made composite jet engine fan blades and assembly, not that i had the vaguest idea what that was when we were trying to get the company. but the vice chairman of the board came down for the announcement that they were going to open this. and he said, this is the most sophisticated manufacturing general electric does anywhere in the world. well, i can assure you 20 years before that, people would have been flabbergasted when they heard the second half of the sentence, and we're going to do it in north mississippi. but, in fact, we do manufacture composite jet engine fan blades and assemblies in batesville, mississippi, about 60 miles south of memphis, and let's just leave it at this. they have doubled the plant size in the four or so years or five years that it's been open. in fact, i remember when david joyce, the head of ge aviation

came for the opening, and this very significant facility, and somebody said to him on the team, we put twice as many lockers here as we were supposed to. that is, lockers for the employees who worked there would have. they spent time with david and as he walked out, he said, we're going to fill all the lockers. and they not only filled all the lockers by having that many employees, they've expanded since then, and importantly for us, they've built another sister plant since then in south mississippi, in ellis, mississippi. ellis is about 20 miles from the university of southern mississippi. and part of i think the success for manufacturing in the united states is a strong tie with

higher education. i'm going to talk a little bit about workforce training in our community colleges, but let me mention first our universities. the university of southern mississippi which is at hattiesburg, for more than 30 years has had a polymer institute. now, those of you who don't know what polymers are should run for governor of mississippi, because i will never forget when i went down campaigning to see the polymer institute, i asked the head of it, i said, shelby, what is a polymer. and he really gave me an illuminating answer. he said a polymer is a repeating molecule. great. you know, what the hell's that got to do with anything. well, of course, it's the heart of the composites industry. and we have a composite center now, associated with our defense

industries and our shipbuilding industries on the mississippi gulf coast. to do such things as make paint that won't burn or that won't smoke when you have naval vessel, the ability to keep from having smoke seven levels down in the ship is obvious once you think about it. well, that's a company that was spun off by the university. they went from research and development to application to commercialization. that's what you need your research universities to do. we have four research universities, and in the last eight years they have begun more and more and more to go on past research and development and application to commercialization. and ge is a great beneficiary of that as well i'm proud to say is

a great benefactor because they help invest in our polymer institute which allows us to focus state efforts on advanced manufacturing with advanced materials. the composites that are used to make the fan blades and assemblies for the genx engine are just an example of that. we focus not exclusively by any stretch, but we focus on three clusters for our manufacturing side, aerospace, automotive and energy. we are an all-of-the-above energy state. today southern company has a coal-fired generation facility under construction in mississippi, $2.5 billion, that will burn indigenous lignite

coal. lignite is a low-grade, rank coal that when i was growing up people had lignite on their land thought it was a nuisance because you couldn't farm it where it outcropped. well, we've learned how to burn soft, light-colored lignite well enough to generate electricity. and now this will be the first coal-fired power plant in the united states that will have car carbon capture and sequestration on a commercial scale and it will emit at the rate of a natural gas powered power plant. but that's the kind of advanced manufacturing we're trying to do in energy. jeff and i were talking about we have two solar panel manufacturers, like ge has a big one in aurora, colorado, we have a couple of them in mississippi. we make dynamic glass windows. what is dynamic glass, i would

ask. well, you know how you can buy glasses that when you go out into the sun they turn into dark glasses but when you're in kind of low light they're clear? well, you can make windows for office buildings out of that, except you can design them and control them so if it's like it is today, 30 degrees and sunny, you can keep them clear to take in the heat. but if it's like it usually is in mississippi, sunny and 95, then they can be darkened simply by the way you set the glass, to use technology to save 10%, 11%, 12% on the energy bill. we make petroleum out of wood. obviously it's a petroleum substitute. it's not regular petroleum, but we make motor fuel out of wood that fedex has an offtake agreement with to put in their

trucks that hunt and chevron both refine into gasoline that can be dropped in to your gas tank to be used with regular gasoline. in fact, they -- one of our agreements with the companies, we would not give them any state support unless a major oil company agreed that they produr petrm, so, we are into some pretty sophisticated, advanced manufacturing of different types in a state that has never been known for manufacturing. severstoll, has a steel mill in mississippi. it's a mini mill on front end. it uses a big carbon arc furnace to melt down the steel, but it's a pretty sophisticated build on the back end for all the

different products they do. of the 600-some people that work there, about 550 of them, this is the first steel mill they ever saw, much less worked in. yet, it was the most efficient steel mill in north america for the last two years. and we're very proud of it. we're also very proud that the first year it was open before the recession started, the average pay was $92,000 a year. not for the executives, for everybody who worked there. primarily because of all the overtime. i mention that because manufacturing jobs are the highest-paying jobs for my state. and we have a lot of different kinds of manufacturing. pack car from seattle, washington, the maker of peterbilt and kenworth trucks, has its only engine manufacturing plant in columbus, mississippi. for years anybody who has been in the trucking business, if you ordered a peterbilt or kenworth

truck you asked for either a cummins engine or a caterpillar engine. they didn't make their own engine. they decided to do it after they bought a european trucking company that made their own engine and when they first sited their first engine plant, again, it was in columbus, mississippi, where european aerospace and defense systems builds helicopters for the united states army. or just up the road where navistar builds the mrap, the mine resistant ambush protected vehicle that has replaced the humvee in the middle east. we are -- as i say, we're not a state with a history of manufacturing like midwestern states, but as ge will tell you, we are a great place to manufacture. we have succeeded in replacing thousands of low-skill, low-paying jobs with high-skilled, high-paying jobs.

witness in the year 2010, the higher per capita income in seven years had gone up 30%. even though there were fewer people working. employment was down about 2%, but income was up 30%. and it's largely because of replacing low-skill, low-paying manufacturing jobs with toyota, with nissan, with more shipbuilding, more aerospace and so on. i hadn't been governor a month when i was up at mississippi state university, our engineering and agriculture school and a professor said to me, you know, governor, our businesses in mississippi got three choices, they can innovate, they can immigrate or they can evaporate.

now, that's a pretty cold way of telling the cold truth. if you are going to stay competitive in the global marketplace, you have to innovate. but innovation requires people -- workforce that can deploy the new technology, that can make the innovation work. now, one of the perverse facts about that is generally innovation destroys jobs. generally innovation means it takes fewer people to produce the same amount or even more units of whatever it is you produce. and that's just the facts. however, that's how you stay competitive in the global marketplace. if you want to talk about america staying competitive, we have got to use more innovation. we have got to keep going, but

then we have to learn how do we create other jobs? how do we create things that we weren't doing before? that's not easy. but i can tell you essential to it is to have a quality workforce. let me just close by saying something that every governor who has been involved in economic development can tell you, the first thing the customer wants, the first thing the company that's looking for a site wants is a quality workforce. when toyota chose mississippi in 2007 for its eighth north american assembly plant, the most sought-after economic development project in the united states that year, their first thing out of their mouth was we picked mississippi because of the quality of the workforce. i think general electric will tell you they like mississippi and continue to expand in

mississippi because of the quality of the workforce. obviously education is an underpinning to a quality workforce. but don't let that confuse you in to thinking everybody's got to go to university. everybody's got to be on the back ka laureaereate track. i don't know the percentage, but a small percentage of students in the united states today need to do that to perform their jobs. what they go there for is because they need to go there so they can get an interview for their job. that the diploma is the certificate that this person is worth considering for a job. even though most of the time very little relationship what you learned in the university, in my case it was drinking and

chasing, that very little relationship -- well, i'm a lawyer. so, maybe it had more relationship than i thought. but the fact of the matter is we don't hire people to do what they learned to do at the university. but we hire millions of people in the united states to learn to do what they learned in workforce training. yet, we have so stigmatized workforce training and workforce development and job training in the united states that it is almost shunned in our high school. i can tell you how you got to be in shop at yazoo high in 1964 when i was there. do you know who was in shop? you smoked. if you got caught smoking, they sent you to shop, because bad kids went to shop, okay? but do you know that the average

auto mechanic with five years experience in jackson, mississippi, makes $70,000 a year? twice as much as the average income for a person that works in mississippi. i mean, how many do you think got sent to learn to do that by their counselor in high school? i think about my own family, my younger son is 32. my bride of 40 years said, you know, reeves decided he's not going to go to ole miss, he's going to go up to community college and learn a trade. what would they have said at the beauty parlor? marcia, what's wrong with him? that's literally what they'd have said at the beauty parlor, what's wrong with him? we've got to destigmatize workforce training in this country if we're going to take advantage of what we can have for american competitiveness. because it is essential if you do not have a workforce that can

deploy the technology and put in place the innovation, you cannot get the productivity increases that are required to stay competitive. so, i'm going to close with that thought. it is, if we're going to be an american -- if we're going to be a country competitive in manufacturing, we're going to have to remember to focus on that. not to the exclusion of all else, but that we have to focus on that. my old friend and fellow mississippian, fred smith, the ceo and founder of fedex has a saying. fred says, the main thing is to keep the main thing the main thing. the main thing is to keep the main thing the main thing. if we expect to beiv in america in manufacturing, the main thing is for us to invest smartly in a workforce that

companies like general electric will be proud to have working in manufacturing in the united states. stick with the main thing. thank you, all. thank you. it's more fun to hear speeches like that when they're out of office, isn't it? >> it's more fun giving them when you're out of office, too. >> i've got a couple questions that we've got to ask. first thing, you know, haley, there's a lot of -- we talk about big businesses like ge but there's a lot of small businesses in mississippi and around the country that are a big engine of growth. how do you keep small business competitive, and what do you have to think about that's maybe different in that regard? >> well, first of all, most of our jobs crea s are created by business. we shouldn't forget the ties

between small businesses and big businesses, because a lot of small businesses biggest base is big businesses. we've got a tax system that is unfair to small businesses. most in the united states get taxed on the individual rate. they are partnerships, sub-s corporations or proprietorships that pay -- right now it's 38.9% and then you add what's going to be added on for the health care program, they pay too high a rate of taxes and needs to be reduced. secondly, they suffer more than you from regulation. ge's -- you know, you got a few thousand people that deal with regulation. it can be the difference between profitability and nonprofitability. when you run up the cost of health insurance -- i mean, we're talking about today, health insurance costs go up

10%. it's a whole lot easier for a great big business to spread that across than it is for a small business. in fact, how does the small businessman hire more people when he's being threatened with a $1.5 trillion tax increase -- largest tax increase in american history, falling largely on employers -- and he doesn't know the cost of his health insurance or his obligations to provide it and then finally under dodd/frank, what the government's going to do to the credit of people like that. we're just kind of guessing as we go along. so, they have a harder tomb getting credit. they have a harder time keeping more of what they earn because of their tax situation. >> yeah. you talked about it. i can tell you that the university of mississippi, mississippi state, southern mississippi, great schools. high-tech schools. when you look at what you had to do in mississippi and other governors as well with the budgets and stuff like that, how

can we manage our states and still preserve the great college system that's been the source o competitiveness for a long time. jeff, a lot of people do not like my saying it, but going to the university today in mississippi is a bargain, about $5,000 a year for the basic cost of going. and that has gone you up seven times in the last eight years because state spending has not -- has actually gone down in the last eight years. yet, we have student huge financial aid programs and the majority of students get some form of student aid, some of our schools a very high percentage. it's still a bargain and we need to keep it a bargain. but right now, we are able to continue to have record

enrollment in our universities and in our community colleges, where we do most of our workforce training. they have had record enrollment in almost all of my eight years because it's still not that expensive and there's a lot of student aid. i worry about the debt, that is something that we have to keep an eye on, the debt of the students going, as long as we will keep it kind of within range, frankly as one of my community presidents said, if we can keep the pell grants where it is more than the cost to go. we have to keep an eye on costs but we are still making it. >> the mood of the country is not that great and economy is coming on the of a deep recession, if you were on the stump, what are the two or three things that you would be pounding the way on in terms of how do we get the economy going and how do we get people unified

behind that task? >> trent lott used to be the leader of the senate, and i was a third year law student when i was a freshman, we were in school together and i used to tell trent, the difference betwe between governors and senators are that senators talk about doing things and governors do thing. we had a democrat governor of a purple state and i'm the republican governor of a blood red state and considered pretty far to the right even on that circumstance. you cannot imagine how much we agree on, because we are results oriented. people elected me to get things done. we had a huge budget surplus, i mean deficit. and we had the worst state in country for lawsuit abuse. they want results. and right now, they are not satisfied with the results.

we have a very anemic recovery. i'll give you an example, it's just caught me totally by surprise, the january unemployments, it has been hailed as a great surge, about 250,000 people got a job in january and the obama labor department said in the same month, more than 450,000 people, almost twice as many, quit looking for a job, because they are discouraged with their inability to find one. what kind of recovery is that? what kind of recovery is 1.2 million people dropped on the of the wkfar. and 3 million people have dropped out of the workforce in the last three years. i mean, there are two million more unemployed today, but that is because you do not count the other three million that quit

looking. to me, one of the most encouraging things of my govern governorship is when the labor participation rate, that is the rate, the percentage of adults who are looking for a job or have one, went from 60% to 64% during my eight years. that is because some people thought i might can get one. i might can get a job. it keeps our unemployment rate higher than it would be otherwise, but nationally the country has come todown to meets from 67% of people in the workforce to down to 63.7%. just incredibly low by historical standards because people cannot find a job. i spoke the other day at washington lee. and 2000 college students i told them one of the things they need

to be concerned about is old my people my age are clinging to their jobs. if you look at the data from the labor department the percentage of people 55 and over who are working are high. that means that jobs are not opening for young people and sure enough the percentage of young people under 30 years old who have a job are historically low. and the ones that have a job are not going up, because they are being blocked out because the 64 year olds are scared to death. they are scared of this -- i would say rotten economy, a nemic economy, it's better than a couple years ago, but on main street, it's difficult to tell the difference between the recovery or the recession. in a small town like where i

live. >> you came out of the crisis called hurricane katrina, with your reputation going up. right? so what the one thing that we can learn about leadership that you learned during hurricane katrina? >> this thing is, be lucky enough to be represent a strong self reliant bunch of people. they were the heroes of katrina and mississippi, were the courageous and compassionate people of my state, they were not looking for a hand out or whining, they knocked down flat. and the next day, they got up and hitched up their britches and went to work, they went to work helping themselves and they went to work helping their the neighbors s the stories of

selflessness and putting others before themselves the winds were 240 miles inland in mississippi, we had 102,000 homes that were not liveable and 40,000 of them were inland, a third of the deaths were inland, it was not just on the coast. but the people, wherever you were you half way up in the state, 200 highmiles up in the state. they waited their turn and were gramp f grateful for the help. my job was to make people have confidence that if they returned to their community that their community could be rebuilt. that meant, open schools. housing, even if it was a fema trailer. don't think a fema trailer is what we call a trailer.

it's not a mobile home. it's like a camper like you go hunting in. we had families that lived in them for three years. 600 square foot. jim, my wife made denny come in one to prove to him that a grown man, particularly one my size or his, that a grown man could not turn around in the bathroom with the door closed in the fema trailer, and you cannot, and it was because we needed a new housing solution and my wife is hard headed. my job was to make people feel like if i went home, we were going to be better than we were. but that is all these people needed was some hope. >> last question, what are the odds of brokered gop convention and what would it be like? >> well the odds are enormously

against it, but the fact that it's in our conversation is unusual. i was at the last contested republican convention in 1976. but it was a convention where there were two can dates. and neither reagan or ford had the delegates. but i think if we have a contested convention, us, we republicans would rather it be called a contested convention than a brock brokers convention offense. if we do, it will be three or four people, not two people. and depending on what happened, it could even be five. if there continues to be no