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‘The defense production act can be used as a incentive rather than a weapon’: NAM CEO – Yahoo Finance


Jan 23, 2021

Jay Timmons, The National Association Of Manufacturers President and CEO, joined Yahoo Finance to discuss manufacturing outlook under President Biden.

Video Transcript


SEANA SMITH: President Biden laying out plans for the use of the Defense Production Act to combat the pandemic. It will help ramp up with the supply of masks, with testing, help with the vaccine effort. So for more on this, we want to bring in Jay Timmons. He’s the National Association of Manufacturers president and CEO.

And Jay, it’s great to speak with you again. I want to read a piece from your most recent statement that you sent out. And you said, a smart targeted approach between the administration and manufacturers can shape the use of the Defense Production Act. I guess, talk to me about what that partnership would potentially look like and how you think your association can better assist the Biden administration at this point.

JAY TIMMONS: Sure, and that’s a great question. Look, the Defense Production Act is designed to help our country get through the most difficult times usually during wartime. And obviously, this is a new type of war. This is a war on the health and the economy of the United States, the pandemic. So the Defense Production Act has been utilized several times over the course of the last few months in the previous administration.

What we would like to see and I think what President Biden and his administration is looking to do is to create a partnership with manufacturers that is incentive-based, basically looking at manufacturers who are willing to upend their operations and convert their lines to make PPE medical supplies. The supply chain for the vaccine, all of those types of things can be empowered through the use of the Defense Production Act.

ADAM SHAPIRO: What kind of discussions have you had with the new administration on doing just that? Because I would imagine you would be kind of the point organization to then reach those who actually do something.

JAY TIMMONS: Well, you know, yes, again, it’s been an interesting 10 or 11 months in that we’ve been working with a lot of our member companies to produce that PPE and medical supplies and now the vaccine. It’s been a frenzied exercise, as you might guess, as we tried to accommodate the great demand for those products. We have had numerous conversations with the administration.

We could not be more thrilled that Jeff Zients is heading up the pandemic response. I can’t think of a better leader for our times for that purpose. We’ve had numerous conversations since President Biden was declared the winner of the presidential contest. And what we have offered is we’ve offered our perspective of what has worked and what hasn’t worked over the last 10 months.

We’ve talked about exactly what you just mentioned, the Defense Production Act, how that can be used as an incentive rather than a weapon for manufacturers, and how we can work in partnership to develop these essential goods and supplies that are necessary to get us over the hump, to get us over the goal line to actually solve the problem of the pandemic and end it once and for all.

SEANA SMITH: Jay, from the conversations that you’re having, I guess, what regions at this point do you think are in the best shape versus those that need the most help right now?

JAY TIMMONS: You’re talking about with regard to the pandemic?

SEANA SMITH: Yeah, with regard to the pandemic and just in terms of the supply, what they need just in terms of masks, with ventilators, with anything that the manufacturers can assist with. Is there certain areas, I guess, of the US that need the most help at this point?

JAY TIMMONS: Yeah, you know, that’s a great question because it ebbs and it flows depending on where you are in the country. So look, I’m from the Midwest from a small rural community in southern Ohio. It was basically not affected during the first several months of the pandemic. But then, as more activity began to take place in my home area, as there was less focus on leadership from the federal government in terms of urging people to wear masks and social distance and stay away from crowds, you started to see the virus take hold in smaller communities.

So the initial response that manufacturers had to had to engage in dealt with large cities like New York and Detroit, for instance. Then we saw Chicago, others. Today, we still have the problem in the large urban areas. Los Angeles is a clear example of that. But you’re starting to see it spread all over. It really doesn’t matter. It doesn’t matter if it’s a red state or a blue state. It doesn’t matter if it’s rural or urban or suburban. You’re seeing it everywhere.

My own father succumbed to COVID. And he was very, very careful, always wearing a mask, always distancing. He only went to the grocery store, like, once a week. This thing is very, very dangerous. And manufacturers understand that, which is why we’ve been working from day one to try to get it under control, stop the spread. And now our job, we believe, is to get everybody in America to roll up their sleeves and get the shot.

ADAM SHAPIRO: Jay, when you talk about incentives for manufacturers, when the government does use the DPA, does it help a manufacturer who might be designated pay for the transition to whatever is the product that then has to be produced?

JAY TIMMONS: Well, that’s certainly one of the benefits of using it in the correct way. Absolutely. I mean, if you think about a manufacturer who’s making whatever they’re making, right, and there’s– and they hold up their hand, which many of them did over the course of the last several months, and say, look, we’re willing to shut down our line for this product and retool it to be able to make, let’s just say, masks. There has to be a financial– or there is a financial cost to doing that. And most of them can’t just absorb that themselves. That’s exactly why DPA was created.

It was also created to be able to have the federal government repurpose certain contracts. We prefer not to see that. We’d rather ramp up production and not interfere with the contracts that many manufacturers have already undertaken for many of these goods, many of these medical supplies. And we’d like to see us being able to ramp up American production from more of the PPE and more of these medical supplies here at home.

SEANA SMITH: Jay, before we let you go, I want to get just your quick thoughts because you issued a few statements. You were vocal on Twitter just about the riots that we saw on Capitol Hill a couple of weeks ago and also the delay and the transition of power initially from the Trump administration. You tweeted back on January 7th, just briefly saying that this is not the vision of America that manufacturers believe in and work so hard to defend.

I’m curious just what you’re hoping to hear from President Biden during his first 100 days, just in terms of helping to unify the country and bringing both sides together so we could move past some of the events that have taken place over the last several weeks.

JAY TIMMONS: Well, look, I think you’ve already seen it in the last two days. I thought that the inaugural ceremonies and the activity throughout today were absolutely beautiful. And they represented the best of America. They represented an America that wanted to come together, to heal, and to be able to move forward. And when we’re talking about healing, we’re talking about not just physically healing and our health healing because of the pandemic, we’re talking about healing the soul of this country, a very divided time for us. And I think most people are just weary of that.

I can say for manufacturers, we want to be part of the solution. We want to move forward, we want to ensure that America can continue to prosper, can continue to grow, and can continue to be the shining example of what democracy and our constitutional form of government is all about. And we want that to be a great example for the entire world. So I think that’s what we’re looking for.

We’re not going to agree with everything with this administration. We didn’t agree with everything with the last administration or the one before that. But there are so many things we can agree on– immigration reform, infrastructure investment, trade agreements, workforce development. There’s so many things that have already been put on the table that give us a path forward to work together to strengthen our country.

SEANA SMITH: Jay Timmons, always great to have you on, National Association of Manufacturers president and CEO. Thanks for joining us.

JAY TIMMONS: Thank you for having me.


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