shorthand on that? as you look at the budget presented by the president, a huge budget deficit, a leadership deficit that continues here because they're so polarized. what does it mean to the job you're doing here and around the world? >> david, it adds uncertainty. everybody knows something has to happen. over the holidays, i read it before. over the holidays i read again the deficit commission. i just think that is the framework of what has to happen. now, i don't love everything, and none of the three of us are going to 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. i just think the sooner we can see that take place, i think what makes businesses effective is that we can adjust more easily than other institutions, right? we'll adjust. >> something is going to happen. what's going to happen that will affect your business?

>> exactly. david, i think you can go through entitlement reform, attacks, a business tax that is no loopholes, a rate 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 -- in the back of my mind, i think all of us are planning for this eventuality. it just -- let's do it. none of us can tell you when it's going to happen. i think we know what it's going to look like. >> let's talk more specifically about manufacturing. the president during his state of the union address said the following, i want to speak about how we move forward and lay out a blueprint for an economy that's built to last, an economy built on american manufacturing, american energy, skills for american workers and a renewal of american val utes. the blueprint begins with american manufacturing. that speaks to, andrew, a public-private partnership where government is a player here. so first, what's the outlook for

manufacturing? and what's the role of government positively and negatively? >> i'm very hopeful we've actually now got the national conversation getting down to specifics. i'd say a few years ago there wasn't even a national conversation. today we have do have one. jeff in his presentation talked about our cost structure coming down for the right reasons, not the least being competitive energy in the country finally, competitive labor costs, et cetera. i think the prospect from here is it has to be a public-private partnership model along the line of the simpson bowls. we need government and business to work together on the possible future of the company on regulatory reform, tax reform. these are programmatic models that the b.rt and other parts of the business community are working on. we have specific ideas but we don't see much action. what i worry about is the political animal takes over. the next six to nine months, nothing is going to happen. we'll have to wait for another

year or two. >> let me break that down. let's be more specific. the president says it begins with american manufacturing, suggesting the government plays a role. so as a manufacturer, what can government do for you? >> first of all, it's the right focus. manufacturing has a multiplicative effect 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 in the full life cycle of products. you get to the next innovation quickly after you've gone down a learning curve on making something. it's the right focus to start with. i'm a little more on the partnership side. i'm a little more on the regulate us properly and get out of the way, kind of guy. i think we know how to design and build things if there's not too much getting in the way of us doing that.

i think right now there's a little bit of tensionha on the y side, whether it's energy and andrew can talk a lot about it, and 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 that's all about protecting the population from what we do, but letting us do what we do within a known framework. that's a big issue. >> there's a number of issues that we could get into, but back to you, jeff. part of this discussion and part of the state of the union was saying to business, you've got some responsibilities, we want to incentivize, but we also want to hold your feet to the fire, use some sticks against you as well. what role, what responsibility do american manufacturers have to bring jobs back home, to try to get involved to a we're all

in it together conversation with government. >> look, david, i could give you a classic laissez-faire capitalist answer, on the one hand, i could say we follow the laws, leave us alone. i don't think that fits today. it doesn't fit overall. i think first and foremost what we owe everybody is to compete and win in every corner of the world. first and foremost, invest in technology, invest in people. take our products, gain market share, fight hard against, you know, all of our global competitors. and probably all three of us -- i don't really have american competitors anymore. all my competitors are german, japanese, chinese. we're kind of like after a hundred years the last man standing in the world we're in. so i'm kind of, love us or hate us, i'm your guy. that's -- so win, number one. but i think, look -- i just

think there's got to be a cognizance of how important jobs are. 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. it's not that every ge job is going to go in the u.s. but i think to a certain extent at points in time there's just too much callousness around it. i think we have to know that -- >> is that a way of saying like an in-sourcing initiative where there would be greater demands on businesses and that the government does play a role? andrew, is that appropriate, something you can live with? you accept the idea that old lays san jose fair arguments have to be put aside? >> i think like jeff and i think jim will agree. i think the context of the

question is completely wrong. i have open border competition and this is the most open border country out there. so the ideals of free trade have to stand. why are you making markets based on false intervention. i'm competing with people subsidized around the world. countries are competing like companies, creating incentives. all the emerging countries wonder what we have. german does it, too. my home country of australia does it, too. we know it's not a level playing field. we know where, if you like, ge is unique in america. dow is unique america. boeing is unique in america. we compete globally. we need a government that doesn't give us a zero sum game by bringing us back to the country. every job we create in the world we create jobs back here. another myth we have to break. jobs back here like jeff was saying is what we should be

striving for -- we need this partnership model on the right kind. so health care, energy, we need time prove the quality of people who are regulating us or managing these policies? maybe i can swim over to jim and let him pile onto my question. i think -- i really do think this in-sourcing discussion as a single pillar makes no sense. >> it wasn't me who raised it, right, it was the president of the united states who raised the discussion. before we get to regulatory reform. i want to ask a more basic question as a layperson. we've talked about this in the past. where is the demand coming from, whether it's for an airplane. i get on airplanes, seems they're all bankrupt. are they buying new aircraft or is it only in dubai. what about nuclear reactors? >> 95% of the world's consumers live outside the united states. and 70% of the gdp is outside the united states.

used to be when jeff and i grew up, if you won in united states you would win globally. today it's the opposite. you need to win globally and then, because you're facing the same global competitors in the united states, it's a different deal. >> the last decade, david, the last decade from boeing and ge -- we sell a lot of engines to boeing. without emirates, all the chinese airlines, all the latin american airlines, our company is a fraction of the size. i think to andrew's point, look, i just don't feel un-american when i'm selling ge engines around the world. i'm sorry. what i try to explain to people, it's like selling a product globally some like a thousand times harder than the u.s., right? you're facing subsidized competition. your brand doesn't mean as much. frequently it's the guy's first

experience with the product, right? it's the chinese airlines, basically was their first experience buying an aircraft. it's just one of those where i think when you're talking to guys like us, we don't just apologize for having to global lies our companies. i understand the complexity and i understand with high unemployment, jimmy is the most -- biggest exporter by far. >> but i would say that i think we -- let ming-like 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 did that. we underestimated in some cases the value of our workers back here in so doing that. i think there's a recalibration because even though you've got to be globally competitive, there's a jump ball, 10% to 15% of your jobs -- 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, we scrutinize the president of the united states, part of it does have to do not just with policy, it has to do with messagesing. it has to do with leadership by communication. how much of the work has to be done by business leaders like yourself to say to american audiences as you did, jeff, when you spoke to that other network in a profile, you should want me to win. because if i win, america wins. how do you do what clint eastwood did in the add, it's half-time in america, chrysler is doing better. we should be happy whether we're selling cars in detroit or sri lanka. >> i agree with the nuance points that jim and andrew made. beyond that, i think globalization is -- it's a 20-minute discussion in a world

that wants one-sentence answers. i think trick to globalization is we have to be vocal and defend ourselves and our companies. we have to say where we've been right and where we've been wrong. there are places on both. it's a nuance discussion -- ge is a net exporter to china. we export more to china than we import from china. that's a nuance discussion where you're creating jobs in both places as you do that. i just think we have to keep chipping away at it. >> to state the obvious, i'm no clint eastwood, right? >> you do have a grizzal appeal to you. >> the point i was going to get to is we at dow decided to put a book out called "make it in america," with an australian accent. the four words or the one

sentence, our articulation of the value proposition here in washington, but out there, our workers who actually can have labels on their product saying made in america, that is an american thing to do. we have to change the conversation. >> i want to get back to regulation, go through individual elements about what makes manufacturing better, how the economy gets better in this area. the shnd in washington for all of us who cover these issues, when we talk to business leaders is we need common sense regulation, 21st century regulation for the business community. what exactly does that mean and what's not happening in that regard now? >> well,iew is that 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.

tone from the legislative branches and from the top was combative and was confrontational. so i think the first thing you've got to do is get over -- get through the financial services discussion which is a separate issue, a lot of risk came into our economy and needs to be addressed. then, like the president is doing, focus on manufacturing which i think is a little bit of a different animal. i think the fact that it's being looked at separately now gives us a chance to get into a more constructive dialogue because the dialogue with our regulators now tends to be more confrontational than it should be, more confrontational than it was designed to be. it's been politicized heavily. the nlrb case against us in south carolina was a sham. it was a sham. and it was something that an unconfirmed person in that agency promulgated on his own. it was something that eventually

they withdrew which was the right thing to do. but it had a chilling effect. we can afford to spend a billion dollars in south carolina and get told we can't do it. we didn't stop investing for a second, however. other companies, the small and medium-sized companies that the administration wants to encourage, they can't afford to take that kind of chance. there's example after example of that kind of heavy-handed as opposed to cooperative. i think the regulatory model in this country is meant to be cooperative. let's find a way. let's keep growing our economy. let's keep driving jobs, but let's contain what we do so that we don't inadvertently harm other constituencies. we're not there yet in my view. >> something like shale gas. so if the studies are true -- there would be people that could articulate better than i could -- we have a boatload of gas. we have a bunch that could

really dramatically change the future of the country. we could actually be an energy exporter in our lifetime. yet everybody is waiting for world war iii to erupt between the epa on one side and somebody else on the other saying, look, here is the standard we have to meet swrechlt to reclaim 100% of the water, do it in an environmentally friendly way. there's no sense that there's going to be an over arching strategy verses yard by yard of fight and warfare. it's just not the way other countries necessarily approach stuff like this. >> that's a great example of what other countries do. they say i have this amazing new entrepreneurial errant to discover, it could be a new chip. here i have discovery of the energy kind. how do i approach it as a nation? what do i worry about? who should i consult with on the regulatory side? who knows anything about hydro

fracking actually? it took a long time before they came to the chemical companies and said what actually is going on in there, which has been going on for about 30 or 40 years. working together on the regulatory side to get responsible production so citizens benefit holistically, society doesn't see a negative. they see a powerful positive. energy exports, not to mention value add in terms of all the sectors like mine which is now, by the way, because of a shale gas has become an exporter only second to aerospace. companies like mine were having to leave the united states because of energy costs. we or coming back. i'm putting $5 billion into texas and louisiana based on these discoveries and value-adding them. that should be viewed as a country value add. how do we put responsible regulation to get the jobs into america at the same time protecting our citizens. >> a related question is what's become a more mainstream

example, the steve jobs/president obama discussion, why don't you make iphones in america? there's not enough engineers here. you don't need to have doctor rats, but you need enough engineers overseeing the work. i can only do that in china. it can't do that in the u.s. jim, for all of your industries, your particular areas of the economy, how do you make more product in the united states complying more people in united states. what has to happen from your point of view? >> you touched on the educational issue, science, technology, engineering and math. we're following behind in this country. when you get to the root cause, it's k-12. kids don't turn on, they don't get excited. the quality of teaching is not there. there's a whole emphasis is there. the president is focused on this area. he should do more. that's a long-term frustrating answer. that sorts it out 15 years from

now. i think there is -- there's a lot of investments, a lot of cash that big companies like ours have available to investment. and it's -- i think we need some degree of certainty on tax incentives, regulatory. i think once we -- i totally agree with jeff. let's take simpson-bowles. let's sit down, let's figure it out, everybody gives a little. we move on. i think even if the answer is half bad, we'll understand the environment we're in and you'll see a lot of investment begin to happen. >> do you actually fear a whip saw because of political leadership? in other words, you fear that there's 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? >> no. well, i don't fear a whip saw. i think that there will be, in all likelihood, something after the election. it's ridiculous we have to wait that long. but after the election,

president obama, point some reasonable solutions will be promulgated. that's my hope and my belief, and it just takes that time, and it's too bad with the jerry mander districts, cnn, nobody stays at home to talk about anything. that dynamic is killing us right now as a country. we have to have a cathartic experience. >> what does it take for leaders to lead and actually use that leadership leverage on the country to move washington a little bit more? you're talking to leaders not only here but around the world. what are you not seeing out of this president or congressional leaders? >> we've all been active on the brt. i think actually businesses kind

of said, let's take the deficit on, let's solve it. i think we've spoken more with one voice on this than almost anything else. i think now -- >> you're showing a lot more initiative encouraged than leadership in congress, rank in file in congress or even the president, who has said repeatedly through aides and so forth, we don't want to just put something on the hill that's going to be designed to fail. >> in the end, the world functions best if my job is to go sell gas. there are certain things -- we should make our companies competitive. i think businesses have kind of spoken that reducing the deficit is probably job one. not all of us will like everything as we come through it, and it's got to happen sooner than later. i would go at this from an a aeromatic point. it's grown in the last 25 to 30

years, basically because of credit. this economy needs to be powered by investment, 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 3, 3.5% gdp growth.fr, six-year election cycle goes against certainty, and if you're living in a volatile question asked. so you say, okay, i believe in the system. yo american system, that's why we're all here. we can sustain ourselves. on some time to get there. but let's take some baby steps. there was a specific proposal out of jeff's report. the project that i'm co-chairing has specific proposals around job creation and retraining and worker outreach and communication that you asked about. the president's export council that jim and mr. jones co-chair,

not the least beingwithr the co suggest that the american democracy still has a vitality around business, but there is a big gap that exists on the specific big steps, okay, the ones we didn't talk about. how do i get to the bigger goal? i always think it comes down to what we do. we face up to the ocredibility. we have to do the tough stuff, we do the tough stuff. and out there, we give a picture of we do this tough stuff, we will be a better company in our case. now, we have it a little easier as a company versus a country, but that's the stop gap. techno impact on the economy, and they see it in their lives based on the devices they're using and how it makes their individual daily lives easier, less complicated, more complicated depending on the the technolog impact on our economy structurally and jobs is huge.

so what role does technology play in mufacturing more competitive around the world? >> well, mean, it depends on the industry, it depends on the company. i would use the dream liner 787 as an example. a huge job creater. it's a huge project with very innovative engines. 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 the ongoing investment in r & d as we go down the learning curve and try to find the next set of composites that will keep us competitive is probably another two or three thousand people. and the life cycle service of

this over the next 20 to 30 years will probably be, in our company and in jeff's, because the engine is a disproportionate service in intensity is probably another five or six thousand people. so this innovation produces huge employment and produces profits for our company and allows us to reinvest. i was at a breakfast where i was listening tool an greenspan the other morning, and he said, i have analyzed the investments in our country and our country is doing everything except making long-term investment with fundamental innovation. that's the chilling effect of not knowing what the playing field is going to look like taxwise, regulatory. what battle are we going to fight if we announce some big investment? but therein is where the jobs are, therein is where the success for the company is. that's the thing we're trying to get. we have a lot of ideas, we just

need to -- >> can i deviate from that slightly? this teaches us something about operating in a different country where the playing field is -- level is not the right word. 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 allows you to do things in a way you'd like to do it a little more. >> look at a place like germany. it's got very well established systems in the past few years. it came out of the recession better than it went in. i think that's -- the u.s. isn't going to be china. there's lots of differences. but germany is not -- just not a bad place to think about, you

know, and it's not a long list. i think it's well-trained people, it's investment tacts, certainty, and i would say the third piece is some form of export. everything today gets cast as, like, corporate welfare and stuff like that. if you're trying to sell a boeing 737 max with engines in africa, you've got a fully subsidized european s superstructure, chinese banks and us. so 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 corporate welfare to put us on the same playing field that our competitors are on. i say labor, investment tacts

and some form of export support. >> and in my world, energy. 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 germans. you know what the renewable standard is, you know what the price is going to be in terms of the alternative, you understand the views on nuclear in this particular case. they've changed it, obviously. so certainly on major imports, whether it belabor be labor or capital. you compete against them. but in germany, they have addressed the very question you asked three times ago, chfwhichs the human talent. they celebrated engineers. they have these training programs, occasional training programs. they pay a lot to the talent

pipeline at the factory level, the smokestack industries stack the chips, understanding it's advanced that they gear to. i think that's probably a prime example. you go to singapore and korea, they're all doing the same. there are no natural resources other than they're investing in the people pipeline. so with respect to the education question and the shortness of skills we have in this country. >> is part of what we're dealing with here in the political debate a debate about competition, that we're in the middle of american decline? do you believe that? >> no. not at all. we're going through a phase where our government and industry are uneasy with each other. each think they're doing the gh