U.S. Sen. Gary Peters foresaw the pain points the country’s manufacturers would encounter during the COVID-19 pandemic and he’s actively pushing legislation he thinks could make the industry more resilient.
In Peters’ role with the Senate Committee on Homeland Security and Governmental Affairs — a committee in which he was formerly a ranking member, but now chairs — the Michigan Democrat and his fellow committee members launched an investigation into high drug prices. This deep dive, which was released in a 2019 report, revealed an overreliance on an offshore supply chain for key medical equipment.
“In that report, I concluded, when there is a pandemic in this country, the United States is going to be in a very serious predicament,” Peters told MiBiz. “A few months later, here we are; here we found ourselves in it. My report moved from being theoretical to real world, and it shows the vulnerabilities.”
As the industry is demonstrating as the pandemic marches on, the U.S. supply chain is efficient but not resilient, especially when it comes to pharmaceuticals, according to Peters.
The country’s shortage of microchips is another example of American manufacturers’ supply chain woes, one that has caused major disruptions to the automotive industry in recent weeks.
“We’re over-reliant on foreign sources for key elements of the supply chain,” Peters said. “We have to change that. We have to bolster our domestic supply chain and that means bolstering domestic manufacturing as a part of the supply chain.”
One voice
Peters has taken steps to encourage U.S. manufacturers to streamline and provide them with a singular voice in Washington, D.C. through a legislative package that he introduced on April 12.
The National Institute of Manufacturing Act is among the three bills included in the package. Peters originally introduced the legislation in 2019, but it died in the previous Congress.
The bill proposes the formation of a National Institute of Manufacturing within the Department of Commerce. Peters said that the idea for the National Institute of Manufacturing came from consulting with experts at the University of Michigan and that he wants to use the existing National Institutes of Health as a blueprint for how the federal agency would approach public-private partnerships.
Peters pointed to the fragmented nature of manufacturing and the absence of a unified strategy at the federal level as limitations. Currently, the United States is home to 58 federal manufacturing programs that are spread across 11 different departments and agencies.
“We need to streamline that,” Peters said. “And that’s what the National Institute of Manufacturing would do. We would have a chief manufacturing officer in the federal government that would oversee that and can speak with one voice to the needs of manufacturers to the executive branch and Congress, as well.”
Despite not gaining traction in the last Congress, Peters said that he hopes his legislative package may be included in the Endless Frontier Act, a bipartisan Senate bill to boost U.S. global leadership and competitiveness.
Against the backdrop of the pandemic, which has caused many disruptions for manufacturers, Peters said he thinks it’s an idea worth revisiting.
I believe (the legislative package) will have momentum and I talked at length with members of the Biden Administration about this idea,” Peters said. “They are certainly committed to strengthening manufacturing. It’s a priority for President Biden to do that.”
Peters also introduced The Manufacturing.gov Act, along with fellow senators Todd Young (R-Ind.) and Marco Rubio (R-Fla.). The bill would create an online hub to connect manufacturers with federal programs.
Peters worked with Rubio to introduce another bill, the The National Manufacturing Advisory Council for the 21st Century Act. The legislation would revive the National Manufacturing Advisory Council, which has only met intermittently in recent years. The council would advise the federal government on manufacturing programs while providing private-sector guidance and insight to the federal government.
The end game to the entire package is to keep up with other countries vying for manufacturing leadership — many of which have a unified federal strategy.
“We have to compete with other nation states that understand manufacturing is absolutely vital to their economy,” Peters said. “They put together a comprehensive strategy that strengthens their manufacturing businesses. … Two clear examples are Germany and South Korea. Those countries understand the importance of manufacturing and support it aggressively. I’m in that camp. I believe you cannot be a great country if you don’t actually make things.”
State groups on board
John Walsh, president and CEO of the Michigan Manufacturers Association, said that Peters has been a consistent voice for the industry and attributes his stance to the fact that he is from a manufacturing-rich state.
The MMA maintains open communication with Peters, Walsh said, noting that he fully supports the three bills, calling them advantageous for both small and large manufacturers.
“Our members, and the industry itself, spends a great deal of time trying to decipher federal law, and then state law on top of that, to determine how they can best operate, whether there are incentives available and how to connect with foreign markets,” Walsh said. “They have to go to a different department for an answer for each of those things. Having a National Institute of Manufacturing and a specific website and kind of this uber agency is a really good idea and long overdue.”
With the industry’s weaknesses in full focus, Walsh said the timing is also optimal. While the legislation might change, as it often does, he expects to see movement on it.
“(The pandemic) will produce some opportunities and this is one of them,” he said. “We’ve had the opportunity to look at our weaknesses and reassess where we want to go forward. Having a National Institute of Manufacturing to be responsible for that … will help us get to the other side even more successfully.”
Justine Burdette, regional director for the Michigan Manufacturing Technology Center-West in Grand Rapids, echoed Walsh’s sentiments on timing, saying that unprecedented measures can often address unprecedented problems or events.
“It is a new day,” Burdette said. “We had this pandemic and hopefully we are coming out of it now. Asking what can be done differently is a really healthy conversation to have.”
Peters also is a long-time proponent of the federal Manufacturing Extension Partnership, of which MMTC acts as a state representative. As such, Peters not only has his finger on the pulse of manufacturing, but specifically Michigan manufacturing, Burdette said.
“I think he recognizes our manufacturing strength, knowledge, knowhow and the importance to our Michigan economy,” she said. “I also think that he is really in tune and listens to our manufacturing sector and is aware of the vulnerabilities that COVID exposed.”