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1 2 1 THE MANUFACTURING COUNCIL 2 3 4 5 6 7 8 9 10 11 DOC Building 12 14th & Constitution Avenue, N.W. 13 Washington, DC 14 15 Friday, 16 January 20, 2012 17 18 19 20 21 The meeting was convened, pursuant to notice, 22 23 at 9:11 a.m., MR. JOSEPH B. ANDERSON, Chair, residing. 24 25 APPEARANCES: 26 27 MEMBERS OF THE COUNCIL: 28 29 MR. JOSEPH B. ANDERSON, JR., Vice Chair, MFC 30 Chairman and CEO 31 TAG Holdings, LLC 32 33 MS. CHANDRA BROWN, Vice-Chair, MFC 34 President 35 United Streetcar 36 Vice President 37 Oregon Iron Works, Inc. 38 39 MR. JASON SPEER 40 Vice President & General Manager 41 Quality Float Works, Inc. 42 43 MR. SAMUEL LANDOL

3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 2 2 1 Chief Operating Officer 2 Sealaska Corporation 3 4 5 6 7 MR. MICHAEL LASZKIEWICZ 8 Vice President and General Manager 9 Automation Power Control Business 10 Rockwell Automation, Inc. 11 12 MR. DAVID MELTON 13 President and CEO 14 Sacred Power Corporation 15 16 MR. LUIS ARGUELLO 17 President 18 DemeTech 19 20 MR. RICHARD BEYER 21 Chairman & CEO 22 Freescale Semiconductor, Inc. 23 24 MR. MICHAEL GAMBRELL 25 Executive Vice President 26 The Dow Chemical Company 27 28 MR. W. DAVID HASTINGS 29 President & CEO 30 Mount Vernon Mills, Inc. 31 32 MS. DONNA L. ZOBEL 33 President & CEO 34 Myron Zucker 35 36 MS. JANE L. WARNER 37 Executive Vice President 38 Illinois Tool Works 39 40 MS. MARY ISBISTER 41 President 42 GenMet 43

3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 3 2 1 ALSO PRESENT: 2 3 MR. JOHN E. BRYSON 4 Secretary of Commerce 5 6 MS. NICOLE LAMB-HALE 7 Assistant Secretary for Manufacturing 8 & Services 9 U.S. Department of Commerce 10 11 12 13 MR. FRANCISCO SANCHEZ 14 Under Secretary of Commerce for 15 International Trade 16 17 DR. WILLIAM SPRIGGS 18 Assistant Secretary for Policy 19 U.S. Department of Labor 20 21 MR. PETER PEREZ 22 Deputy Assistant Secretary for 23 Manufacturing 24 25 DR. MARK DOMS 26 Chief Economist 27 28 DR. JOHAN E. UVIN 29 Deputy Assistant Secretary 30 Office of Vocational and Adult Education 31 32 MS. CHRISTINE KORONIDES 33 National Economic Council 34 35 MR. MICHAEL MASSERMAN 36 Director 37 Department of Advisory Committees

3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 4 2 1 I N D E X 2 3 PAGE 4 5 WELCOME AND INTRODUCTIONS...... 6 6 Joe Anderson, Chairman and CEO, Tag Holdings, 7 LLC, Chaie 8 9 IN HONOR OF JIM McGREGOR...... 12 10 Kellie Johnson, President, 11 AceClearwater Enterprises 12 Peter Perez, Deputy Assistant Secretary 13 for Manufacturing 14 15 DEPARTMENT OF COMMERCE & MANUFACTURING COUNCIL 16 2011 WORK REVIEW...... 16 17 Chandra Brown, President, United Streetcar, 18 Vice-Chair 19 Nicole Y. Lamb-Hale, Assistant Secretary for 20 Manufacturing and Services 21 22 INTRODUCTION OF SECRETARIAL PRIORITIES...... 21 23 Secretary John E. Bryson 24 25 ECONOMIC UPDATE...... 32 26 Dr. Mark Doms, Chief Economist 27 28 DISCUSSION OF 2012 COUNCIL WORK PLAN...... 55 29 30 WORKFORCE UPDATE & DISCUSSION 31 Dr. William Spriggs, Assistant Secretary for 32 Policy, Department of Labor...... 77 33 Dr. Johan E. Uvin, Deputy Assistant Secretary, 34 Office of Vocational and Adult Education.... 96 35 36 ADVANCED MANUFACTURING PARTNERSHIP UPDATE.... 92 37 Dr. David Hart, Assistant Director for 38 Innovation Policy, 39 Office of Science and Technology Policy, 40 The White House 41 42 JOBS COUNCIL UPDATE...... 101 43 Don Graves, Executive Director,

3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 5 2 1 President's Council on Jobs and Competitiveness 2 3 4 5 6 7 DISCUSSION OF MANUFACTURING TASK FORCE...... 82 8 Francisco Sanchez, Under Secretary for 9 International Trade 10 John Fernandez, Assistant Secretary for 11 Economic Development 12 13 DISCUSSION OF NEXT STEPS...... 114 14 Joe Anderson, Chair 15 Chandra Brown, Vice-Chair 16 17 ADJOURNMENT...... 115

3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 6 2 1 P R O C E E D I N G S 2 WELCOME & INTRODUCTIONS 3 Joe Anderson, Chairman & CEO 4 Tag Holdings, LLC 5 6 CHAIRMAN ANDERSON: All right. I'll gavel 7 the meeting to order. We have a very full agenda 8 today, so please allow me to keep us moving as we get 9 bogged down and slow down, and so forth. But we do 10 have a lot to accomplish. 11 First and foremost, I'd like to welcome the 12 Secretary and appreciate you coming on board. I 13 personally appreciate, as all of you may not know, a 14 phone call from him day one saying I'm here and I'd 15 like to work with you, so that approach was very much 16 appreciated in moving forward. We have a very full 17 agenda today -- excited about that. 18 Your reputation precedes you and we are very, 19 very -- manufacturing -- 20 SECRETARY BRYSON: Thank you very much. It's 21 a pleasure to be with you. And you've worked together 22 and worked together well over the past year. I'm 23 delighted to be able to join you. 24 CHAIRMAN ANDERSON: Very good. 25 Moving us along, we will ask the 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 7 2 1 Councilmembers and others to go around the table and 2 introduce themselves so you can at least put a name, 3 face, and industry together. 4 SECRETARY BRYSON: You, like me, are 5 Oregonians. 6 VICE-CHAIR BROWN: Go Oregon! Very snowy 7 right now, by the way. 8 SECRETARY BRYSON: That's what I understand. 9 VICE-CHAIR BROWN: Yes. But I made it out. 10 So I am vice president of Oregon Ironworks and 11 president of United Streetcar. We build boats, 12 bridges -- complexes, military, and some of the first 13 American -- parts in the United States. 14 CHAIRMAN ANDERSON: You can also say that's 15 one of the coolest meetings that the Council has with 16 the -- business. 17 SECRETARY BRYSON: In -- Oregon I saw -- 18 previous meeting -- Oregon and I kind of put two and 19 two together. 20 VICE-CHAIR BROWN: Exactly. Great facility 21 there. It's wonderful. We'd love to have you any 22 time. 23 SECRETARY BRYSON: Thank you. 24 MR. GAMBRELL: Mike Gambrell with Dow 25 Chemical. I've been with Doe 36 years, and spent the 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 8 2 1 last 8 years as executive vice president of 2 Operations. I'm currently an advisor -- 3 SECRETARY BRYSON: We've seen him a lot. 4 (Laughter) 5 MR. GAMBRELL: I think Andrew lives here. 6 (Laughter) 7 SECRETARY BRYSON: Yes. 8 MS. WARNER: I'm Jane Warner. I'm an 9 executive vice president with Illinois Tool Works and 10 I have responsibility for American services -- 11 MR. HASTINGS: David Hastings, president and 12 CEO of Mount Vernon Mills. We're based in South 13 Carolina in the production business, and I have the 14 pleasure of, this coming Wednesday -- 15 SECRETARY BRYSON: And you under state it, is 16 my impression. 17 MR. HASTINGS: Pardon me? 18 SECRETARY BRYSON: Your textile business is a 19 very, very large business. 20 MR. HASTINGS: It is. We're in seven 21 different states, with -- all over North Carolina. 22 I'll be visiting one of those facilities next week. 23 SECRETARY BRYSON: Terrific. 24 MR. MELTON: Dave Melton here. I'm the CEO 25 of Sacred Power Corporation, a Native American energy 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 9 2 1 system and off-grid -- hybrid that takes another 2 source of energy generation -- based in New Mexico -- 3 member of Pueblo -- 4 MS. ISBISTER: Mary Isbister. I'm the 5 president of GenMet. We -- business at the table 6 here. We're a 75-person custom metal fabricator and we 7 support the defense industry, wind industry, purchase 8 industry, a large variety of -- supply chain -- we're 9 the little guys, but big statement. 10 SECRETARY BRYSON: Well, as you know, I mean 11 a large part of the manufacturing sector is made up of 12 small- and medium-sized companies that typically are 13 supply chain providers and crucial to U.S. 14 manufacturing. 15 MS. ISBISTER: Yes. Yes. 16 MR. BEYER: Mr. Secretary, Rich Beyer, 17 chairman and CEO of Freescale Semiconductor -- 18 manufacturing -- 19 MS. JOHNSON: Good morning, Secretary Bryson. 20 I'm Kellie Johnson, president and CEO of Ace 21 Clearwater Enterprises. We're located in Lawrence, 22 California, a third generation family-owned business. 23 We are a supplier to the aerospace and -- industries. 24 SECRETARY BRYSON: I know that well. Fairly 25 well. Yes. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 10 2 1 MR. LANDOL: Good morning, Secretary. Sam 2 Landol. I'm COO of Sealaska Corporation. It's a 3 Native Alaskan corporation with three manufacturing 4 operations in Alabama -- Dothan, Alabama, Mt. 5 Pleasant, Iowa, and Mexico. And we work for Proctor & 6 Gamble. The Kraft Philadelphia cream cheese tubs come 7 from our home. 8 SECRETARY BRYSON: Yes, I read that. So the 9 ownership of the enterprise is largely Sealaska? 10 MR. LANDOL: It's 51 percent owned by 11 Sealaska, so we control the operations. At Proctor & 12 Gamble and companies like Kraft, they want to make 13 certain that they have a diversity supplier so we're 14 there for them. 15 SECRETARY BRYSON: Yes. Yes. 16 DR. SPRIGGS: Good. 17 SECRETARY UVIN: Good morning. I'm Johan 18 Uvin. I'm the Deputy Assistant Secretary for the 19 Department of Education. I'm just delighted to be 20 invited to this Council meeting today. 21 CHAIRMAN ANDERSON: Anybody else? 22 MS. KORONIDES: Christine Koronides, from 23 National Economic Council. I'm not Don Graves, but 24 I'm here to talk about the Jobs Council when it comes 25 up. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 11 2 1 CHAIRMAN ANDERSON: Good. Okay. 2 We have one item that I'd like to -- Kellie, 3 if you and Peter Perez would take a moment and reflect 4 on one of our members. 5 I'm sorry. You're right. On the phone, 6 please? Donna? 7 MS. ZOBEL: This is Donna Zobel. Good 8 morning to Secretary Bryson and the members of the 9 Council. I am CEO and owner of Myron Zucker, 10 Incorporated, based in Michigan. We make quality 11 equipment that helps manufacturers of all sizes 12 improve their electrical distribution. And I'm sorry 13 I could not join you today, but I am joining you from 14 sunny Florida and I will be very interested in the 15 meeting today. 16 Again, welcome, Secretary Bryson. I'm really 17 happy that you're here today. 18 SECRETARY BRYSON: Thank you. 19 CHAIRMAN ANDERSON: Thank you, Donna. 20 Anybody else? 21 (No response) 22 CHAIRMAN ANDERSON: Okay. Kellie? 23 24 25 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 12 2 1 2 3 IN HONOR OF JIM McGREGOR 4 By Kellie Johnson, 5 President, Ace Clearwater Enterprises 6 and 7 Peter Perez, Deputy Assistant Secretary 8 for Manufacturing 9 10 MS. JOHNSON: I think for the purposes of 11 recognition and remembrance of Jim, I'm going to stand 12 if that's all right with everyone. It's really with 13 deep sadness for me that I've been asked to say a few 14 words in remembrance of my friend and our colleague, 15 Jim McGregor. 16 I met Jim when I joined The Manufacturing 17 Council about six years ago. However, I knew about 18 him long before I ever met him, like most of us did. 19 He was a true pioneer in workforce development, always 20 was on the leading edge with those issues. Like 21 everyone that met Jim, I felt an immediate connection 22 and a real friendship, as if I had known him forever. 23 He was like an open book and he was one of 24 the most genuine human beings I have ever known. He 25 had a kind heart and a generous spirit that never 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 13 2 1 shied away from a challenge, and wasn't afraid to 2 speak his mind in that straightforward, simple way of 3 his. 4 In the scope of his life our friendship in 5 those six years were just mere moments, yet he touched 6 my life in such a profound way, as I know he touched 7 so many other lives through his personal 8 relationships, his many professional associations, and 9 his community involvement. 10 We lost someone that was a great champion for 11 manufacturing, especially for the small guy, and more 12 importantly, a true champion of the American worker. 13 Jim was passionate about workforce development and 14 worked tirelessly on behalf of U.S. manufacturing. 15 He was a true American that walked the talk, 16 and he believed in the greatness of our country. 17 Jim's friendship and contribution to the manufacturing 18 community were a gift to all of us. 19 He made this world a better place, and today 20 as we take this moment to remember him I'd like to end 21 with a quote by Mark Twain: "Twenty years from now we 22 will be more disappointed by the things that we didn't 23 do than by the ones that we did do. Sail away from 24 the safe harbors, catch the winds in your sails. 25 Explore, dream, discover." 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 14 2 1 The next time you guys find yourself with 2 your friends, having a drink or two, caught in the 3 middle of a deep belly laugh McGregor-style, I hope 4 you'll take a moment to remember our friend Jim. 5 Thank you very much. God bless you. 6 (Applause) 7 SECRETARY PEREZ: Well, I first met Jim and 8 his wife Nancy and the McGregor family in November of 9 2007 when my wife and I flew to Springfield, Ohio, to 10 represent the National Association of Manufacturers 11 and participate in a wonderful manufacturing event led 12 by Jim and his company, McGregor Metal Works. 13 The event was entitled, "American Made: The 14 Art of Manufacturing". It was another one of Jim's 15 brilliant contributions to all things manufacturing. 16 So after raising money, videotaping at 25 local 17 manufacturing companies, creating a script that 18 described the history and contributions of 19 manufacturing to the greater Springfield, Ohio, 20 region, projecting those photos of people at work onto 21 three large movie screens that were positioned behind 22 a full symphony orchestra performing all American 23 music, by Copeland, Williams, Bernstein, and others, 24 with appropriate live narration, Jim brought home a 25 very powerful, positive message of the value of 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 15 2 1 manufacturing regionally and the importance of 2 innovation and equality to over 2,000 families at that 3 concert, and thousands more at two similar concerts 4 with school children. 5 I remember watching several moms and dads and 6 kids in the audience, and they whispered to them, 7 "That's me, that's my company." So it was a 8 wonderful, wonderful thing. 9 So when I think about Jim McGregor I remember 10 his passion, his excitement about spreading a positive 11 message to U.S. manufacturing that weekend we spent 12 together back in 2007. It is significant to note that 13 Jim McGregor was a member of this Council since its 14 inception in 2004. 15 Jim, we remember you fondly. Thank you. 16 CHAIRMAN ANDERSON: Thank you very much. 17 (Applause) 18 CHAIRMAN ANDERSON: Okay. At this point I'd 19 like to call on Chandra to give us an update on what 20 we're doing and some of the things that have been 21 going on in the Council, just a time -- of where we've 22 been and then we'll come to -- points and where we go 23 from here going forward. 24 25 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 16 2 1 2 3 4 DEPARTMENT OF COMMERCE & MANUFACTURING COUNCIL 5 2011 WORK REVIEW 6 Chandra Brown, President, United Streetcar, Vice-Chair 7 and 8 Nicole Y. Lamb-Hale, Assistant Secretary for 9 Manufacturing & Services 10 11 VICE-CHAIR BROWN: Well, I have to say this 12 Council, in my time here, has been so hardworking and 13 so passionate about these issues. I'm actually really 14 proud to be able to talk about what we have 15 accomplished really just in the last year, so I think 16 it's a pretty impressive list. I think you'll like 17 this as a fairly active Council, very opinionated, and 18 got a lot of work product done. 19 Basically in the last year, last term, we've 20 had five meetings. We met in Ohio, we met in Oregon, 21 we met in Washington, DC. It's great to get out into 22 the community. We've also done five major letters, 23 two of which were in support of the trade agreements. 24 We're in support of the Korean free trade 25 agreement and the Colombia and Panama agreements. And 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 17 2 1 while we know we were just one voice that was 2 supporting it, we are proud of the positions that we 3 took on that. Hopefully they were helpful. 4 In addition, we've had great committee work. 5 These committees are really producing the work product 6 of this Council and there were three letters of 7 recommendation. I have to say I've been incredibly 8 impressed by some of the length and breadth of these 9 letters and what they cover. I'm not going to go into 10 all the details here. 11 There were tons of work and effort put into 12 them, but there were three basic categories, from 13 competitiveness, to workforce development, and energy, 14 and everything from tax reform, to enhancing R&D 15 credits, to innovation on the competitiveness side. 16 On workforce, I think one of the really 17 unique things that came out is how many of us have 18 positions that are open. We are hiring. We are 19 looking for a skilled workforce. I think that often 20 doesn't come out enough, so the work of the workforce 21 development is to find our current workforce, as well 22 as be preparing the workforce for the future and 23 keeping our pipeline flowing. It's a very critical 24 issue to this Council as well. 25 Third, so last but not least, our energy 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 18 2 1 folks, who have probably done the most comprehensive, 2 very long list of recommendations, everything, again, 3 from energy efficiency to energy regulatory reforms, 4 various specific recommendations, into actually 5 touching on a clean energy strategy. 6 So I think they have a very great and 7 ambitious -- but with a lot of detail. And I think 8 what you'll find, what we're probably most proud about 9 overall, is that -- especially from Joe and I and 10 members of this Council, we really want to track our 11 results. We don't want this just to be in a vacuum. 12 So we did a new thing this year, which is a 13 dashboard kind of a matrix. So every one of our 14 recommendations are put in a sheet and tracked, like 15 color-coded, and where are we at. We really like to 16 be able to measure the progress that we're making and 17 the impact, if any, positively or negatively, that 18 we're making in support of manufacturing around the 19 United States. 20 So I think that's a really critical 21 difference that we're really trying to track on what 22 we do, what we recommend, and then what are the 23 results after that. So that's kind of a very brief- 24 term year-end review of what we've been doing. I can 25 see promise. I know we're really looking forward to 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 19 2 1 see what we're going to be able to accomplish in the 2 next year. 3 CHAIRMAN ANDERSON: Thank you very much. 4 Nicole, if you would carry the mantle and be 5 prepared to share your remarks and introduce the 6 Secretary. 7 SECRETARY LAMB-HALE: Great. Thank you, Joe, 8 and hello, everyone, my favorite Council. 9 (Laughter) 10 SECRETARY LAMB-HALE: Don't tell anyone. 11 (Laughter) 12 SECRETARY LAMB-HALE: It's really great to 13 see you all again. And, you know, it's interesting. 14 We have steadily good news. The economy is improving. 15 Not as quickly as we'd like to see it, but it's 16 improving. And as you'll hear both from the Secretary 17 and from Mark Doms, our colleague in the Chief 18 Economist's Office at the Commerce, the manufacturing 19 sector is leading the compadre, creating jobs and 20 driving U.S. exports, and we can be very proud of that. 21 You all know how passionate I am about 22 manufacturing, and I think you'll see even more of 23 that naturally with our new Secretary, John Bryson. 24 He is familiar with the work that you've done thus far 25 and he knows and really wants to remain focused on 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 20 2 1 responding to the recommendations that you've made and 2 working with our fellow agencies and other public and 3 private stakeholders to make progress on the issues 4 that you have identified. 5 And in Secretary Bryson we have a leader on 6 manufacturing who understands and has spent his career 7 demonstrating what the private sector can do and what 8 could be accomplished if the private sector and 9 government work together. 10 He served as chairman and CEO of Edison 11 International for 18 years, and has been a director of 12 -- Petroleum --. He has served as an advisor and a 13 director of entrepreneurial and start-up companies, 14 including Coda Automotive, Inc., and Right-Source 15 Energy, working directly on some of the biggest 16 challenges and opportunities we as a Nation face: 17 energy and innovation. And as a former CEO, he 18 understands the business community's frustrations 19 about Washington and he's here to do something about 20 that. 21 So without further ado, I'd like to introduce 22 Secretary John Bryson. 23 24 25 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 21 2 1 2 3 4 5 6 INTRODUCTION OF SECRETARIAL PRIORITIES 7 Secretary John. E. Bryson 8 9 SECRETARY BRYSON: Well, thank you very much, 10 Nicole. It's wonderful to be here with you today, and 11 particularly wonderful that you've brought so much 12 energy and commitment. Did you say five meetings last 13 year? That's a lot. I know your last meeting was in 14 September, and I got through the confirmation process 15 and took on my position in October, so I'm moving down 16 the drag here. 17 It's one of these things that I had not 18 foreseen in any way. I was surprised to be asked to 19 take something like this on. But as with you, I care 20 deeply about manufacturing, and also giving incentive 21 -- Jim McGregor gave particularly a passion for 22 manufacturing, but also to public service -- bringing 23 together -- manufacturing and related jobs and 24 whatnot. 25 I am greatly sorry to have missed him in -- 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 22 2 1 But all of us are -- public service in one 2 way or another can come together. This is, in my 3 judgment, challenging but also an exciting time to 4 address these things. I'll make some initial comments 5 here. The main thing then is, I want to listen to 6 part of the dialogue and hear from all of you. 7 Let me just say, one of the most important 8 things I think you do -- now have the opportunity -- 9 business and private sector experience, and bringing 10 that voice and that perspective to the Federal 11 Government. There is just no doubt, but there are 12 profound differences between the experience of being 13 in business in the private sector and being in public 14 service in the Federal Government. 15 But what we need to do and what the President 16 needs to -- is seeing to it that in every way we can 17 we make the economy stronger and provide jobs for way, 18 way too many people -- doing with that the things in 19 the field, for example, of education, training, 20 preparedness for people. 21 So that is the mission of the Commerce, it's 22 the mission the President has set out for us to -- I 23 feel glad to be able to be part of it. So, 16 years 24 on the Boeing Board of Directors. I was the longest- 25 serving director on the Boeing board. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 23 2 1 Then when one takes on a position like this, 2 part of the ethics requirements in the Federal 3 Government--and I think they're sound--you have to 4 step away. These things were done in the past 5 completely. So, for example, I care a lot about the 6 Boeing company. It's a great company. 7 Same with Disney, for example. I was with -- 8 yesterday. I was at Disney World yesterday for a 9 meeting of our Travel & Tourism Advisory Board, which 10 likewise was a joy, meeting and knowing these people 11 and vice versa. And they have a huge passion in this 12 area, and they, like you, have had this vigor and 13 excitement about introducing and addressing in every 14 way how travel and tourism might make a difference-- 15 does make a difference in fact. For example, U.S. 16 exports, which of course means U.S. jobs. So I was 17 with Disney people there yesterday, because it was 18 sited at Disney World, and saw all my old friends. IT 19 was great. 20 So, you know, what I've seen at Boeing is 21 that the manufacturing world has certainly changed 22 over the 16 years in which I was a director. Some of 23 that has been of course -- and certainly includes 24 smaller and medium-sized businesses. 25 The introduction of advanced technologies in 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 24 2 1 various way means sometimes fewer jobs in 2 manufacturing. The other substantial increase is in 3 productivity and competitiveness of the entire supply 4 chain of providers of manufacturers. That's the way 5 the world is. That's a good thing. We have to make 6 ourselves absolutely competitive. If we're not 7 competitive here in the U.S., you will lose the jobs. 8 That's just a reality. 9 So the point of view in my company at Edison 10 in Southern California, a large electric utility 11 covering a lot of Southern California, including 12 Torrence, for example, we did lots of those things. 13 That meant fewer jobs in the short term and it meant 14 much smaller service and competitiveness. 15 So we went around the world in 16 competitiveness and we developed our generation of -- 17 facilities competitively in 13 or 14 countries around 18 the world. A very big undertaking, exciting. It'll 19 be the first privatization of electric systems-- 20 repeat: very first ever done in Australia, for 21 example, the very first ever done in New Zealand, 22 among the first -- many -- and find it exciting to do 23 that. 24 So at Boeing I see these changes in 25 manufacturing and Boeing -- I see the questions that 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 25 2 1 you're raising about skills and skills gap that we 2 have across the country. We have lots of job 3 opportunities where the search is for how to -- jobs. 4 People, particularly young people, but people 5 of all ages, that have the training, have the 6 experience already to take on those jobs, and a number 7 of companies -- do that training substantial 8 themselves. But in the meeting I had recently with a 9 manufacturer in Great Britain -- broader context, is 10 the subject of in-sourcing. That is a regular -- 11 We love these kinds of jobs that are coming 12 back to the U.S., the competitiveness of U.S. 13 companies and manufacturers. In order to do that, we 14 don't want to -- to require that companies like yours 15 have to do 16 -- preparedness of people to take on issues. So I 17 know that's been -- 18 You may know that the President has asked me 19 to play a very substantial role across the Federal 20 Government with respect to manufacturing, so he has 21 announced, a month or so ago, that I would, with Gene 22 Spurling, share national development -- Office of 23 Manufacturing -- across the Federal Government. 24 So Gene Spurling is the head of the National 25 Economic Council -- White House, so his role is policy 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 26 2 1 across the Federal Government, that we will do 2 together as co-chair. My responsibility includes the 3 advancement of an actual partnership, which is based 4 here at the Department of Commerce. 5 So let me just say a little bit about that. 6 It was last summer that the President announced the 7 Advanced Manufacturing Partnership. The Dow Chemical 8 Company is very much a part of that, so is Stryker. 9 Last month, here at NIST, the National Institute of 10 Standards and Technology, right here at the Commerce, 11 the National Office -- of Manufacturing -- is now set 12 up here in the Department of Commerce to reach out. 13 We do reach out -- manufacturing -- advanced 14 technology and opportunities to demonstrate and 15 opportunities 16 to -- 17 But people remind me that to take on a job 18 like the one I've taken on, I concluded immediately 19 the same thing you would, that there's lots of things 20 that I could do but I have more or less ruthlessly 21 prioritized because if I don't prioritize, then 22 everything one does -- you can do a lot of nice things 23 but you don't get anything done. What we're about to 24 begin -- is the way you want it. 25 So let me talk a little bit about these. A 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 27 2 1 priority for me, as I've said, is supporting 2 manufacturing and advancing competitiveness. Related 3 to that is our commitment. The Commerce, perhaps you 4 know, was asked by the President -- that we lead 5 across the Federal Government the President's target 6 of doubling our exports in the United States by 2014, 7 so it's a five-year period. We're two years into it. 8 It's a very strong start. 9 Francisco, are you going to say a little 10 further about that in your remarks? 11 (No response) 12 SECRETARY BRYSON: We need very big 13 priorities to help businesses export. Ninety-five 14 percent of the world's consumers live outside our 15 borders. The world is changing. The wonderful thing 16 about that, there's more people around the world that 17 come into more prosperous positions, strong middle 18 classes, people ready to get out of -- competing with 19 us and we with them. It works really well. 20 But a large part of our U.S.-based -- and 21 particularly -- the medium and smaller-sized 22 businesses, have not exported at all. So it's a big 23 priority for us to focus on assisting and guiding and 24 helping in any way we can to take those businesses 25 that are exporting outside the United States. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 28 2 1 Then we have a related major priority for me, 2 and that is to bring investments to the United States 3 in just plain, basic operating facilities. So, 4 investments in the United States. So, for example, 5 China exports to us substantial more than we to them. 6 We are working on that relationship and achieving a 7 better balance in that relationship, but one thing 8 that I'm very focused on now with respect to China and 9 many others around the world is encouraging them, even 10 though they have their headquarters elsewhere, so- 11 called foreign direct investment, they should be and 12 can be investing in the United States. 13 So Francisco will say a little more about 14 that, but we are in many ways the most attractive 15 place in the world, with well-trained people in many 16 respects, with a vibrant economy, proving now that 17 traditionally and over a long period of time we have a 18 very strong economy and we're a country that opens the 19 door and welcomes investments and operations here in 20 the U.S. 21 So, for example, last week I was at the 22 Detroit Auto Show and I met with the individual U.S. 23 manufacturers of automobiles -- General Motors, Ford, 24 Chrysler. It was really striking. But I also met 25 with a group of automobile businesses from around the 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 29 2 1 world that have their headquarters elsewhere, but that 2 sell cars in the United States. 3 What they've learned is that being based here 4 and having their operations here, having their 5 production of automobiles here, and even having 6 production of automobiles here in the United States 7 where they in turn export out, is growing at a really, 8 really striking rate. So that's a big priority for me. 9 Creating more direct investment, having it 10 such that U.S. companies that have been investing 11 overseas, can bring back investments in dollars and 12 people. The reality is, for example, in China, wage 13 rates are moving up strikingly, at a very rapid rate. 14 The cost of transportation back and forth is not 15 trivial. 16 Having a big pier where we can have the 17 supply chain -- production and assist in 18 manufacturing, however that might be. So we'd like to 19 see a lot of that take place. So we had a very good 20 meeting with the President last week on in-sourcing. 21 We had large companies, small companies from 22 around the world, from the U.S., and this in-sourcing 23 idea, this idea of coming together and bringing back 24 facilities or expanding substantially in the 25 investment further strengthens our U.S. base and is, I 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 30 2 1 think, a very 2 powerful -- 3 Let me touch on the other things in my notes 4 that I want to make sure I cover with you. I can skip 5 through a couple of these things because I want to 6 hear from you and I want you to be able to ask me 7 questions. 8 Is John Fernandez going to do this? Okay. 9 So there are elements of the Commerce Department -- 10 there are many bureaus within the Commerce Department, 11 and John Fernandez heads the Economic Development 12 Administration. I won't describe some of the things 13 that they've been doing because he'll do that himself 14 when he gets here. 15 NIST, the National Institute of Standards and 16 Technology -- to present that here today -- so NIST 17 has invested now nearly $90 million in advanced 18 manufacturing. So that is the national program office 19 and -- getting the financial resources within the 20 Federal Government which is an allocation of dollars 21 under tight conditions. But $90 million to expand 22 further at NIST in support of these advanced 23 manufacturing demonstration facilities, training, and 24 so on. 25 You know the statistics about manufacturing. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 31 2 1 You've heard these -- very well-paid jobs -- 2 manufacturing in the U.S. -- the Gross Domestic 3 Product, just out of manufacturing, will put us in the 4 position of being the 5th largest GDP in the world. 5 Just take our manufacturing and compare it to the GDP 6 around the world -- entire country's GDP, we'd be 10th 7 in the world. 8 John, I was just introducing you and Economic 9 Development Administration. I've passed over my notes 10 because I knew you'd do it so well. 11 So let me just conclude with these remarks. 12 What I'd like you to know is I care a lot about this. 13 My door is open. I really, really value what you're 14 doing in this advisory group. Feel free to give me a 15 call or send me a note with things that you think 16 might need to be done and make sure I know it 17 personally. All the rest -- we'll of course 18 adjudicate -- but my door is open. 19 So thank you for that. 20 CHAIRMAN ANDERSON: Thank you, Mr. Secretary. 21 We really do appreciate your comments and knowing your 22 priorities. Alignment is a very important word and we 23 would love to ensure that that occurs, that as you 24 work with other agencies in your -- and as we've -- to 25 rely on ourselves, and you and Department of Commerce 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 32 2 1 can get results. 2 SECRETARY BRYSON: Thank you. 3 CHAIRMAN ANDERSON: Thank you very much. 4 With that, Mark Doms. We'd like to get a 5 couple of thoughts from you, Mark, if you will, please. 6 DR. DOMS: Sure. 7 8 9 10 11 ECONOMIC UPDATE 12 Dr. Mark Doms, Chief Economist 13 14 DR. DOMS: First, it's an honor to be here. 15 One of the reasons I'm here is, the Department of 16 Commerce plots out of a lot of economic data -- and 17 stuff like that. And I think another reason I'm here 18 is because I -- comparison. 19 SECRETARY BRYSON: So Mark sent me this note 20 yesterday. Mark is our Chief Economist. Have you 21 presented this previously? 22 DR. DOMS: No, this is my first time, so -- 23 SECRETARY BRYSON: But somehow he presents 24 this all in a way that adds an element of humor and 25 good fun. And after a while with an economist, that's 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 33 2 1 a particular -- 2 (Laughter) 3 DR. DOMS: Okay. Now I feel obligated to be 4 funny. 5 (Laughter) 6 DR. DOMS: Three people walk into a bar and 7 -- inflation. 8 (Laughter) 9 DR. DOMS: Okay. So maybe what would be 10 useful for you guys is if we make this more of a 11 discussion about what's happening to the economy. 12 And what I would like to do is talk about 13 kind of like an overview of what happened in 2011-- 14 2011 just wrapped up--and talk about the forecast for 15 2012. If you look at the relationship between 16 manufacturing and the total economy, they tend to 17 track each other. But as you guys know, the 18 manufacturing sector tends to be a lot more cyclical, 19 a lot more volatile than the economy as a whole. 20 So for instance, when the economy detracted 21 by just a percent or two during our Great Recession, 22 manufacturing output fell by--does anybody know 23 this?--20 percent. It was just a huge, huge decline. 24 Since then, we've made up some ground. As the 25 Secretary mentioned, we've gained some jobs. We've 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 34 2 1 gained about 330,000 jobs. But we've only gained back 2 that drop, we've only come about 58 percent of the way 3 back from that dip. So we still have a long way to 4 go. 5 When you look at the various sectors in 6 manufacturing that contribute to that, you see that a 7 lot of the sectors are also sectors that have really 8 strong export growth. Especially for you folks who 9 produce durable goods and export to foreign markets, 10 you guys have really been leading the way. 11 The other point I just want to make about 12 manufacturing in general is, we sit here and collect 13 statistics and I can tell you what those numbers are. 14 They'd be incredibly boring without that. But what 15 you can't do with these numbers, is we don't 16 understand all the reasons why the numbers do what 17 they do. It's actually talking to people who run 18 businesses, and it's really quite informative, as to 19 why we see growth or why we don't see as much growth 20 as we would like. 21 So we take that very seriously and that's a 22 very daunting task because in manufacturing alone 23 there's about a quarter of a million employer 24 businesses. So it's important for us, and we take 25 this job very seriously, to talk to lots of businesses 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 35 2 1 across the country all the time because our economy is 2 so large. And just another point is, do you know how 3 many businesses there are in the United States? Like, 4 6 million and in thousands of different industries. 5 So, tracking this stuff is actually kind of quite 6 daunting. 7 So let's talk about what happened in the U.S. 8 economy in 2011. I'm going to tell just a simple 9 story just for the sake of time, and I guess I'll try 10 to tell a joke or two about it, too. 11 So if you'll remember, back early last year 12 the economy was actually doing fairly well. We had 13 pretty strong job growth. We had several lines where 14 we were increasing the labor force by over 200,000 and 15 things were going along at a pretty good clip. 16 People were optimistic about growth in 2011. 17 Then a bunch of stuff started happening. And 18 sometimes good stuff happens, but what happened in 19 2011 is just kind of a series of bad stuff. Some of 20 these bad things affected you. We see that there's a 21 bunch of pin wins. So first, energy and gasoline 22 prices shot up and they shot up -- so imagine a graph. 23 So, energy and gas prices shot up. So in the 24 Nation as a whole, gasoline prices priced at over $4 a 25 gallon. So, you know, what does that mean to the 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 36 2 1 average person? That means the average American 2 family spent an extra $500 on gasoline last year. 3 That's $500 that they weren't spending on your goods 4 and services. It was diverted to petroleum. 5 And where did that $500 mainly go? It went 6 overseas. It didn't stay here. So that's like a big 7 tax on the economy. So that was the first thing that 8 happened. In terms of kind of the magnitude of things 9 that slowed us down, you could argue--a lot of the 10 private sector people argued--that that was probably 11 number one. 12 Second, as you all know, with the horrific 13 events in Japan and how that affected global supply 14 chains and how that affected production here in the 15 United States. 16 Third, Europe. So we hear about Europe quite 17 a bit. It's confusing. Please don't ask me any 18 questions about it. But we'll talk about that a 19 little bit more. We'll show a graph in just a second. 20 The European events just created a lot of uncertainty 21 and destroyed a lot of wealth, and that really 22 hampered, for some businesses--I'd be curious about 23 you--decisions to invest and to hire new workers. 24 What we've been seeing from the latest trade data is 25 that we see our exports to Europe are beginning to 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 37 2 1 feel the effect of the European recession. 2 Then there's a lot of policy uncertainty. So 3 what do I mean by that? Remember last summer about 4 the same time that Europe was kind of imploding? 5 It's the same time that the debt limit debate 6 happened. So that's late June, early August, so that 7 just created a lot of uncertainty. Business owners 8 know that uncertainty tends to be a bad thing. You 9 don't like uncertainty. So when people here in 10 Washington are generating this needless uncertainty, 11 that's a problem as well. 12 So you take all this stuff together and we 13 started seeing the phrase "double-dip recession". 14 Right? Forecasters started increasing their 15 probability that we were going to have a double-dip 16 recession. 17 So let's take a look at this graph. One, 18 it's just a really pretty picture, I think, just from 19 an artistic point of view. But these are the stock 20 markets of worldwide countries, going back to June up 21 to about the present. The blue line up on top now, 22 that's the United States. So remember late July, 23 early August. That's when bad things started 24 happening. That's when the U.S. was downgraded. 25 Remember the S&P? Though I think that wasn't 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 38 2 1 a big factor. But that's when Europe started 2 imploding. That's when the whole debt ceiling thing 3 -- and you saw stock markets around the world just 4 have these massive corrections. So technically did 5 the U.S. have a correction in the stock market? The 6 S&P 500 went down by 16 percent. You saw elsewhere in 7 the world it was true. 8 Then when you look over time though, what you 9 see is that although the United States in 2011 had 10 this series of pin wins, all these kind of negative 11 events for us, and we still managed to run. We didn't 12 have this double-dip recession. We did better than 13 people were expecting. 14 So the U.S. economy didn't do as well as 15 people expected at the beginning of the year and we 16 had all these bad events and people thought we were 17 going to have a recession, and that actually didn't 18 happen. We actually were pretty resilient. So 19 overall, I think we actually did pretty well, all 20 things considered. We always just have to keep in 21 mind about all these bad things that had happened. 22 So if you look at, for instance, the European 23 countries, their stock markets, their equity markets 24 are still very depressed. But the United States is 25 actually kind of back up where it was. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 39 2 1 MR. GAMBRELL: Mark, I find it instructive to 2 start putting a time on the date when you're talking 3 about volatility. It's run from months, to days, and 4 now to time, as of 3:45 p.m. 5 DR. DOMS: Oh. That's my staff. 6 (Laughter) 7 DR. DOMS: Then as you look at measures of 8 volatility in stock markets, you get to that point 9 though. If you look at measures of stock market 10 volatility, those kind of really came up really high 11 as well. They've come down somewhat, especially in 12 the United States. 13 So as I said, despite these headwinds the 14 U.S. economy did pretty well. At the end of the year, 15 for the day we -- like, November/December, most of the 16 press releases -- usually every day there's some 17 economic statistics that are run out there. They've 18 generally been coming in above expectations. 19 So GDP growth in the fourth quarter is 20 expected to be 3 percent, maybe more than 3 percent, 21 which is a pretty good number. The most recent 22 employment report showed 200,000 jobs, which was a big 23 number. In the private sector, it was over 200,000 24 jobs. We'll talk about that in just a second. So 25 that was -- 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 40 2 1 So here's the first quiz. How many private 2 sector jobs did we create last year? Okay. We have 3 all these headwinds. Remember that. I'll give you 4 three choices: 900,000; 1.4 million; and 1.9 million. 5 So despite all the bad stuff that happened, 6 the answer is C. We still created close to 2 million 7 private sector jobs last year, which was pretty good. 8 If we can maintain the pace we saw in December, it 9 will be pressed over 2.5 million. 10 So when you look at these job increases it's 11 actually pretty interesting. What you see is, most 12 industries had fairly substantial job increases in 13 2011. There's a couple that aren't. There's this 14 information industry, the wireless and wired industry, 15 the telecommunications industry. They've been slowly 16 shutting jobs. They're just becoming more and more 17 and more efficient. And also like newspaper 18 publishing. So that's what's causing that. 19 But all the other private sectors you see are 20 pretty good, and manufacturing last year was 225,000 21 jobs. It's been about 330,000 since the trough in the 22 recession, so that's one of the bright spots. Then 23 you can make these arguments that because 24 manufacturing is adding jobs, that's adding jobs 25 elsewhere in the economy too because of all the 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 41 2 1 services that feed into manufacturing. 2 So when you look at this chart, the other 3 thing that really sticks out is government. So 4 government has been shedding jobs pretty consistently 5 for the past two years, so in fact since the trough of 6 the recession government has lost about a half a 7 million jobs in total. 8 So it was 280,000 jobs last year, and of that 9 half million jobs that the government has shed, about 10 half are in state and local education. Okay? So in 11 this conversation that you'll be having, that you have 12 been having about the skills of American workers, 13 because of the state and local budget issues they're 14 having to lay off more and more teachers. This is an 15 area of great concern, so probably today more people 16 will talk about -- we have Bill Spriggs here who could 17 talk about that much more. 18 But the government has been steadily shedding 19 jobs, so when I talked about last month we had 200,000 20 jobs, the private sector had 212,000 jobs and means 21 the government shed 12,000. That's been something 22 that's been going on. The Federal Government has been 23 -- this whole thing. 24 So why contribute it to the growth last year? 25 Why did the U.S. economy grow? So what the bars 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 42 2 1 represent here is just kind of quarterly GDP growth, 2 and the red part is the contribution for consumer 3 spending. So U.S. consumers continued to spend last 4 year. So what you see is that all these little bars 5 here are positive. We expect that to happen through a 6 Q4 as well. 7 But if you ask the question, how much more 8 did your average American family spend in December in 9 2012 relative to 2006, like in retail sales, it's 6.5 10 percent more. That's a rather large increase. So 11 consumer spending increased, so that was a big 12 contributor to the economy. The savings rate went 13 down, but consumers are spending, in part because they 14 did have more income. Remember, when you have $1.9 15 million in private sector jobs, that's income in 16 people's pockets. 17 Also, the tax cuts. So, remember the payroll 18 tax cut of 2 percentage points? So the basic math is, 19 that contributed about $110 billion to the economy. 20 So again, whenever I hear billions, my eyes just kind 21 of glaze over. 22 So what does that actually mean? Well, 23 there's about 113 million households, so that 24 basically means it's $1,000 per household. That's an 25 extra $1,000 each household had in -- so that was 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 43 2 1 certainly quite -- 2 So remember when I talked about gasoline? So 3 some of the money goes to higher gas but they still 4 have -- yes? 5 MR. BEYER: Was petroleum still a drag? Was 6 it a sizeable chunk of that money you just talked 7 about -- or -- 8 DR. DOMS: Yes. What happened is, so gas 9 prices went up and they kind of peaked in the summer 10 and they still remained elevated. In particular -- I 11 have a graph I think later on that shows this. But if 12 you look at the year as a whole, it was a considerable 13 drag. Then the fear is, and I'll preempt this slide 14 going forward, is this is a risk going forward, right? 15 So if the Straits of Hormuz are closed suddenly, 16 what's going to happen to the price of gas, the price 17 of oil? It's going to skyrocket again. 18 The U.S. is very dependent on foreign oil. 19 Our demand is what we call very inelastic. So when 20 the price of oil goes up about 20 percent within a 21 year, how much less gasoline people purchase is maybe 22 like a percent or two. We still have to drive to work 23 and stuff, take your kids to school, all that stuff. 24 So the U.S. is very dependent on this foreign oil, so 25 if price goes up we just shift the money out the door. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 44 2 1 I'll have a quiz about that later, too. So are you 2 guys keeping track on -- okay. 3 So one of the other factors that contribute 4 to the economy is business investment. So you folks, 5 if you bought more heavy machinery, tech equipment, 6 more trucks, more structure stuff like that, that's 7 the blue contribution. It's a business investment 8 that actually picked up last year as well. 9 Now, it really took a huge hit during the 10 recession. I mean, these things here are a pretty big 11 negative, right? But that has been increasing, so 12 that's a positive sign. There's increase in -- yes, 13 sir? 14 MR. GAMBRELL: Mark, back to your comment 15 just a minute ago. If indeed we want to double the 16 exports and we talk about -- do you have a sense of 17 how much of that export is actually oil coming in 18 that's getting re-exported out in a different product? 19 DR. DOMS: So, that's a great question. So 20 we track that. When I talk about these export -- for 21 oil or imports, I actually talk about net imports. 22 Last year, a big area of export growth was for fine 23 petroleum products. So I don't remember what the 24 exact numbers are. The -- was pretty big. 25 But relative to how much oil we bring in, 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 45 2 1 that export part -- like, the Wall Street Journal said 2 -- performance. It's still relatively small. So when 3 I talk about how many billions of dollars our 4 petroleum deficit is, I'm talking about the net -- to 5 the country. 6 So what's ahead for 2012? Okay. So the 7 basic story I think for 2011 is, hey, we were doing 8 pretty good and then we got hit by these series of -- 9 which were unfortunately largely outside of our 10 control. 11 So what do people expect for 2012? Basically 12 moderate growth. So you look at the private sector 13 folks and it's like 2, 2.5 percent, something like 14 that. So why isn't the economy growing faster? Why 15 are these people not having higher growth in their 16 forecast? Well, we still have this housing market 17 overhang, right? 18 So in some of your communities, I imagine, 19 you still have pretty high foreclosure rates. That 20 foreclosure backlog is still pretty bad. Our housing 21 statistics that we produce every month basically show 22 that we're still kind of bouncing along at the bottom; 23 you know, sometimes prices go up, sometimes they go 24 down, sometimes -- 25 But if you look at the graph you have this 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 46 2 1 huge, precipitous decline wherever you're looking at, 2 whether it be home sales, starts, prices, and then we 3 think kind of bouncing -- and we still have this big 4 issue where we just have a lot of houses, a lot of 5 vacancies. That also kind of goes to spending. 6 State and local -- in particular are basing 7 constraints. From the Federal Government point of 8 view, we're not spending -- we don't -- remember that 9 stimulus package? That's kind of gone off so we're 10 not going to be expecting any kick from the Federal 11 Government. So we have a couple of big drags here. 12 One is the housing market, which usually does pretty 13 well when you have recessions, and then the 14 government, especially at the State and local level, 15 is going to be dragged as well. 16 So those are kind of forces that are pulling 17 us back a little bit. It's really cool when you look 18 at the U.S. economy in history. We're very 19 innovative, part of the entrepreneurial society. So 20 whenever there's a recession, people just make -- 21 folks like yourselves, you just make these 22 investments, take these risks, and that's what gets 23 the economy going again. That's why people are 24 expecting this month. 25 So in terms of this entrepreneurship stuff, 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 47 2 1 do you know how many new businesses there are a year? 2 It's like a half a million. It's just amazing. This 3 isn't the self-employed. There's like -- but there's 4 like half a million folks that start businesses and 5 hire workers and they tend to employ about 3 million 6 folks a year. So that's a big source of job growth to 7 the economy and it's a very, very dynamic thing. 8 So this is what the actual forecast looks 9 like. The little blue bar here is Q4. We'll see what 10 that is. That's released next week. Then it's this 11 kind of monitoring going forward. 12 Now, every forecast you ever see is going to 13 be wrong, right? So what you want to do is ask 14 yourself the question ahead of time, why is it going 15 to be wrong? You think about why it's going to be 16 wrong in one direction versus why it's going to be 17 wrong in another direction. 18 So let's talk about the -- why might the 19 forecast be too conservative? Okay. So one reason 20 why it might be too conservative is, you know, these 21 headwinds that we faced last year are beginning to 22 abate. Once maybe we get some good jobs numbers, 23 perhaps we'll start getting more of a virtuous cycle: 24 consumer sentiment will go up, business sentiment will 25 go up, you guys will become a little more optimistic 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 48 2 1 about the future and therefore you might be more 2 likely to pull the trigger on hiring some more folks 3 or investing in some new plant and equipment. 4 So, hopefully that will happen. That's okay 5 if we're expecting last year to do, and the year 6 before that, too. So I think one reason why these 7 economic forecasters are -- it burned two years in a 8 row, so maybe they're going back a little bit. 9 But, so again, the forecast -- happen on 10 average -- story too -- maybe the -- is going to do 11 better. This growth that we saw in the fourth 12 quarter, why shouldn't that continue? We do have some 13 drags on it but they're the same drags that existed in 14 Q4 as well. So, maybe that will -- 15 So we hope that will happen. That's on the 16 up side. Now let's talk -- but we have to be honest 17 about this. Let's talk about the down side for this. 18 Okay. Europe. We'll show a graph of Europe in a 19 second. 20 There's a probability that really bad things 21 will happen in Europe. Okay. That's one. Two, 22 Europe is already entering a recession and folks are 23 expecting this recession to go into next year. That 24 affects our exports and that also affects the growth 25 in other countries. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 49 2 1 So when people are talking about downgrading 2 the economic growth in Latin America and China, part 3 of that downgrade emanates from the slow-down in 4 Europe. Okay. So if we ship certain parts to China 5 that then are assembled and shipped to Europe, that 6 has this ripple effect because these global supply 7 chains are just so complex. So Europe is a risk -- 8 Then policy uncertainty. It's -- tax cut. 9 There you are, you're working hard, you're supporting 10 a family and you get this extra thousand bucks. Are 11 you going to have it this year or not? You don't know. 12 So if you're a consumer, is that going to 13 make you a little more optimistic or a little more 14 leery about maybe pulling the trigger on spending -- 15 perhaps the goods and services -- so we still have 16 this uncertainty. We have this two-month extension. 17 Uncertain, again, from a consumer point of view is 18 just bad. So we want to make sure that -- we have a 19 cool picture of policy -- 20 So, oil. So again, we talked about our 21 dependence on foreign oil. We'll have a quiz about 22 that in a second. So, Europe. How can you quantify 23 what's happening in Europe? One way you can quantify 24 it is you can ask for kind of the big European 25 countries that are in trouble, how much do they have 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 50 2 1 to spend to service their debt? Okay. So basically 2 these are bonds friends. 3 What that means is, how much does Italy have 4 to spend to service its debt relative to Germany? So 5 Germany is kind of the base case. It's kind of like, 6 what Germany spends -- the interest rates for German 7 bonds and U.S. bonds, they're very similar. We're in 8 the same ballpark. So Germany is kind of considered 9 the anchor of Europe. 10 So when you look here, if you look at this, 11 you'll see over time that Italy and Spain, which are 12 really big, you know, they've been steadily going up. 13 Greece, which you always hear about in the news, is 14 relatively small. Their total outstanding debt is 15 like 350 billion euros. That's a lot of money, don't 16 get me wrong, but relative to Italy it's nothing. 17 Italy is well over 2 trillion -- estimates have been 18 2.2 to 2.6 billion. So that's a lot. 19 So if you look at these bond spreads, 20 although they've come down in the past couple of 21 days--this one-was also done at 3:45 yesterday-- 22 they're still incredibly elevated. So when Italy's 23 debt payments are this large given the size of its 24 debt, then to put it into company terms they're 25 incredibly leveraged, right? Now they have to pay 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 51 2 1 much higher interest rates. Is that sustainable? 2 That's the -- 3 So Europe is still an issue. There's a 4 reason why Secretary Geithner has gone over to Europe 5 multiple times this past -- there's a reason why the 6 President went over there as well to try to get them 7 to address these problems. They're big and 8 complicated. We think like Democrats and Republicans 9 have a hard -- you get like the Greeks or Germans -- 10 so I'm hoping Secretary Bryson sends me over there, 11 preferably in the spring, to do fact -- 12 So, policy uncertainty. So we know that 13 there's always conflicts in Washington. We always 14 know that the political parties don't always get 15 along. But how can we actually measure it? So let's 16 take a fun concept and make it really boring. That's 17 what economists do, and that's what they did here. 18 So this was actually done by a couple of 19 economists at Stanford and University of Chicago. All 20 those Stanfords and the PAC 10 school, we still do 21 trust this graph. So what they tried to do, is they 22 tried to actually measure policy uncertainty. 23 This means like, how far in advance did they 24 pass -- how many things did they pass right before 25 expiration? How many times did they see this stuff in 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 52 2 1 the newspaper? That way you can kind of compare it 2 over time. Because you know, back in the '90s and 3 '80s, Democrats and Republicans didn't get along -- 4 actually worse. 5 So according to them, it's actually 6 incredibly high. I don't know why it's so -- why the 7 sprinkles are on the right-hand side of the graph, but 8 that's -- we just did that because we go that extra 9 mile. 10 So what you see here though is that policy 11 uncertainty by this measure is really, really high. 12 And again, if you're a business, especially if you're 13 a business that's dependent on the government in some 14 way, directly or indirectly, again, uncertainty is 15 bad. You might think, okay, let's wait and see how all 16 this is going to ship out. So if you want to yell at 17 politicians, this is a good figure to come down on 18 them. Okay. 19 Now, oil. So we talked about oil before. 20 Did I already give this quiz? Okay. Average per 21 person. This is net. This is excluding the exports 22 of petroleum products. So in 2011, how much per 23 person did we spend on foreign oil? Is it $400, $600, 24 $800, or $1,000. Okay. The answer is D, $1,000. So 25 if you have a household of three people, that's $3,000 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 53 2 1 -- tax dollars you're shipping overseas as part of our 2 oil habit. And what do we use most of our oil for? 3 Transportation. 4 Now, some of you--there's someone from Dow 5 here, for instance, right--use oil and petroleum as a 6 feedstock, but that's a small fraction. Most 7 petroleum goes to transportation uses. So that's just 8 a huge number, right? And that's a big increase from 9 2010 and we'll have to see what that does for 2012. 10 Okay. 11 And then here's that graph. Again, when we 12 think about risk of the economy -- I'm being told to 13 hurry it up. 14 In conclusion -- 15 (Laughter) 16 DR. DOMS: Okay. So, I think the bottom line 17 is here is that in conclusion although we had numerous 18 headwinds last year, that I think we tend to forget. 19 I think it was -- last summer. We were still able to 20 create $1.9 million in private sector jobs. The 21 private sector is expecting moderate growth to go 22 ahead. 23 So when you only have moderate growth, then 24 the unemployment rate is only going to tick down 25 slowly. So that's something that we'll keep a close 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 54 2 1 eye on. But on the up side, bearing the bad news, 2 maybe we'll actually exceed these growth patterns. So 3 that's the up side. 4 But on the down side, we do face several 5 risks that are largely outside of our control, but we 6 have to be vigilant about this. So, that's all. Yes, 7 sir? 8 MR. HASTINGS: Mark, you alluded to this 9 earlier. But I think one statistic that gets 10 overlooked is, for each manufacturing job created, how 11 many other jobs in other sectors of the economy are 12 created? Can you comment on that? 13 DR. DOMS: I can. So this is a -- so there's 14 a couple of different ways to think about it. One, is 15 if you're a manufacturing company like you folks, 16 maybe your accounting services you give to a local CPA 17 firm. So that's that kind of direct service center job 18 that -- 19 Then there's something that's kind of a -- so 20 you guys employ people, and then they spend money at 21 grocery stores and movie theaters and buying presents 22 and stuff like that. So you get that kind of a 23 multiplier effect. 24 So when you look at these job multipliers and 25 compare them, sometimes they can be vastly different 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 55 2 1 -- and then there's this question about, if you think 2 about -- multiplier -- grocery store -- offices and so 3 forth, there's a lot of debate on how big that is. 4 You heard that debate -- right? It's like when we 5 decreased our -- 6 MR. HASTINGS: But I think it would also 7 impact construction, building construction, equipment 8 construction, government because you're paying taxes, 9 but also impact government. 10 DR. DOMS: It's amazing that -- bottom line I 11 think is that people think -- I'm not going to sit 12 here and assess that -- because I think it's too 13 wishy-washy, but -- history -- bigger multiplier than 14 -- 15 CHAIRMAN ANDERSON: Okay. Thank you very 16 much. It was informative and entertaining. Thank you. 17 18 19 20 DISCUSSION OF 2012 COUNCIL WORK PLAN 21 22 CHAIRMAN ANDERSON: What we'd like to do now 23 is open it up for a little discussion. We heard the 24 Secretary's priorities. We have a history as a 25 Council of working on activities in four committees, 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 56 2 1 Mr. Secretary. There are other issues and thoughts 2 that come up from time to time as policy has evolved 3 from the administration and from the Department. 4 So if I could throw it open to the Council 5 members at this point for any reflections, 6 consideration, thoughts about where to from here for 7 the remainder of our period, which is, I think, Jenna, 8 we've got till September? Okay. So we've got nine 9 months. So, three more meetings. 10 What are the kinds of things/issues/subjects 11 that we would share and we'll pursue this further 12 after this formal meeting in our committee meeting 13 work sessions? Please? 14 MR. LANDOL: Yes. I was a part of the 15 Competitiveness Subcommittee and basically we came up 16 with the three items that we included in our letter. 17 One of them was regulations in general, but in terms 18 of things that were impacting negatively 19 manufacturing. That was probably the most emotional 20 topic that we got into. There appears to be, and 21 we've had folks from regulation come in here and there 22 appears to be some headway that has been made in the 23 communications and understanding process. 24 Another one, was a skilled workforce. It's 25 something that has also picked up traction and we see 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 57 2 1 at least everyone acknowledging that there's an issue 2 there that's a matter that needs to be addressed. 3 The third one has been more silent than we'd 4 like, and that was taxes. We understand that taxes is 5 a very complicated situation, particularly when you're 6 dealing with deficits and you're dealing with a 7 somewhat equal distribution of payment of taxes, et 8 cetera. 9 But you could probably draw a metaphor of a 10 runner, which I happen to be, and taxes. If you were 11 to ask a runner, what is the thing that you could do 12 most to improve your running, he'd say, well, probably 13 take some weight off. 14 To a small business in particular, taxes is 15 a weight factor. I believe that there are 16 complications with the S corporations and how that 17 comes into play, but my sense is that there needs to 18 be more dialogue and more understanding on both sides 19 of the complexity of the tax situation because it 20 continues to be, we considered, a number-one burden 21 for small businesses. I think it's a heavy burden for 22 exports. It's one thing to serve your market. 23 When you start talking about exports you're 24 talking about putting yourself at a competitive 25 advantage vis-a-vis foreign competition. There again, 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 58 2 1 it's another matter that I believe requires a great 2 deal more dialogue. 3 MS. JOHNSON: Mr. Chairman, I also worked on 4 the Competitiveness Subcommittee and the three pillars 5 of our strategy, as Sam defined, included regulations, 6 taxes, but also something that's very critical to one 7 of your priorities, which is direct foreign 8 investment. In order to make this country more 9 competitive we need to make sure that we maintain the 10 world's leadership in innovation. 11 In the other subcommittees innovation wasn't 12 addressed, so we felt it was appropriate in a 13 Competitiveness Committee to address innovation. What 14 we'd like to say is that without manufacturing, 15 innovation is just a good idea. We've talked a lot 16 about the complexities of our supply chain and the 17 importance of it, and I'm very happy to see that Dr. 18 Hart is here, because one of the initiatives that 19 we're embracing in my company is modeling and 20 simulation. 21 We know that a lot of the big guys have that 22 capability, they speak that language, and they 23 understand it. But for the supply chain, particularly 24 in the industry that I service, aerospace, it's very 25 complex in a short-run, low-volume -- mix. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 59 2 1 Our customers still are drilling us for a 2 piece price, and in many cases these parts have never, 3 ever been built before. So one "oops" in any kind of 4 physical prototype, we've lost any profitability and 5 it doesn't allow us to continue to invest in our 6 company. 7 So something that I would like to explore 8 that I think can enhance the priorities is how do we 9 get that technology out to the supply chain so that we 10 can truly be innovators and maintain our industrial 11 base here? Because we hear of a lot of the big guys 12 bringing their production back to this country, 13 however, they're still establishing R&D centers 14 overseas. 15 My fear is that as the R&D activity starts to 16 take place in other parts of the world, manufacturing 17 is going to follow that. So I think one initiative 18 that we can pursue, without being redundant with what 19 other advisory committees are doing, is finding a way 20 to get that technology out into the supply chain. 21 SECRETARY BRYSON: Let me just jump in real 22 quickly on that. Francisco, John, pick up the pieces. 23 But I think you will find that this national office 24 that is now being launched here at NIST, so that means 25 Gaithersburg, right outside this area -- its set-up is 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 60 2 1 really striking. It's set up for you. 2 In other words, it is not set up for, for 3 example, academic studies. It's set up so that 4 businesses can come learn, ask that forms of 5 technology be presented there. You have brilliant, 6 brilliant -- people that are doing this. I'd never 7 been to a facility previously -- I've been to a lot of 8 facilities on technology. It is really there for the 9 business community. 10 That's what it is, and I strongly urge you to 11 make your way from Torrence at some point. We'll put 12 out a lot of information over the next year -- so I 13 can touch on some of the others, but this is -- not 14 what -- he has a Ph.D., a physicist, extraordinarily 15 talented guy. Career person in public service here in 16 the Federal Government and was made the head of this. 17 We would all say this really is an advance. 18 CHAIRMAN ANDERSON: Mr. Secretary, a point 19 that I'd like to share with you in perspective, and an 20 opportunity I think that's huge, flows from your word: 21 information. Donna Zobel, who is on the phone, 22 supported and assisted me in a presentation that I 23 made last week to the Operations Management 24 Association in Detroit. These are people who are 25 working on productivity and manufacturing 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 61 2 1 improvements, much more technical than I am, as a 2 president and CEO of a company, general manager, et 3 cetera. 4 And Donna took notes for me and I made the 5 presentation, and then she shared with me, because it 6 was a presentation about The Manufacturing Council and 7 what we do, but then more importantly what are the 8 issues that are important to you as members of this 9 group. And two things came out of that in particular. 10 One, their issues and so forth were not U.S. 11 Government/Commerce policy-oriented at all. They were 12 head-down, survival issues. 13 And I said, personally, when Joan Poole and 14 staff asked me to come on this Council, maybe a Dow or 15 some of the other bigger companies had the capacity 16 and accessed government resources and knew about --. 17 I was just trying to survive with General Motors, and 18 Ford, and Honda, and Nissan, because I'm a survivor. 19 And the key point I would make is, what you 20 have to offer and what you're doing here doesn't get 21 outside the Beltway. It does not get outside the 22 Beltway for a Mary-sized -- if I'm not misspeaking. 23 MS. ISBISTER: Absolutely. 24 CHAIRMAN ANDERSON: And I think -- I chair 25 the Original Equipment Suppliers Association, a trade 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 62 2 1 association of all automotive suppliers, 500-plus 2 companies. And I talked to the executive director 3 before coming here to this meeting. He has councils 4 and committees. He would love to accept the 5 opportunity for Department of Commerce and information 6 and insight on advanced manufacturing to be shared 7 with its members. Now, they have a representation 8 here in Washington but it still doesn't effectively 9 get done. Mary -- excuse me. 10 Donna, would you share your example about 11 your international trade and insurance, as an example? 12 MS. ZOBEL: Thanks, Joe. Yes. I was a small 13 business and we were -- in the pas when we would work 14 with international sales, if we had an opportunity it 15 was always necessary for us to receive payment, if not 16 all of it, at least half of it up front from the new 17 customer. 18 Unfortunately, a lot of the potential 19 business wasn't there because they wanted to set up 20 terms and I began working with U.S. Commercial 21 Services in Detroit, which they -- I just happened to 22 find them through an email that caught my eye, and I 23 started to work with them to set up the probability of 24 insurance on my receivables, and also getting 25 assistance with credit reference checks. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 63 2 1 Now I am doing business in Japan and we have 2 a standing order for a project that we export now 3 that's probably a significant amount of our revenue. 4 So that was important to me to get the job, and I 5 didn't even know that those resources were available 6 until I just happened to open an email. So the 7 services are there but they're not always marketed 8 effectively. So that's one of my examples, so that's 9 been huge for our company. 10 CHAIRMAN ANDERSON: And the point I'm making 11 is, if we chose to set up a pilot -- Donna's in 12 Detroit. She's -- but if we chose to set up a pilot 13 effort, and maybe there are other Council members who 14 will say we'd like to join you in Chicago with Jane 15 and talk more, or whatever, but four or five 16 activities, whether it's international trade -- or 17 Dallas Reed stepped out of the room here. 18 If their labor supports those kinds of issues 19 -- workforce development is one of our major 20 challenges and available worker skills. I think we 21 could make a big difference for manufacturers if they 22 knew how much this side of the room is doing, and 23 often. 24 SECRETARY LAMB-HALE: Joe, I had a quick 25 comment. I'm sorry, Mr. Secretary. You know, last -- 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 64 2 1 I guess it was a year ago we launched a Manufacture 2 America road show and we've done a number of 3 international export initiative road shows. And I 4 guess my question becomes, you know, how effective 5 candles, DeArgos -- is it worth the investment? 6 Because we're reaching people, but maybe not 7 enough people. Maybe it's not broad enough. If we 8 did what you suggest, do you think we'd get the people 9 that would come? Because a lot of our programs work 10 -- you know, people didn't come in the numbers that we 11 wanted. 12 MS. ISBISTER: Well, if I can respond to 13 that. As a small -- economic development 14 organizations, and Wisconsin has over 400 in our 15 state, so it's very diverse. But I think you could go 16 through mechanisms that exist. You know, 97 percent 17 of the country's employees are in businesses like 18 mine, and we're the ones that need the help the most 19 and have the least access to it because we don't know, 20 just as Joe said. So absolutely there are ways to get 21 you in touch with folks that would benefit most from 22 what you had to offer. 23 I think the other thing that this Council 24 probably hasn't done as effectively as might have, and 25 that is make sure that the business community 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 65 2 1 understands that we do comment, have a voice here, and 2 you've asked us to participate. We have not done a 3 good job at sharing that. 4 We have not effectively made sure that the 5 rest of our industry colleagues know that you've 6 asked, because really oftentimes when asked, most of 7 us would step up and participate. Most of us want to 8 make a difference. I'm one of those firm believers, 9 and I may be a little different than Sam, I don't mind 10 paying taxes as long as I know the money's being spent 11 well. 12 You might have an issue about how it's being 13 spent here and there, but you know, the taxation isn't 14 an issue for me. It's the fact that I don't think 15 business oftentimes, or industry generally drives 16 enough of the conversation. 17 If you don't mind, I'm going to segue right 18 into the workforce because I'm the representative here 19 for the Workforce Committee. A couple of things that 20 I've learned, being very, very active in our state's 21 workforce development activities, is that most public 22 sector programs are supply-side driven. 23 So they're driven by the job seeker rather 24 than the industries which had the demand side. What 25 I'm really trying to work with with our state's 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 66 2 1 government is to flip that. If you drive it by the 2 demand side, you then make sure that the education 3 systems that you've developing are supporting the 4 demand side. You're making sure that the people you 5 put into the positions support the demand side and 6 they retain those jobs. 7 The problem is, I think the equation is 8 flipped the wrong way and as a result you end up with 9 this mismatch and you have the education system that 10 sits in the middle, and they don't know if they should 11 be listening to supply side or demand side, and 12 frankly they don't do a good job really helping either 13 at this point. 14 So I guess from the Workforce Council's point 15 of view, we made an offer in our letter in July that 16 said we would be willing to help put together a 17 workgroup that would look for best practice across the 18 country and finding ways to propagate that. 19 I'm doing it in Wisconsin. I've found some 20 wonderful, beautiful pockets where there's business, 21 so there's an industry representative, there's a local 22 government representative, there's a technical college 23 representative, there's a high school group, and 24 they've come together and they've created these 25 advanced manufacturing settings for the community. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 67 2 1 It's in a high school. 2 It's supported by the technical college, it's 3 supported by a local industry, and it is making a 4 difference. Those things can easily be propagated and 5 I think our Council -- there isn't anybody that I 6 think sits at this table here today that wouldn't be 7 willing to participate in an effort to find those 8 kinds of things and make sure that we spread them 9 broadly. 10 CHAIRMAN ANDERSON: Just a couple more 11 minutes, please. 12 MR. GAMBRELL: Just a couple of comments. I 13 think, first of all -- one of the things we've gotten 14 in and done, and I co-chair the -- we found out 15 leveraging -- synchronizing -- across the 16 interagencies is very difficult. We've got the DOC, 17 DOE. I mean, getting them all together so everyone is 18 synchronized is quite an effort. 19 I think that's -- to a couple points on the 20 energy sector. One of the things -- few months ago, 21 it talked about energy efficiency and what new 22 strengths 23 -- you want to talk about investments, something can 24 be done very quickly to land this contingency, and I 25 see 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 68 2 1 -- I see a lot of activity -- another one we talked 2 about is the use of gas, which the U.S. is sitting on 3 such a huge -- that we could put the innovation -- and 4 really go after wind, I think it's a tremendous 5 opportunity that has tremendous rewards. Instead of 6 fighting each other, this thing has put the innovation 7 -- to figure out how to -- 8 SECRETARY BRYSON: You are talking about 9 natural gas, the extraordinary change in natural gas 10 consumption. 11 MR. GAMBRELL: Yes. Just from last year. 12 And I don't see a lot of effort -- and I think -- we 13 started to see some of the later -- United States -- I 14 think investments are needed -- mostly ask ourselves -- 15 I'll give you one tactical thing and it deals 16 with ECA. Their charter is up in May. We're in the 17 process -- the company has asked me to put together a 18 Fortune 200 company, and we've got to ECA and they 19 can't do anything because their charter's up and it's 20 -- export credit agency not only serves large 21 entities, but also small -- and it's beyond me how the 22 government can get bogged down in such creative ways -- 23 MR. BEYER: So I'm a member of the Export- 24 Import Subcommittee. There were several things that 25 we have been working on. One, is -- last year. We 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 69 2 1 continue -- and I guess -- challenge -- individual 2 companies cannot really fight back. It is a matter of 3 -- 4 The second area is export licensing. While 5 there has been progress made, we simply want to 6 continue to facilitate the process -- the export place 7 -- they're certainly marked -- export -- clearly -- so 8 that's the second area. 9 There's a third area that someone from -- and 10 that is the area of advanced manufacturing. If you 11 create -- I remember they need to be seen in the 12 context of, what is the -- regulations, but not 13 literally destroying major areas of -- semiconductors 14 -- and we're working very closely with the support of 15 the Commerce, so -- in the United States. That's all. 16 If -- for another -- stop dead in our tracks and it 17 takes a year to justify -- people -- so this is very 18 -- Commerce Department. 19 CHAIRMAN ANDERSON: I think you've noticed 20 there's some energy in the room. 21 SECRETARY BRYSON: Good. Nothing but good. 22 CHAIRMAN ANDERSON: Chandra and I were trying 23 to decide, well, how are we going to get this ball 24 rolling and get everybody talking? I'll let you 25 conclude and then we need to move on. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 70 2 1 VICE-CHAIR BROWN: So I'd like to kind of 2 just conclude, obviously seeing the passion and the 3 different levels of expertise among all the people 4 here. 5 But I think one of the things that has 6 bubbled out as well has really been the importance 7 overall of the branding of manufacturing. Obviously 8 there's a lot of councils, there's a lot of 9 advisories. We all care about jobs. But we are here 10 as manufacturers, and I sometimes think the importance 11 of that when the national government can help is 12 obviously in kind of a bully pulpit role. I remember, 13 I'm just laughing because a year ago we were here kind 14 of before the State of the Union and I think I had 15 some facts on why -- on how many times manufacturing 16 was going to be mentioned in the State of the Union 17 speech. 18 MS. ISBISTER: I won. 19 VICE-CHAIR BROWN: And Mary won. But, I 20 mean, it's huge kudos. But I think -- and it's so 21 fantastic. It is a compliment. It's a compliment to 22 everyone here at Commerce and across all the agencies, 23 that manufacturing is finally getting, you know, the 24 attention with the new positions that are being 25 created that it really deserves. And I'm pleased. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 71 2 1 Like, even our Chief Economist is willing to 2 say that manufacturing creates more jobs as a 3 multiplier effect than other industries, and also as 4 we've talked about, you know, factually, has higher 5 wages. It's my belief, and I think most people here, 6 that the middle class is built on manufacturing. That 7 is where it is. It's so critical to the future of 8 this country. 9 So I think anything that can be done from a 10 branding standpoint as well, and overall how all of us 11 can be the mouthpieces for -- there's a lot of great 12 facts about what manufacturing does in this economy, 13 all these individual pieces. We need to educate the 14 American public about the importance of manufacturing. 15 It seems surprising that I even have to say that, but 16 you actually do. 17 I think right now there's a surge in American 18 manufacturing. We're big supporters of Buy America 19 and those issues. That is becoming a higher and 20 higher popularity level among the people, so they know 21 it's out there. We need to take advantage of this Buy 22 American, Made in America, and move it forward. 23 So I just wanted to conclude that using 24 anything that you can do to raise this issue, and 25 we're happy to assist with overall branding because 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 72 2 1 it's really important. 2 CHAIRMAN ANDERSON: All right. For those who 3 would have liked to, but did not get to speak, we will 4 come back to this subject over lunch as committee 5 members and talk about where to from here. 6 Mr. Secretary, any comment before we move on 7 with our agenda? 8 SECRETARY BRYSON: Well, maybe I -- I can't 9 resist commenting on a few. The issues, proposals, 10 suggestions, concerns that you're raising are not only 11 valid and important, they are things that we are very 12 focused on. I think it's either a wonderful 13 coincidence or it's the fact that--I think it's more 14 than fact--that as we have been really across all of 15 this focused on the manufacturing sector of the 16 economy, it's an incredible -- for both exports and 17 for bringing back more from the United States. 18 What can we -- we have the view -- this is 19 background in large part -- energy. The -- energy 20 sector -- what I know is, with regard to -- to the 21 extent that the production -- they basically call it 22 the manufacturing -- outside the United States. It is 23 an absolute illusion to say that we -- of losing our 24 advantage of knowledge, strength, capacity, because 25 they go together. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 73 2 1 This is not just a question of what is done 2 in a laboratory somewhere to develop the concept of a 3 new technology, it is in the production of that 4 technology, turning it into commercial product, sizing 5 it and getting it out into the market, learning from 6 the market, getting the feedback from their customers, 7 learning each step along the way as you produce them 8 how you can do that at lower cost, higher 9 productivity, and what kind of skills you have to 10 bring in. 11 So I've been, in my particular sector, 12 concerned, for example, with the extent to which clean 13 energy technologies, the -- electric industry, and 14 particularly in places like California where there's 15 such an emphasis on -- nearly all production is moving 16 outside of the United States. People that do the work 17 in a very entrepreneurial society, innovative society 18 like ours, really -- will lose a significant part of 19 the edge if they're not part of manufacturing. So 20 that's very, very important. 21 I'll only touch on -- taxes -- absolutely. 22 Finally, and importantly, we need to be positioned for 23 all of you in which we take the steps at the Federal 24 and the state levels as we improve the economy and we 25 address all this, to have you in a position where you 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 74 2 1 really have competitive taxes for the things that you 2 produce to sell here and to sell overseas. 3 So there's a lot of work being done on the 4 regulation. Likewise, the regulation is really -- 5 this administration, the President, there's a team 6 headed by -- Kass Sunstein in the Executive Office of 7 the President that is relentlessly focused with all of 8 us 9 -- new law is passed, there tends to be regulations to 10 go along with interpreting that law. What we're all 11 intensely focused on is, yes, health and safety 12 matters. We legitimately need to be honored -- basic 13 -- but we have to work in ways that have never been 14 done before to see to it that they're doing -- so 15 that's very -- 16 In terms of reaching out to the private 17 sector in ways that can assist particularly the small- 18 and medium-sized companies -- little or no exports. 19 There are all kinds of reasons why it's hard. You 20 don't know how to introduce yourself in these new 21 countries, you don't know about the taxes, don't know 22 -- what do you have to do to set up in these countries 23 and make it possible? So there are lots of things 24 that we're very, very focused on. 25 We created something called Export USA here 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 75 2 1 in the Commerce Department that's housed here. There's 2 something called Business USA that the President has 3 -- and here we need to -- the low-cost, readily 4 available means should be made available to all of you 5 that can be done in significant part through the 6 internet, as well as through means of giving our 7 people and others in the Federal Government -- but if 8 we can calculate that as we're taking considerable 9 steps to do, such that you can look up, I'd like to be 10 doing more in, you name it, Latin America. 11 What we can increasingly provide, but there's 12 plenty of work yet to be done, is who do you need to 13 be and who can you be in touch with at the time? We 14 have advocates for U.S. businesses in all these 15 locations. I think 76 countries is the number we're 16 getting down to because we're trying to concentrate 17 our resources. But John Fernandez is going to be 18 very, very pleased, for example, to talk to you, Mary, 19 about the work you're doing in Wisconsin to get the 20 word out, working with the State Economic Development 21 -- John is passionate about this. 22 He's from Indiana, so he says, "Listen, I'm 23 from the midwest, maybe I've got some sense of these 24 things." He's passionate. So I won't try to address 25 all the things that you put before us, but just a rich 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 76 2 1 and important -- what we want to do is help support 2 you and raise the -- and working with the President, 3 working with the people from the White House and other 4 departments. 5 One of the most important things we can do is 6 work effectively with the other departments in the 7 Federal Government -- going along, so that is the 8 reason that the things that we're raising and working 9 with the President -- departments -- one of the most 10 important things we can do is work effectively with 11 the other departments of the Federal Government -- in 12 any sense going along, so that is the reason that I 13 was asked to co-chair this process. 14 CHAIRMAN ANDERSON: -- Dr. Spriggs, and 15 that's the Department of Labor, we can hear your 16 comments. As always, we're -- 17 SECRETARY BRYSON: So with apologies, I'm 18 going to have to excuse myself at this point. It's a 19 great pleasure to get acquainted with you. Thank you 20 for what you're doing. They're calling on me to get 21 out and go right now, so I'll do that. But my 22 colleagues here -- presentation -- very helpful -- 23 friends from the other departments in the Federal 24 Government. 25 CHAIRMAN ANDERSON: Thank you. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 77 2 1 (Applause) 2 SECRETARY BRYSON: And I wish you also a very 3 -- follow-on set of meetings in which --securely the 4 way that these things need to be done. Smaller groups 5 -- so thank you. 6 CHAIRMAN ANDERSON: Thank you. 7 SECRETARY BRYSON: As usual, I've got more 8 pages than -- find a way to put them someplace and 9 move on to the next. 10 CHAIRMAN ANDERSON: Thank you for being with 11 us. 12 Dr. Spriggs? 13 14 15 16 17 18 19 20 21 22 23 24 25 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 78 2 1 2 3 4 5 6 7 WORKFORCE UPDATE & DISCUSSION 8 Dr. William Spriggs, Assistant Secretary for Policy, 9 U.S. Department of Labor 10 11 DR. SPRIGGS: So, yes. Let me be real, real 12 brief. I do want to follow up on Mark Doms' point 13 though about the loss in the government sector. Most 14 of those jobs, unfortunately, being in education on 15 the local level -- and just to remind you that the 16 President's Americans Jobs Act called for us to make 17 the investment to make sure we are keeping teachers in 18 the classroom where they belong instead of in the 19 unemployment line. 20 And I can't emphasize it enough. There's a 21 huge debate about whether government money matters in 22 education. Just so you understand the technical issue 23 in that equation, it's because incomes of parents and 24 -- on kids in public schools are correlated. High- 25 income districts have more money, they spend more on 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 79 2 1 their kids, so they're moving together. The debate is 2 always, is it the parents' money or is it the school 3 money that matters? 4 No one is arguing that money doesn't matter, 5 it's whose money that matters. The big challenge that 6 we are facing, unfortunately, is the rising poverty 7 level that we see among American children. It is 8 going up. It is over 20 percent. Among Latinos and 9 African-Americans, it's over 30 percent. So the 10 problem we're facing is that we're cutting their 11 parents' income and we're cutting investment on the 12 private and public side. 13 The President very highly targeted not only 14 to let's get teachers in, but let's make sure that 15 we're making investments so that the kids are going to 16 have up-to-date labs, so that they'll be ready to do 17 the type of training that we're requiring of them. I 18 just needed to put in that plug because that's a very 19 important part of the Jobs Act. 20 The one portion that did pass, and we do need 21 your cooperation on, is around the hiring of our 22 veterans. So that did pass. There's a Work 23 Opportunity Tax Credit that you can take advantage of 24 if you hire veterans. Veterans are being given what 25 is called a gold card, which will give them express 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 80 2 1 service at our one-stops. 2 Please continue to interface with your local 3 employment service at the one-stops so they can get 4 information about the vets that will be coming through 5 the system who will be looking for jobs. They are 6 waiting to work, they want to work. They have a lot 7 of skills to bring to the table and we do need your 8 help. Again, the Work Opportunity Tax Credit will help 9 you in that hiring. 10 I did want to assure you that the Department 11 is doing a lot on the export issue. We are very 12 engaged with the TPP process. We are very sensitive 13 to this issue of state-owned enterprises. From the 14 Labor Department's perspective, the biggest challenge 15 is if you don't have free workers you can't make this 16 work, especially with facing state-owned enterprises. 17 In the Colombia free trade agreement we have 18 unprecedented changes that were required for Colombia 19 to bring itself up to speed with the rest of the 20 world. Colombia was notorious: if you were illegally 21 employed, you had a death sentence. It was a big X 22 mark on the number of labor leaders who were killed 23 constantly in Colombia, and the fact that these cases 24 were never solved, or even attempted to prosecute -- 25 and Colombia has made changes in its law, changes in 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 81 2 1 its law enforcement, and it is well under way and it's 2 bringing itself up to the rest of the world so that 3 you aren't competing with countries where the labor is 4 not free, so we can bring them up to speed. We're 5 making similar efforts in the TPP to make sure that 6 you aren't facing unfair competition because these 7 state-owned enterprises -- of course, people make up 8 all sort of rules that put you at a competitive 9 disadvantage. 10 The big thing I do want to say to everyone in 11 labor, and Mary, Mike and I will get a chance to talk, 12 but the Workforce Innovation Fund grants are now out. 13 The local workforce boards in your community should be 14 trying to ramp up to this. This is your opportunity 15 to team up with them and give us the best models. 16 The idea of this fund is, while we're still 17 waiting for the reauthorization of the Workforce 18 Innovation Act, is to have the laboratory of this 19 grant to come up with good solutions. So the demand- 20 riven policies that you would like to see put in 21 place, this is the opportunity for those Workforce 22 Boards to come back to us and say, fund this so we can 23 make that happen. So, please get involved. 24 If your Workforce Board is not involved, then 25 sit on their doorstep until they listen to you and get 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 82 2 1 engaged in this process. It's meant to be sort of a 2 state-wide lab, so please, get your local board to do 3 that at the state level as well. But this is a good 4 opportunity. Of course, we still need help on getting 5 the Workforce Investment Act reauthorized. Changes 6 that most of you know need to be made, we need 7 authorization to make that happen. So, we need your 8 continuing support so that we can -- a lot of that -- 9 CHAIRMAN ANDERSON: Thank you very much. I 10 appreciate it. 11 I'd like you to go ahead -- 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 83 2 1 2 3 4 5 6 7 8 DISCUSSION OF MANUFACTURING TASK FORCE 9 Francisco Sanchez, Under Secretary for 10 International Trade 11 12 SECRETARY SANCHEZ: Well, thank you, Joe. 13 Thank you very much. It's always good to be with you, 14 and today is no exception. I sat here listening to 15 opening comments about your 2011 accomplishments, and 16 there are many. That's one of the reasons I like 17 being with you because this is an action-oriented 18 Council. You're not here to meet occasionally and 19 check the box, but you're actually doing things. 20 And I will say that's good, but we can't rest 21 on our laurels. We're going to expect you to push 22 hard in 2012. I hope you got a sense from Secretary 23 Bryson's time here that this is a leader of this 24 Department that not only has a knowledge of 25 manufacturing, but has a pretty good understanding of 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 84 2 1 board appointments from the interaction he had as CEO 2 of a large -- but he has made -- 3 He mentioned earlier, he's got it 4 prioritized. He -- three priorities: export promotion, 5 foreign direct investment, and manufacturing. That's 6 it. Those are the three things. If we're not focused 7 on those three things we are not doing what our leader 8 asked us to do. So I wanted to underscore that. 9 In particular, I wanted to drill down just a 10 bit on his role of him manufacturing both here at the 11 Department and at the White House. He mentioned in 12 his remarks an in-house Manufacturing Policy Task 13 Force. This task force will support his role as the 14 co-chair of the White House Office of Manufacturing 15 Policy. So he is linking what we do very closely with 16 what is happening at the White House. 17 The task force is an all-Commerce effort. So 18 it involves all the bureaus, including our bureau, the 19 International Trade Administration. We're ably 20 represented on this task force by Peter Perez. The 21 purpose of this task force is to make sure that we are 22 leveraging everything that the Department has in 23 support of -- 24 And something that the Secretary has made 25 clear, he made clear to me this morning as we were 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 85 2 1 briefing him and he made clear again as he was 2 leaving, he wants to make sure that this task force 3 and the work he's doing at the White House is closely 4 linked to the recommendations that you made. These 5 are not to be done in isolation. So the work that you 6 do in 2012, our team is going to make sure that it's 7 well fed into the task force, it fed into the Office 8 of Manufacturing Policy. 9 I want to touch on a few things if I could 10 that ITA, the International Trade Administration, is 11 specifically in support of manufacturing. Some of it 12 is export specific. We spent a lot of time last year 13 really drilling down and developing both market and 14 sector strategies. What I mean by that, is you kind 15 of -- you guys do this all the time. I'm not sure we 16 were doing it as well, but we're trying to do it well 17 now. 18 Look at, where do we want to be five years 19 from now in Brazil in terms of trade policy, nontariff 20 barriers? What are the sectors of Brazil? I'm just 21 using Brazil as an example, but we actually did this 22 analysis for a dozen targeted markets and 20 targeted 23 sectors. 24 The criteria was, what are the markets that 25 offer us the best opportunity for exports? What are 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 86 2 1 the sectors that offer the best opportunity to 2 increase our exports? So these strategies are very 3 developed action plans, things that we need to be 4 doing now with an eye toward having achieved them over 5 the next several years. 6 This is critical to achieving the President's 7 goal of doubling exports and it's in keeping with the 8 Secretary's idea that we can't do everything. We've 9 got to prioritize, we've got to focus. So we're doing 10 that and we are taking this concept beyond the 11 Department of Commerce so that we have an all-of- 12 government approach, because we know it's not just -- 13 although we sometimes are a little export promotion- 14 centric in the International Trade Administration, but 15 we know that Ex-Im has an important role to play here. 16 We know that SBA has an important role to play in the 17 State Department. 18 So we're going to take this concept of action 19 plans for these sector and market strategies 20 government wide. When the process is done, we'll have 21 a strategy for Brazil and the three, four, five, or 22 six sectors that we think will really drive export 23 growth to Brazil. The same will be true for China, 24 for India, for Indonesia, Taiwan. 25 The second thing I want to highlight for you 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 87 2 1 is partnership. So that word gets thrown a lot, we 2 want to partner with you. We are becoming very 3 serious about institutionalizing this concept of 4 partnerships. One of the reasons we want to do it is 5 for precisely what you talked about, Mary, is that you 6 don't know about our services, so we want to make sure 7 that we are linked with trade associations, for 8 example, with one big push so that you can, through 9 your trade associations, disseminate all the things 10 that we do. 11 Then we want to take it a step further. We 12 want to actually train people in the associations who 13 can then talk on our behalf, because as much as we 14 like doing road shows, which we do, we think it's 15 important to get out there, we only touch a limited 16 number of people. So we've got to make these 17 partnerships real. One very specific area we've been 18 doing is getting information about and empowering 19 people within the associations to talk about what we 20 do in a way that could be -- 21 We started this process with NAM, and we also 22 started with FedEx, UPS, and the U.S. Postal Service. 23 With FedEx, UPS, and the U.S. Postal Service, we 24 trained all of their international sales 25 representatives, every single one of them, on the 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 88 2 1 service that are available for -- what ITA can do 2 through our 75 offices -- or 75 countries. We have 3 more offices. We're down to 75 -- we were at 77. 4 Again, we're focusing our resources on the 5 highest yield markets, so we're in 75 countries. But 6 what they can do, what Ex-Im Bank can do, what SBA can 7 do. So when FedEx or UPS goes off and makes a sales 8 call for their companies, after they've pitched FedEx 9 or UPS -- it's perfectly appropriate that they pitched 10 their companies first, but after they've done that 11 they pitch the services in the Federal Government in 12 export promotion. 13 If they get a hook, they get a company that 14 says, I'd like to take advantage of that, they then 15 send that company to us. That program has generated 16 over 1,000 new leads. So we've expanded that to the 17 National Association of Manufacturers and we now have 18 a push to expand it to other trade associations. 19 So one of the asks that I'll make of you is, 20 what groups, what manufacturing groups in addition to 21 NAM should we be working with to do this program? I 22 think that will go a long way. Get it to Nicole, or 23 Jenna, or Peter, or to me, any one of us. So we are 24 going to take this idea of partnerships and really put 25 some teeth behind it. It's not just going to be a 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 89 2 1 word that sounds good in a talk. 2 CHAIRMAN ANDERSON: That is exactly the point 3 I was making about getting what you are doing outside. 4 SECRETARY PEREZ: Mr. Secretary, if I could 5 interject, Kellie Johnson was head of the small- and 6 medium manufacturers at NAM and also on their board of 7 directors, so we have a representative right here on 8 the Council. 9 MS. JOHNSON: Yes. And I'm -- of the 10 representative from Commerce -- NAM and I just made a 11 note because we're having a board meeting in March, 12 and I would like to see if we can have that person 13 attend and do a break-out session in the small- and 14 medium-board members and kind of walk through what it 15 takes -- that's a topic -- I mean, it's on top of our 16 agenda at every meeting. 17 SECRETARY SANCHEZ: So let's do it. 18 MS. JOHNSON: Let's do it. 19 SECRETARY SANCHEZ: We are formalizing these 20 partnerships with MOUs where there are expectations, 21 both from us as well as from the associations that we 22 -- these partnerships. 23 MS. ISBISTER: And for what it's worth, I 24 know what NABE has a program -- called Export Help, 25 where -- so I wonder perhaps -- 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 90 2 1 SECRETARY SANCHEZ: I'm talking much longer 2 than I planned to. Let me just highlight two more 3 programs very quickly. But we have an international 4 buyer program. We actively recruit foreign companies 5 to come to the United States for trade shows, and then 6 we have our Trade Specialists at those shows and we 7 link up those foreign buyers with American companies. 8 Can I ask you, I want to know, are we at the 9 right shows? Are there shows that we're not doing 10 that we should be doing? We want your input on how we 11 can make that program stronger. We had 10,000 foreign 12 companies. 13 It's a great program and it's cost effective 14 for small- and medium-sized companies. We may find it 15 hard to take an individual trip to a particular 16 country to explore, but maybe not so hard to go to a 17 trade show within the United States where you have 18 thousands of companies. It's a great program but I 19 think we could use more input from you just to make 20 sure we're focused where we need to be. 21 Finally, we have a Supply Chain Competitive 22 Advisory Committee and there's absolutely no question 23 that part of standing up and supporting manufacturing 24 is standing up and supporting the supply chain. We 25 want to make sure that the government is doing 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 91 2 1 everything it can, I'd say first, to borrow the --, is 2 first do no harm, and secondly, what can we 3 proactively do to support that advisory committee that 4 I believe is going to be critical to achieving that 5 goal. 6 So I think we're all in violent agreement 7 that manufacturing is absolutely critical to our 8 economic recovery. We are, at the International Trade 9 Administration and throughout the Department, 10 completely committed to working with you to continue 11 to improve the numbers that Mark Doms put up there, 12 335,000-plus new employees that have come from 13 manufacturing. We think we can do more if we work 14 well together. Thank you for what you did in 2011. 15 Let's get to work. 16 Thank you, Joe. 17 CHAIRMAN ANDERSON: My pleasure. The only 18 thing I would say in like -- and so forth, the 19 training that you've suggested is going on out there, 20 these have -- an up this side, down this side of the 21 table. I mean, the Supply Chain Competitiveness 22 Advisory Committee -- never heard of it, but it's core 23 and central to what we do in some industries. And 24 again, I know it's new. 25 SECRETARY SANCHEZ: It's brand new. You're 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 92 2 1 right on the cusp. 2 CHAIRMAN ANDERSON: But I'm just reinforcing 3 that that information that exists needs to get outside 4 of the Beltway. 5 SECRETARY SANCHEZ: I agree. We look forward 6 to getting feedback from you. 7 On a personal note, Kellie and Peter made 8 beautiful statements on Councilmember McGregor -- and 9 I'd love to get that quote. It was a beautiful quote. 10 Thank you all very, very much. 11 CHAIRMAN ANDERSON: Dr. Hart? 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 93 2 1 2 3 4 5 6 7 8 9 10 11 ADVANCED MANUFACTURING PARTNERSHIP UPDATE 12 Dr. David Hart, Assistant Director for 13 Innovation Policy, 14 Office of Science and Technology Policy, 15 The White House 16 17 18 DR. HART: Well, I knew that probably the 19 most important thing that I would do would be to show 20 my face here. I didn't realize that would be quite so 21 literal. But let me go one step further and send my 22 cards around and invite people to contact me. 23 I'm pretty much aware of all the activities 24 of the Advanced Manufacturing Partnership, and I can 25 be a router, if not a direct respondent. So let me 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 94 2 1 just pass those out. Just take one and email me if 2 you have questions or inquiries related to it. I'll 3 just hit a couple of high points. 4 The first thing to say is that the Advanced 5 Manufacturing Partnership is an organizing principle, 6 not an organization, and it has threads both on the 7 government side and non-government side. Within the 8 government, I would say the big theme is interagency 9 cooperation. So we've heard that this morning already. 10 The National Program Office, which is being 11 hosted by NIST, is an interagency office. It isn't 12 directly part of the Commerce Department, but will 13 have detailees from other departments as well. It's 14 going to be kind of a central switching point I think 15 for advanced manufacturing activity. 16 The agencies are of course going ahead on 17 their own as well and I think we've been pushing hard 18 on the budget side, especially advanced manufacturing 19 R&D. If you look at OSDP's priorities that it sets 20 with the Office of Management and Budget, you'll see 21 that advanced manufacturing R&D is one of the top 22 items, and I think that will continue. 23 On the non-government side, the main activity 24 occurs through the AMP Steering Committee, which is 25 chaired by President Hotfield of MIT and Andrew 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 95 2 1 Liveris of Dow. That activity, probably the most 2 physical piece of it, has been a series of regional 3 meetings which we held around the country in the fall. 4 More than 1,000 people. They shared the kind of 5 passion that you guys have shown here. 6 We had a fascinating dialogue on a number of 7 the issues that you brought up, but that's part of 8 those things in the break-out sessions. We heard 9 about demand-driven labor force, we heard about small- 10 and medium-sized manufacturers that want to access 11 technical capabilities, whether they're government 12 owned or non-government owned. 13 So we've taken all that input, we've taken 14 input from a lot of other sources and the PCAST group. 15 So this Steering Committee operates within the 16 framework of the President's Committee of Advisors on 17 Science and Technology. They'll be in town and will 18 come up with a set of recommendations in April. I 19 think at that point we'll have sort of a phase change 20 and we'll be in a position to engage more widely with 21 a whole set of constituencies that are not involved 22 now. 23 So stay tuned for sort of transformation of 24 the Advanced Manufacturing Partnership effort in the 25 spring. Let me just leave it there. I know we're out 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 96 2 1 of time. But I'd invite those of you who have 2 specific questions or want to get in touch with some 3 part of the effort to contact me. 4 The four subcommittees within the Steering 5 Committee are Technology, Policy, which governs both 6 macro issues, but especially focuses on micro issues 7 related to collaboration around research, Workforce 8 Developments, and Shared Infrastructure. My two are 9 the Workforce and Shared Infrastructure. Other 10 colleagues at the White House handle the others. Then 11 each of those has a set of members within the Steering 12 Committee. 13 CHAIRMAN ANDERSON: Thank you very much. 14 Dr. Uvin, a subject that comes up locally a 15 lot is the debate about college graduates versus 16 technical education. So we're anxiously excited to 17 hear from you. 18 19 20 21 22 23 24 25 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 97 2 1 2 3 4 5 6 7 8 9 10 11 12 WORKFORCE UPDATE & DISCUSSION (Continued) 13 Dr. Johan E. Uvin, Deputy Assistant Secretary, 14 Office of Vocational and Adult Education 15 16 DR. UVIN: Well, I will try to address those 17 issues in a very short period of time. But let me 18 start by saying how much I connected with the report 19 out from both the Competitiveness and the Workforce 20 group when I heard people talk about the importance of 21 a skilled workforce. As you know, Secretary Duncan 22 and Secretary Ross share this understanding that 23 education and skills of our workforce are critical to 24 our ability to compete. 25 But as we have pursued a number of 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 98 2 1 opportunities in the education space, what we really 2 are finding is that many youth and adults are just not 3 prepared to take full advantage of the education and 4 training opportunities that both the public and the 5 private sector are providing. 6 What we've also discovered is -- I believe 7 this ties into the demand side that was made earlier, 8 is that many of the investments that we're making are 9 actually not very responsive to the -- and the way 10 that they're set up, and often exclusively focus on 11 student interest and don't make the important 12 connection with hose pathways into the economy that we 13 know are going to be so critical, not only in your 14 industry but also in other, what we call, step- 15 dependent industries. We're -- specifically about 16 that -- science, technology, engineering -- 17 So with that being said, let me just quickly 18 point out a couple of investments that we actually 19 have where some of you and your colleagues have 20 actually been able to participate and then just -- in 21 the end I'll just make an offer to work with you 22 around building this database, around best practices, 23 where the demand and the supply side on the public and 24 the private industry can work together. 25 So just some factual information. I'll try 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 99 2 1 to do this in 20 seconds and then wrap up. So we 2 actually do our Federal student -- we're actually 3 investing over $13 billion per year in sort of career 4 training-oriented activities and -- that level, and 5 every portion of that investment is -- supporting the 6 participation of youth and -- in manufacturing -- 7 training program. We've been thinking about, how can 8 we think about those resources and -- that they would 9 be more responsive to what actually is -- 10 We have about one more -- right now. We're 11 funding through the -- Perkins Act. That's a four- 12 month grant program to states. We've supported quite 13 a few that are basically factually related – 14 secondary -- 15 And thirdly, we have what are called sort of 16 national activities. These are sort of R&D funding, 17 if you will, from the education -- with respect to -- 18 and we've selected six states, two of which are 19 developing what we call sort of more vigorous advanced 20 manufacturing pathways and they are actually 21 responsible for -- so we'd be more than happy to share 22 additional information on that. 23 As we're beginning to work more and more with 24 our colleagues in Commerce and Labor on some of these 25 critical issues for advanced manufacturing and other 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 100 2 1 sectors, what we have actually uncovered in the 2 process is that there are approximately 53 examples 3 across all states that where we feel that the 4 education, the employment, training, and the 5 manufacturing community has come together and created 6 productive partnerships, so this may be in terms of 7 the best practices what we are considering as we -- 8 from our perspective. 9 Then, you know, we also try to get a lot of 10 things done through collaborations. We have wonderful 11 collaborations with our colleagues at the Department 12 of Labor, our partner in the trade adjustment 13 assistance community college and career training 14 grants, which as you probably know is a $2 billion 15 investment over a four-year period. Just out of the 16 first round of how we can -- the example of the 17 Consortium of Grantees, which had an exclusive focus 18 on grants to manufacturing those, the -- community 19 college consortium based on -- I understand that 20 there's -- regional -- get some of the -- in your 21 industry. 22 In terms of other interagency work, we have 23 been working with John and others as part of the Task 24 Force for Advanced Regional Innovation -- in our 25 technical assistance provider there. We are a 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 101 2 1 participant in the interagency Advanced Manufacturing 2 Working Group, and we have provided some support to 3 the Advanced Manufacturing Partnership and -- 4 Just in closing, two final points. We, at 5 the industry level, have engaged in a number of 6 conversations with national industry associations and 7 your associations at the table where we are now 8 exploring, so what does it mean when industry has said 9 these are our industry skill standards? So what does 10 that mean for education? What's their role at the 11 national level to sort of figure out how these things 12 can best be configurated in our vocational training 13 programs? 14 And lastly, Secretary Bryson and Secretary 15 Duncan each have committed to a number of joint 16 initiatives and have chosen manufacturers that we 17 would focus on, so we're looking forward to many, many 18 of your ideas down the road and most certainly would 19 be willing to come to a -- of the Council -- to speak 20 -- 21 CHAIRMAN ANDERSON: Thank you very much. 22 Appreciate it. 23 Christine? 24 25 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 102 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 JOBS COUNCIL UPDATE 16 Christine Koronides, National Economic Council 17 18 MS. KORONIDES: Thank you. Sorry. We're 19 getting down to, I think, the last people here. I'm 20 Christine Koronides. I'm at the National Economic 21 Council, where Secretary Bryson mentioned part of our 22 work is the Manufacturing Office. I work on 23 manufacturing policy, small business policy, all sorts 24 of commerce and trade policy as well. 25 I just wanted to -- I'm filling in for Don, 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 103 2 1 actually, though. I also work on our Jobs Council 2 initiatives. I think Don wanted to make sure you knew 3 the most recent -- just earlier this week the 4 President met with his Jobs Council, which is another 5 group of very engaged business leaders like 6 yourselves. 7 The email with the final report, which 8 includes a section on manufacturing, which from 9 hearing what I've heard from what you've said today is 10 very similar and very much in line with the ideas that 11 you all have. They're in part focused on regulations, 12 skilled workforce, taxes, manufacturing, and 13 innovation, six of the same themes that you've all 14 brought up today. 15 I wanted to make sure you knew about -- I 16 think you've heard bits and pieces of some of the work 17 that we're doing sitting at the White House and the 18 President's Office. I can integrate them probably. 19 That's our job, is to integrate all this stuff. 20 But the President has several signature tax 21 initiatives, including accelerated depreciation, 100 22 percent expensing, that have been -- as we've heard -- 23 for the manufacturing sector, the budget includes 24 extending and bringing those provisions in a more 25 permanent fashion, and also some other initiatives 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 104 2 1 that we'll be talking about. 2 But the President has also called for tax 3 reform. We are very much engaged in that discussion 4 right now and we're working really hard, and 5 appreciate your input and your thoughts on those items. 6 MR. LANDOL: Excuse me. Is that report 7 accessible? 8 MS. KORONIDES: Yes. It's online at the Jobs 9 Council site. You guys can have this copy. I've got 10 a bunch lying around. But I have this one with me. 11 On regulations, I think the Secretary was 12 mentioning earlier, Kass Sunstein -- we really in this 13 administration focus on net benefits of regulations in 14 a way that previous administrations haven't. 15 We actually, through the look-back plan, have 16 called for agencies and independent regulatory 17 commissions to identify ways that they can streamline 18 existing regulations, so look back at the things you 19 did 20 years ago that might not be relevant now. 20 Let's cut those down, let's streamline them. We've 21 done a ton of work on that. I think we've already 22 eliminated about 90 regulations. I think that 90 is 23 from the FCC alone, but I've got a lot of stats in my 24 head this way, so I'm not going to be quoted on that 25 one. 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 105 2 1 Unskilled workforce. Again, we hear this a 2 lot. The President heard directly from manufacturers 3 like yourselves at the in-sourcing forum that this is 4 still a really challenging area. You heard from Dr. 5 Spriggs, we've looked at ways to innovate in our Labor 6 Department programs to say, how can we get this money 7 out in a way that incentivizes the community colleges 8 to be working with businesses to be better aligning 9 the training with the needs of businesses. So there's 10 been some innovation in the grant-making. 11 Those are a lot of dollars going out through 12 new innovative challenges. We've also spent a lot of 13 time and energy with partnerships, on -- for America's 14 Future, Penny Pritzker who's on the Jobs Council is 15 leading up that. I encourage you all to be engaged in 16 that. That is 100 percent an effort to align training 17 and workforce needs and really work with the community 18 colleges, really work with other training 19 organizations to be delivering more focused, more 20 targeted training and investments. 21 In addition, Right Skills Now is just an 22 effort from Darlene Miller, who's on the Jobs Council. 23 They're looking to expand that. It's in like two 24 pilot cities now. They want to go to 10. If this is 25 something you're passionate about, get in touch with 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 106 2 1 Don, get in touch with me. Let's work out how you can 2 do this in your community and your area. 3 On energy, we've also done a lot on the 4 natural gas side. I'm happy to make sure that you get 5 a more full report than I can give you in like two 6 minutes on that. Exporting, I think you've heard a 7 lot about today. Innovation, you've heard a lot about 8 as well. We are working here to better link and align 9 our research and development programs. 10 The President issued a presidential 11 memorandum a few months ago on commercialization of 12 Federal research, and we're working really hard right 13 now to accelerate the links between business and the 14 labs and to really ramp up and accelerate 15 commercialization through our efforts. 16 On the information front, I think Business 17 USA, you did hear about. That should be live next 18 week. So we heard from business like you across the 19 country in the Jobs Council that all these services 20 and programs are great, but it's very hard to access 21 them. You don't, you know, search for information by 22 going to the Department of Commerce or the Small 23 Business Administration or the Labor Department. 24 Business USA will be a place where all of the programs 25 and services are in one place. But that could still 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 107 2 1 be hard to navigate. 2 The Office of Science and Technology Policy 3 has worked really hard on, let me just make this like 4 Google, right? You type in "I need insurance" and 5 three different things pop up. You can say, well, 6 there's an insurance program from Ex-Im, there's one 7 from SBA, there's one from Commerce. Like, which one 8 works for me? But looking across three things in one 9 place is a lot different and a lot easier than looking 10 at three or four different websites and not knowing 11 what else is out there. 12 So this should be a really great tool. We're 13 really excited about it. The President called about 14 90 days ago for his CTO to get on this and get 15 everything together in a really searchable, dynamic 16 way. Again, that should be launching. There's like a 17 splash page up now, but it should be fully functional 18 in the next week or so. 19 I think also I wanted to make sure, on the 20 regulatory side, that we talked about -- the President 21 earlier this week announced that we'll be doing some 22 significant permitting reforms, so we recently piloted 23 14 high-priority projects. 24 We heard from folks like you that this is an 25 issue and you're trying to expand and grow and invest 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 108 2 1 in new ways, that you have to coordinate permits from 2 four or five different Federal agencies--and it could 3 be more than depending on the infrastructure and the 4 other things involved--and there wasn't really a way 5 to navigate where the status of your application would 6 be at the Department of Transportation and the EPA at 7 the same time. 8 So now the President has issued an order to 9 create a Permitting Project Management Office under 10 the OMB, and they will have the task of coordinating, 11 keeping the agencies accountable, and looking at 12 permits as like case management rather than as a five- 13 headed process. 14 So that, we're very excited about. I think 15 that will make some significant headway toward some of 16 the issues that you brought up and it should be very 17 helpful. Again, we piloted 14 priority permitting 18 projects that are all on track now, and there's a 19 dashboard. I think there's an example of the 20 dashboard in this report. You should check it out. 21 It actually has -- I think it's a best 22 practice that we'll try to adopt more broadly that 23 really shows transparently how many days are expected 24 to be left in the permitting review process, where the 25 application is in different departments, and looking 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 109 2 1 at just providing that best information to all of you 2 I think goes a long way. 3 So if you have any questions about like a 4 broader initiative, the Jobs Council has--Don sent me 5 with this to make sure I told you--three regional 6 listening-and-action sessions coming up that you're 7 all more than welcome to be engaged in and join and 8 we'll work with folks to make sure you have the 9 information. February 3 in Seattle there's a higher 10 education event with the NAFSA secretary, and February 11 21 in Kansas, a skills and community college event, 12 which it sounds like many of you are very interested 13 in. And March 5, there is a health care workforce 14 event in northern California. Those are listening- 15 and-action sessions, making sure that business leaders 16 are able to speak about policy issues that have -- 17 and that we're carrying that back and taking concrete 18 action. 19 So, any questions before I slip out? 20 CHAIRMAN ANDERSON: Thank you. 21 Last but not least, John Fernandez. 22 23 24 25 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 110 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 DISCUSSION OF MANUFACTURING TASK FORCE (Continued) 19 John Fernandez, Assistant Secretary for 20 Economic Development 21 22 ASSISTANT SECRETARY FERNANDEZ: I've got 23 about a 20-slide Power Point I want to go through. 24 (Laughter) 25 ASSISTANT SECRETARY FERNANDEZ: No. That's 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 111 2 1 okay. I'll try to be very brief. The rolling -- we 2 do work very directly with the local and regional 3 development -- public/private partnerships and our 4 priority is to help communities build assets that 5 enable economic growth, business -- and job creation. 6 So while many of my colleagues you've heard 7 from today -- I think you think that directly support 8 a private sector entity, we tend to build public 9 assets that become a leverage point for others to 10 follow -- 11 In the space of -- and a lot of 12 infrastructure type investments that link to specific 13 business expansion projects, or -- projects -- all the 14 resources they need to get that kind of gap through 15 the financing -- all for competitive grants. 16 In the manufacturing space, the last three 17 years we've probably invested just shy of $76 million 18 on those kinds of projects. Out of that group there 19 were probably 40 that were very specific and kind of 20 public infrastructure projects. One of the 21 traditional kinds of things is helping someone extend 22 a rail -- or expanding the water capacity in a 23 community's system, typical things that you would 24 expect in the infrastructure space. 25 But in this economy, this global economy, we 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 112 2 1 feel very strongly that the definition of 2 infrastructure and competitiveness is very different, 3 and that while traditional infrastructure -- new kind 4 of innovation -- infrastructure that we need to pay 5 attention to as well. So for example, one of the 6 projects we did last year was -- it's called the 7 Midwest Project. 8 It's a public/private partnership where the 9 EPA put in $2 million and the large manufacturers' 10 team put in another $2 million -- partnered with Ohio 11 State -- University and others to build a -- 12 simulation pilot initiative where we're using big 13 systems and tying it to Ohio State's high-speed 14 computing center and developing the training and 15 access for that technology for the supply chain. 16 So we're very specifically targeted the 17 small- and medium-sized manufacturers to use this 18 higher productivity-driven technology so they can be 19 more competitive on a global basis and in the process 20 compete and support the large companies that they 21 supply. 22 We think there's opportunities to do that in 23 other parts of the country as well. We have Mr. Hart 24 from OSTP who's been a big driver of this as well. 25 So, I mean, that's the kind of innovation in 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 113 2 1 infrastructure that if there's a market failure, it 2 wasn't going to happen without our engagement and 3 being a catalyst through the Council on 4 Competitiveness so we could get this done. 5 The same thing I think was mentioned about 6 the linkage on workforce. No question that that's a 7 critical part of -- we've been really fortunate to 8 have a great program -- from the Department of 9 Education and others as part of this Jobs Innovation 10 Accelerator Initiative, where we're sort of bringing 11 together multiple Federal agencies to get alignment of 12 our resources around high growth business clusters 13 within regions so we can help them grow faster. 14 So we were able to bring together funding 15 through EPA, through Department of Labor, and through 16 SBA to see 20 of these kind of clusters. We expect a 17 lot more of that. Other infrastructure in that vein 18 would be -- a very volatile -- systems accelerate 19 commercialization -- 20 So we'll continue to do some of the more 21 traditional asset building in communities, 22 particularly better -- but also are in great locations 23 for business expansion. We'll continue to work on 24 this competitiveness -- as well. There's a whole lot 25 more I could talk about, but we are the champions of 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 114 2 1 bottom-up strategies. We don't pick industries. We 2 have a priority towards manufacturing. We do -- what 3 the Secretary says, we -- as well. 4 But we work with our local partners so it's 5 their strategy, not ours. We have probably the most 6 flexible money in the Federal Government. We don't 7 have as much as some of the others, but it's not a 8 formula, it's not proscriptive. It's, you tell us 9 where the need is and how we can leverage our dollars 10 to -- demand -- and we'll shape our programs to meet 11 your needs. So we look forward to partnering with 12 members of the Council. 13 Let me just say too that I really do 14 appreciate all of the members' willingness to 15 participate. Thank you for your service. 16 CHAIRMAN ANDERSON: Thank you very much. 17 ASSISTANT SECRETARY FERNANDEZ: I appreciate 18 everybody's endurance. 19 CHAIRMAN ANDERSON: Welcome to our world. 20 (Laughter) 21 CHAIRMAN ANDERSON: Thank you again. 22 23 24 25 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 115 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 DISCUSSION OF NEXT STEPS 20 Joe Anderson, Chair 21 Chandra Brown, Vice-Chair 22 23 CHAIRMAN ANDERSON: We still have the 24 remainder of our day, but in terms of the formal 25 Council meeting, rather than the -- with a fire hose 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 116 2 1 coming at me -- with all the activities, which is 2 great. Our challenge as a Council and our committees 3 and work is to -- out and see how we can utilize this 4 and see how we can get it working outside of the 5 Council, and figure -- manufacturing. 6 So how are we going to proceed? 7 MR. MASSERMAN: So we are meeting with them 8 right now in Room 3407. 9 CHAIRMAN ANDERSON: So we're going to end our 10 meeting here. We will go to that location for the EPA 11 meeting, and then from there we'll have lunch and 12 follow on with our own discussion of where to from 13 here. I think the follow-on meeting at 1:00 is going 14 to be abbreviated, so we'll probably get out a little 15 bit early and proceed from there. 16 Nicole, have you got any final comments? 17 SECRETARY LAMB-HALE: Well, as always, thank 18 you so much for everything that you're doing. I want 19 to emphasize that this is really The Manufacturing 20 Council's time. There are witnesses who can say that 21 every time I'm with the Secretary and we talk about 22 his role as co-chair of The Manufacturing Office 23 Policy at the White House, I always say to him, 24 leverage your Manufacturing Council, you guys are 25 engaged, that you can help him do a better job for 3 4 LISA DENNIS COURT REPORTING 5 410-729-0401 1 117 2 1 American manufacturers. So I just want to thank you 2 for all that you have done, what you will be doing. 3 If I can be of any assistance, please don't hesitate 4 to let me know. 5 CHAIRMAN ANDERSON: Jason, are you on the 6 phone? 7 MR. SPEER: Yes, I am. 8 CHAIRMAN ANDERSON: Okay. Well, good. We're 9 glad you were able to join us. 10 What about Jason and Donna? Will we call 11 them again? 12 MR. MASSERMAN: We'll send them emails. Yes. 13 We'll see if we can send you both an email. 14 MS. ZOBEL: Okay. Thank you. 15 (Whereupon, at 11:34 a.m. the meeting was 16 concluded.) 17 18 19 C E R T I F I C A T E 20 This is to certify that the foregoing 21 proceedings of a meeting of The Manufacturing Council, 22 held on January 20, 2012, were transcribed as herein 23 appears, and this is the original transcript thereof. 24 25

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