[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
H.R. 5865, THE AMERICAN MANUFACTURING COMPETITIVENESS ACT OF 2012, AND 
 H.R. 5859, A BILL TO REPEAL AN OBSOLETE PROVISION IN TITLE 49, UNITED 
     STATES CODE, REQUIRING MOTOR VEHICLE INSURANCE COST REPORTING 

=======================================================================

                                HEARING

                               BEFORE THE

           SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 1, 2012

                               __________

                           Serial No. 112-146


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov

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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    HENRY A. WAXMAN, California
  Chairman Emeritus                    Ranking Member
CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina   GENE GREEN, Texas
  Vice Chairman                      DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma              LOIS CAPPS, California
TIM MURPHY, Pennsylvania             MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas            JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California         TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire       MIKE ROSS, Arkansas
PHIL GINGREY, Georgia                JIM MATHESON, Utah
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington   DORIS O. MATSUI, California
GREGG HARPER, Mississippi            DONNA M. CHRISTENSEN, Virgin 
LEONARD LANCE, New Jersey            Islands
BILL CASSIDY, Louisiana              KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky              JOHN P. SARBANES, Maryland
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia

                                 ______

           Subcommittee on Commerce, Manufacturing, and Trade

                       MARY BONO MACK, California
                                 Chairman
MARSHA BLACKBURN, Tennessee          G.K. BUTTERFIELD, North Carolina
  Vice Chairman                        Ranking Member
CLIFF STEARNS, Florida               CHARLES A. GONZALEZ, Texas
CHARLES F. BASS, New Hampshire       JIM MATHESON, Utah
GREGG HARPER, Mississippi            JOHN D. DINGELL, Michigan
LEONARD LANCE, New Jersey            EDOLPHUS TOWNS, New York
BILL CASSIDY, Louisiana              BOBBY L. RUSH, Illinois
BRETT GUTHRIE, Kentucky              JANICE D. SCHAKOWSKY, Illinois
PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia     HENRY A. WAXMAN, California (ex 
MIKE POMPEO, Kansas                      officio)
ADAM KINZINGER, Illinois
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

                                  (ii)



                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Mary Bono Mack, a Representative in Congress from the State 
  of California, opening statement...............................     1
    Prepared statement...........................................     4
Hon. G.K. Butterfield, a Representative in Congress from the 
  State of North Carolina, opening statement.....................    21
Hon. Adam Kinzinger, a Representative in Congress from the State 
  of Illinois, opening statement.................................    22
Hon. Gregg Harper, a Representative in Congress from the State of 
  Mississippi, opening statement.................................    23
Hon. Janice D. Schakowsky, a Representative in Congress from the 
  State of Illinois, opening statement...........................    27
Hon. Edolphus Towns, a Representative in Congress from the State 
  of New York, prepared statement................................   108

                               Witnesses

Hon. Daniel Lipinski, a Representative in Congress from the State 
  of Illinois....................................................    27
    Prepared statement...........................................    30
Hon. Mike Kelly, a Representative in Congress from the 
  Commonwealth of Pennsylvania...................................    34
    Prepared statement...........................................    36
Phillip Singerman, Associate Director for Innovation and Industry 
  Services, National Institute of Standards and Technology, 
  Department of Commerce.........................................    42
    Prepared statement...........................................    44
Zach Mottl, Director of Development, Atlas Tool & Die Works......    53
    Prepared statement...........................................    55
Mark A. Gordon, Executive Committee Member, Manufacturing 
  Division, National Defense Industrial Association..............    58
    Prepared statement...........................................    60
Deborah L. Wince-Smith, President and Chief Executive Officer, 
  Council on Competitiveness.....................................    66
    Prepared statement...........................................    68
Jack Fitzgerald, Owner, Fitzgerald Auto Mall.....................    94
    Prepared statement...........................................    96
Joan Claybrook, President Emeritus, Public Citizen, and Former 
  Administrator, National Highway Traffic Safety Administration..    98
    Prepared statement...........................................   101
    Answers to submitted questions...............................   111

                           Submitted Material

H.R. 5865, A Bill to promote the growth and competitiveness of 
  American manufacturing, submitted by Mrs. Bono Mack............     6
H.R. 5859, A Bill to repeal an obsolete provision in title 49, 
  United States Code, requiring motor vehicle insurance cost 
  reporting, submitted by Mrs. Bono Mack.........................    20
Letter, dated May 31, 2012, from Mitch Bainwol, President and 
  CEO, Alliance of Automobile Manufacturers, to Mrs. Bono Mack 
  and Mr. Butterfield, submitted by Mr. Harper...................    25


H.R. 5865, THE AMERICAN MANUFACTURING COMPETITIVENESS ACT OF 2012, AND 
 H.R. 5859, A BILL TO REPEAL AN OBSOLETE PROVISION IN TITLE 49, UNITED 
     STATES CODE, REQUIRING MOTOR VEHICLE INSURANCE COST REPORTING

                              ----------                              


                          FRIDAY, JUNE 1, 2012

                  House of Representatives,
 Subcommittee on Commerce, Manufacturing and Trade,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:37 a.m., in 
room 2123, Rayburn House Office Building, Hon. Mary Bono Mack 
(chairman of the subcommittee) presiding.
    Members present: Representatives Bono Mack, Blackburn, 
Harper, Lance, Cassidy, Guthrie, Olson, Pompeo, Kinzinger, 
Butterfield, Gonzalez, Rush, Schakowsky, and Sarbanes.
    Staff present: Paige Anderson, Commerce, Manufacturing, and 
Trade Coordinator; Gary Andres, Staff Director; Charlotte 
Baker, Press Secretary; Michael Beckerman, Deputy Staff 
Director; Kirby Howard, Legislative Clerk; Brian McCullough, 
Senior Professional Staff Member, Commerce, Manufacturing, and 
Trade; Gib Mullan, Chief Counsel, Commerce, Manufacturing, and 
Trade; Shannon Weinberg, Counsel, Commerce, Manufacturing, and 
Trade; Michelle Ash, Democratic Chief Counsel, Commerce, 
Manufacturing, and Trade; Felipe Mendoza, Democratic Senior 
Counsel; and Will Wallace, Democratic Policy Analyst.

 OPENING STATEMENT OF HON. MARY BONO MACK, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mrs. Bono Mack. The subcommittee will please come to order. 
Good morning, all.
    Last year when I became chairman of this subcommittee, I 
encouraged my colleagues to join me in an effort to make made 
in America matter again. Since then, we have had hearings, 
forums and some really great discussions on ways to keep 
American jobs and create new American jobs. Now it is time to 
roll up our sleeves and to do our job and pass legislation 
which will help our economy to grow and prosper in the years 
ahead.
    The Chair now recognizes herself for an opening statement.
    Throughout our Nation's long history, a growing and robust 
manufacturing sector has helped to make America great. It has 
been a driving force in our economy since the Industrial 
Revolution. But as our Nation has moved from the atomic age to 
the space age to the information age, manufacturing has not 
kept up, losing nearly 6 million American jobs since the 
beginning of the 21st century.
    Aging, rusting and abandoned factories litter the U.S. 
landscape. Statistics show the manufacturing sector was the 
hardest hit in terms of job losses during the Great Recession. 
While manufacturing accounts for just a tenth of our Nation's 
jobs, manufacturing suffered a third of our Nation's job 
losses. We have a chance now to reverse this trend, and I 
applaud the hard work of Mr. Lipinski and Mr. Kinzinger in 
developing a bipartisan plan for improving manufacturing in the 
United States.
    The American Manufacturing Competitiveness Act of 2012, 
H.R. 5865, calls for two presidential reports to Congress 
outlining a strategy for promoting growth, sustainability and 
competitiveness in the manufacturing sector. The reports are 
due in April 2014 and in 2018.
    The act establishes the American Manufacturing 
Competitiveness Board, consisting of 15 members, five from the 
public sector, including two Governors, and 10 from the private 
sector. The five public appointments are made by the President 
while the 10 private sector members are appointed by the House 
and Senate. The Board would be co-chaired by the Secretary of 
Commerce and one of the private sector members.
    The duties of the Board are, one, to advise the President 
and Congress on manufacturing issues; two, conduct a rigorous 
analysis of the manufacturing sector; and, three, develop a 
national competitiveness strategy which would be made available 
for public comment and submitted to the President. The Board 
will then develop and publish for public comment a draft 
manufacturing strategy based on its analysis and any other 
information the Board determines is appropriate. This strategy 
will include short-term and long-term goals for improving the 
competitiveness of U.S. manufacturing as well as 
recommendations for action.
    The second bill before us today, H.R. 5859, repeals an 
obsolete provision in the United States Code requiring motor 
vehicle insurance cost reporting. I also want to commend Mr. 
Harper and Mr. Owens for their bipartisan work on this 
legislation.
    Here is the problem: In 1993, NHTSA issued a final rule 
requiring new car dealers to make available to buyers a booklet 
containing the latest information on insurance costs. The 
information is updated by NHTSA annually based on date from the 
Highway Loss Data Institute. The information required by this 
regulation is rarely sought by consumers and its value is 
highly questionable. Insurance premiums are based primarily on 
factors that are unrelated to the susceptibility of damage to a 
particular vehicle, including the driver's age, driving record, 
location and miles driven. Additionally, a recent survey of 815 
members of the National Automobile Dealers Association reported 
96 percent of its dealers have never been asked by a customer 
to see the insurance cost booklet that is at issue.
    Clearly this is yet another example of where the cost of a 
Federal regulation outweighs its potential benefits. As a 
nation competing in a tough global economy, we simply can't 
keep doing business this way.
    America is at an important crossroads right now. One 
direction, lined by job-killing regulatory hurdles, a punitive 
Tax Code and indecisive political leadership, will lead 
ultimately to a further erosion of our manufacturing base and 
lost prosperity for future generations of Americans. The other 
direction, where smart policies and smart minds eventually 
intersect, could lead instead to resurgence in U.S. 
manufacturing, putting millions of Americans back to work again 
and breathing new life into the beleaguered middle class.
    Both of the bills being discussed today are a step in the 
right direction, and as chairman of the subcommittee I plan to 
bring them up for favorable consideration in the very near 
future.
    Now I am happy to recognize the gentleman from North 
Carolina, Mr. Butterfield, for 5 minutes.
    [The prepared statement of Mrs. Bono Mack and the proposed 
legislation follow:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE STATE OF NORTH CAROLINA

    Mr. Butterfield. Let me thank you, Chairman Bono Mack. To 
the witnesses today, thank you very much for your testimony.
    Our first bill today, H.R. 5865, the American Manufacturing 
Competitiveness Act, would require the President with the 
assistance of an appointed board to conduct a thorough analysis 
and then publish a national strategy on how to best promote the 
U.S. manufacturing sector in both 2014 and 2018.
    As we all know, changes in the global economy led to many 
job losses in U.S. manufacturing over the past 3 decades. I 
think we can all agree that we want a stronger manufacturing 
sector. Manufacturing jobs are high-quality, good-paying jobs. 
I am heartened that the U.S. manufacturing sector has recovered 
as strongly as it has from the recession with what is now 33 
consecutive months of expansion. But to be truly strong in the 
area of manufacturing, we must plan for competitiveness in the 
long term. To his great credit, President Obama understands 
this.
    The administration's manufacturing initiatives fully 
recognize that the future for U.S. manufacturing will only be 
successful if the American people are successful. Every child 
must have the chance to learn math and science and have a 
familiarity with technology, and adults must have the chance to 
get the education or training that will qualify them for the 
job that they want.
    The administration has published a plan endorsed by a wide 
variety of private sector leaders promoting advance to high-
tech manufacturing. It is Make It In America, manufacturing, 
extension, partnership. It aims to create public-private 
partnerships to encourage the development of new products that 
can be manufactured here in our country. And it has an ongoing 
campaign of reshoring, also referred to as in-sourcing, where 
it works with States to encourage companies that outsource jobs 
abroad to bring them back to the United States. These are just 
a few of the many manufacturing initiatives underway in the 
Obama administration.
    Today we are discussing a proposal to add to the Federal 
work underway on manufacturing. A National Manufacturing 
Strategy as proposed by the bill before us is already a staple 
in several other industrialized countries around the world. If 
we go in the same direction, it will be worth our while to 
ensure that this additional effort compliments steps already 
being taken. I look forward to working with Mr. Lipinski and 
all of my colleagues to make sure that that is the case.
    Our second bill today would repeal a little known provision 
that requires NHTSA to annually provide auto dealers with a 
booklet comparing the insurance costs associated with different 
cars consumers might purchase. As any car owner can tell you, a 
car that gets damaged more easily is one that is likely to 
carry higher auto insurance rates for its driver. But when 
shopping for a car it is not so easy to tell how brittle a car 
is just by looking at it.
    As it is said, information is power and this provision in 
the 1972 law, the Motor Vehicle Information and Cost Savings 
Act, sought to give consumers that power. However, very few 
consumers know that this insurance cost information is 
available to them at the dealership and some question whether 
the format in which NHTSA publishes the information is actually 
useful. Therefore, these booklets are rarely used. These are 
problems that I would be more than happy to work with all of my 
colleagues to fix them.
    We all agree that regulations that are burdensome or do not 
serve their intended purpose should be revisited. This bill 
gives us that opportunity to do so, revisit a regulation that 
may not be meeting its intended purpose. I hope as we do this 
review, we do not just assume that we must throw away the idea 
that it is reasonable for consumers to know what type of 
insurance costs they will face if they buy a particular car.
    Madam Chairman, I look forward to discussing these bills. I 
would like to once again thank our witnesses as well as you for 
convening this hearing today. Thank you. I yield back.
    Mrs. Bono Mack. Thank you, Mr. Butterfield.
    The chair now recognizes the gentleman from Illinois, Mr. 
Kinzinger, for 3 minutes.

 OPENING STATEMENT OF HON. ADAM KINZINGER, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Kinzinger. Thank you, Madam Chair, for the time and for 
your diligent work on bringing the American Manufacturing 
Competitiveness Act before the committee. I would also like to 
recognize the hard work of Gib Mullan, Brian McCullough, Paige 
Anderson and Shannon Weinberg Taylor.
    You know, some things in Congress aren't partisan, believe 
it or not, and don't need to be, and this is one of those. It 
is an honor to work with my colleague and friend Congressman 
Lipinski and the other members of the subcommittee on the 
American Manufacturing Competitiveness Act. I think 
specifically of Mr. Guthrie and Mr. Pompeo.
    Over the past several months in this committee we have 
heard about the importance of creating an environment that will 
allow American manufacturers to thrive in a global economy. We 
are on the brink of a new manufacturing renaissance in this 
country. The only barriers that may impede this renaissance 
will be government created.
    I am worried about the disappearing middle class, the 
decline of the middle class, and I think one of the biggest 
drivers to the decline in the middle class has been the 
disappearance of manufacturing from the United States of 
America.
    In this Congress we have rightly talked a lot about jobs 
and the role government can play in creating or destroying 
jobs. There is no sector in our economy that is providing more 
highly paid and economically advantageous jobs than 
manufacturing. This has been true since the dawn of 
manufacturing at the turn of the 20th century.
    During an address to Congress in 1912, President Taft said 
that manufacturing concerns are running at their full capacity 
and the demand for labor was never so constant and growing. 
Following World War II, the United States became the world's 
strongest economy, and it is no coincidence that we were also 
the leading producer of manufactured goods in the world.
    The decline of manufacturing from the 1990s until today is 
due in no small part to increased global competition. We must 
encourage an environment that will allow business to compete 
globally. While we may not be able to predict where the next 
growth sector for manufacturing will be, we should not try to 
implement a top-down government policy that would benefit 
manufacturing. We should instead insist upon a long-term 
strategy constructed by private sector and government leaders 
to focus our attention on the challenges inhibiting our global 
competitiveness. This is an easy but necessary step to joining 
together private interests and public in the process of 
recommending how the government can make American manufacturing 
more efficient, more friendly and more competitive, and we can 
increase the size of the American middle class by getting 
people back to work and bringing our overall rate of 
unemployment down with good high-paying jobs.
    I am excited to discuss this bipartisan legislation today 
and am hopeful that we can work quickly to bring this 
legislation to a markup with broad bipartisan support. Again I 
would like to thank my friend Congressman Lipinski, and I yield 
back my remaining time.
    Mrs. Bono Mack. I thank the gentleman. The chair now 
recognizes Mr. Harper for 2 minutes.

  OPENING STATEMENT OF HON. GREGG HARPER, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF MISSISSIPPI

    Mr. Harper. Thank you, Madam Chair, and I am proud to be 
the lead sponsor with my good friend Bill Owen of New York as 
the lead Democrat of H.R. 5859, a concise one-page bill that 
will repeal an obsolete mandate that costs the taxpayers 
hundreds of thousands of dollars.
    I welcome the witnesses today. I am glad to have many years 
of automotive retailing experience with Mr. Fitzgerald and 
Congressman Mike Kelly from Pennsylvania on the panels. I am 
also proud to have Mike as a cosponsor of H.R. 5859. He is no 
doubt the voice for car dealers on Capitol Hill, and I 
appreciate his support on this.
    Since 1991, the Department of Transportation has been 
annually distributing by mail a document entitled Relative 
Collision Insurance Cost Information. This information is sent 
by mail to new vehicle dealers who are required to make the 
information available to perspective new vehicle customers upon 
request.
    NHTSA has spent hundreds of thousands of dollars 
distributing this booklet over the past 21 years. While this 
information is of value to insurance actuaries, it has been of 
little to no use to consumers for whom it is primarily 
intended. A recent survey by the National Automobile Dealers 
Association confirmed what we expected. Out of 800 new car 
dealers polled, an overwhelming 96 percent of the dealers 
answered that not a single customer has ever asked to see the 
booklet. I would like to note here that the information will 
still be available and NHTSA can still provide this information 
to consumers on their Web site.
    This simple and bipartisan bill, if passed, would show that 
Congress is serious about efforts to alleviate burdensome and 
unneeded regulations on businesses across this country. The 
President states that it is a priority of his administration to 
identify and eliminate costly, outdated and unneeded 
regulations, and I say Congress should lead now with H.R. 5859.
    I would like to thank the chairwoman for presiding over 
this important hearing. Madam Chair, I would ask for unanimous 
consent to include a letter from the Alliance of Automobile 
Manufacturers in support of H.R. 5859 in the record.
    Mrs. Bono Mack. Without objection.
    [The letter follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Harper. Thank you, Madam Chair. With that, I yield 
back.
    Mrs. Bono Mack. I thank the gentleman. The chair now 
recognizes Ms. Schakowsky for 5 minutes for her opening 
statement.

       OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 
     REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

    Ms. Schakowsky. Thank you, Madam Chairman.
    I am glad that this subcommittee is holding a hearing to 
discuss H.R. 5865, the American Manufacturing and 
Competitiveness Act. President Obama has overseen the most 
dramatic increase in employment in the manufacturing sector 
since the 1990s, and we must work to build upon that progress. 
And I want to congratulate my colleague from Illinois, Mr. 
Lipinski, for drafting and pushing and sponsoring this 
legislation as a means of strengthening Congress' commitment to 
American manufacturing.
    A strong manufacturing base is the foundation of our 
middle-class. Good middle-class jobs ensure that workers earn a 
living wage, that families have clothes on their back and food 
in their stomachs, and that their children grow up in 
communities with good schools and safe streets. A National 
Manufacturing Strategy will help ensure that the goods we buy 
are made in America and that the jobs our economy supports are 
American jobs.
    I don't share the same enthusiasm for H.R. 5859. That 
legislation would eliminate valuable consumer information at 
the point of sale because consumers don't request it. Well, 
consumers don't request the information because they really 
don't know that it exists. We should not be in the practice of 
eliminating valuable information because we do a bad job of 
publicizing it.
    I look forward to working with my colleagues to move 
forward with legislation to bolster our manufacturing base and 
to reconsidering our actions to remove information from auto 
dealerships.
    I yield back. Thank you.
    Mrs. Bono Mack. I thank the gentlelady.
    Now we turn our attention to the panel. We will have three 
panels of witnesses joining us today. Each of our witnesses has 
prepared an opening statement that will be placed into the 
record, and, as we all know, each will have 5 minutes to 
summarize that statement and their remarks.
    On our first panel we have two of our colleagues, and we 
welcome you both, the Honorable Daniel Lipinski of Illinois and 
the Honorable Mike Kelly of Pennsylvania. They both represent 
States with histories deeply rooted in manufacturing.
    We are going to go a little bit out of order and recognize 
Mr. Lipinski first just because we are considering the bills in 
that order. So with that, Mr. Lipinski, you are recognized for 
5 minutes for your opening statement.

STATEMENT OF HON. DANIEL LIPINSKI, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF ILLINOIS

    Mr. Lipinski. Thank you, Chairwoman Bono Mack. I want to 
thank you, Ranking Member Butterfield and members of the 
subcommittee for holding this hearing today and for inviting me 
to testify.
    The American Manufacturing Competitiveness Act, H.R. 5865, 
will bring the public and private sectors together to forge an 
actionable, bipartisan plan to revitalize America's 
manufacturing sector. I would like to thank my friend and 
colleague, Mr. Kinzinger, for working with me on this bill and 
cosponsoring this bill, and also thank Mr. Pompeo and 
Chairwoman Bono Mack for their work on this bill in moving it 
forward.
    Manufacturing is critical for our Nation. It is essential 
for national security so that we don't need to rely on other 
countries for our defense. Successful manufacturing provides 
huge numbers of jobs. Not to pick on Facebook right now while 
it is down, but Facebook employs about 3,000 people. Boeing 
employs 172,000 Americans. Wages and benefits paid in 
manufacturing are one-third higher than in other jobs. Plus 
manufacturing has greater secondary effects in the labor 
market, with each job supporting five others. As a source of 
two-thirds of private sector R&D, manufacturing drives high-
tech innovations. When we lose manufacturing due to 
outsourcing, we lose the ability to create the breakthrough 
technologies of tomorrow.
    American manufacturing still has great strength and 
potential. It boasts the highest productivity in the world; it 
employs 11 million people, and produces $1.7 trillion annually. 
Encouragingly, U.S. manufacturing employment has increased by 
about half a million in the last 2 years. But after the loss of 
one-third of all U.S. manufacturing jobs over the past decade, 
we have a long way to go. This bill will help create the 
domestic environment that is most conducive to America's 
private sector taking full advantage of our strength to grow 
American manufacturing.
    Last Congress a similar version of this bill passed the 
House with very strong bipartisan support, 379-38. In this 
Congress it has again attracted bipartisan support and backing 
from a variety of industry, labor and other groups. In 
addition, conversations with members of the subcommittee as 
well as committee staff have resulted in numerous beneficial 
changes to the bill.
    To briefly summarize, the legislation creates a 
Manufacturing Competitiveness Board with a strong private 
sector and bipartisan representation. The President will 
appoint the Secretary of Commerce, two State Governors of 
different parties and two other former or current executive 
branch officials. Ten private sector representatives will be 
appointed by House and Senate leaders, three by the majority 
and two by the minority in each Chamber.
    The Board will conduct a comprehensive analysis of the U.S. 
manufacturing sector, covering everything from trade issues to 
taxation to new markets and technologies. Based on this 
analysis, it will develop specific goals and specific 
recommendations for achieving those goals. Consolidation of 
government programs, regulatory reforms, improved education and 
training, better coordination between the public and private 
sectors, as well as actions taken by all levels of government, 
universities and stakeholders are to be contemplated under this 
legislation.
    To promote follow-up to this strategy, the President's 
budget will have to state how it is consistent with the goals 
and recommendations of the strategy.
    Finally, the first strategy is to be completed in 2014 and 
the second in 2018.
    I want to be especially clear on one point: This 
legislation is not about the government dictating anything to 
the private sector. It is about bringing the public and private 
sectors together to form a bipartisan consensus plan for action 
that produces an environment for American manufacturing to 
flourish. America lost 6.2 million manufacturing jobs between 
1998 and 2010. We must adopt smart policies that encourage 
innovation, entrepreneurialism, efficiency and investment in 
American manufacturing. Passing this bill would be a good 
start.
    When I am home, my constituents keep asking me, what is 
Washington doing to help spur job creation? This bill can be an 
important answer to that question. Seventy-eight percent of 
Americans favor a National Manufacturing Strategy, including 74 
percent of Republicans and 78 percent of independents. Now, 
many Americans don't think Congress listens and don't think we 
can work together to get anything accomplished. I hope we can 
get this commonsense, bipartisan bill passed and help America's 
manufacturers create the jobs that we need.
    I look forward to answering any questions that you may 
have.
    [The prepared statement of Mr. Lipinski follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Bono Mack. Thank you very much, Mr. Lipinski.
    Mr. Kelly, welcome. You are recognized for 5 minutes.

STATEMENT OF HON. MIKE KELLY, A REPRESENTATIVE IN CONGRESS FROM 
                THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Kelly. Thank you, Madam Chairman Bono Mack and Ranking 
Member Butterfield.
    I really appreciate having the opportunity to testify. I 
think it is so rare in Washington that people that actually do 
what you are trying to regulate get a chance to come to the 
table and talk about it a little bit. I have grown up in it and 
it is part of my DNA. We started our business in 1953 and 
employ about 110 people.
    My view on H.R. 5859 is maybe a little bit different than 
some other folks in government, because dealers are actually 
the ones that have to provide this material and they are under 
penalty of law to provide it and there are great consequences 
financially if you don't.
    Now, when I talk about my experience, I am talking about an 
automobile dealership where I actually sit on the floor, I talk 
to people all the time. We get somewhere between 800 and 900 
people a month that come into our dealership, so about 10,000 
people a year come into the dealership to talk about buying a 
new car. Now, I have got to tell you, in my years, starting 
back in 1967, I never talked to one person that came through 
those doors that said to me, hey, by the way, Kelly, I need to 
look at that information on, let me see, what is it, the 
relative collision insurance cost information. It doesn't 
happen. It just doesn't happen.
    I made a call to the dealership when I was going to testify 
and I asked our guys in the Thursday morning sales meeting, I 
said, do me a favor. Ask our sales force if they have had this 
experience.
    Now, we have over 250 years of sales experience. Not one 
person in that room has ever talked to a prospective owner 
about this booklet; never been asked about it, never been 
questioned about it. Now, people do want to know what it is 
going to cost to insure their car. And I will tell you what, I 
have got to tell you, the answer is with the insurance agents. 
This is an irrelevant piece of information.
    I don't know if you have this, I would like to submit it to 
the record, the actual booklet that we have to provide, and I 
will leave it for you. But it is kind of interesting, the 
booklet itself. This is what it says. This table presents 
vehicles' collision loss experience in relative terms, with 100 
representing the average for all passenger vehicles. Thus a 
rating of 122 reflects a collision loss experience that is 22 
percent higher, which means a worse cost than average, while a 
rating of 96 reflects a collision loss experience that is 4 
percent lower or better than average. Now, it is unlikely that 
your total premium will vary more than 10 percent depending on 
the collision loss experience of a particular vehicle. And it 
goes on to say to obtain completely information about insurance 
premiums, what you need to do is contact your insurance 
company.
    Now, we were wondering about this, so the staff called 
NHTSA's hotline last night. And I would like you all to mark 
this number down. It is 888-327-4236. Now, the representative 
that answered the phone has absolutely no idea about this 
booklet and told our staff to call your insurance agent. Now, I 
got to tell you, there is not a lot of things that the current 
administration and I agree on, but the Obama administration 
seems to agree that this provision is without merit, and in 
their explanatory document accompanying their draft highway 
bill that was presented to the House Energy and Commerce 
Committee as technical assistance, it states that the data in 
the booklet is rarely used and not useful. The administration's 
document also stated that a prospective buyer does not need a 
brochure from the Federal Government to obtain this information 
since insurance agents are trained to provide advice on how 
model selection affects insurance premiums, and I completely 
agree with the administration.
    Now, the other side of the coin is if the dealers don't 
provide this, if somebody comes in and we don't have it 
available for them, the fine is $1,000 per occurrence with a 
cumulative penalty of $400,000. Now, I know those numbers don't 
mean anything in a town like this where we throw around money 
like it really doesn't matter, and, of course, it doesn't, 
because it is not our money, it is taxpayer money. But this is 
a tremendous disservice to taxpayers and it is an unnecessary 
burden on businesses. And it just is amazing to me that we 
actually have gotten to a point where we are having a hearing 
to rescind or to repeal a law that is so onerous and places a 
burden on job creators that they just don't need.
    Now, there are some people that say, well, you know what? 
The problem isn't that the material is useless. The problem is 
that we haven't told enough people about it. Well, we have 
cranked out more useless pieces of paper in this town than 
anybody could imagine.
    I appreciate what you are doing, Mr. Harper and Mr. Owen. 
This does release a burden on dealers to provide a piece of 
information that nobody has ever asked for, nobody needs, 
nobody is going to find useful. It does fall on the part of the 
consumer. They call their insurance agent to find out what it 
is going to cost to insure a car. They would hardly look at 
this piece of material and come up with any idea.
    In fact, I am going to leave it. I want you all to look 
through this. Look through this, and you please tell me after 
you look through it what in the world you would gain from this, 
what information you would gain as a buyer that would help you 
make a decision on what your ultimate cost of a vehicle is 
going to be and ownership is going to be.
    So, again, I thank you for the opportunity to come before 
you. I also have been only been here for a year and after. I 
spent all my life on the floor of a dealership so I do know a 
little bit of what I am talking about, and I think that it is 
time to start listening to the people that actually have to 
abide by these rules to find out what possible use this has for 
the American taxpayer or the American consumer.
    Thank you very much, and I appreciate the opportunity to 
testify.
    [The prepared statement of Mr. Kelly follows:]

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    Mrs. Bono Mack. Thank you very much, Mr. Kelly.
    I do not have any questions of the panelists, but I will 
recognize any of our colleagues that do.
    Mr. Butterfield. I think I may have one or two for Mr. 
Lipinski.
    Mrs. Bono Mack. I will recognize Mr. Butterfield for 5 
minutes.
    Mr. Butterfield. Again, Mr. Lipinski, thank you very much 
again for your testimony today and all the hard work you do 
here in the Congress. This isn't the first time that the Energy 
and Commerce Committee has taken up your legislation calling on 
the President to prepare a National Manufacturing Strategy. In 
fact, in 2010 we reported a different version of this bill out 
of the full committee by a voice vote and passed it on the 
House floor under suspension of the rules. Obviously, efforts 
to promote and revitalize American manufacturing are something 
everyone here can get behind. We were able to work together to 
get a bill through the House before and I am sure we can work 
together to do it again.
    So I share Mr. Lipinski's view that we must on an ongoing 
basis do a better job with strategic thinking and planning to 
maintain the competitiveness of the U.S. manufacturing sector. 
This sector is vital to job creation, innovation and even to 
our national security.
    Nonetheless, I want to acknowledge the Obama 
administration's increasing emphasis on the manufacturing 
sector. The first time we passed Mr. Lipinski's bill we weren't 
aware of the many manufacturing initiatives that were bubbling 
up through the administration, and since that time we have seen 
Congress put even more emphasis on strategic planning and 
policy making related to manufacturing.
    Let me just share a few examples of what I am talking 
about. At the end of 2009, the Obama administration issued a 
framework describing the state of manufacturing and setting out 
the administration's current policies and initiatives. That was 
year one of the Obama administration.
    In mid-2011, President Obama's science, technology and 
innovation advisers followed up with another report that 
prompted him to establish the Advanced Manufacturing 
Partnership to promote high-tech manufacturing. This past 
December, the President created the new White House Office of 
Manufacturing Policy within the National Economic Council to 
coordinate manufacturing efforts across departments.
    Congress in fiscal year 2012, in the 2012 Consolidated 
Appropriations Act, calls for the Secretary of Commerce to 
establish a task force on job repatriation and manufacturing 
growth. The accompanying House Report requires the Secretary of 
Commerce to update a 2004 report on manufacturing. It also 
requires the Secretary to establish an Economic Security 
Commission to advise the administration and Congress on long-
term strategic competitive manufacturing challenges. So we must 
all focus on bolstering American manufacturing and that we 
don't squander scarce government resources on efforts that are 
redundant.
    Mr. Lipinski, would you agree with me, sir, that any new 
efforts by Congress to promote and grow the manufacturing 
sector should not duplicate existing efforts?
    Mr. Lipinski. I certainly agree that we should not be 
duplicating any existing efforts, and I applaud the 
administration and also Congress in the past couple of years, 
especially Chairman Frank Wolf of the CJS Appropriations 
Subcommittee has requested some reports, and I think we have 
definitely made progress in focusing on manufacturing since I 
first introduced the version of the bill in the last Congress.
    One of the purposes of this bill is to try to cut down on 
redundancy. We have a lot of redundancy already in the Federal 
Government, and my intention certainly in this bill, and I 
think we can work to make sure that we utilize what is being 
done already and sort of fold that into what will be done with 
the National Manufacturing Strategy.
    Mr. Butterfield. Thank you. Will you agree that any new 
efforts by Congress to promote and grow the manufacturing 
sector should try, to the extent possible, to bring together 
all of the different moving parts that have been put in place 
by Congress and the White House? Would that be valuable?
    Mr. Lipinski. That is one of the big purposes here, is to 
put together all these moving parts that have already been put 
in place or in motion.
    Mr. Butterfield. All right. We are going to try to work 
together to make it happen. Thank you. I yield back.
    Mr. Lipinski. Thank you.
    Mrs. Bono Mack. I thank the gentleman.
    The chair now recognizes Mr. Harper for 5 minutes.
    Mr. Harper. Thank you, Madam Chair.
    Mr. Kelly, if I could ask you a question, and you may have 
had the opportunity to review the statement of Joan Claybrook, 
who will testify I believe on the third panel today, and I want 
to just read one portion of what she said and get your response 
to this in one of the paragraphs in her opening statement. Here 
is what is in her letter. It says, ``I can understand why car 
dealers want to keep consumers in the dark about insurance 
collision cost information. Dealers want to sell the cars they 
have on their lot. If consumers have access to information 
about a vehicle that might show expensive repair costs and that 
discourages a sale, the dealer might lose a customer and the 
sale.''
    How do you respond to that type of an insult?
    Mr. Kelly. Well, I think that most of those insults come 
from people who have never been in our business and don't 
understand the relationship between the business owner and the 
people that keep them alive, and that is our customers or our 
buyers. So anybody that I have ever been in contact with in my 
business is probably one of the most stable people in that 
community. And I tell people all the time, if you really wonder 
about the integrity and the value of your car dealer, if your 
son played little league baseball, look at whose name is on the 
outfield fence. If your daughter marched in the marching band, 
look who is in the program.
    So, I mean, it is absolutely--that is foolhardy and 
irresponsible to make that statement. There is absolutely no 
reason why anybody would want to keep anybody from knowing 
about the vehicle that they want to purchase, and we do provide 
all kind of information. But the information we try to provide 
is usually relevant. And only again from people who live in 
some other galaxy do you get these kinds of comments. When you 
are actually on the ground, you are face-to-face with people 
every day and your ability to make sure that the checks that 
you issue every 2 weeks are cashable, that relationship that we 
have with the customer is absolutely critical.
    So I want everybody to be completely comfortable with what 
they buy, and so do all my dealer friends.
    Mr. Harper. And when you referred to the table, the stuff 
that is here for the collision insurance loss numbers that they 
keep, a consumer is not going to look at that and gain any 
information. They are going to call their insurance agent, just 
as you said, to get the true cost of what that potential 
vehicle would cost.
    Mr. Kelly. Well, the variables are great, the gender, the 
age, where you drive the car, business or pleasure, where you 
live. There are so many different variables in it, so there is 
no one size fits all.
    Mr. Harper. And there is no way to create a government 
document chart that is going to tell the insurance company what 
they are going to be charging for that premium.
    Mr. Kelly. Yes, and I think history would probably show 
that there hasn't been very many government documents that 
really come to a realistic value of what a vehicle is and the 
purchasability of it.
    Mr. Harper. Thank you, Mr. Kelly. I appreciate it. I yield 
back.
    Mrs. Bono Mack. Thank you. The chair now recognizes Dr. 
Cassidy for 5 minutes.
    Mr. Cassidy. To my colleague Mr. Lipinski, I like the 
general kind--knowing that you thought about this, I ask these 
questions not to challenge, but just to pick your brain. It 
really seems like our manufacturing right now has been driven 
by natural gas, the hydraulic fracturing, that sort of lowered 
energy cost, decreasing input cost, encouraging companies to 
bring their resources back to the United States, and that has 
actually happened quite independently of a manufacturing 
policy. In fact, you could even argue that it has happened 
despite the administration's efforts to inhibit that.
    So I guess my question is, and, again I am not challenging, 
I am just exploring with you, my question here is if we had had 
a manufacturing policy 4 years ago, it seems like it would have 
emphasized renewable energy sources. Solyndra, for example, was 
an example of such a policy, not to knock it, but just to give 
an example of where the administration's emphasis was, as 
opposed to what happened just by market forces and by private 
enterprise, where hydraulic fracturing took place and now Dow 
is expanding, ExxonMobil is about to build a huge new plant, et 
cetera.
    So your bill, I guess I am struggling to see if we see that 
what is happening that is good in manufacturing is a result of 
kind of the private sector unimpeded, or despite an impediment, 
how would your bill add to that?
    Mr. Lipinski. Well, certainly it makes a difference to have 
the much cheaper natural gas here, and that certainly helps 
manufacturing. I wouldn't say that that has been everything 
that has helped spur the creation of half a million 
manufacturing jobs. But what we are looking at here is across-
the-board what can be done. And I think that the idea of having 
this board with buy-in from not only whoever the administration 
is in 2014, but also from both Houses of Congress, both 
parties, to look broadly across what can be done, energy policy 
perhaps will be part of that. I would expect it to be part of 
that. But there is a lot more to any sort of manufacturing 
strategy.
    So I think that if we looked broadly at everything that can 
be done, I think we could be even further along in promoting 
manufacturing, having more manufacturing jobs. But that is not 
to say that energy policy isn't part of that. It is part of it, 
but it is only one piece of it.
    Mr. Cassidy. Then the next thing, again, not to challenge, 
just to explore, if you look McKinsey Quarterly will have white 
papers on what we need to improve manufacturing, the Chamber of 
Commerce will, I am sure labor unions do, institutes for tax 
policy. It almost seems like we know the answer is out there. 
Our tax rates are uncompetitive, we have, a high debt to GDP, 
et cetera. How would this add to that which is available in the 
private sector?
    Mr. Lipinski. Well, I think we have seen a lack of having a 
well-coordinated policy. And a lot of these studies, and there 
is probably a lot of truth in them, but we need to bring all of 
that together and to have action. I mean, that is really the 
key here. I think there is much more that can be done to create 
the environment for the private sector to have the best 
opportunity, the best incentive to create more manufacturing 
jobs. I don't think that we have done that. There have been a 
lot of studies, but I don't think that--many of them have not 
been followed up on, I believe, and this is one way to try to 
make sure that we put out a plan and encourage follow-up by 
Congress and by the President.
    Mr. Cassidy. Thank you. I yield back.
    Mrs. Bono Mack. I thank Dr. Cassidy. And with that, we 
thank both of our panelists for your testimony today and for 
doing all you can to help manufacturing in America and to 
create new jobs.
    We will have a brief recess as we seat our second panel. I 
do ask unanimous consent from the subcommittee to allow our 
colleagues to sit on the dais as joyful witnesses, but not 
participants. With unanimous consent, you are welcome to join 
the dais.
    So a brief, brief, brief recess as we put the second panel 
in place, please.
    [Recess.]
    Mrs. Bono Mack. On our second panel we have Zachary Mottl, 
Director of Development at Atlas Tool & Die Works. Next we 
have, not in this order, next we have Mark Gordon, Executive 
Committee member, Manufacturing Division, National Defense 
Industry Association. Also testifying is Phillip Singerman, 
Ph.D., Associate Director for Innovation and Industry Services 
at the National Institute of Standards and Technology for the 
U.S. Department of Commerce. Our fourth witness is Deborah 
Wince-Smith, President and CEO for the Council on 
Competitiveness.
    Good morning, everyone. You will be recognized for 5 
minutes for your opening statements. To keep track of time, 
please look at the lights on the timer in front of you. When it 
turns yellow you have one minute left. So if you will please 
make sure to turn the microphone on and bring it close to your 
mouth so we can all hear you clearly. With that, we will go 
ahead and recognize you in the order you are seated and begin 
with you, Dr. Singerman, for 5 minutes.

    STATEMENTS OF PHILLIP SINGERMAN, ASSOCIATE DIRECTOR FOR 
    INNOVATION AND INDUSTRY SERVICES, NATIONAL INSTITUTE OF 
 STANDARDS AND TECHNOLOGY, DEPARTMENT OF COMMERCE; ZACH MOTTL, 
   DIRECTOR OF DEVELOPMENT, ATLAS TOOL & DIE WORKS; MARK A. 
  GORDON, EXECUTIVE COMMITTEE MEMBER, MANUFACTURING DIVISION, 
 NATIONAL DEFENSE INDUSTRIAL ASSOCIATION; AND DEBORAH L. WINCE-
   SMITH, PRESIDENT AND CHIEF EXECUTIVE OFFICER, COUNCIL ON 
                        COMPETITIVENESS

                 STATEMENT OF PHILLIP SINGERMAN

    Mr. Singerman. Thank you, Chairwoman Bono Mack, Ranking 
Member Butterfield, and members of the subcommittee. I am 
honored to be here today to share the administration's strategy 
to promote growth, sustainability and competitiveness in the 
manufacturing sector.
    We all know manufacturing matters. As President Obama has 
said, ``An economy built to last demands that we keep doing 
everything we can to keep strengthening American 
manufacturing.''
    Over the past 2 years, U.S. manufacturers have created 
nearly half a million jobs, the longest period of sustained 
manufacturing job growth since the 1990s. In addition, 
manufacturing is helping us to advance our national priorities. 
For example, manufacturing is a key driver of U.S. exports. In 
2011, the United States exported nearly $1.3 trillion in 
manufactured goods, an all-time record, which supports 
Secretary Bryson's goal of building it here, selling it 
everywhere.
    Last summer's report on advanced manufacturing by the 
President's Council of Advisers on Science and Technology, 
PCAST, reminded us why manufacturing remains essential. 
Manufacturing that is based on new technologies can provide 
high quality, good paying jobs for American workers. 
Manufacturing is crucial to our balance of trade, representing 
60 percent of U.S. exports, and manufacturing drives 
technological innovation, accounting for 70 percent of private 
sector research and development.
    The report also made clear that the government should play 
an important role through the development of an innovation 
policy. While the United States should avoid industrial policy, 
we should be aggressively supporting an innovation policy that 
provides the best overall environment in which to do business 
and fosters the development of powerful new technologies.
    The report looked at a broad range of approaches to help 
sustain and grow the sector. In addition to research and 
development, the report looked at such areas as tax, trade, 
workforce, small business and education, and how each helped 
the manufacturing sector. Today I want to briefly highlight the 
importance of innovation on advanced manufacturing.
    In June of last year, the President called for the private 
sector to lead the formation of an Advanced Manufacturing 
Partnership whose purpose is to bring together industry, 
universities and the Federal Government to identify emerging 
technologies and supportive policies that will create high 
quality manufacturing jobs and enhance our global 
competitiveness.
    To complement this public-private partnership, the 
administration also strengthened the Interagency Organization 
for Advanced Manufacturing. The Advanced Manufacturing National 
Program Office was established at NIST to coordinate Federal 
agency efforts to accelerate the pace of innovation, promote 
technology transfer, and more rapidly integrate technology 
breakthroughs into the commercial market. This interagency 
effort currently involves not only the Department of Commerce, 
but the Departments of Energy, Defense, Education, the National 
Science Foundation and NASA.
    NIST also works in support of manufacturing through its 
Hollings Manufacturing Extension Partnership Program, MEP, and 
its Technology Partnership Office. MEP is a longstanding 
public-private partnership whose work leads small and mid-sized 
manufacturers to new sales, new product development and market 
expansion.
    In March, the President announced a new initiative, the 
National Network for Manufacturing Innovation, which is a 
proposed one time, $1 billion Federal investment to catalyze 
collaboration among industry, academia, to perform research and 
development that will accelerate innovation for advanced 
manufacturing, build a stronger innovation system, and link 
innovations more directly to domestic production capabilities. 
The Institutes for Manufacturing Innovation will help bridge 
the gap between basic research and product development, provide 
shared assets to help companies access cutting age 
capabilities, and create an environment to train students and 
workers in advanced manufacturing skills.
    The President also announced that the administration will 
take immediate steps to launch a pilot Institute for 
Manufacturing Innovation based on existing programs and funding 
within the Department of Defense, partnering withEnergy, 
Commerce, NASA and the National Science Foundation. The key to 
the success of these efforts is partnerships. The leverage from 
these partnerships enables the share resources and creative 
spark needed to drive innovation here and at home.
    Madam Chair, in closing let me say how much we appreciate 
the committee's work in support of a vibrant and dynamic 
manufacturing sector in the 21st century, and we look forward 
to working with you on legislation to further the 
administration's efforts to support U.S. manufacturing. Thank 
you again for the opportunity to testify.
    [The prepared statement of Mr. Singerman follows:]

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    Mrs. Bono Mack. Thank you very much, Dr. Singerman.
    Mr. Mottl, you are recognized for 5 minutes.

                    STATEMENT OF ZACH MOTTL

    Mr. Mottl. Good morning. Thank you very much, Chairman Bono 
Mack and Ranking Member Butterfield and members of the 
committee, for providing me the opportunity to speak before you 
today.
    Manufacturing is a subject very dear to my heart. I am the 
fourth generation of my family since 1918 to own and operate my 
business, Atlas Tool & Die Works. I work there as the Director 
of Development. I am also Vice President and co-owner of Abet 
Industries as well as Accushim, Inc. The businesses are located 
in Lyons and LaGrange, Illinois, which are Chicago suburbs in 
Representative Dan Lipinski's district. All three companies are 
my family's related businesses in precision manufacturing. Our 
companies make various parts and assemblies for the defense, 
aerospace, telecom, electronics, medical, industrial and heavy 
machinery industries. Together we employ around 80 people.
    I also serve as the chairman of the TMA Government 
Relations Committee and vice chair of the association. TMA 
represents nearly 1,000 small- and medium-sized manufacturers 
in the Midwest. We employ over 27,000 skilled workers.
    As an advocate of the critical importance of a healthy and 
growing manufacturing sector in any economy, I support passage 
of the American Manufacturing Competitiveness Act of 2012. One 
thing that strikes me about this bill is that it makes no 
assumptions of the best path forward to ensure America is the 
global manufacturing leader.
    That is important because there are so many diverse 
opinions of what the manufacturing sector needs. Some people 
feel unfettered free trade is a problem, others say it is tax 
policy and others say energy policy or training and workforce 
development, and still some people say the industry is strong 
and nothing is needed. With these varying opinions, all from 
purported experts, it is very difficult to develop a path 
forward. Instead, this bill creates a system that thoughtfully 
and methodically evaluates the issues surrounding the industry 
and it outlines a framework to develop a plan for success.
    As a business owner, I know that planning is critical. 
Plan, execute and review, that is the basic core of any good 
business model. Unfortunately, when an organization doesn't 
operate with the plan, what happens is a plan to fail. Right 
now the United States is operating with a plan to fail in the 
world economy when it comes to manufacturing, and that is 
unacceptable for a global superpower.
    We simply must be the world leader in manufacturing. And 
why is that so important? Manufacturing is a keystone stone 
industry in any economy. Most economists agree that for every 
sales dollar in manufacturing, there are two to three dollars 
of supporting activities required. This is the highest 
multiplier effect of any industry.
    In addition, manufacturing creates good jobs that value 
skills, jobs with healthy benefits and jobs where you can find 
a lifelong career. Manufacturing is critical to national 
defense as well as product innovation.
    Finally, manufacturing is one of the fastest growing 
sectors in the world economy. It requires capital investments 
in land and equipment, it requires many factors of production, 
and, in short, it is simply one of the fastest ways to jump-
start employment, investment and innovation.
    Many other countries realize these facts. They are 
constantly and actively working to court manufacturers to 
locate within their borders. We live in a world with many 
competitors and they look at our position with envy. They are 
working to surpass the United States in many areas, and if we 
ignore what they ever doing and neglect to make our own plans, 
I assure you those competitors will succeed.
    Countries like China, Russia, Brazil, Canada, the U.K., and 
many others have a clear and detailed national manufacturing 
strategy. They have decided what critical industries they want 
within their borders and are actively working to foster 
success. They are asking the questions, what can we help you do 
to be more competitive? How can we help you sell more products 
and create more jobs? Whether it is consideration of a VAT 
versus an income tax, adding or removing tariffs and import 
barriers, providing regulatory relief, requiring domestic 
production or even low cost loan and financing programs, these 
countries are working in a concentrated and organized effort 
towards success.
    Furthermore, many of these countries already have developed 
best practices when it comes to supporting their manufacturing 
sectors. The American Manufacturing Competitiveness Act will 
not only bring the U.S. into line with our competitors, but 
compel us to study and learn from them. And this type of 
benchmarking is a standard best practice management technique.
    Ultimately the success of any industry depends on many 
factors. However, our collective will to ensure and achieve 
success is probably the most important factor. The American 
Manufacturing Competitiveness Act and ultimately the National 
Manufacturing Competitiveness Strategy developed in Section D 
of that act are important first steps to the long-term health 
and success of our overall economy.
    I applaud Congressman Lipinski and Congressman Kinzinger 
for their leadership to develop and sponsor this bill, and I 
urge you all to pass this bill in committee and ultimately the 
full House.
    Thank you for your time and consideration, and I look 
forward to your questions.
    [The prepared statement of Mr. Mottl follows:]

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    Mrs. Bono Mack. Thank you, Mr. Mottl.
    Mr. Gordon, with that, you are recognized for 5 minutes.

                  STATEMENT OF MARK A. GORDON

    Mr. Gordon. Madam Chairman Bono Mack, Ranking Member 
Butterfield, members of the subcommittee, thank you for the 
invitation to speak today.
    My name is Mark Gordon, Director of Defense Programs at the 
National Center of Advanced Technologies and a member of the 
Manufacturing Division at the National Defense Industrial 
Association. On behalf of the 1,700 corporate members and 
almost 100,000 individual members, I am pleased to appear 
before the subcommittee today to discuss the need for a 
competitiveness strategy to successfully develop a national 
ecosystem supporting American manufacturing.
    There should be no doubt as to the importance of the 
manufacturing sector to the economic and national security of 
the U.S. You have already heard an impressive number of 
statistics from multiple speakers. Most importantly, 
manufacturing means stable, high paying jobs for millions of 
U.S. taxpayers, and these jobs depend directly on the current 
and future competitiveness of the U.S. manufacturing sector in 
comparison to our trading partners, trading partners which 
possess national manufacturing strategies which aim to boost 
their competitiveness.
    While the U.S. is competitive in manufacturing today, our 
essential goal should be to increase our competitiveness to 
ensure future growth in an increasingly aggressive global 
environment.
    There are many recently published strategic plans, studies, 
reports and road maps on U.S. manufacturing, all of which focus 
recommendations on structural barriers, emerging technologies, 
infrastructure partnering or economic preservation models as 
vital components that lead to the revitalizing, reshoring or 
expanding of the U.S. manufacturing capability.
    My position is that developing a competitive manufacturing 
sector requires establishing and maintaining a national 
manufacturing ecosystem that simultaneously addresses 
structural limitations such as export control regulations, 
public and private R&D investments, such as advanced materials 
or processing and fabrication needs, and bridging the gap to 
successful scale-up and commercialization.
    Given the multitude of existing recommendations and 
strategies, what is required is a balanced approach that sets 
priorities among these mechanisms with the single goal of a 
competitive American manufacturing ecosystem, an ecosystem that 
proofs fertile enough to grow and maintain domestic 
manufacturing capacity.
    Turning to the specific issue of national security, Under 
Secretary of Defense Frank Kendall stated earlier this year 
that essentially the industrial base is part of our force 
structure and we have to treat it like it is, acknowledging the 
vital role of defense manufacturing and the requirement to 
actively manage its capabilities.
    The 2012 defense guidance clearly defines strategies built 
upon exploiting our technological advantage, such as advanced 
electronics, lightweight materials and reduced size, weight and 
power for a broad range of defense systems. The DOD recognizes 
that these technological advances are realized through 
manufacturing technologies, which is why the 2013 defense 
budget highlights advanced manufacturing as a top priority, 
along with cyber and autonomous systems.
    However, this strategy or this priority is set within a 
reduced budget environment with pressures on acquisition costs 
that will defer modernization and increase sustainment 
requirements. Acquisition and sustainment are both supported by 
the same industrial base which is threatened by these 
reductions.
    This defense industrial base, which is at the lower tiers, 
is predominantly small and medium size with commercial and 
defense companies. It possesses a variety of specialized 
manufacturing capabilities required to produce and sustain 
defense systems and must be managed to ensure readiness and 
avoid obsolescence. A defense industrial base that is 
technologically vibrant, highly capable and financially fit is 
in the national interest, and as such the Defense Department is 
a unique beneficiary of a highly competitive manufacturing base 
because of the reinforcing nature of an economic healthy 
manufacturing ecosystem on this shared industrial base.
    Our endorsement of this bill is based upon a stated 
objective, board membership and duties and a lengthy list of 
topics to be considered during the comprehensive analysis and 
strategy development. However, we note that the comprehensive 
analysis under section 4, paragraph C, would seem to require 
considerable effort and no staff budget or board support is 
currently specified. Obviously, resources will be required 
commensurate with the expected level of effort and will not be 
left to the private or public service board members.
    I am honored to have had this opportunity to provide you 
with the defense industry perspective on the importance of 
developing the needed ecosystem, and speaking on behalf of NDI 
membership, I thank you all for actively supporting U.S. 
manufacturing policies.
    [The prepared statement of Mr. Gordon follows:]

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    Mrs. Bono Mack. Thank you, Mr. Gordon.
    Ms. Wince-Smith, welcome back to our committee. It is a 
pleasure to have you here again, and we are recognizing you for 
5 minutes.

              STATEMENT OF DEBORAH L. WINCE-SMITH

    Ms. Wince-Smith. Thank you, Chairman Bono Mack, Ranking 
Member Butterfield, and members of the subcommittee, for 
inviting me to discuss Representative Lipinski's bill to 
promote the competitiveness of American manufacturing in the 
global economy.
    The Council on Competitiveness is a 25-year-old nonprofit, 
nonpartisan organization uniquely comprised of CEOs, labor 
leaders and university presidents all working together to 
ensure U.S. prosperity.
    Under the leadership of our chairman, Sam Allen, the 
chairman and CEO of Deere and Company, the Council is 
undertaking a multi-year U.S. manufacturing competitiveness 
initiative. Last December we released a National Manufacturing 
Strategy called MAKE: An American Manufacturing Movement. We 
addressed the key issues around talent, technology, investment 
and infrastructure to develop this action agenda. We are 
certain that the committee will find this comprehensive 
strategy useful in its efforts to support America's 
manufacturing future.
    We know manufacturing is a cornerstone of American 
independence, economic prosperity and national security. The 
image of manufacturing as dumb, dirty, dangerous and 
disappearing is obsolete. Today manufacturing is smart, safe, 
sustainable and surging. It is inextricably linked to America's 
innovation capacity and a driving force leading our 
technological transformation from high performance computing, 
modeling and simulation tools in an exascale economy, to 
materials by design, advanced robotics, sensors, smart 
automation, and the new additive manufacturing revolution well 
underway.
    And manufacturing is broader. It is more deeply integrated 
with services and has a higher multiplier effect on the economy 
than at any time in history. The manufacturing enterprise 
includes research, development, production, sales, 
distribution, logistics, customer service, marketing and 
support.
    In short, manufacturing is a full lifecycle system 
extending from the making of physical products to the delivery 
of premium services. Understanding the full life cycle of 
production from startup to scale-up is essential if we are 
going to enact policies that will ensure the United States' 
long-term success.
    Ms. Wince-Smith. OK. The council applauds continued 
increased public and political attention given to 
manufacturing. America's economic portfolio requires a healthy 
and growing manufacturing sector to tackle the grand 
macroeconomic problems facing our country, from job creation, 
sustaining our middle class, debt reduction, entitlement 
reform, to infrastructure investment for the future.
    We urge Congress and the President to develop and implement 
a national manufacturing strategy that unleashes America's 
manufacturing potential in a time of great transformation. And 
we are pleased that the American Manufacturing Competitiveness 
Act of 2012 is progressing through the House.
    Supporting America's manufacturing future does not mean an 
industrial policy of selecting favorite sectors or firms, 
subsidizing decaying industries, or adopting protectionist 
policies that inhibit fair global competition and trade. These 
tactics rarely prove effective. Instead, the government should 
focus on creating the right conditions for manufacturing to 
thrive. This is an imperative given the changing dynamic of 
global competition and the steady rise of state-supported 
capitalism coupled to predatory mercantilist trade policies, 
and targeted intellectual property theft, and pervasive cyber 
threats against our digital networks.
    In this global, knowledge-intensive economy, the 
competitiveness of U.S. manufacturing has never been more 
uncertain or more important, and so the policy prescriptions 
must be right. America's economy needs accelerated 
productivity, faster economic growth. Our security requires a 
deeper, more resilient industrial base. And our private sector 
is deployed and prepared to produce solutions to meet national 
and global challenges in energy security, health, environment, 
food security, and, as I mentioned, pervasive threats to cyber 
networks.
    Our global economic competitors are aggressively developing 
and implementing robust national manufacturing strategies. They 
are targeting high-value investment, they're targeting advanced 
production, and building skilled workforces.
    Today's hearing is one of many critical steps Congress can 
take to keep America competitive in global manufacturing. This 
bill lays the groundwork and process for creating a national 
manufacturing strategy, and for developing and expanding the 
essential nonpartisan, public-private partnerships. The council 
hopes this committee and the full committee will continue to 
work in a bipartisan fashion to move this bill forward through 
the legislative process.
    Americans have always been pioneers; we are risk takers, 
and we are makers. Our task is to create the enabling 
conditions for 21st century innovation and production in scale 
in America. We must establish a business environment, and 
nurture and grow the ecosystem that fosters breakthrough 
innovations, rapid commercialization and allows firms, both 
small and large, to succeed in the global economy. The council 
stands ready to work with you to set in place the policies 
needed to ignite a new era of competitive and sustainable 
manufacturing.
    Thank you for this opportunity to be before you, and I look 
forward to your questions.
    Mrs. Bono Mack. Thank you, Ms. Wince-Smith.
    [The prepared statement of Ms. Wince-Smith follows:]

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    Mrs. Bono Mack. The chair now recognizes herself for 5 
minutes for questions, and I will direct my first question to 
Mr. Mottl.
    As we all know that there was a jobs report released today, 
and unemployment rose to 8.2 percent as the sluggish economy 
added only 69,000 new jobs, which was the fewest number in a 
year. These are dismal reporting numbers.
    But can you speak to--you are a fourth-generation, family-
owned and -operated business. What do you see as the biggest 
threats to your ability to compete?
    Mr. Mottl. Well, related to the employment number, I can 
say I personally had a 10 percent employment growth last month, 
so we hired eight new people. But in terms of that issue, we 
have a very hard time finding skilled and trained workers right 
now. We are busy, and we have growing demand, and I am just 
having a very hard time hiring people who have the skills to 
work. Now, I think if we had this act in place, maybe some of 
those issues would have come out, and we would have some policy 
addressing that issue.
    The other problem that I see as a manufacturer, you know, 
having many, many years in business is that we talked about the 
defense base. About 30 to 40 percent of our business is 
defense. The other large portion of that is commercial. And any 
small business will tell you that they probably have two or 
three key customers, and without those customers they really 
couldn't operate.
    I have seen a lot of my larger key customers leave--largely 
leave the country probably due to predatory trade policies 
where they, you know, can assemble products a lot cheaper 
elsewhere. That is my personal opinion. But in terms of how 
does that affect defense base, well, as I lose my large key 
customers, I am more dependent on the defense work or the 
remaining work that is here. I am less competitive serving that 
because my capacity is not just shared over, you know, 
commercial work as well as defense work, it is now more defense 
related. So it makes me less competitive, and all of these 
issues together, I think, are things that would come out if you 
had a national strategy act to look at this and develop policy 
around that.
    Mrs. Bono Mack. Well, can you speak to specific changes in 
U.S. Policies that you would like to see implemented to help to 
improve the environment?
    Mr. Mottl. Yes. Specifically, there are some trade issues. 
I am a free market advocate myself, but I think as we integrate 
into a global economy where there is a lot more planning going 
on and--in other economies, and we are trading with people like 
that, we need to figure out how to address that and how to keep 
our sectors competitive with that.
    Specifically tax policy. We don't have the most competitive 
tax policy here in the U.S. for manufacturers who want to 
export. From my perspective, we trade with a lot of countries 
who have adopted a VAT tax in favor of a lower corporate or 
eliminated corporate income tax.
    If you look at that in another light, not in manufacturing, 
you might not like that policy, but if you look at that in 
terms of manufacturing, and exporting and creating jobs, 
companies that export get that VAT tax refunded to them, 
whereas U.S. companies have their income tax and all of their 
taxes built right into the cost of the product, so it makes it 
less competitive when you export it.
    So some of these policies, if you look at it in the light 
of manufacturing, look a lot different.
    Mrs. Bono Mack. Thank you.
    Ms. Wince-Smith, the legislation before us tries to avoid 
creating a new government bureaucracy by relying heavily on 
input from the private sector, which is intended to include the 
full range of nongovernmental organizations and nonprofits. It 
also tasks the Board with looking at ways to streamline 
government processes or cut back on unnecessary regulation.
    Can you agree with that approach? Do you want to speak to 
that a little bit?
    Ms. Wince-Smith. Yes, I think that is one of the very 
positive elements in the proposed legislation, because the bill 
recognizes the full panoply of private-sector leadership that 
is required to really develop and enact a national strategy 
that is a systems integration effort. So I think the types of 
expertise identified in the legislation are right on.
    In terms of not duplicating and ensuring a smooth-function 
bureaucracy, we are making a lot of progress in integrating 
manufacturing in the administration, and I certainly want to 
applaud the efforts of the administration to do that. However, 
we can do a better job on that, and I think that this national 
strategy will be one more step with congressional involvement 
to encourage that.
    The defense sector is a huge leader in what we are talking 
about, and yet defense, because of its imperative for national 
security, really, I think, is not fully utilized in the 
transformation. At the end of the day, this manufacturing need 
is a huge national security initiative.
    Mrs. Bono Mack. Thank you.
    I am going to yield back my last 20 seconds and recognize 
Mr. Butterfield for 5 minutes.
    Mr. Butterfield. Thank you.
    Dr. Singerman, thank you very much for your testimony. I 
understand that there are a number of initiatives underway as a 
result of President Obama's intense focus on manufacturing. 
This includes initiatives that are underway at the White House, 
and some through the Department of Commerce, and some in other 
places of the executive branch.
    As you might be aware, this isn't the first time that we 
have considered Mr. Lipinski's bill. In the last Congress on a 
bipartisan basis, we reported a different version of his bill 
out of this committee and passed it through the House, but it 
never made it through the other body.
    At that time we really weren't aware of all of the things 
that you guys are doing in the executive branch related to 
manufacturing, and now we know. And since that time we also 
have seen Congress push through its own ideas to put more 
emphasis on planning and policymaking related to manufacturing.
    I believe that--let me just skip to the question. Given 
what you know about current efforts to bolster manufacturing, 
can you please share with us your thoughts about how we can 
make H.R. 5865 an effective and useful addition to what the 
Commerce Department and administration already have underway.
    Mr. Singerman. Thank you, Mr. Butterfield, for that 
question. Let me say that I generally concur with the 
sentiments that have been expressed by the committee, and my 
colleagues on the panel, and Mr. Lipinski about his 
legislation, the importance of manufacturing to the Nation's 
innovation ecosystem and to our global competitiveness, and the 
importance of a national strategy--not a Federal strategy, but 
a national strategy--in support of advanced manufacturing to 
identify public and private investments and policies to support 
that.
    But we have been working with Representative Lipinski's 
staff, have had conversations with them about this legislation, 
and we are delighted to work with the committee as you consider 
this bill.
    I think a number of the members of the subcommittee raised 
questions about coordination, and the chairwoman raised a 
question about duplication and bureaucracy. These are issues 
that I think the committee will consider as it addresses this 
legislation moving forward.
    Mr. Butterfield. What are examples of times when the 
Commerce Department or, more specifically, the National 
Institute of Standards and Technology work closely with the 
private sector?
    Mr. Singerman. It is a very good question. We have a 
Visiting Committee on Advanced Technology, which is composed of 
leaders from the academic and industrial sectors. It is a 
Federal advisory committee, so it is a public body. It is a 
very high-level body, and it provides advice to the Under 
Secretary of Commerce for Standards, Patrick Gallagher, and his 
management of the organization.
    This Congress in the America COMPETES Act created--directs 
two studies, one by the Department of Commerce on innovation 
and competitiveness capacity. NIST was closely involved in 
supporting that, and that study was overseen by an external 
advisory board.
    We are also supporting, as I indicated in my testimony, the 
Advanced Manufacturing Partnership, which is a private-sector-
led industry and academic group of leading research 
universities and global companies to provide guidance to the 
administration on the development of policy.
    There are several other examples, but those are just a few 
that----
    Mr. Butterfield. So you clearly recognize the private 
sector as a stakeholder in this process?
    Mr. Singerman. Absolutely.
    Mr. Butterfield. And you do that enthusiastically?
    Mr. Singerman. Yes. I would also add the Manufacturing 
Extension Partnership's Advisory Committee, also a Federal 
advisory committee, which focuses on the needs of small and 
midsize manufacturing firms, again, populated by private-sector 
individuals from community colleges, industry, and professional 
societies.
    So this is really a theme of the administration reaching 
out to the private sector to provide guidance to our 
activities.
    Mr. Butterfield. Thank you. I yield back.
    Mrs. Bono Mack. Thank you.
    Mrs. Blackburn is recognized for 5 minutes.
    Mrs. Blackburn. Thank you, Madam Chairman.
    Dr. Singerman, I want to stay with you for just a minute on 
that, because you testified that government should avoid 
industrial policy and making bets on particular companies and 
industries, and should invest in innovation policy to create 
the best overall business environment.
    Now, I agree with you. I think that picking winners and 
losers is a very bad idea, and frankly, this administration 
just really hasn't been very good at it. When you look at what 
has happened with Solyndra and Beacon Power and InterOne, all 
casualties, if you will, of the DOE loan program, and that 
trying to get in here and manipulate and pick those winners and 
losers. So the track record there isn't very good.
    And the purpose of the Advanced Manufacturing Partnership 
that you were just mentioning is to bring together industry, 
universities, and the Federal Government to invest in emerging 
technologies. Am I saying this right?
    Mr. Singerman. Yes, that was my testimony.
    Mrs. Blackburn. OK. And so the purpose, they will invest in 
these that will create high-quality manufacturing jobs. So my 
question to you is this: Is that not picking winners and losers 
in terms of which technologies that you are going to back?
    Mr. Singerman. So that is a very important question, and 
obviously a question that has----
    Mrs. Blackburn. I think the differentiation is very 
important.
    Mr. Singerman. A very important question and a very 
important differentiation. And the focus of the Advanced 
Manufacturing Partnership, and I would also say the efforts 
that we are involved in at the National Institute of Standards 
and Technology, are not focused on funding individual 
companies. We recognize that one needs, as I think other 
members of this panel have mentioned, a balanced and 
comprehensive approach that looks at trade.
    Mrs. Blackburn. OK. Then let me come at it like this with 
you. OK. What are the emerging technologies that you are 
wanting to go for? And then who gets to decide what those 
technologies are going to be? Whose decision is it to pick out 
and say, all right, we are going to go invest in this 
technology and not this, because in this committee we look at 
the issue of energy, the picking winners and losers and trying 
to go after wind and solar and not an all-of-the-above hasn't 
fared very well.
    So what are the criteria that they are going to base this 
on, and who are going to be the elites that make the decision 
of what wins and what loses?
    See, I like competitiveness, and I like the marketplace 
making these decisions rather than a group of people that have 
been self-identified as being pros in this and thinking that 
they are going to self-vet their opinions and arrive at a 
decision. So I have got a little bit of a problem with that 
one.
    Let me move on. I have got just a minute and a half left. I 
want to talk a little bit about information technology and 
piracy. In my area in Tennessee, we have a lot of auto 
manufacturing, we have financial service applications, health 
care, entertainment that are all dealing with this. So when you 
look at the issue of competitiveness as far as it relates to 
intellectual information technology inputs and IP protections, 
I want to know what any of you are doing that we can quickly 
state, and then if the Department and Commerce and the FTC has 
been helpful or has not been helpful.
    Anyone want to respond?
    Ms. Wince-Smith, go ahead.
    Ms. Wince-Smith. Thank you, Congresswoman Blackburn.
    I think this issue of protecting and dealing with the cyber 
infrastructure is at the top of the list, because virtually 
every private sector and government network is being 
consistently targeted by adversaries, and some even, I think, 
of our trading partners. We have to have an integrated strategy 
for this and actually the enabling technologies that enable us 
to both protect and ensure that these cyber networks are 
operational, because everything depends on their resiliency and 
performance. So it is a huge priority for our country.
    Mrs. Blackburn. OK. Thank you.
    Any addition to that?
    No, OK. Thank you.
    Mr. Mottl, I will just say manufacturing added only 12,000 
jobs this past month, so I am glad to know where 800 of those 
jobs were added. So it looks like you were the winner in the 
month.
    Quickly, do you think this administration's economic 
policies are helping or failing you? Anyone want to answer?
    OK. Go ahead.
    Mr. Mottl. It was eight jobs, but I wish it was 800.
    Mrs. Blackburn. Eight. OK. I thought you said--I misheard 
you, so we will correct that record.
    Mr. Mottl. You know, related to the administration's 
efforts and what you talked about picking winners and losers, 
you know, I think we have to have a good overall policy like we 
talked about, a good competitive policy. But in addition to 
picking winners and losers, I think our competitors are doing 
that, and maybe I would argue that what happened with Solyndra 
and with those industries was that we did not do a good enough 
job supporting them. I would say that some of our trading 
partners----
    Mrs. Blackburn. I would probably take issue with that, and 
my time has expired. So I thank you for the answer.
    Mrs. Bono Mack. I thank the gentlelady.
    And the chair now recognizes Mr. Gonzalez for 5 minutes.
    Mr. Gonzalez. Thank you, Madam Chair.
    This is my biggest fear. I would be supportive of this bill 
because obviously I was supportive of its last version and 
such. The issue I take is simply I actually see that we are 
ignoring things that are systemic that took over a number of 
years to develop in this country, and we are facing the 
consequences now. My problem is we can have another commission, 
we can have another board, but we are all--both Congress and 
the private sector are whistling past the graveyard.
    Let me give you my take on things, and I am going to be 
quoting from different articles over a period of time. This is 
from the Hamilton Project. It was cited in an article in the 
Post on January 19, 2012: From 2001 to 2007, investment in 
equipment and software, the kinds of investment that boost 
productivity and create good jobs, declined 15 percent as a 
share of our GDP.
    Something has been happening out there. Where is our GDP? 
Where do we invest our money?
    The combined assets of conventional banks and so-called 
shadow banking systems grew from a mere $500 billion in 1970 to 
$30 trillion in 2008. In the 1970s to the 1980s, financial 
firms comprised 15 percent of all corporate profits. By 2006, 
it was up to 33 percent. Financial services gradually comprised 
nearly 62 percent of GDP. You better figure out where that 
money is being invested.
    What we want in the greatest return--to be honest with you, 
I don't even know where my 401 is being invested. If I was a 
teacher, I don't know where my pension--but I guarantee you, it 
is going to be usually in the highest-yielding products out 
there, which generally do not create jobs in the United States 
of America. We are not doing anything about it. And maybe this 
is one way that we can bring people together and address it.
    This is Harold Meyerson way back on January 5, 2011, in the 
Post: There is a way to look at the recession, that it is 
institutional, that it is a consequence of the decisions by 
leading banks and corporations to stop investing in job-
creating enterprises that were key to a broadly shared 
prosperity. The share of profits of United States-based 
multinationals that came from their foreign affiliates had 
increased from 17 percent in 1977 and 27 percent in 1994 to 
nearly 50 percent in 2006.
    This is Nouriel Rubini in a Post article of September 17, 
2010. 2010. Most policy approaches, including the Obama 
proposals, have tended to subsidize the demand for capital 
rather than the demand for labor. That has the problem 
backwards.
    In the second quarter of 2010, capital spending reached an 
annual growth rate of 25 percent. The argument that increased 
demand for capital leads to greater demand for labor--that is, 
if you buy more machines, you need workers to run them--has not 
held up. Firms are investing in capital goods, equipment, and 
offshore offices that allow them to produce the same amount of 
goods with less and lower labor costs.
    We exceed all other countries in productivity. We do more 
with less, and with the recession, obviously that may have been 
needed, but we have reached the breaking point. To avoid a 
chronic increase in the unemployment rate, we need to subsidize 
the demand for labor, achieving job creation rather than making 
it cheaper to buy capital, as investment and other tax credits 
would do.
    And that is the focused approach that goes back to what Mr. 
Butterfield was saying about preparing a workforce to be 
globally confident in products and services that are produced 
in this country, that can be consumed in this country, as well 
as exported. We are not doing much of that.
    And I thank you for your testimony today, and obviously, I 
am using my 5 minutes to basically set out there what we are 
all ignoring, both in the private and public sector, and until 
we come to grips what got us to where we are today, we are not 
going to undo it.
    I have 30 seconds, but I do want to ask Mr.--is it Mottl, 
is that how you pronounce that? How were you able to hire eight 
additional folks? What were the contracts, the nature of the 
contracts? I am real curious about that.
    Mr. Mottl. Well, primarily we are hiring in the machining 
and turning departments for programming, and these are highly 
skilled, highly technical positions. I have had to increase 
wages. You know, we were initially advertising around $20 an 
hour. We were hiring people at $25 and $26 an hour. We were 
stealing people from other companies because there is just, 
quite frankly, not a trained labor pool out there. So that is 
how I was able to find those people.
    Mr. Gonzalez. And where is this demand emanating? I mean, 
in other words, the contracts are coming; is it private, or is 
it government, local, State?
    Mr. Mottl. Defense work has driven a lot of my growth right 
now. My telecom business has been shrinking, and we have looked 
for other markets. It has been defense. Also some of our 
industrial products and our heavy equipment. We do a lot of 
work for Caterpillar, and that has been growing, but it has 
been defense, some heavy equipment, and then some general 
industrial products for export.
    Mr. Gonzalez. Thank you very much. I yield back, Madam 
Chair.
    Mrs. Blackburn [presiding]. I thank the gentleman.
    At this time Mr. Harper is recognized for 5 minutes for 
questions.
    Mr. Harper. Thank you, Madam Chair.
    And thank each of you for being here today and giving us 
some insight into what is going on in the manufacturing world.
    Mr. Mottl, I have a couple of questions I would like to ask 
you, if I may. If we benchmark our manufacturing environment 
and capabilities against our closest competitors, let us say, 
in other countries, whether that is Germany or China or Japan 
or others, if you were to align those, where would you expect 
to see the biggest differences between us and those 
competitors?
    Mr. Mottl. I would say it is definitely going to be in tax 
policy. It is going to be in education and training. In 
Germany, they do a lot more vocational training, which is given 
legitimacy along the lines of a college degree. I would love to 
see that here. Also in terms of trade and whether it is 
supporting exports or protecting industries that you want to 
see, I think other countries take a closer look at that.
    Mr. Harper. What are some of the issues that you see or 
think of as a manufacturer that--of those issues, how would you 
implement those or make them part of the core of our national 
strategy, particularly on the education issue? I am certainly 
intrigued by that and how we can implement that here. We are 
seeing it some, particularly in my home State of Mississippi, 
that a lot of the community colleges are taking that approach 
for job training, and we are seeing that. Anything along those 
lines that you might see?
    Mr. Mottl. Yes. In Illinois, there are a lot of community 
colleges doing this as well. My association, TMA, also has 
taken a lead role. We have had a historical leg up in this 
training. They have been training since the 1920s. We work with 
some of the MEPs. I have seen some great things out of those 
programs.
    But again, there is a fractured--there are a lot of 
different groups doing this, and there is no one really 
comprehensively bringing those programs and policies together 
and saying, ``This is the best practice; we are going to go 
with this program because it has really worked.''
    Mr. Harper. Madam Chair, in light of the time restraints, I 
will yield back.
    Mrs. Blackburn. The gentleman yields back.
    At this time Mr. Sarbanes is recognized for 5 minutes for 
questions.
    Mr. Sarbanes. Thank you, Madam Chair.
    I wanted to ask Dr. Singerman a question about the 
scouting--Supplier Scouting Program inside NIST. Before I ask 
you the question, I just want to read a little bit about it to 
the committee and to anyone who is not aware of it, because it 
is a great success, and I want to ask some follow-up questions 
about how we may be able to expand this.
    So within this, you have the Manufacturing Extension 
Partnership, which is an attempt to work with manufacturers all 
across the country, support their efforts to network and make 
connections, and get real concrete opportunities.
    The Supplier Scouting, which is part of the MEP's Make It 
in America Initiative, has worked to streamline Federal agency 
contracting with small and medium U.S. manufacturers. The 
program does this by connecting manufacturers with the 
procurement offices of various Federal agencies and assisting 
in the expansion and development of the manufacturers' product 
offerings to respond to the government's evolving contracting 
needs. The program has been a great success helping to ensure 
Federal agencies such as DOE, DOD, and DOT comply with the 
various Buy American statutes, while simultaneously bolstering 
the U.S. Manufacturing base.
    For example, in the case of the Department of Energy, of 
the 83 Buy American waivers filed by the agency suggesting that 
there were no U.S. Manufacturers to supply their contracting 
needs, the Supplier Scouting Program was able to identify 39 
matches between U.S. manufacturers and the Department of 
Energy, representing a 47 percent success rate. Subsequently, 
65 different U.S. manufacturers received business from the 
Federal Government. This is business that would otherwise have 
been shipped overseas. And there are other examples of the 
success.
    Let me ask you a couple of questions. Has there been 
interest from other agencies in entering into the Supplier 
Scouting partnership similar to that of the Department of 
Transportation, Department of Energy, or Department of Defense? 
Are you aware of that?
    Mr. Singerman. Let me answer that by just adding some 
context to your question for the committee.
    The Manufacturing Extension Partnership program has been in 
existence for nearly two decades. It is a public-private, 
Federal-local program in which the Federal Government provides 
a third of the funding, the private sector provides a third of 
the funding, and State and local governments provide another 
third of the funding. Every State has a center. Some States 
have more than one center. These are typically--these are 
nonprofit, often university-affiliated organizations. These are 
not Federal employees or Federal organizations. The Federal 
Government is a partner with local organizations. And in the 60 
centers with over 400 locations in every State, there are 
approximately 1,400 experts, generally from manufacturing 
backgrounds, who have expertise in various areas of specialty 
and know their industries in their communities.
    And it is through this national network that suppliers are 
identified for opportunities that the Federal Government and 
increasingly the private sector have, where they need 
suppliers, small and midsize firms, but are unable to find 
them.
    We have started to work closely with the Small Business 
Administration, which has a complementary program working with 
the private sector.
    Representative Sarbanes, you mentioned the Department of 
Transportation. That has been a highly successful program, 
particularly in the area of high-speed rail, a sector that this 
country has not been a leader in in the past, and there was a 
perception that there were no small firms that could supply 
material for the large construction programs. The MEP program 
organized well-attended hundreds of small firms at meetings on 
the west coast, in Chicago and most recently in Florida, and 
has made numerous connections, actual deals, product sales for 
small firms working with the Federal agencies, and, through 
those, the Federal agencies, contracting through large 
companies to build high-speed rail. So it has been an 
extraordinarily successful program.
    Mr. Sarbanes. I am running out of time, but first of all, I 
wanted to say that I think that Congressman Lipinski's bill is 
a terrific opportunity to focus us generally on these 
manufacturing issues, but programs like the Supplier Scouting 
Program can really help to bolster that focus. Are there plans 
to make sure that there is continued support financially within 
the MEP budget for the Supplier Scouting Programs?
    Mr. Singerman. So, the MEP program has ceded these efforts, 
but we have relied upon contracts, if you will, or interagency 
agreements with the Department of Transportation, Defense 
Logistics Agency, Department of Energy to fund the additional 
effort that is required on a really one-to-one, boots-on-the-
ground basis to identify those firms that have the capability 
or could develop a capability to provide the products and 
services to these Federal agencies and increasingly to private 
companies.
    Mr. Sarbanes. Thank you. I yield back.
    Mrs. Bono Mack [presiding]. The gentleman's time has 
expired.
    The chair recognizes Mr. Kinzinger for 5 minutes.
    Mr. Kinzinger. Well, thank you, Madam Chair. And again, 
thank you for--to all of the witnesses coming in. I really 
appreciate.
    The manufacturing sector has received obviously a lot of 
attention recently, but it hasn't always been a focus. I think 
specifically, you know, 10, 20 years ago, I remember hearing 
members of government saying that, in essence, manufacturing 
was out of vogue, and we have moved beyond a manufacturing 
economy.
    One portion of this bill that I think is important is it 
puts in place a Presidentially confirmed group of private-
sector and government experts that will focus our attention on 
manufacturing for two distinct Presidential terms.
    Do each of you believe raising the stakes in the creation 
of a Board that delivers recommendations to Congress, do you 
believe it will lead to a greater consensus on policies or 
actions that will improve the environment for American 
manufacturing?
    And we will start with you, ma'am.
    Ms. Wince-Smith. I think it will if it is comprehensive. 
And you just mentioned, Congressman, that manufacturing itself 
meets the new definition. It is far broader than the making of 
something. It is this whole complex supply system, the 
marketing, all of that. If we can address all of those issues 
and ensure that Treasury and Justice and other agencies in our 
government that have such an impact on policy are part of this, 
it will be very successful.
    Mr. Kinzinger. And I think that is a good point. I mean, 
the reality is manufacturing is not a thing. It is an idea. And 
to really get a grip on the idea and all of the ancillary parts 
of it and everything that is involved, I think to have people 
committed to sitting around and having a discussion or a talk 
about the big picture and how are we going to put our arms 
around the big picture and every facet of it is better than 
really kind of muddling through in a, you know, piecemeal kind 
of basis.
    Mr. Gordon.
    Mr. Gordon. I would absolutely agree with that.
    In fact, in the Defense Department one of the things that 
Congress has already done in the NDAA from 2011 is to establish 
a manufacturing and industrial-based policy instead of just an 
industrial policy, is manufacturing and industrial-based 
policy, essentially moving the organization responsible for 
manufacturing within DOD up four levels, much higher, to the 
Secretary of Defense.
    In addition to this, you have already heard what I talked 
about in terms of advanced manufacturing now being one of the 
top three priorities for R&D, and the Department's S2D2, which 
is a sector-by-sector and technology-by-technology study of 
what needs to happen in the industrial base.
    Mr. Kinzinger. I would hate to see us in a position where 
we are someday having to buy dumbed-down equipment from other 
places just to defend ourselves against potentially anybody.
    So, Mr. Mottl, welcome, from Illinois, Land of Lincoln.
    Mr. Mottl. Thank you. Yes, great, great State.
    I would agree with what was said before, and I think the 
key is sustaining things. You know, success doesn't happen when 
you kind of pop in with an idea and then disappear. You need to 
sustain it.
    And then the other end of it is action. You know, a lot of 
these recommendations come out of a lot of groups. I am hoping 
that this, like we said, a comprehensive, formal approach, will 
actually lead to legislative action to solve some of the 
problems, Because there are plenty of reports out there right 
now, but having to all come together, and action has not 
occurred.
    Mr. Kinzinger. I agree with you.
    Dr. Singerman.
    Mr. Singerman. I would only add that I think it is 
important, as has been mentioned by the members of the 
subcommittee, for the private sector to be closely engaged and 
leading this effort, working with the public officials at the 
Federal and State level.
    Mr. Kinzinger. Now, I saw that the Chicago-area factory 
output fell to a 2 \1/2\-year low in May, showing signs of a 
slowing economy in Illinois. I would argue it is because many 
of Illinois' government policies are very unfriendly to 
surrounding States, and just like the United States needs to 
compete with other countries in the world, Illinois needs to 
compete, and unfortunately some of our leadership has not 
gotten that message.
    The State of Illinois is burdened by insurmountable debt 
that I believe is inhibiting manufacturing growth. In our 
legislation we include two governors selected by both parties 
as members of the board.
    Can each of you speak a little bit and actually very 
briefly, I have got about 50 seconds, about the importance of 
the role of State governments in fostering environment for 
manufacturing and growth?
    And we will start with you, Dr. Singerman.
    Mr. Singerman. I would like to speak to that, because we, 
at the Department of Commerce, in this view the role of States 
as crucial in developing a national strategy for manufacturing 
resurgence. And although we agree that the Federal Government 
should not have an industrial policy, I agree with 
Representative Blackburn, States all have industrial policies. 
Every State picks winners and losers. The States that I have 
been affiliated with, Pennsylvania and Maryland, and 
knowledgeable about other States as well, they all have very 
concrete programs to invest in particular companies or loan 
dollars to particular companies.
    What the Federal Government can do uniquely that States 
cannot do is provide the context and the R&D funding at a high 
level through the National Science Foundation, through NIST and 
other agencies to provide the basis for the States.
    Mr. Kinzinger. Thank you.
    Just if I may, just very briefly, Mr. Mottl, if you want to 
address.
    Mr. Mottl. For example, workers' comp in Illinois is a huge 
problem compared to our neighbors. It is $1,000 per employee 
for me in Illinois; in Indiana it would be $400 per employee 
for my same coverage. So----
    Mr. Kinzinger. You are not the only one I hear that from.
    Thank you, Madam Chair. And I yield back.
    Mrs. Bono Mack. I thank the gentleman.
    The chair now recognizes Mr. Rush for 5 minutes.
    Mr. Rush. Madam Chairman, I want to thank the ranking 
member, Mr. Butterfield, for holding hearings on these 
important matters.
    My question is about H.R. 5865. The world today looks like 
a wide-open field in the midst of a high-stakes economic 
marathon as frontrunners, other countries are trying to surpass 
the U.S. It was predicted that this year, this past year, 2011, 
the U.S. manufacturing industry--it is interesting that our 
Nation is dominated, is on a path to finish this economic 
marathon in second place after China. I certainly hope that 
this is not the case. But I also feel as though unless we 
change course now, it is probably going to be true.
    In the same token, the political unrest and turmoil that we 
are witnessing overseas and even in our own country is clear 
evidence that job creation is a top priority for all of us.
    I understand that the bill that we are considering is a 
bipartisan bill, and I hope, Madam Chair, that in the rewrite 
of the bill, that you have engaged with both sides of the aisle 
for all the changes that I have seen on this bill, as we did 
when we adopted H.R. 4952, during the last Congress.
    America's manufacturing sector is an important and 
exceptional foundation for the future of our country, 
considering the fact that in 2009 the manufacturing sector 
employed more than 11.5 million people. But the surprising 
thing about this is although it is significant, when you 
consider the Nation actually lost 5.8 million jobs between 1999 
and 2000, then that certainly kind of balances our enthusiasm.
    And I agree that our--with my colleagues on the other side 
that we live in a very competitive economic environment that 
requires an aggressive, multifaceted policy agenda to bring our 
industry back to where it was before the recession.
    What I disagree on is the methodology that would lead us to 
our global competitive advantages again. And it is clear that 
the objective is not just to have a competitive manufacturing 
industry, but, more important, to have an industry that creates 
jobs here in America.
    So that said, Dr. Singerman and Ms. Wince-Smith, what 
safeguards can we put in place to make sure that the Board 
created by this bill will indeed develop a strategy that is 
centered on jobs, job creation, and competitiveness?
    Ms. Wince-Smith. Well, I think in terms of the job-creation 
opportunity, it is huge, but it has to be addressed in the 
context of the jobs of the future, not protecting the jobs of 
the past. And if we just look at the energy sector alone, where 
this country is poised to really have game-changing 
capabilities and resources for energy security, think of the 
manufacturing supply chains and the added value that will come 
if we could move out aggressively in that particular component 
of the manufacturing enterprise, energy alone.
    I would also add on the job front that if we don't change, 
and this has been said, our training systems and training in a 
way that recognizes the full component of jobs in 21st-century 
manufacturing, we will continue to see other nations beat us in 
the global war for talent, which is part of this. So, I think 
we need to look at these issues in the national strategy in a 
very broad way, but recognize the opportunities, not focus on 
protecting the jobs of the past.
    Mr. Rush. Do you care to respond?
    Mr. Singerman. Yes, sir.
    Just to build off of Ms. Wince-Smith's comments, in order 
to create the jobs of the future, we have to invest in research 
and development now, which creates the infrastructure, the 
technological infrastructure, that enables companies like Mr. 
Mottl's and others', to build products and provide specific 
services.
    The program that the President announced in March for a 
national network for manufacturing innovation is designed 
precisely to do that and to solve a very particular problem 
that has arisen over the last three decades, the growing gap 
between basic research, which the Federal Government properly 
supports, and applied research, which is the province of the 
private sector.
    What we find is that there is a growing gap in the middle. 
Sometimes people call it the ``valley of death.'' And the 
purpose of these manufacturing institutes is to bridge that 
valley of death in a public-private partnership. That is the 
vehicle that this committee has been talking about, the 
mechanism, and that is the institutional arrangement that is 
conceived of and the development of the manufacturing 
institutes.
    So, research and development, but in a collaborative, 
industry-led, academic, Federal Government-supported mechanism.
    Mr. Rush. Madam Chair, I yield back.
    Mrs. Bono Mack. The chair recognizes Mr. Pompeo for 5 
minutes.
    Mr. Pompeo. Great. Thank you, Madam Chairwoman.
    And I want to say thank you to Mr. Lipinski for working. 
You came with this legislation to me several months ago and 
asked for my input, and I really appreciate that, and have had 
the chance to try and help shape what we are working on.
    I am often skeptical that another board, another agency 
will help us very far down the road, but I think this is a good 
step to get the private sector engaged and come up with some 
core principles that everyone can rally around.
    Mr. Mottl, I won't take my whole 5 minutes, but I want to 
ask you a question.
    First, I want to thank you, Ms. Wince-Smith, for mentioning 
energy. I agree. We have the opportunity with natural gas to 
change America's manufacturing sector for decades to come here. 
I wish we didn't have 10 agencies from this President 
investigating hydraulic fracturing today, which puts at risk 
this very renaissance that you spoke to. So I hope you all will 
take back when you talk to the administration that says this is 
important, and we don't need 10 Federal agencies regulating the 
industry that has regulated at the State level for years 
successfully and done no damage to groundwater anywhere, even 
according to Ms. Jackson from EPA.
    But that is a bit of an aside, but it is very important 
from a manufacturing policy standpoint.
    Mr. Mottl, you talked a little bit about the fact that you 
compete with international companies. Sometimes those are 
planned economies. I came from the same place. I actually was 
in sort of the same business. I ran a company that did CNC 
milling and lathes. I actually--you probably wouldn't want me 
to make your part, but I won't hurt anybody around a CNC lathe.
    But then you wandered off into a space that I am a little 
bit concerned about. I wanted to get your thoughts. You said, 
well, they are planned, so we should do something about that. 
What is it you would suggest? I give you--you talked about in 
the context of solar, and so now this administration has a 
subsidized solar technology, and then now is making it even 
more expensive at creating a tariff barrier for entry of solar 
products that we now have a belt and suspenders trying to prop 
up this particular sector. Is that the kind of thing that you 
think helps your business or another manufacturing company, or 
the kinds of policies that would help?
    Mr. Mottl. Well, it is a tricky issue, and I can't say if I 
would agree that that is the right route. I think we need to 
look at what the right route is, bring in experts and figure 
that out.
    My point being that certain countries will do whatever it 
takes to make that industry compete, and how do we address 
that? I don't know the exact answer. But they will do whatever 
it takes.
    From my perspective, why are my largest customers deciding 
that it is no longer competitive to assemble and build their 
electronics and telecom housings here? It is primarily 
government policy in other countries who are making it that 
much more competitive. I have been told that my subcomponents 
are competitive even with China's labor. I am very efficient--
--
    Mr. Pompeo. Sure.
    Mr. Mottl [continuing]. But when my largest customers 
simply choose to move their entire assembly operations out of 
this country because they say it is no longer competitive to do 
business here, there is nothing I can do about that.
    Mr. Pompeo. I appreciate that. I would just suggest that 
oftentimes those policies that those countries engage in do 
impact manufacturing here, but they are really good for 
American consumers; that is, that we end up with affordable 
projects that people want and buy, and products that are very 
affordable. When we put tariff barriers, we are simply driving 
up the very cost of the thing that we want.
    So I can it is tricky, and maybe that is why we can get 
this group together, and they can help us figure a way through 
this.
    With that, Madam Chairwoman, I yield back the balance of my 
time.
    Mrs. Bono Mack. Thank you, Mr. Pompeo, and thank you for 
your work on this issue.
    And recognize Mr. Guthrie for 5 minutes.
    Mr. Guthrie. Thank you very much. Appreciate being here.
    My background is manufacturing. I grew up, my dad worked 
for Ford. When I was in high school, they shut the plant down. 
So my dad decided--he started on the factory floor during the 
union, worked his way through college kind of thing, and after 
they shut the plant down, he said, well, Ford is going to 
outsource, and I know how to make them. Maybe I will start a 
business and make them for myself.
    So he started a business. After I got out of the Army, I 
worked with him until I came here for about 20 years building a 
business. So, I know aluminum die cast factories that do a lot 
of tool and die--tool and die companies.
    And the one thing--and the shock that is always kind of 
around my public policy, things I have been interested in, was 
I remember I showed up for high school football practice the 
first day of my senior year in high school, and people were 
saying, ``What are you going to do this year?'' And I said, 
``Well, I want to go to West Point, I want to go to college.'' 
I remember a friend of mine saying, ``Well, I got a friend that 
can get me on at Ford.'' And that was a legitimate economic 
decision for an 18-year-old to make in 1981 in our hometown. If 
somebody could get you on at Ford, you would make more money 
probably than I would going to college.
    By the time we graduated, the plant was shutting down.
    And so I think you hit the point about trying to find 
skilled labor particularly is that you can make a really good 
living in the--middle-class living in manufacturing, and I 
think what we are all longing to bring it back so we can have 
the high school graduates go make a middle-class living, but it 
is difficult to do that if you don't bring a certain skill. So 
I think that has got to be an important part of the mix, and I 
think a lot of that happens in State governments and community 
colleges and technical colleges.
    But people need to know there are $27-an-hour jobs out 
there. You don't have to go to college to get them, but you do 
have to bring something to the table in order to get that kind 
of wage.
    So that is just something that has always been on my mind. 
And that is why I love manufacturing, love seeing products 
made. Not just manufacturing. We were doing a hydro down in my 
district, and I was climbing over it the other day. And it is 
just you see people working and building something that is 
going to make a difference, and that is important. And I think 
we need to do what we can, if this bill is the right direction 
to go, to come up with not picking winners and losers, but what 
is the government doing to prevent people from winning.
    And that is the question, Mr. Mottle, you said that your 
assemblers--and that was the problem we had. We made end caps 
for a little electric motor. Well, the electric motor company 
moved to Mexico, and guess where the die castings went about a 
year or two later? To Mexico. So we were able to do--we figured 
out we have to be highly engineered products, and we have to 
have skilled people build them; if not, the unskilled people 
will build unskilled small products. So that is what we did and 
have been successful with it.
    But when your assembler says, I can't manufacture here 
because I am not competitive. So some of that is wages, and we 
don't want to have Chinese wage rates. I have been over there 
and seen. We don't want to pay those. And that is not building 
in a country for us. I mean, it is better for them. It is 
lifting some of their people up, but that would not lift our 
people up.
    But what else are they saying? I know wage rates is an 
issue that we need to make sure that--you are paying good 
wages; you just need people that have the skills, that have the 
productivity to demand that.
    So, what are your assemblers--I know assemblers typically 
have a lot of labor.
    Mr. Mottl. Yes. Actually, particularly in the telecom 
industry, a lot of that integration is fairly automated. It is 
pick and place on circuit boards and assembly. The circuit 
boards and----
    Mr. Pompeo. So labor is not driving their decision?
    Mr. Mottl. I would say it is a portion of that, yes, but I 
also think that there has got to be--again, I am not running 
their business, I am guessing here, but I think it has to be a 
lot to do with the taxes, tax implications, the cost of 
capital. I suspect that they get some very low-cost 
opportunities to buy that expensive assembly equipment that 
automates it and to build those factories to do that. And I 
think they just get a lot more support from sometimes other 
countries that are willing to court them.
    Mr. Guthrie. So they are not just moving to China for low-
cost wages. There are a lot of things.
    Mr. Mottl. There is a total package.
    Mr. Guthrie. Anybody want to talk about that, because if we 
compare ourselves to China, Germany, Japan and our kind of 
first-world competitors, and any of you, why does--would we see 
different that they are doing different that we could do 
better? Obviously, we have the highest corporate tax rate. You 
just mentioned that. That is obviously something that has got 
to be fixed if we are going to be competitive. But anybody want 
to talk on any of the--let us start from left and go right, I 
guess.
    Mr. Singerman. I would just like to add that if you look at 
Germany, which is a high-wage, high-benefit, highly unionized 
country, they are one of the world's most dynamic manufacturing 
in export-based countries. One of the signature activities that 
they engage in is a very active apprenticeship program. So they 
have a very highly skilled level of workforce. And these are 
people who don't have to go to college, but are ensured of 
good-quality manufacturing jobs that are stable over time.
    One last thing. With the German economy, what the 
government has done has created a situation in which during 
times of economic distress, workers are not laid off, but their 
work hours are reduced. So the dislocation to both the 
individuals and the firms is reduced, and when the economies 
pick up again, they can rapidly ramp up their activities 
without having to go back into the marketplace and compete for 
additional workers.
    Mr. Guthrie. And thanks for that.
    Ms. Wince-Smith, I think you had a comment on that.
    Ms. Wince-Smith. Well, I would just add another dimension, 
building on the comments about capital cost structure and 
regulatory environments as being very critical, and we are 
competing on that, that the United States and Brazil are the 
only two major nations that do not have a territorial tax 
system. So when U.S. enterprises are producing three times the 
value of all exports in growing markets in the emerging world--
and this is good because these are customers, and we want to 
have exports--and not being able to repatriate $1.4 trillion in 
offshore profits because of double taxation, that is certainly 
something that we need to change.
    And I was very interested that a whole group of Brazilian 
manufacturers said to their President Dilma Rousseff, we have 
to get a territorial tax system, because Brazil actually owns a 
lot of manufacturing enterprise in the United States, and they 
are, interestingly enough, not bringing that money back to 
Brazil. I hope more of it stays here. So that is one thing we 
need to do is a territorial tax system.
    Mr. Guthrie. In the time I have, I want to close. And you 
are right.
    Mrs. Bono Mack. The gentleman's time has expired. Thank 
you--and then some. But thank you very much.
    At this point we do conclude the panel. We are trying to 
get the next panel in before votes start on the floor, so we 
all appreciate very much your testimony today. And with that, 
thank you for being here. We look forward to working with you.
    And we will take a very brief recess while we seat the 
third panel and then begin immediately.
    So, thank you again.
    [Recess.]
    Mrs. Bono Mack. Again, each of our witnesses has prepared 
an opening statement that will be placed into the record. Each 
of you will have 5 minutes to summarize that statement in your 
remarks.
    And joining us on our second panel are Jack Fitzgerald, 
owner of Fitzgerald's Auto Mall. Welcome. And the Honorable 
Joan Claybrook, president emeritus of Public Citizen, and 
former NHTSA Administrator. Welcome to you both. Good morning, 
yes, still. Thank you very much for coming.
    With that, Mr. Fitzgerald, you are recognized for 5 minutes 
for your opening statement.
    Mr. Fitzgerald, would please begin your statement?

STATEMENTS OF JACK FITZGERALD, OWNER, FITZGERALD AUTO MALL; AND 
JOAN CLAYBROOK, PRESIDENT EMERITUS, PUBLIC CITIZEN, AND FORMER 
 ADMINISTRATOR, NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION

                  STATEMENT OF JACK FITZGERALD

    Mr. Fitzgerald. Thank you, Madam Chairman, Mr. Butterfield, 
members of the committee. I am very grateful for the 
opportunity to be here on behalf of NATA.
    I was a car salesmen starting in 1956. That is a long time 
ago, isn't it? I have been a car dealer since 1966. And I have 
lived these changes, and on behalf of NAD, I want to say I 
support 5859 for all of the reasons that Congressman Kelly 
gave. On behalf of Jack, I want to say that I was probably 
cheerleading for this regulation in 1972, because I thought, 
and still think, that even though she doesn't like me, I think 
she is doing an awful lot for this country, she and Ralph 
Nader, who is a friend of mine. I get along better with him; 
and Jack Gillis, whom I like to think is a good friend of mine, 
too. These people have done good things for this country.
    But remember, if you think back--and I am so old, I 
remember all of these things--but we were rethinking our souls 
in the 1970s, you know, the Vietnam thing. We were relooking at 
everything. Nobody ever came to this room to do something bad. 
The people that passed these regulations and passed laws, they 
come here to do what you do: the best for the country they can.
    And in those days, we had a lot of work to do in terms of 
automotive safety, gasoline mileage, overall efficiency of our 
business. So the people that went after us, the industry, they 
had a war to fight. Some of them still fighting it, but they 
won. Our cars are vastly improved, they are safer, they are 
more efficient. They do cost a lot more money, but they are 
wonderful products.
    So I am not here to say anything bad about Ms. Claybrook or 
the people that got this law. But I would point this out to 
you. There are lots of ways to get information on cars. My 
favorite is Consumer Reports, by the way, Consumers Union. This 
is The Car Book, written by Jack Gillis, who is a disciple of 
Ms. Claybrook. This one, by the way, was dedicated to you, did 
you know that?
    Well, if you look at how to shop for insurance in this 
book, this guy gives you--it is a real compilation of useful 
information for consumers.
    I have always been on the consumer side because they buy 
cars from me. That is rocket science, isn't it? But I believe 
very strongly in supporting all the consumer endeavors, because 
they buy cars from me. And there are a couple of pages here, 
and there is nothing about using that chart that we are talking 
about. And the reason for that, I used to get it from the 
insurance companies before the government got involved, and I 
thought it was kind of neat. You know, it would tell you, 
purported to tell you if the car you are buying is going to 
have more damage than the next car that you might choose. The 
problem is it is all historical and it is arcane, and if you 
are not an engineer--Ms. Claybrook has made herself into an 
engineer. She has studied stuff that I would never get to and 
my customers would never get to.
    It just didn't do anything for me. And I used to get the 
booklets from them. The Highway Loss Data Institute would send 
that stuff to you for free, or they did years ago. I imagine 
now you just get it online. I used to get it in the mail and I 
would make copies of it and give it to my salesmen and say, 
tell your customers about things like this. They will 
appreciate it. Well, I don't think my salesmen understood it, I 
think I probably misunderstood it, and I know the customers 
just didn't care. They didn't respond a bit.
    So, I did not purposely conceal it from them. If you look 
on my Web site, you will see I don't conceal anything. I would 
put Consumers Report on there, except they won't let me. But we 
tell them everything. That is how we do business. That is how I 
have always done business. And there was no concealing of this 
information from my customers.
    I want to say I think that this country owes a debt of 
gratitude to Ralph Nader and his army, of which she was one of 
the leaders, for moving the ball down the field to make us take 
safety seriously. There is no reason for people to be dying in 
cars. I am alive today because the government demanded that we 
have seatbelts in cars, shoulder harnesses. And the car that I 
total lost was a former car driven by Senator Byrd from 
Virginia. I used to be a Ford guy and I got the cars from Ford. 
This was a big Lincoln Continental. I hit an Oldsmobile 98. And 
I survived just fine because it had an interlock on it and I 
couldn't not use the seatbelt.
    So I will ever say a word in opposition to people who take 
on the effort to try and improve safety and improve efficiency 
in our automobiles. It is a tough job. But this regulation is a 
waste of money. And what is really historic is that you all are 
going to do something about it.
    Mrs. Bono Mack. Mr. Fitzgerald, we need you need to wrap 
up. I am sorry. We have a vote on the floor. We need to have 
you conclude, please.
    Mr. Fitzgerald. I am very grateful to you for considering 
this. I have been in this town since 1935 and this is the first 
time I ever heard of anybody repealing a regulation. I think it 
is wonderful. I think it is historic. I celebrate it, and I 
congratulate you for being willing to do it. I thank you.
    [The prepared statement of Mr. Fitzgerald follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mrs. Bono Mack. Thank you very much.
    Mrs. Claybrook, you are recognized for 5 minutes, please.


                  STATEMENT OF JOAN CLAYBROOK

    Ms. Claybrook. All right. Thank you very much for the 
opportunity to testify this morning. I am here to oppose this 
legislation to repeal the important consumer information law, 
subsection C of title 29, section 32302. What this does is 
provide consumers with comparative information about motor 
vehicle makes and models on the costs of repair damage, crash 
damage.
    Auto dealers are attacking this as wasteful and obsolete. 
And while I appreciate Mr. Fitzgerald's kind comments, I do 
disagree with him on this legislation. Dealers claim that the 
consumer never asks for the booklet that it is printed by the 
agency, the National Highway Traffic Safety Administration, and 
sent to dealers each year.
    First, let's lay to rest the issue of the absence of 
consumer requests for this booklet. I have no doubt that 
consumers don't ask for the booklet. They don't ask for the 
booklet because they don't know it exists. How could they ask 
for something they don't know anything about?
    The consumer information requirement has suffered from a 
veritable conspiracy of silence. Neither the dealers nor NHTSA 
make any effort to inform consumers about its existence or 
usefulness. It is a self-fulfilling problem. The real question 
is whether consumers want information about differences in 
insurance costs for different makes and models of vehicles 
based on differences in damage susceptibility and crash-
worthiness.
    Has the NADA ever surveyed consumers to ask this question? 
Apparently not. Would anyone in this room want to speculate 
about how consumers would respond to that question? There is no 
doubt that consumers want accurate information about the cost 
to repair a vehicle they are considering buying because repair 
costs are a huge part of the expense of owning a car.
    Consumers are concerned about car insurance and repair 
costs, just like they are concerned about gasoline prices. 
Every Member of Congress knows how sensitive consumers are 
about that. Why hasn't the gas tax been increased in recent 
years despite the funding of the needs for the funding of the 
Highway Trust Fund? It hasn't because Members don't want to 
touch a sensitive consumer issue. But they are willing to 
eliminate this particular requirement of consumer information.
    It is interesting to note that in today's economic cost 
information, such as vehicle damageability, it is all the more 
important, because consumers are struggling to stay afloat 
financially. Indeed, NADA just last month attacked NHTSA's fuel 
economy standards saying that they cost too much and make cars 
unaffordable. But while the dealers are willing to attack fuel 
economy standards on cars, they ignore cost savings to 
consumers as they try to eliminate this requirement.
    And there is no doubt that the best place for consumers to 
get and evaluate collision damage information is at the point 
of sale, at the dealership. That is why the Congress passed the 
law in 1992 requiring dealers to distribute it. That is why the 
gas mileage requirement booklet is to be at the dealership. 
That is why in 2005 Congress added a requirement that 
information about NHTSA's new car assessment crash test be 
listed on the Monroney price sticker so that consumers would 
have this information available when they went to buy the car. 
What new information does Congress or NADA possess that is 
persuasive and documents that consumers don't want such 
information at the point of sale?
    It is important to remember that a satisfied consumer is a 
repeat consumer and dealers, as Mr. Fitzgerald mentioned, 
should be putting their consumers first. Dealers claim that the 
current law is a waste of money, but their bill would have 
NHTSA continue to collect and publish the comparative collision 
cost information and probably just publish it on the Internet, 
but not have it at the point of sale.
    Much of the cost of this program rests with NHTSA's 
collection and analysis of the information, and not with 
sending a copy to each dealership. I would say that in 1991 in 
the proposed rule NHTSA said that the economic effects of the 
requirements are minimal and no consumer auto dealer or anyone 
else objected to the cost of the distribution.
    Having NHTSA put the information on the Internet, as the 
Alliance of Manufacturers suggested yesterday, will do little 
to inform consumers in the throes of deciding which car to buy 
when they are in the showroom. Technical and price information 
must be available to the consumers at the point of sale, and I 
know that Mr. Fitzgerald is aware of the importance of that.
    The dealers claim that the current law is obsolete, but 
what is obsolete about getting collision insurance cost 
information by make and model when you buy a new car? As NHTSA 
pointed out in its proposed rulemaking, insurance data 
applicable to the collision portion of the insurance premium 
provided by the HLDI information on average represents 40 to 50 
percent of the total premium cost to a car buyer.
    The dealers' primary claim for eliminating the statutory 
requirement is that consumers aren't asking for the 
information, and that is an issue that is totally within the 
control of the dealers themselves. This attack by the auto 
dealers on consumer information about collision damageability 
is not the first time that NADA has tried to stop this program. 
As noted in the March 5, 1993 rule, NHTSA asked NADA to allow 
the agency to use this list of dealerships to expedite the 
mailing of the insurance cost booklet to the dealers but NADA 
declined to cooperate and NHTSA was forced to get the 
information from the Department of Energy consumer gas mileage 
guide.
    Also with regard to the obligation of dealers to make 
consumers aware of the insurance booklet, in 1993 NHTSA stated 
to ensure consumer awareness of the availability----
    Mr. Harper [presiding]. We are over time, if you can 
finish.
    Ms. Claybrook. OK, I will. Thank you very much.
    I would just say it is very important that consumers get 
the information from NHTSA, and that NHTSA could improve this 
information substantially and has not done so, nor have the 
dealers recommended that it be improved, and I would suggest 
that that is another important piece of this.
    Thank you very much for letting me testify.
    [The prepared statement of Ms. Claybrook follows:]

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    Mr. Harper. Thank you both for your testimony. I will now 
recognize myself for 5 minutes for questioning.
    If I could, Ms. Claybrook, certainly thank you both for 
being here, but in your opening statement, your remarks, you 
stated that there was a veritable conspiracy of silence on 
this. And I guess my question would be, this law goes back to 
1972. They were supposed to have this by 1975. You were the 
Administrator from 1977 to 1981. It is not implemented. NHTSA 
doesn't issue a final rule to implement this mandate until 
March 5, 1993. So how do we call it a veritable conspiracy of 
silence when NHTSA didn't even implement it for more than 20 
years?
    Ms. Claybrook. Well, that is the conspiracy of silence, 
because they didn't actually implement the law. And I will say 
that in the absence of having the insurance information 
available, which finally got produced by the Insurance 
Institute for Highway Safety with its HLDI program, it is 
called, then finally there was information available to use. 
But the Department of Transportation did not have such 
information available and did work during my administration to 
try and figure out how to do that.
    Mr. Harper. But you would agree that delay did include 4 
years with you as the Administrator of NHTSA?
    Ms. Claybrook. It did. It did. I would have liked to have 
been there longer and I would have taken more care of it.
    Mr. Harper. When you look at the information, and this 
information that we are talking about, which is a very small 
part of our regulatory structure here, when we are looking at 
it, it is just measuring and showing the actual property 
damage, the cost of the repair for that vehicle. It doesn't 
factor in the other things such as bodily injury or things of 
that in the insurance picture, is that correct?
    Ms. Claybrook. That is correct. It could, but the law does 
not require it to do that. But the crash worthiness data is 
available with the new car assessment program that NHTSA 
implemented that I started, and it is in fact in the 2005 law 
now at the dealership itself also on the Monroney price 
sticker.
    Mr. Harper. But the information that we have in the booklet 
that NHTSA prepares is not verified information. They just use 
the information that is provided by the Highway Loss Data 
Institute, is that correct?
    Ms. Claybrook. The Institute for Highway Safety, which is 
the insurance industry.
    Mr. Harper. Right. Which in that they include all the 
factors of costs that might impact, not just the crash, the 
repair cost of the cars, but the other things that are on there 
also.
    Ms. Claybrook. Right. They do.
    Mr. Harper. And so this is why we are looking at this one 
regulation that is just a minor point that really doesn't tell 
us. And even in the information that NHTSA prepares and you are 
certainly familiar with on here, it clearly states that 
therefore to obtain complete information about insurance 
premiums, you should contact insurance companies or their 
agents directly.
    Ms. Claybrook. Right, that is correct. And I think that 
that alone is a great piece of information for the consumer to 
have. And I know that Mr. Kelly, who testified earlier, said 
that he tells people to call their insurance agent. But in fact 
most dealers don't do that.
    Mr. Harper. I yield back my time, and right now I will 
recognize Mrs. Schakowsky for questioning.
    Ms. Schakowsky. Thank you so much. I appreciate your 
actually charming testimony, Mr. Fitzgerald, and I wanted to 
say that I think I have been a consumer advocate for about as 
long as Ms. Claybrook has been and we have worked together on 
many things, and I have to tell you, I was not aware of this 
document, and now having become aware of this document, I am 
even more interested. And let me give you an example.
    I am looking at a copy of it now, nicely color coded, which 
actually the NHTSA one is not, and perhaps the presentation of 
that document could be made more consumer friendly so people 
would understand.
    But if I am buying a car, let's say I had a teenage driver 
so insurance costs are really very expensive. And I look at the 
Chevy Malibu, and for all coverages it is at a 94, which is 
below the mean in terms of the various safety features and the 
collision costs, et cetera. And in the same category of four 
door models is the Kia Optima, which is 134, so above the mean 
in the cost, and that is 38 points difference. And when I look 
at bodily injury liability, the difference is 56 points between 
the Chevy Malibu and the Kia Optima. I would be interested to 
know that so that I could be forewarned.
    So my question really to you, Ms. Claybrook, is can you 
tell us exactly what are the benefits to the consumer of 
having, and I think in a much more consumer friendly way, at 
the point of sale this kind of information? To me it seems very 
important.
    Ms. Claybrook. Well, I think that the information that 
NHTSA publishes could be drastically improved, and particularly 
in the collision area. When you buy a new car, you buy 
collision insurance.
    Ms. Schakowsky. Right.
    Ms. Claybrook. And so 40 to 50 percent of the premium is 
collision insurance of your new car. So that is why this is 
important, because it is going to tell you that there is going 
to be vast differences between collision insurance for one 
model versus another model.
    Ms. Schakowsky. Right.
    Ms. Claybrook. That is the real importance of this in this 
particular format.
    I issued a standard for a 5-mile-an-hour no-damage bumper. 
It was eliminated by the Reagan administration. It is now 2 \1/
2\ miles, which doesn't mean much of anything. It allows 
damage. So if there were a really strong regulation, which 
there should be, to protect vehicles in damageability, this 
would be less important. But there isn't. This is the only 
thing that is available to the consumer on damageability of the 
vehicle. That is why it is so important. And I am disappointed 
that the----
    Mr. Harper. If the chair may interrupt just to inform, we 
only have a minute left for votes on the floor. If you would 
like, we can come back.
    Ms. Schakowsky. No, we don't need to come back. I think 
that the point has been made, and certainly in the written and 
the oral testimony, that this is useful consumer information if 
it is made more accessible I think to consumers.
    Ms. Claybrook. I think that rather than eliminating it, I 
think it would be much more important for NHTSA to bite the 
bullet and make it more useful.
    Ms. Schakowsky. I agree. Thank you.
    Mr. Harper. The gentlelady yields back. I want to thank 
each of you for being here today, and remind members they have 
10 business days to submit questions for the record and ask the 
witnesses to please respond promptly to any questions that you 
may receive.
    The hearing is now adjourned.
    [Whereupon, at 11:55 a.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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