ILMA Compoundings February 2017 - 9

recent joint MAPI/Deloitte survey [www.mapi.net/forecasts-data/
cyber-risk-advanced-manufacturing] found that 40 percent of
manufacturers had been affected by at least one cyber incident in
the preceding year and that 38 percent of those breaches resulted in
damages exceeding $1 million.

Regulatory Enforcement and Compliance
In the U.S. and abroad, environmental and safety requirements
continue to grow, and not in a unified fashion, so manufacturers
must stay apprised of changes, including in countries' enforcement posture. In particular, countries are increasing their focus
on preventing human trafficking for forced and indentured labor,
a hidden and serious problem. This has direct implications for
manufacturers. The passage of the UK Modern Slavery Act of 2015
is prompting companies to look more closely at all their facilities
and hiring practices. U.S. regulators are not far behind; as one
MAPI member commented, potential legislation (S.1968 - Business Supply Chain Transparency on Trafficking and Slavery Act
of 2015, 114th Congress (2015-2016)) could be very similar to
Dodd-Frank's conflict minerals requirements in terms of compliance obligations for manufacturers.

OPPORTUNITIES FOR IMPROVEMENT
Corporate Tax Policy
At 35 percent, the U.S. has a higher statutory corporate tax rate
than all of our major trading partners - and all OECD countries.
While provisions allow reductions below the top-line statutory rate,
state and local taxes add burdens, too; the net effective corporate
tax rate from all government levels is about 40 percent, including
federal, state and local taxes.

As the U.S. rate held firm over the last two decades, other
countries lowered their statutory rates; this is detrimental to U.S.
competitiveness. Between 2006 and 2014, Canada, China, Germany, Japan, South Korea and the U.K. all decreased their rates by
significant amounts. Hungary is lowering its corporate tax rate to 9
percent in 2017; this will be the lowest rate in the EU.
By standing still, the U.S. is falling behind. If the U.S. switched
to a territorial system, it would remove a barrier to corporate repatriations, promoting an increase in domestic investment. On the
campaign trail, politicians promised to address U.S. tax rates; if a
lower tax rate comes to fruition, it would significantly improve the
competitiveness of U.S.-based manufacturers.

The Regulatory Burden
Manufacturers bear an outsized regulatory burden that costs
companies and the U.S. economy billions of dollars a year. Relieving this burden would be a welcome improvement. Since 1981,
the U.S. federal government has promulgated more than 2,300
manufacturing-related regulations - an average of just under 1.5
regulations per week for more than 30 years. [www.industryweek.
com/regulations/competitive-edge-want-manufacturing-renaissance-fix-regulatory-system]
The MAPI Foundation's 2012 analysis [www.mapi.net/forecasts-data/macroeconomic-impacts-federal-regulation-manufacturing-sector] found that between 1998 and 2011, the cumulative
inflation-adjusted cost of compliance for major manufacturing-related regulations grew by an annualized rate of 7.6 percent. Since
regulations are layered one on top of another, the impact on manufacturers is greater than the sum of individual regulations.
The true cost of these regulations is hard to measure, however,
because the executive branch is required to report the cost impacts
of only "major" regulations (those determined to have an annual
effect on the economy of $100 million or more).
In 2012, the Securities and Exchange Commission (SEC)
estimated that the initial cost of compliance for conflict minerals
regulations would be $3 billion to $4 billion and that annual compliance costs would range from $207 million to $609 million. The
MAPI Foundation calculated that U.S. manufacturing's 2014 costs
for air pollution and greenhouse gas abatement, waste removal and
wastewater treatment totaled 1.2 percent of U.S. manufacturing
value-added, or $24.6 billion. Every dollar that goes to regulatory
compliance is a dollar that cannot be used for jobs, R&D or capital
investment.
The new administration and Congress have an opportunity to
lessen this regulatory burden in two very distinct ways - reviewing outdated regulations to determine which should be modified,
consolidated or repealed and changing the rule-making process to
require better information about likely effects and costs of regulations before making decisions. Both of these actions would reduce
compliance costs and encourage growth and innovation.

9


http://www.mapi.net/forecasts-data/cyber-risk-advanced-manufacturing http://www.mapi.net/forecasts-data/cyber-risk-advanced-manufacturing http://www.industryweek.com/regulations/competitive-edge-want-manufacturing-renaissance-fix-regulatory-system http://www.industryweek.com/regulations/competitive-edge-want-manufacturing-renaissance-fix-regulatory-system http://www.industryweek.com/regulations/competitive-edge-want-manufacturing-renaissance-fix-regulatory-system http://www.mapi.net/forecases-data/macroeconomic-impacts-federal-regulation-manufacturing-sector http://www.mapi.net/forecases-data/macroeconomic-impacts-federal-regulation-manufacturing-sector http://www.mapi.net/forecases-data/macroeconomic-impacts-federal-regulation-manufacturing-sector

ILMA Compoundings February 2017

Table of Contents for the Digital Edition of ILMA Compoundings February 2017

Letter from the CEO
Inside ILMA
What's Coming Up
New Members
Perspective
Industry Rundown
In the Know
International Insight
Market Report
Your New BFF: How Technology Will Boost the Sales and Customer Service Interaction for Your Lubricants Company
The Climate "Accountability" Movement: Why It Matters to the Lubricants Industry
Wind Power Ramps Up Lubricant Demand
Business Hub
Counsel Compound
Washington Landscape
In Network
Portrait
ILMA Compoundings February 2017 - Cover1
ILMA Compoundings February 2017 - Cover2
ILMA Compoundings February 2017 - 1
ILMA Compoundings February 2017 - 2
ILMA Compoundings February 2017 - Letter from the CEO
ILMA Compoundings February 2017 - Inside ILMA
ILMA Compoundings February 2017 - 5
ILMA Compoundings February 2017 - What's Coming Up
ILMA Compoundings February 2017 - New Members
ILMA Compoundings February 2017 - Industry Rundown
ILMA Compoundings February 2017 - 9
ILMA Compoundings February 2017 - 10
ILMA Compoundings February 2017 - In the Know
ILMA Compoundings February 2017 - International Insight
ILMA Compoundings February 2017 - 13
ILMA Compoundings February 2017 - Market Report
ILMA Compoundings February 2017 - 15
ILMA Compoundings February 2017 - Your New BFF: How Technology Will Boost the Sales and Customer Service Interaction for Your Lubricants Company
ILMA Compoundings February 2017 - 17
ILMA Compoundings February 2017 - 18
ILMA Compoundings February 2017 - 19
ILMA Compoundings February 2017 - 20
ILMA Compoundings February 2017 - 21
ILMA Compoundings February 2017 - The Climate "Accountability" Movement: Why It Matters to the Lubricants Industry
ILMA Compoundings February 2017 - 23
ILMA Compoundings February 2017 - 24
ILMA Compoundings February 2017 - 25
ILMA Compoundings February 2017 - Wind Power Ramps Up Lubricant Demand
ILMA Compoundings February 2017 - 27
ILMA Compoundings February 2017 - 28
ILMA Compoundings February 2017 - 29
ILMA Compoundings February 2017 - 30
ILMA Compoundings February 2017 - 31
ILMA Compoundings February 2017 - Business Hub
ILMA Compoundings February 2017 - 33
ILMA Compoundings February 2017 - Counsel Compound
ILMA Compoundings February 2017 - Washington Landscape
ILMA Compoundings February 2017 - 36
ILMA Compoundings February 2017 - 37
ILMA Compoundings February 2017 - In Network
ILMA Compoundings February 2017 - 39
ILMA Compoundings February 2017 - Portrait
ILMA Compoundings February 2017 - Cover3
ILMA Compoundings February 2017 - Cover4
https://www.nxtbook.com/ygsreprints/ILMA/G127535ILMA_vol71_no7
https://www.nxtbook.com/ygsreprints/ILMA/G126213ILMA_vol71_no6
https://www.nxtbook.com/ygsreprints/ILMA/G125546_ILMA_vol71_no5
https://www.nxtbook.com/ygsreprints/ILMA/G124996_ILMA_vol71_no4
https://www.nxtbook.com/ygsreprints/ILMA/G123886_ILMA_vol71_no3
https://www.nxtbook.com/ygsreprints/ILMA/G123315_ILMA_vol71_no2
https://www.nxtbook.com/ygsreprints/ILMA/G122980_ILMA_vol71_no1
https://www.nxtbook.com/ygsreprints/ILMA/G121540_ILMA_vol70_no11
https://www.nxtbook.com/ygsreprints/ILMA/G120882_ILMA_vol70_no10
https://www.nxtbook.com/ygsreprints/ILMA/G120035_ILMA_vol70_no9
https://www.nxtbook.com/ygsreprints/ILMA/G121XXX_ILMA_vol70_no8
https://www.nxtbook.com/ygsreprints/ILMA/G120XXX_ILMA_vol70_no7
https://www.nxtbook.com/ygsreprints/ILMA/G119XXX_ILMA_vol70_no6
https://www.nxtbook.com/ygsreprints/ILMA/G118112_ILMA_vol70_no5
https://www.nxtbook.com/ygsreprints/ILMA/G117382_ILMA_vol70_no4
https://www.nxtbook.com/ygsreprints/ILMA/G116888_ILMA_vol70_no3
https://www.nxtbook.com/ygsreprints/ILMA/G115555_ILMA_vol70_no2
https://www.nxtbook.com/ygsreprints/ILMA/G114774_ILMA_vol70_no1
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no12
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no11
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no10
https://www.nxtbook.com/ygsreprints/ILMA/g109884_ILMA_vol69_no9
https://www.nxtbook.com/ygsreprints/ILMA/g109284_ILMA_vol69_no8
https://www.nxtbook.com/ygsreprints/ILMA/g108494_ILMA_vol69_no7
https://www.nxtbook.com/ygsreprints/ILMA/g107507_ILMA_vol69_no6
https://www.nxtbook.com/ygsreprints/ILMA/g106483_ILMA_vol69_no5
https://www.nxtbook.com/ygsreprints/ILMA/g105803_ILMA_vol69_no4
https://www.nxtbook.com/ygsreprints/ILMA/g104743_ILMA_vol69_no3
https://www.nxtbook.com/ygsreprints/ILMA/g103647_ILMA_vol69_no2
https://www.nxtbook.com/ygsreprints/ILMA/g102869_ILMA_vol69_no1
https://www.nxtbook.com/ygsreprints/ILMA/g101930_ILMA_vol68_no12
https://www.nxtbook.com/ygsreprints/ILMA/g100836_ILMA_vol68_no11
https://www.nxtbook.com/ygsreprints/ILMA/g99200_ILMA_vol68_no10
https://www.nxtbook.com/ygsreprints/ILMA/g98468_ILMA_vol68_no9
https://www.nxtbook.com/ygsreprints/ILMA/g97711_ILMA_vol68_no8
https://www.nxtbook.com/ygsreprints/ILMA/G96767ILMA_vol68_no7
https://www.nxtbook.com/ygsreprints/ILMA/G95397ILMA_vol65_no6
https://www.nxtbook.com/ygsreprints/ILMA/G94323ILMA_vol68_no5
https://www.nxtbook.com/ygsreprints/ILMA/G93127_ILMA_vol69_no4
https://www.nxtbook.com/ygsreprints/ILMA/G91785_ILMA_vol68_no3
https://www.nxtbook.com/ygsreprints/ILMA/G90956_ILMA_vol68_no2
https://www.nxtbook.com/ygsreprints/ILMA/G89146_ILMA_vol68_no1
https://www.nxtbook.com/ygsreprints/ILMA/G87981_ILMA_vol67_no12
https://www.nxtbook.com/ygsreprints/ILMA/G85409_ILMA_vol67_no11
https://www.nxtbook.com/ygsreprints/ILMA/G83595_ILMA_vol67_no10
https://www.nxtbook.com/ygsreprints/ILMA/G81672_ILMA_vol67_no9
https://www.nxtbook.com/ygsreprints/ILMA/G80238_ILMA_vol7_no8
https://www.nxtbook.com/ygsreprints/ILMA/G79388_ILMA_vol7_no7
https://www.nxtbook.com/ygsreprints/ILMA/G78361_ILMA_vol7_no6
https://www.nxtbook.com/ygsreprints/ILMA/G77448_ILMA_vol7_no5
https://www.nxtbook.com/ygsreprints/ILMA/G75899_ILMA_vol67_no4
https://www.nxtbook.com/ygsreprints/ILMA/G75036_ILMA_vol67_no3
https://www.nxtbook.com/ygsreprints/ILMA/G72720_ILMA_vol67_no2
https://www.nxtbook.com/ygsreprints/ILMA/G72220_ILMA_vol67_no1
https://www.nxtbook.com/ygsreprints/ILMA/G70970_ILMA_vol66_no12
https://www.nxtbook.com/ygsreprints/ILMA/G69813_ILMA_vol66_no11
https://www.nxtbook.com/ygsreprints/ILMA/G67522_ILMA_vol66_no10
https://www.nxtbook.com/ygsreprints/ILMA/G66343_ILMA_vol66_no9
https://www.nxtbook.com/ygsreprints/ILMA/G64859_ILMA_vol66_no8
https://www.nxtbookmedia.com