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81–699 2013

MADE IN THE USA: STORIES OF AMERICAN 

MANUFACTURERS 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

JUNE 19, 2013 

Small Business Committee Document Number 113–024 

Available via the GPO Website: www.fdsys.gov 

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Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

BLAINE LUETKEMER, Missouri 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

JAIME HERRERA BEUTLER, Washington 

RICHARD HANNA, New York 

TIM HUELSKAMP, Kansas 

DAVID SCHWEIKERT, Arizona 

KERRY BENTIVOLIO, Michigan 

CHRIS COLLINS, New York 

TOM RICE, South Carolina 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

YVETTE CLARKE, New York 

JUDY CHU, California 

JANICE HAHN, California 

DONALD PAYNE, JR., New Jersey 

GRACE MENG, New York 

BRAD SCHNEIDER, Illinois 

RON BARBER, Arizona 

ANN McLANE KUSTER, New Hampshire 

PATRICK MURPHY, Florida 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 

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(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Sam Graves ..................................................................................................... 1 

Hon. Nydia Vela ́zquez ............................................................................................. 10 

WITNESSES 

Richard Schwind, Jr., V.P., General Manager, Continental Took, Smithville, 

MO ......................................................................................................................... 2 

Terry Iverson, President & CEO, Iverson and Co., Long Grove, IL .................... 4 

Bruce Broxterman, President, Richards Industries, Cincinnati, OH .................. 6 

Mike Mittler, President, Mittler Brothers Machine & Tool, Wright City, MO .. 19 

Jim Allen, Director, Shapeways, Inc., Long Island City, NY ............................... 21 

Jill Johnson, Founder & CEO, Institute for Entrepreneurial Leadership, Newark, NJ .................................................................................................................. 24 

Anthony Wanger, President, IO, Phoenix, AZ ....................................................... 26 

Barbara Schindler, President and COO, Golden Artist Colors, Inc., New Berlin, NY ................................................................................................................... 36 

Shelly Gibbons, Vice President, Quik Mart, Tucson, AZ ...................................... 38 

Mike Bergmeier, President, Shield Agricultural Equipment, Hutchinson, KS .. 39 

Aaron Bagshaw, President, WH Bagshaw Co., Nashua, NH ............................... 42 

Brad Braddon, President, Commodore, Bloomfield, NY ....................................... 50 

Shirley Brostmeyer, CEO, Florida Turbine Technologies, Jupiter, FL ............... 52 

Richard Najarian, President, Precision Global Systems, Troy, MI ..................... 54 

APPENDIX 

Prepared Statements: 

Richard Schwind, Jr., V.P., General Manager, Continental Tool, Smithville, MO ........................................................................................................ 69 

Terry Iverson, President & CEO, Iverson and Co., Long Grove, IL ............ 72 

Bruce Broxterman, President, Richards Industries, Cincinnati, OH ........... 77 

Mike Mittler, President, Mittle Brothers Machine & Tool, Wright City, 

MO .................................................................................................................. 81 

Jim Allen, Director, Shapeways, Inc., Long Island City, NY ........................ 83 

Jill Johnson, Founder & CEO, Institute for Entrepreneurial Leadership, 

Newark, NJ ................................................................................................... 85 

Anthony Wanger, President, IO, Phoenix, AZ ............................................... 90 

Barbara Schindler, President and COO, Golden Artist Colors, Inc., New 

Berlin, NY ...................................................................................................... 99 

Shelly Gibbons, Vice President, Quik Mart, Tucson, AZ .............................. 102 

Mike Bergmeier, President, Shield Agricultural Equipment, Hutchinson, 

KS ................................................................................................................... 104 

Aaron Bagshaw, President, WH Bagshaw Co., Nashua, NH ........................ 110 

Brad Braddon, President, Commodore, Bloomfield, NY ................................ 112 

Shirley Brostmeyer, CEO, Florida Turbine Technologies, Jupiter, FL ........ 119 

Richard Najarian, President, Precision Global Systems, Troy, MI .............. 122 

Question and Answer for the Record: 

Congressman Hanna to Ms. Barbara J. Schindler, President and COO, 

Golden Artist Colors, Inc., New Berlin, NY ................................................ 128 

Additional Material for the Record: 

None. 

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(1) 

MADE IN THE USA: STORIES OF AMERICAN 

MANUFACTURERS 

WEDNESDAY, JUNE 19, 2013 

HOUSE OF REPRESENTATIVES, COMMITTEE ON SMALL BUSINESS, Washington, DC. 

The Committee met, pursuant to call, at 1:00 p.m., in Room 

2360, Rayburn House Office Building. Hon. Sam Graves [chairman 

of the Committee] presiding. 

Present: Representatives Graves, Chabot, Luetkemeyer, Tipton, 

Hanna, Huelskamp, Schweikert, Bentivolio, Collins, Vela ́zquez, 

Schrader, Payne, Meng, Schneider, Barber, Kuster, and Murphy. 

Chairman GRAVES. We will go ahead and call this hearing to 

order, and Ranking Member Vela ́zquez is detained for a few moments. She is speaking across town but she is on her way and she 

said we can go ahead and get the hearing started. 

So with that I would like to say good afternoon, and we do call 

this hearing to order. 

In recognition of National Small Business Week, today we are 

going to hear from small manufacturers around the nation who 

have achieved success while producing goods right here in the 

United States. And I would like to welcome all the witnesses who 

are going to be here today and thank them for taking time out of 

their busy schedules and from running their businesses to offer us 

their insights. And we are going to have four panels all together 

today. 

We have all heard about the decades-long decline of the manufacturing industry in America. Since the late 1970s, a combination of 

high U.S. wages and cheaper overseas production costs have led to 

a loss of nearly 11 million manufacturing jobs in the U.S., with 

nearly 2 million of those occurring during the recent recession. In 

an attempt to cut costs, many companies that previously made 

goods domestically moved their production to China and other nations with much less expensive labor. 

Now, after years of industry decline, we are seeing a shift that 

is taking place. In April 2010, the U.S. began adding manufacturing jobs for the first time in many years. High consumer demand for Made in American products, rising foreign wages, and the 

increased realization by American entrepreneurs of hidden overseas production costs has led to more manufacturers producing 

goods and creating jobs here at home. In the past three years, the 

industry has added a half-million jobs to the U.S. economy. 

Today, we are fortunate enough to have with us a group of accomplished American manufacturing leaders that have been doing 

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business in the U.S. for years. Some started their businesses at the 

kitchen table, and others took the helm of a local manufacturing 

mainstay. Whether it is a story of a paint producer in New York 

or an agricultural equipment maker in Kansas, common traits of 

success are very evident. 

I look forward to hearing from our witnesses today about the 

things that have led to their accomplishments, as well as the challenges that they see ahead. And again, I want to thank all of our 

witnesses today that are in the audience for making the trip all the 

way to Washington to participate in this hearing. 

With that I will make the first introduction. With our first panel 

and our first witness today is Rick Schwind, Jr., of Smithville, Missouri. Rick is the vice president and general manager of Continental Tool and Manufacturing. It is a producer of specialty tools 

and other machine components. This 20-employee, American manufacturing business makes a wide array of products, including mechanical pullers, sockets, spanner wrenches that are used by the 

U.S. military. Continental Tool was purchased by the Schwind family in 2008. And Rick, thanks for coming all the way from Missouri’s Sixth District to be with us here today, and welcome to the 

Small Business Committee. 

STATEMENTS OF RICHARD SCHWIND, JR., V.P., GENERAL MANAGER, CONTINENTAL TOOL; TERRY IVERSON, PRESIDENT 

AND CEO, IVERSON & COMPANY; BRUCE BROXTERMAN, 

PRESIDENT, RICHARDS INDUSTRIES. 

STATEMENT OF RICHARD SCHWIND, JR. 

Mr. SCHWIND. Good afternoon. My name is Rick Schwind, the 

vice president and general manager of Continental Tool and Manufacturing, located in Lenexa, Kansas. I am also a resident of Smithville, Missouri, located in Chairman Graves’s congressional district. 

Thank you for the opportunity to be here to speak about our company and today’s small business climate. 

Continental Tool is a family-owned, private CNC manufacturer of 

specialty tools, gages, assemblies and components with roughly 20 

employees. Approximately 80 percent of our business is manufacturing tools designed for military end use. Think of the Army mechanic that takes care of the Abrams tanks, Humvees, and Bradley 

fighting vehicles. We make many of those specialized tools. We 

make specialized wrenches for the landing gear on fighter jets, for 

the adjustment of sights on weapons, for the setting of fuses on 

mortar rounds, and hundreds of other tools. In addition, we provide 

a host of machine components to cooling towers, fire trucks, lighting fixtures, pumps, and valves. 

My parents purchased the business in 2008 from a family who 

had started it from scratch in 1980. My dad’s dream was to purchase a small, manufacturing company and offer a career, not just 

a job, with paid training and benefits to anyone who simply had 

the right attitude and did not mind working for everything they 

earned. 

As for myself, I graduated from the University of Kansas and 

later received an MBA from the University of Missouri-Kansas 

City. I had worked as an operator in a machine shop while in colSBREP-219 with DISTILLER

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lege and after working in technology and telecommunications, I 

came back to manufacturing at Continental Tool. Like my dad, I, 

too, was realizing a dream. Not only being able to work side by side 

with my father, but also being in the business of ‘‘making stuff’’ for 

America. 

As you remember, 2007 and 2008 were banner years for manufacturing, but as the recession began to take shape, things 

changed. Raw material pricing, surcharges, and the overall cost of 

doing business increased. But like any small business at that time, 

we pulled back, assessed the situation, drew financial lines in the 

sand, and lived within them. There were opportunities to buy new 

equipment that we passed up. There were people we wanted to hire 

but did not due to our own commitment to live within our financial 

guidelines. The single best (and most difficult) advice my dad gave 

me was that we needed to manage our business with our minds but 

not necessarily our hearts. 

2011 and 2012 were much better. We rebounded to 2008 levels 

and operationally we were in a great place. The challenge of the 

recession led us to sharpen our pencils in just about every way and 

we got better. Most importantly, we retained every employee during that period. 

Challenges remain for our industry where we struggle to find 

skilled labor. It takes anywhere from five to eight years of on-thejob training to become truly skilled in machine setup and operation. The average age of a skilled worker in our company is 50, 

and that seems to be consistent across the industry. These men 

and women are approaching retirement age, and as a nation, we 

need to build our skilled labor bench strength, or else we will have 

many people with college degrees but no technical skills. 

But as a company, we face additional issues. Uncertainty over 

health care is a major concern. Today, our company fully pays for 

the health care premium of every employee. But not knowing the 

financial implications of the Health Care Law next year has us 

questioning whether we will be able to provide this going forward 

or whether we will be forced to turn this cost over to the employee. 

As I mentioned, roughly 80 percent of our business is supplying 

the defense industry. This is where sequestration has had a real 

impact on us. We agree Washington needs to reduce our nation’s 

debt and reign in spending quickly. Our company made difficult decisions during the recession and significant cuts to survive, and the 

Federal government should do the same. However, in our company 

we took a sensible, precision approach to our finances just as we 

would when manufacturing a tool, while Congress did not. 

Unless Washington quickly addresses the situation they created 

with sequestration and the budget, the impact to small manufacturers like ours, whose primary customer is the Federal government, will be severe. Our sales to the government are down 30 percent this year, and we recently were forced to lay off three employees, temporarily we hope, and are working to refinance our longterm debt to reduce monthly expense. 

Even though our company survived the most recent recession, we 

are seriously concerned with the current environment facing small 

business. Does Washington really understand our challenge? Do 

they sense the concern we have with lack of skilled labor, with 

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health care uncertainty, ineffective and costly regulation, the sequester and indecisiveness regarding the budget? We certainly 

hope so, but the environment remains scary. 

I am thankful that the Committee is asking for input from companies such as ours in order to stem the tide. Small business is the 

backbone of our economy. 

I am honored to be here today, and many thanks to Chairman 

Graves and the Committee. 

Chairman GRAVES. Thank you, Mr. Schwind. 

I will now yield time to Mr. Schneider to introduce our next witness. 

Mr. SCHNEIDER. Thank you, Chairman Graves, for allowing 

this opportunity to invite owners of manufacturing companies to 

testify during National Small Business Week to highlight the critical role these small businesses play in our economy. Manufacturing, in particular, has been a promising growth sector of late, 

re-emerging after years of decline. However, headwinds remain. Of 

particular note, I consistently hear, as Mr. Schwind just mentioned, 

from my district companies, about the growing skills gap threatening manufacturing and growth prospects. That is why I am so 

pleased to invite Terry Iverson from Long Grove, Illinois, for today’s hearing. 

Terry has been involved in manufacturing for more than 30 

years. His family’s involvement in the industry dates back to the 

1920s. Terry is currently president and CEO of Iverson and Company. His company sells machine tools, automated and precision 

machines that power today’s manufacturing. Additionally, he is a 

minority owner in his brother’s company, the Chicago Dial Indicator Company, which manufacturers mechanical and electronic 

gauges. With years of experience in the industry, Terry is now giving back to the manufacturing community by forming 

CHAMPIONNow, a chain to advance manufacturing as perceived 

in our nation now, an organization working to address the skills 

gap in the United States. 

Terry, I want to personally thank you for coming today, and I 

look forward to hearing your testimony. 

STATEMENT OF TERRY IVERSON 

Mr. IVERSON. Mr. Chairman and members of the Small Business Committee, thank you for the opportunity to join you today. 

My name is Terry Iverson. We do sell machine tools in the states 

of Illinois, Wisconsin, and Indiana. We have approximately 20 people, and my brother Erik does run our indicator business that has 

about 35 people. As you have said, both companies are over 80 

years old. 

I come to the Committee today to speak about the skills gap 

issue in manufacturing. This country is facing a crisis at this moment. If we do not find the next generation of manufacturing engineers, programmers, and CNC machinists, then the manufacturing 

sector will diminish because we do not have the human resources. 

Recently, I have been pleased to hear that there is a buzz about 

manufacturing in the media, attention it deserves. I strongly believe that manufacturing has made this country great, and supplies 

good paying incomes for millions of families, and I believe that fuSBREP-219 with DISTILLER

5 

ture generations as well, but we must be mindful of the skills gap 

issue. 

In my 33 years on the road, I have talked to thousands of manufacturers and subcontract machine shops. They have all increasingly shared one problem—they cannot find enough skilled personnel. I have been told time after time, ‘‘Terry, I will buy a machine from you. Just give me an operator to go with it.’’ 

Baby boomers are getting closer to retirement. I am 54. The average age for the manufacturing employee is 56. Young people are 

being discouraged by their relatives, their counselors, their teachers, and the media to not pursue manufacturing careers. Because 

of the misperceptions, that must change. The industry is no longer 

a dark, dirty, dingy, low-paying profession. Advanced manufacturing in the U.S. is heavily computerized and automated. In Europe, not only do they still have apprenticeships in manufacturing, 

but they also have a culture that holds these professions in high 

esteem. Neither currently here in the U.S. is the case. 

The young people of our country are our future, and we need to 

educate the next generation of the realities of the industry compared to the general public’s perception. Forty-two percent of young 

people going to college do not find their degree in four years. Approximately 53 percent of recent college graduates are either underemployed or unemployed. Seventeen million workers with college degrees are now working jobs that do not require one. With 

skyrocketing college tuitions and admission requirements, it is 

clear that manufacturing should be embraced by our students. 

There is clearly a demand in the U.S. for highly skilled manufacturing workers. Many are of the opinion that all manufacturing has 

gone overseas. While some of this notion is true, the advanced 

manufacturing will and must stay in this country. Some of the low 

skilled tasks have gone, in fact, to the Far East, but the highly 

skilled positions with STEM-related skills are still needed in this 

country. 

There are as many as 6,000 jobs for highly-skilled manufacturing 

positions currently unfilled, despite unemployment at 7.6 percent. 

Manufacturing needs the best and brightest and best math and 

science students that are great with their hands. They need to be 

seen as manufacturing champions. 

After being involved in technical education in several community 

colleges, high schools, and serving on some technical boards around 

the country, I came up with a vision and organization called 

CHAMPIONNow. As Brad noted, it is an acronym that stands for 

Change How Advanced Manufacturing’s Perceived in our Nation. 

The Now is the call to action. You can see our film trailer on our 

website. 

Since founding CHAMPIONNow in 2009, I have been involved in 

various projects. Currently, I am involved in a project that will film 

inspirational stories of career paths into manufacturing with young 

people, and these can be used as role models for others unaware 

of these successful opportunities. 

I have been involved in Project Lead the Way in my community. 

This program gives high school students a way to apply theoretical 

knowledge with hands-on applications, strengthening their STEM 

skills. This was missing in my engineering education and I became 

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disenchanted and went into the working world. My family and my 

father’s devotion to the art and science of manufacturing has actually brought me into what has now turned into a lifelong passion 

of making things. 

CHAMPIONNow is poised and ready to champion manufacturing 

careers. We need to educate our country on how exciting, challenging, honorable, and financially rewarding these careers can be. 

Everyone in our industry has to quit complaining and join together 

and take action. I encourage everyone here to do what they can to 

lead the charge on the skills gap and support U.S. manufacturing. 

We have many needs in technical education, policies, and perception. We need everyone on both sides of the political spectrum to 

agree on this and play a part in the solution. 

Thank you again for all of your time and giving me the opportunity to speak today. I hope I have been able to bring to light 

some things and a passion that can make a difference in what I 

consider to be a vital topic in the U.S. manufacturing industry. 

Chairman GRAVES. Thank you, Mr. Iverson. 

I will now yield to Mr. Chabot to introduce our next witness. 

Mr. CHABOT. Thank you, Mr. Chairman. 

It is an honor to introduce our next witness here this afternoon, 

Bruce Broxterman, who is the president of Richards Industries, 

which has been producing industrial valves for a host of industries 

since 1948. 

Bruce Broxterman started at Richards Industries as an inside 

sales correspondent back in 1980 and now serves as its president. 

As Bruce Broxterman can surely tell you, his is a customer-driven 

company. Their growth and longevity directly reflects the value of 

the products and service it offers its customers. I am thankful that 

Bruce Broxterman was able to attend today’s hearing to highlight 

what has made his company successful and speak to some of the 

challenges American manufacturers face today. 

Bruce, Jack is your brother or cousin? 

Mr. BROXTERMAN. My older brother. 

Mr. CHABOT. Older brother. That is what I thought. 

And on a side note, Bruce’s brother, Jack Broxterman, was a 

football coach and social studies American History teacher at my 

high school, LaSalle High School back in Cincinnati, and I had him 

as a teacher and I had him as a coach, as well. And I ended up 

getting a college football scholarship partly as a result of his coaching and certainly the interests that he gave me in politics and government and American history and that sort of thing. So for better 

or worse, the Broxterman family is at least partly responsible—— 

Mr. BROXTERMAN. It is not our fault. 

Mr. CHABOT. Not your fault. 

Some of my colleagues on the other side of the aisle would probably say for real, but we welcome you here, Bruce Broxterman, and 

look forward to hearing you now. 

STATEMENT OF BRUCE BROXTERMAN 

Mr. BROXTERMAN. Thanks, Steve. 

Good afternoon, Chairman Graves. Thank you for holding this 

important hearing today to highlight the value of manufacturing in 

the United States, and thank you for the opportunity to talk briefly 

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about the challenges and opportunities that lie ahead for U.S. manufacturers. 

As Steve said, my name is Bruce Broxterman, and I am the 

president and CEO of Richards Industries, a privately held manufacturer of industrial valves located in Cincinnati, Ohio. We have 

been in business since 1961, and our mission is to provide heavyduty valves to control flow, pressure, and temperature for our customers in the process industries—places like refineries, chemical 

plants, petrochemical plants, pharmaceutical facilities, and food 

processing plants. 

Richards Industries has been fortunate to experience solid 

growth over the past six years. After a management buyout in 

2007, we have seen unprecedented growth of our revenues and 

profits. Over those six years, our sales grew nearly 45 percent, with 

net earnings improving at nearly the same rate and employment 

growing by 12 percent to just under 150 employees. 

The deep recession of 2008, followed by a slow and uncertain 

economy, has resulted in a challenging business environment, and 

even now is proving to be difficult. 

Richards has grown by staying focused on the niche markets and 

taking care of our key financial fundamentals. 

We have a single-minded philosophy of providing products to 

meet the ‘‘special’’ requirements of our customers around the world. 

These products are highly engineered solutions to different customer process problems. Manufacturing runs in our plant are low 

and precision is high. 

Being a small manufacturer can be challenging, but it provides 

the opportunity for us to be agile and flexible as we work to provide our customers with fast response and product delivery that 

they need to be effective and successful in their operations. We are 

often asked to build an engineered custom product and ship it in 

less than two days, and our lean process structure and flexible approach enables us to do that. 

Our products are used in every corner of the world. Despite our 

size, you will find Richards Industries products on drilling platforms off the coast of Brazil, in pharmaceutical plants in the heart 

of Europe, on gas pipelines in Central China, and in chemical 

plants in Kazakhstan. 

In 2007, international sales represented just 19 percent of our 

Richards Industries revenues. In 2012, international sales were 45 

percent of the shipment total. 

Along with increased revenues, Richards Industries has been 

able to achieve healthy levels of net income and cash flow, thus enabling the company to repay the debt taken on at the time of the 

acquisition, while at the same time reinvesting significant amounts 

of capital in the company. The reinvested capital has been used to 

generate further company growth and jobs. 

At the heart of our success are the employees at Richards Industries. Our team is talented, experienced, and creative, but most importantly, they are committed to excellence and performance, 

bringing a ‘‘consider it done’’ attitude to work every day. Additionally, the family culture runs through our company, helps set up our 

team for success, and has resulted in Richards Industries being 

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chosen as the ‘Best Place to Work’’ five out of the last six years by 

a local Cincinnati business publication. 

There are, however, immediate and future challenges that 

threaten our ability to maintain our pattern of success as a manufacturer in the United States. First among them is the structural 

cost of U.S. manufacturing imposed by government tax policy, regulatory policies, and legislative initiatives. Richards Industries is 

structured as an S-corporation and, therefore, the taxable income 

generated by the enterprise flows directly through to personal tax 

returns of the owners of the company. High individual federal tax 

rates imposed on the owners siphon off precious capital that, but 

for the higher taxes, would be reinvested back into the company to 

purchase capital assets, grow the company, and create new jobs. 

The Manufacturing Institute estimates that these structural 

costs add a full 20 percent to manufacturers’ costs of doing business here in the United States relative to our major partners. 

U.S. health care costs have increased 80 percent in the last decade, and we believe that much of the cost increase is attributable 

to government involvement in the insurance marketplace via coverage mandates. We believe that the expansion of government involvement in health care brought on by the implementation of the 

Affordable Health Care Act will put forward further pressure on 

health care costs. 

Of equal concern is the shrinking supply of qualified workers. 

The manufacturing workforce is moving toward retirement at a 

faster rate than the rest of the economy, and we cannot find qualified workers to fill positions as machinists, operators, and skilled 

assemblers. The U.S. education system is not equipping American 

students with the right skills and the right disciplines to support 

the manufacturing economy. The lack of qualified workers will impact U.S. manufacturers’ ability to compete in the global marketplace. 

I encourage the Committee to continue to explore these growing 

challenges and to act to alleviate the accelerating headwinds. 

I am very proud of the small part that Richards Industries plays 

in the nearly $2 trillion U.S. manufacturing sector, and I am excited about the opportunities ahead. 

Thank you for your support as we move forward through these 

challenging times, and thanks for the opportunity to testify. 

Chairman GRAVES. Thank you very much, Mr. Broxterman. 

Mr. Tipton, questions? 

Mr. TIPTON. Thank you, Mr. Chairman. I would like to thank 

our panel for taking the time to be here. I am a small business guy. 

That has been my real trade in life, and the ability to create jobs 

and to be able to address some of those headwinds I think is critically important. And I certainly want to applaud all of your efforts. 

If we could, you may not have a specific number. I know in my 

particular district in Colorado we still have double digit unemployment, real unemployment, in my two largest communities. Can you 

tell us out of your home areas in your state what is unemployment 

looking like right now? Mr. Schwind, do you want to start? 

Mr. SCHWIND. I do not have the exact figures, but I can tell you 

it is hard to find the people with the skill to work for us. There 

seem to be plenty of workers available to come to work, but almost 

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zero with the skills that we need to have them safely work within 

a shop like ours with cutting tools, with machines, with chips. Safety is a huge issue, so we cannot take people fresh off the street and 

put to work; they need to be acclimated to the environment to be 

able to work effectively but really safely. So I do not have the specific number; I just know that there might be people that could fill 

the jobs but they are not skilled enough to do it. 

Mr. TIPTON. Right. 

Same experience? 

Mr. BROXTERMAN. It is amazing. I am sorry, I had a campaign 

on Saturday to hire—we are trying to hire three machinists. First 

of all, it took us a good four weeks to put together a list of potential 

candidates. We had 50 scheduled for interviews. On Saturday 

morning there were 12 no-shows. It is amazing to me the effort 

that you have to put forth just to find—and these are not experienced machinists. We have a training program, an apprenticeship 

program, so we are willing to invest in them and train them, but 

to find qualified folks who are trainable is getting to be impossible. 

Mr. IVERSON. We have gotten involved in some internship programs, I think five. We are only a 20-man company, so for us that 

is kind of a big deal and we found the same thing. Retaining people 

is very difficult. There is a lot of recruiting going on and people are 

paying people to go from one industry to another, so that is a 

struggle that we struggle with. But I think the actual unemployment may be around 9 percent in our state. I am not really sure. 

Brad might know that better than I. But certainly, finding people 

is very difficult for all three of us. 

Mr. TIPTON. Great. 

Well, Mr. Schwind, I was captivated really by a comment you 

made that came from your father, ‘‘To manage your business with 

your mind and not with your heart.’’ But you then followed that 

with ‘‘even in tough times you were able to hang on to the people 

that you worked with.’’ Does that really demonstrate that particularly with the small businesses that we have in this country that 

it is more of a family operation and that includes those that you 

work with? 

Mr. SCHWIND. Absolutely. Absolutely. Being a 20-person company, we know the families of every individual. We know the kids, 

the kids’ names. So we take on ourselves responsibility of the welfare of those individuals—not just the folks who work for us but 

the entire family unit. 

During the recession, we kept everyone because we got a little 

smarter. We did things that we did not do before. We brought some 

things in-house that we had paid for currently, and you are willing 

to do that. You try to do everything you can to retain your workforce because it is a personal relationship. If we had 800 or 900 employees, it might not be that way, but given that I know the names 

of every individual and every family member of the folks that work 

for us, you do what you can to keep—to hang on to those employees. 

Mr. TIPTON. Right. You know, it was interesting listen to all 

three of you because what you were specifically noting is what happens here in Washington is impacting your ability to be able to create jobs to be able to hang onto the people you have and to be able 

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to build for the future. You cited the Affordable Care Act as being 

able to create uncertainty, potentially endangering jobs, sequestration. I think it is worthy of note out of the House of Representatives we passed two pieces of legislation, and I would encourage 

you to get a hold of your senators to take up those pieces of legislation. Also, the STEM act that we passed out of the House of Representatives when we were looking at Science, Technology, Engineering, and Math to be able to address them. 

But if you could give, and Mr. Broxterman brought it up at the 

very end, we just had the fiscal cliff legislation a few months back, 

which is impacting sub S-corporations, S-corporations like his. If 

you have a piece of advice for Washington, what would it be? 

Mr. BROXTERMAN. You know, from my perspective it is to be 

aware of the impact that that has on small businesses. The impression that comes to folks like myself is that we are the fat cats that 

are sitting on the back of our yacht with a martini in our hand. 

Well, that is actually an S-corporation. That is a small business. 

I tried to tell this to my folks at election time, is that what has 

an impact on us is the approach that all income, all personal income over $250,000 has got to be taxed at a higher rate. Those are 

small businesses. Those are S-corporations. Those are not just individuals who have been very highly compensated. 

Mr. IVERSON. I have seen a lot of people that have, because of 

the fiscal crisis, have not invested in their businesses in terms of 

capital equipment, things that can make them more productive. So 

that is something that I have seen in calling on different manufacturers in the three states. 

Mr. SCHWIND. The one thing I would mention in terms of 

Washington, and I know most of the folks on this panel have small 

business backgrounds so you know what I mean when I say this, 

but spend every dollar as if it were your own. Within our companies, whether we are ordering tooling, ordering services from an 

outside vendor, spend the money as if it were your own and it is 

amazing how much more conservative we spend when we think of 

things that way. 

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

Chairman GRAVES. Ranking Member. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. And thank you for 

being here today sharing with us the successes. 

This Committee is well aware of the great role that you play in 

our economy. And so we are concerned about providing a climate 

that is conducive to help you do what you do best, and that is creating jobs for our economy. 

There has been some discussion here in the House regarding a 

comprehensive tax bill, and the chairman and I have participated 

in some roundtables with the Ways and Means members, leadership. And so my question to you is besides lowering tax rates, what 

specific tax changes could better help small businesses have greater access to cash? 

Mr. BROXTERMAN. I think from my perspective, the continued 

ability to buy capital equipment and have taxes not be a big factor 

in that decision-making process is a major plus. We are typically 

a company that buys a major machine tool every year. 

Ms. VELA ́ ZQUEZ. Have you used section 179? 

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Mr. BROXTERMAN. We have. Yes. And we have—— 

Ms. VELA ́ ZQUEZ. One of depreciation? 

Mr. BROXTERMAN. Yes, absolutely. And it does. It makes a difference whether you make that move or you wait a period of time. 

Ms. VELA ́ ZQUEZ. Sure. 

Mr. BROXTERMAN. Or perhaps put that move off all together. 

This is the first year in probably 15 years that we did not buy a 

piece of capital equipment, and it was because of the uncertainty 

in the tax situation that caused us to do that. 

Mr. IVERSON. I would agree also. The section 179 is huge in our 

business. We sell machine tools. A couple of years ago the 179 was 

more aggressive than it is currently. I know a customer that had 

a family business that invested in a $1.2 million piece of equipment, which was a huge investment for them, and the reason that 

they were able to do that and invest back in their business is because of the 179 and implications on their tax burden. 

Mr. SCHWIND. I would suggest that in addition to the advantages on capital purchases, within companies that provide training 

for their employees. We have all said that we have a lack of skilled 

labor. 

Ms. VELA ́ ZQUEZ. Yes. 

Mr. SCHWIND. Our company belongs to the National Tooling 

and Machining Association (NTMA), and NTMA has created an online university to send students to achieve college level training at 

night while they work in our shops during the day. But the individual companies bear the costs of sending those students to programs such as this. And I think more incentives for companies to 

provide training in-house or at least to provide some incentive to 

do it not only makes their individual companies stronger but across 

the industry if we are doing this, I think there can be some leverage there. 

Ms. VELA ́ ZQUEZ. Well, there are some partnerships happening 

between community colleges across the country and the small business sector in New York I am quite aware because one of them is 

in my district. And precisely, I just held a roundtable with small 

manufacturers, and time and again the major issue is to find 

skilled workers. 

Thank you, Mr. Chairman. 

Chairman GRAVES. Mr. Chabot. 

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

Bruce, I think I would like to go to you since you came all the 

way from Cincinnati. 

You had started—what year did you start? Was it 1948—excuse 

me, 1961 or 1948? 

Mr. BROXTERMAN. The company was incorporated in 1961 but 

the original product line was developed in 1948. That is correct. 

Mr. CHABOT. All right. I was just wondering how my cracked 

staff could have got that wrong. 

Mr. BROXTERMAN. Okay. No, they were right. 

Mr. CHABOT. My question is this. You have been a very successful company and you have approximately 150 employees now. 

Times are different now than they were back then. If you would 

have started a company or wanted to start a company like you did 

back then now, would that have been possible? What additional 

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challenges do startups have out there nowadays that were not in 

existence back when you guys started up? 

Mr. BROXTERMAN. Well, you know, I think there are a few 

things. It is interesting. I was involved in a management buyout 

of the company in 2007. We could not do that today because there 

is just no way in the banking environment that I could have gotten 

the funds to help me finance that. 

Mr. CHABOT. Is that because of Dodd-Frank in particular, do 

you think? 

Mr. BROXTERMAN. Yeah. I mean, from our standpoint I just 

had this conversation with U.S. Bank this week, and they said you 

should mention that if you get the chance because that kind of legislation change has a huge impact on their approach to lending dollars to people like me. 

I think, too, I think the issue of finding skilled labor now as a 

startup would be very difficult. It is hard enough for me as a company of 150 to get people to take the chance to go to work for a 

small company, much less someone who is just a startup and just 

getting out of the chute. 

Mr. CHABOT. Well, getting into that question about skilled 

labor, and all three of the witnesses here have mentioned that, 

they are having the same difficulty, and that is in an economy 

where we have ballpark somewhere between 7.5 and 8 percent unemployment, and that really, I would argue, does not adequately 

reflect the true unemployment when you look at people that used 

to work full-time and are working part-time who are still counted 

as working, and people that have given up working all together 

have gotten so discouraged they drop off and they are not counted 

at all anymore. So it is probably significantly higher than that. But 

whatever, the unemployment rate is higher than it ought to be, yet 

folks like yourselves are having a hard time hiring people. Are 

there any things that you would suggest that either we ought to 

be doing or maybe the local vocational schools ought to be doing or 

somebody ought to be doing to make folks employable in these high 

paying jobs which you all are screaming? And I will let all three 

of you touch on that if you would like to. 

Bruce, do you want to go first since you are the hometown guy 

to me? 

Mr. BROXTERMAN. You know, that is one that I thought of 

quite a bit on the way out here and as I prepared for the testimony, and it is difficult. I think there are some line items in the 

budget that support the nonprofits, such as the MEPs in Cincinnati. It is a group called TechSolve that offers low-cost training 

for companies like ourselves. They have a machining center where 

they share their expertise on machining and machining skills. But 

it is a challenge. It is a special challenge. 

I like hearing about what Steve has to talk about because he has 

taken kind of a unique approach there I think that would be helpful as well. But it is a challenging time and I am not sure what 

the answers are. 

Mr. CHABOT. Okay. Would either one of the other witnesses 

want to—— 

Mr. IVERSON. Well, I got an e-mail from the president of the 

Illinois Manufacturing Association, and he said that basically, stuSBREP-219 with DISTILLER

13 

dents coming out of high school, just their math skills are not up 

to par. And so a lot of us, the first thing they do at community colleges is that they find that they have to re-teach and do a better 

job at getting the math skills sharpened first. So I think schools 

in general are not—they are being measured maybe in an inappropriate or not necessarily an efficient way. And so a lot of people, 

a lot of schools are putting prominence on things that may be they 

should not have prominence on. 

Mr. CHABOT. Thank you. 

Mr. Schwind. 

Mr. SCHWIND. Yes. I think in our own experience we find new 

individuals coming into our company with no experience have 

found us as maybe a second or a third option. They were not charging into machining out of high school because while in high school 

there was no real promotion of it. I think we need to get with mom 

and dad while these youngsters are still 14-, 15-, 16-years old in 

high school. I know within the high schools at least in our area we 

have had good success with robotics, and out of that students are 

learning how to design high level. They are learning how to build. 

But it seems to be gone the days where you would go to high school 

with kids that can rebuild cars when they get out of high school. 

It just seems like we have lost focus or funding. I am not sure why. 

But at the high school level there is very little real building or 

manufacturing going on. It seems to have moved more towards design and engineering, which is still good, but we just lost that 

hands-on approach I think at the high school levels. 

Mr. CHABOT. Thank you. 

Mr. Chairman, I see my time is about ready to lapse. Just let me 

make one final point. 

I happen to be the chair of the Subcommittee on Foreign Affairs 

on Asia and the Pacific, and Mr. Broxterman, you had mentioned 

that about 45 percent of your sales now are international, and we 

are looking at TPP and we are looking at trade with the Europeans 

and a whole bunch of other free trade agreements and things of 

that nature, so in 10 seconds could you tell us do you think those 

types of things would be helpful? Would you like to see the international trade to go up? 

Mr. BROXTERMAN. Absolutely. Obviously, our goal is to have 

it be half of our business or more. The more you can do to reduce 

barriers between us and our foreign markets and support us in our 

work and sending products overseas, the better. Places like Brazil 

where there is a challenge in terms of their import taxes, and then 

obviously, we have had some property rights issues in China as far 

as patented products being copied, those are the things that are 

toughest for us. 

Mr. CHABOT. Thank you very much. 

Thank you, Mr. Chairman. I yield back. 

Chairman GRAVES. Mr. Schneider. 

Mr. SCHNEIDER. Thank you, Mr. Chairman. I want to thank 

the witnesses. I know, having run a business, taking a day and 

coming to Washington is difficult, so thank you for taking time out 

of your busy schedule and sharing with us your stories. 

Particularly, stories of manufacturing. I know when I graduated 

in 1983 with an engineering degree, we had 12 percent of our gradSBREP-219 with DISTILLER

14 

uates in engineering and 22 percent of our economy, our GDP was 

manufacturing. Both those numbers are today at half. All three of 

you have told us that you have a hard time finding employees. 

When I am home in my district I make a habit of visiting companies in the district. I am batting 100 percent. Every single company 

we go to is saying the same thing. We cannot find people with the 

skills we need. 

And Mr. Schwind, you made a comment about kids coming out 

of school but not having the requisite skills. There is a distinction 

between knowledge and know-how, and what we need are people 

who have the know-how to put a car together, to operate these machines. 

I was proud the first bill I introduced is the America Works Act, 

which is working with community colleges and industry to help 

close the skills gap. And Terry, what you have been doing in Illinois with CHAMPIONNow, working with—high schools and some 

of the other things is nothing short of miraculous. So that was a 

long way of saying thank you to you all for what you do. 

And I would be remiss, also, Mr. Schwind, your father was a client of mine before you bought the business, and having worked 

with family businesses for almost 20 years and working with my 

own dad, I tip my hat to you because as you all said, family businesses treat their employees like family. That is how we are going 

to grow the economy. 

As we look forward, as we look to close the skills gap, you mentioned, Mr. Broxterman, that it takes a number of years to train 

people in your business. How long has it taken you at this point 

to fill an open position? 

Mr. BROXTERMAN. From our standpoint, the process is threefold. One is to actually find a pool of employees, and that typically 

runs two to three weeks. And then once you have them is to bring 

them in and vet that process. And then finally, to make that offer 

and try to bring them onboard. I would guess that the whole process for us is somewhere in the range of about three months. 

Mr. SCHNEIDER. Mr. Iverson? 

Mr. IVERSON. Well, we are in a situation where we do not have 

a production technician, which is hard enough in itself. Many times 

we have to find either a service engineer—we have been very lucky 

with our service people. But salespeople that have to have mechanical skills and other skills, time management skills, so we have had 

to actually bring young people in and develop them, and it is short 

of two years to get to the point where they can actually do the job 

effectively. So if we are trying to find someone seasoned, it may 

take us every bit of six months or more. 

Mr. SCHNEIDER. Mr. Schwind. 

Mr. SCHWIND. In our experience, to recruit someone and recruiting someone with skill, anywhere from three to six months. 

Lots of interviewing, but finding someone with the actual handson and the practical experience could take up to six months. Finding someone to come in with no skill is relatively easy, but then 

you shift a lot of the responsibility and cost of training, safety, all 

that, right back into your shop. So you would prefer to obviously 

hire the more experienced because you bring in some unknowns 

when you bring in someone fresh with no skill. 

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Mr. SCHNEIDER. Sure. Do you see that timeframe—getting people, getting people the skills, having to retrain or train backwards, 

having a restrictive impact on your ability to grow your businesses? 

Mr. SCHWIND. From my standpoint, it definitely is. It reduces 

capacity. We run three shifts. In past years, that second and third 

shift was a big part of what we did. Our second and third shifts 

now are just skeleton shifts because we just do not have the manpower to fill them. 

Mr. IVERSON. At our indicator business we do not have a second shift and we compete with competitors all over the globe. And 

we have actually gone to what they call ‘‘lights out’’ manufacturing, 

where we can run the machines at night unattended. People can 

say that that is taking away jobs but it really is not. It is making 

us more competitive, and trying to put a second shift on—a first 

shift is hard enough. A second shift is almost impossible. 

Mr. SCHWIND. We do long manufacturing runs, so we do run 

a second shift, but we pick and choose. There are certain cases 

where we can take a relatively new employee and have them run 

certain jobs, but in many cases, if it is something specialized, we 

intentionally hold off. And we could run it but cannot because we 

do not have the human capital trained enough to do it. 

Mr. SCHNEIDER. Great. Thank you. 

I am running out of time. I could sit here and talk all day about 

manufacturing, about small business, about family business, so 

again, thank you. One of the things we need to push through is sequester, and Mr. Schwind, you touched a bit on about it, but real 

briefly in a couple of seconds, can you give us a sense percentagewise the impact sequester is having on your business? 

Mr. SCHWIND. Year-to-date it has been about a 30 percent impact on our revenue to the federal government. And like I said before, we knew something had to happen. Sequestration did, but 

within the recession when demand dropped, we at least had insight 

into when things were going to turn around. Right now, with our 

government buyers, we do not have that insight. That is what is 

hard for us to plan. So what we have done in response is we are 

looking for commercial work and adding that to our pipeline, but 

it has been difficult for us. About a 30 percent drop. 

Mr. SCHNEIDER. Mr. Iverson. 

Mr. IVERSON. I would concur. I mean, there is a lot of uncertainty, and because of the uncertainty, people are not going to buy 

machine tools. Our indicator business, we are investing in research 

and development quite heavily, but you know, we cannot necessarily make the investments that we would normally make. 

Mr. BROXTERMAN. The impact there is less for me. It does add 

to the uncertainty of the overall economy, and therefore, the investments that my customers make. But I do not directly sell to that 

marketplace that is so strongly impacted by sequestering. 

Mr. SCHNEIDER. Well, again, thank you. Your success is our 

success. The ability for you all to grow is how we will grow our future. So thank you all again for coming today. 

Mr. BROXTERMAN. Thanks. Thank you. 

Mr. SCHNEIDER. And I yield back. 

Chairman GRAVES. Mr. Luetkemeyer. 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. 

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I just wanted to thank the individuals for coming today. I appreciate your insights, the real life stories of how you operate your 

businesses, the impact of the rules, regulations, and trade policies 

of this country on what you do. I am going to save my questions 

until the next panel because it is a long, long day for us, so I will 

just yield back with that, Mr. Chairman. Thank you very much. 

Chairman GRAVES. Ms. Kuster. 

Ms. KUSTER. Thank you very much, Mr. Chair. 

I appreciate it. I was planning to yield back to wait for the next 

panel but I appreciate this conversation so much I just wanted to 

weigh in very briefly. 

I am, like my colleagues, very, very interested in small business 

and workforce development, and I have been on this Congress at 

your Company tour whenever I go back. I am now up to 17 companies, very, very similar to your own with this CNC high-level manufacturing. And the witness that I brought here from New Hampshire today actually is going to describe a five generation company 

that has industrial revolution machines that are over 100 years old 

in the same company, the same factory as CNC machines that are 

cutting edge. So we are proud of it in New Hampshire. 

But I just want to share with you a bill that I have introduced, 

Workforce Development Investment Act. It is H.R. 1747, and I 

would love to get bipartisan support from the panel that will provide tax incentives to employers who partner with local colleges to 

prepare students for the workforce. And is this the type of legislation that might be helpful for you working with your local community colleges, technical colleges? And if so, I would love to get your 

comments. 

Mr. BROXTERMAN. I would just say that that is the kind of 

thinking that will help us move forward. It is exactly the kind of 

thing that we need. Some type of a break so that we can work with 

local experts to train folks. We have our own Richards Industries 

University that we created for ourself, which is a combination of 

on-the-floor work plus online work to help our folks learn the industry, but anything that can accelerate that process because it is 

three to six months to find somebody, but it may be as much as 

two years to train someone that moved from basic hand-drilling 

type operations to the true CNC environment. 

Ms. KUSTER. That would be terrific. 

Your comment about the math skills, that is precisely what I am 

running into. Like my colleague, Mr. Schneider, I am batting— 

every single company that I have been to has had this issue. One 

company, of every 10 that they bring in for an interview, only four 

have the math and English skills. Of those, two are disqualified for 

drugs and alcohol, and of the two that they hire, only one will last 

longer than four months in the company. 

Mr. BROXTERMAN. You know, I have not done the math but I 

bet ours is very similar to that. 

Ms. KUSTER. Is very similar. 

Mr. BROXTERMAN. And that is the sequence that we run into 

as well. 

Ms. KUSTER. So, my only other comment, and then time is short 

today, I will yield back, but just how can we all be working together to make sure that we invest in this basic infrastructure 

SBREP-219 with DISTILLER

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which is our public school system? One of you mentioned Project 

Lead the Way, and I am a huge fan of that. My son started in the 

seventh grade and our teeny little town of 7,000 people, and he is 

now studying engineering in college and starting to work this summer at Lincoln Labs. So how can we all be working together to encourage those types of programs in our public schools? 

I love your CHAMPION NOW program; maybe Mr. Iverson, you 

have something you could add to that. 

Mr. IVERSON. Well, I think we need to keep, you know, STEM 

going, Project Lead the Way. We cannot let those not be supported. 

I think they need to be implemented more across the board 

throughout the whole country. Different states I travel in, I see one 

state doing a great job and another state not. I also think that the 

school system needs to be measured a little bit differently than it 

is so we can encourage and rate the school about how successful 

they are not of just sending young people to four-year universities, 

but then also success stories as well and incentivize the schools 

and track the schools for those successes as well. But I also think 

that Project Lead the Way has got to succeed and we have got to 

support it. 

Ms. KUSTER. And then the last question for Mr. Schwind, one 

of you talked about videos, and what I have learned from my visits 

to the community colleges is a comment that you made about it is 

often the parents that have the image of the old, grungy, dark 

shop, and so I think the videos would be brilliant in trying to bring 

the parents into this modern environment where it is so clean and 

some of these companies that I go into, everybody has got the caps 

and the clothing, so any comment about how we could engage the 

parents. 

Mr. SCHWIND. Absolutely. And I think the story is a good one 

in that the image needs to change for what manufacturing really 

is, but you think of all the students going through four-year universities, saddling up $60,000–70,000 of debt with no job. In our industry, many of our companies, especially within the NTMA, pay 

for that training, if there is some tax incentive to do that, and 

these students graduate, have a good-paying job with no debt. It 

is nothing but a good story, and I think that needs to be intertwined and told by guidance counselors and directly talking to 

mom and dad. I think it is a great opportunity. I think videos 

would help. 

Ms. KUSTER. Terrific. 

Mr. IVERSON. We are involved in a lot of videos, and I concur 

100 percent that the parents and the influencers need to know 

what reality is more so. National Manufacturing Day, I think it 

was the FMA, has October 5th where we open our doors as companies and all the manufacturers need to do that and participate so 

that the parents can come in and see what the reality is on the 

manufacturing floor. I also think your point about getting businesses, partnering with community colleges is huge. And when you 

see that happening, there is a notable difference in impact on the 

community in the manufacturing sector. 

Ms. KUSTER. Excellent. Well, thank you so much. And I appreciate you all coming to Washington and all the witnesses today, 

and I will look forward to working on these ideas with you. 

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Thanks, and I yield back. 

Chairman GRAVES. Mr. Hanna. 

Mr. HANNA. I will just thank the witnesses for being here today, 

and I yield back. 

Chairman GRAVES. Ms. Meng. 

Ms. MENG. I also thank the witnesses for being here. I yield 

back. 

Chairman GRAVES. That is everybody. 

There are no other questions with that. I appreciate our first 

panel for coming in. Thank you. Some of you traveled a long way, 

obviously, and I very much appreciate that. And with that we will 

seat the second panel. I will turn the gavel over to Mr. 

Luetkemeyer. 

Mr. LUETKEMEYER. Okay. Could the second panel please come 

forward? Mr. Mittler, Mr. Wanger, and Ms. Johnson, Mr. Allen. 

Okay, let us get started with the second panel. And thank all of 

you for coming. 

We will apologize to you before we get started here. We have 

votes scheduled in about 15 minutes, and so when you see the bells 

and whistles and everything start to go off around here, we will 

take probably a few more questions at that point and then go five 

or 10 minutes or so and then we will have to take off. We will ask 

for your indulgence while we go cast a few votes and we will come 

back and we will continue with the Committee at that time. 

If you have been watching the discussion, you know that in front 

of you you have got a little box that has red, green, and yellow buttons on it. You get five minutes to make your statement, and then 

all of the members up here have five minutes to ask you questions, 

and we will try and hold to that, in the general vicinity of, but it 

is my honor this afternoon to be able to introduce one of my constituents, Mr. Mike Mittler. He is president and co-founder of 

Mittler Brothers Machine and Tool in Wright City. Mittler Brothers has been making high-quality, metal working equipment since 

1980. The business includes a product line of metalworking and 

fabrication tools used in auto racing and aviation market. Additionally, they play a role in engineering, designing, and building special 

machines to automate industry. Mr. Mittler and his brother have 

built a very successful family operation that has not only excelled 

in business, but it has also provided safe and stable jobs for the 

local community and supported local students in developing skills 

and technical experience for future careers. 

I must add for the enjoyment of any NASCAR fans in the room, 

Mr. Mittler is a racing enthusiast whose experience in auto racing 

is related to a number of ideas for special tools and machine concepts, and his support of a particular individual who is now one of 

the top race car drivers in the NASCAR family. So in my opinion 

he is the perfect example of how hardworking Americans can 

achieve anything when their innovation and ingenuity are allowed 

to flourish. 

I am happy to welcome this great Missourian to the Committee, 

and I remind Mr. Mittler he has five minutes to present his testimony. My special welcome. Thank you. 

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STATEMENTS OF MICHAEL MITTLER, PRESIDENT, MITTLER 

BROTHERS MACHINE & TOOL; JIM ALLEN, DIRECTOR, 

SHAPEWAYS, INC.; JILL JOHNSON, FOUNDER AND CEO, INSTITUTE FOR ENTREPRENEURIAL LEADERSHIP; ANTHONY 

WANGER, PRESIDENT, IO. 

STATEMENT OF MICHAEL MITTLER 

Mr. MITTLER. Thank you, Congressman. It is my privilege, and 

I feel my duty, to be here to give my testimony today, so thank you 

very much. 

As you said, my name is Mike Mittler, president and co-founder 

with my brother Paul of Mittler Brothers Machine and Tool, a 

manufacturing company located in Wright City, Missouri. And as 

you said, I feel we are the classic example of small business. We 

founded our company around the kitchen table at my mom and 

dad’s house Super Bowl Sunday of 1980. On Monday, following the 

Super Bowl, we rented a 2,500 square foot building for $400 and 

a handshake with the owner. How little did we know? 

Paul and I worked many long days and nights as the only employees of the company to build our reputation of quality work and 

great customer service. We had honed our basic customer service 

skills with the first Mittler Brothers, cutting grass, raking leaves, 

painting houses, and many other odd jobs while in high school. 

With me, the oldest of eight children, and Paul the youngest, if we 

wanted to have any money at all, we had to earn it. 

Mom and dad were great role models while providing the initial 

startup money, which we paid back with interest by the way. They 

quickly said, ‘‘You boys are on your own and you have to make it.’’ 

Always glad to offer advice, they did not meddle in the business 

and knew we had to make our own mistakes so we would really 

learn the hard way. 

In 1984, we moved to our second location, a 7,500 square foot 

building that we helped build with a lot of sweat equity. We added 

both customers and employees slow but sure over the years and 

moved to our current location, a 50,000 square foot building in 

Wright City in 2004. 

Like Rick, I am a member of the National Tooling and Machining 

Association. I was proud to have served as the national chairman 

of that organization in 2006. There are thousands of companies like 

ours in manufacturing America, and together, it is these small 

businesses who provide jobs to the majority of Americans. 

Our most important asset is our people, and we are proud to 

have 10 people with over 20 years of service with us. Two of them 

started right out of high school and are now grandfathers. We currently have 60 employees, and last year we paid out over $2.5 million in payroll to our people. I am very proud to currently have five 

military veterans as part of our team, and I feel these are the real 

heroes of this country. We have always given young people a 

chance to work for us, and currently have several moving up 

through the ranks, including two still in high school working part 

time for us. 

Our people are all highly skilled, and we employ welders, machinists, toolmakers, engineers, painters, and assembly technicians. 

Our people are guided by just three basic rules—safety, quality, 

SBREP-219 with DISTILLER

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productivity. We provide a quality benefit package, including 

health care, that we pay the majority of, a 401K plan, a gain sharing program that last year paid over $200,000 to our employees, 

and a flexible work schedule to allow our people to deal with their 

family and their job. 

We utilize the latest technology in our manufacturing processes, 

including 3D sold design modeling software and high tech CNC, 

our computer-controlled machines. 

Our company has two main areas of focus. One is our product 

line of special machines and components for the auto racing, 

hotrodding, restoration, aircraft, and bike building industry. And 

the other is design and building of special equipment for industrial 

automation. 

Our standard products serve both the professional racer, fabricator, and the do-it-yourselfer who has our products in their own 

home workshop. We are proud to be able to sell our products all 

around the world. Our products have been featured in a number 

of hit TV shows, including the American Chopper series and several other how-to shows. Numerous trade publications and many 

online videos have also featured our products. We maintain a dynamic website, publish a 90-page catalog, and exhibit in several 

trade shows to promote and sell our products. 

In the design and build area, we manufacture custom machines 

and systems for large industrial companies, helping them compete 

in the global economy. Our customers include companies in medical, building products, energy, heavy truck, and general industry. 

While we have been successful over the years, many things I currently see bother me and give me cause for great concern. I wonder 

often would I do it all again? In today’s climate, could my brother 

and I succeed and create the jobs that we currently have? Unfortunately, I think the answer is no. 

There is too much uncertainty right now and the costs of manufacturing in America are rising, making us less globally competitive. Uncertainty over the health care law, instability in the tax 

code, ineffective and costly regulations are the biggest problems we 

face. It seems most of our obstacles come from right here in Washington. Small businesses do not need a helping hand. We need a 

sensible partner in government which allows entrepreneurs to 

build a business and most importantly create jobs. 

In closing, I am proud and thankful to live in the greatest country in the world and proud to have an opportunity to contribute in 

a very small way to that greatness. May God continue to bless 

America. Thank you. 

Mr. LUETKEMEYER. Thank you, Mr. Mittler, for your testimony. 

For the next witness we will have Mr. Payne introduce our next 

business, Ms. Johnson. 

Mr. PAYNE. Thank you. 

Mr. Chairman, if the Committee would be so kind to skip by Ms. 

Johnson. I have not received my information yet. 

I think that is a little shorter than the one I had. 

Mr. LUETKEMEYER. We will skip her? 

Mr. PAYNE. If the chairman would. 

Mr. LUETKEMEYER. Okay. 

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Mr. PAYNE. Thank you. 

Mr. LUETKEMEYER. Ms. Meng, is she here? There we are. You 

can introduce Mr. Allen. 

Ms. MENG. Thank you, Mr. Chairman, and Ms. Ranking Member. It is my pleasure to introduce Mr. Jim Allen. 

Mr. Allen is the director of Economic Programs at Shapeways. 

Shapeways is the world’s leading 3D printing marketplace where 

users can make, buy, and sell 3D printed products. The startup 

company produces and ships hundreds of 3D printed objects per 

day from its 25,000 square foot facility in Queens, New York. It 

also has the capability to print millions of objects per year. 

Shapeways uses cutting-edge technology that places it at the forefront of 3D technology. I am proud to have Shapeways as part of 

our Queens community and look forward to Mr. Allen’s testimony. 

Welcome, Mr. Allen. 

STATEMENT OF JIM ALLEN 

Mr. ALLEN. Thank you for inviting me to speak at this Committee. 

Again, my name is Jim Allen, and I am the director of Economic 

Programs for Shapeways. We are the world’s leading 3D printing 

marketplace and community. We harness the power of 3D printing 

by granting consumers access to commercial and industrial-grade 

printers to basically print whatever they want. These are done in 

our ‘‘factories of the future,’’ which as Ms. Meng mentioned is in 

Long Island City. We also have one in the Netherlands. 

We want to make product design both personal, accessible, and 

inspiring, and that is something that we can do through 3D printing. I have worked closely for the last two years of the company 

by maintaining close relationships with local, state, and federal 

government agencies and the local economic development community. I have also been involved in creating what we call the ‘‘factory 

of the future’’ in Long Island City, leveraging my experience in 

manufacturing and economic development. 

The Shapeways story reads like a new-age American success 

story. The company was founded in 2007 by Peter Weijmarshausen 

and Marleen Vogelaar in the Lifestyle incubator of Phillips Electronics in the Netherlands. At the time, 3D printing was still very 

expensive and virtually unknown. It was really the domain of large 

corporations, prototyping service bureaus, and architects, but it 

really was not used for creating real products for real consumers. 

Consumers were using 3D software to design objects but they really had no outlet to actually have those objects in their hands. The 

founders of Shapeways said, ‘‘Let us make this possible.’’ 

And so in 2008, the company launched their website and started 

3D printing, basically achieving the impossible. In 2010, the company was spun off from Phillips and the Dutch founders packed 

their bags and their families and moved to the U.S. They moved 

here to New York for the same reasons that a lot of companies do— 

direct access to the world’s largest consumer market, as well as access to capital. The founders also realized that New York City is 

a hub for creativity and design, and so they looked at this as being 

an opportunity to tap into the American workforce. 

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Since late 2010, Shapeways has created over 70 well-paying jobs 

in the U.S. in the fields of manufacturing, software and web design, marketing, product design, finance, and customer service. As 

we continue to grow, we are going to have probably over 50 people 

in the manufacturing plant and we are also going to need to have 

support at our corporate office in Manhattan, so there will be additional jobs created there. 

I want to highlight Shapeways growth from the perspective of 

community and marketplace. We have a diverse and global community comprised of designers, shoppers, as well as creators, who are 

turning out ideas on a daily basis. At least count they were 

uploading 60,000 new products every month to our website. We 

also have thousands of members of our community that do not 

have any 3D experience and who want to get involved in creating 

objects that populate their lives. At most recent count, we have 

over 300,000 community members. 

We also have shop owners. These are people who have design experience and are placing their designs on our website for others to 

purchase. We allow them to set their price and make their own 

profit in return for a small fee from us, but we manage the transaction from end to end. In 2012, we paid out over $500,000 in payments to these shop owners, and at that point there were 8,000 

shop owners. Now we have over 10,000. 

We have also been fortunate in raising capital. In 2010, we raised our initial $6 million, and over the last few years we have 

raised an additional $41.3 million. Most recently, a $30 million 

round through Andreesen-Horowitz and supported by Union 

Square Ventures, Index Ventures, and Lux Capital. This is a testament not only to the Shapeways concept and business model, but 

is indicative of the game-changing potential of 3D printing. As we 

go forward, we are going to continue to roll out new materials, invest in the latest 3D printing technology, and work our way towards 100 percent local production. Right now nearly 90 percent of 

the products sold in the U.S. are manufactured here in the U.S. 

I feel that this is the tip of the iceberg, not only for 3D printing 

but also for U.S. manufacturing in general. I gave a talk last January at the Leadership Summit of the International Economic Development Council and noted that there is a significant uptick in venture funding of manufacturing in hardware-based companies. So it 

is not just the latest social media fad or website that is being funded. This coupled with improvements proposed in the Jobs Act to 

ease restrictions on crowdfunding may help spark a renaissance in 

U.S. manufacturing. 

One of the challenges that we face, which has been mentioned by 

each one of the previous presenters, has to do with finding and attracting the best talent, and this we think stems from a lack of 

STEM education. We need to continue to support those programs. 

I worked for an economic development agency outside of Chicago 

before and was working closely with the workforce development organizations there and the manufacturing community to make sure 

that that happened. 

Before I finish, I would like to acknowledge the warm welcome 

and assistance Shapeways has received from Queens, Manhattan, 

and the State of New York, from Governor Cuomo, Mayor 

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Bloomberg, Congresswomen Carolyn Maloney and Grace Meng. We 

have been welcomed with open arms. Queens may not be known 

for its manufacturing industry, but the past few years Shapeways 

has realized how great a community this can be for business with 

the right investments and strategy. We hope that Shapeways can 

be both a hub and a catalyst for the resurgence of manufacturing 

in this area. 

Thank you again for your time. 

Mr. LUETKEMEYER. Thank you, Mr. Allen. 

Mr. Payne, do you want to introduce your witness? 

Mr. PAYNE. Thank you, Mr. Chairman. 

It is my honor to introduce Ms. Jill Johnson, CEO of the Institute for Entrepreneurial Leadership, also known as IFEL, located 

within my district in Newark, New Jersey since 2002. She started 

the organization to serve the unique needs of minority- and 

women-owned businesses with her father, Dr. Henry Johnson, who 

was a minority business advocate in Newark for over 20 years. In 

2011, she expanded the organization’s reach through a partnership 

with the City of New York Base Workshop in Business Opportunities program, which has special outreach to low-income communities, including the re-entry and veteran populations. 

While today’s hearing focuses on the resurgence of small business manufacturers, I wanted to ensure that the challenges and opportunities for entrepreneurs of various sectors, including manufacturing, from disadvantaged backgrounds, were highlighted as well. 

Given Ms. Johnson’s 20 years plus experience with minority- and 

women-owned businesses and her work in urban and low income 

communities, she is equipped just to do that. 

In her current capacity as the CEO of the Institute for Entrepreneurial Leadership and Workshop in Business Opportunities, Ms. 

Johnson is responsible for strategic direction of the organization 

that will guide their vision to make the American dream through 

entrepreneurship available to anyone who has the drive and commitment to be successful. She has led the company in the creation 

of successful programs focusing on entrepreneurial training and 

mentoring services for New Jersey Department of Labor, the Newark Urban Enterprise Zone, and the Rutgers Center for Urban, Entrepreneurial, and Economic Development. In 2012, the Institute 

for Entrepreneurial Leadership and Workshop in Business Opportunities together served over 1,700 aspiring and existing entrepreneurs in New York and New Jersey, as well as through five affiliate partners in four states. Prior to launching the Institute, Ms. 

Johnson was a financial analyst at Goldman Sachs, an associate 

publisher of Yes Magazine, which was a family-owned business, 

and the president of On Point Consulting, a strategic business 

planning consulting firm started by her husband. 

Again, it is my honor to introduce Ms. Jill Johnson. 

Mr. LUETKEMEYER. Ms. Johnson, you have five minutes. And 

just to let everybody—the witnesses as well as the panel members 

know, we will take this testimony and then we will adjourn to go 

vote. As you can see on the board, we are in the process of voting, 

and then we will return probably in about 30 to 45 minutes. 

So, Ms. Johnson, you have the floor for five minutes. Welcome. 

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STATEMENT OF JILL JOHNSON 

Ms. JOHNSON. Thank you very much to the Committee. 

My name is Jill Johnson, and on behalf of the Institute for Entrepreneurial Leadership, the Workshop in Business Opportunities, 

and the thousands of people who pursue small business ownership 

as their path to the American dream, I thank you for the opportunity to address this Committee today. 

I am here to share our view of the challenges that exist for the 

entrepreneurs that we serve which are particularly acute in segments that require high levels of capital investment, like manufacturing. 

The Institute for Entrepreneurial Leadership is focused not on 

the entrepreneurs who start businesses with loans from their parents or corporate buyout packages or by raising money on Wall 

Street; our clients are regular people who aspire to live a better 

life, people for whom the American dream is a concept worthy of 

pursuit. 

For over 10 years, as Congressman Payne said, from our base in 

Newark, New Jersey, we have provided one-on-one mentoring to 

businesses with revenues of less than $250,000. While these types 

of enterprises are often demeaned as ‘‘mom and pop’’ businesses 

not worthy of investment, we celebrate these entrepreneurs as the 

agents of change in communities where change is most needed. 

In 2011, we joined forces with Workshop in Business Opportunities, an amazing organization that has trained over 15,000 entrepreneurs since 1966, in the areas of New York City where the 

angel investment dollars do not flow. Since joining forces, we have 

created an end-to-end training, mentoring, and support continuum 

for the entrepreneurs that are often left out of the mainstream 

small business ecosystem. Last year we served close to 1,800 existing and aspiring entrepreneurs, and we launched a pilot program 

to replicate our model nationally through affiliate partners. Our clients are 73 percent women, 70 percent with household incomes 

below $60,000, and 74 percent black and Hispanic. The challenges 

that our clients face in starting and growing businesses revolve 

around three primary issues: the Capital Gap, Talent Gap, and Opportunity Gap. 

In 2010, white Americans were about six times as wealthy as 

nonwhite Americans. In dollars and cents, this translates to the average white family having about $632,000 in wealth, versus 

$110,000 for Hispanic families, and $98,000 for black families. 

While access to capital is often viewed as best addressed through 

the private sector, private sector solutions are generally not interested in low return, nonscalable ventures. 

While the SBA does what it can, the SBA cannot replace the type 

of business startup and growth capital offered through personal 

wealth and friends and family investment. Black businesses are 

particularly affected due to the historical lack of intergenerational 

wealth transfer. While money alone cannot fix a flawed business 

model, it is a simple truth that money can buy expertise and can 

enable a small business to stay afloat long enough to figure things 

out and adjust. Access to capital makes the pivot to profitability 

possible. Undercapitalized businesses have no room for error. We 

need to find solutions to the access to capital gap. 

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In addition to capital constraints, many entrepreneurs rank lack 

of business training as high among the challenges they face. Again, 

this is where we see a divergence in what exists for high tech, high 

growth businesses and the businesses that we serve. Across the nation there is a strong effort to support incubators and accelerators 

for companies that have the potential to attract significant private 

sector investment dollars, as well as research grants. Most of the 

value is in having access to the talent and expertise that entrepreneurs generally cannot afford during the early years in the development of the business. These incubators and accelerators stimulate innovation, provide support, and connect capital to projects 

that can change the world. What we are missing is the same level 

of resource for entrepreneurs who can change communities. We 

need to find solutions to the talent gap. 

Related to the previous two issues, a challenge for many of our 

clients is the inability to win meaningful contract opportunities. 

While this is due in large part to lack of capacity, we find that the 

absence of strong networks and relationships is also a limiting factor. Limited resources often prevent undercapitalized entrepreneurs from attending conferences, playing golf, joining clubs, 

and making the sales calls necessary to develop strong relationships with large potential customers. Government set-aside programs and corporate spend goals have been helpful in certain 

areas. However, for the businesses that we serve, these programs 

do not apply. We need to find solutions to the opportunity gap. 

After our years of working with thousands of aspiring and existing entrepreneurs, I have come to believe with all my heart that 

solutions are possible. I have presented several in my written testimony. It is not enough to just focus on those who have been blessed 

with the benefits and privilege of history; we must also empower 

those individuals who have not but aspire for more and whose spirits are still open to dreaming. 

On behalf of the thousands of entrepreneurs like the ones that 

we serve, I ask that as you consider ways to support the manufacturing sector, that you commit yourselves to inclusion of community entrepreneurs whose success creates a path to economic self 

sufficiency for more of us and a healthier economy for all of us. 

Thank you very much. 

Mr. LUETKEMEYER. Thank you, Ms. Johnson. That was right 

on five minutes. Very good. 

We apologize to the panel. This is our life around here. We are 

in the process of putting the rule on the floor for the Farm Bill, 

and so we are going to have a recess here for probably about 30 

to 35 minutes, I would assume, around 3 o’clock, give or take five 

or 10 minutes, we will be back. It probably will not be any sooner 

than 3 o’clock, but I would say as soon as we can get a number 

of members back here we will again go back to work. And I apologize, but again we ask for your indulgence. 

With that, we will recess until a little after 3:00. 

[Recess] 

Mr. SCHWEIKERT. Okay. Our Subcommittee is back in session. 

This is actually one of those moments where I got to be in the 

chair at just the right moment. I get to introduce Mr. Wanger. 

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Anthony Wanger is president of IO, a global leader in the manufacturing of software-defined data centers with intelligent controls, 

the next generation of data center inner structure technology, and 

integrated hardware and software data center platforms. IO intelligent controls offer enterprises, governments, and service providers 

an innovative way to deploy provisions and optimize data center 

capacities anywhere in the world. As president, Mr. Wanger directs 

the company’s expansion and acquisition activities overseas, key 

transactions, and the company’s legal, HR, security, and risk management functions. 

Prior to his involvement with IO, Mr. Wanger co-founded and 

managed Sterling Network Services, a leading enterprise data service provider. Earlier in his career, Mr. Wanger was a private equity 

investor and served as a senior vice president at Sterling Partners, 

where he directed a variety of investments and transactions for the 

firm. Mr. Wanger graduated with a bachelor of arts degree in political science from Embry Riddle University—that is a strange place 

to go for a bachelor in poly science—and a juris doctorate degree 

from Boston University. 

I know him. He is my friend. I am allowed to screw with him. 

And from a personal standpoint, knowing of the company, knowing some of the technologies, one of the reasons I am actually very 

pleased to have my friend actually here from Arizona. It is often 

when we speak of manufacturing we think of the production of 

widgets and things and not understanding the platforms it requires 

to manage in an information world. 

Anthony. 

STATEMENT OF ANTHONY WANGER 

Mr. WANGER. Thank you so much. Good afternoon, everyone. 

This is a terrific opportunity to appear before the Committee. In 

addition, I would like to thank each and every member of our team 

at IO. We now have employees all over the world prominently in 

Arizona but we have folks in several other states and also overseas. 

I owe a great thank you to my co-founders and partners, George 

and Bill Slessman, and our financial backers who have been steadfast. We built this business from the ground up, no employees. We 

started with a Costco folding table the first day of January 2007. 

So it has been an interesting several years. 

Lastly, I guess I would like to thank our customers who are the 

reason we are here, and people ask me all the time what is the secret to business and the secret to small business success? I think 

it is very simple. It is find great customers and keep great customers and make customers happy. If you do those things the rest 

of it is manageable. 

Just a little bit to add to the introduction, I come from a family 

of all small business owners. My mother, father, grandparents, father-in-law, sister-in-law are all small business owners. So these 

are discussions that we do not just have here, but also over the 

dinner table and at holidays. 

About IO, just to give you a little bit of background, we are a 

manufacturer of modular data centers and we are a leader in the 

software-defined data center industry. I brought an image over 

there. We build very large scale building blocks that can be used 

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and combined to create the data center capacity that a given company needs, from the very small all the way through large global 

giants. Our technology can be used to deploy, provision, and optimize so-called clouds. We hear a lot about the cloud in the news. 

The cloud really, ultimately, is a series of servers and storage devices that are connected to the Internet, and the demand for these 

services is substantial and growing. Our customers are industry 

leaders in everything from financial services, education, entertainment, health care, retailing, and more. 

I am very proud to say that our products and technology are 

made in the USA. We manufacture our data center modules in 

Chandler, Arizona. We recently doubled the size of our factory from 

two lines to four lines, and in addition, we employ a great deal of 

technical specialists, including software developers, so all of our 

physical hardware is software-defined and software-controlled by 

the operating system that we developed in a proprietary fashion, 

which again we believe to be industry leading. I am very proud to 

say that we have a substantial number of U.S. patents both issued 

and pending and that every day we go to work we wake up to 

please our customers and to innovate; to find better solutions to the 

problems and help our customers solve those problems. 

A recent item of note, the company is very pleased that we are 

now an exporter. We just landed our first IO anywhere modules in 

Singapore. We sent around on Twitter a picture of the modules literally hitting the dock earlier this month, and that was a proud 

moment for us to see great high technology products going from the 

U.S. to Asia and the rest of the world. 

We employ a workforce of approximately 385 people. The joke 

was that I am very pleased to be able to appear before you today 

but in a year or so we might exceed 500 employees because we are 

scaling rapidly and we have added about 100 employees this year 

already. Most of that was attributable to the expansion of our manufacturing operation. 

We both sell our modules, our IO Anywhere modules to customers directly where they deploy them and we also operate them 

for our customers as a service, and we do so in data centers in Arizona, New Jersey, and Ohio. And as mentioned, soon in Singapore. 

Our corporate headquarters is located in Phoenix, Arizona, and I 

think it is an important point that not only do we directly employ 

these folks but we have an ecosystem of terrific partners—supply 

chain partners and installation partners and other folks. And so 

when a small business is able to succeed and grow, I think we are 

able to take a lot of folks along with us, not just our direct employees but also the folks that work with key partners. 

Having done this, I personally in expansion have traveled a great 

deal and been able to see how much of a hunger there is for American-made products and technology. We are leaders in the IT and 

Internet infrastructure industry and IO is proud to be a part of it. 

Mr. SCHWEIKERT. Thank you. Not as good as Ms. Johnson in 

hitting the mark, but it was very, very close. 

One of the joys of getting to sit in the chair is I get to throw out 

a couple of questions, and so think of this sort of as the lightning 

round. 

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There are a couple things having listened to some of the opening 

statements. Ms. Johnson, just for the fun of it, are you familiar 

with the discussions on crowdfunding? And how do you think that 

future is going to help? Because I was listening to sort of you describe a lot of the sort of these tiny little organizations who are trying to set up businesses and get themselves going. Will it help? 

Ms. JOHNSON. Absolutely. And I think that crowdfunding is 

really, really an exciting opportunity for a lot of the businesses. We 

recently, actually, joined with Kiva Zip, which is doing 

crowdfunding, and they are doing it in a bit of a different way. So 

people can actually give contributions, loans essentially, in increments of $25 to give people a loan up to $5,000. We had someone, 

a client who was on the platform and was able to raise $5,000 in 

less than 30 days, and this was the money that provided the resources that she needed to really get her product up and going and 

to another level. 

Mr. SCHWEIKERT. I am elated to hear that. It is one of those, 

as you spoke in your opening statement, we do have some communities, some populations which do not have necessarily the family 

structures, the economic structures or banking relationships. It is 

a new world out there if we can ever get the SEC to finish its rule 

sets. I am excited because is think it is going to do sort a certain 

level of egalitarian level of access to capital. 

Ms. JOHNSON. The other thing that it does, just to add, is that 

it provides access to markets as well because it familiarizes more 

people with the product. 

Mr. SCHWEIKERT. Mr. Wanger, now the Jobs Act last year also 

had the emerging growth company part of it. So if you ever chose 

to go public in the next couple of years, do you believe you would 

fit into that portion of the Jobs Act? 

Mr. WANGER. Yes, I do. My understanding is that we would be 

right within the definition of the emerging growth company definition of the Jobs Act. 

Mr. SCHWEIKERT. And have you, as an organization, thought 

about what that might do to your ability to hire people and create 

jobs and create that platform for economic growth? 

Mr. WANGER. We have. Ultimately, we compete against very, 

very large companies, and one of the advantages they have besides 

their access to capital is also their ability to provide stock options 

and equity ownership and some of those items. So the ability to 

streamline a process to test the market and to do those things 

would be very beneficial. 

Mr. SCHWEIKERT. Okay. Forgive me for asking, but Mr.—is it 

Mittler? 

Mr. MITTLER. Mittler. 

Mr. SCHWEIKERT. Mittler, sorry. 

Mr. MITTLER. Yes, sir. 

Mr. SCHWEIKERT. Anything you see out there, both we have 

done in Congress that is helpful or you see as bottlenecks right 

now in your ability to grow and provide economic expansion? 

Mr. MITTLER. Well, I think that the health care law is certainly 

a big unknown for all of us. We are spending a lot of time trying 

to understand that. No one seems to really know what the direct 

impact of that is going to be for us. So that is something that we 

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feel has hurt us directly. We provide a very rich package. We pay 

about 85 percent of the total premium, not only for our employee 

but all their families and all that. We then, to keep our premium 

down, we have a partial self-funding, so that we assume part of a 

large deductible, but we self-fund that back to the employee to keep 

our premium down or low and still provide a good benefit to our 

employees. So that, I think, is a huge thing. 

We, as some of the other members spoke about, we are a familytype business. I do not know every one of my employees’ children’s 

names but I know all their names, most of their spouses. We engage them at least twice a year in social events. So I think that 

is a real problem for us. 

And then burdensome regulation, I think a lot of these regulations are written for the big guys, and when OSHA comes into a 

small business it is really quite a worry for us. And so I have said 

here before, I think OSHA as a small business should be there to 

support us, pat us on the back, and yes, if there are flagrant, repeated violations, certainly, fines would be in order. But I think 

they should be there to serve and help us to be globally competitive, help us to provide a safe environment. 

As you noted my three rules, I am a very simple guy—safety, 

quality, productivity. And I am proud to have been over a five-year 

run without a lost time accident. 

Mr. SCHWEIKERT. Thank you, Mr. Mittler. 

Mr. Allen, same sort of question. As policymakers, what are the 

bottlenecks that you see coming either from regulatory or public 

policy for you? 

Mr. ALLEN. I guess I see a couple areas. One I mentioned during my talk was about I think with the Jobs Act with the relaxing 

of restrictions on crowdfunding, if that could get passed through 

the SEC, I think then as Jill was talking about, that there is a lot 

more access to markets. It is sort of a validation of what a product 

or a company can do. One of the most successful campaigns that 

was on Kick Starter, a crowdfunding site, was for a manufactured 

product. The founders were looking for only about $250,000. They 

raised close to $10 million. So that tells you be careful what you 

wish for. But I think that is one thing. 

Within the 3D printing industry, we also have to look at intellectual property rights. We are very vigilant about making sure that 

people do not upload designs that have been copyrighted by others 

and they certify when they upload designs and sell them that they 

are their own designs. So that is something that we want to make 

sure happens or that we police ourselves, but we are also worried 

that larger companies may want to shut down companies like ours 

because they look at us as a repository for designs that could conceivably be—they may think that they are theirs. 

Mr. SCHWEIKERT. Interesting. 

Mr. Wanger, I saw your head nodding, so let me ask sort of you 

have had amazingly rapid growth, and I am elated to have you as 

part of my community. But with that, what are the bottlenecks 

that are hitting you, and what do you think we as policymakers 

should take on that would be helpful? 

Mr. WANGER. Thank you. I think from my perspective it would 

be an effort to create simplicity, perhaps safe harbors. Time and 

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time again I will be on a conference call with a benefits lawyer and 

a finance lawyer and a securities lawyer and an auditor and I am 

paying them all to fight with each other to try to understand what 

the intention was. And I think that things like a safe harbor or like 

a clear rule or a path as was exposed in the Jobs Act is just so 

helpful to us because it just gives us a clear path. We can comply 

with the law and get on with the business of business and job creation. 

Mr. SCHWEIKERT. With that, I pass over to the ranking member, Ms. Kuster. 

Ms. KUSTER. Thank you very much. And thank you, Mr. Chair. 

And I want to thank all of you as witnesses for taking the time as 

small business owners to come down and be with us in Washington 

today. 

My questions are focused, and I am so impressed by the way 

with all of your companies. Mr. Wanger, you are setting records 

here on job creation, so Congress needs to take note. We all were 

elected to create jobs, and I thank Mr. Mittler for his comment that 

Congress should be a sensible partner with business, and I agree 

with that approach. 

My question is in the area of workforce development. And I guess 

I will start with you, Mr. Wanger. Have you had any difficulty with 

this level of growth in terms of the skills? We heard on the previous panel issues around STEM education or preparation for the 

workforce and I was referencing a bill that I have introduced on 

tax incentives to employers who partner with local colleges to prepare students for the workforce. Do you have any comment on 

workforce development? 

Mr. WANGER. Sure. Thank you. 

Yes, I do. I actually sit on, in Arizona, on the Arizona Workforce 

Development Task Force as part of our Technology Council. We 

have had very good success training individuals who were previously residential contractors or tradesmen or women, and they 

have come into the factory and been able to contribute meaningfully quickly after some training. That has been a very positive 

story for us. I think a bigger challenge has been around some of 

the very specialized areas—sofware development, electrical, and 

sort of multiple discipline engineering can be a challenge because 

we need folks who understand electrical engineering and computer 

science and mechanical engineering. And so literally today on our 

website I think we have 30 or 40 open jobs openings, and most of 

the ones we have trouble filling are on these STEM technical areas. 

Ms. KUSTER. So I want to invite you to come to New Hampshire 

where we have on taxes, either income or sales. You have a long 

list. We would love to have you—and a great engineering school as 

well. 

So I wanted to turn to Ms. Johnson. In the same realm, do you 

have issues with the companies that you are working with in terms 

of the talent pool available and the education system? And do you 

have any recommendations of how we could be the sensible partner 

with business on the education side? 

Ms. JOHNSON. Absolutely. And I think that the challenges that 

a lot of our clients face are even more acute because they have 

fewer resources, and so they are hiring from probably the lowest 

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end of the talent pool and in inner city communities where the educational systems tend to be not what they should be. And then I 

guess from a personal standpoint I have four sons who are all in 

public school—three of whom are in public school, and one of the 

things that I have seen is just a movement away from working 

with your hands. And when I was in school we had to take shop— 

metal shop or wood shop. I took wood shop. And so you develop a 

familiarity and comfort with working with your hands and being in 

that environment that may lead someone to decide that a career 

in manufacturing is the right path for them. And I think it would 

be very beneficial to move that back into schools at the earliest 

educational levels, even at the elementary level, so that way young 

people have options. They have a path. It is not just, you know, if 

you are smart you go to college and if you are not you do something 

else. It is that now you are training very smart people and talented 

people from the very earliest levels to look at manufacturing as an 

option. And in our inner city communities where people may not 

have the ability and wherewithal to go on to college, this is really 

a viable career path that needs to be encouraged. 

Ms. KUSTER. Excellent. Thank you so much. 

I note that the clocks are not working but I will yield back in 

case I have any time. 

Mr. SCHWEIKERT. I just thought you were special. 

Mr. Hanna. 

Mr. HANNA. I will just thank the witnesses for being here today. 

You all have very impressive resumes and I will yield back. 

Mr. SCHWEIKERT. And my friend from Arizona, Mr. Barber. 

Mr. BARBER. I have no questions. 

Mr. SCHWEIKERT. Mr. Bentivolio. 

Mr. BENTIVOLIO. Does it work? Can you hear me all right? 

Ms. Johnson, I could not have come at a more opportune time for 

me anyway. 

I was a vocational teacher and general ed teacher before I came. 

In my district we are really concerned about something just mentioned regarding apprenticeship programs. I noticed over my tenure 

as a teacher that the metal shop, the CAD, the woodshop disappeared, and it is a great loss because there are a lot of kids out 

there wondering what they are going to do and they have no clue. 

They are being forced or told to go to college. 

And also, we have a bunch of veterans coming home from overseas and having been a veteran, in 2007, I came home. I went to 

college and you know all that, and I found that the best, most 

therapeutic thing for me was to work with my hands. I took up gardening and it was very relaxing for me and within weeks I was 

well adjusted and back. 

They are going to have some fun with that later I am sure. 

What would you recommend? Because right now I am finding out 

there is a problem working with VA and the Department of Labor. 

Getting the Department of Labor, for instance, to agree to an apprenticeship program that the VA or a soldier once he is discharged 

can apply for VA benefits. But it does not apply to apprenticeship 

programs because the Department of Labor does not authorize it. 

I am just now getting into that. Do you have an information on 

that? Can you help me in understanding what the big problem is? 

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Ms. JOHNSON. I am not familiar exactly with VA benefits, but 

one of the things that I do want to say based on our experience in 

working with the Department of Labor, in New Jersey there was 

a very innovative program to support entrepreneurial training. And 

the challenge often with entrepreneurial training programs is that 

it is not deemed as looking for work. And so even programs like 

Job Corps, they are responsible for helping young people get 

trained for jobs, starting a business does not count for that. 

And so one of the things I would love to see is that there is more 

of a relationship between the job training programs and entrepreneurship because for so many people there are just not the jobs out 

there. And when you especially look at the re-entry population, 

that will have a special emphasis as well. There are just not opportunities for them in the workforce oftentimes with the skills that 

they have. However, having a trade and learning to work with your 

hands, that is something that is then a transferrable skill to starting your own business. 

Mr. BENTIVOLIO. How would you recommend we get public 

schools and other schools more interested and focused on giving 

students the opportunity to go to an apprenticeship program like 

carpentry, masonry, or a manufacturing technician of some sort? 

Do you have any suggestions? 

Ms. JOHNSON. I do. I think that really, again, it starts with 

having exposure. I did not originally say I think I want to take 

something working with my hands; I want to take woodshop. It 

was either I took home economics, metal shop, or woodshop. And 

I was not so interested in cooking, and so I chose to do woodshop. 

And now actually doing sheet rocking and spackling and working 

on my home is a release from the work that I do every day, and 

it also supports home ownership. And so I think that in creating 

an opportunity for exposure is what young people need where it is 

not an option because young people do not always know best what 

they need. 

Mr. BENTIVOLIO. Well, I just spoke to a young—do I still have 

some time left, Mr. Chairman? 

I just spoke to a young congressional award winner for students, 

and the student came to my office today and asked if there was a 

program where she could—because she does not really know what 

she wants to do. A lot of students think they do but they will get 

involved in something and they find, well, that is not really what 

I wanted to do. And I suggested maybe they follow me because one 

of the opportunities I have as a congressman is I get invited to a 

lot of my constituents’ place of business for a tour. I am just wondering if maybe that is an opportunity we should explore and get 

more young kids involved at the high school level, maybe during 

the summer, to tour some of these various employers’ facilities. Do 

you think that is a good idea? Suggestion? 

Ms. JOHNSON. I absolutely think so. And I think that would 

also be an amazing opportunity for a lot of the entrepreneurs like 

the kids that we serve to close the talent gap. And having young 

people, whether they are in high school or especially even at the 

college age, where now you have programs like Teach for America, 

which allow very young, energetic people to go into the teaching 

profession for a period of time. We could do the same thing with 

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entrepreneurs in disadvantaged communities and provide incentives for people to work and support these entrepreneurs while getting access to training and just experience so that they can then 

have the opportunity to decide what they want to do. This would 

be a great experience for a lot of veterans returning home as well. 

Mr. BENTIVOLIO. Thank you. I have some more questions I 

would like to explore if we have time. 

Mr. SCHWEIKERT. We may have to make a circle around. 

Mr. BENTIVOLIO. No problem. 

Mr. SCHWEIKERT. Thank you, Mr. Bentivolio. 

Mr. BENTIVOLIO. I yield back my time. Thank you. 

Ms. MENG. Thank you, Mr. Chairman. 

I was curious to any and all of the panelists what are some programs, if any, federal programs that have been helpful to your 

businesses? 

Mr. MITTLER. I would comment that the section 179 for the advanced depreciation of capital equipment is beneficial for us. Our 

business is very capital-intensive, buying expensive CNC machine 

tools, so that really helps us defray the cost of that. So I think that 

is a positive benefit. 

Mr. ALLEN. One program that I have taken advantage of with 

Shapeways is the Manufacturing Extension Partnership through 

the National Institute of Standards and Testing where they provide 

low cost manufacturing training, safety training, lead manufacturing and other topics, and train the supervisor. 

Ms. MENG. Similarly, the R&D tax credit is of great importance 

to the manufacturing industry because it provides the ability to invest in innovative research. Currently, America leads the world in 

groundbreaking R&D and small companies are prominent in that 

effort. How in your view could the R&D credit be made more business friendly? And should it be made permanent? 

Mr. MITTLER. I would like to comment on that again. That is 

exactly parallel with the other. Since we develop our own products, 

having that R&D tax credit is very important, and I think if that 

was made permanent then that would give us a longer range view 

of developing more increased products. So I would highly encourage 

that that R&D tax credit be made permanent. Every few years we 

see are we going to have it, are we not going to have it? I mean, 

we move forward the best way we can, and if we benefit, we benefit. But if we knew that that was there, and again, that is part 

of the uncertainty that I spoke of, you know, we are not in a certain climate, so if we had more certainty that would make it easier 

to have a long-term view of developing more and bigger products. 

Ms. MENG. Thank you. I yield back. 

Mr. SCHWEIKERT. Thank you. 

Mr. Payne. 

Mr. PAYNE. Thank you, Mr. Chairman. 

Ms. Johnson, as you know, New Jersey’s Small Business Development Centers, in conjunction with the SBA and several other organizations, hosted a series of educational and networking events 

around entrepreneurial and small businesses this week. During 

Monday’s event I heard from a young man with an interest in 21st 

century manufacturing opportunities particularly dealing with 

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technology. Can you speak of the possibilities and opportunities 

and challenges facing your particular constituency in these efforts? 

Ms. JOHNSON. Sure. Thank you. 

I think that the challenges really exist around the three areas 

that I mentioned in my comments—the access to capital gap being 

a very large part of that. It is very difficult to get a business started and to scale up, if you will, without the capital necessary to, 

one, test and do prototypes. And I was discussing that with Jim a 

little bit earlier—to test and do prototypes—and to be in business 

long enough for the reality to actually happen. And so I think that 

one of the challenges with access to capital can be effectively addressed through crowdfunding. I think that will just open a lot of 

doors and enable people to test concepts in a short order using 

funding that they are able to raise, not relying just simply on their 

own means. 

I think that the other real challenge is just an access to opportunity around contracting, and I think that most of these small 

businesses with which we deal, which are the very smallest in size, 

are not able to take advantage of contracting opportunities as 

many of them exist because they are just too small and they do not 

have the opportunities to scale. And I think as Mr. Wanger mentioned in being able to create additional opportunities and utilizing 

resources that exist and creating an ecosystem so that businesses 

that may be growing very rapidly like his company are able to 

bring others along by providing contracts. And even if some of the 

contracts are in catering and janitorial services and other resources 

that exist or that are required by the ecosystem and that community, those are ways to create a spillover effect by the growth and 

success of other businesses. And I think that is especially true in 

the manufacturing sector. 

Mr. PAYNE. And also, we tend to find I know in the constituency 

that we serve, bonding in different areas—in construction and what 

have you. Not manufacturing, but the capacity for people to be able 

to afford the bonding that is required has been prohibitive in entrepreneurs moving forward. 

My experience in small business, I come from a manufacturing 

background in the 1970s. My uncle had created a company in 1969 

that manufactured the old computer forms that we used to use, the 

big folded sheets with the holes down the side that are obsolete. 

But we were the only minority firm in the nation that was doing 

that at that time in the 1970s, hiring—we called it guys coming 

back home from doing their debt to society but now we call it reentry. So I am very proud of that background which really continues to lead me down this path to try to help young people in 

startup businesses be successful. 

In your testimony, in speaking of the enormous level of support 

and resources for high tech and high growth business, you state 

that what is missing is the same level of resource of entrepreneurs 

who can change communities. Can you expand on that point? 

Ms. JOHNSON. Sure. I had the opportunity to visit the Entrepreneurship Center I think it is called in Nashville as part of a 

conference that was held by the Startup American Partnership, 

which has been highly touted, lots and lots of publicity, and lots of 

resources. It is a great partnership and provides a great benefit to 

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high tech, high growth businesses. There are many incubators and 

accelerators that focus on high tech, high growth businesses, and 

they are doing that because we have made a conscious decision 

that as in particular areas and as a country, that we want to be 

the leaders in these areas. And I think that if we are going to have 

the same amount of success with businesses, with companies that 

are providing the jobs to people from the re-entry population that 

are serving the needs of local communities, that are creating economic opportunity in our most distressed communities, we also 

have to think about the level of resource with which we are supporting these types of entrepreneurs. 

We have resources provided through the SBDCs and SCORE and 

various resources provided through the SBA, but our feeling about 

that is if those resources alone were not good enough to have the 

type of high tech, high growth companies that we wanted to 

produce, why do we feel that that is enough for minority women 

and small businesses that are community-based businesses in the 

areas where they are in most need and that have the fewest resources? I think we have to be serious about or decide if we are 

serious about really growing those types of businesses and then 

provide and support those businesses with the requisite resources. 

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

Mr. SCHWEIKERT. Thank you, Mr. Payne. 

I actually also remembered green bar computer paper. I think 

that is what we all called it, which is actually sort of tear—I also 

remember punch cards. 

Last quick comment. Thank you. Having Mr. Wanger here is special for me because Arizona is a long way away, but actually all 

of you had some really interesting things to share. 

There are no further questions for the panel. I want to thank the 

witnesses. 

The third panel will be getting ready to be seated. And Mr. 

Hanna, I believe you are chairing the next panel, and this panel 

is actually now closed. If you have any other testimony or comments you would like to submit for the record, I believe it is tradition in this Committee to keep it open for five legislative days. And 

with that, the next panel. 

Mr. HANNA. Thank you, everyone, for being here. 

I will begin by introducing Barb Schindler, our next witness, 

president and chief operating officer of Golden Artist Colors, a 

world-renowned company, that does business in over 60 countries, 

I believe. Ms. Schindler joined the company in 1997 as comptroller, 

and previously served as chief financial officer. Golden Artist Colors is an employee-owned company which began in 1980 in New 

Berlin, New York, proudly located in my congressional district. The 

company makes tools and products for artists, including acrylic 

paints, and provides good jobs in my community. For that we are 

all very grateful. 

Welcome, Ms. Schindler. You may begin. 

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STATEMENTS OF BARBARA SCHINDLER, PRESIDENT AND COO, 

GOLDEN ARTIST COLORS, INC.; SHELLY GIBBONS, VICE 

PRESIDENT, QUIK MART; MIKE BERGMEIER, PRESIDENT, 

SHIELD AGRICULTURAL EQUIPMENT; AARON BAGSHAW, 

PRESIDENT, WH BAGSHAW CO., INC. 

STATEMENT OF BARBARA SCHINDLER 

Ms. SCHINDLER. Good afternoon, members of the Committee. 

And thank you, Congressman Hanna, for inviting me to be here 

today to testify on manufacturing in America. 

My name is Barbara Schindler, president of Golden Artist Colors. 

Golden manufactures acrylic and oil paints for professional artists. 

As a global company, we export our products to 60 countries 

around the world. 

Our mission is to grow a sustainable company dedicated to creating and sharing the most imaginative and innovative tools of 

color, line, and texture, for inspiring those who turn their vision 

into a reality. 

To achieve that mission, we operate on three principles: 1. Make 

the best products; 2. Provide customers with the best service; and 

3. Find people that can make the first two things happen. Our 

products are intended to preserve the artistic legacy of our times 

for hundreds of years. This is a unique responsibility and privilege 

that we take very seriously. In 2002, Golden became an employeeowned company. We have 157 owners coming to work each day, 

knowing that their contribution will have a direct impact on their 

investment and their retirement. 

The art materials industry is one which grows a meager 2 percent per year. Despite that reality, Golden has grown its business 

21 percent since 2009. Many of our competitors have moved a portion of their manufacturing to emerging markets, predominately 

China. We choose to remain here, as we recognize we can protect 

our product quality and intellectual property in the U.S. Our continuous efforts to drive manufacturing efficiencies improve our ability to remain competitive; however, our commitment to new product development and consumer relationships is essential for continued growth. Our five-member technical support team responds to 

13,000 phone calls and e-mails annually. We also contract with 

over 40 teachers throughout North America who provide art education for over 15,000 people each year. 

Most of the issues we face are local and industry-related, yet 

there are three significant issues where we feel the Federal government can provide leadership and assistance. They are health care, 

education, and harmonized labeling standards. 

We remain optimistic that the Affordable Care Act will meet its 

goal of creating affordable health insurance to all Americans. As we 

prepare for this future, however, it is our approach to ready our 

employees and our business for every aspect of health care, and not 

simply the ACA impact alone. 

At Golden, we have been managing affordability via staff education and wellness. Yet, a consumer mindset can only go so far in 

an opaque market such as health care. Medical inflation outpaces 

the cost of living. We need your continued efforts to address the entire health care system. Americans must embrace wellness and 

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health care providers must place the patient in the center of all 

they do so that we may once again enjoy the highest quality health 

care in the world and not simply the highest cost. 

Secondly, an educated and creative workforce is critical to sustain success in any business. Unfortunately, due to federal mandates and budget shortfalls, art teachers are being lost in almost 

every district. We are troubled by the lack of arts education in our 

schools and believe this is a serious situation that will in the long 

run shrink one of the most significant drivers of American ingenuity and leadership. 

Finally, we need a harmonized regulatory framework for health 

and safety labeling of art materials. Applying state of California 

mandated health warnings to our products, warnings that are 

deemed appropriate by no other jurisdiction in the world, causes 

confusion and lost sales not only in the U.S. but in our foreign markets as well. Adoption of the United Nations’ Globally Harmonized 

System of Classification and Labeling of Chemicals as the preemptive standard for consumer products, would eliminate these burdensome domestic and international inconsistencies. 

Golden’s future is both positive and sustainable. We will be successful if we are able to maintain and hire an educated and enthusiastic staff. Employee ownership has been a point of difference between us and other employers. Federal support for ESOPs is invaluable for creating workplaces which honor and celebrate its 

staff. ESOPs are not a cure-all for business success, yet it provides 

another level of security for employees trying to navigate their future. When employees are treated like owners, they act like owners. 

Thank you again for the privilege to address this Committee. 

Mr. HANNA. Thank you. You have about a moment left if you 

would like to wait for the 157 people that are watching you I understand. 

Ms. SCHINDLER. No, that is good. 

Mr. HANNA. You are all right then. Good. 

Ms. SCHINDLER. Thank you. 

Mr. HANNA. Thank you. 

I would like to yield to Mr. Barber, who will introduce our next 

witness. 

Mr. Barber. 

Mr. BARBER. Thank you, Mr. Chairman, and thanks to all the 

witnesses for being with us today. It has been a very educational 

hearing so far, and I know it will continue that way with your testimony. 

It is my honor and pleasure to introduce Shelly Gibbons. Shelly 

and I come from the same town. We were both from Tucson where 

she is the vice president of Quik Mart, a family-owned and grown 

small business in Tucson, Arizona. Quik Mart was started in 1965 

by Shelly’s dad. Growing up, Shelly and her brother and sister 

worked almost every job there was in the business from counting 

change to pulling weeds to secret shopping, which she still does 

when she is not being recognized. She told me yesterday that actually her dad would have the children around the dinner table and 

he would throw a bunch of change and he would say you better 

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know how to count that. So we need to do more of that it seems 

to me. 

Now almost 50 years later, the Quik Mart business has not only 

survived the test of time but has grown. From those first three 

stores, Quik Mart now has 27 stores, all in southern Arizona, and 

it is truly a local small business success. As a former small business owner myself, and my wife, we owned a business for 22 years, 

a retail business, I know just how hard it is to start a business, 

make ends, meet, meet a payroll, keep the customers coming back, 

and so my hat is off to any business that can survive the first five 

years of opening and operation because that is usually when businesses, if they are going to succeed, do; and those that do not, fail. 

As a member of Congress now, as a small business owner in the 

past, it is my job to make sure that the voices of small businesses 

in Arizona are heard here in Washington. And I invited Shelly here 

today to testify before the Committee, to tell us her family story 

because her family business is a shining example of the entrepreneurial spirit that is in so many southern Arizonans and working 

families across the country. 

I want to thank you for joining us today, Shelly. It has been 

great talking with you and getting to know you. We met many 

years ago when I was district director for Congresswoman Gifford. 

It is great to see you here today in my new capacity as a member. 

We welcome you and look forward to your testimony. 

STATEMENT OF SHELLY GIBBONS 

Ms. GIBBONS. Thank you, Mr. Barber, and Mr. Chairman. 

My name is Shelly Little Gibbons. My family owns Quik Mart 

stores in Tucson, Arizona. My father, Wes Little, started Quik Mart 

in 1965, like Mr. Barber said, where he opened three stores. My 

mother and father are the ones that chose the colors, the logo, and 

the name Quik Mart. He liked the way that there were four and 

four letters, so that is why there is no C in Quick. After these three 

stores opened, mom and dad would scrape and save until they had 

enough money to buy another corner or build another store. They 

did not borrow any money from the bank to expand the business. 

Growing up, there were a few memories I remember clearly. One 

is dad working extremely hard to keep the business running, but 

he would also be home every night for family dinner. Another is 

how we would take Sunday drives. Mom and Dad would pack us 

three kids in the car and we would drive around the streets of Tucson. As I got older, I realized our family drives were to be looking 

at different street corners where Dad was contemplating building 

another store. Another family tradition was every time a new store 

opened, in the evening we would all drive out to the new location 

to visit and check how it looked at night. So you can see all of our 

stores are like another child in our family. 

Quik Mart slowly grew from the three stores in 1965 to the 27 

we currently have today in Pima County. The 27 stores we have 

are not all the original stores. We have opened and closed and renamed many a store. Since all stores are family owned and not 

franchised, if one is not doing well and hurting the company’s bottom line we will close it. Sometimes the city and county help with 

that by changing traffic flows, so it is not as convenient to get to 

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us anymore. Or sometimes it just turns out not to be a great corner. Housing developments that we thought were going to go in did 

not. 

Owning convenience stores is a hard business, especially after 

2008. It became harder and tougher. Our vendors now charge us 

a fuel charge when they deliver products. Unemployment tax, 

workman’s comp premiums, payroll tax health insurance, everything every year keeps going up while the business with so many 

people unemployed keeps going down or is staying the same. Also, 

we are experiencing more shoplifting, beer skips, and robberies 

with so many people out of work and desperate. 

Our next big expense is the new Affordable Health Care Act. We 

employ over 170 employees, so either way we go, providing health 

insurance for our employees through the company or paying the 

penalty and sending our employees to the Exchange will be a huge 

expense for us. 

But with all I have mentioned, we are very proud that we Quik 

Mart stores and little family have been open and around for almost 

50 years. You do not see too many family businesses that have 

grown and have had this much impact on a community as ours 

has. We have kept many people employed throughout the years. 

We have even had many generations of family members work for 

Quik Mart. People like working for us because we are local. Our 

corporate office is right there in Tucson. Any of our customers or 

our employees can come by at any time to see us. 

We have had a lot of loyal employees that have been around for 

over 30 years, and the majority of our employees stay five years or 

longer. Quik Mart—We are Tucsonans. 

I would at this time like to thank Congressman Ron Barber 

again for inviting me to testify here. Thank you. 

Mr. HANNA. I will yield to Mr. Huelskamp to introduce our next 

witness. 

Mr. HUELSKAMP. Thank you, Mr. Chairman. It is my privilege 

to introduce my fellow Kansan, Mike Bergmeier. Mike is the owner 

of Shield Ag Equipment in Hutchinson, Kansas. Shield Ag has been 

in business for 75 years and is a small manufacturer that meets 

the needs of farmers with tools and assemblies required for a sustainable modern agriculture. And I will say I have known Mike’s 

Equipment long before I knew Mike in our own operation. His customers are regional and international, with distributors in Canada, 

Europe, Asia, Mexico, New Zealand, and Australia. Mike currently 

employs 44 full-time and five to six seasonal part-time employees. 

Mike is a graduate of two outstanding universities, Kansas State 

and Wichita State. He also served his community for eight years 

on a local school board. Mike and his wife Angie are parents of six 

children and reside outside of Hutchinson. 

And I welcome him to Washington to share his testimony today. 

Thank you for being here and joining us today, Mike. 

STATEMENT OF MIKE BERGMEIER 

Mr. BERGMEIER. Thank you, Representative Huelskamp. 

My name is Mike Bergmeier. My wife Angie and I own Shield 

Agricultural Equipment, South Hutchinson, Kansas. 

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The economy of the United States was built around the three 

super sectors that create wealth—mining, agriculture, and manufacturing. I am proud to own a small business within manufacturing in direct service to agriculture. 

The only way to create wealth is to create it out of something 

tangible, hard, growable, or renewable. When a president or a politician from either party starts talking about creating jobs, I worry, 

because government spending does not create wealth for the 

human race. And the more jobs balance shifts away from the big 

three, the poorer we become as a nation. 

That is why I am here today, for my children, not for me, to tell 

you why my children might not have the same opportunities I did 

to own a business and employ people. With all respect, please allow 

me the time to discuss these government functions that inhibit the 

ability for me to grow my business. And you will see a danger down 

the road for my children. 

It is difficult for most politicians and business leaders to pin 

down overregulation. It just seems there are no specifics; just talk 

about there being too many. I liken these government regulations 

to the Eastern Red Cedar tree. Cedar trees supply windbreaks and 

shelter for farm and domestic and wild animals where I live. Having more of them seems to be a good thing. I have plenty of cedar 

trees. The problem is that one cedar tree left unattended becomes 

about a dozen within a year, and then 100 within a few years, and 

1,000 within a decade. And you get to the point where you cannot 

grow or maintain your farm and ranch your livestock. The 

bluestem quits growing because the cedar trees suck up all the resources. You have to spray more invasive weeds because they will 

grow or the grass will not. 

And you look back on it and say where did all these cedar trees 

come from? And you cannot pick out any one cedar tree that is the 

culprit. The only real option is to get out the chainsaw and cut 

down as many as you can without much regard for the good trees 

or the bad trees, because my quarter of grass land became dysfunctional and I had to do something. 

Here is a sampling of the forest of laws and regulations that 

keep me from expanding my business. The Patient Protection and 

Affordable Care Action of 2010. My company will remain at 44 fulltime and 4 to 15 part-time employees. Any benefits to people 

PPACA aside, this was the real issue. It hurts the people you are 

trying to help the most, folks in the lower and middle income classes. Those 4 to 15 part-time men and women will not have access 

to my health care insurance, and I will not expand. As my company 

paid total health care insurance premiums, Arista, by $45,000 a 

year, that is one person I cannot hire. It is that simple. I have to 

make payroll every Friday and I have got to pay my suppliers on 

time. 

So let us go back to the cedar tree thing again. The following is 

a list of just a few of the new forest of regulations that are impediments to growth. The RIN numbers are listed in my written testimony, and all have potential onerous effects on any future expansion. From the EPA, stormwater runoff revision of section 402(p) 

of the Clean Water Act, and the national pollution discharge elimination system, revisions to hazardous chemical reporting, risk and 

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technology reviews for foundries. From the Department of Labor 

and OSHA, electrical power and distribution protection; trip, slip, 

and fall safety improvements; and the new revisions to the national 

ambient air quality standards for particulate matter, dust, under 

Title I of the Clean Air Act. By the way, it is 522 pages long and 

impossible to interpret. 

There are at least 200 rules, laws, and regulations out there that 

my business falls under, and expansion is just not worth the trouble. My bankers spent more time on the banking regulations that 

regulate the regulations than they do in processing business loans. 

Full implementation of Basel III capital requirements will impair 

the ability of business lenders to provide funds for expansion. The 

federal tax code is incomprehensible and nearly impossible to comply with. The forest of cedar trees is just too thick. When you increase my taxes, I just react. I do not hire the next person. I do 

not purchase a new piece of equipment, and I do not improve my 

operations and expand into new opportunities. 

As I fear that my kids will not have an opportunity to own a new 

business, a small business, or work in one of the big three wealth 

creation industries due to burdensome government regulation and 

laws, I also worry that their education will not position them to be 

future leaders. The education system in the U.S. is broken. We 

spend more money per student on education than any of the other 

11 most developed countries in the world with lesser outcomes than 

most of the other 11. I implore you to completely gut the No Child 

Left Behind and AYP standards. Allow the states and localities to 

determine what is best for the lifelong earners we are trying to 

raise. 

In closing, I have got to tell you the truth. You do not owe me 

nothing. I was born with nothing, raised in a great family environment, educated at a small rural school, and I graduated from the 

finest land grant university in the United States. In 1983, I moved 

to Hutch with nothing but a college degree from Kansas State and 

a used pickup truck. You can overtax and under serve me. I really 

do not care because I love my family and I love my employees and 

other stakeholders, and I will continue to work to make a living because that is what I do. And the USA continues to be a great country to operate a small business. I will leave this life someday and 

report to God with nothing and that is fine by me. What I am asking you to consider is making sure that my children, grandchildren, 

and future generations of Americans have the same opportunities 

that I have and that you do not overtax and regulate business to 

the extent that nobody wants to take the risk anymore of joining 

in the great triangle of wealth-producing industry. We all owe that 

to our children. Thank you very much. 

Mr. HANNA. Thank you, sir. 

I would like now to have Ms. Kuster introduce our next witness. 

Ms. Kuster. 

Ms. KUSTER. Thank you very much, Mr. Chairman. 

I am delighted to introduce our next witness. Aaron Bagshaw, 

my constituent from Nashua, New Hampshire, and I want to thank 

Aaron for being here with us today and for sharing your inspiring 

story of manufacturing innovation and ingenuity. It is my pleasure 

to introduce Aaron, who is the president of W. H. Bagshaw ComSBREP-219 with DISTILLER

42 

pany, a pin manufacturer, in my congressional district in Nashua, 

New Hampshire. 

In business since 1870, and in Nashua, New Hampshire, for the 

past 60 years, the W. H. Bagshaw Company is the oldest pin 

maker in America. A small, family-run business, Bagshaw has 

adapted to the times and now manufactures products for the medical, aerospace, defense, and high tech industries. I also want to 

note that Mr. Bagshaw works in a fifth generation company. Aaron 

and his wife, Andrea, were kind enough to host me and Congressman Hoyer in their factory earlier this year to discuss the importance of American manufacturing. I am thrilled to return the favor 

and give Aaron the opportunity to discuss his company’s success 

story. 

And with that, I recognize Mr. Bagshaw so he may address the 

Committee. 

STATEMENT OF AARON BAGSHAW 

Mr. BAGSHAW. Good afternoon. Thank you to the Committee. 

I appreciate the opportunity. Representative Kuster, thank you 

very much for the invitation to speak to you all today. 

As a small business owner, it is so encouraging to know that our 

voices are being heard and that small business, and manufacturing 

in particular, is such a priority to our delegation. Representative 

Kuster has been to our factory, like she said, on two visits now, 

once as a candidate, and more recently, like she said, with Steny 

Hoyer. 

My name, Aaron Bagshaw. I am president of the W. H. Bagshaw 

Company in Nashua, New Hampshire, a fifth generation pin manufacturing business. After combing through our records recently, I 

have discovered that we have manufactured and shipped, since our 

inception 143 years ago, almost 42 million pounds of pins to happy 

customers all over the world. Amazingly, this would be enough 

steel to build the Chrysler Building in New York City. 

My great, great grandfather started manufacturing pointed pins 

for the textile industry in 1870. In the 1920s, we were the only and 

original manufacturer of the Brilliant Tone phonograph needles. 

We still manufacture textile and phonograph pins today, as well as 

more modern products that are in higher demand. The life cycle of 

the pin to me, and probably to some engineers out there, is baffling. If any engineers are listening right now, I would like to share 

this information with you. We still manufacture and sell the same 

product we manufactured 143 years ago. However, over the years 

we obviously had to adapt, update, and change not only what we 

sell but how we manufacture it. We are now making complex machined components for high tech applications using advanced machinery. 

Our pin-making machines are modeled after Leonardo Da Vinci’s 

grinding concepts. We are a living, breathing showcase of where 

the Industrial Revolution meets the Digital Revolution. We have 

machines that can make millions of pins per week, and we have 

state-of-the-art machines that can make incredibly complex components. Often in my tours of our facility, I will say that our ‘‘older’’ 

machines can make a lot of pins fast. I liken our story to what 

Henry Ford described as ‘‘you can have any color you want as long 

SBREP-219 with DISTILLER

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as it is black.’’ You can have any pin you want as long as it looks 

like a pin that we have manufactured before. Textbook Industrial 

Revolution. Next on our tour, I would show you our computer-controlled machines that are making parts unattended. We download 

a computer program into the machine wirelessly or directly from a 

laptop. With setup assistance of an operator, the machine manufactures complex components. Textbook Digital Revolution. All under 

one roof. 

When people learn about our business, after the obvious question, ‘‘What do you mean, pins?’’, we are asked, ‘‘How have you 

managed to stay in business so many years?’’ Our magic formula 

seems to be having this incredible legacy and foundation partnered 

with lots of mojo and a fresh approach to marketing and to management. As well, we like to say, we are a 143-year-old startup. 

Our core values are: Family, a ‘‘Make it Happen’’ approach, Empowerment, Courage, and Perseverance. 

The story of our family business truly is one of courage and perseverance. Through the years we have weathered several years, obviously, a Depression, and the recent Recession. Ten years ago, we 

made a courageous decision to branch out into new markets, investing in CNC machines. CNC stands for computer numeric controls, which means that they are programmable machines. One operator can run several machines at one time. These machines have 

allowed us to produce pins that are much more complex for the 

aerospace and high tech industries. Several years ago, my wife and 

I made another courageous decision—we purchased a controlling 

interest in the business to secure the business for future generations. 

As with most businesses, we are concerned about the economy, 

health care, and energy costs, but our most important resource is 

our labor force, and a big challenge for us is access to skilled labor. 

There is a shortage in our area of machinists who are skilled at 

running these types of machines. In some cases, we have been able 

to bring in entry-level employees and train them. We are working 

with our local community college to bridge some of the gaps in 

their skill levels so we can accelerate their learning. We were excited to learn that a federal grant allowed for a major upgrade to 

the equipment in their machining labor. Having these partnerships 

with community college will be effective for the continual development of our workforce. While a large corporation can hire someone 

to focus on workforce development and educational outreach, a 

small business like ours does not have that resource. We have 

taken advantage of lean manufacturing courses in our state, 

NETAAC programs, export assistance through the U.S. Department of Commerce, and business advising from our New Hampshire Small Business Development Center. The Trade Adjustment 

Assistance for firms has also been very beneficial. Support like this 

is critical to small businesses like ours. 

We often say, ‘‘If you think a pin is just a pin, you do not get 

the point.’’ We have survived for 143 years on grit, determination, 

fortitude, and a bit of luck. From Da Vinci to Ford to the Digital 

Revolution, we, as a company, need and will continue to need the 

skills that stem directly from the fields of Science, Technology, Engineering and Math. Our story does not end here. Our continued 

SBREP-219 with DISTILLER

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growth and evolution will rely heavily on the ability of our employees to adapt and grow and use these technology skills. Thank you. 

Mr. HANNA. Thank you. There are a number of themes going 

on here today. Deep concern about the health care law. An idea 

that regulation is far-reaching and growing and cumbersome and 

difficult, and keeps you from growing your businesses. Another 

theme clearly is the lack of—there is opportunity, there are jobs, 

lack of employees to fill STEM-type jobs—Science, Technology, Engineering, and Math, which is directly related to how we educate 

ourselves in this country and how we compete globally. 

Something unique among our panel, I think, is Barbara 

Schindler’s ESOPs program. And it is an Employee Stock Option 

Plan. Maybe you could enlighten us a little bit about how that 

works and how it has changed the dynamic in your company since 

the Goldens originally started. And what kind of incentives it may 

or may not provide. 

Ms. SCHINDLER. Sure. So our business was started by Barbara 

and Mark Golden and Mark’s parents, and they put probably 

$5,000 into it and sold a lot of artwork and started the business. 

In 2002, when it was determined that they were interested in creating this ESOP, Mark Golden tells the story that he always asked 

employees to act like they were owners. Act like it is your dime 

that you are spending, and so whatever you are doing, keep that 

in mind. 

So 2002 actually allowed us to finally say, okay, not only are we 

asking you to act like owners, but you will be owners. We have always been an open company where we have shared our financial 

information, and when it is a year that is more challenging, or if 

we are venturing into a new market that we want everyone to be 

aware of, we provide that information to them. So we really have 

an open set of books. So it was an easy transition for us to move 

into an ESOP environment. 

We continue to educate them on what evaluation, how that happens, you know, what happens when you take on debt, what does 

that do to your valuation? So we continue to educate our staff on 

the meaning of it, and then besides having the ESOP, we continued 

with our 401K match, which many ESOP companies do not, but we 

really want our folks, when they retire, to be situated where they 

can celebrate their years of hard work. 

So the ESOP, just so people know. I had, in fact, our electric guy, 

our electrician, he was at the point in his career where he is over 

55 and he has been in the plan for 10 years, and he could diversify. 

That is one of the rules around ESOP, to protect your interests. So 

he could actually take 25 percent of the monies of his shares in the 

ESOP and convert it and put it in his 401K or another investment. 

And he said to me, he said, ‘‘Barb, I know what we are doing. I 

have no idea what any other company is doing.’’ And I aid, ‘‘Well, 

that is right.’’ He said, ‘‘I am comfortable leaving my money here.’’ 

And I said, ‘‘It is your choice. Do what you need to do.’’ But that 

is the feeling, the sentiment that it brings. 

So it is a great avenue. The owners, they wanted to really give 

back to the arts and so they created an artist in residency program. 

And that is what having the money out of the company and into 

their hands enable them to do. So it is a win all around. 

SBREP-219 with DISTILLER

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Mr. HANNA. Thank you. Ms. Kuster. 

Ms. KUSTER. Thank you very much, Mr. Chairman. And thank 

you, Ms. Schindler, for sharing that story with us. One of the most 

successful companies that I have visited on this Congress at our 

Company tour—I visited 17 small companies now and one of them 

has an ESOP. And I love visiting there because the associates, as 

they called them, all of the employees are so excited to show me 

what they are working on, and they always want me to know what 

the next product line is and where—and the other thing that I love 

is when I get to the end and they are showing me the shipping and 

delivering and there are these huge boxes that say ‘‘Ship to Shanghai.’’ And this is what this whole day is about and this week and 

this whole Committee is Make it in America. So I am very proud 

of what you are doing, and I think you do get better energy out of 

your employees when they are owners. 

I am interested—a previous panel member said that government 

should be as sensitive partner in business. And I certainly agree 

with the comments on we want to avoid overburdensome regulation 

but by the same token we have had a lot of conversation today 

about education, STEM education. I have a bill about cooperating 

with community colleges. 

I have not heard as much today, but I do hear on visits about 

infrastructure. And I am going to guess that your companies are 

not going to, building the roads and the bridges to get your employees to your plants and get your products to market. And so I would 

love to hear your comments on what the government can do to provide you with the infrastructure that you need, and it may be telecommunications, but getting your products to market. If you could 

comment on that I would be interested. 

Mr. Bergmeier, did you have any comments? 

Mr. BERGMEIER. Well, you know, we pay taxes for the roads. 

You know. And so I kind of expect that out of my government. That 

is part of the taxation I pay on diesel fuel and gasoline. So, of 

course, infrastructure is a way to improve the economy because you 

can flow goods quicker. But with regards to any special programs, 

I already feel like it is the government’s job to do that because I 

am paying the taxes for that to happen. 

Ms. KUSTER. And have you had any issues that all the other 

panelists have discussed—STEM education, difficulty in hiring in 

this new technological environment that we are in. Have you had 

any issues about hiring? 

Mr. BERGMEIER. My shop is pretty simple. We are a modern 

shop with modern equipment and CNC equipment, but we are still 

a blacksmith shop. And we hire people who have skills. We are in 

a rural area, so in general we can get people with physical skills 

to come to work. I do work with the Kansas WorkforceONE development program. In working with their directors, you have to bring 

them aside but they will tell me the truth; that they cannot get 

people to apply because they make $11.45 an hour on a 40-hour 

week sitting at home because of SNAP programs and other welfare 

programs and social programs. Those people cannot recruit people 

to their programs to be trained to go into the Kansas workforce because they make more money sitting at home. 

SBREP-219 with DISTILLER

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Ms. KUSTER. Mr. Bagshaw, do you want to comment on your 

experience with the community colleges and training and maybe 

comment on the wages if that is the issue—what the wages are for 

manufacturing in New Hampshire. I know that we have a 5.3 percent—— 

Mr. BAGSHAW. Unemployment? 

Ms. KUSTER. Unemployment. So most people in New Hampshire are employed. We do not have the situation you re describing 

in Kansas where may be the benefits are far more generous than 

in New Hampshire. 

Mr. BAGSHAW. We are understanding right now that with our 

local community college that they are going to be receiving or they 

have already received a grant for a machine that is representative 

of the machine that we use in our facility which will be absolutely 

dynamite for us. We are ready to hire people and put them into positions now. The issue that we have is that when we do hire people, 

usually we are training them for six months, seven months, eight 

months. It takes them probably a year before they are really contributing to the team. So that is the battle that we have. So with 

the community college and partnering with them, hopefully, we can 

reduce that timeframe. 

Ms. KUSTER. And if I could just very briefly with my one second 

left, what is the average hourly wage of the incoming employees? Mr. BAGSHAW. I think they could be making $20 an hour when 

they are coming out of that community college. 

Ms. KUSTER. Thank you very much. 

Mr. HANNA. Mr. Huelskamp. 

Mr. HUELSKAMP. Thank you, Mr. Chairman. I appreciate the 

opportunity to ask a few questions. I certainly appreciate the testimony from Mr. Bergmeier. 

We were talking, in general, the hearing theme is Made in the 

U.S. And I know, Mike exports all around the world, in multiple 

cases. Tell me now, as an American manufacturer, where the other 

folks who were trying to shed jobs overseas. How are you able to 

complete in a multitude of countries and get that done? 

Mr. BERGMEIER. Well, what Shield Ag has done is, as you can 

see we, we are at 75 years old, but in the last 10 years we have 

reinvented ourselves to really focus on sustainable agriculture. 

That is a more sustainable footprint and the ability for underdeveloped countries to grow their own food. And by doing that we 

have positioned some of our products so that countries, other than 

the United States, that want access to U.S. agricultural technology, 

come and find us. And that is where we have been successful in 

our export markets. 

Mr. HUELSKAMP. Okay. Fantastic. 

Describe a little more. You had, I think, seven different regulations you had identified. Can you pick one of them out of the business and say, hey, this is what it is doing to me? 

Mr. BERGMEIER. I picked the ones that are impediments to me 

putting up more plant, property, and equipment. By looking at 

which ones I would have to file paperwork on it. Remember, big 

companies will complain about this stuff, too, but it is just me and 

some great managers making payroll every Friday. So if I want to 

put up 2,000, 3,000, 5,000 square feet, I have got a lot of stuff to 

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do. And I also run heat treat facilities and things like that, which 

are subjected to all these EPA things and it is just not worth the 

hassle. 

I did not want to pick on any one particular organization, but 

when I see the flood of recent regulations and updates to regulations since about 2009, I say those are targeted right at me. So why 

should I want to do it? I will just continue to do what I can within 

the laws of my own building as I grow my revenues. 

Mr. HUELSKAMP. And Ms. Schindler, what has been your experience with implementation or the new regulations coming out of 

the president’s health care plan and response from your employees? 

Mr. Bergmeier indicated he has capped the number of employees 

he is going to hire. He is not going to cross the 50-employee threshold. Your thoughts? 

Ms. SCHINDLER. For us, as I said, we remain optimistic. We 

took a serious approach to wellness and looked at our health plans, 

and we actually moved to a high deductible health plan with the 

heavy savings account probably five years ago. So there has been 

a lot of education, just about being consumers of your medical 

needs. You know, you would not buy a car, just that the salesman 

is saying, ‘‘Hey, trust me. Buy it.’’ So we have done a lot of education for our staff to just—I am just trying to be better prepared 

for going to the doctor and their medical needs. 

So for us there is a lot that you do not know. We had to try to 

understand it just with—we bring in a lot of college students which 

we love because for us our back to school time of year is now. We 

are preparing for all the colleges taking art materials, and so we 

bring in about 15 to 20 college students for the summer and we 

were not sure what that was going to mean with the Health Care 

Act. And I said, ‘‘Look, on the end we cannot change our business 

practice; we just have to understand what it may mean and then 

keep talking about that.’’ 

I think for us as we understand it, I know that this year for our 

renewal, there is a 5 percent increase that we are going to have 

to bear just because of the act. But we strive to say, okay, there 

is a challenge with raw materials. I have the same challenges with 

all the different markets and trying to figure out who is the best 

partner to be able to sell to that consumer and understand the consumer in that market. 

And so our approach is really to say, well, with this opportunity, 

how can I increase more business? So we are always looking at 

growing the venue side because we have these challenges. So that 

is how we are approaching it. We do understand the theory behind 

it and we do believe that everyone needs to have health insurance. 

How it is going to pan out, we hope the dialogue continues so that 

you can ask us for that feedback. But there is a lot that is not, you 

know, there is a lot that you are still developing. And we realize 

we have to partner in that development. 

Mr. HUELSKAMP. Yeah. It was reported I think yesterday or 

maybe even today that the January 1st deadline, the regulations 

are behind schedule, and there are some things you do not know 

today and maybe we will not even know on the deadline, January 

1st, so I appreciate the testimony. 

I yield back, Mr. Chairman. 

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Mr. HANNA. Mr. Barber. 

Mr. BARBER. Well, thank you, Mr. Chairman. And thank you 

again to all of the witnesses. I think your testimony has been excellent and you have made a number of points that I think we all 

need to take to heart. 

You need to know you have allies in this Committee, on both 

sides of the aisle. We would not be here if we were not interested 

in helping small businesses thrive. And not only survive but thrive 

because we know, all of us, that 70 percent of this economy is in 

your hands, and in the hands of many other people in this country 

who run small businesses or run into all the problems that you 

have talked about today. I want to make sure that we deal with 

those problems as specifically as we can, and I will come back to 

that in a moment. 

But I wanted to ask Ms. Gibbons a little bit more, if you could 

share a little bit more about your concern. I think other witnesses, 

too, have some concerns about the health care law, the Affordable 

Health Care Act. As you know, it is going to be implemented over 

the next six months or so, starting July 1st, in October enrollment, 

and then implementation in January if things go according to 

plans. And I am concerned about that as well. 

I want to make sure that this health care law, and we know that 

it is going to continue, works for small businesses. So I am really 

interested in what we can do to make it work because we are not 

going to have implemented it over the next several weeks, and 

months. 

So Ms. Gibbons, can you tell me and other witnesses perhaps, to, 

what kind of help do risk sources assistant do you need—you do 

not have that would make easier for you to work within this new 

law that we have got? 

Ms. GIBBONS. Well, I think part of it is information and I know 

that out there it is very sketchy, low to reach us. But in our situation with our employees, right now we do offer health insurance. 

The time limit, you know, they have to work for us for a year. The 

type of employees we have, of course, are under-educated, lower income employees, and so what we are struggling with is sending our 

employees to the Exchange, and from the research and having 

them take advantage of the subsidies seems like the best way for 

them to get affordable health insurance. But then the penalties 

that we would have to pay would cost us up to $250,000 a year 

that we cannot afford. 

So we probably will continue with the health insurance that we 

are offering for them but we struggled with what would be best for 

our employees versus the company, but sometimes keeping the 

company up and running so that they have a job is the difference 

between our employees having health insurance or not. But we are 

afraid that a lot of our employees are just going to just do the 

buyout because it is the cheapest way to go. And then we are back 

to them not having health insurance. 

Mr. BARBER. It is tough balancing act, and I think small business all across the country are going to try to figure out what to 

do. 

I am really interested in taking a hard look at specific parts to 

the bill. I was not here when it was approved, but I am interested 

SBREP-219 with DISTILLER

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in fixing what is wrong with it and there are many things that we 

need to fix, and that is co-sponsored some bills that I hope will help 

small businesses if we are able to get them through. 

Let me move to a different question in regard to regulations. You 

know, we hear a lot here in these—how businesses, small businesses struggle with bureaucracy and red tape. And we need to 

make government work better for small business. I think sometimes it is about getting out of the way, and sometimes it is about 

removing things that are burdensome. And certainly, even the tax 

code is problematic for business, the same individual if we need to 

fix that as well. 

So can you describe, Ms. Gibbons, some regulations that you 

faced that you deal with that you think do not make any sense, we 

could get rid of them; we would get them out of your way and you 

would be able to do a better job as a small business owner. 

Ms. GIBBONS. Well, I think some of the tax codes could go 

away. I do not know which ones specifically. The problem that we 

have is our small business is 170 plus employees, and so a lot of 

the tax codes and the tax breaks that we could get were too big 

of business to get those but then we are not a big business either. 

So we sort of get stuck, crunched in the middle, with not getting 

any tax breaks and still having to pay like a big business all the 

taxes and unemployment and workers’ comp. 

Mr. BARBER. Well, I am out of time but I know there are many 

other questions all of us want to ask you all. And again, thank you 

for being here. Thank you for doing what America needs, and that 

is keeping small business not only alive but growing hopefully and 

continuing to serve our communities and the people who live in 

them. 

Thank you so much. I yield back. 

Mr. HANNA. Thank you. 

Mr. Bentivolio. 

Mr. BENTIVOLIO. I yield back. Thank you very much, ladies 

and gentlemen. 

Mr. HANNA. Thank you to all of our witnesses. Thank you for 

your insights, your long travel, and the distance, and certainly the 

expense. And we are deeply appreciative of all of that. 

If there are no further questions for this panel, I want to thank 

you and excuse the panel. The next panel may now be seated and 

I will turn the gavel over to Mr. Collins of New York. Thank you. 

Mr. COLLINS. In the interest of time we are going to go ahead 

and jump in. I think we have some other members on the way. 

This has been one of those days that we have all been jumping 

around not sure when votes are coming. But anyway, thank you all 

three for coming, and in particular I guess we will start with Mr. 

Braddon, who was invited down here by me. He is the president 

of Commodore Plastics in Bloomfield, New York. I had the pleasure 

of touring that factory here just a month or so ago. They are located in New York’s 27th District, which as I said I am proud to 

represent. It is a family-owned business operated by Mr. Braddon’s 

father, started in 1981, who is with us today and his lovely wife. 

Thank you for joining us. 

Commodore is a manufacturer of foam meat trays for supermarkets and food processors. It employs 150 people and it runs 24/ 

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7. He and his company service approximately 4 percent of the U.S. 

market for meat trays. He is also the president of the sister company, Commodore Technology, which makes all the equipment 

Commodore plastic uses and also sells this technology to vendors 

around the globe. And from what I remember the machines are 

about the size of this room, so it is not exactly small equipment. 

They employ approximately 30 people in Commodore Technology. It 

is a successful exporter. And as we all know, we cannot export too 

much. 

I want to thank Mr. Braddon for traveling to Washington with 

the family to share with us the success of his business and what 

this Committee and the Federal government can do to help him 

and his business grow, expand, and succeed. Thank you. 

STATEMENTS OF BRAD BRADDON, PRESIDENT, COMMODORE; 

SHIRLEY BROSTMEYER, CEO, FLORIDA TURBINE TECHNOLOGIES; RICHARD NAJARIAN, PRESIDENT, PRECISION 

GLOBAL SYSTEMS. 

STATEMENT OF BRAD BRADDON 

Mr. BRADDON. Thank you very much for the introduction. 

Thank you for having me. 

I submitted a report here that is I think better to read—or better 

for you to read than for me to read, and so I am going to go a little 

unscripted here and just kind of touch on what our story is. I do 

not need to read that one. I know that one pretty well. And then 

a little bit about us and government and kind of how we see that 

and a little bit about something that is really bothering us and 

then something a little bit about taxes. 

My father started the business in 1981. He was working for 

Mobil Chemical as a process engineer and he was watching them 

put foam lines in. They would put a line in and it would be full. 

They would put another one in and it would be full. And he 

thought, jeez, I can do this. I know how to do it. I am doing it. So 

he managed to pull a line together and he gets some people and 

he gets a building and he starts—he has got this idea he is going 

to make four trays. And he goes and gets these four trays going 

and of course his money is gone. He did not have very much money 

to start with, so really the American dream story started with 

$30,000 and became a manufacturer. 

But pretty quickly they said, ‘‘No, George. You have got to have 

all the sizes.’’ And he was scratching his head like I do not know 

how I am going to come up with all the sizes. And he is an investor 

so he invented a way to get the sizes. He introduced some colors, 

and eventually, he did get some business. So far into that business, 

after about 10 years, pretty successful, and then the plant burns 

down. And so it is reset button and we are beginning all over 

again. 

But during this process he found a customer that was Pepperidge 

Farms, and they had an extrusion line. And they did not want to 

run it anymore. They decided that being vertically integrated, making your own foam trays, did not make a lot of sense so he got 

some new equipment, new used equipment and a customer at the 

same time. And what happened was he realized that the manufacSBREP-219 with DISTILLER

51 

turing footprint that they had for this little teeny operation was 

the manufacturing footprint that he needed. And so we are a teeny 

little player in a great big market and we survive because we have 

this other footprint. We build all of our own equipment. That is 

what Commodore Technology does, and so we are the only ones 

with it. And all the other competitors in the U.S. are big. They do 

not want that manufacturing footprint because they are big, and so 

that is kind of how we are able to survive. 

So one of the things I guess is we do not really consider ourselves 

a small business anymore because we are not finding ourselves 

having to do—I do not have to do everything myself anymore. 

George does not have to do everything himself anymore. And when 

he did, that is when we considered ourselves to be small. And when 

we did have to do everything ourselves, that is when the regulations are tough. Right now I look at OSHA as that is the guide on 

how to be safe. Just follow that guide and you will be safe. It is 

a law of cause and effect. It is perfect. We could not think of those 

rules ourselves. It works good. 

Some of these regulations that we have had some issues with, we 

had an issue with not knowing a law existed. There was a chemical 

bulk storage law that existed that we did not know existed. We figured out that it existed, but by the time we had our program in 

place we had a visit, had the wrong program, and had a pretty 

good size fine there. Most recently, we had some building code 

problems. We had a building that we have been occupying since 

1994 and we find out from the fire chief that we do not meet these 

guidelines and we have to move. Well, we really did meet the code, 

and fortunately, we were able to find an architect and we swung 

around that curve ball. 

So when it comes to the Affordable Care Act, I think we should 

talk about that just for a minute. Mostly, what we are finding out 

and what we are learning is that we meet these requirements with 

what we offer today. The thing that we are most concerned about 

is the affordability provision. And this year it is okay. We have 

maybe a slight change that will be needed, but next year it changes 

pretty dramatically, and we just do not know kind of where that 

is going to come from and what that is going to mean to us. 

I already went over on time. Please do not mind. 

There is a couple of things that I outlined about some of the 

other regulations. You never think about audits on 401Ks, a workman’s comp that we had where we were sued by New York State 

and we lost. We were part of a pool. I explain a little bit about 

that. The one thing I say about taxes here is I am told that there 

are loopholes in taxes but they do not apply to us. I do not know 

what they are. If they do exist, they certainly do not apply to us. 

We feel like we pay taxes. And they feel like they are pretty significant. And when you do pay a lot of taxes it is difficult to reinvest 

because you pay the taxes, you pay yourself, and the other thing 

that happens a little bit to me personally right now is where the 

S-corps or the company’s profits are coming through our owner, so 

my income tax—I look like this on paper, right, but I get paid 

somewhere like this. So I am not eligible for financial aid for my 

kids to go to college so I better make sure that I save some money. 

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I am going to jump to the thing that is really bothering us, and 

that is what is going on with some product bans. And right now 

there are some product bans on foam, hinge hood containers, and 

they are mostly going on in California and they are mostly being 

done by individual cities. But just recently, Mayor Bloomberg proposed a ban on Styrofoam. And Styrofoam is a trade name. It is 

really called polystyrene foam trays. That is what we make, and so 

we are super concerned about this attitude, and it is really not 

based on something that is—it is not real. There is a perception 

that this stuff is bad for the environment, but the reality is that 

it is not. And it is taking just a little bit of plastic and making a 

lot of products. We are foaming plastic like in the bathroom when 

you foam soap and use a little teeny bit of soap and you get a lot 

of soap. It is a little bit of the same thing. 

One of the things I want to add about that is polystyrene foam 

that is used in the United States is made in the United States and 

it is good manufacturing jobs and a lot of the people who work for 

us, this is the first job they have ever had and they come in here 

and we provide them with some structure and we provide them 

with some benefits. I am just kind of dumbfounded that this is a 

concern of ours really. That I guess would be the thing that is really bothering me. 

Mr. COLLINS. We can even talk about that some more, but at 

this point what I would like to do is yield to Mr. Murphy to introduce our second witness. 

Mr. BRADDON. Okay. 

Mr. COLLINS. And then we can do some questions after. 

Mr. BRADDON. I am sorry that I went over. 

Mr. MURPHY. Thank you, Mr. Chairman. 

I would like to also thank I guess Ranking Member Vela ́zquez. 

I passed her in the tunnel, so I got a little wave to her. 

On behalf of the Small Business Committee I would like to welcome Shirley Brostmeyer, CEO of Florida Turbine Technologies. 

Ms. Brostmeyer is an engineer by training and trade. She started 

her career as a line engineer working on turbine blade and vein designs for GE and has worked across the international turbine industry as a manager and consultant. As CEO of FTT, an innovation in its field, Ms. Brostmeyer represents the best of American 

ingenuity. Her experience working in both extremely large and 

small companies from the lowest level to the highest is invaluable 

to the Committee as it seeks to level the playing field for small 

businesses seeking government contracts. I thank Ms. Brostmeyer 

for traveling to Washington from beautiful Jupiter, my hometown, 

to speak at this hearing, and I look forward to your testimony. 

Thank you. 

STATEMENT OF SHIRLEY BROSTMEYER 

Ms. BROSTMEYER. Thank you, Congressman Murphy, and 

thank you to the Committee for this opportunity. 

Again, I am Shirley. I am the chief executive officer of Florida 

Turbine Technologies. We are a leading provider of engineering, development, and testing, and the manufacturer of test equipment for 

turbomachinery. This turbomachinery is used for military and commercial aircraft, space propulsion, and industrial power. 

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Florida Turbine Technologies began in 1998 in Palm Beach 

County with a handful of engineers, and we have grown to supply 

research and development activity worldwide with over 200 employees. FTT is a leader in innovative turbomachinery improvements. In fact, we lead the nation in patents per employee. Many 

of FTT’s patents are recognized by the Air Force, who actively review these patents as extremely innovative ideas. 

Thanks for the privilege of speaking with you today, and I would 

like to encourage the creation of a new federal acquisition regulation for government research and development projects. Currently, 

whether or not a company has production products is being used 

as a selection criterion for R&D, and this should not be allowed. 

We at FTT feel that better utilization of small business for government contracts would provide more innovative and affordable 

solutions—saving money for the taxpayers, and creating exports 

that will boost our economy. I would like to quote a March 2010 

House Armed Services Committee report regarding the current defense acquisition process, ‘‘Small businesses are largely locked out 

of the process or accorded contracts only on the goodwill of one of 

the larger firms. We are concerned that the end result of this process is the gradual erosion of competition and innovation in the defense industrial base.’’ 

Only 2.5 percent of research and development funds are allocated 

to Small Business Innovative Research programs, or as you probably know it, the SBIRs. And yet, small businesses provide the 

most innovative and agile workforce available without the large 

overhead costs of large companies. For the other 98 percent of government R&D acquisitions, government decision makers actively 

use a selection criterion which puts small business at a significant 

disadvantage. This criterion is that a company must have at least 

one active production program to be a serious competitor for R&D 

funds. This is true because of historical close ties between the government and its large production suppliers. But this is also true because government employees prefer to work with a ‘‘proven entity,’’ 

albeit expensive and less innovative. They feel comfortable that the 

technology will be taken to market and not left on a shelf after 

their investment. But there are many contractual ways to deal 

with product transition into production, and once a development 

prototype from a small business has been proven, larger businesses 

will often compete to license the available technology. 

FTT has developed small engines that address future DoD needs 

for small UAV and missile platforms. We have developed our most 

recent engine on SBIR funds, and we have matched the funds dollar-for-dollar with profits from our commercial business. This small 

engine would reserve as an ideal platform to affordably demonstrate advanced aircraft engine technologies. However, we are 

discouraged from competing for R&D contracts because our small 

engine is not currently in production. This issue is certainly not 

limited to the turbine engine community. The findings in the 2010 

House Armed Services Report confirm that this is a pervasive 

issue. 

Thus, I have a recommendation which would increase small business participation in R&D programs, and this is it: create a Federal 

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Acquisition Regulation that R&D contract decision makers may not 

use the existence of production programs as a selection criteria. 

I thank you for your time, and I hope you consider this change 

to the existing acquisition philosophy. 

Mr. COLLINS. Thank you, Ms. Brostmeyer. I always say do not 

bring me a problem without a solution. That was well done. You 

have a solution. 

I would like to now yield to Mr. Bentivolio to introduce our next 

witness. 

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

fellow Committee members, I am very appreciative we are holding 

this hearing today. According to the business research firm, Dunn 

and Bradstreet, Michigan’s Eleventh Congressional District is the 

second leading manufacturing district in America. It is my privilege to introduce Mr. Richard Najarian, representing an exemplary 

manufacturing company in this industrial district. Mr. Najarian— 

did I pronounce that correctly? 

Mr. NAJARIAN. You did. 

Mr. BENTIVOLIO. Thank you. Mr. Najarian is president of Precision Global Systems, a manufacturer for some of the world’s largest automotive and defense companies based in Troy, Michigan. 

Since being founded in 1983, PGS has become a leader in crisis 

manufacturing management, machine and assembly, and component recertification. With over 100 employees in three manufacturing sites, PGS ships over 3 million parts every month across 

North America and beyond. Mr. Najarian is also chief investment 

officer and a board member of Premier Biomechanical—excuse me, 

Biomedical, Incorporated, a company working with the U.S. Army 

to develop cures for cancer, traumatic brain injury, and suicide ideation. A veteran of the frontlines of American capitalism, I am honored to introduce an individual who has been successful in good 

times and bad and has insights to share on public policy moving 

forward. Mr. Najarian, I thank you for coming and look forward to 

your testimony. Thank you. 

STATEMENT OF RICHARD NAJARIAN 

Mr. NAJARIAN. Thank you for the introduction. 

Am I on? I guess I am. Okay. 

Thank you for the introduction. First and foremost, this is a fantastic forum and I thank you for that. 

Congressman Bentivolio’s invitation came through another organization called Automation Alley, which is a networking organization in southeastern Michigan, and we have been working with 

them for a little while here with regard to both automotive and defense contracting. 

I hope you have a chance to read my testimony, my written testimony. If you have not, please if you get a chance to take the time 

I would appreciate it. As a graduate of the University of Michigan, 

B.A. in English, 1989, Go Blue, I like to write, and sometimes I can 

get a little carried away on the written testimony side so I will be 

brief in the oral testimony here. 

Our capabilities are in component recertification, value add subassembly, as well as complete production assembly. The PGS team 

implements these processes at one of three manufacturing sites ocSBREP-219 with DISTILLER

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cupying nearly 200,000 square feet located in southeastern Michigan. We ship over 3 million parts each month to customer locations 

throughout North America and beyond. 

Several years ago I wrote a letter to the employees of PGS to 

note some of the trends I was witnessing. As you will know, we 

were already in the midst of the recessionary events that created 

such turmoil in our economy. I am going to read a couple of excerpts from that note. 

‘‘The tides change, the winds shift, the water ebbs and flows, and 

the sun sets only to rise again. PGS has had wonderful days and 

yet these recent days have been extremely slow. We will soon find 

growth and opportunity at our doorsteps, and with the systems recently implemented, we will have no hesitation to open the door 

and let it in. 

We arrived at our place within the automotive industry by design. We do great things for great companies. We work behind the 

scenes of our customers who continue to waste millions of dollars 

in scraps, rejects, and wasteful processes. We have tasked ourselves to help them stop this absurdity. Our ideas will reinvent 

their successes as well as ours.’’ 

Then in 2010, I issued yet another letter, but this time the ebb 

had receded and the flow had begun again for PGS. I will read an 

excerpt from that note. 

‘‘The year was 2008 and the economy was on the brink of disaster. In many ways it provided a test of our resolve. How hard 

could our group be tested? And we were tested unlike any other 

time in our 27 year history. The entire automotive manufacturing 

industry lay in ruin as Congress and the American people questioned our intelligence, our ingenuity, and our integrity. 

How will we all help? Cast no shadow on the questions each of 

us asks for they are the power of our future. Harnessing the power 

of success with innovation and determination will lead our company and our team into a very bright future and only we determine 

how our future shall unfold by the course of our actions and the 

strength of our spirit.’’ 

So I was asked to come here and talk to this Committee about 

the question of what will be obstacles in our growing manufacturing organization? And I will say it is a very deep and troubling 

question. There are a lot of regulations that are out there. There 

are a lot of taxes that are out there. Tax code, there is a section 

179 expense election, and we think about all these things but there 

are a couple things that came to mind. One is, and I share some 

concerns with my neighbor to the left of me, is how do we get U.S. 

manufacturers to do business with U.S. manufacturers that are 

small business companies? And the second is how do we account 

for the waste that is a byproduct of every manufacturing site? 

Incentivizing one company to do business with another could be 

one of the most intriguing demonstrations of U.S. policy in years. 

Small business manufacturers based in the U.S. shall be granted 

certification as such. 

Giving a federal tax incentive for work produced to a small business manufacturer would stimulate the economy, continue to assist 

more small businesses in gaining a better foothold on their specific 

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product or service and keep these factories still active and in the 

market. Market forces do not always favor the small business. 

Frontline buyers are typically unaware of how their purchasing 

power can affect their community, and upper management may 

consider how they save money through supplier consolidation or 

shared product/material purchases. They may consider how they 

better brand their product or push themselves into new markets. 

Why not extend the new opportunity to U.S. small business manufacturers similar to minority-owned, women-owned, 8(a), and so on. 

The second idea is with regards to waste. Plastic plugs and caps 

are utilized for either shipping from plant to plant or as assembly 

aids. The caps and plugs are used one time in a way to either protect a seal, maintain fluid in an assembly, secure a wire, assist in 

protecting a sensitive area during the assembly process. Quite literally, thousands of tons of material are annually sent to landfills 

as a result of this seemingly innocuous process. We estimate approximately 20 million pounds of plastic sent to landfills or dumps 

each year just from the auto industry. And just because a plant has 

plastic material removed from their site does not qualify them as 

a zero landfill facility. 

LEED, as some of you may know, has become the standard for 

buildings erected or modified throughout the country. It is now 

time to establish a new standard for the manufacturing process 

throughout the country that incorporates the same need to respond 

to environmental concerns. Why not certify via an outside independent auditor, whether a plant or facility really has done all that 

is possible to either reduce or eliminate the waste product entering 

our soil? 

Again, thank you for the opportunity to present this testimony. 

I hope the two primary ideas I offered will be respectfully considered by this Committee as reasonable and possible. Further, to the 

hearing, I pledge my continued support and vigilance to these 

ideas, and I look forward to your desire in kind. Thank you. 

Mr. COLLINS. Thank you, Mr. Najarian. 

I know Mr. Bentivolio has got another meeting he is going to 

have to go to, so I will yield to Mr. Bentivolio at this time. 

Mr. BENTIVOLIO. Thank you. 

Mr. COLLINS. Five minutes. 

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

Mr. Najarian, I understand you manufacture an increasingly diverse line of automotive parts. Can you describe some of the challenges involved in branching into a new product line? 

Mr. NAJARIAN. Well, some of the issues that we run into as a 

small business is because of resources. Typically, in some of the instances that I have had we have been fortunate that we have established some relationships with some larger OE customers—OE 

being original manufacturers or original equipment manufacturers. 

The difficulty in that is being able to—even though our ingenuity 

or engineering, our abilities or capabilities are available to do 

something, a specific product, it is hard to get a customer to actually give you the opportunity to do so. And the reason why is because maybe you are not doing it today. 

Well, what does that mean? What I am talking about is in my 

case we were doing a derivative of a project. We happened to be 

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working on actual and a customer, in this case it was Chrysler, 

gave us the opportunity to work in engines and transmissions. It 

was a derivative of what we were doing but they saw through that 

and said, ‘‘Well, we see the success that you have on the actual side 

so we would like to talk to you about engines and transmissions.’’ 

So I think the trouble is—and then when that happens, the ability for us to then go into engines and transmission work becomes 

greater. The problem is getting that frontline customer to come to 

you and say could you do something. The problem today is the buyers are typically going to a smaller set of large organizations, and 

that is who they typically go to. And the reason why is because 

they really do not understand how they affect their community atlarge. So if you look at their city, their state, or their country, from 

that standpoint, how they affect it from their purchasing is not 

something that the typical buyer really understands. And I am 

talking the frontline buyer. I am not talking about management 

and so on and so forth. 

So I think that is part of the issue, is getting them to better understand what it is that small business can do for their community 

because sending the money overseas, which is what a lot of them 

do, it is usually out of convenience because those are the companies 

maybe that do that project already or that part already. 

Mr. BENTIVOLIO. And earlier you had a proposal where you indicated that a number of facilities declared themselves to be zero 

landfill facilities but that is not always the case. Would you care 

to elaborate on the scale of this issue and how it affects companies 

like your own which reuse and recycle their waste internally? I 

want you to expand on that, too, because I found that very interesting what you are doing with these caps. Can you talk about 

that? 

Mr. NAJARIAN. Sure. 

Mr. BENTIVOLIO. Thanks. 

Mr. NAJARIAN. So the caps and plugs that we are talking about 

are shipping aids. What happens is what we designed was a process to recover those and a process to clean them and recertify 

them, send them back to the manufacturer. When I am talking 

about a manufacturer, I am saying, okay, so for instance let us 

take a transmission. On the transmission you might have four or 

five plugs or caps that are used to protect either a seal or a port. 

When they are taken off at the assembly site when they are assembling the vehicle, they typically throw those parts away. And so we 

developed a way to bring those back, clean them, requalify them, 

and send them back to the transmission site, for instance. I actually patented and actually have a patent that came through in 

April of this year, so we just finally closed that out which was a 

huge success for the organization. 

But one of the things that I am concerned about is there are a 

lot of companies out there, large organizations that qualify themselves as zero landfill organizations, and they are really not. They 

might be selling their plastic or selling the stuff that they would 

otherwise put into the landfill; somebody else puts it in a landfill 

for them. They might burn it off. Somehow, some way, trust me, 

it is going into the land. It is going into the soil. And I think we 

need to start regulating that with regard to not—and I am not 

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talking about regulations like we typically think of regulations, but 

what I am saying is that if you are going to call yourself a zero 

landfill facility, you should be certified as such. 

And similar to LEED, where LEED does, okay, well, you are 

platinum or gold or silver star, LEED building, we should have 

similar capabilities of judging whether or not a plant really takes 

the environment into consideration. They do not have to. There is 

no requirement, but if they are going to say it and they are going 

to qualify themselves as such, then we need to give them some sort 

of standard by which they should follow. 

Mr. BENTIVOLIO. I see my time is expired. Thank you very 

much, Mr. Najarian. I appreciate your testimony. 

Mr. NAJARIAN. Thank you, Congressman. 

Mr. BENTIVOLIO. To all of you, I want to hear more about your 

story. Real quick. I have about five seconds here. Is the original 

owner in the room? 

Mr. BRADDON. Yeah, right here. 

Mr. BENTIVOLIO. Okay. Good job. Thank you. We need more 

like you. 

Mr. COLLINS. Thanks, Mr. Bentivolio. 

At this point I will yield to Mr. Murphy. 

Mr. MURPHY. Thank you, Mr. Chairman. 

Ms. Brostmeyer, again, welcome. Thank you. 

Your Florida Turbine Technologies is one of the most innovative 

in America and you remarked on that already. And it is a prime 

example of the kind of high tech design in manufacturing where we 

are always going to hold an edge in America. As you pointed out, 

FTT has the greatest number of patents per employee in the nation. I mean, how cool is that? That is something to be proud of. 

In addition to outserving the competition patents, I understand 

that your company excels at finding new and innovative applications for existing technologies. A talent that large, that large of a 

talent pool you have, companies are often unable to replicate this. 

Can you give us a concrete example of how a FTT product or a prototype that has benefitted from being able to quickly and easily 

cross pollinate some of these technologies? 

Ms. BROSTMEYER. Definitely. That is an excellent question. We 

see that actually working with some large companies that work in 

multiple industries that one group does not talk to the other, and 

that is one of the really powerful things about a small technology 

company. Although we work in various industries, we are so small 

that we are able to take lessons learned from one industry and 

apply it into another. So one example where we are doing that, we 

have developed a sequential cooling scheme for an industrial turbine application. It is being tested this year and it is going to have 

all kinds of efficiency improvement implications in the machinery. 

But we just actually took the same concept and designed it into an 

aircraft engine application and we have actually just received an 

award, an SBIR award to test that as well or to develop it to the 

point of test. So it is really good to get the synergies from different 

industries, especially high tech like the space industry that we are 

in, aircraft engines, and industrial turbines. 

What I think is rather interesting is that our country is behind 

in rocket turbines and rocket space relative to the Russians and 

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the Europeans, but we are not behind in aircraft engines and we 

are not behind in industrial turbines. So lessons from those industries can readily be transferred to our rocket industry, and we are 

actively doing that. 

Mr. MURPHY. You mentioned SBIR. Can you maybe talk about 

some things you have done to take advantage of that program, and 

perhaps some things we could learn and some improvements that 

you would recommend to us? 

Ms. BROSTMEYER. Sure. Yes. FTT is very active with the SBIR program. I mean, over the years we have been awarded over $10 

million worth of SBIRs. And actually, we have designed and developed an entire turbine with SBIR funds. In our case, actually, we 

matched those funds with profits from our commercial ventures. 

But that saved the government—I mean, normally you are looking 

at a 10 million plus program and so it saved a lot of money in 

terms of the development costs. 

I think SBIR is a great program. I guess if we had to make a 

couple suggestions, one would be that they shorten the time cycle 

because there is more than a year from the time that we—there 

is some kind of a technology need identified to the time that one 

is actually awarded the monies to start working. So that could be 

shortened. That would be helpful. And another thing that we feel 

would be helpful is, I mean, if you have a good idea such as our 

small engine and you are getting the momentum, there is a $1 million cap on phase two SBIRs. And we feel perhaps it could be a little higher than that in order to enable really larger products to 

continue being developed. 

Mr. MURPHY. Thank you for those recommendations. 

And you made the case that the defense acquisition process is inherently biased against small businesses and you had a pretty 

shocking quote there. You have recommended the federal acquisition process not just use prospective contractors’ production status 

as selection criteria. If we were to make this change, how would 

you recommend the government ensure small businesses with unknown production capability were able to produce the products that 

the government needs? 

Ms. BROSTMEYER. Well, again, that is a really good question 

because I know that is the concern that is cited a lot of times when 

small businesses are locked out of the process. But there are a couple things. First of all, we are right now working on licensing 

agreements for technologies that we have developed under research 

SBIR programs, and if there is a good idea, larger companies will 

want to license the technology or a team or a joint venture, but in 

the worst case, if the government funds a small business for a R&D 

or development program and the small business is unable to commercialize it, the government owns rights to the technology and 

therefore, the government could take the project and go to somebody else, you know, even a larger manufacturer at that point to 

put it into production. So that would be the worst case if the small 

business cannot figure out a way to license or work together with 

other businesses. But I guess the other point is that the government should encourage large businesses to engage with small businesses who have good ideas, and that encouragement would also 

really go a long way. 

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Mr. MURPHY. Thank you. Just one more question here. 

I caught the tail end of your testimony, Mr. Braddon, and Mr. 

Najarian, you spoke about this idea of LEED certification for manufacturers. I am certainly not an expert on Styrofoam but I guess 

I am in the general public category. You mentioned perhaps the 

naı ̈ve thinking that Styrofoam is very bad for the environment. I 

fish, I dive, every time I go in the ocean, when I see things floating 

it is always Styrofoam. My understanding is that it does not break 

down. Maybe you could explain that. And Mr. Najarian, your 

thoughts on what he said. 

Mr. BRADDON. Okay. Well, when he talks about the zero landfill, I would say that our plant probably qualifies as a zero landfill. 

It is not something that we have purposefully tried to say that we 

are, but every bit of scrap that is generated in our process goes 

back in and we make more product with that. And that would be 

on the foam side of the business. 

On the equipment side of the business, our scrap is metal chips, 

and so of course, that is all recycled, and all of our cardboard is 

recycled and all of our plastic wrap is recycled. And the most garbage that comes out of our plant is from the cafeteria. That is 

where most of it comes from. 

As far as foam in the environment, foam is basically inert, and 

if you do not like it because it floats, well, it is very light. Only 5 

percent of a foam tray is actually plastic. The rest starts out as a 

blowing agent. You know, you take plastic and you foam it. It is 

not too much different than this plastic. You do not hate this plastic, but if we were to foam this plastic you might hate it. And we 

cannot understand that. It is taking a little bit of plastic and making a lot of product. A typical meat tray might weigh 6 grams, so 

you get about 500 school lunch trays out of 10 pounds of plastic. 

I mean, that is a pretty efficient use of material, and it is inert. 

And if you do want to use it as waste to energy, it has got a high 

BTU content. You could say that you were going to take these natural resources and you were going to make electricity. Well, you 

could take these natural resources, you could make plastic, then 

you could make electricity. Why not use it once first. 

My father invented the term ‘‘precycle.’’ He says you are going 

to use it for this. Use it for something else first. And I think there 

is a lot of hope to that waste to energy. Right now you have these 

recycling programs where they throw everything in the bin. Everything in the bin. And then you cannot really sort everything out of 

that bin. Like if you look at the Europeans, they have a green dot 

program. They collect clear PET, green PET, blue PET, aluminum, 

and steel. They do not collect everything like we do. But we are collecting everything, and I think that could be a really nice way to 

waste energy because it is not absorbent, it will help the stuff that 

is soaking wet that is in with the plastic to burn. You get a real 

nice BTU content. I think it makes a lot of sense. 

Mr. MURPHY. Mr. Najarian? 

Mr. NAJARIAN. Do I have to push this button again? I do not 

know. Okay. 

So I do not have anything necessarily against polystyrene so I 

did not make any ovations to that, but as far as what I was talking 

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about, my idea is specific to any facility, any manufacturing facility 

in the country. 

With regard to making sure that the waste that they have, this 

byproduct, and a lot of it is plastic, some of them are good with 

their cardboard, baseboard, you know, metal, of course, is always 

recycled because you get some good money for the scrap dealers 

that are out there in this country and everybody is looking for steel 

or aluminum or some form of metal, so that is not an issue. And 

they have recycling programs for light bulbs and things of that nature, but the question that I am asking, and the assistance that I 

think needs to be done is how can we actually certify a company 

as being environmentally sound. 

I have, for instance, TS69, 49, 9001, and ISO14001, those are all 

certifications, two are for quality and one is for environmental. 

14001 tells me I measure my aspects and impacts to the environment very well and I follow exactly the rule that the international 

standard states. But what it does not say is am I really removing 

this product from my facility the right way? Or in this case what 

I am talking about is recycling those plastic parts. There is nothing 

that says that you cannot recycle on a normal basis. These parts 

that I am talking about are washed and brought back and we 

charge a nominal amount of money for it. It is a cost savings to 

the company, but the bigger issue is certifying those companies 

within. And not just allowing them to self-proclaim themselves. 

You know, self-proclamations of, hey, we are zero landfill. We do 

not affect the environment at all, and nobody can challenge it because there is no auditing committee that comes in and says are 

you really that? So it is kind of that truth in advertising. We do 

not allow that. We regulate that; we should regulate these things 

of things, too. 

Mr. MURPHY. Thank you all very much. 

Mr. COLLINS. Yeah, no, thank you. I have got a last but not 

least. 

A few questions. I am also a small business guy. I have done that 

for 40 years—high tech, low tech, and bio tech, and one of my companies also lives on patents. The funny one off the record here— 

but we are not off the record—is the patent on bed bugs. So we are 

going to see where that one goes. 

What I would ask is maybe a rhetorical question just to get some 

info. One benefit of these hearings is to get on the record your opinion. You are all successful, hardworking, small business owners, 

and it is helpful for all of us when we go to other committees even 

to give them feedback from here. So my rhetorical question or comment to start is in my businesses we have a mantra ‘‘Grow or die.’’ 

Every day we come in we want to take care of our customers, we 

need to worry about orders, collecting money, paying our bills, et 

cetera, et cetera, but we all plan to grow. I mean, how are we going 

to grow? Whatever that is. We may not always succeed. 

Now, to me, growth is an investment. It takes money, and so I 

guess the concern I have on this Committee and serving in Congress now and seeing some of the environment that we talk about 

here, I talk about financial things. For the first time in history, 

small business taxes are higher than big corporations. It has never 

happened before. 39.6 percent for subchapter S pass-through, and 

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I am presuming all of you are subchapter S pass-throughs. So you 

are paying, and I pay, at 39.6 percent. But the biggest corporations 

pay at 35. Now, to me, number one, that is just plain wrong. But 

my rhetorical comment is that is money you cannot invest in your 

business. 

Mr. NAJARIAN. Right. 

Mr. COLLINS. The money is coming to Washington for whatever 

programs—good, bad, or indifferent—but you do not get to keep the 

money to invest, and I think you probably could confirm you take 

most of the money you make and reinvest it. That is what entrepreneurs do. They do not, by and large, have yachts and airplanes 

and that kind—you are always looking to grow your business. So 

every dollar that comes to Washington is a dollar you cannot invest, and this tax code that we are talking about at a 25 percent 

marginal tax rate, I am presuming, and that will be one of the 

questions, what would your reaction be on the positive or neutral— 

but I think positive—to a 25 percent top marginal tax rate that 

says—putting aside the state you are in, I am from New York, you 

know, shame on me or unlucky me—you get to keep 75 percent instead of only 60. How would that impact you if we are able to get 

tax return this year? What would you think of a 25 percent top 

marginal rate which is what they have in Europe? 

Maybe we will start with Mr. Braddon and ask all three the 

same. 

Mr. BRADDON. Of course, that would have a positive effect. 

Right now, you have a certain amount of debt capacity and you 

have to be at a certain profitability level in order to have that debt 

capacity. So when you start bumping up close to that, then you are 

done. And you cannot borrow any more money. The bank looks at 

your ratios and they say, okay, you are done. We are not doing anymore. And then particularly if you have a bad year, which happens, 

you know, you lose customers, you gain customers, especially in a 

market that is not growing, and yeah, it would give more debt capacities. It would fix those ratios. You would be able to borrow 

more money and buy more equipment and grow. 

Mr. COLLINS. I will take that as a yes. 

Ms. Brostmeyer. 

Ms. BROSTMEYER. Yeah. I mean, certainly, everyone wants 

more money to reinvest in their business, and we would be no different than that. I do not know the big picture as far as how our 

government is going to get enough taxes to do what they need to 

do, but I would say that I think the off shoring of profits that is 

going on in large businesses is a big problem. And as a small business, I look at some of the large businesses and ask myself, well, 

gosh, you know, how can they shift their profit centers offshore 

such as they do? How do they get away with that? And to me that 

is also something that really needs to be addressed because that is 

where a small business is really at a loss. They will pay their 

taxes. They have no choice about it. 

Mr. COLLINS. Thank you. 

Mr. NAJARIAN. So 15 percent is quite a bit. I could not fathom 

that happening. 

Mr. COLLINS. Twenty-five. 

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Mr. NAJARIAN. No, I mean, 15 percent reduction over what I 

have got now from almost 40 percent, right? I think it is 39.6 or 

something like that. But anyway, one of the issues that we ran into 

I know last year, it was a very nice year for PGS, but it was funny 

because at the end of the year we needed up with no cash—paying 

down loans, our payables went down, so that was nice. We paid off 

our working capital loans. And at the end of the day we had no 

cash left because the rest of it went to taxes. And in fact, I ended 

up in the negative territory when you added the taxes into it. So 

that was kind of an interesting side note. 

I think extra money for us, we would be moving into new markets. We would be pushing a little bit harder into new opportunities that right now we hesitate on because of the resources that we 

have or do not have right now. We have a great relationship with 

our bank we established a couple years ago. We actually worked 

with the SBA on a big loan a couple years ago which has been absolutely the most fantastic thing that happened for my organization and allowed us to actually grow and prosper. So if any of you 

had anything to do with that I thank you for that. I think what 

we would look at is moving into new markets and pushing a little 

bit more on the limits of what we could do from a manufacturing 

standpoint. And in doing so you increase business. You just keep 

going. 

Mr. COLLINS. That is helpful because when we stand up and we 

make these proclamations that if we give small businesses more 

cash, they will spend it on job creation. And that if we need more 

jobs, and we do in this economy, the quickest way to get those jobs 

is let small business owner, who all are subchapter S. So these are 

not the fat cats. The three of you sitting there who would take that 

differential and put it right back in your business, whether it is 

R&D, another trade show, or in Ms. Brostmeyer’s case, another 100 

patents. Right? 

Ms. BROSTMEYER. Yes. 

Mr. COLLINS. Which is jobs. And so we have talked about it 

would be revenue neutral. We would get rid of all those loopholes 

that Mr. Braddon does not know about. But if it is revenue neutral, 

and I think that is our focus, and I do not think it is even—I think 

it is bipartisan. We need to unleash the ingenuity and the creativity of small business owners who speed to market, which is 

what Ms. Brostmeyer was talking about, would make the bigger 

corporations look slow and lethargic. 

Now, my other question really concerns Obamacare, you know, 

the Affordable Care Act. And I bring that up because, again, there 

is a cost issue. There are two issues here. One is impact on your 

employees. And you are not running a fast food restaurant where 

you can cut your workers down to 27 hours. That is not something 

you are going to do, and I was just in with some insurance companies who were begging to repeal the health insurance tax. And I 

go, ‘‘Where does the $100 billion come from?’’ That was a way of 

raising monies to pay for the expansion of Medicaid. And while it 

is going to get passed on to you, by the way, we had a hearing on 

that a few weeks back, and someone from the insurance industry 

said, yes, the $100 billion health insurance tax paid by the health 

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sumers, which are businesses, impacting premiums. So now we do 

not yet know exactly what is coming, but I have heard a lot of 

folks, if they have got 39 or 42 or 45 employees say I want to grow 

but not beyond 49. And we have seen smaller companies like yours 

cutting hours. 

But my question on Obamacare is where is that in your thought 

process right now? How big of a concern? Have you gotten your 

premiums for next year yet? And maybe the last one, maybe the 

controversial one was if you could vote tomorrow to repeal 

Obamacare, or let it go just the way it is because there are no 

changes coming. It is what it is. So would you repeal it or not? 

That is kind of a direct question I am curious about. 

Mr. BRADDON. So we have a fair amount of people who are— 

I guess a starting wage of around $10 an hour. And so when you 

look at the affordability piece of that, right now I think it is 20 percent of a single—it is 10 percent of a single program, that is the 

affordable—— 

Mr. COLLINS. Yeah. Affordability is like 9.5 percent of W-2 

wages. If you had a $20,000 employee, the affordability would be 

considered $2,000 for his portion. 

Mr. BRADDON. Okay. So that is not too far off from what a single policy goes for; right? I mean, that is not that different. It 

might be $4,000 for a single policy. Okay, so you check the mark. 

We are going to pass on affordability. Now, next year it goes to the 

employee and all their dependents. 

Mr. COLLINS. Except their spouse. 

Mr. BRADDON. Except their spouse. So if you have—now you 

are buying them a family policy. I mean, right now no policy exists 

like that. It is either single, two, or family. There is no—not being 

offered to me. So now, okay, the same person that makes $10 an 

hour, now we have to buy them a family policy. That is about a 

$9,000 a year policy. So now you are paying $7,500 if it is a—— 

Mr. COLLINS. I want to meet your broker because in my companies the single policy is like $6,000 or $8,000 and the family is 

$15,000. So. 

Mr. BRADDON. Yeah, well, you know, yeah, okay. 

Mr. COLLINS. A lot of people—not to put words in your mouth— 

really do not know yet what they are going to do. 

Mr. BRADDON. Right. There is an uncertainty right now. I do 

not know how many people are going to sign up. Right now we 

have 90 out of 170 roughly. And so how many people are going to 

sign up this year more? I do not know that. So that is an uncertainty. And then next year, how many people fall into this particular bucket where now we have an extra 7,500? And I think 

what is going to happen is people are going to move in favor of 

eliminating low paid positions. And you are going to take that bottom rung on the ladder and you are going to raise that up and people are not going to be able to get on the bottom rung anymore. 

Mr. COLLINS. So would you repeal it? 

Mr. BRADDON. For the way it is? I think it is going to do more 

harm than good, and I would. 

Mr. COLLINS. Thanks. 

Ms. Brostmeyer. 

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Ms. BROSTMEYER. Yes. Well, our company provides health 

care. We always have for our employees and their families. Really, 

it is not going to influence us in any way except that our premiums 

are going up at a little bit higher rate than they would have otherwise. We are extremely vigilant about comparing policies and trying to find something that works for us, so we did just change carriers in an effort to try to keep the premiums at an affordable rate. 

I mean, it is a challenge, and I would not say that I would repeal 

it because I will say, I mean, I have a handyman. I have a cleaning 

woman. I utilize lot of household help in order to work, and my 

husband works, and we have two teenage daughter. So we have a 

lot of household help, a lot of help. None of them have health insurance. I mean, you ask them, you know, what are you going to do 

if something happens? And I go to the emergency room. I have 

been there a few times, and it is filled with people who do not have 

health insurance. And there are people, like my sister for instance, 

I mean, people that have medical conditions that in the past have 

worried, oh, gosh, it is going to be really hard for me to change jobs 

because I have a specific medical condition and, you know, preexisting conditions are so difficult. Employers are going to look at 

that and say I know that it is going to be a challenge to hire you 

and put you on a medical plan. So I do not feel I have the oversight 

to say, okay, here is exactly what we should do about health care, 

but I know it is a complex issue and I would not claim to say let 

us get rid of it. I do not think that is the right solution. 

Mr. COLLINS. That is why I am asking. 

I will say this. Some of the lower paid folks qualify under Medicaid. One thing as a nation we have to remember when we talk 

about the uninsured, we normally think about the poor. Well, in 

fact, they have insurance; it is called Medicaid. And when we worry 

about the emergency rooms, the thing that I worry about is many 

doctors do not take Medicaid patients. If you show up at the door 

of a primary physician, a dermatologist, and you say I am on Medicaid, more than not, certainly up in our area, they do not accept 

you. So you go to the emergency room with your insurance card. 

The expansion is Medicaid, so now you have a lot more Medicaid 

carrying individuals who are going to the emergency room. Well, if 

you think it is crowded now—— 

Ms. BROSTMEYER. It is going to get worse. 

Mr. COLLINS. Just wait. Yeah. Unintended consequences. 

Mr. Najarian. 

Mr. NAJARIAN. If it is a vote of three I am going to go with repeal. 

Anyway, so, you know, I am a republican by nature and by my 

beliefs. 

Mr. COLLINS. And a taxpayer. 

Mr. NAJARIAN. Yeah. And a taxpayer. Yes. And I hesitate to 

say that out loud because I am being audited right now by the city 

and the state which is one of those coincidental things. And it is 

okay. We go through those days. 

So we have in a similar sense, we have had insurance for our 

employees since day one. The company opened in 1983 and we 

have been providing insurance for everybody. There was a time we 

used to pay 100 percent. We cannot do that anymore so we pay a 

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percentage. And I think the biggest issue that I found, if somebody 

was to say what is the matter with health care, I would say that 

the problem with health care is we do not understand it. I am talking about Obamacare, not health care in general. And what I mean 

by we do not understand it, small businesses are very savvy. Small 

business owners are typically pretty savvy people. And I say this 

because if we knew six months ago, a year ago when everything 

was voted on and passed, it is fine. It is passed. We are not changing it. You said it yourself, it is not going to go away right now. 

But for us to plan for it, you cannot—we are in the dark. I think 

it is absolutely absurd for us to be in the dark this long to know 

exactly how we should plan. When everything came through we 

had an insurance carrier who came to me and said this is what it 

is going to be like. Three months later I get the guy come back in 

my office who says, okay, there are changes to it. We did not understand these other things. Oh, now there is another system. We 

still do not really understand what it is that we are going to be 

doing. And so for us to plan for the inevitable is difficult. 

Mr. COLLINS. The uncertainty. I was just with an insurance 

company and they were sharing they have had to put forth their 

premiums for next year and they do not know who is signing up. 

Mr. NAJARIAN. Right. 

Mr. COLLINS. They do not know if the young and the healthy 

are going to stay in, and they are all brand new policies. Policies 

that are being offered have never existed before because they include the health clubs. They have to have prescription coverage. 

There are a lot of things that now have to be in policies that were 

not before, so they do not have a base to compare it to. They do 

not know who is signing up, but they had to lock in their premiums. 

Mr. NAJARIAN. Right. 

Mr. COLLINS. They have done that, and right now they do not 

know what their profits or losses may be. So it is an unknown. 

Mr. NAJARIAN. Right. And we have been trying to plan for it 

like everybody else, but it is just you are planning sort of in a bubble almost because every small business owner has a different interpretation of exactly what is going to come down. 

Mr. COLLINS. So as we wind down, one other quick one. I am 

being selfish because you are helping me here a little bit. I have 

held hearings on cybersecurity because I chair the Subcommittee 

on Technology, and I am also on the Science, Space and Technology 

Committee. The statistics are 87 percent of small businesses do not 

have formal cybersecurity polices, and I have to admit across my 

companies I am as guilty as the rest. I have one that is really good 

and the rest are not. But cybersecurity and small business, when 

we worry about customers paying our bills and collecting our 

money, cybersecurity is not real high on the list. We are trying on 

this Committee to shine a light on it, to make people more aware. 

I am just curious where you are on that and also specifically, are 

you in the cloud or not? 

Let me start with Ms. Brostmeyer. 

Ms. BROSTMEYER. Yeah. First of all, we are not in the cloud. 

And I am sort of curious how that works with very secure information. But I am told that there are ways to do it, that one can really 

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stay secure. So I have been asking the question should we be looking at this, and I really do not know enough about it yet. But we 

do have cybersecurity. I mean, we see all the time threats in our 

industry especially from Asia, from all over the world, and we are 

very vigilant, sometimes too vigilant that it slows our computers 

down so much because there is just so much involved. 

Mr. COLLINS. Is somebody in charge and do you educate your 

employees on passwords—changing your password dos and do nots? 

Ms. BROSTMEYER. Absolutely. Yeah, very important in our 

business. And so, yeah, there are people in charge. We have a 

group that really monitors it very regularly. 

Mr. COLLINS. Good for you. 

Ms. BROSTMEYER. And we are trained. 

Mr. COLLINS. So you are part of the 13 percent. 

Ms. BROSTMEYER. I guess so. Yeah. 

Mr. COLLINS. Thank you. Mr. Najarian? 

Mr. NAJARIAN. I am going to hand you this capability statement in a little bit, and the differentiators talk about—the first 

thing says cybersecurity compliant. It is something that we take 

very serious. We are in the cloud. We have been in there quite a 

while. Everything that I do, I can operate the entire company over 

the Internet, but we work with a company that is very secure. If 

I lose anything tomorrow, if something happened and the system 

went completely down, we actually have cold storage and hot storage sites that are not even located nearby our facility. 

We are very dedicated to traceability to everything—lot 

traceability, lot controls, things like that, so parts coming into our 

plant, when they go out we know where they got to in the process 

in the assembly, so if a customer calls up and says I have got a 

problem, I not only contain what he has on his floor but I can contain any other customer that has shared those types of parts. 

But I think that one of the questions that you asked with regard 

to cybersecurity is understanding how it can negatively affect your 

company, and until you have really had to react to something, and 

that is typically why anybody starts up and says, okay, we need to 

be a little bit more vigilant, is because they have had an issue. And 

I think the shame of it is that, yeah, we have a lot of people that 

are hacking into our computers all the time—not ours personally 

but in the United States. And a lot from overseas. And I know the 

government is the primary objective for a lot of those overseas nationals. 

Mr. NAJARIAN. They are actually coming after small businesses. 

Mr. COLLINS. And the small businesses. 

Mr. NAJARIAN. Stealing your IP, stealing your customer list, 

getting your banking information, and your employees’ data. 

Mr. COLLINS. Yeah. And that is the challenge, just keeping everything in a secure site. And that is why we do this in a cloud 

bubble because we have found that if somebody can get in to a 

computer itself, they still cannot get into that and that is one of 

the issues that we—— 

Mr. COLLINS. Yeah. Good. Good. 

Mr. Braddon. 

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Mr. BRADDON. We do not specifically have a cybersecurity policy. I think we follow some good practices. We have the standalone 

system for our banking. Our servers are hardware in a closet on 

our own site. We do have, you know, we are doing some offsite 

backups in a couple of different ways and knock on wood, we have 

not had any issues. 

Mr. COLLINS. Yeah, I think as we move forward there is going 

to be more and more emphasis on it, and I think as you do business—if your customers are big customers, they are going to want 

to know—there is something called Trust Mark, which is the 

cybersecurity, like you were talking about LEED certification, and 

maybe we can get something for the sustainability and all of that. 

And we are trying to shine a spotlight on it on this Committee because small business people do not generally go to work worried 

about cybersecurity. It is Federal government, big banks, insurance 

companies. But they are starting to come after us, and when they 

do, it can be devastating if you are not ready. And most are not 

ready. 

So I guess I know we are running out of time, but this has been 

very helpful. 

Mr. Braddon? 

Mr. BRADDON. I would like to maybe mention one thing. In my 

testimony I talk about one piece of self-regulation that we do, and 

I think it is similar to what you are talking about with the ISO 

certifications where we hire a company and they come in and they 

do their inspection and they give us a guideline on how to make 

products that are safe for serving food, and then they come in and 

then they give us a score. And believe it or not, they have competition. Right? So there is different—and a food producer can look at 

those guys and say I like the way that AIB is doing their audit or 

I like the way these guys are doing their audit. So you have competing companies that are regulators. Basically, it is a form of regulation, and we voluntarily sign up. And if some of these ideas 

come out, maybe so will more of that type of regulation. 

Mr. COLLINS. We are always looking for a competitive advantage. And hey, if you have got one and you can promote it and it 

gets you business, you want to do that, that is what we do as entrepreneurs. 

Well, I thank you for your time. I know we have run over a little 

bit but all of you should be proud of yourselves, and we thank you 

for the jobs you have. And I know you are all going to grow your 

companies this year. So thank you for the new jobs that you are 

going to be adding, caring about your employees and all that we 

do here. 

So what we have started is a dialogue. That is what the Small 

Business Committee does. Talk about small business—your issues, 

your concerns. You have given us some good ideas here, and I am 

sure we can follow up on some of that. So again, thank you for all 

of your time. 

I ask unanimous consent that the members have five legislative 

days to submit statements and supporting materials for the record. 

So without objection, so ordered. 

The hearing is now adjourned. Thank you. 

[Whereupon, at 5:30 p.m., the Committee was adjourned.] 

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A P P E N D I X 

Testimony of 

Mr. Rick Schwind 

Vice President, General Manager 

Huntington Partners Inc. DBA Continental Tool & Mfg 

before the 

House Committee on Small Business 

June 19, 2013 

Good afternoon. My name is Rick Schwind, Vice President and 

General Manager of Continental Tool & Mfg, located in Lenexa, 

KS. I am also a resident of Smithville, MO located in Chairman 

Graves’ Congressional District. I am honored to be here today, and 

thankful to Chairman Graves and this committee for the opportunity to speak about our company and today’s small business climate. 

Continental Tool is a family-owned, small private CNC manufacturer of specialty tools, gages, assemblies and components with 

roughly 20 employees. Approximately 80% of our business is manufacturing tools designed for military end use. Think of the Army 

mechanics that take care of and maintain the Abrams tanks, 

Humvees, and Bradley fighting vehicles. We make many of those 

specialized tools. We make specialized wrenches for the care of 

landing gear on fighter jets, for the adjustment of sights on weapons, setting of fuses on mortar rounds, and hundreds of other tools. 

In addition, we provide a host of machined components to cooling 

tower companies, fire trucks, lighting fixtures, pumps, and valves. 

My parents purchased this business in 2008 from a family who 

started it from scratch in 1980. My dad had retired as an executive 

with a background in manufacturing and industrial distribution. 

His dream was to purchase a small manufacturing company and 

provide long term employment for the company’s employee base, 

but also to find and nurture a younger generation of worker. His 

dream was to be in a position to offer a career, not just a job, with 

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paid training and benefits to anyone who simply had the right attitude and didn’t mind working for what they earned. 

As for myself, I graduated from the University of Kansas and 

later received an MBA from the University of Missour-Kansas City. 

I had worked as an operator in a machine shop while in college and 

eventually ended up in management. For a few years I worked in 

a technology start-up and then the telecommunications industry 

before coming back to manufacturing at Continental Tool. Like my 

dad, I too was realizing my dream. Not only being able to work side 

by side with my father, but also being in the business of ‘‘making 

stuff’’ for America. 

As you remember, 2007 and 2008 were banner years for manufacturing. The economy was good, competition was fair, opportunities were everywhere. But as the recession began to take shape, 

things changed. Raw material prices, surcharges, and the cost of 

business increased. Competition became fierce. But like any small 

business at that time, we pulled back, assessed our situation, drew 

financial lines in the sand and stuck to those principles. In a world 

full of emotion and momentum, we became focused on running the 

business with the best financial acumen we could muster—by the 

numbers. There were opportunities to purchase new equipment we 

wanted to take advantage of, but we passed up. There were people 

we wanted to hire, but didn’t due to our commitment to live within 

financial guidelines. The single best (and most difficult) advice my 

dad gave me was that we needed to manage the business with our 

minds but not necessarily our hearts. We needed to protect the jobs 

of our employees to the best of our ability. Use our mind, emotion, 

and faith as the backbone for every decision, but levy that against 

the financial justification on whether or not to proceed. We knew 

of several shops in our area at that time that failed to fully comprehend the financial aspects of some of the decisions they made, 

and sadly some of those shops failed and closed during that time 

period. 2009 and 2010 were indeed a challenge. 

2011 and 2012 were much better. I’m glad to say that our business rebounded to 2008 levels and operationally we were in a great 

place. The challenge of the recession led us to sharpen our pencils 

in just about every way and we got better. Our processes improved, 

our quality improved, our margins improved, and we retained 

every employee. 

But challenges remain. In terms of talent, we continue to struggle to find skilled labor. In our industry, it takes anywhere from 

5–8 years of on the job training to become truly skilled in machine 

setup and operation. The combination of mathematics, mechanics, 

and technology are a challenge for anyone new to this industry and 

the learning curve is steep. I’ve heard there is renewed focus at the 

college levels on engineering, but we cannot stop there. There is an 

even more pressing need for skilled labor. The average age of a 

skilled worker in our company is 50 and that seems to be consistent across our industry. These men and women are approaching 

retirement age and as a nation we need to build our skilled labor 

bench strength, or else we will have many people with college degrees, but no technical skills. 

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But as a company we face additional issues. Uncertainty over 

health care is a major concern. Today, our company fully pays for 

the health care premiums for all employees. But now knowing the 

financial implications of the Health Care law next year had us 

questioning whether we’ll be able to continue providing this going 

forward, or whether we will be forced to turn this cost over to the 

employee. 

As I mentioned, roughly 80% of our business is supplying the defense industry. This is where sequestestration has had a real impact on us. We agree with the decision to pass a law holding Congress accountable to reduce our nation’s debt and reign in spending. Our company made difficult decisions and significant cuts to 

survive, and the federal government should do the same. However, 

we took a sensible, precision approach to our finances as we would 

when manufacturing a precision tool while Congress did not. 

Unless Washington quickly addresses the situation they created 

with sequestration, the impact to small manufacturers like ours, 

whose primary customer is the Federal government, will be severe. 

Our sales to the government are down 30% this year, and we recently were forced to lay off three employees, temporarily we hope, 

and are working to refinance our long term debt to reduce monthly 

expense. 

Even though our company survived the most recent recession, we 

are seriously concerned with the current environment facing small 

businesses. Does Washington really understand our challenge? Do 

they sense the concern we have with health care uncertainty, ineffective and costly regulation, the sequester and the indecisiveness 

regarding the federal budget and tax? We certainly hope so, but the 

environment remains scary. 

I am thankful that this committee is asking for input from companies such as ours in order to stem the tide. Small business is the 

backbone of our economy. We employ the majority of workers, and 

due to our small size we build close, personal relationships with 

our employees and take on the responsibility of the welfare of their 

families. We ask that our government use sound financial justification in every decision, just as we do in our shops and plants across 

the country. As Americans, we are blessed with that special drive 

to do things beyond ordinary, and I see that drive in every small 

business owner I meet. 

I am honored to be here today, and many thanks to Chairman 

Graves and this committee. 

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‘‘Made In America: Highlighting the Success of Small 

American Manufacturers’’ 

Testimony of: 

Bruce Broxterman 

President and CEO 

Richards Industries 

Cincinnati, Ohio 

Before the Committee on Small Business 

United States House of Representatives 

June 19, 2013 

The Honorable Sam Graves, Chairman 

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Good afternoon, Chairman Graves. Thank you for holding this 

important hearing today to highlight the value of manufacturing in 

the United States and thank you for the opportunity to talk briefly 

about the challenges and opportunities that lie ahead for US manufacturers. 

My name is Bruce Broxterman and I am the President and CEO 

of Richards Industries, a privately-held manufacturer of industrial 

valves, located in Cincinnati, Ohio. 

We have been in business since 1961 and our mission is to provide heavy duty valves to control flow, pressure and temperature 

for our customers in the process industries such as refining, chemical, petrochemical, pharmaceutical, food processing—just to name 

a few. 

We have six different product families that are made up of highly 

engineered products that are specifically designed to meet unique, 

individual requirements. 

Richards Industries has been fortunate to experience solid 

growth over the past six years. After a management buyout in 2007 

we have seen unprecedented growth of our revenues and profits. 

Over those six years our sales grew nearly 45% with net earnings 

improving at nearly the same rate and employment growing by 

12% to just under 150 employees. 

The deep recession of 2008 followed by a slow and uncertain economic recovery has resulted in a challenging business environment 

that even now is proving to be difficult. 

Richards has grown by staying focused on the niche markets and 

taking care of our key financial fundamentals. 

Staying Focused: Richards Industries continues to thrive as a 

manufacturer here in the US because of our single-minded philosophy of providing products to meet the ‘‘special’’ requirements of 

our customers around the world. These products are highly engineered solutions to difficult customer process problems. Manufacturing run quantities are low and precision is high. 

Agility & Flexibility: Being a small manufacturer can be challenging but it provides the opportunity for us to be agile and flexible as we work to provide our customers with the fast response and 

product delivery that they need to be effective and successful in 

their operations. We are often asked to build an engineered custom 

product and ship it in less than two days and our Lean process 

structure and flexible approach enables us to consistently do it. 

International Reach: Our products are used in every corner of 

the world. Despite our size, you will find Richards Industries products on drilling platforms off the coast of Brazil, in pharmaceutical 

plants in the heart of Europe, on gas pipelines in Central China, 

and in chemical plants in Kazakhstan. 

In 2007, International sales represented just 19% of Richards Industries revenues. In 2012, international sales were 45% of the 

shipment total. 

Richards Industries were among the winners of the Governor’s 

Export Award in 2010. 

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Financially Sound: Along with increased revenues, Richards 

Industries has been able to achieve healthy levels of net income 

and cash flow, thus enabling the company to repay the debt taken 

on at the time of the acquisition while simultaneously reinvesting 

significant amounts of capital in the company. This reinvested capital has been used to generate further company growth and job creation. 

Talented Workforce/Special Culture: At the heart of our success are the employees at Richards Industries. Our team is talented, experienced and creative but, most importantly, they are 

committed to excellence and performance bringing a ‘‘Consider It 

Done’’ attitude to work every day. Additionally, the family culture 

that runs through our company helps set up our team for success 

and has resulted in Richards Industries being chosen as the ‘‘Best 

Place to Work’’ five out of the last six years by a local Cincinnati 

business publication. 

There are immediate and future challenges that threaten our 

ability to maintain our pattern of success as a manufacturer in the 

US. First among them is the structural cost of US manufacturing 

imposed by government tax policy, regulatory policies, and legislative initiatives. Richards Industries is structured as an S-Corporation and, therefore, the taxable income generated by the enterprise 

flows directly through to the personal tax returns of the owners of 

the company. High individual federal tax rates imposed on the 

owners siphon off precious capital that, but for the higher taxes, 

would be reinvested back into the company to purchase capital assets, grow the company, and create new jobs. High federal corporate tax rates have the same effect on entities structured as traditional C-Corporations. 

The Manufacturing Institute estimates that these structural 

costs add a full 20% to manufacturer’s costs of doing business relative to our major trading partners. 

US health care costs have increased 80% in the last decade and 

we believe that much of this cost increase is attributable to government involvement in the insurance marketplace via coverage mandates. We believe that the expansion of government involvement in 

health care brought on by the implementation of the Affordable 

Care Act will put further upward pressure on health care costs. Indeed, just last week the Ohio Department of Insurance announced 

that preliminary indications point to individual health insurance 

premiums increasing 88% in 2014 relative to 2013 rates. We anticipate similar premium increases for the plans we offer to our employees. Cost increases of this magnitude will in part be passed on 

to our employees and in part borne by Richards Industries, again 

diverting capital that would otherwise be deployed to grow the 

company and increase jobs. 

Of equal concern is the shrinking supply of qualified workers. 

The manufacturing workforce is moving toward retirement at a 

faster rate than the rest of the economy and we cannot find qualified workers to fill positions as machinists, operators, and skilled 

assemblers. The US education system is not equipping American 

students with the right skills and in the right disciplines to support 

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the manufacturing economy. This lack of qualified workers will impact US manufacturer’s ability to compete in the global market 

while manufacturing products in the US. 

I encourage this committee to continue to explore these growing 

challenges and to act to alleviate these accelerating headwinds. 

I am very proud of the small part that Richards Industries plays 

in the nearly $2 trillion US manufacturing sector and I am excited 

about the opportunities that lie ahead. 

Thank you for your support as we move forward through these 

challenging times and thank you for the opportunity to provide testimony today. 

I look forward to your questions. 

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Written Testimony 

of 

Mike Mittler 

President & Co-Founder, Mittler Brothers Machine Took 

Before the 

U.S. House of Representatives Committee on Small Business 

Wednesday, June 19, 2013 

My name is Mike Mittler, President and Co-Founder with my 

brother Paul of Mittler Brothers Machine and Tools, a manufacturing company located in Wright City, Missouri. We are the classic example of a small business. We founded our company around 

the kitchen table at my mom and dad’s house Super Bowl Sunday 

of 1980. The following Monday, we rented a 2,500 square foot 

building for $00 and a hand shake with the owner. How little did 

we know. 

Paul and I worked many long days and nights as the only employees of the company to build our reputation of quality work and 

great customer service. We honed our basic customer service skills 

with the first Mittler Brothers—cutting grass, raking lots of leaves, 

painting houses and many other odd jobs while in high school. 

With me the oldest of eight children and Paul the youngest, if we 

wanted to have any fun money, we had to earn it. 

Mom and dad were great role models and while providing the initial startup money, they quickly said you boys are on your own and 

you have to make it. Always glad to offer advice, they did not meddle in the business and knew we had to make our own mistakes 

so we would really learn the hard way. 

In 1984, we moved to our second location in a 7,500 square foot 

building we helped build with a lot of sweat equity. We added both 

customers and employees slow but sure over the years and moved 

to our current location the 50,000 square foot building in Wright 

City in 2004. I am a member of the National Tooling and Machining Association and there are thousands of companies like ours 

manufacturing in America, but together it is these small businesses who employee the majority of Americans. 

Our most important asset is our people and we are proud to have 

10 with over twenty years of service with us. Two of whom started 

right out of high school and who are now grandfathers! We currently have 60 employees and last year we paid out over $2.5 million in payroll to our people. I am very proud to currently have five 

military veterans as part of our team and feel these are the real 

heroes of this country. We have always given young people a 

chance to work for us and currently have several moving up thru 

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the ranks including one still in high school working part time for 

us. 

Our people are all highly skilled and we employ: welders, machinists, tool makers, engineers, painters and assembly technicians. 

Our people are guided by just three basic rules; SAFETY, QUALITY, PRODUCTIVITY. We provide a quality benefit package including health care, more on this later, a 401K gain sharing program that last year paid over $200,000 to our employees and a flex 

work schedule to allow our people to deal with their family and job. 

We utilize the latest technology in our manufacturing process including 3D solid model design software and computer controlled 

machines. 

Our company has two main areas of focus, one is our own product line of special machines and components for the racing, hot 

rodding, restoration, aircraft and bike building industry. And the 

other is design and building of special equipment for industrial automation. 

Our standard products serve both the professional racer, fabricator, and the do it yourself who has our products in is home workshop. We are proud to be able to sell our products globally with 

customers in much of Europe, Russia, Japan, Australia, New Zealand, Canada, and Mexico. Our products have been featured in the 

hit TV series American Chopper and several other ‘‘how to’’ shows. 

Numerous trade publications and many online videos have also featured our products. We maintain a dynamic web site, publish a 90- 

page catalog and exhibit in several trade shows to promote and sell 

our product. 

In our design build area, we manufacture custom machine and 

systems for large industrial companies helping compete in the global economy. Our customers include companies in the medical, 

building products, energy, heavy truck general industrial area. 

While we have been successful over the years, many things I currently see really bother me and give cause for great concern. I often 

wonder would I do it all again? In today’s climate, could my brother 

and I succeed and create these jobs in Missouri? Unfortunately, I 

think the answer is no. 

There is too much uncertainty out there right now and the costs 

of manufacturing in America are rising, making us less globally 

competitive. Uncertainty over the health care law, instability in the 

tax code, ineffective and costly regulations are the biggest problems 

I face. It seems most of our obstacles come from Washington. Small 

businesses don’t need a helping hand, they need a sensible partner 

in government which allows entrepreneurs to build a business and 

create jobs. 

In closing, I am proud and thankful to live in the greatest country in the world and proud to have the opportunity to contribute 

in a very small way to that greatness. May God continue to bless 

America! 

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Statement for the House Committee on Small Business 

Committee Hearing 

Mr. Chairman, Rep. Sam Graves, and Rep. Nydia Vela ́zquez, 

Ranking Member, and Members of the House Committee on Small 

Business. 

On behalf of the Institute for Entrepreneurial Leadership, the 

Workshop In Business Opportunities and the thousands of people 

who pursue entrepreneurship and small business ownership as 

their path to the American dream, I thank you for the opportunity 

to address this Committee today. 

I am here to share our view of the challenges that exist for the 

women, minority and low income entrepreneurs that we serve and 

to offer potential solutions to help them contribute to economic recovery and stability that never seems to make it to America’s most 

distressed neighborhoods. 

Our entrepreneurs are mostly people who see starting a business 

as an avenue to a better life. They have an idea, a vision and a 

lot of passion. The resilience of small business owners and aspiring 

entrepreneurs never ceases to amaze me, particularly those whom 

we support. On a daily basis, they continue to push forward and 

succeed against considerable odds. 

IFEL is focused not on the entrepreneurs who start businesses 

with loans from their parents or SBA, corporate buyout packages 

or by raising money on Wall Street. Our focus is not on the high 

tech, high growth businesses that grab the attention of wealthy 

angel investors. Our clients are regular people who aspire to live 

a better life, people for whom the American Dream is a concept 

worthy of pursuit. 

For over ten years from our base in Newark, NJ, the Institute 

for Entrepreneurial Leadership has provided one-on-one mentoring 

to women, minority and inner city businesses with revenues less 

than $250,000. While these types of enterprises are often demeaned 

as ‘‘mom and pop’’ businesses not worthy of government or private 

sector investment, we celebrate these entrepreneurs as the agents 

of change in communities where change is most needed. If we can 

help these businesses grow, we can make a difference for the people they employ, the customers that they serve and the communities in which they exist. 

In 2011, we joined forces with Workshop In Business Opportunities (WIBO), an amazing organization that has trained over 15,000 

entrepreneurs over 47 years in the areas of New York City where 

the angel investment dollars do not flow—communities like Harlem, South Bronx, Washington Heights, and Bedford Stuyvesant. 

Since joining forces, we have created an end-to-end training, mentoring and a support continuum for the entrepreneurs that are all 

too often left out of the mainstream small business ecosystem. Last 

year we served close to 1800 existing and aspiring entrepreneurs 

through our trainings, one-on-one business mentoring, clinics, 

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1Minorities in Business, 2001, Published by the SBA Office of Advocacy, p. 22 

webinars and other resources. I come before you today to speak on 

their behalf. Our clients are 73% women, 70% with household income below $60K (36% below $20K), and 74% black and Hispanic. 

The challenges that our clients face in starting and growing businesses revolve around two primary issues: the Capital Gap and the 

Talent Gap. I would like to take a few minutes to discuss each and 

then propose some solutions for consideration. 

The Capital Gap 

A study released by The Urban Institute in April 2013, details 

the increasing gap in the wealth between white Americans and 

nonwhite Americans. The study discussed that with the 2-to-1 

earnings differential has remained relatively constant for the last 

30 years, the gap in wealth has increased substantially from preto post-recession. The study, summarizing Federal Reserve data, 

indicates that before the recession, non-Hispanic white families, on 

average, were about four times as wealthy as nonwhite families 

and by 2010, were about six times as wealthy. In dollars and cents, 

this translates to the average white family having about $632,000 

in wealth, versus $110,000 for Hispanic families and $98,000 for 

black families. 

The Minority Business Challenge, a report published by the 

Milken Institute and the Minority Business Development Agency 

in 2000, revealed that capital gaps exist at very level for financing 

the capital structure of minority businesses: equity, mezzanine and 

senior debt. It went on to say that the fact that minority-owned 

businesses tend to be more prevalent in industries with lower entry 

costs may—at least in part—reflect more binding liquidity constraints and generally less access to startup capital among prospective minority business owners.1

While capital access is often viewed as best addressed through 

the private sector, private sector solutions are generally not interested in low return, non-scalable ventures. Initiatives like the highly touted Startup America Partnership and the resources available 

in Silicon Valley and Silicon Alley and other high tech regions do 

a great job at supporting the development of the entrepreneurial 

ecosystem for high tech, high growth businesses—there is not, however, a place at the table for those businesses that do not fit this 

mold. And while the SBA does what it can through the limited resources that it has, the truth is that the SBA as its capital resources as currently structured cannot replace the type of business 

startup and growth capital offered through personal wealth and 

‘‘friends and family’’ investment. Black businesses are particularly 

affected due to the lack of intergenerational wealth transfer that 

has occurred historically due to the fact that blacks in America 

were for so long denied the opportunity to own and build. In a community of ‘‘have nots’’, financial support from friends and family is 

not an option. To date, there have been few options to address lack 

of access to capital, which is inextricably linked to lack of collateral 

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2 Creating Capital, Jobs and Wealth in Emerging Domestic Markets, p. 64 

ness without capital—a vicious cycle. We need to find solutions to 

the access to capital problem created by the wealth gap. 

The Talent Gap 

In addition to capital constraints, many entrepreneurs rank lack 

of business training as high among the challenges they face. Increasingly, financial institutions see training and mentoring as a 

risk mitigator, increasing a business’s likelihood of success and repayment.2 While most small business and entrepreneurial experts 

agree that money can’t fix a business without a fundamentally 

sound business model, it is a simple truth that money can buy expertise and can enable a small business to stay afloat long enough 

to figure things out and adjust. Access to capital makes the pivot 

to profitability possible. Access to capital enables entrepreneurs to 

bolster their own skill sets, hire experts and build a capable employee base. Undercapitalized businesses have no room for error 

and little capacity for weathering a storm. 

Again, this is where we see a divergence in what exists for high 

tech, high growth businesses and for the community based businesses that we serve. In New Jersey and across the nation, there 

is a strong effort to support incubators and accelerators for tech 

companies that have the potential to attract significant private sector investment dollars as well as government and institutional research grants. The NJIT Enterprise Development Center, which 

has collaborated with us since our inception, supports high tech 

companies and the Entrepreneur Center in Nashville, which I visited through a Startup America conference, which accelerates the 

development of high growth companies, are two such examples that 

do a great job at their intended purpose. The NJITEDC has university support and the Entrepreneur Center has the support of the 

entire Nashville entrepreneurial and business communities. There 

are many, many examples of similar facilities and resources across 

the country and around the world for high tech, high growth businesses—and this is a good thing. Most of the value proposition of 

these incubators and accelerators is in having access to the talent 

and expertise that they could not otherwise afford during the early 

years in the development of the business. These incubators and accelerators stimulate innovation, provide support and connect capital to projects that can change the world. What we are missing is 

the same level of resource for entrepreneurs who can change communities. 

By helping community based entrepreneurs and small business 

owners gain access to talent, we can help them navigate their way 

to success. Their success can provide economic stimulus at a local 

level and sets the stage for healthy functioning communities with 

strong families, motivated youth, safe streets, arts and culture, and 

more. If we are able to help more community based entrepreneurs 

realize their potential, we can create jobs for those who are often 

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tions to the talent gap that exists for community based entrepreneurs. 

Solutions 

So what are the solutions to these challenges that have plagued 

the micro-enterprise landscape for years? While there are no magic 

bullets, a renewed commitment to community based entrepreneurs 

and small business owners as the engine of revitalization in our 

most distressed regions can lead us to solutions that require relatively limited financial stimulus from the federal government. 

Here are a few solutions that we propose: 

Access to Capital: 

1. Provide incentives for private debt investment in micro-businesses. These businesses are not great candidates for equity investment for many reasons. A loan of $20–100K is often what they 

need and could be provided by friends and family, except this target population doesn’t have friends and family with these resources. For loans with principal payments deferred 3+ years, interest paid could be tax free or at a reduced tax rate. 

2. Encourage the SBA to work with its micro-lending partners to 

relax the credit and collateral requirement for loans up to $10K. 

3. Include incentives for investors in businesses in distressed 

communities in the crowdfunding legislation being considered. 

Eco-system: 

1. Motivate banks to support entrepreneurial training and ongoing support (with evidence of results) through stronger CRA requirements; give additional credit for banks that demonstrate results in historically redlined communities 

2. Include small business development as a component of Community Block Grant funding 

3. Require that federally funded projects not just have minority 

subcontractor targets, but also include targets for ancillary services 

like catering, photography, and printing. This could provide a boost 

to local businesses in the area around federally funding projects. 

4. Require SBA funded programs like SBDC, SCORE, WBC to 

demonstrate evidence of partnership with community based organizations. 

‘‘Government must be a key partner in creating a favorable environment for business to flourish in integrating these communities 

into a regional, national, and global economy. The nonprofit sector 

also must continue to be a partner. 

Community-based organizations and other nonprofit entities 

have a critical role to play in linking investment with community 

resources so that partnerships can create a fertile environment for 

community capitalism. They are a critical component to the success 

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3 Excerpts from Community Capitalism: Rediscovering the Markets of America’s Urban Neighborhoods, The Ninety-first American Assembly, April 1997, The American Assembly, Columbia 

University. 

portunities, leveraging public and philanthropic dollars, creating 

healthy communities, and facilitating business investment. 

Community capitalism’s goal must be to create healthy economies that produce jobs, income, and wealth for community residents at rates that are at or near national norms. This will provide 

the economic foundation on which business, government, nonprofit 

organizations, and individual residents can join together to build 

decent homes, good schools, cultural and recreational opportunities—all the ingredients of livable, sustainable communities.’’3

After our years of work with thousands of aspiring and existing 

entrepreneurs, I have come to believe with all my heart that solutions are possible if we believe that entrepreneurship is truly the 

way to the American Dream. It is not enough to just focus on those 

who have been blessed with the benefits and privilege of history, 

we must also empower those individuals who have not, but aspire 

for more and whose spirits are still open to dreaming. On behalf 

of the thousands of people who pursue entrepreneurship and small 

business ownership as their path to the American dream, I ask 

that you commit yourself to inclusion of the community entrepreneurs whose success creates a better way of life for us all. 

Respectfully Submitted, 

Jill Johnson 

Chief Executive Officer 

Institute for Entrepreneurial Leadership/Workshop In Business 

Opportunities 

550 Broad Street, 15th floor, Newark NJ 07102 

www.ifelnj.org / www.wibo.org 

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Made in the USA: Stories of American Manufacturers 

Testimony of: 

Barbara J. Schindler 

President and COO 

Golden Artist Colors, Inc. 

New Berlin, NY 

Before the Committee on Small Business 

United States House of Representatives 

June 19, 2013 

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Good afternoon Chairman Graves, Ranking Member Vela ́zquez 

and members of the Committee. Thank you to Congressman Hanna 

for inviting me to be here today. 

My name is Barbara Schindler, President and COO of Golden 

Artist Colors, Inc. Thank you for the opportunity to provide testimony on manufacturing in America. GOLDEN manufactures acrylic and oil paints for professional artists. As a global company, we 

export our products to 60 countries around the world. Currently, 

our international sales make up 25% of our business. 

Our mission is to grow a sustainable company dedicated to creating and sharing the most imaginative and innovative tools of 

color, line and texture for inspiring those who turn their vision into 

reality. 

To achieve that mission, we operate on three principles: 1) make 

the best products, 2) provide customers with the best service and 

3) find people who can make the first two happen. Our products 

are intended to preserve the artistic legacy of our times for hundreds of years. This is a unique responsibility and privilege we take 

very seriously. In 2002, GOLDEN became an employee owned company. We have 157 owners coming to work each day, know that 

their contribution will have a direct impact on their investment 

and retirement! 

What makes GOLDEN a successful manufacturer in America? 

The Arts Materials Industry is one which grows a meager 2% per 

year. Despite that reality, GOLDEN has grown its business 21% 

since 2009. Many of our competitors have moved a portion of their 

manufacturing to emerging markets, predominantly China. We 

choose to remain here, as we recognize we can protect our product 

quality and intellectual property in the United States. Our continuous efforts to drive manufacturing efficiencies improve our ability 

to remain competitive; however our commitment to new product development and consumer relationships is essential for continued 

growth. Many product concepts come from artists/consumers who 

use our brand. Our five-member technical support team responds 

to 13,000 phone calls and emails annually. We also contract with 

over 40 teachers in North America who provide art education for 

over 15,000 people per year. 

GOLDEN believes in giving back to our local community and the 

global arts community as well. Each year the company has contributed 10% of its net profit to the many non-profit organizations that 

make a difference in our world. Business is an ecology of interconnected resources, human and environmental. Each business 

needs to find its own way in nourishing these resources to remain 

sustainable. 

What obstacles do we face on a federal level? 

Most of the issues we face are local and industry related, yet 

there are three significant issues where the Federal Government 

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can provide leadership and assistance. They are health care, education and specific to our industry, harmonized labeling standards. 

We remain optimistic that the Affordable Care Act will meet its 

goal of creating affordable health insurance to all Americans. As we 

prepare for this future, however, it is our approach to ready our 

employees and our business for every aspect of health care, and not 

simply the ACA impact alone. 

At GOLDEN we have been managing affordability via fierce staff 

education and wellness. Yet, a consumer mind set can only go so 

far in an opaque market such as health care. As health care services remain rationed, especially in rural areas of our State, and 

with medical inflation outpacing the cost of living in multiples, we 

need your continued efforts to address the entire health care system. Americans must embrace wellness and health care providers 

must place the patient in the center of all they do so we may once 

again enjoy the highest quality health care in the world and not 

simply the highest costs. 

Secondly, an educated and creative workforce is critical to sustain success in any business. Unfortunately, due to federal mandates and budget shortfalls, art teachers are being lost in almost 

every district. We are troubled by the lack of arts education in our 

schools and believe this is a serious situation that will in the long 

run, shrink one of the most significant drivers of American ingenuity and leadership. 

Finally, we need a truly harmonized regulatory framework for 

health and safety labeling of art materials. Applying State of California mandated health warnings to our products, warnings that 

are deemed appropriate by no other jurisdiction in the world, 

causes confusion and lost sales not only in other States of the U.S., 

but in our foreign markets as well. Adoption of the United Nations’ 

Globally Harmonized System of Classification and Labeling of 

Chemicals, as the preemptive standard for consumer products, 

would eliminate these burdensome domestic and international inconsistencies. 

What does the future look like for GOLDEN? 

GOLDEN’s future is positive and sustainable. With the help of 

NYS and Chenango County, GOLDEN just began a capital project 

to prepare us for future growth. 

We will be successful if we are able to maintain and hire an educated and enthusiastic staff. Employee ownership has been a point 

of difference between us and other employers. At the 2011 Inc Magazine Awards for the 50 Top Small Companies to work for, at 

which GOLDEN was one of the recipients, 12 of the 50 companies 

recognized were ESOP companies. Federal support for ESOPs is invaluable for creating workplaces which honor and celebrate its 

staff. ESOPs are not a cure-all for business success, yet it provides 

another level of security for employees trying to navigate their future. When employees are treated like owners, they tend to act like 

owners. 

Thank you again for the privilege to address this committee. 

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Testimony of Aaron Bagshaw, President of the W.H. Bagshaw 

Company 

Before the U.S. House of Representatives Committee on Small 

Business 

‘‘Made in the USA: Stories of American Manufacturers’’ 

June 19, 2013 

Good afternoon. I first want to thank Representative Kuster for 

the invitation to speak to you all today. As a small business owner, 

it is so encouraging to know that our voices are being heard and 

that small business, and manufacturing in particular, is such a priority to our delegation. Representative Kuster has been to our factory for two visits now, once as a candidate and more recently with 

Representative Steny Hoyer. 

I am Aaron Bagshaw, President of the W.H. Bagshaw Company 

in Nashua, NH, a fifth generation pin manufacturing business. 

After combing through records, I have discovered that we have 

manufactured and shipped, since our inception 143 years ago, almost 42 million lbs. of pins to happy customers all over the world. 

Amazingly, this would be enough steel to build the Chrysler Building in New York City. 

My Great Great Grandfather started manufacturing pointed pins 

for the textile industry in 1870. In the 1920’s, we were the only and 

original manufacturer of the Brilliantone Phonograph needles. We 

still manufacture textile and phonograph pins today, as well as 

more modern products that are in higher demand. The lifecycle of 

the pin is baffling. If any engineers are listening I would like to 

share this information with you. We still manufacture and sell the 

same product we manufactured 143 years ago. However, over the 

years we have had to adapt, update and change not only what we 

sell but how we manufacture it. We’re now making complex machined components for high tech applications using advanced machinery. 

Our pin making machines are modeled after Leonardo Da Vinci’s 

grinding concept. We are a living, breathing showcase of where the 

Industrial Revolution meets the Digital Revolution. We have machines that can make millions of pins per week and we have state 

of the art machines that can make incredibly complex parts. Often 

in my tours of our facility I will say that our ‘‘older’’ machines can 

make a lot of pins fast. I liken our story to what Henry Ford described as ‘‘you can have any color you want as long as it’s black’’. 

You can have any pin you want, as long as it looks like one we 

have manufactured. Textbook Industrial Revolution. Next on our 

tour, I would show you our computer controlled machines that are 

making parts unattended. We download a computer program into 

the machine wirelessly or directly from a laptop. With the setup assistance of an operator, the machine manufactures complex components. Textbook Digital Revolution. All under one roof. 

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When people learn about our business, after the obvious question 

‘‘What do you mean, PINS?’’, we are asked ‘‘How have you managed to stay in business so many years?’’ Our magic formula seems 

to be having this incredible legacy and foundation partnered with 

lots of mojo and a fresh approach to marketing and management. 

As we like to say, we’re a 143 year old startup. Our core values 

are: Family, a ‘‘Make it Happen’’ approach, Empowerment, Courage 

and Perseverance. 

The story of our family business truly is one of courage and perseverance. Through the years, we have weathered several wars, a 

Depression, and the recent Recession. Ten years ago we made the 

courageous decision to branch out into a new market, investing in 

CNC machines. CNC stands for Computer Numeric Controls, which 

means that they’re programmable machines. One operator can run 

several machines at one time. These machines have allowed us to 

produce pins that are much more complex for the aerospace and 

high tech industries. Several years ago, my wife and I made another courageous decision—we purchased a controlling interest in 

the business to secure the business for future generations. 

As with most businesses, we’re concerned about the economy, 

healthcare and energy costs. But our most important resource is 

our labor force, and a big challenge for us is access to skilled labor. 

There is a shortage in our area of machinists who are skilled at 

running the types of CNC machines that we have in our factory. 

In some cases, we have been able to bring in entry level employees 

and train them. We’re working with our local community college to 

bridge some of the gaps in their skills so we can accelerate their 

learning. We were excited to learn that a federal grant allowed for 

a major upgrade to the equipment in their machining lab. Having 

these partnerships with community colleges will be effective for the 

continual development of our workforce. While a large corporation 

can hire someone to focus on workforce development and educational outreach, a small business like ours cannot—tax incentives 

for these types of partnerships would be quite welcome. We have 

a huge slate of process improvements we would like to tackle and 

are always interested in tax incentives that support these measures. We have taken advantage of Lean Manufacturing courses in 

our state, NETAAC programs, export assistance through the US 

Dept of Commerce, and business advising from our NH Small Business Development Center. The Trade Adjustment Assistance for 

FIRMS has also been very beneficial. Support like this is critical 

to small businesses like ours. 

We often say, ‘‘If you think a pin is just a pin, then you don’t 

get the point.’’ We have survived for 143 years on grit, determination, fortitude and a bit of luck. From Da Vinci to Ford to the Digital Revolution we, as a company, need and will continue to need 

the skills that stem directly from the fields of Science, Technology, 

Engineering and Math. Our story does not end here. Our continued 

growth and evolution will rely heavily on the ability of our employees to adapt and grow, and use these technology skills. 

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Commodore - A Small Manufacturing Business 

Our Story 

Commodore is a small manufacturing business located in Bloomfield NY. We make polystyrene foam meat trays and the equipment 

to make foam products. Commodore Technology LLC makes the 

machines and the molds for Commodore Plastics LLC and also sells 

equipment for export. Commodore Plastics makes and sells mostly 

meat trays for the domestic market. We started as a foam packaging business in 1981 and added machinery sales around 1990 

when we learned that there is a market for equipment designed 

like ours. 

My father, George, decided to start a foam business in 1981 

when the industry was in a high growth period. He was able to pull 

some people together and buy some used equipment. His plan was 

to offer a few items with some unique features added to the current 

offering. Right away this idea didn’t work. The customers required 

that he be able to offer all of the sizes. He could not afford the 

molds for all of the sizes using the current processing technology 

so he developed and patented a new method of trimming the parts 

from the web. He was later able to offer more sizes, but still had 

trouble with sales. So George started offering colored trays (rose, 

blue, charcoal) instead of just the offering at the time of white and 

yellow. The developments came as a result of necessity and are 

part of our continuous improvement. 

It was much more difficult than my father imagined, but he had 

some lucky breaks too. At one point, he learned that Pepperidge 

Farms had decided that they would rather buy their trays instead 

of making their own. As a result, he was able to get some equipment and a new customer at the same time. This led to a discovery 

that the smaller equipment that Pepperidge Farms had been using 

was more efficient with material than what he had been doing. Because we are small relative to our competitors, we needed a different manufacturing footprint in order to be competitive. With the 

addition of this new equipment, he could see what previously had 

not been known to him. 

From this knowledge, we developed a system that incorporates 

many of the ideas behind Lean Manufacturing. We need to make 

shorter runs of different sheet types and colors and this change allows for us to do it efficiently. This turned out to be a big advantage when it came to selling equipment and molds. Many of the 

worlds markets are smaller and a producer might make trays, 

hinge lid containers, and plates all in the same plant. Our foot 

print works well for this so we have been able to design, manufacture, and sell equipment and molds to companies in Central and 

South American. Today the area where we are most active selling 

equipment is in Russia and the former Soviet Republics. 

Our company’s biggest setback occurred on May 19, 1991. The 

entire business burned to the ground. There was almost nothing of 

value remaining. Insurance was expensive so we were underinsured leaving us few options. We focused exclusively on making 

machines and molds. We found this to be very difficult and we 

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were determined to get back into the foam business. Then in 1995, 

we found a way and found it to be even harder the second time. 

Things started out very slowly and 10 years after the fire, we were 

still well below our pre-fire revenue levels. 

I have always been impressed with my father’s optimism. For the 

first 20 years, we struggled. We reinvested every penny that we 

earned back into the business. He had everything that he owned 

on the line. 

Things have improved. The last 10 years have seen 8 that were 

profitable and a few good years where we earned more than a normal return. We have a strong balance sheet and currently meet all 

of our bank convenants. Commodore is now 175 employees strong 

and offer competitive compensation packages. We are able to attract some great people to come and work with us. We are the largest private employer in the Village of Bloomfield and an important 

part of our community. We contribute to many great causes from 

kid’s baseball to the school yearbook. We are very happy where we 

are now with the business and very hopeful that we can continue 

to grow and prosper. 

Commodore and Government 

Our Company and the Government are sort of like partners with 

the Government having the final word in many areas. The Government has a set of rules that we live by called regulations and we 

pay taxes on our profits. The government does what they can to ensure the market place is fair for all competitors and also does what 

they can to help us to be successful through Government programs. 

Over time we have found our way through the maze of laws and 

regulations. We have great products so we are competitive in a mature market. We know that we need to get all of the details just 

about perfect or there will be no profits for a given period. We are 

most concerned about things that we can’t control. One of things 

where we have the least control is with the most recent government intervention on the part of Mayor Michael Bloomberg in the 

form of product bans. 

Regulations 

Regulations can be a very real barrier to entry. There are so 

many different regulations that can be very complicated and also 

costly. Over time, the regulation become less onerous and if done 

right can be a guide to best practices. Listed below are some of the 

regulations that we follow. An unfortunate aspect of regulations is 

that they don’t always change as fast as new technologies become 

available. 

OSHA 

We want a safe work place and feel this is one of our most 

important responsibilities to our employees. The last thing that 

we want to see is a person getting hurt on our watch; this is 

the same as what OSHA wants. We meet or exceed the regulations and as a result, have a safe work place. 

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Chemical bulk storage 

We are regulated by the EPA for chemical bulk storage. The 

butane is use to foam the plastic and we buy it by the tanker 

load. The tank needs to be big enough to fully unload the 

truck. We had a case where we did not know a law existed regarding the storage. We found out about the law after we had 

been using the tank and were in the process of creating a safety program to meet the regulation when we had an EPA visit. 

We were given a chance to submit the program that we were 

working on and when we did so at the wrong program level, 

we were subject to a fine. 

Building codes 

The codes for buildings and fire systems can be confusing. 

We have an older building that was built around 1900. At one 

point we had a very difficult time with the fire inspection process. We were very fortunate to find an architectural firm with 

the necessary expertise to move us forward. 

AIB 

We are self regulated by The American Institute of Bakery. 

We hire AIB to do an annual inspection of our manufacturing 

facility. AIB publishes a guideline for facilities making packaging for food. We develop processes that follow the guideline 

and they assign us a number grade for our performance 

against the standard. Because of this, our customers do not 

need to inspect our facility to know that we are delivering safe 

and sanitary packaging. Our December 2012 score is 940 out 

of a possible 1000 points. 

The Affordable Care Act 

We offer a group health care option to our employees. We 

pay for about half of the cost. We have about 90 of our 175 full 

time employees that participate. We purchase our coverage 

from a brokerage company and they spend time with management to help us decide what package is the best fit for our employees. They also explain the benefits to our employees and 

they are our primary source of information. We have been in 

constant contact with them since The Affordable Care Act 

passed, but we still do not understand how much our costs are 

going to change. We assume that some of the people who do 

not get insurance through the company get it from other places 

including their parents or spouse. We also assume that some 

do not have insurance. How many will join our plan is unknown and this is concerning. We think that our plan meets 

the affordability requirements this year, but the regulation 

changes and our current plan may not meet the requirements 

next year. 

I have concerns that the legislation will decrease the employment for the entry level worker. At Commodore Plastics, we 

have chosen to do a lot of work in our plant manually as opposed to automatic packing machines. We feel the added complexity of having more equipment and the setup associated will 

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limit flexibility. With the upcoming changes, I can see companies choosing automation over hiring more people. 

401K 

We offer our employees a defined contribution retirement 

plan. Since we have more than 100 participants, we are required to do an annual audit. The cost of the audit is about 

$10,000 not including the time spent by our employees. 

GAAP Accounting 

We are required to follow GAAP accounting. The banks that 

we work with insist that we follow the rules so they can understand the financial health of a business before loaning the 

business money. We understand the rules and do the accounting ourselves and then have them reviewed by an accounting 

firm that specializes in reviews and audits. 

Taxes laws 

The tax laws are very complicated so we hire an accounting 

firm to prepare our taxes. We have been through an IRS audit 

of our business and personally. 

Workman’s Comp. 

We purchased workman’s compensation insurance through a 

pool regulated by New York State. We were members of the 

pool for one year and then moved to a different carrier. Years 

later when the fund was empty and still had claims to pay; the 

attorney general of NYS sued the past and present members 

of the pool. We spent a significant amount of money on attorneys and eventually paid a settlement of about $250,000. 

Visas for Visitors 

Because we make equipment and also run a manufacturing 

plant, we can offer training to our Technology customers by 

having them spend time in our plant. We have been having 

trouble getting the necessary travel visas for them to come and 

visit. 

Taxes 

We are an S corporation so we pay our income taxes through the 

owner’s tax return and do not file a separate corporate return. The 

negative impact is that individuals pay a higher tax rate than C 

corporations leaving us at a competitive disadvantage. 

Loop holes 

I have heard of these, but don’t know of any. These must 

apply to some other type of company or product because we 

pay almost 50% of our income in taxes. 

Reinvesting in the company 

High income tax rates hinder growth. Our owners work for 

the business. We pay money to our owners for living expenses; 

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we pay our taxes and reinvest the rest. With the tax amount 

being high, the reinvestment is low. Successful manufacturing 

businesses constantly reinvest just to stand still and more investment is required to grow. Alternatively, we borrow money 

to grow, but banks will not lend to a company that is not reinvesting as it will not have the proper debt to equity ratios. 

Lower rates would increase growth. Perhaps a reduced rte for 

money that remains inside the company would do the same 

thing for an S corp. 

Financial assistance 

We have taken part in a few different government loan programs. The loans were a very important part of our past. The loan 

guarantees that we were able to get from SBA and USDA allowed 

us to borrow money and grow our business. 

EXIM Bank 

We have an ExIm line of credit that we use to finance our 

work in progress for exporting machinery and tooling. The program also allows us to write a standby letter of credit. The program has worked well for us in the past. We have customers 

that use the ExIm bank to finance their projects. We are currently working on an order that will ship to Paraguay. This 

will be their second project using an ExIm loan guarantee. 

Product bans 

We are most concerned about PS foam packaging bans. We believe that the bans are based on people’s negative reaction to litter 

and not based on scientific fact. There are many people who think 

that ps foam is bad for the environment. They base their opinion 

on emotion and avoid understanding the facts about foam packaging. Foam packaging is polystyrene that is foamed to stretch the 

natural resources to make more product using less material. People 

don’t seem to have a problem with the unfoamed version of the 

exact same material. There are many positive attributes of foam 

packaging. The process to produce foam uses little energy and 

there is no water waste. Foam packaging is thought to be non recyclable but that is not the case. It is being recycled and turned into 

many household products. All of the internal scrap in our plant is 

recycled and put back into the products that we make. 

Mayor Michael Bloomberg has proposed a law that would ban 

polystyrene take out containers in New York City. This ban will 

have little to no impact on litter or the amount sent to landfill. 

This ban is bad for New York State and it is bad for Commodore. 

It is very difficult for us to understand how a government can pick 

the winners and losers without considering all of the other products in a category and without having the science on their side. I 

have invited Mayor Bloomberg to visit our plant and have had no 

response. It seems to me that he should see the material being 

made before taking such consequential actions. 

Made in USA 

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Most of the foam used in the US is produced in the US. The 

substitutes that are being pushed by the bans are often made 

abroad. In many cases, these products are made in China and 

often are made from recycled paper. Paper is made from wood 

and contains many naturally occurring but potentially dangerous chemicals. The substitute products are less environmentally friendly when looking at the entire life cycle of the 

product. 

Waste to Energy 

We expect in the future that waste to energy will become 

more popular. Plastic packaging is generally non absorbent 

and also has high BTU content. Instead of using petroleum to 

make electricity, use is to make packaging and then use the 

packaging to make electricity. 

Conclusion 

Commodore is a small, privately help company operating in 

Bloomfield, New York which is located in the Finger Lakes Region. 

We have been in business for since 1981 and employ 175 people. 

While our company has had its’ share of challenges through the 

years, (fire disaster, market driven, regulations), we are healthy 

with a bright future. We believe in reasonable and fairly administered government oversight; one that allows privately held companies to compete effectively domestically and abroad. 

Our biggest concern is that Government will ban our products. 

I appreciate the opportunity to have Commodore’s story heard in 

front of the Committee on Small Business. 

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Florida Turbine Technologies, Inc. Testimony of Shirley 

Brostmeyer, Chief Executive Officer Before the Committee on 

Small Business U.S. House of Representatives June 19, 2013 

Prepared Testimony and 

Statement for the Record of 

Shirley Brostmeyer, Chief Executive Officer 

On Behalf of 

Florida Turbine Technologies, Inc. 

Before 

The Committee on Small Business 

U.S. House of Representatives 

Hearing on 

Made in the USA: Stories of American Manufacturers 

Wednesday, June 19, 2013 - 1:00 p.m. 2360 Rayburn House Office 

Building 

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1 House Armed Services Committee Panel on Defense Acquisition Reform Findings and Recommendations, March 23, 2010, pg 7. 

Good afternoon. Chairman Graves, Ranking Member Vela ́zquez 

and Members of the Committee. I am Shirley Brostmeyer, Chief 

Executive Officer of Florida Turbine Technologies, Inc., a leading 

provider of engineering, development, and testing of 

turbomachinery for military and commercial aircraft, space propulsion, and industrial power. Florida Turbine Technologies, Inc. 

began in 1998 in Palm Beach County, Florida, and has grown to 

supply research and development activity worldwide with over 200 

employees. FTT is a leader in innovative turbomachinery improvements. In fact, we lead the nation in patents per employee. Many 

of FTT’s patents are recognized by the Air Force, who actively reviews these patents, as extremely innovative ideas. 

Thank you for the privilege of speaking with you today. I would 

like to encourage the creation of a new Federal Acquisition Regulation for government research and development projects. Currently, 

whether or not a company has production products is being used 

as a selection criterion. This should not be allowed. 

We at FTT feel that better utilization of small business for government contracts would provide more innovative and affordable 

solutions—saving money to the taxpayer, and creating exports that 

will boost our economy. I would like to quote a March, 2010 House 

Armed Services Committee report regarding the current defense 

acquisition process, ‘‘Small businesses are largely locked out of the 

process or accorded contracts only on the goodwill of one of the 

larger firms...(we are) concerned that the end result of this process 

is the gradual erosion of competition and innovation in the defense 

industrial base.’’1

Only 2.5% of Research and Development funds are allocated to 

Small Business Innovative Research programs (SBIRs). And yet 

small businesses provide the most innovative and agile workforce 

available, without the large overhead costs of large companies. For 

the other 98% of government R&D acquisitions, government decision makers actively use a selection criterion which puts small 

business at a significant disadvantage. This criterion is that a company must have at least one active production program to be a serious competitor for R&D funds. This is true because of historical 

close ties between the government and its large production suppliers. But this is also true because government employees prefer 

to work with a ‘‘proven entity’’, albeit expensive and less innovative. They feel comfortable that the technology will be taken to 

market and not left on a shelf after their investment. But there are 

many contractual ways to deal with product transition into production. And once a development prototype from a small business has 

been proven, larger businesses will often compete to license the 

available technology. 

FTT has developed small engines that address future DOD needs 

for small UAV and missile platforms. We have developed our most 

recent engine on SBIR funds, and have matched the funds dollarfor-dollar with profits from our commercial business. This small engine would serve as an ideal platform to affordably demonstrate adSBREP-219 with DISTILLER

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vanced aircraft engine technologies. However, we are discouraged 

from competing for R&D contracts because our small engine is not 

currently in production. This issue is certainly not limited to the 

turbine engine community. The findings in the 2010 House Armed 

Services Report confirm that this is a pervasive issue. 

Thus, I have a recommendation which would increase small business participation in R&D programs: create a Federal Acquisition 

Regulation that R&D contract decision makers may not use the existence of production programs as a selection criterion. I thank you 

for your time and I hope that you consider this change to the existing acquisition philosophy. 

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Testimony of Richard T. Najarian 

President of Precision Global Systems (PGS Inc) 

Before the 

Committee on Small Business 

United States House of Representatives 

On June 19, 2013 

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Good afternoon Chairman Graves, Ranking Member Velazquez 

and members of the Committee. Thank you for extending an invitation to provide testimony on behalf of President Global Systems 

and the many manufacturers throughout the country who would 

otherwise love to have this opportunity. I respectfully submit this 

testimony not only on behalf of Precision Global Systems, but also 

as a member of the Board of Directors, Chief Investment Officer, 

and Vice President of Premier Biomedical Inc., a company developing cures for Cancer, Traumatic Brain Injury, and Suicide Ideation. We are working with the University of Texas and El Paso and 

last week signed a Cooperative Research and Development Agreement (CRADA) with the U.S. Army. We hope to be manufacturing 

modules that will be used in the treatment and cure of many of the 

most debilitating and life-threatening diseases known to mankind. 

Beginning in 1983, PGS has been providing products and services for some of the world’s largest corporations in the automotive 

and defense industries. Since surviving the dramatic downturn 

which began in 2007, we have diligently helped support our customers’ increased production volumes through creative cost savings 

programs by implementing high quality and environmentally responsible innovative manufacturing processes. Our capabilities are 

in component recertification, value add sub-assembly, as well as 

complete production assembly. The PGS team implements these 

processes at one of its three manufacturing sites, occupying nearly 

200,000 sq. ft. located in S.E. Michigan. We ship over 3 million 

parts each month to customer locations throughout North America 

and beyond. 

In order to survive during this difficult period, we like so many 

companies aggressively addressed every opportunity we faced with 

a sense of urgency and resolve that helped us survive and ultimately thrive in this newly defined manufacturing environment. I 

strongly believe there is no greater place to manufacturer a product 

than in the United States for several reasons. First is the challenge. We are challenged everyday for process improvements, process capability, and process repeatability. The test of our group is 

the laser like focus of those in the positions of responsibility and 

authority. While added-value is created on the plant floor, it is the 

resilience and dedication of the entire team from the front office to 

the shipping clerk that keeps us on track. Second is the satisfaction. All passionate manufacturers truly care about what they provide, whether a product or a service. There is an absolute satisfaction when the parts going out of your plant meet or exceed your 

customer’s expectations. We all revel in the knowledge that there 

is a PGS part on a car or a military vehicle. 

Several years ago I wrote a letter to the employees of PGS to 

note some of the trends I was witnessing. As you well know, we 

were already in the midst of the recessionary events that created 

such turmoil in our economy. To be optimistic and energized with 

the economy falling fast is not an easy notion to grasp. I don’t want 

to dwell on what was, but I do want to share a couple of paragraphs from that letter. 

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Excerpt from Letter to the Employees of PGS - March 

5, 2007: 

Mexico, Asia, and the Eastern Bloc have reined in companies 

willing to expose themselves to cultures as a way to survive, not 

necessarily a way to prosper. We may relish the thought of potential growth outside of our borders, but the answers to our 

current issues are in our backyards. Over time the same concerns and difficult questions will be asked, even if we buy a new 

chalkboard today. The capability of an organization is only as 

strong as its weakest member. Whether it is a person, a factory, 

a division, or a technology. We are all subject to the same scrutiny by our customers, and therefore are subject to the criticism 

that may follow in our wake. The recipe for success lies in the 

ability to fix the ineffectiveness and inefficiencies wreaking 

havoc on your core business. 

The tides change. The wind shifts. The water ebbs and flows. 

And the sun sets only to rise again. PGS has had wonderful 

days, and yet these recent days have been exceptionally slow. 

We will soon find growth and opportunity at our doorsteps, and 

with the systems recently implemented, we will have no hesitation to open the door and let it in. 

We arrived at our place within the automotive industry be design. We do great things for great companies. We work behind 

the scenes of our customers who continue to waste millions of 

dollars in scrap, rejects, and wasteful processes. We have tasked 

ourselves to help them stop this absurdity. Our ideas will help 

reinvent their successes as well as ours. 

Then in 2010, I issued yet another letter, but this time the ebb 

had receded and flow had begun for PGS. To share how we accepted nearly every job, project, or opportunity that was presented to 

us would seem boring to those that read this testimony. However, 

I can tell you this, we worked hard, maintained our sense of direction, responded with responsibility and integrity and showed up 

every day to do it again, and again, and again, and again.... 

There is an air of nostalgia when I think back on those days. 

Please take a second to read these three paragraphs from that letter. 

Excerpt from Letter to the Employees of PGS - April 

22, 2010: 

Six months ago I began writing this letter, only to see more 

revisions than the weeks that passed. I only say this because 

you should know that the future of PGS was uncertain and that 

caused a multiplicity of indistinguishable rants on this keyboard. And so I start with the past and then move us to the future....The year was 2008 and the economy was on the brink of 

disaster. In many ways it provided a test of our resolve. How 

hard could our group be tested—and we were tested unlike any 

time in our 27-year history. The entire automotive manufacturing industry lay in ruin as Congress and the American public questioned our intelligence, our ingenuity, and our integrity. 

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Appropriate manufacturing techniques will need to be employed by every player in this industry. Strategy is not just 

doing it in-house or outsourcing specific processes. The industry 

needs to challenge not only what, but how they manufacturer. 

Designing for the manufacturing process and working with the 

Tier I companies to think similarly is not just a desire but a 

prerequisite. They cannot merely react to a print or spec, but actually suggest and participate in the process. A rebirth of what’s 

appropriate will surely find its way to the engineering and 

product development tables throughout Detroit. 

So how will we all help? Cast no shadow on the questions 

each of us asks for they are the power of our future. Harnessing 

the power of success with innovation and determination will 

lead our company and our team into a very bright future and 

only we determine how our future shall unfold by the course of 

our actions and the strength of our spirit. 

So here I am, writing to you as a Small Business Corporation 

from the great State of Michigan through an invitation that was 

started by our dear friends and colleagues at Automation Alley in 

the city of Troy. They have certainly found the recipe for networking companies to do business together for all the right reasons. 

I was asked what I thought may be an obstacle in my growing 

manufacturing business in the coming months and years. What is 

it that I think would help if the SBA could somehow assist. Well, 

to be honest, it is a very deep and troubling question. Is it the tax 

code or a specific request to repeal a new tax on my company? Is 

it how we set-up our organization as an L.L.C., an S-Corp, or a CCorp? Is it universal health care or the bureaucracy in permitting 

and expansion projects? Should I ask you to lift a regulation, or increase the Section 179 Expense Election? There are a number of tedious and cumbersome personal and corporate objectives that are 

laid out every day to your group and other groups just like you. Indeed these are all great questions and issues that you have no 

doubt taken up the cause to either settle or fix. 

At dinner parties or with friends and family at the backyard 

BBQ, I find my thoughts and comments invariably gravitating to 

two fundamental ideas—how do we incentivize a US manufacturer to do business with other US manufacturers AND how 

do we monitor and account for the waste that is the byproduct of every manufacturing site? 

Idea #1: 

Incentivizing one company to do business with another could be 

one of the most intriguing demonstrations of U.S. policy in years. 

Small Business Manufacturers based in the U.S. shall be granted 

Certification as such. Customers willing to use these companies as 

suppliers to their enterprise will be given a tax abatement against 

their building taxes, because it is the manufacturing building that 

houses the equipment and people that produce the product. Although there is a specific and unique formula that each city 

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charges, their replacement funds would come from the U.S. Government. 

Giving federal tax incentive for work provided to a small business manufacturer would stimulate the economy, continue to assist 

more small businesses in gaining a better foothold on their specific 

product/service, and keep these factors still active and in the market. Market forces don’t always favor the Small Businesses. While 

I believe in the free market as much as the next, there are times 

when assistance becomes not necessary, but imperative. Tax incentives can create a call to arms by even the largest of purchasing 

departments to focus more attention on U.S. based Small Business 

Manufacturers. 

Front line buyers are typically unaware how their purchasing 

power can affect their community. Upper management may consider how they save money through supplier consolidation or 

shared product/material purchases. They may consider how they 

better brand their product or push themselves into new markets. 

Similar efforts are made on behalf of companies certified as minority, women owned, veteran, disabled veteran, 8a, etc. So why not 

extend the same opportunity to U.S. based Small Business Manufacturers (USSBM’s)? Naturally, this would be a short-term program that would create a heightened awareness by purchasing departments of every large OE (original equipment) Manufacturer because it would put money back into their pockets through taxbased incentives and grow the very core of the companies this Congressional committee represents. 

Idea #2: 

I cannot tell you how many manufacturing plants are self-proclaimed zero-landfill facilities. My regular routine involves the 

touring of some of the largest manufacturing facilities in the world 

- some exceeding 2 million square feet. One of the services PGS 

provides is the recertification of components that would have otherwise been scrapped during the manufacturing process. While touring these manufacturing facilities I observe the thousands of plastic caps and plugs that are collected and regularly sent to solid 

waste sites. 

Plastic cups and plugs are utilized either for shipping from plant 

to plant or as assembly aids. These caps and plugs are used once 

as a way to either protect a seal, maintain fluid in an assembly, 

secure a wire, or assist in protecting a sensitive area during an assembly process. Quite literally thousands of tons of material are 

annually sent to landfills as a result of this seemingly innocuous 

process. We estimate approximately twenty (20) million pounds of 

plastic sent to landfills or dumps each year. Just because a plant 

has plastic material removed from their site does not qualify them 

as a zero landfill facility. Either they pay a waste company to dispose of the product or they put in it a ‘‘dump’’, which has a slightly 

different definition than a landfill. Regardless of how they ‘‘dispose’’ 

of this product, they should not be able to qualify themselves as 

zero landfill unless they have been certified as such. 

SBREP-219 with DISTILLER

127 

LEEDTM has become the standard for buildings erected or modified throughout the country. It is now time to establish a new 

standard for the manufacturing processes throughout the country 

that incorporates the same need to respond to environmental concerns. Plastic plugs and caps, cardboard, metal, fluids and chemicals, waste from grinding services, and by-product from non-traditional manufacturing all require consideration in assessing opportunity to enter a dump or landfill. Why not certify, via outside 

independent auditing and government oversight, whether a plant 

or facility really has done all that is possible to either reduce or 

eliminate the waste product entering our soil. 

Again, thank you for the opportunity to present this testimony. 

I hope the two primary ideas I offered will be respectfully considered by this Committee as reasonable and possible. Further to this 

hearing I pledge my continued support and vigilance to these ideas 

and look forward to your desire in kind. 

SBREP-219 with DISTILLER

128 

SBREP-219 with DISTILLER


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129 

Æ 

SBREP-219 with DISTILLER


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