AFS Agenda for a Strong Metalcasting Economy

AFS is the only association working full-time to advocate for a positive business climate for the $44 billion Metalcasting economy. AFS is working aggressively for policies that quicken and strengthen a post-Covid-19 economic recovery. To help AFS advance this agenda through Corporate Membership, contact Ben Yates at (847) 824-0181 X 205 or byates@afsinc.org.

To read the American Foundry Society 2021 Federal Priority Issues, please click here.

To read the American Foundry Society 2020 Federal Priority Issues, please click here.

To read the American Foundry Society 2019 Federal Priority Issues, please click here.

 

Introduction

The American Foundry Society (AFS) is North America’s largest trade association and professional society representing and serving the metalcasting industry. Metalcasters design, manufacture and finish highly engineered metal castings that are essential to how the modern world functions.

Castings are found across manufacturing -- in motor vehicles, transportation rolling stock, aerospace, national defense, agriculture, energy development, mining, medical devices, clean water and wastewater systems, fire safety equipment and dozens of other applications.

The metalcasting industry has annual U.S. sales of $44 billion, an economic impact of $110.5 billion, and accounts for 490,000 jobs either directly, indirectly or through induced (related) impacts. The impact of the industry upon employment, economic activity and tax revenue is presented nationally, by state, and by congressional district in the AFS 2020 Economic Impact Analysis.

Metalcasters devote tremendous resources to employee training, recycling, environmental stewardship, safety, product design, efficient production, quality control and outstanding service.

Public policies have a major impact on metalcasters’ ability to produce castings and keep quality jobs here in the U.S. As the industry’s leading advocate, AFS and its members regularly share information and policy recommendations with key policymakers. A summary of recent AFS policy victories can be found on our website.

On behalf of the $44 billion metalcasting industry, AFS presents the following Agenda for a Strong Manufacturing Economy:

 

Environmental Quality

America’s metalcasters are committed to environmental quality and annually invest tens of millions of dollars to advance that cause by meeting environmental requirements, and in many cases implementing beyond-compliance practices. U.S. environmental quality has improved markedly and continuously for a number of decades. These positive results are evidence that economic growth and environmental quality are not mutually exclusive. The AFS Environment, Health & Safety (EHS) Division provides a wealth of conferences, webinars and resources to help metalcasters achieve environmental goals and compliance.

AFS has a long history of working with regulators and other stakeholders to foster understanding of environmental challenges and the best way of addressing them. AFS urges that environmental policies be based on sound science, feasibility studies, and rigorous cost-benefit analysis. Metalcasters should be afforded flexibility in how they go about achieving environmental standards given the unique nature of their processes and operations.

  • Climate Change. As global and national attention focuses on efforts to address climate change issues, government officials, industry trade groups, community organizations, and the public are developing strategies on the best approaches to reduce greenhouse gas emissions.  The metalcasting industry is recognized as an energy-intensive, trade-exposed industry sector and could be significantly impacted by the many proposals to address climate change.  AFS is evaluating the technical and policy issues associated with climate change and developing a position on how the metalcasting industry can best address climate change measures in an economically and environmentally sustainable manner.
     
  • Iron and Steel Foundry Air Emissions Standards. EPA promulgated National Emissions Standards for Hazardous Air Pollutants (NESHAP) for iron and steel foundries.  After eight years of implementing these standards, EPA was required to conduct a residual risk and technology review to determine if the NESHAP has been effective, and if additional air emissions controls are needed to protect human health and the environment.  Based on its review completed in October 2020, EPA concluded that no new emission limits were needed for iron and steel foundries.  This conclusion is testament that iron and steel foundries have implemented effective control measures to reduce hazardous air pollutant (HAP) emissions and minimize risks to human health and the environment.

    In working closely with EPA officials on the development of this rulemaking, AFS provided critical information regarding facility emissions data, foundry production processes, and the operation of air emission control devices used at foundries.  These cooperative efforts demonstrated how iron and steel foundries effectively implemented control measures to reduce HAP emissions to minimize risks to human health and the environment.  In addition, AFS identified for EPA substantial work practices that will continue to advance this environmental success story.  AFS remains committed with its members to continue to implement sustainable control measures and work practices to reduce HAP emissions and protect human health and the environment.
     
  • Stormwater Discharge Controls. AFS members are committed to the implementation of best management practices to manage stormwater discharges at its facilities, and have worked cooperatively with EPA and other industry trade groups to identify reasonable and appropriate controls.  EPA finalized the 2021 National Pollutant Discharge Elimination System (NPDES) Multi-Sector General Permit (MSGP) that authorizes stormwater discharges associated with industrial activity in areas where EPA is the NPDES permitting authority.  The final 2021 MSPG incorporates many of the measures that AFS has advocated, including a reduction of burdensome benchmark monitoring requirements, retention of sector-specific stormwater control measures, and greater flexibility for demonstrating compliance.  These changes represent a more cost-effective and sustainable approach to minimizing the impact of stormwater discharges that is protective of human health and the environment.
     
  • EPA National Recycling Goal. EPA has a stated goal of increasing the U.S. recycling rate to 50 percent by 2030.  The metal casting industry has long been committed to recycling and the conservation of valuable resources and supports EPA’s national recycling goals.  The metalcasting industry is a recycling industry, and includes several categories of recycling: 1) scrap metal and other metal-bearing materials as raw materials for the metalcasting process; 2) reuse of materials in-house as part of ongoing manufacturing process, 3) beneficial use of industrial by-products such as foundry sand, and 4) reclamation or reuse of secondary materials generated from the manufacturing process that are not returned to the foundry.  AFS has commented to EPA that all of its recycling activities should be included to calculate the overall recycling rates in the U.S. and has agreed to work with EPA in continuing to promote recycling activities in the metalcasting industry. 
     
  • Green Foundry Initiative and Case Studies. AFS recognizes that a strong business case can be made for promoting environmental sustainability within metalcasting facilities.  Through the Green Foundry Initiative, AFS gathers information from member companies regarding significant and novel approaches to improve sustainability, reduce energy and resource use, decrease or eliminate waste generation, minimize toxicity, identify beneficial use options for spent materials, and generally reduce their environmental footprint while maintaining production.  

    The Green Foundry Initiative provides metalcasting operations an opportunity to highlight the sustainability efforts that are being implemented at their facilities in the following five key areas:
    • Management Systems and Metrics
    • Air Emissions
    • Water Use and Discharge
    • Materials and Resource Conservation
    • Waste Management and Beneficial Use
 

Infrastructure Investment

A 21st Century economy must start with 21st Century infrastructure. The U.S. has under-invested in infrastructure investment for many years, with negative implications for our manufacturing competitiveness and quality of life. The time has come to modernize our entire infrastructure system. Accordingly:

  • Increased Investment. AFS supports increased investments to modernize roads, highways, bridges, airports, railroad and transit, schools, and ports, as well as drinking water and wastewater systems.

  • Streamlined Permitting. The Society supports streamlining and accelerating the federal permitting process, as the current lengthy permitting and environmental review process can add to projects’ time and cost, while deterring the entry of private capital.

  • Buy-American Provisions. AFS supports the principle that when taxpayer funds are used for infrastructure projects, all of the metal used, including castings, should be made in the U.S. Domestic preference provisions should be consistent with the longstanding application of existing Buy America provisions for surface transportation projects administered by DOT.

  • Water Infrastructure. To modernize our water infrastructure, AFS supports full funding for the EPA state revolving loan funds programs; and full funding for the Water Infrastructure Finance & Innovation Act.

  • Electrical Grid. Americans are utilizing more distributed power technologies than ever before. Investments in the electrical grid will support the modernization needed to ensure U.S. electricity supply stability.

  • Freight Railcar Manufacturing. AFS supports legislation to provide a tax credit for U.S. railcar leasing and manufacturing companies for the cost of replacing existing cars with new fuel-efficient railcars or for modernizing existing railcars.

The men and women who work in the metalcasting industry will play a major role in all infrastructure modernization efforts. In fact, an estimated 40 percent of castings are dedicated to infrastructure. Few investments would have a greater positive impact on our economy than infrastructure modernization.
 

International Trade

AFS supports an open, transparent and fair playing field for manufacturers to participate in global trade, including vigorous enforcement of U.S. trade laws and international trade agreements. Too often, foreign countries including China have engaged in unfair and unlawful trade practices, such as currency manipulation, intellectual property theft, subsidies, and dumping, which result in an uneven playing field, and a shift of market share away from the U.S. These illicit practices have contributed to the closure of some casting-consuming factories and foundries, as well as countless job losses in American communities. These practices must come to an end. Therefore:

  • Trade Laws. The Society supports strengthening U.S. antidumping and countervailing duty laws. Congress must ensure adequate resources for the agencies responsible to enforcing these laws. AFS calls for legislation that strengthens and updates trade remedies. AFS supports continuing to allow the countervailing duty law to be applied to currency manipulation by foreign governments.

  • Trade Enforcement. AFS backs vigorous enforcement of U.S. trade laws. The Administration should work to halt transshipment, circumvention, and other forms of evasion of trade remedy orders.

  • Reshoring. AFS applauds and encourages voluntary reshoring initiatives for castings and other critical goods. AFS partners with The Reshoring Initiative, which helps companies quantify the financial benefits of reshoring. AFS also advocates public policies that result in shorter, trustworthy supply chains for critical minerals that we can mine and utilize domestically as well as for large-capacity batteries, pharmaceuticals that are needed to keep our workforce healthy, semi-conductors that power vehicles, phones and military equipment, as well as other key goods.

  • Exports. As a matter of policy, AFS supports federal programs that assist manufacturers in the complex process of exporting and complying with export-licensing and similar requirements.

  • Tariffs. AFS supports retention of the Section 232 and 301 tariffs on ferrous and non-ferrous metal casting imports that were adopted during the Trump Administration.

 

Safety & Health Policy

AFS member companies have made substantial investments in training and technology to promote workplace safety and health.  The AFS Environment, Health & Safety (EHS) Division provides numerous conferences, webinars and print/web resources concerning regulations, new developments, as well as sound practices. From an advocacy perspective, AFS also advises policymakers, offering expert guidance on how proposed and existing regulations and laws affect the industry and its employees. AFS’ Washington office regularly engages with OSHA on key EHS issues.

To promote safety and health, AFS encourages policies that conform to the following principles: 

  • Sound Laws and Rulemaking. New and existing workplace safety laws and regulations should be technologically attainable, based on current risk assessments, practical, and as cost-effective as possible. They should be performance based, so that employers are afforded flexibility to meet standards in the best way possible in light of their unique mix of operations, equipment, and product lines.

  • Enforcement. AFS encourages federal and state authorities to emphasize a collaborative and consultative approach, as opposed to an adversarial approach, with employers as they make conscientious efforts to safeguard their employees and comply with expansive state and federal requirements. 

 

Tax Policy

AFS supports a tax system based on simplicity and predictability that promotes investment through lowering the cost of capital. R&D tax incentives should be predictable and permanent. Maintaining a federal tax burden on manufacturers as low as possible as a means of promoting investment, business development, expansion and job creation must be a national priority. Consistent with that goal, the AFS-backed 2017 Tax Cuts and Jobs Act (TCJA) brought tax rates for corporations and pass-through businesses closer to international norms, and simplified business tax accounting. It also repealed the corporate alternative minimum tax (AMT) and reduced the impact of the individual AMT. AFS strongly supports retaining these effective tax provisions and making them permanent.

 
  • Net Operating Loss (NOL) Tax Policy. AFS opposes retroactively repealing the NOL relief that was adopted in the 2020 CARES Act. Repeal would result in a substantial tax hike on thousands of businesses that have suffered financial setbacks during the pandemic. The CARES Act included a 5-year carryback for losses incurred in 2018, 2019, and 2020.  With small business revenue declining by 30 percent in 2020, this provision ensures businesses of all sizes – as well as their workforce and investors -- benefit from the policy.

  • Permanent Section 199A Deduction for Pass-Through Businesses. The 2017 TCJA created a 20 percent deduction for businesses organized as pass-throughs, through 2025. Many metalcasters are structured as pass-through entities and, without this deduction, would face a competitive disadvantage to companies organized as C-Corporations. AFS strongly supports making the credit permanent.

  • Alternative Minimum Tax (AMT). The AMT creates needless complexity and is a stealth tax increase on metalcasters. The 2017 TCJA increased the exemption level for individual AMT filers, but that will expire in 2025. While the AMT should be repealed altogether, at the very least the AMT relief in the TCJA should be made permanent.

  • Permanent Estate Tax Repeal. Since many foundries are family-owned, they must plan for the estate tax if they want to keep the business operating after the death or retirement of the owner.  Permanent repeal of the estate tax would keep family-owned foundries operating for future generations, and for the economic vitality of the communities in which they operate. The AFS-backed 2017 TCJA increased the estate tax exemption from $5 million to $10 million, but that tax relief will expire in 2025 without Congressional action. AFS supports a permanent extension of the higher exemption.

  • Full Expensing for Capital Equipment. TCJA of 2017 permitted full expensing for investments of capital costs, such as machinery and equipment, in the year the expense, but only on a temporary basis. The policy will begin phasing out in 2022 and will be eliminated by 2026—meaning the tax burden on investment is scheduled to increase. AFS supports retaining a robust capital cost-recovery system to drive new investments in foundries.

  • LIFO (Last In, First Out) Accounting Method. The Society advocates policies to continue to permit the use of LIFO, a widely accepted inventory accounting method which has been recognized in the U.S. tax code for more than 70 years. Repealing LIFO accounting would cause metalcasters using LIFO to report their LIFO reserves as income, resulting in a massive tax increase, with negative consequences for employment, productivity and the U.S. industrial base.

  • Promote Infrastructure Investment in the Tax Code. AFS supports the expansion of the private-activity bond (PAB) cap to allow for additional investment in highways and utilities, and include additional types of public infrastructure, such as public buildings like schools and hospitals.

  • R&D Investments. AFS supports permanently repealing the R&D amortization provision in existing law.  Currently, businesses can immediately deduct 100% of R&D expenses in the year in which they are incurred, however, starting in 2022 businesses will be required to amortize or deduct over a period of years their R&D expenses.

 

Workforce Development

AFS surveys continue to reflect a worker shortage in manufacturing in general, and in metalcasting in particular. This skills gap will likely remain a major challenge for years to come as the Baby Boom generation is continuing to retire. To meet current and future workforce needs, federal policies should encourage students to consider career and technical education (CTE) to prepare them for rewarding careers in manufacturing. Hence:

  • Enhanced Federal Training Programs. AFS supports reauthorizing and expanding the Workforce Innovation and Opportunity Act (WIOA), which helps provide education and training to job seekers and connects workers with employers. The Society supports expanding Pell Grant eligibility to high-quality short-term programs which will help students get the job training they need. AFS supports providing workers that have been displaced or are underemployed as a result of the pandemic with access to skills-based education. Training programs should be continually evaluated and refined to reflect the needs of an ever-evolving workforce.

  • Training Incentives. To continually prepare a 21st Century workforce, AFS supports Including workforce development provisions in infrastructure reauthorization legislation and expanding tax credits for employers that provide training to employees. AFS also supports federal support for growing apprenticeship opportunities. All training incentives should be structured to allow employers the optimum flexibility needed for the modern workplace.

  • Truck Driver Shortage. As with manufacturing, the surface transportation industry has faced a shortage of workers for a number of years. The driver shortage has resulted in inefficiencies in the supply chain and distribution system. This particularly affects metalcasters, who rely on shipments of critical supplies to the foundry, and the shipment of final castings from the foundry. AFS therefore supports prudent legislation that provides realistic and effective incentives for individuals to be trained and hired for driver positions.

  • Legal Immigration. Legal immigration policies should focus on meeting the workforce needs of the American economy.

 

To help attract future employees to the foundry industry, AFS offers a free, fast-paced, 5-minute Metalcasting Careers Video on YouTube and the AFS website that portrays young people explaining why they love their careers in metalcasting, and a magazine for students titled Melting Point. For those already in the industry, the AFS Institute offers a full array of highly rated virtual, classroom, in-plant and Foundry E-Learning training programs.

 

AFS Public Policy Contact Information

Questions and comments about this agenda may be sent to Doug Kurkul, CEO, at dkurkul@afsinc.org or to Stephanie Salmon, Washington Representative, at ssalmon@afsinc.org.