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79–769 2014

OUR NATION OF BUILDERS: MANUFACTURING IN 

AMERICA 

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 

FEBRUARY 14, 2013 

Serial No. 113–5 

( 

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

opening statement ................................................................................................ 6 

Prepared statement .......................................................................................... 6 

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

California, opening statement ............................................................................. 8 

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

WITNESSES

Rick Yuse, President, Space and Airborne Systems, Raytheon Company .......... 12 

Prepared statement .......................................................................................... 14 

James R. Steiner, Senior Vice President, Specialty Materials, Corning Incorporated .................................................................................................................. 19 

Prepared statement .......................................................................................... 21 

Bob Holler, Director, Global Respiratory Protection Business, 3M ..................... 30 

Prepared statement .......................................................................................... 32 

Eric R. Meyers, President, Oil City Iron Works .................................................... 46 

Prepared statement .......................................................................................... 48 

Jeff Smatsky, Factory Manager, Zephyrhills ........................................................ 66 

Prepared statement .......................................................................................... 68 

Joseph K. Block, Vice President of Sales, Block Steel Corporation ..................... 75 

Prepared statement .......................................................................................... 77 

Harold Arnold, President, Fram Renewable Fuels ............................................... 91 

Prepared statement .......................................................................................... 93 

Ron Saxton, Executive Vice President, JELD-WEN ............................................. 102 

Prepared statement .......................................................................................... 104 

(1) 

OUR NATION OF BUILDERS: MANUFACTURING 

IN AMERICA 

THURSDAY, FEBRUARY 14, 2013 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND

TRADE, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 10:03 a.m., in room 

2322 of the Rayburn House Office Building, Hon. Lee Terry (chairman of the subcommittee) presiding. 

Members present: Representatives Terry, Lance, Blackburn, 

Harper, Guthrie, McKinley, Bilirakis, Johnson, Barton, Upton (ex 

officio), Schakowsky, McNerney, Welch, Barrow, and Waxman (ex 

officio). 

Staff present: Charlotte Baker, Press Secretary; Sean Bonyun, 

Communications Director; Howard Kirby, Legislative Clerk; Nick 

Magallanes, Policy Coordinator, CMT; Brian McCullough, Senior 

Professional Staff Member, CMT; Gib Mullan, Chief Counsel, CMT; 

Shannon Weinberg Taylor, Counsel, CMT; Michelle Ash, Democratic Chief Counsel; Will Wallace, Democratic Policy Analyst. 

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

Mr. TERRY. Good morning, and start our hearing. 

And Jan said it is OK that Henry is experienced enough to be 

able to take the lead right now. 

So good morning, and Happy Valentine’s Day. It is appropriate 

that we have this hearing on Valentine’s Day because we expect it 

to be a real positive love fest and not some of the usual hearings 

that we may have in Congress, or at least the ones that people see 

on the news. We are here to celebrate American manufacturing. 

But speaking of love fest, this is my 21st wedding anniversary 

as well. So as my wife is taking kids to school and getting ready 

for work, happy anniversary, honey. And by the way, I have got a 

3D bust coming for you for Valentine’s Day and our anniversary. 

And maybe she can put that on her nightstand and she can see me 

every night before bed. I am sure every woman out there is saying 

that is exactly what they want. 

So with a subcommittee title of Commerce, Manufacturing, and 

Trade, our first hearing could have dealt with any number of 

issues. The agencies and subject matter within our jurisdictions are 

numerous and diverse, and they all have complex issues worthy of 

our discussion. 

2 

I would like to thank all of our witnesses here today traveling 

from all parts of our Nation to be here today to share their manufacturing experiences. And I have Mr. Holler from 3M. And now, 

while he is from Minnesota—one of their plants is in my district 

in Valley, Nebraska. They make respirators—masks—for all over 

the world and they employ over 500 people in my district. And so 

hopefully, today, Bob and some of the other witnesses can shed 

some light on why those chose where to manufacture. 

So at this point, I am going to recognize myself for 5 minutes. 

Today, we are going to start from square one by focusing on a 

sector which has undoubtedly served as a core building block in securing America’s greatness, and that is our manufacturing. 

Our goal is simple: to hear directly from the individuals most immediately affected by U.S. manufacturing policies—the manufacturers themselves—and gain a clearer understanding about what is 

right with American manufacturing today and what can be done to 

make it even better tomorrow. 

We will hear from eight different business leaders representing 

a broad cross section of U.S. manufacturing, companies making everything from glass used for iPads and Smartphones, to respirator 

masks, to missile defense systems. My hope is that a wide range 

of ideas and perspectives will surface during the discussion that 

can, in a manner of speaking, ‘‘set the table’’ for more specific manufacturing topics that will be tackled down the road. 

While today’s discussion will likely be wide-ranging, subsequent 

hearings could focus on specific manufacturing sectors like autos, 

auto parts, pharmaceuticals, chemicals, energy, and steel. 

Why have we chosen to kick off the 113th Congress with a series 

of hearings covering a topic as broad as the state of U.S. manufacturing? The bipartisan manufacturing showcase this morning, 

which highlighted 60 products from 20 different districts on this 

subcommittee, says it all. 

In the districts represented on our subcommittee alone, manufacturing accounts for over 800,000 jobs, which pay an average of 

77,000 nationally, according to NAM. In Nebraska alone, the manufacturing sector consists of over 37,000 jobs just in 2011. 

One would think that given this morning’s showcase and these 

impressive statistics that the United States was living up to the 

subtitle of our hearing, which is Our Nation’s Builders. Unfortunately, with each passing year, this title becomes more representative of our past and less so of our future. 

The domestic manufacturing sector was hit the hardest in terms 

of job losses during this Great Recession. While manufacturing jobs 

account for just 1⁄10 of the Nation’s jobs, this sector suffered 1⁄3 of 

the Nation’s job losses. To be clear, during a time of record unemployment, roughly 33 percent of the jobs lost were in the manufacturing sector. To paint an even starker picture of the state of U.S. 

manufacturing, the Information Technology and Innovation Foundation reported that the manufacturing sector suffered an average 

3.1 percent-per-year decline from 2000 to 2011, resulting in an average job loss of nearly 1,300 jobs per day. 

One answer could be working to create an environment where 

companies already here see it worth their while to expand here. We 

often talk about job creation, and President Obama devoted a sigVerDate Nov 24 2008 14:28 Jun 24, 2014 Jkt 037690 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-5 CHRIS
3 

nificant piece of his State of the Union to it, but what does job creation really mean? That is why you are here. We want companies 

manufacturing abroad to come to America, make investments in 

capital and take advantage of the most productive manufacturing 

labor workforce in the world because I truly believe that our labor 

is second to none. 

According to the National Association of Manufacturers, on average, manufactures of all sizes spend over 14,000 per employee to 

comply with regulations. Even when taking into account environmental regulations alone, manufactures spend 7,200 per employee 

in regulatory compliance. No wonder it costs more to manufacture 

in the U.S. 

I agree with the President. We need to focus here in Congress 

on how we attract more jobs to our shores. We need to ask how we 

can equip people with the skills needed for the jobs that will power 

the engine of job creation. Manufacturing doesn’t just create jobs, 

it creates great, high-paying jobs and it creates jobs in other sectors. Manufacturing has one of the strongest multiplier effects in 

the economy. Every $1 in direct spending produces an additional 

$1.35 in indirect outputs. 

But the benefits of manufacturing don’t stop there. A strong 

manufacturing base is key to closing our trade deficit and to sustaining a U.S. economy that can be a leader in the global economy 

in the long term. 

I look forward to hearing all of your testimony. At this time I 

yield back my 12 seconds and yield to the ranking member for 5 

minutes. 

[The prepared statement of Mr. Terry follows:] 

PREPARED STATEMENT OF HON. LEE TERRY

Good Morning, and Happy Valentines Day. We expect a love-fest at our hearing 

and speaking of love-fest today is my 21st Wedding anniversary. 

With a subcommittee title as broad as ‘‘Commerce,’’ ‘‘Manufacturing,’’ and 

‘‘Trade,’’ our first hearing could have dealt with any number of issues. The agencies 

and subject matter within our jurisdiction are as numerous as they are diverse— 

and all have complex issues worthy of being discussed before a Congressional committee. 

I would like to thank all of our witnesses for traveling to Washington for this 

hearing. In particular, I would like to thank Bob Holler from 3M, for making the 

trip. 3M has a great manufacturing facility in Valley, Nebraska that employs over 

500 people. Hopefully today, Bob and some of the other witnesses can shed some 

light on why those chose to manufacture here in the U.S. 

Today, we are going to start from square one by focusing on a sector which has 

undoubtedly served as a core building block in securing America’s greatness. Manufacturing. 

Our goal is simple: to hear directly from the individuals most intimately Affected 

by U.S. manufacturing policies—the manufacturers themselves—and gain a clearer 

understanding about what is right with American manufacturing today and what 

can be done to make it better tomorrow. 

We will hear from eight different business leaders representing a broad cross-section of U.S. manufacturing—companies making everything from the glass used for 

iPads and smartphones, to respirator masks and missile defense systems. 

My hope is that a wide range of ideas and perspectives will surface during this 

discussion that can, in a matter of speaking, ‘‘set the table’’ for more specific manufacturing topics we will tackle down the road. 

While today’s discussion will likely be wide-ranging, subsequent hearings could 

focus on specific manufacturing sectors like autos and auto parts, pharmaceuticals, 

chemicals, energy, and steel. 

4 

Why have we chosen to kick-off the 113th Congress with a series of hearings covering a topic as broad as the state of U.S. manufacturing? The bipartisan manufacturing showcase this morning, which highlighted over 60 products from 20 different 

districts on this subcommittee, should say it all. 

In the districts represented on our subcommittee alone, manufacturing accounts 

for over 800,000 jobs, which pay an average wage of $77,000 nationally according 

to the National Association of Manufacturers. In Nebraska alone, the manufacturing 

sector consisted of over 37,000 jobs in 2011. 

One would think that given this morning’s showcase and these impressive statistics that the United States was living up to the surtitle of our hearing series, ‘‘Our 

Nation of Builders.’’ Unfortunately with each passing year, this title becomes more 

representative of our past and less so of our future. 

The domestic manufacturing sector was hit the hardest in terms of job losses during the Great Recession. While manufacturing jobs account for just a tenth of the 

nation’s jobs, this sector suffered a third of the nation’s job losses. To be clear—during a time of record unemployment—roughly 33 percent of the jobs lost were in the 

manufacturing sector. 

To paint an even starker picture of the state of U.S. manufacturing, the Information Technology & Innovation Foundation reported that the manufacturing sector 

suffered an average 3.1 percent per year decline for the 2000 to 2011 period, resulting in an average job loss of nearly 1,300 jobs per day. 

We often talk about job creation—President Obama devoted a significant piece of 

his State of the Union to it—but what does job creation really mean? 

One answer could be working to create an environment where companies already 

here see it worth their while to expand—and companies manufacturing abroad want 

to come to America, make investments in capital, and take advantage of the most 

productive manufacturing labor force in the world-because I truly believe that our 

labor force is second to none. 

Another potential answer could be reigning in the costs of regulations. According 

to the National Association of Manufacturers, on average, manufacturers of all sizes 

spend over $14,000 per employee to comply with regulations. Even when taking into 

account environmental regulations alone, manufacturers spend over $7,200 per employee in regulatory compliance costs. No wonder it costs 20 percent more to manufacture in the U.S. 

I agree with the president. We need to focus here in Congress on how we attract 

more jobs to our shores. We need to ask how we can equip people with the skills 

needed for the jobs that will power the engine of job creation. 

Manufacturing doesn’t just create jobs, it creates good, high-paying jobs, and it 

creates jobs in other sectors. Manufacturing has one of the strongest multipliers effects in the economy: every $1 in direct spending produces an additional $1.35 in 

indirect output. But the benefits of manufacturing don’t stop there: a strong manufacturing base is key to closing our trade deficit and to sustaining a U.S. economy 

that can be a leader in the global economy for the long term. 

# # # 

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you so much, Mr. Terry, and I want to 

congratulate you on your new role as chairman of this wonderful 

subcommittee. I am pleased to serve as the ranking Democrat. I 

also want to thank you and all the staff that helped put together 

that wonderful display of manufacturing. And a special thank you 

to Michelle Ash and Will Wallace of the Democratic staff for helping make that happen. 

Our subcommittee has oversight over many areas that are of critical importance to the American people—consumer protection, 

product and auto safety, travel and tourism, interstate and foreign 

commerce, privacy and trade in manufacturing, which is our focus 

today. 

5 

In this Congress I look forward to working with you, Mr. Chairman, to find areas where we can all advance the priorities of the 

American people. Manufacturing is a great place to start. 

I am pleased to welcome as a witness Joe Block, the vice president of Block Steel, located in my district in Skokie, Illinois. Block 

Steel is great American success story founded in 1948 and is run 

today 65 years later by the descendents of the founders. They have 

about 60 employees, are a union shop with good wages and health 

benefits. As the country’s largest aluminized steel distributor, they 

are a critical supplier to the automotive appliance and HVAC industries, and I am sure all of our witnesses could attest the sector 

has changed dramatically from the images that many of us still 

have of the giant factories with long assembly lines. 

We are seeing major leaps in the area of advanced manufacturing where a skilled and educated workforce and groundbreaking 

technology play a key role. Like traditional manufacturing jobs, advanced manufacturing jobs are good jobs and can be filled by workers with a range of training. The growth of the industry is good 

news for building the middle class, a theme the President focused 

on earlier this week in the State of the Union Address. 

And the industry is growing. After years of job losses, manufacturing is a bright spot as we come out of the Great Recession. In 

my State of Illinois, 40,000 new manufacturing jobs have been created since December 2009—one of the top five states in the country 

for growth in manufacturing jobs. More than half a million manufacturing jobs have been created nationwide since the end of 2009. 

The manufacturing industry requires a few basic things including investment in innovation, good and reliable infrastructure, and 

an educated and skilled workforce that will fill the millions of good 

jobs that manufacturing can produce. 

I am extremely concerned about proposed cuts to federal investments in these areas, including what we would see under sequestration. This hearing will give us the opportunity to examine more 

closely the successes and challenges the industry is facing, and I 

look forward to the testimony of our witnesses. And I certainly 

hope you will also help us understand how we can be better partners to help grow our manufacturing sector. 

I would like to yield the balance of my time to my colleague, Mr. 

Welch. 

Mr. WELCH. I think the ranking member. 

I want to brag a little bit. We have got Mr. Saxton from JELDWEN here, and JELD-WEN is a company with a national presence, 

but it has two facilities in Vermont and has been a great contributor to our Vermont economy. It is combining skilled manufacturing, creating very good jobs in a State that has lost a lot of jobs. 

We used to have a big machine tool industry in Springfield, 

Vermont, and we more or less have lost it. JELD-WEN has come 

and it is a manufacturing facility that has created 800 very goodpaying jobs in Windsor County, which is where I am from. And I 

used to be a State Senator before I got demoted to Congress. 

And so we are very proud of JELD-WEN, which combines very 

good manufacturing practices, high technology, good employee relationships, and energy efficiency. It uses certified wood. It makes 

6 

windows and doors that are tremendous in insulating homes, saving energy. 

And we have had big debates about energy policy in this committee and they will continue, but there seems to be a good deal 

of bipartisan support for the notion that anything that creates good 

jobs and allows energy efficiency to save homeowners and building 

owners money is a really good thing. 

So I really want to welcome Mr. Saxton and thank you for all of 

the good work JELD-WEN is doing in Vermont. Thank you. 

Mr. TERRY. At this time I recognize the full committee chairman, 

Mr. Upton, for 5 minutes. 

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. UPTON. Well, again, congratulations, Mr. Chairman, for your 

first hearing. I was very impressed with the demonstration downstairs that many of us participate in. 

You know, when Henry Ford built his first horseless carriage in 

Michigan, Michigan began its journey as the face of the American 

automobile manufacturing. We later supplied our military with vehicles during times of war and felt the burgeoning consumer demand that followed it. And we have experience the pains of a 

changing automobile industry, certainly over the last several decades that I am very pleased with the resurgence of manufacturing. 

But much like the rest of the country, Michigan’s economy is far 

more diversified now. Manufacturing, and not just auto-related, is 

still extremely important to our economy producing $70 billion in 

output in 2011 and accounting for 16 percent of our State’s GDP. 

In my own district, we have more than 660 manufacturers who employ 10 or more folks, accounting for nearly 50,000 of the jobs in 

my district. 

Statewide, the manufacturing industry directly employs over a 

half a million Michiganders. And each of those jobs produces others 

upstream and downstream in Michigan and elsewhere. So we are 

pleased with this subcommittee and the hearing. And I would yield 

to the vice chair of the full committee, Ms. Blackburn, from Tennessee. 

[The prepared statement of Mr. Upton follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

Thank you, Chairman Terry, for calling today’s hearing, ‘‘Our Nation of Builders: 

Manufacturing in America.’’ I am also encouraged by your plan to use the committee’s jurisdiction to further examine manufacturing this Congress. 

When Henry Ford built his first ‘‘horseless carriage’’ plant in my home state, 

Michigan began its journey as the face of American automobile manufacturing. We 

later supplied our military with vehicles during times of war and filled the burgeoning consumer demand that followed. 

Michigan’s economy is now far more diversified, but manufacturing—and not just 

auto-related manufacturing—is still extremely important to the state’s economy, 

producing $70 billion in output in 2011, and accounting for 16 percent of our state 

GDP. In my district alone, we have over 660 manufacturers who employ 10 or more 

workers, accounting for almost 50,000 jobs. Statewide, the manufacturing industry 

directly employs over a half million Michiganders, and each of those jobs produces 

others upstream and downstream, in Michigan and elsewhere. 

According to University of Michigan, professor and American Enterprise Institute 

Scholar Dr. Mark Perry, the top 500 publicly traded U.S. manufacturers had $6.01 

trillion in revenue last year and would have been the world’s third largest economy 

7 

if they were their own country. Our manufacturing sector has been resilient and is 

one of the few bright spots in our economic recovery that has been adding jobs. The 

benefits of building products in the U.S. are clear: higher average wages, increased 

innovation, and greater economic multiplier effects for the entire economy. There 

are many challenges facing American manufacturers today, but I am still confident 

manufacturing can lead the way. Anyone who came by our Manufacturing Showcase 

this morning and saw a sample of some of the broad range of products made in our 

members’ districts—including the medical devices made by Stryker in my district— 

know our manufacturers still define what is ‘‘world-class.’’ 

I am pleased we have such an excellent panel of witnesses that represent the 

voices of our constituents. I am anxious to hear how they assess our current economic situation and what policies they believe need to be addressed to improve our 

shared goal of expanding manufacturing. 

# # # 

Mrs. BLACKBURN. Thank you, Mr. Chairman. I think we all want 

to welcome you. We are delighted that you are here and delighted 

to have bipartisan support for growing the manufacturing footprint 

in this country. 

I do want to say that, today, we have welcomed Nissan North 

America, and they are located right there in my district and right 

outside of the district have a facility where they manufacture the 

Pathfinder, the Maxima, the Infiniti JX. Bodine Aluminum is also 

present with us today and they do an engine block that is in the 

Camry and the RAV4. So we are delighted with those. 

Mr. Steiner, I welcome you. Your Gorilla Glass, which is a product that I have referenced more than once in this committee, is produced there in conjunction with work from Doerfer in Nashville 

and we appreciate that. And at this time, I yield to Mr. Barton of 

Texas. 

Mr. BARTON. Thank you, Ms. Blackburn. I want to take my brief 

time to introduce to the committee Eric Meyers. He and his father, 

who is sitting behind him, have owned Oil City Iron Works in Corsicana, Texas, a foundry founded over 125 years ago. The first 

major oilfield west of the Mississippi was discovered in Corsicana 

in 1895. The first oral refinery west of the Mississippi, Magnolia 

Petroleum, now a part of ExxonMobil, shortly followed. The Meyers 

family have been providing through their foundry the basic building blocks for industrial might for America, as I said, for over 125 

years. 

Eric has got a master’s degree and an undergraduate degree. He 

and his father have a company that has no debt. They provide over 

250 good-paying jobs in Corsicana, Texas. In his spare time, Eric 

is the emergency manager for Navarro County which he self-funds. 

If there is a tornado within 100 miles, he is there. And 2 years ago 

we had a tornado in Rice, Texas. He was there before the Highway 

Patrol was there. So Eric, we welcome you and we look forward to 

your testimony. 

With that, I want to yield to my good friend from New Jersey, 

Mr. Lance. 

Mr. LANCE. Thank you, Mr. Barton. And congratulations to you, 

Chairman Terry, and thank you for giving me the opportunity to 

serve as vice chair of the subcommittee. And I look forward to 

working in a bipartisan fashion to generate new ideas and inVerDate Nov 24 2008 14:28 Jun 24, 2014 Jkt 037690 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-5 CHRIS
8 

creased regulatory efficiencies that will benefit our Nation’s manufacturing sector. 

I welcome those who have participated in the showcase from the 

area of New Jersey I represent: Ortho Clinical Diagnostics, a J&J 

affiliate in Raritan, New Jersey; Bihler of America, based in Phillipsburg, New Jersey, which works with J&J to create extremely 

small needles for sutures; Voltaix: Electronics Chemicals company, 

manufacturing specialty gases in Branchburg, New Jersey; AllState Legal, an engraving and stationery manufacturer in 

Cranford, New Jersey; and Kuhl Corporation, a third-generation 

commercial egg-washing manufacturer that opened its doors in 

Flemington, New Jersey, in 1909. I look forward to working with 

manufacturing operations throughout the Nation to determine how 

Congress can be a partner in future growth. 

And I yield to Congressman Harper. 

Mr. HARPER. Thank you, Mr. Lance. 

And I am pleased to introduce Mr. Rick Yuse of Raytheon Company, who serves as the president of Raytheon Space and Airborne 

Systems, a division that is a leading provider of products that give 

military forces the most accurate and timely information on today’s 

network-centric battlefield. 

One product under his purview is Raytheon’s active electronically 

scanned array, or AESA radar. These radars are an integral piece 

in the U.S. Military’s tactical aircraft fleet, as well as a number of 

our foreign allies’ aircraft. We have over 700 Mississippians who 

work at the Raytheon facility in Mississippi that are responsible for 

assembling these highly technological and life-saving radars. 

Raytheon takes advantage of Mississippi’s track record of being 

business-friendly, its skilled and plentiful workforce, and its quality 

workforce training programs. 

We look forward to hearing from you today, and we welcome you, 

Mr. Yuse, and appreciate you being here today. 

And with that, I will yield to the gentleman from Kentucky, Mr. 

Guthrie. 

Mr. TERRY. At this time, I have got to interrupt because you are 

out of time. So what we are going to do is go to 5 minutes over 

here and we will do a unanimous consent so the others can introduce. Fair? So I recognize the gentleman from California, the full 

committee ranking member, Mr. Waxman. 

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

Mr. WAXMAN. Thank you very much, Mr. Chairman. And I want 

to congratulate you on your new chairmanship of the important 

subcommittee which is holding its very first hearing today. 

I also want to welcome Ms. Schakowsky as the subcommittee’s 

new Democratic ranking member. I look forward to working with 

both of you and our colleagues as we continue our oversight over 

interstate commerce and strive to ensure commonsense consumer 

protections for all Americans. 

A strong manufacturing sector is vital to our identity as a nation. 

It is a source of countless scientific breakthroughs and is essential 

to maintaining our national defense capabilities. Manufacturing is 

9 

also a key building block for strong and stable middle class in this 

country. 

In my home State of California, the manufacturing sector adds 

more than $200 billion to the economy and employs more than 1.2 

million people. In the Los Angeles area, particularly the South Bay 

region, this is one of the country’s greatest centers of defense and 

aerospace manufacturing. And I have the great honor to have been 

elected to represent this area. It is also home to several promising 

manufacturers of energy efficiency technology. 

This morning, I am proud to showcase examples of manufacturing from El Segundo in Redondo Beach in my district. NanoH2O 

displayed an industry-leading energy efficient reverse osmosis 

membrane that it has developed for desalinization purposes. Northrop Grumman displayed two aerospace products it is manufacturing for the Federal Government: the Navy’s F/A–18 Super Hornet strike fighter and Nassau’s James Webb Space Telescope. 

And I am also pleased to recognize Mr. Yuse from Raytheon, who 

was centered in El Segundo, and Raytheon has facilities in Mississippi but it is headquartered in the South Bay. And we are 

pleased to have you with us. 

Tuesday’s State of the Union address reaffirmed the President’s 

dedication to making the Nation a magnet for new jobs in manufacturing through the development of manufacturing innovation institutes. The President’s proposals for targeted investments in education, infrastructure, and clean energy will also help grow the 

manufacturing sector. 

There is one big threat to manufacturing looming on the horizon. 

For the health of the manufacturing sector and the economy as a 

whole, Congress should work to avert the massive arbitrary spending cuts set to take effect on March 1. The sequester should be replaced with a balanced, responsible deficit reduction plan. It is time 

we returned certainty and predictability to our manufacturers, 

small businesses, American families, and our entire economy. 

Our manufacturing sector has accomplished great things. The 

U.S. can continue to be at the forefront of global manufacturing 

creating transformative technologies for years to come, but Congress must do its part. We can’t expect our economy to rebound if 

we keep dragging the economy down with obstacles to growth, like 

the sequester. 

I am looking forward to the testimony from our witnesses. I must 

apologize that there is another subcommittee meeting at the exact 

same time and I have to go down there to that subcommittee hearing as well. I will come back as soon as I am able to, but I want 

to welcome all of the—— 

Mr. TERRY. Henry, you actually have a little bit of time left. Our 

clock is off. 

Mr. WAXMAN. Well—— 

Mr. TERRY. If you would like to yield—— 

Mr. WAXMAN [continuing]. Yes—— 

Mr. TERRY [continuing]. To Mr. Barrow. 

Mr. WAXMAN. I do want to yield the balance of my time, which 

I assume is substantial, to Mr. Barrow from Georgia. 

[The prepared statement of Mr. Waxman follows:] 

10 

PREPARED STATEMENT OF HON. HENRY A. WAXMAN

I want to thank Mr. Terry for holding this hearing and to congratulate him on 

his new chairmanship of this important Subcommittee. I also welcome Ms. 

Schakowsky as the Subcommittee’s new Democratic Ranking Member. I look forward to working with both of you—and all of our colleagues—as we continue our 

oversight of interstate commerce and strive to ensure commonsense consumer protections for all Americans. 

A strong manufacturing sector is vital to our identity as a nation. It is the source 

of countless scientific breakthroughs and is essential to maintaining our national defense capabilities. Manufacturing is also a key building block for a strong and stable 

middle class in this country. 

In my home state of California, the manufacturing sector adds more than $200 

billion to the economy and employs more than 1.2 million people. 

In the Los Angeles area, the South Bay region is one of the country’s greatest centers of defense and aerospace manufacturing, and I have the great honor of being 

elected to represent this area. It is also home to several promising manufacturers 

of energy efficiency technology. This morning, I was proud to showcase examples of 

manufacturing from El Segundo and Redondo Beach in my district. Nano H2O displayed an industry-leading, energy-efficient reverse osmosis membrane that it has 

developed for desalination purposes, and Northrop Grumman displayed two aerospace products it is manufacturing for the federal government: the Navy’s F/A–18 

Super Hornet strike fighter and NASA’s James Webb Space Telescope. 

This is something that President Obama and his Administration clearly recognize. 

The Obama Administration has a number of initiatives underway to bolster American manufacturing. 

Tuesday’s State of the Union address reaffirmed the President’s dedication to 

making the nation a ‘‘magnet for new jobs and manufacturing’’ through the development of Manufacturing Innovation Institutes. The President’s proposals for targeted, 

deficit-neutral investments in education, infrastructure, and clean energy will also 

help grow the manufacturing sector. 

There is one big threat to manufacturing looming on the horizon. For the health 

of the manufacturing sector—and the economy as a whole—Congress should work 

to avert the massive, arbitrary spending cuts set to take effect on March 1. The sequester should be replaced with a balanced, responsible deficit reduction plan. It is 

time we return certainty and predictability to our manufacturers, small businesses, 

American families, and our entire economy. 

Our manufacturing sector has accomplished great things. The U.S. can continue 

to be at the forefront of global manufacturing, creating transformative technologies 

for years to come—but Congress must do its part. We can’t expect our economy to 

rebound if we keep dragging the economy down with obstacles to growth like the 

sequester. 

I’m looking forward to the testimony of our witnesses. 

Thank you. 

Mr. BARROW. I thank the gentleman for yielding. 

And I want to congratulate Mr. Terry on his being elected as 

chairman of the committee and thank him for holding this hearing 

on manufacturing in America. 

Most folks agree that American manufacturing is good for our 

country, but American manufacturing is good for other countries as 

well. In my district, goods that are made in America are literally 

running the rest of the world. 

Fram Renewable Fuels is doing just that. As one of the first 

wood-pellet producers and exporters in the southeast, they manufacture fuel that serves in place of coal to generate electricity to 

utility companies around the world. I had the honor of visiting 

Fram on a manufacturing tour of my district last fall, and I was 

impressed by the sophistication of their operation, which is responsible for exporting over 375,000 metric tons of wood pellets each 

year. I have seen the difference that they are making through manufacturing, and I look forward to the testimony of Fram’s president, 

11 

Mr. Harold Arnold, as we examine how we can better support 

America’s manufacturers and continue to be a ‘‘Nation of Builders.’’ 

And with that, Mr. Chairman, I yield back. 

Mr. TERRY. Thank you, Mr. Barrow. The time has run out. I 

would ask unanimous consent for 2 additional minutes on the majority’s side so that two members can introduce their guests. 

Hearing none, we will have 2 minutes. And Mr. Guthrie, you are 

recognized for 1 minute. 

Mr. GUTHRIE. Thank you, Mr. Chairman. I appreciate that. 

It is my pleasure to introduce Mr. Jim Steiner. He is the vice 

president for Corning Special Materials and general manager of the 

Harrodsburg, Kentucky, plant that makes Gorilla Glass, which, if 

you don’t know what it is, if you have an iPhone in your pocket 

or if you have an iPad in front of you, you are touching it every 

time you tap the glass to get to your areas you want to go to. And 

this product is emblematic of cooperation between a couple of great 

American innovators and where they always say good enough is 

never good enough. And we appreciate you being here. I have enjoyed touring your facility. It is a wonderful place. 

I also point out in the room below, there is another manufacturer. The gateway to the Bourbon Trail is Clermont, Kentucky, 

and there is Jim Beam and you saw Booker’s and Knob Creek 

down there and Basil Hayden and also Toyota, which is not in my 

district, a manufacturing plant, but they have a lot of parts suppliers down there as well. They are in Georgetown, Kentucky. 

So with that, I yield to Mr. Bilirakis. 

Mr. BILIRAKIS. Thank you. I appreciate it very much. Thank you, 

Mr. Chairman. 

I would like to welcome and thank Mr. Jeff Smatsky at 

Zephyrhills Water for their appearance today. Mr. Smatsky serves 

as a factory manager at the Zephyrhills Water plant. It is in 

Zephyrhills, Florida, in my district, the 12th Congressional District 

of Florida. The 258 employees at the Zephyrhills plant produce 

both the Zephyrhills and the Nestle ́ Pure Life brands of bottled 

water in a variety of single-serve and bulk containers ranging from 

8 ounces to 5-gallon water cooler containers, which are distributed 

to homes in Florida, offices in Florida, all across Florida. 

Zephyrhills serves a valuable role in Pascoe County, a community that I represent in the Tampa Bay area in Florida as well, all 

of Florida. His testimony will shed light on the state of our economy and how we may be able to spur economic growth in this vital 

sector. 

And I yield back, Mr. Chairman. Thank you. 

Mr. TERRY. Thank you, Mr. Bilirakis. And all of our witnesses 

have been introduced by their sponsoring member. 

So we will begin our testimony. Mr. Yuse, you have 5 minutes. 

12 

STATEMENTS OF RICK YUSE, PRESIDENT, SPACE AND AIRBORNE SYSTEMS, RAYTHEON COMPANY; JAMES R. STEINER, 

SENIOR VICE PRESIDENT, SPECIALTY MATERIALS, CORNING 

INCORPORATED; BOB HOLLER, DIRECTOR, GLOBAL RESPIRATORY PROTECTION BUSINESS, 3M; ERIC R. MEYERS, 

PRESIDENT, OIL CITY IRON WORKS; JEFF SMATSKY, FACTORY MANAGER, ZEPHYRHILLS; JOSEPH K. BLOCK, VICE 

PRESIDENT OF SALES, BLOCK STEEL CORPORATION; HAROLD ARNOLD, PRESIDENT, FRAM RENEWABLE FUELS; AND 

RON SAXTON, EXECUTIVE VICE PRESIDENT, JELD-WEN 

STATEMENT OF RICK YUSE 

Mr. YUSE. Good morning, and thank you, Chairman Terry, Ranking Member Schakowsky, and committee members. On behalf of his 

Raytheon constituents, I also want to thank Congressman Harper. 

As president of Raytheon Company’s Space and Airborne Systems business, I am honored to be here representing our company 

and discussing our contributions to America’s manufacturing infrastructure. Thank you for the opportunity to share the many ways 

that Raytheon, and in particular, Forest, Mississippi, Consolidated 

Manufacturing Center contribute to America’s national security, 

global competitiveness, and economic prosperity. 

While my focus will be on Raytheon’s Forest operations, I would 

be remiss if I failed to note Raytheon’s manufacturing footprint 

covers many other States and our suppliers’ operations expand that 

economic footprint even further. 

As a member of the defense and aerospace industry, Raytheon proudly competes in a market that contributed $218 billion in overall sales to the United States economy in 2012. Raytheon specializes in defense, homeland security, and related mission support 

services, providing state-of-the-art electronics, mission systems integration, and other capabilities in the areas of sensing; effects; 

command, control, communications, and intelligence; and 

cybersecurity. But more importantly, the work we do and the products we design and manufacture in places like Forest save lives 

and make the world a safer place. 

Raytheon’s ability to succeed in the global marketplace requires 

skilled, well-trained, and dedicated workforce; a stable fiscal, tax, 

and regulatory environment; and the ability to export our products 

to United States allies. In fact, as our domestic budget faces increased pressure, defense exports can help decrease costs and risks 

associated with technological advances for the U.S. military, support America’s industrial base, and strengthen our balance of 

trade. 

Our operation in Forest, Mississippi, contributes significantly to 

Raytheon’s capability and reputation for manufacturing excellence. 

Our legacy in Mississippi stretches back to 1983 when we opened 

our doors in support of a single military radar program. Over the 

years, we have increased the scope and scale of our operations in 

Forest, expanded our facility, added jobs, and broadened the array 

of products built. 

Today, we have over 700 employees in Forest. They are some of 

the most skilled laborers in the country. They work in a 340,000 

square-foot state-of-the-art manufacturing space building sophistiVerDate Nov 24 2008 14:28 Jun 24, 2014 Jkt 037690 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-5 CHRIS
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cated airborne, ground-based radars, electronic warfare technology, 

and advanced communication systems for use by U.S. and allied 

war fighters. 

Thanks to Forest, we have delivered more than 500 active electronically scanned arrays, or AESA radars, an industry first that 

we will soon celebrate with our Mississippi employees. 

The AESA radar is used on our military fighter planes to greatly 

increase their ability to detect and track airborne targets. Its capabilities also allow our pilots to identify multiple targets at once. 

This technology provides game-changing performance and tactical 

advantages, enabling war fighters to accomplish their mission and 

return home safely to their families. This radar and the lives it 

protects are a source of tremendous pride for the Raytheon workers 

who build it. Our radars have logged more than 400,000 cumulative operational flight hours on Air Force, Navy, and Marine tactical aircraft. 

Between 2004 and 2011, Raytheon ramped up its AESA production rates tenfold with a 100 percent on-time delivery rate in 2012. 

This efficiency supports our customers’ growing needs and demonstrates our ability to further increase production and jobs as we 

win additional contracts. In particular, foreign sales of U.S. military aircraft are an important growth area for Raytheon, the industry, and our country. As of last year, three key military aircraft 

production lines, the C–17, the F–15, and the F–16 were being extended largely by international export demand. These foreign sales 

drive increased demand for radars built in Mississippi. 

Whether driven by domestic or international sales, increased demand for Raytheon’s products significantly enhances the economies 

of the United States and Mississippi. In 2012 Raytheon operations 

contributed over $38 million in payroll to employees in the State. 

In most cases, our employees earned almost double the average annual Mississippi salary. 

Mr. TERRY. Excuse me. Could you get to the conclusion? 

Mr. YUSE. Beyond our employees, we estimate that Raytheon’s 

overall economic activities generated more than 400 additional 

jobs. Much of our success in Forest also is tied to the quality of our 

local and regional suppliers, who range in size from small business 

to Fortune 100 corporations. In 2012, for example, we spent nearly 

$6 million with 60 Mississippi suppliers. 

Finally, I want to point out the strong partnership that Raytheon 

has established with the federal, state, and local officials who count 

on our Forest employees and the facility as their constituents. This 

partnership is vital to our manufacturing process. 

Raytheon and the men and women of Forest, Mississippi, 

produce complex and cutting-edge technologies that protect our Nation, help our war fighters and their vital missions, and contribute 

to our Nation’s economic prosperity. We are proud of these employees and their many accomplishments. 

[The prepared statement of Mr. Yuse follows:] 

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Mr. TERRY. Thank you, Mr. Yuse. Appreciate your testimony. 

There are what we call the shot clocks, little monitors there on 

your desk. And it will turn to yellow at 1 minute left, so if you hit 

1 minute and have a couple pages left, maybe skip a couple of 

them. We are really anxious to get to questions. 

So at this time, Mr. Steiner, appreciate you. You are from Corning, representing Corning. 

STATEMENT OF JAMES R. STEINER 

Mr. STEINER. Chairman Terry and Ranking Member 

Schakowsky, thank you for the opportunity to be here today. My 

name is Jim Steiner. I am responsible for the Specialty Materials 

business at Corning. It includes our Corning Gorilla Glass business 

and our factory in Harrodsburg, Kentucky. But I would also like 

to thank you because we do have a small aerospace and defense 

business and you set me beside one of our customers today. 

But I would also like to thank Congressman Guthrie, who represents our facility in Harrodsburg. He has personally witnessed 

the success of Gorilla Glass manufacturing, and we appreciate his 

interest and support. 

Many of the members I notice are actively touching our product 

as we speak, so I thank you for also being a user of Gorilla Glass. 

We have been in business for over 160 years. Corning was founded by the great-great-grandfather of Amo Houghton, who many of 

you served with here in Congress, and Amo sends his best. 

Innovation and invention are keys to Corning’s success over its 

long history. It includes the invention of many life-changing things 

like the catalytic converter, optical fiber, and glass for liquid crystal displays. 

Today, I want to tell you the story of Gorilla Glass, an American 

success story. It is a good enough story that I shouldn’t be able to 

screw it up. We invented in 1962 when Amo Houghton was our 

president a material we called Chemcor. It was a chemically 

strengthened glass we actually saw as a way to compete with the 

steel industry. It was a cool invention. The issue was we never 

really found any mass markets to commercialize it in, so it never 

became a success. In 2006 this small group in my division worked 

on taking the Chemcor base and inventing a new glass that could 

be used on mobile devices. In late 2006 we did a small development 

run, and once again, we thought we had a really cool invention but 

we needed a way to commercialize it. 

Then, along came Steve Jobs and Apple. In early 2007, as Apple 

was approaching the launch of the iPhone, they had originally designed the phone with a plastic cover. And as Steve Jobs did the 

first exhibition of the iPhone, as he walked off the stage, he looked 

down at it and the plastic was scratched. So he told his team that 

he wanted to use glass and he took an active role in finding a solution. He called our chairman Wendell Weeks and he challenged us 

to provide a glass that he could use for the launch of the iPhone. 

Luckily, we had done this small development run and we had the 

invention. The challenge was we had to take that invention and 

commercialize it. And the iPhone was due to launch in 3 months. 

So we went to our factory in Harrodsburg, Kentucky, and gave 

them 3 months to take a glass composition and develop the manuVerDate Nov 24 2008 14:28 Jun 24, 2014 Jkt 037690 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-5 CHRIS
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facturing process and make the initial shipments in May of 2007. 

Now, typically, for us a glass development will take years, even 

decades to go from invention to commercialization but we had 3 

months this time. We challenged the Harrodsburg plant and they 

pulled it off. Now, this only happened because of a close working 

relationship with Apple and the opportunity to meet that timeline 

and launch on their product. 

We got a very quick start in 2007. Our first year sales were 19 

million, which sales for a new product in the first year of 19 million 

are quite significant. But we have grown significantly. We are now 

on over a billion devices out in the field. We have 33 different customers. And in 2012, I am happy to say, we broke $1 billion in revenue. See what I mean? It is a tough story to screw up. 

So our employment in Harrodsburg now is well over 400 jobs. We 

are running the factory full. Back in 2008 we got as low as about 

1⁄5 of our capacity, but the success of our work in Harrodsburg to 

bring up the manufacturing has allowed us to continue to invest 

in Harrodsburg. Last year, we started up two new melting tanks 

to make additional glass and we have invested over $240 million 

in the Harrodsburg facility for new production capacity. 

That success of Gorilla Glass has also allowed us to spend more 

in research and development in our Corning, New York, facilities. 

We have recently expanded our capabilities in Corning to do additional specialty flat glasses and have spent about $200 million in 

capital in that facility, too. And we believe over 1,000 people in 

Corning are now supported by the success of the Gorilla business. 

So our next product we are working on and we have invested in 

Harrodsburg is Willow Glass. This is Willow Glass. It is 100 micron 

thick glass, about the thickness of your human hair. It is a cool invention and now we are looking for where to commercialize that. 

So I thank you for your support. 

[The prepared statement of Mr. Steiner follows:] 

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Mr. TERRY. Thank you very much. 

Mr. Holler from 3M, you are recognized for 5 minutes. 

STATEMENT OF BOB HOLLER 

Mr. HOLLER. Thank you. Good morning, Chairman Terry, Ranking Member Schakowsky, and members of the committee. My name 

is Bob Holler. I am the director of the Respiratory Protection Business of the Personal Safety Division for the 3M Company. The 3M 

Valley plant in Nebraska—— 

Mr. TERRY. Is your mic on or—— 

Mr. HOLLER. The 3M Valley plant in Nebraska is the primary 

manufacturing site for a complete range of 3M respiratory protective equipment, including disposable and reusable respirator protection and surgical masks, along with medical electrodes, patient 

warming plates, sorbent materials, hearing and eye protection. 

As a manufacturer of personal protective equipment, one of our 

most pressing issues facing our Valley facility is making sure that 

America’s workers are not only able to address the day-to-day safety needs, but also that our Nation is prepared to respond to threats 

and hazards that pose a risk to our country. This is an issue that 

the 3M Valley alone cannot address. It needs to be a shared responsibility with many stakeholders, both public and private, and 

today, I would like to focus on our roles. 

The role of government is to own the leadership position in prevention, protection, mitigation, response, and recovery of national 

threats and hazards. They need to ensure that the proper protective equipment is integrated into the capabilities of protection response and recovery. Although the Nation has made great strides 

in preparing against threats and hazards, we feel the role of personal protective equipment is not being fully leveraged in national 

preparedness. 

For example, the Pandemic and All-Hazards Preparedness Act is 

intended for us to improve our Nation’s public health and medical 

preparedness and response capabilities for all emergencies. And the 

strategic intent is to advance countermeasures to diagnose, mitigate, prevent, or treat harm from any biological agent, toxin, chemical, radiological, or nuclear agent or agents whether naturally occurring, unintentional, or deliberate. 

However, the definition of countermeasures is so narrow that it 

only recognizes FDA-cleared respiratory protection devices. FDAcleared respirators only represent a small segment of the devices 

and the capacity to produce these devices is very limited. Plus, they 

do not provide protection against chemical, radiological, or nuclear 

agents. 

3M feels the definition for countermeasures should be expanded 

to include the National Institute for Occupational Safety and 

Health-approved devices. And as such, the strategic direction would 

match its intent while also expanding the scope of products that 

would be available during an event. Additionally, if the definition 

is expanded, it could open up new opportunities and benefits to 

manufacturers to engage in developing technologies that may increase protection from many types of hazards. 

Another key area that needs addressing centers on preparing 

and responding to an event. The time to secure personal protective 

31 

equipment for our responders and the general population is before, 

not after, an event. 3M has played a major role in providing PPE 

during many major events over the last 12 years from 9/11 to 

H1N1. And producing and delivering products during an event is 

extremely challenging from all aspects to the manufacturing process, to raw material availability, to capacity, and to who gets the 

products and when. 

We have two recommendations. First, the government should 

work more closely with manufacturers on plans on how to ramp up 

production and delivery when an event occurs. The second, nations 

should secure and maintain a stockpile of product with necessary 

types of PPE that will be available to both responders and the civilian population. For example, prior to H1N1, the national stockpile 

of N–95 respirators was over 103 million, and the majority of these 

were shipped during that event. Today’s N–95 stockpile by our reports sits only at 17 million. 

As one of the world’s largest designers and producers of PPE, 3M 

would like to work closely with all stakeholders in the mission to 

protect our Nation in preparing, responding to emergency events. 

We thank the chairman and ranking member and the committee 

for the opportunity today to share these thoughts, and we look forward to continuing to dialogue with all on this important topic. 

Thank you. 

[The prepared statement of Mr. Holler follows:] 

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Mr. TERRY. Thank you, Mr. Holler. 

And now Mr. Meyers from Oil City Iron Works. 

STATEMENT OF ERIC R. MEYERS 

Mr. MEYERS. Good morning. Chairman Terry, Ranking Member 

Schakowsky, and members of the subcommittee, and from my district, Congressman Barton, I want to thank you for the opportunity 

to testify before you today to discuss the opportunities and challenges facing our company in the foundry industry, as well as ways 

to make American metal casters and manufacturing more competitive in the global marketplace. 

My name is Eric Meyers, President of Oil City Iron Works. I am 

a third generation Texas metal castor. We employ close to 250 folks 

there at our foundry. Our foundry has been in existence for 125 

years with our family operating it close to 50 years. We manufacture thousands of different types of iron castings ranging in weight 

from 2 to 8,500 pounds for the energy, mining, agriculture, waterworks, and transportation sectors. 

Metal castings are the foundation for all other manufacturing, 

and metal casters are a vital building block for every nation’s economic wealth. Every sector from agriculture, construction, 

healthcare, mining, to automotive, aerospace, and defense relies on 

castings. In fact, 90 percent of all manufactured goods and capital 

equipment incorporate engineered castings into their makeup. 

Oil City Iron Works supplies valves and pumps for power generation, gas turbine and compression parts, and general oilfield equipment parts to well-known companies such as Caterpillar, Halliburton, and FMC, as well as many other smaller ones. 

During the State of the Union address, President Obama called 

for a variety of energy initiatives, including expedited oil and gas 

permitting and increased funding for infrastructure. As part of his 

energy agenda, the President should move to approve the building 

of the Keystone pipeline to bring oil from Canada to the Gulf 

Coast. 

The growth in energy sector has provided significantly more 

work for Oil City and our industry, which has led to more jobs and 

lower domestic natural gas prices over the past few years. Establishing new stringent regulations on our energy sector will not only 

hinder foundries and domestic manufacturers but the long-term 

health of the economy and the prosperity of American workers. 

Today, the U.S. metal casting industry is comprised of 2,000 facilities with 80 percent employing 100 workers or less. Our sector 

is truly one of small business. Unfortunately, over 300 foundries 

have shut their doors over the past 5 years. This reduction can be 

directly attributed to the recession, foreign competition, and onslaught of regulations. Our government has created barriers to 

competitiveness and making it harder than ever for the manufacturer in the United States. 

There are a number of roadblocks that stand in the way of competitiveness and I am going to focus on just three key issues in my 

verbal comments today—number one, federal regulations. Unfortunately, over the past several years, we have not seen sensible and 

cost-beneficial regulation being proposed by EPA, OSHA, Department of Labor, and NLRB. 

47 

I want to highlight a proposed rule under development by OSHA 

of serious concern to the foundry industry. The Agency has submitted its proposed rule for crystalline silica sand to OMB for review that is expected to mandate extensive and costly engineering 

controls. We believe the best way to protect our workers is stronger 

enforcement of the current regulations. 

A recent economic study reveals that the annual compliance cost of such a rule will likely reach $5.5 billion for all industry sectors, 

including manufacturing, construction, and shipbuilding. The 

foundry industry is estimated to face compliance cost of roughly $2 

billion per year, and that is for engineering and ancillary costs 

alone. OSHA’s potential new regulation would amount to about a 

6 percent factor of U.S. foundry revenues for 2007, making our sector one of the most heavily impacted among all those affected. This 

regulatory cost burden would be very difficult for our industry to 

bear. 

Number two, the shortage of skilled workers. Adding to the challenges of regulatory overreach is the fact that approximately hundreds of thousands of manufacturing jobs remain unfilled due to 

the lack of qualified applicants. Despite an unemployment rate 

hovering near 8 percent, manufacturers are still struggling to fill 

jobs. Foundries rely on a variety of skilled workers to maintain and 

grow their companies, including machinists, electricians, welders, 

and pattern makers. Many of these positions have taken a long 

time, as long as 7 months to years to fill. 

For example, our Class A electrician position has been open for 

nearly 2 years with no qualified applicants. We have approached 

an area technical school to send graduating welders to us for possible employment. However, all of those graduates are already 

promised positions with other Texas-based companies. Currently, 

we are working with our local college to implement a certificate 

program for welding. 

Number three, tax policy. We need fair and competitive tax policies. Depreciation is an area of the tax law where uncertainty has 

significant impact on our capital expenditures and decisions. The 

difference is 50 percent bonus depreciation, 100 percent depreciation, and no bonus depreciation is substantial. The change in the 

tax law determines whether we purchased an asset this year or 

perhaps not at all or whether we hire additional workers. 

In conclusion, Oil City understands and supports the need for 

reasonable regulations to protect the environment and workers’ 

safety and health, but we also recognize that our industry and the 

entire manufacturing sector are facing unprecedented pressures in 

their efforts to remain competitive in the global economy. To continue manufacturing momentum and promote hiring, the United 

States needs not just improved economic conditions but also government policies that are more attuned to the realities of global 

competition. In this current economy it is clear that cost of ineffective regulations and increases in taxes dampen the economic 

growth and will continue to hold down job creation. For some 

foundries, it will be the final straw that destroys their whole business. 

Thank you again for the opportunity to appear before you today, 

and I would be happy to respond to any questions. 

48 

[The prepared statement of Mr. Meyers follows:] 


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Mr. TERRY. Thank you, Mr. Meyers. 

Mr. Smatsky from Zephyrhills, Florida. 

STATEMENT OF JEFF SMATSKY 

Mr. SMATSKY. Thank you, Chairman Terry, Ranking Member 

Schakowsky. It is a pleasure to be here today. I assure you, I will 

honor my time commitments. 

I would like to thank Congressman Bilirakis for his leadership 

in our district and to congratulate him on joining this prestigious 

committee. 

I would also like to point out that there is an additional Nestle ́

Waters facility connected with spring sources located in Congresswoman Blackburn’s district in Hohenwald, Tennessee. I would like 

to thank the Congresswoman for her support and friendship. 

Zephyrhills brand spring water was established in 1964, is one 

of five regional spring brands for Nestle ́ Waters North America. It 

is the primary brand produced and manufactured at our factory in 

Zephyrhills, Florida. 

The Zephyrhills spring water comes from natural springs located 

in the Zephyrhills area, as well as other carefully selected spring 

sources across Florida. Today, 70 percent of what Americans drink 

either comes in a can, in a bottle, or another container. We take 

pride in producing healthful beverage bottles in Zephyrhills, Florida. We produce the Zephyrhills natural spring water, Nestle ́ Pure 

Life purified water, along with Deer Park spring water, which is 

also bottled out of our sister factory in Madison County, Florida. 

At Zephyrhills, we are proud to not only produce great quality 

bottled water, but as well as have great quality jobs. A couple statistics about our factory: our plant was built in 1990. We employ 

258 full-time employees. We also additionally bring on 30 seasonal 

employees to cover peak season demands. The plant produces 

Zephyrhills and Nestle ́ Pure Life in single-serve containers, as well 

as the 5-gallon water cooler containers, which are distributed to 

homes and offices across Florida. Our spring water is piped to the 

factory and in some cases tankard, at which point it goes through 

a state-of-the-art multifaceted, multistage quality process and ends 

with the hygienically sealed bottle that ensures food safety and 

quality in the marketplace. 

Preforms, which come from our sister factory in Madison County, 

are made into bottles in our blow molders. They are then filled, 

capped, labeled, packed, wrapped, palletized, wrapped again, prepared for shipment, all within the four walls of our facility. Across 

Florida, Nestle ́ Waters employees 1,000 people with an annual payroll of $42 million. We spend an additional $80 million with Florida-based business partners, compete in engagement activities as 

well as distribution networks. Incidentally, Madison County plant 

was the first lead-certified factory in the State of Florida. 

Our company is committed to both understanding water resources and share that understanding with the community. Our 

showcase partnership in Zephyrhills is with Crystal Springs Preserve. This 525-acre nonprofit sanctuary has been restored to its 

natural spring habitat and houses an educational facility, which is 

visited by more than 35,000 students annually. Last month, we 

just launched a traveling science center with the Crystal Springs 

67 

Preserve. It is called Water Ventures. It is really cool. It is a 53- 

foot semi trailer that has been customized to provide a museumquality-like platform for water education and encouraging positive 

stewardship to Florida’s diverse watersheds. 

Bottled water has the lightest environmental footprint of any 

packaged beverage. We are intensely focused on lightening that 

footprint even further. We want and need our bottles back so that 

we can achieve cradle-to-cradle recycling and reuse. And we made 

a commitment to be the bottled water industry leader at 60 percent 

recycling rate for all plastic bottles nationwide. 

Mr. Chairman, you may not always hear from the industry representatives who are generally pleased with how they are regulated 

by the Federal Government, but bottled water is one such industry. 

Under the jurisdiction of the FDA, bottled water is one of the most 

regulated food products in the country. For example, every day, 

every line across 29 facilities throughout the United States, our 

product is tested, quality inspected at least 200 times to ensure 

that we meet and exceed FDA requirements and our own internal 

quality standards. The FDA regulations are even stronger since the 

enactment of the Food Safety Modernization Act, and we feel that 

we and the rest of the industry are regulated appropriately and in 

accordance with all laws and the high standards of our consumers. 

One area where we are not currently regulated at a federal level 

where we may be able to find some bipartisan compromise is with 

the issue of labeling and consumer’s right to know. We believe that 

Americans have the right to know where their water is from and 

what is in it. In recent years, there has been an effort by some in 

Congress to introduce one federal standard for bottled water labeling and transparency and we have in our industry association 

looked forward to working with this committee on ideas for such 

a legislative approach. 

In closing, I would like to thank you again, Chairman Terry, 

Ranking Member Schakowsky, as well as Congressman Bilirakis 

and the committee members for your attention today. We applaud 

your leadership in assessing the current climate for manufacturing 

in America today and finding ways to improve it. Thank you. 

[The prepared statement of Mr. Smatsky follows:] 

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Mr. TERRY. Thank you. 

And Mr. Block from Block Steel, who is Jan’s witness today. 

Thank you for coming from Chicago. 

STATEMENT OF JOSEPH K. BLOCK 

Mr. BLOCK. Thank you, Chairman Terry, Ranking Member 

Schakowsky, distinguished members of the subcommittee. I really 

appreciate being here today because I think my company has a fantastic story to tell. 

We have been in business since 1948. That is 65 years. We are 

in our 65th year. And the story of our company, I believe, especially post-World War II, tracks a lot of the issues that are happening with American manufacturing. I would like to talk a little 

bit about my company, and while I do, I hope this illuminates some 

of the issues that are not only specific to Block Steel Corporation 

but in general to those small- to medium-sized U.S. manufacturers. 

I think with the knowledge of these issues and an understanding 

of their ramifications, public policy can be fashioned which more effectively supports the growth and sustainability of U.S. manufacturing, especially for the smaller and medium-sized businesses 

such as Block Steel Corporation. 

Block Steel Corp. represents a great American success story, and 

for the past 65 years, we have adapted to the changes which have 

occurred in the manufacturing base in the United States. Located 

in Congressman Schakowsky’s district—we were actually previously on the west side of Chicago—we began by supplying a lot 

of the companies that today don’t even exist, such as Zenith Electric, who made television sets, Sunbeam Appliance, and a company 

called the Hurley Electric Company, which was—their product was 

Thor washing machines, and they were actually the first company 

to produce an electric washer that we know today. Although there 

is a little bit of debate about who was the first. 

Those companies really don’t exist anymore. In fact, at one time 

in the ’70s, Zenith Electric was our largest customer. This is for 

those of us that don’t remember of a certain age, television sets 

used to be big steel boxes and used a lot of material. And how we 

have adapted to those changes and that the change in our customer 

base I think represents some of the changes that have occurred to 

American manufacturing over the years. Certainly, televisions 

today are not produced with a quantity of steel, and to the best of 

my knowledge, they are not produced even in the United States 

anymore. 

We made a decision in the ’60s and early ’70s based upon the request of one of our customers to get into a product called aluminized steel. Aluminized steel is aluminum-coated sheet steel. I 

have a piece of it here and I can show it to you. And it is used primarily in HVAC, automotive applications. It is used in any application where heat and corrosion resistance is needed. We have become the premier supplier of aluminized steel in the United States 

and really in North America, and we are really known worldwide 

for that product. 

What I think is interesting is that we are in the middle of a supply chain, so we buy from the mills which produce steel and then 

we sell to manufacturers which use that steel to make a product, 

76 

whether it is an automobile or a fireplace or an appliance. So we 

see both sides of some of the arguments which have to do with 

trade. 

I would like to really quickly quote—this is from Thomas J. Gibson, and he is the president of the American Iron and Steel Institute. Now, I don’t agree entirely with what he says but I think it 

points out some of the issues that we all have to deal with because 

there is a real dichotomy in dealing with what side of the equation 

you are on with trade in manufacturing. He was responding to 

President Obama’s speech the other night and he said, ‘‘We need 

to recognize the massive trade imbalance we have with China and 

the fact that China operates with a built-in competitive advantage 

by undervaluing its currency. China has at least 200 million tons 

of excess production capacity in steel that is almost double the size 

of our entire domestic industry. The President needs to take action 

to address the import surge we are facing in steel, including declaring China a currency manipulator and working with Congress to 

pass a tougher trade enforcement legislation like the ENFORCE 

Act.’’ Really quick, there is two sides to that story. Manufacturers 

want cheap steel wherever they can get it but the steel mills want 

protection so that they obviously can protect their market. 

Thank you. 

[The prepared statement of Mr. Block follows:] 

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Mr. TERRY. Perfect timing. 

Mr. BLOCK. All right. 

Mr. TERRY. Thank you very much. And by the way, Mr. Block 

and others, we are actually contemplating a steel-only hearing—— 

Mr. BLOCK. Great. 

Mr. TERRY [continuing]. So we could work through those issues. 

Mr. Arnold, appreciate you here from Fram Renewable Fuels. 

STATEMENT OF HAROLD ARNOLD 

Mr. ARNOLD. Glad to be here. Thank you very much for inviting 

me. 

Fram is a small company in South Georgia. We make wood pellets. Wood pellets are wood fiber that has been dried and compressed into a pellet form, and the purpose of doing this is to enhance transportation and logistics of it and increasing the energy 

density when it is burned. The uses of wood pellets are for the residential stove and heating market. Mostly, that market is in the 

upper Midwest and the Northeast in the United States. Combined 

heat and power plants in Europe use wood pellets extensively 

where they generate heat for communities or large office complexes 

and a little bit of electricity and provide steam for industrial offtakers and then large-scale power generation in Europe, wood pellets can be used as a renewable fuel component to displace coal. 

And because of treaty obligations, they have to have an increasing 

amount of renewable fuel in their fuel mix every year. 

Because of the Kyoto Treaty and other obligations that they have 

such as the 20/20/20 target—20 percent reduction in greenhouse 

gases, they are looking for 20 percent of the mix from renewable 

fuels, and 20 percent from improved energy efficiency—wood pellets are a low-cost form in this. And what they have found there 

in markets such as the U.K. is that you can base load your power 

grid with wood pellets whereas intermittent sources—very good 

sources with cheap fuel like solar and wind, you can’t base load. 

We manufacture in America. We have Appling County pellets in 

Baxley, Georgia. We employ 40 people there, original investment 

about $25 million. That mill originally had a design capacity of 

130,000 tons. We have recently expanded that by another 100,000 

tons up to 230. February of last year we constructed a joint venture 

operation in Lumber City, Georgia, where we can produce another 

120 or 125,000 tons, a $10 million investment, and created 14 or 

15 jobs there. 

We have just broken ground on a new plant to be constructed in 

Hazlehurst, Georgia, in two phases. The first phase will employee 

62 people, produce 300,000 tons per year, and then it will be expanded later, another $30 million investment with two additional 

lines and increase employment by about another 20 people in that. 

We do aggregate pellets from other very small producers in Georgia, and we expect to export over 450,000 tons this year and we expect to double that next year. 

The foreign market is the demand that Fram feeds. That demand—the U.S. exported about a million-and-a-half tons in 2012. 

We expect that to grow to over 12 million tons in the next 10 years. 

So it is an area with tremendous growth in it. 

92 

We have been helped by various government programs that are 

in place. The USDA rural loan guarantees were very helpful to us 

in establishing our plants. We have availed those. The Investment 

and Production Tax Credits, of course, are very helpful to us. Port 

infrastructure in the U.S. is somewhat lacking, and the work that 

the Corps of Engineers is doing to improve that with dredging is 

very important to us and, you know, in budget constraints, hopefully, they get enough to keep the channels open so we keep the 

ships going in and out. 

Thank you very much for inviting me up to tell our little story 

of our little company. We expect the global demand for the products that we are making to increase. The U.S. can be at the forefront in this and develop many things as we go along. And we are 

just on the edge of raw materials coming from bio sources that is 

going to really help in a lot of ways. Companies like Bridgestone 

are making tires now entirely from plant matter, and we will see 

a lot of things like this develop out of our industry as things move 

along. So this is a great country to be in and a great town to be 

end in the forest industry. 

[The prepared statement of Mr. Arnold follows:] 

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Mr. TERRY. Well, thank you. I have asked for a wood pellet grill, 

so I am with you. 

Mr. Saxton, I appreciate you being here today, JELD-WEN. 

STATEMENT OF RON SAXTON 

Mr. SAXTON. Thank you, Mr. Chairman, Ranking Member 

Schakowsky, members of the subcommittee, and especially Congressman Welch for the opportunity to testify today. 

My name is Ron Saxton and I am an executive vice president of 

JELD-WEN. And I also serve on the board of the Window and Door 

Manufacturers Association and the Executive Committee of the National Association of Manufacturers. 

JELD-WEN began in 1960 in Klamath Falls, Oregon, and is now 

one of the world’s leading manufacturers of windows and doors. 

JELD-WEN employees 20,000 people across more than 100 locations in the Americas, Europe, Asia, and Australia. In the United 

States, JELD-WEN manufacturers in 17 states and employs approximately 9,000 people. Vermont is an example of our commitment to U.S. market. As Congressman Welch knows, we employ 

over 800 people there in two of our facilities in Ludlow and North 

Springfield. 

Well before the term sustainability was popular, JELD-WEN 

adopted an ethos that the efficient use of our natural resources was 

a critical aspect of manufacturing. One example of our sustainability ethic at work is a facility where we utilize wood waste from 

our window framing manufacturing plant to create door skin products in a neighboring facility. 

While JELD-WEN sells products into both commercial and home 

remodeling markets, our strength as a company and job creator is 

intimately tied to the new housing construction market. With the 

steep decline in housing starts, the last 6 years have been very 

challenging for everyone in the housing industry. The slow, steady 

recovery in housing is having a positive impact on our bottom line, 

and we are hiring again, almost 1,000 people in the last year. 

However, as you are well aware, what you do in Washington can 

have a positive or disruptive impact on our industry. Consistency 

and predictability with regard to housing, finance, and regulatory 

policy are necessary, and I would like to highlight some energy efficiency policies that have significant impact on JELD-WEN and our 

industry. 

In remodeling, doors and windows are very important products. 

They are important to manufacturers like JELD-WEN, but they 

are also an important part of the U.S. energy debate. To illustrate 

this, consider that much of the existing housing stock in the United 

States uses single-pane windows manufactured prior to the late 

1970s. If America focused on replacing the almost 1 billion singlepane windows in older homes with new energy efficient windows, 

we could avoid the need for literally dozens of new power plants. 

Clearly, JELD-WEN would benefit, but a broad commitment to improving the energy efficiency of existing housing would be a boon 

to American employers and consumers well beyond window and 

door companies. 

The not-too-distant past shows how government action can move 

markets. In 2009 at the height of the housing collapse, Congress 

103 

passed a significant 2-year tax incentive for energy-efficient residential products, including windows. The enhanced 25-C tax incentive attracted consumers to energy-efficient products and saved 

jobs across the sector from manufacturers to distributors to installers. In addition to providing a bridge to better times, it locked in 

energy savings for years to come. 

Recent bipartisan efforts to utilize incentives beyond the tax code 

have been led by members of this committee, most notably Representatives Welch and McKinley. We hope you will continue with 

those efforts in the 113th Congress. A good energy policy is also a 

good job strategy. However, misaligned energy policy, even if wellintentioned, can hamstring growth. 

JELD-WEN has been an ENERGY STAR partner since 1998 and 

past Partner of the Year in both the United States and the Canadian ENERGY STAR programs. As such, we are very concerned 

that recently proposed changes to that program relative to our 

products are a mistake for consumers and homeowners, as well as 

manufacturers. ENERGY STAR for windows has been a phenomenally successful program. For decades, it has pointed the consumer 

toward the best and most cost-effective energy-saving products. 

Through active collaboration with industry, the program has offered a voluntary and informative system that has promoted energy efficiency, consumer economic benefit, and encouraged manufacturing in the United States. 

Today, the EPA is considering changing the criteria for ENERGY 

STAR-rated windows to a point where there is no realistic cost-effectiveness for consumers, and we fear the long-respected program 

will become irrelevant. We are working diligently with EPA to fix 

the issue but a standard that does not recognize a balance of costeffectiveness with energy efficiency threatens to dramatically and 

negatively impact an extraordinarily popular and effective program. 

In closing, I want to reiterate just two points. First, a stable, 

strong housing construction market is important to all of us, from 

my son and daughter-in-law looking to buy their first home to companies like JELD-WEN that supply materials for home construction. Second, there is an important and constructive role that the 

government can play in energy efficiency, but if programs like 

EPA’s ENERGY STAR program are pushed beyond the standards 

that consumers recognize, those programs marginalize benefits to 

everyone. 

I thank the Committee for your time and attention. 

[The prepared statement of Mr. Saxton follows:] 

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Mr. TERRY. Well, thank you very much. Appreciate all of your 

testimony. It has been very insightful. 

And I will recognize myself for the first question because I get 

to. 

But what I am curious—and several of you have put it into your 

testimony, but I want to highlight that, so what I want each to 

do—eight of us in 4 1⁄2 minutes—to be able to just say one, two, 

maybe three things that if someone came to you and said we need 

you to expand your production, give me one of the things that you 

would worry that would be a barrier or something that we can do 

that would really make it easier for that to happen. 

Mr. Yuse, we will start with you since you just sat there the 

longest. 

Mr. YUSE. Thank you. I appreciate that. 

The top of my list would be reforms and the tax codes and regulations. The best way for us to expand our manufacturing and 

product base is to become more affordable. Over the years, we have 

had numerous affordability programs. We have been able to drop 

the product prices. We have been able to drop or hold steady our 

labor rates. We need to go look at the other aspects of cost which 

affect our competitiveness in the marketplace. 

Mr. STEINER. So I would just quickly answer that to focus on 

U.S. tax rates. When we expanded Gorilla Glass, we had the choice 

to expand in the U.S., Korea, Taiwan, or Japan, and higher U.S. 

tax rates make it more difficult to justify an expansion. 

Mr. TERRY. Mr. Holler? 

Mr. HOLLER. Illuminating my comments to the area of preparedness for an epidemic or a safety hazard, I think it would be close 

coordination with the government on what areas and what types 

of products we would need to expand our capacity so that way we 

are working in concert to make sure we are addressing the right 

products for the events that we need to prepare for in the future. 

Mr. TERRY. Good point. 

Mr. Meyers? 

Mr. MEYERS. Thank you. For us in our industry, obviously, uncertainty with regulations is a huge issue with us and it plays a 

major role in what we do as far as expansions and what we look 

at. I echo the gentleman to my right. And tax codes are very important to us, as well for all small manufacturers because that uncertainty as well will either ultimately decide on whether we expand 

or whether we do not. 

Mr. SMATSKY. I don’t think we have a barrier that exists with 

our company today. I think the challenge that we faced is getting 

our consumers and folks out in the communities to switch to that 

healthier lifestyle and consumer more water, quite honestly. 

Mr. TERRY. OK. 

Mr. Block? 

Mr. BLOCK. Probably the barriers that I would see to us would 

be certainly taxes are always an issue, not necessarily the particular level of taxes for myself, but to see a fair and simplified and 

more equitable tax code across the Nation so that there is more of 

a level playing field, I think that would be fairly important. 

I also would like to see harmonization of, you know, environmental or regulatory issues so that there isn’t a competition necVerDate Nov 24 2008 14:28 Jun 24, 2014 Jkt 037690 PO 00000 Frm 00116 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-5 CHRIS
111 

essarily between States to who can be the least regulatory or even 

if possible or to the amount feasible worldwide to a degree so that 

there is a harmonization of regulatory issues that gives pretty 

much a level playing field. 

Mr. TERRY. Thank you. 

Mr. Arnold? 

Mr. ARNOLD. I would say number one is access to capital. At 21 

years old I could walk in a bank—I inherited that I guess from my 

father and grandfather—but it was much easier to borrow capital 

than it is today. It is very, very difficult and time-consuming and 

you need a raft of legal counsel, accounting, and all to make those 

things happen. 

The second thing would be in an export business access to a sufficient port infrastructure and keeping the channels and waterways 

open. Those are things we can’t do. We can build a manufacturing 

plant, but we can’t do those things. 

Mr. TERRY. Interesting. 

Mr. Saxton? 

Mr. SAXTON. If the market gives us the opportunity to expand, 

there are no barriers that are going to stop us. The one concern 

that we do have, which one of the previous witnesses mentioned, 

is the labor force. As I said, we hired 1,000 new workers in the last 

year and we are continuing to expand, and the reality is that with 

high unemployment rates we have been very surprised how hard 

it is to hire qualified workers in many places. 

Mr. TERRY. That is an interesting mention. I have actually heard 

that from other manufacturers in Omaha, one that had five welding positions open for months and they couldn’t get them filled. So 

I appreciate that. 

The ranking member is now recognized for 5 minutes. 

Ms. SCHAKOWSKY. Let me just follow up on that. How many of 

you have found it hard to fill slots with qualified workers? Can you 

just raise your hand? We have an issue here that I think our committee ought to definitely explore—— 

Mr. TERRY. That is seven of the eight raised their hands. 

Ms. SCHAKOWSKY. Yes. And who didn’t? Was it Mr. Holler? 

Mr. TERRY. The—— 

Ms. SCHAKOWSKY. So you are able to hire? 

Mr. HOLLER. Within my limited scope with 3M. I really can’t 

speak for the whole company. 

Ms. SCHAKOWSKY. OK. 

Mr. HOLLER. But oftentimes, we have many candidates for different roles at 3M and we are known as an innovative company 

and oftentimes can attract many good employees. 

Ms. SCHAKOWSKY. Let me also continue along the line of workers 

and talk to my friend and neighbor and business in my district, 

Mr. Block. 

We know that global competition in manufacturing is far more 

intense today than it was 3 decades ago, the result in advances of 

transportation and communication and increasingly free flow of 

international trade. And consumers have benefited from that with 

lower prices on many everyday products and multinational firms 

have benefited from various savings related to cost of labor. But 

the impact of globalization on smaller manufacturers and American 

112 

workers is far more uneven. You mentioned even playing field a 

couple of times. So in your testimony you mentioned the un-sustainability of the race by businesses to find the lowest cost wages 

or lowest taxes around the world and you called for a level playing 

field to help ensure that companies large and small compete on innovation, better products, better business practices instead of on 

cutting wages and benefits. And I wondered if you could elaborate 

on this recommendation and how you believe it might help American manufacturing workers. 

Mr. BLOCK. Sure. I think that part of it stems—— 

Ms. SCHAKOWSKY. Put your mike on. Yes. 

Mr. BLOCK. You know, part of it stems from how our company 

was founded and how we deal with our employees. And ever since 

the inception of our company, we treat our employees like family. 

We have always paid very good wages and we have always created 

a situation where they have had pretty good health benefits. And 

when we see situations where new competition comes into areas 

whether it would be from overseas or whether it would be in other 

locations, and they start up businesses with a much lower cost 

structure—perhaps they do have those wages or they don’t provide 

those health benefits—it really creates an unlevel playing field to 

a degree. And that is why, from our point of view, we don’t want 

to be a race to the bottom. We don’t want to have to survive by 

cutting benefits, by cutting wages to my employees. I know when 

I was—if I can expand on this—— 

Ms. SCHAKOWSKY. Yes, go ahead. Sure. 

Mr. BLOCK [continuing]. But I know a lot of us when I was growing up, I always thought that America, the land of opportunity, 

things would always get better, and there was always an opportunity for advancement. And it just kills me today personally when 

I see workers who have worked for 20, 30, 40 years having to deal 

with having their wages cut, having to have to deal with their benefits cut. And I am not naive. I understand that we live in a world 

in which there is competition for labor and there is competition for 

resources. But is it fair that the United States should have to follow the lead of whether it would be Asian countries or whatever 

countries it is that we have to bring our wages down to match 

that? Would it not be better if we put in place leveling the playing 

field that they eventually would have to bring their wages up or 

their healthcare costs or whatever the case may be? 

And that troubles me because these consumers who are having 

their wages cut are the very people who buy the products that I 

certainly supply to the marketplace, the cars, the appliances, or 

whatever, or houses, as the case may be. 

Ms. SCHAKOWSKY. Thank you. That was kind of Henry Ford’s 

idea that he wanted his workers to be able to buy his cars. 

I wanted to talk about the uncertainty from current fiscal policy 

because we are facing so many issues right now. And I just wondered, you know, with the idea, for example, Mr. Yuse, of sequestration, which would affect your business. It seems to me it 

would—actually, let me just ask you. Would it be correct to say 

that sequester would threaten economic harm to the aerospace industry? 

113 

Mr. YUSE. Well, first off, let me say that, you know, we share the 

concerns expressed by the Secretary of Defense and the Joint 

Chiefs regarding the impact of sequestration should it be implemented. And yes, we are concerned about the impact on the business if indiscriminate budget cuts are made. It is difficult for us 

right now to anticipate the level or the exact mechanism by which 

those cuts will be implemented, so the exact impact to any program 

or any facility is difficult for us to predict. But if you take large 

quantities of funding out of the system, it will have an impact. 

Ms. SCHAKOWSKY. So the lack of predictability itself is a problem, 

though, is it not? 

Mr. YUSE. Yes. And the uncertainty is absolutely problematic. 

Ms. SCHAKOWSKY. Can I ask just one raise of hands? Raise your 

hand if you feel that your business would be better off in 2013 if 

there were greater certainty on predictability right now in the outlook for fiscal policy. OK. Thank you. 

Mr. TERRY. All right. Thank you. 

Mr. Barton, you are recognized. 

Mr. BARTON. I love to be recognized, Mr. Chairman. Thank you. 

I want to ask—since Mr. Meyers is my friend and from my district and he is in the oil patch—what his view is on the competitiveness as related to natural gas prices in the United States. Does 

that help your industry or hurt your industry? 

Mr. MEYERS. Well, thank you, Congressman Barton. Obviously, 

the competitiveness in the industry has been a benefit to most 

metal casters because we have seen quite an increase in products 

going out to the energy sector. One of the things that we do face 

with the natural gas industry and its increasing competitiveness is 

also a competitiveness for some of our raw products, one being 

sand. That is a big issue for us in Texas in foundries and metal 

casters. But I think overall, if you look at the increase in energy, 

specifically natural gas and oil, that increase has been beneficial to 

us in manufacturing not only just for foundry corporations or companies but also across the board to people producing machines for 

other various reasons. 

Mr. BARTON. As a fuel source, though, do you use a lot of natural 

gas in your foundry? Is that a base load fuel for your foundry? 

Mr. MEYERS. We use some natural gas, but primarily, it is all 

electric-run. 

Mr. BARTON. Electric. 

Mr. MEYERS. So in a tangible way, the natural gas prices do affect our operations because of the energy costs. We have seen energy costs maintain a pretty stable level for the past year-and-ahalf, but some forecasts are now starting to trend up. So that will 

be an issue as we move through this year and the next year and 

some of our contracts are 6- to 8-month contracts begin to expire 

and we move forward on new contract negotiations. 

Mr. BARTON. Well, I will ask Mr. Steiner of Corning the same 

thing. What I am trying to get at is the fact that we have used hydraulic fracturing and horizontal drilling in our shale formations 

and drop natural gas prices so that they are the lowest in the 

world, I am told that that helps our competitiveness in our base 

manufacturing sector because of the lower natural gas prices. Have 

you found that to be the case, Mr. Steiner? 

114 

Mr. STEINER. Yes, it takes a lot of energy to melt sand at 1,200 

degrees, so our melting units are both natural gas and electric-fired 

so that the competitiveness of natural gas certainly helps us. 

Mr. BARTON. OK. I am going to switch gears a little bit with Mr. 

Arnold. My first question is just kind of serendipitous, but when 

I saw Fram, I thought oil filters. Is your company related at all to 

the Fram oil filter company? 

Mr. ARNOLD. No, sir, we are not. One of our investors is Norwegian roots, and Fram in the Norwegian language means onward 

and upward. 

Mr. BARTON. Oh. 

Mr. ARNOLD. And it is also the name of a wooden polar exploration vessel that is in a museum in Oslo that was near and dear 

to his heart. He used the word Fram in many of his companies. 

Mr. BARTON. OK. Now, my friends on the minority side, on the 

Democrat side, are always talking about green jobs and how great 

green jobs are. I am not anti-green job. I think I have finally seen 

an example of a green energy company that actually makes a little 

sense, and that is yours. 

Mr. ARNOLD. Thank you. 

Mr. BARTON. You know, from what little bit I was able to gather 

from your testimony, your company takes wood and makes it into 

pellets and sells the pellets for fuel. Is that right? 

Mr. ARNOLD. That is correct. 

Mr. BARTON. Now, what percent of your market is residential in 

the United States versus exported overseas for base load power 

plants in Europe? 

Mr. ARNOLD. One hundred percent of our market is export. Early 

on in the formation of our company, we were a participant in the 

domestic market, but logistically, we are too far removed from the 

Northeast where the concentration of residences with wood pellet 

stoves is. It is actually more economical for us to ship into Europe 

than it is to ship into Maine. 

Mr. BARTON. I want the subcommittee to understand this. We 

don’t have cap-and-trade in the United States so we are using natural gas and coal and nuclear for our base load power plants pretty 

much. But in Europe, they do. But it is more competitive to 

pelletize wood in the United States, ship it to Europe, use it as a 

base load fuel source in spite of the fact that your BTU content as 

compared to coal is not all that good, but because you are renewable, you get credit in Europe and we are burning wood pellets just 

like we used to burn wood here in the United States for transportation on the railroad. So it is kind of odd that we are doing it that 

way, but it is good for you and your company and the people in 

Georgia. Are there a lot of companies like yours that are springing 

up to do that? 

Mr. ARNOLD. There is a growing number of companies, but to 

make it clear on what is going on there is the European utilities 

are required to use a renewable fuel by government dictate. And 

it is not more economical to them than using coal. 

Mr. BARTON. I understand. 

Mr. ARNOLD. But it is—— 

Mr. BARTON. And they are mandated to do it so it is helping us. 

Mr. ARNOLD. It is helping us. 

115 

Mr. BARTON. Their mandate in Europe is creating green jobs in 

the United States. 

Mr. ARNOLD. It is creating green jobs and also there is an evolution going on in the technology. We are building our third mill 

now, and each one of them is great improvements in technology 

and efficiency, which will lower the cost of it and eventually will 

help you guys. 

Mr. BARTON. I am all for a renewable fuel mandate in Europe. 

Mr. ARNOLD. Yes. 

Mr. TERRY. All right. Mr. McNerney from California, you are now 

recognized for 5 minutes. 

Mr. MCNERNEY. Well, thank you, Mr. Chairman. 

You know, I spent about 10 years in manufacturing before coming to Congress, and so I found this to be a very interesting panel 

and I appreciate your coming out here and talking to us. 

I have a couple of observations. Mr. Smatsky, I really appreciated your comments on the cradle-to-cradle philosophy, and that 

is adopted. Could you explain what that means a little bit and 

maybe give us a hint of how you think that could be more widely 

adopted in the United States? 

Mr. SMATSKY. Yes, thank you for the question. 

The cradle-to-cradle philosophy is really about recycling and 

reuse and getting the bottle back. About 27 percent across the 

United States currently today have recycle programs, so we need 

to develop the recycling aspect to get the bottles back. Currently, 

right now, we are working on recycled PET bottles that we are introducing into the California marketplace, as well as in our Deer 

Park spring water brand. 

Mr. MCNERNEY. OK. Thank you. 

Mr. Meyers, I found your comments about the lack of appropriately trained workers to be concerning as did the ranking member and other members of this subcommittee. And it sounds like 

you have taken steps in your company to help ensure that you are 

going to have those workers that you need. Do you see that as the 

way education is going to be going in this country where the private sector has to take a more strong step, a more strong active 

role in providing for educated workers? Or do you think the public 

education system is going to be able to step up and provide that 

service? 

Mr. MEYERS. OK. Well, thank you. First of all, that is correct. I 

do believe that the private sector is pushing technical trade training, and that is very obvious when you look at our sector and any 

manufacturing job in specific. It is just not something that is 

pushed at the local level or through public schools, so we were 

proactive in that in approaching our local college there to look at 

technical trade programs. And as we talked to other foundries 

throughout the country, they are basically doing the same thing if 

not just for the lack of skilled workers or tradesmen, simply because in our State we look at the competition with other sectors. 

For us it is very difficult because a lot of our skilled workers and 

tradesmen will either go to work in an oil field or in areas such 

as higher-level manufacturing in the aerospace or defense. So it is 

very hard. And either way you look at it, it is very competitive for 

116 

the workforce, and we are not seeing the increases in the workforce 

that we need. 

Mr. MCNERNEY. Well, thank you. 

Mr. Yuse, I know Raytheon has made significant contributions 

towards STEM education—science, technology, engineering, and 

mathematics. Could you elaborate a little bit on the direction that 

Raytheon is moving and how that could be replicated by smaller 

companies? 

Mr. YUSE. Absolutely. So as an engineering company, we are 

very concerned with the decline in interest in science, technology, 

engineering, and mathematics. Our industry is very dependent on 

a robust source of engineers and scientists for us to deliver the 

kind of innovation and technology the country needs. We have created a series of programs at a variety of levels—both the local, 

state, and at the university levels—for encouraging younger folks 

to go into that field of work. 

Mr. MCNERNEY. Have you found that program to be effective? 

Mr. YUSE. Yes, we have. We have found we had over the years now spent in excess of $72 million promoting STEM in a variety 

of different venues up to and including with the Smithsonian Institute. I would encourage companies across the board, but particularly those who are very dependent on high-skilled workers, to look 

into doing similar types of activities because we do find that the 

younger folks, when they get into it, really start to become interested in it. And I think that is very important for the future of our 

country and for our national security. And I would encourage the 

Congress to look into programs that could accomplish the same 

thing. 

Mr. MCNERNEY. So somehow, Congress might be able to give incentives to smaller companies to getting engaged in the way that 

the larger companies like Raytheon—— 

Mr. YUSE. Smaller companies, school districts, teachers. There 

are a variety of different ways. I think communications to younger 

folks is a major factor. The more they know about it, I think the 

more interest that can be generated. It is for the high-tech industry 

a decline in interest in STEM is a concern for the country. 

Mr. TERRY. Thank you. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

Mr. TERRY. I recognize the vice chairman of the committee, Mr. 

Lance. 

Mr. LANCE. Thank you, Mr. Chairman. 

To the panel in general, to what extent does the fact that the 

Chinese currency does not float freely have an impact on your manufacturing? Mr. Block? 

Mr. BLOCK. I think it is certainly a big problem, and you know, 

in my industry, which is the steel industry—— 

Mr. LANCE. Yes. 

Mr. BLOCK [continuing]. The whole China situation is certainly 

very complex. But just a few statistics, raw steel production in 

China, they have excess capacity of something around 200 million 

tons of excess capacity to produce steel. And we don’t even really 

know for sure because the steel industry in China is very fragmented. But there is an estimate today that 50 to 70 percent of the 

world’s productive capacity to produce steel is in China. And what 

117 

that creates is, obviously, on a global scale huge market manipulation in theory because if the Chinese decide to go at a policy to just 

produce steel at a crazy rate and sell it on the world market, it will 

drive prices down, which may or may not be good, depending upon 

which side of the supply chain you are on, but it certainly would 

not be good for the American steel industry. 

Mr. LANCE. Thank you. Is your company—is it called Block Steel 

or is it Inland Steel? 

Mr. BLOCK. Block Steel. 

Mr. LANCE. Block Steel. 

Mr. BLOCK. You are thinking probably of Joseph Block? 

Mr. LANCE. Yes. 

Mr. BLOCK. It is not related. 

Mr. LANCE. Not related. 

Mr. BLOCK. But he was the chairman of Inland Steel. 

Mr. LANCE. But that was in the Middle West, was it not? 

Mr. BLOCK. Correct. Inland Steel was actually in—well, the remnant of Inland Steel is still there. It is owned by ArcelorMittal now. 

Mr. LANCE. Yes. 

Mr. BLOCK. Yes. 

Mr. LANCE. Thank you. 

And to the panel in general on an issue that had been raised earlier, we are going to be engaged in a reform I hope this year on 

corporate tax policy, Ways and Means more so than E and C, but 

certainly an important issue to us all. What would you suggest as 

we try to have a better corporate tax system in this country? Yes, 

sir? 

Mr. YUSE. In general, American businesses pay among the highest corporate tax rates in the world. 

Mr. LANCE. Yes, sir. 

Mr. YUSE. We compete internationally. International sales are of 

a benefit to our customers and to the economy in general. The 

higher tax rates cause us to be less competitive in the international 

marketplace. So anything that could be done to reduce overall tax 

rates and make U.S. products more competitive in the marketplace 

would be very helpful. 

Mr. LANCE. Yes. 

Mr. YUSE. It would also be very helpful to have that coupled with 

a substantial research and development incentive—— 

Mr. LANCE. Yes. 

Mr. YUSE [continuing]. Which is also common internationally. 

Mr. LANCE. And of course, certainty in that area, making sure 

the R&D portion is permanent—— 

Mr. YUSE. Correct. 

Mr. LANCE [continuing]. And does not have to be extended periodically by the Congress. 

Mr. YUSE. Absolutely. 

Mr. LANCE. A final question to the panel. Manufacturing’s future 

needs, besides your current concerns, what do you think might be 

the next big thing to confound growth in your industries and what 

challenges are you likely to face looking forward in the next 5 to 

10 years or even 10 to 20 years? 

Mr. YUSE. So as we try to deal with the potential for budget cuts, 

we have been focused on international sales. International sales, as 

118 

I mentioned a few minutes ago, benefit this country in a number 

of ways. A lot of development can go on in those programs that our 

U.S. customers can take advantage of. The bulk of the jobs are here 

in the U.S. They are not overseas, at least in my industry, which 

tends to offset some of the earlier discussions today. So I do believe 

that, you know, the ability to expedite international sales in my industry is a stabilizing influence going forward. 

One of the things we see competing internationally is that we 

compete not only with companies, but we compete with countries. 

So it would be very helpful to get congressional and administrative 

advocacy for the promotion of international sales. That would be a 

big help. Fully fund all of the international security assistance programs, which enable U.S. allies to make the purchases of the systems that they need. And then finally, streamline the armed sale 

process in general. I know that is something that has been talked 

about recently. It can be a lengthy process. Anything that can be 

done to expedite that would help this entire situation and boost 

manufacturing in the U.S. 

Mr. LANCE. Thank you. My time is expired. 

Thank you, Mr. Chairman. 

Mr. TERRY. Thank you. 

And now we would recognize the gentleman from Georgia, Mr. 

Barrow. 

Mr. BARROW. Thank you, Mr. Chairman. 

Mr. Arnold, I want to follow up on some of the leads that were 

opened up by my friend Mr. Barton from Texas because he talked 

about one of two trends we have discussed today that I think provide an object lesson. Each provides an object lesson in the tension 

for the debate between folks that say we ought to put mandates out 

in front of technology in the blind hope that technology will catch 

up to the mandates on the one hand, and folks who think no, we 

ought to invest in technology. Put the technology out in front of the 

mandates and the mandates will take care of themselves. 

He brought up one of these trends, the fact that Europe has imposed conditions on the marketplace that are not market-based at 

all. They have imposed mandates on the marketplace and say you 

have got to go do something you are not doing now. And the unintended consequence of that is at the cost of European utility consumers, we are investing in research and development here in this 

country where the raw materials to meet that artificial mandate 

can be found and where it is stimulating research and development 

in your area, not exactly I ought to think they contemplated but 

that is what is happening as a result of that approach to put the 

mandate out in front of the technology. The nearest available technology may be in America. We may be benefiting from it in the 

12th District of Georgia as a result of what is going on there at 

their expense but not the expense of our utility consumers. 

Likewise, we talked about what is going on with fracking, the 

fact that there has been an explosion in a traditional source of energy but it has been inaccessible to us because of our inability to 

get to it because of our technology. But what is happening now? If 

you listen to Ted Nordhaus and folks at the Breakthrough Institute, they will tell you this is a direct pay off of 35 years of investVerDate Nov 24 2008 14:28 Jun 24, 2014 Jkt 037690 PO 00000 Frm 00124 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-5 CHRIS
119 

ment in very basic research that has only come into fruition now, 

stuff that was started during the Carter years. 

So what is happening in natural gas is the payoff of an investment in technology ahead of mandates. Without cap-and-trade, we 

have achieved tremendous reductions in CO2 and we have exploded 

the available natural gas to our consumers because we invested in 

technology, not mandates. 

Now, that is a lead-in to what I want to ask you. What do you 

think we ought to be doing in the area of research and development? How can government help encourage and incentivize manufacturers to invest in research that will provide a long-term payout? What do you think ought to be our priorities in that area? 

Mr. ARNOLD. I think the priorities in that area should be a very 

broad base, putting as much research and development money in 

small amounts into as many different companies as you can to foster as many ideas out there, because out of there will come the one 

that will pay off in the beginning. As Thomas Edison said, he has 

found 1,000 different ways not to make a light bulb. That is what 

we have to have in this country to keep bringing new technology 

to the forefront. There will have to be some pull in some technologies in some markets to get people involved, but we also need 

a lot of research and development and it needs to be academic tied 

to industry sponsorship in some way. But it doesn’t need to be 

giant block grants from Department of Energy or anybody else that 

goes to one segment of one industry to one company where success 

or failure has used up all of that money. It can be used in many, 

many different places in my opinion. 

Mr. BARROW. My friend Tom Fanning, the head of the Southern 

Company, is fond of describing sort of an S curve in which you can 

get from research. There is a small amount that is spent at the 

most basic level, the most basic pure research. We don’t know 

where it is going to lead. Then, there is a tremendous amount of 

money in the high part of the S curve in which folks are researching how to develop a lead, something that has come out of basic 

research. And then there is the deployment phase where it levels 

off again where you are just trying to deploy something that you 

have got ready to go in the marketplace. His position is that the 

government ought to confine its investments or its incentives at the 

most basic level possible where the highest payoff will be from investing in that very basic research where there is very little support that you can get from the private sector to get the kind of 

breakthroughs that you will need. But the private sector is good at 

taking off with that. What do you think about that? Is that a model 

that we should build on? 

Mr. ARNOLD. I personally think that is a very good model to 

build on, and that is the kind of things that we look for is reading 

some research paper where somebody has stumbled across an idea 

and then I can take that idea and improve our processes or come 

up with a completely different business model out of that. 

Mr. BARROW. I think of the difference between investing in something like DHARMA where they are doing incredibly basic research 

on the one hand and the payoffs you get from that, as opposed to 

investing in a development or deployment strategy for a big old 

outfit like Solyndra. I can’t help but think that the biggest payoff 

120 

is investing at the front end of that S curve, where there is the 

least amount of outside money that is available through private 

sources to lead to the kind of development and breakthroughs that 

private sector knows what to do with once they have got it. But it 

is very hard for them to provide that kind of support. That sort of 

seems to me to be sort of a good object lesson. 

Mr. ARNOLD. I would agree with that approach. 

Mr. BARROW. Thank you, Mr. Arnold. 

No further questions. 

Mr. TERRY. Thank you. 

Mr. Harper is recognized for 5 minutes. 

Mr. HARPER. Thank you, Mr. Chairman. And thank each of you 

for taking the time out of I know what is a very busy schedule for 

each of you to be here and to shed a little light on your businesses 

and make us perhaps think outside of the box and to give us some 

ideas to go forward on how we can make it more conducive to do 

your business and how we can create and grow jobs in this country, 

and that is a great thing and we congratulate you on the successes 

that you have had. 

And Mr. Yuse, we are certainly glad to have you here, and I remember the very first time that I came into almost official contact 

with Raytheon in my district was when I was running, and you 

had a great advocate there in Forest, Mississippi, Mayor Chambers, who just went on and on about the impact that you had as 

a company there in east central Mississippi. And you know, I have 

been there for Veterans Day event and, you know, the workforce, 

the team there is exceptional and you should be very, very proud 

of what is there and what you see. 

But how is that support of your local and state government officials, what has that meant to you in Forest, Mississippi? 

Mr. YUSE. Well, thank you for the kind words. We are very, very 

proud of the facility and the workforce there. We have an excellent 

working relationship with all levels of the government in Mississippi from local, state, up through this level. And it has gone a 

long way in helping us work with various agencies. We are on a 

number of statewide initiatives to do everything from expand the 

use of broadband technology to energy initiatives. The workforce is 

very, very involved in community service. They put in a lot of time 

on a regular basis and I think that goes a long way to building 

community spirit, which helps us work with the community when 

we need to go do something with the facility or find people or expand the facility. So in general, the working environment has been 

extremely beneficial to the success of our operation there, and I 

thank you for it. 

Mr. HARPER. Well, we are delighted to have you there and look 

forward to working together for many years on that. And you mentioned earlier in your testimony that with us as a country having 

one of the highest corporate tax rates, you mentioned that as something if you could see done—you talked about tax codes and regulations earlier. If our corporate tax rates were reduced to a level 

where we were one of the lowest and not highest, what would you 

see as the benefits that would come from that and how quickly 

would we realize the benefits after a change was made? 

121 

Mr. YUSE. I think the change would be quite quick. The primary 

effect would be we would be much more competitive very quickly 

in the international marketplace where we are competing with 

companies that do have lower corporate tax rates. And I think that 

is the primary factor there. And there is a large potential for foreign sales but we have to be able to compete. We have to have, as 

I said, advocacy from the United States Government. We have to 

have affordable prices, and we have to have the ability to export 

the technology. In many cases, foreign companies, you know, can 

sell technology that we are not allowed to export out of the U.S. 

Those are kind of the three things that tend to limit our ability. 

Mr. HARPER. You mentioned also the regulatory burdens that are 

there. What area of regulation are you referring to when you say 

that we need to look at improving, you said, the tax code and obviously regulations? Would that be in the area of the export regulations you just referred to? 

Mr. YUSE. That would be one area just, you know, general reporting on, you know, a variety of different business processes. We 

might want to take a look and see how those are being used. Anything that is being used and is meaningful, I am happy to do it. 

Mr. HARPER. Great. 

Mr. YUSE. If it is not being used, maybe we ought to think about 

it. 

Mr. HARPER. Again, thank you all for being here. 

With that, I yield back. 

Mr. TERRY. Mr. Guthrie, you are recognized for 5 minutes. 

Mr. GUTHRIE. Hey, thank you, Mr. Chairman. Thanks. 

And to be a witness for Mr. Barton’s question, actually my family 

has an aluminum foundry and we are gas. And so it has made us 

tremendously competitive compared to people that we are competing with in other countries. And you know, it is all about inputs 

and how much input costs. And any time we do mandates and 

things here that raise the price of energy, it will go counter to 

bringing manufacturing jobs back to the country. It is just a fact 

of—that is our competitive advantage in Kentucky, particularly 

with coal. We have cheap electricity and it has made us a competitive State. 

But a question with Mr. Steiner, I think we heard the other 

night in the State of the Union about the tax credits that 

incentivize people to send jobs overseas. One thing that does is our 

tax rate, so if we want to lower our tax rate, it will bring jobs back 

as well. 

Mr. Steiner, you are in Kentucky. Obviously, I know you are 

there because of the great working employees that are there. But 

I know the iPhone isn’t necessarily completely assembled in the 

United States—— 

Mr. STEINER. Correct. 

Mr. GUTHRIE [continuing]. And so why are you competitive in 

Kentucky and what decision-making did you—I know you got a 

great workforce, but I am interested to know why you chose to 

manufacture it here. 

Mr. STEINER. So at Corning we always start with an invention 

and then what allows us to compete is a very efficient process. So 

we spent a lot of our R&D dollars on process efficiency. And the 

122 

process we use in Kentucky allows us to compete worldwide. But 

we are hampered by the effective tax rate. A dollar of income out 

of Harrodsburg is about 39 percent and our effective tax rate as a 

company is 21 percent. So it is much lower in other areas of the 

world. 

Mr. GUTHRIE. So—— 

Mr. STEINER. So we have to offset the tax rate difference with a 

much more efficient process. 

Mr. GUTHRIE. But if you had a lower tax rate, you would still 

strive to be more efficient just because of competition—— 

Mr. STEINER. Absolutely. 

Mr. GUTHRIE. Yes, so that would—— 

Mr. STEINER. You always compete with the process first. 

Mr. GUTHRIE. Always compete with the process. But your process 

is energy-intensive. 

Mr. STEINER. It is. And our process again in Harrodsburg, labor, 

batch materials, and energy are the three major cost components 

so—— 

Mr. GUTHRIE. What do you think that drives your energy 

costs—— 

Mr. STEINER. Reduction in energy costs certainly helps us. 

Mr. GUTHRIE. And anything that drives up energy costs makes 

you less competitive. 

Mr. STEINER. Makes us less competitive and that is an advantage 

we have over other areas of the world—— 

Mr. GUTHRIE. Yes. 

Mr. STEINER [continuing]. In Kentucky. 

Mr. GUTHRIE. And not specifically in Kentucky, but yes, as a 

country as well, most parts of the country. 

Mr. STEINER. Correct. 

Mr. GUTHRIE. So with the trade agreements that we are talking 

about, there is the Transpacific and the European. What are your 

issues with that and what—— 

Mr. STEINER. So again, about 78 percent of what we make we export. In the case of Gorilla Glass, virtually every square foot that 

is made in Kentucky gets exported outside of the U.S. because industry, as Mr. Block said, to make televisions don’t exist in the 

U.S. yet. So to keep access to global markets is vital to us because 

we are basically an export company. 

Mr. GUTHRIE. Yes. That is what is interesting to note about what 

you do is you are not making for the—well, eventually, the products come back for the American—— 

Mr. STEINER. Many of the products come back. 

Mr. GUTHRIE. Many of them come back but you are not just here 

making for the domestic market; you are actually exporting and 

find yourself competitive. But anything that we do here—well, 

what kind of things could we do to make it better? I know the tax 

rate, we don’t want to affect energy rates. 

Mr. STEINER. Access to foreign markets is quite important. The 

other issue that is very important for us is IP protection. Again, 

we compete because we invent first and then reinvent a process. 

It is important to have U.S.-style IP protection all over the world, 

not just in patent law but in trade secrets. It is a little easier to 

enforce patents because we can look at a product and tell whether 

123 

or not it has used our glass composition. Trade secrets is a more 

difficult issue from us because somebody could copy our manufacturing process, but since you don’t have access to it outside the 

U.S., you may not know that. So we need fair enforcement all 

around the world in both patent law and trade secret. 

Mr. GUTHRIE. Is some of your decision to manufacture here is to 

protect your intellectual property? 

Mr. STEINER. So we feel more comfortable certainly with our situation in the U.S. A lot of our industries are in China and that is 

a constant discussion in Corning of how do we protect ourselves 

outside the U.S. like we can within? 

Mr. GUTHRIE. Well, you are great employer and we really appreciate what you do for that community. It is several big industries. 

A lot of it is driven by energy costs and we really appreciate what 

you do. And I actually just picked you guys up in redistricting, so 

I have been very blessed to represent you and look forward to 

working with you. 

Mr. STEINER. Thanks. And we appreciate your support. 

Mr. GUTHRIE. Thanks. 

I yield back. 

Mr. TERRY. Thank you. 

And Mr. McKinley, you are now recognized for 5 minutes. 

Mr. MCKINLEY. Thank you, Mr. Chairman. And thank you for assembling the meeting prior to this with the displays and also for 

this panel that we have. 

I guess I am taking a little bit more of a cynical approach perhaps. I have been here 2 years in Congress. Years ago, before going 

to college, I worked on an assembly line. My brother was in the 

steel industry working in the mills, and I have seen the demise of 

the industry in our area. In northern West Virginia, we have lost 

30,000 steel worker jobs. They have been lost in part primarily because of, I believe, government interaction, government intrusion, 

government regulations. And I have heard you talk a little bit 

about that. I have heard a lot of love coming from the side of the 

table from people that say they have your best interests at heart, 

and I would think that the manufacturing all should be very robust 

given all the love that you are getting from the side of the table. 

But we have heard comments made about the sequester. We 

have had 2 votes on the sequester. We are trying to avoid in the 

sequester but we can’t get the other side of the aisle to support us 

on that. Oh, they will say they are concerned about it, but we have 

given them the votes and they don’t take them. 

So I am concerned about it. I am concerned about where we are 

going to go with us. I listened to that initial polling and I thought 

it was a very good question that the chairman came up with, and 

it was just Joe Hanson. It certainly wasn’t scientific. But when he 

mentioned tax code and regulations, that is more than all the other 

combined, the issues that were raised. Tax code and regulation. 

But yet, we can’t get the people on certain areas of our Congress 

to accept that. They think it is more of what we have been doing 

for the last 4 years in Congress, more regulation, more government 

intrusion, more taxes, higher energy costs. Is that the direction? Is 

that what you are telling us now? I would like to make sure we 

are—should we be going in that—do you really think the last 4 

124 

years is the best direction we could go if we are going to make 

manufacturing all that it can be where we have American 

exceptionalism again in our manufacturing? Is this the direction we 

should continue? 

Or what would you suggest to wake up Members of Congress to 

understand what it is like to see a demise and struggle within the 

manufacturing business? Can you give us some direction on where 

you might give it to us? I heard you say tax code and regulation 

but EPA and OSHA, regulatory, tax policy, ObamaCare, I have 

heard how that is affecting businesses all over. The sequestration, 

R&D, energy costs, what should we be doing, not just sweet talk 

but actual what can we do? What should we do if we are going to 

reverse manufacturing in the demise? Can a few of you give me 

some good examples? 

Mr. MEYERS. Thank you for the question. You asked what Congress should do, and honestly, for our industry, the regulations and 

taxing, healthcare, everything that we see coming down the pipeline is becoming more burdensome. What you could do is stop. 

Mr. MCKINLEY. Thank you. 

Mr. MEYERS. You could stop. That would allow us to be the manufacturing engine that drives this country and let us get back to 

work. 

Mr. MCKINLEY. But why don’t you think that people are hearing 

that? It is so basic. Get government off our backs. Free up—I hear 

it time and time again. Manufacturing will get back if we just back 

off, but the Congress doesn’t seem to want to back off. It thinks it 

is going in the right direction by becoming more intrusive in your 

workplace. How do you do it? What are we missing here? Why 

aren’t people listening to you? 

Mr. MEYERS. Well, basically, we have been vocal for years, and 

why that has not reached Congress is beyond us. But I think when 

you look at the jobs lost and how our entire manufacturing sector 

continues to struggle, you know, when is it going to be too late? 

When we are all out of business? So I appreciate the opportunity 

to be here and express our issues of not only my company but our 

industry and manufacturers in general. 

Mr. MCKINLEY. Thank you. Any others in the time remaining? 

Yes, sir. 

Mr. ARNOLD. It is not so much the regulation as it is the unknown, as Congressman Waxman talked about. You know, gridlock 

and arguing from both sides is a necessary part of the government 

process. We need that. But when something is enacted, get to it, 

then, on specifically what we have got to do about that. We have 

had the ObamaCare for 2 years now. The only thing I have seen 

out of that—we provide hospitalization for our employees. Our insurance cost just went up 20 percent a year for the last 2 years. 

And yet, it is not even enacted yet, but the anticipation of that, the 

unknown, the insurance companies have had to respond that way. 

So what we need is swift action. 

I talked for a second about the dredging of the entrance to the 

channel in Brunswick. The Corps of Engineers has been working 

on that for 4 years. They don’t get the allocation of the money to 

be able to do that completely at one time. So it is piecemeal and 

it fills right back in. We are in a world where we have to respond 

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to market conditions immediately and government is not responding as quickly. 

Mr. MCKINLEY. Thank you. 

Mr. TERRY. Thank you very much. 

Mr. Johnson from Ohio, you are recognized for 5 minutes. 

Mr. JOHNSON. Well, thank you, Mr. Chairman. I too appreciate 

the opportunity for today’s hearing and the demonstration of products that we saw earlier. I have several manufacturers from Ohio 

that displayed their wares, Thermo Fisher and their orbital mixer, 

Quanex and their window efficient linings, and of course, Magnum 

Magnetics, one of the few companies that provides flexible magnets 

to consumers and businesses. 

I had a line of questions here but I want to take just a second 

because we have asked you guys a lot of questions and you have 

been very gracious to give us your opinion. One of the issues that 

came out in the State of the Union that has been alluded to here 

several times is the President’s insistence that cap-and-trade is 

still on the table. Climate control is still a big issue. It probably 

doesn’t come as a surprise to you in eastern and southeastern Ohio 

where we have a wealth of oil and natural gas and the prosperity 

that that is bringing to our region and to America’s ability to become more energy independent and secure, the vast amounts of 

coal that we have that provide reliable and affordable energy. That 

is a big issue. And because of where we are located, manufacturing 

is a big deal. We are in a manufacturing corridor. 

And I talked to businesses every single day that are saying, Bill, 

we are in jeopardy of having to lay off our people because we simply cannot keep pace with these rising energy costs as coal-fired 

power plants shut down, as energy costs go up. As the tax burden 

and regulations continue to drive up our cost of doing business, we 

are not going to be here. 

So let me just ask—you have been polled a couple times now so 

for the sake of time, let me just ask one final polling question in 

my time. How many of you believe that additional climate control 

regulations coming out of the Federal Government that are going 

to drive up your cost of operations, including driving up the cost 

of the energy that it takes to run your operations, how many of you 

think that is going to have a negative impact on your ability to 

grow and expand and hire and innovate within your companies? 

How many of you think that is going to have a negative impact? 

The rest of you don’t think it is going to or are you just silent? 

I have got to ask. 

Mr. HOLLER. For me it is just beyond the scope of my responsibility. 

Mr. JOHNSON. Mr. Yuse, you don’t think climate control regulations are going to have an effect on your business? 

Mr. YUSE. So I guess, in my opinion it depends on how they are 

implemented exactly. 

Mr. JOHNSON. I qualified that. They are going to raise operating 

costs; they are going to raise the cost of reliable, affordable energy. 

It was very specific, because that is what is happening with the 

shutdown of the coal industry, the elimination of coal-fired power 

plants, and the attack on hydraulic fracturing and our ability to go 

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after fossil fuels. That is going to affect your operating costs. Is 

that going to affect your business? 

Mr. YUSE. Well, let me just say that anything that impacts operating costs will theoretically have a negative effect. 

Mr. JOHNSON. I realize this is a politically charged question because it is one that the President is very interested in pursuing. 

I can see the stares and the why are you putting me in this position to have to answer this. Well, folks, I am going to tell you. You 

folks are the ones that help us determine what the agenda is and 

how we fight these battles. If you don’t want to see increased operating costs, if you don’t want to see your electricity rates go up, 

then I would simply encourage you, speak out. Speak out in your 

industries. Speak out when you come here. Let the American people hear what it is doing to manufacturing. 

Do you know why we can’t stand up a nuclear power plant in 

America anymore? It is not because of technology. It is not because 

of permitting. It is because of what David McKinley talked about 

earlier. It is because we don’t manufacture the kind of steel here 

anymore to enclose nuclear reactors. We have to buy that overseas. 

And you have got other industries that are in jeopardy of being 

closed down because of onerous climate control regulations. So I 

would just encourage you, don’t be bashful. You want us to help 

your industry and spur many fracturing? Give us a voice with the 

American people. 

Thank you, Mr. Chairman. I yield back. 

Mr. TERRY. The gentleman from Florida, Mr. Bilirakis. 

Mr. BILIRAKIS. Thank you, Mr. Chairman. I appreciate it very 

much. Thank you for giving me the opportunity to serve on this 

committee as well. This is an outstanding hearing. 

Mr. TERRY. As long as you continue to think that way. 

Mr. BILIRAKIS. Thank you. I will. I promise you. This has been 

outstanding. 

Now, I want to focus also on the regulation and the overlapping 

regulation or overregulation as well. And I want to ask Mr. 

Smatsky a question. Your testimony briefly touched on how your 

company and business is regulated by the FDA but has faced the 

possibility of also being regulated by the EPA. Can you further explain how your business operations would possibly be impacted by 

adjusting to a new regulatory scheme? Must you also comply with 

the sets of state and local regulations? Do your federal regulations 

again conflict or overlap with these state and local regulations? Because that is what I keep hearing in my district and all over the 

State of Florida. And then what is it going to cost you to comply 

with these over-burdensome regulations in my opinion? That is my 

question. Thank you. 

Mr. SMATSKY. Thank you for the question. 

In terms of the FDA regulations, they are of the highest standards to protect the consumers. So we feel as a food manufacturer, 

it is in our best interest to go with the highest-level standards, 

which is above and beyond the EPA. I can’t recall the second question that you asked me as well. 

Mr. BILIRAKIS. Well, in other words, do the state and local regulations in general conflict with each other? Do federal regulations 

127 

ever conflict—and I believe they do—and overlap with state and 

local regulations? 

Mr. SMATSKY. They do, Congressman, although I just don’t have 

enough data at this point in time. I would have to get back to you 

to further answer that question to give you more clarity. So I am 

happy to submit anything for the record. 

Mr. BILIRAKIS. Yes, what does it cost you? I would like to hear 

from other members of the panel as well, anyone that once to jump 

in. Thank you. Anyone else want to? Mr. Block? 

Mr. BLOCK. Well, we don’t really do any particular hot processes 

or have any issues with the regulatory environment ourselves. Certainly, our customers do. But I am not knowledgeable enough to directly answer that question for my customers and for what they do. 

Obviously, the mills themselves have certain issues with regulatory 

situations. I know, Mr. Johnson, I am not sure which district you 

cover. I think—— 

Mr. JOHNSON. Ohio 6, all along the Ohio River. 

Mr. BLOCK. Oh, OK. But like AK Steel, which is in southwest 

Ohio, has had environmental issues which has impacted them. 

They are difficult issues. I don’t know if you want me to expand 

on this or not, but I might be going off on a tangent here and that 

might not be a good thing. 

Mr. BILIRAKIS. Well, give me a specific example of how you face 

overlapping regulation. 

Mr. BLOCK. Well, we personally don’t, to be honest with you. I 

mean my business is relatively—it is complex and it is details, but 

in the actual factory, it is relatively simple. So we really don’t deal 

with regulations that impact us directly. 

Mr. BILIRAKIS. OK. I have one other question, Mr. Chairman. 

Can you please describe—and this is for the entire panel—how 

your manufacturing enterprises fit within the domestic economy? 

And then how do you impact other businesses and sectors up and 

down the supply chains? Anyone want to jump in? 

Mr. MEYERS. Well, obviously, with the casting industry, our products are used throughout the U.S. and primarily domestic. And 

what we see as the beginning user of the beginning process with 

castings is it is a cascading effect all the way across the entire supply chain. 

So I want to go back real quickly to what you are asking about 

regulations and the overlapping. Fortunately, in the great State of 

Texas, we have regulatory issues that are pro-business not only 

from the fact of the areas that they come, but our agencies in the 

State of taxes work with businesses. They are not coming down 

against us but they work with us to help us maintain goals and 

achievements that we need to look at as far as environmental or 

safety. So I think that when you talk about overlapping regulations, you know, it it is more of a regulatory-friendly issue in helping our manufacturers and not constantly bombarding us with regulations and issues that we simply can’t do. 

Mr. BILIRAKIS. Very good. 

Mr. Chairman, I would like to yield back the rest of time. 

Mr. TERRY. Thank you. 

Mr. BILIRAKIS. Thank you very much. 

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Mr. TERRY. And so there is no more questions to be asked of you 

here at the panel, but that doesn’t mean that we won’t submit 

questions to you. You or your representatives probably already 

know that or have been briefed that we have the opportunity. And 

I have several questions that were kind of prompted from your testimony and answers to questions. So be looking forward to receiving your answers to those. 

And to all the members, I remind you that you have 10 business 

days to submit questions for the record and ask the witnesses to 

respond promptly. 

And then, I want to mention that the manufacturers’ showcase 

will open again for an hour after this hearing. And I want to thank 

all of their help for the showcase, our clerk, Kimberly Howard; our 

press secretary, Charlotte Baker; and Caroline Ferguson from the 

committee. 

Now, thank you. You guys were awesome, great testimony and 

feedback, exactly what we were looking for. So thank you for being 

here today. And we are adjourned. 

[Whereupon, at 12:17 p.m., the subcommittee was adjourned.] 

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