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82–180 2014

OUR NATION OF BUILDERS: POWERING U.S. 

AUTOMOBILE MANUFACTURING FORWARD 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, 

AND TRADE 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

APRIL 10, 2013 

Serial No. 113–27 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

RALPH M. HALL, Texas 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

BEN RAY LUJAN, New Mexico 

PAUL TONKO, New York 

(III) 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

LEE TERRY, Nebraska 

Chairman 

LEONARD LANCE, New Jersey 

Vice Chairman 

MARSHA BLACKBURN, Tennessee 

GREGG HARPER, Mississippi 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVE B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

JOE BARTON, Texas 

FRED UPTON, Michigan, ex officio 

JANICE D. SCHAKOWSKY, Illinois 

Ranking Member 

G.K. BUTTERFIELD, North Carolina 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

JOHN D. DINGELL, Michigan 

BOBBY L. RUSH, Illinois 

JIM MATHESON, Utah 

JOHN BARROW, Georgia 

DONNA M. CHRISTENSEN, Virgin Islands 

HENRY A. WAXMAN, California, ex officio 

(V) 

C O N T E N T S 

Page 

Hon. Lee Terry, a Representative in Congress from the State of Nebraska, 

opening statement ................................................................................................ 1 

Prepared statement .......................................................................................... 3 

Hon. Janice D. Schakowsky, a Representative in Congress from the State 

of Illinois, opening statement .............................................................................. 4 

Hon. Leonard Lance, a Representative in Congress from the State of New 

Jersey, opening statement ................................................................................... 5 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 6 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

prepared statement ..............................................................................................

WITNESSES

Joseph R. Hinrichs, President of the Americas, Ford Motor Company ............... 8 

Prepared statement .......................................................................................... 10 

Answers to submitted questions ...................................................................... 134 

Scott Dahl, Regional President, Starters and Generators—North America, 

Robert Bosch, LLC ............................................................................................... 16 

Prepared statement .......................................................................................... 19 

James C. Wehrman, Senior Vice President, Honda of America Manufacturing, 

Inc. ......................................................................................................................... 44 

Prepared statement .......................................................................................... 47 

Answers to submitted questions ...................................................................... 140 

Chris Nielsen, President, Toyota Motor Manufacturing Texas, Inc. ................... 64 

Prepared statement .......................................................................................... 66 

Answers to submitted questions ...................................................................... 148 

Scott E. Paradise, Vice President, Marketing and Business Development, 

Magna, International ........................................................................................... 76 

Prepared statement .......................................................................................... 79 

William A. Smith, Executive Director, Government Affairs and Community 

Relations, American Axle & Manufacturing ...................................................... 88 

Prepared statement .......................................................................................... 90 

Annette Parker, Ed.D., Executive Director, Automotive Manufacturing Technical Education Collaborative (AMTEC) ............................................................ 97 

Prepared statement .......................................................................................... 99 

Kathy M. Kinsey, Deputy Secretary, Maryland Department of the Environment, Member of the Electric Vehicle Infrastructure Council ......................... 103 

Prepared statement .......................................................................................... 105 

SUBMITTED MATERIAL

Statement of Motor & Equipment Manufacturers Association ............................ 126 

Statement of American Federation of Labor and Congress of Industrial Organizations ................................................................................................................ 132 

(1) 

OUR NATION OF BUILDERS: POWERING U.S. 

AUTOMOBILE MANUFACTURING FORWARD 

WEDNESDAY, APRIL 10, 2013 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND

TRADE, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:19 a.m., in room 

2123, Rayburn House Office Building, Hon. Lee Terry (chairman of 

the subcommittee) presiding. 

Present: Representatives Terry, Lance, Blackburn, Harper, Guthrie, Olson, McKinley, Kinzinger, Bilirakis, Johnson, Long, 

Schakowsky, Dingell, Barrow, and Waxman (ex officio). 

Staff Present: Charlotte Baker, Press Secretary; Kirby Howard, 

Legislative Clerk; Nick Magallanes, Policy Coordinator, CMT; 

Brian McCollough, Senior Professional Staff, CMT; Shannon 

Weinberg Taylor, Counsel, CMT; Tom Wilbur, Digital Media Advisor; Michelle Ash, Minority Chief Counsel; and Will Wallace, Minority Policy Analyst. 

OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEBRASKA 

Mr. TERRY. Well, I just want to welcome all of our witnesses here 

today. And isn’t it nice that we can come here under no crisis, no 

angst or anxiety? Things are actually improving in the automobile 

industry. And we just want to say to the industry and its suppliers, 

what can we do to help? And that should be a question we actually 

ask more often. But it is almost—I said a lovefest in one of our 

hearings, but, in reality, that is about what this is. We just want 

to help. We want you to do better. 

So, go to my official? Oh, yes, those type of details. 

So, good morning. And welcome to our third installment of our 

subcommittee series of hearings entitled ‘‘Our Nation of Builders.’’ 

Today we are focusing on the U.S. automotive manufacturing sector—a sector that supports more manufacturing jobs than any 

other manufacturing industry, employing almost 8 million Americans across all 50 States, according to the Alliance of Automobile 

Manufacturers. 

Our subcommittee will be hearing from a distinguished panel of 

witnesses consisting of experts from several sectors within the 

automotive manufacturing industry. And it is my hope that our 

witnesses can shed some light on the criteria taken into considerVerDate Nov 24 2008 15:01 Aug 12, 2014 Jkt 037690 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-27 CHRIS
2 

ation when making a determination on where to initiate manufacturing and where to expand manufacturing in the United States. 

I also hope to surface important details on the effect that expanding or initiating manufacturing can have on a community, 

whether it is through job creation, increased tax revenue, or charitable involvement. 

Auto manufacturers, suppliers, and dealers have certainly faced 

tough times in the last few years. Our great recession saw vehicle 

production fall from 10.7 million in 2007 to 5.7 million in 2009. 

However, since 2009, we have seen this figure rebound to 8.7 million vehicles produced and 100,000 jobs recouped or added. 

This is progress, but we have more work to do to create jobs and 

grow our Nation of builders. Attracting foreign investment to build 

manufacturing facilities in the U.S., lowering barriers to expansion, 

and incentivizing companies to increase domestic production capacity should be top priorities in Congress. 

By all accounts, increased domestic manufacturing is a net positive. When we increase manufacturing, we not only increase direct 

employment but also take advantage of the auto industry’s tremendous employment multiplier. Eight hundred thousand direct jobs 

represents a total economic effect of almost 8 million domestic jobs. 

We all know that more jobs means less unemployment, more tax 

revenues for cities and States, and a better quality of life for thousands of Americans. What increased domestic manufacturing also 

means is that the U.S. can expand its export base and shift from 

being a net importer to a net exporter. Policies aimed at promoting 

increased domestic manufacturing, a higher level of foreign direct 

investment, and increased exports are critical right now, given the 

current negotiations on the Trans-Pacific Partnership and the potential for a U.S.-EU trade agreement. 

When discussing trade agreements, many automatically think 

about tariffs. However, there is much more to these pacts than tariffs on imports. This subcommittee has jurisdiction over and is very 

interested in non-tariff-related barriers. To that end, we would be 

very interested to hear the opinions of our witnesses when it comes 

to the positive effects that pursuing a regulatory mutual-recognition standard should have on the domestic automobile industry. I 

am sure that as free trade talks continue this will be an important 

issue for this subcommittee. 

With us today we have eight witnesses on two different panels. 

The first panel will consist of Joe Hinrichs, president of the Americas for the Ford Motor Company. 

I have a Ford. A little suck-up moment. 

Scott Dahl—— 

Ms. SCHAKOWSKY. So do I. 

Mr. TERRY. There you go, ranking and—teamwork here. 

Scott Dahl, regional president for starters and generators in 

North America for Robert Bosch. Thank you. 

Our second panel: James Wehrman, senior vice president of 

Honda North America Manufacturing; Chris Nielsen, president of 

Toyota Manufacturing in Texas; Scott Paradise with Magna International, where he is vice president of marketing and business development; Annette Parker, executive director of the Automotive 

Manufacturing Technical Education Collaborative; William A. 

3 

Smith, with American Axle & Manufacturing, where he serves as 

executive director of government affairs and community relations; 

and, finally, Kathy Kinsey, deputy secretary with the Maryland Department of the Environment and member of the Electric Vehicle 

Infrastructure Council. 

I hope that all fits on your business card. 

Again, I would like to thank our witnesses for appearing here at 

our subcommittee today. 

[The prepared statement of Mr. Terry follows:] 

PREPARED STATEMENT OF HON. LEE TERRY

Good Morning and welcome to the third installment in our subcommittee’s series 

of hearings titled ‘‘Our Nation of Builders.’’ Today we are focusing on the U.S. Automotive manufacturing sector-a sector that supports more jobs than any other manufacturing industry-employing almost 8 million Americans across all 50 states, according to the Alliance of Automobile Manufactures. 

Our subcommittee will be hearing from a distinguished panel of witnesses, consisting of experts from several sectors within the automotive manufacturing industry. It is my hope that our witnesses can shed some light on the criteria taken into 

consideration when making a determination on where to initiate manufacturing and 

where to expand manufacturing. I also hope to surface important details on the effect that expanding or initiating manufacturing can have on a community—whether 

it be through job creation, increased tax revenue or charitable involvement. 

Auto manufacturers, suppliers and dealers have certainly faced tough times in the 

last decade. The Great Recession saw vehicle production fall from 10.7 million in 

2007 to 5.7 million in 2009. However, since 2009, we have seen this figure rebound 

to 8.7 million vehicles produced and 100,000 jobs recouped or added. This is 

progress but we have more work to do to create jobs and grow our nation of builders. 

Attracting foreign investment to build manufacturing facilities in the U.S., lowering barriers to expansion and incentivizing companies to increase domestic production capacity should be top priorities for this Congress. By all accounts, increased domestic manufacturing is a net positive. When we increase manufacturing 

we not only increase direct employment but also take advantage of the auto industry’s tremendous employment multiplier—800,000 direct jobs represents a total economic effect of almost 8 million domestic jobs. 

We all know that more jobs means less unemployment, more tax revenues for cities and states and a better quality of life for thousands of Americans. What increased domestic manufacturing also means is that the U.S. can expand its export 

base, and shift from being a net importer to a net exporter. Policies aimed at promoting increased domestic manufacturing, a higher level of foreign direct investment and increased exports are critical right now given the current negotiations on 

the Trans-Pacific Partnership and the potential for a US–EU free trade agreement. 

When discussing trade agreements, many automatically think about tariffs. However, there is much more to these pacts than tariffs on imports. This subcommittee 

has jurisdiction over, and is very interested in, non-tariff related trade regulations. 

To that end, we would be very interested to hear the opinions of our witnesses when 

it comes to the positive effects that pursuing a regulatory mutual recognition standard could have on the domestic automotive industry. I am sure that as the free 

trade talk continues, this will be an important issue for this subcommittee. 

Again, I would like to thank our witnesses for appearing before the subcommittee 

today and look forward to their testimony. 

# # # 

Mr. TERRY. And I now recognize the ranking member, Jan 

Schakowsky, for her opening statement. 

4 

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. 

I really welcome all of our witnesses and look very much forward 

to your testimony. 

This is the subcommittee’s third hearing of the year and the 

third in our series on manufacturing—a critical sector of our economy that creates good jobs for American workers. Nearly 800,000 

employees in the motor vehicle industry and parts manufacturing, 

and they support millions of additional jobs nationwide in other industries. And without a doubt, it is valuable to look at the factors 

that have contributed to the current strength of the industry and 

the potential for future growth. 

Clearly, we are doing something right and you are doing something right. The big three U.S. auto companies have rebounded significantly from the 2008 financial crisis, and 10 other major auto 

manufacturers now have facilities located here in the United 

States. The industry is investing in creating new technologies, including those for improved safety, emissions control, and fuel economy, and rolling out new features and achievements seemingly 

every single day. 

Manufacturing of cars, trucks, and other products has shifted 

substantially from the image many of us still have. Like the rest 

of our society, manufacturing has gone high-tech. There are more 

computers in the design room, on the testing floor in factories, and 

more computers in the cars themselves. 

The changes in the manufacturing process and the rapid pace of 

innovation means that the auto industry depends on a workforce 

that has the education levels, skills, experience, and credentials to 

step into those jobs that are available. I know that even in my little 

auto shop in my neighborhood, you really have to have a pretty 

good knowledge of computers to even touch a car these days. 

At our previous hearing, we heard that steel executives are having difficulty finding qualified workers. In almost all of your prepared testimony, everyone that is testifying, you mention the need 

to expand educational opportunities and job training for workers 

and applicants so that your companies can continue to grow. 

I am hopeful to hear more about how STEM and technical education, skills training, and workforce development can be leveraged 

to further strengthen the auto industry. And I must say, we have 

been talking about this for a while, but I think it is really time to 

see fairly dramatic changes in our preparation of our students as 

they move toward the outside world in jobs. 

I hope to hear also how you are working to get all consumers, 

from purchasers of the most high-end models to the most basic, the 

newest critical features and the latest fuel-economy elements that 

will help buyers truly get the most value and peace of mind for 

their money. 

Let me just say that I was a big supporter of the help that our 

government offered to the auto industry. And I think that the industry itself took full advantage of that, not taking advantage of 

the taxpayers, but actually bringing back the industry. And we are 

very, very happy about that. 

5 

I will want to talk in my questioning about a particular safety 

feature, mainly the prevention of backover accidents, and ask you 

about those. And I thank all of our witnesses for coming here today 

to testify. 

I yield back. 

Mr. TERRY. Thank you. 

At this time, I recognize the vice chairman, Leonard Lance, for 

5 minutes. 

OPENING STATEMENT OF HON. LEONARD LANCE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. LANCE. Thank you, Mr. Chairman. 

I am pleased that we are able to reschedule the hearing from the 

cancellation in March, and I welcome the new witnesses who have 

been added since then. 

New Jersey, the State I represent, has 1.8 percent of automotive 

jobs in the United States, and these are primarily corporate rather 

than manufacturing positions. From the panel today, Ford and Toyota have both regional offices in the Garden State and contribute 

vital business to New Jersey, so I thank you for your contribution. 

The North American headquarters for several other companies are 

in New Jersey, as well—BMW, Mercedes, Jaguar Land Rover, 

Volvo, and Mitsubishi, none of which I can afford, personally. New 

Jersey accounts for approximately $22 billion in new car sales, and 

the Garden State has 123 supplier companies and nearly 3,000 

dealerships. This yields a great deal of revenue at both the Federal 

and State levels. 

New Jersey also has a vital role in the supply chain. Along the 

eastern seaboard, our ports are used primarily for incoming shipment of automobiles and parts. 

I am encouraged that more foreign direct investment is coming 

to the United States and that our domestic automotive industry, including manufacturers and suppliers, is innovating and expanding. 

We have challenges regarding STEM-educated employees in the 

U.S. workforce, the ways our complicated Tax Code affect businesses, and the lack of certainty regarding governmental projects 

related to business. 

I welcome your testimony and your suggestions about the ways 

in which government can be a better partner to the manufacturing 

community and to the automotive industry in particular. And I 

thank you for your participation today. 

And I am pleased to have others have the remaining portion of 

the 3 minutes, and I would be happy to yield to my colleagues. 

I yield to the vice chair of the full committee, Mrs. Blackburn of 

Tennessee. 

Mrs. BLACKBURN. Good morning, and welcome. We are delighted 

that you are here. And on behalf of our constituents in Tennessee 

who are involved in the auto manufacturing industry with Toyota 

and Nissan and GM and Ford Motor Credit, which is located in my 

district, Bosch has a presence there, we are delighted that you are 

here. 

We like building things and making things in Tennessee, and we 

think we do a pretty good job of it. And one of the frustrations that 

6 

we are hearing from so many of our manufacturers is the debilitating effect that overreaching government agencies, regulatory 

agencies, are having on their ability to do business here and manufacture here. 

So we are delighted to hear from our panel and welcome that 

panel today. And we do seek your input. We like ‘‘made in America,’’ and we want it to be a good, healthy environment. 

With that, I yield back my time. 

Mr. LANCE. Thank you. 

Others who wish to speak? 

Mr. TERRY. Please, we need to delay for another minute, so—oh, 

Henry is here. 

All right. No further time, and the gentleman yields back his 

time. 

And now the gentleman from California is recognized for 5 minutes. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you, Mr. Chairman, from Nebraska. I appreciate your stalling for time for me to get here from our other 

committee. We have two committees meeting simultaneously, 

which makes it difficult. 

I am glad you are holding this hearing on auto manufacturing. 

Motor vehicle and parts manufacturers play a major role in the 

U.S. economy. In my home State of California alone, the broader 

auto industry employs more than 412,000 people. We need a vibrant U.S. auto industry that leads the world in innovation. 

However, it was just 4 years ago that the financial crisis left our 

domestic auto industry on the brink of liquidation. If President 

Obama had not acted forcefully to rescue the industry, the livelihoods of millions of Americans would have been lost. 

Since that time, the auto industry has emerged more productive 

and profitable, thanks largely to the rescue engineered by the 

President. The industry is also more innovative, which has led to 

job growth. 

There are two areas, in particular, in which rapid innovation has 

become especially apparent. 

First, there has been a significant advance in emission control 

and fuel economy. Emission-control technologies help the environment, but they also create jobs. In 2010, these new technologies 

were associated with $12 billion in total economic activity. 

Consumers are increasingly considering fuel economy at the 

point of purchase when they are deciding on what car to buy. Reflecting an agreement with automakers, the Obama administration 

set rules to restrict greenhouse gas emissions and required an average fuel economy of 35.5 miles per gallon by 2016 and 54.5 miles 

per gallon by 2025. Fuel-economy innovations include alternative 

energy vehicles, full and hybrid electric vehicles, and various energy-efficiency technologies. 

This is tremendously important, and it is ironic that the other 

subcommittee of our full committee that is meeting at this moment 

is trying to pass a bill to approve the tar sands pipeline from CanVerDate Nov 24 2008 15:01 Aug 12, 2014 Jkt 037690 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-27 CHRIS
7 

ada. They don’t want to hear the discussions whether it is a good 

idea or a bad idea, the pipeline is good or the pipeline is not good. 

They don’t care that the tar sands, in order to be sent through a 

pipeline, is going to require so much use of energy that it is going 

to add to our global warming problem. Rather than discuss things 

that we can do to become less dependent on oil, they say, well, 

what we need is to produce more oil, even if it pollutes our environment. 

The second particular innovative area for autos is safety technology. It has been driven by consumer preferences for safer cars. 

Electronic stability control, airbags, seatbelts, child restraints are 

now mandatory and have saved thousands of lives. Newer advances 

in safety technology include advances in collision avoidance, adaptive cruise control, and rearview cameras. 

Innovations like these make cars less polluting, less dangerous. 

They are good for the environment. They are good for public health. 

They are good for the safety of American families. But they are 

also good for motor vehicle and parts manufacturers. 

I understand that some of our witnesses today will advocate for 

regulatory harmonization, both with other countries and with 

States. As the United States continues to negotiate the Trans-Pacific Partnership and begins its work on the U.S.-EU agreement, 

we must ensure that the push for regulatory consistency does not 

create a race to the bottom. You can be consistent, but you can be 

consistent with the lowest protection. We don’t want that. I consistently believe in the principle that trade agreements negotiated by 

the U.S. should not compromise our environmental or safety standards here in this country or abroad. We should strengthen the competitiveness of our auto industry by raising our own standards, not 

by weakening those of others. 

In addition, we need to remain mindful that the progress we 

have made on cleaning up cars hasn’t just happened. Time and 

again, the States have taken the first step and demanded cleaner 

cars. That certainly happened in California. Those State successes 

have then been expanded at the national level. We should be supporting innovative State efforts, not trying to undermine them. 

We have done well and we must continue to do well to produce 

good cars, safe cars, less polluting cars. And I am proud of the auto 

industry, and we ought to continue to do what we can to help them. 

Thank you. I yield back. 

Mr. TERRY. Thank you, Mr. Ranking Member, Mr. Waxman. 

And at this time, we turn it over to our witnesses. 

And so, Mr. Hinrichs, you will have 5 minutes. And being the experienced person you are, you know the lights in front of you. Yellow means start wrapping it up. Red means you can stop. 

So, with that, Mr. Hinrichs, you are recognized for your 5 minutes. 

8 

STATEMENTS OF JOSEPH R. HINRICHS, PRESIDENT OF THE 

AMERICAS, FORD MOTOR COMPANY; AND SCOTT DAHL, REGIONAL PRESIDENT, STARTERS AND GENERATORS—NORTH 

AMERICA, ROBERT BOSCH, LLC 

STATEMENT OF JOSEPH R. HINRICHS 

Mr. HINRICHS. All right. Good morning. And thank you, Chairman Terry, Ranking Member Schakowsky, and all committee members, for providing us this opportunity. 

My name is Joe Hinrichs, and I am president of the Americas for 

the Ford Motor Company. Ford is a global automotive industry 

leader, but our success is especially tied to our competitiveness 

here in the United States, where we conduct the vast majority of 

our research and development, produce more than 2 million vehicles annually, and support manufacturing in 48 States through our 

supplier network. 

I have been with Ford since December of 2000. Before that, I 

spent 10 years at General Motors and 2 years in private equity. I 

started at Ford as a plant manager, and I have worked in seven 

different manufacturing plants in five different States in the 

United States throughout my career. 

More recently, I was president of Ford’s Asia-Pacific and Africa 

region, based in Shanghai, China. Before that, I served as group 

vice president of global manufacturing and labor affairs, responsible for the operations of 105 assembly, stamping, and powertrain 

manufacturing plants. So manufacturing is and has been my world. 

Manufacturing matters. It remains the backbone of every successful economy in the world. As an example, one job at an auto 

plant supports nine additional jobs. This year, Ford is creating 

more than 2,200 new salaried positions right here in the U.S. This 

builds upon the 8,100 salaried and hourly jobs we created just last 

year. 

Ford demonstrated we can compete with automakers around the 

world. We are now lean, more efficient, and we are producing cars, 

utilities, and trucks with quality, fuel efficiency, safety, smart design, and great value. 

Government is also a key stakeholder in helping shape the competitive climate our industry depends on. I would like to highlight 

four key issue areas that are critical to Ford. 

First, corporate tax reform. The U.S. has the highest corporate 

tax rate among developed countries. A lower rate frees up capital 

that can be reinvested in new products, technologies, and manufacturing innovation. We are encouraged that Congress and the President have both identified the need to drive down the corporate rate 

to ensure American companies remain competitive. Tax reform can 

further expand economic growth and jobs. 

Second, regulatory efficiency and certainty. We need a performance-based, data-driven approach to regulation, especially as we 

develop emerging technologies like vehicle-to-vehicle communications and driver-assist features. We need efficiency in the regulatory process that provides certainty and avoids a patchwork of 

State regulations that can undermine efficiency, often with no societal or environmental benefit. 

9 

When multiple regulators do exist, we need to work together to 

ensure that we ultimately develop standards that are achievable 

and consistent with one another so that compliance costs are minimized. 

New regulations also must be monitored to ensure that they are 

consistent with underlying assumptions, market conditions, and 

technological advancements. As an industry, we worked together to 

shape one national program for fuel-economy regulations, projecting standards over an unprecedented 10-year period. Our support of this effort was dependent upon a robust and equitable midterm review, which is absolutely critical. Data collection must 

begin today to support a final assessment in 2018. 

Third, trade. Ford has supported every free-trade agreement approved by the United States, and Ford is a leading vehicle exporter 

in the United States. We need to continue to open new markets to 

American-made products and ensure that new trade agreements 

are not just to reinforce one-way trade. 

Trade issues are not just about tariffs. Trade flows can be significantly skewed by using non-tariff barriers, including currency manipulation to protect home markets and subsidize exports. We firmly believe exchange rate values should be determined the marketplace, not by governments. We encourage the U.S. to include strong 

and enforceable discipline to prevent currency manipulation in the 

future of trade agreements. 

In addition, trade agreements can also help harmonize regulations across borders. A U.S.-EU free-trade agreement that pursues 

regulatory harmonization and mutual recognition of standards will 

enhance competitiveness in both regions. 

Fourth, training and education. We need to continue training our 

current workforce and encourage education in math, science, and 

engineering if America is to remain competitive and innovative in 

the future. For our current workforce, continued up-skilling is critical to maintaining our competitive performance. Existing Federal 

training programs should be flexible, work closely with States, and 

prioritize incumbent worker training. 

In summary, other countries are leveraging their workforce and 

markets to encourage and attract manufacturing. I experienced 

this firsthand in China and throughout Asia. For the U.S. to continue to lead, we have to be more innovative, efficient, and collaborative. We will need your help to ensure that government policy 

supports manufacturing. What is at stake is not just the future of 

Ford or American manufacturing but the very future of jobs and 

growth across our great country. 

Thank you. 

Mr. TERRY. Thank you. And well-timed. 

[The prepared statement of Mr. Hinrichs follows:] 

10 


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82180.002
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82180.003
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82180.004
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82180.005
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82180.006
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Mr. TERRY. Mr. Dahl, you are now recognized for 5 minutes. 

STATEMENT OF SCOTT DAHL 

Mr. DAHL. OK. Chairman Terry, Ranking Member Schakowsky, 

members of the committee, thank you for the opportunity to testify 

before you today. My name is Scott Dahl, and I am the North 

American regional president for the Starter Motors and Generator 

Division of Robert Bosch. 

I am particularly honored to be here today because North American manufacturing, U.S. manufacturing has supported me. They 

have put me through college, and it made me the person I am 

today. My father became a journeyman tool and die maker back in 

1966 and worked there in GM and Chrysler until the late 1980s, 

when he transitioned to a die engineer without a 4-year degree. 

Robert Bosch founded our company in 1886 when he opened the 

Workshop for Precision Mechanics and Electrical Engineering in 

Stuttgart, Germany. Today, Bosch employs more than 300,000 associates across the globe, including 15,000 here in the United 

States. We have deep roots in the U.S. Our founder first opened his 

New York office in 1906, where he had learned about American ingenuity as an apprentice under Thomas Edison. Now we operate 

more than 100 manufacturing, engineering, and service sites across 

the country. 

We have four business sectors: automotive technology, energy 

and building technology, consumer goods, and industrial technology. Automotive is our largest sector, comprising nearly 60 percent of our business. And our automotive technology has touched 

almost every part of the vehicle, with specialized business units devoted to vehicle safety, advanced diesel systems, electronics, gasoline systems, hybrid technologies, and car multimedia, just to name 

a few. Together with our customers, we make vehicles safer, cleaner, and more economical. 

In January, we unveiled our prototype automated driving test vehicle outfitted with Bosch advanced radar systems and computer 

algorithms. Many of our high-tech components and systems that 

support automated driving will in the near term help drivers avoid 

collisions, save fuel, and reduce emissions. Predictive emergency 

breaking will reduce the severity and number of crashes in the 

near future. Engine start-stop systems and high-efficiency alternators help improve fuel economy and reduce emissions up to 8 percent and 2 percent, respectively. And both systems provide an excellent cost-benefit ratio, as they can easily be integrated into existing systems. 

None of these incredible advancements would be possible without 

strong and sustained investment into innovative products. Research and development are at the heart of Bosch success. Approximately 42,000 Bosch engineers work at 86 locations across the 

globe and file an average of 19 patents per day. 

One innovation project under way, in collaboration with the University of Michigan, AVL, and other partners, is something we call 

ACCESS. This project is 50 percent funded by the Department of 

Energy vehicle technology program. ACCESS aims to increase the 

efficiency of a gasoline engine up to 30 percent. And because the 

U.S. Government is supporting this high-risk, high-reward project, 

17 

we chose to establish the global center of competence for this technology here in the U.S. This project is an excellent example of public-private relationships that can keep the U.S. at the forefront of 

innovation. 

While the U.S. continues as a world leader in innovation, there 

is a growing need for workplace development and worker training. 

To illustrate the challenge facing Bosch and many other manufacturers, I want to highlight South Carolina, where many of our 

automotive products are made. 

First, the good news: Bosch will have added approximately 450 

jobs over 5 years in South Carolina to support the manufacture of 

products ranging from precision machine fuel injectors to electronic 

stability control and engine management systems. 

However, there has been a significant struggle to identify and 

hire skilled workers for these positions. Bosch recently joined the 

Department of Commerce in hosting an economic roundtable at our 

Charleston plant, and the significant lack of skilled workers was 

echoed by other employers from the region as well as several economic development specialists. Our plant managers across the 

country expressed the same frustration. They have worked diligently to attract employees, participating in job fairs and military 

veteran recruiting events all across the country. 

Along with their fellow manufacturers in South Carolina, Bosch 

embraced several different avenues to address this challenge, including direct engagement with and support for local technical colleges and in-house apprenticeship programs. At just one of our 

South Carolina plants, we have graduated 308 apprentices in three 

different curriculums: electrician, mechanic, and toolmaker. And in 

March we also provided a $400,000 Greenville Technical College to 

support their training program. 

The intent of these programs is to produce individuals like my 

father who have hands-on, real-world experience to help companies 

like Bosch innovate, develop, and manufacture the next generation 

of technology here in the United States. 

While Bosch recognizes that occupational training is part of our 

social responsibility, the reality is that significant resources are required to hire and train workers who are not prepared to enter the 

modern manufacturing workplace. We are willing to do our part, 

but we need greater flexibility and focus from our Nation’s education system so K through 12 schools can instill the base knowledge, interest, and skill set required for jobs in science, technology, 

engineering, and math, referred to as STEM. This is vital to keep 

the U.S. attractive for investment. In fact, this is one of the issues 

that Bosch considers to be very important when we look at where 

we put our investments. 

Looking to the future, Bosch sees many exciting opportunities on 

the horizon. At the top of the list is the Transatlantic Trade Investment Partnership. We support this endeavor and believe that it 

would result in notable benefits for the automotive industry and 

consumers, particularly in the form of enhanced regulatory harmonization and standardization. 

Both the U.S. and the EU maintain stringent requirements and 

performance standards for motor vehicles and motor vehicle components. And this is particularly true relative to passive and active 

18 

safety technologies and carbon emissions. Significant benefits could 

be accrued from additional regulatory harmonization between the 

U.S. and EU. And we look forward to engaging with the committee 

as negotiations progress. 

Thank you for the opportunity to speak before the committee, 

and I welcome any questions you may have. 

Mr. TERRY. Thank you very much. 

[The prepared statement of Mr. Dahl follows:] 

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82180.010
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Mr. TERRY. Both well done and much appreciated. 

My first question is to Mr. Hinrichs. And you testified about the 

job creation and improvement over the last couple years. But what 

do you attribute, what does Ford attribute to the job growth in the 

auto industry and the recovery? 

Mr. HINRICHS. Well, certainly, coming out of a global financial 

crisis and the recession that occurred not just here but in most 

parts of the world, we are seeing increased demand for autos today 

as the U.S. economy starts to improve. 

But at Ford specifically, the restructuring actions that we undertook back in 2006, 2007, 2008, and 2009 led us to have a much 

stronger business, which is now growing. And over the last 4 or 5 

years, we have increased our market share and are now reinvesting in our business. 

We received lots of supports along the way from all of our stakeholders to make that happen. But, clearly, as the U.S. economy improves, we are able to reinvest here in the United States. We converted many of our manufacturing facilities from truck plants to 

car plants to adjust to the new reality of where the auto market 

has gone and where it is going. And we are investing in high-technology and new technologies to meet the new CAFE and other requirements that are out there for the industry. 

We are very proud to be investing in the United States. And with 

the 8,100 jobs we created last year, 2,200 salaried jobs this year, 

plus 1,200 at our Flat Rock facility we will be adding this summer, 

you can see that we are investing in America and growing. 

Mr. TERRY. I appreciate that. 

You also mentioned, if you can answer fairly quickly, that the effective tax rate impacts Ford’s global competitiveness. Could you be 

more specific? 

Mr. HINRICHS. Yes. As you know, the U.S. has one of the highest 

corporate tax rates in the world and certainly the highest amongst 

the large economies. When you want to compete as a manufacturer 

to export, you have to have a competitive environment to operate 

in. We just started shipping Ford Explorers from Chicago here in 

the United States to China. 

We are competing with manufacturers who have different tax 

rates, so our cost structure is different. If you want to have a manufacturing base that is capable of exporting here from the United 

States, we need to have a competitive tax rate vis- AE2a-vis the 

other countries of the world we are competing against. 

Mr. TERRY. Now, do you know if Ford has said whether a 25 percent or a 28, have they gone into those type of details? 

Mr. HINRICHS. We have said, listen, this is so important to industry that everything should be on the table as part of the conversation here, that what we want is a lower tax rate so we can reinvest. 

Mr. TERRY. Very good. I appreciate that. 

Mr. Dahl—by the way, putting you two together, a U.S.-based 

automotive company and then the European-based company of 

Bosch’s size and impact in the industry, was purposeful on our 

part. 

So I want to know, first of all, as a European company, you mentioned in your testimony opening up the innovation research center 

26 

in the United States, that you chose the United States. What were 

the factors that led to that decision? 

Mr. DAHL. I think there are several factors when we take a look 

at the investments of R&D in the United States. 

One is, of course, the innovative and can-do attitude that all of 

the associates in the United States tend to have. It is different 

here. Everyone is willing to work together as a team to try to find 

a solution for these topics and kind of think outside the box. 

So we also like to look at developments that are for regional specific. So Bosch does have our research and development centers and 

RTC in Palo Alto and in Pittsburgh. So we support full R&D, corporate R&D here. But then also our divisions have regional development activities in the United States, as well, which also support 

the global R&D. 

So, really, the attitude of the people, the education, the innovative spirit, these are really the focus points for us having it here, 

along, of course, with our customer base, which is also very interested in our activity. 

Mr. TERRY. Several of our universities are engaging in research 

and development of advanced manufacturing technologies. Does 

that factor into the decision for Bosch? 

Mr. DAHL. Absolutely. Absolutely. We partner with several universities, ourselves, in Michigan and other areas to have these advanced technologies and utilize those resources in our activities. 

Mr. TERRY. Mr. Hinrichs, same question. 

Mr. HINRICHS. Most definitely. When you think about manufacturing leadership, partnership with universities is critical to get 

the new technology that is out there. And we do a lot of that 

partnering, as well. 

Mr. TERRY. Can either one of you say specifically one breakthrough that has been helpful that has come through a partnership 

with the university? And you can quit saying University of Michigan. 

Mr. DAHL. I mean, I was going to bring the example of the ACCESS issue, where we are achieving this 30 percent through a various array of technologies, working with the University of Michigan. 

Mr. TERRY. We just wish Fred was here to hear all of this, but 

he is upstairs. 

All right. I appreciate that. 

And now the ranking member, Ms. Schakowsky, you are recognized. 

Ms. SCHAKOWSKY. Thank you. 

Mr. Hinrichs, as promised, I wanted to ask you about the issue 

of rearview visibility. Every year, NHTSA estimates that there are 

228 fatalities and 17,000 injuries, 100 children, who, in my view, 

needlessly die as a result of being backed over by drivers who can’t 

see them. 

I was the lead sponsor, along with my Republican colleague Peter 

King, of the Cameron Gulbransen Kids Transportation Safety Act 

of 2007, which required a rulemaking to improve visibility and prevent those tragic backovers. I mean, we would have press conferences every 6 months or so, and parents and grandparents 

27 

would come holding pictures of their children that they had literally killed. 

So, in the proposed rule, NHTSA estimated that rearview video 

systems would reduce fatal backovers by 95 percent. So we are 

awaiting finalization of the rule. And NHTSA concluded that the 

cost to include rearview cameras in cars that already have some 

sort of in-vehicle display is less than $90 per vehicle. 

So my question for you—and I will want to get an answer also 

from Mr. Wehrman of Honda and Mr. Nielsen of Toyota. So each 

year more and more vehicles are sold with these in-car displays. 

What percentage of cars sold by your company currently come with 

those display screens? And what are your projections for the next 

year? And when will you reach 100 percent? 

Mr. HINRICHS. Thank you. 

I don’t have with me the specific percentages of vehicles that 

have displays in them, but we can certainly follow up on that. 

I can tell you that at Ford, all of our light-duty cars and trucks 

sold here in the United States have the option of having a rearview 

camera. And we have been moving forward with a lot of new technology with the displays. As a matter of fact, the take rate on 

MyFord Touch, which includes a display, has been growing every 

year, and it is substantially up this year. 

I will have to follow up with you on the numbers regarding the 

displays. 

Ms. SCHAKOWSKY. OK. 

Let me just ask you this, because obviously it is my view that 

everyone should have access to rear visibility and other safety features. I mean, there are so many ways in which our children, we 

can’t protect them from the world, but this is one where we know 

this will prevent these kinds of horrific fatalities. 

And so, recognizing this potential, do you, does Ford support the 

finalization of the rear visibility rule? 

Mr. HINRICHS. Well, we at Ford want to continue to work with 

the government to find the right solution that makes sense for customers and for safety. We have always been advocates for safety. 

There are many technologies that help with identifying any obstacle or person in the rear of the vehicle—for example, sensors as 

well as rearview cameras. And so we are open to certainly continuing to work together, find the right solution that works for customers, and, clearly, keeps everyone safe. 

Ms. SCHAKOWSKY. Right, except that the kind of research that we 

have done is that even the sensors, and regardless of how you place 

the mirrors, that we still have these blind spots, and that the most 

surefire way is to have these rearview cameras. 

Now, the auto industry did support originally the legislation, not 

the particular technology. But now we are down to the question of 

whether or not we are going to have this particular technology. I 

mean, that is the issue. And I certainly would love to have the support of the industry and hope that we can work together on that 

particular technology. 

Mr. HINRICHS. Thank you. I am sure we can work together because, clearly, we all have the same interest in mind. 

Ms. SCHAKOWSKY. Thank you. 

I yield—no, I don’t yield back. 

28 

I wanted to ask Mr. Dahl about the investments in fuel injectors, 

for example, for clean diesel passenger cars. 

I understand that your company announced over the next 5 years 

it will invest $125 million and create approximately 450 new jobs 

in a new manufacturing facility in Dorchester County to this effect. 

I wonder how much progress has been made thus far. 

Mr. DAHL. We actually are getting ready to launch our new highpressure fuel pump, and that will basically lead the market, if you 

will, with regards to performance and fuel-efficiency improvements. 

And, additionally, we are utilizing the manufacturing base there 

in Charleston, and we will export. So we will actually supply 15 

percent of the world’s exports of that technology out of Charleston 

for that high-pressure pump. 

Ms. SCHAKOWSKY. Thank you very much. 

I yield back. 

Mr. TERRY. Thank you. 

The vice chairman of the subcommittee is now recognized for 

your 5 minutes, Mr. Lance. 

Mr. LANCE. Thank you very much, Mr. Chairman. 

Mr. Hinrichs, you have testified that Ford created an impressive 

8,100 jobs in the United States last year, including 1,000 jobs that 

were repatriated from other countries. 

Would you please explain to the committee what factored into 

the decisions to repatriate those jobs? And, more broadly, to what 

do you attribute the job growth in general? 

Mr. HINRICHS. Well, the work we have done inside our company 

and certainly with the UAW to make our business from a manufacturing standpoint much more competitive has allowed us to bring 

more work back in. So some work that was done overseas, transmission work in Japan or some supplier work in Mexico, has been 

returned to work here because we have a much more competitive 

manufacturing environment today. 

We are also seeing strong growth in the industry here with Ford 

and our volumes are growing, which is also helping with that. We 

also made some announcements that we are bringing more production back into the U.S., including a recent announcement that we 

will bring a transmission currently built in Spain back to Cleveland, Ohio. 

So the work that we have done with UAW to make our contract 

and our operating patterns much more efficient is allowing for that. 

Mr. LANCE. Thank you. This is good news, and I think we are 

all pleased to hear that. And I hope that trend might continue. 

I know that our recovery has been slower than all of us would 

like. We are hearing some concerns at the moment about the European market. And would you comment on the European market as 

it affects Ford? 

Mr. HINRICHS. Sure. 

Ford announced a pretty aggressive restructuring plan for our 

business in Europe in October, which includes the closure of three 

manufacturing facilities. Europe, as an industry, is going through 

somewhat similar situations that we went through here in North 

America several years ago, which means overcapacity and the need 

to rationalize that capacity. 

29 

And Ford is taking a leadership role in Europe in making that 

happen. It is not easy to do, but it is necessary, just as we did here 

in closing 16 manufacturing facilities to now allow us to have the 

ability to grow with a much more competitive cost structure. 

Mr. LANCE. Thank you. 

You have stated in your testimony that there has been a significant struggle to identify and hire skilled workers. And, of course, 

many Americans who are out of work or who are underemployed 

wish to work or wish to work fully. 

And you have also stated that you are pleased to see that some 

States are starting to pilot programs like Germany’s dual education 

approach. And could you describe to the committee your view on 

dual education and how we might improve so that as many Americans as who want to work are able to work? 

Mr. HINRICHS. Well, yes. We have been very fortunate in the 

growth we are seeing in our employment. It has attracted a lot of 

interest. And, in fact, at Ford, probably because of our history and 

the strength of our brand, we have been able to attract a lot of good 

talent and are getting the talent we need. But our supply base continues to tell us that one of the biggest challenges they face is getting skilled labor in the manufacturing environment to help support our business. 

We have been focused on upscaling our workforce, both salaried 

and the manufacturing workers in the plants, for the new technology that has been discussed about what is happening in the future. Because we are a high-tech business. 

Mr. LANCE. Of course. Thank you. 

Mr. Dahl, might you comment on that, regarding making sure 

that we have the necessary skills so that young people can go into 

manufacturing? 

Mr. DAHL. Absolutely. I think Bosch values manufacturing very, 

very much. Some of our top executives have a manufacturing background—for instance, Mike Mansuetti, the president of Bosch 

North America. 

These apprenticeship programs, we feel, are absolutely vital. If 

you take a look at how Germany is set up with their dual education system, where you get to go through the standardized 

schooling and then you have to apply with the company, you get 

accepted with that company, and then you get the specialized 

training for not only the manufacturing but also other areas, we 

see that to be very beneficial in Germany, where the unemployment rate for young people has dropped significantly due to these. 

So bringing these types of programs into South Carolina, North 

Carolina, all the other States, we think is a very big advantage for 

us. 

Mr. LANCE. Thank you. 

I am not aware of these figures. Does Germany have a lower unemployment rate among young people, lower than our rate here in 

the United States? 

Mr. DAHL. Yes, they do, sir. 

Mr. LANCE. And, at least in part, in your opinion, is that due to 

this dual education approach? 

Mr. DAHL. Yes. Yes, I believe it is. 

30 

Mr. LANCE. That is certainly something we should analyze in 

this country moving forward. 

I have 10 seconds left, so I will yield back my time. 

Mr. TERRY. Thank you, Mr. Vice Chairman. 

And, at this time, it is my distinct honor to recognize not only 

the dean of Congress but what we consider as the dean of the automotive industry. 

Mr. Dingell, you are now recognized. 

Mr. DINGELL. Mr. Chairman, thank you for your friendship, for 

your very fine introduction, and for the having of this hearing 

today. 

First, welcome to our witnesses, especially Joe Hinrichs, who 

comes from the great company Ford, which is headquartered in my 

district. I would also like to welcome Chris Nielsen from Toyota. 

The trucks his plant makes were substantially designed in my district. 

Now I would like to use my time to gain a better understanding 

of the potential benefits of a free-trade agreement between the 

United States and the European Union. Trade is a tricky subject, 

and I think here there may be an opportunity to do some good, as 

long as it results in job creation and advances the public interest. 

Mr. Hinrichs, does Ford currently export vehicles or parts from 

the United States to the EU, yes or no? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. Mr. Hinrichs, has Ford announced plans to expand 

its vehicles or parts exports to the EU, yes or no? 

Mr. HINRICHS. Yes, we have. 

Mr. DINGELL. Mr. Hinrichs, are there differences between U.S. 

and EU vehicle standards, yes or no? 

Mr. HINRICHS. Yes, there are. 

Mr. DINGELL. Does Ford believe these differences inhibit its ability to export vehicles from the United States to the EU? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. Do? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. OK. Mr. Hinrichs, would harmonization of these 

standards reduce Ford’s design, engineering, and manufacturing 

costs, yes or no? 

Mr. HINRICHS. Yes, they would. 

Mr. DINGELL. Mr. Hinrichs, would harmonization of these standards benefit all automakers with a manufacturing presence in the 

United States, yes or no? 

Mr. HINRICHS. Yes, they would. 

Mr. DINGELL. Mr. Hinrichs, does Ford believe that harmonization 

of these standards with the EU would not lead to a diminution of 

U.S. vehicle occupant safety, yes or no? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. Now, Mr. Hinrichs, just so my colleagues and I understand the term ‘‘harmonization’’ a little better, would you please 

submit for the record what Ford believes the term would mean 

within the context of the trade deal which we are now discussing? 

Mr. HINRICHS. With the European Union? 

Mr. DINGELL. Yes, and just submit that for the record. 

Mr. HINRICHS. OK, we will, yes. 

31 

Mr. DINGELL. Now, Mr. Hinrichs, does Ford believe harmonization of standards would aid in the development of common global 

vehicle platforms, yes or no? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. Now, Mr. Hinrichs, would the development of such 

platforms enhance Ford’s ability to export from the United States? 

Mr. HINRICHS. Definitely, yes. 

Mr. DINGELL. And that would generally benefit American manufacturers, too, would it not? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. Now, Mr. Hinrichs, does Ford believe U.S. automakers could be competitive in price and quality by exporting from 

the United States, yes or no? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. Now, I would like to ask a question or two about 

how a potential U.S.-EU free-trade agreement might influence 

trade relations with Asian countries. 

Mr. Hinrichs, again, are standards in Asian countries where vehicles are produced different than the U.S. and EU standards, yes 

or no? 

Mr. HINRICHS. Yes, they are. 

Mr. DINGELL. Now, Mr. Hinrichs, am I correct that China alone 

is expected to expand its production to well over 20 million vehicles 

in the near future, yes or no? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. Now, Mr. Hinrichs, although China does not export 

many automobiles today, do you expect China to eventually become 

a major auto exporter, yes or no? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. And the U.S. and EU respectively have 15 million 

vehicle markets; is that correct? 

Mr. HINRICHS. Generally, yes. 

Mr. DINGELL. Now, Mr. Hinrichs, with this in mind, would common standards help U.S. and EU vehicle manufacturers to compete 

better with their Asian counterparts, yes or no? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. And, also, specifically with regard to the Chinese? 

Mr. HINRICHS. All the Asian manufacturers. 

Mr. DINGELL. Now, in conclusion, does Ford believe a U.S.-EU 

free-trade agreement would create opportunities to enhance U.S. 

global competitiveness, yes or no? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. Now, Mr. Hinrichs, I would like to contrast the potential benefits of a U.S.-EU free-trade agreement with what would 

happen if Japan is allowed to join the Trans-Pacific Partnership, 

TPP. 

Is it true that foreign automakers have only approximately a 5 

percent market share in Japan? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. I would note that I have been complaining about 

this having existed because of the way the Japanese behave with 

regard to closing down on imports. 

32 

Now, Mr. Hinrichs, based on Ford’s experience, is it reasonable 

to assume that permitting Japan to become a party to TPP would 

result in Japan’s making meaningful policy changes, yes or no? 

Mr. HINRICHS. No, it wouldn’t. 

Mr. DINGELL. So if we are going to let them in, we ought to see 

to it that they first agree that they are going to open their markets. 

Am I correct? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. Now, Mr. Hinrichs, in other words, the potential 

benefits to U.S. automakers would be greater in a U.S.-EU freetrade agreement than in a TPP with Japan as a member, yes or 

no? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. So thank you, Mr. Hinrichs. It seems that there 

are significant opportunities for U.S. automakers in a free-trade 

agreement with the EU but questionable benefits if the Japanese 

get into a TPP without opening their markets, which have been 

closed tighter than a drum since World War II; is that right? 

Mr. HINRICHS. Yes. 

Mr. DINGELL. Thank you for your courtesy, Mr. Chairman. And 

I am delighted to see that the committee is going into these matters. And since the committee has jurisdiction over these things, I 

would expect that we would actively and very interestedly see to 

it that the TPP is in the benefit of the United States, our workers, 

and our industry, and not in the benefit of a market-closing country like Japan. 

Thank you. 

Mr. TERRY. So noted. And brilliantly done, as usual. 

At this point, we recognize the vice chairman of the full committee, Ms. Blackburn, for 5 minutes. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. 

And I appreciate that you all would both be here. 

Mr. Hinrichs, let’s talk about that Ford Motor Credit unit there 

in Tennessee, 800 employees. I have had the opportunity to be 

there a couple of times, as I had said. 

And I am just curious how these credit units are going to fit into 

your plans for the future and what we can do within the financial 

system to make those captive finance arms continue to work on behalf of the commercial end-user. If you could talk about that? 

Mr. HINRICHS. Yes, thanks. Ford Credit is an incredible part of 

our company and our success over the last several years, and we 

are so glad that we could keep Ford Credit as a captive part of our 

business. I am actually on the board of Ford Credit, so I get a close 

look at the business. And we are very proud to be in the Nashville 

area and a part of Tennessee. 

It is critical that all the regulation that is going into place, which 

has good intentions, does not allow for unintended consequences of 

the inability for captive finance companies to compete when it 

comes to serving dealers for wholesale and retail and serving customers for retail financing. I think that is one thing we should keep 

in mind, to make sure that as we move forward the regulatory environment here in the United States, that we can allow for consumers to get access to credit and for dealers to have access to 

credit for their wholesale financing. 

33 

Mrs. BLACKBURN. Well, thank you for that. 

And I think it is so important just to remind each of us that you 

can manufacture all the things that there could possibly be or anyone could possibly want. If they cannot get credit and cannot afford 

it, you are not going to have the end-user out there that is going 

to be able to benefit from those items. 

And, indeed, trade is an important component, but that domestic 

marketplace is also very important also. And I would appreciate 

that as you see things that are a hindrance to this, that you would 

bring those forward and be open in articulating those to us. 

Mr. Dahl, let me ask you, you talked about Bosch’s patents that 

you hold. And just very quickly, piracy and illicit products in the 

marketplace, how is that affecting you all? What kind of impact are 

you seeing there? 

Mr. DAHL. A lot of the piracy, obviously coming out of the AsiaPacific area, hasn’t affected our automotive industry in a large 

fashion. 

Mrs. BLACKBURN. OK. 

Mr. DAHL. In some of the aftermarket areas, perhaps, but nothing from an OE perspective. 

Mrs. BLACKBURN. OK. If you have further information on that, 

I would appreciate knowing that. And I would think you all could 

probably give us some stats on that. We continue to fight the impact of piracy on U.S. products, whether it is entertainment or a 

manufactured product. 

Let me ask you, you talked about your dad. I liked hearing you 

talk about your dad and his engineering abilities. And I am sure, 

because of that, you are particularly close to what engineers are 

doing to innovate and solve problems. 

One of the things that comes forward to us many times is the 

impact of these blended fuels, the E10s, E15s, the corrosive nature 

that that plays on the engines. Is this something that you all are 

looking at? 

It seems as if we are approaching an issue—on one hand, let’s 

use the renewable fuels. On the other hand, we are getting less gas 

mileage, less miles per gallon, and it is having an adverse impact 

on the systems. 

So what are you all doing to help address this? 

Mr. DAHL. Certainly, a lot of our research and development activities are in that direction of how can we withstand these corrosive fuel combinations. We have made a lot of progress up to this 

point in time, but we need much more. 

Mrs. BLACKBURN. Mr. Hinrichs, how about you? What is Ford 

doing? 

Mr. HINRICHS. Well, Ford has been a leader in advanced technologies, and we support moving forward with all of them. We 

want to make sure that, for example, on E15 and products like that 

that we don’t do a disadvantage to the vehicles in a retroactive nature. Vehicles need to be designed and capable to use these new 

technologies, and we can’t just artificially go back and say, let the 

older—— 

Mrs. BLACKBURN. Yes. Let me ask you this: How much added 

cost does this put on the vehicle as you are having to go in and 

34 

design so that it can take the corrosive nature of these blended 

fuels? How much more does it make a vehicle cost? 

Mr. HINRICHS. Yes, I am sorry I don’t have the specifics with me, 

but there certainly is an increased cost in the powertrain system 

to be able to handle the advanced fuels. We are very supportive of 

moving forward with that, but we want to make sure that we understand what those costs are as we get the benefits. 

Because there are all kinds of new advanced technologies out 

there, including electrification of vehicles and all these alternative 

fuels. All of them need to be part of the solution, but we need to 

make sure that we are looking forward and not necessarily just arbitrarily letting older vehicles use the technology. 

Mrs. BLACKBURN. Right. Plus, we want to make certain people 

can afford those cars. If you could submit that information to me, 

I would appreciate it. 

I yield back. 

Mr. TERRY. Thank you. 

At this time, we will recognize the gentleman from Kentucky, 

Mr. Guthrie, for 5 minutes. 

Mr. GUTHRIE. Thank you, Mr. Chairman. 

Thank you guys for being here, and the rest of the panel that 

will be here next. 

My dad is a Ford retiree, so I grew up in the automotive industry. As a matter of fact, I left the automotive industry when the 

good citizens of Kentucky allowed me to come here. And it is massive. I remember I left the Army to go work in a factory, and I am 

watching a power-steering pump/rack that was on the Ford Explorer, going down about 60, 70 an hour, going down the line. And 

you pick one up, and it is this big, but every one of them had a 

power-steering clip attached to it, four wheels, four tires, windshields. And that was only one car and one model of one car for 

one company. 

And so having a robust automotive industry is just so important 

to all of us. And when Toyota came to Kentucky, my district doesn’t 

have the big plant, and I wish it did, but we have a lot of suppliers 

that came with it. So those type of brackets and things are made 

in my district. And Magna is in my district to serve Ford. They are 

there to sell bodies, to truck them up to Louisville to your plant. 

And, also, General Motors makes the iconic Corvettes right near 

where I live. 

So it is great to have you guys here to talk about this. The thing 

that I want to focus on—and I have already talked about a minute 

and a half, but I think the automotive industry is so important. 

But everywhere I go in my district, whether it is a manufacturing 

plant—and, from my experience in manufacturing plant today, 

with the unemployment rate that we have, nobody can find qualified workers. And what are you guys trying to do? 

At the State level, we are trying to do more. I know we have a 

bill that got out of the House to go to the Senate to try to help with 

the SKILLS Act that Virginia Foxx has put forward. But it just 

seems like we have this disconnect of people just dropping out of 

looking for work right now. And everybody is looking for workers, 

if they can get the worker with the right skills. And some of them 

35 

can’t get just hourly work. Just people come in to do basic skill 

work, as well. 

And what are you guys trying to do. Just address it. And then 

in the next panel, we will talk about it a little more, I guess. 

You pay well. It is not like there is something to a earn minimum wage job either. 

Mr. HINRICHS. Yes. We are proud of the jobs we create, and you 

mentioned Louisville. We hired 2,000 people last year, and we had 

to cut off the application of like 18,000. The interest is exciting to 

work at Ford. We are proud to be a longstanding member of the 

Commonwealth. I think we are actually the second largest employer in the State of Kentucky now. 

When you look at the skill requirements in this country for manufacturing, specifically, it comes back to what Scott said also, technology, engineering, science, math, these skills and these subjects 

matter, and if you look at the Asian country, they are emphasizing 

this in their schools and in their disciplines when it comes to education. The one thing we need to do is get back to emphasizing the 

innovation comes from science, engineering, and math and make 

that a priority with our students. 

I have three teenagers who are in high school right now emphasizing the importance of those subjects. And also, continual training. One thing we work very closely with the Commonwealth on 

and continue to upscale our workforce because technology advances. You hire somebody today, and 10 years from now the technology has changed dramatically in manufacturing or other places, 

so working together with governments locally, regionally to continue to help train and have policies to help develop training programs are very important. 

Mr. GUTHRIE. Mr. Dahl, what are you guys focusing on in trying 

to bring that, the skill levels, or finding people that are employable? 

Mr. DAHL. I think the issue is on both the skilled labor and on 

the engineering side, too. So the skilled labor, of course, we were 

implementing our own apprenticeship programs. We are working 

with the technical colleges, we are supporting these colleges with 

training material, textbooks, grants even to bring the students in. 

And on the more the engineering side, we are supporting the Society of Automotive Engineering, a World in Motion programs, the 

first robotics programs where we are in actually working with 

these people. In fact, this Saturday we are hosting a VIP reception 

for that first robotics in Michigan. It is so critical for us to actually 

have our engineers go work with the young students and get them 

excited about this technology so that they can move forward in 

their own, should we say, education paths. 

Mr. GUTHRIE. What we did, we started a factory—my father left 

Ford and started a factory in the 1980s, and we found we couldn’t 

find tool and die makers, industrial, the guys you are probably 

looking for and we had to really create them. That sort of actually 

got me involved in politics, started working with the tech school, 

and we found there was a whole floor full of smart people, very 

smart people. They didn’t figure out they were smart in high school 

or somebody didn’t tell them they were smart in the aptitudes that 

they had, and we had one guy that was essentially a high school 

36 

dropout almost. Well, just barely got out that’s now got his engineering degree because he flourished, and so that is my passion. 

We are out of time, and we will hit that on the next panel, I am 

sure. Well, thank you for your coming here today. 

Mrs. BLACKBURN [presiding]. The gentleman yields back. At this 

time I recognize Mr. McKinley for 5 minutes. 

Mr. MCKINLEY. Thank you, Ms. Chairman. 

I would like to hear Ford’s perspective on this issue. We have the 

condition of our roads and bridges. I am a fellow of the ASCE, and 

we know that bridges are rated at a C and our roads are rated at 

a D in their condition, and with the CAFE standards that are being 

promoted to get up to approximately 55 miles per gallon, the CBO 

is claiming that we are going to have a reduction in revenue by 

about 21 percent for a loss of reportedly at $57 billion that we 

would otherwise use for infrastructure. What would you suggest 

that we should be doing to replace that revenue so that we can 

maintain our bridges and roads if we are going to maintain 55 

miles per gallon? 

Mr. HINRICHS. Well, I think infrastructure in the United States 

is a very critical discussion item for manufacturing even, because 

getting parts moved around, having solid and predictable routes for 

transportation is critical to a manufacturing base, so it is a very 

applicable topic for us today. 

At Ford, we believe that it is Congress’ responsibility to work 

through the funding mechanisms, but clearly, when you look at the 

countries, the advanced economies that are out there driving manufacturing today, the road systems, the rail systems, bridges, et 

cetera, are part of the infrastructure investment priorities that go 

on in government. 

China is a great example. I just lived there the last 3 years, and 

that infrastructure drives the ability to be able to manufacture 

competitively. 

As far as funding goes, there are many alternatives, and obviously Congress will consider those, but I do think that the status, 

the current status of our infrastructure here in the United States 

needs to be a priority as they move forward to be competitive in 

manufacturing. 

Mr. MCKINLEY. Don’t you see we are exacerbating the problem 

by pushing 55 miles per gallon in a short timeframe? That obviously $57 billion, that is just to replace what we currently have, 

and our bridges are at C and our roads are D. We have needed 

more money, not less money for our infrastructure. 

Let me, in the time remaining, if I could, continue to hear what 

Ford’s perspective is. Also with the CAFE standards implemented, 

you have seen cars be getting smaller and lighter; and from a safety standpoint, I have here reports that were produced here in 2009 

by the Insurance Institute. Also USA Today has put out articles 

about this that suggests that there had been a 23 percent increase 

in deaths per cars as a result of the reduction in weight and size, 

and there were 1,300, and that equates to 1,300 to 2,600 additional 

crash deaths occurred in 1993 because of vehicular weight reduction. 

We are just talking about deaths, let alone how many people 

were injured in the hospital and health care costs as a result of 

37 

this. So I am just, you can see my conflict here, trying to achieve 

energy efficiency, but at what risk? If we are taking money away 

from infrastructure and we are putting our families, our children, 

and our spouses at risk in driving smaller, lighter cars when they 

could be injured, what should we be doing about that if we want 

to achieve 55? 

Mr. HINRICHS. Well, I think all of us—— 

Mr. MCKINLEY. Are the reports correct? Or do you deny that 

these—or would you say these reports are inaccurate? 

Mr. HINRICHS. Well, I don’t have the reports in front of me, so 

I can’t speak to them specifically, but I will be happy to follow up 

on that. In regards to the safety of all vehicles, all manufacturers 

continue to improve the safety of our smaller vehicles, different 

technologies, of course, as a part of that. There has been a 

downsizing of the fleet, partially because of fuel economy requirements but also partially because of affordability and what has happened since the global financial crisis. 

Our focus is on making every vehicle that we sell as safe as possible and giving those options for safety features to our customers. 

I will follow up with you on the data that you recognize with our 

team so we can follow up on that. 

Mr. MCKINLEY. Thank you very much. I yield back the balance 

of my time. 

Mrs. BLACKBURN. Gentleman yields back. At this time, Mr. 

McNerney, you are recognized for 5 minutes. 

Mr. MCNERNEY. I thank the chairwoman. Thank you panelists 

for your testimony today. 

Mr. Hinrichs, I am honored to have you in front of me. How 

would you say that the new fuel efficiency standards that have 

been promulgated recently have affected innovation and job creation with Ford and with the American manufacturers in general? 

Mr. HINRICHS. Sure. At Ford we were a big supporter of the one 

national standard and all the work that went on, including back in 

the 2007 Energy Independence and Security Act. Let me give you 

an example of how the future looks with Ford in that regard. 

We took a plant in Michigan called the Michigan Truck Plant 

which produced Expeditions and Navigators, large SUVs, and converted it into making small cars, and now that plant makes Focus, 

C–Max hybrid, C–Max plug-in hybrid, Focus battery electric vehicle, all in the same plant, down the same line, only place in the 

world where we do where that is done. That is the future. That is 

what is driving advanced technology is with the fuel economy 

standards. 

At Ford, we believe it is very important that we use data with 

the government together for the upcoming midterm review to make 

sure that we are all moving forward, consumers and the industry, 

to meet the expectations of the one national standard over the next 

several years. 

Mr. MCNERNEY. Are you leveraging research being conducted at 

the national labs like Sandia National Labs, their internal combustion facility for your innovation and new product design? 

Mr. HINRICHS. We have partnerships throughout the United 

States and with universities, with national labs, with all kinds of 

different—and other companies as well, looking at everything from 

38 

hydrogen to, of course, batteries and electrification of the vehicles, 

and what is happening with compact natural gas and everything 

else. All of that is part of the future in the industry. 

Mr. MCNERNEY. Well, my first question was regarding effective 

fuel economy regulation on innovation. What about federal regulation on safety? Is that a big impact on innovation and job creation 

as well? 

Mr. HINRICHS. Both advanced technology for fuel economy and 

also for safety is affecting the industry. It is one of the reasons why 

we brought in our remarks the need for homologation around regulation around the world because we are a global auto industry now. 

We use global platforms. We compete globally. 

In regards to safety specifically, the most important thing is that 

we work together to make sure that we have the intended results, 

obviously, for the customers and the other individuals, pedestrians 

around the area, but we want to stay focused on the delivery of 

those safety features that have the best benefit. 

Mr. MCNERNEY. Thank you. How are foreign nations leveraging 

their workforce impacting your ability to manufacture in the 

United States on a competitive basis? 

Mr. HINRICHS. Well, auto manufacturing takes place in many 

countries around the world. I think when you look at it, what we 

have asked for is that any—and we supported all the U.S. Free 

trade agreements, that any free trade agreement going forward 

takes into account all aspects of what can happen, both tariff and 

non-tariff barriers, and also, to make sure that there is a discussion around what mechanisms could be in place around currency 

manipulation. We feel that is another issue that needs to be addressed in free trade. 

The American economy is the largest economy in the world and 

the American auto industry is the second largest in the world and 

it is one of the most attractive for people to compete in. We want 

to make sure that if we are going to have free trade and fair trade 

in the United States, that other countries play along the same way. 

We are old-fashioned that way. 

Mr. MCNERNEY. I think I like your answers because they are 

kind of to the point and brief and they don’t wander around for 5 

minutes. 

Mr. Dahl, I want to ask you a little bit about the impact of American education on our ability to be productive and competitive with 

overseas companies. 

Mr. DAHL. Again, we believe that education of the STEM areas 

is absolutely vital to our future success. We have seen, as we stated 

earlier, a challenge in getting applicants for not only the manufacturing jobs, but also from an engineering perspective, so we feel it 

is absolutely vital as a part of our future here in North America 

from a manufacturing and a R&D center. 

Mr. MCNERNEY. Are we, in your opinion, competitive on the educational aspect in order to keep competitive on the production and 

economic sectors? 

Mr. DAHL. I don’t want to comment on the competitiveness of 

North American educational system. I can just only state that, 

again, we are still having some challenges here. We have challenges in other areas as well, but our focus here is North America, 

39 

United States in trying to get those education levels to be satisfactory for our employment. 

Mr. MCNERNEY. Thank you. I yield back. 

Mrs. BLACKBURN. Gentleman yields back. 

At this time, Mr. Johnson, you are recognized for 5 minutes. 

Mr. JOHNSON. Thank you, Madam Chairman. 

I came to Congress in 2010 after the 2010 election from the auto 

industry. I worked for a company that manufactured electronic 

components, highly-engineered electronic components for all of the 

automotive and many of the recreational vehicles and 18-wheel 

tractors and those sorts of things, so I have watched with interest 

the progress that you folks have made in job creation in spite of 

the challenges that you had. 

Let me just, I want to take a little bit of a broader scope in my 

questions. How does U.S. Energy policy affect your manufacturing 

process? And with all the progress that you have made, do you see 

progress in this area maybe stalling, or even reversed, by tighter 

environmental controls, any concerns? 

Mr. HINRICHS. Well, one of the most exciting things happening 

in the United States actually is the whole natural gas and what 

is happening in that side of the business that could possibly lead 

to lower energy costs for manufacturing in the U.S. 

In regards to in general, regulatory environment, as we discussed, one of the big areas of opportunity we believe that exists 

here in the U.S. Is to work collectively with the U.S. And other governments to homologate regulations around the world when it 

comes to fuel economy, safety, other things, without sacrificing the 

intended outcomes of both those areas. 

But we think actually manufacturing can been more competitive 

in the U.S. With a lower energy cost base, which is certainly encouraging right now. 

Mr. JOHNSON. So it would stand to reason, then, with increased 

pressure from Washington, to regulate hydraulic fracturing and 

kind of stymie the development of oil and gas development, domestic energy development, and the shale plays across the country. 

That would have a negative impact potentially on your industries. 

Mr. HINRICHS. Well, what I will say is the auto industry is energy intensive, so the ability to lower energy costs in the United 

States would help make automotive manufacturing in America 

more competitive. 

Mr. JOHNSON. Mr. Dahl, any comments? 

Mr. DAHL. I can only second Mr. Hinrichs’ commentson that. It 

definitely would make us more competitive manufacturing-wise. 

Mr. JOHNSON. Great. Again, in a broader context, sorry for putting you on the spot, but what Federal agency have you found to 

be most helpful in dealing with, and this is not a trial so you can’t 

take the Fifth, so. 

Mr. HINRICHS. I think the correct answer is all agencies are great 

to work with, and we enjoy our relationships with all of them as 

a large manufacturer in the United States. 

I will make a general statement, and that is, we are U.S. Citizens, we are Americans, we all have the same interest at heart. We 

want our country to be great. And so agencies that listen and work 

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fective because ultimately, we all want the same thing, but we 

have to find the best way to get there. 

Mr. JOHNSON. Right. OK. Mr. Dahl, any thoughts? 

Mr. DAHL. I think we have had very good relationships with all 

of the agencies, so I can’t single out one or the other at this point 

in time. 

Mr. JOHNSON. Well, without putting you too much on the spot, 

the reason for this line of questioning, of course, is, we hear from 

manufacturers all over the country and businesses all over the 

country about the negative impacts of the regulatory burden that 

comes out of Washington. I mean, the cost for starting a manufacturing company, sustaining a manufacturing company, complying 

across the board with the massive mountain of Federal regulations. 

If there is a regulatory burden that causes you the most frustration, what would that be? 

Mr. HINRICHS. I wouldn’t call it frustration, but clearly, in the 

auto industry, one of the most important opportunities we have 

working with the government has been around fuel economy and 

emissions, and it is a very important topic for all of us, so that is 

one of the most important topics. I wouldn’t call it frustrating, but 

it is certainly one of the most important. 

Mr. JOHNSON. You are right. You are quite the diplomat. 

Mr. DAHL. Actually, I wouldn’t look at regulation. I would look 

at the current economic uncertainty, which is really the major factor that is affecting our investments in manufacturing right now. 

Mr. JOHNSON. OK. Well, thank you. Madam Chairman, I yield 

back. Thank you, gentlemen. 

Mrs. BLACKBURN. I thank the gentleman for his time. Mr. 

Kinzinger, you are recognized for 5 minutes. 

Mr. KINZINGER. Well, thank you, Madam Chair, and I want to 

thank this committee for holding this hearing. This is kind of a 

step in a longer process we have had in talking about manufacturing in this company, and I think it is very important. In the 

last—and I thank you-all for coming in, too, by the way. In the last 

two decades, we have seen a steady decline in America’s share of 

global manufacturing activity. This is due, in part, to increased 

competitiveness from emerging economies but also due, I think, to 

outdated economic policies. 

Today we have had the opportunity to hear from a key part of 

that in auto manufacturing, a sector that we have seen hit, major 

lows, frankly, and then come back from those major lows into what 

today appears to be resurgence in a very good, a very positive day. 

I have a couple of questions for each of you. I don’t think I am 

going to take all my 5 minutes. Well, it will be up to you. 

Mr. Hinrichs, first, Ford has recently expanded operations in 

Chicago to produce the Ford Explorer, and as a result, the supply 

base has benefited very successfully. In the case of Illinois, do you 

know approximately, of course, how many suppliers you have that 

support those assembly operations and do you know, again, in general, how many—how much you purchase annually from these suppliers? I know it is asking for a very specific number, so it doesn’t 

have to be very specific. 

41 

Mr. HINRICHS. That is why I lean back. We have 200, 250 suppliers in Illinois, and we purchased well over a billion dollars’ 

worth of material each year in Illinois. 

Mr. MCKINLEY. By the way, I know it is a good question if you 

have to lean back. That is always a good thing, if you have to get 

the information from behind. 

Mr. HINRICHS. It is hard to memorize everything. 

Mr. MCKINLEY. I understand that. Also in your testimony you 

mention currency is an issue that should be addressed as part of 

trade agreements. How does currency impact your ability to expand 

exports specifically in the Chicago area, in Illinois, but in general. 

Mr. HINRICHS. Well, as I said earlier, we think the free market 

should set currency rates, and if a government has intervened in 

the past or threatens to intervene in the future, that affects currency rates. We don’t think that is what fair trade represents and 

what free trade should represent for the United States. We compete with global manufacturers, whether producing in Chicago or 

producing anywhere in the United States. 

Ultimately, the global platforms we are on and the vehicles we 

ship around the world are competing with great companies, strong 

companies around the world, and we need a fair and free environment to do that in, and it can’t just be one-sided from the United 

States’ perspective. 

Mr. MCKINLEY. Thank you. That actually brings to mind maybe 

a little bit of a separate subject but very related to this. Illinois is 

a manufacturing hub, obviously, a center of the country in both 

transportation and people and everything else, but we have created, in our State, some terrible economic policies. I am not going 

to ask you guys to comment on this, but some terrible economic 

policies, including increasing our corporate tax rate in the middle 

of a recession, which makes zero sense to me, and what we have 

seen is we are competing with Indiana, with Wisconsin, with Iowa, 

with the south, and we are having to fight tooth and nail to try 

to even keep manufacturing in our State, much less get new manufacturing, but what you see is, although those competiveness, that 

competitiveness we have at the State level against other surrounding States, frankly they are winning, as a country, we have 

to compete like that around the world. Gone are the days where 

we can put up the walls and say, well, we are just going to do business here at home now. We have to understand that just like Illinois competes with Indiana, we are competing with India, with 

China, and so we have to create that environment. I think that is 

what you gentlemen are getting to is the idea that to create an environment here, we want to expand in the United States. This is 

where we want to be, you know. The weather is fine here, everything is good, the people are great, just create an environment that 

we can do that so that we can be competitive and access the consumers around the rest of the world. 

Mr. Dahl, you have a facility in the small town of Watseka, Illinois, which I represent, and you have, I think, approximately 130 

employees, so thank you for that great injection into the economy 

there. I understand you have dealt with manufacturing operations 

around the world. What do you believe makes the U.S. Unique relVerDate Nov 24 2008 15:01 Aug 12, 2014 Jkt 037690 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-27 CHRIS
42 

ative to other countries and economies and what are some of the 

lessons learned in that process? 

Mr. DAHL. I go back to the unique innovative can-do attitude 

here within North America. The United States in particular, the 

associates don’t give up, they see a problem and they pursue it, and 

they find a solution and they are willing to work outside of their 

normal boundaries as a team to find that, and that is one of the 

main things that attracts us here to the United States. 

Mr. MCKINLEY. Thank you. And I think that is a good point, because you see as government comes in and forces more regulation 

in some cases, I think it stifles innovation and especially with the 

uncertainly in the economy, you have a lot of young entrepreneurs 

right now that may have an idea that have no idea how to pursue 

it because it has created such an—they don’t know if it will be successful, what the economy is going to look like. 

Finally, does Bosch conduct research and development activities 

in the United States and what informs your business decision on 

where to conduct R&D activities? 

Mr. DAHL. We have corporate R&D centers in Palo Alto, California and in Pittsburgh, Pennsylvania. We have R&D centers in 

our various divisions that do regional specific R&D for particular 

products, and then also support the global development, R&D for 

the rest of the divisions. 

Mr. MCKINLEY. OK. Thank you. Gentlemen, thank you, and 

Madam Chair, I yield back. 

Mrs. BLACKBURN. The gentleman yields back. 

Mr. Harper for 5 minutes. 

Mr. HARPER. Thank you, Madam Chair. And I welcome and appreciate each of you taking time from very busy schedules to join 

us and give us a little insight into what is going on. Question for 

each of you, and I will start with you, Mr. Hinrichs, would be, talking about intellectual property protection for the industry. How important is that to you, what are we not doing properly, and what 

could we do better? 

Mr. HINRICHS. Where it manifests itself, and from OEM perspective in the auto industry is typically in after-market parts, and one 

of the things that, of course, we do is we stamp the Ford Blue Oval 

where we can on our own after-market parts that are obviously designed and up to our standards. But counterfeit components that 

go into the after-market business is where the auto industry is 

most interested in intellectual property protection, and I think we 

just need to continue to be diligent in enforcement, both of our expectations of what comes into these borders but also with other 

governments to ensure that that is a priority that recognition of intellectual property rights is something that is fundamental to global business competitiveness. 

Mr. HARPER. Mr. Dahl. 

Mr. DAHL. I absolutely concur. I think our biggest challenge is 

in the after-market area. We do have issues there. The department 

is actually 100 percent dedicated to finding these counterfeit parts 

and to eliminating them, so any support we can get to basically at 

the borders to ensure that they are not coming in is key. 

Mr. HARPER. Thank you. Mr. Hinrichs, you have managed facilities in a number of different States, and I am sure they are varied 

43 

in what is there. If you were looking at helping any place in the 

country, here is how you put your put your best foot forward, these 

are the things that we found are most effective to help on competitiveness, what advice would you give to a local area if you are talking about a new product line, you are going to be look at your existing facilities and comparing them, what is it that stands out that 

you would say was good advice? 

Mr. HINRICHS. Yes. Well, we actually work with the State agencies to attract and hire personnel, so the first thing would be good 

cooperation and good screening processes for training—for uncovering the talent that wants to come to work. It is not just about 

someone is willing to work, but can they work in a team environment, are they willing to upscale their technical capabilities, et 

cetera. 

We work with many of our States, including Commonwealth of 

Kentucky, where we had good training and development funds to 

support the continual development of our workforce. I think that 

is very critical and one, I think, we can differentiate at the local 

level. 

The other thing is partnerships with local community colleges or 

educational institutions to do some of that skilled trade development, the apprenticeship development that Scott talked about or 

also in our own facilities, those are good examples. I think the best 

advice I can give is just be willing to listen to what the needs are 

and find creative solutions because we want to be in your area. 

Mr. HARPER. I thank each of you. In order to allow sufficient 

time for the next panel, I yield back. 

Mrs. BLACKBURN. Thank you, and we appreciate the gentleman 

for yielding back and appreciate each of you being here today at 

this time. We want to thank you and say the first panel has concluded. 

We would ask our second panel to bear with us as we have a 

very short recess and give the clerk time to preset your name 

plates so you will know where to take your seat. This first panel 

is concluded. 

[Recess.] 

Mr. TERRY [presiding]. All right. We are back in after this short 

recess. Thank you for all of your patience in this matter. 

Since all have been previously introduced by our original opening 

statements, Mr. Wehrman, you can begin. You have five minutes. 

44 

STATEMENTS OF JAMES C. WEHRMAN, SENIOR VICE PRESIDENT, HONDA OF AMERICA MANUFACTURING, INC.; CHRIS 

NIELSEN, PRESIDENT, TOYOTA MOTOR MANUFACTURING 

TEXAS, INC.; SCOTT E. PARADISE, VICE PRESIDENT, MARKETING AND BUSINESS DEVELOPMENT, MAGNA, INTERNATIONAL; ANNETTE PARKER, ED.D., EXECUTIVE DIRECTOR, 

AUTOMOTIVE MANUFACTURING TECHNICAL EDUCATION 

COLLABORATIVE (AMTEC); WILLIAM A. SMITH, EXECUTIVE 

DIRECTOR, GOVERNMENT AFFAIRS AND COMMUNITY RELATIONS, AMERICAN AXLE & MANUFACTURING; AND KATHY M. 

KINSEY, DEPUTY SECRETARY, MARYLAND DEPARTMENT OF 

THE ENVIRONMENT, MEMBER OF THE ELECTRIC VEHICLE 

INFRASTRUCTURE COUNCIL 

STATEMENT OF JAMES C. WEHRMAN 

Mr. WEHRMAN. Good morning, and thank you, Chairman Terry 

and Ranking Member Schakowsky for inviting me here to testify 

today. My name is Jim Wehrman. I am the senior vice president 

of Honda of America Manufacturing in Marysville, Ohio. Today I 

would like to give you an overview of Honda’s evolving presence in 

the United States, and then I will spend a few minutes discussing 

areas where we think the government could be helpful to manufacturers. 

Honda’s three decades of manufacturing in this country have 

been a real success story for our company, and through that success, we believe we have made a significant contribution to the U.S. 

economy as well. Our automobile presence in the U.S. began in 

1969 by importing every vehicle that we sold here, but early on, 

our founder, Mr. Soichiro Honda, determined that to be successful 

we needed to build our products close to our customer. 

So in 1982, we became the first Asian manufacturer to build 

automobiles in America, and since then, we haven’t looked back. 

Last year, more than 90 percent of the vehicles we sold in the U.S. 

were built in North America, and as our local presence grew, we 

added many functions associated with building cars, including new 

R&D facilities, design centers, testing and certification laboratories 

and parts manufacturing facilities. Today, Honda operates nine 

manufacturing facilities across the United States, four of which 

have the capacity to produce more than 1.3 million Honda and 

Acura vehicles. Our other U.S. facilities produce 1.5 million auto 

engines, 1.3 million transmissions, 2 million general purpose engines, more than 400,000 power equipment products, and more 

than 575,000 altering vehicles and ATV engines. 

Our 14 research and development facilities perform all aspects of 

new model development with 24 Honda and Acura models conceived, designed, and engineered in the U.S. since 1991. Honda employs over 28,000 American associates nationwide. We are supported by an extensive network of over 500 parts and materials 

suppliers in 34 States with almost $22 billion purchased from U.S. 

suppliers in 2012, but the process does not end there. It continues 

to evolve, and in the last 2 years alone, Honda has invested $1.3 

billion to expand our U.S. manufacturing capabilities to position 

our company to export vehicles from the U.S. to 49 different countries and U.S. territories worldwide. 

45 

This expansion is simply the next step in the evolution of our 

U.S. operations. In 2012, Honda exported more than 90,000 vehicles, a number that we expect to double in the coming years, and 

in 2 years, we expect to be a net exporter. We will export more vehicles than we import. 

Moreover, we recently announced our intention to focus new responsibilities here in the U.S. for Honda’s global operations. Historically, all of our global model development was led by Japan. In 

the future, though, the U.S. will serve as a center for developing 

our manufacturing processes for some of Honda’s highest selling 

vehicles. Associates here in America will lead the effort to generate 

new ideas, develop processes and then change trained associates 

from Honda factories throughout the world in those new techniques. 

Our next frontier in the U.S. is Honda Jet, an advanced light jet 

aircraft that delivers class leading performance, fuel efficiency, 

comfort, and quality. Our competence in the U.S. as a manufacturing base is reflected by the decision to locate the world headquarters of Honda Aircraft in Greensboro, North Carolina. 

Now, I would like to talk about two areas that we think the government has a key role to play in helping strengthen manufacturing. We hear so much today about the gap between skills workers need in today’s manufacturing environment and the skills 

workers have, but we also know that the government is facing difficult budgetary choices, and workforce development programs need 

to harness the joint power of the public and private sectors to ensure the productivity of the American workforce. 

One of the ways Honda fosters workforce development is through 

partnerships with local education institutions. For example, Honda 

Manufacturing of Indiana has worked with Ivy Tech Community 

College to develop training curriculum for Honda’s equipment services and die services associates. 

Now, most auto makers today are also developing alternative 

fuel vehicles. Honda is the only auto maker currently producing six 

different drive trains and improve more fuel efficient internal combustion engine, hybrid, plug-in hybrid, battery, natural gas, and 

fuel cell vehicles. 10 States currently require manufacturers to sell 

a total of 5 million advance technology vehicles between now and 

2025. 

At the moment, however, the infrastructure simply does not exist 

to support these vehicles, and what is the greatest concern to us 

is that with the exception of California, States plans to assure that 

that infrastructure will be in place during their infancy. The Clean 

Air Act grants authority to California and other States adopting 

California’s regulations to require these advance technology vehicles. However, neither California nor the EPA believes it has the 

authority to assure that the necessary infrastructure will exist. 

That places auto makers in an untenable position. We are required 

to sell the vehicles but there is no assurance that the infrastructure will be there to support them. 

30 years ago, when Honda began auto production in the U.S., 

many doubted the wisdom of that move. 

Mr. TERRY. Wrap up. 

Mr. WEHRMAN. I guess my light is—— 

46 

Mr. TERRY. Wrap up. 

Mr. WEHRMAN. OK. Well, today, U.S. auto production exceeds 

our production in Japan, and our U.S. operations are assuming 

leadership for much of Honda’s global manufacturing direction. We 

continue to believe in the ability of the U.S. to compete globally. 

Thank you very much—— 

Mr. TERRY. Thank you. 

Mr. WEHRMAN. —for the opportunity to testify. 

Mr. TERRY. Thank you. 

[The prepared statement of Mr. Wehrman follows:] 

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Mr. TERRY. Mr. Nielsen. 

STATEMENT OF CHRIS NIELSEN 

Mr. NIELSEN. Thank you, Chairman Terry and Ranking Member 

Schakowsky and members of the subcommittee. My name is Chris 

Nielsen, and I thank you for the opportunity to participate in this 

hearing. I am president of Toyoto Motor Manufacturing, Texas, our 

facility in San Antonio that builds Tundra and Tacoma pickup 

trucks. I would like to spend the next few minutes sharing Toyota’s 

view and how we might work together with Congress to improve 

U.S. manufacturing. 

First, I am proud of the auto industry, the role it plays in the 

U.S. economy and the role that Toyota plays in both. We have been 

part of the U.S. automotive story for over half a century. It had 

been U.S. manufacturers for nearly 30 years. Today we have 10 

plants in the U.S., and with our four other North American plants, 

we produce 12 models, accounting for 70 percent of our U.S. vehicle 

sales. And this substantial manufacturing footprint also is boosting 

our ability to export. 

Our U.S. operations currently ship vehicles to 21 global markets, 

soon to be 23. Across these operations, sales and R&D, Toyota employs over 31,000 people in the U.S. and we are directly and indirectly are responsible for 365,000 jobs. 

Now, let’s talk about how we can make all that productivity even 

more competitive. The topic on which I would like to focus my remarks is workforce training. If you visit an automotive manufacturing plant, one thing will be immediately obvious. People build 

cars. While there is a great deal of automation in modern auto 

plants, producing quality automobiles requires skilled, disciplined, 

and well-trained workers. 

Sadly, even with relatively high unemployment, our sector struggles to attract work ready applicants. In fact, nationally 600,000 

skilled technical jobs are currently unfilled. Why? Manufacturing is 

not as widely viewed as a rewarding career as it once was, despite 

the excellent pay and benefits in today’s advanced manufacturing 

jobs, and for those advanced jobs, only 5 percent of our candidate 

pool is qualified. Most applicants have only a single discipline such 

as a welder or a programmer, and many have basic educational deficiencies. 

Toyota is not sitting still in confronting these issues. A great example is our Advanced Manufacturing Technician, or AMT program, developed in 2010, now rolled out across most of our plants 

and endorsed by the automotive manufacturing technical education 

collaborative as a best practice. To date, Toyota graduates have a 

100 percent pass rate in the technical written exam, which is double the historical average. 

Congress can help the sector in two major ways: First, the government can help encourage cooperation among itself, academia, 

and the private sector to improve K through 12 STEM education 

and teacher recruitment. Second, you can help focus resources on 

workforce programs that encourage nationally, portable 

credentialed programs likes AMT, emphasize next generation 

multi-skilled worker training, and encourage coordination between 

65 

community colleges and local employers to help ensure curriculums 

meet local employment needs. 

Many of the right resources are already in place, but for manufacturing to remain competitive into the 21st century and beyond, 

technical and intellectual training must be more balanced and also 

more available. Toyota will do its part. We hope Congress will help 

by encouraging funding of programs, promoting the kinds of technical skills that the 1.7 job automotive sector needs to carry it forward into the future. 

I would like to close on a real positive note, and I am going to 

stick with what I know best, which is the great State of Texas. 

Conventional wisdom is to locate plants near suppliers for obvious 

efficiencies, but in the case of the plant that I run, we went where 

the buyers were. Texans purchase about 20 percent of this country’s Tundras. Our challenge was both to find skilled workers and 

to provide suppliers the opportunity to set up local operations. We 

offered suppliers space on our property, and today there are 21 onsite suppliers in San Antonio. A third of the suppliers are minorityowned, and two-thirds of our workforce is Hispanic. 

As you know, when the world’s economy slowed, cars and especially trucks were dramatically affected, but we retained all of our 

employees and reinvested in their training and development. We 

asked for their help in improving operations, so we were ready 

when the economy came back. We preserved jobs. There are nearly 

6,000 on site. And we may soon be in a position to create more, provided we can find the skilled workers we need. 

Now, let me finish where I started in behalf of the 31,000 Toyota 

workers in the U.S., we are proud of what we have accomplished. 

With the right kind of training in the American workforce, there 

is no limit to what this country can do. We are committed to a successful and competitive industry for the long term, and know that 

a highly trained U.S. workforce is essential to the success of our 

company and to the American economy. Thank you. 

Mr. TERRY. Thank you very much. 

[The prepared statement of Mr. Nielsen follows:] 

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Mr. TERRY. Mr. Paradise, you are recognized for 5 minutes. 

STATEMENT OF SCOTT E. PARADISE 

Mr. PARADISE. Mr. Chairman and members of subcommittee, my 

name is Scott Paradise. I am responsible for marketing business 

development in the Americas for Magna. On behalf of our 20,000 

American employees working at 62 manufacturing facilities in 15 

States, it is a pleasure to be here today to share Magna’s perspectives in the future of American automotive manufacturing. Magna, 

if you are not aware, we are a most diversified supplier in industry 

today. We make—what we don’t make is tires and glass, and just 

about everything else we do, including contract manufacturing and 

only contract manufacturing for OEM customers so we don’t compete against them. 

We are completely global. We were established in 1957. We are 

the number one supplier to the industry in the USA, and we are 

the number four supplier globally in the market. 

We have over 400 manufacturing and product development facilities in 29 countries, and our sales last year were approximately 31 

billion U.S. dollars. 

I am also pleased to inform you that Magna has increased our 

investment here and are hiring here in the United States. Between 

2009 and 2017, we have committed to investing nearly $840 million 

in 22 new or expanded facilities, and in the process, we alone at 

inside of Magna are creating 6,500 new jobs in communities such 

as Michigan, Kentucky, Tennessee, Missouri, Alabama, South 

Carolina and Georgia. These are meaningful jobs with good pay 

and good benefits, the kind of jobs that support families and help 

build for a better future. 

Let me commend Chairman Terry and Ranking Member 

Schakowsky for convening this important hearing today. It is critical to the health of the U.S. economy that Congress and the automotive manufacturing industry work together to encourage innovation and job growth. In that regard, I will focus my remarks on the 

need for a partnership between government industry as a means 

of growing the manufacturing base in the United States. 

Before discussing areas where the Federal Government can contribute to a successful partnership, I will briefly call the members’ 

attention to my written statement that highlight areas where 

Magna and other private sector manufacturers must control their 

own costs, including R&D workforce development and product 

costs. While not exhaustive, they are illustrative of the types of cost 

that industry can control. 

Now I would like to focus to the public component of the successful public/private partnership and would like to propose several 

areas in which Congress and this subcommittee should take particular care in order to ensure American leadership in the automotive manufacturing sector, that is, regulation and legislation, 

corporate tax rates, workforce development, and other incentives. 

When it comes to regulation and legislation, the key objective 

from Magna’s perspective is to continue the active dialogue and collaboration between the public and private sectors to ensure that 

any new legislation or regulation that changes policy objectives in 

77 

a way that does not create new problems where none previously existed. In my written statement, I point out several errors where industry and policymakers have worked collaboratively to leverage 

the expertise and innovation of the private sector to meet certain 

policy objectives, including those related to driver safety and fuel 

efficiency standards. I would also suggest that hearings such as today’s are critical to making this process work for U.S. consumers, 

manufacturers, and the U.S. economy. 

Another issue that Congress should address is the high corporate 

tax burden in the United States. It has been mentioned earlier. 

The U.S. corporate tax rate is the second highest among OECD 

countries and is a drag on American business and job creators. The 

high corporate rate discourages capital investment in the U.S. as 

companies may be lured to locate major operations in countries 

with a lower tax burden such as Mexico. 

Reducing the overall tax burden on corporations in the U.S. 

would help spur greater capital investment, increase manufacturing output, promote job retention in the United States, and 

stimulate the U.S. economy. 

In addition, the United States is unquestionably the top high 

skilled manufacturing nation in the world. While market forces 

have pushed many low skilled manufacturing jobs broad, U.S. manufacturing industry has been undergoing something of a renaissance through high skilled labor, including in the automotive sector. 

Competition, however, is strong across the globe, and for America 

to compete, we will need is a top caliber workforce to meet the 

needs of the 24th century manufacturers. Congress should therefore work to develop workforce training initiatives that respond to 

employer needs and prepare American workers for the high skilled 

jobs of the future. Such workforce development initiatives could include investing in community colleges and stimulating K through 

12 vocational training, creating new scholarships for high skilled 

manufacturing programs, leveraging government procurement to 

place greater emphasis on new manufacturing technologies, adequately funding Workforce Investment Act programs and supporting innovative public/private initiatives at the local and State 

level. 

For example, one State public/private initiative that has been 

particularly successful is Michigan’s Community Ventures program. It is collaboratively run between Governor Rick Snyder and 

Michigan MEDC Corporation. Out of that program, we have hired 

75 people who were not working at the time and put them to work 

inside of our facilities. It has been a great success. 

Lastly, Congress can encourage the growth of the manufacturing 

sector through tax incentives. Such initiatives could include energy 

efficiency tax credits, R&D tax credits, infrastructure investments 

to modernize and improve our Nation’s roads, bridges, ports and 

schools. 

In conclusion, the automotive manufacturing industry is a key 

drive of the U.S. economy and we look to continue to participate 

in it heavily, and on behalf of Magna’s 120,000 employees and the 

20,000 here, we appreciate your time. Thank you. 

Mr. TERRY. Appreciate yours. 

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[The prepared statement of Mr. Paradise follows:] 

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Mr. TERRY. Mr. Smith, you are now recognized for your 5 minutes. 

STATEMENT OF WILLIAM A. SMITH 

Mr. SMITH. Well, good afternoon. And thank you, Chairman 

Terry, Ranking Member Schakowsky, committee members for providing this opportunity to present some issues we face in automotive manufacturing. My name is Bill Smith, and I am executive 

director of Government Affairs and Community Relations for American Axle & Manufacturing, a tier one automotive supplier 

headquartered in Detroit, Michigan. AAM is a $3 billion supplier of automotive driveline and 

drivetrain systems. We operate more than 30 locations across four 

continents, with 12 of our facilities located in the United States. 

We have invested over $2.3 billion in these facilities, and we are 

in the middle of $100 million investment in new tooling and equipment for our Three Rivers, Michigan facility to launch a new industry leading disconnecting all-wheel drive system, which will provide 

enhanced fuel economy and safety over existing driveline systems 

in the industry. 

AAM currently employs 3,000 associates in the United States 

and another 8,400 in other countries. I have worked for AAM since 

2005 and have had the personal pleasure of starting up new manufacturing operations in China, Poland, and the United States, and 

prior to my work for AAM, I spent 37 years in other manufacturing 

companies for a total of over 45 years of manufacturing experience. 

I feel that manufacturing is one of the key engines that will drive 

our economy to the next level. Let me provide some supporting 

data. 

Across the Nation, 12 million Americans are employed directly in 

manufacturing jobs. For every dollar invested in manufacturing, 

$1.48 is added to the economy, the highest multiplier of any economic sector. Manufacturers in the United States perform twothirds of all private sector R&D in the Nation, driving more innovation than any other sector. However, our competitiveness is slipping, so much so that it is now 20 percent more expensive to manufacture in the United States compared to competing countries. 

Manufacturers are poised and ready to power the economy with 

the right policies in place. I would like to offer four areas in which 

we can focus to improve our manufacturing competitiveness. 

Number one, corporate tax reform; two, energy; three, R&D incentive; and four, workforce training. The United States now has 

the dubious distinction of having the highest corporate income tax 

rate among the Nations in the OECD as mentioned. Other countries are lowering corporate tax rates. We need to create a national 

tax climate that enhances the global competitiveness of manufacturers in the United States, and we need Congress to consider reducing the corporate tax rate to a level that will make the United 

States competitive with other major trading partners. 

And in the area of the energy, energy is now becoming a significant competitive cost advantage for manufacturing in the United 

States compared to our major trading partners. We can widen this 

gap and enhance our energy security by embracing every energy resource at our disposal with steps such as approving construction of 

89 

new domestic and cross-border pipelines, new transmission lines, 

expanding energy-related transportation infrastructure. Also, we 

can standardize and streamline regulations and policies to provide 

access to traditional energy resources, electricity generation, and 

the expansion of renewable alternative energy. 

Moving to R&D. Innovation propelled the United States to its 

global leadership position in manufacturing, but other nations are 

eager to take our place and are establishing R&D incentives that 

are more attractive than those offerred by the United States. We 

must provide a strong and permanent competitive research and development R&D incentive. We need a stable, forward-looking R&D 

incentive in place to guide our budgeting decisions to perform R&D 

in the United States. 

And finally, moving to workforce training and skills. World class 

manufacturing demands world class talent proficient in STEM disciplines. Skills must match our level of manufacturing technology. 

AAM is currently hiring approximately 500 associates at our Three 

Rivers, Michigan facility. Due to skills mismatch, we were only 

able to hire one in three applicants for manufacturing assembly positions. And on a national level, more than 600,000 manufacturing 

jobs are unfilled due to skills mismatch. These skills gap threatens 

U.S. competitiveness. 

Our manufacturing workforce today is required to understand 

statistical process control, value stream mapping, machine maintenance and other numerous skills to maintain our competitive position, so we need to put a national focus on increasing proficiency 

in STEM education and start generating interest in manufacturing 

careers much earlier in our education systems. 

So, in summary, we need your help in supporting and enacting 

policies to address corporate tax reform, energy, R&D incentives, 

and the workforce skills gap. It is our belief at AAM that these actions in these key areas will improve our manufacturing competitiveness and stimulate economic growth and job creation. Thank 

you. 

Mr. TERRY. Thank you. Perfect timing. 

[The prepared statement of Mr. Smith follows:] 

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Mr. TERRY. Ms. Parker, you are now recognized. 

STATEMENT OF ANNETTE PARKER 

Mr. PARKER. Thank you, Chairman Terry and Ranking Member 

Schakowsky and members of the subcommittee for the opportunity 

to testify today. My name is Dr. Annette Parker, and I am executive director of the Automotive Manufacturing Technical Education 

Collaborative, AMTEC, at the Kentucky Community and Technical 

College System, KCTCS. 

I am proud to be here today to share our story and to discuss 

with you how we can further support automotive manufacturing in 

the United States. 

In order for the United States to be able to keep its leadership 

position, or competitiveness in the global economy, the workforce 

must keep pace with the knowledge and innovation in advanced 

automotive manufacturing, and other STEM disciplines. 

The Automotive Manufacturing Technical Education Collaborative was created because education leaders in Kentucky and 

other States came together and recognized this key challenge for 

the automotive manufacturers to maintain the flexible workforce 

and develop new worker competencies that would enable automakers to maintain high performance work organizations that create jobs and add value to products and services. 

We recognize that highly skilled engineers are part of the solution; however, there also needs to be, we need to fill the gap from 

middle-skilled workers and technicians in advanced automotive 

manufacturing. 

These types of workers generally have an associate degree or industry recognized post secondary credential. Yet, institutions of 

higher education are not producing the number of students needed 

by our employers. These types of workers also need the fundamental skill-sets that are common across all of the automotive 

manufacturing companies, and it is the basis of the development of 

the AMTEC center. 

The auto workers have shared with us that they need work-ready 

employees with the basic skills to whom they can provide specific 

company training. In order to meet industry skills, AMTEC has 

recognized that the automotive industry requires uniquely trained 

employees to support increasingly flexible and lean manufacturing 

lines, fluctuating customer demands, a growing focus on green 

manufacturing, and rapidly improving technology. 

In response to these industry demands, AMTEC offers an industry-endorsed, multi-skilled maintenance certification assessment, 

validated college curriculum aligned to industry-endorsed skill 

standards, shared best practices and educational models among colleges and industry partners, and flexible career pathways to fit 

unique needs of students, employers, and employees. 

AMTEC, through the leadership of the Kentucky system, built a 

collaboration of approximately 35 community colleges and automakers in 12 States to build consensus in the development of national standards for multi-skilled maintenance or mechatronics 

technicians for the automotive manufacturing sector; the development of competency measurement tools to assess knowledge skills 

and abilities of incumbent and future STEM technicians; the develVerDate Nov 24 2008 15:01 Aug 12, 2014 Jkt 037690 PO 00000 Frm 00103 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-27 CHRIS
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opment of career pathway models that follow the key success factors in order to create a pipeline for the future workforce; and we 

also have AMTEC academies that we convene with key stakeholders to share those best practices and learn and grow from each 

other. 

Through the development of standards, competency-based 

modularized curriculum, and assessments, AMTEC has created a 

unique collaboration of industry in colleges that provide education 

of workers prized by the industry. In 2011, the National Governors 

Association, through a case study selected AMTEC as a model in 

national best practice. 

The NGA states that the AMTEC story shows that it is possible 

for governors to work collaboratively with industry, with community colleges, and with each other to provide people with the opportunity to build their technical skills and ensure both America’s future prosperity and their own economic security. 

AMTEC is at the forefront of education because the future workers involves a very different kind of technical worker, a very different kind of partnership, and a very different kind of education. 

As a collaborative, we are excited about the future as we work with 

K–12 educators, community colleges, automotive manufacturers 

and suppliers, to ignite our students’ interests to educate them to 

compete globally and accelerate them into the workplace to become 

competent, well-educated STEM workers in the advanced automotive manufacturing industry. 

AMTEC academy events have been successful in convening college and industry stakeholders to learn and grow from locally specific best practices. As a matter of fact, the next AMTEC academy 

is hosted by Nissan, at the Tennessee Technology Center in 

Murfreesboro, Tennessee, April 11th and 12th, 2013. 

The recommendations that AMTEC would provide include continued funding in support of collaborative efforts across the automotive sector and other sectors that drive supported national 

standards and assessments. We recommend the expansion of collaborations that engage K–12 higher education, industry, and government entities. 

The National Science Foundation Advanced Technological Education Funds have been critical to the development and success of 

AMTEC and similar centers of excellence that need to be continued 

with support funding. 

And finally, these efforts should be national in scope, and therefore cross local, regional, and State lines to increase collaboration 

and effectiveness while reducing duplication of funds and efforts. 

Thank you, again, for the opportunity to speak today. 

Mr. TERRY. Thank you. 

[The prepared statement of Ms. Parker follows:] 

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Mr. TERRY. Ms. Kinsey. 

STATEMENT OF KATHY M. KINSEY 

Ms. KINSEY. Chairman Terry, Ranking Member Schakowsky, 

members of the subcommittee, my name is Kathy Kinsey. I am a 

Deputy Secretary at the Maryland Department of the Environment, and I want to thank you for the opportunity to be here today 

to address the subcommittee on an issue that we believe is very 

central to the long-term future of the automobile industry in this 

country. And that is the need for alternative fuel vehicles and development of a robust fueling infrastructure in the Nation. 

Maryland has enjoyed a very long association with General Motors, and the future of the automotive industry in this country is 

very important to us. Baltimore is now home to GM’s new Allison 

Transmission Plant, which manufacturers the electric drive trains 

for the Volt, and also which will start production next week of electric motors for the new Spark EV that they are manufacturing. 

So expansion of the alternative fuel vehicle market is particularly important to us. We see it as critical to achieving our air quality and our long-term greenhouse gas action goals. Many in this 

room know very well that poor air quality is one of our State’s most 

intractable environmental problems, and in spite of the tremendous 

progress that we have made in reducing emissions and improving 

fuel efficiency of our automobiles, car and truck emissions remain 

a major cause of our ozone nonattainment problems in Maryland 

and on the East Coast, and atmospheric deposition of nitrogen is 

responsible for nearly one-third of the nutrient pollution in the 

Chesapeake Bay, and half of airborne nitrogen oxygen oxide is attributable to the mobile source industry sector, mobile source sector. 

Transportation is second, only to the energy sector as a source 

of greenhouse gas emissions in our State. So expansion of the electric vehicle market is a very high priority for the O’Malley-Brown 

administration in our State, and you know, we are very committed 

to developing a robust market, and a fueling infrastructure for 

plug-in vehicles in our State, and we are moving forward on a 

number of different fronts to do that. 

And I really would like to respond to the characterization that 

our, the development of our infrastructure is in its infancy. Our 

draft greenhouse gas plan which is due to be finalized very shortly, 

has set a goal of 60,000 plug-in electric vehicles on the road in 

Maryland by 2020. Last year the legislature passed two very important bills removing potential regulatory barriers to development 

of a State charging network infrastructure charging network. 

This year the legislature passed two bills extending tax credits 

for plug-ins, and charging stations both, and extending HOV lane 

access, and I will say that GM worked very closely with us on those 

initiatives to ensure passage of both of those bills. 

We have in Maryland and will continue to provide significant 

State funding for installation of public charging stations. In 2010 

and 2011, we awarded $.5 million in matching grants for charging 

stations. This year, Governor O’Malley has committed $1 million in 

his capital budget for charging stations at MARC and Metro stations. And we now have more than 350 public charging stations in 

104 

the State. And this ramp-up has occurred over a relatively short 

period of time. 

Two years ago, our general assembly established the electric vehicle infrastructure council, and it is comprised of members from 

all of the interest groups. GM was a member of the council, and 

we looked comprehensively at all of the barriers and challenges in 

our state to establishing a robust charging infrastructure network. 

There is a final report that was issued in December with many, 

many recommendations for removing barriers, enhancing the market, developing our charging infrastructure, and it included a very 

detailed blueprint for installation of a state-wide charging network 

that would be adequate to service 60,000 PEVs that we hope to 

have on the road in Maryland by 2020. 

And this year because of the work that we have done on that 

council, the general assembly extended the council for another 3 

years to continue to work so that we can dig a little deeper into 

some of the more challenging aspects of developing the infrastructure network, develop pilot demonstration projects, engage in more 

outreach and education. 

We have been working collaboratively in Maryland with the 

other East Coast states through the Transportation Climate Initiative on a regional initiative to develop a charging network along 

the I-95 corridor on the East Coast that is going to hopefully enable 

long-distance travel throughout the region. 

And in closing, I just want to say that I—we in Maryland, I believe we have demonstrated our very strong commitment to working with the automobile industry, the charging station manufacturers, the utilities, our sister States, and the many other stakeholder 

groups to make the necessary investment in our infrastructure. 

And we have seen a significant expansion of the infrastructure 

in a short period of time, a big upward trend in EV sales in Maryland, and we expect it to continue. Thank you very much. 

Mr. TERRY. Thank you very much. 

[The prepared statement of Ms. Kinsey follows:] 

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Mr. TERRY. My first question goes to Mr. Wehrman and Mr. 

Nielsen. And as manufacturers with U.S. facilities, will an E.U./ 

U.S. free trade benefit you, and what would you like to see in this 

area? Mr. Wehrman first. 

Mr. WEHRMAN. Yes, as I mentioned, the export has become a 

much bigger part of our business for Honda in North America. And 

without question, any Free Trade Agreement certainly helps us. 

We recently began exporting to Korea as a result of the Free Trade 

Agreement that was signed with South Korea, and that is very 

beneficial to us. We would expect to see more opportunities to export to Europe, to the E.U. as a basis of—based on our Free Trade 

Agreement or any other Free Trade Agreement, for that matter. It 

certainly opens opportunities. 

Mr. TERRY. And what would we need to have in that trade agreement to facilitate your exports of U.S. manufactured Hondas? 

Mr. WEHRMAN. Naturally, elimination of any tariff barriers, but 

also looking at non-tariff barriers and ideally, any work towards 

harmonization of standards. Because clearly, the difference in 

standards increases the cost of manufacturing. The more commonality, the more volume we can get, the more competitive we 

can be, both in North America, and in other markets as well. 

Mr. TERRY. Mr. Nielsen. 

Mr. NIELSEN. Chairman Terry, I believe a very similar response 

as a global automaker, we strongly support free trade across the 

globe. So any type of—we are supportive of trade agreements with 

all regions, including Europe. And to the second part of your question, also we are in support of harmonization activities, but I would 

add not only between the U.S. and Europe, but also harmonization 

on a more global basis. A forum does exist today that all automakers are a part of, and we think—— 

Mr. TERRY. What is that? 

Mr. NIELSEN. I am sorry? 

Mr. TERRY. What is the forum? 

Mr. NIELSEN. I am sorry, I don’t recall the exact name but it is 

a world, a global harmonization forum that allows participants 

from each of the main global regions to work on harmonization 

across the globe. And you know, as a company that exports to 23 

global markets, that is critically important to us. 

Mr. TERRY. Thank you, and then for Mr. Paradise and Mr. 

Smith. You have facilities in Europe and the U.S. How do you see 

the potential for Free Trade Agreement to benefit your companies? 

And we will go with Mr. Paradise first. 

Mr. PARADISE. Anything that has to do with free trade, we are 

supportive of, and anything, as Chris pointed out, that balances, 

and makes sure that things are fair between countries, is important to us. 

We can manufacture anywhere in the world, but if we can have 

a balanced trade agreement between us, and be able to ship product back and forth without unnecessary tariffs that penalize our 

products, that is where we are looking to get to. 

Mr. TERRY. All right, Mr. Smith. 

Mr. SMITH. Thank you, Mr. Terry. We don’t make decisions at 

AAM strictly based on trade policy, but are very much in support 

115 

of trade policies that are well thought out and balanced across the 

planet. 

Mr. TERRY. OK, and then again to Mr. Paradise and Mr. Smith. 

Both of you in your testimony mentioned the U.S. Tax Code. Now, 

obviously we aren’t Ways and Means, but we are working to get 

their jurisdiction moved to us. 

Thank you for laughing. I am going to ask the same question I 

did of our first panel in that respect. Do you have any feel for what 

a reformed corporate Tax Code should look like by way of, is the 

appropriate number 20 percent, or 25 percent? Have you guys had 

any feel? 

Mr. Smith, you seem—— 

Mr. SMITH. Well, again, the gray hair comes from a lot of thinking and things like that about the world. Certainly, something 25 

percent or south thereof would be really good. 

Mr. TERRY. Do you think that would level the playing field so you 

could be more competitive, not at a disadvantage? 

Mr. SMITH. It may not completely level the playing field, but certainly puts us a little bit more in the game. Working in other countries, there is a lot of very aggressive folks out there that we work 

with that try to attract our business, and at least that moves it in 

the right direction. 

Mr. TERRY. Mr. Paradise. 

Mr. PARADISE. Anything you can get us 30 percent or below will 

make us competitive. When you look at the success that Mexico has 

had in securing OEM facilities which ultimately attract us as suppliers to be close by, nowadays logistics costs are huge and we are 

under huge pressure to locate as close as we can to the OEMs. 

Mr. TERRY. All right, very good. I yield. I am going to recognize 

Ranking Member Schakowsky. 

Ms. SCHAKOWSKY. OK, as promised, Mr. Wehrman and Mr. 

Nielsen, I wanted to go back to the issue of rearview video systems 

in the cars. And let me just state, again, I am going to be meeting 

with a woman this week whose husband tragically ran over and 

killed their 1 year old, and then 5 years later, he committed suicide. 

These are just agonizing situations, and when we lose two children a week, they are not rare. So these kinds of systems could reduce by 95 percent those accidents. 

So you may not have these numbers now. I would like to know 

the percentage of cars served by your companies that currently 

come with display screens, and your projections for next year, and 

when you think you might reach 100 percent. What percentage of 

new cars sold by your companies have rearview cameras standard, 

and what percentage of Honda and Toyota cars sold in Japan have 

rearview cameras? 

Let me get to that. Are there different standards for what is 

standard in a car in the U.S. when it comes to safety, U.S., and 

other markets? Let me start with you, Mr. Wehrman. 

Mr. WEHRMAN. First of all, yes, there are different standards, but 

I can’t say I am an expert as far as what the standards are in 

Japan compared to North America because my focus is, of course, 

on North America. 

Ms. SCHAKOWSKY. Sure. 

116 

Mr. WEHRMAN. Regarding the rearview cameras, 96 percent of 

the Hondas sold in the U.S. do have rearview cameras today. And 

our intention is over the next couple of years, to make that 100 

percent. And that is not based on regulation. It is just based on our 

overall commitment to safety, and because customers do appreciate 

this feature and they want this feature. So that is what has driven 

it. 

Our general feeling on the regulation is certainly a regulation 

that improves the safety, is something to be considered very heavily. We would recommend it be based on a performance standard 

than a specific technology. It may very well be over the next couple 

of years that a better technology for detecting a child behind the 

car might be available compared to video, and we would like to 

have that flexibility to adapt the best and most effective technology 

should that happen. 

Ms. SCHAKOWSKY. Thank you. Mr. Nielsen. 

Mr. NIELSEN. I am pleased to say that for all of our trucks and 

sport utility vehicles, we currently have rearview vision systems 

available. And as you know, those are the vehicles that are the 

most critical in terms of rear visibility. We have rear visibility systems available on most, all of our passenger cars as well. I don’t 

have a specific number for you. 

Ms. SCHAKOWSKY. As an option? 

Mr. NIELSEN. As an option, that is correct. And also we are supportive certainly of the role in principle. We would also like to also 

understand the technical detail, but we agree that this is a very 

important issue and are very supportive of it as well. 

Ms. SCHAKOWSKY. Thank you. I wanted to ask Dr. Parker a question. So you are saying that right now, the certification process is 

just for Kentucky and for AMTEC, but that you are working to 

make a national standard so that a certification can be available 

provided there is certain training? 

Ms. PARKER. Yes, we believe that the standards for the fundamental skills for multi-skilled maintenance is essentially the same 

across all manufacturers, all automotive manufacturers, and have 

thus worked with our industry partners to define what those standards should be and to develop standards that follow APA requirements of high stakes assessments that they are using to analyze 

incumbent workforce—worker skills, and also to certify new STEM 

students that are coming through the pipeline. 

Ms. SCHAKOWSKY. Now that we have other manufacturers is 

there anyone who doesn’t agree that some sort of a national certification or standard of competency would be helpful, so that is a 

good direction to go in. And thank you for your leadership. 

I wanted to ask Ms. Kinsey, are you aware that there is a battery project going on right now in Illinois, a collaboration of universities and industry to make a more efficient battery for cars smaller and better? Are you aware of that? 

Ms. KINSEY. I am not familiar with that. 

Ms. SCHAKOWSKY. OK, so you know, hopefully, we are going to 

be able to be on the leading edge of technology. I just want to tell 

you. I myself would be more interested for my next car and my 

Ford—are they still here—is 10 years old, so it is probably time for 

me to be thinking about it. 

117 

But it is typical, a grandmother’s car with 78,000 miles on it. I 

should get something good when I trade it in. The infrastructure 

issue really is critical, so you are saying that the technology is all 

there, but—and Maryland has made a commitment. What about 

other States where people are considering buying electric cars? 

Ms. KINSEY. Well, the Transportation Climate Initiative, which is 

comprised of the Northeast States, New York, Rhode Island, Massachusetts, all along the corridor down through Maryland, are 

working collaboratively together. I mean, all of the States in the 

Northeast are working on various infrastructure initiatives, and we 

are working together on this regional initiative. 

So I can’t speak with specificity about what other States are 

doing outside of their involvement with us in this regional initiative. I do know that New York is also a leadership State. They 

have done a lot with the development of the infrastructure in that 

State. 

Ms. SCHAKOWSKY. Thank you so much. 

Mr. TERRY. Thank you. Mr. Guthrie, you are recognized for 5 

minutes. 

Mr. GUTHRIE. Thank you, and I welcome Dr. Parker here from 

our great Commonwealth. She is from Woodford County. I think 

Mr. Stronach has a place in Woodford County, a rather nice place, 

from Magna, who owns Magna. And it is a show place for horse 

country there. It is just wonderful. So thanks. And your facility in 

Bowling Green, we appreciate that very much. 

What is interesting, I was saying earlier that my father worked 

for the automotive industry. I also had job at Ford in 1982 when 

I was a senior in high school, too. And I would tell you, I would 

bet if you had all of the CEOs, or guys in your level here talking 

about what can we do to make the automotive industry more competitive and jobs staying in America, not some of you sitting here, 

but some of maybe earlier their predecessors would have said, we 

need barriers. We need to make sure that we don’t have other competition coming in, because, I mean, I have lived through that. 

And now you are not, nobody is here asking for that. And nobody 

is here saying we need lower wages, we need whatever. What you 

are saying is, we need better tax rates. And I was in a meeting 

with the President and he said that we could agree that we need 

a corporate tax reform. That is not our committee, unless Chairman Terry pulls something off, but I know that our chairman in 

the Ways and Means is working for that. 

So hopefully, this is a call to Washington to come together because of our bipartisan meeting here today, and we all want manufacturing to stay in America. And there is one thing easy that you 

said, not easy to do, but something we can do to have immediate 

impact, and that is regulatory certainty. All of you said it, and energy, is what we are discussing the Keystone Pipeline in another 

meeting right now. 

But the question of how we are going to get this workforce 

trained, and we have unemployed people, people dropping out of 

the workforce, that is a little longer term because you have got to 

change. But my question I guess is for Dr. Parker, and any of you 

that want to add, everybody here says they are looking for workers. 

Everywhere I go in my district say they are looking for workers. 

118 

We know people aren’t working. And how do we get people into the 

KCTCS system, which is our community college and technical 

school system in Kentucky, or in these? Why is the market not 

working for labor? I think you said 600,000 unfilled manufacturing 

jobs in America today. Why isn’t the market working for labor? 

Ms. PARKER. Well, I have done some research in this area, and 

one of the things that the research has shown in manufacturing, 

specifically, is that we were of the thought that people didn’t understand that manufacturing is not your father’s old manufacturing 

environment. And they just needed to understand that, young people and parents. 

And the research has shown that that is really not the issue. 

They understand that manufacturing is high tech now. They understand that it is important to our economy, and that they need 

it in their backyards. But they don’t think that their kids should 

go into manufacturing, parents, so what we have to do is a better 

job of the understanding that the skills that these workers will 

have, these STEM students will have are transferrable in manufacturing, because over the last 30 years as we have become global at 

companies, it is very important that they do have a global footprint, that there has been this fear that all jobs would go to China. 

So we need to do a better job of informing our parents and our 

young people about what a job and the skills in manufacturing 

would provide to them and to their future. And then I think we 

need to quit condemning, and we don’t do this in Kentucky, so let 

me make that clear, but we need to quit condemning K–12, and 

come together with K–12 and with business and industry to provide those solutions. 

And we do a good job of that with several of our programs. We 

have an outstanding program that Mr. Nielsen referred to that is 

emulated in Kentucky at Bluegrass Community and Technical College, where the college, the companies and actually not just Toyota. 

Toyota is providing this for everyone in Scott County in that region, and the K–12 systems all come together and work together 

towards these issues. 

And so it informs the young people and informs the parents 

about good jobs, good skills, and a future, and that is where I think 

we need to go. 

Mr. GUTHRIE. Because, like I said, they closed the Ford plant. I 

told this story, but a friend of mine, beginning of our senior year 

of high school said, I know somebody with some pull that can get 

me on at Ford. Graduate from high school and work for 30 years 

and retire and be in the middle class. But if you show up today to 

one of your facilities with only a high school ability, you can’t afford because the productivity is not there, but if they show up with 

industrial maintenance, with all of these different lists, they are 

middle class. I mean, they are literally middle-class jobs in Kentucky for people with those skills. 

And what I am trying to figure out, in State government, and 

here, how do we get, why isn’t the market working, because it 

seems like somebody would want to make $60- or $70,000 a year 

with skills for 2-year skills instead of working at minimum wage 

or somewhere for the rest of their life. And we haven’t been able 

to make that connection yet, and we have got to figure out how to 

119 

do it as a country, because people can that, I mean, we need those 

jobs. 

Ms. PARKER. Right. I think we need to do a better job of informing our parents and our young people that manufacturing is a 

good, viable career, and that you need an education beyond a high 

school education and the community colleges have a significant role 

to play there. 

Mr. TERRY. That is a good point, and before I recognize the gentleman from Maryland, Mr. Sarbanes, I will say that just this last 

week we had that same discussion in a forum back home. And yet, 

we talk about K through 12. When you are in high school, they 

judge themselves about how many kids go to a 4-year college. And 

so we have got to turn that thought that somehow if a kid doesn’t 

go to a 4-year college, that that is a failure on the high school part. 

Ms. PARKER. Exactly. 

Mr. TERRY. And that is just not true. 

Ms. SCHAKOWSKY. May I make one quick comment? Wheeling 

High School, in Wheeling, Illinois, is a STEM high school, and I am 

telling you, these kids are job ready, if they want to be, when they 

graduate from high school. So it is not simply, and there are ways 

to do it even in high school. 

Mr. TERRY. Yes, and that is where we need to get that back into 

the high schools, as she testified. So the gentleman from Maryland, 

Mr. Sarbanes, you are recognized for 5 minutes. 

Mr. SARBANES. I appreciate it, Mr. Chairman. I want to thank 

the panel for being here. 

Ms. Kinsey, I wanted to ask you a couple of questions. First off, 

thank you for the integral role you have been playing in Maryland’s efforts to be really on the cutting edge when it comes particularly to sort of the takeup on electric vehicles. And I want to 

congratulate you and the Maryland Department of the Environment, the council that you are a member of, and Governor 

O’Malley, frankly, for the commitment that is being made to that. 

And you sort of described the phenomenon that if you build it, 

they will come, in a sense. If you build an environment in which 

it is easier to access these opportunities than not, you will start to 

get the sort of engagement and traction that we want to see. 

What I was curious about, is kind of looking back over Maryland’s coming to this experiment. What were some of the things 

that were identified as real hurdles that maybe you discovered 

afterwards weren’t as tough to overcome as maybe they had been 

made out to be? 

What was some of the narrative ahead of Maryland really taking 

the plunge on this that was borne out in the experiment, and what 

parts of that narrative sort of refreshingly did you discover weren’t 

as kind of sinister or daunting as they may have seemed to be? I 

would be curious about that. 

Ms. KINSEY. Well, I guess I would answer that by saying that we 

have a lot of challenges remaining, and I will acknowledge that. 

Funding is a huge issue for us right now. The electric vehicle 

charging stations are not, comparatively speaking, very expensive, 

but funding public charging stations, given our budget constraints 

at the State level and the Federal level, is a challenge. We defiVerDate Nov 24 2008 15:01 Aug 12, 2014 Jkt 037690 PO 00000 Frm 00125 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-27 CHRIS
120 

nitely need to work to get more funding committed and dedicated 

to charging stations. 

I think that we are starting to see in Maryland much greater acceptance of the need, the understanding, the need for these vehicles. One of our biggest challenges going forward is working with 

employers. Everybody has an electric plug in their home, so everybody can charge their electric vehicle at night overnight. That is 

not the problem. The challenge that we are facing going forward 

is convincing employers to start installing these vehicles so that— 

the charging stations so that their employees will start buying 

these cars and driving to work with confidence. 

I mean, range anxiety is one of the two biggest barriers to acceptance of electric vehicles, plug-in vehicles. The other one is the 

cost. And so these things are all intertwined. And I think if we can 

expand significantly the number of charging stations, I think we 

are going to see a very, very significant increase, very rapidly of 

the number of stations. But that is a challenge. 

And the other big challenge that we are going to be looking very 

closely at going forward when our council reconvenes later this fall, 

is urban charging and multiunit dwelling charging situations. 

These are very challenging because most residents in these situations don’t have access to a garage, or a private driveway, or an 

electric plug. 

And so we really have to come up with some really good, creative 

solutions to providing that charging infrastructure in the urban 

and in multidwelling settings. So we need to have some demonstration projects in some of our urban areas. We would like to start 

working on getting employers and businesses to install charging 

stations that can be for use of employees and patrons during the 

day, but then for residents at night when the businesses are closed. 

Mr. SARBANES. That is helpful because you have identified really 

out of all of the various things that need to be focused on, the two 

key factors are the charging station infrastructure, and the range 

anxiety. And they are interrelated. Obviously, if you have got more 

charging stations along the way, you are going to be less anxious. 

I mean, I have range anxiety. I have hesitated to take the plunge 

because I commute every day from north of Baltimore, and I think 

that that distance is just enough to produce that extra level of 

range anxiety, and worry about whether I can get here in time for 

the chairman’s hearing. So that is an impediment to me. 

But the availability of charging stations would obviously help 

with that, and the manufactures have a role to play in terms of the 

vehicles themselves and their ability to overcome that range anxiety. But again, I want to congratulate you on the efforts Maryland 

has made and you have mentioned GM and some of the others who 

have really stepped up and made that a collaborative experiment, 

and I think it is an exciting thing to watch. Thank you. 

Mr. TERRY. At this time, we recognize the vice chairman of the 

committee, Mr. Lance. You are recognized for 5 minutes. 

Mr. LANCE. Thank you, Mr. Chairman, and I apologize for being 

at committee and then leaving and then coming back. I have followed your testimony, and it is a pleasure to be with you all. 

Mr. Wehrman, I want you to know that I have a 2004 Honda Accord with 175,000 miles on it as of yesterday, and it is going 

121 

strong, four-cylinder stick shift, but not an electric car yet for the 

reasons that my colleagues have suggested. 

Mr. Nielsen, it was a pleasure to meet with you and your colleagues in the chairman’s office, and we had a wonderful discussion 

about initiatives to encourage young people to enter manufacturing, because these jobs do provide high salaries, and strong benefits, and I know that Toyota, and others are working in this area. 

It is my understanding that San Antonio is the seventh largest 

city in the United States, and it is the largest majority Hispanic 

city in the country. And perhaps you have discussed this with colleagues, but would you elaborate on career opportunities afforded 

to the Hispanic community by Toyota, especially given the diversity 

of San Antonio’s population? 

Mr. NIELSEN. Thank you very much for that question. We really 

embrace the fact that we are a part of the San Antonio community. 

We have been welcome with open arms from when we first broke 

ground almost 10 years ago, and being a key participant in the 

community, and providing job opportunities for the young people in 

the community is really important to us. 

And we look at our workforce development at several different 

levels. Of course, we commented in the testimony about our Advanced Manufacturing Technician program which really starts at 

the high school graduate level, and allows them to do a work-study 

program, 3 days at work, 2 days at school to earn enough money 

to pay for their education so they can earn an Associate’s Degree 

without having to go into the significant debt that so many people 

have to go into to earn their degrees. 

But we have really looked to go even further than that. We start 

really at the middle school level in supporting a lot of STEM initiatives in the community to expose the young people, especially on 

the south side of San Antonio, to careers and opportunities. 

Mr. LANCE. Is that the side that has the larger Hispanic population? 

Mr. NIELSEN. It is. It is. The plant is located on the south side 

and overall, San Antonio is about two-thirds Hispanic but on the 

south side it is maybe 85, 80, to 90 percent. So that is, most of the 

population is located there. 

Mr. LANCE. Thank you. Would there be comments from other 

members of the panel on this issue as how we move forward to 

make sure that young people are trained appropriately for the positions that your great companies provide? Ms. Parker. 

Ms. PARKER. Yes, I would just like to say that Mr. Nielsen’s program with the Alamo Community College District is an exceptional 

program, that Toyota has taken a major leadership role within 

AMTEC, and across the country as a best practice. And it has also 

been used outside of the automotive industry with Lockheed Martin, and over 10 years, that same program has been offered to 

Lockheed Martin, and the program has students now that one of 

their students, a model student, is a chief negotiator for Lockheed 

Martin now and has attained her Master’s Degree. 

So it is an outstanding program that has support from the government of San Antonio, the industries in San Antonio, and the college, and K–12 system. 

122 

Mr. LANCE. I thank you. I think that this will be a continuing 

issue, especially since so many young people are in debt as a result 

of higher education, and although interest rates are currently low, 

I would imagine at some point they might increase, and it would 

further exacerbate an already extremely difficult situation. And obviously, we have to move in the direction in the 21st century of 

making sure that young people are well educated and well educated in the positions that your companies and others provide. And 

although I do not agree with the President on all issues, I certainly 

was in support of his statements during the State of the Union address that we need a fundamental analysis of higher education in 

this country. Costs are extremely high, and have far outstripped 

rates of inflation, and I commend the efforts of all on the panel who 

have been involved in this, and I thank you for your participation 

today. 

Thank you, Mr. Chairman. 

Mr. TERRY. Thank you, Mr. Lance. And now the gentleman from 

Texas, Mr. Olson, you are now recognized. 

Mr. OLSON. I thank the chair, and good afternoon, and welcome 

to the panelists. I appreciate you coming back after the 

Snowquestration. Thank you, thank you, thank you for coming 

back here again. 

As you can tell, I am a Texan. And whenever we have a chance 

to brag about Texas, then by golly, I am going to brag about my 

home State. 

Coming up on the screen here, is a picture that I am sure all of 

you saw during the Super Bowl, the most recent Super Bowl with 

a Toyota Tundra pickup truck towing the Space Shuttle Endeavor 

to its final resting place in California. I saw that commercial and 

thought, this is Hollywood with the special effects, but then I 

talked to Mr. Nielsen. No. This was actually a Toyota pickup truck 

made in San Antonio, Texas, modified with a special trailer hitch 

that pulled the shuttle over the bridge. The problem right there is 

that bridge could not withstand the weight of the shuttle and the 

track that NASA had to get over the bridge. That was the big obstacle, getting the shuttle from LAX Airport to the museum. Toyota 

stepped up and got that to its destination. 

That picture is Texas in pecan shells, Tundra pickup truck, 

Space Shuttle Endeavor, and you see in the back, Randy’s Donut 

Shop. Thank you, Mr. Nielsen, for getting that space shuttle home. 

And again, I want to talk to you about Toyota’s motivation for 

locating in San Antonio, Texas. You had a choice to do that almost 

a decade ago, which created, as you know, 6,000 direct jobs through 

both Toyota Motor Manufacturing and your parts suppliers. And 

they have actually moved with their plant on site. 

So can you tell me about the business climate in Texas, how that 

influenced the move, State, and local tax incentives, ability to purchases a large piece of land and big suppliers, 21 of them right 

there in San Antonio? Tell me about that. 

Mr. NIELSEN. Well, thank you very much for recognizing our 

Tundra product. We are awfully proud of the product we make, and 

that was a proud day for us towing the shuttle, and certainly, if 

there is a shuttle available to tow to the space center in Houston, 

we would be more than happy to do that as well. 

123 

Mr. OLSON. We are working on that. 

Mr. NIELSEN. But our decision to locate in Texas was really first 

and foremost driven by, that is where the market is. That is the 

largest pickup truck market really in the world, and we wanted to 

be located there. And we found that working with both the State, 

and the local governments in Texas to be just a wonderful experience, a very pro-business environment, very supportive of us. 

We needed some infrastructure put in place, specifically around 

training, since in the San Antonio area, manufacturing was not a 

large part of the economy, historically. And we put in place initial 

training programs that initially serviced Toyota, but as Ms. Parker 

has mentioned, now are serving many other companies as well, 

such as Boeing in their facility where they provide the technical 

support and service for Air Force One; Lockheed Martin, and a 

number of additional companies, international companies as well, 

that are located in the San Antonio area and are able to take advantage of the education infrastructure that we have put in place 

through cooperation with State and local governments. 

Mr. OLSON. And sir, as you know, San Antonio is military city 

U.S.A.; Air Force bases, Army Hospital, Brooke Army Medical Center. Would you elaborate on what Toyota has done about our combat war heroes coming back from Iraq and Afghanistan, who joined 

your team, I mean, and came back with special skills, advanced 

training, how does that translate to the workplace? 

Mr. NIELSEN. The transition of so many returning veterans came 

at the perfect time for us as we were struggling to fill many of 

these multi-skilled maintenance technician positions at our plant. 

And of course, our education programs we are putting in place will 

be very helpful for us in the long run, but in the short run, in order 

to close some of the gaps, we could focus on recruitment of some 

of the returning veterans. And I am very proud to say that just 

over the course of the last year, we have hired 30 returning veterans from all branches of service. They come in with both the 

technical skills they learned in the service, but perhaps even more 

importantly, the ability to work as a part of a team to be very disciplined. And I think that has been extremely helpful to us at the 

plant, and we are very proud to be able to offer good employment 

opportunities to those returning veterans. 

Mr. OLSON. As someone served in the Navy for 10 years, thank 

you, thank you, thank you for taking care of our veterans. They 

have been fighting for our freedom. They deserve our support when 

them come back home. I guess we all can work hard going forward, 

and as we said, make sure that blue collar does not become some 

sort of term of delusion. I mean, these are good-paying jobs. 

Right down to Eagle Ford Shale right there south of San Antonio. You get out right now with a high school degree, maybe a couple of years of trade school, junior college, learn some skills, pass 

a drug test, you can be making $65,000 bucks now right off the bat; 

$100,000 within 5 years. 

That is good money that provides for a family. That is just great. 

We need to make sure the American people realize, the kids realize 

they have got a future in manufacturing. I yield back the balance 

of my time. 

124 

Mr. TERRY. Thank you. I appreciate the 5-minute Texas commercial. 

Mr. OLSON. I can go another 5 minutes. 

Mr. TERRY. I bet you could. I bet you could. So, and I just have 

to counter by saying, there is something special about being in the 

middle of America, with great rail and truck access. 

So, with that, I ask unanimous consent to include in the hearing 

record a statement by the Motor & Equipment Manufacturers Association, and I know we have run that by your side already. 

So hearing none, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. TERRY. Ms. Schakowsky, you also have a request? 

Ms. SCHAKOWSKY. I do. I would like to put in the record a statement from the American Federation of Labor and Congress of Industrial Organizations. 

Mr. TERRY. And without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. TERRY. So thank you. You have provided excellent testimony 

and feedback from our questions. All of you were spectacular, and 

we thank you, and you are now adjourned. 

But I have to say before we adjourn up here, remind members 

that they have 10 working days to submit any questions for the 

record. You may receive questions from us, and we would appreciate a timely reply to those questions that we were unable to answer or ask. So with that, we are adjourned. 

[Whereupon, at 1:08 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

We are a nation of builders, and the auto industry is a source of great pride. The 

auto industry produces a product that touches the daily life of nearly every American, but I think the great impact of the industry on our economy may not be widely 

understood. 

Our nation’s auto manufacturers, suppliers, and dealers have certainly faced some 

challenges in the last decade—but the sector is on the rebound. Vehicle output is 

on the rise, sales are up, and the Big 3 have all recently announced they plan to 

expand operations and hire more employees. 

The auto industry, comprised of auto manufacturers, dealers, and parts suppliers, 

touches all 50 states. It is the largest industry in the country with over 1.7 million 

people employed in designing, engineering, and manufacturing of vehicles and parts. 

The multiplier effect of the industry is calculated at 8 million jobs here in the U.S. 

Of course, my home state of Michigan has a proud and storied history as the Auto 

State and our rich tradition continues: 125 auto companies transformed Detroit into 

Motor City in the early 20th century, directly and indirectly employing hundreds of 

thousands of workers. To this day, the impact on Michigan still resonates: auto 

manufacturing and its downstream impact employ over 20 percent of Michiganders. 

In my southwest Michigan district, close to one-third of the manufacturing is auto 

related. I am especially pleased that William Smith from American Axle is testifying 

today—the company has a long tradition in Three Rivers, Michigan. American Axle 

and its workers have played a prominent role in Michigan’s comeback—recently announcing they are investing more than $100 million in the Three Rivers plant and 

are adding an additional 500 jobs. 

Although this hearing is not about safety mandates or other auto regulation, I 

want to be clear about our interest in those topics: we intend to have industry back 

to discuss those issues in the future. There are exciting developments in the auto 

safety realm such as vehicle-to-vehicle communication and other active safety systems that we wish to explore. Today, however, we are most interested in hearing 

about the challenges facing the industry as well as the success stories. This is an 

important time in auto manufacturing. 

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