CONCEALED CARRY COMES TO ILLINOIS

THE ILLINOIS

Mwww.ima-naet.org n ufa ctureFall 20r 13

IMA MEMBER PROFILE: C. Cretors & Company Common tax opportunities and challenges for Illinois manufacturers Quarterly Economic Update

Commercial Bank

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United States — Economic Forecasts, 2012-2014F 2013 2014 2015 20122012 22013F 013F 2014F2014F 2 2QQ 3QF 4QF1QFF 1QF 2QF3QF2QF 3QF 44QFQF 1QF GDP SAARSAAR 2.5%1.9% 2.0% 2.9% 3.0%3.1% 3.1%3.0% YoYYo2.8%1.6%Y 2.8% 1.6% 2.6%11.6.4 6 11.4. 1.91.39 2.32.522.5.822.8. 33.0.10 3.3.1 Domestic Demand SAAR 2..11 1.7 2.02.0 3 3.2.2 3 .3 3.3.3 3 3.4.4 3.2 YoYYoY 2 2.4.4 11.5.52.71.51.55 2.7 1.5 1.5 11.5.5 2.22.2 2 2.5.5 2.9 3.33.3 3.3 Consumption SAARSAAR 11.8.88 11.8. 22.7.07 33.0.333.3.133.1. 33.4.24 33.2. YoYYo2Y 2.22.91.91.9822.8.911.9.911.9. 22.2.32 22.3.722.7.033.0. 33.2.32 3.3.3 Business Investment SAAR 4..77 3.9 3 3.4.4 4 4.7.7 4 .7 5.1.1 5 5.4.4 5.5 YoYYoY 7 7.3.3 22.4.44.42.43.34 4.4 2.4 3.3 11.8.8 4 4.1.1 4 4.2.2 4.5 5 5.0.0 5.2 HHousinousing Investment SAARSAAR 14.2 10.3 9.19.14.420.719.61 14.4 20.7 19.6 14.3 14.0 YoYYo12.913.2Y 12.9 13.2 14.6 15.2 14.2 11.5 12.0 13.6 15.9 17.2 17.1 Government SAAR -0.4 -1.7 -2.8-2.8 1 1.1.1 -0.7-0.7 0.0 0.10.1 0.0 YoYYoY -1.0-1.0 -2.4-2.4 -0.7-0.7 -2.0-2.0 -3.2-3.2 -2.3-2.3 - 1.0 -1.0-1.0 - 00.6.6 0 0.1.1 -0.2 Exports SAARSAAR 8.08.80 4.84. 55.7.67 55.6.655.6.844.8. 55.2.12 55.1. YoYYo5Y 3.53.72.72.765.65.02.02.13.13. 44.2.02 66.0.455.4.455.4. 55.3.23 5.5.2 ImportsImports SAARSAAR 66.9.9 3 3.5.5 44.7.7 6 6.4.4 6 6.7.7 6.1 6 6.0.0 6.3 YoYYoY 2.22.2 1.81.85.71.21.98 5.7 1.2 1.9 33.9.9 5 5.4.4 5 5.3.3 6.0 6 6.3.3 6.3 PCE Deflator YoYYo8Y 11.8.211.2.2911.9.111.1.211.2. 11.2.52 11.5.122.1.122.1. 22.1.11 22.1. Core PCE Deflator YYoYo8Y 11.8.311.3.3 11.9.29 11.2.211.2. 11.4.54 11.5.911.9.022.0. 22.1.11 22.1. UnemploUnemployment Rate % 8 8.1.1 7.47 .4 6 6.7.7 7.67.6 7.3 7 7.2.2 7 7.1.1 6 .9 6.8 6.66.6 6.5 S&PS 500 Profits (US$ Per Share)5.5) YoYYoY 66.1.1 55.5.5 66.2.2 5.8 4.2 77.6.6 6.26.2 5.6 7.0 5.9 NA Notes:Notes: F Citi forecast. E Citi Estimate.Estimate. YoY Year-to-year percent change. SAAR Seasonally adjusted annual rate. Domestic demandemandd excludes inventories and net exportsexports.. Sources:Sources: Bureau of Economic Analysis,Analysis, BureauBureau of Labor Statistics,Statistics, II/B/E/S,/B/E/S, Treasury Department, Wall Street JournalJournal and Citi Research forecasts

Interest Rate and Bond Market Forecasts as of 23 October 2013 QQuauarterlyerly AverageAverage CCurrenturrent 44QQ 1 133 1 1QQ 1 144 22QQ 1 144 3 3QQ 1 144 4 4QQ 1414 1Q1Q 1515 US PolicyPolicy Rate (FFeded FundFunds s) End Quarter 0.25 0.250.25 0.25 0 0.25.25 0.250.25 0 0.25.25 0.25 3-Month Libor 0.24 0 0.24.24 0.24 0 0.32.32 0 0.45.45 00.55 .55 0.65 2 Year TreasuTreasurry YieldYield 00.30.30 00.33.33 0 0.43.43 0.580.58 0.730.73 0.900.90 1.08 5 Year TreasurTreasury Yield 1.29 1 1.32.32 1.48 1 1.75.75 1.981.98 22.15 .15 2.38 1010 Year TreasurTreasury Yield 2.52 2 2.56.56 2.70 2 2.95.95 3 3.15.15 3 3.25.25 3.40 3300 Year TreasurTreasury YieldYield 33.62362.62 33693.69.69 3 3883.88.88 44.13.13 4.284.28 4.354.35 4.50 22-10-10 Year TreasuTreasurry CurvCurvee 222 222424 228 2 23838 2 24343 2352 35 233 2 Year Swap Spread (Swap(SwapSwap Less GovGovtt) , bp 13 15 19 20 20 20 20 10 Year Swap SSpprreadea d (Sw(Swaapp Less GovtGov t) , b p 14 1212 8 5 5 5 5 30 Year Swap Spread ((SwapSwapSwap Less GovGovtt ), bp -3 -5-5 -10 -14-14 - -1818 - -2323 -25 3300 Year MorMorttgaggage Yield 4.28 4 4.29.29 4.40 4 4.63.63 4.834.83 4.984.98 5.15 1010 YearYear BreakevenBreakeven InflatioInflation218n 218 224224 238238 243243 240240 2 23838 2 23535

$OOH[SUHVVLRQV RI RSLQLRQ DUH VXEMHFW WR FKDQJH ZLWKRXW QRWLFH DQG DUH QRW LQWHQGHG WR EH D JXDUDQWHH RI IXWXUH HYHQWV 7KLV GRFXPHQW LV IRU LQIRUPDWLRQ RQO\ DQG GRHV QRW FRQVWLWXWH D VROLFLWDWLRQ WR EX\ RU VHOO DQ\ oQDQFLDO product. Opinions expressed hereinein may differ from the opinions expressed by ottherher businesses of Citigroup Inc., are not intended to be a foorrecasst of future events or a guarantee of future results or investment advice, and are VXEMHFWWR FKDQJH EDVHG RQ PDUNHW DQG RWKHU FRQGLWLRQV 3DVW SHUIRUPDQFH LV QRW D JXDUDQWHH RI IXWXUH UHVXOWV $OWKRXJK LQIRUPDWLRQ LQ WKLV GRFXPHQW KDV EHHQ REWDLQHG IURP VRXUFHV EHOLHYHG WR EH UHOLDEOH &LWLJURXS ,QF DQG LWV DIoOLDWHVGR QRW JXDUDQWHH LWV DFFXUDF\ RU FRPSOHWHQHVV DQG DFFHSW QR OLDELOLW\ IRU DQ\ GLUHFW RU FRQVHTXHQWLDO ORVVHV DULVLQJ IURP LWV XVH 7KURXJKRXW WKLV GRFXPHQW ZKHUH FKDUWV LQGLFDWH WKDW D WKLUG SDUW\ SDUWLHV LV WKH VRXUFH  SOHDVHQRWH WKDW WKH VRXUFH UHIHUHQFHV WKH UUDDZ GDWD UHFHLYHG IURP VXFK SDUWLHV Ì  &LWLJURXS ,QF 1$ $OO ULJKWV UHVHUYHG &LWLEDQN 1$ 0HPEHU )',& &LWLEDQN ZLWK $UF 'HVLJQ LV D UHJLVWHUHG VHUYLFH PDUN RI &LWLJURXS ,QF Mission Statement Fall 20 13 The object for which the Illinois Manufacturers’ Association was formed is to strengthen the eco - Common tax nomic, social, environmental and governmental conditions for manu - facturing and allied enterprises in opportunities the state of Illinois, resulting in an enlarged business base and and challenges1 for6 increased employment. Chairman Michael Holewinski IFrlolmi ntaxoabiilsity mof tarannsacutiofnas tco tquualirfyeingrs President for economic incentives, tax opportunities Gregory W. Baise Editor and risks can be highly complex — Stefany J. Henson information from IMA member McGladrey The Illinois Manufacturer is published quarterly by the Illinois Manufac - turers’ Association. All rights IMA MEMBER PROFILE: C. Cretors & Company reserved. The title, The Illinois By Dan Naumovich ...... 14 Manufacturer, is a trademark of the Illinois Manufacturers’ Association. Risk management for manufacturers: Achieving results Copyright 2013© Illinois through smart insurance and employee relations practices Manufacturers’ Association. By Tonya G. Newman and Sonya Rosenberg, Neal, Gerber & Eisenberg LLP ...... 22 Reproduction of all or any part is prohibited except by written permis - sion of the publisher. Published arti - Columns cles do not necessarily reflect the President’s Report: Illinois’ is closing one day at a time — views of the magazine or its pub - lisher. Information in this publica - a sad commentary on the condition of our state ...... Page 4 tion should not be substituted for Legislative Report: Illinois is in a worse financial situation than it was advice of competent legal counsel. before the temporary income tax hike that is now set to expire ...... Page 6 For address changes and adjust - ments, write to The Illinois Human Resources: Concealed carry comes to Illinois — Manufacturers have Manufacturer. Presort standard good reason to be concerned about weapons in the workplace postage paid at Bloomington, IL. — by Mark A. Spognardi, Arnstein & Lehr LLP ...... Page 7 Postmaster: Send address changes to The Illinois Manufacturer, 220 Workforce Development: Knowledge retention — What it takes to acquire East Adams Street, Springfield, IL and train champion employees in today’s economy — by Ken Mall, EDSI ...... Page 9 62701. Telephone: 217-522-1240. Government Initiatives: First-to-file: The race to the patent office is on — If you have any questions, please by Michael P. Furmanek and Benjamin T. Horton, Marshall, Gerstein & Borun .... Page 11 contact Stefany Henson, Editor and Director of Publications at Energy & Environmental Issues: Innovative funding options for energy 217-522-1240, Ext. 3017, or efficiency initiatives — by Constellation ...... Page 19 email [email protected]. Legal Issues: Harassment prevention — An investment you can’t afford to ignore — by David B. Ritter and Jennifer Cerven, Barnes & Thornburg LLP ...... Page 21 Share your company news with IMA . . . Management Techniques: Build a high performance organization with the News information, press re leases and articles may be high performance equation — by Joe Radloff, Dimensional Growth, LLC ...... Page 27 sent to Stefany Henson, Editor and Director of New IMA Members: Welcome! ...... Page 30 Publications, Illi nois Manu facturers’ Associa tion IMA Calendar of Events ...... Page 30 (IMA), 220 East Adams Street, Springfield, IL 62701, or ON THE COVER: Charles “Bud” Cretors, Charlie Cretors and Andrew Cretors (left to right), proprietors email: [email protected]. of C. Cretors & Company in Chicago, a leader in Illinois manufacturing for 128 years and an IMA member since 1940.

The Illinois Manufacturer is underwritten by Constellation — an Exelon Company President’s Report GREGORY W. B AISE

IThlel foillnowoing iedsito riiasl a pcpealroed isn ailmnosgt ev eory nnewespa pder aand yne was btlog ain th et sitamte reecently. This is a true reflection of what I observed while traveling — and it’s a sad commentary on the condition of our state.

was traveling last week around Illinois.What I saw was sad. Very sad. My observations have been cement - ed in my mind while witnessing one gubernatorial hopeful resigning his candidacy and others continue to maneuver aggressively. To those who still aspire to serve in the governor’s mansion, I have some pointed questions that voters need answered. I will get to those in a moment. IMy trip began in my hometown, Jacksonville, for a memorial service for a mentor of mine which may have set the mood, but as I left town with fond memories of what used to be a thriving community, I was struck with how things had changed. Oh, Jacksonville still has its good points. While some manufacturers are still there, driving out of town it’s hard to miss the empty skeleton of the old Anderson Clayton facto - ry. It began manufacturing food products just after World War II, but closed a few years ago. Several other facilities are closed and the manufacturing base has shrunk dramatically. The town reflects a tired image of an era gone by. Later in the week I drove to Peoria. I traveled via Illinois Route 29, which enters the city from the north. Passing the small towns that dot the road along the Illinois River, you see empty buildings that once housed family-owned manufacturing facilities and were the center of economic activity in the town. They are now gone, as are the cafes, gas stations and small retail establishments that thrived when they were in business. . . . CAT executives More towns that reflect a tired image of an era gone by. When I arrived on the outskirts of Peoria, I passed the full parking lot of the Mossville Caterpillar facility. get so many overtures Finally an image of the way it used to be. But empty manufacturing and retail facilities on the north side of town quickly snapped my attention back to the “new reality.” The housing stock is mostly run down or from other states’ empty. One has to wonder, where did those families go to find their American dreams? governors and Arriving downtown, the energy level shot through the roof. A new CAT visitors center was teeming with guests. CAT’s headquarters dominated the skyline, a CAT tech center was close by and the looming East economic Peoria manufacturing hub was just a couple of miles away. But could all of this go away, too? I know for a fact that CAT executives get so many overtures from other states’ governors and economic development depart - development departments that they now have a form letter they send in response thanking them for their ments that they now interest but declining. For now. Will that always be the answer? Many scoff at the notion, but don’t be so sure. I am only observing and have no knowledge or insight, but when you look at the disappearing manufacturing have a form letter landscape of Illinois, one cannot know the answer to that question with certainty. Thank goodness CAT wants to stay here, in a state that has helped drive others away. And I’m sure the 4,000 Illinois companies who are they send in response vendors to CAT thank their lucky stars as well. But how long can good people tolerate bad treatment? thanking them Earlier that day, the news of 400 jobs associated with one of our members, a lighting company in Gurnee, announced they were leaving for Kenosha, Wisconsin. Their employees won’t even have to move. Another for their interest but blow to our state’s manufacturing base. One does not have to travel any distance to see a recent example of Illinois’ loss of jobs and the havoc it is bringing to our economy and citizens. declining. For now. Our unemployment rate continues to lead the Midwest and be second worst in the nation. The violence and murder rate in neighborhoods that once housed manufacturing facilities in Chicago are national news. Our pen - sion debt is worst in the nation. Our state continues to spend more than it brings in each year. Illinois is the poster child for the ruinous economic policies of high taxes, excessive workers compensation costs and regula - tory policies that drive employers to look elsewhere. Politically, we need solutions, not slogans. We cannot afford to wait. We desperately need leadership. So I ask our candidates for governor on both sides of the aisle: What are your specific answers to these questions? No slogans. No quibbling. No spin. 1. How would you solve the pension debt problem? (No, not anyone else’s plan, your plan.) 2. Do you support the extension of the temporary state income tax? If not, how do you plan to replace that revenue? 3. How do you plan to improve our state’s education program to produce a skilled workforce for the future? 4. What is your plan to bring down worker compensation costs and reform our state’s burdensome regulato - ry climate? 5. How do you plan stop Illinois from closing one day at a time? Until we hear some specific answers to those and several other important issues, Illinois will continue to reflect a tired image of an era gone by. n

Gregory W. Baise is President and Chief Executive Officer of the Illinois Manufacturers’ Association. He may be reached at 630-368-5300, or via email at [email protected].

4

Legislative Report MARK DENZLER

Solutions, not clichés, for Illinois’ tax system

ore than two hundred years ago, Ben Franklin coined the phrase, in this world nothing can be said to be certain, except death and taxes. While he was actually describing the newly minted United States Constitution in his letter to Jean-Baptiste LeRoy, Franklin’s words are extremely prophetic in Illinois today, where we are just beginning to see the start of a Mmajor tax policy discussion set against the backdrop of looming 2014 elections. Nearly three years ago, in the waning days of the 96th General Assembly, Governor Patrick Quinn and a Democrat General Assembly passed the largest income tax increase in Illinois histo - ry. Lame duck lawmakers provided just enough votes to increase individual income taxes by 66 percent while corporations saw their tax rates jump by 45 percent. Calling it a four-year temporary income tax hike, supporters like Senate President John Cullerton stated during the floor debate that “the first thing we have to do is pay our bills and cut spending.” Fast forward to 2013. Despite this massive increase in income taxes, in many ways Illinois is in a worse financial situation than before. While our mountain of unpaid bills has decreased slightly over this time, it still hovers around $6.5 billion. Illinois’ pension debt — the absolute worst in the United States — has skyrocketed and now approaches $100 billion despite the fact that the state While advocates of a has made its actuarially-required pension payment in each of the last three years. While many other states have begun to recover from the recession, Illinois remains mired in economic malaise graduated income tax with a 9.2 percent unemployment rate, the second highest in the nation. Now, with only one year left on the “temporary” income tax increase, the Governor and many like to use the old Democratic lawmakers are already looking past the “temporary” income tax (set to expire at the cliché of making end of 2014) and exploring a new, graduated income tax on Illinois taxpayers. One particular pro - posal authored by retiring Rep. Naomi Jakobsson from Urbana creates a seven-tiered system with people pay their a top rate of nine percent for taxpayers earning more than $500,000. While advocates of a graduated income tax like to use the old cliché of making people pay “fair share” because their “fair share” because it’s politically popular, such a system will have a negative impact in the it’s politically popular, real world, both for individual taxpayers and for businesses. A small business with approximately $500,000 in annual revenue would see a $20,000 tax hike compared to today’s five percent tax such a system will rate under this graduated income tax plan. That’s money that could be better invested in new equipment or pay raises for employees. have a negative A middle class family, perhaps a teacher and a firefighter, earning a combined income of impact in the real $100,000 would pay $2,000 in additional taxes under the graduated income tax plan. That family could use this extra money for groceries, car repairs, or perhaps a short vacation. world, both for The fact of the matter is that a flat tax system is one of the true economic benefits that Illinois still enjoys. individual taxpayers But our tax system problems cannot be laid solely at the feet of the Democrat Party who initi - and for businesses. ated and passed the record income tax increase. Many Republican legislators, particularly those seeking higher political office, like to simply tell people that Illinois’ problems can be resolved solely by “eliminating the income tax increase.” But those legislators and candidates owe us more than simple platitudes. How do they plan to balance Illinois’ budget by eliminating between $6 and $7 billion in annual revenue? Certainly cutting taxes will stimulate the economy, but addition - al budget cuts and program eliminations would be necessary. As we head into 2014, Illinois will hear an awful lot of rhetoric from the political candidates on both sides of the aisle. Some will be screaming “fair share,” while others will yell “cut taxes.” Neither solution is that simple. We need real leaders with real solutions for reforming Illinois’ tax system to make it work for everyone. n

Mark Denzler is Vice President and Chief Operating Officer of the Illinois Manufacturers’ Association. Mark can be reached at 217-522-1240, extension 3008, or [email protected].

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6 Human Resources MARK A. SPOGNARDI

ECmoplonyecrse coancleernded acboautr wreya pconos imn thee sw otrkopl aIcellinois

n July 9, 2013, the Illinois other state of a misdemeanor involv - public pre-school and daycare cen - General Assembly enacted the ing the use or threat of use of physi - ters, and elementary and secondary Illinois Firearm Concealed cal force or violence within the five educational establishments, and in Carry Act (40 ICLS 66), becoming year period preceding the date of their parking lots. The law also pro - Othe last state in the Union to adopt a the application for a concealed carry hibits concealed carry in hospitals, concealed carry firearms law. The license, or two or more violations of mental institutions, and non-acute law requires an Illinois Concealed driving under the influence of alco - health centers, and their parking Carry License for a citizen to carry a hol, drugs, intoxicating compounds, lots, and in establishments where concealed weapon in Illinois, or a combination thereof, or as the more than 50 percent of the revenue excluding current peace officers and subject of a pending arrest warrant is derived from the sale of alcoholic retired police officers under a feder - or prosecution. The license applicant beverages, and their parking lots. ally approved program. The law must also not have been under a The law prohibits the concealed becomes effective immediately, but court ordered alcohol or drug treat - carry of firearms in any building or the legislation gives the Illinois State ment program within the preceding parking area of any area under the Police, charged with enforcing the five years of the date of the license control of the executive or legislative law, 180 days after the Act’s effective application. Finally, the applicant branches of state government, date to issue rules and regulations. must undergo 16 hours of approved except for areas under the control of The State Police will make applica - firearms training. the Department of Natural Resources tions available to the public on The law places restrictions on where firearm possession is permit - January 5, 2014. where firearms can be lawfully car - ted. The law also prohibits con - The law has a litigious history, ried concealed. Conceptually, the cealed carry in any court building, borne out of the lawsuit known as law generally places restrictions on or building under the control of Moore v. Madigan , in which the and makes distinctions between car - local government, or any area where Seventh Circuit found that the State’s rying a concealed weapon in public firearms are prohibited under federal ban on carrying firearms was uncon - and private buildings and their park - law. The prohibition also extends to stitutional and in violation of the ing areas. Specifically, the law pro - any building or parking area of any Second Amendment to the hibits concealed carry in private and see page 8 Constitution of the United States. As CONCEALED CARRY a result of the lawsuit, the Illinois legislature was ordered by the Court to, within 180 days, draft a law allowing the carrying of a concealed firearm. The law does not allow the open carry of firearms. Under the law as passed, the per - son carrying must possess a valid license to carry a concealed weapon. A “concealed firearm” means a loaded or unloaded handgun carried on or about a person concealed or partially concealed by the person licensed. It also means the carrying of a weapon in a vehicle. To receive a concealed carry license, an individual must be at least 21 years old and possess a valid Firearm Owner’s Identification Card (“FOID”). The individual is disquali - fied if found guilty in Illinois or any

Mark A. Spognardi is an attorney with the law firm of Arnstein & Lehr LLP in Chicago. He may be contacted by phone at 312-876-7186, or by email at [email protected].

7 who are in control of statutorily pro - that a person may carry the con - CONCEALED CARRY hibited zones must also post this cealed weapon in the immediate Cont. from page 7 approved sign. The law provides an area around the vehicle in the pro - express presumption that concealed hibited parking area, for the limited firearms are allowed to be carried purpose of storing and retrieving the adult or juvenile detention or correc - on the property if no approved sign weapon from the vehicle’s trunk, tional institution, prison or jail. is posted. The state approved sign provided the person ensures the Additionally, the law prohibits will be available on the web site of firearm is unloaded before exiting concealed carry in public parks, the Illinois State Police at the vehicle. playgrounds, and athletic facilities, www.isp.state.il.us/firearms. The law Because of the language concern - licensed gaming establishments, also acts as a denial and limitation ing prohibited areas, and a failure to sports stadiums/arenas, airports, on home rule powers under the adequately address a private employ - and amusement parks, museums, Illinois Constitution. er’s property rights, it can be expect - and zoos, and their respective park - ed that there will be litigation over ing areas. Public and Private col - the extent to which an employer leges and universities are free to The law has a litigious history, may prohibit firearms in areas adja - develop policies regulating the car - cent to the physical establishment rying of concealed firearms, includ - borne out of the lawsuit known where it conducts business, such as ing parking areas. Cryptically, the parking lots. Given the tension law states that the owner of real as Moore v. Madigan, in which between the presumption of lawful property of any type may prohibit carry when no sign prohibiting carry the carrying of concealed weapons the Seventh Circuit found that is posted, and given the statutory on the property under his or her language allowing concealed carry in control, but the owner must post a the State’s ban on carrying parking lots, future litigation will sign noting that firearms are prohib - focus on the extent to which ited on the property. firearms was unconstitutional employers may prohibit employees The law contains important from concealed carry in the employ - employer rights, and provides that and in violation of the Second er’s parking area, and whether there an employer may prohibit firearms has been adequate posting. or weapons on its property. Amendment to the Constitution A prudent employer will have a Specifically, the law states that signs written policy, either stand alone or prohibiting the concealed carry of in an employee handbook, which guns shall be posted at the entrance of the United States. applies to visitors and employees, of any building, premises, or real stating its policy with regard to property specified as a prohibited weapons on its property, including area, unless the building or premises The law provides an important its parking lot, and other areas that is a private residence. The law also exception which applies to all it controls. For those employers who provides that the owner of private employers and all statutorily prohib - wish to prohibit concealed weapons real property of any type may pro - ited areas. This exception provides on its property, it should clearly hibit the carrying of concealed that a person may lawfully carry a specify where concealed carry is firearms on the property under his concealed weapon in a vehicle in a prohibited, and post conspicuously or her control. To invoke this prohi - parking lot, and may carry and store in those areas where the prohibition bition, a sign measuring 4” x 6” the firearm in a locked case, in a applies, including parking areas. inches must be conspicuously post - locked, parked vehicle in the park - Other employers may be more gun ed. The state police are mandated ing lot. When stored in the vehicle, friendly, allowing concealed carry in with adopting rules for the standard - it must be in a secured container out their respective physical buildings, ization of signs. As noted, employers of plain view. The law also provides and/or in the parking lots. n

IMA’s 2013-2014 Annual Compensation Report now available . . . How do your compensation plans compare? This report is what you need to plan for the future. Compiled by the Illinois Manufacturers’ Association with assistance from Verisight, the IMA Compensation Report contains valuable data specifically relevant to Illinois manufacturers. Order online today at: http://www.ima-net.org/2013-14-comp-report For information, call Janie Stanley, 800-875-4462, ext. 4214, or email: [email protected] IMA’S 2014 HOLIDAY REPORT IS ALSO AVAILABLE ONLINE AT WWW.IMA-NET.ORG

8 Workforce Development KEN MALL Knowledge retention — What it takes to acquire and train champion employees in today’s economy!

ne of the leading indicators companies are investing in technolo - Skills Gaps — It is clear that high - on the health of the manufac - gy. A company called iRobot sells a er skilled workers are doing better turing industry that everybody $22,000, easy-to-train robot designed during this recovery than the lower can agree on is auto sales. In to go in a factory where they do not skilled workers. It is also clear that October, automakers reported anoth - currently have robots. The robot has when the amortized cost of purchas - er month of double-digit increases, a useable life of about three years, ing a robot is less than half the cost selling 17 percent more cars com - which means it costs less than $4 of a low-skilled/low-paid worker — pared to the same month last year. If per hour to operate. Some tradition - the robot will get the job. Fortunately, the trend holds, U.S. auto industry al jobs associated with manufactur - robots still require maintenance, sales would be at a post-recession ing, and even manufacturing jobs which is likely to be performed by high of 16.09 million vehicles, returning to the U.S. from overseas, humans and not other robots. increasing sales by more than 1.6 will likely go to robots. Will the manufacturing sector in million vehicles from last year’s total. Knowledge Retention — It’s the U.S. grow? Yes! Will employment With the unemployment rate hard enough to attract skilled new in the industry also grow? Yes, just nationally still above seven percent workers, but the healthy economy not as fast as most people hope or (and in Illinois more than nine per - (and increased 401k balances) is expect. Future jobs will require cent), a big question is, what does the convincing an increasingly signifi - higher skills, and not just technical improvement in the manufacturing cant portion of the skilled and skills. Future manufacturing workers sector mean for people looking for experienced workforce to retire. and trades people will be expected jobs. It seems that the answer today Years of experience are walking out to solve complex business problems revolves around: wages, technology, the door and little is being done as well as technical problems as part knowledge retention, and skills gaps. proactively to capture that institu - of their daily work — skills that Wages — Our firm recently sur - tional knowledge. see page 10 veyed 62 manufacturing companies KNOWLEDGE RETENTION across the Midwest to identify their future hiring trends. The good news is these 62 companies plan to hire 568 new employees over the next three years with production workers leading the hiring with 280 new hires, followed by machinist, (88 new hires), fabricators (66 new hires), and welder-fitters (54 new hires). The bad news is wages for the less skilled production worker range from $7.25 per hour up to $20 per hour, with the average at $11 per hour. The higher-skilled posi - tions fared a little better, ranging from $8.50 per hour to more than $40 per hour. Technology — The annual investment by U.S. manufacturers in new technology has increased almost 30 percent since the reces - sion ended. Instead of hiring low wage workers to perform simple and repetitive manufacturing tasks,

Ken Mall is Managing Director of Workforce Consulting at EDSI. He has more than 20 years of leadership experience working with top-tier companies, labor organizations and government agencies identifying the skill needs of their workforces, and developing and implementing solutions to meet those needs. He can be reached at 313-271-2660 or by email at [email protected].

9 don’t tell you the skills necessary to Institute of Metal Working (NIMS) KNOWLEDGE RETENTION perform the jobs. and American Welding Society Cont. from page 9 Analyzing your jobs by defining (AWS), which are based on job tasks the job tasks, and associating skills analysis, making it possible for you with each job task will help you to to map the skill needs of your job to were not needed by assembly line ensure the skills of current and the most appropriate credential for workers a generation ago. future workers will match the job your situation. Training providers tasks you need them to perform. including Career and Technical Skill gaps will also be easy to identi - Education programs base their cur - What does it takes to acquire and train fy and close using job task analysis riculum on job task analysis. Sharing champion employees in today’s economy? It takes everybody working — when gaps are identified, creating your job task analysis with training together — industry, education, and an On-the-Job (OJT) program or providers and CTE programs will government — to create a system identifying an external training help them to improve their programs that will meet manufacturer’s current course is quick and easy using job and meet your needs more directly. and future needs, while taking peo - tasks as the reference. Training providers know that in ple from unemployment (or under - Job analysis is also very useful order to meet employers’ specific employment) to jobs and ultimately, when trying to identify the knowl - skill needs, their training curricula family-sustaining careers. edge leaving the organization. may need to be reorganized to tar - Imagine creating a detailed list of job get exactly what employers are tasks that are key to your organiza - seeking in terms of training content Closing the skill gap is key — but tion’s continued operation, and then and delivery, and to incorporate what can manufacturers do directly identifying who in your organization industry-recognized credentials. to close the skill gap? The answer is easier than you can perform those tasks. Chances are Developing a clearer understand - might think: manufacturers need to you’ll identify several people at or ing of the specific requirements of clearly define what their skill needs near retirement that you depend on your jobs, and sharing that informa - are. Throw away those job descrip - to perform those tasks. With the job tion with current and future work - tions and learn how to perform a task analysis in hand, you’ll have a ers, training providers and others, job task analysis. Job descriptions map to start creating your knowl - will help you acquire and train usually define what employees are edge retention strategy. champion employees in today’s responsible for and the education or The manufacturing industry is economy. n experience level expected, but they embracing credentials like National

IMA 2013 ACnelneubaral tLinugn c1h2e0o yne a• rFs roidf arey,p Dreesceenmtinbge rm 6a,n 2u0fa1c3t u• rJe.rWs .i nM Ilalirnroioistt Chicago

Darren W. Woods, President, ExxonMobil, is our keynote speaker. Mr. Woods will speak on “Energy Forecasting and Its Impact on Manufacturing.” Also . . . Breakout Sessions . . . Networking Reception . . . IMA member Milestone Anniversary Awards Visit the IMA calendar of events at www.ima-net.org for more information or to register today!

Constellation — Provides products and services to manage energy cost and risk over time

10 Government Initiatives MICHAEL P. FURMANEK & BENJAMIN T. HORTON

First-to-file: The race to the patent office is on

ore than two years ago, on patent puzzle. Thus, the AIA strives though, there are plenty of reasons September 16, 2011, for global harmony: why it is a good idea. President Obama signed the It is the sense of the Congress Although it may appear to be America Invents Act (“AIA”) into that converting the United easy to determine who truly invent - Mlaw. The AIA makes dozens of States patent system from ‘first ed first, as required in a First to changes to the United States patent to invent’ to a system of ‘first Invent country, in practice it has system. The changes range from inventor to file’ will . . . pro - proved difficult, expensive and time small things like increasing patent mote harmonization of the consuming. Determining First to office filing fees, to larger things like United States patent system Invent often required litigation or lit - restricting the right to sue those who with the patent systems com - igation-like proceedings, where doc - falsely mark a product with a patent monly used in nearly all other umentary evidence and witness testi - number. On March 16, 2013, the countries throughout the mony were closely scrutinized. AIA’s most significant change went world . . . Ultimately, some trier of fact such as into effect — that change moved the Leahy-Smith America Invents a judge or a jury had to evaluate the United States from a First to Invent Act, § 3(p). evidence and reach a determination country to a First to File country. Despite the benefits of interna - as to which individual invented first tional harmony, maybe, just maybe and, therefore, deserved the patent. there is a hint of unfairness about a Determining who is First to File, First to what? First to Invent means that if two system that awards a patent to the however, is as easy as looking at the individuals, A and B, file patent individual that invented second, date stamps on the competing applications on the same invention, third, or fourth, as opposed to the patent applications. Also, because a the patent may be awarded to the individual who truly invented first. It First to Invent determination often individual that can prove that he almost seems un-American. Despite invented first. He is the First to these undertones of First to File, see page 12 FIRST-TO-FILE Invent. On the other hand, in a First to File country, the patent may be awarded to the individual that simply filed the first patent application, with no regard for who actually invented first. He who is First to File, wins the patent. Until now, the United States had been a First to Invent country for over 200 years. As other coun - tries around the world implemented and modified their patent laws, they abandoned First to Invent because it was complex and inefficient.

First to File is the way of the world When the Philippines switched from First to Invent to First to File in 1998, the United States officially became the last First to Invent coun - try in the world. As one might imag - ine, with the increasingly global nature of conducting business, cling - ing to such a system had made the United States an awkward and com - plicated piece of the international

Michael P. Furmanek ([email protected]) is a partner and the Chair of the mechanical patent prosecution practice group at Marshall, Gerstein & Borun. http://www.marshallip.com. Benjamin T. Horton ([email protected]) is a partner in the patent litigation practice group at Marshall, Gerstein & Borun, a Chicago boutique law firm dedicated to protecting intellectual property since 1955.

11 to prove that it was the First to anniversary of the first-filed pro - FIRST TO FILE Invent, and therefore, deserved the visional, the organization should Cont. from page 11 patent over its competitor. have a better perspective on In a First to File country, the whether making the investment competitor that files first is awarded in a regular patent application is requires judges and juries across the the controlling patent. worthwhile. If a regular patent country to weigh evidence, it is an application is filed by that one inherently unpredictable process. year anniversary, the subject mat - Now that the United States is a First ter in the regular application will to File country should I file patent be entitled to the filing date(s) of What’s the catch with First to File? applications for all my ideas? First to File makes it easier to There are undoubtedly many the provisional application(s) dis - predict who will be entitled to a strategies that manufacturers are closing the corresponding subject patent. But First to File also makes it implementing to protect their corpo - matter. more difficult to determine when rate assets in the post-AIA world. • Third, if your organization is and whether or not to file for a Here, however, are some basic already a prolific patent filer, one patent. things that can be easily done to might consider broadening your When the United States was a maximize your potential in the patent disclosures by including as First to Invent country, it was often United States, the world’s most many related concepts as possi - the case that manufacturers would recent First to File country. ble in the application, even develop new methods or machines • First, establish corporate policies though some may appear to fail and proceed in secrecy through the taking First to File into account. your organization’s particular lit - normal course of business to perfect At a minimum, this could include mus test for patenting. With this those new methods or machines. By establishing a formal evaluation approach, if you subsequently the time the kinks were worked out, program for new ideas. Such develop a new use or commer - the manufacturer would generally evaluations may be conducted by cial application for those ideas, have an idea of the commercial via - one or more members of the the disclosure is there and it has bility of the new method or machine management team, marketing the early filing date on which and the decision whether to pursue team, and/or legal team and you can rely. patent protection was easy. If the should occur on a frequent and The above considerations are invention worked and it had com - regular basis. The faster the eval - only a few that can help manufac - mercial viability — protect! In the uation team learns of new devel - turers alleviate at least some of the meantime, if a competitor developed opments, the sooner they can anxieties that are inevitably present the same idea and sought patent assess the financial and competi - in the First to File, post-AIA world. protection first, the manufacturer tive viability of those develop - Every organization is unique in its could always “swear behind” the ments, which means, for com - structure, objectives and policies, competing patent by pointing to any mercially viable ideas, less time is and therefore, each is encouraged to dated documents, lab notebooks, test wasted from conception of the review those structures, objectives results, correspondence, and the like, idea to when a patent application and policies to ensure alignment that prove earlier invention. Thus, is filed. Another key aspect to with the new United States patent this evaluation process is educa - although the manufacturer may have law realities. n filed for patent protection at a later tion. The engineers, marketing date, it at least had the opportunity professionals, and any other The information contained in this members of your organization article is for informational purposes that may be developing new only and is not legal advice or a ideas must be educated on the substitute for obtaining legal advice. fact that in order to protect those Opinions expressed herein are those developments, they should be of the authors and are not to be evaluated early. attributed to Marshall, Gerstein & • Second, file provisional applica - Borun or any of its former, present tions on everything that your or future clients. organization develops. Provisional applications never become patents themselves, but they can be cheaper to prepare Advertiser Index and file than regular patent appli - Citibank ...... ifc cations. The advantage is that a Constellation ...... 20 & bc provisional application gives the inventor up to a year to test, Heritage-Crystal refine, further develop, and, yes, Clean, LLC ...... ibc determine the commercial viabili - ty of his invention. Within that JCS Computer Solutions .....12 year, further provisional applica - McGladrey ...... 5 tions can be filed to incorporate key refinements over the original PNC Bank ...... 13 concept. By the one year

12

IMA MEMBER PROFILE: C. Cretors & Company is a family business . . . pictured (from left) are Andrew Cretors, Charles “Bud” Cretors and Charlie Cretors (seated) C. Cretors & Company Since 1885 . . . the people who invented the popcorn machine

By Dan Naumovich

he marriage of popcorn and open. Years later, the movie propri - Similar to the Chicago Bears, the movies has been such a har - etors decided to take over this Cretors franchise originally hailed monious and enduring rela - attractive revenue stream and pur - from downstate Decatur before mov - Ttionship that most people have chased their own poppers. And all ing up north and hitting it big. Not never even considered how the two throughout the world, they are still only did Charles Cretors invent the got together in the first place. As is doing so to this day. first commercial popcorn popper, a usually the case in these situations, Andrew Cretors knows the story steam-powered machine, but he also there is a fascinating story of how well. His great, great grandfather, came up with the process of pop - they met. It’s a tale of innovation, Charles Cretors, founded C. Cretors & ping the corn in oil. This resulted in circumstances and an Illinois-based Company in 1885. He also invented more even cooking temperatures manufacturer. those poppers that brought popcorn and more flavorful popcorn. When movie theaters first began to the masses. Today, Andrew serves In 1893, Charles introduced his popping up in the early 1900s, their as president, having taken over for product to the public at the proprietors had to decide how they his father, Charlie Cretors, in 2006. Columbian Exposition in Chicago, wanted to present themselves to the His brother, Charles “Bud” Cretors where the smell of buttered popcorn public. At the time, theaters were and sister, Beth Youdell, are also drew much attention his way. At the the home of either fine arts perform - involved in the business. Charlie said turn of the century his company ances or bawdy burlesque shows. that keeping things in the family has invented a horse-drawn popcorn Deciding that they would rather be been a key to their success. wagon and in the following decade associated with the former, they “This is especially true in the designed poppers that were pow - went for a more dignified atmos - export business. Most of the older ered by electricity. When the phere, one that didn’t include the cultures of the world see family as Depression hit in the 1930s, the selling of concessions. very important. The fact that our cheap entertainment offered by Over time, the movie houses family has continued to run the movies created a boom not just for proved quite popular and ticket business, rather than cash in on it, is theater owners, but for the Cretors holders waited in long lines on the respected. People also like to have a Company as well. sidewalk. Industrious street vendors, face. If you have a complaint with “That was the market we grew selling what was still a novel snack General Motors, there is no Mr. up in and that’s where a lot of our at the time, rolled up with their pop - General Motors to speak to. You sales throughout the years have corn carts to feed the theater goers can, however, speak to Mr. Cretors,” come from. Every major movie the - while they waited for the doors to he said. ater chain in the U.S. and pretty

14 lenges that they currently face is things, we’re not that big of a compa - simply keeping up with demand. ny. We don’t have lobbyists and Still, they are keeping an eye on for - lawyers and PR companies out there eign competition. advocating for us, so an organization “We’ve seen in other markets like IMA lets us leverage our compa - where the foreign competition ini - ny into a much larger voice,” he said. tially offers poor quality, but then C. Cretors & Company has been they stick with it and start to a member of the IMA since 1940. improve. So we’re cautiously watch - Having an association that specifical - ing our competitors to see if they ly addresses the needs of manufac - improve enough to where it would turers has also proved beneficial make it difficult for us,” he said. over the years. When C. Cretors & Company was just At home, one of the challenges “The IMA has been beneficial getting started, they used the above the company faces is finding work - from a benchmarking standpoint apparatus to entice customers to try ers with the necessary experience and a networking standpoint. It their new popcorn snack. and expertise to operate in a manu - gives us the ability to speak to other facturing environment. people who are manufacturers. much throughout the whole world “There’s a lack of skilled labor. There are a lot of other peer groups has had a machine from us,” We need to find people who can out there, but sometimes if you’re Andrew said. put our stuff together. They need to the only manufacturer sitting around Anyone today who has ever vol - be able to read wiring diagrams. a table of service providers, it can unteered to work the concession They need to be able to operate a be difficult to relate,” he said. stand at one of their child’s sporting lathe and know how to cut metal,” C. Cretors & Company has been events has most likely operated a Andre said. a leader in Illinois manufacturing for Cretors machine. In addition to the In terms of the current business 128 years. Their long-term success popcorn poppers, the company man - environment for manufacturers, can be attributed to many things — ufactures other staples of the trade Andrew feels that the state is making chief among them a commitment to such as cotton candy makers, hot dog efforts to create favorable condi - quality and the consistency that cookers, nacho cheese dispensers, tions. He said that his company has results from remaining a family-run and snow cone shavers. Cretors also faced challenges in maneuvering business. Asked for his take on why provides equipment to commercial through the red tape when attempt - they have remained so strong for so food producers. Intersnack, Frito-Lay ing to attain certain incentives being many years, Charlie credits a simple and MOM Brands (formerly, Malt-O- offered and he thinks the manufac - approach: Meal Company) are among its indus - turing industry as a whole would be “Probably just by being direct trial clients. better served if the availability of and honest with customers and While the company manufactures such incentives were better commu - employees.” n and sells concession equipment, nicated. That said, Andrew admits to what the customer is really buying is not being very politically involved. Author Dan Naumovich is a free - an opportunity. Whether it’s a That is why he values the compa - lance journalist and business copy - school, a candy shop, a movie the - ny’s membership in the IMA. writer. He can be reached at ater or a giant food manufacturer, “The voice that IMA provides up [email protected] or through his the customer views the Cretors’ the chain and into the political arena website at www.naumo.com. products as a means of generating is huge. In the grand scheme of revenue. “It’s been recognized since the C. Cretors & Company employee Danny Sotelo assembles days of my great, great grandfather a popcorn machine at the company’s manufacturing facility. that people buy our equipment to make money. And when you think about it, they’re really buying a promise for their investment. So it’s extremely important to us that the machines perform well over time,” Andrew Cretors said. As domestic manufacturing has continued to move overseas, Cretors has taken advantage of their position as an “American Made” company. “We put a Made in America stick - er on every box that goes out, unless it’s going out to parts of the world where they may not want that,” Andrew said. As an international company and the leader in their market, Andrew said that one of the biggest chal -

15 Common tax opportunities and challenges for Illinois manufacturers

By Thomas J. Blaze and Robert Kolosky, McGladrey

tate and local taxes present one state is subject to tax on all of sourced many challenges and oppor - its income in that state. On the other based tunities for Illinois manufac - hand, a manufacturer with activities upon the Sturers. From tax base calculation to in more than one state may establish location of the the nuances of apportionment, from the right to apportion its income benefit of the service, taxability of transactions to qualify - between the states in which it has subject to throwout. ing for economic incentives, tax business activities. However, the Under Illinois’ throwback opportunities and risks can be high - nature and extent of the activities rule, sales of tangible personal ly complex, and are often missed in required to establish the right to property are sourced to Illinois if the the day-to-day focus on operations apportion depends upon the state. property is shipped from and the drive for growth. To maxi - For Illinois income tax purposes, an office, store, mize benefits and mitigate risk, a manufacturer has the right to warehouse, fac - these items should be analyzed in apportion if the manufacturer is tax - tory or other relation to a company’s facts and cir - able in another state. A manufacturer place of storage cumstances. is subject to tax in another state if it in Illinois and the tax - Income tax nexus issues is either (1) subject to a net income payer is not taxable in the One of the core issues in relation tax, a franchise tax measured by state of the purchaser to state income taxes is determining income, a franchise tax for the privi - and/or the purchaser is the which states have the legal right, or lege of doing business, or a corpo - U.S. government. This rule jurisdiction, to impose an income tax rate stock tax in that state or (2) the effectively treats an out-of- on a business. This concept of juris - state has the legal right to subject state destination sale as an diction, or “nexus” as it is known in the manufacturer to a net income Illinois sale for the state tax arena, is defined by lim - tax, regardless of whether the state manufac - itations imposed by the Commerce imposes such a tax on the taxpayer. turers Clause and the Due Process Clause Note that Illinois takes the position that are of the U.S. Constitution, Federal Law that voluntary tax payments and not (e.g., Public Law 86-272), and state payments of a minimum franchise subject specific “doing business” definitions. tax that bear no relation to the man - to taxes These limitations can require highly ufacturer’s activities in that state do in the desti - complex analysis, and conclusions not give the manufacturer the right nation state. In depend upon the states in which a to apportion. regard to a manufactur - manufacturer has business activities Once a manufacturer establishes er’s sales of services, and the nature and extent of those the right to apportion, it is required throwout applies if a tax - activities. to apportion its income in Illinois payer makes sales of serv - The right to apportion, using a single-sales factor formula. ices where the benefit of throwback and throwout. While Under this formula, a taxpayer’s services is received in a the most obvious impact of making income is apportioned using a frac - state in which the taxpayer a nexus determination is whether a tion, the numerator of which is the is not subject to tax. Receipts business has to file and pay income taxpayer’s Illinois-sourced business from thrown out services are exclud - tax in a particular state, these deter - gross receipts and the denominator ed from both the numerator and minations also play out in deciding of which is the taxpayer’s total busi - denominator of the service whether that business has the right ness gross receipts. Sales of tangible provider’s sales factor. The analysis to apportion, is subject to Illinois’ personal property are sourced to for determining whether a business throwback rule for sales of tangible Illinois if the property is delivered or is subject to tax in a state for throw - property, or is subject to Illinois’ shipped to a purchaser within back and throwout purposes is the throwout rule for sales of services. Illinois, subject to a throwback rule. same as is used for determining As a general rule, a manufacturer For manufacturers that also perform whether the taxpayer has the right that only has business activities in services, receipts from such sales are to apportion. However, it is impor -

16 towards payment of Illinois with - Resale certificates from cus - holding taxes and may be carried tomers. Under the Illinois sales tax forward for five years. law, sellers who are required to col - Research credits. In addition to lect tax must either charge tax or doc - the research income tax credits ument an exemption when they available at the federal level, Illinois make deliveries in Illinois. When sell - businesses are allowed to take a ing to customers that claim the resale credit for qualifying expenditures exemption, manufacturers should that are used to increase research document the exempt sale by obtain - and development activities in ing a properly completed CRT-61, Illinois. The Illinois income tax cred - Illinois Resale Certificate. The obliga - it equals 6.5 percent of qualifying tions of a seller with respect to expenditures. accepting a Certificate of Resale were Economic Development for a addressed in Rock Island Tobacco Growing Economy (“EDGE”). The and Specialty Company v. Illinois State of Illinois offers a non-refund - Department of Revenue, 87 Ill.App.3d able statutory state income tax credit 476, 409 N.E.2d 136, 42 Ill. Dec. 641 tant to note that a known as EDGE. EDGE is designed (3rd Dist. 1980). The Rock Island taxpayer that has the to offer a special tax incentive to court held that when a retailer obtains right to apportion encourage businesses to locate or a proper Certificate of Resale that may still be subject to expand operations in Illinois when contains a registration or resale num - throwback or throwout there is active consideration of a ber that is valid on the date it is for sales made into partic - competing location in another state. given, the retailer’s liability is at an ular states if the taxpayer’s For eligible businesses, EDGE end. However, if the registration or apportionment right is awards are based on the amount of resale number is determined not to not established by state income taxes withheld from the be valid, the Illinois Department of its activities in wages or salaries of employees in Revenue will assess sales tax on the those states. newly created jobs or retained jobs retailer. The purchaser’s registration or attributable to a particular project. reseller number should be verified at Income tax The amount of EDGE is awarded the Department’s website by clicking credits and and calculated on a case-by-case on the “Tax registration inquiry” box. incentives basis, and can be as high as the Drop shipments. The adminis - Illinois provides amount of tax receipts collected tration of a drop-shipment or “third numerous tax credits and from Illinois income taxes paid by party sale” can be a troublesome business incentives the newly hired or retained employ - and confusing area for many differ - designed to encourage ees of the company in connection ent businesses, including manufac - business investment. with the project. EDGE can be used turers. To understand the taxation of These programs are against income taxes and is general - a drop-shipment, we must first look subject to varying quali - ly earned and paid over a period at the components of drop-shipment fying requirements and not exceeding 10 years. In addition transactions. Generally, the following application processes, to the requirement that the business occurs: and generally require must have a competing location in • The retailer accepts an order for ongoing documenta - another state, eligible businesses tangible personal property from tion and reporting. must also make an investment and its customer, the final end user of For manufacturers, retain or create employees. the tangible personal property; Illinois’ small busi - • The retailer (who does not have ness job creation, Sales tax on retail sales the desired property) places a research, and economic The sales tax is a tax on the sale similar order with a third party, development credits can at retail of tangible personal proper - usually a manufacturer or distrib - be particularly lucrative. ty, enumerated services, and certain utor; Small business job other specifically taxable items. • The third party then ships the creation tax credit. Any Manufacturers registered for sales tangible personal property direct - Illinois business that has and use taxes are required to collect ly to the retailer’s customer (ulti - no more than 50 full-time sales tax from their customers unless mate user), but sends the invoice employees (counting all locations) an exemption is available and prop - for the property to the retailer; that hires new full time employees erly documented. It sounds simple • The customer then receives an between July 1, 2012 and June 30, on the surface, however there are invoice from the retailer. 2016 is eligible for a tax credit of significant consequences in not fully Sales and use tax on this transac - $2,500 per new employee hired, understanding this concept. tion will primarily depend on the provided the new hire results in an Following are two situations that state where the property is shipped overall increase in employees by the require special attention by retailers to. If the third party shipper is not business. The credit is applied and manufacturers. see page 18 TAXES

Constellation — 24/7 Access to billing and energy usage data

17 manufacturers often end up over - manufacturer can use the credit to TAXES paying sales and use taxes. To help offset the state sales or use tax on Cont. from page 17 manufacturers better understand purchases of production-related tan - some of the core opportunities in gible personal property. Examples of this area, we have addressed some items where a manufacturer can use registered to collect tax in the state of the sales and use tax credits and the MPC include: where they are shipping the proper - incentives below. • All property used or consumed in ty into on behalf of the retailer, then Manufacturing machinery and a manufacturing facility, including the shipper charges no tax on their equipment. In Illinois, sales tax pre-production or post-produc - bill. If the retailer is not registered in does not apply to sales of machinery tion material handling, receiving, the destination state, the liability and equipment used primarily in the quality control, inventory control, then falls into the hands of the ulti - manufacturing or assembling of tan - storage, staging and packing for mate end user to self-assess the gible personal property for whole - shipping or transport; applicable use tax on the transac - sale or retail sale or lease. The • Property used or consumed in tion. However, if the shipper is reg - exemption extends to repair and R&D activities; istered to collect tax in the destina - replacement parts as long as the • Property purchased for incorpora - tion state, then by law they are parts are incorporated into exempt tion into real estate within a man - required to collect a tax on the machinery and equipment. ufacturing or graphic arts facility; transaction from the retailer. The The difficulty in applying the • Fuels, coolants, solvents, oils, retailer can give the shipper a valid exemption includes determining lubricants, cleaners, adhesives, resale certificate that will allow the where the manufacturing process and other supplies and consum - shipper to exempt the transaction begins and where it ends. The ables; and with the retailer. Most destination statute specifies that the manufactur - • Hand tools, protective apparel, states will accept as proof of resale, ing process commences with the and fire and safety equipment. a certificate issued from a state other first operation or stage of production Production-related tangible per - than theirs. Some states do not and in the series and does not end until sonal property does not include herein lay the issue. These states the completion of the final product property used, within or without a require the shipper to have a valid in the last operation or stage of pro - manufacturing facility, in sales, pur - resale certificate from the destination duction in the series. To illustrate, chasing, accounting, fiscal manage - state issued by the retailer. If the forklifts that move raw materials ment, marketing, personnel recruit - retailer can’t issue a certificate from from in-bound transportation trucks ment or selection, or landscaping. the destination state, the shipper into raw material inventory and fork - The MPC must be used within must charge tax on their invoice. If a lifts used in the finished goods two calendar years following the manufacturer finds itself in a drop- warehouse generally fall outside the year in which the credit was earned. shipment situation, it is important to manufacturing process and would Specific MPC forms must be com - understand each state’s laws regard - not qualify for the exemption. pleted and filed by the manufacturer ing third party drop-shipments into However, forklifts used to move par - on an annual basis or the MPC is their states. tially finished goods from one man - not valid. These forms are due by Illinois is one of the states that ufacturing station to another will fall June 30th of each year. The will accept an out of state resale cer - within the manufacturing process Department of Revenue estimates tificate or other proof that the sale is and would qualify for the exemption that the MPC is one of the most for resale. California, on the other as long as they are primarily used in underutilized credits administered by hand, does not recognize the resale that capacity. the Department. exemption when the retailer/pur - Manufacturer’s Purchase Resale exemption for purchases. chaser is not registered in California Credit (MPC). The MPC is a signifi - The most obvious exemption for to collect sales or use tax. Instead, a cant sales tax credit available to Illinois manufacturers is the resale registered California wholesaler is Illinois manufacturing companies exemption. Illinois provides that a required to collect tax from con - and printers that purchase qualifying purchase of tangible personal prop - sumers based on the retail price or exempt manufacturing and printing erty is deemed to be purchased for wholesale price plus a 10 percent machinery and equipment, including resale, and applies to the extent to markup or less if the wholesaler can qualifying repair and replacement which the property is resold as an document a lower markup. parts. Purchasers of qualifying ingredient of an intentionally pro - Sales and use tax exemptions exempt machinery and equipment duced product or byproduct of man - and credits will receive a credit equal to 50 per - ufacturing. This is fairly clear when Illinois makes many sales and cent of the state tax portion of the a manufacturer of furniture purchas - use tax exemptions and credits avail - sales tax (i.e., 6.25 percent) that es wood for an ingredient into the able to manufacturers. However, it is would have been paid if the qualify - furniture tax-free under a resale very complicated to maximize the ing machinery was taxable. For exemption. But what about paint utilization of these opportunities, example, a manufacturer that pur - that is applied to the furniture, acids and on-going documentation chases one million dollars annually used to clean the wood or better requirements can put many of these of qualifying exempt manufacturing yet, paint thinner that is used as an items at risk on audit even if a man - machinery, equipment and repair additive to the paint? Paint will gen - ufacturer qualifies and complies with parts will earn MPC equal to $31,250 erally be classified as an ingredient the initial application and documen - ($1,000,000 * 6.25% * 50%). while acids and paint thinner may tation requirements. As a result, Once the MPC is earned, the see page 24 TAXES 18 Energy & Environmental Issues CONSTELLATION

Innovative funding options for energy efficiency initiatives

ccording to the 2012 Deloitte Option 1: Energy Performance conservation measures (ECMs) like reSources study, 90 percent of Contracting (EPCs) lighting and variable frequency US companies have specific Energy Performance Contracts, drives. The primary markets for this electricity and energy management also known as EPCs, require no option are in the public sector. Agoals in place. Of those companies, upfront capital for energy efficiency Option 2: Design/Build Programs nine-in-ten are specifically targeting projects. Instead, energy efficient In the design/build approach, the electricity consumption and cost building improvements are funded organization that seeks to improve reduction as means to achieve these through guaranteed cost savings over energy efficiency has access to goals. As sustainability becomes more a relatively long-term contract (typi - upfront capital for the energy effi - essential to corporate brand and cally greater than 10 years and up to ciency projects. Capital requirements environmental stewardship efforts, 20) with an energy service company are often in excess of $1 million. The many companies are creating sustain - (ESCO). The ESCO handles project organization funds the project, and ability plans that reduce greenhouse design and development, procure - the ESCO provides an extension to gas emissions and also deliver energy ment, construction, commissioning, the organization’s staff for technical cost savings. Improving energy effi - and reporting, and also may assist expertise to accelerate the effort, ciency is a common component of a with arranging the financing. EPCs maximize efficiency, help the cus - larger sustainability plan that also are typically utilized to leverage tomer understand the energy mar - may include load response, on-site short-term savings projects with kets’ impact on the project and navi - solar installations, renewable energy long-term ones while enabling major gate the available rebates, incentives supply or carbon offsets. energy related infrastructure and tax credits. Primary markets for However, in today’s competitive improvements. Large capital this option are healthcare and higher economy many companies are chal - improvement projects, such as chiller education; secondary markets include lenged to find capital or financing to and boiler replacement, are usually commercial and industrial enterprises. implement desired energy efficiency mixed in with quick payback energy see page 25 initiatives, even when cost effective ENERGY EFFICIENCY solutions could be implemented. According to the Deloitte reSources study, capital funding is the number one barrier to progress, followed by length of payback period. At the same time, many compa - nies lack in-house resources and tech - nical expertise to efficiently design and implement an energy efficiency program. So, given the constraints on financial and technical resources, how can an organization gain control of their energy usage and lower their energy cost? The first step is to identi - fy which energy efficiency option is best suited for your situation. Three ways to reduce energy costs Businesses seeking to improve energy efficiency have three primary options: 1. Energy Performance Contracting 2. Design/Build Programs 3. In-Electric-Rate Funding

Constellation is the preferred energy provider for IMA members. For more information, visit www.constellation.com/IMA. Or, you may con - tact Constellation’s Roger Tarras at [email protected], 888-312-1563.

19

Legal Issues DAVID B. RITTER & JENNIFER CERVEN Harassment prevention — An investment you can’t afford to ignore hen you find yourself with a Pancakes franchise in Racine, harassment prevention and correc - “To Do” list that gets longer Wisconsin. The jury found in tion program were on trial, how each day, and more tasks at favor of employees who claimed would it look to a jury? Or, from a hand than the time to complete they were subjected to sexual more practical standpoint, ask your - Wthem, it can be easy to let anti- harassment and awarded punitive self — if we invest time and money harassment training fall to the bot - damages. The jury verdict was in non-discrimination and harass - tom of the list. Yet a comprehensive, upheld on appeal to the Seventh ment training will we see a return thorough, and well-documented Circuit Court of Appeals, which on our investment? With those training program for all employees in its lengthy opinion provided a thoughts in mind, let’s take a quick and especially supervisors will pro - road map for employers who look at the law, and then consider vide both tangible and intangible want to avoid such dire conse - the benefits of a prevention program benefits that should not be over - quences. EEOC v. Management and some of the best practices for looked. Failure to focus on harass - Hospitality of Racine d/b/a/ effective policies and procedures. ment prevention can lead to dire International House of Pancakes, There is constant litigation involv - consequences. For example: 666 F.3d 422 (7th Cir. 2012) ing federal and state laws prohibit - • News headlines in early May tout - Although an employer may think ing workplace discrimination, ed a $240 million verdict from a that the odds are slim that a harass - including harassment. Title VII of jury in Iowa — in a case brought ment charge against your company the Civil Rights Act (one of the by the EEOC on behalf of a class will develop into a lawsuit that the statutes enforced by the EEOC) pro - of developmentally disabled indi - EEOC ultimately takes to trial with a hibits discrimination on the basis of viduals who alleged they were million-dollar or more outcome, the sex, including harassment because subjected to harassment and dis - mere possibility of such litigation of sex. The non-harassment obliga - criminatory treatment in a food should keep managers and business tions also include other protected processing operation. Although owners awake at night. classes such as race, religion, and the dollar verdict was reduced So perhaps now is the time to national origin. Title VII applies to once the damages caps were ask yourself these two questions — employers with 15 or more employ - enforced, this stunning verdict if the adequacy of our company’s see page 26 sent a clear message to employ - HARASSMENT ers. EEOC v. Hill Country Farms, No. 3:11-cv-00041-CRW-TJS (U.S. Dist. Ct. S. D. Iowa 2013). • In another recent case that gener - ated news coverage, a seven-day trial resulted in a $1.5 million jury verdict on claims of sexual harassment and retaliation by a group of temporary employees at a logistics facility. EEOC v. New Breed Logistics, No. 2:10-xv- 02696-STA-tmp (U.S. Dist. Ct. W. D. Tenn. 2013). Again, the EEOC was the plaintiff on behalf of the victims. The EEOC issued a press release about the case and noted it had brought eight cases to trial in the current fiscal year and pre - vailed in all but one. • The EEOC also brought harass - ment claims against the operators of an International House of

David B. Ritter is an employment attorney and a partner in the law firm of Barnes & Thornburg LLP in Chicago. Jennifer Cerven is also an empoloyment attorney at the firm. David may be reached at 312-214-4862 or by email at [email protected]. Jennifer may be reached at 312-214-8323 or by email at [email protected]. Barnes & Thornburg LLP is an IMA member company.

21 Risk management for manufacturers: Achieving results through smart insurance and employee relations practices By Tonya G. Newman and Sonya Rosenberg, Neal, Gerber & Eisenberg LLP

o borrow from Amelia Earhart, These points go beyond the general abroad, and whether the law of the “preparation is two-thirds of any (and more usual) consideration of jurisdiction(s) in which the company venture.” Carefully assessing the adequacy of policy limits, policy is doing business imposes any addi - pTotential risks — and ensuring that language, trigger issues, exclusions, tional insurance requirements (many appropriate insurance and personnel products completed issues, and do). The penalties for failing to com - and other policies and practices are batch clause issues. ply with some countries’ require - in place — are among the most 1. Claims history and risk assess - ments can be quite severe. important measures a company can ment. The company should review 4. Named insureds. Who are the take to mitigate against some of the its recent claims history, including intended insureds under each policy? greatest legal risks manufactures claims based on employee relations If the company has subsidiaries, are face. Yet, time and again we see issues. Identify the areas of greatest they intended to be covered under companies taking shortcuts with this legal risk, which will aid in the eval - the policies, or do they have their preparation, only to end up in cost - uation of areas of exposure that own coverage? Does the company ly, protracted litigation. might have been overlooked during use the services of independent con - This article pools our collective previous insurance renewals. tractors? If so, consider whether they experiences to tell you what manu - 2. Current and future operations. should be covered under EPL, D&O facturing companies can do now to What are the contours of manufac - and/or CGL policies (the answer is put into place appropriate protec - turing operations? Does the compa - not necessarily “yes”). Do vendor or tions and guard against legal prob - ny intend to expand and, if so, other contracts require the company lems before they arise. where and how? If plans include to provide insurance coverage? If so, acquiring stock or assets of another the manufacturer should ensure that Does the company’s insurance business, due diligence should go its “Additional Insured” endorsements program meet its needs? An obvious starting point in any beyond the usual products liability are correct and that the policy other - discussion of effective risk manage - questions — it should include insur - wise satisfies its obligations to those ment is insurance. And while most ance and indemnity. The company third parties. By the same token, if manufacturers purchase several lines should consider how any indemnity any of the manufacturer’s contracts of insurance, it is our experience arrangements will work, and require another company to provide that a number of manufacturers do whether they will be enforceable as insurance, the manufacturer should not regularly reevaluate their insur - a practical matter after the purchase obtain copies of the relevant policies ance needs. We recommend that (e.g., are there dollars to back them — with endorsements — with every companies regularly review their up). The company should obtain a policy period. existing program, with an eye copy of the target’s insurance poli - 5. Duty to defend and retentions. toward the past (to assess the most cies that may respond to any claim Most general liability policies require prevalent source of claims) and — and keep them so that it may the insurer to defend the company toward the future (to assess potential tender new claims. Last, the compa - against lawsuits. Manufacturers in cer - future exposures based on planned ny also should consider whether tain sectors that face repeated litiga - growth, new product lines, and legal and how the policies being renewed tion in which litigants claim high-dol - developments). A periodic insurance will offer coverage for a newly lar value catastrophic personal injuries audit should result in a more effec - acquired business. or assert high-dollar value property tive renewal process and insurance 3. Outsourcing issues. The insur - damage claims might prefer to control program more carefully tailored to ance implications of doing business the defense. An insurer might be will - the company’s needs. abroad can be complex. To the ing to permit the insured to control When beginning an insurance extent the company is manufactur - the defense, subject to certain condi - audit, consider the following types ing its products in any other country tions such as defense counsel or a of questions and issues, as a starting or otherwise outsourcing, evaluate third-party administrator periodically point for effective discussion with whether a policy written in the updating an assigned claims adjuster insurance brokers, counsel, or both. United States will provide coverage on the status of all litigation, and/or a

22 large self-insured retention for each relevant jurisdictions. Should any - facturers, so are good, proactive occurrence. thing be printed in another lan - employee relations practices. Often Thoughtful consideration of these guage? It also is important to period - overlooked, such practices can play types of questions should guide an ically re-review warnings to take the deciding role in helping to pre - effective evaluation of the entire into account whether the warnings vent or, at a minimum, helping a insurance program, and help deter - are adequate in light of subsequent company successfully and efficiently mine whether it meets the compa - developments since the product’s defend against, a legal claim from a ny’s existing and anticipated needs initial release. If the product is dis - rogue employee that otherwise might during the next policy period. tributed and/or used in other coun - be a source of tremendous financial, tries, the company needs to consider operational and public relations stres - Other proactive risk mitigation — whether a warning written for the sors on a company. From the products liability In addition to taking steps to but - U.S. market is sufficient for those employee relations perspective, effec - ton up insurance coverage issues, other markets (and, again, whether tive risk management must include a manufacturers can be proactive in it should be written in another lan - thoughtful audit of a company’s per - other ways to mitigate the risks posed guage for those markets). sonnel policies and relevant training by the creative plaintiffs’ bar. We offer 3. Actively — even aggressively history, and a working plan for effec - a few suggestions for consideration, — participate in claims investiga - tive implementation and enforcement which are part and parcel of the tions. One of the worst things a going forward. exposure evaluation described above. manufacturer can do from a risk The easiest place to start an 1. Evaluate and assess exposure. management standpoint is to gain a employment audit is by reviewing Just as proper insurance is a useful reputation for “rolling over” and current employee-related policies. In tool in protecting the company’s quickly settling claims. Although it that respect, a good employee hand - bottom line when faced with prod - takes time, manufacturers can shed book is a must. Though the content ucts liability litigation, so too is an themselves of that reputation, which of the handbook will differ depend - evaluation of exposure to that litiga - may well make them a less frequent ing on the culture, needs and tion in the first instance. Conducted target of the plaintiffs’ bar. Shedding locale(s) of a business, every hand - proactively — that is, before a law - that reputation can directly impact book should contain the following suit is filed — such an evaluation the bottom line, both in terms of “Top-5” policies, and risk managers can help identify the scope of expo - reducing resources directed to should ensure they are drafted to sure. More importantly, it can help a defending litigation, dollars spent on comply with applicable law: company identify where changes retentions or deductibles under 1. At-will employment. An can be made to decrease exposure. insurance policies, and in terms of employee handbook should convey Areas of inquiry should include: policy premium dollars. If a manu - the general policy of at-will employ - (a) product design and testing facturer receives notice of an investi - ment, reflecting that either the (including design drawings, design gation of an incident — whether it is employer or the employee may ter - changes, testing documents and a scene investigation or a lab exam minate the employment relationship interviews by counsel of key person - — evaluate the likely exposure and at any time, for any lawful reason, nel involved in both); (b) product decide how actively to participate. with or without notice. While an at- certifications (i.e., U.L. and others) Over time, becoming a regular pres - will employment policy has long and the implications thereof; and (c) ence at investigations (and later, been the staple of any employee for existing products, prior incident aggressively defending rather than handbook, the National Labor reports (including informally report - settling lawsuits) may go a long way Relations Board (“NLRB”) recently ed incidents, previous litigation to convincing the plaintiffs’ bar that put this policy to the test, question - regarding the same product, discus - the manufacturer will no longer so ing whether it might be interpreted sions during risk management or readily settle claims, and ultimately, as interfering with employees’ rights similar committee meetings, etc.). prompting them to turn elsewhere. to discuss and attempt to change It is easy to see that the results of These are only a few suggestions their work conditions, including any such evaluation and assessment to evaluate and mitigate exposure to through joining a union. would be a discovery gold mine in a products liability claim. One of the Regardless of whether the com - the event of litigation. Care should keys to effective risk management is pany is unionized, a poorly worded be taken in selecting who will con - to recognize that products liability at-will policy may draw unwanted duct the evaluation, how they will need not, and should not, be a reac - attention from the NLRB. Thus, it is do so, and how and to whom the tive business. Instead, companies can important to review the company’s results will be communicated, to work with their counsel to evaluate at-will policy with fresh eyes to preserve the attorney-client privilege. and minimize litigation risks posed by ensure it serves its purpose in a 2. Instructions and Warnings. existing products, and as they prepare legally compliant manner. On a Manufacturers should consider hav - to bring new products to market. related note, an employee handbook ing a risk manager as well as legal also should contain: (i) a prominent Good, proactive employee relations counsel review all instruction manu - disclaimer that it is not intended and practices = Lower risk of litigation als, labels, warnings, warranties and Just as smart insurance and prod - should not be interpreted as creating the like, and revise them to ensure ucts liability practices are essential in a contract of employment for any set that they comply with the law of the effective risk management by manu - see page 29 RISK MANAGEMENT

Constellation — Visit www.constellation.com/IMAAD2

23 manufacturers that apply and quali - property’s value when it is first used fy, there is a state utility tax exemp - within the county. The rate was low - CTAonXt.E fSrom page 18 tion on gas, electricity and the ered to .75 percent on June 19, Illinois Commerce Commission’s 2013. Several lawsuits were filed administrative charge and telecom - challenging the validity of this tax. be classified as a consumable. These munication excise tax. Eligibility is On July 24, 2013, the Judge hearing types of determinations depend based on making a minimum invest - the consolidated Non-Titled Personal upon a number of issues, and the ment in the enterprise zone and cre - Property Use Tax cases granted a treatment of one item can vary ating or retaining minimum number preliminary injunction against Cook depending upon the specific facts of full-time-equivalent jobs. County for collecting this tax. This is and circumstances. Local Sales and Use Taxes an ongoing issue that has not been Packaging. The exemption for Illinois manufacturers that are resolved. Manufacturing companies packaging materials and containers located in the City of Chicago or in located in Cook County should is similar to the resale exemption in Cook County should be aware of monitor developments. that items purchased for sale to oth - potential tax issues in both of those Conclusion ers can be purchased by the manu - jurisdictions. All local sales and use Illinois manufacturers face a facturer exempt from tax. In Illinois, taxes in Illinois are administered by number of highly complicated tax sellers of containers to manufactur - the Illinois Department of Revenue, issues. This article provides a high ers who sell tangible personal prop - with the exception of Chicago and level summary of some of these tax erty contained in such containers to Cook County. Dealing with a locally issues, and presents some of the others are deemed to make sales of imposed tax that is administered opportunities and risks related there - such containers to purchasers for locally can create additional layers to. An Illinois manufacturer should purposes of resale if the purchasers of opportunities and risks, and consider reviewing its tax processes of such containers transfer the own - should be analyzed to the same and positions in relation to its cur - ership of the containers to their cus - extent as taxes administered at the rent facts and circumstances to tomers together with the ownership state level. determine whether it is fully taking of the tangible personal property Chicago. The Chicago advantage of these and other oppor - contained in such containers. The Department of Revenue administers tunities and mitigating its tax risks. theory driving this exemption is that over twenty five separate taxes. the packaging is an inseparable part Three taxes that manufacturing com - Author Thomas J. Blaze is a State of the product being purchased. panies located in Chicago typically and Local Tax Director in the Conversely, returnable containers, or should be paying are the Use Tax Chicago, Illinois, office of McGladrey containers where ownership does for Non-Titled Personal Property LLP. Author Robert Kolosky is a not transfer to the purchaser will (Use Tax), the Personal Property Director in McGladrey’s State and generally be subject to the sales tax. Lease Transaction Tax (Lease Tax) Local Tax Practice in Chicago, Enterprise Zone Credits. An and the Employers’ Expense Tax. Illinois. n enterprise zone is a specific area The Use Tax is a tax on the pur - designated by Illinois in cooperation chase of non-titled tangible personal Disclaimer: The information contained with a local government to receive property for use in Chicago from a herein is general in nature and based on tax incentives and other benefits to retailer located outside Chicago. The authorities that are subject to change. McGladrey LLP guarantees neither the stimulate economic activity. For all tax is one percent of taxable pur - accuracy nor completeness of any infor - manufacturers located within the chases with the first $2,500 of pur - mation and is not responsible for any boundaries of an Enterprise Zone, chases each year exempt. The Lease errors or omissions, or for results there is a state sales tax exemption Tax applies to businesses or individ - obtained by others as a result of reliance for building materials permanently uals that either are a lessor or lessee upon such information. McGladrey LLP affixed to the property in a project of personal property used in assumes no obligation to inform the that is certified by the particular Chicago. The tax is eight percent of reader of any changes in tax laws or zone administrator. receipts or charges. The Lease Tax other factors that could affect informa - There are also two additional tax also applies to software licenses that tion contained herein. This publication exemptions that a manufacturer in are exempt under the Illinois sales does not, and is not intended to, provide legal, tax or accounting advice, and an enterprise zone may qualify for tax law. The Employers’ Expense readers should consult their tax advisors under certain conditions. First, for Tax generally applies to businesses concerning the application of tax laws to manufacturers that apply and quali - that employ 50 or more full-time their particular situations. This analysis is fy, there is a state sales tax exemp - workers or employees that perform not tax advice and is not intended or tion on purchases of tangible per - 50 percent or more of their work in written to be used, and cannot be used, sonal property to be used in the the City of Chicago. The tax is $2 for purposes of avoiding tax penalties that manufacturing or assembly process per employee per month. may be imposed on any taxpayer. or in the operation of a pollution Cook County. Effective April 1, control facility within an Enterprise 2013, Cook County imposes a use This article represents the views of the Zone. Eligibility is based on making tax upon the privilege of using in author or authors only, and does not a minimum investment in the the county non-titled personal prop - necessarily represent the views or profes - Enterprise Zone and creating or erty that was purchased outside of sional advice of McGladrey. retaining a minimum number of full- the county. The tax rate was initially time-equivalent jobs. Second, for set at 1.25 percent of the non-titled

24 nities are excessive, alternative ing of 70 or higher in order to be ENERGY EFFICIENCY opportunities for cost savings may considered for leasing. Cont. from page 19 be warranted. In any case, the ener - Similarly, if the organization is gy efficiency company should con - renting or supplying to particular sider the financial implications (and commercial/industrial companies Option 3: In-Electric Rate Funding net costs and benefits) of deviating with efficiency requirements, consid - With in-electric rate funding, no from these constraints. eration of these is needed to opti - upfront capital is required. Relatively mize benefits. How will energy reductions impact low-capital cost energy efficiency Many Fortune 500 companies your new commodity contracts? improvements are funded via energy In most cases, if you are going to require property managers or suppli - cost savings over a relatively short- be entering a new electric contract ers to demonstrate certain levels of term contract (typically 3-5 years). The and are planning to implement ener - energy efficiency in order to conduct ESCO handles project design, procure - gy efficiency measures, you are likely business with them. Hence, attaining ment, construction, commissioning not able to capture all of the benefits this level of efficiency may enable and may assist with arranging financ - of those decreases in energy uses. establishment of beneficial business ing. Primary markets for this option Typically, most retail energy relationships. are commercial and industrial enter - providers will not deviate from your Working with an integrated supplier prises, healthcare, and private higher historical usage and demands when An integrated supplier (ESCO) education. The remainder of this providing new pricing. provides expertise, knowledge, and white paper focuses on this option. However, since the energy resources for all portions of the Strategic integration of energy initiatives improvements and the retail energy energy value chain. Integrated sup - To optimize the benefits of ener - are being delivered by the same pliers offer power and gas supply, gy efficiency initiatives, a holistic provider, there is the necessary renewable energy solutions, and energy approach is recommended understanding of their interaction to demand side offerings such as load that accounts for a broad range of fully maximize the situation. response programs and energy effi - considerations. An integrated, strate - Therefore, improvements to load ciency projects. gic energy plan that incorporates profiles and reductions in demand Such a supplier can help compa - demand-side and supply-side solu - can be recognized throughout the nies take advantage of market tions including commodity procure - term of the contract. prices, reduce energy bill line item ment, energy efficiency and load charges (e.g., capacity, transmission, Rebates, incentives and capacity credits response can yield significant results. To maximize savings, companies and demand tags), and avoid poten - Working with an integrated energy considering energy efficiency initia - tial penalties due to commodity con - supplier will allow companies to tives also need to be aware of feder - tract terms and conditions. understand the options available and al, state, local, and utility rebate and Harnessing energy data for strategic how the pieces of the ‘energy puz - incentive programs, as well as effi - energy planning and management is zle’ fit together. Here are some ciency capacity credits from the another key aspect to achievement important questions an integrated regional independent system opera - of energy related goals. energy supplier can help answer to tor (ISO) or regional transmission Customers that work with integrat - help you make sure your supply- organization (RTO). Also, utility ed suppliers can have better access side and demand-side initiatives are rebate programs, deadlines, and lev - to historical energy usage data, com - working in concert. els of funding are changing constant - pare usage to industry benchmarks, Will energy reduction impact your existing ly. Some utility rebate agreements and build a plan that incorporates commodity or load response contracts? prohibit the capture of efficiency forecasted market prices. Integrated An existing electricity contract capacity credits, while others allow suppliers may also be able to tailor a with your energy service provider companies to capture both capacity program to a company’s specific may pose energy bandwidth con - credits and realize energy savings. needs, help them meet sustainability straints. Bandwidth is the allowable Understanding these various goals, and better navigate complicat - deviance from a historical baseline components and the constantly ed energy markets. in electricity usage. changing offerings is imperative to About efficiency made easy In some cases, an electric supply maximizing the return on your proj - While facing rising costs and contract will impose a fee if a com - ect as well as prioritizing when there budget constraints, many businesses pany’s actual electricity demand or are multiple opportunities in differ - are looking for ways to fund energy usage exceeds or drops below the ent marketplaces. conservation measures. Efficiency allowable bandwidth. As an exam - Made Easy (EME) is a unique solu - An energy efficient supply chain ple, if the electricity supply contract Many companies are seeing tion that combines a commodity imposes a 10 percent bandwidth, increasing pressure from customers price with high-impact energy effi - then a 20 percent reduction in ener - and occupants to be more energy ciency measures without utilizing gy use may not be advantageous, efficient. Companies renting office limited capital. This allows business - depending on the terms and penal - space to government entities, are es to realize cost savings through a ties of the electricity contract. often required to administer energy reduction in energy consumption Similarly, reducing energy usage audits and achieve minimum Energy over time. n may adversely impact existing or Star ratings. planned load response contracts or For example, the U.S. General Learn more about Constellation’s ener - opportunities. If the penalties and Service Administration requires gy efficiency solutions. Call 888-312- terms of these contracts or opportu - buildings to have an Energy Star rat - 1563 or visit constellation.com/IMA.

25 stringent for employers. The Illinois tale. In that case, the Court of HARASSMENT Human Rights Act imposes strict lia - Appeals emphasized that a reason - Cont. from page 21 bility for sexual harassment where a able jury could find that the employ - supervisor is the perpetrator. That er’s preventative measures were means that an employer is liable for inadequate, noting that a non- ees. The Illinois Human Rights Act the actions of a supervisor without harassment policy in and of itself also prohibits discrimination in the the possibility of using the compa - does not shield an employer from workplace. However, the provisions ny’s anti-harassment policies and punitive damages in a sexual harass - that prohibit sexual harassment procedures as an affirmative defense. ment case. New employees had apply to employers with one or Moreover, the Illinois Supreme Court training that consisted of watching a more employees. The Human Rights has ruled that supervisory liability video, reading a copy of the policy, Act also provides for individual lia - will apply even if the supervisor in and signing it. Yet the complaint bility for sexual harassment, while question has no supervisory powers procedure was not available in print Title VII does not. As a result, all over the victim but is a supervisor in for employees to refer to during Illinois employers, regardless of size, a different department. Sangamon their employment, and employees are covered by laws prohibiting County Sheriff’s Dept. v. Illinois who subsequently moved into man - harassment; and all managers in Human Rights Commission, 233 Ill. agerial positions did not receive Illinois can be held individually 2d 125, 908 N.E. 2d 39 (Ill. 2009). training or instruction on managerial liable for their actions. For Illinois employers, training responsibilities with respect to com - Another significant difference and accountability for all employees plaints of harassment. between federal and state law is the is important, but especially so for Other highlights from the case issue of an employer’s liability if a supervisors due to the strict liability are likewise instructive: (1) the mere supervisor engages in sexual harass - standard. creation of sexual harassment policy ment. Under the U.S. Supreme Court With these legal standards in is not enough — it must provide a precedent from the cases of mind, let’s turn to the benefits of meaningful process for employees to Burlington Indus., Inc. v. Ellerth, 524 ensuring that policies and proce - express their concerns, with a rea - U.S. 742 (1998) and Faragher v. City dures are in place and that employ - sonable complaint process; (2) there of Boca Raton, 524 U.S. 775 (1998), ees are trained. must be effective training and an employer is liable for co-worker While placing a dollar figure on accountability for managers who are on co-worker harassment only if the litigation can be challenging, legal in charge of enforcing the policy; (3) employer knew or should have fees and defense costs for a single- prompt investigation of employee is known of the harassment and did plaintiff harassment case can easily “a hallmark of reasonable corrective not take prompt and effective cor - run up to $100,000, and a multiple- action; (4) there must be a clear rective action. But if the individual claimant case or class action can top path for reporting harassment. In the who is accused of harassment is a that figure by a wide margin; and IHOP case, the employer’s policy supervisor, then the employer can these amounts do not include dam - was faulted because it included no be subject to liability, even if the ages paid to the successful plaintiff. names or contact information at all. employer was unaware of the Yet the savings in litigation costs are In contrast to the policy and cur - harassment; this is called vicarious just one reason that companies need sory training that the court (and liability. However, if the harassment to stay up to date in preventative jury) found deficient, a comprehen - did not result in a tangible employ - measures. sive anti-harassment program may ment action (such as a termination), Other benefits, while hard to include the following: (1) training then an employer may be able to measure, include improved morale, for all new hires; (2) training for all defend against the claims by show - greater productivity, and less employ - newly promoted or newly hired ing that it had in place procedures ee turnover. Employees who are sub - supervisors that is specific to their to prevent and correct harassment jected to workplace harassment can supervisory duties and responsibili - and that the plaintiff failed to make be distracted and disgruntled, the ties and periodic “refresher” training use of the procedures. The U.S. effects of which can spread to others for all supervisors; (3) training that is Supreme Court just addressed the in the workforce, lowering morale geared toward front-line employees, question of who is a “supervisor” — and decreasing productivity. Time ensuring that it is in language that is a question that had divided lower spent on workplace investigations understandable to the audience courts. In Vance v. Ball State Univ. also distracts from other pressing (which may, in some cases, mean 570 U.S. (June 24, 2013), the Court projects. And once a lawsuit is filed, translation and documentation in a ruled that an employee is a “supervi - a great deal of time must be devoted language other than English); (4) sor” for purposes of vicarious liabili - to litigation defense. Litigation of this posters, handbooks, intranet ty for harassment under Title VII if nature almost always involves man - reminders, an 800 number for com - he or she is empowered by the agement and even top management plaints and other communications employer to take tangible employ - which distracts them from running that ensure employees have access ment actions against the alleged vic - the company’s business. to the information they need to tim of the workplace harassment. So how best to ensure policies make a complaint — including spe - Once again, the rules under the and procedures will pass muster? cific people to whom complaints Illinois Human Rights Act are more Consider the IHOP case a cautionary see page 28 HARASSMENT The Illinois Manufacturer is underwritten by Constellation — An Exelon Company

26 Management Techniques JOE RADLOFF Build a high performance organization with the high performance equation n today’s world, organizations of to keep the equation balanced. education, experience, and abilities all types and sizes are looking Some organizations have several of an employee have an economic for the winning formula or equa - tools in their toolbox that could help value for employers and for the tion. They want a formula that them in defining their current state, economy as well. It is critical for Iallows the organization to be flexi - measure, and continuously improve organizations to clearly understand ble, empowered, adaptable to all four variables in the High the value of its people. In order to change, and drives continued suc - Performance Equation, while other do so, organizations must continue cess. As organizations seek out this organizations have a few tools in to evolve from the human resources winning formula they must remind their toolbox. The key to using any mindset to the human capital themselves to never overlook the tool to help you in achieving your approach. Human Capital gains or basics. That’s why, from Newton’s goals is knowing what tool to use, loses value depending on how much Laws of Motion to the KISS principle when to use it, and how to use it. is invested. While Human Resource (“Keep it super simple”) and block Using the wrong tool, the wrong is a great resource for supply, it must and tackling metaphors, you will way, and at the wrong time can cost be supplemented with knowledge, find all types of formulas, equations, organizations millions dollars in creativity, and have the ability to per - and models that can lead organiza - profits. So, as you develop your form labor to produce economic tions and businesses to success, win - strategy around the High wealth in order to evolve into ning, and High Performance. I have Performance Equation make sure human capital. The continuous found, through my work experience you define current and future state, process of developing and improving and educational experience (my select the correct tools, improve and your employees and recruiting the working MBA), the following “High develop current state, and measure right employees helps organizations Performance Equation,” that mirrors all the 4P’s of the equation, while to improve and evolve their culture. the KISS principle, does not defy the remembering all 4P’s are not inde - Since people directly impact the laws of motion, and provides the pendent of each other. In order to three other P’s of high performance, block and tackling needed to elevate become a High Performance developing and improving the organizations to a level of High Organization you must develop high human capital will be the key to the Performance. performance culture in all areas of organization’s success. What are your short and long-term plans for developing and improving your human capital? What are your short and long-term goals for your human capital and how will you measure High Performance = People + Processes + Productivity + Profitability your success? What tools are you going to use to develop and In order to better understand the the high performance equation, and improve your human capital? high performance equation, it’s criti - that starts with its people. Here are some thoughts and cal to understand the 4P’s. They are People are the key ideas on how you may be able to their own variable, but also depend - ingredients in human cap - find answers to these questions. ent on each other as you develop ital, which is also the • People are assets that must be your High Performance backbone of every organi - valued, measured, developed and Organization. It seems obvious that zation. Human capital is a rewarded. These four areas must each one of the 4P’s are dependent measure of the economic be part of a short and long-term on the others. But in real life situa - value of an employee’s skill set. This strategy. tions, we often treat them independ - measure builds on the basic produc - • Unlike capital assets, people do ently as we look at ways to improve tion input of labor measure where all not depreciate and can increase our organizations. When implement - labor is thought to be equal. The in value if developed, measured ing the High Performance Equation, concept of human capital recognizes and rewarded. you must define your current state that not all labor is equal and that • Employee assessments, succes - and future state, measure, and con - the quality of employees can be tinuously improve all 4P’s in order improved by investing in them. The see page 28 HIGH PERFORMANCE

Joe Radloff is owner/president of Dimensional Growth, LLC, an employee assessment, training and consulting company focusing on human capital and process improvement. Joe may be reached at [email protected] or 217-691-4447.

27 Lean Manufacturing is a very were OSHA recordable and LTA’s; HIGH PERFORMANCE effective system of Productivity/ Quality Performance in PPM defec - Cont. from page 27 Process/Quality improvement tech - tive; Employee Engage ment including niques developed for manufacturing training, hiring, retention, and succes - environments, but can be used by sion planning; Daily Productivity sion planning, high payoff hiring, all organizations when it comes to Performance; Monthly Spending high performance leadership continuous improvement. Again, Variance and Cost Savings. Improved training and development, skills people are the key to success for profitability is a direct function of an for high performance teams, productivity and process improve - organization selecting the right KRI’s, change management, the trust ment. Lean Manufacturing tech - measuring, and making improve - factor and employee engagement niques can be used as a very effec - ments to those KRI’s in order to are just a few tools that can help tive tool for all types of businesses ensure continued success. After you you develop your people into a and organizations by helping them establish your KRI’s for your organi - high performance organization. identify and eliminate waste. These zation, you will notice that people • Short and long-term goals for techniques are constantly improving have the biggest impact to the human capital can be defined the process and productivity and improvement of every KRI that you and measured in employee reten - are absolutely dependent on well- establish for your organization. tion, employee engagement trained people. Therefore, it is criti - As you start to use the High scores, succession planning, cal that all people in an organiza - Performance Equation in moving employee training and people tion be well trained in their work your organization to High productivity. and develop a clear understanding Performance Organization, you must High performance organizations of the continuous improvement. keep in mind that High Performance recognize that developing, improv - With that being said, it is critical for is a direct reflection of your people ing and valuing their people is criti - leadership at all levels in an organi - and is an ongoing continuous cal to improving the value of its zation be trained and educated in improvement vision. Just like human capital. They know that making the High Performance Newton’s laws of motion and the while most other assets are replace - Equation part of their culture. K.I.S.S. principle, the High able and become obsolete, the With people, Performance Equation never development and nurturing of their process, and productiv - changes but allows organizations to people is key to becoming a high ity training and continuously improve in the four performance organization. improvement programs key areas of its business. One other As I mentioned ear - in place, the organiza - thing to remember is that becoming lier in the article each tion will now see how a High Performance Organization is P in in the High these variables can directly improve a journey and you must continue to Performance Equation profitability in their organization. Not evolve during each leg of the jour - is it’s own variable, but only will an organization see the ney. One may ask, is the journey each being dependent improvement in the bottom line of ever complete when it comes to on each other and with their P/L, they will also see improve - high performance? With that ques - people having the largest ment in all their KRI’s (Key Results tion in mind, you must challenge impact on the other three Indicator). Improvement in the orga - yourself to define your current and P’s in the equation. The nization’s KRI’s is a direct correlation future state of how you and your faster you get your people to the improved profitability of the organization are going to use the moving in the direction of high per - organization. Leaders must remember High Performance Equation in help - formance the greater impact you will the K.I.S.S. principle when establish - ing you to set your long & short- have in moving your process and ing KRI’s for their organization. Key term vision and developing your productivity to a high performance Results Indicator should be limited to strategic plan for High Performance. state. There are several tools that can the most important indicators that Let the journey begin, so start “plan - be used to improve process and pro - drive the business and its profitabili - ning your route and welcome to the ductivity, but none can be successful ty. For example a few KRI’s that I journey of High Performance.” n without the involvement of well- measured during my career as a trained people. leader in manufacturing environment

sheets, signed acknowledgement area. All employers should place a HARASSMENT forms, and other records should be comprehensive review of their Cont. from page 26 kept to ensure an employer can harassment complaint procedures prove that it provided training in the high up on their “ to do” list. A fail - event that its policies and proce - ure to act now could result in signif - should be raised, and alternatives dures become the centerpiece of liti - icant losses and embarrassment in should the employee need to skip a gation — and a shield against a the future. Now is the time to act! n level to report a supervisor’s harass - multi-million dollar verdict. ing conduct. In addition, attendance Employers should not ignore this

Constellation — Over 10 years as the IMA’s endorsed energy supplier

28 incredibly — many companies contin - keep in mind that restrictive RISK MANAGEMENT ue to rely on archaic systems commu - covenant law is constantly evolving, Cont. from page 23 nications policies that focus more on and can vary significantly state-to- telephones and facsimiles than com - state. A restriction that is certain to puter systems and related email, texts be upheld in one state may be term; and (ii) well-worded discipli - and Internet and social media posts deemed a patently overbroad and nary policies giving management the and activities that have come to unlawful in another. In Illinois, flexibility to take appropriate correc - define modern communication. It is restrictive covenants have been rou - tive action, if, when and as appro - essential to have updated communi - tinely enforced so long as they have priate on a case-by-case basis, with - cations systems and, often, social been appropriately tailored in time out being held to a progressive dis - media policies in place to effectively and scope, and based on a legiti - cipline procedure. communicate to employees what they mate business interest. Just recently, 2. Equal employment can and cannot do, and what they however, one Illinois Appellate opportunity/non-discrimination. should expect relative to privacy and Court ruled that a restrictive These policies also are a “must- potential disciplinary ramifications covenant will be enforced only if have” for any employee handbook. when they use company-provided supported by a minimum of two (2) Just as it is relatively easy to write computer communications systems. years of continued employment as these policies correctly, it also is It should be noted that such poli - consideration — an offer of employ - easy to get them wrong, including cies have also recently generated a ment or employment lasting less by failing to include the appropriate great deal of unwanted attention than two years will not suffice. protected categories or a mandatory from the NLRB, so it is important to Fifield v. Premier Dealer Services, complaint procedure to report any write them in with the eye toward Inc., No. 10-CH-9204, 2013 Ill. App. related complaints and concerns. ensuring that will not be deemed to 120327 (1st Dist. June 24, 2013). 3. Anti-harassment. A harassment inappropriately interfere with or chill Thus, crafting an enforceable lawsuit, particularly a sexual harass - employees’ rights to discuss their restrictive covenant is a fine art, and ment lawsuit, can involve protracted terms and conditions of work. should be done by experienced, litigation and greatly damage a com - Of course, a good handbook is competent attorneys who are not pany’s reputation. An updated, com - hardly worth the paper it is written only familiar with the applicable law, pliant anti-harassment policy should on unless it is consistently and effec - but who will take the time needed to help prevent harassment from occur - tively enforced. Policy enforcement understand the company’s business ring in and, to the extent such con - should begin with the company’s and what protections are appropriate - duct does occur, to mitigate its harm - leadership, and specifically the lead - ly required to stave off harmful dis - ful effects through mandatory internal ership’s awareness of and commit - closure, solicitation and competition reporting, investigation and remedial ment to upholding and enforcing activities. action procedures. In federal litiga - personnel policies in a consistent In conclusion tion, maintaining and consistently and effective manner. That requires Experienced, successful risk man - enforcing a well-written anti-harass - risk managers to communicate key agers at manufacturing companies ment policy can make all the differ - handbook policies whenever new know that effective risk management ence between whether the company employees join the company, and requires constant vigilance and will be held liable for the alleged also during periodic training inter - proactive follow-up. Taking effective, conduct, or whether the suit will be vals thereafter. Though often dread - efficient steps now to ensure that the dismissed before it gets to a trial. ed, policy training really does not business is protected with appropri - 4. Wage and Hour. Often neglected have to be, and should not be, “bor - ate insurance coverage, smart prod - or boiler-plated in an employee ing” or “tedious.” If done well, it ucts practices, and working employ - handbook, these policies are essen - should be informative and insightful ee relations policies and practices tial in establishing and enforcing in helping management and subordi - can make all the difference in pre - effective, legal time management nate employees to recognize and venting expensive, protracted and and pay practices, and in providing resolve workplace issues before they image-damaging legal claims later. n a defense to companies in lawsuits turn into legal problems. Tonya Newman is a partner in the General over the payment of wages and ben - Litigation and Insurance Policyholder practice efits. As such claims are frequent Risk management through effective restrictive covenant agreements groups of Neal, Gerber & Eisenberg LLP contenders for class actions targeting In addition to ensuring that the (Chicago). She devotes most of her practice to manufacturers given the nature of business has solid employment poli - products liability defense and insurance their business, it is imperative to cies and procedures in place, manu - counseling and insurance coverage litigation ensure that the company’s wage and facturers should be proactive about for policyholders. She may be reached at 312- hour policies — including policies the measures being taken to protect 269-8425 or [email protected]. as to employee classification, record - the company’s proprietary informa - Sonya Rosenberg practices in the firm’s Labor ing of time, overtime, and paid time tion, products, customers and employ - & Employment group, counseling and advis - off — are in good working order. ees from the competition. Well-draft - ing employers through various employee rela - 5. Communications systems and ed, enforced — and enforceable — tions issues in all aspects of the employment relationship, and representing employers in social media. In the last two restrictive covenant agreements are decades, rapidly evolving technolo - discrimination and harassment claims at all essential in helping a company to levels, from administrative proceedings gies have entirely transformed how achieve these important goals. through state and federal appeals. She may be businesses, and their employees, In reviewing restrictive reached at 312-827-1076 or operate and communicate. Yet — covenants, manufacturers should [email protected].

29 Welcome to the IMA

NA T Me I PwRECA SIT MA membFReEEPrORsT-MCMORAN OIL & GAS RANA MEAL SOLUTIONS Aurora, IL Bakersfield, CA Bartlett, IL AMCOR RIGID PLASTICS GOVERNORS STATE UNIVERSITY RMH FOODS, LLC Batavia, IL University Park, IL Morton, IL AMERICAN FOREST & PAPER HENDRICKSON TRUCK COMMERCIAL ROSE PACKING COMPANY ASSOCIATION VEHICLE SYSTEMS Chicago, IL Washington, DC Woodridge, IL S P X HYDRAULIC TECHNOLOGIES BARNETT/BATES CORPORATION I T RISK MANAGERS, LLC Rockford, IL Joliet, IL Oakbrook Terrace, IL SHAMROCK PLASTICS, INC. BRIDGFORD FOODS OF ILLINOIS LABRIOLA BAKING COMPANY Peoria, IL Chicago, IL Alsip, IL TAYLOR GROUP INSURANCE AGENCY CORBETT DUNCAN & HUBLY PC LINE CRAFT TOOL COMPANY Chicago, IL Itasca, IL Lombard, IL THYSSENKRUPP NORTH DIMENSIONAL GROWTH, LLC MANUFACTURER GROUP BENEFITS AMERICA, INC. Chatham, IL OF ILLINOIS Chicago, IL Naperville, IL FIBERTEQ Danville, IL MIGHTY HOOK, INC. Chicago, IL

N2ovem0ber1 14, 23013 -2014 CaleDecenmbedr 13,a 201r3 of events February 25-26, 2014 IMA’s Annual Sales Tax Seminar Lean Overview with Simulation Today’s Challenge, Tomorrow’s Reward 8:30 am to 12:00 noon CST, NIU-Naperville Presented by IMEC. 8:00 am –4:30 pm, NIU Disadvantaged Business Enterprise Campus, 1120 E. Diehl Road, Naperville Rockford, 8500 East State Street, Rockford. $279 (DBE) Conference A Sales Tax Seminar specifically for manufactur - per person. Meeting today’s manufacturing chal - The Department of Transportation’s Office of ers. JoAnna Simek, Tax Manager with Wolf & lenges demands a lean enterprise — streamlining Business and Workforce Diversity (OBWD) will Company, will update you on recent tax law product design and manufacturing by applying soon open up registration for the 2014 Today’s changes, how manufacturers are impacted by sales lean manufacturing principles concepts and tech - Challenge, Tomorrow’s Reward Conference (TCTR). and use taxes, review exemptions, deductions and niques. Fees include lunch and all training materi - The statewide event, hosted by OBWD, will be exclusions. She’ll also discuss manufacturers’ pur - als. Register at www.imec.org/events.cfm or con - held at the Abraham Lincoln Hotel and Conference chase credit and multi-state taxes. tact Roger Shrum, IMEC Business Development Center in Springfield. Last year, the event attract - Specialist at 815-298-7134 or [email protected]. ed over 365 participants with representation from December 6, 2013 agencies including Central Management Services, IMA’s 2013 Annual Luncheon January 15, 2014 Small Business Administration, the U.S. 10:00 am-2:00 pm, JW Marriott Chicago Hotel, IMA Breakfast Briefing: Addressing the Future Department of Transportation and the Department 151 West Adams Street, Chicago — Keynote for Union & Non-Union Companies of Commerce and Economic Opportunity. This year, speaker: Darren Woods, President, ExxonMobil 8:00-10:30 am CST, Mon Ami Gabi Restaurant, Oak participants can expect one-on-one opportunities Refining & Supply Co., Vice President, Brook Center Mall, Oak Brook. Several recent NLRB with prime contractors, workshops on topics spe - ExxonMobil Corporation. Topic: “Energy decisions and the 2012 elections have changed the cific to the Disadvantaged Business Enterprise Forecasting and its impact on manufacturing.” labor law landscape for union and non-union (DBE) community and a networking event. For employers. Unionized employers will need deeper more information, contact Dana Goodrum at 217- labor contract understanding to protect their con - 524-7793. tractual rights and reinvigorated unions make non- union employers more vulnerable to organizing. Visit http://www.ima-net.org/calendar-of-events for information, pricing, registration, etc., related to all IMA events. For more information, contact Kimberly McNamara at [email protected], 800-875-4462, ext. 9371 The Illinois Manufacturer is underwritten by Constellation — An Exelon Company

30