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+
+ - THE NEW FACES OF AMERICAN MANUFACTURING
+
+[House Hearing, 114 Congress]
+[From the U.S. Government Publishing Office]
+
+
+ THE NEW FACES OF AMERICAN MANUFACTURING
+
+=======================================================================
+
+ HEARING
+
+ BEFORE THE
+
+ COMMITTEE ON SMALL BUSINESS
+ UNITED STATES
+ HOUSE OF REPRESENTATIVES
+
+ ONE HUNDRED FOURTEENTH CONGRESS
+
+ SECOND SESSION
+
+ __________
+
+ HEARING HELD
+ MAY 12, 2016
+
+ __________
+
+[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
+
+
+ Small Business Committee Document Number 114-060
+ Available via the GPO Website: www.fdsys.gov
+
+
+ ____________
+
+
+ U.S. GOVERNMENT PUBLISHING OFFICE
+20-075 WASHINGTON : 2016
+
+
+________________________________________________________________________________________
+For sale by the Superintendent of Documents, U.S. Government Publishing Office,
+http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
+U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).
+E-mail, [email protected].
+
+
+
+
+ HOUSE COMMITTEE ON SMALL BUSINESS
+
+ STEVE CHABOT, Ohio, Chairman
+ STEVE KING, Iowa
+ BLAINE LUETKEMEYER, Missouri
+ RICHARD HANNA, New York
+ TIM HUELSKAMP, Kansas
+ CHRIS GIBSON, New York
+ DAVE BRAT, Virginia
+ AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
+ STEVE KNIGHT, California
+ CARLOS CURBELO, Florida
+ CRESENT HARDY, Nevada
+ NYDIA VELAZQUEZ, New York, Ranking Member
+ YVETTE CLARK, New York
+ JUDY CHU, California
+ JANICE HAHN, California
+ DONALD PAYNE, JR., New Jersey
+ GRACE MENG, New York
+ BRENDA LAWRENCE, Michigan
+ ALMA ADAMS, North Carolina
+ SETH MOULTON, Massachusetts
+ MARK TAKAI, Hawaii
+
+ Kevin Fitzpatrick, Staff Director
+ Jan Oliver, Chief Counsel
+ Michael Day, Minority Staff Director
+
+
+ C O N T E N T S
+
+ OPENING STATEMENTS
+
+ Page
+Hon. Steve Chabot................................................ 1
+Hon. Nydia Velazquez............................................. 2
+
+ WITNESSES
+
+Mr. John Ratzenberger, Fiddlers Bay Productions, Milford, CT..... 4
+Mr. Dustin Tillman, President and CEO, Elite Aviation Products,
+ Irvine, CA..................................................... 7
+Ray Perren, Ph.D., President, Lanier Technical College, Oakwood,
+ GA, testifying on behalf of the Association for Career and
+ Technical Education............................................ 9
+Ms. Kim Glas, Executive Director, BlueGreen Alliance, Washington,
+ DC............................................................. 11
+
+ APPENDIX
+
+Prepared Statements:
+ Mr. John Ratzenberger, Fiddlers Bay Productions, Milford, CT. 25
+ Mr. Dustin Tillman, President and CEO, Elite Aviation
+ Products, Irvine, CA....................................... 27
+ Ray Perren, Ph.D., President, Lanier Technical College,
+ Oakwood, GA, testifying on behalf of the Association for
+ Career and Technical Education............................. 32
+ Ms. Kim Glas, Executive Director, BlueGreen Alliance,
+ Washington, DC............................................. 38
+Questions for the Record:
+ None.
+Answers for the Record:
+ None.
+Additional Material for the Record:
+ None.
+
+
+ THE NEW FACES OF AMERICAN MANUFACTURING
+
+ ----------
+
+
+ THURSDAY, MAY 12, 2016
+
+ House of Representatives,
+ Committee on Small Business,
+ Washington, DC.
+ The Committee met, pursuant to call, at 11:00 a.m., in Room
+2360, Rayburn House Office Building. Hon. Steve Chabot
+[chairman of the Committee] presiding.
+ Present: Representatives Chabot, Hanna, Luetkemeyer,
+Gibson, Radewagen, Knight, Curbelo, Hardy, Kelly, Velazquez,
+Chu, Hahn, Meng, Lawrence, Clarke, and Adams.
+ Chairman CHABOT. The Committee will come to order. Good
+morning. We want to thank everyone for being with us today as
+we discuss the present and future state of American
+manufacturing.
+ Given the importance of manufacturing to our economy, I am
+delighted to be holding this hearing and listening to the
+testimony provided by our outstanding panel here this morning.
+When people think of manufacturers, too often they think of
+giant corporations with huge production facilities and steam
+whistles commanding shift changes. The truth is that the vast
+majority of American manufacturing is done by small businesses.
+In fact, 99 percent of all manufacturers are categorized as
+small.
+ Though they might be considered small, their effect on our
+economy is enormous. Manufacturers in the United States employ
+over 12 million people and directly contribute over $2 trillion
+to our economy each year. We cannot underestimate their
+indirect influence either. Every dollar spent on manufacturing
+in America adds $1.37 to the economy, and a single
+manufacturing job can lead to the creation of three to five
+more jobs in other industries.
+ Without a doubt, manufacturing plays a vital role in
+America's economic well-being. The economic force that is
+American manufacturing is now facing a significant challenge--
+preparing a workforce that can do the job.
+ According to the National Association of Manufacturers
+(NAM), over the next decade, nearly 3.5 million manufacturing
+jobs will likely be needed, and 2 million of those are expected
+to go unfilled due to what is being referred to as the skills
+gap.
+ There are two major contributing factors to this widening
+gap: baby boomer retirements and economic expansion. An
+estimated 2.7 million jobs are likely to be needed as a result
+of retirements of the existing workforce, while 700,000 jobs
+are likely to be created due to natural business expansion and
+growth.
+ In addition to retirements and economic expansion, other
+factors have contributed to the shortage of skilled workforce,
+such as lack of science, technology, engineering and
+mathematics, or STEM, skills among workers, and a gradual
+decline of technical education programs in public high schools.
+ Frankly, another big problem plaguing American
+manufacturing is its perception. As the old saying goes,
+perception is reality. The things we build, the way we build
+them, and the skills required to do so are significantly
+different than in generations past. This is not your
+grandfather's, or even your father's industry anymore. It is
+high-tech. It is skills-based, and it provides good jobs with
+good benefits that can provide for growing American families.
+ We must do a better job educating young people to improve
+the perception of what manufacturing really is, and getting the
+word out that manufacturing oftentimes, for the most part, is
+clean, safe, and high-tech, rather than dirty and dangerous.
+ I am looking forward to hearing your thoughts on the
+innovative ways that we can work together with academia, and
+manufacturers, and former actors on Cheers, to address the
+workforce development issues facing the next generation of
+American manufacturers.
+ I would now like to yield to the Ranking Member, Ms.
+Velazquez, of New York.
+ Ms. VELAZQUEZ. Thank you, Mr. Chairman, and thank you for
+holding this important hearing.
+ Throughout much of the 20th century, American manufacturing
+was the nation's economic engine. The country rose to its place
+as a global economic superpower as customers clamored for the
+latest American-made products. However, manufacturing sprawl in
+the U.S. economy has changed considerably since then, but
+today, we are seeing a manufacturing resurgence. Following
+years of decline, U.S. manufacturers added 856,000 workers to
+the payrolls in the last seven years. Moreover, the country's
+exports, a key measure of manufacturing activity, has been
+growing exponentially and are now at their highest level in
+recent memory.
+ These are positive developments. With almost one-eighth of
+our economy rooted in manufacturing, strengthening this sector
+is vital to our country's overall economic health--and to job
+growth for working families and the middle class.
+ Although this renaissance is promising for our nation,
+there remain challenges that are preventing this sector from
+reaching its full potential. According to the latest U.S.
+Census Bureau data, small and medium-size businesses account
+for 95 percent of world consumers, so we must ensure American
+small manufacturers have access to this global market. As the
+U.S. becomes an attractive destination for new manufacturing
+facilities, workforce training programs must adapt to provide
+the skills necessary for manufacturing jobs in the 21st
+century. Greater federal investment in Science, Technology,
+Engineering, and Math education will enhance domestic
+manufacturing. Local and private sector apprenticeship programs
+can prepare young people for careers in rapid growth areas.
+ For manufacturers everywhere, access to capital is a
+persistent problem. This is especially true for smaller startup
+firms that are on the cusp of fast growth. For these reasons, I
+introduced the Scale-up Manufacturing Investment Company Act.
+This legislation will expand investment opportunities for small
+and emerging manufacturers. We must also remember that economic
+growth depends on innovation. Research and development fuels
+technological advancement, and it is critical in fostering new
+jobs.
+ Unfortunately, the federal policy shift from domestic
+investment to deficit reduction could have severe implications
+for U.S. competitiveness in international markets and for
+manufacturing jobs. All of these and other challenges point to
+a need for concerted efforts at the federal, state, and city
+levels. In recent years, House Democrats have united behind the
+``Make It in America'' agenda, a series of proposals to
+strengthen and expand our manufacturing base. These efforts are
+important, but they can only succeed if they are guided by
+insight from the actual businesses. That is what makes today's
+hearing so important. As such, I would like to thank you for
+being here today and sharing your experiences.
+ Thank you, Mr. Chairman. I yield back.
+ Chairman CHABOT. Thank you. The gentlelady yields back.
+ I will now, before introducing our panel, explain briefly
+our rules. We operate on the 5-minute rule. You will each get 5
+minutes. We will get 5 minutes when you are finished to ask
+questions, and we have a lighting system to kind of assist you
+there. You have 5 minutes. The green light will be on for 4.
+The yellow light will come on when there is a minute to go, and
+then the red light will come on and we will ask you to wrap up,
+if at all possible, within that time. We will give you a little
+leeway.
+ Now, to introduce our distinguished panel here today, our
+first witness is multi-Emmy-nominated actor, director,
+producer, author, and staunch Made in America advocate, John
+Ratzenberger. While he may be best known for his role as Cliff
+Clavin on the television show Cheers, or for his voice acting
+in Pixar movies, John has spent the better part of the past 2
+decades passionately campaigning about how important it is for
+Americans to recognize the needs for and to provide the
+training to produce skilled laborers. To that end, he produced
+and starred in the Travel Channel series Made in America, which
+highlighted American-made goods and the workers who build them.
+With speaking engagements across the country, he continues to
+encourage the reintroduction of trade, mechanics, shop, and
+carpentry skills back into the schools so that we can marry
+human talent and skills to today's innovative society in order
+to create a better America. Thank you for being with us today,
+Mr. Ratzenberger.
+ Up next will be Dustin Tillman, Founder, President, and CEO
+of Elite Aviation Products in Irvine, California. Elite is an
+aircraft component design, engineering, and manufacturing
+company committed to providing cost-competitive, quality
+manufacturing, and customer-centric solutions to its clients. A
+graduate of the University of California-Los Angeles where he
+received his Bachelor of Arts degree in Economics and Political
+Science, Dustin entered the supply chain management industry
+and quickly attained a role of director of supply chain
+management for Zodiac Airspace, a multibillion dollar airspace
+company. More recently, he maintained a role in the business
+management sector for Panasonic Avionics Corporation, where he
+oversaw the strategic and tactical performance, as well as the
+business relationships of dozens of worldwide partners. We
+thank you also for being here this morning, Mr. Tillman.
+ Our next witness will be Dr. Ray Perren, president of
+Lanier Technical College in Oakwood, Georgia. He is testifying
+on behalf of the Association for Career and Technical
+Education. Dr. Perren is completing his 36th year as an
+educator, and is currently leading efforts to construct a new
+main campus for Lanier Tech in Hall County, Georgia. He
+previously served as President of Wiregrass Georgia Technical
+College, as Assistant Commissioner for Technical Education for
+the Technical College System of Georgia, and is President of
+East Central Technical College in Fitzgerald, and is Dean of
+Academic Affairs for DeVry University's operations in Georgia
+and North Carolina. His first 20 years as an educator were
+spent in the Paulding County School System in Dallas, Georgia,
+where he served as a teacher, elementary and middle school
+principal, and as the district's superintendent of schools. We
+thank you for being with us here this morning also, Dr. Perren.
+ And I would now like to yield to the Ranking Member, Ms.
+Velazquez, to introduce our final witness.
+ Ms. VELAZQUEZ. Thank you, Mr. Chairman. It is my pleasure
+to introduce Ms. Kim Glas, executive director of the BlueGreen
+Alliance. Over the past 15 years, Ms. Glas has served in senior
+leadership positions in the Obama Administration and the U.S.
+House of Representatives, most recently serving as the deputy
+assistant secretary for Textiles, Consumer Goods, and Materials
+at the U.S. Department of Commerce. In that capacity, she
+worked to improve the domestic and international
+competitiveness of a wide array of products. She served for 10
+years on Capitol Hill, working extensively on manufacturing,
+trade, and economic policy issues for Congressman Mike Michaud
+from Maine, and Congressman John LaFalce from New York.
+Welcome. Thank you.
+ Chairman CHABOT. Thank you very much.
+ Mr. Ratzenberger, you are recognized for 5 minutes.
+
+STATEMENTS OF JOHN RATZENBERGER, EMMY-NOMINATED ACTOR AND MADE
+ IN AMERICA ADVOCATE; DUSTIN TILLMAN, PRESIDENT & CEO, ELITE
+ AVIATION PRODUCTS; RAY PERREN, PRESIDENT,LANIER ECHNICAL
+ COLLEGE; KIM GLAS, EXECUTIVE DIRECTOR, BLUEGREEN ALLIANCE
+
+ STATEMENT OF JOHN RATZENBERGER
+
+ Mr. RATZENBERGER. Good morning, everybody, and thanks for
+having me and inviting me up.
+ You are probably still wondering, what does he have to do
+with manufacturing, this guy, this actor? I grew up in
+Bridgeport, Connecticut. At the time, it was the jewel and the
+crown of the industrial northeast. We pretty much made
+everything there. We made ships. We made rifles. We made boats.
+Bead chains for electric lights. As a matter of fact, evidence
+is mounting more and more that the first mechanized air flight
+took place there by a German immigrant named Gustave Whitehead
+2 years before the Wright Brothers.
+ So that is the kind of town it was. Everybody had a skill.
+I grew up amongst people who knew how to do things. All the
+neighbors had skills. We never called a handyman into the house
+because if you could not do it, your father could not do it,
+your uncles, there was a neighbor. And everybody traded skills.
+Whether it was carpentry or electronics, everybody knew how to
+do something. As the years have gone on, we find that just the
+opposite now is happening. It is very difficult to find someone
+to lay bricks or to build cabinets, and we all know that. But
+there is a reason that happened, and it is because early on
+just after the sixties and into the seventies, we sort of got
+the idea that everybody has got to go to college. I went to
+college, but I can also build a house.
+ When I was 14 years old, I decided, I want to learn to
+build a house and everything in it because I was surrounded by
+people who knew how to use tools. And I did. So after college,
+that is really what kept me alive was my carpentry skills. I
+raised my children in the same say saying get a skill that
+nobody can take from you, and also a skill that you can go
+anywhere in the world and tomorrow you will have a job. But
+when we were kids, also it was different because we were free-
+range children. On Saturday it was, what are you doing inside?
+Get out. Go play. Well, that was it. That was the order. There
+was no structure to it. There was no helicopter parenting. We
+went outside and played. We built treehouses. We rode off on
+our bicycles 5, 10 miles from home. We did not even know our
+own telephone number. But, you know, the chain on the bicycle
+breaks, you have got to be home before the streetlights are on,
+well, you have got to fix that bicycle chain. So we thought we
+were playing, but in actuality, we were problem-solving every
+single day. When you are building a treehouse, you have got to
+put the ladder on the side of the tree and you knew very early
+on that you did not use finishing nails to put those ladders on
+because it popped out and before you know it you were in the
+hospital with a broken arm. It was part of the deal.
+ But once again, we were problem-solving. We have taken that
+away from our children now. They do not grow up problem-solving
+anymore. We cosset at them and make sure that everything is
+okay in their world, and then when they get to college they
+have nervous breakdowns because things are not going their way.
+We did not get trophies for just showing up, and that was the
+big difference.
+ But the most dangerous thing we have done for our
+civilization is that, again, in the seventies, you know, 30, 40
+years ago, we canceled shop classes and we canceled home ec
+classes because whether it was political experimentation,
+social experimentation, they said all boys and girls are the
+same and girls should not be in the kitchen and boys should not
+have this advantage, so we took those skills away from our kids
+and nowhere along the line do they learn those skills,
+especially if they do not have a father or an uncle to teach
+them that. Again, I was a carpenter and I made sure my kids
+knew how to handle tools, and to this day they are doing real
+well because of it because you also learn common sense when you
+use tools. But we took that away from the kids, too.
+ So now we are in a situation where there are 600,000 jobs
+available in manufacturing. That is just in manufacturing.
+There are hundreds of thousands of jobs available in
+construction all over the country. But at one time we were an
+agrarian society. We grew up on farms or near farms. You learn
+the advantage of using tools because you had to. You could not
+call 1-800 fix my barn door when it blew off in a storm at 2:00
+in the morning. You dealt with it yourself and you saw your
+parents dealing with it and you knew that was possible in your
+life. So you stretched out more. Even during World War II, a
+lot of the accounts I read said we won it because if a Jeep
+broke down, at least 9 out of 10 people standing around knew
+how to fix it. Now that is not the case because we have so many
+people now, you know, we moved into cities since the Industrial
+Revolution, but even then we had shop classes to keep up with
+the Industrial Revolution. But we canceled those, so now the
+kids growing up in a lot of the cities, and if they do not have
+the advantage of growing up on farmland or near the sea,
+everything is done for you. Someone else picks up your garbage.
+Someone fixes the heating in your building. So your mindset
+growing up is, oh, somebody else will take care of it. That is
+not healthy for our civilization. We have to get back to the
+``I am capable of doing that. I can fix that. I can build
+that.'' So we must reinstate shop classes back in the schools.
+There has got to be a way of doing that. There is actually
+several ways of doing it.
+ The disadvantage is that we are not going to have works
+showing up. The average age is 58 years old right now of people
+that know how to make things in the United States of America.
+When they are retired, that is it. We also have 70 percent of
+everyone incarcerated in the United States is a high school
+dropout. When the shop classes were canceled at schools
+nationwide, the dropout rate went up 30 percent because these
+kids had nothing to do. You were not offering them anything to
+do. Those of you in the room that know how to fix things, make
+things, you know a lot of self-esteem goes along with that. You
+do not need a trophy. You do not need someone to show up and
+say, here, good job for tying your shoes. Because you built
+that coffee table. You fixed that roof. Your self-esteem is
+just there. It is married to the accomplishment of making
+something with your very own hands.
+ When I cross the country and I talk about this, and I have
+been doing it now for 15, 20 years, because when I was doing my
+show Made in America there was one thing, I went to a company
+that was making sports equipment. A specific sporting
+equipment. I do not want to say what it is because the CEO will
+get angry at me, but the man who was going around fixing all
+the machines, I was talking to him and I said, so you are
+probably pretty close to retirement, huh? He said, yeah, a
+couple of years. I said, what are you going to do? He said,
+well, go fishing, this and that. We started talking. I said,
+well, who are you training? He said, well, there is nobody to
+train. Kids come out of high school. They cannot even read a
+ruler because they do not teach them to use some tools. There
+is nobody coming up after this guy. This fellow's job was to
+fix the machines when they broke down. I said, what happens
+when the machines break down and you are not here? He said,
+they are going to have to fly in somebody from the company that
+made the machine. I said, that could take a couple of weeks. He
+said, yeah. That machine will be shut down for at least a
+couple of weeks, maybe three. Productivity stops and the orders
+stop because if you cannot deliver that product to the
+customer, they are going to go somewhere else for that product.
+That company could fail just for the want of that one man who
+knows how to use tools. I found that all over the country. That
+is what made me start, because I do love this country dearly. I
+lived overseas for 10 years, and I know what a great country
+this is. I know that it is the strength of America that keeps
+the world at peace. The strength of America is manufacturing.
+Manufacturing is to America what spinach is to Popeye.
+ Chairman CHABOT. Mr. Ratzenberger, I think we will conclude
+with that if you do not mind. We will get a little longer with
+questions.
+ Mr. RATZENBERGER. Oh, does this mean I am 3 minutes over?
+ Chairman CHABOT. Yeah. Yeah, it does.
+ Mr. RATZENBERGER. I thought I had 3 more minutes to go. I
+thought, geez, I thought I have been talking more than 5
+minutes. Well, thank you.
+ Chairman CHABOT. Thank you very much. You will have more
+time. We will just get to questions.
+ Mr. RATZENBERGER. I do not need it. You are fine. Thanks.
+ Chairman CHABOT. Mr. Tillman, you are recognized for 8
+minutes and 17 seconds, apparently.
+ Mr. TILLMAN. Thanks.
+ Chairman CHABOT. No, 5 minutes, if you can.
+
+ STATEMENT OF DUSTIN TILLMAN
+
+ Mr. TILLMAN. Thank you. Good morning, Chairman, Ranking
+Member, and members of the Committee.
+ First off, wonderful remarks from the both of you. You hit
+the nail on the head.
+ We are very proud, our company, to be an American
+manufacturing company. I am proud to be a part of the reshoring
+effort. We have been able to bring a lot of jobs back, and I am
+also proud to say that we have been able to take work back from
+China, believe it or not, by introducing some of these
+efficiencies, a focus on innovation that you guys made
+reference to.
+ We are doing a lot of exciting things and we are supporting
+what is being referred to as the Second Golden Age of Aviation.
+When I started the company in 2013, there were certainly
+struggles that we faced. Struggles from a capital perspective
+as was alluded to. Struggles from a human capital perspective
+is what I want to talk about. But by far and away, the biggest
+question that I got was, what the heck are you doing starting a
+company manufacturing parts in America? And that is a travesty,
+you know?
+ As John made reference to, I believe in the American Dream
+as well. I believe in the spirit of America. Now is the time
+for us to really reassert our dominance as a manufacturing
+powerhouse that we once were. I think through Committees like
+this, and through the testimony and some of the strategies and
+policies that we can talk about, that we can apply this, and
+not just for aerospace and defense companies like ours, but for
+all businesses, because it is important and it needs to be a
+priority.
+ When you talk about the working capital challenges, the
+government has done some significant things. They have
+introduced the Jobs Act. This was a very important piece of
+legislation for us raising capital, articulating the message
+that we have as an organization to grow, and making it a
+successful vehicle for us to accomplish.
+ The human capital challenge is by far and away the biggest
+one. People come to our facilities and they say, what is your
+biggest struggle? Is it the machine tools? Is it the
+facilities? No, it is finding good, qualified people. They do
+not exist anymore in the numbers that they once have, and it is
+a sad state of affairs right now.
+ I have to say, for as great of a country that we are with
+regards to media, we do a horrible job demonizing manufacturing
+these days. Nowadays it is the millennials that we need to
+focus on. We need to make manufacturing cool. This is where we
+found a tremendous success, really dedicating ourselves to
+institutional folks from academia. You have to showcase the
+exciting aspects of manufacturing, because it is exciting.
+Nowadays when you walk into our facilities, it is like walking
+into a new-tech environment. There is not the dingy machine
+tools with grease everywhere. You are walking into an extension
+of the cutting-edge of technology that is exciting. When you
+watch these operators making parts nowadays, it is like
+watching a thing of beauty. There is certainly art and there is
+a lot of science behind it, and getting that message out there
+is going to be important so that we do not fall short and have
+this enormous generational gap affect our ability to remain
+competitive.
+ For us, as an organization, we have had significant success
+working with veterans. We founded a nonprofit called Elite
+Veterans Initiative where we focus on not just providing
+support to these folks, and there are over 500,000 unemployed
+veterans today, I would argue the number is probably higher,
+and I would also cite that veterans in general say that finding
+a job is their biggest challenge getting out of the military.
+This is a problem for us as a nation. These are folks who are
+well trained. They have all the skillsets, the discipline, the
+honor, integrity, that makes manufacturing, and business in
+general, great. We need to embrace these individuals, and not
+just by providing support, turkey dinners, but also training
+and providing employment. We are proud to say that 10 percent
+of our workforce is veterans, and this number is growing as we
+grow.
+ I would also like to shed light on some of the legislation.
+I think that traditionally, there has been a lot of focus on
+small minority disadvantaged businesses, which were very
+important, particularly in the sixties and seventies. We need
+to take a fresh look at this legislation. We need to make sure
+that it is evolving with the changing dynamics of the
+marketplace.
+ I will speak from a supply chain guy for a second. To
+remain competitive, the large folks out there--the Boeings, the
+Northrop Grummans--they have to consolidate their supply
+chains. Unfortunately, as part of that consolidation effort,
+you are finding a lot of those businesses, once participants of
+the supplier diversity initiative, going out of business. I
+think we need to take another look at that. We need to not only
+empower individuals, but also companies employing these
+individuals because that is going to be a recipe for long-term
+success in my opinion. This is what I have experienced growing
+a business and struggling to do so. But we are growing. We have
+three sites in just over 2-1/2 years, and we are, again, very
+proud to be a part of the reshoring effort. The good news is,
+like I said before, we are in the midst of the second golden
+age of aviation. There is more booked, undelivered work now
+than at any time in the history of flight. The time is now,
+ladies and gentlemen, to really reassert ourselves as the
+dominant manufacturing powerhouse that America once was. Thank
+you very much.
+ Chairman CHABOT. Thank you very much. I appreciate it.
+ Dr. Perren, you are recognized for 5 minutes.
+
+ STATEMENT OF RAY PERREN
+
+ Mr. PERREN. Good morning, Chairman Chabot, Ranking Member
+Velazquez, and members of the Committee. I appreciate the
+opportunity to come before you today to discuss the changing
+face of American manufacturing and the need to assure that we
+have a well-trained workforce. I have so much I would like to
+say, but in respect of the 5-minute rule, I am going to give
+you the Reader's Digest version.
+ I think it is a given that the face of manufacturing has
+changed greatly in the last few decades. In fact, manufacturing
+has probably changed as much from the technological revolution
+as it did from the industrial revolution back in the early
+1800s. Although the face of manufacturing is changing, the
+perception of manufacturing has not changed. Too often people
+think of manufacturing jobs as being physically repetitive work
+carried out in dirty environments with little or no ability to
+use critical thinking to improve job performance. Nothing could
+be further from the truth.
+ Many, if not most, of our country's manufacturers utilize
+highly technical equipment, practice lean manufacturing and
+quality philosophies that require the workplace to be clean,
+safe, and highly organized, and encourage critical thinking.
+Yes, manufacturing has changed. It is important to note that
+educational programs are also changing in order to meet the
+needs to today's manufacturers.
+ Another lingering perception is that in order to be
+successful in this country, one must have a 4-year degree in a
+white collar job. While there will always be a demand for
+individuals with 4-year college degrees, the truth is that most
+of today's high-tech jobs can be filled by individuals with 2-
+year degrees or shorter certificates awarded by our nation's
+technical colleges. These technical colleges are our nation's
+pipeline to assure manufacturers have the workforce needed to
+thrive in the United States. Most technical colleges are
+regionally accredited, connected to business and industry, and
+allow students to prepare for good-paying jobs and without
+accumulating large amounts of debt. And that is a real win-win.
+ As has already been said here today, according to the
+National Association of Manufacturers, over 98 percent of our
+nation's 250,000 manufacturers are considered small businesses.
+Three-fourths of all manufacturers employ fewer than 20 people.
+ Manufacturers are in almost every community across the
+nation. The average manufacturing worker in this country earns
+over $52,000 per year, and that is nearly $80,000 per year when
+benefits are factored in. The overwhelming majority of these
+workers participate in health insurance programs through their
+employer.
+ Over the next decade, nearly 3.5 million manufacturing jobs
+will be needed. Although manufacturers provide excellent pay
+and benefits, 2 million of these nearly 3.5 million jobs are
+likely to go unfilled due to the skills gap. We have good jobs,
+and today's young people represent the brightest generation
+this country has ever raised. So what is the disconnect?
+ I believe that it goes back to the perception I have
+already mentioned, that our longstanding belief that one must
+have a 4-year degree in a white collar job to achieve the
+American Dream. More discussions, such as the ones that we are
+having here today are necessary to change this perception. We
+need events to encourage this discussion, such as the
+Manufacturers Forum held by the Greater Hall Chamber of
+Commerce in Gainesville, Georgia, which bring together
+community leaders, high school administrators and counselors,
+business leaders, parents and students. We need creative
+outside-the-box solutions, such as the partnership between
+Lanier Tech, the Georgia Governor's Office of Student
+Achievement, the Hall County and Gainesville City schools, and
+Goodwill of North Georgia, which provide an alternate pathway
+to high school completion. This program has provided
+outstanding results and has allows a group of young people to
+go from being potential high school dropouts to skilled welders
+working for manufacturers such as Kubota.
+ We need community involvement, as typified by the Mahalo
+spirit found at King's Hawaiian. This manufacture is so tied in
+with the community that people everywhere see the quality of
+life enjoyed by its employers.
+ While I believe that local efforts are essential, I also
+believe that the Congress has a unique opportunity to support
+technical colleges and workforce development as you reauthorize
+the Carl D. Perkins Act. I also ask that you consider funding
+year-round Pell. Just as manufacturers and other employers
+never stop operations for more than a week or two, technical
+colleges operate on a year-round calendar. Manufacturers and
+businesses are looking for a steady stream of graduates, not
+just in May.
+ Most importantly, I think it is the spirit that has been
+expressed here already, I think that Congress should look at
+taking lead in creating a sputnik moment for technical and
+career education. Just as the nation got behind the effort to
+become the world's leader in space exploration in the 1950s and
+'60s, this nation needs to get behind the effort to secure our
+role as the world's leading manufacturer.
+ I would like to ask Congress to consider providing funds to
+improve our nation's education infrastructure. Many of our
+technical colleges were built in the 1960s, and although these
+colleges work to keep equipment up-to-date, some equipment is
+in service much too long due to lack of resources. Just as our
+nation's highways and bridges form critical transportation
+infrastructure, education infrastructure provides the pathway
+from today into the future.
+ Finally, every time I come to this place I am in awe. I am
+awe of the great history of this place. I am in awe of the
+leadership that this nation has been blessed with. I am in awe
+of the work that you do every day. I ask that you be in awe of
+us. Be in awe of the amazing work that happens in our nation's
+technical colleges. Be in awe of the life-changing work we do
+in preparing young people and adults to enter the workforce
+with skillsets that are in high demand. Being that all the
+changes that we are affecting are generational in nature,
+grandchildren who are not even born today will have a better
+quality of life thanks to the work that is being done by our
+technical colleges with their grandparents today.
+ In conclusion, I appreciate the time you have afforded me
+and this panel to discuss the new faces of American
+manufacturing. I ask for your help and for the help of the
+entire business and manufacturing community in ensuring our
+nation's technical colleges provide the trained workforce we
+need in order for our economy to prosper for generations to
+come. Thank you.
+ Chairman CHABOT. Thank you very much.
+ Ms. Glas, you are recognized for 5 minutes.
+
+ STATEMENET OF KIM GLAS
+
+ Ms. GLAS. Thank you. Good morning, Chairman, Ranking
+Member, and the distinguished members of the House Small
+Business Committee. My name is Kim Glas, and I am the executive
+director of the BlueGreen Alliance, and we are a partnership of
+labor unions and environmental organizations committed to
+creating that fair economy for our manufacturing base.
+ I am delighted that you are holding a hearing like this
+today, and I am really honored to be asked to participate on
+behalf of all my organizations.
+ At the center of the BlueGreen Alliance work is
+strengthening American manufacturing. Driving new business and
+quality job creation across a clean energy economy. The
+BlueGreen Alliance Foundation helps to fulfill that mission
+because we directly work with manufacturers, a lot of small
+manufacturers across the country, to enter those clean energy
+economy supply chains, and providing assistance to those
+manufacturers of all sizes to participate in some of these
+emerging sectors.
+ But I would be remiss to not mention some of the challenges
+that our manufacturers across this country, both small and
+large, are facing. The United States lost millions of
+manufacturing jobs between 2000 and 2014, and of the more than
+2 million jobs lost during the Great Recession of 2007 to 2009,
+less than half of those have been recovered. Lack of adequate
+resources to enforce our trade rules, currency manipulation,
+and failed trade policies all risk turning back the clock and
+further exasperating these threats to our manufacturing base.
+But while there are challenges, we do see opportunity. Domestic
+and global markets for energy efficiency, renewable energy,
+clean transportation, and infrastructure are growing, and our
+small and medium-size companies that we are working with are
+looking at those opportunities to grow their business here at
+home.
+ Here is an example. As part of our larger national
+initiative, we have been working on a housing initiative
+regarding retrofitting low-income housing across this country.
+There is a transformation in retrofitting low-income housing.
+We have identified more than 1,000 U.S. manufacturers and
+distributors of products ranging from insulation, to energy
+efficiency lighting, to HVAC systems, looking for opportunities
+to grow in the United States and globally. Industrial
+manufacturers of all sizes are already are investing in energy
+efficiency and to help keep down their costs, but an additional
+15 to 30 percent reduction over all energy consumption can be
+achieved through further deployment of industrial energy
+efficiency with onsite renewable technologies, and if we are
+taking advantage of some of these efficiencies, that creates
+opportunities for small and medium-size manufacturers to make
+those technologies here at home and making our businesses much
+more globally competitive.
+ Public infrastructure projects utilize significant
+financial resources, whether it is building bridges, tunnels,
+or transit systems. When you use inputs sourced from countries
+with weak environmental or labor standards, that has long-
+lasting implications, not only on our workforce here but with
+higher greenhouse gas emissions, toxic air emissions, and
+potential impacts to the safety and the reliability of the
+materials used for public infrastructure. We believe strong
+procurement standards--Buy America, Buy Clean--for publicly-
+financed infrastructure projects will help make sure that these
+projects are more domestically sourced and provide enhanced
+opportunities for smaller U.S. manufacturers to break in and
+further grow their businesses.
+ Finally, the automotive industry has regained its
+competitive position globally and brought back over 250,000
+direct manufacturing jobs building new and more fuel-efficient
+vehicles, advanced auto components, and innovative materials,
+and it is critical that we continue the growth of advanced
+automotive manufacturing, and a lot of small, medium-sized
+businesses are seizing those opportunities.
+ But to further seize the opportunity to grow these quality
+jobs, we need to prioritize key policies and investments.
+ First, our companies are looking for market certainty.
+Manufacturers across the energy sector depend on policy
+leadership and consistency to create the climate for a robust,
+private investment in these promising, yet emerging fields.
+ Second, additional investment is needed to bring more
+energy and transportation infrastructure up to the level needed
+to support our country and the global economy.
+ Third, we need to look at forward-leaning standards,
+procurement policies, to spur adoption of clean and efficient
+technologies and encourage investments to deploy advanced
+energy, transportation, and infrastructure, and to manufacture
+these technologies in America.
+ Fourth, it is important to provide technical assistance to
+small manufacturers looking to enter the market. That one-on-
+one support is absolutely critical.
+ And finally, the energy workforce is aging. It is critical
+we utilize established apprentice and other training programs
+to ensure all manufacturers, regardless of size, have skilled
+applicants for the jobs that they are looking to fill.
+ I really appreciate the opportunity and your support and
+your work around small business, and thank you for the
+opportunity to appear here at today's hearing.
+ Chairman CHABOT. Thank you very much. We will now have 5
+minutes to ask questions, and I will begin with myself.
+ Mr. Ratzenberger, you had mentioned, when you were making
+the Made in America series, the story about the gentleman that
+if the machine broke down there really was not anybody here to
+fix it so he would have things shut down for weeks and bring
+somebody in from Europe or somewhere else. Were there any other
+stories of that nature that you think we could learn from
+experiences that you had while making that series?
+ Mr. RATZENBERGER. Even recently to that point, I was in the
+airport, in Kennedy, and a fellow came up to me and thanked me
+for my work in promoting jobs and skills training. I asked him
+what he did, and he said he made tanks for compressed air. I
+said, where are you off to? He said he was going to Argentina
+to hire welders. He said he had jobs for 30 welders to start
+tomorrow. He was flying to Argentina to find them. That, more
+than anything, I find nationwide. People come and say, look, I
+could use 10 welders. We are talking salaries $65,000 and up.
+Some welders are making $100,000 a year in very specialized
+welding. But people are desperate for those jobs. Employers
+cannot find them. They do not exist anymore because the ones
+that still work are working, they are making good money, and
+they do not want to uproot their families and move to another
+state. There is no reason.
+ Chairman CHABOT. Absolutely. Thank you.
+ Mr. Tillman, let me turn to you. A topic our Committee has
+examined extensively is the cost of Federal regulation and how
+that cost is borne by various segments of the economy. Research
+has found that manufacturers pay nearly $20,000 per employee
+per year on average to comply with Federal regulations, or
+nearly double the $10,000 per employee that is borne by other
+firms as a whole. Manufacturers' costs are much higher. How
+much of a factor do you believe that things like this, the
+regulations that businesses have to deal with every year, and
+those are increasing, how much is that related to firms in this
+country to say, well, I am heading to Mexico, or I am heading
+to China or elsewhere to do business there because regulations
+are a lot less?
+ Mr. TILLMAN. It is a determining factor. I think it is
+different state to state, obviously. We are a company that has
+a presence not only in California, but also in Washington
+State. Absolutely, it plays heavily on where we decide to
+expand to. We have big growth initiatives. We would like to
+expand to most states within the domestic economy located near
+some of these hot centers of aviation activity, and there is a
+lot of stuff going on right now. It certainly needs to be
+relooked at. The fact of the matter is it is inevitable that
+folks, in order to stay alive, are being subject to some
+extremely competitive pressures now to keep doing what they are
+doing. The more regulations that continue to weigh them down,
+it is not that they want to; they are absolutely, as a
+necessity, forced to. That is something that we do not want to
+see happen, certainly. We have had to fight, and fight, and
+fight, to stay competitive in the state of California. And
+while we have done it, it certainly does not hurt having
+regulations that really foster and incentivize wanting to stay
+there.
+ Chairman CHABOT. Thank you. I have only a little more than
+a minute to go.
+ Dr. Perren, Mr. Ratzenberger had talked about the 30
+welders that somebody was going all the way to Argentina to
+get, and I have heard similar stories to that and other things
+which we are not training people anymore. You still have 5
+percent, approximately, of Americans that are unemployed, which
+is probably double that if you really look at the people who
+have given up looking for a job and they are no longer counted
+in those statistics, or people that are working part-time that
+used to be working full-time, or people that are underemployed.
+They have the qualifications to work, and ought to be earning a
+lot more but they are working at a fast food industry job or
+something, and that is honorable work, but oftentimes that is
+work you might want to start out and then move up. But what
+ought we be doing in the education system to deal with those
+types of things? What are we not doing now that we ought to be
+doing?
+ Mr. PERREN. A couple things come to mind. First of all,
+reintroducing career technical education programs at a stronger
+level at the high schools. Even though they are strong in many
+of our communities, affording high school students to begin
+welding, even in middle school learn how to do basic welding.
+Our technical college, we are limited only by our physical
+space in terms of the number of welders that we can turn out.
+Every welding booth we have is full, and we have the same issue
+in our community. Kubota is expanding their manufacturing
+facility near Gainesville. They will be hiring 600 additional
+welders in the next 3 years. Where are they coming from? And
+again, we are at capacity now. And again, helping our K through
+12 system also continue to reenergize their vocational programs
+is important.
+ Chairman CHABOT. Thank you very much. I am sorry I ran out
+of time, Ms. Glas, but my time is expired.
+ The gentlelady from New York, the ranking member is
+recognized for 5 minutes.
+ Ms. VELAZQUEZ. Thank you. I would like to hear from Ms.
+Glas and Dr. Perren. As more manufacturing begins to move
+towards clean and green products and technologies, education in
+these technology products and business operations must do the
+same. Are the curriculums keeping up with this move towards
+green technology?
+ Mr. PERREN. All of our programs meet with industry advisory
+boards two times a year. These industry advisory boards are
+made up of employers, manufacturers. They provide us with
+guidance as to what they expect in the workplace. We do revise
+our curriculum based on what our employers are telling us. We
+also introduce green equipment and other equipment that is used
+in the workplace based on what our employers tell us from those
+biannual meetings.
+ Ms. VELAZQUEZ. Ms. Glas?
+ Ms. GLAS. I will just note that I have building and
+construction trades as part of the BlueGreen Alliance,
+including the plumbers and pipefitters where those welding
+skills are needed, and their apprenticeship programs are wildly
+popular. They have done major recruitment efforts to ensure
+that that next generation workforce is learning the skillsets
+necessary for that clean energy economy and learning that
+skillset that when they are doing the work, that it is
+qualified work, that it is certified to meet the standards,
+that it is delivering what that work should be. So we are very
+excited about some of the work, and I think there are more
+opportunities for apprenticeship programs like the building and
+construction trade apprenticeship programs to work even further
+with technical colleges to ensure we are all pulling in the
+same direction.
+ Ms. VELAZQUEZ. Thank you. Mr. Tillman, manufacturing in my
+district is alive and growing. The problem that we are facing
+is the lack of space. As more manufacturing work moves towards
+automation, workers need advanced education to operate the
+machinery that produces highly technical goods, like computers
+and aerospace parts. These jobs also command higher pay,
+helping more families live the American Dream. Do you feel your
+employees are adequately trained, or must you invest in
+training and education upon hiring them?
+ Mr. TILLMAN. Yeah, we have taken a very aggressive stance
+on human capital. Again, we are in the people business. We work
+with a lot of local technical schools, which is something that
+not a lot of manufacturers do. We bring in training programs
+into our facilities if they are not offered, in terms of
+apprenticeship and things like this. We have a pretty robust
+human capital management training program. I think in general,
+as automation becomes--which is the trend certainly that it is
+going, these environments, they need to foster innovation. They
+need to embrace it. I think oftentimes with traditional
+manufacturers, they are possessing a lot of antiquated
+technologies. You do not see a lot of reinvestment, and it
+certainly prohibits them with the aging workforce. If you have
+a lot of people trained on previous generations of technology,
+it is not so easy to embrace these new practices. I think you
+have to get in front of it. We are certainly doing that.
+ Ms. VELAZQUEZ. Do you have any recommendations as to what
+we can do at the state and federal level to provide the kind of
+incentives or the kind of support that you need? Because I can
+believe that that could be very costly.
+ Mr. TILLMAN. Absolutely. Certainly, we would like to see
+more incentives for us to go that extra mile and ensure that we
+are, again, it is an ultracompetitive environment out there,
+and organizations have to be incentivized to want to go the
+extra mile. We would like to see more work done at the academic
+level as well, and not just at the technical school level, but
+even before that. K through 12, this is the time.
+ Ms. VELAZQUEZ. Do you sell your products abroad?
+ Mr. TILLMAN. We do not currently.
+ Ms. VELAZQUEZ. You do not?
+ Mr. TILLMAN. No, we do not currently.
+ Ms. VELAZQUEZ. I yield back.
+ Chairman CHABOT. The gentlelady yields back.
+ The gentleman from New York, Mr. Hanna, who is the Chairman
+of the Subcommittee on Contracting and Workforce is recognized
+for 5 minutes.
+ Mr. HANNA. Pell grants. You could not be more correct. They
+ought to be year-round, and there is a conversation ongoing
+about that.
+ Interesting, Mr. Ratzenberger, I asked my wife why she
+married me, and it is because I do not watch TV, I do average
+plumbing, average electrical work, and I am an okay carpenter.
+That is her short list. But there is something strange about
+this conversation, and I say that because there is also
+something insidious about it which Mr. Ratzenberger sort of
+alluded to. Correct me if I am wrong, but we discouraged years
+ago the very thing that we are missing today. Now, one would
+naturally think that the laws of supply and demand would fix
+all these problems that we are talking about, right, but
+clearly, they have not. In my own community, there are a few
+hundred jobs that we know of, maybe a couple thousand, that is
+defined as the skills gap, and yet you would say that where
+there is a vacuum, labor flows in. But it is not happening. I
+am interested to hear what you said. It is because we
+discouraged people from going into the trades. I have Ms. Glas,
+35 years in the operating engineers. That is what I did. That
+is how I made a living. They are great ways to make a living,
+but we told people that was not good enough. Somehow that was
+not appropriate if you wanted to, whatever it was, do. Now we
+find ourselves in a place where we are short of jobs for the
+very reason we thought we would not be. At the same time, we
+have this enormously costly 4-year educational process.
+ Mr. Perren, you talked about 2-year trade schools that
+prepare you for a lifetime of jobs, and we know that most
+people change jobs--it used to be once, now it is seven or
+eight times. It is disturbing to think that something so
+valuable at any point in our history was diminished, but Mr.
+Ratzenberger, what do you think about that? How did we get to
+place where we--this may be a philosophical question, too.
+ Mr. RATZENBERGER. Sometimes I joke around saying it was my
+fault because I was a carpenter and I helped build the stage at
+Woodstock. It was right around then that the perception shifted
+where we started honoring mediocrity instead of success. It
+flipped the whole idea of what it is to be a success right on
+its head. That seeped into the school system. Certainly, the
+media, because now, instead of--and I always use the Beatles
+song. Forgive me, you Beatles fans out there, but Lucy in the
+Sky with Diamonds. Picture yourself in a boat down the river,
+with tangerine trees and marmalade skies. So it is lionizing
+the people who do drugs and have hallucinations floating down
+the river, but my question always was, who built that boat? The
+boat is the key factor. Someone with a work ethic, someone with
+skills built the boat so you could do nothing. I think the
+media, especially, anytime it depicted someone with tools who
+knew what they were doing, somehow they were either the villain
+or depicted as stupid. Why would a child growing up, looking at
+that, want to be that? I even think, I go so far as to say we
+should change that term ``blue collar worker'' to essential
+worker, because if they all went home, did not show up to work
+tomorrow, we would screech to a halt.
+ We can do without actors and sports celebrities. Only our
+families would miss us if we disappeared. Society would go on
+just fine, seamlessly. Imagine if all the truck drivers pulled
+off to the side of the road and said, nah, we are not going to
+work today. These are the people that should be honored in the
+media, certainly in commerce. My mother worked in a factory,
+too, and when I picked her up late at night, the 3 to 11 shift,
+and I thought there should be an audience here applauding these
+people because this job and these people are what keeps us
+going. I am icing on the cake, you know, and that is my
+favorite part of the cake.
+ Mr. HANNA. To Ms. Glas, that is why I have always supported
+Davis-Bacon. What is wrong--Davis-Bacon is parody. You know who
+it is. What is wrong with making $70,000 to $100,000 with
+benefits? When you walk around the capitol here, people are a
+lot of things, but the thing that strikes me is the
+construction. The actual building, the physical presence of
+what we see here and the talent that went behind it. It is
+quite amazing. It is. It makes you feel bad, does it not? What
+we have come to is we need to be a society now because the
+world is so competitive and the world is leveling that it is
+those value-added products through higher education, more
+complex, more intellectual capital, like Elite, that will
+actually make us competitive with the world to sell those
+things that we cannot make here because they do not pay well
+and they can be done someplace else. But now we are in a
+position where we have to say we need to educate ourselves
+better, compete better, and as I said, make value-added
+products.
+ My time is expired, thank you, Chairman.
+ Chairman CHABOT. Thank you very much. The chair will note
+for the record, I think that is the first time in, at least my
+20 years, that we have heard a Lucy in the Sky with Diamonds
+quote here in this Committee. We thank you for that.
+ The gentlelady from California, Ms. Chu, who is the Ranking
+Member of the Economic Growth, Tax, and Capital Access
+Subcommittee is recognized for 5 minutes.
+ Ms. CHU. Thank you, Mr. Chair.
+ Ms. Glas, my state of California is home to the largest
+manufacturing base in the country, and, it has some of the
+strongest carbon reduction policies in the nation. In fact,
+California is responsible for about 11 percent of the nation's
+manufacturing production. Can you tell us about how Federal and
+state governments can encourage industry growth to ensure that
+the clean energy economy is developing good manufacturing jobs
+in the U.S.?
+ Ms. GLAS. I think the state and Federal policy plays a key
+role in contributing to how and whether manufacturers continue
+to grow. California has been a leader across the country on
+environmental policies to help spur that sort of next
+generation of investments. I would caution, though, that there
+are some big industrial manufacturers who are producing
+products in California and on the West Coast that are producing
+aluminum or steel products, steel inputs that go into some of
+that next generation product. You want to ensure that we are
+sourcing those products here in the United States where it is
+less carbon intensive. Importing steel from China is two to
+three times more carbon intensive. How do we ensure the full
+value of the benefits for the clean energy manufacturing
+economy go from the raw material producer all the way through
+the chain? The state and the Federal government have a lot to
+do with whether manufacturing in this sector will grow and
+really seize the opportunities that lie ahead.
+ Ms. CHU. How about some of these tax credits? For instance,
+how has the long-term extension of the production tax credit
+and the investment tax credit impacted clean energy
+manufacturers?
+ Ms. GLAS. They have been enormously helpful in ensuring
+that these industries see a longevity and making sure that they
+are cost competitive with those companies that are importing
+product. I will say that because there has been uncertain
+around those tax credits in the past, a lot of companies have
+been hesitant to make the investments that they wanted to make
+in the sector. I really appreciate Congress moving forward on
+that. I think that was a significant leap ahead. But markets
+demand certainty, and so I would continue encouraging this type
+of thinking of how to get to the next generation technologies.
+ Ms. CHU. The research and development tax credit was made
+permanent. How could this R&D credit be made to be more
+business friendly?
+ Ms. GLAS. I think that was a wonderful step forward. A lot
+of this work actually happens on the ground level of
+manufacturers talking to technical colleges, talking with
+apprenticeship programs. There is a lot more fostering and
+convening that needs to happen locally to ensure that next
+generation workforce is in the pipeline and that manufacturing
+is a career opportunity that everyone wants to be a part of
+because it is part of the gateway to the middle class.
+ Ms. CHU. Mr. Tillman, I enjoyed your story on reshoring
+which is when a company shifts manufacturing back to the U.S.,
+jobs are not only created at the new factory but at many
+surrounding business, like parts suppliers, restaurants, and
+real estate agents. Can you elaborate on this secondary
+economic impact of reshoring manufacturing?
+ Mr. TILLMAN. Absolutely, we have seen that as well.
+Bringing jobs back from a manufacturing perspective, certainly
+in the aerospace and defense industry supply chain, there is
+quite an extensive supply chain. We have seen elements of that
+locally for us, even within the southern California region.
+That is all part of the effort. Again, we speak about the
+successes we have, but moreover, it is about the success of
+America, and that is why we are here. If we can see more of
+that in general, not only in California but throughout the rest
+of the U.S. economy, you are going to see the multiplier effect
+of that. We are going to do our part, and obviously, we are
+here to ensure that Congress is doing their part. But again, I
+think together we are going to get there. The momentum has
+changed. Reshoring is here to stay. We are doing a better job
+at getting the message out there to local schools. We need to
+continue that. This needs to be an ongoing effort. Again, now
+is the time to do it because there are so many opportunities
+out there.
+ Ms. CHU. Anyone else on the panel?
+ How could we invent, incentivize, and increase in the
+purchases made by large businesses from small business
+suppliers and reshoring? Is there a way we could do that?
+ Mr. TILLMAN. With regards to incentivizing for raw material
+product, I think Ms. Glas spoke to it. From parts that we
+manufacture, there is a value stream to that, and it begins
+with raw material production. Emphasizing production in the
+United States would be a huge benefit to this initiative, in my
+opinion. I think clarity with regards to some of the policy. I
+know, as Ms. Glas mentioned, there is a lot of leaps forward,
+and I think we need to encourage that. After the legislation is
+put into place, let's take the next steps and really get at the
+ground floor and see how that legislation is affecting tactical
+business management and strategy. Once we do so, I think it is
+going to shed light on some other opportunities there.
+Clarification within that legislation. Making it aware. We as a
+company, obviously seek these sorts of things, and oftentimes,
+it is not terribly accessible to us, so more broad education on
+how these policies affect local businesses would be
+tremendously helpful.
+ Chairman CHABOT. Thank you.
+ Ms. CHU. Thank you.
+ Chairman CHABOT. The gentlelady's time is expired.
+ The gentleman from Nevada, Mr. Hardy, who is the Chairman
+of the Subcommittee on Investigations, Oversight, and
+Regulations, is recognized for 5 minutes.
+ Mr. HARDY. I would like to thank you all for being here. I
+think it is an informative discussion we are having here. Mr.
+Ratzenberger, you hit right on what I have always believed. I
+grew up as a fifth generation son of farmer ranchers, and we
+could hold just about anything together with a baling wire and
+duct tape to make things keep moving. Through that process, I
+went to college for 1 year, and that year of college, the first
+thing that was taught to me by my aide was to make sure I get
+an academic education because the trades and everything are
+going out of style.
+ Mr. Perren, do you believe that is part of maybe the
+problem; that academia has pushed so hard to make everybody get
+a college education that they have looked down on the trades as
+being a viable opportunity to raise a family?
+ Mr. PERREN. It goes back to some comments I made that the
+perception of success in this country tends to be tied to a 4-
+year degree, and the trades do not tend to be in that career
+path or that education path.
+ Yes, there is a perception that everyone wants their son
+and daughter to graduate from a 4-year institution, and there
+is nothing wrong with that. Most everyone in this room did
+that. Absolutely nothing wrong with that, but not at the
+expense of keeping others from going into areas where they are
+passionate. There are so many kids that if they had the ability
+to use their hands, if they even knew what they could do with
+their hands, if they were exposed to career explorations where
+they know what the careers are that are available to them, they
+could follow their passions and go into the trades and view
+these things as not something you do if you cannot go to
+college, but something you do because you are following your
+heart. You are following your dreams and you are doing what you
+are wired to do.
+ Mr. HARDY. One of the issues that has really been
+frustrating for me, I think Mr. Ratzenberger, you brought it
+up, but 35 years ago the schools changed. When I grew up, we
+had auto body. We had shop. We had welding. We had all these
+opportunities to do certain things. You can learn trades, but
+you also have to learn work ethic, and I believe you brought
+that up.
+ In our state of Nevada, we saw that shift almost 40 years
+ago, when I graduated, where these were leaving. Now, it is
+starting to come back but it is coming at a different level
+which is higher tech, but it has to do with the drones and
+building robotics. But these youth have to get involved. It is
+not part of academia. It is something they do on the side, and
+the trades are providing opportunity for these youth to come
+out and learn how to build something with their hands with
+fancy machines and everything else that is donated by society.
+Do we need to invest more in our high school education to
+prepare people for going into college, in your opinion?
+ Mr. RATZENBERGER. I think we should be investing in the
+grammar schools. Every innovator, from Leonardo da Vinci,
+Benjamin Franklin, Thomas Edison, Steve Jobs, started as a
+child tinkering. I knew Steve Jobs, and we would talk about
+that. He loved working on car engines with his dad. Thomas
+Edison had 3 months of formal educatin--3 months. That is it.
+He hung around a boatyard and learned how to do things.
+Leonardo da Vinci was an illegitimate child, he grew up on a
+farm. You have to get them when they are young, tinkering and
+making things. Old cardboard boxes. My mother, God bless her,
+she used to get old radios from garage sales and cut off the
+cord and just say, here, take it apart. I have been a tinker
+and an inventor ever since. Putting things together, taking
+things apart. That is all you have to do with a child. It is
+very cheap, too.
+ But you have to start young. Thomas Edison never went to a
+school and said, I want to learn how to invent a lightbulb. It
+all happened in here when he was very young. So my
+recommendation is start at the younger ages, K through 12, as
+Dustin mentioned. That is where it needs to start. Once they
+are in high school they are already set. They have their likes,
+dislikes, their priorities. Certainly, by college, it is gone.
+ I sit on the board of a university and I am always joking,
+and say to the president, every year before we give them their
+degrees, they should be required to go out to the parking lot
+and change the tire on their car. If you cannot do that, what
+good is your degree? You do not have enough common sense to do
+that? But I also joke and I say, before anybody can be sworn
+in, any elected official, you should be required to assemble a
+coffee table from IKEA. I mean, that is tough.
+ Chairman CHABOT. Now you are hitting too close to home.
+ Mr. RATZENBERGER. Well, I know you farm boys can.
+ Mr. HARDY. My time is expired. I just want to tell you, Mr.
+Tillman, thank you for lunch last night, or dinner last night.
+No, he did not buy me dinner.
+ Mr. RATZENBERGER. Good restaurant, too.
+ Chairman CHABOT. The gentleman's time is expired.
+ The gentleman from Mississippi, Mr. Kelly, is recognized
+for 5 minutes.
+ Mr. KELLY. Thank you, Mr. Chairman, and thank all you
+witnesses. It is so important, and I have a very--my district
+has a lot of manufacturing and a lot of agriculture, and I
+would say in Mississippi, my part of the district, even though
+it is rural, most of the manufacturing that is coming there
+right now, it is coming because of workforce. We have a very
+skilled workforce that is getting better every day. We also
+have water and rail and energy and all those things that are
+important, as well as a workforce. We have a community college
+system in Mississippi that is still pretty good, and I think it
+is one of the best in the nation. It is one of those things
+that I think we should thump our chest about.
+ It is often funny. We have people who come to manufacturing
+jobs in Mississippi and they come kicking and screaming,
+telling their folks, I cannot believe I have to go to
+Mississippi. Do you know what the problem with that is? They
+never want to go back. They want to stay because of the people
+and the things that are so great there.
+ Veterans are also very good in my heart. I have served a
+long time. I know you have veterans that work for you, but we
+talk about certificates of skill or journeyman's license or
+professional trade associations. What are we doing to recognize
+those skills that these soldiers, sailors, airmen, and
+marines--because we have heavy equipment operators, welders,
+carpenters, mechanics, all of these things--are there anything
+in the civilian side or Small Business Administration that
+recognizes or certifies these guys coming off active duty or
+reserve component who have on-the-job training that is not
+necessarily recognized in the civilian side? Does anybody know,
+and specifically, Mr. Tillman?
+ Mr. TILLMAN. It is actually interesting. I was at Northrop
+Grumman, the global headquarters, earlier this week, and the
+woman that I was meeting with is a veteran. She was saying a
+big part of the problem that exists is interpreting a military
+resume, which has a lot of the same fundamental attributes that
+normal college resumes have but it is written differently, and
+there are different skillsets that are emphasized. She brought
+that to light because she is a veteran, she is able to, and
+oftentimes on a hiring committee say, no, that is actually what
+we are looking for, it is just called something else. I think,
+in general, businesses need to be more equipped on that. That
+is going to happen inevitably if you are hiring more veterans
+because you are going to be embracing that skillset and just
+the knowledge and know-how that goes into interpreting it. The
+reality is, again, it is quite a travesty when veterans cite
+finding a job as the hardest thing. As they retire from active
+military, as they are entered into the job force, companies
+need to be incentivized. Again, not because it is not something
+that they want to do; it is just so competitive out there that
+there has to be an overwhelming desire for them to go the extra
+mile. When we have done it, it has been very successful. And
+introducing training programs, like I said, these are the folks
+that we need to, and it is a cultural thing. A lot of active
+military that are retiring now are millennials, they do fall
+into that 18-to-34 category.
+ Another part of that question made me think about what we
+hear a lot, which is the sort of Google myth that you have to
+have sleeping pods in order to make employment exciting, and
+that is not the case. A sense of belonging. A sense of
+community. Listening. Empowering them to be successful, giving
+them a voice. This is really what they want ultimately. If we
+can work towards creating that culture, you are going to have a
+higher success rate, whether it is veterans or any other
+millennials, or people even before that.
+ Mr. KELLY. Mr. Chairman, that is one of the things. There
+are so many skillsets. First of all, people who come out of the
+military generally are very humble and do not inflate their
+resumes with the things that they are capable of doing, unlike
+a lot of kids who come straight out of college. They are trying
+to turn certain leadership positions into doing these great
+things, and these kids in the Army are coming out, and Navy and
+Air Force, and they are coming out with great leadership skills
+that do not show up on their resumes.
+ So, one, we need to teach these guys how to write about
+their skills. Two, I think we really need to look at a civilian
+equivalency skillsets to go with all MOSs and all the military
+services, because you have airplane mechanics and helicopter
+mechanics. Even in our signal and intelligence scores, these
+guys are dealing with cutting-edge technology that you guys
+have not seen yet. Fortunately, I have been exposed to that,
+but these kids are way ahead in technology but it is a hard job
+to transition that from the military to the civilian skillset.
+So I really hope you guys will think about ways that we can
+highlight these skills and make sure. I apologize, I only have
+8 seconds left, but I yield back. Please think about ways we
+can take care of our service members and use their skills to
+maintain our role as the greatest manufacturer in the world. I
+yield back.
+ Chairman CHABOT. Thank you. Thank you. The gentleman yields
+back.
+ The ranking member is recognized for the purpose of asking
+questions.
+ Ms. VELAZQUEZ. Yes, just one question. Dr. Perren, and Ms.
+Glas, and even Mr. Tillman. How can we get more young girls and
+women interested in order to change the mindset that the trades
+are not for girls or women?
+ Ms. GLAS. This might get to Mr. Ratzenberger's comments
+about sort of tinkering and learning early. As a woman who has
+devoted her entire career to growing the manufacturing base, I
+do not recall a single time in elementary school or in high
+school where a guidance counselor or career counselor ever
+said, have you considered going into manufacturing? Do you know
+what manufacturing today looks like? Because it is a lot more
+innovative. It is not your mom and dad's manufacturing anymore.
+It is very lean. It is very automated. It takes high skills in
+terms of engineering skills, math skills, and science skills.
+ Personally, I think women do not fully understand or
+appreciate the type of employment and how it can be a family-
+sustaining wage. There is a gap. There is a gender gap in the
+building and construction trades. There is no doubt about that.
+But I think----
+ Ms. VELAZQUEZ. And even when you look at STEM.
+ Ms. GLAS. Yep.
+ Ms. VELAZQUEZ. Right? And the national focus on it. When
+you look at the numbers, you see a great gap when it comes to
+women.
+ Ms. GLAS. Completely. It is something that I do not know,
+exactly how to bridge that gap. A lot of people have been
+thinking about ways to do that, but I think earlier on in the
+school age, women need to be shown that there are possibilities
+in this sector. What these sectors are about. What are the
+types of jobs in these sectors? What is the income level of
+these sectors? To get people more talking about the fact that
+they want to be part of a manufacturing skilled training
+future.
+ Mr. PERREN. We also encourage nontraditional learners.
+Whether it is women going into welding, air conditioning, and
+also, men going into nursing or whatever. We encourage
+nontraditional learners to try to bridge that gender gap. We
+actively encourage that.
+ If I may address the gentleman from Mississippi's
+statement, returning military veterans, when they bring their
+MOSs to us, we evaluate that, and we actually give them course
+credit based on the service work that they did in the military,
+so they can actually earn significant course credit when they
+return from service towards a degree at colleges all across
+this nation. We are trying to recognize the tremendous skills
+that they have learned while they were in the military.
+ Chairman CHABOT. Thank you. Did you want to comment, Mr.
+Tillman?
+ Ms. VELAZQUEZ. I yield back.
+ Chairman CHABOT. You yield back?
+ Mr. TILLMAN. The only comment that I would have is I think
+it is a curriculum issue. I think there is a certain social
+level of acceptability in schools. John spoke a lot about
+solving the problem by bringing shop classes back, and that is,
+by and large, a lot of it. I think kids in general--I have
+children--they are encouraged to do more traditional things. I
+think if you make that more acceptable in general at the lower
+level, K through 12 area, they will not feel so awkward by
+pursuing a nontraditional pathway because the reality is it
+absolutely is misinformation. As Dr. Perren was referring, we
+have very high-paying jobs, and as a manufacturing company, we
+maybe see 1 in 1,000 women who apply because it is such a
+rarity. We would love to encourage more of that.
+ Chairman CHABOT. Thank you. The gentlelady yields back.
+ Before wrapping up, we will check with the gentlelady, but
+Mr. Ratzenberger, did you want to comment on kind of the role
+of women as you have seen in manufacturing? I think you
+mentioned your own daughter?
+ Mr. RATZENBERGER. Oh, my daughter is a great carpenter. She
+is a producer in Hollywood, but she had her own toolbox all
+through college.
+ In addressing that, I talked to a retired commandant at
+West Point, and I said, where do the best officers come from?
+Without skipping a beat he said farms. Boys and girls. I said,
+why is that? He said because they are always problem solving
+from a very young age. Instantly they have to deal with it, as
+you well know. If we reinstate those manual training classes in
+school, the children, the boys and the girls who do not have
+the advantage of growing up on a farm, they have the advantage
+of putting their hands to physical things and problem solve.
+The brain is formed between birth and 3 years old; 5 years old,
+maybe. So that is the age you have to get kids interested, and
+they can mold the world around them to their liking. You do not
+let the world mold you; you mold the world. You take what
+natures gives you and you say, how can I make something else?
+Again, Steve Jobs, da Vinci, Thomas Edison, it all starts at a
+very young age. So boys or girls, it does not make a difference
+at all.
+ Chairman CHABOT. Very good. Thank you very much.
+ I would like to comment as Chair, I think all four of you
+were great. Excellent panel here. There are a lot of takeaways.
+We spend a lot of money on education in this country every year
+and we need a highly trained and skilled workforce for jobs
+that are now going unfilled and that we have to seek people in
+Argentina to do our welding. I mean, it is incredible. I think
+you have given us a lot to think about here as members of the
+Small Business Committee. As we have said, 99 percent of the
+manufacturers are small business folks, so this was right in
+our sweet spot. Thank you very much for sharing your
+experiences with us. We will share it with our colleagues, not
+only on this Committee but other Committees in Congress as
+well.
+ I will ask unanimous consent that members have 5
+legislative days to submit statements and supporting materials
+for the record.
+ Without objection, so ordered.
+ If there is no further business to come before the
+Committee, we are adjourned. Thank you very much.
+ Mr. RATZENBERGER. Thank you.
+ [Whereupon, at 12:22 p.m., the Committee was adjourned.]
+
+
+ A P P E N D I X
+
+
+ House Committee on Small Business
+
+ Presented by John D. Ratzenberger - May 12, 2016
+
+ This great country of ours, this land we call the United
+States of America was founded and nurtured on 2 basic guiding
+principles: Freedom and the Ability to use that freedom to
+build the finest civilization yet seen on earth.
+
+ We built this nation guided by our imaginations and the
+skills we learned from our elders. We cut our own timber with
+saws we made ourselves from the ore we mined using tools that
+we machined and honed on machines that we built from scratch
+with our own hands. We drew, measured and shaped the tools we
+needed to build our homes and the villages towns and cities in
+which we lived. We travelled from place to place in vehicles we
+built and maintained ourselves to harness the pulling power of
+the livestock given to our use and care. We used our own hands
+to build the barns, fences, and corrals that kept our animals
+protected so that we could feed our families with food we grew
+ourselves in fields plowed with more tools that we designed and
+proudly crafted.
+
+ We were always a nation of builders, tinkerers and
+craftsman that met each and every task and challenge with
+hands-on skills that were passed from generation to generation.
+We built our own ships that gave birth to the United States
+Navy. The same ships that fought the Barbary pirates off the
+coast of North Africa when Thomas Jefferson was President. We
+used the same time honored skills to construct the battleships
+and landing craft that were necessary for our victories on D-
+Day as we pushed the Nazi nightmare back and extinguished the
+flame of evil so that our children could live in peace. We made
+every one of the weapons carried by our brave men and women
+throughout our history to protect the place we call home.
+
+ With our own hands, we designed and constructed a rocket
+ships that landed us on the moon and launched the satellites
+that transmit our cell phone signals from one place to the
+next. We used our hands to construct medical equipment that
+have saved millions of lives worldwide. Make no mistake, we are
+the peacekeepers of the world because of our manufacturing
+might. Manufacturing is to America what spinach is to Popeye.
+
+ While future generations may have to explain that analogy,
+we in the year 2016 understand that without tinkerers,
+builders, and manufacturing throughout the land, we are
+rendered spineless and helpless. Manufacturing is the backbone
+of Western Civilization. Everything we do every single day is
+reliant first on someone's ability to not only put a nut and a
+bolt together but to make that nut and that bolt in the first
+place. I have always known these truths to be self evident
+because I grew up in the once mighty industrial town of
+Bridgeport Connecticut surrounded by people who knew how to
+design, make, build, fashion, repair and maintain anything you
+wanted. My uncles proudly boasted about their ability to hone a
+piece of metal down to 1/5000th of an inch tolerance as though
+the fate of western civilization rested on it. As a ten year
+old, I thought it was funny but as I got older and a tad more
+sophisticated, I realized that my uncles were right. The fate
+of Western Civilization rests entirely on our ability to make
+things. The world would get along just fine without actors,
+reality stars, musicians and sports celebrities. Our loved ones
+would be sad but the world would continue to hum along
+seamlessly. Think, however, what would happen if all the
+skilled trades people from carpenters and plumbers to farmers
+and truck drivers decided not to show up for work tomorrow. We,
+the entire nation, would instantly grind to a halt causing
+problems that would take generations to overcome.
+
+ So why then have we stopped teaching our children the joys
+of crafting something out of nothing? About fifteen years ago
+while visiting a number of factories and filming the different
+ways companies make things for my TV show ``John Ratzenberger's
+Made in America'', I realized that there were hardly any
+workers under the age of forty in any of the facilities. After
+talking with dozens of CEOs and plant foreman in every state, I
+was made aware of the fact that nationwide, the manual arts,
+that is: wood shop, metal shop, auto repair and even home
+economics were taken out of the middle and high school
+curriculums about 35 years ago. Not only did that result in a
+dropout rate back then of 30 percent instantly but it left us
+with a skilled essential workforce whose average age today is
+58 years old.
+
+ There are close to a million jobs available right now in
+small businesses around the country that rely on people with
+mechanical common sense skills that we've stopped offering in
+our public schools 2 generations ago. The most repeated
+complaint today from potential employers is that it's
+impossible to train someone for any of the jobs available when
+they graduate from high schools everywhere without the ability
+to even read inches and fractions from a simple ruler.
+
+ The big worrisome question then is this... How do we
+reinstate the necessary programs in our schools to give our
+children a familiarity of the tools that built and maintain our
+civilization and way of life? If the average age of the people
+that keep our nation and the nation's infrastructure working is
+58 years old then how long do we have before it all stops?
+
+ I also submit that we do away with the term ``blue collar
+worker'' and replace it with ``essential worker'' because
+that's exactly what they are. Once they are all retired then no
+more ships, buildings, trains, planes, or automobiles. No more
+tractors, no more farms, no more food unless we grow it
+ourselves in fields we plow with tools we've made with our own
+hands. That's the way it's always been and if we someday want
+to explore the universe, cure disease and marvel at what awaits
+us in the oceans depths then we'd better get busy introducing
+our youngsters to the vital art of using tools and the joy of
+self reliance. Thank you.
+
+ John Dezso Ratzenberger
+ [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
+
+ About Elite Aviation Products
+
+ Good morning and thank you for inviting me to testify
+before this committee. I am Dustin Tillman speaking on behalf
+of Elite Aviation Products, Inc. as its President & CEO.
+Bringing manufacturing jobs back to America is something that
+has always been very important to use as a company. This
+process has become affectionately referred to as ``re-
+shoring,'' and is a topic that has been garnering a great deal
+of attention in the mainstream media as of late. Elite Aviation
+Products is an American aerospace & defense (A&D) engineering
+and manufacturing company, and is a proud participant of the
+re-shoring movement. Elite was born through recognition that
+despite surging demand pressures in both the commercial
+aviation and A&D marketplaces, American manufacturing over the
+decades has been stifled by an overwhelming lack of investment
+in emerging technologies, a slowness to adapt business models
+with 21st century efficiencies, immense growth capital
+requirements as well as a lack of investment and prioritization
+of cross-trained workforces. By recognizing and addressing
+these issues, Elite Aviation Products has been able to quickly
+break into the Aerospace marketplace while creating domestic
+manufacturing jobs, and dispelling the myth that successful
+manufacturing in America is a thing of the past.
+
+ However, for Elite, and many companies out there just like
+Elite, there's still a lot more work to be done so that our
+nation can reassert itself as the manufacturing powerhouse it
+once was. Many say that in our current socioeconomic
+environment, the vision that our country will be a nation of
+builders once again is all but attainable. Manufacturing
+operations tend to be one of the most capital intensive
+businesses to develop. Manufacturing requires large investments
+in real estate, machine tools, and human capital (employees)
+development and acquisition. These vast overhead costs has
+driven many corporations to take their operations abroad in
+order to improve their bottom line, and has discouraged
+countless others from attempting to venture into this space.
+
+ Weathering the Storm--The Challenges We Face
+
+ When starting or growing a business it's challenging enough
+to continually position oneself for success. Business can often
+times be affected by capital constraints, cyclicality, market
+uncertainty, difficulty developing and procuring proper human
+capital, change in the tastes and preferences of consumers as
+well as unfavorable or antiquated legislation.
+
+ Encouraging Growth in the Skilled Labor Workforce & Making
+Manufacturing Exciting
+
+ Throughout my career I was exposed to legislation whose
+intent was to protect small, minority owned, and disadvantaged
+businesses because government wanted to affect diversity
+amongst those qualified to support this work. Instead of
+creating jobs for the many, often times, over the years I've
+watched it allow very few to prosper to the detriment of those
+employees and customers who depended on these organizations for
+longer-term sustainable support. The reality is that often
+times those that fall within these parameters generally remain
+small, and are therefore unable to truly embrace the changing
+dynamics of the marketplace, which are demanding more and more
+from them. Many times, unable to evolve, these once protected
+businesses fall short and end up disqualified and out of
+business. While the intention of this legislation was
+benevolent, in my experiences it fails to achieve the desired
+growth and sustainability it set out to.
+
+ Instead of watching history continue to repeat itself what
+would be wonderful to see is emphasis placed not just on small,
+minority owned, and disadvantaged businesses, but also small
+and midsized businesses that are capable of growing through the
+empowerment and development of all its employees, not just
+those categorized. Rather than crafting legislation that only
+incentivizes select individuals to own a business, it would be
+encouraging to see legislation that supports and rewards those
+businesses who commit themselves to training, developing, and
+employing all skilled labor.
+
+ As a nation we also need to do a better job of accurately
+characterizing the multi-faceted and exciting careers that
+exist within manufacturing. Despite our talent as a culture for
+crafting top-notch media, we do a poor job at shining a spot
+light on the exciting and fulfilling career paths that exist
+within modern manufacturing; full of all the intricate and
+challenging dynamics that would enthrall and captivate the
+young workforce entering the job market.
+
+ Empowering our Nation's Heroes
+
+ For us, and many other businesses out there, the best pool
+of talent that I've been exposed to have been veterans. These
+highly trained individuals who possess key characteristics for
+success in business, e.g., honor, integrity, discipline, and
+leadership are right in our own backyards, and, from what I've
+seen, eager to get to work. Motivated to plunge into this
+untapped pool of talent, Elite Aviation Products founded the
+Elite Veterans Initiative, whose mission is to support,
+empower, and employ our Nation's heroes. What we discovered
+through this process is that often times while these
+individuals are out there keeping our borders safe they are
+unable to build their resumes, which often times is an
+important pre-requisite in the job market. Consequently, this
+often works against these individuals when they retire from
+active military and assimilate back into the marketplace.
+Because employers are not adequately incentivized to hire from
+this pool, unfortunately the net result is they pass for
+someone who has the resume that solves their immediate
+requirement.
+
+ Capital Requirements
+
+ As mentioned above, the amount of capital required to enter
+a marketplace like manufacturing (whether it be aerospace,
+automotive, or any other sector) is immense, particularly if a
+company is properly positioning itself for sustainable
+efficiency and long-term growth. The proper foundation of a
+modern manufacturer requires large investments in advanced
+machine tools (many small manufacturers work off slow,
+antiquated technologies and are unable to expand for this
+reason), expensive software systems, real estate, and a large
+amount of employee development and training. The amount of
+capital required and the lack of avenues to obtain this capital
+has precluded the growth and development of the workforce
+within the manufacturing sector.
+
+ With the introduction of the JOBS Act (Jump Start Our
+Business Startups) in 2012, more businesses have been able to
+obtain the capital they needed in order to begin and expand.
+While at times a difficult and complex piece of legislation to
+navigate and full utilize, this type of legislation is a big
+step in the right direction. Without this legislation, Elite
+Aviation Products would never have been able to procure the
+capital needed purchase the advanced machine tools, technology,
+develop human capital, and acquire the real estate necessary to
+create a modern manufacturing company. Continued simplification
+and support of legislation similar to the JOBS Act is in our
+opinion one of the most crucial components in encouraging more
+Americans to start manufacturing businesses and thus create
+high quality jobs and development opportunities for many
+Americans.
+
+ Unlimited Opportunities for Growth
+
+ The world has entered into what's being referred to as the
+2nd Golden Age of Aviation characterized by the simultaneous
+development of entirely new fleets of aircraft by all premier
+airframe manufacturers. As such, there's more backlogged work
+now than at any other time in the history of flight, and
+visionaries and industry moguls alike are seeking to expand
+this into the cosmos. The current supply chain supporting the
+A&D industry is unable to keep up with these demand pressures,
+which has left the door wide open to the flood of new young
+talent entering the job market. With so many opportunities now
+and into the distant future it is time for America to once
+again showcase its dominance. We have a tremendous opportunity
+to get it right and make a huge impact on society.
+
+ Call to Action
+
+ If during this 2nd Golden Age we are to make a significant
+impact and showcase our ingenuity as a country, aggressive
+legislation to incentivize programs related to job creation and
+lowering the barriers of entry to the manufacturing industry
+must be seen.
+
+ Additional efforts to help place veterans
+ and disadvantaged groups in training programs or
+ positions in growing manufacturers
+
+ Shift in focus from diverse business owner
+ incentives, to incentives aimed at growing and
+ sustaining diverse work forces
+
+ Tax vehicles that incentivize reinvestment
+ in newer more efficient machine tools and other
+ technologies
+
+ Continued support and simplification of
+ legislation like the JOBS Act, which enable new
+ manufacturing businesses to secure growth capital and
+ create jobs
+
+ Incentivize companies who hire fresh talent
+ straight from trade-schools and community colleges
+
+ Subsidized internships for students seeking
+ career opportunities within the manufacturing sector
+
+ Thank you again for the opportunity to participate in this
+committee hearing.
+ Testimony of D. Ray Perren, D.S.L.
+
+
+ President
+
+
+ Lanier Technical College, Oakwood, Georgia
+
+
+ A Unit of the Technical College System of Georgia
+
+
+ Before the Committee on Small Business
+
+
+ United States House of Representatives
+
+
+ ``The New Faces of American Manufacturing''
+
+
+ May 12, 2016
+
+ Good morning Chairman Chabot, Ranking Member Velazquez, and
+members of the committee. I appreciate the opportunity to come
+before you today to discuss the changing face of American
+manufacturing and the need to assure we have a well-trained
+workforce. My name is Ray Perren. I am the president of Lanier
+Technical College. Lanier Tech is a public two-year
+postsecondary institution within the Technical College System
+of Georgia. I am just completing my thirty-sixth year as an
+educator. I spent my first twenty years in K-12 education
+serving in roles including classroom teacher, elementary school
+principal, middle school principal, system curriculum director,
+assistant superintendent, with my last four years in K-12 spent
+as district superintendent of schools. For the last 16 years I
+have served as dean of academic affairs for a university, and
+for the last ten as a technical college president. All of these
+stops along the way have allowed me to be involved in education
+from Pre-Kindergarten through graduate programs. I have been
+fortunate to be involved in education during the time of the
+Technological Revolution.
+
+ The New Faces of Manufacturing vs. Lingering Perceptions
+
+ I think it is a given that the face of manufacturing has
+changed greatly in the last few decades. In fact, the
+Technological Revolution has changed the face of manufacturing
+as much in the 21st Century as did the Industrial Revolution in
+the 19th Century. In his classic work, The Wealth of Nations,
+Adam Smith identifies the factors of production as land, labor,
+and capital. The technological revolution has allowed
+manufacturers to increase productivity and profitability by
+decreasing the costs associated with labor. We've all heard the
+comments, ``Robots are going to replace humans in the
+workforce.'' Although this is a bit of an exaggeration, it is
+true that technological advances--such as robotics--allow
+manufacturers to increase productivity while managing labor
+costs. Technology allows us to produce more using less human
+labor. But technology does not and will not replace humans in
+the workforce.
+
+ We have all heard of the concept of ``reshoring.''
+Reshoring is where manufacturers who moved production from the
+United States in the last one-third of the 20th Century are
+bringing operations back. These operations are not returning in
+the same form in which they left. The jobs created by reshoring
+require a different skill set than the jobs lost by offshoring.
+It is no longer acceptable to simply have warm bodies in
+manufacturing settings. Today's manufacturing environment
+requires highly skilled individuals who not only understand
+complex technological applications but also are adept at
+problem solving.
+
+ Although the face of manufacturing is changing, too often
+the perception of manufacturing has not changed. Too often,
+people think of manufacturing jobs as being physically
+repetitive work, carried out in dirty environments, with little
+or no ability to utilize critical thinking to improve job
+performance. Nothing could be further from the truth. The
+repetitive motions and monotonous tasks that would have been
+performed by workers of the past have been replaced by robotics
+and other forms of automation.
+
+ A couple of years ago, I had the opportunity to tour the
+manufacturing facility Caterpillar had recently opened just
+outside of Athens, Georgia. I was impressed by the cleanliness
+of the work environment, the focus on teamwork, and the
+encouragement of critical thinking by all employees. In
+Gainsville, Georgia, American Yazaki Corporation has a program
+that allows workers to change work assignments every two hours.
+This reduces the possibility of repetitive motion injuries and
+provides for a very flexible workforce. These are examples of
+how manufacturers invest in and treat their workforce. All
+across this nation, the modern manufacturing environment is
+very clean and is very likely air conditioned. In fact, many if
+not most of our nation's manufacturers practice lean
+manufacturing and quality philosophies that require the
+workplace to be clean, safe and highly organized. Today's
+manufacturing jobs are well-paying. For example, graduates of
+our Industrial Systems Technology, Machine Tool Technology, and
+Welding Technology programs can expect entry level wages of
+$35,000 to $45,000 annually. Wages for people with five or more
+years of experience could easily reach $55,000 and above. Very
+often skilled craftsmen earn six figure incomes when overtime
+pay is factored in. Yes, manufacturing has changed. It is
+important to note that education programs are also changing in
+order to meet the needs of today's manufacturers.
+
+ One lingering perception is that in order to be successful
+in this country one must have a four-year degree and a white-
+collar job. Parents, high school guidance counselors, and
+others who have influence over our young people tend to steer
+high school students away from technical colleges. Too often,
+those that are steered toward technical colleges are the ones
+that counselors feel are ``not cut out for college.'' While
+there will always be a demand for individuals with four-year
+college degrees, the truth is that most--and I do mean most--of
+today's high-tech jobs can be filled by individuals with two-
+year degrees or shorter certificates awarded by our nation's
+technical colleges. These technical colleges are our nation's
+pipeline to assure manufacturers have the work force needed to
+thrive in the United States. If I may use Georgia's technical
+colleges as an example, these institutions are regionally
+accredited, connected to business and industry, and allow
+students to prepare for good paying careers without
+accumulating large amounts of debt.
+
+ Technical Colleges Provide Real-Life Education for Real-
+Life Careers
+
+ Georgia's technical colleges use a hands-on, lab based
+instruction model. Although our students learn theory, the
+majority of their course work is done in laboratory and
+clinical settings. Our instructors not only have the
+credentials needed to teach in a regionally accredited post-
+secondary institution, but they also have work experience in
+the field in which they are teaching. For example, all of our
+welding instructors have been welders, all of our mechantronics
+instructors have worked as maintenance technicians in
+manufacturing plants, and all of our engineering technology
+instructors have worked as engineers or engineering technicians
+in industrial settings. Additionally, instructors from each of
+our more than 40 program areas meet at least two times each
+year with industry advisory boards from the specific industry
+for which they are preparing our graduates. These industry
+advisory boards review curriculum, examine laboratory
+equipment, and keep the college informed of trends so that the
+programs stay current and relevant. Our programs not only focus
+on the hard skills necessary to be successful in the workplace,
+but also on the work ethic, soft skills if you will, that
+employers expect to find in employees. These work ethics
+include attendance, character, teamwork, appearance, attitude,
+productivity, organizational skills, communication,
+cooperation, and respect. Because of this hands-on
+instructional model, delivered by practitioners, regularly
+reviewed by industry partners, with additional focus on soft
+skills, we guarantee our graduates. If an employer hires a
+technical college graduate and finds that he or she does not
+perform at an acceptable skill level, then we will retrain the
+graduate at no cost to the graduate or the employer. Our
+nation's technical colleges are uniquely prepared to assure
+manufacturers have the workforce needed to keep America's
+economy the strongest in the world.
+
+ The Disconnect
+
+ According to the National Association of Manufacturers,
+98.5% of our nation's 256,363 manufacturers are considered
+small business. Three-fourths of all manufacturers employ fewer
+than 20 people. Manufacturers are in almost every community
+across the nation. The average manufacturing worker in this
+country earns over $52,000 per year. When benefits are factored
+in, the average compensation for manufacturing jobs is just
+short of $80,000 per year. The overwhelming majority of these
+workers participate in health insurance programs through their
+employer. Over the next decade, nearly 3.5 million
+manufacturing jobs will be needed. Although manufacturers
+provider excellent pay and benefits, nearly 2 million of these
+3.5 million jobs are likely to go unfilled due to the skills
+gap.
+
+ So we have good jobs. Today's young people represent the
+brightest generation this country has ever raised. So why the
+disconnect? I believe it goes back to perception and our long-
+standing definition of the American Dream where we all have
+good paying jobs, with benefits, allowing us to support a
+happy, healthy family. More discussions such as the one we are
+having today are necessary to help change the perception. These
+discussions need to be held not only in the halls of Congress,
+but also in every community in America. We need events to
+encourage this discussion such as the Manufacturer's Forum held
+by the Great Hall Chamber of Commerce which bring together
+community leaders, high school administrators and counselors,
+business leaders, parents, and students. We need creative,
+outside the box solutions such as the partnership between
+Lanier Technical College, the Hall County and Gainesville City
+School Systems, Goodwill of North Georgia, and the Georgia
+Governor's Office of School Achievement which provide an
+alternate pathway to high school completion and career
+preparation for the growing number of very bright young people
+who have disengaged from the education process because they
+don't see the relevance. This program has provided outstanding
+results and has allowed a group of young people to go from
+being potential high school dropouts to skilled welders working
+for manufacturers such as Kubota.
+
+ What Can Congress Do?
+
+ I truly believe that in order to create awareness of the
+amazing careers available in manufacturing--and the critical
+nature of providing a highly-skilled, job ready workforce to
+meet the needs of manufacturers--this nation needs to
+experience a Sputnik Moment. Just as the national got behind
+the effort to become the world's leader in space exploration in
+the 1950s and 60s, this nation needs to get behind the effort
+to secure our nation's role s the world's leading manufacturer.
+Our world-wide communications and defense systems would not
+exist today without the efforts to lead space exploration 50
+years ago. Our place in the global economy 50 years from now
+will be determined by how we address the need to prepare
+today's young people to enter the nation's manufacturing
+workforce today.
+
+ While I believe that local efforts are essential, I also
+believe there is a role for the Congress and the Federal
+Government. I believe the Congress has a unique opportunity to
+support technical colleges in workforce development as you
+reauthorize the Carl D. Perkins Career and Technical Education
+Act. I urge you to use this opportunity to encourage secondary
+and postsecondary institutions to work together with local
+business and industry partners to develop career pathways that
+support manufacturing and other careers in each specific
+community. A ``one size fits all approach'' to career pathways
+is not practical in a nation as large and as diverse as is
+ours.
+
+ If a community is heavily engaged in manufacturing, then
+career pathways should reflect manufacturing. If a community is
+significantly engaged in manufacturing, health care and
+logistics, then career pathways should support those specific
+workforce sectors. These pathways should lead to postsecondary
+awards (degree, diploma, or certificate) and/or an industry
+recognized licensure or credential.
+
+ I also ask that you consider funding year-round Pell. Just
+as manufacturers and other employers never stop operations for
+more than a week or two, most technical colleges operate on a
+year-round calendar. Students are expected to attend fall,
+spring, AND summer semesters. Because many of our programs are
+``lock-step'' in nature, students must go summer semester or
+risk having to sit out until that coursework is offered again.
+Technical training to support manufacturing is very rigorous.
+It requires the individual to learn a skill and become a
+proficient problems solver on a year-round basis. Manufacturers
+and businesses are looking for a steady stream of graduates--
+not just in May. Many of our students rely on Pell Grants and
+other forms of state and Federal financial aid to help them
+afford postsecondary education. Year-round Pell would go a long
+way to helping college become even more affordable for many of
+our students.
+
+ As we look to create a ``Sputnik Moment'' for career
+education, I would like to ask Congress to consider providing
+funds to improve our nation's education infrastructure. Many of
+our technical colleges were built in the 1960s. Although
+technical colleges work to keep equipment up-to-date, some
+equipment is in service much too long due to lack of resources.
+Just as our nation's highways and bridges form critical
+transportation infrastructure, education infrastructure
+provides the pathway from today into the future. I would also
+like to ask Congress to consider tax credits for businesses
+that invest in technical colleges by purchasing new or donating
+gently used equipment to help keep our infrastructure as
+current and modern as possible.
+
+ Finally, every time I come to this place I am in awe. I am
+in awe of the great history of this place. I am in awe of the
+great leadership this nation has been blessed with. I am in awe
+of the work you do here every day. I ask that you be in awe of
+us. Be in awe of the amazing work that happens in our nation's
+technical colleges. Be in awe of the life-changing work we do
+in preparing young people and adults to enter the workforce
+with skills the skill sets that in high demand. Be in awe that
+the changes we are effecting are generational in nature.
+Grandchildren yet unborn will have a better quality of life
+thanks to the work our technical colleges are doing with their
+grandparent today.
+
+ Conclusion
+
+ In conclusion, I appreciate the time you have afforded me
+and this panel to discuss the new faces of American
+manufacturing. I ask for your help, and the help of the entire
+business and manufacturing community, in assuring our nation's
+technical colleges provide the trained workforce our nation
+needs in order for our economy to prosper for generations to
+come. Help us facilitate that ``Sputnik Moment'' to business,
+industry, young people, parents, and others who influence the
+decisions of our youth and make them aware of the high-tech
+nature of today's manufacturing environment, the excellent jobs
+with strong pay and benefits that are available in almost every
+community, and the understanding that you can attain the
+American Dream through graduating from one of our nation's
+technical colleges. Thank you. I will be happy to answer any
+questions.
+ Testimony of Kimberly Glas
+
+ Executive Director of the BlueGreen Alliance
+
+ United States House of Representatives
+
+ Small Business Committee
+
+ Thursday, May 12, 2016
+
+ As prepared for delivery
+
+ Good morning Chairman Chabot, Ranking Member Velazquez, and
+members of the House Small Business Committee. My name is
+Kimberly Glas, and I am the Executive Director of the BlueGreen
+Alliance. On behalf of my organizations, our national labor
+unions and environmental partners, and the estimated 15 million
+members and supporters they represent, I want to thank you for
+holding these hearings today on, ``The New Faces of American
+Manufacturing.''
+
+ In 2006, the United Steelworkers and the Sierra Club formed
+the BlueGreen Alliance with the belief that creating good jobs
+and protecting the environment were not mutually exclusive. In
+fact, in this increasingly globalized economy, we could no
+longer choose between jobs and the environment. We can and must
+have both.
+
+ Since then, the BlueGreen Alliance has worked to create and
+maintain quality, family-sustaining jobs while also addressing
+our greatest environmental challenges. Our unique national
+partnership is dedicated to creating good jobs, a clean
+environment, and a fair and thriving economy.
+
+ The clean energy economy is growing. A recent report by
+Environmental Entrepreneurs (E2) found that more than 2.5
+million Americans work in clean energy. Using data from the
+U.S. Bureau of Labor Statistics and the Department of Energy,
+the report found that there are 1.9 million jobs in energy
+efficiency and m ore than 400,000 in renewable
+energy.i
+
+ At the center of all of our work is strengthening American
+manufacturing--driving new business and quality job creation
+across the clean economy. As the world moves to a cleaner, more
+efficient economy, there is a significant opportunity to ensure
+that these technologies--which are largely developed in the
+United States--are also produced here, creating good jobs and
+strong communities. Building and industrial energy efficiency,
+renewable energy, and advanced technology vehicles--these
+industries are growing rapidly and it is imperative that the
+United States commit to ensuring that they create quality jobs
+and strong communities in every corner of our country. The
+long-term health of the U.S. econony--and the prosperity of our
+families and communities--depend on American leadership in
+these industries.
+
+ A number of years ago, the BlueGreen Alliance Foundation
+created the Clean Economy Manufacturing Center, which works
+directly with small manufacturers to help them identify
+opportunities and overcome obstacles to entering clean energy
+supply chains. The Center has worked hands on with hundreds of
+small companies, providing technical advice, research support,
+and training to aid them in evaluating capabilities and
+potential for becoming suppliers in key sectors of the clean
+energy economy. Over the past few years, and working with
+government initiatives like the Manufacturing Extension
+Partnership, this program served more than 1,200 companies
+nationally, including 100 companies that requested customized
+technical assistance.
+
+ The manufacturing industry is core to the American economy
+and--while there have been success stories of growth--
+significant challenges remain.
+
+ Challenges to U.S. Manufacturing
+
+ Manufacturing comprises a diverse market basket of goods
+and service production worth $2.08 trillion--or 12.5 percent of
+U.S. Gross Domestic Product, and supports 17.4 million jobs
+with 25 percent higher compensation than the U.S. economy
+overall.ii However, the U.S. manufacturing sector--a
+key driver to our economy--has faced significant challenges in
+recent years.
+
+ According to the Economic Policy Institute, the United
+States lost more than 5 million manufacturing jobs between
+January 2000 and December 2014, thanks to destructive trade and
+tax policies and other measures that contributed to a growing
+trade deficit and an un-level playing field for American
+manufacturers--both large and small. Since the recession of
+2007-2009, an estimated 900,000 of the 2.3 million
+manufacturing jobs lost during that period have been
+recovered.iii However, a lack of adequate resources
+to enforce trade rules, in addition to currency manipulation
+and failed trade policies, risk turning back the clock and
+further exacerbating these threats to American manufacturers.
+
+ Meanwhile, incentives remain for manufacturers to offshore
+production to lower wage locations with weak labor and
+environmental standards--in what amounts to a race to the
+bottom. For example, the United Steelworkers--a founding member
+of the BlueGreen Alliance--represent workers at a Carrier
+Corporation facility in Indiana. The company announced in
+February that it would close that facilities--which produced
+HVAC systems--outsourcing 1,400 jobs to Mexico.iv As
+we have seen over the last decade or so, when manufacturing
+jobs are lost, communities, workers, and local tax bases are
+devastated.
+
+ This also presents a significant challenge when it comes to
+addressing climate change. When the United States imports
+manufactured goods from locations across the globe, the carbon
+intensity to make manufactured goods in that part of the world
+is contributing more greatly to climate change. For example,
+steel produced in China--a country that produces nearly half
+the world's supply--is more carbon intense than that which is
+produced in the United States.v
+
+ Other challenges also remain to manufacturers in the United
+States who are seeking to grow. We thank the House and Senate
+for their recent longer term extension of critical federal
+incentives to grow renewable energy--the Production Tax Credit
+(PTC) and Investment Tax Credit (ITC). Policy uncertainty or
+inconsistency at federal level, however, has stunted industry
+growth in the past, and remains a concern at state level. An
+uncertain policy climate means inconsistent demand for new
+energy technologies, such as wind turbine manufacturing, and in
+turn for manufacturing the components and materials that go
+into them. In addition, while the U.S. has a variety of
+incentives to spur adoption of clean energy and efficiency,
+there are relatively few incentives for energy efficiency or
+clean energy manufacturing.
+
+ Opportunities for Growth
+
+ In these challenges, however, we see significant
+opportunity. Domestic and global markets for energy efficiency,
+renewable energy, transportation technology, and infrastructure
+are growing rapidly, resulting in potential opportunities for
+manufacturers across the sector. In our work, we see a
+particular opportunity for manufacturers to meet the growing
+demand for building and industrial efficiency. In addition,
+there is tremendous opportunity to modernize our public
+infrastructure, particularly in the manufacturing of components
+for America's passenger rail and transit sectors, and ensuring
+that we fully leverage the dollars we spend on infrastructure
+to drive clean, high quality American manufacturing and good
+job growth. It is also essential to ensure that the recovery of
+manufacturing and jobs in the automotive sector grows as
+technology continues to advance.
+
+ Growing the U.S. Manufacturing Base Through Energy
+Efficiency Retrofits
+
+ One of our newest efforts is our Energy Efficiency Housing
+Initiative. As the energy industry grows globally, there is a
+significant opportunity to grow associated domestic industries.
+The 2015 Green Building Economic Impact Study issued by the
+U.S. Green Building Council shows that green construction's
+growth rate is rapidly outpacing that of conventional
+construction and will continue to rise in the United
+States.vi It is critical that as this industry
+grows, domestic suppliers for the industry also grow--thereby
+multiplying the economic impact and creating good paying jobs
+across the spectrum.
+
+ However, if no effort is made to integrate the growing
+demand for energy efficiency products with an economic
+development strategy that supports and expands the local supply
+chain to produce those products, other countries may be better
+positioned to capture the jobs and business opportunities. In
+addition, without a clear focus on the safety and health of the
+materials used to make affordable housing more energy
+efficient, we will be trading lower energy costs for greater
+health impacts and ignoring the potential manufacturing job
+growth from the production of safer materials.
+
+ The BlueGreen Alliance Foundation's project is designed to
+understand more fully the gaps in the supply chain for these
+products and opportunities for manufacturers to grow in this
+sector. Our extensive outreach uncovered a broad range of
+energy efficiency housing products made in the United States,
+and is part of a larger national initiative to accelerate the
+retrofit of multifamily low-income facilities. Through this
+process, we discovered more than 1,000 U.S. manufacturers and
+distributors of products ranging from insulation to energy
+efficient lighting to HVAC systems. These manufacturers are
+looking for opportunities to grow in the United States and
+globally.
+
+ This project is designed to help local communities capture
+the benefits of energy efficiency retrofits, including lower
+utility bills, improved tenant health, and increased economic
+development. It will also aid domestic manufacturers that are
+interested in learning about opportunities to participate in
+the energy efficiency retrofit market supply chain, low-income
+residents living in affordable housing, and building owners and
+contractors wanting to learn about energy efficiency housing
+products and potentially hazardous chemicals contained in some
+building materials. States and federal agencies should also
+prioritize the use of domestically manufactured, efficient, and
+non-toxic building materials where they are involved in
+building construction and upgrades.
+
+ Industrial Energy Efficiency
+
+ Similarly, the industrial sector also provides a major
+opportunity for efficiency improvements and jobs and
+manufacturing growth. As previously mentioned, manufacturing
+represents a significant portion of the GDP--about $2
+trillion--and supports more than 17 million workers.
+Manufacturing is also a heavy user of energy, accounting for 24
+percent of U.S. energy consumption.vii And while
+manufacturers are already investing heavily in energy
+efficiency, an additional 15-30 percent reduction in overall
+energy consumption is possible through further deployment of
+industrial efficiency (and on-site renewables) technologies.
+
+ In addition to reducing emissions, taking advantage of
+efficiency opportunities can reduce operating expenses and the
+carbon footprint of energy-intensive, trade-exposed
+manufacturers, provide a hedge against rising fuel costs and
+have the additional benefit of making American manufacturing
+more competitive in the global marketplace. And while these
+benefits help major manufacturers preserve jobs in the United
+States, manufacturing, installing, and maintaining industrial
+efficiency equipment could provide a major boost to the many
+smaller companies that make this technology.
+
+ The BlueGreen Alliance is also currently working in
+Illinois, Michigan, Minnesota, Ohio, and Pennsylvania, to
+identify, create, and maintain good manufacturing jobs in the
+energy sector. Key opportunities include legislative and
+regulatory measures that would boost funding for carbon
+emission reductions in the industrial sector--perhaps as part
+of a compliance approach to the Clean Power Plan. Other
+opportunities at the state level include complementary
+legislative and non-legislative efforts that would expand use
+of industrial efficiency, combined heat and power (CHP), waste
+heat to power (WHP), on-site renewables; engage a qualified
+workforce; and promote domestic manufacturing of clean energy
+components.
+
+ Driving Manufacturing through Energy and Transportation
+Infrastructure
+
+ The BlueGreen Alliance Foundation has also done extensive
+research on and outreach to manufacturers of components for
+America's passenger rail and transit sectors--as well as in
+advanced vehicles, components and materials. A 2015 report by
+the BlueGreen Alliance and the Environmental Law & Policy
+Center showed more than 750 companies in at least 39 states
+currently manufacturing components for passenger rail and
+transit rail.viii
+
+ New BlueGreen Alliance analysis shows over 2,000
+assemblers, components, and subcomponents manufacturers who
+stand to benefit as the nation, states, and cities invest in
+transit vehicles, systems, and infrastructure. For example,
+these include major global companies like Siemens, which builds
+locomotives for Amtrak utilizing components from 69 suppliers
+in 23 states; one of those suppliers was Siemens' Norwood Motor
+plant, represented by IUE-CWA local 765. Electric motors have
+been built at this factory in Norwood Ohio for 100 years with
+many of the employees being the second or third generation of
+their family to work there. Similarly, investments in
+transportation infrastructure builds jobs at electronics
+manufacturers like Alstom Signaling in Rochester, New York,
+helping bring back jobs to manufacturing communities hard hit
+by previous generations of manufacturing decline.
+
+ Investment in infrastructure is critical for American
+manufacturing. It is important that we more fully engage
+smaller domestic manufacturers in the transit supply chain,
+opening up opportunities for growth. But investment is just the
+first step in ensuring we build strong clean transportation
+manufacturing. It is critical that we also more fully engage
+smaller domestic manufacturers in the transit supply chain,
+opening up opportunities for growth.
+
+ Incentives to Engage American Manufacturers and to ``Buy
+Clean''
+
+ Public infrastructure projects utilize significant
+financial resources, often at the expense of the taxpayer. How
+these funds are spent can have a big impact on the overall
+benefits to local communities, to manufacturing, and to the
+U.S. economy. Compliance with long standing Buy America rules
+can be made more effective both for major projects and for the
+small manufacturers looking to take part in major projects. In
+addition, new model procurement language, such as the U.S.
+Employment Plan, recently adopted by Amtrak, provides clear
+quantitative measures for major bidders to take additional
+steps to improve domestic content, local jobs, and job quality.
+
+ There is also opportunity to improve the energy and
+manufacturing outcomes of major infrastructure projects. These
+projects use energy-intensive manufactured materials--steel,
+cement, and plastic--for which the environmental impact can
+vary greatly from one mill to another, let alone from one
+country to another. Building bridges, tunnels, and transit
+systems that use inputs sourced from countries with weak
+environmental standards have long lasting implications with
+higher greenhouse gases and toxic air emissions. These
+taxpayer-funded projects can cost taxpayers much more than
+procurement costs. Put simply, a bridge cannot be built without
+steel, but a bridge can be built using the cleanest steel
+available.
+
+ Recent analysis by the BlueGreen Alliance Foundation found
+that, for example, had ``Buy Clean'' criteria been integrated
+into development, procurement, and implementation stages of one
+construction project--the Bay Bridge--an estimated 180,000 tons
+of carbon emissions would have been averted, which is
+equivalent to taking 38,000 cars off the road in the United
+States for a year. According to the American Society of Civil
+Engineers, there is currently a $76 billion need to fix
+structurally deficient bridges in the United States.
+Establishing procurement criteria that incentivize more cleanly
+produced materials would not only result in significantly lower
+emissions, but improved safety and overall decreases in cost.
+
+ Clean Vehicles
+
+ Finally, no discussion of the promise of clean energy
+manufacturing would be complete without emphasizing the
+critical importance of continuing the recovery and growth of
+advanced automotive manufacturing in the United States. The
+industry, which anchors American manufacturing as a whole, has
+been transformed over the last eight years. Thanks to sound
+environmental, manufacturing, and economic policies working
+hand in hand, and also thanks to huge investments made by auto
+companies and workers. Americans are driving better, cleaner
+vehicles that dramatically cut carbon pollution and better
+protect the American economy from instability in global oil
+markets.
+
+ At the same time, the industry has regained its competitive
+position globally, and brought back over 250,000 direct
+manufacturing jobs building new more fuel-efficient vehicles,
+advanced auto components, and innovative materials, in addition
+to millions of related jobs. But the industry continues to
+change rapidly, and whether considering turbocharged engines,
+continuously variable transmissions, high-strength steel,
+aluminum or carbon fiber, power electronics, or battery
+technology, it is vital to ensure that we build these
+technologies in companies large and small across the United
+States.
+
+ Recommendations
+
+ In summary, the BlueGreen Alliance believes several key
+factors are necessary to promote American manufacturing jobs.
+
+ Market Certainty
+
+ Large and small manufacturers across the energy sector need
+policy leadership and certainty to create the climate for
+robust private investment in these promising but emerging
+fields. The five-year extension of critical policies like the
+ITC and PTC is crucial to increasing demand for renewable
+energy component products. But additional mandates and
+investments are needed to further establish a domestically
+sourced renewable energy industry. Similarly, consistent, long-
+term fuel economy and greenhouse gas reduction standards
+provide visibility and certainty critical for automotive
+assemblers and suppliers to make the large long-term
+investments necessary to retool to build the next generation of
+vehicle technology here.
+
+ Rebuilding America's Energy and Transportation
+Infrastructure
+
+ This year's passage of a long-term transportation bill was
+an important first step in providing consistent investment in
+infrastructure, but much more is needed to bring our energy and
+transportation infrastructure up to the level needed to support
+a leading economy. Investments to enhance and spur forward-
+looking infrastructure are critical to building manufacturing.
+Also critical are measures to ensure that public dollars drive
+domestic manufacturing growth, and galvanize a rebirth of small
+manufacturing. These measures include:
+
+ 1) Facilitating and improving implementation of long-
+ standing Buy America policies;
+
+ 2) Adopting innovative and best value procurement
+ practices that increase domestic suppliers access to
+ major infrastructure projects, and improve job quality,
+ skills and training; and
+
+ 3) Implementing Buy Clean criteria that ensure public
+ infrastructure dollars reinforce domestic investment in
+ state-of-the-art clean production of key materials, and
+ don't contribute to offshoring jobs and increasing
+ pollution.
+
+ Manufacturing Efficiency, Clean Energy, and Vehicle
+Technology in America
+
+ Federal policies should continue to promote adoption of
+clean and efficient technology and encourage investments to
+manufacture these technologies in America. This means boosting
+and restoring critical clean energy manufacturing programs like
+the Department of Energy's Advanced Technology Vehicle
+Manufacturing (ATVM) loan program--which helps attract and
+upgrade the major advanced assembly plants around which
+networks of large and small suppliers arise--and the 48C
+manufacturing tax credit from the American Recovery and
+Reinvestment Act, which provided incentives for hundreds of
+smaller manufacturers to enter clean energy fields. Continuing
+to build and improve regional hubs that link advanced clean
+energy or transportation technology innovation and
+manufacturing is also key.
+
+ Expanding Assistance for Small Manufacturers
+
+ Small manufacturers often need tailored assistance to take
+advantage of opportunities in the clean energy and energy
+efficiency markets. The National Institute of Science and
+Technology's Hollings Manufacturing Extension Partnership in
+the Department of Commerce partners in all 50 states, MEP
+``works with small and mid-sized U.S. manufacturers to help
+them create and retain jobs, increase profits, and save time
+and money,'' and has a number of programs aimed at helping
+small companies enter these emerging energy and transportation
+sectors.
+
+ Growing the Energy Workforce
+
+ The rapidly changing energy sector also brings big
+workforce opportunities and challenges. As older workers
+retire, it is critical to ensure that the next generation of
+workers is well trained for these safe, family-sustaining
+energy and transportation jobs. Partnering with established
+apprenticeship programs and other training programs can help
+ensure small manufacturers are on a level playing field when it
+comes to finding skilled workers.
+
+ Conclusion
+
+ In closing, Chairman Chabot, Ranking Member Velazquez, and
+members of the committee, allow me to again thank you for your
+important work to support small businesses and American
+manufacturing, and for granting me the opportunity to appear at
+today's hearing and provide a brief overview of how the
+BlueGreen Alliance Foundation and Clean Economy Manufacturing
+Center is working every day to achieve the goals shared by this
+committee--building a robust, sustainable American economy
+providing opportunities for businesses to thrive, American
+workers to prosper, and for a cleaner economy to protect the
+public and the environment.
+
+ Thank you.
+
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