give the founding family credit. the business model is a fantastic as this model, this everyday low price but the culture of the company is also what i give such tremendous credit to mr. sam, ms. helen, the walton family and then the leaders, the ceo that followed sam walton was then dave glass and lee scott and i myself. as i have gotten to work closely with my two predecessors that followed sam and before i was in this office, i've had a chance i think to get to know sam walton threw a lot of other people. >> do you like living in bentonville? >> i will tell you what it is a great place to live. >> does it feel kind of small sometimes? >> is interesting. my wife and i use that is home because we have now you know the positive thing. we have a daughter and son-in-law and three grandchildren very close by, and

a lot of great friends and a lot of involvement in the community and it is a great place to live. >> a question right here. >> jeff ornstein with peter salomon company. walmart stock prices have been flat for over a decade. how do you sort of a address that in b how does that affect the morale of the employees and executives? >> i think the way we address it is by improving sales and a lot of the earlier discussions abous that investors look in buying in a company. the growth of our business we have talked as they did yesterday with some about growth leverage and returned. so you know i don't wake up and start each day saying i need to increase stock phrase. i look at how do we grow our business, serve more customers and then leverage that to

produce return for the shareholders and i think that is what will end up ultimately affecting stock price. related to the question of morale, i will tell you i think over the years companies have to look at how do they evolve and change in the way that they motivate and that is something that over many years the company does that. whereas a start up company might have one formula, walmart was a start up company at one time and back in the 1970s when it went public and then had significant share price growth over the 1970s, there would have been one method then that would have been the right thing for motivation of associates. now, in this period of time there becomes different ways to create motivation and incentives and to drive performance of both management and associates. it is different for a mature company that is a large global business like walmart that it would be a starter.

>> get off you like analyst pay too much attention to that sales metric? is at the right one to keep an eye on? >> i think it is a very important one so i think there are others that are important also, but i would not deny -- i think any business looking at the base of operation and what is the strength of that base is very very important. companies want to grow and add and make acquisitions and build new stores. that is important also but it is always important to look back at the base of operations and that is what con store sales end up being about. >> we can take one or two more quick questions. anybody over here so i have missed? mr. again. >> this is on the fuel thing. have you considered or do you already have carpooling or vans? using social networks to encourage her customers to

carpool? >> that is something that frankly and our home offices we do and where we have a large group of associates, it is one of those i think that we have explored some consideration about customers and frankly haven't really addressed that. that is one that we will give more thought to. i think with customers and how customers get from their home to a walmart store with rising fuel prices, i think there are opportunities. in some areas and markets around the world we have different approaches to helping customers and i think it has worked and something we have talked about some. i think it is one that gas prices and as you hear sometimes in the media, there are thresholds that create differences in behavior and overlong period of time i expect gas prices to continue to rise and i think it is something that

ideas like that will get even more consideration from customers and business businesses. >> mike, hope you appreciate this rousing welcome to new york [laughter] [applause] >> no, i do, i really do.

this week on "the communicators," our guest is intel corp. vice president, peter cleveland who talks about the obama administration's efforts to improve american innovation by assisting the u.s. technology community. >> host: we are pleased to welcome to "the communicators," peter cleveland vice president of the intel corp. and he is also in charge of their global public policy group. mr. kleven if you could start by giving us a snapshot of what the intel corp. is, what it makes and where it is located etc.. guest: intel corporation was founded about 40 years ago and silicon valley, and we are

primarily a microprocessor company that we are getting involved in all sorts of different types of products, software solutions, hardware solutions. we produce the chips inside net looks, servers, desktops that are chips also run medical devices. they also run gps systems in cars. you see them all over the world and we are a great american manufacturing success story. we have been profitable for decades and employ 43, 44,000 americans and our domestic manufacturing base. so, we have helped found silicon valley and we are going stronger today. >> host: so you still manufacture heavily in a united states? >> guest: absolutely. in california, oregon and arizona and new mexico we employ 43, 44 thousand high-tech high wage workers. they are the heart and soul of intel and as we expand our manufacturing facilities we

count on them to build our next silicon process technology, our new architecture. as we go forward it is our american working manufacturing base that is key for us. >> host: also joining us in our conversation is gautham nagesh from "the hill" newspaper technology reporter there and people get to his questions in just a minute but president obama in the last couple of months has been talking about his innovation agenda, and he has been referencing this in several speeches. here he is from last month at penn state. >> anywhere you go in the country you will find inventors and businesses that create products that are now sent all around the world. but, innovation has also flourished because we as a nation have invested in the success of these individual entrepreneurs, these inventors, the scientists. in this country from the moment you have a new idea, you can

explored in the world's best labs and universities. you can develop it with a research grant. you can protect it with a patent. u.k. market it with a loan to start a new business. you have got a chain that takes a great idea all the way through and that is something we as a nation have always invested in. it is how we as a people have advanced ideas from the early stages of research to the point where you can hand it off and let the private sector run with the ball. that is how investments in basic research have led to things like the computer chip and gps and millions of good jobs. so in america, innovation isn't just how we change our lives. it is how we made a living. and to support american innovation, what my administration has tried to do is not just hand out money.

>> host: peter cleveland is important for the government to get involved in technology innovation? >> guest: absolutely. president obama gets it. those remarks right there explain how investing in innovation and job competitiveness is crucial and there is a partnership goes that goes on between the private sector and the government whether it is patent reform our immigration reform or the r&d tax credit. the president has set sail on the right course. he is not perfect. they are areas that we work with him but they private sector and the government coming together to push innovation makes all the sense of the world. >> host: in your kind of hometown newspaper the mercury news, san jose mercury news william shugart had an op-ed this past week. he is a professor at the university of mississippi and associated with the independent institute in oakland. he wrote while public investments in -- technological innovation sound like a good idea, the danger is that the

funds will be directed toward politically popular projects rather than those with the highest economic value. remember jimmy carter's quest for a new synthetic fuel >> guest: that is one point of view. at intel we would disagree with that and as for the science foundation the national institute of standards and the department of energy they do crucial work. they produce the seed corn for great companies like intel so we collaborate with them and when president obama raised his spending levels for these types of agencies and departments departments 70% consistently since he came into office, that is a real plus for silicon valley and tech companies like intel. >> host: gautham nagesh. >> guest: we have seen a very political discussion over increasing the amount of r&d funding available from the federal government.

>> host: how do you view the president's fiscal 2002 budget request in a way to handle that money? >> guest: the president has made a series of good decisions to invest in nanoelectronics research, to extend the r&d tax credit permanently but this is a hard slog. tax reform is an area for example where we are going to have to work with the administration on statutory rates, on the territorial tax system on effective marginal rates. nothing is ever easy. he has derided in the right principle to push science and push engineering. however, we will have to work in the context of a republican held house, democratically held senate and a democrat in the white house to reach good compromises that encourage open platform, open systems and open standards so that companies like dell, or microsoft or intel or

apple, the heart and soul of american technology can flourish going forward. >> host: can i step back and ask you? we have seen science itself become politically charged in a lot of ways in the last few years. how does intel view these discussions regarding the importance of basic scientific research and funding and its importance to our economy as it company that is sort of at the nexus of scientific innovation and creating jobs? >> guest: we have to do better. we sponsor summit called the intel science talent search. we just brought in 40 of the brightest kids in the nation who present projects on a vast array of topics and we awarded $100,000 to a new winner. the k-12 education system is crumbling, and states and federal government have to adjust curriculum, have to infuse technology into the classroom so that students learn faster and more efficiently but

particularly in these areas. the dropout rates are unacceptable and i'm probably being charitable when i say the system is crumbling in these areas. we really have to invest in education particularly stem education and science technology and sharing them now. is gory talking about more teachers, more money for universities to do research? what specifically are you advocating? escort of better corporate temperament between the governor and -- government and researchers at university so there's less litigation about disputes about who is investing what. higher standards for teachers, bringing technology into the classroom so that there is an immediacy to the learning curriculum that is going on at the k-12 level. we are losing kids in the eighth, ninth and tenth grades and other nations are surging ahead so we have to, we have to do better in this area. >> host: peter cleveland your boss the present of intel said last year that an american

attack was on the decline and one of the reasons was because of our education system. he is now serving on the president's jobs council. has he seen improvements? has he seen the difference? >> guest: paul has 38 years of experience. he knows how to run a company effectively and i think the president reached out to him to seek his counsel about steps that we can take to improve the workforce. what can we do in the immigration area? what can we do to reduce patent litigation so the patent and trade mark office works more effectively? it is a brick-and-mortar process. you have to invest in a people and invest in education. you have to take regulatory steps in statutory steps in government so that the private sector can expand its headcount. so paul is a good candidate to talk to the president often and the president came and visited our campus recently in oregon and we were thrilled to host him

there. >> host: the you see a difference between this administration and the bush administration in its approach to tech? >> guest: i think there are some subtle differences. the current president i think the leaves and heavily invested in science and you have seen that with a series of budgets. when i talk about these various departments and agencies we continue to talk to him about tax reform. president george bush had some good ideas in the area of tax policy that would generate momentum in the private sector and so when we talk about statutory rates or talk about a territorial tax system which intel advocates for, i give george bush higher marks and did many other respects, president iraq obama has done a fine job as well. >> host: one of the areas and i want to investigate some of the those areas you mention but one of the ongoing stern concerns has been the h-1b visa

issue. why is that still an issue? >> i think the politics of immigration are white-hot and so reasonable legislators on both sides of the aisle, republicans and democrats recognize that listing the cap on the specialized pieces makes sense so that facebook and other silicon valley companies can recruit the finest minds. we hit the cap already this year and -- >> host: for 2011? >> guest: for 2011. there will be a new series of admissions for national starting in april but we are stuck once again because the cap number is too low so comprehensive immigration reform fails due to politics but there are specific subjects like h-1b visas, employment-based green cars that there is a consensus around but due to the larger debate, we can't get any forward momentum.

>> host: you do not see legislative action in this area coming this year? >> guest: i will be honest and direct. we will try to take some regulatory steps that encourage the white house to perhaps adjust per country limits of admissions at the state department but comprehensive immigration reform will be very difficult, given that balance in congress. that doesn't mean the issue shouldn't be talked about. there are a whole series of issues that matter and will testify and explain how we use these people to generate jobs and to generate new patents to expand our domestic manufacturing. immigration reform is crucial going forward. >> guest: speaking specifically of the h-1b visa program we have seen concerns expressed in from both sides and others say their companies concerned there aren't enough h-1b is out there. i've seen reports of mostly come most of the visas going to firms are there are reports a disproportionate number going to

staffing firms based outside the u.s. and they are routed through technical companies here in the u.s.. do you have any views as to how the program should be administrated? would intel like to see changes in the way the visas are dispersed? >> guest: i think you raise a very valid point about who gets the h-1b visas, the 65,000 that are allotted annually. we compete vigorously for those slots as to other great american technology companies. there are international staffing firms that have a different function and a different business model, and we operate differently than those firms. administrative changes would be appropriate as congress considers this. >> guest: also you mentioned president obama's visit to your facility in oregon and they took that opportunity to announce you guys will be building a new i believe 5 billion-dollar facility in arizona. can you talk about that plan and also was there any thought given to building a facility outside of the u.s. because you have discussed some of the tax issues and that sort of thing.

>> guest: we will be investing $5 billion in arizona. it signals our commitment to our workers, the education that they have, this system of government in this country that is very friendly towards how we operate. these are not easy decisions for us because we can build a factory overseas much more cheaply. it would cost us a billion less but we are dedicated to our own country and we believe in our workers. we work closely with public officials both state, local and federal and we will continue investing in this country. the investment decisions get tougher for companies like intel. you don't have to subsidize us like you subsidize subsidize gmr aig. we are very profitable and very successful but it does make sense for the government to go the extra mile on all these areas so that we can continue to build out domestically versus going overseas. >> host: peter cleveland let's

talk a little bit about tax rates. one of the issues and foreign tax rate versus the american tax rate. what would intel like to have done with the tax system? >> guest: they would like statutory rates to come down so we can compete more effectively. oecd countries many other poor nations have a much lower statutory tax rate. they have a much lower effective marginal rate of taxation as well. we recognize there will be a trade-off. if you reduce those rates than tax loopholes or expenditures as they are called, some will have to be closed and that made, may not benefit us but overall we want to compete against the other companies in korea and elsewhere. we beat the competition right now. we are first-class. we are number one but tax rates are crucial so if president obama and speaker boehner talk about a series of issues in the next year or year and a half they ought to try to find some

common ground such that comprehensive tax reform might be able to occur after the next presidential election. >> host: is a true the u.s. is the only company that taxes foreign earnings if you bring it back into the borders? >> guest: that is true and it is a deterrent of companies like cisco or intel to bring their money back for r&d purposes or for hiring purposes. our money is stuck due to the punitive high tax rate and so something has to give here. there needs to be a consensus and a negotiation or compromise an president obama gets it. he knows the arguments and politics intrudes sometimes when you have tax debates. we are in a wait-and-see mode but we are hopeful. >> host: gautham nagesh. >> guest: we recently sell the senate passed senator leahy's dough with a fairly strong

bipartisan coalition. can you give us and tell's view that the particular the way it alters the patent filing system to favor the first as -- >> guest: senator leahy has done terrific work on patent reform for many years. on all sorts of provisions in that legislation, damages on venue on the legal standard of review for how a judgment occurs on first day file, on the patent and trademark office's ability to set its own fees and then i have the money it collects diverted to other parts of government. senator leahy deserves a medal. the senate has acted 95-5 and that is a good consensus. that is positive when you have republicans endemic that started together. paul o. delaney our ceo went to town to take the next that to -- step to speak to lamar smith who is a republican who also has

worked on this issue for years. you had leahy a democrat on the house side and lamar smith a republican who wants to move forward. this is an area where something could get enacted into law and intel is right in the middle. we are very hopeful about legislation in the form area. >> guest: is there anything you would like to see in the house version of the bill that is not in the senate version of the bill? >> guest: bill? >> guest: we would like to see a process at pto called interparty review which is fair and appropriate administratively so that there is not expensive litigation. there is a way to judge how patents are issued and the elements of those patents on a less costly basis. we spend $125 million on patent litigation oftentimes down in texas and we fight and we fight hard because we have plaintiffs who sue us, the practicing entities and we believe in the products.

we have 46,000 patents in our portfolio so this is a drag on our ability to innovate. it is frivolous litigation we are not the only one to suffer from this. microsoft and other tech companies suffer like we do. >> host: peter cleveland when you go and do research on the lawsuits against intel in on their own web site in fact as well, trust is always the issue including an fpc issue with intel and antitrust. new york as issues in europe has issues with antitrust. would you like to explain that? >> guest: fundamentally big is not bad. we have been extremely successful. urich amy -- european companies, chinese companies love our microprocessor so we have a sizable market share. we have worked with the ftc and with commercial litigants and continue to work with the commission to resolve the differences. we don't engage in anti-competitive behavior. our business practices are sound

but we recognize that the public authorities have the right to raise these types of questions and we are as responsive as we can be. at the end of the day, we produce a fantastic products. we are at of the competition in terms of the size of our microprocessors come in, terms of the architecture and that is why car companies or computer makers and many many others by intel chips. there's nothing we can do about it but we will continue to work on on a corporate basis with authorities around the world on this issue. >> guest: what is it like to work with europe in their governing bodies? >> guest: we try to become a trusted adviser to the european commission on all sorts of issues, on environmental and energy issues, on privacy data security issues. we have worked very closely with them on antitrust questions. we have 85, 86,000 employees around the world who are trying to do the right thing and they

have incredible backgrounds and we have a lot to offer. if we can provide that information and knowledge and analysis to the leadership in europe, that is the goal. i am flying to europe this afternoon and i will be there this week to take just these kinds of steps. >> host: this this is c-span's made it is brooke raymond our guest is peter cleveland vice president of global public policy for the intel corporation. gautham nagesh of the hill, technology reporter is with us as well. >> guest: sticking with antitrust we saw intel settled in august in an antitrust complaint no admissions of wrongdoing but we did see some concerns in the government regarding anti-competitive behavior. do expect similar concerns given your record acquisition such as finian and the mcafee and security sector? do expect the sector to scrutinize these transactions? >> guest: we have worked closely with authorities on the mcafee and infineon.

the mcafee transaction and the security software area $7.7 billion deal was approved and security is becoming more and more crucial to consumers so we will take steps to integrate mcafee successfully into our business. the bottom line is broadband is exploding. we are at the dawn of the internet age, and we are trying to diversify our business away from just microprocessors into new areas, into software and into operating systems and it is challenging because there are other competitors in that space but we recognize that open standards and markets and free trade agreements are positive in terms of expanding our business process. >> host: has governments broadband plans enacted last year been beneficial number one in your view to the country and to intel? >> guest: absolutely. the president talked about a sputnik almond for this country

in a state of the union address in late january and he set a goal for expanding broadband to 90% of the country. he he has got the right ideas here. the problem is that spectrum allocation right now and needs to be rearranged on a voluntary basis. we need to make sure that mobile mobile -- have sufficient spectrum so that people that are on the go in on the move can rely on data and e-mail communications. right now, that is just not the case that we need to expand spectrum allocation to mobile wireless providers. there would be a lot required to do that. the president is supported. they are democrats and republicans that are supported. it will take legwork to complete that process. >> host: can intel be more efficient in the way they designed their microprocessors to increase spectrum usage? >> guest: we are trying to get smaller and smaller with our