. It will be consistent with what parks are supposed to be.”

Wallace discussed covering the White House while President Trump is engaged in “the most direct assault on American press” that he has witnessed.

“Last year Trump tweeted about fake news more than 150 times,” Wallace said, pointing specifically to a tweet that called the “failing U.S. media … the enemy of the American people.”

Despite this, Wallace said “even hypochondriacs sometimes get sick.” He added: “I think this president has gone so far over the line, the press feels it has been given leeway to push back, and I think that’s a big mistake.”

When such attacks occur, it’s important for the press to stand together, Wallace said.

Pruitt discussed the EPA’s effects on the boating industry, touching on air emissions, fuel policy and environmental stewardship.

 

This year’s ABC had a full schedule of issues.

This year’s ABC had a full schedule of issues.

Modern Fish Act

Changing rules around saltwater fishing in federal waters was the top priority for the National Marine Manufacturers Association and the Center for Sportfishing Policy.

The groups say that the existing Magnuson-Stevens Fishery Conservation and Management Act is working for commercial fishermen, but not for recreational anglers.

“Magnuson Stevens is working OK for commercial fishing now,” said George Cooper, partner with Forest Tate Partners. “Environmental groups would love to let it sit as it is. That is not our case, and I think we’ve made that case very well on Capitol Hill.”

The Modern Fish Act, a bill that has moved through committees in both the House and the Senate, would amend the Magnuson-Stevens Act to differentiate between commercial and recreational anglers in federally managed salt water. The bill is expected to make it to the floor in the U.S. House and Senate this month.

One goal of the Modern Fish Act is to improve angler harvest data, said Mike Leonard, conservation director for the American Sportfishing Association.

The law also would require reviews of how fish are allocated, and differentiate between how commercial and recreational fishing are handled.

“A lot of these allocations were set in the 1980s,” Leonard said. “Given all the changes in society, fisheries and science, how we’re allocating this fishery is based on ideas from the 1980s. It seems crazy. We have bigger, faster boats, technology, electronics, and more people are going offshore fishing as a result.”

The annual industry gathering in Washington, D.C., offers participants the opportunity to talk face-to-face with colleagues from around the country.

The annual industry gathering in Washington, D.C., offers participants the opportunity to talk face-to-face with colleagues from around the country.

Workforce crisis

U.S. manufacturing is more robust than it’s been in years, but workforce shortages could hamper growth, said Chad Moutray, chief economist at the National Association of Manufacturers. While manufacturing is growing at 3 percent — its highest rate since 2014 — job openings are at an all-time high.

“Manufacturing is growing 3 percent,” Moutray said. “We haven’t grown at 3 percent since 2014.” Job openings, however, are at an all-time high, he said.

The industry rolled out its new workforce initiative, “10+1 Strategy: A Marine Industry Guide to Growing the Workforce.” It is the result of a yearlong collaborative effort among the Marine Retailers Association of the Americas, NMMA and Rhode Island Marine Trades Association.

The “10+1 Strategy” gives companies local, statewide and national strategies to implement on a local and national level to cultivate a workforce, MRAA president Matt Gruhn said at a workforce session during ABC.

The MRAA conducted a study two years ago among dealers to determine how much they suffered from workforce shortages, and found that 21 percent of positions at dealerships went unfilled. Of those, 59 percent were related to service.

“The projection at the time was that we’d see 31,000 jobs unfilled by 2019,” Gruhn said. “So we’re seven months away from that, and we’re in the process of recreating the study. By all accounts, expect to see that number got a little bit worse.”

Endorsed by 25 national, regional and state trade associations, the “10+1 Strategy: represents an industrywide business plan in the form of an all-new, instructive document designed to help address the workforce challenges currently facing the marine industry.

Authored by RIMTA CEO Wendy Mackie and her team, the guide has 10 strategies intended to cultivate a unified approach toward building the industry’s workforce, as well as a “plus 1” strategy that calls for hiring a national workforce coordinator.

Underpinning the 11 strategies are nearly 90 tactics and more than 20 resources that can be implemented and used by national, regional and state trade associations as well as industry employers.

“This plan provides a strong response to the issues impacting our industry’s employers,” said Mackie. “What we are most proud of is that it provides real-world, actionable solutions and empowers our employers to begin using the recommended tactics today. For boating to be successful in the economy, now and into the future, we must build a workforce that will allow for growth, success and sustainability.”

Paxson St. Clair, president of Cobalt Boats, prepares for meetings with members of Congress.

Paxson St. Clair, president of Cobalt Boats, prepares for meetings with members of Congress.

Rebranding trades

The workforce crisis presents a “huge opportunity,” said U.S. Rep. Paul Mitchell, R-Mich.

“We’ve neglected technical education in this country for 20 or 30 years,” Mitchell said. , echoing the message of many during discussions on Capitol Hill with legislators. “We decided everyone had to go to college. There reality is there’s a huge opportunity for people who want employment, but we don’t have people who have the skills.”

Katie Spiker, senior federal policy analyst with the National Skills Coalition, encouraged businesses to tell members of Congress that they are investing, but need the government to invest too, including reforming welfare programs to include giving people access to skills training.

“Apprenticeships are difficult and daunting to start on your own,” Spiker said. “Working with community colleges can be tough.”

The coalition is working to reform welfare because of the tightening labor market. “Getting people access to skills is a really important part of the conversation,” Spiker said. “We need to make sure these programs are promoting access to skills.”

The Manufacturing Institute is working on recruitment of youth, veterans and women, said Cristina Crawford, program communications associate. Events such as Manufacturing Day, awards such as STEP Ahead honoring women in manufacturing, and initiatives such as Heroes Make America are all designed to appeal to those groups.

“We work to place these students across manufacturing facilities across the country,” Crawford said. “We have a goal of an 85 percent job placement rate.”

Overall, industry in Maine is strong, said U.S. Sen. Angus King, I-Maine. “At virtually every business I visit today in Maine, the most significant problem is workforce,” King said.

Aging demographics and the opioid crisis are the main culprits for the lack of skilled workers, King said, adding: “That’s something everyone in this country has to be concerned with.”

“Frankly, the problem is there aren’t enough workers,” said Thom Dammrich, president of the NMMA. “It’s not that there aren’t enough workers that are trained; there just aren’t enough workers. The solution is legal immigration. We need immigration reform so we can get the flow of legal immigrants in this country. Our economy can’t grow without a growing population, and immigration is the path to achieve that.” 

Attracting millennials to boating  remains a focal point of the marine industry.

Attracting millennials to boating remains a focal point of the marine industry.

Tariffs

The boating industry is facing a “perfect trade storm” of three aluminum tariffs that are affecting supply and pricing, according to a panel.

There’s a 10 percent tariff on imported aluminum and a 25 percent tariff on steel. An additional 25 percent tariff has been laid on Chinese imports, including aluminum and steel products used in boat, motor and equipment production, coming into effect as early as June — with more, perhaps, on the way

“There has just been a proposal to add steel trailer wheels to the list,” said Kristin Heim Mowry, a partner at trade specialists Mowry & Grimson. “That could just be a U.S. manufacturer of these products wanting the government to penalize a Chinese competitor. It doesn’t seem to have much to do with intellectual property.”

The EU has threatened to retaliate with tariffs on all U.S.-made boats imported into Europe, a move to penalize specific U.S. industries including recreational boating.

“The effect on trade is real, and it’s impacting the bottom line of our manufacturers,” said Nicole Vasilaros, vice president of federal and legal affairs for the NMMA.

Several manufacturers said they were seeing prices rise 7 percent to 8 percent, preemptively, on aluminum and steel. Even if no tariffs are imposed, the starting point is now higher overall, some said.

Tariffs and trade adjustments “should be done with a scalpel and not with a chainsaw,” said Sen. King. “We have to be precise.”

Aluminum prices have fluctuated wildly during the past six months, at times jumping 30 percent, while supply of sheet aluminum used for making boats has become limited. Some pontoon boat builders, Vasilaros said, expect additional costs from the tariffs to add $750 to $4,000 to each boat’s cost.

Dometic’s suppliers have warned of 15 percent price increases, with monthly fluctuations for materials used in air-conditioning compressors, and that those prices could change monthly.

Three different types of tariffs are being levied on steel and aluminum. Those include 10 percent on imported aluminum and 25 percent on steel. The NMMA has formed a coalition with the Recreational Vehicle Industry Association and National Association of Trailer Manufacturers to lobby against the tariffs.

Heim Mowry is most concerned about the antidumping and countervailing duties handled by the Department of Commerce and International Trade Commission. The Commerce department announced preliminary duties ranging from 31 percent to 115 percent on specific Chinese companies.

“These kinds of tariffs are cumulative and could go on for generations,” she said.

The panelists urged ABC attendees to speak with members of Congress about their concerns on tariffs, and to speak at upcoming ITC hearings on July 17.

“It’s important that we emphasize how many manufacturing jobs are dependent on having access to aluminum at reasonable prices,” Vasilaros said, noting that aluminum boat builders employ 22,000 workers. “We’re talking about $3 billion in sales with 111,000 aluminum powerboats sold last year, and another 205,000 boat trailers. The economic impact is significant.”

U.S. Secretary of the Interior Ryan Zinke (left) named Correct Craft president and CEO Bill Yeargin  to the Made In America Outdoor Recreation Advisory Committee.

U.S. Secretary of the Interior Ryan Zinke (left) named Correct Craft president and CEO Bill Yeargin to the Made In America Outdoor Recreation Advisory Committee.

NAFTA

ABC panelists and attendees also focused on the uncertainties ahead for the North American Free Trade Agreement.

“We find ourselves at a moment when the economy is really ticking along,” said John Murphy, senior vice president of international policy for the U.S. Chamber of Commerce. “But our trade policies are causing quite a lot of uncertainty, both among our manufacturers and with partners abroad. The way this administration thinks about trade is different from every other postwar president. Trade is viewed as a zero-sum game. The only way to win is by someone else losing.”

Murphy said NAFTA negotiations were “coming to a head” as representatives from the United States, Canada and Mexico geared up to meet in Washington, D.C. The Trump administration is facing pressure to wrap up the negotiations by mid-May, allowing the U.S. Congress time to vote.

Canada and Mexico remain particularly concerned about U.S. proposals for auto manufacturers. One would give cars tariff-free treatments only if 40 percent were built in a high-wage country such as the United States or Canada.

“On automobiles, the most difficult part will be getting the Mexicans and Canadians to agree to a labor component equaling $16 per hour for 40 percent of the car,” said Kellie Meiman Hock, manager partner of McLarty Associates, an international trade consulting firm. “Bringing labor costs into the equation is highly unusual. Mexicans are saying that you can’t mandate these wages, and the Detroit automakers are saying they can’t compete with those stipulations.”

Meiman Hock said that other provisions, such as a sunset clause that forces NAFTA renegotiation after five years, would not give U.S. manufacturers enough of an investment horizon to decide whether to manufacture in Mexico.

“If they cannot come to an agreement, President Trump could withdraw from NAFTA and that might then force the parties to renegotiate,” she said.

U.S. boat and equipment manufacturers with operations in Mexico are watching. Matt Peat of Transhield, an Elkhart, Ind., manufacturer of custom covers for boats and more, said that 15 percent of its products are made in the United States and the remainder in Mexico.

“We have a local unemployment rate of 1.8 percent,” he said. “There are just not enough people in our area to do the manufacturing we need. That shortage of labor is now epidemic. It’d be a tailspin for us if NAFTA falls apart.”

Peat said that when the company started in 1994, it had six employees in Elkhart and four in Mexico.

“Now we have 60 people in the US and 300 in Mexico,” he said. “We’re building our future down there.”

Transhield remains “very concerned,” says Peat, about what is happening with NAFTA, especially the five-year sunset proposal. “It doesn’t give us enough clarity to develop a long-term outlook,” he said.

The panelists said the current negotiations should wrap up by May 17. 

Regulator Marine’s Joan Maxwell (left) and Grady-White’s Kris Carroll received a leadership award from NMMA president Thom Dammrich.

Regulator Marine’s Joan Maxwell (left) and Grady-White’s Kris Carroll received a leadership award from NMMA president Thom Dammrich.

Honors and awards

U.S. Rep. Garret Graves, R-La., received the 2018 Congressional Award for helping to introduce the Modern Fish Act companion bill in the House of Representatives. That bill cleared the House Committee on Natural Resources in December.

“We have seen increased participation in recreational fishing,” said Graves, making it important to ensure Congress has the right balance of guidelines for commercial and recreational fishing.

Former American Sportfishing Association president Mike Nussman received the Eddie Smith Manufacturer of the Year Award for his recreational fishing advocacy. Center for Sportfishing Policy president Jeff Angers presented the award, an antique sextant, to Nussman, who joined the American Sportfishing Association as vice president for government affairs in 1993 and took the helm as president and CEO in October 2001. He recently retired.

Regulator Marine president Joan Maxwell and Grady-White Boats president Kris Carroll received the 2018 Hammond Marine Industry Leadership Award for their service and commitment to advocacy on behalf of the recreational boating industry.

Dammrich said he was presenting that award to “two of the hardest-working people in the industry.”

This article originally appeared in the June  2018 issue.

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