Archive for the ‘Environment’ Category

California Targets Manufacturing Industry to Reduce Pollution

Tuesday, October 4th, 2022

On September 14, 2022, I had the pleasure of attending the California Metal Coalition quarterly meeting in San Diego held at the offices of C & H Machine in Escondido. The CMC website states: “California is home to 4,000 metalworking facilities, employing over 350,000 Californians with high-paying manufacturing jobs and health benefits.   Jobs provided by our industry are the path to the middle class for many Californians.”

After introductions, Executive Director James Simonelli provided an overview of legislation and rules changes that could adversely affect the metals industry in California. 

First, he discussed AB 423 – San Diego County Air Pollution Control District: members and duties. This bill was sponsored by Assembly Member Todd Gloria (elected as San Diego Mayor in 2020) on May 28, 2019 and was signed by Governor Newsome on Oct 11, 2019

He pointed out that while “existing law provides for the establishment of air pollution control districts and air quality management districts,” San Diego’s air pollution control district was handled by the County Board of Supervisors. AB 423 required the San Diego County Air Pollution Control District to become a separate agency with a specified membership as of March 1, 2021. It required local governments to appoint members to the San Diego County Air Pollution Control District governing board in a specified manner and appoint a specified liaison to consult with the United States Navy, the United States Marine Corps, and the United States Coast Guard. AB 423 greatly expanded the authority of the SDAPCD for permitting, compliance/enforcement, local air monitoring, and new rule making.

Next, Mr. Simonelli reported further developments with regard to AB 617 that was passed and signed by the Governor on July 16, 2017.  “It requires the California Air Resources Board (CARB) and air districts to develop and implement additional emissions reporting, monitoring, reduction plans and measures in an effort to reduce air pollution exposure in disadvantaged communities. It mandates a statewide strategy to reduce emissions, with a review at least once every five years. Through grants to community-based organizations, locals can more easily analyze data and participate in new air pollution reduction programs.”

The bill is supposed to provide the following benefits to disadvantaged communities:

“Quicker review of pollution control technology – In districts exceeding air pollution limits, the new law supports an expedited process to implement the best available retrofit control technology at industrial sites.

More significant penalties for polluters – Penalties increase five-fold to $5,000 for violating air pollution laws from non-vehicular sources”.

However, Mr. Simonelli said that the task force was set up to find out what concerns disadvantaged communities had with regard to pollution, and the task force is currently looking at facilities where welding of metal is being done as welding operations can create emissions of lead, hexavalent chromium, copper, nickel, and cadmium.

The next item for discussion the agenda went along with California’s recent ban of the sale of new gasoline-powered cars and light trucks by 2035.  They would also like to have Zero-Emission Forklifts.   

Mr. Simonelli said they are targeting internal combustion forklifts, such as propane powered, with a lift capacity of 12000 lbs. or less.  “New equipment cannot be purchased after 2026, and current equipment must be phased out between 2026 – 2038.  The primary option will be electric forklifts.  CMC submitted formal written comments to CARB on August 19 2022.  This measure is scheduled for consideration by the Board in 2023.”

The CRB website states, “Accelerating the transition to zero-emission technologies, where feasible, is an important component of CARB’s strategy to meet the state’s air quality and greenhouse gas reduction goals. As such, CARB staff is currently developing a measure that would drive greater deployment of zero-emission forklifts within fleets throughout the state. This measure, which has been identified in CARB’s Mobile Source Strategy, State Implementation Plan, and Sustainable Freight Action Plan, is one of several near-term actions intended to facilitate further zero-emission equipment penetration in the off-road sector.

CARB staff is currently developing a measure that would drive greater deployment of zero-emission forklifts within fleets throughout the state. This measure, which has been identified in CARB’s Mobile Source Strategy, State Implementation Plan, and Sustainable Freight Action Plan, is one of several near-term actions intended to facilitate further zero-emission equipment penetration in the off-road sector.

Forklifts operate in many different industry sectors but are most prevalent in manufacturing and at freight facilities, such as warehouse, distribution centers, and ports. There are approximately 100,000 forklifts operating in California.”

If you are thinking you are safe because you don’t live in California, think again. In reporting on the ban of gas-powered cars, CNBC reported: “The decision is expected to have sweeping impacts beyond California and will likely pave the way for other states to follow. At least 15 states including New Jersey, New York, and Pennsylvania have adopted California’s vehicle standards on previous clean car rules.”

Mr. Simonelli then discussed two proposed rules by the South Coast Air Quality Management District:

 Proposed Rule 1460 – Control of Particulate Emissions from Metal Recycling and Shredding Operations.  

This rule addresses controlling emissions (fugitive dust) from scrap recycling of which there are about 200 in the district along with several shredding facilities.  It would affect registration, housekeeping, water use, and potential enclosures at these facilities. The first Working Group meeting was held on March 16, 2022, and two additional Working Group meeting were held in May and July.  There was a Public Workshop on September 6, 2022 and a special public hearing on September 21, 2022.  A notice for the final Public Hearing was sent out on October 4th announcing the final Public Hearing to be held November 4, 2022, when the board votes on the proposed rule. 

Proposed Rule 1435 – Control of Toxic Emissions from Metal Heat Treating Processes.

This rule address controlling emissions from heat treating, forging, brazing, plating, anodizing, and other processes in which metal is heated, which may produce hexavalent chromium. The first Working Group meeting was held August 6, 2019, and the University of California Riverside is conducting research on heating metal and creating hexavalent chromium. The SCAQD website states: “Hexavalent chromium is a toxic air contaminant that is a potent carcinogen mainly produced by industrial processes. Long-term inhalation of hexavalent chromium over a lifetime can:

  • Increase the risk of developing lung and nasal
    cancers
  • Cause or worsen certain health conditions such as
    respiratory tract irritation, wheezing, shortness of
    breath etc.

It is important for manufacturers to participate in industry organizations like the California Metals Coalition to be able to keep informed about issues that will affect their industry and have an organization that will lobby for or against issues that will affect their industry. Company owners do not have the time to do research on their own with regard to what their state legislatures and regulating agencies are doing that could adversely affect their company.  I strongly recommend that company owners and executives look into joining the organization that best fits your industry in your state as well as national organizations that keep track of legislation being considered by Congress, such as the Coalition for a Prosperous America, a non-profit, non-partisan organization working to “save American manufacturing, of which I have been a member for 11 years.

It will only be through unprecedented collaboration between organizations such as CMC, CPA, and many others that we will be able to achieve the vision of Industry Reimagined 2030 to transform the narrative of American manufacturing from one of inevitable decline to one of vibrant opportunity that is necessary to revitalize American manufacturing to create more jobs and prosperity for our country. 

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What is the Heart and Soul of Manufacturing?

Tuesday, March 15th, 2016

Once in awhile you read a book that has such kernels of truth that they touch your soul. One such book is The Heart & Soul of Manufacturing by Bill Waddell that I just finished reading. The subtitle reveals the focus of his book: “How Lean Management aligns with the better angels of our nature to create extraordinary business results.”

I met Bill in 2014 when we were both speakers at the Lean Accounting Summit in Savannah, Georgia and reconnected with him at the summit in Jacksonville, Florida last year. I knew that we connected at a higher level because of his presentations and the topics we cover in our blogs, but reading his latest book confirmed it.

Bill has been a lean guru for more than 30 years, and in his Introduction, he writes this about his journey, “During the time I have grown in my own thinking from seeing lean as an exciting new set of tools to use on the factory floor and in the supply chain, to an all-encompassing business and economic model, to what it truly is: All of the above driven by and centered on a powerful and rare organizational culture.”

My own lean journey has been much shorter ? only 10 years since I attended my first workshop about lean in 2006, but it was preceded by getting my certificate in Total Quality Management in 1993. By the end of the 1990s, I had discerned that TQM failed because it started from the bottom up with “Quality circles” and was not adopted as a philosophy or incorporated into the corporate culture by C-level management.

I began my lean journey with the viewpoint that the adoption and implementation of lean tools and principles would help American companies be more competitive in the global marketplace and play a role in “saving” American manufacturing as expressed in my book published in 2009.

When I read Bill’s book, I resonated with his statement, “The cut throat world of business, and especially manufacturing over the last thirty years, has become centered on the negative: laying off good people in pursuit of lower headcounts, closing plants and moving the work to China, decimating entire small towns across America, and bankrupting small suppliers by abruptly terminating long relationships and replacing them with cheaper foreign sources.” These facts are what motivated me to write my book, Can American Manufacturing be Saved? Why we should and how we can.

The understanding of the importance of the total transformation of the culture of a company was revealed to me when I took classes in 2014 from Luis Socconini of the Lean Six Sigma Institute to acquire my Yellow Belt in Lean Six Sigma and thereafter read his book, Lean Company.

After years of applying the Toyota Production System tools and principles in his consulting, Bill dug deeper into the precepts behind them to understand what enables “Toyota with its nearly perfect track record of providing lifetime employment to its workers ? and making a lot of money at the same time.” One of the five precepts that more Americans need to emulate is “Be contributive to the development and welfare of the country by working together, regardless of position, in faithfully fulfilling our duties.”

Bill realized that there are other people like him “who want to do their jobs well, but also want to treat people well…they want to have a positive impact on the world around them and especially on the people around them.” The purpose of his “book is to send the message to those people that it is possible to do both…it provides a path for good people to combine the crafts of their trade with their moral code, to be good manufacturers because they are good people, rather than feeling they must either be good manufacturers or good people.”

Bill’s book features in depth consideration of companies that are every bit Toyota’s equal in their people-centered culture: ATC Trailers, Barry-Wehmiller, and West Paw Design.

Bill states that a lean culture is more than a “feel good culture;” it must be “a driver for a completely different way of running the business.” It must be based on “servant leadership,” wherein “the servant leader is always asking, ‘How can I help?’ Leadership and management exist to enable the folks on the front lines to better serve customers.”

Bill writes, “Eliminating waste and empowering people intersect beautifully.” But, in the goal to eliminate waste, “The resources that are the most important to eliminate wasting are people’s time and talents.” He adds, “Traditional management sees human beings as little more than unique tools, while lean thinkers see people as the very heart and soul of the organization’s reason for existence.” And, “In a lean company letting a thinking, feeling, growing person go ? laying them off ? is a shameful waste of a resource that is both precious and has enormous economic value.”

Those familiar with lean will understand his emphasis in a subsequent chapter on organizing a company by value streams, which engenders the feeling that “we’re all in this together” in the “shared commitment to the common good.” In a company with a lean culture, “success is defined by how the team performs along the entire end-to-end value stream…Rather than pit people against each other for individual recognition, lean incentivizes people to help each other, and to do whatever they can to make the other folks on the team more capable, to enable them to bring more of their talents to bear on the job.”

In chapter 5, “It’s all about Growth,” he writes, “There is a widespread misconception that lean is a strategy for reducing costs by eliminating waste. Quite to the contrary, lean is an engine for growth. The purpose of waste reduction and ideally elimination is to free up capacity.” When you free up capacity, you can grow, produce more, and make more profits. As Bill writes, “no company has ever cut its way to success…Success can only come from more, and you can’t cut your way to more.”

In chapter 6, “Hard Core Culture,” Bill discusses what is meant by a lean culture in contrast to “the traditional culture of blame, and its companion – arrogance…that causes most companies to fail from the inside out.” While a lean culture eliminates blame to utilize the Deming Cycle of Plan, Do, Check, Act (PDCA), Bill states, “The core concept of respect for people is not just theoretical or philosophical respect based on the belief that we are all children of God and equal in His eyes. It is professional respect, as well…based on the knowledge that no one knows everything about a process or an operation, but everyone involved knows something.”

Chapter 7, “Accounting,” contains Bill’s easy to understand explanation of “the important aspects of lean accounting, and how they support the decisions a principled, faith driven manager…” Lean accounting measures costs “based on cross functional value streams, rather than in each functional silo. It is based on “real money…it largely does away with the various types of cost types typically assigned to them…Standard costs are done away with in lean.”

I became a big proponent of lean accounting after a four-hour module in my Yellow Belt class that was reinforced when I attended sessions at the Lean Accounting summits of 2014 and 2015.

In chapter 8, Bill recounts the horrific story of the Triangle Shirtwaist factory fire that I recounted in my own book, wherein 145 women workers died in a fire because the doors were locked so the women couldn’t get out via the stairs, three of the four elevators weren’t working, and the owners had not installed a sprinkler system. It was the worst industrial incident in American history. It shocked the country and “it set off a series of laws and changes in industrial safety that eventually put an end to sweatshops in the United States.”

Bill then recounts the stories of two equally or more horrific tragedies that occurred in 2012 and 2013 offshore: Tazreen Fashions factory fire in Bangladesh where 117 women died in a fire because of locked doors and no fire prevention system and the Rana Plaza factory building collapse killing more than 1,200 people. He comments, “Since NAFTA was enacted some twenty or more years ago there has been a flurry of global trade agreements that typically pay little more than lip service to moral and ethical issues…These same trade agreements have had the effect of causing American environmental regulations to be something of a sham…great swaths of American manufacturing has moved to places such as China and Vietnam where there has been little or no environmental concern.”

We have actually been outsourcing our pollution to primarily China or Mexico. There is no sky-high fence to keep the air from crossing our border with Mexico, so we are breathing the polluted air being generated by companies in Mexico. In addition, the horrifically polluted air from China is actually coming to the U. S. on the trade winds.

The rest of the chapter 8 is a rather lengthy discussion of the differences between a privately owned vs. a publicly owned company with regard to practicing moral principles in the conduct of business.

Chapter 9 focuses on people, as “lean is a completely people centered business theory… lean management assumes the best and is based on empowerment and trust.” A culture of lean eliminates the conflict between management and labor. He presents examples of the “talent development” aspect of lean and now some companies evaluate people on the basis on their skills and knowledge in a four-square quadrant for both compensation and leadership. He concludes, “The companies with the best people working together on the best teams are the winners, and putting the best people into the best teams is done by principled leaders, not on the basis of accounting parameters.”

Chapter 10 considers “A Few Specifics,” and one of them that flies in the face of modern technology is the elimination of ERP systems as lean companies “see big IT systems as creators of significant levels of non-value adding waste. ERP systems create the need for planners, production schedulers, cost accountants and buyers. They require data collection and entry, as well as supervisors to oversee all of this, along with the costs of the software and hardware itself.” He provides examples of how ATC and West Paw Design use much simpler systems based on kanban (“a Japanese term mean something like ‘display card'”) He explains “Lean companies operate on a demand pull basis, rather than sophisticated forecasting models. Under this approach, they set a minimal inventory level in place and their purchasing and producing simply replenish that which has been used to meet actual customer demand…”

He concludes, “Perhaps the biggest reason lean companies avoid systems such as ERP is their cultural aversion to complexity. Complexity is the enemy of short cycle time, and it is the enemy of continuous improvement.”

The final two chapters contain a plea to take action and start leaning. He states, “You can’t change the basic trajectory of the business unless you change how you manage it…The gut wrenching, radical transformation in the business is not on the shop floor ? it is in the management office.” He states that successful lean leaders don’t come to this enlightened approach to management through logic, “they come to it through their principles…a principled leader is not content with the basic shop floor tools…they delve deeper and deeper into lean to find the zone of the management structures and philosophies need to allow them to manage by their principles and they dive even deeper into the core of lean culture until they fully understand and support the cultural rules need to turn the whole company into one driven by the leader’s strongly held beliefs.” He encourages companies to “learn why a strong culture is the linchpin of Lean success.”

The kernels of truth I briefly highlighted herein are why I recommend this book to everyone who wants to live and work by his higher principles while achieving greater success. If more American companies had the type of lean culture that Bill envisions, we truly could rebuild our manufacturing industry to make America great again and create jobs for millions of out of work Americans.

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Why are there so few states with “Bottle Bill” laws?

Tuesday, September 22nd, 2015

American consumers have increasingly favored recycling to benefit their community and the environment. Recycling is defined as the process of collecting and processing materials that would otherwise be thrown away as trash and turning them into new products. One of the best ways to promote recycling is with “bottle bills,” which is another way of saying “container deposit laws.” A container deposit law requires a minimum refundable deposit on beer, soft drink and other beverage containers in order to ensure a high rate of recycling or reuse. After learning that only ten states have container deposit laws, I decided to investigate why this is the case.

I am sure that everyone would agree with the following benefits of recycling cited by the Environment Protection Agency’s website:

  • Reduces the amount of waste sent to landfills and incinerators;
  • Conserves natural resources such as timber, water, and minerals;
  • Prevents pollution by reducing the need to collect new raw materials;
  • Saves energy;
  • Helps create new well-paying jobs in the recycling and manufacturing industries in the United States.

The three steps to recycling materials listed on the website seem simple:

  • Step 1: Collection and Processing – Recyclables are collected by curbside collection, drop-off centers, and deposit or refund programs. Next, “recyclables are sent to a recovery facility to be sorted, cleaned, and processed into materials that can be used in manufacturing. Recyclables are bought and sold just like raw materials would be, and prices go up and down depending on supply and demand in the United States and the world.”

The one hitch in these steps is that it takes enough recyclable material to make it profitable to manufacture products out of recycled material or make new products that utilize recycled content, such as carpeting, park benches, and even asphalt. The question is do we have enough recycled material to make the clear water bottles that could be endlessly recycled?

When you think of all of the trillions of clear water bottles purchased in the U. S. by American consumers, you would think that there would be more than enough material to keep making water bottles out of recycled material without having to use any virgin material. However, since there are only 10 states with bottle deposit laws, this is not the case. These states are: California, Connecticut, Hawaii, Iowa, Maine, Massachusetts, Michigan, New York, Oregon, and Vermont. Oregon was the first state to successfully pass a bottle deposit law in 1971, Vermont was the second state to pass a bottle deposit law in 1973, and Hawaii was the most recent in 2002. Most of the other states passed laws in the 1980s. Delaware passed a law in 1982, but it was repealed in 2009. The deposit is 5 cents for every state except Michigan, where it is 10 cents.

Tennessee proposed a bottle bill in 2009 and 2010 that failed to pass even though ten county commissions voted to endorse the bill. It would have required a five-cent deposit on beverage containers. The recycling rate in Tennessee is 10 percent, which was projected to increase to 80 percent with a bottle bill. Discarded bottles and cans are the primary contributor to litter in Tennessee.

Texas attempted to introduce a bottle bill (SB 635) into legislation in 2011, but lost by a vote of 101 to 40. It would have required a ten-cent deposit on beverage containers under 24 fl. oz. and 15 cents for larger containers. Recycling promoters filled a new bill in 2013, SB 645, but it was left pending in subcommittee on 4/22/2013. Two new bills have been introduced in Texas in the 2015 legislative cycle ? HB 2425 Regarding Refundable Deposits and SB 1450 Calling for Refundable Deposits.

Why is there so much opposition to bottle bills?

According to the Institute, “Bottle bill opponents include beverage container manufacturers, soft drink bottlers, beer, wine and liquor distributors and retail grocers. As ‘new age’ drink containers are targeted for inclusion in existing bottle bills, juice, sports drink and bottled water manufacturers have joined the anti-bottle bill forces…”

Major opponents of bottle bills are:

  • Anheuser Busch
  • The Coca Cola Company
  • Pepsi-Cola Company
  • Can Manufacturers Institute
  • Distilled Spirits Council of the United States
  • Food Marketing Institute
  • International Bottled Water Association
  • National Beer Wholesalers Association
  • Grocery Manufacturers Association
  • National Food Processors Association
  • National Grocers Association
  • American Beverage Association

The Container Recycling Institute claims that these companies and organizations have spent huge sums of money “to defeat ballot initiatives over the past twenty years, with industry opponents outspending proponents by as much as 30:1.”

During the last three years the three leading container trade groups (Aluminum Association, the Glass Packaging Institute, and the Association of Postconsumer Plastic Recyclers) have changed their position and now support bottle bills because of the success of existing bottle bills.

What are the reasons given for opposing bottle bills? The Container Recycling Institute lists the following reasons on a page titled Myths and Facts:

  • Deposits aren’t needed where there is curbside recycling.
  • Deposit systems target only a small part of the waste stream (less than 3% of municipal solid waste (MSW) by weight).
  • Deposit systems address a small portion of litter: 7 to 25 percent.
  • Deposit return is inconvenient (consumers prefer home curbside bins).
  • Deposits rob curbside programs of valuable aluminum can revenue.
  • Deposits are more expensive than other recycling programs.
  • Deposit returns are expensive for distributors.
  • Deposits are a tax” and increase the price of beverages.

I live in California, which is one of the bottle bill states, and we also have curbside recycling in the city of San Diego. I prefer to separate out the containers for which I paid a deposit and take them to a recycling center to get my deposit money back. In the major cities of California, stores do not take the bottles back. You can take them to recycling centers conveniently located in the parking lots of neighborhood shopping centers or to municipal waste management landfills where privately owned recycling centers are located.

I do not understand how anyone could consider a deposit fee a “tax” because it is refunded. None of the sales taxes I pay are ever refunded to me. Also, under container deposit systems, the cost of recycling is borne by producers and consumers, not by government and taxpayers as is the case for curbside recycling programs.

The Container Recycling Institute says that beverage containers comprise 40-60% of litter. Because of the bottle deposit law in California, you rarely see any bottles as litter. Homeless and poor people pick up all of the bottles that could be litter on streets and sidewalks to turn them in to get the deposit money. States that have bottle bills “showed reductions in beverage container litter ranging from 69% to 84%.”

In January 2015, a report was released, “Waste and Opportunity 2015: Environmental Progress and Challenges in Food, Beverage, and Consumer Goods Packaging” by Conrad B. MacKerron, Senior Vice President of As You Sow, a nonprofit organization dedicated to increasing environmental and social corporate responsibility. The Project Editor was Darby Hoover, Senior Resource Specialist of The Natural Resources Defense Council (NRDC), an international nonprofit environmental organization with more than 1.4 million members and online activists.

The report revealed that “With an overall recycling rate of 34.5 percent and an estimated packaging recycling rate of 51 percent, the United States lags behind many other developed countries.” With regard to beverage recycling, the report states, “Major beverage companies like Coca-Cola, Nestlé Waters NA, and PepsiCo are taking positive individual actions to boost bottle and can recycling. Still, most brands support neither a container deposit nor an EPR (extended producer responsibility) scheme to boost recycling—two proven ways to increase container recycling.”

With regard to beverage containers, PET (Polyethylene terephthalate) is the material most frequently used and thus is “currently the most recycled plastic material, yet only 30 percent of PET bottles are recycled. But since 94 percent of the U.S. population has access to PET collection, there is much more PET that could be recovered. “High demand and limited supply for recycled PET (rPET) demonstrates the economic potential of increasing recycling rates if materials can be recovered without significant contamination.” However, “U.S. reclaimers reported average yield losses of 31 percent for PET bales from curbside programs and 25 percent for bales from deposit programs” due to contamination by other recycled materials.” The report recommended expanding the use of PET to other types of packaging such as clamshell food containers to increase the supply of rPET.

One good reason to expand container deposit laws is stated in the report: “Recycling also helps create new, well-paying jobs in the recycling and manufacturing industries. The firms that process metals, paper, electronics, rubber, plastic, glass, and textiles represent 137,000 direct jobs and $32 billion in revenue. When suppliers and indirect impact are factored in, the industry supports nearly half a million jobs and generates a total of $90 billion annually in economic activity. If we increased the U.S. national recycling rate to 75 percent by 2030, we would generate nearly 1.5 million new jobs.”

Other key findings of the report were:

  • Up to 50% of the U.S. population may lack convenient access to curbside recycling for commonly recycled materials like bottles, cans, and newspapers.
  • Companies are required to pay for collection of materials in Europe, Canada, and other markets, but fight accepting that responsibility in the U.S.
  • Many companies also fight container deposit legislation – the most successfully demonstrated method to increase recycling rates, yet only operating in 10 states.

I agree with one of the recommendations of the report: “Increasing our ability to recycle packaging successfully will lead us closer to developing a circular economy in which raw materials are captured and processed to re-enter commerce many times over, thus increasing resource efficiency and reducing greenhouse gas emissions and our reliance on nonrenewable natural resources.”

Since clear PET plastic bottles can be recycled nearly endlessly, one of the best ways to accomplish this is to pass bottle bills in more states in the U. S., so we can increase the domestic supply of recycled PET. We also need to pass legislation to keep recyclers from selling the PET containers to China so that American companies like Plastic Technologies Inc. won’t have to buy recycled PET from other countries.

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Entrepreneurial Spirit Molds Success of Plastic Technologies Inc.

Tuesday, September 22nd, 2015

During my tour of manufacturing plants in the Toledo, Ohio region last month, I decided to write an article about Plastic Technologies, Inc because of the interesting story about Dr. Tom Brady who founded the company in 1985. When I interviewed Dr. Brady last week, he told me that when he worked for Owens-Illinois, Inc. from 1971-1984, he had become the VP and Director of Technology and had led the development of the first PET (polyester) plastic soft drink container and had directed the technical activities for all of O-I’s plastic product lines.

When I asked him what led him to start PTI, he said, “In late 1985, I happened upon a unique opportunity to start the company. Several of the major Coca-Cola bottlers were seeking to expand their already successful PET bottle manufacturing operations and to develop new and innovative PET plastic soft drink packaging products. The four largest Coca-Cola regional bottling cooperatives agreed to jointly sponsor and fund product development and engineering projects, and they approached me to manage those project development efforts. Not having an interest in just changing jobs, I made a counter offer to those Coca-Cola cooperatives to establish a separate independent company for the purpose of managing their projects. When they agreed, I left O-I to start Plastic Technologies, Inc. and signed long term contracts with all four Coca-Cola cooperatives.”

Dr. Brady also said, “Because of my industry experience, I was quickly able to identify additional customers that were non-competitive to Coca-Cola and I hired a small, but highly experienced professional staff, to do the technical development for the Coca-Cola Cooperatives and for other customers. Because of our professionalism and experience, we were quickly able to establish a reputation in the industry as a high quality PET R&D and technical support company. As our technical staff expanded and our revenue grew at compound annual rates of 35%, we moved to a larger facility in 1989 and set up both analytical testing and process development laboratories, with the capability of prototyping and testing PET containers and preforms. We founded Phoenix Technologies International LLC in 1991 in nearby Bowling Green, Ohio and have since then expanded the plant three times to produce recycled PET using proprietary technology.

Because PET had become the material of choice for new packaging during the 80’s and 90’s, we were able to quickly expand our customer base and to become involved in developing many different products and businesses, including health care packaging, plastic recycling, specialty compound development, and even leisure products. Our experiences outside the PET packaging field provided a basis for us to hire additional technical professionals to staff our laboratories and establish a reputation in the plastics industry as a substantial technical development company.

Since those early days, we have developed relationships with most major manufacturers, resin suppliers, machinery builders, brand owners, and converters. Today, we even supply preforms for blow molding to customers needing specific quantities or unusual designs. We have also learned how to work effectively with competitive customers andwe have become recognized for our excellence in protecting customer intellectual property and confidentiality. Today, our customers are involved in every step of the PET value chain from raw material supply through end of life recyclability.”

I asked if they were affected by the Recession of 2008-2009 and if so, what did they do to survive it? Dr. Brady said, “The recession did have a big effect on PTI’s business, but the recession, per se, was not the most significant issue. Rather, the recession just added to the challenge of changes that were already happening in the world at large. As is true for almost every business today, one of the challenges for PTI today is to redefine its business going forward. Dr. Brady said that what PTI has done successfully for 30 years is no longer as different and special as it once was. The challenge for PTI, and for every business today, is to find the “gaps” in the markets of the future that can be filled by employing the experience and knowledge that has been developed over many years.

Mr. Brady did say that “we had to do some things differently during the recession. We had to get more professional about sales because there are many more companies selling the same technologies and services now. The biggest impediment to our continued growth is that there are more competitors, so that staying ahead of the competition is a bigger challenge.” When he started the company, he was working with the top levels of management at his major customers. Now, he says that business is being done at a different level. More business is handled today by professional purchasing agents, so you have to be more price competitive than in the past. They also went through formal training in Lean, which has been beneficial to their manufacturing businesses, because, he says, “You have to be more efficient to be competitive in every aspect of your business today.” However, the Lean initiative didn’t affect PTI’s testing lab. Rather, becoming ISO certified has had more of an impact on that lab.”

Since I had seen a whole wall of patents PTI had been granted on display at their headquarters, I asked if the change in patent law under the America Invents Act of 2011 affected his company. He replied, “We have to take the steps to be “first to file” instead of being able to rely on being “first to invent.” We have to file more provisional patents than we ever had to in the past, which adds another big burden and costs that we didn’t have previously. Our number of patent applications has shrunk now that we can’t depend on being first to invent. Anything that adds bureaucratic activity becomes a burden on business.”

After my visit, I had emailed Dr. Brady information on the proposed patent legislation (H.R. 9 and S.1137) and asked if these bills would have an effect on his company.” He responded, “You don’t have time to fight everything that comes up. You try to work around it. In fact, we find that patents are less valuable than they used to be. It is more important to be first to the market and to be innovative. Our growth hasn’t been about becoming a bigger and bigger company. We started Phoenix Technologies and our other companies so that those teams could be more entrepreneurial themselves. Our growth model has been to expand by creating our own “Intrapreneurs,” by offering those intrapreneurs ownership and by growing as a family of companies. Our PTI family of companies now includes two manufacturing companies, two technical development and engineering service companies and three joint venture companies that license technology or sell specialty services to the packaging industry (Preform Technologies LLC, Phoenix Technologies International LLC, PTI Europe SARL, PETWall LLC, Minus 9 Plastics LLC and The Packaging Conference). Today, many PTI employees are owners and are in a position where they can truly feel it’s their company. Any employee can be considered by the management team for an opportunity to buy an equity stake, and 40% of PTI employees are owners today. We have more than 200 employees worldwide and many of the products you buy every day are sold in plastic containers designed by one of our companies.”

During my visit, I was astonished to learn that there are only 11 states that have bottle deposit programs to encourage recycling ? California, Connecticut, Delaware, Hawaii, Iowa, Maine, Massachusetts, Michigan, New York, Oregon, and Vermont. In these states, about 80% of bottles are recycled, while in non bottle-deposit states only about 20% of bottles are recycled. I asked why more states didn’t have bottle deposit programs, and Dr. Brady responded that many major companies oppose the programs because they say it would add to their costs. Dr. Brady explained, “You have to have an infrastructure in place to get enough material to make recycling profitable. However, he emphasized that everybody, even those who think deposit systems cost more money, would win if there was more recycled material, because the costs for virgin material would go down. He also pointed out that a lot of the recycled material goes offshore to China and other Asian countries because it is cheaper to ship the material in the empty containers that are going back to Asia than it is to ship the material to Ohio. We are a big enough company that we can buy recycled material from other sources in Mexico, Canada, South America, and even Iceland, and, we also benefit because we put it back into the highest value end-use products ? food and beverage containers. Dr. Brady pointed out that when China and India get to our standard of living, there isn’t going to be enough of all raw materials to go around. That means that reusing all materials will eventually become necessary and that recycling will become a significant industry, rather than to remain a “nice thing to do.”

During our interview, I learned that Dr. Brady had taken a leave of absence from the company in 2009 to become the Interim Dean of Education at the University of Toledo. He said, “At first, I was judged by the faculty and staff at the college to be a poor choice as the interim dean. However, I actually had the advantage of being completely dependent upon the expertise and experience of the faculty and staff at the college. I made a personal commitment to get to know each and every person in the college and to understand the personal and professional backgrounds of everyone. As a result, we were able to work together to craft a mission and strategy for the future and to create a climate of success going forward.”

Therefore, I wasn’t surprised to learn that Dr. Brady’s grandfather founded the University of Toledo’s college of secondary education. His mother, an aunt, his two sisters and both grandmothers all taught school. He doesn’t just “talk the talk”; he “walks the talk.” When he was interviewed by Plastic News prior to being inducted into the Society of Plastics Industry Hall of Fame in, 2012, he said, “My goal is to help anywhere I can to make education better. If we don’t educate our kids in this country, we’re lost. Our only competitive advantage is being able to be entrepreneurs. The rest of the world can catch up in everything else, so we better figure it out. And, there are not going to be enough unskilled jobs in the future, so you better educate people so they can go out and create their own jobs.”

Dr. Brady emphasized the importance of education and training in the whole economic development equation by saying, “In a sense, I think I could reduce the entire economic development issue to just this one issue. That is, if we spent every one of our economic development dollars on building a world class K-16 education and training system, I truly believe that economic development would happen naturally as a by-product of that initiative.” He reiterated a point that he had made to the mayor of Toledo a few years earlier:

  • Higher per-capita income is a by-product of higher-paying jobs
  • Higher-paying jobs are a by-product of knowledge-based commerce
  • Knowledge-based commerce is a by-product of education and talent
  • Talent and education are by-products of a superior K-16 school system, substantive trade and skill development institutions, and a superior teaching and research university.

I completely concur and made similar points in my book, Can American Manufacturing be Saved? Why we should and how we can, as well as the several blog articles I have written about workforce development and attracting the next generation of manufacturing workers. Manufacturing jobs are the foundation of our economy and the middle class. We must strengthen our manufacturing industry to create more jobs if we want our children and grandchildren to have an opportunity to live the “American Dream.”

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Posted in Cleantech, Environment, Innovation, Manufacturing, Patent Reform, Technology | No Comments »

New Textile Dyes and Fiber Could Generate Paradigm Shift

Tuesday, August 11th, 2015

It is rare to encounter a technology that is so disruptive that it has the potential to generate a paradigm shift, and I had that opportunity last month when I interviewed Suzanne DeVall, founder and president of PBO, Inc. Her patented technology for utilizing the bi-product from tobacco plants to create a new textile fiber and natural dyes could generate a paradigm shift in the textile and leather industries.

I first met Ms. DeVall over four years ago when I was a managing member of a small business incubator for startup companies in the “clean technology” field. She was too early stage for our program, as she was going through a lengthy R&D stage, but I kept in touch with her to keep informed of her progress because I thought her technology had great promise.

In my recent interview at her office in Palm Springs, I asked how and when she got the idea of utilizing tobacco plants. She said, “I’ve been involved with the textile industry for over 30 years and have been a champion for organic materials. From 2007 to 2009, I was part of a small team who traveled to growing areas in Europe and the Middle East to set controls for certified organic textiles. In Turkey and Syria, I saw organic tobacco fields near cotton fields. Tons of plant material was going to waste since they only harvested the leaves for tobacco products, and I thought it would be interesting to see if a textile fabric and natural dye could be produced out of the tobacco plant bi-product. I began working with scientists in the Carolina Research Triangle along with key scientists in the tobacco agricultural and harvesting industry to verify that there was a large amount of raw material resources to support a large scale industrial project.”

I told her that I had written about the devastation of the southern textile industry in my book due to mills closing after transferring textile manufacturing to China, India, and other Asian countries. The textile industry lost 57% of it jobs from 2000 – 2010, and North Carolina had a large number of textile companies, so was the state most impacted by job losses in that industry. It was no wonder that North Carolina scientists were interested in a new textile fabric and dyes made from one of the state’s major crops.

Ms. DeVall continued, “With the assistance of leading scientists, we began converting the tobacco plant bi-product into a viable textile dye. After thousands of trials, our work led to the AvaniTM Color System to be sold under our wholly owned subsidiary, Dimora Colours, Inc., and I was issued a patent on April 8, 2014. We convert our extracted liquid base to a one-step and two-step powder process that is water-soluble. Our research also resulted in a “spinable” fiber that could be woven into fabric, but you can’t patent a fiber any more than you can patent fabrics made out of cotton, silk, flax, hemp, or wool.”

I asked why organic dyes are important, and she said, “The apparel industry is a seven trillion dollar a year industry that uses an astounding 8,000 synthetic chemicals, so it has a big pollution problem. The World Bank estimates that 17 – 20 percent of industrial water pollution comes from textile coloration and treatment. They have identified 72 toxic chemicals in our water solely from textile dyeing, 30 of which are permanent. This is a serious environmental issue for the industry. The U. S. EPA and other national and international agencies have placed increasingly strict regulations on the manufacture and use of synthetic colorants. The pigment and dye industry has had to develop the technology necessary to analyze and remediate pollutants in wastewater.”

She added, “Consumers have the mistaken illusion that synthetic fibers and dyes in clothing are safe. Your skin is the largest organ of elimination and absorption—what goes on the skin goes in the body. When toxins are absorbed through your skin, they are taken-up by the lymphatic system, then into the blood stream and eventually the liver to remove the toxins from your body. Your skin also keeps you healthy by actually eliminating about one pound of toxins daily.”

Our process doesn’t need the pre-treatment, washing, soaping and adding of enzymes, so it only takes three hours compared to the 8 to 10 hours of the traditional dyeing process. With our organic materials, we do not require harmful chemicals for processing the fibers and dyes. Our one-step and two-step powder process is a key development for saving energy, water, time labor and shipping costs. Our dyeing process saves about 60% of labor, energy, and water.”

 

I asked how she came up with that figure. She said, “We have been in clinical trials with major dye houses in the United States, Japan and Europe over the past 18 months with great success. We ran dyeing trials using our dyes at three companies, and these companies told her that it saved them about 60% of labor, energy, and water. They don’t have to heat water for so many different batches to do the pre-treatment, dyeing cycle, soaping, washing, and enzyme treatment.

She added that they use a water filtration system prior to delivering the colorant to the fibers in the final stages. “The water required for our closed loop system does not have to be of a high quality as our process purifies the water. The remaining water is then reused for the next batch. Our water system utilizes the content of the discharge and neutralizes it to a PH of 7.0; which is alkaline not acidic. As this discharge is neutralized during our process, the water is not only safe, it is also drinkable. This is a very attractive and cost-effective major benefit to third world countries where water is a scarce resource.”

 

Ms. DeVall then showed me many different samples of fabric, household textiles, and leather that had been dyed using her proprietary dyeing process. She showed me samples of cotton, hemp, silk, cashmere, and her tobacco fiber in addition to combinations of all of these fibers. The colors were so rich and vibrant that I wanted something made out of every different fabric. The colors ranged from a soft butter yellow to a rich dark purple. The leather was so soft that I thought it was deerskin, but she said it was just normal cowhide. The natural properties of her tobacco plant based dyes have a softening effect on leather that reduces the amount of tanning required.

I next inquired about the industries that could benefit from the AvaniTM Color System. Ms. DeVall responded, “In addition to the apparel industry, our dyes could obviously be used by companies producing household linens and textiles. But there are several other industries that could benefit from using our dyes, such as the leather goods industry, furniture manufacturers for fabric and leather upholstery, paper and packaging, and cosmetics. Our dye powders could also be added to PET material that comes in a powder to make colored bottles and containers without any added chemicals.” This made me think of the company I visited on my plant tour in Toledo, Ohio, Plastic Technologies, Inc., because they make clear and colored bottles and containers out of PET material.

This led me to ask how they plan to market their products. Ms. DeVall replied, “We plan to obtain licensing agreements with companies in different industries and regions of the world. We have discussed a license agreement with several dye manufacturers to process all our major orders. We would provide the technology and they would provide the processing facility and produce the dyes on a royalty arrangement. We have secured our first license agreement with a company in Japan to sell in Japan, Korea, and Taiwan.”

On my drive back home to San Diego, I felt as if I had been given a rare gift of an encounter with a visionary whose knowledge, experience, and tenacity had given birth to a new technology that could indeed generate a paradigm shift in more than one industry and make our global environment better in so many ways. I look forward to writing a future article about PBO’s success.

 

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California’s Metalworking Industry is a Leader in Technology and Environmental Consciousness

Tuesday, May 13th, 2014

The California Metals Coalition (CMC) held their 41st annual meeting in Anaheim on May 8-9th, 2013. Over 150 business leaders from metalworking companies and the industry’s service providers attended the meeting. The California Metals Coalition membership is a diverse representation of the state’s metals industry. Membership in CMC is corporate, and the employees of each facility are individual members of the organization. The member companies are small businesses ? the average number of employees per company is only 50, so without an organization to be the voice and advocate for the metalworking industry in California, these companies and this industry would have no influence on statewide policies affecting them.

California’s metalworking industry began when metalworking facilities were established in1848 to manufacture the tools that led to the start of the gold rush and birth of our state in 1850. Today, California is home to 6,100 metalworking facilities, employing approximately 213,500 Californians, providing high-paying manufacturing jobs, health benefits, and a solid economic foundation to the Golden State. This level of employment represents 18% of California’s 1.2 million manufacturing jobs. This industry generates $12.2 billion in goods and services and $7.9 billion in wages for the economy.

The types of services provided by member companies includes: sand, permanent mold, investment, rubber/plaster mold, and die casting, machining, forging, metal fabrication and welding, metal stamping, metal finishing, metal raw materials, metal recycling, and tools and dies.

According to CMC data, in the metalworking industry, 8 out of 10 employees are considered ethnic minorities or reside in communities of concern. Living-wage employment for this diverse workforce can be found in working-class communities throughout the state because the average full-time hourly wage is $18.00 (not including benefits) or $37,000 per year. Jobs provided by this industry are the path to the middle class for many Californians.

What do these companies make? Metal manufacturers make the parts that go into solar panels, electric cars, medical devices, airplanes, unmanned vehicles, ships for the Navy and private companies, products for the military and defense industry, and thousands of other applications. Metalworking products and services are a direct reflection of the innovation and hard work put forth by California’s workforce and business owners.

Californians discard enough aluminum each day to build five Boeing 737 jets, and California metalworking companies recycle millions of tons of discarded metal each year. Metal is recycled and used as the primary material source to build components that fly our planes, housings that spin renewable-energy windmills, medical devices that keep our families safe, and defense items used by our troops. California metalworking companies recycle about 1,830,000 tons of metal per year, and every ton of waste that is recycled rather than disposed in landfill produces $275 more in goods and services.

The keynote speaker of the conference was Jerome Horton, Chairman of the Board of Equalization, who acknowledged the importance of this industry to the economy of California by mentioning some of the above data. He said that the BOE is helping California companies grow and had worked with the California Metals Coalition and other organizations to obtain the new manufacturers exemption tax credit that was signed into law by Governor Brown as part of Assembly Bill 93 and Senate Bill 90. This exemption will become effective July 1, 2014 and expires on July 1, 2022. It applies to specified NAICS codes, applicable to the whole metalworking industry and has a $200 million limitation. Tax-exempt property must be used 50% or more in one of the following activities:

  • Manufacturing, processing, refining, fabrication, or recycling tangible property
  • Research and development
  • Maintaining, repairing, measuring, or testing any qualified property
  • As a special purpose building and/or foundation

The BOE expanded the meaning of this tax credit to apply to tooling, whether it is retained or sold. Tooling must be either manufacturing by a company or purchased, be used in the manufacturing process, and have a life of over one year.

He also outlined the benefits of the new employee hiring credit that replaces the tax credits offered by Enterprise Zones that have been eliminated. This tax credit is based on wages of $12-$28/hour. There is a maximum of $56,000 per employee over five years, and the credit is equal to 35% each year.

The BOE has a much larger reserve than they need and are starting to refund monies to California companies. Last year the sales tax revenue increased from $52 billion to $56 billion, which helped enable the state budget to be balanced, but the State still has $300 billion in debt.

Kimberly Ritter-Martinez, Chief Economist for the Kyser Center for Economic Research at the Los Angeles Economic Development Corporation was the next speaker. She provided an overview and comparison of the national economy and the state economy. If California were a country, it would be the 9th largest economy measured by Gross Regional Product in the world. However, California is lagging the national average in creating jobs, so that the unemployment rate in March was 8.1% compared to 6.7% nationwide. Jobs in durable goods manufacturing only increased by .8% for the state. She predicted 2.4% growth in the State GRG in 2014, and 2.9% in 2015.

Although California is losing businesses to other states, the LAEDC has helped companies such as Space X and American Apparel stay in California.

Jack Broadbent, Executive Office of the Bay Area Air Quality Management District, was added to Thursday’s schedule of speakers as he had a conflict with attending on Friday as originally scheduled. The Bay area District was established in 1955, includes 9 counties with a population of seven million, and covers 5,540 square miles. The purpose of the Bay Area District was to improve air quality by reducing particulate matter, noxious odors, reduce visible emissions, and reduce future emissions. The California Air Pollution Control Officers Association (CAPCOA) was formed to coordinate the rules of many local and statewide agencies involved in air quality.

In 2013, two new rules were adopted after extensive consultation with industry and other stakeholders. Rule 12-13 applies to foundries and forges, and Rule 6-4 applies to metal recycling operations. The Bay Area District led the state in creating an Emissions Minimization Plan to focus on fugitive emissions by reducing particulate matter, toxics, and odors. It incorporates continuous improvement via on-going facility assessments and Plan updates. All the draft plans have been received, and the next step will be a determination of District completeness, a public review period, District review and approval, followed by facility implementation.

In the Q & A period, I asked if the air pollution being transported by the trade winds from China is being taken into consideration, and he said that they have had to adjust the base of the ambient air quality because of the transported pollution. He has been to China five times in the past three years, and he said that China’s particulate matter in their air is more than 10 times the U. S. standard.

Brian Johnson, Deputy Director of the Department of Toxic Substances Control (DTSC) was the next speaker. He briefly described the Hazardous Waste Management program and the new Policy and Program Support Division that was formed after restructuring last year. The metalworking industry is getting a great deal of attention by the legislature, regulators, and the community around specific metals sites. A Hazardous Waste Reduction Initiative was introduced into the legislature last year, and a Safer Emissions Products Initiative is on the horizon. The Department is using 17 categories of pollution burden data of Census Track ratings to prioritize their response to community complaints for specific metals sites.

The next topic was workmen’s compensation insurance, and State Senator Ted Gaines (R) who is a candidate for Insurance Commissioner described how his long experience as an insurance agent would be beneficial to working with the metalworking industry to improve this insurance program. A panel of five members of CMC shared their experiences with regard to this issue. Of note, is the fact that California has some of the highest workmen’s compensation rates of any other state for certain industries. For example, the California rate for die casting companies is 5 times the rate in Mississippi.

The issues discussed at this conference demonstrate why the metalworking industry is challenged in doing business in California. However, many of these companies, especially foundries and forgers, cannot easily pick up stakes and move to other states. The high cost of doing business in California has resulted in more companies going out of business rather than moving to another state.

Adding to these challenges has been the fierce competition this industry has experienced from China in the past decade. CMC Executive Director, James Simonelli, told me that in the year 2000, the industry had about 325,000 employees. This means that the current employment of 213,500 is 40% less than it was 14 years ago. The good news is that all of the attendees to whom I spoke were experiencing some “reshoring” of parts coming back from China.

When compared to manufacturing facilities around the world, California is the place to find the most technologically advanced, and environmentally conscious metal manufacturers. California’s metalworking industry is arguably the world’s leader for efficient, clean, and safe metal manufacturing.

Posted in Economy, Environment, Jobs, Manufacturing, Reshoring, Taxes/Regulations | No Comments »

Deadly Food Products Coming to a Store Near You?

Tuesday, October 29th, 2013

For the last several years, there has been one story after another about tainted or even deadly food or ingredients to human and pet food coming from China. The two latest stories were  the jerky treats that caused hundreds of pet deaths and the laundering of honey coming from China by a German importer. However, the majority of Americans are blissfully ignorant of the origin of many of the food products stocked in their neighborhood stores. If they really knew the source of many of the products they buy, they would be horrified. The public outcry would be sufficient to put enough pressure on our elected officials to remedy the situation rapidly.

More than a hundred years ago, there was an exposé of the Chicago meat packing industry in Upton Sinclair’s The Jungle, followed by many other articles in the Progressive Era publications of the day. There was a huge public outcry. As a result, President Theodore Roosevelt sent labor commissioner Charles P. Neill and social worker James Bronson Reynolds to Chicago to make surprise visits to meat packing facilities. Although the meat packers were tipped off in advance about their visits, they saw enough revolting conditions at the meat packing plants to corroborate the claims of the many articles and submitted a report to the president and Congress.

As a result, the Federal Meat Inspection Act of 1906 (FMIA) was passed by Congress and signed by President Theodore Roosevelt to prevent adulterated or misbranded meat and meat products from being sold as food and to ensure that meat and meat products are slaughtered and processed under sanitary conditions. All labels on any type of food had to be accurate (although not all ingredients were provided on the label). Even though all harmful food was banned, there were still few warnings provided on the container. USDA inspection of poultry was added by the Poultry Products Inspection Act of 1957.

Also in 1906, President Theodore Roosevelt signed into law the Pure Food and Drug Act, under which the Food and Drug Administration (FDA or USFDA) was formed as an agency of the United States Department of Health and Human Services. The Federal Food, Drug, and Cosmetic Act (abbreviated as FFDCA, FDCA, or FD&C) was passed by Congress in 1938 to replace the earlier Pure Food and Drug Act of 1906 and gave authority to the USFDA to oversee the safety of food, drugs, and cosmetics. This Act has been expanded to include food coloring, food additives, bottled water, homeopathic products, and foods produced by genetic engineering and natural sources. Genetically modified food is regarded as containing a “food additive” and is subject to pre-market approval by the FDA if the protein added to the food by the genetic engineering process is not “generally recognized as safe.” On May 28, 1976, the FD&C Act was amended to include regulation for medical devices. The amendment required that all medical devices be classified into one of three classes.

The FDA is now responsible for protecting and promoting public health through the regulation and supervision of food safety, tobacco products, dietary supplements, prescription and over-the-counter pharmaceutical drugs (medications), vaccines, cosmetics, biopharmaceuticals, blood transfusions, medical devices, electromagnetic radiation emitting devices (ERED), and veterinary products.

Six years ago, there was the biggest pet food recall in history when a Chinese producer contaminated dog and cat food with melamine, a compound used in plastics, causing the deaths of animals across the United States. The public outcry helped lead to the inclusion of animal food in the Food Safety and Modernization Act, a landmark food safety bill passed in 2010 that was the first major overhaul of the Food and Drug Administration’s food safety laws since the 1930s. It gave the USFDA more control over food imports as well as broad new powers to set standards to prevent contamination of produce and processed food.

After the latest scandal regarding jerky treats for pets imported from China, the Food and Drug Administration published a proposed regulation on October 29th that would govern the production of pet food and farm animal feed for the first time. This would help prevent food-borne illness in both animals and people.

The problem with passing more regulations for the USFDA to handle is that it is grossly understaffed and underfunded for its complex and growing regulatory mission. The 2012 budget was only $4.36 billion, and the budget request for 2013 was $4.5 billion. About 45%, or $2 billion of the 2012 budget, is generated by user fees. Pharmaceutical firms pay the majority of these fees, which are used to expedite drug reviews.

The USFDA regulates more than 80% of America’s food supply and $1 trillion worth of consumer goods. Much of the expenditures are for goods imported into the United States. While the USFDA is responsible for monitoring a third of all imports, it only inspects less than 1% of food imports at the ports of entry. Many foreign countries such as China don’t have the same or any standards for source inspections that are required for food manufactured in the United States. They don’t have the same regulations against harmful pesticides and environmental pollution. Thus, importers are bypassing all of these inspections and regulations so can sell their products cheaper. This means that when you eat imported foods, you are playing the Chinese food version of “Russian roulette.”

We need to increase funding for the USFDA, and one simple way would be to require importers to pay a fee for screening of imports  to the USFDA for imports that are under its jurisdiction. This would enable the USFDA to add more staff to expand their inspection of imported goods, especially food imports.

You may be thinking that the U. S. Consumer Protection Agency is recalling food products that are determined by the USFDA to be contaminated or toxic, but you won’t find any food products listed if you go to their site to see the list of the products recalled for the month. This agency recalls manufactured products such as appliances, electrical goods, and toys, etc. The USFDA website lists all of the food, drug, and cosmetic recalls. No country of origin information is listed on the USFDA website. The Consumer Protection agency website has been revamped this year to make it more difficult to find out where a product is manufactured. Previously, you would see the list of products recalled, and the country of manufacture would be listed with the description of the product and why it was recalled. Now, it is a two-step process. On the first page, you see an image of the product and the reason why it was recalled, but no country is listed. You have to select finding products by country of manufacture to get the list for a particular country, such as China. Now, it would be more difficult to come up with how many products are coming from China compared to other countries.

The best solution for this problem would be for Congress to pass a law requiring country-of-origin labels for all human and pet food products similar to the nutritional information labels now required on packaged food products so consumers can see where their food is coming from. San Diego entrepreneur and businessman, Alan Uke has proposed what he calls a “Transparent Label.” in his book, Buying America Back:  A Real-Deal Blueprint for Restoring American Prosperity. He wants such a label for all manufactured products, which would include food for humans and pets. He feels that it is important for consumers to “see the last place where the product was manufactured” and “to discern what portion of its components came from other places.” In the case of food, it should include country-of-origin for all of the major ingredients so that consumers would be able to make decisions on whether or not they want to buy a product based on the origin of the major ingredients.  Mr. Uke also recommends that consumers be provided the country of origin information they need at the point of sale whether at a store or online.

He points out that the current information provided on country of origin labels is “misleading, incomplete, inaccessible, or all of these…In order to support our economy and American industries, we must have easily accessible, clearly communicated, and truthful information about a product’s entire origins.” We desperately need to have such a “Truth in Origin” label.

Hundreds of American pets have been poisoned and died by tainted food products from China. American children have already been harmed by dangerous levels of lead and cadmium in toys. How many Americans must die from tainted Chinese products before Congress acts?

Posted in Environment, Taxes/Regulations, Trade Policy | 1 Comment »

Made in USA Products Succeed in Home Décor Market

Tuesday, July 23rd, 2013

When ABC began the “Made in America” series on the World News with Diane Sawyer on Monday, February 28, 2011, the ABC team examined three rooms of the home of John and Ana Ursy in Dallas, Texas and removed all foreign-made products. The result was a virtually empty house – no beds, no tables, no chairs, no couches, and no lamps. Only the kitchen sink, a vase, a candle, and some pottery remained.

If the ABC team conducted the same examination today, they might find more Made in USA products. Every season, more and more Made in USA products are available in retail stores, such as Home Depot and Lowes. Consumers are choosing to buy Made in USA products, and retailers are paying attention. Even Walmart, the nation’s largest retailer, announced that it would increase sourcing of American-made products by $50 billion over the next 10 years.

One company was ahead of the trend by providing Made in USA carpet products to the home decor market ? FLOR, owned by $1.1 billion Atlanta-based textile manufacturer, Interface Inc.

In my recent interview with FLOR President Greg Colando, he said, “In 2003, I was requested by Interface founder Ray Anderson to start a company that would use 100% recycled material to make carpet tiles for the consumer market.”

Colando continued, “We started FLOR with three employees in a small office on the west side of Chicago. Our strategy was to grow this brand by word-of-mouth. We sought out design influencers (bloggers, designers, design celebrities) to introduce them to the product, let them fall in love with it, and then spread the word through their own influence.”

We weren’t able to start off with 100% materials in 2003 as they just weren’t available. It was a practice that evolved over many years. First, we committed to the idea that carpet could be 100% sustainable. Back 10-15 years ago, it seemed unattainable to be able to make carpet using recycled materials as you drove through neighborhoods and saw rolled up carpeting at the end of driveways headed for landfills.

We began the process of working with our vendors and demanding they supply us with the materials we were seeking. And here we are, about to celebrate our 10-year anniversary, and our entire line consists of 100% recycled nylon face fibers as it is now possible to get 100% recycled nylon yarn from suppliers. We have some unique texture products, like Fedora (a best seller) where each square you purchase removes five plastic water bottles from a landfill and diverts it into our carpet.”

Today, FLOR is headquartered in Chicago, IL, but their carpet tiles are finished in their manufacturing plant in La Grange, GA. The company has grown from the original three founding employees to more than 100. From their distribution center near Atlanta, their employees are bringing a smarter solution for floor covering to the market place to every store in all the major markets in the United States.

Instead of downsizing during the recession of 2007-2009, Mr. Colando said, “We actually grew our business during the recession. A new idea/product combined with a large home/design market place provided a great deal of room for growth, even as the rest of the world around us seemed to be crumbling. One wonderful asset we had was our ability to trim down spend while increasing efficiency and staying flexible. Now, we are a rapidly growing business, opening 20 of our own stores in the past couple years.”

FLOR’s products are an innovative system of carpet squares that you assemble to create custom area rugs, runners, or wall-to-wall designs of any shape or size. Using FLOR’s patented adhesives, you connect the carpet squares together and not to your floor. In addition to dozens of patterns and colors of carpet tiles that you can design and assemble yourself, FLOR offers 75 pre-designed combinations of rugs ranging from simple two-tile mats, iconic button rugs, to unique shapes such as the Hop-Scotch rug and Faux Hide rug.

Mr. Colando said, “Our Georgia manufacturing plant is not an automated manufacturing plant using robotics. It is a simplistic “pick and pack” product where members of the FLOR team work hard each and every day to put forth the best possible end customer experience. The majority of our orders ship the same day, which shows the efficiency of the operation.”

“Pick and pack” means that an employee selects the carpet design styles and colors to fill a customer’s specific order and packs them in the shipping box. FLOR doesn’t manufacture the actual carpet tiles; they are manufactured in traditional rolls at one of Interface’s domestic plants and shipped to FLOR, where they are cut into carpet squares and stored in the warehouse by color and design.

FLOR’s becoming a success as an environmentally responsible company, making products for the domestic market in the USA was the result of one man’s vision ?Ray Anderson, who founded Interface Inc. in 1973 to produce the first free-lay carpet tiles in America. Interface is now one of the world’s largest producers of modular commercial floor coverings, with sales in 110 countries and manufacturing facilities on four continents. Interface manufactures carpet for the commercial market ? corporate, healthcare, education, retail, hospitality and government. While Interface manufactures carpet in Australia, England, Holland, Shanghai, China, and Thailand for markets in those countries and regions to eliminate shipping products across the ocean, 90% of the carpet for the domestic market is Made in USA.

Anderson first turned his focus toward the environment in 1994 when he read The Ecology of Commerce by Paul Hawken, and also Ishmael by Daniel Quinn, seeking inspiration for a speech to an internal task force on the company’s environmental vision. Hawken argues that the industrial system is destroying the planet and only industry leaders are powerful enough to stop it. Anderson made a decision to transform the company into using recycled materials wherever possible to become a sustainable company.

He made a promise to have the company eliminate any negative impact it may have on the environment by the year 2020 through the redesign of processes and products, the pioneering of new technologies, and efforts to reduce or eliminate waste and harmful emissions while increasing the use of renewable materials and sources of energy. Interface now leads the industry in environmental achievement and the exploration of environmentally efficient products and processes.

In 2009, Anderson said, “Fifteen years later, we’re only halfway there. But we’ve saved over $400 million, which has more than financed everything else that we’ve done — the R&D, the capital expenditures, the process changes, employee training, the whole ball of wax.

Interface’s Mission Zero Progress has been remarkable. The use of recycled and biobased materials has gone up from 1% in 1996 to 49% in 2012. The water use (gallons per square yard) has gone down from 1.9 gallons in 1996 to .4 in 2012. The waste to landfill from Interface’s carpet products has gone down from 12.5 million pounds in 1996 to 2.0 million pounds in 2012. The Greenhouse Gas Emissions (pounds of CO2e per square yard) from Interface’s carpet factories dropped from 2.8 pounds to 1.6 pounds.

In other words, “Between 1996 and 2008, the company cut its net greenhouse gas emissions by 71 percent (in absolute tons), yet sales increased by two-thirds and earnings doubled.”

Anderson chronicled the Mission Zero journey in two books, Mid-Course Correction: Toward a Sustainable Enterprise: The Interface Model (1998) and Confessions of a Radical Industrialist: Profits, People, Purpose: Doing Business by Respecting the Earth (2009). The latter was released in paperback as Business Lessons from a Radical Industrialist in 2011.

As we can see, one man with a vision can have a huge impact. Anderson’s bold vision and ambitious goal has already accomplished things not thought to be possible, but it is a goal that demands constant improvement and attention. The management of Interface and FLOR are committed to continue with the ambitious sustainability goal to achieve a zero environmental footprint by 2020.

Unfortunately, Ray Anderson died on August 8, 2011 after a 20-month battle with cancer. On July 28, 2012, Anderson’s family re-launched the Ray C. Anderson Foundation with a new purpose. The Foundation’s mission is to create a brighter, sustainable world through the funding of innovative projects that promote and advance the concepts of sustainable production and consumption.

Interface and FLOR stand in sharp contrast to many other American companies that have offshored manufacturing to China and other parts of Asia to escape what they perceive as onerous environmental regulations in the U. S., reduce labor costs, and increase profits. If Interface and FLOR can be financially successful American companies in highly competitive markets while exercising environmental responsibility in the conduct of their business and supporting Made in USA products, they should be rewarded by consumers with more business.

 

Posted in Cleantech, Environment, Innovation, Manufacturing | No Comments »

The Trans-Pacific Partnership Trade Agreement Would Harm our Environment

Tuesday, July 9th, 2013

Proponents say that the Trans Pacific Partnership (TPP) trade agreement would be a platform for economic integration and government deregulation for nations surrounding the Pacific Rim and facilitate free trade to counter China’s financial influence in Asia and the Pacific. The negotiating parties include Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States. Japan also announced its intention to join the agreement last spring. Because the TPP is intended as a “docking agreement,” other Pacific Rim countries could join over time, and the Philippines, Thailand, Colombia, and others are already expressing interest.

The TPP is poised to become the largest Free Trade Agreement in the world. The ongoing, multi-year negotiations over the TPP are supposed to conclude this year, so the window of opportunity for preventing this free trade agreement is rapidly closing.

Among other reasons about which I have written previously, opponents of the TPP say it would harm our planet’s environment, subverting climate change measures and regulation of mining, land use, and biotechnology. The Pacific Rim is an area of great significance from an environmental perspective. It includes Australia’s Great Barrier Reef, the world’s largest coral reef system, home to more than 11,000 species. It includes Peru and its Amazon Rainforest—one of the most biologically diverse areas on Earth.

In May 2007, citizen-led advocacy groups including the Sierra Club forged a bipartisan consensus   that set the minimum standards for environment, labor and other provisions to be included in future trade agreements. According to sections of the TPP that have been leaked, it appears that these minimum standards are being ignored.

It is essential that the environment chapter of the TPP build on the environmental protection progress that has been made. “At a minimum, the environment chapter should be binding and subject to the same dispute settlement provisions as commercial chapters; ensure that countries uphold and strengthen their domestic environmental laws and policies and their obligations under agreed multilateral environmental agreements; and include biding provisions to address the core environment and conservation challenges of the Pacific Rim region, such as efforts to combat illegal trade in wood, wood products, and wildlife and to strengthen fisheries management.”

If you “Google” TPP and the environment, you come up with more than 20 pages of articles by one organization after another and one author after another expressing reasons why the TPP would harm the environment. The opposition to the TPP began as early as 2011 when the first drafts were leaked and intensified in 2012. These organizations include the Sierra Club, Public Citizen group (founded by Ralph Nader), the Citizens Trade Campaign, and Economy in Crisis, among many others.  A common thread of the articles is either a subtle or overt accusation that President Obama has “sold out” to Wall Street/big banks and multinational/transnational corporations.

On their website, Union-backed We Party Patriots states, “…the Trans-Pacific Partnership (TPP) is being put together in extreme secrecy. This secrecy comes complete with a total lack of mainstream media coverage despite serious potential long-term effects. Leaked documents show that the TPP will have a chilling effect on the ability of the United States government to take legal action against multi-national corporations for their abuses of environmental, agricultural, and labor laws.”

The Fair World Project’s website states that in late 2012, “a group of labor leaders, trade justice advocates, family farmers, environmentalists, food sovereignty groups and others from the U.S., Canada and Mexico created a ‘North American Unity Statement Opposing NAFTA Expansion through the Trans-Pacific Partnership (TPP),’ with the goal of uniting 1,000 organizations in opposition to the TPP.”

On March 7, 2013, Friends of the Earth announced that it had released a new video, “Peril in the Pacific: Trans Pacific trade agreement threatens people and the planet.” The video illustrates these threats by telling the story of “Chevron v. Ecuador” international investment suit brought under an existing U.S. treaty. The video raises questions like: “Who should pay to clean up what has been called the “Rainforest Chernobyl” in the Ecuadorian Amazon? Why are the people of the rainforest who suffered the most not represented at the international tribunal hearing the case? Is it U.S. policy to favor the financial interests of multi-national corporations over people and the environment in such disputes?”

The video also asks why the negotiating framework for the TPP favors Wall Street and multinational corporations at the expense of current U. S. environmental and climate policy and why does it  allow multinational corporations to challenge laws that protect our air, land and water.

Because the Asia-Pacific region accounts for about one third of all the threatened species in the world, Friends of the Earth is concerned that the TPP trade agreement potentially checkmates many of our country’s past environmental victories and would block new initiatives. The natural environment and rich biodiversity of the Pacific Rim are threatened by illegal and/or unsustainable commercial exploitation of the ocean, natural resources, and forests.

Friends of the Earth recommends that the TPP negotiators must address the following issues to avoid the most serious environmental harms by:

  • Including an environment chapter that would obligate countries to enforce domestic environmental protections and abide by global environmental agreements that are enforceable through international lawsuits.
  • Rejecting the proposed TPP investment chapter that would authorize foreign investors to bypass domestic courts and bring suit before special international tribunals biased in favor of multinationals to seek awards of unlimited monetary damages in compensation for the cost of complying with environmental and other public interest regulations.
  • Rejecting “provisions of the TPP intellectual property chapter that would provide international legal protections for corporate patents on plant and animal life, granting companies ownership and sole access to these building blocks of life.”
  • Rejecting the regulatory coherence chapter that could hamstring environmental regulation and “encourage cost-benefit analysis that exaggerates financial costs and minimizes the intrinsic value of protecting living things, wild places, and the stability of the ecosystem.”

Friends of the Earth urges that the TPP “must serve to strengthen environmental protection and support the biodiversity in the Pacific Rim and not facilitate a race to the bottom in environmental deregulation.”

What surprises me is that all of the above organizations supported President Obama in his bid for re-election last year despite the fact that he had gone back on his pledge “to oppose Bush-style free trade agreements that lead to thousands of lost American jobs”  and his word to ”not support NAFTA-type trade agreements” in his 2008 campaign. Now that he is elected for his second and last term, what incentive does he have to listen to the opinions of these organizations that oppose the Trans-Pacific Partnership agreement? None!

A few conservative news outlets such as WorldNet Daily began to recognize the dangers of the TPP early this year, beginning with the article, “Obama skirting Congress in globalist plan?” in which Jerome Corsi warn that “the administration apparently plans to restrict congressional prerogatives to an up-or-down vote” utilizing the  “fast-track authority,” a provision under the Trade Promotion Authority that requires Congress to review a FTA under limited debate, in an accelerated time frame subject to a yes-or-no vote. Under fast-track authority, there is no provision for Congress to modify the agreement by submitting amendments to ensure foreign partners that the FTA, once signed, will not be changed during the legislative process.

In a more recent article, “Obama’s 2-ocean globalist plan,” Jerome Corsi writes, “Quietly, the Obama administration is systematically putting into place a two-ocean globalist plan that will dwarf all prior trade agreements, including NAFTA, with the goal of establishing the global sovereignty envisioned by New World Order enthusiasts. The two agreements are the Trans-Pacific Partnership, or TPP, and the Transatlantic Trade and Investment Partnership, or TIPP. WND has learned the Obama administration plans to jam the TPP through Congress no later than Dec. 31.”

We certainly cannot expect to influence the President to oppose the TPP near the end of three-years of negotiations that took place under his direction. With the virtual black out  of coverage about the TPP in the mainstream media, the best we can do is make our opinions heard loud and clear to our Senators and Congressional representatives and urge our family, friends, and  members of our personal and business network to do the same. We must urge our elected representatives to vote against granting President Obama “fast track authority” under the Trade Promotion Authority. There is no time to waste. Contact your congressional representative and tell them we cannot afford another damaging “free trade” agreement that would destroy our national sovereignty, hurt American manufacturers, and harm our environment. Tell them to vote “no” to granting the President “fast track authority.”

 

 

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