NAM CEO talks on AI, banking, manufacturing, trade relationships, labor markets

National Association of Manufacturers (NAM) CEO Jay Timmons joins Yahoo Finance Live to discuss AI, the labor markets, and the banking sector.

Video Transcript

- Generative AI could impact some 300 million jobs around the world. That's according to a new report from Goldman Sachs, now adding that to 2/3 of jobs could be automated to at least some degree. Let's talk about all this, what it means for the manufacturing sector.

For that we have Jay Timmons, CEO of the National Association of Manufacturers. Jay, it's great to see you again. So let's talk about AI. How big of an impact do you see it being on the sector going forward?

JAY TIMMONS: I actually think it's going to be an incredibly positive impact on the sector because it is going to enhance manufacturing capability and output and it's going to be a supplement to jobs all across the world. So you think about all the technological advances we've had over the course of the last few decades, but especially the last 5 to 10 years. All of these advances have given additional capabilities to the workers who we have. And in fact, we've expanded the number of manufacturing workers in this country by over a million in the last few years.

- So can it be additive when you look at GDP growth moving forward?

JAY TIMMONS: I think absolutely that it's additive. I'm actually in Europe right now. We are talking to several of our member companies who have operations in Europe and they're very excited about the possibility of AI and other technological advances to help them increase production and capabilities in their factories.

And they're also pairing that technology with the human factor. You have to have that in order to be successful. So I realize the jobs will change, but I don't think we're going to be eliminating jobs because of technology. I actually think we'll be adding jobs-- adding human jobs-- to go alongside of robotics and other types of technology, including AI.

- That's good news for many of the people out there that have been worried about AI's impact on the employment picture here going forward. Jay, I also want to talk to you about the stress that we've seen in the banking sector. Lots of talk about what that could potentially mean in terms of slowing economic growth. What are you hearing from your members?

JAY TIMMONS: Yeah, so this is actually very timely, Shawna. Because as I said, I am in Europe. We are here-- and I think the banking crisis that we've seen over the past few weeks really highlights one of the reasons that we're here. It is all about protecting and promoting democracy, and doing that through commerce and strong relationships with our allies.

The world right now is obviously in crisis thanks to Russia's invasion of Ukraine. They've made themselves pariahs. And so what we want to do is, we want to make sure that our allies are being able to work together to solve some of these big macroeconomic issues, whether it's a banking crisis or whether it's increasing trade opportunities-- which is the main purpose of my travels here in Europe, is to try to make sure that we're taking advantage of every opportunity to strengthen our relationships.

I was in London today to talk about a potential US-UK trade agreement. I'm in the EU this evening to talk about the same. And I think that the most important thing that we can do as a business community in the United States, is to reach out to our allies to make sure that those bonds are strong. We can overcome any obstacle, even a banking crisis, if we're working together.

- And Jay, that's also the focus of the National Association of Manufacturers' latest survey. And you say in that report, policymakers must act with urgency. What do you need from policymakers and what are you hearing from your members on that front?

JAY TIMMONS: So the first thing we need is we need a much more robust agenda from the administration. We haven't seen a trade deal negotiated in our country or with our country for four presidencies. And we haven't actually taken action on any trade agreement in at least 10 years except for renewing the USMCA, which is really a modification of the trade agreement that was already in effect.

Meanwhile, countries all across the world are making deals of their own. And what they're doing is, they're taking business away from manufacturers in the United States. We're growing manufacturing in the United States thanks to the 2017 tax reforms, thanks to the infrastructure investment legislation, thanks to the CHIPS and Science Act. And we're hearing now more opportunities as a result of the IRA.

But we can produce all the goods that manufacturers can handle in the United States, but our own market is only so big. We want to sell to other customers all over the world. 95% of the world's customers live outside of the United States. And we can strengthen our supply chains and we can also sell our products if we have the right trade agreements in place.

- Jay, what is the current picture of our supply chains right now? Because we've heard from a number of companies-- really across many of these industries-- pointing to the fact that we have seen significant improvement. I think it's safe to say the worst may be behind us, at least for now. But how big of an issue are some of these backlogs that we are seeing in supply chains today?

JAY TIMMONS: Yeah, I'm not going to jinx it by saying the worst is behind us. [CHUCKLES] But Shawna, I will say that I've been hearing good news from manufacturers that our supply chain is unlocking. I really want to make the point, though, that the supply chain-- while we can supply so many of the inputs for our manufactured products in the United States, we still have to rely on product from other countries from time to time.

We would like to make-- look, I represent manufacturers the United States. I'd like us to make everything in our country. It's just not feasible. It's just not possible. Critical minerals, for one-- we simply don't mine them in the supply that we need in the United States.

We need to rely on a supply from other countries. That's why we need to solidify those trade relationships and those commercial relationships with our allies, because we've got some bad actors out there. We know we can't deal with Russia. We have concerns about China. We have concerns about India. So let's shore up our relationships with our North American allies, our European allies, Japan, Australia, so many others around the world, so that we can make sure that we don't have that meltdown again in the future, and we can keep our manufacturing base strong.

- One other challenge addressed in the report, Jay, is nearly 3/4 of your members listed attracting and retaining quality workforce as a primary business challenge. How do we overcome that? How do you solve that?

JAY TIMMONS: Yeah. So you know, Dave, you just hit the nail on the head. When I said we can't make everything in the United States, even if we filled the 850,000 open manufacturing jobs that we have today, we still couldn't produce all the goods that are needed, not only in the United States, but around the world. At the NAM, our Manufacturing Institute is engaged in many programs to try to attract, for instance, more women into the manufacturing workforce. We just simply have a huge gender gap in manufacturing.

We're trying to work with the Second Chance hiring program so those who may have been incarcerated for a nonviolent offense can come back and be productive members of the workforce. We have apprenticeship programs. We have programs on military bases.

And then we have a program called Creators Wanted, which is designed to inspire that next generation of the manufacturing workforce and let them have an idea of what modern manufacturing is like, and let them see for themselves. And then that takes this full circle back to what you started this segment with-- young people are learning new-- they're learning new skills when it comes to technology. Robotics, artificial intelligence, augmented reality, all of those things are what modern manufacturing is all about. And that next generation are the ones that are going to deliver for us.

- Indeed. Best of luck in that search. Jay Timmons, always appreciate you being here.