MICHauto Testifies Against House Bill 6233 on Direct Sales

MICHauto’s Director of Government and Community Affairs Jason Puscus provided written testimony today to the Michigan House Government Operations Committee in opposition to House Bill 6233. The issue of direct sales is an important and timely discussion as Michigan seeks to preserve its longstanding dealer franchise model while adapting to the needs presented by the emergence of a consumer market for electric and autonomous vehicles.

MICHauto shares its members’ and the broader business, labor, and environmental communities’ concerns that a rushed effort will fail to address the intended issues while inadvertently causing harm to our ongoing efforts related to economic development, market competition, and the pursuit of a clean energy vehicle fleet. The Detroit Regional Chamber also penned a letter to the same effect.

View the official testimony below.


September 24, 2020
Testimony to the House Government Operations Committee
in opposition of House Bill 6233

MICHauto is a statewide economic development initiative of the Detroit Regional Chamber, dedicated to promoting, retaining, and growing the automotive industry in Michigan. MICHauto embodies a public-private strategy, championing Michigan as the global epicenter of the automotive industry and providing a platform for collaboration on advocacy and talent attraction and development.

MICHauto urges your opposition to House Bill 6233 as introduced. While well intentioned, the objectives of this bill are not ready for legislative consideration, and MICHauto shares the concerns of our members and the broader business, labor, and environmental communities that a rushed effort will fail to address the intended issues while inadvertently causing harm to our ongoing efforts related to economic development, market competition, and the pursuit of a clean energy vehicle fleet.

The issue of direct sales is an important and timely discussion as Michigan seeks to preserve its longstanding dealer franchise model while adapting to the needs presented by the emergence of a consumer market for electric and autonomous vehicles. Michigan’s role as a global leader in this dynamic environment necessitates a balance between protecting the consumer, safety, and enabling a progressive market that is open to new and innovative business models. While HB 6233 hopes to address this issue, codification of the Tesla v Benson stipulated agreement serves as insufficient and potentially harmful. As Michigan continues to pursue the world’s innovators, it must maintain an open door to prospective companies, which will only be hindered by inadvertently creating a closed, unequal, and uncompetitive regulatory scheme.

Michigan’s current warranty compensation rate statute is the result of years of negotiations between manufacturers, auto dealers, and other related stakeholders. Adopted only two years ago, MICHauto and our members have been pleased with the overall results and are not aware of a single complaint or concern from anyone in the automotive community. Revisiting this issue so soon without a compelling reason seems to lack merit and will only create greater confusion and uncertainty in the market. It is also worth recognizing that the proposed bill, by interjecting into pre-existing contracts and unilaterally restating their terms, sets a dangerous – and in this case, wholly unnecessary – precedent of infringing on contractual agreements between consenting private parties.

MICHauto appreciates the ongoing positive relationship shared with Rep. Sheppard as an ally and advocate of Michigan’s automotive industry. We look forward to continuing this conversation on behalf of the industry and participating in a thoughtful discussion on how best to achieve all of these shared objectives.

Sincerely, Jason Puscas
Director, Government and Community Affairs

Middle-Skill Workforce Report Reveals Talent Needs for Connected Vehicles

Connected and automated vehicles (CAVs) are reimagining how automobiles move and interact with their environment, driving new industry development and disrupting traditional suppliers and workers. For regions like Southeast Michigan to succeed in this new era, a well-trained workforce will be needed. The University of Michigan Economic Growth Institute, with support from MICHauto investor American Center for Mobility (ACM), and the Ralph Wilson Foundation, researched the emerging middle-skill workforce needed to support CAVs.  

The subsequent reportUnderstanding the Middle-Skill Workforce in the Connected & Automated Vehicle Sector, provides context for the evolving job duties and details the necessary soft skills and technical skills for the current and future workforce. Additionally, emerging gaps are highlighted for the current and future workforce. 

View the full report.

Key findings demonstrate that a combined mechatronics skillset (a combination of mechanical, electrical, and electronic knowledge) forms the critical foundation for the CAV technician workforce. Advanced skills in software and data systems as well as skills in cybersecurity will be necessary as vehicle complexity and connectivity continues to expand.  

Technicians offer unique perspectives and experiences and can help streamline advancements when appropriately equipped and trained. The success of this sector in Southeast Michigan will depend not only on the engineering designers and innovators, but also the technicians who assist in bringing an idea from design into reality. 

MICHauto Reacts: US Drops Tax on Canadian Aluminum

The Office of the U.S. Trade Representative announced this week that it is ending the 10% tariffs on Canadian aluminum after imposing them in August. The office noted that shipments of Canadian aluminum are returning to normal levels and that it could re-impose the tariffs if imports spike again. Canada was also preparing to impose tariffs on U.S. products before this update was announced.

As an advocate for the state’s automotive industry, MICHauto supports the elimination of this tax. By not imposing these tariffs, the U.S. remains committed to faithfully enacting the terms of the United States-Mexico-Canada Agreement, avoids retaliatory tariffs, and preserves the positive relationship with our largest trading partner. Further, this action maintains affordable materials prices for our state’s automotive companies at a time when they are already battling other challenges posed by the COVID-19 pandemic.

Last month, MICHauto spoke out in opposition of these taxes stating, “At a time when business of all sizes depends on trade for economic growth and job creation – amid an ongoing economic downturn due to COVID-19 – decreasing the value of our cross-border partnership that has shown resiliency the past few months, is harmful to manufacturing and the economy.”

Read MICHauto’s official statement on the matter here.

MICHauto Investors Gather Virtually for Two Weeks of Meetings with Legislators

From Sept. 8-18, MICHauto brought together executives from 12 automotive companies to meet with 28 legislators for 2020 Capitol Conversations: Automotive Impact virtual sessions. Throughout the two weeks of digital meetings, automotive leaders had the opportunity to discuss issues that are critically impacting their companies’ growth, worker safety, and the overall economic health of the industry amid the COVID-19 global pandemic.

Reminiscent of MICHauto’s annual Automobility Day at the Capitol, the 2020 Capitol Conversations aimed to foster collaboration between industry leaders and the state government. While MICHauto was unable to bring investors to Lansing this year, it has never been more important for legislators to have a deep understanding of the impact the industry has on their district and their constituents.

“Bringing together legislators and the voice of the industry is critically important as we navigate the challenges of the pandemic and position Michigan to be a global leader in automobility,” said Glenn Stevens Jr., executive director of MICHauto and vice president of automotive and mobility initiatives for the Detroit Regional Chamber.

Discussions during the two weeks focused on the impact of COVID-19 on Michigan’s automotive industry, with emphasis on steps companies have taken to protect the health of their workers, the impact on the talent pipeline and the ability to get employees back to work, the importance of avoiding another industry-wide shut down, and increased liability issues.

“These small group conversations were very effective in openly discussing our new challenges during a pandemic, and the talent and technology opportunities that will enable our industry’s growth,” said Stevens.

Bamboo Detroit, Ford Motor Company to Host ‘Michigan Central Sessions’ Starting Sept. 16

Join Ford Motor Company and Bamboo Detroit on Wednesday, Sept. 16 from 6-7 p.m. as they bring you local and global experts on mobility, innovation, and startups.

All are invited to join a virtual series this Fall to learn about new trends and technologies shaping our cities’ futures during and after the crisis, and what startups can build and innovate on next. Details for this virtual gathering and discussion will be provided upon registration.

The first session on Sept.16 will explore how innovation districts can fuel startup and economic growth. Hear lessons from leaders in innovation across the country, and discuss together what could be created right here in Detroit to foster new companies.

Upcoming sessions are scheduled for Oct. 14 and Nov. 18.

 

MICHauto and Industry Leaders Provide Testimony in Legislative Hearing on COVID-19

MICHauto took the industry to Lansing to discuss the issues and concerns created by the COVID-19 pandemic. Several key MICHauto stakeholders provided testimony to the Joint Select Committee on the COVID-19 Pandemic, on Wednesday, Sept. 2 at 8:15 a.m. The legislative hearing was broadcast on House TV. Thank you to the Michigan Automotive Caucus for its support coordinating the discussions.

Watch the full session.

View highlights of testimony from:

  • Carla Bailo, President and CEO, Center for Automotive Research
  • Brian O’Connell, Regional Director, State Government Relations, General Motors Co.
  • Glenn Stevens Jr., Executive Director, MICHauto; Vice President, Automotive and Mobility Initiatives, Detroit Regional Chamber
  • John Walsh, President and CEO, Michigan Manufacturers Association
  • Mark White, President and CEO, Shape Corp.

MICHauto’s Glenn Stevens Jr. kicked off the hearing with the following testimony:

Good Morning.

Committee Chair Hall, Majority Vice Chair Nesbitt, Minority Vice Chair Guerra, distinguished Senators and Representatives of the Great Lakes State and the Joint Select Committee on the COVID-19 Pandemic, and Committee Clerk Lake – Thank you.  Thank you for the opportunity to join you this morning with my colleagues and friends from Michigan’s automotive, design, engineering, and manufacturing community.  Thank YOU for your service to all of us and to our State.  It is greatly appreciated.

I had a friend from my hometown of Marquette who left us too soon. Representative John Kivela, of Michigan’s 109th House District, was the type of person who believed in collaboration, in unity and the power and synergy of working together.  I know he is looking down wishing he were here to help and be a part of the solutions we are working on, just as you are today.  He would be pleased to see this today.  Rest in Peace John.

  • November 2019. China witnessed its first case of COVID-19.
  • December 2019. Europe witnessed its first case of COVID-19.
  • March 10th, 2020. Michigan saw its first reported case of COVID-19.
  • March 18th, 2020. The first Michigander lost their life to coronavirus.

As of September 1st, 6,769 Michiganders have lost their lives to COVID-19.  Among them were your colleagues and our leaders, State Representative Isaac Robinson and former State Representative Morris Hood the 3rd.  Also gone too soon. Rest in peace to those gentlemen as well. Too many gone, and unfortunately, we are not through to the other side of this yet.

We would like to submit that because of our healthcare heroes, leaders in so many walks of life, and ordinary citizens and volunteers, this number would undoubtedly be higher.  And because of our automotive, manufacturing, and mobility industries and their actions, deaths have been prevented, and recovery has been enabled.  Just as Michigan mobilized its Arsenal of Democracy in 1940 to provide critical supplies to our allies in their fight against Nazi Germany and the Axis Powers, 80 years later Michigan mobilized again in a fight against an unseen and unknown enemy.  Our Arsenal of Health took over with a century of innovation, engineering, and manufacturing experience, skills, and grit and set it into action again to provide supplies and technologies to a frontline right here in our hometowns.

Today we bring together a representation of the people and companies who stood up, acted, worked countless hours, and are still at it to provide materials, supplies, and equipment to our frontline healthcare heroes.  Our organization, MICHauto, serves as the voice and convening body for Michigan’s automotive and mobility community.  Our home is at the Detroit Regional Chamber. We are part of the economic development, education, attainment, workforce development, and policy initiatives that are helping to drive a diverse and inclusive talent pipeline for growth and opportunity for our industry citizens.  MICHauto also serves as the Statewide association that consists of a “big tent” for our industry stakeholders.  We work with and for the OEMS (Original Equipment Manufacturers), suppliers, technology companies, professional service providers, start-ups, economic development agencies, universities, and community colleges.  We are dedicated to promoting, growing, and retaining Michigan’s signature automotive and mobility industry as the state’s only cluster association.

Before my colleagues address you, I would like to take a few minutes to set the stage and provide you a summary of our industry’s unparalleled previous 6 months which have brought us here today.

March of this year was not the first sign of the battle for our automotive industry in this pandemic.  Michigan is home to many global suppliers and a globally connected supply chain that stretches to every corner of the planet.  Because of this, companies experienced the shutdown of Wuhan, of Italy and subsequently many other parts of the industry landscape. These companies had to deal with the pandemic early on other continents.  These global experiences helped us at home, here in Michigan, when the virus was at our front door.

We have experienced several phases over the past few months.  It began in March with the industry shutting down.  Even in the tumultuous downturn that commenced in the Great Recession of 2008, we did not see a complete shutdown.  Determination of essential production was critical, and companies had to navigate 50 different state governing policies, the closure of our borders, and the myriad of international proclamations and orders.  All of this while some states “stayed open,” auto dealerships were unrestricted, and demand continued.

As mentioned, the industry immediately pivoted to the design and manufacturing of PPE, Personal Protective Equipment, and innovations to support the healthcare workers.  Across Michigan, we saw time and time again companies and individuals making masks, shields, bed coverings, and high-tech equipment such as ventilators. The industry worked 24/7 and was “on call” to support the doctors, nurses, technicians, and first responders who were on duty and literally fighting the battle.

As many of you know, this is a very capital-intensive industry with perhaps the most complex supply chain on the planet.  Therefore, it was essential that financial matters be addressed simultaneously.  Companies sprang into action to utilize lines of credit, minimize non-essential expenses, and prepare for what was a very uncertain future.  Tools such as the CARES act and financial liquidity instruments have been utilized and deployed wherever possible.  Remarkably the industry has not seen a significant surge of bankruptcies or failures.  As someone who has been in this industry and through the Great Recession, I can comfortably say that this is due in large part to our industry’s leadership and actions. Companies operate with discipline, focus, and an eye to the unseen while continuing to execute.  Rather than be a victim of an inflection point, the automotive industry had been adjusting to a slow down and anticipating some leaner years.  However, this pandemic was not something that could have been foreseen.

While companies looked after the well-being of their employees, their balance sheets and continued production for essential industry, preparations were also being made immediately for a restart.  Companies such as Lear, Magna, Adient, Ford, GM, and others created Safety Playbooks.  They used their global experiences and resources to assemble incredibly intricate safety protocols. They detailed every aspect of testing, safety, training, and response imaginable, and the protective equipment that would be needed.  They were done in conjunction with the UAW, with other associations and groups, and as individual companies.   One of the most significant and powerful developments which came out of the development of these playbooks is that they shared them in an open source manner with smaller companies and other industries.  The automotive community set the bar high for keeping companies open and protecting their people.

As our numbers abated and the economy began to turn again, we saw that the OEMs would restart production in May.  MICHauto, along with associations like OESA, the Original Equipment Suppliers Association, advocated for an earlier start for the supplier industry.  Over 70% of the vehicle components utilized in an assembly plant come from the suppliers.  On May 5th we submitted a letter to Governor Whitmer advocating for a minimum of 5 days for the suppliers to start operations prior to the OEMs.  We are pleased that this occurred.

As we sit here today, the safety protocols are working, operations are in full swing and the industry is operating at a very robust level.  On July 16th as cases did see a surge in our State, MICHauto submitted another letter urging Governor Whitmer not to close manufacturing again, but rather to let the safety protocols that were implemented continue to do their job.  There have been no outbreaks linked to our plants. This industry remains committed to keeping businesses open and protecting employees.

Another step we have taken at MICHauto and the Chamber was to ask companies to take the “Mask Up Michigan” pledge and to adopt our “Work Smart. Play Smart” campaign and messaging.  The industry has witnessed that while the Safety Playbooks are working, it is important that employees remain vigilant in all aspects of their lives.   Many companies such as Lear and Continental Structural Plastics, a Teijin Company, have utilized the SMART acronym:

  • Socialize in small groups
  • Mask up to keep manufacturing moving
  • Always opt for outdoor dining and activities
  • Remember to be smarter than the virus and to be vigilant of the symptoms
  • Take this seriously.  It will be temporary, and we WILL get through this.

We will do what it takes to continue to keep our companies open, people employed, and our communities as vibrant as possible in this trying time.  Michigan is home to 22 OEMs, 96 of the top global suppliers to the North American market, and over 2,200 testing, design, engineering, and manufacturing facilities.  The auto industry is in some way directly or indirectly present in every community of our State.  It has been our lifeblood and it will be our future as we continue to build the vehicles in demand today while imagining and engineering the next generation mobility solutions that our societies and planet demand. Transportation is changing, and Michigan is at the forefront of this revolution.  We have proven over the decades how innovative and resilient we are, and we have shown it again these past six months.  We have proven that we can make what is needed for the market in times of emergency.  This industry has an annual economic contribution of $225 Billion to our State.  The opportunity to capitalize on the growing mobility sector and to continue to use the auto industry as a platform for diversification through Industry 4.0 technologies and mobility solutions will be critical for our State.  This starts with education, infrastructure eliminating the digital divide for all citizens, and to growing our population in this State.

There are challenges that the pandemic will continue to throw at us, and you will hear about some of them today.  There are also so many success stories of people and companies that have stepped up that they are literally impossible to track.  There are also the challenges for companies to implement the USMCA, deal with liquidity issues, and adapt to the changing market forces.

Since March 23rd, every Monday at 3 p.m. we have convened a call.  On this call with Jason Puscas, who heads up Advocacy for MICHauto (thank you for your efforts Jason) are representatives from MICHauto, Michigan Manufacturers Association, Original Equipment Suppliers Association, Motor Equipment Manufacturers Association, Center for Automotive Research, The Right Place in Grand Rapids, Business Leaders for Michigan, the Detroit Regional Partnership, the Michigan Economic Development Corporation, Labor and Economic Opportunity Department, federal legislators like Congresswomen Dingell and Stevens and the office of Sen. Gary Peters as well as periodically representatives of the Michigan Legislative Auto Caucus.  Most importantly we also have members of the Michigan Legislative Auto Caucus involved with these calls and in daily contact with the industry.  Sen. Schmidt, Sen.McMorrow, Rep.Lilly, and Rep.Tate the Co-chairs of the Caucus have been engaged and a tremendous asset for all of us.  In March and April, this group worked to coordinate PPE manufacturing and supply, we moved into safety protocol and recovery.  We are now focused on navigating the current “new normal” while looking toward our future.

Our auto community has set aside everything with the north star goal of protecting and growing our industry, ensuring that it operates to help save lives now and into the future, and designing, engineering, and building the transportation solutions the world needs. We are an industry that solves global issues not contributes to them.

Collaboration, unity, and the power of working together has brought the synergy that has carried us these past few months and it is precisely what WE will need to focus on as we look to the future.

Thank you again for your service, for your time and for listening today.

Guest Speaker Testimony

John Walsh, President and CEO, Michigan Manufacturers Association
Walsh’s testimony on behalf of Michigan-based manufacturers centered on the importance and impact of the supply chain, especially in the throws of the COVID-19 pandemic. He emphasized its fragility and complexity – how the slightest disruption can impact business globally. To that end, Walsh discussed the concept of regionalizing supply chains as a protective measure to ensure great flexibility and nimbler adaptivity should future crises arise. His testimony also addressed liability protections to support health and safety efforts being taken by manufacturers.

Brian O’Connell, Regional Director, State Government Relations, General Motors Co.
O’Connell highlighted General Motors’ leading safety protocols and strategies for maintaining and recovering its business. Like most, General Motors was hit with significant impacts to employment and revenue as a result of COVID-19 shutdowns and lingering effects as restarts are underway. In addition to General Motors’ priority to keep employees safe, O’Connell showcased the company’s efforts to serve the community and support frontline workers at the helm of containing COVID-19. Despite the significant financial damage the pandemic inflicted on its business, General Motors quickly shifted operations to produce essential PPE and medical equipment from the onset of the crisis in the U.S. It converted a plant to make ventilators in less than 30 days, having produced more than 30,000 as of Aug. 31. All of the items they produced were donated as were the 22,000 hours of services to make this possible.

Mark White, President and CEO, Shape Corp.
White’s testimony focused on Shape Corp.’s commitment to its people, navigating the crisis by first protecting the health and safety of team members, their families, and communities and supporting customers before shifting to the business’ recovery. He acknowledged the labor issues the pandemic is causing, particularly with employment challenges with recruiting, absenteeism, and turnover due to workers’ changing personal and financial circumstances. White’s team has made tremendous investments into the team to ensure expert health and safety measures for employees and facilities as well as increased wages and flexibility for workers, calling on legislators to consider the financial toll these necessary adjustments are taking on businesses to establish long-term solutions.

“We need progressive workforce development programs that provide training and upskilling.”

Carla Bailo, President and CEO, Center for Automotive Research
Bailo provided key metrics demonstrating COVID-19’s ongoing impact on the automotive industry in terms of vehicle sales, employment, vehicle miles traveled, and more. She acknowledged that the industry’s recovery is underway – a two-year process predicated on continued progress – which requires three key factors: a healthy workforce, healthy supply chain, and healthy demand. The automotive industry is resilient and has proven so through the collaboration and adaptation through this crisis, which poses both opportunities and challenges as the industry prepares for future innovation and evolution in the new normal created by the pandemic. Paramount to that is leadership in updating supply chains and facilities to accommodate new technology and putting solutions to social inequities at the forefront as new transit systems are created.

“Crisis breed opportunity.”

 

Building Trust Amid Disruption: OEM and Supplier Execution in the New Normal

In partnership with KPMG, MICHauto gathered nearly 50 automotive industry leaders to discuss the transformations underway and how businesses can best adapt. This session with speakers Mike DiClaudio, principal of Human Capital Advisory; Sam Fogleman, partner of Internal Audit and Enterprise Risk; and Atif Zaim, principal of Financial Services Solutions, shared with attendees an assessment of the industry now and the changes required for success moving through and beyond the COVID-19 crisis.

Key takeaways from the conversation include:

  • Company culture is being impacted in unexpected ways. In-office workers report that their happiness at work has worsened compared to remote workers’.
  • Despite uncertainty, commitment has increased. 73% of employees say their commitment to their organization has increased, and 71% say their desire to stay with their current organization has increased.
  • Value and flexibility are key. In these stressful and rapidly changing times, to thrive, employees are seeking flexibility in their work options to accommodate professional and personal needs. Similarly, the need to feel valued as an employee has proven more important and improves morale and productivity.
  • Management styles need to evolve. As workstyles shift to fully remote, hybrid, or phasing back into physical offices, managers will need to be more versatile than ever, especially to overcome challenges around defining productivity and effectiveness.
  • Focus must shift from where we work to how we work. As work is reoriented, businesses should consider how work is done in the framework of task, type, tools, time, and tech,
  • Workforce analytics must become a priority. While businesses use data to get to know and better serve their customers, now is the time to apply the same research, monitoring, and predictions to employee behaviors and feelings. Focusing on the human perspective will allow teams to better support employees and predict and avoid challenges that may lie ahead.
  • Businesses can navigate the complexities of compliance through a module-based approach. Using categories of strategy and policy, structure, risk and data analytics, and compliance and process can help identify key or evolving priorities and guide program management strategies.
  • Balance immediate needs with future reality. The current priority for businesses is to stabilize and establish processes to restart safely and effectively. Special attention to maintaining productivity, solving for fatigue, ensuring compliance, and immediately retooling will set businesses up for success in the future. Looking ahead, adaptation is key through creating flexible but sustainable work models and optimizing service delivery.

View the full discussion.

MICHauto and CAR Present: The Long-Term Impact of COVID-19 on the Automotive Talent Pipeline

Thursday, Sept. 24
Noon


Join MICHauto and the Center for Automotive Research (CAR) for an hour-long session discussing the industry’s perspective on this disruption and the State of Michigan’s workforce development response. Register today for the session on Thursday, Sept. 24 at noon.

Finding and retaining top talent is an ongoing challenge for the Michigan automotive and mobility industry. It is predicted that the COVID-19 global pandemic will add further disruption due to its impact on the talent pipeline. Approximately 25% of college students are reconsidering their enrollment plans this fall, while 40% of high school graduates, who had planned on attending a four-year college or university, are no longer expected to enroll at these institutions. Decreases in 2020 postsecondary enrollment is likely to impact the future talent pool for Michigan businesses.

Part One: Industry Perspective on Talent Impact

Panelists:
Peter Hungerford, Executive Vice President and Chief Operating Officer, ADAC Automotive Inc.

Eric James, Human Resources Director for the North America Business Unit, Marketing and Sales, Customer Experience, Ford Customer Service Division and Lincoln, Ford Motor Company

Renee McLeod, Vice President and Chief Human Resources Officer, Adient

Moderator:
Jerome Vaughn, News Director, 101.9 WDET

Part Two: Workforce Development Response

Panelists:
Susan Dynarski, Professor of Public Policy, Education and Economics, University of Michigan

Russ Kavalhuna, President, Henry Ford College

Dexter Sullivan, Program Manager, Michigan Mobility Institute

Moderator:
Jerome Vaughn, News Director, 101.9 WDET

 

 

 

 

Answers to Frequently Asked Questions Regarding Current U.S. Immigration Issues

Rami Fakhoury and Matthew C. Morse
Fakhoury Global Immigration

What are the current restrictions that are affecting entry into the United States for foreign nationals?

There have been a series of Presidential Proclamations this year that have significantly restricted entry of foreign nationals into the United States. These proclamations have restricted the ability of foreign nationals from Iran, Libya, North Korea, Syria, Venezuela, Yemen, Somalia, Eritrea, Kyrgyzstan, Myanmar, Nigeria, Sudan, and Tanzania from entering the U.S. In addition, foreign nationals who have been physically present in Schengen countries of Europe, the United Kingdom, Ireland, and Brazil are restricted from entering the U.S., unless an exemption or exception applies. There is a proclamation restricting certain foreign nationals from the People’s Republic of China from entering the U.S. There is also a proclamation restricting the ability of foreign nationals from entering the U.S. as an H-1B, H-2B, J-1, or L-1 nonimmigrant or preventing foreign nationals from applying for one of these visa types, if certain conditions are met.  As of the date of this writing, the closure of the U.S. northern and southern land borders to all but essential travel remains in effect.

With the US denying entry to visa holders, how are they managing visa expirations that have to be done in the home country?

The U.S. is currently denying entry to foreign nationals who fall under one of the restrictions listed above. Travelers who are not in one of the affected categories may still be able to enter the U.S. as long as they have a valid visa or travel document.

The U.S. Department of State announced a phased-in-resumption of visa services on a post-by-post basis. Visa services remain limited to student visas and emergency visas. Foreign nationals interested in applying for other types of visas should review the website of, or send an email to, the embassy or consulate they wish to apply through for a visa.

As indicated above, certain foreign nationals are not eligible to be issued an H-1B, L-1, or H-1B1, or J-1 visa unless exempt or an exception applies to their case.  If not exempt from the restriction, the U.S. embassy or consulate would need to determine if an emergency visa appointment is appropriate to request a National Interest Exception (NIE) is granted. NIEs are explained in the response to the next question.

Foreign nationals inside the U.S. in a valid nonimmigrant status should not depart the U.S. at this time. If a foreign national’s nonimmigrant status is expiring while in the U.S., an application or petition should be filed with USCIS to extend their nonimmigrant status. With respect to foreign nationals pursuing extensions of status inside the U.S. for a particular nonimmigrant category that authorizes employment, the foreign national may work for up to 240 days while the extension of stay petition is pending with the USCIS.

What is a National Interest Exception and how does one qualify for it?

If a foreign national is restricted from entering the U.S., or being issued an H-1B, H-2B, L-1, or J-1 visa, because of a presidential proclamation, the foreign national may still be eligible to obtain a visa or gain entry into the U.S. by applying for and being granted a National Interest Exception (NIE).  An NIE may be granted in the following instances:

  • The work or activity is related to healthcare or research designed to alleviate the effects of the COVID-19 pandemic (H-1B, L-1A, L-1B ONLY);
  • The work or activity is related to a request by a U.S. government agency or entity to meet critical U.S. foreign policy objectives or satisfy treaty or contractual obligations (H-1B, H-2B, L-1A, L-1B ONLY) ;
  • The work or activity is necessary to facilitate the immediate and continued economic recovery in the U.S. if two of the three criteria are met: i) the foreign national was previously employed or trained by the petitioning U.S. employer; ii) the foreign national is traveling to the U.S. based on a temporary labor certification (TLC); iii) the denial of the visa will cause significant financial hardship to the employer (H-2B ONLY)
  • The work or activity entails resuming ongoing employment in the U.S. in the same position with the same employer in the same visa classification, and forcing employers to replace such workers would cause undue hardship (H-1B, L-1A, L-1B ONLY) ;
  • The work or activity is technical or managerial in nature and will help facilitate the economic recovery of the U.S. if two of the five following criteria are met: i) the petitioner shows a continued need for the services or labor and/or the case contains Labor Condition Application (LCA) approved on or after July 2020; ii) the work or activity is significant and contributes to an employer meeting critical infrastructure needs; iii)  the foreign national’s education, training or experience demonstrates unusual expertise; iv) the wage rate paid to the H-1B worker exceeds the prevailing wage rate by at least 15%; or v) the denial of the visa will cause significant financial hardship to the employer (H-1B ONLY);
  • The work or activity involves caring for a minor U.S. citizen, Green Card holder, or nonimmigrant in lawful status by an au pair possessing special skills required for a child with particular needs (J-1 ONLY);
  • The work activity prevents a U.S. citizen, Green Card holder, or other nonimmigrant in lawful status from becoming a public charge in the U.S. (J-1 ONLY);
  • The work or activity involves providing childcare services for a child whose parents are involved with providing medical care to others to combat COVID-19 and/or engaged in COVID-19 research (J-1 ONLY);
  • The work or activity involves an exchange program conducted pursuant to an MOU, Statement of Intent, or other valid agreement or arrangement between a foreign government and any federal, state, or local government entity in the U.S. that is designed to promote U.S. national interests, if agreement with the foreign government was in effect prior to June 24, 2020 (J-1 ONLY);
  • The work or activity involves interns or trainees on U.S. government agency-sponsored programs, or specialized teachers in accredited educational institutions with a program number beginning with G-5 on Form DS 2019, or involves critical foreign policy objectives (J-1 ONLY);
  • The foreign national is a senior-level executive or manager filing a critical business need or critical infrastructure need of the employer if two of the following three criteria are present and the foreign national is not seeking to establish a new office: i) the foreign national will be a senior-level executive or manager; ii) the foreign national has spent multiple years with the company overseas, and has substantial knowledge and expertise within the organization that can only be replicated by a new employee within the company following extensive training that would cause financial hardship to the employer; or iii) the foreign national will fill a critical infrastructure need of the employer (L-1A ONLY);
  • The work or activity involves a technical expert or specialist meeting a critical infrastructure need, if the following three criteria are met: i) the foreign national’s proposed job duties and specialized knowledge indicate the individual will provide significant and unique contributions to the petitioning company; ii) the foreign national’s specialized knowledge is specifically related to a critical infrastructure need, and iii) the foreign national spent multiple years with the company overseas, indicating a substantial knowledge and expertise within the organization that can only be replicated by a new employee within the company following extensive training that would cause the employer financial hardship (L-1B ONLY).

 

What is the process for applying for an NIE?

The foreign national would submit electronically the Form DS 160 (Nonimmigrant Visa Application) to the U.S. Department of State and select a date for a visa appointment.  The foreign national will then be given an opportunity to request an emergency visa appointment and would need to indicate the basis for the emergency visa. The embassy or consulate may grant the request for an earlier or emergency visa appointment. At the visa appointment, the foreign national would present his or her request for an NIE to the consular official. The foreign national will need to bring a signed statement confirming the work or activity to be engaged is in the U.S. national interest. Documentation supporting the NIE request should also be brought to the visa appointment. Consular officials have been given broad discretion to grant NIE requests as part of the visa application process.

What are the long-term projections on these proclamations from the President?

If President Trump should win re-election, we anticipate that the proclamations restricting entry into the U.S. will be extended beyond their current December 31, 2020 expiration dates.

If former Vice President Joe Biden should win, the immigration policies would be less restrictive and more favorable to immigrants. The Biden campaign has released a proposed immigration platform that would rescind President Trump’s numerous proclamations restricting entry into the U.S. immediately.

Is there any legislation that lawmakers have proposed to counter or undo the proclamations issued by President Trump?

Two bills have been introduced in the House of Representatives. The first called the “No Ban Act,” would undo the Trump Administration’s previous travel bans and require that future bans be tailored to “specific and credible facts.” The second bill, called the “Access to Counsel Act,” would require that most people stopped at a port of entry be allowed to consult with a lawyer or family member.[1] Given that Congress is divided, it is unlikely that these bills will be enacted into law.

In addition, two major lawsuits challenging the legality of several of the proclamations were filed in July 2020. The first by the American Immigration Lawyers Association and two other plaintiffs, the second by the U.S. Chamber of Commerce and three other plaintiffs. The cases are making their way through the courts, and it is uncertain whether either will be decided before the presidential election.[2]

If a foreign national was outside the U.S. at the time of the COVID-19 pandemic and has a valid approved H-1B or L-1 petition, but not a valid visa, will the foreign national need to wait for the Presidential Proclamation to be lifted in order to be able to apply for and be issued an H-1B or L-1 visa?

The foreign national would need to wait until the Presidential Proclamation of June 22, 2020, which restricts applicants of certain nonimmigrant visas from entering the U.S., is lifted or expires in order to be eligible to apply for an H-1B or L-1 visa, unless one of the exemptions described in the Proclamation applies, or the foreign national qualifies for a National Interest Exception (NIE).

If a foreign national is the beneficiary of an approved H-1B cap petition for the 2021 Fiscal Year (FY) (October 1, 2020 to September 30, 2021) with an October 1, 2020 start date, and is currently outside of the U.S., will the foreign national be able to apply for an H-1B visa and use it to enter the U.S. in order to begin work on October 1, 2020 or soon thereafter?

A foreign national who is the beneficiary of an approved FY2021 H-1B cap petition, who is currently outside of the U.S. will have to wait until the June 22, 2020 Presidential Proclamation is lifted or expires before being eligible to apply for an H-1B visa, unless one of the exceptions listed in the proclamation applies or the foreign national qualifies for a National Interest Exception (NIE).

Does the June 22, 2020 Presidential Proclamation prevent a foreign national in valid nonimmigrant status in the U.S. from filing an Application to Register Permanent Residence or Adjust Status (Form I-485)?

A foreign national in valid nonimmigrant status may file a Form I-485 application in the U.S. in order to try to adjust their status to that of a U.S. lawful permanent resident. In addition, the foreign national inside the U.S. may also file an Application for Employment Authorization (Form I-765) or an Application for Travel Document (Form I-131). Furthermore, a U.S. employer may still file an ETA Form 9089 (Application for Permanent Employment Certification) on behalf of a foreign national, as well as an Immigrant Petition for Alien Worker (Form I-140) on behalf of the foreign national.

Does the June 22, 2020 Presidential Proclamation prevent foreign nationals, who are inside the U.S. in valid H-1B, or L-1 status, from having an amended petition or change of employer petition filed on their behalf?

No. A foreign national inside the U.S. in valid H-1B, H-2B, L-1, or J-1 status may be eligible to have an amended petition filed on their behalf or a change of employer petition filed on their behalf. In addition, foreign nationals in valid H-1B, H-2B, L-1, or J-1 status may be eligible to extend their status in the U.S.

Sources:

MICHauto Investor: Restrictive Immigration Policy Hurts Michigan’s Economy

Rami Fakhoury, founder and managing director of MICHauto investor company Fakhoury Global Immigration USA PC, commented on the issue of immigration policy in a Crain’s Detroit Business op-ed. View the full piece below.


The spring and summer of 2020 have seen a dramatic acceleration of the Trump administration’s measures to restrict immigrants from coming into the United States.

After the onset of the coronavirus pandemic, the White House issued a series of proclamations that effectively limited entry into the U.S. from many nations, including Brazil, Iran and the Schengen countries of Europe. Two of the most damaging proclamations were passed in April and June, respectively. April’s proclamation suspended entry into the U.S. for immigrants who were outside the U.S. or did not have a valid visa as of the proclamation’s effective date of April 24.

Although this proclamation was supposed to last only two months, it has been extended until Dec. 31 and could be extended further by the president. A similar proclamation was issued June 22 that barred entry into the U.S. of foreign nationals who did not have a valid visa in certain specific guest worker categories like the H-1B and L-1.

Like its predecessor, the June proclamation will not expire at least until Dec. 31, and may also be extended at the president’s discretion.

Supporters and members of the administration have argued that these proclamations are necessary to protect American workers during a time of unprecedented economic contraction.

Yet, the facts speak otherwise: Immigrants have made, and continue to make, significant contributions to our regional economy. Take one of the best-known guest worker visas — the H-1B, for specialty occupations such as engineers or computer scientists. Well before the pandemic struck, Michigan employers have relied upon H-1B workers to fill highly skilled positions. In FY 2019 alone, Michigan employers secured 4,350 H-1B visas to bring in talent to fill skill gaps. Ultimately, these H-1B guest workers help Michigan businesses to expand and hire more U.S. workers. A study conducted by the Partnership for a New American Economy concluded that over 21,800 jobs for U.S.-born workers in Michigan were created between 2010 and 2013 as a result of H-1B workers.

Other guest worker visas, such as the L-1 visa for foreign executives, managers or workers with specialized knowledge, produce similar economic multipliers for our state. These workers often come over to help set up or run Michigan-based offices for overseas companies and, as such, play a major role in driving foreign direct investment in our state.

Indeed, a report issued by Oakland County’s Department of Economic Development and Community Affairs shows that the county attracted $575 million in domestic and foreign investment in 2019, with 41 percent coming from companies headquartered outside of the U.S. Indeed, immigrant-owned firms employed over 167,000 Michiganders in 2018, contributed $7.1 billion in taxes, and had $18.4 million in spending power.

In fact, many of the jobs lost due to the coronavirus pandemic were not in sectors that generally employ immigrants. Unemployment figures from the Bureau of Labor Statistics show that unemployment rates for service occupations jumped from 4.2 percent (June 2019) to 18.8 percent (June 2020), computer and mathematical occupations rose only from 1.5 percent (June 2019) to 4.3 percent (June 2020), while health care practitioners and technical occupations increased from 1.5 percent (June 2019) to 4.2 percent (June 2020).

These statistics show that job losses were highest in lower-skilled service occupations, and that demand for higher-skilled workers in computer science and health care continues.

Even with the high unemployment numbers produced by COVID-19, U.S. businesses still struggle to find qualified skilled talent. The effects of the Trump administration’s proclamations will only aggravate this situation, leading businesses either to relocate their facilities to another country, or to become increasingly disadvantaged as their competitors in other countries attract these workers instead. The Information Technology Industry Council, composed of representatives from the major IT firms, has demanded the White House reconsider its restrictive policy toward immigration.

The U.S. Chamber of Commerce and three other litigants have gone further and taken the unprecedented step of suing the Trump administration, contending that the proclamations exceed the president’s legitimate authority. Litigators from the American Immigration Lawyers Association, the Justice Action Center and the Innovation Law Lab have also sued to challenge the entirety of President Donald Trump’s immigration bans.

Business leaders, tech giants and social justice groups all agree — the president’s restrictive proclamations are both morally wrong and economically counterproductive.

Hindering skilled immigrants from entering the U.S. will continue to hinder Michigan’s — and the nation’s — economic recovery. We encourage the Trump administration to reverse its short-sighted restrictionist policy soon so Michiganders, already suffering under the terrible burden of COVID-19, will not have to endure an unnecessarily protracted recession due to the unavailability of skilled talent.

This article was originally published in Crain’s Detroit Business.