Get on board for a DC sit-down

I write this column to provide an opinion or to consider on a range of topics - from education to politics to business issues.

I tend to receive a lot of written comments when my topic is government-related issues. As you would expect, many agree with positions I take. Others really disagree.

I try hard to stay unbiased. But, on issues that I feel our government should or shouldn’t be involved in, I take a stand.

When it comes to politics, I tend to concentrate on how, if left in a vacuum of input from their constituents, elected officials have a tendency to become very internally and fraternally focused. This is particularly the case on those matters that will win for them support in the seniority of their party or gain them favor with congressional colleagues.

In these instances, we end up with legislation and the resultant regulations that are completely out of touch with what the general population sees important or as the role of government.

On Capitol Hill

Representatives from my organization, along with a large group of senior executives from supplier companies, spent several days this past April on Capitol Hill.

HDMA’s 1,050 supplier member companies are facing a wide range of new laws and regulations and I feel the best way to make our case for effective government is to have major employers from each district or state make personal, pre-arranged face-to face visits with their senators and congressional representatives to discuss their issues.

With all of the challenges facing our country, and particularly our industrial base, one would think that all of the newly elected and re-elected politicians would be busy fulfilling their many campaign promises. Not so.

It was amazing for me to make calls on congressional offices and meet with elected officials and their staffs, and see first-hand that the majority of them are operating in somewhat of a vacuum.

Our members have several critical issues dealing with labor and environmental regulations, trade policy, new laws regarding international embargoes, etc. All of these are creating a range of unintended consequences down range from the original laws passed.

The individuals we brought to DC all had very strong views on several of those issues and were armed with facts and anecdotal accounts of how the new laws and regulations are affecting their businesses’ ability to expand their operations and hire more people.

Lack of Knowledge

What we have found during our visits, and on previous visits, is the lack of knowledge of the impact of new laws on employers and, as a result, employees and shareholders. The one main reason for this lack of knowledge: the necessary input from the stakeholders - you, the business executive.

Regardless of the size of your business, you have the opportunity to meet with your senators or congresspersons and provide a frank, yet factual, account of how certain new laws are affecting your business. More importantly, our elected officials need to hear from the people they represent.

What Can Happen

When all of the banking issues and scandals surfaced in 2008, Congress rightly felt a need to pass sweeping laws and regulations that would hopefully avert future crises in that industry. The result was a comprehensive new law, the Dodd-Frank Wall Street Reform and Consumer Protection Act.

When the regulations directed by the new law were written, a provision referred to as Conflict Minerals resulted. This provision dealt with a complete restriction on a set of minerals exported from the Congo region in Africa, which the United Nations has identified as a human-rights abuser.

Well-meaning legislation, it required that any company selling to public companies had to certify that none of the restricted minerals were being used in producing their products.

What the legislators did not realize when agreeing to the Conflict Minerals provision was the high cost of compliance. For one of our medium-size member companies, compliance cost well over $1 million a year. Larger companies are absorbing costs double or triple that rate.

Another thing our elected officials do not understand is that such compliance costs need to be recovered and this is usually done through a company reducing its employment numbers.

No elected official intentionally wants to hurt their constituents and possibly drive new operations to other countries. Sadly, that happens more frequently that you might think.

Not An Uncommon Occurrence

The elected officials we visited with in Washington were not only unfamiliar with the Conflict Minerals provision within Dodd-Frank, they were shocked to learn about the cost to businesses for compliance. That, by the way, is not an uncommon occurrence with legislation and regulations.

Similar future situations need to be averted, and that can be helped along with more direct contact with elected officials.

Make appointments in your local offices or in Washington to see your elected officials. Better yet, invite them to visit your business. Take it from me, if you ask, they will make the time for visits.

Talk with them about how your business runs and how certain laws and regulations can impact your ability to grow your employment in their states and districts.

This is really the way our system was designed to work. Our elected officials work for us, and they need to be vigilant on behalf of the employers in their areas.

Tim Kraus is the president and chief operating officer (COO) of the Heavy Duty Manufacturers Association (HDMA). Prior to joining HDMA, he served in various executive positions with heavy duty industry parts manufacturers. HDMA exclusively serves as the industry voice of the commercial vehicle product manufacturers. It is a market segment affiliate of the Motor & Equipment Manufacturers Association (MEMA).