man having raped a white woman, and when this story spread into the shipyard, several thousand of the ship ward workers -- some say at least 2,000 shipyard workers -- came out of the shipyard and came downtown to the city hall and to the police department and to try to find the person who had allegedly committed this crime. >> there are hundreds of videos to choose from online. subscribe at youtube.com/c-span. louisiana governor bobby jindal spoke at the annual cpac meeting held in washington. he talked about some of his initiatives at governor and his experience working with federal officials during the 2010 gulf oil spill. this runs about half an hour. [applause] >> thank y'all very much.

[cheers and applause] thank y'all very much. thank you for that very generous reception. i want to thank chris cox for that very generous introduction. let's give chris and nra another great round of applause for all the great work they do every day. [applause] you know, i came here to talk to you today about the fact that when you put conservative ideas into action, they yield great ultimate results. now, that may be a startling assertion for a city like washington d.c. [laughter] you know, i served in congress about three years, a couple of terms. well, i found too often in washington, d.c. congress seems to me sometimes to be like a debating society. there's a lot of talk about conservative ideas, there's a lot of debate, a lot of words, a lot of rhetoric, but the reality is a lot of the best action happening today in the america is actually happening in our states across this great country. [applause] you look at great republican governors like scott walker in wisconsin -- [cheers and applause]

rick scott, rick scott in florida, mitch daniels in indiana and so many others doing a great job across this country. [applause] i'm here today to tell you that in louisiana we've not just been debating and talking about conservative principles, we've been actually putting them into action. and we discovered something interesting. when you act on conservative ideas, when you put them into action, when you put them into laws, they actually work. [applause] i want to talk about that. but before i talk about that, i want to spend just a couple of minutes on one other topic before i get to what i really came to talk to you about today. you know, i was looking through some documents, i came across a passage from an interesting old document the other day. it's kind of dusty, it's about 223 years old. [laughter] folks here in d.c. may not have seen it recently, may not have read it. i want to read just a passage from this document. it's only 45 words. congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof or abridging the freedom of speech or of the

press or the right of the people peaceably to asemiand to petition the government for a redress of grievances. now -- [cheers and applause] just two simple questions. if you e-mail that language over to the obama white house right now, my first question, would they even recognize it, or would they just want us to change and edit this language? yesterday the administration finally began backtracking on their most recent assault on religious liberty, to some extent finally reading their mistake -- realizing their mistake. you and i know the mistake that the obama administration made here was to violate the first amendment to the constitution of the united states of america. [applause] but the administration doesn't even admit it. they don't even get it. they don't even understand what

religious freedom means. the real mistake they actually made was this, they very briefly let the american people see what is behind that curtain. they gave us a glimpse of their true colors. after all, this is 2012. to them religion is, what? 1900s. what's all the fuss about? can't these catholic bishops take a joke? [laughter] you know, i remember another time when president obama briefly gave us a glimpse behind the curtain. remember four years ago when the president was at a fundraiser in san francisco. he characterized folks like us, like you and me, as unsophisticated ingrates who were, and i quote, bitterly clinging to our guns and religion. [cheers and applause] as the governor of the great state of louisiana, i have a message for president obama. he was exactly right about us. [applause] [cheers and applause]

in louisiana and all across america, we love us some guns and religion, and we make no apologies for it. [cheers and applause] and i want to talk to you about what we've done in louisiana, and that's why i came here to talk to you today, to show you that conservative principles work. i'll start with a lesson i've earned from my father. mark twain said this better than me, it's an amazing thing how much smarter your parents get the older you become. [laughter] what do i mean by that? you know, my dad, there are certain things my dad always told us when we were growing. i'm sure like your parents did to you. and they'd make us roll our eyes. there are certain things that they would always say, and you'd swear you would never say that to your chirp.

[laughter] my wife and i have three beautiful children, and i find myself saying more and more of those things to my kids every day. i'll give you a couple examples. my dad would tell me, son, you better eat your vegetables because there are starving children in china. [laughter] i never understood that. i said, look, if they want my vegetables, let's mail them to them. they'll be happy, i'll be happy, everybody wins that way. of. [laughter] you know, another thing my dad would say was, son f all your friends jumped off a bridge, would you jump off a bridge? i had no idea what that meant. [laughter] but one of the things that my dad would tell us every day, he'd say, sons, you should be so grateful that you live in america. [cheers and applause] he'd say every day you should get up and thank god you were blessed to be born in the greatest country in the history of the world. [cheers and applause]

and, you know, trying to tell a child to be grateful he was american, what else was i going to be? [laughter] i didn't really appreciate what my dad was trying to teach me until i got older, and i started having my own children. and then i realized how amazing my parents' example and story really are. my parents came over 40 years ago to louisiana in search of the american dream. to give you an idea, my mom was pregnant with me, my parents got to louisiana so my mom could study at lsu. my dad was so confident, he went and got the yellow pages out and started calling company after company until somebody would hire him. he didn't want a handout, he simply wanted a job so he could feed his family and pay for his unborn child. they had so few resources, they actually went to the hospital, the insurance company refused to cover the cost of my birth. they said i was what they called a pre-existing condition. [laughter] now, i didn't pre-exist the

marriage. i don't want you to get the wrong idea. they were married, i just pre-existed the insurance coverage. [laughter] my dad literally paid in installments to the doctor, paid that bill in full but paid in installments. i always ask about that, how do you pay for a baby in installments? if they miss a payment, are you going to take the baby back? i mean, what do they do? [laughter] he said, son f they would have taken you back, i would have skipped a payment just to send you back. [laughter] my dad's one of nine children. grew up in a house without electricity, without running water. was the first and only one in his family to get past the fifth grade. i know, because i've heard these stories every single day of my life. [laughter] if you ever try to complain to my dad and say, dad, i need an allowance for all the chores i do, he'd say, son, how much do you think you should pay me for the food you eat, the clothes you wear and the roof i put on

top of your head? [applause] now, the reason i tell you all that, my dad -- and i'm sure you all had parents like this. he was one of those dads if you ever complained about anything, you'd get a lecture about how they had to walk uphill to get to school, uphill to get home. they couldn't afford downhill. [laughter] now, the reason i tell you all that is my dad every day would tell us, son, i'm not giving you an inheritance o or a famous last name, but if you work hard and get a great education, you can be anything you want in this great country. there's no limits on what you can accomplish in the united states of america. [applause] and to me, that's the american dream. i ran to be governor of the great state of louisiana because too many of our kids couldn't pursue those dreams at home without leaving. we were the only state in the south for 25 years that consistently exported our sons and daughters to other states.

i campaigned to be governor over five years ago to help turn that around. and, you know, we went about it -- our very first step, we had a special session on ethics. we said, look, we're going the keep our dreamers, our entrepreneurs, our sons and daughters right here in louisiana, we're going to start with ethics. why do we start there? they surveyed business leaders across the country, they said one of the most convincing things you can do to convince us to stay in your state is crack down on corruption. now think about, when you heard the governor of louisiana was coming to talk to you today, think about some of my predecessors and stories you've heard about politics in louisiana. i told the press after i was elected, it's my hope that i'm the most boring but hopefully one of the most effective governors in the state's history. [applause] my wife, who's here again, tells me, well, you've got boring done. you've fulfilled that promise. [laughter] let's work on the second. so we knew we had to start on

ethics. you know, a congressman from louisiana used to joke about louisiana, he used to say half my people are underwater, the other half are under indictment at any given moment in time. [laughter] but the problem was as long as people thought who you knew was more important than what you knew, they didn't want to invest in our state. we had a comprehensive ethics session, we went from 44th worst to number one in the entire country. [cheers and applause] went from the bottom five on the better government association's integrity index to the top five, but we didn't stop there. we had a second special session to cut taxes. in the our first year, not only did we constitute the largest income tax cut in our state's history, we got rid of taxes for companies on debt, on new quilt, on utilities. for me, it's pretty simple. i've got two philosophies when it comes to taxes. number one, if you want to encourage an activity, don't tax it. if you want to discourage an

activity, tax it. it's pretty simple. [applause] my second philosophy was even simpler than the first. i made a promise to the people of louisiana. i said, as long as i'm your governor, we will not raise any taxes period as long as i'm governor of the great state of louisiana. [cheers and applause] i first talked about the fact we did have to make tough choices. the reality, though, is in a tough economy you've got two choices. do you make the tough choices in government, or do you shift that burden to your families and businesses? we made the tough choices in government. we cut spending 26%, we cut our budget by 26%, we've cut the number of government positions by not only over 10,000, the lowest number of state employees in 20 years. we privatized group homes that were costing us $600 per day, in the public sector $200 in the private sector. got out of the group home business. sold out over a thousand cars out of the state car fleet, we eliminated over 100 state boards. two signs we're on the right

track. number one, our credit ratings, while the american credit rating's actually gone down for the first time in our nation's history, louisiana's credit rating has been improved to its best point ever in more than 25 years in our state's history. [cheers and applause] cato institute gave louisiana one of only four states to get an a grade for fiscal responsibility. in other words, we were shown we can do more withless, and we continue to do that. i just submitted my budget this week, fifth budget in a row that reduces spending, reduces the number of state employees, that is balanced without raising taxes. now -- [applause] we created a work force training program that's number one in the country, provided a day one guarantee saying we will retrain companies' workers if they're not ready to work on the first day for free. the bottom line is this, results. after 25 years of losing our people, for four years in a row, the last four years that i've been governor, for four years in

a row we've had more people move into louisiana rather than leaving the state, reversing that out migration. [applause] and i can give you a long list of economic development accomplishments. we've created over 45,000 jobs in economic development, over $10.5 billion in private capital. named the most-improved state in the country, number one state for per capita economic development, number one state in the south three years in a row according to southern business development, highest-ever ranking for business friendliness according to "forbes". we're the most improved state in the country. unemployment rate below the national and southern averages every single month during these last four-plus years since i've been governor. the bottom line is this: we have shown that conservative principles work. we have shown that the if you cut tacks and -- taxes and cut spending, you can create good-paying jobs. [applause] and i'm grateful the people of

louisiana reelect me with a record margin last fall and, you know, a lot of people would have said why don't you just stop there and defend what y'all have accomplished, make incremental progress instead. we are tackling two very ambitious and comprehensive reform proposals in this upcoming session. i want to spend my time talking about both of these. the first is reforming our pension debt and programs for public employees and the second is education reform in our state. let me start with pension reform. we're going to do what washington doesn't have the courage to do which is to tackle our long-term debt. the reality is in louisiana our ual's $18.5 billion we spend taxpayer money every year on our retirement system. if we do nothing, that debt will increase by $3 billion at the e7d of the year, and i predict almost every state here has got some form of this public debt problem because politician after politician made promises to public workers that they knew they wouldn't have to keep. and they simply sent that debt to future generations.

you contrast that with what my dad was telling me as a child, you work hard in this country, you can pursue your dreams, what father would want to mortgage his children's future? yet that's exactly what we're doing in state after state and right here in the nation's capital. let's be honest, you don't reform your pension debts, really your only choices are you break your promises to employees which we're not going to do. you raise taxes, which we're not going to do. or you stop funding critical services which we're not going to do. so instead we're proposing a comprehensive reform package that does three things. for new employees, let's move them into a defined contribution plan so they've got a portable retirement plan that goes with them, and they share the risks and the rewards with taxpayers. secondly, for existing employees -- [applause] by the way, only 20% of private -- right now when you look at the private sector, the vast majority are already in a defined contribution plan. very few private sector employees get any type of

pension program anywhere near what states and others are offering through their public pension programs. it just makes sense to catch up with the private sector. [applause] secondly, let's raise the retirement age to the social security age. let's actually average the benefits based on the five highest years of compensation, not the three highest years, to prevent artificial spiking. let's also make other reforms to make this more affordable. for example, back in the '80s taxpayers paid of 0% of the re-- 60% of the retirement program cost. today it's 75/25. 75% of employees pay 25g %. i just want to restore it back to about a two-thirds to a third ratio. just a two-thirds/a third ratio to bring some relief making employees pay a little bit more for their own retirement plans, their own retirement benefits. [applause] and then finally, let's not increase benefits until we can afford to do so. it makes no sense to continue to

increase benefits before we've already paid for the benefits that are already promised, already on the books. the third and final part of the retirement overhaul, we've got four state retirement plans in the state of louisiana. why not combine a couple of these? you can get rid of millions of dollars by getting rid of the overhead, the legal advisers, the out-of-state trips without impacting one employee's retirement benefits. this would save taxpayers half a billion in the first year and reduce the ual by almost half a billion dollars as well. saving taxpayers hundreds of millions of dollars and literally helping to finally address this retirement debt issue so that we're not just mortgaging our children's future. seems to me like washington could learn something from the states if they'd think about tackling social security, medicare and other long-term entitlement programs right here in the nation's capital. [applause] now, the second issue, and i want to spend a little bit more

time is comprehensive k-12 educational reform. the reason this is so important is that we live in an aspirational society. what do i mean by that? you know, in america unlike what some of these protesters who were trying to come in before, unlike what they say, you're not entitled to equal results. >> amen! [cheers and applause] >> you don't, you don't have the right to your neighbor's car or house. nobody owes you a fancy home or a luxury vacation. but you are entitled to equal opportunity. what america's about, the premise of america -- [applause] the american dream is that your last name, your zip code, your income, your race, your gender doesn't determine your outcome in this great country. it's one of the things that makes america such an amazing example to the rest of the world. but that starts with a great education. it starts, our children will only have that chance to succeed and pursue the american dream

and actually inherit more opportunities than we inherited from our parents which is what every father and every mother wants for their child. if we give them a great education. now, in louisiana we've made some progress n. new orleans and particularly post-katrina, 80% of our kids are in charter schools. the number of failing schools has declined, the number of kids reading on level has gone up. [applause] but we've got a lot more work to do. and in my first term we passed some bills. we increased the mfp, the public education funding by 9%. total funding's gone upper student, we brought our teachers' pay to the southern average. we passed a value-added assessment act to say let's evaluate our teachers, our tombs at the beginning of the year, towards the end of the year, compare the difference and evaluate our teachers based on how well their students are doing. [applause] one of louisiana's largest teacher unions said publicly,

we're okay with evaluating teachers as long as you don't link it so heavily to student achievement. [laughter] that's like asking how the football game was without looking at the final score. what in the world does that mean? the most important thing is student achievement. education reform has got to be about the children, not the adults in those schools. [cheers and applause] we also passed a teachers' bill of rights to put discipline back into the classroom. let me tell you something, the number one reason we lose good teachers is the lack of discipline. [applause] i don't know about you, but when i was growing up, if i got in trouble at school, i got spanked when i got home, and when my dad got home, i got spanked yet again. [laughter] if you try to tell my dad, if i tried to say i didn't do it, he'd say, son, i know you too

well. i know you got away with something else today. i'm spanking you for that. don't worry about it. [laughter] we've done other thing as well. we passed a red tape waiver act. teachers unions said it's not fair that charter schools have more flexibility than we do. of as long as they could show students were learning, the union turned around and sued us in court saying we didn't have the constitutional authority to give them the very flexibility they said they want inside the first place. [laughter] in order, they didn't want us to take away their excuses, they wanted to be able to hide behind that red tape and bureaucracy a little bit longer. [applause] but what we're doing is not enough, and that's why we've proposed six bills going into the new session that will overhaul education to make sure every child in louisiana is getting a great education. and let me focus on just two examples, two components. number one, the research shows the best thing we can do for our kids when it comes to education is to make shower they've got --

sure they've got a great teacher. it's more important than class size, than facilities, than anything else. that they have a great teacher. indeed, there was research done from stanford showing the economic impact on that child's future earnings, there was recent research done from harvard, columbia, yale showing that a good fourth grade teacher can increase the chances your child will later go to college and decrease the chances they'll become pregnant as a teenager. now think about that, all by having a good fourth grade teacher. i bet you we could get a bumper sticker and everybody put it on their cars, we should have a great teacher in every class room. yet look at our policies. they're not designed to do that. we've got tenure policies in louisiana, 99% of the teachers rated satisfactory under the current policies, yet 44% of our schools are getting a d or f. we also instituted letter grades. we've got a third of our kids, over 200,000 kids, below grade level, yet under the current

tenure system 99% are rated satisfactory. you know, you look at the way we compensate teachers. it's no exaggeration to say we basically pay teachers based on how long they've been breathing. [laughter] now think about that. what other business, what other venture, what other not-for-profit group could survive if it said to its employees, we're not going to reward you if you put in extra effort, if you get better results, there'll be no extra recognition, reward or compensation. where else would we do that except in education? that makes no sense which is why we're proposing to change the tenure rule so that even if you have tenure, if you're an ineffective teacher, you lose that tenure that first year, and after three years you lose your certificate. [applause] [cheers and applause] and that's why we propose to

change the compensation rules so we can finally pay our best teachers what they're worth for the great teachers out there, help is on the way. for the aspiring teachers that want to get better, help is on the way. for teachers that refuse to get better, maybe they don't belong in the classroom anyway. [applause] the second big change we're promoting is to give parents, give families more choices. no child should be trapped in a failing school. again, it's a great bumper sticker. every child deserves a great education. and we're proposing expand charters to expand the cruise of scholarships so over a half of our kids can go to private schools. basically, let the dollars follow the child instead of making the child follow the dollars. let's truly liberate our kids. [cheers and applause] we're also proposing to give dollar-for-dollar tax credits to those who donate to charities willing to help subsidize the cost of private tuition for those that want to get their

education in a private school. whether you're home schooled, whether you go to online school, charter school, dual-enrollment course, we want the dollars to follow the student so that it's no longer a monopoly, no longer that you are trapped in a failing school. listen to what the unions had to say about this. one of the union leaders literally said this, the executive director of one of our largest teachers' unions said this: poor parents, poor parents don't have a clue when it comes to making educational choices for their children. i met with a group of moms the very next day, they said we make choices for our children every single day. we know our children's educational needs better than any bureaucrat in washington, d.c. or in baton rouge. [cheers and applause] but if you, if you want an example of that kind of top-down, elitist,

bureaucratic-centered thinking, just listen to that quote. poor parents don't have a clue when it comes to making educational choices for their children. if you or i had said that, if a conservative or republican had said that, it'd be on the front pages of every newspaper every day. i've been calling for this union official to either be fired, to resign, i've been at least expecting the union to issue an apology. so far nothing. and the reality is that's offensive to me, and it should be offensive to you. we need to empower parents. they know best what meets the needs of their children, certainly better than the government. [applause] i could talk to you more about education reform. weaver doing other things, but the bottom line is this: we live in a country where every child should be free to pursue the american dream. as conservatives, we believe that every child should have the same chance to succeed. we believe that, again, the government doesn't owe you equal results, but it does owe you equal opportunity. and that starts with a great

education. look, the coalition for the status quo will tell you just give us more time and more money, and to them i say this, our children only grow up once. [applause] we owe them a great education today. we can't afford to wait until tomorrow. [applause] now, i could keep talking to you about louisiana. i want to close with one final story. you've had a lot of speakers come up here and talk to you about the importance of this year's election. you've had a lot of speakers tell you we've got to replace this administration because their energy policies, especially given the keystone pipeline decision. you had speakers rail against this administration for wanting to raise our taxes, rail against this administration for obamacare and taking over more and more of our lives, rail against this administration for regulations that are threatening small businesses. and all of that is true, and i amen and second every single thing they've said. but i want to add one more reason this election is so

important. during that oil spill that hit my state, i had the chance to work with the president and his people up close over an extended period of time. and what i saw concerns me. what i saw and what i heard were people who maybe very, very book smart but who've never run anything in the private sector. and i'll give you an example of what i'm talking about. you know, during our regular meetings and calls, the president would talk repeatedly about his nobel prize-winning energy secretary. [laughter] i began to think that was part of his title, like that was -- i mean, and i didn't understand what that had to do with stopping the oil from coming to our coast. you know, there are a lot of people in louisiana, we don't all have nobel prizes or even ph.d.s or fancy degrees, but we know our coast, and we know our state. and so after a while of being frustrated seeing this oil coming to our coast, they kept telling us don't worry about it, the resources are coming

tomorrow. local leader said to me, i finally figured it out. when the government -- when the pure bureaucrats tell you, when bp tells you resources are coming tomorrow, tomorrow doesn't mean tomorrow. it just means not today. well, at one point, we were watching the oil eat away our coast, and i love cajun ingenuity. a local, a local fisherman got this idea said, governor, why don't we just vacuum that oil out of the water. ..

they were not there and they picked up thousands of gallons of oil. before you the private sector had dozens of these barges working along our coast. the first one was the funniest looking thing you've ever seen. he said aren't those the same trucks they used to clean the porta potties? i said don't put that in -- that sounds awful. but eventually that industrial barges. they just weren't using trucks strapped on the back of a boat. but then i got a call from the white house, said governor, we're shutting down your barges. so this is one of the first things that's working, taking oil out of water. i said we have to do our inspections. i say what you mean you have to do your inspections? they said we've got to check the bowels to make sure they are not leaking drops of oil back into the water after they pick it up.

i said why can't you do that instead of making a comeback to the port or no, that's the rule. this is absurd. within hours of the nationally was all over it. then they changed the story and they said no, they now need to count the number of life jackets and our expenditures on those boats. we gave them 24 hours. they finally realize how absurd this was and to let those barges go back to work without the inspections. here's the moral of the story. they wasted precious time while oil was coming into our coast. they refuse to listen to the people who lived along the coast that knew better than all the experts what could be done to protect our coast. i want to close with this final point that i should have conservative principles have worked in louisiana to cut taxes, spending and grow our economy and how we are attacking education and pension reform. i have one final thought for this upcoming election. the white house, the presidency

is to abort for on the job training. we cannot afford another four years of president obama. god bless you'll. thank you all very much for having me today. [cheers and applause] bee♪ ♪ >> coming up next live coverage of a forum on the future of american manufacturing and global competitiveness.

>> shouldn't your president have the highest, or the moral and ethical standards and be an example to our children and young people in this country, ask yourself that question, please. shouldn't his life make him a role model for your future children? shouldn't any when you elect to this office always keep his promises? >> as candidates campaign for president, we look back at 14 men who ran for the office and lost. go to our website, c-span.org/thecontenders to see video of the consider such a lasting impact. >> do they not have the right to protest and revolt against a government that they feel does not serve their interest? who appointed us to sacrifice the lives of young americans, trying to weigh in on the side of a government that represents perhaps 15% of the people of

lebanon, and has little or no apparent support from the other 85%. >> c-span.org.org/the contenders. >> we are live on this money morning at the mellon auditorium for a forum on the future of u.s. manufacturing, hosted by general electric. during the day we'll hear from heads of a number of major corporations, including dow chemical and boeing. and get remarks from ohio senator rob portman, john hickenlooper enemy of louisville, kentucky. speaking out is the chair and ceo of ge, jeffrey ml. >> in what i would call extended enterprise. i think these are some of the hallmarks of some of the things again will talk about as the week goes by. as you go to the next slide, the date is split into, or the weakest split into four segments. today, we're going to talk about

american competitiveness. tomorrow is a discussion on innovation. the next date is on global competitiveness, talk a lot about what are the fast growth regions around the world and what do you have to do in order to export. and then on thursday we will talk about the workforce, veterans, and what it takes to create jobs and what are some big segments of job creation on a global basis. what i'm going to do today is talk about just 10 ideas on things we've seen work, and things we've learned about how to drive competitiveness inside our company. the first three are what i would colleges kind of business gratitude, about innovation, american manufacturing, and a focus on exports. the next few i think are just about systems of competitiveness. the importance of energy and health care, making every company competitive on a global basis. the next two are about how to work with customers, both large

and small, away to focus on midmarket customers, and the value of taking some of the tools that come from social media, data and analytics, and helping our customers be more productive. and then lastly, talk about skills, talk about empowering workforces and really a public-private partnership as ways to drive competitiveness. these are just our ideas. you will hear a lot more bad as the week goes on, and i think one of the best part about this is we had opportunity to learn from each other and to share best practices. so take that with that spirit. first on innovation and technology, this is what the u.s. has always stood for, is technology and innovation. i would say most companies today are spending more in research and development than the previous generations. in the u.s., r&d spending has

stagnated between two and 3%. we think that needs to go up. various research groups have said that investments in technology and innovation have about a 30% return. so the case for technology and the case for innovation is without dispute. one of the questions that i asked when i travel around the world is how many engineers graduate in the country each year. this is the biggest symbol of the long-term competitiveness of those countries, more than just about anything else you can study and track. so science and technology is absolutely critical. in ge over the last decade we've gone from 2% of our industrial revenue and r&d to 6% of our industrial revenue into r&d. and 2012 we will launch more new products than any year in our history, roughly twice our historical average. and so regardless of company,

regardless of region, we think that a resurgence and a focus on science, technology, innovation, has got to be the cornerstone of any successful company. it's the cornerstone of job creation and it's something we think winning countries and winning companies will do. second, manufacturing. there's a lot written today about manufacturing. what i would say, i came to work for ge in 1982. for roughly 20 years, if you look at global process, matters were inexpensive and the largest peace in your cost structure tended to be labor. we live in a deflationary time period. now we live in more of an inflationary time period where the cost of materials are really the largest cost on anybody's income, income statement. and so as result i think it makes manufacturing, owning your

own supply chain very different today. and that's the way strategically we look at our business. ge has always been good at manufacturing. we have made a very strong focus to control our own supply chain, but we think this is going on around american business at the same time. we have seen good growth in the monthly jobs numbers in manufacturing. go back, in ge we have announced or created 11,000 manufacturing jobs since 2009. we have 16 sites that are either new or being refurbished. so we have a strong focus on american manufacturing. i thought i would just tell anything yet, and we have some of the local guys that will be here this week, but we are basically moving our appliance manufacturing from mexico and china back to fundamentally louisville. and when we look at it on a cost basis, our labor is still higher that it's closer than it has

been in the past. but both my and distribution are less expensive in the united states than importing. so we see the opportunity to bring jobs, certain jobs, not every job back. and we think this will take place in areas like software as well. so there is a good case to be made for the competitiveness of american manufacturing versus previous decades, and we think some of this will go on in the future. now if you go to the next slide, exports are key. if you're the infrastructure business, the way we are, you know, our markets are going to be predominantly elsewhere. and we see the need to really focus on global markets. there's going to be a billion consumers joining the middle class in emerging markets alone. so there is no country that is off limits fundamentally in terms of the opportunities for growth and you look forward into the future. so exports are key. we will make 140 -- this is the

ge stable product. 140 turbines this year. thousands of employees there. we have roughly 50% market share globally, less than 5 million in the message. so if we're not selling in every corner of the world we will fall behind. inside ge, exports really drive 30,000 jobs. there's a five-six model by on every export job, so this creates more than 1000 jobs in the supply chain. if you're going to be exported and if you're going to grow global you also have to create jobs and other countries, not just the united states. so we are doing that as well. and we are building very strong customer relationships. so if you walked through any of our factories in the united states, they know the global airlines, the global utilities, global hospitals to our customers. so exporting, competing means winning at every corner of the

world. it's harder. it's harder to sell a scan and turkey than it is in chicago. but that's the transition that american companies have made to be more competitive, and i think we can export in line with any other country anywhere in the world. so shift gears. those are just three strategies. i think there's two places where every business faces the same challenges when it comes to long-term competitiveness. one is healthier, and one is energy. health care, you know, it's actually important for our employees and retirees to have write access, high quality health care at an affordable cost but and this is something we all have to work on together. now, our health care costs have come down over the last two years. our cost per employee is loaded

tasha is lower today than it was in 2008. it's really driven by an employee directed health care plan, and a very focused wellness program. ge has 620 sites in the united states. we treat health care the same way we treat safety, the same one we have treated the bpp program over the last decade, so extreme is focused on 20 parameters of health care inside those sites. and it really helps drive how we make investment decisions and long-term competitiveness. so we really managed this very intensely to make sure our employees get great health care at an affordable cost. what you learn is that there's really no such thing as national health care. every city in this country is different. there's 15 cities that matter the most because they are the biggest concentrations of ge employees and retirees. so in 2009, we worked with a

local employers in cincinnati because that's where a lot of our employees retirees live, and we worked with the provides, we work with png and crocus. we worked with big entrance congress to really focus on driving common information, comment care, agree 100 plus what's called patient-centered medical home, coordinated care centers. and the results are pretty remarkable in terms of dr visits, fewer admissions, fewer affordable conditions, and we really think this combination of having a smart employ when it comes to health care, plus working in consortiums around an individual city with other manufacturers, providers, and the town. you know, our goal is to keep this growth in line with inflation. so for the past 25 years basically health care costs for companies have grown at two to three times cpi. we think by doing these two

things we can keep the growth of health care cost inside cpi. and that's what our goal is, but we can't do it as an individual company. this takes a consortium of companies in order to do it, and it takes going city by city by city, driving best practices and driving information. so health care cost, and this helps small businesses and big businesses alike. so this is extreme important that the private sector gets actively involved in driving and when health care costs. and improving wellness, quality and access at the same time. a similarly in energy, you know, i think this approach, and people save more and more of being all in on energy. is extreme important for the u.s. today. unit, i think, when i think about energy, i think about a resource endowment, i.e., do you have natural resources at your disposal, and they created endowment. you have intellectual capability

that can drive energy, innovation and i think to a large extent the u.s. has both. we have a resource endowment as measured by a boom in natural gas, with shell gas and other finds the u.s. has an incredible abundance. in corridors we have great wind. look at kind of the central corridor to the west. we are probably the best way to do power generation of any place in the world, and with some of the cleanest coal and access to oil. so we start as, what other countries would look at, as a natural resource powerhouse. then you add to that some of the technical innovations around energy efficiencies, some of the innovations around renewables, some of the clean and environmentally friendly systems around shale gas on advanced technologies and things like nuclear reactors, batteries, gas

turbine systems, efficient engines and jet engines and automotive engines. and then the great university that we've got. we can actually put this together as a country and achieve i think multiple goals over the next decade. you know, i never think complete energy self-sufficiency is necessary a good thing because you want to be part of a global network. but i think between now and the end of the decade this country can have great control over its energy, can do it in an environmentally friendly way, can create jobs and competitiveness. the challenges that we have are really, one is we have a very old red. we have week, our infrastructure. week energy infrastructure. and the other one today, believe it or not, on a relatively basis the u.s. market is relatively

small. so we have lots of global competition and lots of demand that is outside the united states. but if we can find a way to solve a couple of the core problems, have a more expansive view of energy, i think this is the place with u.s. over the next decade can really prosper. so, you know, as i go through so far, technology, manufacturing, exports, those are things that if they are working in the united states. and then if you look at affordable health care, access to energy, these are the two pillars of every productive society when i travel around the world. so those are the things that i think so far we need to be working on. next, just think about what's our responsibility working with our customers, and i think all of us in the business cycle, you know, we have to be focused and externally of how to work with customers and how to work with suppliers. and i break it into two groups.

with customers in ge capital, we've had a big focus on what we call the middle-market. the middle-market our companies between $10 million a billion dollars in revenue, and it turns out this is a huge segment. they actually do identify themselves as little market customers. there's 2000 covers, 80% expected growth. it is a third of the u.s. workers, and this is actually a segment in the economy that actually fared pretty well during the downturn. and while we try to do inside the company is take down any barriers between ge and this group of companies, and what we call access to ge. so if you're one of our middle-market customers, and let's say you're running a steel plant and you want to learn how to do manufacturing, we have found ways both over the internet and in person to allow the customer to access gt team

when it comes to have to do the manufacture. if you want to know how to do employee training, we open up the doors to ge to this group of customers to say how do you do training. acquisition integration, same way. financial management, same way. and we think tearing down these barriers between our supply chain, our customers and they companies helps the entire enterprise work more effectively. and this is one of the things we can do in this target segment which is a real system of growth. and i think one of the things that maybe sometimes we draw an artificial delineation between companies, you know, big companies and small companies. when the reality really is that the extended enterprise works well together. suppliers, companies, customers. so this is another pillar of competitiveness and the things that work. if you go to the next slide, you know, i think the other aspect,

this tends to be out of office in the way companies work together with other big companies is the role that analytics and the internet is going to play on out assets move. i think if you look at the revolution of the last 10 years of social media, the whole aspect of man to machine, or machine to machine technology, over the coming decade is going to be one of the big trends. we have about 250,000 units, jet engines, gas turbines, mr scanners, and we take all of these through sensor technology maybe 10 terabytes of data, maybe more, maybe twice that amount. and we have the ability now to model usage data, real-time, with our customers that has a chance to drive significant productivity and performance for our customers. and we're focused on doing that. one point of fuel burned to the

global installed base, is worth $59 to the airline industry. right? one extra mile of velocity for a locomotive customer is billions of profits. if we can get ct scanners and mr scanners never to fail, to 100% uptime, that's probably 25 or 30% more capacity in radiology in every hospital around the country. and so i think this focus on using technology to drive productivity is really important for customers. so these two things in terms of what works are ways that companies need to focus on the customers, to help their customers become more productive. and we think this again is a big pillar of opportunity in terms of what is working in the united states today. if you then you shift gears and talk about people, because i think, you know again, human resources our key if you want to drive progress in the future. and what i call high skills

training, this is one of the first places that the jobs council looks in terms of ways to drive employment and ways to drive long-term productivity in the country. now, it's a fact that may be the most straightforward way to create jobs is to fill the jobs that are open today. you, i think sometimes we want to have grandiose programs and grandiose ideas. somewhere between two and 3 million open jobs today. and the reason why a lot of the jobs go unfilled is because people don't have the right skills. so if you look at the left hand side, this is a program called right skills now, and this is really the brainchild of darlene miller who runs a small business in minnesota. darlene was a number of the jobs council, and this is a focus on advanced manufacturing jobs, using community colleges as ways to get people trained in six weeks, up and going, to have great skills, advanced skills.

it's got a tremendous small business focus, and there's literally a hundred different ideas on how to leverage community colleges in ways to drive jobs. you know, i travel the would i spend a lot of time outside the united states, and everybody around the world has employment issue. yet very few people just work, know where their open jobs are and know how to get people trained for those jobs. so the left hand side i think championed by small business, embraced by big companies can focus on community colleges as a way to get people with the right skills now employed and in the job area. the right hand side was the brainchild of intel. and the idea is how do you get 10,000 foreign engineers graduating in this country. so we graduate about 135,000 engineers in the united states every year. china and india together graduated millions every year. so we have a large opportunity.

and if you look by 2020 what most economists would forecast is don't be a 2 million jobs deficit, mainly in engineering in the united states. so we've got eight years to get a tremendous increase. and the issue is, you know, there's a 75% dropout rate for people who go to study engineering as a freshman, 75% of them don't make it to graduate. that's mainly because of the subjects are easier, let's face it. it is hard to graduate with an engineering degree. and so paul's idea is to work with a bunch of universities, big engineering schools, to make them better, what's called retention, having financial rewards for students who study engineering, and to make sure the private sector absorbed internships so that if you are a senior in high school and you

decide to be an engineer, you basically do it with a pointed you that you will get a summer job ahead of your colleagues who aren't working quite as hard. and so we have doubled as a company, and with 60 other countries. we typically hire 2500 engineers every summer, in internship programs are grew basically that this year, as our many other companies in the united states. so, human resources our key. these are just two ideas from a standpoint of what's possible going forward in the future. now, the reason why people are important, the reason why skills are important is because increasingly we want people to run the show. and so, in many ge facilities we now have self-directed teams. they are america line is where we assembled a lot of the jet engines that you probably feel on your lights flight are you a

fly on your next flight. this site has just under 400 people with one manager. and basically the workforce, the work teams decide the schedule, put in place metrics, you training come into hiring. and we have well trained, well educated, team-based, highly productive, high quality. the education and skills development, this is not some kind of theoretical exercise but i think the way companies work today is the people closest to the action, the people on the floor of the people who are dictating pace and knowledge and driving schedules and drive quality. we think this is the way productive assets work. so think about again, strategy, innovation, manufacturing

exports, two pillars of competitiveness, and health care and energy, a focus on customers, making customers more productive, both small and big, a dedication to training, both engineering and advanced manufacturing, putting trained people in teams where they can drive action and pace. we think these are the ideas that are working at these are ideas that we can share, and you're going to see these ideas across numbers of successful companies. the last thing i would talk about is just the importance of public-private partnerships. the private sector tribes jobs in the united states. that's true, and that will always be true. but the government can provide a catalyst that can happen a couple different ways. first stage but i think one of the values and the united states is there are 50 different experiments that happen in 50 different states, and governors can be entrepreneurial and governors can help create the right environment. and we think that's been very

effective. a place where ge is invested in the last couple years, and haley barbour will be here today, is mississippi. one of the great things that governor barbour did was focus on workforce training, and not just creating a training fund to get people up and going, but also linking companies to universities and colleges in the state of mississippi, which we capitalize on that. and as a result, we have two high-tech aviation plans going into mississippi. one is already completed, up in poverty. the other will be finished this year. and these manufacturing plants wilted high-tech materials, going to jet engines. we've linked up with mississippi state, southern mississippi, some of the big engineering schools in the state. and this in the span of, let's say five years, roughly 1000 jobs. mississippi. so very effective, under no real, quick, productive, good jobs created in the state.

the right hand side, the president set a goal of doubling exports in five years, which we think is achievable, but the trade agencies are extremely important to people like xm are extreme important partners as countries like ge sell around the world. i was just in africa for a week, last week. the chinese government is everywhere in africa. and we need to level the playing field in order to allow our companies -- never have the same affairs because we don't need the same advantages, quite honestly, but i think it does give a sense when people like xm and opec and other organizations are in that were all in as a country and we're trying to compete and trying to win. and i think just with a little bit of support and focus it on small business and big businesses alike, it goes a long

way. and the we think both at the state level and at the federal level through agencies like xm, it's extremely important. and both of these create jobs. which is what the end result is. that's what creates a win-win. so this is in government working together helps create competitiveness. and so again just to recap the 10 ideas that we would have. technology, manufacturing, exports, you know, we do business in more than 120 countries. every country thinks about health care and energy. i think two pillars of competitiveness, so those are extremely important help your customers, make them more productive, trained people, educate people. and then unleash the power of every brain inside the factories to make people competitive. and embrace the sense that while the private sector create jobs,

the government can create important catalyst and the right environment in which people want to compete and want to create jobs. so the last thing i would just say for the week is competition creates -- or requires confidence, as a thirty-year ge executive i can tell you that i am probably more confident today than any other time i can the number in the ability of factories and businesses in this country to be competitive, that there's many good things that are happening in american business today. i think companies are competitive. they want to win. there's a strong desire to wanting to drive not just competitiveness in their own companies but more broadly. that in order for us to measure success, we have to went in every corner of the world to 60% of our revenue is outside the united states. 70% of our backlog is outside

the united states. we've got to sell in china. we've got to sell in mongolia. we've got to sell in nigeria. we've got to sell in polling. we've got to sail in paris. we've got to sell in mexico. we've got to sell everywhere. we've got to be hungry. we've got to be out there every day fighting for our companies. and the last thing is i think just in general, businessworks together. there is an extensive enterprise. there is a supply chain. there is a customer chain. there's teamwork inside companies that are very powerful. and i think it's this notion of enterprise and teamwork that are essential to american business that i think helps us compete. so, that's just the way i want to frame the week. you'll hear a lot of different discussions on various items throughout this week. we've made a few announcements this morning, including the hiring of 5000 veterans over the next five years, roughly 1000 a year. some investments in our aviation

business, ways to take the health care program more extensively, ways to use, i would say things like idea shops where people in towns will be able to access manufacturing and learn from each other, to a certain extent in the ge enterprise so some various announcements this week. so, again we say welcome. we sort we don't know all the answers, but we are ready to learn, and ready to help drive improvement. so with that will do is introduce the next segment i'm going to be joined onstage here with two of my long-term colleagues, jim mcnerney who is chairman and ceo of boeing, the biggest u.s. exporter, somebody who's winning around the world. jimmy, come on in. [applause] andrew liveris from dow, the companies preeminent specialty which is especially tentacles

company. [applause] and benevolent guy, david gregory. he was a backstage when it came back a but hoping there's now. david gregory. welcome. good having you. [applause] >> david, i will turn it over to you. thank you very much. thank you for having me. it's a terrific honor to be on this panel. let me jump right into because i want to pick up on, we are in washington, about some of the government question, public-private partnership questions. but let me start with the broader economy. we were talking backstage about what you see, we all see over the next six months in a political context. but just for americans who are going through such a time of slow growth and high joblessness. why don't i start with you and as you, what you're seeing other and how it looks. >> i see a normal recovery, except for real estate and construction. you know, which is often times 23 points on the unemployment, a point and have on growth.

but i think, i see pretty moderately strong global demand with the exception of europe, particularly asia and the middle east, u.s. recovering. so finish where he started. pretty normal recovery except for construction, real estate which for a variety of reasons that i think you can just hasn't bottomed out yet and may not for a while. >> talk about economic growth as a more important indicator. that may experience some volatility but how does that impact or how does reflect what you're saying? >> similar. throughout the u.s. now is the time to get us the confidence we'll need to get it going in the right direction. 8.3, 8%, maybe lower than that, what jim was talking about. i heard some of what you're talking about. the jobless recovery but we have jobs out there, so it's the whole skills discussion which osha will get into.

but broader u.s. really tough to europe. is what i see. we think europe will be fine at the end of the day. if you've been around a long time, so they have resiliency if nothing else, but this is going to be a testing time for europe. emerging world, the normal issues, inflation. >> you've been spending the last several minutes going through the macroeconomic picture. one of the things we talk a lot about in washington is fiscal imbalance come a leadership vacuum, and what the ultimate does to kill business in america. can you provide more than just shorthand on that? as you look at a budget, outlined has been presented by the president today that is likely not to be acted on, huge budget deficit at a leadership deficit that continues because they are so polarized. what does it mean to the job you're doing here and around the world? >> i think it just adds uncertainty because everybody knows something has to happen. over the holidays i read it before but over the holidays i

read again the deficit commission, and i just think that is the framework of what has to happen. i don't love everything, and none of the three of us will love everything, but you look at both who was on the commission, their recommendations are sensible. that is the outline of what ultimately has to happen, and i just think the sooner we can see that take place, it just, i think what make makes businesses effective is that we can adjust more easily than other institutions, right? so we will adjust. >> something is going to happen. was going to have that will affect your business? >> exactly, dave. and i think, yeah, you can go through entitlement reform, a business tax that is no loopholes rate, you know, mid '20s, high '20s, wherever it goes. you go down the deficit commission recommendations and you just say look, in some way, shape, or form so the back of my

mind might i think all of us are planning for this eventuality. let's do it. nine of us can tell you when it's good to have but i think we know what's good to look like to talk more specifically about manufactured the president during a state of the address set the phone, i want to speak about how we move forward and lay out a blueprint for an economy that is built to last and an economy that's built on american manufacturing, american energy, skills 4 and workers in the renewal of american values. the blueprint begins with american manufacturing. that speaks to, enter, a public-private partnership where government is a player here. so first, what's the outlook for manufacturing, and which the role of government positively and negatively? >> i am very hopeful with ashley now got the national conversation getting down to specifics. i was a few years ago there wasn't even a national conversation. today we do have one, jeff, and his presentation talks will cost structures coming down for the right reasons. not the least being competitive energy in the country.

competitive labor cost, et cetera. so i think a prospect from here is the has to be a public-private option model along the lines of the simpson-bowles. we need government and business to work together on the possible future of the country, layered back to specifics. on what? regulatory reform, tax reform. these are models, other parts of the business committees working on. we've got specific ideas but we don't see much action. and what i worry about it is a political animal taking a. the next six, nine months nothing will happen to have to wait for another year in let me break it down a bit. the president talked about in his state of being that it begins with american manufacturing, suggesting that the government plays a role. as a manufacturer, what can government do for your? >> first of all, it's the right focus. manufacturing has a multiplicative affect job wise. jeff, you pointed that out in

your talk. three quarters of the technology in this country emanates services, then use it in providing services. you get to the next innovation quickly after you're gone down a learning curve on making something. so it is the right focus to start with. i am a little bit more of, on the partnership site. i'm a little bit more on the regulators properly and get out of the way kind of guy. i mean, i think we know how to design and build things, if there's not too much getting in the way of us doing it. and i think right now there is a little bit of tension that is not productive on the regulatory side, whether it is energy, and andrew can talk a lot about it, so can jeff, or on the labor side. where i have a big speech. and fda, there's another speech. and don't see the same kind of regulatory partnership.

it's all about protecting the population from what we do, but letting us do what we do within a known frank -- >> let me pick up on that because there's a number of issues we could get into. part of this discussion, part of his state of the union was saying to business, you've got some responsibility. we want to incentivize, but we also want to hold your feet to the fire as well. what role, what responsibility do american manufacturers have to bring jobs back home, to try to get involved in a we're all in a kind of conversation with the government? >> you know, david, i could give you a classic laissez-faire capital enters, on one hand i could say we follow the laws, leave us alone. i don't think that fits today but it doesn't fit. it just doesn't fit over all. i think first and foremost what we owe everybody is to compete and win in every corner of the

world. so first and foremost, invest in technology, investing people, take our products, gained market share, fight hard against, you know, all of our global competitors, and probably all three of us, you know, i don't even have american competitors anymore. all of my competitors are german, japanese, chinese. we're kind of like after one of years the last man standing in the world we are in. so, you know, i am kind of love us or hate us, i'm your guy. and so win, number one. but i think look, i just think there's got to be a cognizance of how important jobs are. you know, it's just, all three of us, none of us were born in our job. we all worked our way up through our various companies, and the pride people have when they have a job, the respect they have for each other when they have a job,

and the notion that jobs are precious. and it's not that every ge job is going to go in the g. and 10 u.s., but i think certain point a time there is just too much callousness around, and i just think we have to know -- >> insourcing initiative where they would be greater demands on businesses and that the government does play a role. is that a private? is that something you can live with? d. accept the idea that all arguments have to be put aside speak was i think like jeff, i'm sure jim will agree, i think the context of the question is completely wrong. i mean, i have open for competition, this is the most open border country out there so the ideas of free trade which you can speak a lot about have to stand. so why are you making markets based on false innovation. i'm competing, like jeff said, with people who are subsidized around the world. they are creating incentives. so the singapore, taiwan,

mexico, all the emerging countries but what we have. my home country of a story it does it, too. so we know it's not a level playing field but we know where, if you like, ge is unique in america. dow is unique in america. boeing is unique in america. we compete globally. so we need a type of government that doesn't give us a zero-sum game and by bringing us back to the country. the world is where we are competing. and every job we great in the world we create jobs back here. another thing we have to bring. and jobs back here like jeff was in is what we should all be striving for without impairing american competitiveness by creating the ron kind. we do need this model on the right can. health care, energy, registration and help implement we need to improve the quality of people who are regulate us are managing these policies. made i will switch over to jim and let him, i do think this insourcing discussion just as a single pair makes no sense to

make the president of the united states raised the insourcing discussion to be forget to rate for before i want to ask a more basic question and the layperson, which is just, you and i talked about this in the past but where is demand coming from, whether it is for airplane, i don't know, i got airplanes, they are all bankrupt or are they buy new aircraft orders it on in to buy? what about nuclear reactors? >> 95% of, sorry for jumping in, 95% of the world's consumers are outside the united states, and 70% of the gdp is outside the united states. so that's, you, used to be when jeff and i grew up, if you want in united states you would when globally. today, it's the opposite. unita when globally and then, because you are facing the same basic competitors in the united states. >> the last decade, david, the last decade from boeing and dow, we sell a lot of engines to

boeing. all the chinese airlines, all the latin american airlines, you know, our companies are a fraction of the size. and i think the andrew point, look, i just don't feel un-american what i'm selling ge engines around the world, i'm sorry. and unicode what i tried to find the people, it's like selling a product globally is only like a thousand times harder than the u.s. writes? you are facing competition, your brand doesn't mean as much. and frequent it is the guy's first experience with product, right? the chinese airline basically was the first experience buying aircraft. so i don't, it's just one of those were think when you're talking to guys like us, we just don't apologize for having to globalize or companies but now i understand the complexity and understand, but jimmy is the most common unicode but i would

-- >> but i would say, i think lending alike have over the last 15 years extended our supply chains a little too far globally in the name of low-cost. we lost control in some cases over quality and service when we do that. we underestimated in some cases the value of our workers back here in so doing it. so i think there's a recalibration because even though you've got to be global, globally competitive, there's a job ball, 10 to 15% of the jobs. and i think you'll see more come back to the u.s. in part for business reasons, and in part because we want to be good citizens. >> when people like me who scrutinize the president of united state, part of it does have to do not just with policy, it has to do with kinetic leadership, through communication. how much of the work has to be done by citizens like yourself to say to american audiences, as

you did, jeff, when you spoke to the other network result in a profile, that you should want to win because if i win, america wins. how do you do what clint eastwood did in that ad, which is to say it's about time in america, christ is doing better. and we should all be cheering for that whether we are selling cars in detroit are selling them in sri lanka. >> look, i agree with the nuanced points that jim and andrew may. i think beyond that is globalization is, it's a 20 minute discussion in the world that wants one sentence, answers, right? i think the trick to globalization is we have to be global and we have to defend our companies regret to say where we've been right and we been wrong. has been places on both. it's a nuanced discussion on, you know, ge is a next exporter -- net exporter to china. we export more to china than we import from china but that is a

nuanced discussion where you're creating jobs in both places as you do that. so i just think we have to keep chipping away. i'm no clint eastwood, right? however, we took -- >> you do have a grizzled field to you. [laughter] >> that's the point i was going to get to, you know, we decide to put a book out there called make it in america with an australian accident. make it in america means the brand and the perception, the four words or the one sentence. our articulation here in washington, but out there, our workers who actually can have labels on the products saying made in america. that is an american thing to do, and we have to change the conversation. i want to get back to regulation. i want to get some individual elements about what makes manufacturing data, how the economy is better in this area.

the short end in washington for all of us who cover these issues, we talk to business leaders is we need commonsense regulation, 21st century regulation for the committee. what exactly does that mean and what's not happening in that regard? >> well, might he is the financial crisis, 2008, promulgated a political backlash that produced a lot of regulation in the financial services area. the discussion broadened from there, and splattered over every regulatory agency in d.c., a tone from the legislative branches and from the top was combative and was confrontational. i think the first thing you've got to do is get over, get to the financial services discussion, which is a separate issue. a lot of risk came into our economy that needs to be addressed, and then like the president is doing, focus on manufacture which i think is a little bit of a different

animal. and i think the fact that ge looks at separating out gives us the chance to get into more constructive dialogue. because dialogue with the regulators now tends to be more confrontational than it should be, more confrontational than it was designed to be, and it's been politicized heavily. coming, the nlrb case against us in south carolina was a shame. okay? that was a shame. and it was something that in unconfirmed person in that agency promulgated on its own, and it was something that eventually they withdrew which was the right thing to do, but it had a chilling effect. coming, we can afford to spend a billion dollars in south carolina and get told we can't do it, okay? we didn't stop investing for a second, however. other companies, the small and medium-size companies that the administration wants to encourage, they can't afford to take that kind of chance if

there's -- and there's example after example of that kind of heavy-handed as opposed to -- i think the predatory model in this country is meant to be cooperative. let's find a way, let's keep going our economy, let's keep driving jobs, but let's contain what we do so we don't inadvertently harm constituents. we are not there yet. pick something like shale gas, right? so if the studies are true, right, and i think there would be people that could articulate better than i could, we have a boatload of gas. i mean, we have a bunch that could really dramatically change the future of the country. we could i should be an energy export in our lifetime. yet everybody is waiting for world war iii to erupt between the epa on one side and someone else on another person saying look, here's the stand but we have to we claim all the water, 100% of the water. we've got to do in

environmentally friendly way, but there's no sense that there's going to be an overarching strategy versus yard by yard of the fight and warfare. it's just not the way, you know, other countries necessary approach stuff like this. >> that's a great example of what other countries do. they say i have this amazing new onto no real arm of this country. it could be a new chip. here i have discovery of the energy kind. now, how do i approach this? what do i worry about? what should i -- who should i consult with on the predatory side? who knows anything about hydrofracking actually? it took a long time before he came to the chemical comes and said what is going on there which been going on for about 30 or 40 years. so this process up front, looking to get on the regular site to get responsible production so that citizens benefit holistically, society doesn't seem negative, society sees a powerful positive. energy exports, not to mention

value added to all the sectors, become a net exporter only second to aerospace because of the shale gas discovers. companies like mind. we're not coming back. i'm putting $5 billion in to louisiana based on these discoveries and value adding them. now, that should be viewed as a country value add. how do we export that to get jobs in america at the same time protecting our citizens? >> every question i think is what's become a more mainstream example, new jobs, president obama discussion, why don't you make the iphones in america. there's not enough engineers. i need to go to china. you don't need of a doctor picking up a certain level of advanced education to enough engineers who are overseeing the work, and i can onto the in china. i can't do that in the u.s. jim, for all of your industry, or your particular areas of the economy, how do you make more

products in the united states and employ more people in the united states? what has to happen from your point if you? >> i think you touched on the educational issue, stand, science, technology engineering and math. we are falling behind in this country. when you get to the root cause, k-12, kids don't turn on. they don't get excited. the quality of teaching is not there. so there's a whole emphasis there at the president actually is focused on this area. you should do more, but that is a long-term frustrating answer because that sort about 15 years from now. you know, i think there is, there's a lot of investment, a lot of cash that they companies like ours have available to invest. and i think we need some degree of certainty on tax incentives, regulatory. i think once we, as i totally agree with jim. let's take simpson-bowles, let's

sit down, let's figure it out. everybody gives a little and we move on. i think even if the answer is have that we will understand the environment we're in, and you see a lot of investing in. [inaudible] in other words, you fear that there is enough distinction between the parties that if mitt romney becomes the president that you could have such change that you want to keep some of that cash rather than invest it and? >> no. no. well, i don't fear. i think it would be in all likelihood something after the election, it's ridiculous we have to wait that long, but after the election president obama, republican-controlled house and senate, i think at that point some reasonable solutions will be promulgated. that's my hope and my belief your and it just takes that time, and it's too bad with the gerrymandered districts, fox news, cnn, no one stays in washington on the weekend talks

about. you are penalized if you compromise. you losing your home district. that dynamic is just killing us right now as a country. we've got to have a lethargic experience to get us to the other side. >> what does it take them a nasty more of a political leadership question, both of you. what does it take for leaders to lead and actually use that leverage, that leadership leverage on the country to move washington a little bit more? you are talking to leaders not only here but around the world. what are you not seen out of this present our congressional leaders with whom you're doing business? >> jim and andrew, we've all been acting -- i think business is kind says let's take the deficit on. let's solve it. and i think we have spoken more with one voice on this that almost anything else. you know, i think -- >> you're showing a lot more initiative and courage and leadership in congress, rank-and-file in congress or even the president who has said repeatedly through aid and so forth, we don't want to just put someone up on the hill that's

going to be designed to fail in that in the end of the world functions best if my job is to go sell gas turbines and jet engines to people -- there certain things we should make our companies competitive. i think this is kind of spoken and said reducing the deficit is really probably job one. none of us are going to like everything as we come through it, and it's got to happen sooner than later i would add this point, and that is, roughly 65% of u.s. economy is consumer driven. it's grown dramatically over the last 25, 30 years basically because of credit. this economy needs to be powered by investment. that's got to be, and that's why certainty is in some ways more important today because that's got to be the engine that helps power this economy back to three, 3.5% gdp growth. >> i think the two, four, six year election cycle speaks against. if you're living in -- how do answer the question you ask.

actually you enterprising okay, i believe in the system. effectively in the american system. that's why we are all here. so you've got to say we can sustain, on the big ideas they may take some time. let's take baby steps. there was a -- specific proposal, the advanced manufacturing partnership which i'm am co-chairing have specific proposals in and around job reskilling and retraining and worker outreach and communication that you asked about the president's export council that jim and others culture, specific outcomes on trade, not the least being the signing of the free trade with the columbia and the panama one. ..

>> individual daily lives easier, less complicated, more complicated fending on the technology. but we know that technology's impact on our economy structurally and jobs is huge. so what role does technology play in making our manufacturing more competitive around the world? >> well, i mean, it depends on the industry, depends on the company. i mean, i would use the dreamliner 787 as ap -- an

example. a huge job creator. it's an innovative product with innovative engines -- >> very innovative -- >> very innovative engines. [laughter] but what drags -- the long-term investment is probably 10,000 jobs to build the infrastructure in seattle and in south carolina. the ongoing employment is somewhere in the neighborhood of 8,000 people. the ongoing investment in r&d as we go down the learning curve of production and try to find the next set of composites that will keep us competitive is probably another two or three thousand people. and then the service, as i pointed out earlier, the life cycle service of this product over the next 20 or 30 years will probably be in our company and in jeff's because the engine is disproportionate service intensity is probably another five or six thousand people. so this innovation produces huge employment and produces profits for our company, allows us to

reinvest. and i was at a breakfast where i was listening to alan greenspan the other morning, and he said i've analyzed the investment in this country, and our companies are doing everything except making long-term investments with fundamental innovation. >> right. >> and that's the chilling effect of not knowing what the playing field's going to look like tax wise, regulatory. you've got to fight, you know, what battle are we going to fight if we announce some big investment. but it's, therein is where the jobs are. therein is where the success for the company is. and that's the, that's the thing we're trying to get. we've got a lot of ideas, we just need to -- >> can i deviate from that slightly, but related -- >> sure. >> -- for you guys which is give us an example. teach us about operating in a different country where the playing field is a level -- the wrong word, but you can identify it. >> jeff gave the best speech on that one. >> yeah. where you feel like you know

what the future is, you can invest in a more long-term way, the regulatory environment is more welcoming, and it allows you to do things in the way you'd like to do it a little bit more in this country. >> you know, david, if you just look at a place like germany, you know, has got very well established investment rules. they have modernized their labor systems over the past couple years. there's a reason why germany is one of the few countries in the world that came out of the recession better than it went in. and i think that's, you know, that's, you know, the u.s. isn't going to beat china. there's lots of differences. >> yes. >> but germany's not, you know, just not a bad place to think about it. and it's not a long list. i think it's well trained people, it's investment tax certainty, and then i'd say the third piece is, you know, some form of export, you know? everything today gets cast as corporate welfare and stuff like

that, right? but if you're, if you're, you know, if you're trying to sell a boeing 737 max with ge engines in africa, you've got a fully-subsidized european superstructure and chinese bank financing, you know? be and us. so i think, you know, things like xm are a way that we can level the playing field. we will never have a better package than those two entities have. but it's not really, it's not really corporate welfare to put us on the same playing field that our global competitors are on. and that's, you know, those -- i'd say labor, investment tax and some form of export support. >> and in my world, energy. so energy policy which we've all talked about and the absence of it here is really a killer in my world. energy-intensive industries go to the germanys, and they've got an energy policy.

may not like every aspect of it, with but you know what the renewable standard is, you understand the view on nuclear. in this particular case, they changed it obviously. so clearly, there's a certainty i can get on major imports whether it be labor or capital. they also create incentives on the r&d side. germany's a great example because there are some opaque systems you don't want to compare yourself to, but you compete existence them. but in germany they addressed the question three times ago which is the human talent. they celebrate engineers. they celebrate apprentices. they have these training programs, vocational training programs. they pay a lot of attention to the tall element pipeline -- talent pipeline at the factory level for not smokestack industries, but stacks of chips. in other words, understanding that it's advanced manufacturing they're geared to. and i think that probably is the example. you go to singapore today, taiwan and korea, they're all doing the same.

countries with no natural resources other than their people. and investing in their people pipeline. that gets back to the education question and the shortage of skills we have in this country. >> is part of what we're dealing with here in the political debates, um, and in a debate about competition that we're in the middle of american decline? do you believe that? >> no. >> not at all. >> no, not in the -- we're going through a phase where our government and industry are uneasy with each other. each think they're doing the right thing, not connecting. we need to figure it out. the, and both sides have their arguments, and they frame it politically. we frame it economically we think. but absolutely not. do i feel that ge or dow or boeing are more or less

competitive now than we were ten years ago? i think without a question we're more competitive than we were ten years ago because we've kept the investment. could we be making more progress if partnership was characterized by some of the things that we talked about as opposed to the way we find it? i think so. but, you know, i mean, the dreamliner, it had its own developmental issues, but one of them was labor issues and slowdowns in investment in south carolina because of the government, you know? keystone. you know, eric cantor, you know, there's plenty of blame on both sides. the side within a month i'm not going to decide within a month on keystone, that's the president's response. so the whole thing was politicized as opposed to what's the right thing for our country, you know? and let the regulatory process work. >> but you don't think it's declined? >> i do not. i also think you've got to get away from this one-sentence answer that we're all victim to.

solyndra does not define the solar industry. we're launching powerhouse solar shingles as we speak from invention to commercialization, three years. goes on roofs in nevada, california and colorado. a shingle invented in america, made in america by american ingenuity. not panels that get subsidized in china which is a great industry. we are working on next generation aleck ri call storage before innovation's alive and well here. we've just got to get these pieces to work together again. >> and you're okay with government playing a role in funding that -- that was one of the recommendations, right? >> we are used to in this country spectacular failures and spectacular successes, okay? it took a while to get the dreamliner, okay? it took -- like a fine wine. [laughter] like a fine wine. and we have lots of fine wine in this country.

it takes a while. >> no, no, i look -- you know, david, you know, i wouldn't listen to us, i would talk to the people who work for us in our factories and stuff like that. i think they feel like they, you know, they feel like they can compete and win with anybody in the world. and i actually see as a guy that travels the world our relative competitive position has improved in the last decade. it hasn't gone down. number one. number two, when you think about something like the dreamliner, it turns out this country's still good at doing hard things. and that is a competitive advantage over the long term. that is a competitive advantage. >> can you remember a time, um, you know, i'm fairly familiar with ge, um, and, you know, some of the messaging, some of the marketing, you know, we bring good things to life. more recently, hey, wait a minute, we don't get budweiser if not for you guys? does that speak to a fact that we're in a new era where a

political climate, a level of populism in the country has reached a level where you need to make a point like that? is that -- >> oh, sure. look, companies don't, we don't stand on our own, you know? again, i think jim said it, andrew said it. none of us feel like we're above it all, you know? we are part of this system, you know? we really are. and i think we've got to reflect the era of the time. you know, our slogan is imagination at work. guess what? nobody gives a damn about imagination right now. they only care about work. so now we talk about ge works, you know? [laughter] you know, david, it's just, it's just, you know, today people want solutions, they want basics, they want resiliency, they want, you know, i think basically people kind of say if i have to read another op-ed piece, i'm going to kill myself. [laughter] i want to see somebody do something about something. and i think companies have to be a part of that ecosystem, and we

want to be. >> so we've just got a few minutes left. why don't you each take a minute and talk to a washington, you know, audience here about what you're looking for on the whole playing field as you think about the future of manufacturing and american competitiveness, what you want to see in the next six month toss a year or what you're looking out for in the next six months to a year. >> i would say exports focusing on manufacturing. there's a whole series of things relating to free trade agreements, export control law reform, sensible immigration visa. there's a whole list. and the administration is being responsive there. so we've got to keep pushing that, i would think. get to a tax policy that is competitive globally. right now we're not competitive globally. a strong statement on education. and then i think there's an industrial base issue. you look at where a lot of innovation in this country came

from, not only the defense industrial base, but other industrial bases have produced as by-products everything from gps to microprocessors to the internet. sorry, al, the internet. [laughter] you know, so there's an industrial base issue which is about tax, some tax incentives on innovation and r&d. and so that -- it's not a new list, but get focused on it and use the president's tone from the top on manufacturing to actually get some of these things done. >> yeah. very similar, advanced manufacturing agenda that adds value to now our new energy base. we can build a specific plan around energy like we could never have done five years ago. an address to infrastructure, a national infrastructure plan. we need a series of -- [inaudible] on that, i think the jobs council did that. get tourism done, there's a whole lot of programs that need

to be put in place, maybe some legislative work, get them out there in terms of best practices. and a one-stop shop to investment. the president started on that with the department of commerce, the reorganization. they don't subsume good things. but really look at this one-stop shop in terms of regulatory approvals, you know? 60 federal agencies approving investment in some state, and then they've got the state approval. so really streamline things. work on the efficiency side if we can't get the big picture stuff taken care of. >> david, i would say three things. i would recommend that everybody go back and reread the deficit commission. i am hard pressed to see a were better group of people with more common sense solutions, and therein does lie one of the answers. number two, education. you know, this country's just not going to win having math and science ranked 25th or 26th in the world. you know? we all can do better as citizens

there. and the third thing is i think if world really thought the u.s. was going to bring its a game, every place around the world to compete and win business in every corner of the world, you know? by having great companies, small and large, by having, you know, xm or other trade, you know, agreements we would shock people in terms of how well, i think, we could do. those three things. >> thank you all very much. >> thank you very much. [applause] >> thanks. >> thank you. [applause] >> thanks, david. well done. well done. [applause] [background sounds]

[background sounds] ♪ ♪ >> good morning. i'm chip blankenship, president and ceo of ge appliances. it's my pleasure to kick off the following panel by telling you how we're recharging manufacturing in the united states. in 2009 ge announced plans to invest a billion dollars in the appliance business to transform all of the products that we make and how we make them by 2014. aside from the size of this investment, it's a big number for an appliance business, aside from the number the biggest news

was where we're making the investment. right here in u.s. factoryies and the process creating 1300 new u.s. jobs. these new investments represent a huge shift in our business model from outsourcing to insourcing. since the late 1970s we've focused on manufacturing in low-cost countries. but by 2008 we began to reassess that approach. and consider total cost, not just labor cost. as we looked at transportation, supply chain complexity, rising wages in developing countries and the impact of losing core competencies, we found that the factories in our largest market -- the united states -- could be competitive with factories anywhere else in the world. let me tell you about four key

elements that align to make this conclusion possible. first, manufacturing innovation. we are transforming the way we work, adopting lean design and manufacturing methods. just last week we launched the geospring hybrid water heater, the first new product in 50 years to be manufactured at appliance park in louisville, kentucky. it was designed by a team of product engineers, factory layout specialists and production workers who brought both common sense and real world technology skills to their jobs. by the way, i invite you to check out our new hybrid water heater behind you. it's 60% more efficient than a conventional one and saves an average of $325 a year. coming soon to a store near you. second, labor and management cooperation. on the factory floor and at the

bargaining table. our salaried and hourly personnel work side by side to resolve problems that arise. we need every member of the team to make this work. cooperation at the bargaining table means confronting new market realities about wage rates. our union stepped up and agreed to reset the starting wage for new hires. same benefits, but a more competitive rate. third, technology investment. the reality is when you outsource core products, you don't invest as much in technology, tools, training and l talent. you just don't need to. but being competitive in the u.s. means being all many and drafting the best innovators and engineers for your team. and it means having the tools to move faster to keep up with consumer demand.

where in the past we might have introduced a new design every three years, today that's just not possible. after we introduced this fist round of -- first round of 13 new platforms, by 2014 we'll turn around and do it all again. now, the fourth pillar is what our panelists are here to talk about; government support. look, i'm a committed free market, free trade kind of guy. having gotten that out of the way, i'll tell you i'm also a realist. which has led me to recognize the following: government is the principle provider of education, must equip americans with the skills they these to achieve economic security that comes with gainful employment. businesses are job creators. government, through tax and other policies, must make sure that businesses retain the earnings that they need to reinvest and sustain job growth.

government must recognize that we face fierce competitors. failing to meet the challenges posed by other countries is not an option if we want to secure our economic future. ge's appliance division has been very fortunate to have the support of federal and state government and our own louisville, kentucky, metro government represented today by louisville mayor greg fisher on the panel. this partnership has been critical in helping tip the scales in favor of investment in our u.s. factories. i'm as anxious as you are to hear from our panelists on their ideas about how government can support a healthy manufacturing sector, so let's get started. it's my pleasure to introduce our panel moderator, bruce katz. bruce is vice president at the brookings institution and founding director of the brookings metropolitan policy program which provides decision

makers with policy ideas for improving the health and prosperity of cities and metropolitan areas. bruce regularly advises federal, state, regional and municipal leaders on policy reforms that advance the competitiveness of their communities. please join me in welcoming bruce and the panel. [applause] ♪ ♪ >> um, good morning, everyone. um, so let's get started. i want to introduce the panel, but i just want them to do this little preface. i think everything we've talked about this morning whether it's technology, whether it's trade, whether it's taxes, whether it's regulation, skilled workers, all the elements that are critical to recharging american

manufacturing is a federalist act. so the federal government critical, obviously, and we have senator portman here. states, remember, we're a union of states, broad powers over market-shaping areas. cities and metros are where it all comes together. and business, networks and manufacturing firms and the ecosystem that supports them. so we've got a great panel here to have one of the few federalist conversations we actually have in washington. senator portman, the senator from ohio, but as critical to this panel, former u.s. trade representative, former head of omb and coming from a state that's a major global manufacturing presence. governor john hickenlooper, governor of colorado. former mayor of denver. also a former founder of a small manufacturing firm. [laughter] okay? now, it was a microbrew, but

over the weekend i actually lookedded at the north american industrial classification system, and micro brews are there as part of food production. [laughter] so greg fisher, mayor of louisville. sixteenth largest city in the united states. obviously, large manufacturing presence. and mayor fisher also was the owner of a small manufacturing firm earlier in his career. so both of these folks have lived this and can talk from that experience as well as from their governmental experience. last but not least, jay, national association of manufacturers. this is really the critical constituency group representing manufacturers large and small in the united states. on a wide range of issues. so i'm going to start and go with the hierarchy of the system here. i usually start from the bottom up with the mayors, but i'm

going to start with senator portman. >> that would be the bottom of. [laughter] >> and ohio, obviously, when you think about the united states and our manufacturing platform, it's a very substantial platform not generally recognized. 11% of gdp, 9% of all jobs. ohio's more manufacturing, 16% of your gdp, 12% of your jobs. since coming to the senate you've been a major advocate of manufacturing. both with regard to some of the comprehensive job efforts put forward by the senate republicans. you've joined up with jeannie shaheen on a very interesting energy efficiency and industrial competitiveness act and also given your perch on armed services, on budget, energy and natural resources you, basically, oversee many of the issues at the federal level that have an enormous effect on

manufacturing competitiveness. as you think about a national manufacturing policy, what do you think are the essential elements, and what does the national government do to move the ball forward? >> well, first, thanks for having this conference today, and it is great to be joined here with, um, colleagues at the state and local level and also with jay who's got a global perspective on this. you know, my position on it's really pretty simple having toured about 100 manufacturers in ohio in the last few years. what they're looking for is not for the federal government to play an active role in their lives, but to create the environment for success. and to me, it comes down to five or six issues, and i ask our manufacturers about each of these issues every time i visit. one, certainly, is trade. you talked about that a little earlier. 25% of the jobs in ohio that are manufacturing jobs, and by the way we have 600,000 of them now, we want more, are trade jobs because they support exports. so incredibly important that we

have open markets. i think as jay will tell you, we can do a lot better. we don't export nearly as much as our competitors do as a percent of our gdp, particularly in manufacturing. so opening more markets and being sure that it's a level playing field so it's both opening markets, but also on the enforcement side. second, i think the thing i hear most about, honestly, is probably the regulatory tax environment, and that's the uncertainty that i'm sure, you know, you two hear about a lot and jay hears from his members. on the tax side, of course, we have both an individual tax system that is uncertain, unpredictable, at the end of the year you'll see a huge increase in taxes to a lot of manufacturers, and on the corporate side we're dealing with a tax code that we haven't touch inside the last two decades while each one of our competitors have reformed theirs. so we're at the top end now in terms of our rate, and the complexity is also at the top which makes us less competitive in global marketplaces. so that issue, and then the regulatory side, you know, depending on the business there's almost always a regulation at the federal level

the people talk about. and this is why i've introduced legislation that's bipartisan that just forces the regulators here to look at a cost benefit analysis and the impact on jobs specifically and also how to use the least burdensome alternative. certainly, energy cost is a big deal as is health care, so it's basically what the federal government can do to create the environment for job creation that i hear constantly. and, look, we, um, we have a little increase right now in our employment in ohio, our unemployment number is actually a little below the federal level for the first time in a few years. that's good news. we should celebrate the good news. but in my view, we still have a structural problem in that our economic systems are not keeping up with the rest of the world. we're not as competitive as we should be. and so that's why i think we need to reboot all these systems and, you know, i mentioned trade, taxes and regulations, health care and energy, worker retraining is another one that i hear about constantly. and i think we need to be much more aggressive here in washington. some republicans say washington

should do less, i think washington should actually do more. not in terms of creating jobs, government doesn't create jobs, but in terms of, again, creating that climate for success. and this requires, in my view, a much more aggressive and bold reform effort. >> okay. that's a very helpful introduction. i think we're going to come back to at least probably three of the five or six that you mentioned. >> all right. >> i want to move down the tier here, to the states, and colorado is, obviously, not as manufacturing-intensive at the starting point as ohio. about 7% of gdp, 6% of your jobs, but it's moving up, and it's moving up rapidly in many disparate sectors. i thought what was interesting about your approach to advanced industry and advanced manufacturing is how it's really started with the bottom up. you've been around the state, you've been to all the counties. there's a colorado innovation network that is emerging that is connecting the dots between advanced r&d, technology,

prototyping and, ultimately, production. and i thought it'd be interesting if you could talk about that network that's emerging and how you think state policy plays, um, under this federal system. what are the key areas that you need to work on to buttress and leverage your potential? >> well, we certainly when i came into office about a year ago, we recognized there was a real vacuum of people, they knew they needed to do something about jobs. so we called it the bottom-up economic development process, we went out to all 64 counties and said what do you want in the next 20 years, 30 years, and how do we get there? how can government help? of course, we heard get out of the way, less regulation, less taxes. we also heard that we want the state to be more pro-business. we want an environment that's more pro-business, we want to have access to capital, we want to have stronger innovation technology, we want to make sure that we have training for our work force, and all over the state in 64 counties we heard people want to, they want to

brand colorado as pro-business. now, colorado, obviously, i would argue, the most beautiful state in america -- no offense to my friends and neighbors. but that means we have to hold ourselves to the highest standard of ethics, highest standards of environmental protection, and we have a huge amount of natural gas, but if we're going to be pro-business, we reduce the time for drilling permits, but we make sure if somebody spills frack fluid into groundwater or a pond, we increase the fine. we make sure that doesn't happen. that bottom-up plan is what helped create the colorado innovation network, what we call c.o.i.n. which is taking all the research labs in the various departments of the various universities, colorado school of mines and colorado state university and university of denver, all of them, and then blending them with -- we have 24 federal laboratories, and usually these all work kind of at, or at least in parallel purposes. colorado innovation network brings them all together with our business schools and then with a big infusion of the business community of trying to

make sure that we take ideas and innovations and get the entrepreneurship, right? innovations are great, but without entrepreneurs, they sit on a shelf, right? jim clifton's written a book about this, talks a lot about how innovation's great, collaboration's critical, but in the end you need that entrepreneurship to really create the jobs, and that's part of what c.o.i.n. is going to focus on, getting those ideas, have the business schools connected with all these research labs and tied into support for the business community with internships, etc. and, obviously, you know, the idea is to just accelerate job creation. >> so it's really the governor is sort of almost the orchestraters of all these disparate systems and institutions and individuals -- >> well, i'm the head salesperson, the head orchestrater, and i think it's good for each one of our states is going to compete and try to become the most pro-business state, holding ourselves to the highest standards. there's no magical invention. but i think that will begin to transform the whole country as we get four or five or six

states that are significantly pro-business and they're going to start seeing success. i don't think you're going to solve health care or transportation or education without a strong business community. so as those states do better, other states will follow, and i think that creates a rising tide that helps the whole country. >> so let's go down to the place where things actually happen, right? [laughter] >> ouch. >> i know, i know. federal government, state government, the world exists in cities and metropolitan areas, particularly in the united states. our schools, our community colleges, our advanced research institution is the and most importantly, our firms, large/small trade associations and so forth. you've been mayor for a short period of time coming out of the business sector. but one of the first things you did was start a collaboration with a sister city, lexington, about how long -- >> an hour away. >> an hour away but a place that you had been highly competitive with -- >> right. >> -- in the past.

and you've got a whole new initiative with lexington that is primarily around making this part of this corridor of northern kentucky that moves up into ohio a platform for advanced manufacturing. what are you doing, what are you thinking about? this is a very interesting kind of multicity, multimetro collaboration, not generally something that happens in the united states. so what was the impetus, and where do you think it's headed? >> i've been mayor for just a little bit over a year, and like most cities we say we need jobs, and the obvious question is how are we going to get these jobs. the strategy, more or less, was to recognize that jobs are happening in cities, right? kentucky is 55% of our people live in metropolitan areases now, so most people think of kentucky as a rural state, but we're a metropolitan state. almost like all the states as well. new mayor in lexington, kentucky, named jim gray, both of us are business people that just happen to be mayors. we're not lifelong politicians,

so if there's a problem, let's work together. let's do it. they say there's not enough of that going on in the political world. so we said our competitive advantage compared to the rest of the country appears to be advanced manufacturing. we have two ford motor company plants, ge appliance park, toyota's north american manufacturing headquarters is in this cluster we call the bluegrass, bluegrass economic advancement movement. so we're in the process of identifying what our assets are, what our weaknesses are, how do we align the business strategy with the government strategy, education, foundation and nonprofits and develop that type of alignment so we can drive excellence in advanced manufacturing. lots of support and interest, you can imagine, from the private sector who kind of feels -- which i was part of -- you feel like you're just kind of hanging out there and succeeding despite, you know, government help or despite a well-intentioned alignment.

so learning a lot of things in the six months the project has been underway, especially when it comes to work force preparation where there's been a lot of talk but not enough action. >> so we're going to run the circuit, then i'm going to come back and start working through some of the issues that have been raised. jay, national organization advocating on behalf of american manufacturers. i looked over the weekend at your manufacturing renaissance plan, and there really were four critical goals there. u.s., best place in the world to manufacture and attract foreign direct investment; u.s. expand access to global markets to reach as we heard in the prior panel the 95% of consumers that live outside the united states; we have a work force that's 21st century, and we are the world's -- or manufacturing firms of the world's leading innovators. what's your sense of the federalist conversation? because, you know, we're in washington, everyone's obsessed with washington. very self-referential.

how do you think about the federal, state, local engagement and the circuit try between -- >> you just took, you took my entire -- >> uh-oh. >> because you talked about our renaissance document. we do focus on those four goals that are based on the fact that it's 20% more expensive to manufacture in the united states than it is among our major trading partners around the world. and that's when you take into account several factors, but the four leading factors or indicators are tax policy which senator portman is a great leader on trying to resolve that problem. april 1st we will have the highest corporate tax rate in the world. it's also based on our energy policy, it's based on our regulatory policy, and it's based on our tort policy. and it does not take into account differences in labor costs. so that 20% is really a number that we've imposed on ourselves in this country and that we have an obligation, we think, to fix.

the partnership between the federal government, the state government, local governments is absolutely critical. i worked for a governor in the 1990s in virginia, and at that time even just a few -- that's not that long ago, states had the luxury of competing against each other. every governor wants to be able to leave office saying that there are more private sector jobs created in their state than are -- or existing in their state than before they became governor. today as we've heard referenced several times already, we're in a worldwide competition for jobs. so the federal government has to be a partner. and one of the ways the federal government can be a partner is to reduce that structural cost disadvantage that we are experiencing in this country, reduce that 20% to allow us to be able to compete and succeed with our international competitors. >> so let me start going through and sort of taking each of these issues because i think what this panel's doing and what the prior panel is doing is really describing what could be the

pillars for a new manufacturing renaissance. a whole set of different issues. there's no one committee that, basically, deals with all this stuff, right? so it's very fragmented by committee and agency in this town, legislatures, only at the city level does it all come -- um, i wrote with a metropolitan program at brookings, i have to constantly come back. >> thank you. >> senator portman, you were on simpson bowles. let's take the tax issue first. what has to happen vis-a-vis the tax system both rate, but also structure so that we are beginning to provide that platform for advanced manufacturing? >> bruce, i was not on simpson-bowles because i was actually running a campaign in 2010 when that was going on, but i was on the supercommittee. >> i'm sorry. >> sort of the successor to simpson-bowles although less success. i call it the not so supercommittee. but, you know, our tax system is

antiquated in the sense that we're not keeping up and in a global economy, increasingly competitive, fast moving, you know, we need to reform it. i mentioned the corporate tax code is the great example of that where since ronald reagan in 1986 lowered the rate to 34%, now 35, we really haven't touched the corporate tax code in a substantial way. and during that time every one of our oecd, meaning the other developed countries in the world, trading partners have reformed their code. all of them have. >> right. >> it's not just about the rate, although that's important, as jay said, but it's also about the complexity of the code. so if we're going to compete globally, you mentioned 95% of the consumers living outside the united states. a more interesting statistics is it's now over 80% of the purchasing power. so a company like ge makes most of its money overseas, most of its revenues, same with the fortune 200 as a group. we're competing with one hand tied behind our back. partly the rate, partly the fact

that we tax on a worldwide, rather than a territorial system which basically means other companies have an advantage that are headquartered in japan, germany or china. and on the individual side our code has gotten to the point where it's so complex and difficult to work through that it is a disadvantage to the companies that are entities, and i grew up in a company that was a subchapter s company, i'm still the owner of a subchapter s company, and that's the way 85% of the companies operate. these guys know because they've probably been through that too. that needs to be simplified as well. the good news is there's a growing consensus on how to do it which is to lower the rate and broaden the base, basically meaning getting rid of a lot of the so-called tax breaks, some call them loopholes, some call them preferences which is a nicer way to say it. but the bottom line is it's been riddled to more and more -- [inaudible] the effective tax rate might be lower than the statutory tax

rate, but there's a lot of inefficiency in it. at brookings your economists love to say we want to allocate resources more efficiently, and to do that you've got to lower the rate and broaden the base. so the good news is we've got an opportunity now, i think, with this consensus to do that on the corporate side. jay mentioned the 35% rate, taking that down to 25%. it can be done. we have a score from the joint tax committee, it can be bipartisan. it certainly was in the supercommittee, we worked on this with regard to the individual rate, there's a little more, i'd say, political controversy because the 2001-2003 tax code is ending at the end of this year. so the so-called bush tax cuts are ending. that's, by the way, a $5 trillion tax increase most of which no one wants to see happen. my view would be let's not let that happen, but let's reform the whole code so that that is almost an irrelevant issue as to what expires and what doesn't, rather let's put together a code

that is more pro-growth, pro-manufacturing and gives us the not just to have a simpler code for all our constituents, but also be more competitive in the global marketplace. >> so let me bring the two of you into this conversation and rodden it out -- broaden it out so that tax reform includes not just rate broad and base, but also what kind of investments do we need to make? and i apologize, i have simpson-bowles on my mind i think too much these days, probably because i think jeff immelt mentioned it again. >> by the way, simpson-bowles, dome any chi, they're very similar. all kind of end up with three brackets, so it's fewer brackets, lowering the rate and broadening the base. >> and i thought what's interesting about all of those efforts is they talked about this notion of cut and invest. so as we're reforming the tax code so that we can be more competitive as a general proposition, we are also selecting those kind of investments whether they're advanced r&d, whether they are

skilled workers, we're going to talk about 10,000 engineers, you know, over a particular period of time. so as you think about tax reform from the state and local level and listening to the national conversation, is it just about the tax code itself, or does it also include some of the investment imperatives that we need to make at all levels? who wants to take that? >> well, our key toward growth when you take a look at louisville, over the last 18 months between ford motor company and ge we have over $2 billion of investment into the community and 4500 new jobs. so that's big for any city anywhere in the world. >> yeah. >> and how that came about was the partnership between, obviously, the companies driving it, number one, but the state and local level coming together with incentives, tax incentives to make the transition much easier for them. and then, frankly, a wonderful

partnership between the companies and their organized labor as well which, basically, resulted into a two-tier labor system, compensation system. which some people are critical for, critical about, but the bottom line for a two-tier systems is you're not talking about having an either $25 an hour job or a $15 an hour job, you're talking about a $15 an hour job or a $0 an hour job. it's this recognition of a global standard for productivity, quality and safety. so the state and local governments come together in that partnership along with government and labor to make it happen on the local level. >> and i'd echo that to a large extent. colorado, as you mentioned, doesn't start from a high level in terms of manufacturing experience, but when general electric was looking at doing their solar manufacturing facility, we competed with a number of other states, and, you know, you put your incentives on the table. but i think to a certain extent that's just the ante, right?

that's not what won you the game. what businesses are looking for is a partnership and the predictability that comes from that partnership. and we worked -- i don't think our incentives were the highest, but we worked very hard to convince ge that we would be the best partners they ever had, even better than kentucky -- >> hold on. >> in that level. >> in your niche. >> in our niche at that level. >> the fight begins. [laughter] >> and i think the same thing, arrow electronics moved from new york to colorado last year and, again, it wasn't the incentives that attracted them. we really went out of our way to say, all right, here's an advanced manufacturing company, it's the largest company no one's heard of, right? they're a fortune 140 company, close to $120 billion a year, and they're going to bring a whole string, a whole cluster of electronic manufacturers, small manufacturers with them that want to be close to them. >> right. >> those kinds of opportunities. and when you're talking about taxes, one of the things that i've, that we haven't gotten to in business what gets rewarded

gets done, right? and yet we don't reward companies for creating jobs in any real way, and i think that's -- if you step back and look at it, that's probably the single most important thing that most of our citizens care about right now. they care about jobs, right? quality of life starts with a good job. and yet we've got to figure out a way in addition to, you know, taxing profits or other measures, but finding a way to provide incentives and some sort of reward for those businesses to create jobs in this country. because we know that in many cases they have a real disadvantage to do that. >> bruce, if i could just add in there one thing. anybody can put incentives on the table, right? >> right, sure. >> you feel like, okay, what's next. what comes back time and time to us is what's your work force? do you have an advanced manufacturing culture? is your pipeline from high school through ph.d. one that supports advanced manufacturing? how do we partner? some of the things that are being done better in foreign countries than are being done here. so that's really the whole culture we're trying to form with our bluegrass economic

advancement movement. >> could i stick on this point for just one second and then come back? work force. it seems -- and, senator, you mentioned as well you talk to small and large manufacturers. keeps coming back do we have the skilled workers. it strikes me that we've got several issues here. one is, what's the perception of manufacturing in the united states? do people think these are, you know, the old cake -- caricature of manufacturing jobs; dirty, not technologically sophisticated? there still are these perceptions about manufacturing, particularly in a culture that has sort of celebrated finance and some other sectors. so there's both a perception issue, do you on the ground level and do you at the national level, do you find this is an issue, and secondly, can you deliver predictable, continuously workers either out of high school, out of community college and, ultimately, the engineers out of advanced institutions and how that gets

wired. as you've talked to firms, what seems to be the central barrier here? i mean, and how much does this cultural issue or perception issue come up as something that we need to really tackle, um, at a national scale? anyone want to take that? >> let me just say briefly i mentioned i have had the opportunity to visit about 100 factories in ohio over the last few years, and what i do hear time and time again is even at a time of relatively high unemployment and, again, ours is a little lower now than it was a couple years ago, but people can't find the skills that they're looking for. and jay's done a study on this, and i read it recently. i think 82% of manufacturers said they cannot find the skills they're looking for. now, you know, some of those skills are not there because there isn't the community college, and there isn't the connection with the universities and so on that there ought to be. but some of it, i think, is perception. there's a small manufacturer in many cincinnati who's trying to

convince that next generation of workers that working in many manufacturing is the cool thing to do. and in ohio the average callly manufacturing, $67,000 a year. so these are high-paid jobs. and as you know, these two gentlemen who tour them all the time and you go to your company all the time, they're increasingly high-tech jobs. even a few years ago i'd go to a manufacturer where there was one operator for a million dollar piece of equipment, and they thought that was, you know, pretty efficient. now that same operator has three or four different machines that he's operating all through a monitor, all computerized, all required not just the ability to -- requiring not just the ability to work the monitor, but to fix problems. these are jobs that require a lot of training and, therefore, higher salaries. so part of our challenge, i think, is to change the roughly 40 federal programs that work through nine different agencies and departments, streamline it, consolidate it, make it more efficient. and, this is, again, what's frustrating, hearing what these

guys are going at the state and local level, i don't think the federal government's doing its part. we've got to change this image of manufacturing and to make it something that is more attractive for the next generation coming up. >> and to the senator's point, at the nim we are working on exactly that. when we talk about the perception of modern manufacturing, 68% of americans understand and believe that manufacturing is critical to economic growth and job creation in this country, but the perception of manufacturing has diminished over time. so when my grandfather stood in the line to get a job in manufacturing, manufacturing of that era 80 years ago is very different than today. it's, i like the senator's word, it's cool. i use that word all the time on, when i'm out talking to young people. it's technologically driven, and it's very modern and efficient. we're working, we have 20 states right now that have implemented

a program called dream it, do it which really helps young people experience modern manufacturing and understand its potential. but i want to rewind just a little bit to your initial question or your question right before this. it's not just trade associations, it's not just governors and mayors and, certainly, businesses that can change the perception of manufacturing. it really needs to start right at the top. and there has to be a commitment from the federal level, from the president, from congress to embrace manufacturing, to understand its promise and its potential, understand that it has as jeff immelt mentioned earlier the highest multiplier effect of any dollar invested or any job that's created. and we have to have that commitment from the top. to this president's credit, he's outlined a commitment to manufacturing in his state of the union speech. there are many members of congress that are talking about

manufacturing. there are certainly governors and mayors that are embracing the promise. but there is no coordinated effort. when i worked for a governor, on day one he sat his cabinet down and said you will be my competitiveness cabinet. every single day you will try to think about things that are going to create jobs in this state, that are going to enhance manufacturing, that are going to enhance attracting business to our state. and if you're doing anything else, quit doing it. and we have to have that commitment from the top down. and the president, whoever that president is, has to work with congress on a daily basis to talk not just about tax reform which is so incredibly critical, but trade, work force issues where 5% of manufacturing jobs go unfilled as the senator mentioned. research and development activities. all of those critical components that are outlined in the manufacturing renaissance document that you referenced, bruce, need to be part of a comprehensive package to advanced manufacturing in this country and to insure that we

embrace it for many generations to come. >> you know the one thing i'd add on to that, it is important at the top, but we've also got to figure out how to translate that down into the culture. >> absolutely. >> kids today would rather be a hairstylist than do advanced manufacturing even though they know they're going to make a third or even half the money. they like the fluidity, they like the culture of it. somehow we've got to brand that, and i think it has to be in the schools. >> that's right. >> in our urban school districts kids don't believe they'll be able to go to college, and they just don't think they'll be able to get advanced manufacturing jobs, so how do we get more incentives? when immoment talked about doubling the -- immelt talked about doubling the incentives, somehow even how our media, we've got to be thinking and be very intentional about how we make this appealing and attractive to, you know, we're a culture -- to a certain extent even the toughest neighborhoods, we're a culture of affluents.

the kids are reading us magazine and people magazine and, you know, they're not -- they don't believe, they don't push themselves like they could. i should take that off the record, pretend i didn't say that. [laughter] but part of that's our job, right? >> it is. >> as manufacturers making sure young people have the opportunity to see what happens in a manufacturing facility. when i visit manufacturers around the country, you probably, all three of you have probably experienced the same thing. the work force that is there often times has been there 15, 20, 25 years because they love what they do. they're working with their hands, they're innovating, they're creating new methods and ways of doing things -- >> and they're competing. >> they're competing -- >> in a global marketplace, and they love that challenge and take it on. i get inspired every time i go to a manufacturer, large or small. you mentioned some of the new flexibility on the labor rules. increasingly, workers feel like they have a stake in this, and i think that's critical to our success. again, a lot of that's being done at the state and local level, and that's important. earlier when you said states competing with one another or

cities for that matter and, you know, working at the local level helps because it, you know, a rising tide that lifts all boats. i think that's true. i think the competition is good because you're competing now, you know, not with indiana, your neighbor, you're competing with india. >> that's right. >> and china and ohio. although you're winning with regard to -- [laughter] but you got chip to go over to louisville. that is really exciting. and that's good. and my only point is i think there's a federal overlay that's not keeping up with that. and to jay's point, there has to be, um, an intentional, as john said, focus and a concerted effort to put competitiveness number one and manufacturing has to be at the top of that list given the multiplier effect and the importance of making things. >> i think there's a cultural overlay as well. >> yeah. >> with okay? so often people now look at work or education as toil. oh, i've got to work, i've got to go to school. versus this is a journey of lifelong learning. i'm picking up new things, i'm

learning how to operate in a broader society. so when you go to companies that are best in the world like ge appliances last friday in louisville, you could eat off the floor, number one. but the self-directed teams, people are learning how to operate as problem solvers, as leaders, as followers. so when you take a look at the workplace, advanced manufacturing or anywhere is a place where i'm going to engage with an employer, and the contract is i'm going to always be learning new things that are going to be giving me more capability and theoretically value-added, theoretically compensation abilities to provide for my family. that's great for the workplace. >> right. >> but that culture is huge for our country because then those skills translate into your churches, into your neighborhoods, into the way that we look at ourselves as a nation that we're working together for something bigger than ourselves, and i'm an integral part of that. and that culture is so polar from toil, and i have to do this to read "us" magazine or

whatever it might be. i think we need to celebrate that type of culture and say this is who we are as folks from denver. but this is our country, and we don't emphasize, i think, that enough of this is what it's all about. it's this journey of us working together that should be full of joy. >> you're starting to see that pivot, too, if you just look at the super bowl and you see the ads that were being played there. >> sure. >> and you're starting to see that happen, and it just needs to happen more, you're exactly right, mayor. >> clint eastwood at halftime -- >> exactly. >> this is interesting because, again, in d.c. and, frankly, in state capitols and city halls the conversation tends to be very programmatic, right? what are we going to do on tax, what are with we going to do on work force, what are we going to do on land, etc., etc., etc. , and what we're describing here is a culture shift -- >> right. >> -- where we begin to dignify work again, and we begin to talk about craftsmanship again. i mean, one of the most interesting things i see around the country -- two things,

actually, is high schools that are beginning to bring back vocational, what we used to call vocational ed. we now call career and technical services. so you can go into some inner city high schools where we're teaching manufacturing because of the job, the wage effects that you're describing. the other -- >> by the way, one of the things that john mentioned that i think is working extremely well in some parts of ohio, not as well as others, is where business partners with a high school. >> absolutely. >> instead of partnering with a community college or university, at the high school level bringing kids in showing them manufacturing can be cool. ..

>> we introduced people to young kids that main event out one mile race of where they lived before, to see what an office looks like and what social skills are required to get a job your we can get so caught up after that we forget we have a whole group of our society right now that doesn't understand some of these basic work issues we are talking about. it's a big national issue. >> let me bring this up at. again, adding of a culture shift is critical, or else we will make all the policy reforms in the world and we're still going to do with the perception of manufacturing, which is not accurate but it is still deeply held in our country.

a couple of issues that were raised by some of the prior panels i've that would be good to air here since we have a lot of work going on. energy, okay. so the notion that the united states can have cheap, reliable, predictable energy as a platform for manufacturing is an enormous shift. we've got some really hairy environmental issues to deal with. how do we do this? how do we get beyond the polarization? not just partisan polarization, but the real concerns that people have about environment in iowa or other parts. the ohio is really exciting. in the west they are used to having these natural gas and oil finds periodically. in ohio we are again becoming a producer of natural gas and oil, and we are going to be exported

we believe the next decade. and it's a huge opportunity for jobs or by the way, specifically manufacturing jobs because we make a lot of pipes. a steel mill in youngstown, ohio, which used to be the still capital. u.s. steel is expanding in northeast ohio as well. we also make bombs and make other structural steel for the plants. there's a huge opportunity here. i do think the environmental issue can handle among the committee. we are so interested in making sure the fracking, hydraulic fracturing can be successfully done and it is operably regulated. fracking water, make sure it doesn't get into the groundwater and soil. the companies that have been doing this for 50, 60 years are good at it. they have dealt with a lot of these issues. ohio happens to have pretty deregulate in place. maybe some states need to work on that but i think there's an enormous opportunity. i don't frankly see that there is a huge disconnect here between what the communities

want and what the industry wants when it is done in a safe and in a way with a regular environment that requires them to do it in an appropriate way. so i think it's a great opportunity. and specifically for manufacturing. not just the extraction of resources but it is great for us. >> i couldn't agree more. it is a great opportunity. it's one of those places, we talk about competition been so valuable but also the cooperation including in the time, time spent with people -- people creates relationship which creates trust. the big issue there, there are two marketing gurus in colorado that say collaboration is a new cooperation. we push the environmental community and the oil industry to really become more transparent. there's been a level of almost hysteria people worrying about phrack fluids, terrible i think misleading stories in the media.

ultimate about a month a half ago ahead of the leadership, environmental defense fund stand side-by-side with a senior vice president of halliburton, and they agreed to a set of regulations that would allow halliburton to protect their trade secret and yet give environmental community full trust that the chemicals that they will reveal what the composition of the chemicals are. it's like coke, right? coke is the most viable trade secret. they put the ingredients on the label. how do we not get there? that challenge is how do we get to the level of trust. now we're asking our oil and gas companies to do any water wells close to where they're going to drill a well, take a waters test and simple. colorado, we can't find an example of the fracking. we been going since i was a geologist in the '80s, we can ever find an example of fracking ever get into groundwater. hundreds of thousands of frac jobs over the last several decades.

there's been a couple of places in east coast were that has happened to very that operate. but how do we give the public more of a short? this low energy will bring back chemical industry, create all kinds of jobs at a different level but there is a disconnect there, pr wise be back on 1000 -- >> the 20% differential that i mentioned earlier has actually one interesting fact for the first time. we actually have a cost advantage on energy right now. it's very slight, but we need to drive that number up because that will help us in all other areas. the senator and governor both talked about fracking. we've got to get the policy right. we've got to get all of the regulatory policy right. we just got to get it done because the potential with shale gas is enormous. we've done a study with pwc that shows that the shale will create

1 million, 1 million manufacturing jobs in this country in the next few years. then you think about the spinoff jobs that occur from the. has enormous potential and that doesn't even take into account all of the benefits that businesses will derive from lower cost, lower cost energy. so we really need to focus on that but we also need to take the politics out. congratulations governor on that great achievement while you're governor. but, you know, a lot of times we simply play politics with energy policy, the keystone pipeline is a great example. that needs to move. we need to make sure that we are trying to encourage every type of energy supply and development that we possibly can in this country, because it chose mean jobs in the future. there's a question about that. in the meantime private industry is driving innovation, conservation. ge appliance, great reduction in home energy costs. go to the auto show, see fuel

efficiency standards 40, 45 miles per gallon as well. so while we are dealing with all days, up at a high level, the businesses are listening to consumers saying we want to spend less on energy at the same time. >> and this is about global competition. >> you mentioned the legislati legislation. from new hampshire and it's about energy efficiency and helping companies to be able to have the tools that the need to move toward efficiency technology and people are making things with a lot less energy. and fewer people and more efficiently. you know, this is on energy site part of how we're going to get more competitive and able, not just to expand exports, but be more competitive in this country serving our own market and taking away market share. so energy efficiency is something where the united states lags, not just demand which i think it's pretty obvious to people but also our european competitors and most of the emerging markets.

we have a great opportunity there to do more to let me ask you. we're in d.c. we might as well talk about politics. there seems to be on this panel, and, frankly, whenever we get federal officials, governors and mayors together, we seem to move towards the pragmatic space as opposed to the partisan side. so if we took the presidents advanced manufacturing partnership, basically just went through their core set of recommendations, for national policy but also frankly for state and local. can we think about a place, a year from now, right, beginning a new administration, whoever is elected, where there's a small set of big systemic change affect that occur at a national scale, manufacture potential to is that outside the realm of

possibility, or are we in the three to five year cycle where the states and cities have to innovate and eventually washington will begin to scale up, or reflect or, you know, sort of harm the division? is this one of those few issues where we can actually get beyond partisanship? because it seems like the way we are talking it here, who's going to be against these kinds of practical almost none ideological approach is. >> i said at the outset, i believe there is a huge opportunity here with all of our challenges we have with our economic structures. i mentioned energy, also regulations and taxes. there's no reason this can't be bipartisan. the presidents own jobs and counsel as you indicate has made recommendations, as has the manufacturing group it if you look at it is regular relief,

which includes some of the things we talked about early. we have a bipartisan bill it to the. the administration has not yet but we hope there will. corporate tax rates, they have all recommended going to return to a system and unlocking the roughly 1.8 drink that is locked up overseas. these are things that i know the administration has talked about doing it. hope they will send some even this year. but in a political year may be tough to get some of these done. i think as result all is going to be working toward some consensus. there's growing consensus on the tax reform side and the revelatory site and on energy site. so my hope is we will be able to make progress, if not the issue then right after the election regardless who is elected. >> from states and cities perspectives, taking that as sort of 2012, not a lot happened, i should have. a lot gets debated and discussed but not a lot happens at this level. what are you are pushing towards? and then at the end of the day,

a year from now, what do you want on the priority list, if there is a list? >> i still think like a business guy, i don't know about you. i just happened to be mayor right now. when you have a company, you have these competitors and if you're dysfunctional as a company, your competition loves it, right? so think if you're china or if you're germany and are watching us as a country right now, bickering over all these things, they love it, especially when it comes to manufacturing, manufacturing policy. so the federal and social policies where they are not playing the same rules that we have. we say that's not fair. guess what, the world is involved. so how does our capitalism, how does our laissez-faire and economy get involved as well if we feel we can learn something from germany's alignment between education, universities, r&d, business, or what china is doing with infrastructure as well. so i would like to see what are we learned, how do we adapt our system as result to really get unstuck in america

manufacturing. >> i would ask of that and go even further to say that i think a lot of, in the short term, it will happen in cities to the lesser extent, states but as a former mayor i can take some credit, that it is, one question is why don't we get more business people like greg, how do we get more of that risk and reward, all those thoughts that go through your decision-making, how do we get more of that fixed in? i think we will see innovation short term in cities and to a lesser extent states, ultimately the big changes have to happen at the federal level. if we can't afford for it not to be bipartisan actually nonpartisan, and a year from now we need to have set the table, all of us here, every business, business leader, every american needs to set the table so that they manufacturing renaissance can occur after the next election. >> that's the final word. i want everyone to thank the

panel and then i just have some housekeeping to do. so thank you all. that was great. [applause] >> so, we are going to have two concurrent breakout sessions in the room behind me. the larger breakout room will have a session brought to you by the "washington post live" on the winning formula for entrepreneurship. and the small break the room will have a session on investing in the middle market, which was talked about this 20. so both panels will begin at 11:30, and we will see you there. if you. thank you. [inaudible conversations]

[background sounds] >> c-span to live this morning here in washington for a discussion about the future of u.s. manufacturing hosted by general electric. they will be taking a break for about an hour and a half, but there are more speakers coming up, including the keynote speaker of the forum, mississippi governor haley barbour. he is expected to take the stage at about 1:00 eastern time. also just to let you know president obama is talking about some of the major point of his 20 '13 budget request, which calls for $3.8 trillion in spending, tax increases on the wealthy and money for infrastructure and education, and the president is speaking at a community college just outside

of washington. you can catch his comments now underway on our companion network, c-span. more budget requests announced later today. the state department unveils details of its proposal and we will have live on c-span3 at 1:30 p.m. eastern. than the defense department's budget with speakers from the army, navy and air force taking reporters questions. and all that starts at about 2:00 and we'll be on our companion network, c-span. we will be back to this discussion on the future of manufacturing in about an hour and half. but while the group takes a break, here at the mellon auditorium, we will take a look at remarks from earlier by the ceo of general electric, jeff immelt and we'll come back to this discussion as soon as things get underway again. >> what i think will be an interesting week on american competitiveness, with a real focus on what's worked in sharing best practices and describing ideas and really talking about ways to create

jobs and fighting is going to be a great week, and a lot to be shared. if you were to have read last month's harvard business review, roughly 75% of the people surveyed think that america's competitiveness is going to decline over the next three years. and i have to say that is in contrast to what we see, what i see. and i would go beyond that to say i think on a relative basis american competitiveness is as strong today as i've seen in generations. and it's what i'm going to go to this point is just some of the things that are working and then we've got a series of workshops and panels over the next few days to discuss again the best practices and what his work. if you look at, go to the next slide, please. if you look at, it's just a major headlines of the things that we think are important.

i think it's about confidence, and like i said, if you look inside a lot of the big american companies like boeing and caterpillar, turn four, ge, people have more confidence in the ability to compete to win on a global basis. there is a lot of best practices. i would say that many and most of american business came through the crisis in better shape than a lot of the growth that is outside the united states, so you've got to the confidence to take your game into every corner of the world. and another thing you'll see as you go through this week is the fact that business works together. small business and big business work together, and various companies work together in what i would call an extended enterprise. and so i think these are some of the hallmarks, some of the things again we will talk about as the week goes by. as you go to the next slide, the day is really split into, or the weakest split into four

segments. today we'll talk about american competitiveness, tomorrow is a discussion on innovation. the next day is on global competitors, talk a lot about what are the fast growth regions around the world and what do you have to do in order to export. and then on thursday we will talk about workforce, veterans and reservists, and what it takes to create jobs and what are some of the big segments of job creation on a global basis. what i'm going to do today's talk about just 10 ideas on things we've seen work, and things we have learned about how to drive competitors inside our company. the first three are what i would colleges business strategy strategy. it's about innovation, american manufacturing and a focus on exports. the next two i think are just about systems of competitiveness. the importance of energy and health care to make every company competitive on a global

basis. the next two are about how to work with customers, both large and small, and where to focus on midmarket customers and the value of taking some of the tools that come from social media and data and analytics, and helping our customers be more productive. and then lastly, talk about skills, talk about empowering workforces and really a public-private partnership as ways to drive competitiveness. these are just our ideas. you hear a lot more about it as the week goes on. i think one of the best parts about this is we have the opportunity to learn from each other and to share best practices. so take that with the spirit. first on innovation and technology. this is what the u.s. has always stood for, is technology and innovation. i would say most companies today are spending more in research and develop and than the previous generations.

in the u.s., r&d spending has stagnated between two and 3%. we think that needs to go up. various research groups have said that investments in technology and innovation have about a 30% return, so the case for technology and the case for innovation is without dispute. one of the questions that i asked when i travel around the world is how many engineers graduate in a country each year. this is the biggest symbol of the long-term competitiveness of those countries, more than just about anything else you can study and track. so science and technology is absolutely critical. in ge over the last decade we've gone from 2% of our industrial revenue and r&d to 6% of our industrial revenue into r&d. in 2012 we will launch more new products than any year in our history.

roughly twice our historical average. and so regardless of company, regardless of region, we think that a resurgence and a focus on science technology, innovation, has got to be the cornerstone of any successful company. it's the cornerstone of job creation and it's something we think winning countries and winning companies will do. second, manufacturing but there's a lot written today about manufacturing. what i would say, i came to work for ge in 1982, for roughly 20 years, if you look at mobile costs, materials were inexpensive and the largest peace in our cost structure tended to be labor. we lived in a deflationary time period. now we live in more of an inflationary time period where the cost of materials are really the largest costs on anybody's income, income statement.

and so as result i think it makes manufacturing, owning your own supply chain, very different today. and that's the way strategically we look at our business. ge has always been good at manufacturing. we have made a very strong focus to control our own supply chain, but we think this is going on around american business at the same time. we've seen good growth in the monthly jobs numbers and manufacturing. go, go back. in ge, we have announced they created 11,000 manufacturing jobs in 2009. we have 16 sites that are either new or being refurbished. so we have a strong focus on american manufacturing. i thought i would just help a vignette and we have some of the local guys will be here this week but we are basically moving our appliance manufacturing from mexico and china back to fundamentally louisville. and we will look at it on a cost

basis, our labor is still higher, but it is closer than it has been in the past. but both make use and distribution are less expensive in the united states then importing. so we see the opportunity to bring jobs, certain jobs, not every job back. and we think this will take place in areas like software as well. so there is a good case to be made for the competitiveness of american manufacturing versus previous decades, and we think some of this will go on for the future. if you go to the next slide, exports. it could infrastructure business the way we are, you know, our markets are going to be predominantly elsewhere. and we see the need to really focus on global markets. there's going to be a billion consumers joining the middle class in the emerging markets alone. so there is no country that is off limits fundamentally in terms of the opportunities for growth, we look forward in the

future. so exports are key. we will make 140 -- this is ge stable product, 140 heavy-duty gas turbines fishermen in greenville, south carolina, a thousand employees there. went roughly 50% market share locally, less than five will go to the united states. so if we're not selling in every corner of the world we will fall behind. inside ge, exports really drive 30,000 jobs. there's a five to six multiplier on every export job. so this creates more than 100,000 jobs in the supply chain. you are not come if you going to be exported, if you're going to grow globally also have to create jobs and other countries, not just the united states so we are doing that as well. and we are building very strong customer relationships. so if you have walked through any of our factories in the united states, they know the global airlines, global utilities and global hospitals to our customers.

so exporting, competing names winning in every corner of the world. and you know, it's harder. it's infinitely harder to sell an mr scanner to turkey than it is in chicago. but that is the transition that american companies have made to be more competitive. and i think we can export in line with any other country anywhere in the world. so shift gears. those are just three strategies. i think there are two places where every business faces the same challenges when it comes to long-term competitiveness. one is health care and one is energy. and health care, you know, is extremely important for employees and retirees to have great access, high quality health care at an affordable cost and this is something we all have to work on together. our health care costs have come down over the last few years.

our cost per employee is lower today than it was in 2008. it's really driven by an employee directed, health care plan, and a very focused wellness program. ge has 620 sites in the united states. we treat health care the same way we treat safety. the same way we have treated the dpp program over the last decades, so extremely focused on 20 parameters of health care inside those sites, and that really helps drive how we make investment decisions, and long-term competitiveness. so we really manage this very intensely to make sure our employees get great health care and affordable cost. what you learn is there's really no such thing as national health care. every city in this country is different, and there's 15 cities that matter the most because they are the biggest concentrations of ge employees

and retirees. so in 2009, we worked with a local employers in cincinnati because that's where a lot of our employees and retirees live. we worked with the providers. we worked with p&g and kroger. we work with big insurance companies to really focus on driving, and information, common standards of care, and creating 100 plus what's called patient-centered medical home's, coordinated care centers. and the results are pretty remarkable in terms of er visits, fewer admissions, fewer unavoidable conditions. and we really think this combination of having a smarter employee when it comes to health care, plus working in consortiums around an individual city with other manufacturers, providers, in town, you know, our goal is to keep this growth in line with inflation. so for the past 25 years basically health care cost for companies have grown at two to

three times cpi. we think that by doing these two things we can keep the growth of health care costs inside cpi. and that's what our goal is, but we can't do it as an individual company. this takes a consortium of companies in order to do it, and it takes going city by city by city driving best practices, driving innovation. this helps small businesses and big businesses alike. so this is extremely important, that the private sector get actively involved in driving and lowering health care costs, and improving wellness, quality and access at the same time. similarly in energy, you know, i think this approach, and people say it more and more of being all in on energy, is extremely important for the u.s. today. you know, i think when i think about energy, i think about a resource endowment, i.e. do you have national resources at your

disposal, and they created endowment. ..

>> and jet engines and auto motive engines and then the great university and labs that we got we can actually put this together as a country and achieve i think multiple goals, i think, over the next decade. i never think that complete energy self-sufficiency is a good thing because you want to be a part of the global network but i think between now and the end of the decade this country can now have great control over its energy, can do it in a environmentally friendly way, can create jobs and competitiveness. the challenges that we have are really just twofold. one is we have a very old grid. so we've got weak power infrastructure, weak energy infrastructure. and did other believe it or not

on a relatively basis the u.s. market is relatively small so we have lots of global competition and lots of demand that's outside of the united states. but if we can find a way to solve a couple of the core problems, have a more expansive view of energy, i think this is a place where the u.s. over the next decade can really prosper. so, you know, if anything through so far technology, manufacturing, exports. those are things that i think are working in the united states. and then if you look at affordable health care, access to energy, these are the two pillars of every productive society when i travel around the world. so those are the things that i think so far we would so far need to be working on. let's just think -- what's our responsibility working with our customers? i think all of us in the business cycle, you know, we have to be focused externally of how to work with customers and

how to work for suppliers. and i'd break it into two groups. with customers from ge capital we had a big focus on what we call the middle market and the middle market are companies between $10 million and a billion dollars in revenue and it turns out this is a huge segment and they actually do identify themselves as middle market customers. there's 200,000 companies, 80% expected to grow. it's a third of the u.s. workers and this is actually a segment in the economy that actually fared pretty well during the downturn. and what we try to do inside the company is take down any barriers between ge and this group of companies. and what we call access ge. so if you're one of our middle market customers and let's say you're running a steel plant and you want to learn how to do lead manufacturing, we have found ways both over the internet and

in person so allow that customer to access the ge team when it comes to how to do lean manufacturing. if you want to know how to do employee training, we open up the doors to ge to this group of customers to say how do you do training. access integration, the same way. management and the same way and we think tearing down these barriers between our supply chain, our customers and big companies helps the entire enterprise work more effectively. and this is one of the things we can do in this target segment which is a real system of growth. and i think one of the things that maybe sometimes we draw an artificial delineation between companies -- big companies and small companies when the reality really that the extended enterprise works really well together, suppliers, companies and customers. so this is another pillar of competitiveness in the things

that work. if you go to the next slide, you know, i think the other aspect -- and this tends to be offers promised in the way big companies work together with other big companies is the role that analytics and the internet is going to play on how assets move. i think if you look at the revolution over the last 10 years in social media, the whole aspect of man to machine or machine-to-machine technology over the coming decade is going to be one of the big trends. you know, we have about 250,000 units in our installed base of jet engines, gas turbines, mr scanners and we take off these through sensor technology, maybe 10 taxpayer -- terra bites of data and we can real time with our customers that have a chance to drive significant productivity and performance for our customers and we're focused on doing that.

you know, one point of fuel burn through the global install base, global fleets worth $5 billion of profitability for the airline industry. one extra mile of velocity for our locomotive customers is millions in profits. if we can get ct scanners and mr scanners never to fail, to have 100% up-time, that's probably 20%, 30% more capacity in radiology in every hospital around the country. and so i think this focus on using technology to drive productivity is really important for customers. so these two things in terms of what works are ways that companies need to focus on their customers, to help their customers become more productive. and we think this again is a big pillar of opportunity in terms of what's working in the united states today. if you then shift gears and talk about people, because i think, you know, again human resources

are key if we want to drive progress in the future and what i call high skills training, this is one of the first places that the jobs council looked in terms of ways to drive employment and ways to drive long-term productivity in the country. now, it's a fact that maybe the most straightforward way to create jobs is to build the jobs that are open today. you know, i think sometimes we want to have grandiose programs and grandiose ideas. there's somewhere was the

brainchild was from paul from intel and the idea is how do you get 10,000 more engineers graduating in this country? so we graduate about 135,000 engineers in the united states every year. china and india together

graduate a million every year. so we have a large opportunity. and if you look by 2020 what most economists would forecast is there'll be a 2 million job deficit mainly in engineering in the united states. we've got eight years to get a tremendous increase and the issue is there's a 75% dropout rate for people who go to study in engineering as freshman, 75% of them don't make it to graduate. and that's mainly 'cause other subjects are easier. you know, let's face it. it is hard to graduate with an engineering degree. and so paul's idea is to work with a bunch of universities, big engineering schools, to make them better at what's called retention. having financial rewards for students who study engineering and to make sure the private sector absorbs internships so

that if you are a senior in high school and you decide to be an engineer, you basically do it with a point of view that you're going to get a summer job ahead of your colleagues who aren't working quite as hard. and so we've doubled as a company and we've got 60 other countries. we typically hire 2500 engineers every summer in internship programs. we're going to basically double that this year, as are many other companies in the united states. so human resources are key. these are just two ideas from a standpoint of what's possible going forward in the future. now, the reason why people are important and the reason why skills are important is because increasingly we want people to run the show. and so in many ge facilities we now have self-directed teams. durham, north carolina, is where we assemble a lot of the jet

engines that you probably flew on your last flight or you'll fly on in your next flight. and this flight has just under 400 people with one manager. and basically the workforce, the work teams decide the schedule, put in place metrics, do training, do hiring and we have well trained, well-educated team-based highly productive, high quality teams. and so i think it's not -- the education and the skills development -- this is not some kind of theoretical exercise. i think the way companies work together is that people closest to the action, people on the floor are the people who are dictating pace and knowledge and driving schedules and driving quality. and we think this is the way that productive assets work. so i think about it again.

strategy, innovation, manufacturing exports, two pillars of competitiveness in health care and energy. a focus on customers, making customers more productive, both small and big. a dedication to training, both engineering and advanced manufacturing, putting trained people in teams where they can drive action and pace. we think these are the ideas that are working and these are ideas that we can share and you're going to see these ideas across numbers of successful companies. the last thing i'll talk about is just the importance of public/private partnerships. the private sector drives jobs in the united states. that's true. and that will always be true. but the government can provide a catalyst and it can happen in a couple different ways. first states, i think one of the values in the united states is there's 50 different experiments that happen in 50 different states and governors can be

entrepreneurial and governors can help create the right environment and we think that's been very effective, a place where ge is invested in the last couple years and haley barbour from mississippi. and the great thing governor barbour did is focus on workforce training and not create a training fund to get people up and going but linking companies to universities and colleges here in the state of mississippi in which we capitalize on that and as a result we have two high tech aviation plants going into mississippi, one's already completed and up and operating, the other will be finished this year. and these manufacturing plants will do high tech materials that will go into jet engines. we've linked up with mississippi state, southern mississippi, some of the big engineering schools in the state and this in the span of, let's say, five years point to point will be roughly 1,000 jobs in mississippi. so very effective,

entrepreneurial, quick, productive good jobs created in the state. the right-hand side, you know, the president set forth a goal of doubling exports in five years, which we think is achievable. but the trade agencies, the expert in trade agencies are extremely important. people like xm are extremely important partners as companies like ge sell around the world. i was just in africa for a week, last week, and the chinese government is where he shall in africa and we need to level the playing field to allow the chinese to compete. we don't need the same advantages, quite honestly but i think it does give a sense when people like xm and opec and other organizations are in that were kind of all in as a country and we're trying to compete and trying to win and i think just with a little bit of support and focusing on small businesses and

big businesses alike, it goes a long way. and so we think both at the state level and at the -- at the federal level through agencies like xm it's extremely important and both of these then create jobs, which is what the end result is and that's what creates a win-win. so business and government working together helps create competitiveness. and so again just to recap the 10 ideas that we would have, technology, manufacturing, exports -- you know, we do business in more than 120 countries. every country thinks about health care and energy as being two pillars of competitiveness so those are extremely important. help your customers, make them more productive. train people, educate people and then unleash the power of every brain inside the factories to make people competitive. and embrace the sense that while

the private sector creates jobs, the government can create important catalysts and the right environment in which people want to compete and want to create jobs. so the last thing i would just say for the week is competition creates -- requires confidence as a 30-year ge executive, i can tell you that i'm probably more confident today than any other time i can remember in the ability of factories and businesses in this country to be competitive. that there's many good things that are happening in american business today. i think companies are competitive. they want to win. there's a strong desire to wanting to drive not just competitiveness in their own companies but more broadly. that in order for us to win success we have to win in every corner of the world. 60% of our revenues outside of

the united states, 70% of our backlog is outside of the united states. we've got to sell in china, we've got to sell in mongolia, we've got to sell in nigeria, we've got to sell in poland, we've got to sell in peru. we've got to sell in brazil, we've got to sell in mexico. we've got to sell everywhere and we've got to be hungry and we've got to be out there every day fighting for our companies. and the last thing is, i think just in general business works together. there is an extended enterprise. there is a supply chain. there's a customer chain. there's teamwork inside companies that's very powerful. and i think it's this notion of enterprise and teamwork that are central to american business that i think helps us compete. so that's just the way i want to frame the week. you're going to hear a lot of different discussions on various items throughout this week. we made a few announcements this morning including the hiring of 5,000 veterans over the next five years, you know, that's roughly 1,000 a year.

some investments in our aviation business. ways to take the health care more extensively. ways to use -- i'd say things like ideas for people in towns to be able to access manufacturing and learn from each other and participate to a certain extent in the ge enterprise so some various announcements this week. so, again, we say welcome. we certainly don't know all the answers but we're ready to learn. and ready to help drive improvement. >> a number of budgets announced today. president obama just announced the main points of his proposal for 2013 and you can see that on the c-span video library. more later today, the state department announces details of its proposal at 1:30 eastern. we're going to bring that to you live on c-span3 and the defense department's budget with speakers from the army, navy and air force will be taking reporters' questions and that defense budget -- the defense

budget announcement will start at 2:00 and that's going to be on our companion network, c-spa c-span. >> we're going to return to ge's forum on u.s. manufacturing and competitiveness in about an hour they're taking a break now. it's going to be at 12:45 eastern and at 1:00, the keynote address from former mississippi governor hail will barbour. until then we're going to take a look at a discussion from the event earlier this morning with federal, state and local perspectives on manufacturing. you'll hear from ohio senator rob portman, colorado governor john hickenlooper and the mayor of louisville, kentucky. >> my pleasure to kick off the panel how we're recharging manufacturing in the united states. in 2009, ge announced plans to invest a billion dollars in the appliance business. transform all the projects that we make and how we make them by

2014. aside from the size of this investment, it's a big number for an appliance business. aside from the number, the biggest news is where we're making the investment. right here in u.s. factories and the process creating 1300 new u.s. jobs. these new investments have a huge shift from manufacturing. from outsourcing to insourcing. in the late 1970s, we focused on low cost countries but by 2008, we began to re-assess that approach and consider total cost, not just labor cost. as we looked at transportation, supply chain complexity, rising wages in developing countries and the impact of losing core competencies, we found that the factories in our largest market,

the united states, could be competitive with factories anywhere else in the world. let me tell you about four key elements that align to make this conclusion possible. first, manufacturing innovation, we're transforming the way we work, adopting lean design in manufacturing methods. just last week, we launched the geospring hybrid water heater, the first new product in 50 years to be manufactured at appliance park in louisville, kentucky. it was designed by a team of product engineers, factory layout specialists and production workers who brought both commonsense and real world technology skills to their jobs. by the way, i invite you to check out our new hybrid water heater behind you. it's 60% more efficient than a conventional one. and saves an average of $325 a

year. coming soon to a store near you. second, labor and management cooperation, on the factory floor and at the bargaining table. our salaried and hourly personnel work side-by-side to resolve problems that arise. we need every member of the team to make this work. cooperation at the bargaining table means confronting new market realities about wage rates. our unions stepped up and agreed to reset the starting wage for new hires. same benefits but a more competitive rate. third, technology investment, the reality is when you outsource core product, you don't invest as much in technology, tools, training, and talent. you just don't need to. but being competitive in the u.s. means being all in and drafting the best innovators and

engineers for your team and it means having the tools to move faster to keep up with consumer demand. wherein the past we may have introduced a new design every three years today it's not possible. after we introduced 11 new product platforms, by 2014, we'll turn around and do it all again. now, the fourth pillar is what our panelists are here to talk about, government support. i'm a committed free market kind of guy, having gotten that out of the way, i'll have to tell you i'm also a realist which has led me to recognize the following. governments is the principaled providers of education, must equip americans with the skills they need to achieve economic security that comes with gainful employment.

businesses are job creators. government through tax and other policies must retain the earning, that they need to reinvest in sustained job growth. the government must recognize they face fierce competitors. failing to meet the challenges posed by other countries is not an option if we want to secure our economic future. ge's appliance division has been very fortunate to have the support of federal and state government and our own louisville metro government represented today by louisville mayor. it has been very critical in helping tip the scales in favor of investment in our u.s. factories. i'm as anxious as you are to hear from our panelists on our ideas about how government can support a healthy manufacturing sector so let's get started. it's my pleasure to introduce

our panel moderator bruce katz, bruce is vice president at the brookings institution and founding director of the brookings metropolitan policy program which provides decision-makers with policy ideas for improving the health and prosperity of cities and metropolitan areas. bruce regularly advises federal, state, regional and municipal leaders on policy reforms that advance the competitiveness of their communities. please join me in welcoming bruce and the panel. [applause] >> good morning, everyone. so let's get started. i want to introduce the panel but i just wanted to do this little preface. i think everything we've talked about this morning, whether it's

technology, whether it's trade, whether it's taxes, whether it's regulation, skilled workers -- all the elements that are critical to recharging american manufacturing is a federalist act. the federal government is critical, obviously, and we have senator portman here. states, remember, we're a union of states. broad powers over market-shaping areas. cities and metro is where it all comes together. and business. networks and manufacturing firms are the ecosystem that supports them. so we got a great panel here to have one of the few federalist conversations we actually have in washington. senator portman, the senator from ohio, but as critical to this panel, former u.s. trade representative former head of omb and coming from a state that's a major global manufacturing presence. governor john hickenlooper, governor of colorado, former

mayor of denver, also a former founder of a small manufacturing firm. okay, now it was a microbrew but over the weekend i actually looked at the north american industrial classification system. and microbrews are there as part of food production. [laughter] >> greg fisher, the mayor of louisville, 16th largest city in the united states. obviously, large manufacturing presence and mayor fisher also was the owner of a small manufacturing firm earlier in his career. so both of these folks have lived this and can talk from that experience as well as from their governmental experience. last but not least, jay timmons, the national association of manufacturers. this is really the critical constituency group representing manufacturers large and small in the united states on a wide

range of issues. so i'm going to start and go with the hierarchy of the system here. i usually start from the bottom up with the mayors but i'm going to start with senator portman. >> that would be the bottom. [laughter] >> and ohio, obviously -- when you think about the united states and our manufacturing platform, it's a very substantial platform, not generally recognized. 11% of gdp, 9% of all jobs. ohio's more manufacturing, 16% of your gdp, 12% of your jobs. since coming to the senate, you've been a major advocate of manufacturing. both with regard to some of the comprehensive job efforts set out by senate republicans. you joined up with jeanie shaheen on a very interesting efficiency and general competitiveness act and given on

services and budget, energy and natural resources, you basically oversee many of the issues at the federal level that have an enormous effect of manufacturing competitiveness. as you think about a national manufacturing policy, what do you think are the essential elements and what does the national government do to move the ball forward. >> well, first things for having this conference today and it is great to be joined here with colleagues at the state and local level and also with jay who has a global perspective on this. you know, my position on it is really pretty simply having toured 100 manufacturers in and to plan for an environment for success and to me it comes down to five or six issues and i ask our manufacturers about each of these issues every time i visit. one certainly is trade. you talked about that a little bit earlier but 25% of