More than 400 manufacturing industry executives recently attended a summit hosted by the National Association of Manufacturers (NAM). Discussion topics included three pressing issues: tax policy, domestic energy sources, and better workforce preparation.

 

"Bush-era tax cuts" set to expire at the end of 2012 are a significant concern, as approximately 70% of domestic goods producers operate as pass-through entities, where business income is taxed at the individual's income rate. The top marginal rate for individual federal income tax will rise from 35% back to 39.6% and the maximum rate on capital gains will rise from 15% to 20% if no new legislation is enacted. Higher taxes mean less cash to be reinvested into the business for hiring or big-ticket capital improvements.

 

Secondly, the manufacturing sector uses about one-third of all energy consumed in the U.S., making increasing domestic energy production an important issue. NAM is looking to lawmakers to streamline the regulatory and permitting processes for energy development and to expedite the permitting process for oil and gas exploration on the Outer Continental Shelf.

 

Finally, a recent study conducted by The Manufacturing Institute found that 42% of leaders said potential business growth has been stunted by a shortage of qualified engineers. NAM offered solutions to develop a workforce capable of handling modern, high-tech manufacturing by utilizing the Manufacturing Skills Standards Council (MSSC) certification program, addressing government regulations related to employer-labor relations, and greater investment in Science, Technology, Engineering and Mathematics, areas in which the U.S. lags global peers.

 

View NAM's blueprint for a domestic manufacturing renaissance.

 

Please contact Scott Olinger, CPA, CPIM, at (800) 880-7800 or solinger@hsccpa.com for more information.

Social media has the potential to accelerate marketing and brand-building efforts, as well as a new avenue through which to interact with customers, investors, and potential employees. Manufacturing leaders have not rushed onto the social media scene, with only one in four having a corporate Facebook account, according to a 2011 GlobalSpec study. Although manufacturers are trailing other industry sectors, this delay does enable manufacturing executives to observe the opportunities and risks presented by social media in other industries.

Potential risks include damage to company reputation, the limitations of anti-virus software and firewalls, and the risk of data leakage through "social engineering," where a bad actor will use an innocent or plausible social media communication as a guise to extract confidential information or gain access to a network.

Training of associates as part of the ramp up of a social media campaign can be an effective way to reinforce the idea that employees will be held accountable for what they say and post regarding the company. Additional training such as security awareness training can be effective in reducing the risk presented by "social engineering." Further strategies for reducing the risks presented by social media include a combination of enhanced security monitoring, extensive network segregation and isolation, network based malware devices and rapid incident response.

Click here to read the full article.

Please contact Scott Olinger, CPA, CPIM, at (800) 880-7800 or solinger@hsccpa.com for more information.

Any agreement involving the transfer of large amounts of assets and liabilities should not be considered lightly, as trouble spots can arise. But if properly considered, these difficulties can be effectively dealt with to help the overall transaction achieve both the desired business and tax results.

Under the Internal Revenue Code, no fewer than nine different types of reorganizations permit one corporation to acquire a second corporation in a tax-free (really tax-deferred) manner. The statutory merger, by far the most common form of reorganization in the manufacturing community, has three types and certainly represents the predominant method of acquisition.

In addition to briefly detailing each of the three types of allowable statutory mergers, this white paper by Rick Bailine, Managing Director at McGladrey's Washington National Tax office, focuses on three areas that can lead to trouble, including issues related to cash mergers, due diligence and one of the most misunderstood rules in corporate taxation, the step transaction doctrine.

Please contact Mike Vogel, CPA, at (800) 880-7800 or mvogel@hsccpa.com for more information.