Economic Expansion, Industry Events and the Latest on Tariffs

0:00The following is an audio recording of our latest episode of Advanced Manufacturing Live. Follow SME Media on LinkedIn, Facebook, and YouTube to catch our next episode live. Welcome to Advanced Manufacturing Live. I'm SME, Senior Editor, Michael McConnell. And I'm here with our Editor, Editor, Editor, Editor, Editor, Rachel Thomas, and Associate Editor, Carrie Gitter. Hey guys, hello. Hey, hi. Hey, hi. Good to meet you. Yeah, Carrie, you're back. I'm back after a bit of time off to have a baby boy, so I'm glad to be back with you guys. Well, congrats, and we're glad to have you. Thank you so much. Yes, absolutely. Well, gosh, there's a lot of stuff going on right now, a lot of things to talk about. Where do you want to start? So, Carrie, you want to start with you? Sure, absolutely. So, yeah, just this Monday, we had an industry update come out. The

1:05Manufacturing PMI report issued by the Institute for Supply Management, which comes out monthly, and that's kind of an economic indicator of the health of the industry across different sectors, surveying executives from various different aspects of manufacturing. And for the second month in a row, the industry is in expansion territory, which... Good news. Yeah, very good news, and I know Rachel covered the report last month, and that was the first expansion month, January, in a long time. And so, this month of expansion in February is actually only the third in 40 months, mostly the industry's been in contraction. And you can see some metrics there on the various different indexes, new orders, production. So, they're growing, although the rate of expansion slowed a bit. From January, it was 52.6 percent. That was the Manufacturing PMI, and February was 52.4 percent. So, there was a point to drop off, but Susan

2:11spent, who's the spokesperson there for ISM said, this is still growth, just at a slower pace, with some indexes becoming a bit more sluggish this month. But there were comments from respondents that were positive, saying businesses improving, backlogs are growing, and that's something that, you know, we haven't heard in quite a while. But at the same time, I imagine, the over geopolitical news kind of overshadowed a lot of things, huh? Absolutely, yes. So, this call was Monday morning, when the report was issued, and obviously, coming off a very eventful geopolitical weekend. And so, there were several press questions about the conflict with Iran and the effect that that's going to have on manufacturing industry. And Susan Spence basically said, you know, what one would assume, which is that supply chain volatility is going to be a major fallout from this, and that manufacturers across

3:16sectors can't be to prepared. So, you know, at this point, we don't know how long the conflict is going to last, it could be weeks, it could be months. And so, she was really advocating for for business owners executives to shore up those supply chains, and plan accordingly, you know, for the worst case scenario, so that, you know, we're already seeing, especially with energy and fuel supply chain effects happening right now. And that's very much in the news. So, but it's not only going to be those industries affected, you know, there's a multitude of supply chain issues that could be ripple effects from the conflict. So, yeah, manufacturers should really keep an eye on how those ripple effects could influence their particular business. Yeah, I'm curious. I know, Carrie, you quoted in your piece for us. You were saying, you know, Susan Spence of ISM said, you can never be to prepared regarding, you know, the uncertainty with

4:19the war. Did she specifically say, like, how manufacturers can prepare, or do you have any thoughts on that yourself? Well, I think, you know, the best thing that manufacturers can do, you know, based on what Susan was saying in the call is just to really evaluate their current supply chains with regard to what's going on in the Middle East and how their particular lines of supply may be affected. So, you know, some businesses and some industries may have a big crossover with the Middle East and with materials coming out of there and others may have less. So, it really is dependent on the business, but it's taking a look at your business of supply chain and figuring out, you know, what those effects could be and taking proactive steps to mitigate them, you know, maybe switching suppliers or reevaluating, you know, because as I said before, we don't know the duration of the conflict. So, you know, it could have lasting effects.

5:24Yeah, I wanted how you said it just depends on, you know, the different sector in the industry. I know you quoted a fabricated metal specialist in your story saying, you know, their business was improving and, you know, there's opportunities everywhere. But when I was reading through the press release on the ISN website, I saw another quote from a chemical products professional saying, you know, and I have to quote here, today Americans produce, American produce commodities like steel and aluminum are the highest price in the world by far. Hence the section 232 tariff policy is having the exact opposite effect of their intention on an American manufacturer like us. It is raising prices while lowering demand and profitability just to read that quote there. So, it was interesting to see the different sides. Well, yeah, in this February report was kind of interestingly time because the data in there really doesn't reflect A, this new conflict in the Middle East or B, the recent Supreme Court decision on tariffs and the effects that's

6:28going to have, which Michael talked about a bit later. So, yeah, people from different sectors in this month's report were still citing tariffs and tariff volatility as a business challenge. But it remains to be seen how that might shift or, you know, because right now tariffs have been have been voided but may still be in place. So, you know, we're in a kind of a weird limbo with that. But yeah, it'll be interesting to see in March's report where things stand then kind of the timing of the press call was kind of unfortunate. It was kind of right on the precipice of these huge developments that are going to have such big effects. So, I think March will be a lot of really fascinating information coming out. And Rachel, I wanted to shift to you. I know you just took a field trip recently to auto tool in Columbus, Ohio, is that correct? Outside of Columbus, plain city, which I had never heard of prior to the trip. I hadn't been to Ohio

7:30too many times outside of Columbus and Sandusky for like Cedar Point. So, new territory for me. Fun. So, it's also a bit about your trip and what was being showcased there and what robotics and automation technology you saw? Yeah, absolutely. So, I was at the auto tool facility, like we mentioned in plain city, Ohio. It's a beautiful campus. Just lots of natural lighting, good at employee space. We kind of got to walk around through the whole facility. And then on the main shop floor area, while there were different machining cells and things over towards like the back of the shop floor and the front area where all like there was about 20 almost technology partners that were presenting their own, you know, industry things like the equipment, pamphlets and things like that. So, it was cool that as you walked to the top floor immediately, you're welcomed by those tech partners. And then auto tool tech day itself was, as the name mentioned,

8:31a big play to showcase automations that are happening in the industry right now. And it was powered by KUKA Connections, which is an ongoing initiative by KUKA to, you know, bring different industry experts and yeah, those type of partners together. So, they were about, I want to say, four keynotes from KUKA, JCB, EWI, and then the Ohio State University's Center for Design Manufacturing Excellence. And so, those kind of happened throughout the day. And they provide wonderful insights, very conversational style. They have their presentation going, but took a lot of questions from the audience as well. And then in between those keynotes, you can go back downstairs to look at the cells downstairs and then speak with those booths. So, it was really cool. I enjoyed it. Yeah, as the video shows, there's one of the cells I was talking about. So, yeah, it was cool. I had never been to something like that. So, it was cool. Yeah, you got some great, great footage

9:36and photos. And also did a really nice write-up, which I wanted to ask you one question about that. One of the speakers it sounds like spoke about AI at the event and the effects that that could have on automation and manufacturing. You talk a bit about what he said and how artificial intelligence might be playing a role in future automation technology. Yeah. Yeah, AI, of course, as you know, is a big thing for the entire industry, but specifically looking at automation, it was something that both Steve Forest of AutoTool and then also Jay Logan McNeil, he talked about it in his presentation as well, that, you know, especially with Benpicking is what the biggest thing that I was seeing with how AI could come in to play. There was a tech partner there named Apera. I hope I'm saying the company's name right, but they had a really cool demonstration of how the Apera

10:38visioning software can be used for Benpicking. So in the demo, I don't think I have a photo for us to see, but there was a Apera camera above a like a KUKA Benpicking setup. And I didn't unfortunately get to see the full demo because every time I tried to go back down, they're like, oh, we just finished it up. That's like, oh darn. But it seemed like it was a pretty cool setup of just how to show, you know, Benpicking and how the Apera system could, you know, scan the different objects. And that way the robot could be able to pick up what's needed from the Benpicking. So that was just like one of the specific things that it was focused on for AI. But again, yeah, the 4D vision tech for industrial robotics and things was a big discussion. Interesting. Rachel was, we mentioned the audience. Was it a lot of press people like us, or was it a lot of customers who came to this event? Yeah, it was funny. And I think actually Steve, our editor-in-chief had asked me that when I came back. I think I was the only press person

11:40there, at least from who I spoke with. A lot of them seemed, the people I got to speak with, from KUKA and everything else. They, a lot of sales managers, account managers, people who, you know, regularly go to these events and present their products and technologies. But I think I was the only press person. There's a couple times when people are like, oh, you're here to like cover the, you're going to do like a recap or are you doing, they thought I might be the social media person. I'm like, no, I'm just getting, which I do take photos for social media, but very casually from my phone, no professional setup. But yeah, so it was cool to, you know, have that side of just be able to be a journalist there. Yeah. Yeah, people get excited when they find out that that press is there. Yeah, absolutely. Sorry, Mike, what are you saying? No, it's okay. I'm sorry, you two carry. Have you been around robots like that before, Rachel? Have you been around that kind of environment? No, um, actually, you know, this, this job here at

12:40SME Media is my first foray into, you know, manufacturing previous roles. I've, you know, reported or talked about like tech startups and things like that. But manufacturing in this sector is my first foray fully into, you know, going directly to the shop floors and seeing these robots, these automation technologies and things. Um, so it's been, this is my first time, especially seeing, um, there was a KUKA autonomous mobile robot. I think it's called the KUKA, the KMP 3000P. And while we were all on the shop floor, yeah, there it is right there. Um, it was literally kind of like maneuvering around the people on the floor. It would like use it scanner. It's, I'm sorry, it's 3D cameras and it has like a laser sensor and it would know when to, you know, stop and kind of assess its surroundings and then kind of maneuver around the people on the floor. And it was holding a piece of auto tool steel as it was going because the KUKA robots could be used for, um, like payload,

13:43pay, I'm sorry, I'm trying to remember the word that they were talking about, but basically, um, like pick up and drop off materials and things like that. So, uh, it sounds, it sounds, sounds pretty cool. Was there anything you were really like really impressed with seeing? Yeah, let me think, um, really the, um, the KUKA robot that was just showing the screen, that was really cool to see it be able to, like I said, maneuver around us, no one to stop, kind of turn. They had, um, like arrows with duct tape on the floor and I think that's what the, the robot was following. I'm not sure if it actually knew like these are taped arrows, but it, it was kind of going around it. So maybe it, it did know what that was. So, that was really cool to see. Um, and then also that cell in the video that was just on the screen as well. That was pretty cool. I'm, I don't think I mentioned the exact name of it in my write-ups, I am blanking on what that cell was doing, but that was also another cool technology.

14:43Yeah, and for anybody who's interested in automation, the Automate conference is coming up in, in June, in Chicago, and I had the chance to attend that in Detroit last May, um, and it was really like an incredible showcase of robotics, um, you know, everything from AMRs to, um, co-bots to humanoid robots. There was a little dog robot hopping around the show floor, so I saw some amazing stuff last year and, uh, I wish that were in Detroit again, um, in 2026, but yeah, that's a great showcase for automation. Yeah, that was something I remember talking to another attendee. They were like, oh, you have to go to that. So we'll see if one of us gets sent if we're going. Yeah, Rachel, you, um, you mentioned there was a number of speakers, and, and did any of those people talk about the acceptance of robotics in the manufacturing industry? Yeah, you know, I feel like that was the resounding, you know, they're here to stay.

15:46These are definitely things. I remember Steve, during his talk, was like, you know, automation is all around us. He per, Steve Forest of Auto Tools, he gave a brief intro of the company, and then, you know, it was really just like, automation is here to stay. Um, and if also if I remember, Jay Logan McNeil from EWI, he had mentioned that, you know, that with, with any type of new technology, automation can definitely present, it's like obstacles and challenges. As you know, you have older, you know, veterans in the industry who may not to say like they're stuck in their ways, but, you know, it's like, maybe a little bit more cautious about, you know, bringing in automation technologies, whereas you have like newer people to the industry, like younger folks who are like gravitating directly right to those spaces. So it's definitely a mix of, I believe McNeil had said, you know, the dynamic of the shop for may change, and there's also definitely going to need to be like, hireings and, you know, trainings like that type of workforce development in there. So,

16:46but it seemed like there was a big, most of the people were looking forward to, you know, these new technologies and automation. Yeah, I was wondering if anybody, if any companies are still hesitant, because some people are, are sitting their ways and they're, they're skeptical about, about new technology. Yeah, absolutely. Um, I would say that Jay Logan McNeil from EWI, he was the only one that I remember, you know, really taking some time to talk about, you know, there are obstacles, there are challenges, not everybody's going to be immediately ready to implement these. Um, he did say that the best way to go about it is not taking every single new technology and like, oh, we need this, we need that, we need this, we need that, because that will definitely overwhelm your company. It's really about picking the best tools to, you know, best run your business. So, yeah. Be more strategic. Yeah, exactly. Be more strategic. Um, you know, slow, slow increments of the like, well, not slow, but, you know, like, smaller increments of bringing it into your business. Yeah, and probably for a lot of these business owners too,

17:47with the workforce gaps, you know, they're dealing with automations kind of like a necessity. Yeah. Mm-hmm. Just to get that work done, because they don't have the the labor that they need all the time to, to fill those, those positions. Yeah, absolutely. There are a couple times that was brought up, you know, been picking will be great for, you know, for the, so address that, especially as, you know, forklift operators, they were tiring. They did say that being a forklift operator, it's not like the most like glamorous work, you know, finding a lot of people who just want to, you know, take that role long. So that's where like, been picking, for example, or, you know, a forklift operating could come into play. Mm-hmm. Yeah, I saw, I went to an open house a few months back at Anderson Material Handling, which is a company here in Michigan, and they specialize in, you know, material handling, been picking all that, and they were introducing a lot of automation solutions as well for that, for that very reason.

18:50Yeah, I liked how, you know, another general theme with those speakers, they're very real about the unglamorous sides of, you know, the industry and how we can find ways to, you know, best support the workers and, you know, the business and everything, people first, for sure. So they were not just saying these robots are going to replace everyone. That was not the thing. Yeah, I was like, sorry guys, pack it up. Like, no, it's definitely, it's like, for example, co-bots, it was very much a collaborative, you know, we can implement these to best, you know, down, down, down, take over, like, the workforce development challenges and just, you know, bring that all together. Oh, cool. Great. Mike, I want to segue into your discussion here with a question. Yeah. Because we have such a wild news cycle lately. Just, can you start with the basics? What's the recent Supreme Court decision on tariffs? And what does that mean for where we're at right now with the tariff situation? All right. Well, how much time do we have?

19:53Because the tariffs, which the president implemented back in April of last year, if I recall, and if, you know, anything about the history of Donald Trump, you know, he's not a new convert to tariffs. He is, he has always believed that he read some of his books from the 80s and some of his interviews at the time. He really believed that Japan with the automotive industry in the 80s was ripping off America and so he's really believed that. So there's nothing's changed there, but now he's in a position to actually affect some change. And so he even went to these tariffs, some of which were, they're actually all the more fairly high. I mean, really the highest we've seen in a hundred years because economists on both sides of the aisle have gotten away from tariffs and other than using them strategically, just as a general rule, they're not the main way to raise revenue, at least they had not been in the in the recent past. But the president had a different philosophy. So he came in, he put in these tariffs, immediately went to a lawsuit because he claimed,

20:54he used a law that is known as AEPA. I forget what that stands for, but it's a 1977 law that deals with emergencies. And so it gives the president certain powers because there's an emergency to deal with these problems. He president liked that law, using that law for implosing these tariffs because he didn't have to go through Congress. So he didn't have to have that vote on the record with that. He said, we're instituting these tariffs. These countries are going to pay this amount or this amount or that amount. However, of course, a lot of importers who actually pay those tariffs when they bring product into the US did not like it. So they sued and took a while for the lawsuit to go through the courts, even though it was on an expedited path. And just back on February 20th, I think. So very short time ago, they were declared unconstitutional. The Supreme Court Justice Chief Justice John Roberts said that the law was never intended to be used in a way that totally disregarded Congress because historically Congress has always had the power of the purse

21:59and the ability to just set tariff rates. So that was a loss. But the White House has not changed their tone much. They immediately said they're going to institute for the next 150 days a new tariffs. I think at 10%, or maybe 15%, which those are going to be subject to lawsuits eventually too. But in the short term, tariffs are still here, but they are, in some cases, they're less than they were before because the rates vary by country. And these are flat amounts, 10 or 15%. And then other countries, it's quite a bit more than they negotiated with the administration. So things are really crazy. And then just yesterday, I think, a federal judge said the White House needs to start refunding that money. And of course, while he may have said they need to start doing that, it really is a very slow process to see when and if that will actually ever happen. So kind of crazy. I don't know how much you guys have been following it other than reading

23:02some of the pieces I wrote, but I don't know if you'd want to make a bet on whether or not the tariffs will still be here in the next two or three years. I'm not sure how I would bet on that either. I'll save my money on that one. Are you getting any sense of the reactions from the manufacturing industry and from businesses? The businesses that were out in front of this, saying these were a bad idea and unconstitutional, they're already announcing with a refund money, please. Some of the major companies like Federal Express FedEx, I believe they're on the record in court saying that, but a lot of them are kind of holding back just to wait and see how it shakes out because things have been so erratic. They don't want to make a business decision without knowing where things are going to go. So they've been relatively quiet, at least in my experience. I think you probably have tariffs came up. Some of those PMI calls you were on, I'm sure. Yeah, I mean, month, the month, since last year, that's a consistent refrain from

24:07manufacturers across various sectors that the tariffs have been a challenge to their business and an economic burden and an obstacle to growth. At least, that's been a common complaint as the industry was contracting, although with these last few months of expansion, perhaps that's mitigated somewhat by other factors. But yeah, no, it's definitely, there's been a lot of yeah, a lot of negative responses to the effects of the tariffs on these businesses from these leaders. Although to be fair, you know, tariffs, I think I wrote one of these pieces too, tariffs do have winners and losers. There are certain businesses that always benefit from a tariff. The steel industry is one that they've been very happy about these because they're able to sell more because of the higher prices that they were competing against, you know, and losing oftentimes, they're now able to better compete because they can't come in

25:09other countries, can't come in and undercut their steel prices. So yeah, it's not hard to find manufacturers that aren't having happy with tariffs, although there's plenty that have not, of course. Yeah, I think it seems to be a lot of those small to medium-sized manufacturers that have been hit harder, you know, in terms of their supply chains and yeah, and sourcing with burials and all of that. Absolutely. Mike, I know in your story that just went up shortly before this live stream, there's supposed to be another case hearing scheduled for this Friday. Yeah. Do you think that? Pretty quick, really. Yeah. Do you think that expected appeal that you mentioned your story? Do you think that will work? Or do you? Yeah, I guess it's a big deal, but no, I'm never even pretended to be a, you know, a trade lawyer. So I wouldn't guess. You know, and I haven't riddled out of articles that have said what they think is going to happen, although most of the articles I have seen and with the presence that we said is, or some of the

26:15people in the administration, there are other laws that have been tested. So the White House definitely has other avenues that they can institute. If not these exact tariffs, similar tariffs, maybe similar in scope or in level, but they may not go as long. They may have to re-op them under different laws, but the White House seems to be committed to them as a tool, as an economic and a policy tool. So we'll just see. I'm sure there will be more stories to write. Yeah, I'm curious, too, for you, Mike and Carrie, if you guys have any input, you know, with the recent rulings, how will you say if there is any like direct immediate impact for, you know, the daily life of, you know, just to average Americans, like, are there any immediate effects, or I know people are kind of worried, like, will gas go up immediately? Or, you know, you know, I mean, gas is, gas is always a commodity. So it goes up and it goes down. Obviously, when there's geopolitical stuff going on, like in Iran, that that's a bigger issue in the short term

27:17for gasoline. But tariffs, you know, they're tricky because they're not obvious, you know, most, you don't get a bill for your coffee that has in the bottom of the receipt, you know, you bought a pound of coffee and includes, you know, you know, $0.28 in tariffs. It's kind of mixed in there. So it's hard to say that it would have an impact on everyone's daily life. The other issue is, once prices go up, except for commodities, it's hard for them to come down. Things get priced in and businesses are reluctant to lower because their costs are always on a slower, hopefully, or not so slow. Sometimes they'll trek upward. They're reluctant to roll things back. And so I don't know. I fear that we may, you know, be with, these will be with us for a while in some form. And even if they, even if other people want to get rid of them, a new administration, it's hard. Once that money comes in, they get spent. And then what do you, what do you do?

28:17And so that's another thing I've read about a lot of analysts have concerns about. And there's no good answer as of yet. Rachel, you have something happier to talk about, right? Just yeah, just to kind of wrap things up, you know, there'll always be ongoing conversations to pay attention to on that. But yeah, I'm a slightly happier note, you know, as I mentioned during our last live stream, we are still in, you know, our 2026 30 under 30 program nominations are still very much open. This program, as the name, you know, dictates it, we highlight 30 professionals, whether they're, you know, student college aid students, you know, doing research or things in college or in their classes or, you know, people who are out in their career, just making, you know, paving the way in the manufacturing industry, you can nominate them at the link that is on the screen right now, advanced manufacturing.org slash 30 under 30. I'm just with the criteria,

29:18again, the person must be 30 or younger as of December 31, 2026. And self nominations are welcome, so you can definitely nominate yourself. And nominations close April 17. So there is time, but, you know, time always flies, so don't wait too long to get your person in if you want to nominate. Yeah, and this is a, this is a fantastic project that I really enjoyed working on. Last year, there's so many amazing people that we, that we showcase and it's incredible what some of them are doing, whether they're in graduate school or founding startups early in their careers. It's just a really impressive and inspiring array of, array of manufacturing talent out there. So, amid this new cycle that can be a bit disheartening or, or hard to, to keep up with, this is always a bright spot that we love to showcase the positivity there. Absolutely, a great diverse array of people. And I look forward to those profiles on the people who are honored this year in a publication. So, yeah, so it looks like we're at the end of our,

30:21now our fifth, you know, advanced manufacturing life. We've got a few episodes under our belt, so it's a great conversation with you guys today. Thank you. As always, thank you for tuning in. I'm SME Media Editor, Rachel Thomas. I'm Carrie Yitter, SME Media Associate Editor. And I'm Michael McConnell, SME Media Editor. Thanks again, everyone. Have a great rest of your day.