[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]




 
                    STRATEGIC PLANNING FOR NATIONAL 
                     MANUFACTURING COMPETITIVENESS

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

                                HEARING

                               BEFORE THE

                SUBCOMMITTEE ON RESEARCH AND TECHNOLOGY

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                        WEDNESDAY, JULY 10, 2013

                               __________

                           Serial No. 113-40

                               __________

 Printed for the use of the Committee on Science, Space, and Technology





       Available via the World Wide Web: http://science.house.gov


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              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                   HON. LAMAR S. SMITH, Texas, Chair
DANA ROHRABACHER, California         EDDIE BERNICE JOHNSON, Texas
RALPH M. HALL, Texas                 ZOE LOFGREN, California
F. JAMES SENSENBRENNER, JR.,         DANIEL LIPINSKI, Illinois
    Wisconsin                        DONNA F. EDWARDS, Maryland
FRANK D. LUCAS, Oklahoma             FREDERICA S. WILSON, Florida
RANDY NEUGEBAUER, Texas              SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas             ERIC SWALWELL, California
PAUL C. BROUN, Georgia               DAN MAFFEI, New York
STEVEN M. PALAZZO, Mississippi       ALAN GRAYSON, Florida
MO BROOKS, Alabama                   JOSEPH KENNEDY III, Massachusetts
RANDY HULTGREN, Illinois             SCOTT PETERS, California
LARRY BUCSHON, Indiana               DEREK KILMER, Washington
STEVE STOCKMAN, Texas                AMI BERA, California
BILL POSEY, Florida                  ELIZABETH ESTY, Connecticut
CYNTHIA LUMMIS, Wyoming              MARC VEASEY, Texas
DAVID SCHWEIKERT, Arizona            JULIA BROWNLEY, California
THOMAS MASSIE, Kentucky              MARK TAKANO, California
KEVIN CRAMER, North Dakota           ROBIN KELLY, Illinois
JIM BRIDENSTINE, Oklahoma
RANDY WEBER, Texas
CHRIS STEWART, Utah
VACANCY
                                 ------                                

                Subcommittee on Research and Technology

                   HON. LARRY BUCSHON, Indiana, Chair
STEVEN M. PALAZZO, Mississippi       DANIEL LIPINSKI, Illinois
MO BROOKS, Alabama                   FEDERICA WILSON, Florida
RANDY HULTGREN, Illinois             ZOE LOFGREN, California
STEVE STOCKMAN, Texas                SCOTT PETERS, California
CYNTHIA LUMMIS, Wyoming              AMI BERA, California
DAVID SCHWEIKERT, Arizona            DEREK KILMER, Washington
THOMAS MASSIE, Kentucky              ELIZABETH ESTY, Connecticut
JIM BRIDENSTINE, Oklahoma            ROBIN KELLY, Illinois
LAMAR S. SMITH, Texas                EDDIE BERNICE JOHNSON, Texas
                            C O N T E N T S

                            Date of Hearing

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Larry Bucshon, Chairman, Subcommittee 
  on Research and Technology, Committee on Science, Space, and 
  Technology, U.S. House of Representatives......................     6
    Written Statement............................................     7

Statement by Representative Lamar Smith, Chairman, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..     8
    Written Statement............................................    10

Statement by Representative Daniel Lipinski, Ranking Minority 
  Member, Subcommittee on Research and Technology, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..    11
    Written Statement............................................    11

                               Witnesses:

Dr. Jonathan Rich, Chairman and CEO, Berry Plastics, Inc.
    Oral Statement...............................................    13
    Written Statement............................................    16

Ms. Deborah Wince-Smith, President and CEO, Council on 
  Competitiveness
    Oral Statement...............................................    21
    Written Statement............................................    23

Mr. Zach Mottl, Chief Alignment Officer, Atlas Tool and Die 
  Works, Inc.
    Oral Statement...............................................    36
    Written Statement............................................    39

Discussion.......................................................    48

             Appendix I: Additional Material for the Record

Submitted statement by Representative Eddie Bernice Johnson, 
  ranking Member, Committee on Science, Space, and Technology, 
  U.S. House of Representatives..................................    60


                    STRATEGIC PLANNING FOR NATIONAL



                     MANUFACTURING COMPETITIVENESS

                              ----------                              


                        WEDNESDAY, JULY 10, 2013

                  House of Representatives,
                    Subcommittee on Research and Technology
               Committee on Science, Space, and Technology,
                                                   Washington, D.C.

    The Subcommittee met, pursuant to call, at 1:35 p.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Larry 
Bucshon [Chairman of the Subcommittee] presiding.
[GRAPHIC] [TIFF OMITTED] T2219.001

[GRAPHIC] [TIFF OMITTED] T2219.002

[GRAPHIC] [TIFF OMITTED] T2219.003

[GRAPHIC] [TIFF OMITTED] T2219.004

    Chairman Bucshon. The Subcommittee on Research and 
Technology will now come to order.
    Good morning and welcome to today's hearing entitled 
``Strategic Planning for National Manufacturing 
Competitiveness.''
    In front of you are packets containing the written 
testimony, biographies, and truth-in-testimony disclosures for 
today's witness panel. I now recognize myself for five minutes 
for an opening statement.
    Again, good afternoon. I would like to welcome everyone to 
today's hearing, which is being held to examine H.R. 2447, the 
``American Manufacturing Competiveness Act,'' sponsored by the 
Subcommittee Ranking Member, Mr. Lipinski.
    Manufacturing has been a critical part of the American 
economic competitiveness since the industrial revolution. Many 
of the groundbreaking technologies that are widely deployed 
today are the result of American ingenuity and manufacturing.
    Manufacturing represents approximately 11 percent of the 
American economy, and manufacturing output has risen by 13 
percent over the last several years. Manufacturing also has the 
greatest multiplier effect of any major sector in the American 
economy. According to the Bureau of Economic Analysis, for each 
dollar spent in manufacturing generates an additional $1.35 in 
spending.
    In my State of Indiana, there are 9,698 manufacturers, and 
probably changing every day, employing 556,537 workers. With 
16.4 percent of our workforce employed in the manufacturing 
industry, Indiana ranks first in manufacturing employment and 
second in manufacturing as a gross state product nationwide. 
The 8th District of Indiana is home to many of these 
manufacturers and I have seen the work being done firsthand at 
manufactures like Berry Plastics, whose CEO will testify today, 
Toyota Motor and Alcoa, amongst many others.
    Universities--along with the manufacturers, universities 
like Vincennes University, the University of Evansville, and 
the University of Southern Indiana, offer degrees related to 
advanced manufacturing and are working closely with businesses 
to develop a talented and well-trained workforce, which is 
critical.
    Clearly, manufacturing is of critical importance to the 
American economy. However, employment in this sector is 
significantly lower as a share of the economy than in the post-
World War II era. Further, we have seen reports from prominent 
think tanks such as the Information Technology and Innovation 
Foundation, arguing that America is losing its competitiveness 
in manufacturing and may suffer relative decline as a result.
    As a country, we lack a strategic plan to guide economic 
policy decisions that affect American manufacturing 
competitiveness. We have heard a number of proposals by the 
Administration to establish expensive Federal manufacturing 
programs. However, these programs have come without a plan that 
addresses the comprehensive competitive environment faced by 
today's American manufacturers.
    Today's hearing allows us to examine the American 
Manufacturing Competitiveness Act of 2013, which calls on the 
National Science and Technology Council's Committee on 
Technology to develop a national manufacturing competitiveness 
plan. It would task the Committee with conducting an analysis 
of the factors that affect American manufacturing 
competitiveness such as tax issues, trade, workforce, and 
intellectual property factors.
    The goals of the strategic plan are to promote economic and 
employment growth in the manufacturing sector, support a 
skilled workforce, enable innovation and investment in 
manufacturing, and support national security. I believe such a 
strategic plan, if developed responsibly, can have positive 
implications for America's manufacturers and can lead to 
policies that improve our competitiveness.
    However, I have some reservations about the development and 
implementation of the plan. First, it is critically important 
that a strategic plan reflects the real needs of our Nation's 
manufacturers and should not be politicized and used as a tool 
to advance favored interests.
    Second, reflecting the recommendations of the President's 
Council of Advisors on Science and Technology, a manufacturing 
plan must not serve as industry policy. The Federal Government 
should not be in the business of picking winners and losers. 
Finally, we should ensure that this plan does not promote 
manufacturing at the expense of all the other sectors of our 
economy.
    I am looking forward to hearing from our witnesses on their 
thoughts about the proposed legislation, including any 
recommendations they have for possible improvements.
    I would like to thank our witnesses for being here today 
and look forward to their testimony.
    [The prepared statement of Mr. Bucshon follows:]

Prepared Statement of Subcommittee on Research and Technology Chairman 
                             Larry Bucshon

    Good afternoon, I'd like to welcome everyone to today's hearing, 
which is being held to examine H.R. 2447, the American Manufacturing 
Competiveness Act, sponsored by the Subcommittee's Ranking Member, Mr. 
Lipinski.
    Manufacturing has been a critical part of American economic 
competitiveness since the industrial revolution. Many of the 
groundbreaking technologies that are widely deployed today are the 
result of American ingenuity and manufacturing.
    Manufacturing represents approximately 11 percent of the American 
economy, and manufacturing output has risen by 13 percent over the last 
several years. Manufacturing also has the greatest multiplier effect of 
any major sector in the American economy. According to the Bureau of 
Economic Analysis, each dollar spent in manufacturing generates an 
additional $1.35 in spending.
    In my state of Indiana, there are 9,698 manufacturers employing 
556,537 workers; with 16.4 percent of our workforce employed in the 
manufacturing industry, Indiana ranks first in manufacturing employment 
and second in manufacturing as a gross state product. The 8th district 
of Indiana is home to many of these manufacturers and I have seen the 
work being done firsthand at manufactures like Berry Plastics, whose 
CEO will be testifying before us today, Toyota Motor and Alcoa. Along 
with the many manufacturers in our district, universities like 
Vincennes University, the University of Evansville and the University 
of Southern Indiana offer degrees related to advanced manufacturing and 
work closely with these entities to develop a talented and well-trained 
workforce.
    Clearly, manufacturing is of critical importance to the American 
economy. However, employment in this sector is significantly lower as a 
share of the economy than in the post-World War II era. Further, we 
have seen reports from prominent think tanks such as the Information 
Technology and Innovation Foundation, arguing that America is losing 
its competitiveness in manufacturing and may suffer relative decline as 
a result.
    As a country, we lack a strategic plan to guide economic policy 
decisions that affect American manufacturing competitiveness. We have 
heard a number of proposals by the Administration to establish 
expensive federal manufacturing programs. However, these programs have 
come without a plan that addresses the comprehensive competitive 
environment faced by America's manufacturers.
    Today's hearing allows us to examine the American Manufacturing 
Competitiveness Act of 2013, which calls on the National Science and 
Technology Council's Committee on Technology to develop a national 
manufacturing competitiveness strategic plan. It would also task the 
Committee with conducting an analysis of the factors that affect 
American manufacturing competitiveness, such as tax, trade, workforce, 
and intellectual property factors.
    The goals of the strategic plan are to promote economic and 
employment growth in the manufacturing sector, support a skilled 
workforce, enable innovation and investment in manufacturing, and 
support national security. I believe that such a strategic plan, if 
developed responsibly, can have positive implications for America's 
manufacturers and can lead to policies that improve our 
competitiveness.
    However, I have reservations about the development and 
implementation of this plan. First, it is critically important that a 
strategic plan reflects the real needs of our nation's manufacturers 
and should not be politicized and used as a tool to advance favored 
interests. Second, reflecting the recommendations the President's 
Council of Advisors on Science and Technology, a manufacturing plan 
must not serve as industrial policy. The federal government should not 
be in the business of picking economic winners and losers. Finally, we 
should ensure that this plan does not promote manufacturing at the 
expense of other sectors in the economy.
    I am looking forward to hearing from our witnesses on their 
thoughts about the proposed legislation, including any recommendations 
they have for improvements. We thank our witnesses for being here today 
and we look forward to your testimony.

    Chairman Bucshon. And I now recognize the Ranking Member, 
Mr. Lipinski, the gentleman from Illinois, for his opening 
statement.
    Mr. Lipinski. Thank you, Mr. Chairman. I would like to 
thank you and I would like to thank Chairman Smith for holding 
this hearing on this bipartisan bill I introduced with 
Representative Kinzinger, as you said, the American 
Manufacturing Competitiveness Act, H.R. 2447. I have been 
working for the last four years on this legislation to put more 
Americans to work by creating an economic environment that 
would boost domestic manufacturing.
    In each of the past two Congresses under both Democratic 
and Republican majorities, this bill has passed with 
overwhelming support, and I am hopeful that we can work 
together to not only pass the bill in the House but finally get 
this commonsense idea into law. At its core, this legislation 
is simply about bringing the private and public sectors 
together to develop a forward-looking set of recommendations 
for tax, workforce, energy, trade, R&D, regulatory, and other 
policies that would best enable domestic manufacturers to 
compete globally and put more Americans to work.
    A vibrant manufacturing sector is critical for America's 
economic success and success of the middle class. In 2011, 
manufacturing contributed $1.8 trillion to our Nation's economy 
and accounted for 47 percent of all U.S. exports. Successful 
manufacturers provide the economy with huge job numbers. For 
example, Boeing employs 172,000 people compared to Facebook, 
which employs about 4,900 people. These are jobs with wages and 
benefits that are 1/3 higher than in other sectors.
    Plus, manufacturing has an incredibly high multiplier 
effect. For every manufacturing job we create, we add five 
additional jobs, and as a source of nearly 2/3 of U.S. 
investment in research and development, manufacturing drives 
innovation. When we lose our capacity to manufacture, we lose 
much of our ability to create the breakthrough technologies and 
products of tomorrow. Simply put, made in America equals 
American jobs and a strong economy. And let us never forget 
that manufacturing is critical to defending America. We cannot 
afford to outsource our Nation's defense.
    While manufacturing remains vital to the American economy, 
since the 1970s, the number of manufacturing jobs has been 
shrinking from 20 million in 1979 to fewer than 12 million 
today. The recent recession hit workers in manufacturing 
especially hard, and China is poised to overtake America as the 
world's leading manufacturer. The hemorrhaging of manufacturing 
jobs has contributed to the stagnation of middle-class wages. 
Since 2000, inflation adjusted median household income has 
fallen by about $4,800. But recently, there have been good 
signs with American manufacturing showing signs of a comeback. 
Continued American leadership in innovation and a domestic 
energy boom could help spur a manufacturing renaissance.
    However, challenges do remain. Many other nations have 
national manufacturing strategies. It is not just countries 
like China but also Japan, Germany, United Kingdom, and many 
others have strategies to help their domestic manufacturers. 
Meanwhile, the United States has a multitude of overlapping 
Federal agencies and policies that impact manufacturers without 
any coordination.
    Let me be clear. What this bill calls for is not an 
industrial policy or picking winners and losers, but the 
Federal Government already has countless departments, agencies, 
programs, and policies that affect manufacturing from our tax 
code to our energy and environmental policies to name just a 
few. Most importantly for this committee, our government also 
has policies and programs related to research and development, 
technology transfer, education, and workforce. However, we have 
no one examining the impact that government policies are having 
on manufacturing and how we can be more efficient and 
effective. This is why I have introduced this legislation.
    Through coordination of various government agencies that 
are most involved in manufacturing and, most importantly, 
coordination with private sector leaders, an evaluation would 
be conducted of our manufacturing sector's current state and 
what policies would create the best economic environment in 
which manufacturers would thrive. It is vitally important that 
this be a recurrent effort wherein we can reassess the global 
and domestic economic environment, technology developments, and 
other events that will help the United States adapt its 
policies with the changing world.
    At the end of the day, this bill is about setting aside 
politics and implementing policies that will create an 
environment conducive to the flourishing of American 
manufacturing, which is vital for middle-class American jobs 
and for national security. If we continue to muddle through 
without a coordinated plan, government will still be impacting 
manufacturing but in an uncoordinated, often inefficient, 
sometimes wasteful manner that handcuffs American businesses. 
We should change this policy.
    I look forward to hearing from all of our witnesses about 
how we can best do this. Thank you.
    [The prepared statement of Mr. Lipinski follows:]

     Prepared Statement of Subcommittee on Research and Technology
                Ranking Minority Member Daniel Lipinski

    I would like to thank Chairman Smith and Chairman Buschon for 
holding this hearing on the bipartisan bill I have introduced with Rep. 
Kinzinger, the American Manufacturing Competitiveness Act, H.R. 2447.
    I have been working for the last four years on bipartisan 
legislation that would put more Americans to work by creating an 
economic environment that would boost domestic manufacturing. In each 
of the past two Congresses--under both Democratic and Republican 
majorities--the bill has passed with overwhelming support. I am hopeful 
that we can now work together to not only pass a bill in the House, but 
finally get this common-sense idea into law.
    At its core, this legislation is simply about bringing the private 
and public sectors together to develop a forward-looking set of 
recommendations for the tax, workforce, energy, trade, R&D, regulatory, 
and other policies that will best enable domestic manufacturers to 
compete globally and put more Americans to work.
    A vibrant manufacturing sector is critical for America's economic 
growth and the success of the middle class. In 2011, manufacturing 
contributed $1.8 trillion to our nation's economy and accounted for 47 
percent of all U.S. exports. Successful manufacturers provide the 
economy with huge job numbers. For example, Boeing employs 172,000 
people compared to Facebook which employs about 3,000 people. These are 
jobs with wages and benefits that are one-third higher than in other 
sectors. Plus manufacturing has an incredibly high multiplier effect. 
For every manufacturing job we create, we add five additional jobs. And 
as a source of nearly two-thirds of U.S. investment in research and 
development, manufacturing drives innovation.
    When we lose our capacity to manufacture, we lose much of our 
ability to create the breakthrough technologies and products of 
tomorrow. Simply put, ``Made in America'' equals American jobs and a 
strong economy.
    And let us never forget that manufacturing is critical to defending 
America. We cannot afford to outsource our nation's defense.
    But while manufacturing remains vital to the American economy, 
since the 1970s the number of manufacturing jobs has been shrinking, 
from 20 million in 1979 to fewer than 12 million today. The recent 
recession hit workers in manufacturing especially hard, and China is 
poised to overtake America as the world leader in manufacturing. The 
hemorrhaging of manufacturing jobs has contributed to the stagnation of 
middle-class wages--since 2000, the inflation-adjusted median household 
income has fallen by about $4800.
    But recently there has been some good news, with American 
manufacturing showing signs of a comeback. Continued American 
leadership in innovation and a domestic energy boom could help spur a 
manufacturing renaissance. However, challenges remain and need to be 
addressed. Many other nations have national manufacturing strategies. 
This is not just countries like China, but also Japan, Germany, and the 
United Kingdom, among many others, have strategies to help their 
domestic manufacturers. Meanwhile the U.S. has a multitude of 
overlapping federal agencies and policies that impact manufacturers 
without any coordination.
    Let me be clear, what this bill calls for is not an industrial 
policy or picking winners and losers. But the federal government 
already has countless departments, agencies, programs, and policies 
that affect manufacturing, from our tax code to our energy and 
environmental policies to name just a few.
    Most importantly for this Committee, our government also has 
policies and programs related to research and development, technology 
transfer, education and workforce.
    However, we have no one examining the impact that government 
policies are having on manufacturing and how we can be more efficient 
and effective. This is why I have introduced this legislation. Through 
coordination of various government agencies that are most involved in 
manufacturing, and most importantly, coordination with private sector 
leaders, an evaluation would be conducted of our manufacturing sector's 
current state and what policies would create the best economic 
environment in which manufacturers would thrive. And it is vitally 
important that this be a recurrent effort, wherein we can reassess the 
global and domestic economic environment, technology developments, and 
other events that will help the United States adapt it policies with 
the changing world.
    At the end of the day, this bill is about setting aside politics 
and implementing policies that will create an environment conducive to 
the flourishing of American manufacturing, which is vital for middle 
class American jobs and for national security. If we continue to muddle 
through without a coordinated plan, government will still be impacting 
manufacturing, but in an uncoordinated, often inefficient, sometimes 
wasteful manner that handcuffs American business.We should change this 
policy.

    Chairman Bucshon. Thank you, Mr. Lipinski.
    The Chair now recognizes the Chairman of the full 
Committee, Mr. Smith, for an opening statement.
    Chairman Smith. Thank you, Mr. Chairman. Also, I would like 
to thank the Subcommittee's Ranking Member, Dan Lipinski, for 
sponsoring the bill we are considering at this hearing, the 
American Manufacturing Competitiveness Act of 2013. And, Dan, I 
didn't realize until your opening statement that you have been 
working on it for 4 long years. So I am glad we are having this 
hearing today.
    And I support Mr. Lipinski's overarching goal, the creation 
of a manufacturing strategy to better guide government policies 
and Federal spending. We must foster innovation so that 
powerful new technologies are developed here and not overseas, 
and so that the United States provides the best environment in 
which to do business. Made in America is a label we want to see 
on advanced technologies coming out of American laboratories 
and factories. And I am looking forward to this hearing today 
to focus our discussion on what challenges American 
manufacturers currently face, what issues this Federal 
manufacturing strategy should address in order to ensure 
American competitiveness, and possible policy recommendations 
as well.
    Finally, Dr. Rich, I understand you manufacture a number of 
objects, but one of them is fancy coffee cups we have in front 
of us today up here. So thank you for that.
    And thank you, Mr. Chairman. I will yield back.
    [The prepared statement of Mr. Smith follows:]

          Prepared Statement of Committee Chairman Lamar Smith

    Thank you, Chairman Bucshon, for yielding me time. I would like to 
thank the Subcommittee's Ranking Member, Dan Lipinski, for sponsoring 
the bill we are considering at this hearing, The American Manufacturing 
Competitiveness Act of 2013.
    While I share the reservations expressed by Dr. Bucshon about some 
aspects of the bill, I support Mr. Lipinski's overarching goal-the 
creation of a manufacturing strategy to better guide government 
policies and federal spending.
    We must foster innovation so that powerful new technologies are 
developed here and not overseas and so that the United States provides 
the best environment in which to do business. ``Made in America'' is a 
label we want to see on advanced technologies coming out of American 
laboratories and factories.
    I'm looking forward to this hearing today to focus our discussion 
on what challenges American manufacturers currently face, what issues 
this federal manufacturing strategy should address in order to ensure 
American competitiveness, and possible policy recommendations.
    I would also like to make a public commitment to Ranking Member 
Johnson that the Committee will hold a hearing on her manufacturing 
bill in September.

    Chairman Bucshon. Great.
    If there are Members who wish to submit additional opening 
statements, your statements will be added to the record at this 
point.
    Chairman Bucshon. Now, it is my pleasure to introduce our 
witnesses. Our first witness is Dr. Jonathan Rich, the Chairman 
and CEO of Berry Plastics, which is located in Evansville, 
Indiana, in my district.
    With a portfolio of more than 13,000 products, Berry 
Plastics is one of the largest global manufacturers of flexible 
and rigid plastic packaging for food, personal care, 
pharmaceutical, healthcare, and industrial applications--
including the cup that Chairman Smith just pointed out.
    I had the opportunity to tour their headquarters in 
Evansville and see firsthand the impressive manufacturing done 
at this facility. And Berry Plastics employs 15,000 workers at 
88 global manufacturing facilities with approximately 70 of 
those located in the United States.
    Dr. Rich has a bachelor's of science degree in chemistry 
from Iowa State University and a Ph.D. in chemistry from the 
University of Wisconsin, Madison. In 2010, he was granted an 
honorary doctorate of science degree at Iowa State University. 
Dr. Rich is an inventor with more than 25 issued United States 
patents and has published 14 scientific journal articles. He is 
a past Director of the Rubber Manufacturing Association and the 
International Institute of Synthetic Rubber Producers and is a 
member of the American Chemical Society and the Society of the 
Plastics Industry. Welcome, Dr. Rich.
    Our second witness is Ms. Deborah Wince-Smith, President 
and CEO of the Council on Competitiveness. She has more than 20 
years of experience as a senior U.S. Government official. 
Notably, she served as the Nation's first Senate-confirmed 
Assistant Secretary of Commerce for Technology Policy in the 
Administration of President George H. W. Bush overseeing 
Federal technology transfer policy, implementation of the Bayh-
Dole Act, and the White House National Technology Initiative. 
Ms. Wince-Smith graduated magna cum laude from Vassar College 
with a bachelor's of arts degree. At King's College at the 
University of Cambridge she read for a master's degree in 
classical archaeology. In 2006, she received an honorary 
doctorate in humanities from Michigan State University.
    I now would like to yield to the Ranking Member, Mr. 
Lipinski, to introduce our third witness.
    Mr. Lipinski. Thank you, Mr. Chairman. It is my pleasure to 
introduce our final witness, Mr. Zack Mottl. Mr. Mottl is the 
fourth generation of his family to own and operate Atlas Tool 
and Die Works, which is located in Lyons, Illinois, in my 
district. The company was founded in 1918 and it is a world-
class precision manufacturing facility offering a broad array 
of metal manufacturing services for the defense, aerospace, 
telecommunication, electronics, and medical industries, among 
others.
    In his current role as Chief Alignment Officer, Zack works 
not only to meet the business needs of new and current 
customers but he is engaged in outreach and development 
strategies that identify operational improvements. In addition 
to his leadership at Atlas, Zack is serving a second term on 
the Tooling and Manufacturing Association of Illinois Board of 
Directors. TMA represents over 1,000 member companies. In 2011 
he was elected by the board to serve as TMA's Chairman.
    I have been to Atlas a number of times and I am always 
impressed with the work that they are doing and I appreciate 
hearing from Zach about the difficulties that small 
manufacturing businesses are facing in America. It is my 
pleasure to have Zach testify today and offer his perspective 
on the need for national manufacturing strategy. With that, I 
welcome Zach Mottl and I yield back.
    Chairman Bucshon. Thank you. I now would like to recognize 
Dr. Rich for five minutes for his testimony.

    TESTIMONY OF DR. JONATHAN RICH, CHAIRMAN AND CEO, BERRY 
                         PLASTICS, INC.

    Dr. Rich. Well, good afternoon, Mr. Chairman and Members of 
the Committee. My name is John Rich. I am the Chairman and CEO 
of Berry Plastics Operation.
    Berry Plastics, headquartered in Evansville, Indiana, in 
Indiana's 8th Congressional District, is one of the largest 
food, personal care, healthcare, pharmaceutical, and industrial 
packaging companies in the United States. Starting from a small 
beginning in 1967 with three employees and one plastic 
injection molding machine, today, we employ over 15,000 people 
at approximately 70 United States manufacturing warehousing 
facilities, which are located in more than 30 different States.
    A significant milestone was reached last October when we 
took the company public and shares of our common stock began 
trading on the New York Stock Exchange. While Berry Plastics is 
not a household name, we have over 13,000 customers and we 
manufacture over 50,000 different packages with our products 
being found in nearly every household in America, and I have 
yet to meet someone who doesn't have at least five of our 
products at home right now.
    Even though Berry is a significant industry player, the 
global packaging industry in which we participate is extremely 
competitive. As such, we are diligent in pursuing those 
initiatives which will allow us to best meet or exceed our 
customer's expectations. Berry's competitive advantage is 
rooted in our expertise in manufacturing. Each year, we 
typically invest approximately $250 million in state-of-the-art 
capital equipment and $50 million in product and manufacturing 
process research and development. These investments in 
manufacturing innovation, new product development, and the 
investments we have made in training for our people are the 
primary factors which have allowed us to grow at over 20 
percent per year since 1995. It is also the principal reason 
that we have been able to compete and win in the ever more 
challenging global marketplace. And yet, if we stop innovating 
and investing in new technologies either as a company or 
country, then our success will quickly disappear.
    Throughout our history, Berry has worked cooperatively with 
federal, state, and local governments with the mutual goal of 
growth that in turn creates new jobs that generates consumer 
spending and tax revenues in our communities. When it all 
works, we create exciting new products for our customers, new 
jobs for our communities, and increased value for our 
shareholders.
    A great example of this is our new thermal packaging 
technology that we have branded Versalite, an example of which 
you have in front of you. Hopefully, nobody will ever have to 
burn their hand again on a cup of coffee here coming soon to a 
coffee store near you. So to fully develop the initial 
conceptual ideas behind Versalite, we had to invent a new 
material, new product, and a new manufacturing technology.
    I am very pleased to say that all of this is being 
installed in our new factory in Madisonville, Kentucky. The 
support extended by the state and local agencies in the 
proximity of the new plant to our core engineering base in 
Evansville made locating in Kentucky the right decision for 
Berry Plastics. Manufacturing at this one facility should 
create over 400 new jobs for a community in need of employment 
opportunities for its citizens.
    However, it is important to understand that not only is the 
competitiveness of America's manufacturing industries vital to 
the stability and success of our local communities, it is also 
vital to our national security. While Berry has not 
historically participated extensively in government contracts, 
we have done some work in the past but are not currently 
working on any active contracts.
    To be successful, Berry, like other manufacturing 
companies, must have the ability to invent state-of-the-art 
products, manufacturing processes, and equipment, but it is 
imperative that we have the ability to recruit and train the 
best workforce in the world. The most important single factor 
that determines our success at Berry and the key to maintaining 
and expanding America's leadership in manufacturing lies in the 
development of outstanding engineers, scientists, and our 
manufacturing labor force. In this regard, Berry--and companies 
like Berry, have benefited from the important partnerships that 
we have with universities, vocational schools, and government 
laboratories and agencies. The strengthening of that 
relationship between private industry and government is a vital 
part of the legislation being proposed.
    My own personal experiences a good example of the long-term 
benefits of government investments in research and development 
for which I have always been grateful. As an undergraduate 
student at Iowa State, I worked in the Department of Energy's 
Ames lab. While a graduate student, I worked on the research 
sponsored by the National Science Foundation in the Air Force 
Office of Scientific Research.
    I am pleased to appear here today in support of the goals 
targeted by H.R. 2447. The bill's objectives of promoting 
growth, jobs, sustainability, and competitiveness is vital to 
our national interest and critical to helping us progress in 
recovering from the economic downturn, the lingering effects of 
which continue to be felt by companies like Berry.
    Perhaps the most important aspect of the proposed 
legislation is the goal of supporting the development of 
skilled workforce. The government is in a unique position to 
support manufacturing-related research and development at 
United States universities and vocational institutes. It is 
important that this support contain both generic and targeted 
objectives. Government agencies such as NSF, the Department of 
Energy, National Institute of Standards, Department of Defense, 
NASA, and others are particularly well-suited to carry out this 
mandate.
    In light of the time, let me close by saying that to 
succeed it is imperative that we invest in new materials and 
manufacturing processes like those being supported in this 
bill. I am happy to support the bill and would be willing and 
interested in participating in however the private sector may 
be involved in the development of the strategic plan. I thank 
you very much for the opportunity to appear here.
    [The prepared statement of Mr. Rich follows:]
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    Chairman Bucshon. Thank you, Dr. Rich.
    Ms. Wince-Smith, you are recognized for five minutes for 
your testimony.

   TESTIMONY OF MS. DEBORAH WINCE-SMITH, PRESIDENT AND CEO, 
                   COUNCIL ON COMPETITIVENESS

    Ms. Wince-Smith. Thank you, Chairman Bucshon, Ranking 
Member Lipinski, and Members of the Subcommittee, for inviting 
me to discuss H.R. 2447, the American Manufacturing 
Competitiveness Act of 2013 introduced by Congressman Lipinski.
    My name is Deborah Wince-Smith, and I am the President and 
CEO of the U.S. Council on Competitiveness. This organization, 
almost 30 years old, is a nonprofit, nonpartisan organization 
comprised of CEOs, labor leaders, university presidents, and 
national laboratory directors. We come together to set an 
action agenda for U.S. competitiveness, productivity, and 
leadership to raise the standard of living and security for 
every American.
    Although America remains the world's top producer, our 
Nation has surrendered important manufacturing sectors. They 
were not all lost in the pursuit of cheap labor or the result 
of products becoming low-margin commodities. We have lost 
production of cutting-edge innovations developed in America 
because, among other reasons, we have had tax, regulatory, 
workforce-skills challenges, finance, and infrastructure 
limitations that made production elsewhere more competitive.
    The Council on Competitiveness has long recognized that 
technologically advanced manufacturing and production is 
essential to our Nation's economic growth, prosperity, and 
national security. Indeed, America's leadership in the 
development and deployment of next-generation manufacturing is 
directly linked to our future innovation capacity across all 
sectors of our economy, including the service economy.
    In 2009, the Council launched our flagship U.S. 
Manufacturing Competitiveness Initiative under the leadership 
of Samuel Allen, a CEO and Chairman of Deere, our Chairman of 
the Council, and a distinguished group of CEOs, university 
presidents, labor leaders, and lab directors. Since the start 
of this initiative, we have held over 18 strategic dialogues 
across the country, including most recent discussions on the 
future of additive manufacturing hosted at Oak Ridge National 
Lab and cyber-enabled manufacturing hosted at Sandia National 
lab. These strategic dialogues have together hundreds of 
experts and practitioners from the broader network of the 
Council, including CEOs from multinationals and startups, 
research universities, community college presidents, and the 
laboratory environment as well, and we together challenge 
ourselves to think: what can we do to achieve America's full 
manufacturing potential and accelerate the innovation that 
underpins this transformation?
    The central recommendation and analysis of the 
manufacturing initiative have been captured in our landmark 
report MAKE: An American Manufacturing Movement, which we 
released to the Summit in 2001. MAKE plays out many policies 
and actions the Council recommends to develop a national 
manufacturing strategy, including many in the concrete 
initiatives the Administration and Congress have implemented, 
such as in advanced materials, smart sensors and robotics, 
additive productions, data analytics, and cyber security, and 
digital fabrication utilizing the power of high-performance 
computing for large enterprises and ensuring we bring this 
capability down into the supply chain of our small and medium-
sized businesses.
    The Council has called for policy reform and legislative 
action to create an innovation-friendly ecosystem to attract, 
retain, and support from startup to scale-up the high-value 
investment in manufacturing production. We have worked with 
Deloitte to produce two ground-breaking reports looking at what 
CEOs around the world think about manufacturing 
competitiveness. In both reports, CEOs ranked access to 
innovative talent and national economic policies such as trade, 
tax, IP protection, and standards as the top two drivers of 
manufacturing competitiveness.
    The Council has long recognized that the cost and access to 
sustainable energy has a huge impact across every sector. We 
are very excited to form a new partnership with the Department 
of Energy, the American Energy and Manufacturing 
Competitiveness Partnership, to explore the pivotal linkages 
between energy and new opportunities for the public and private 
sectors to develop new models for energy efficiency and to 
embed energy productivity through all manufacturing processes.
    Without strong public and private support for the complete 
lifecycle innovation and production process, the United States 
cannot maximize the return on its innovation investments 
measured in jobs, growth, tax revenue, and national security.
    In closing, we urge Congress and the President to develop 
and implement a national manufacturing strategy to maximize 
America's manufacturing potential. The American Manufacturing 
Competitiveness Act under consideration today by the 
Subcommittee is key to our future. The Council strongly 
supports an enactment by the House and Senate.
    Thank you again, Mr. Chairman, for having me today, and I 
look forward to your questions.
    [The prepared statement of Ms. Wince-Smith follows:]
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    Chairman Bucshon. Thank you very much. That buzzing means 
they have called a vote but we will finish your testimony, Mr. 
Mottl, and then after approximately a 45-minute interruption, 
then we can--we will take some questions. So I recognize Mr. 
Mottl for five minutes for his testimony.

  TESTIMONY OF MR. ZACH MOTTL, CHIEF ALIGNMENT OFFICER, ATLAS 
                    TOOL AND DIE WORKS, INC.

    Mr. Mottl. All right. Good afternoon. Thank you very much, 
Chairman Bucshon, Members of the Committee, Ranking Member 
Lipinski, for providing me the opportunity to speak before you 
today.
    Manufacturing is a subject very near to my heart. I am the 
4th generation of my family, since 1918, to own and operate our 
business, Atlas Tool and Die Works. I am also the Vice 
President and co-owner of Abet Industries, as well as Accushim, 
Inc. The businesses are located in Lyons and Lagrange, 
Illinois, in Representative Dan Lipinski's district. All three 
companies are my family's related businesses in precision 
manufacturing. We make various parts and assemblies for the 
defense, aerospace, telecom, electronics, medical, and 
industrial industries. Together we employ around 80 people.
    I also serve as Chairman of the Tooling and Manufacturing 
Association of Illinois. TMA represents 1,000 small and medium-
sized manufacturers in the Midwest and together we employ 
around 30,000 skilled workers.
    As an advocate of the critical importance of a healthy and 
growing manufacturing sector in any national economy, I am here 
to support passage of the American Manufacturing 
Competitiveness Act of 2013. I commend Congressman Lipinski and 
Congressman Kinzinger for their great bipartisan work on this 
legislation. I think it is great that the Administration and 
Congress are also working to advance manufacturing policy. 
After all, we really haven't had a national manufacturing 
policy since Alexander Hamilton's ``Report on Manufacturers'' 
in 1791.
    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. We have heard from other 
experts that various things that the manufacturing sector might 
need. Some people feel free trade is a problem; others say it 
is tax policy or energy policy. Still other people say it is 
fine and nothing is needed. With all these opinions, it is 
difficult to develop a path forward and a much-needed national 
manufacturing strategy.
    The bill creates a system to thoughtfully and methodically 
evaluate the issues surrounding the industry and then outlines 
a framework to develop a plan for success. As a business owner, 
I know planning is critical. Plan, execute, review: that is the 
basic core of any good business model. But unfortunately, when 
an organization doesn't operate with a plan, what happens is a 
plan to fail.
    I also support the Administration's efforts in launching 
the National Network for Manufacturing Innovation. As you know, 
most of the innovation occurs at the local level and is 
realized by small and mid-size companies in small steps at a 
time as part of their processes. However, there are some 
critical components we need from government to be successful. 
We need predictability and stability, especially in the areas 
of taxes and regulation. We need research and development tax 
credits to be permanent. We need a practical relationship 
between business and government. Too often, I find we are 
moving at different speeds with government usually moving 
slower than the private industry as needed to create innovation 
and jobs.
    We need government programs to be easily accessible to 
small and mid-size manufacturers and to know what tools are 
available. Large manufacturers can more easily navigate the 
government juggernaut but small and mid-size companies like 
mine are often overwhelmed.
    With regard to the much-discussed skills gap in our 
workforce, I believe there is a gap in manufacturing and here 
is why. As a generation of manufacturing shifted overseas, many 
high schools, technical schools, and even community colleges 
scaled back hands-on training programs. Today, with 
manufacturing on the rebound, jobs coming back to the United 
States, many manufacturers like myself can't find the skilled 
workers to run the highly complex technologically advanced 
machinery we now use. Many of the remaining training programs 
have become fragmented and disconnected. Too often students 
earn credentials that are not portable and are not nationally 
recognized.
    There has been a lot of discussion about STEM recently, and 
I would be remiss if I didn't address the subject. I fully 
support STEM and agree with the need in this country for 
advanced learning. However, I submit that technical training 
needs to be on par with advanced learning. We need to offer 
young adults at least two tracks to career success where 
technical training is valued just as much as a four-year 
college degree.
    Right now, the United States is operating without a plan in 
the world economy when it comes to manufacturing, and this is 
unacceptable for a global superpower. We simply must be the 
world leader in manufacturing. As we heard, manufacturing is a 
critical industry and does generate a lot of wealth and a great 
multiplier effect. In addition, we have got good jobs that 
values skills and you can find a lifelong career. It is 
critical for the national defense and additional facts are 
included in my written testimony.
    Many other countries understand these facts. They are 
constantly and actively working to court manufacturers to 
work--locate within their borders. We live in a world with many 
competitors. They are working to surpass the United States in 
many areas, and if we ignore what they are doing and neglect to 
create our own strategy, I can assure you they will succeed.
    China, Russia, Brazil, Canada, the U.K. have a clear and 
detailed strategy and they are actively working to foster 
success. They are asking the questions: What can we do to help 
you sell more product, be more competitive? How can you create 
more jobs? Furthermore, many of these countries already have 
developed best practices when it comes to supporting their 
sectors.
    The American Manufacturing Competitiveness Act will not 
only bring the United States into line with our economic 
competitors but it will also compel us to study them and learn 
from them. 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. This act and 
ultimately the strategy developed out of it is an important 
first step to ensure the long-term health.
    I applaud Congressman Lipinski, Congressman Kinzinger for 
their leadership to develop and sponsor the bill. I urge you 
all to please pass this out of 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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    Chairman Bucshon. Thank you very much.
    At this point, we have been called to a vote so the 
Committee will stand in recess while we vote and reconvene ten 
minutes after the last vote. That would be in approximately 45 
minutes to an hour. Thank you.
    [Recess]
    Chairman Bucshon. The Committee will come back to order.
    Thanks again for the patience of our witnesses and everyone 
in the crowd and the Members. And we wanted to make sure with 
the great testimony of our witnesses that we had an opportunity 
to ask some questions that would help us along the lines of 
what we are discussing today and as it relates to 
manufacturing.
    I will recognize myself for five minutes to start the line 
of questioning, and I will start with Dr. Rich.
    If you had two or three things that Congress could do to 
help improve America's competitiveness in manufacturing, could 
you give us a little insight about what you think those might 
be?
    Dr. Rich. Yes. Again, I think the number one most critical 
item is that we develop and create a base of well-trained and 
skilled people. The investments that the bill will make in that 
training, the investments in research and development, making 
sure that we have the most competitive workforce available in 
the world, I think that is the number one priority that--for 
companies like ours where we are vitally dependent on our 
engineering base. So I would urge the Committee to make sure--
to make the appropriate investments in people.
    Secondly, I think the investments in medium- and long-term 
research projects are also vitally important. Along those 
lines, the government is especially well-equipped to invest in 
the development of certain vital technologies, including 
materials, diagnostics, sensors, ergonomics, investments in 
technology that will ensure that our work places are both 
productive and safe and so forth.
    So--but I completely agree with your opening statement in 
that we should be careful not to over-intrude into the 
marketplace and try to pick, as you say, winners and losers. I 
think there, private industry is much more adapted to both 
responding to the marketplace and, frankly, to taking the bumps 
when those decisions turn out to be wrong. Private industry and 
our investors know what those risks are when they take them as 
opposed to taxpayers, I think, who are oftentimes, you know, 
less sure of what those risks might be in advance. So I 
completely agree with your position on that.
    Lastly, I think the third thing that I would say is that--
to have a longer-term perspective, to have a longer-term 
perspective on the vital technologies that are going to be 
necessary again ranging from the capabilities and logistics, 
the ability to manufacture things rapidly and on time are going 
to be very important. So those are three things that I would 
say.
    Chairman Bucshon. Great, thank you. And I will talk with 
Ms. Wince-Smith.
    My understanding is that some of our trading partners 
require transfer of intellectual property, IP, in exchange for 
access to their markets. China, for instance, has set certain 
IP transfer requirements through forced partnerships with 
American companies. In other cases, IP has been stolen through 
cyber espionage. How important is it for our manufacturing 
strategy to consider these unfair trade practices other 
countries are doing that may be detrimental to American 
manufacturing?
    Ms. Wince-Smith. Well, I think it is absolutely critical 
and I think it is a bedrock issue. There is, as we know, 
tremendous innovation in the next generation of capabilities of 
manufacturing, and there is no question that it is being 
targeted. We have the data and facts on the cyber attacks that 
are coming from China and other parts of the world but 
particularly China after specific intellectual property. It is 
also being acquired, as you mentioned, Mr. Chairman, through 
the forced technology transfer that goes and partnerships.
    But I do think we have to change the way we deal with 
intellectual property in terms of the infringement and 
protection. Right now, the burden is really on those entities 
who have been infringed as opposed to the infringers. And, you 
know, just as we have very strict standards, legal standards, 
and industry standards around safety and health for food 
products that--what comes into the country, how it is made, and 
all those things, one of the suggestions I would have is that 
we need to think about creating a new standard for intellectual 
property certification that when any component or product comes 
in to this country and any finished entity, there has to be a 
certification from the producer that they have not infringed 
intellectual property just as they have to do this.
    So an example I would use is Kellogg's cereal. When they 
make cereal in Europe, they have five standards to meet on how 
much vitamin D goes in and they do that in order for this 
product to be sold.
    And so I had the honor to be--and I am on the IP Theft 
Commission that is chaired by former Governor Jon Huntsman and 
retired Admiral Dennis Blair, and our report came out in May, 
just one factoid. If China had the level of intellectual 
property protection that the United States has, the estimate in 
this report is we would have an additional $1 trillion in GDP 
and 2 million more jobs.
    Now, the manufacturing part is key to this and so that has 
to be at the heart of any national manufacturing strategy.
    Chairman Bucshon. Great, thank you. My time has expired. 
Mr. Lipinski is recognized.
    Mr. Lipinski. Thank you. I am usually watching and I know 
exactly when the--when my time is coming, but I am very 
interested in listening to what the responses that you had were 
and there are some things I want to follow down--you know, 
continue up on.
    But first I want to thank all of you for your support of 
the legislation, and certainly, I think most people here agree 
and I certainly agree that we don't want to be here picking 
winners and losers but there is so much more that can be done 
just sort of to set out the environment, create the 
environment, because there is so many government--I think that 
is one of the things that I have faced with this bill is people 
say, well, just let the private sector be. But we all know--you 
all know that there is a lot of ways that the government is 
impacting manufacturing already. It is just not doing it 
necessarily in a smart, thoughtful manner. So I thank all of 
you for the support of the bill.
    I look forward to trying out this cup, and tomorrow morning 
when I drink a cup of tea, I will put the hot water in there 
and test that out. So thank you, Dr. Rich.
    And, Ms. Wince-Smith, thank you for all of your work with 
the Council on Competitiveness. We have worked together on a 
lot of manufacturing issues, and I think it is very important 
that you raised technologically advanced manufacturing here 
because I think a lot of people, when they think about 
manufacturing, they don't think about advanced manufacturing 
and about new technology and the opportunities that are 
available and more and more are being made available every day, 
especially through the great research and development that is 
going on in this country at private industry and also in our 
research universities and national labs.
    And so I think that is very important that people don't 
just think about manufacturing as what we have done in the 
past, although we don't want to abandon that. We want to 
continue to do that type of manufacturing, but we also have to 
look to the future.
    But I want to start--I want to follow up on one of the 
points that Dr. Rich had said about education and workforce. 
Mr. Mottl, in your testimony you mentioned that the Tooling and 
Manufacturing Association of Illinois has a new program, the 
Bridgework and Pathways Initiative, focusing on augmenting the 
manufacturing and training programs of 48 of Illinois' 
community colleges. Can you tell us a bit more about this 
initiative and its goals because obviously this is something 
that we all understand is critical right now, and some people 
look out there and say how could you possibly have a shortage 
of qualified workers in anything with our high unemployment? 
But I hear that from manufacturers all the time is the 
difficulty in finding qualified workers. So can--Mr. Mottl, can 
you tell us about that program, anything else you want to talk 
about in that area?
    Mr. Mottl. Thank you. Yes, well, the Bridgework and 
Pathways program is--our goal is to get kind of a standard 
curriculum going among the 48 community colleges so I, as a 
manufacturer, know that if you have a certification in 5 axis 
precision machining, it is a standard program and I know what I 
am getting when I hire an employee. Also, to help build 
enthusiasm for these type of programs, a lot of times, you 
know, parents don't want their children to go into these 
programs and what I would really love to see from the Federal 
Government is the Department of Education revalue these 
training programs.
    But we find with students who go into them and ultimately 
come to work for my member companies is that they are like to 
come and go from the program. They will come and they will take 
some courses, they will get a certificate, and then they will 
work for a little bit but they will come back and take some 
more classes and layer that together. So what we are trying to 
do is develop a set of stackable credentials that can add up 
ultimately to a degree. Maybe you would take some capstone 
courses or some humanities courses and then end up with a 
degree. So the whole time they are working, they are earning a 
living with one of our member companies hopefully, and earning 
a degree that will ultimately add up to--whether it is an 
associate's degree or a four-year college degree.
    But we have just found that in general the programs are 
very fragmented, everybody a different program, and it didn't 
necessarily jive with what manufacturers like myself wanted out 
of the program. So that is what we are doing with Bridgework 
and Pathways.
    Mr. Lipinski. Thank you. And I will yield back the rest of 
my time and hopefully have a chance to ask a few more 
questions. Thank you.
    Chairman Bucshon. Ms. Esty, you are recognized for five 
minutes.
    Ms. Esty. Thank you, Chairman Bucshon, for holding today's 
hearing, and I am proud to join Representative Lipinski in 
cosponsoring this important legislation. And I want to thank 
the three of you for your patience with our unpredictable 
voting schedule.
    I, too, want to follow up on this discussion, this very 
important discussion about workplace--workforce development 
because it really does seem to be in a lot of ways the 
linchpin.
    In Connecticut we are working very hard on these same 
issues. I have a long-time manufacturing district which is 
struggling with this, and I am hearing from manufacturers in my 
district like Ward Leonard in Thomaston and Access Technologies 
in Farmington and Altek Electronics in Torrington and hearing 
directly from these same questions about certification 
programs, access to training programs, credentialing issues. 
And frankly, one of the issues that we have been struggling 
with is the legacy of having lost these manufacturing jobs in 
the past, and we have been looking at this issue about young 
people who might be very interested themselves if they knew 
more about the salary ranges, what the work entailed, but their 
parents or grandparents may be deeply suspicious because their 
experience was so bad with these jobs having been lost.
    Now, that being said, you know, from your perspective and 
experience, what do we think the best way is to engage young 
people? How do we bring them in? Is this something we should be 
looking with getting better teaching and more exciting teaching 
in elementary and secondary school in STEM technologies? Should 
this be around apprenticeship-in-training programs? You know, 
what can you suggest to us is the best route to go?
    Mr. Mottl. I am assuming that is for me. Yes, I have an 
interesting perspective on that. So we have done a summer camp 
program at TMA. That is one of our first steps. We now do a 
program for young kids. I think they are in the fifth grade and 
sixth grade and they come to our summer camp program on 
manufacturing. In fact, it is going on right now. It is a 2-
week program and a lot of what we do is we take them to 
manufacturers and show them the high-tech manufacturing. It is 
computerized. It is one person operating multiple machines that 
are doing multiple operations. It is really high-tech stuff. 
And I think that manufacturers, especially small ones, we sell 
ourselves short and forget to say we are high-tech. We really 
are. And so that is one program we have done.
    Also, we have together a pamphlet--had the pleasure of 
having--Sydney Hoyer came to visit and we were able to show him 
at TMA the pamphlet that we have for young people, and what it 
does is it shows different careers in different wage ranges and 
salaries and the training you need to get there. So you can see 
that if you spend a few thousand dollars and take a couple 
months of certification programs, you can come out right away 
making 30, 40, even $50,000 a year as a machinist. And that is 
where you get the parents excited. They say, boy, I don't have 
to load up on 30 grand in college debt. I can take a few 
thousand dollars of training courses and come right out and be 
working.
    So I think that is important to get the parents on board 
because I personally have hired people and had a young person 
ready to take the job and the parents said, no, you are not 
going to go work in manufacturing. That is not the career for 
you. So I think that is important.
    Also, we have Women in Manufacturing Committee at TMA who 
is working with the Girl Scouts to get a program going getting 
young girls into engineering and STEM programs. So I don't know 
all the details of the program because they are just putting it 
together, but that is something that they are working with the 
Girl Scouts in Chicagoland area again at a very young age.
    Ms. Esty. And actually for all of you following up on this, 
we have discussed previously in this Subcommittee the German 
model and looking at what Germany has done in its vocational 
training. And for all three of you, if you could suggest to us 
whether you--what lessons you think are learnable by us for 
best practices for beefing up that relationship between the 
business community and the educational community to provide the 
skills we need now?
    Dr. Rich. Well, I can speak directly to that having lived 
in Germany for three years and worked in a chemical facility 
there. I was able to participate in the training program there.
    I think, look, we have to have the appropriate apprentice-
in-training programs here in the United States. We do it a 
little bit differently here. In Europe, many times the 
companies will take multiple years of apprentice programs but 
people also commit to working their whole lives with the same 
company. Here we have the dilemma of people moving company to 
company more, and this is where I think there is a great 
opportunity for partnership between private enterprise and the 
government.
    In the State of Indiana we have a terrific program through 
the Ivy Tech vocational schools. At Berry we take tremendous 
advantage of that. Those kinds of--and we also provide a lot of 
the financial support for that in addition to the government. 
So I think those kinds of government industry cooperations can 
be a terrific part of what this bill is all about.
    Ms. Wince-Smith. I would just add that, you know, the 
workforce boards in each State have access to significant 
funding from the Department of Labor and that we really need to 
ensure that those resources are being aligned with the demands 
and needs that are coming, you know, from the employers as a 
first order.
    Secondly, there are a number of very innovative advanced 
labor unions. I will mention the pipefitters and plumbers in 
particular. I know that union very well. Its President is very 
active in the Council on Competitiveness. This union, you know, 
does very high-skilled work. They do the welding on nuclear 
subs. You go through their training, they pay for everything, 
you get a certificate as a journeyman welder. You make, 
depending on where you are in the country, 60 to 80,000 a year. 
They are bringing that training to our military bases for 
returning veterans. It is a very strong partnership with the 
companies that use pipefitters and plumbers. So that 
collaborative ownership between business and labor needs to be 
extended to other parts of the economy.
    And finally, I would say on the engineering issue that was 
raised, STEM is absolutely critical; we know that. But we also 
need to take the E in STEM and blow that out because at the end 
of the day everything we are talking about requires 
engineering, design engineering, engineering that goes through 
the whole product cycle. And we are not elevating the 
engineering discipline in this country to the way we can and 
should.
    The Council on Competitiveness is making this a very 
thrust--big thrust. We are teaming with Lockheed Martin to 
create the National Engineering Forum, which we hope over time 
will become the Davos for engineering. But engineering is 
something that needs to start, you know, in K through 12 and 
really be elevated the way it was at different times in our 
history.
    Chairman Bucshon. Thank you. We will have I think one more 
round of questioning and then we will adjourn the hearing. I 
guess I can ask Dr. Rich this question. The nature of 
manufacturing today is very complex and it is difficult to 
clearly differentiate sometimes between manufacturing and the 
services that support it. How would you recommend the NSTC, 
Committee on Technology, take into account the very complex 
network of the players developed--when developing--involved 
when developing a manufacturing strategy? And is it appropriate 
to develop policies that treat manufacturing differently from 
other sections of the economy when there is such this 
interconnectedness? How do you fit that all together?
    Dr. Rich. Well, I think the lines of distinction between 
service and manufacturing are clearly blurring, right. A lot of 
that has been driven by the tremendous advances in IT 
technology which allows you to put support and service into the 
products that you make. So I don't think you can disconnect 
those two subjects anymore and I would urge the Committee to 
think about how you take the appropriate technologies, 
especially in IT, and apply those.
    When we make a product, our relationship with the customer 
doesn't end after we have at the product in a box and shipped 
it out. We have a lifetime responsibility for that product and 
a lifetime responsibility for the relationships with our 
customers. So I wouldn't draw a hard line of distinction there.
    Chairman Bucshon. Ms. Wince-Smith?
    Ms. Wince-Smith. Yes, absolutely. Manufacturing and 
services are merging, blending as Dr. Rich said, and a lot of 
the value now comes from this merger. So you think of a company 
like Deere where, you know, they are making the most advanced 
high-tech equipment in the world for harvesting and agriculture 
and other applications. They are also a weather forecaster. 
They are a consultant to farmers. And all their--and all that 
gets wrapped around. And you think of the great potential of 
data analytics and all of that for enabling--advance that, too, 
as part of this.
    So we really need to look at manufacturing in a different 
way with different language. It is an extended enterprise. 
Everything from the ideation, the design, the advanced 
research, how the logistics supply chain enables this, again, 
that is a lot of IT capability and you know the whole--full 
lifecycle. So service innovation and how it links to 
manufacturing should be a very important part of the strategy.
    Chairman Bucshon. Mr. Mottl, you have comments on that?
    Mr. Mottl. Yes, I would say, you know, as a small business, 
we are selling more and more services to our customers as well. 
They have outsourced their engineering. They don't do any work 
in-house. They say we need you to make the product. We need you 
to design it as well. So we will sell design services, but I 
would say maybe I am not an honest broker, but I think 
manufacturing is certainly the most important industry we have 
here. I mean clearly--but the multiplier effect is what speaks 
for it, you know.
    When you are in manufacturing, you need transportation. It 
is the factors of production. You buy equipment and that 
requires shipping services. You need attorneys, you need 
lawyers. And obviously service needs, you know supporting--
every industry has supporting services but manufacturers, 
simply because of the factors of production, whether you are 
bringing your raw materials in, you are shipping finished goods 
out, you are bringing equipment income, you are building a 
building to do it, you know, that is why I think it is the most 
important industry.
    Chairman Bucshon. Okay. Thank you. I yield to Mr. Lipinski.
    Mr. Lipinski. Thank you. Yes, I am tempted to just use the 
five minutes and ask Ms. Wince-Smith to continue to say all 
these great things about engineers is one of the--as one of the 
dozen engineers in Congress, I like hearing the importance of 
engineers and engineering.
    But I am going to have a general question first for Mr. 
Mottl, then Dr. Rich, and then Ms. Wince-Smith what you can add 
to that. The question is what can the--in your opinion what can 
the Federal Government do--I know, Mr. Mottl, we have talked 
about issues with the State, but leave those off the table. 
What could the Federal Government do to make your business more 
competitive?
    Mr. Mottl. Well, you know, a lot of business owners will 
say just stay out of the way, and, you know, that is important, 
but setting a level playing field and setting a good table. I 
like to use the analogy of a buffet. If you set a great buffet 
out, we will all come and eat so--or, you know, whether it is 
the tax policy, energy policy. If we have good stable planning 
and policies, I can build my business around that. If I don't 
know what is going to happen tomorrow whether it is the R&D 
credit or energy policy, we saw a lot of products into the, you 
know, oil and gas production industry. Is that industry going 
to be growing like it is growing now or is it going to change 
in a few years? It is very hard. So stability is important from 
my perspective.
    Transportation is really important, too. The Federal 
Government does a lot for transportation. I am constantly 
moving goods in, bringing in raw materials, and shipping out 
finished goods so I need a good, stable transportation network 
that is well maintained.
    Of course, you know, we talked about the IP theft and trade 
issues. You know, I saw what happened in the telecom 
electronics industry. My company historically builds mechanical 
switching. Western Electric was our customer, then AT&T, and 
all throughout, but I saw what happened when we kind of open 
the doors and bought the cheapest product we could buy. We lost 
a lot of the value that we added here in the United States when 
it went, you know, to the lowest-cost country.
    So I think sometimes some government policies need to look 
at, you know, what is worthwhile to be building here? What is 
the cost of it? You know, you can pay less for a product but 
the value maybe isn't there because you didn't get the jobs, 
you didn't get the growth, you didn't get the tax from, you 
know, those jobs and that sale of the product. So a little bit 
smarter planning maybe on trade issues I think would be 
important for businesses like mine as well.
    Mr. Lipinski. Dr. Rich?
    Dr. Rich. Again, I think, first and foremost, the most 
important thing which again is being addressed in this bill is 
the investment in people.
    Beyond that, I would say the appropriate balance of 
regulation is also important. Let me give you a specific 
example. My personal view is that we are on the cusp of one of 
the greatest industrial revolutions here in the United States 
that we have seen since may be the beginning of the 20th 
century with the development of North American shale gas. 
That--this sheer extraction of the energy, the lower cost will 
create thousands of jobs, but the secondary industries which 
create new materials, new products based on that will create 
even more jobs.
    We have to be able to develop this infrastructure and 
simultaneously protect the air and the water that we all need. 
I always view that is the concept of responsible progress. We 
can make responsible progress and develop these natural 
resources. It is going to require a lot of new technologies. I 
don't accept the fact that it can't be done and not 
simultaneously protect the environment. There is a tremendous 
opportunity for new technology there but we also have to have 
balanced regulations to make sure that we can take advantage of 
these resources.
    This could be the greatest industrial revolution that we 
have seen certainly in my lifetime, and it will create an 
enormous number of jobs.
    Mr. Lipinski. Thank you. Ms. Wince-Smith, anything to--you 
want to add to that?
    Ms. Wince-Smith. I would just add, you know, I fully 
endorse what my two colleagues here have said. You know, the 
whole issue of America going from being a country that is 
energy weak to energy strong as we lead the transformations to 
a low-carbon world in the future is so important.
    But one thing that government can do that no one else can 
do is to really capitalize and assist in the way these 
transformations in the science and technology and their 
deployment. You know, if we can be the country that, you know, 
develops and manufactures at scale non-lithium batteries, if we 
can be the country that, you know, sets the standards for 
additive manufacturing production, we know what the future is 
beginning to look like and there are ways in which if we 
capture the--not just the research but the deployment here, it 
will be huge.
    And so this bill is very important because it talks about 
an integrated strategy. Defense Department has huge needs and 
capabilities here. You link that with NSF and DOE and the other 
parts of the government with the, it is just--we have 
tremendous potential. So connecting the dots, you all have in 
the government the capacity to do that and the private sector 
will really come to the table as well.
    Mr. Lipinski. All right. Thank you.
    Chairman Bucshon. Thank you. Ms. Esty, five minutes.
    Ms. Esty. I would love to follow up on that last point and 
relate it to--for all three of you. First question is on the 
role of basic research and in manufacturing in particular if 
there are areas that--again that the Federal Government has an 
important role to play in basic research. So that is the first 
question. And the second one is this linkage that you just 
mentioned, Ms. Wince-Smith, about the linkage for deployment. 
We have some vigorous debate going on. We had votes this 
afternoon that had to go exactly around this issue. What should 
be the role of the Federal Government in deployment of 
technologies and of research that is being developed? So I 
would love your thoughts on both of those questions. Thank you.
    Ms. Wince-Smith. I will just use one example that captures 
it. I had the opportunity two weeks ago to be at University of 
Toledo in Ohio and coming from Akron I knew Toledo but I wasn't 
aware that this university really did all the basic research 
for the jettisons of the solar industry that builds on their 
glass history and things. And, you know, they created--first 
solar came out of that entity but, you know, all the 
manufacturing, all the infrastructure went to China for a lot 
of the capital cost regulatory issues.
    So somehow, we have to link this basic research where we 
still lead the world in many areas with the condition for 
ensuring deployment, and that of course gets to the power of 
government procurement, state procurement, as well as perhaps 
even--and this may sound a little pushing the envelope, but why 
can't we think the way some of our competitors do about 
creating some advanced manufacturing zones where there are huge 
privileges and opportunities to be the first users of these 
capabilities?
    I heard in Toledo they have a plan to create buildings that 
will be net zero energy with the next-generation solar panels. 
How can we make that happen?
    So it is exciting but we have some challenges because the 
rest of the world is looking at our basic research as the seed 
corn for their next-generation products and services, and we 
have got to make sure we capture the value here as well.
    Ms. Esty. One of the things that would be helpful to follow 
up on is this question I--which I think you are absolutely 
right about--state and government procurement being part of 
that investment by the society, by taxpayer dollars, and the 
society ensuring we develop those robust markets here, not just 
the technology that then is produced elsewhere, but that we put 
our bang for the buck behind it to get to scale because we 
aren't getting to scale. And that remains a problem. And it is 
not good enough just to develop the technology and license it 
to the world, or worse yet, have them steal it and take it and 
develop it elsewhere.
    So helping us and thinking about the right way to do those 
procurement rules so it doesn't--picking winners and losers, 
you know, how do you develop criteria that is not picking 
winners and losers and yet is putting a goal out there that our 
great engineers and scientists work towards to achieve and then 
bid on and then take advantage of, as you mentioned, Mr. Mottl? 
We have to find a way to incorporate the value of producing it 
here, the value of those jobs, as compared to the value of 
paying people who can't find work.
    And we need help on that because it isn't part of our 
calculation now and I think it should be. When you look at what 
is the lowest-cost producer for DOD, you should estimate the 
cost of not employing American engineers, the cost of not 
having visas for high-tech students who came to this country 
and would love to stay.
    Mr. Mottl. Well, there is a great quote by Abraham Lincoln. 
I am going to butcher it a little bit on the numbers though. He 
said, you know, we can buy our rails from England and we will 
have the rails and they will have the gold or we can make the 
rails here for maybe a little more expensive. I am butchering 
the numbers, but he said then we will have the gold and the 
rails. So we need to think about that and that value.
    But, you know, when we talk about the tech transfer, we had 
a unique discussion here before about Argonne labs. I am right 
there. My company is right nearby and they brought myself and 
some other small manufacturers in and said, hey, we have all 
these patents and technologies. How can we partner with you to 
get them? We scratched our heads and said, you know, we just 
don't have the capital. As a small business, access to some 
kind of low-cost capital where I could use that money and tie 
up this technology and have the time to figure out how to use 
it.
    Where they said, you know, a lot of Korean companies buy up 
all their patents, in particular one company, and they have a 
lot of cash and I don't know if that cash is somehow 
supplemented through government programs, but that is--they are 
getting a lot of the technology simply because they have access 
to the cash. And if I had the ability to have the cash and the 
time to play with the technology, I know I could--you know, 
companies like mine could work with it.
    Chairman Bucshon. Okay. Thank you.
    I would like to thank all the witnesses for their valuable 
testimony and the Members for their questions. The record will 
remain open for two weeks for additional comments and written 
questions from Members. The witnesses are excused and the 
hearing is adjourned.
    [Whereupon, at 3:46 p.m., the Subcommittee was adjourned.]
                               Appendix I

                              ----------                              


                   Additional Material for the Record




 Submitted statement by Committee Ranking Member Eddie Bernice Johnson

    Thank you, Mr. Chairman. This afternoon we are examining 
legislation--introduced by my colleague Mr. Lipinski--that would 
require the development of a national strategic plan for manufacturing.
    I strongly believe that if the United States is to remain 
competitive in the long-term, we need to ensure that American companies 
maintain their capacity to manufacture new and innovative products here 
at home.
    While the United States is struggling to sustain its competitive 
edge other countries are focusing their full attention on 
manufacturing. They are aggressively investing in research and 
development.
    And they are implementing the policies and programs necessary to 
build a 21st century economy now.
    We simply cannot afford to stand idly by and watch our competitors 
position themselves ahead of us. A robust and healthy manufacturing 
sector is just too important for our economy and our national security. 
That's why I am pleased that we are examining Mr. Lipinski's 
legislation today. We need to create a strategy that outlines a vision 
and set of goals for manufacturing.
    I had hoped that my Republican colleagues would have agreed to my 
request to broaden the scope of today's hearing to include 
manufacturing legislation that I authored. It would have also been 
useful for the Committee to hear from the witnesses on proposals that 
may well be part of such a strategy.However, that being said, I've been 
recently been informed that my colleagues plan to hold a hearing on my 
bill in September.
    My legislation, the Advancing Innovative Manufacturing Act of 
2013--or the AIM Act, makes strategic investments in manufacturing 
research, development, and education. It brings the public and private 
sectors together to tackle the research needs of industry. It provides 
small and medium-sized manufacturers with innovation vouchers that will 
allow them to make their companies and products more competitive. And 
finally, it ensures that our community colleges are preparing students 
for the manufacturing jobs of the future.
    We need our manufacturing sector to be the most sophisticated in 
the world, using the newest technologies and the most efficient methods 
and processes. By doing this, we can ensure the survival of our 
manufacturing sector and maintain our global leadership.
    I am hopeful that while not specifically asked to comment on what 
should or should not be a part of our efforts to revitalize American 
manufacturing, today's witnesses can offer the Committee some 
recommendations on what areas we should prioritize.
    Thank you, Mr. Chairman. I look forward to having a more detailed 
discussion of the programs proposed in my legislation in September as 
the Chairman has committed to me.

                                 
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