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[Senate Hearing 112-312]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 112-312
 
        MAKING IT IN AMERICA: INNOVATE LOCALLY, EXPORT GLOBALLY

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

                             FIELD HEARING

                               before the

                         COMMITTEE ON COMMERCE,

                      SCIENCE, AND TRANSPORTATION

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 27, 2011

                               __________

    Printed for the use of the Committee on Commerce, Science, and 

                             Transportation

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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             KAY BAILEY HUTCHISON, Texas, 
JOHN F. KERRY, Massachusetts             Ranking
BARBARA BOXER, California            OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida                 JIM DeMINT, South Carolina
MARIA CANTWELL, Washington           JOHN THUNE, South Dakota
FRANK R. LAUTENBERG, New Jersey      ROGER F. WICKER, Mississippi
MARK PRYOR, Arkansas                 JOHNNY ISAKSON, Georgia
CLAIRE McCASKILL, Missouri           ROY BLUNT, Missouri
AMY KLOBUCHAR, Minnesota             JOHN BOOZMAN, Arkansas
TOM UDALL, New Mexico                PATRICK J. TOOMEY, Pennsylvania
MARK WARNER, Virginia                MARCO RUBIO, Florida
MARK BEGICH, Alaska                  KELLY AYOTTE, New Hampshire
                                     DEAN HELLER, Nevada
                    Ellen L. Doneski, Staff Director
                   James Reid, Deputy Staff Director
                   Bruce H. Andrews, General Counsel
   Brian M. Hendricks, Republican Staff Director and General Counsel
            Todd Bertoson, Republican Deputy Staff Director
                Rebecca Seidel, Republican Chief Counsel
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 27, 2011....................................     1
Statement of Senator Rockefeller.................................     1

                               Witnesses

Hon. Suresh Kumar, Assistant Secretary for Trade Promotion and 
  Director General, U.S. and Foreign Commercial Service, U.S. 
  Department of Commerce.........................................     5
    Prepared statement...........................................     6
Judy McCauley, District Director, Small Business Administration..     9
    Prepared statement...........................................    11
Mark R. Julian, Director, Business and Industrial Development, 
  West Virginia Development Office...............................    13
    Prepared statement...........................................    15
Randall T. Moore, Sub-District Director, United Steel, Paper and 
  Forestry, Rubber, Manufacturing, Energy, Allied Industrial and 
  Service Workers International Union (USW), AFL-CIO.............    20
    Prepared statement...........................................    23
Don Gallion, Founder, former President, CEO, and Chairman, FCX 
  Systems........................................................    26
    Prepared statement...........................................    28

        MAKING IT IN AMERICA: INNOVATE LOCALLY, EXPORT GLOBALLY

                              ----------                              

                         MONDAY, JUNE 27, 2011

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Charleston, WV.
    The Committee met, pursuant to notice, at 10:06 a.m., in 
the Ceremonial Courtroom, Seventh Floor, Robert C. Byrd U.S. 
Courthouse and Federal Building, 300 Virginia Street East, 
Charleston, West Virginia, Hon. John D. Rockefeller IV, 
Chairman of the Committee, presiding.

       OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    The Chairman. Good morning, everyone.
    [Audience response.]
    The Chairman. I have never been a judge before. I kind of 
like it.
    [Laughter.]
    Female Voice. We are not guilty.
    The Chairman. You know, I spent some time last night going 
over all of the names of the people who are here as witnesses, 
not just the formal witnesses, but all of you, and it is a 
very, very distinguished list. If you could see it--well, you 
can see each other. I mean, there are people who are absolutely 
at the top of their professions, and I am very happy about that 
and very pleased about that.
    So the Senate hearing is called to order. I will make a 
statement. And then we will go on to our panelists, and we will 
have a discussion. And this will be very good.
    This is the first time I have held a full committee 
meeting, since I have been Chairman, outside of Washington. 
First time, obviously, I have had one in West Virginia. That is 
very important to me because this subject is massively 
important to all of us.
    I would like to thank everybody, as I indicated, for 
joining us this morning. It is some time out of your day. I 
hope it will be worthwhile. It certainly is for those of us who 
work on the Commerce Committee.
    West Virginians have delivered a constant message to me 
everywhere I go, and that has been true for years, has it not? 
What we need in this state is more jobs. And that is what it 
is, is more jobs, more jobs, more jobs.
    People campaign on that. People talk about it. And the 
question is, are we doing all that we need to be doing about 
that? And I think the answer to that question is no, which is 
why we are having this hearing.
    It is everybody's top priority. From Whitesville to 
Weirton, from Barboursville to Berkeley Springs, that is what 
people talk about, and that is understandable.
    But you know, we have lost about a third of our 
manufacturing jobs in the last number of years. Our exports 
have picked up by 50 percent, which is very interesting. Don 
Gallion will know about that. Our exports have really picked 
up.
    Coal is sometimes considered a part of exports, but 
actually, it is not exactly. It is not a manufactured good. It 
is a resource. It has gone up 200 percent in terms of exports. 
So, evidently, the export market is wide open, and are we 
taking advantage of it? I think that we are probably not.
    I have talked with traditional manufacturers and high-tech 
companies, as well as workers at all stages of production. This 
economy that we are going through now obviously has hurt West 
Virginia, and it has hurt everybody else. Does that mean that 
we wait until it gets better before we start talking about 
this? No. This is exactly the right time to be talking about 
it.
    In fact, one of the interesting things is that this 
economy, which has sort of made people slimmer, so to speak, 
has caused companies to slim down and become more efficient. 
Now that is good. That is a good practice. The economy itself 
is a bad practice. But that will get better when it gets 
better, and there is nothing we can do about that here this 
morning.
    My general feeling is that we have to do whatever we can to 
create more jobs for people in this state. And I don't say just 
particularly for people from the middle class, but I do mean 
particularly for people from the middle class. Because people 
that have more education and more resources are probably more 
likely to be able to find jobs.
    West Virginia companies can grow if we increase our 
customer base. Well, that is an obvious statement. If we export 
our goods to more countries and find more customers abroad, our 
companies will grow and more workers will be hired. That is 
self-evident.
    Let me be clear. West Virginia companies have done an 
impressive job in promoting their products abroad and exporting 
them abroad. They have done a very impressive job. But the 
point is there is always room for growth. There is always room 
for improvement. Not all of our companies are doing that.
    Some of them are doing that. A lot of our large companies 
do that automatically. A lot of our smaller companies are doing 
it just by dint of hard work and discovering that the world is 
a big oyster out there, and we can make money from it.
    And Don Gallion is going to be talking to us about that, I 
hope, Don. And you are also chairman of the Export Council.
    Mr. Gallion. Yes, sir.
    The Chairman. So we have great companies with the best and 
most productive workers in our country. We always say that, and 
I always believe that. And we build products that consumers 
across the world want to buy. Therefore, what is our problem? 
The problem is to get those products to people who want to buy 
them, to make them aware of it and then have them buy them.
    We just need to connect the right companies with the right 
buyers. And that can often be complicated, and it is a hard 
thing to do. This area is an area in which the Federal 
Government can be helpful. I repeat, the Federal Government can 
be helpful.
    [Laughter.]
    The Chairman. And it really can. And that is one of the 
mindsets that we have to overcome that we will do it ourselves, 
and the Federal Government, all they do is get in the way.
    Well, maybe that is true sometimes, but it is not true in 
this case. It is not true in this case. There are a lot of 
people who work for the Department of Commerce and other 
agencies who care tremendously about making themselves 
available to you. Any manufacturers who want to export or to 
grow or simply want to do better within this country, they are 
available.
    We have actually, I think, people in, what is it, 170 
different embassies? Something like that. An enormous amount, 
their job all over the world is simply to help expedite people 
who want to promote exporting. So, actually, that is 75 
embassies around the world.
    The Federal Government does have expertise. They do have 
knowledge about consumers worldwide. Why wouldn't they? They 
are out there. We are not, as much. And they have a strong 
record of connecting American manufacturers with foreign 
buyers. That is a good thing.
    There is a newly announced program in the Commerce 
Committee called CommerceConnect, and there are lots of nice 
names around these days. But this is a program that really does 
work, and I am sure that our Honorable Assistant Secretary is 
going to be talking that. The Department of Commerce is 
establishing ``One Stop Shop, and it really is designed to 
assist manufacturers who are looking to grow.
    Additionally, the government has an important role to play 
to protect companies from unfair trade practices--another big 
subject, unfair trade practices--and to enforce trade laws. We 
have several treaties that are coming up with South Korea and 
Panama and Colombia.
    And these things have to be considered very carefully. 
Ordinarily, people are not for those things in West Virginia 
because they somehow think they will take away jobs. Well, let 
us discuss whether or not they do take away jobs or, in fact, 
whether they open up new jobs. Because if you have a trade 
agreement with another country, nobody is as open and honest 
and plays by the rules as much as the United States does. We 
understand that.
    But there is a lot of buying power out there. I mean, 
Russia is a really hot territory these days. We don't think of 
that. China always has been. South Korea has been. There is a 
lot of it going on around the world, and we are not taking 
advantage of it.
    So selling products abroad should never mean giving up 
trade secrets, the whole question of patents--large subject, 
which we can discuss--or allowing other countries to unfairly 
dump their products in the United States. I have spent more 
personal time in front of the International Trade Commission 
than I have in front of any other government agency.
    Every time I walk in, they get glum because they know they 
are going to get another speech on American steel or somewhere 
else where we are being treated badly by other countries, and 
what are they going to do about it? Well, there are things they 
can do about it. We have agency representatives here that can 
discuss the ins and outs of exporting and the government's 
trade enforcement role.
    So I called this hearing to highlight opportunities for 
expansion and job creation here in West Virginia. That is my 
whole purpose. It is my whole purpose.
    I am Chairman of the Commerce Committee, and I have been 
focusing on increasing jobs. And that is my focus for the next 
number of years, however long I should be there. And I want 
that to be the focus because it is the most important thing we 
can do, and we are ideally situated to do it because we have 
oversight of the Commerce Department and others, and it is a 
very powerful committee with a wide range of skill sets 
underneath it.
    We have to revitalize the American manufacturing sector. I 
am looking into everything from tax proposals to reforming the 
Department of Commerce itself. But most importantly, I am eager 
to know of any new ideas from West Virginians, manufacturers or 
otherwise.
    And what I am telling you now is that I will keep the 
record open on this hearing so that you have a chance, as ideas 
occur to you--hopefully, in the next several days--to send 
those directly to my Committee, and we will make that available 
to you. So that they will then become a part of this official 
hearing record.
    So, off we go. The West Virginia manufacturing community, 
it is powerful. It is good. It is diminished. Severely 
diminished, best-paying jobs in the state. What are we going to 
do about it? Do we accept that as our fate, or do we decide 
that we have to work together doubly hard to change it?
    I am for the latter, and I am for momentum. I believe in 
momentum, and I believe in optimism.
    So, having said that, I will now turn immediately--
instantly, I want to say that Maryam Khan, who is Senator Kay 
Bailey Hutchison's representative, is here. Where is Maryam?
    There. OK. Thank you.
    And Jack Smedile, who works with Senator Blunt, is here. He 
is from Missouri, and I am very happy that they are here. So 
they are actually Senators. They are just seated over there, 
but they are actually Senators.
    So I want to introduce our panel, and then I will do that 
one by one, and then they will give their testimony, and then 
we will go into questions and have ourselves a good discussion.
    Mr. Suresh Kumar is Assistant Secretary of Commerce and 
head of the U.S. and Foreign Commercial Service. Susan Schwab 
used to be head of that, wasn't she, under George Bush?
    Mr. Kumar. Thank you.
    The Chairman. And she was a very good friend.
    It is a very powerful position. Have you heard of that 
position? Maybe not. Have you heard of the U.S. and Foreign 
Commercial Service? Probably not. Is it a potentially huge 
factor in your lives? You bet it is.
    So, Mr. Kumar, I would like to introduce you and have you 
give your testimony.

           STATEMENT OF HON. SURESH KUMAR, ASSISTANT

           SECRETARY FOR TRADE PROMOTION AND DIRECTOR

         GENERAL, U.S. AND FOREIGN COMMERCIAL SERVICE,

                  U.S. DEPARTMENT OF COMMERCE

    Mr. Kumar. Thank you, Senator Rockefeller, for those kind 
words and the opportunity to testify here today, to appear to 
discuss manufacturing and export promotion.
    I am particularly delighted to be here in West Virginia. It 
is an exceptionally pretty place, and the great state of West 
Virginia is perhaps the right place to have this field hearing.
    The United States is the world's largest and most 
productive manufacturer, but competitors abroad are 
increasingly producing quality goods at less cost. Our 
companies and workers must have access to programs that will 
help us out-innovate the competition to win the future.
    We must install programs that help American workers 
constructively engage in international markets. Companies win 
by exporting higher-value manufactured goods that the world's 
consumers need and by leading the development of new 
industries. Workers win because export-driven jobs pay 18 
percent more than the average U.S. manufacturing job.
    The National Export Initiative is one of the economic 
strategies to win the future. The NEI, as we call it, is off to 
a good start. Exports last year comprised 12.5 percent of our 
GDP, up from 11.2 percent recorded in 2009.
    In West Virginia, exports of merchandise grew 34 percent in 
2010, and that is double the national growth rate of 17 
percent. Thus far for 2011, we remain on track to achieve the 
NEI goals.
    The National Export Initiative creates deep market linkages 
and connects innovation to the marketplace. The U.S. and 
Foreign Commercial Service has a network of 1,452 trade 
specialists, and it provides comprehensive business counseling 
and support. We call it the ``soup to nuts'' service, and our 
programs are available across 109 offices in the United States 
and across 129 offices in 79 embassies.
    Our trade specialists Leslie Drake and Diego Gattesco at 
our USEACs in Charleston and Wheeling work with West Virginia 
exporters every day to identify opportunities and help them 
export to new markets.
    I am pleased to announce today that the Department of 
Commerce will roll out its CommerceConnect initiative to 
Charleston next month. Through counseling, by working directly 
with West Virginia businesses, and through our collaboration 
and leveraging of services with local and state governments and 
of the Appalachian Regional Council, our West Virginia offices 
recorded 53 export successes, totaling over $11 million last 
year.
    Some examples of such partnerships are FCX, who you will 
hear from later today, and another is Kanawha Scales and 
Systems in Poca, a world leader in batch loading systems for 
the mining industry. The U.S. Commercial Service worked with 
Kanawha and helped facilitate a representative agreement with 
an Indian coal mining company that led to a $3.5 million order 
with a large steel and coal company there. Two new full-time 
jobs were created within the company to support their growing 
exports to India.
    I would like to acknowledge your leadership, Senator 
Rockefeller, in passing the Small Business Jobs Act bill, which 
was signed into law. Your work passing this bill has provided 
rural America's manufacturing base a powerful tool to compete 
in global markets.
    The administration recognizes that increasing global trade 
provides opportunities for growing America's small and medium 
enterprises. That is why the trade agreements with Korea, 
Colombia, and Panama are a priority for the Obama 
administration. More than $10 billion in increased exports of 
goods alone, supporting more than 70,000 American jobs, are at 
stake.
    In West Virginia, manufacturing companies will see 
increased competitiveness and growth in exports as a direct 
result of these trade agreements. In 2010, West Virginia 
chemical exports to Korea, Colombia, and Panama totaled $73 
million, and primary metals manufacturers made up another $22 
million in exports.
    The passage of these trade agreements will significantly 
reduce tariffs, which, in some cases, will be completely 
eliminated within 10 years. This will spur growth and improve 
West Virginia's chemical and primary metal manufacturers' 
competitiveness in the global marketplace.
    While the FTAs will allow us to win the future and add 
jobs, we also have our obligation to retrain and reposition 
American workers. Knowing that trade positions American 
products in the competitive global marketplace also means 
adjustments for the American worker.
    The administration is committed to a strong and robust 
renewal of Trade Adjustment Assistance, or TAA, and supports 
workers who need training and other services when their jobs 
are adversely affected by trade.
    The administration's renewed focus on trade through the 
National Export Initiative has resulted in exports increasing 
17 percent last year to $1.84 trillion, the second highest ever 
in our nation's history. Last year, we assisted 18,000 
companies to export, of which 16,000 were small and medium 
enterprises.
    As a result, nearly 5,600 companies exported for the first 
time or increased their exports overseas. Eighty-five percent 
of these were small and medium enterprises. We posted 12,300 
export successes, and I am absolutely delighted to report that 
for every $1 invested in the U.S. and Foreign Commercial 
Service, $135 by way of facilitated exports was returned to the 
American taxpayer.
    Thank you again for the opportunity to appear before you 
today. I look forward to answering your questions.
    [The prepared statement of Mr. Kumar follows:]

Prepared Statement of Hon. Suresh Kumar, Assistant Secretary for Trade 
 Promotion and Director General, U.S. and Foreign Commercial Service, 
                      U.S. Department of Commerce
    Chairman Rockefeller, thank you for the opportunity to appear today 
to discuss manufacturing and export promotion. I am delighted to be in 
West Virginia.
    America's long-term goal to out-educate the competition and spark a 
new wave of American innovation will create jobs for the next 
generation and guarantee that America can win the future. This not only 
helps create greater sustainable employment but also helps us become 
more competitive around the world.
    Of those companies that export, 58 percent export to only one 
country. With 95 percent of consumers living outside our borders, we 
must help companies expand their global footprint to reach more 
customers worldwide. In 2010, West Virginia companies exported to a 
total of 132 countries. Recent statistics show exports of manufactured 
goods support an estimated 18,000 jobs in West Virginia and over 17 
percent of all manufacturing workers here depend on exports for these 
jobs. Of the companies exporting goods from West Virginia, Small and 
Medium sized companies generate more than one-quarter (27 percent) of 
the total exports. There is a world of opportunity for West Virginia 
manufacturers and businesses particularly for export growth in areas 
like chemical manufacturing, primary metals manufacturing and the 
machinery sectors.
    As Secretary Locke stated in his March 2 testimony before this 
committee, the Obama administration believes that manufacturing is 
essential to America's economic competitiveness. Manufacturing is a 
vital source of good middle-class jobs. The manufacturing sector makes 
up 11.7 percent of the overall U.S. GDP. In 2010, more than one in ten 
private sector jobs were in the manufacturing sector with11.5 million 
Americans employed directly in manufacturing. And it is a key driver of 
innovation, with 70 percent of all private sector R&D spending done by 
manufacturing companies.
    The United States is the world's largest and most productive 
manufacturer but competitors abroad are increasingly producing quality 
goods at less cost. Our companies and workers must have access to 
programs that will help us out-innovate the competition to ``win the 
future.'' We must install programs that help American workers 
constructively engage in global markets. Companies win by exporting 
higher value manufactured goods that the world's consumers demand and 
by leading the development of new industries. Workers win because U.S. 
manufacturing jobs supported by exports pay 18 percent more on average.
    Clearly we can, and must, do more to ensure that U.S. businesses 
capture the full potential of economic opportunities that exist 
internationally.
    The National Export Initiative (NEI) is at the forefront of the 
Obama Administration's short and long term economic strategy for 
winning the future. The President's goal of doubling U.S. exports in 
five years serves as a catalyst to enhance our competitiveness, create 
sustainable jobs and build a stronger America. What sets the NEI apart 
is that it is the first time the United States has a Presidential-led, 
government-wide export promotion strategy.
    The Appalachian Region is an example of hardworking Americans who 
have the skills and dedication to produce the best products in the 
world--America's exporting future starts here.
    The NEI is off to a good start. Exports comprised 12.5 percent of 
U.S. GDP in 2010, up from the 11.2 percent recorded in
    2009. Exports contributed nearly half of the 2.9 percentage point 
growth in real GDP in 2010. The $1.84 trillion in exports of U.S. goods 
and services represents the second-highest annual total on record, with 
exports growing 17 percent since 2009. In West Virginia, exports of 
merchandise grew 34 percent in 2010 much faster than the national 
average growth rate. Thus far for 2011, we remain on pace to achieve 
the NEI goal. In April 2011, U.S. exports of goods and services 
increased to a record high of $175.6 billion, with record exports of 
goods at $126.4 billion and services at $49.1 billion. The monthly 
export values for U.S. industrial supplies ($43.4 billion) and capital 
goods ($41.0 billion) were also the highest on record. Overall for 
2011, exports are up 16.7 percent, which is higher than the 14.8 
percent Compound Annual Growth Rate (CAGR) needed to double exports by 
2015.
    The NEI requires us to create deep market linkages and connect 
innovation to the marketplace. The United States and Foreign Commercial 
Services' (US&FCS) global network of trade specialists allows us to 
provide comprehensive service and programs to assist U.S. businesses. 
Approximately 1450 trade specialists across our 108 domestic U.S. 
Export Assistance Centers (USEACs) and 126 offices in our embassies and 
consulates across 79 countries provide soup to nuts programs that 
include:

  -- Market research

  -- Market entry plan development

  -- Information and help on securing access to finance and working 
        capital

  -- Assistance on navigating foreign customs and regulations

  -- Classic matchmaking; vetting potential distributors and joint 
        venture partners

  -- Advocacy to ensure our businesses have a level playing field in 
        public procurement projects

  -- Commercial diplomacy that provides solutions to programs such as 
        nontariff barriers

    Our trade specialists, Leslie Drake and Diego Gattesco at our 
USEACs in Charleston and Wheeling work with West Virginia exporters 
every day to identify and help them export to new markets. They make 
West Virginia businesses aware of opportunities and the various 
programs that the International Trade Administration (ITA) and USFCS 
has to offer such as:

  -- Trade missions to different markets

  -- International Buyer Programs at various trade shows and

  -- Regional trade fairs

    Our USEACs work closely with state and local economic development 
partners as well as the Appalachian Regional Commission (ARC). ARC's 
support of small and medium-sized exporters in the region has allowed 
these firms to reach more world-wide markets in recent years. Through 
the guidance of the Export Trade Advisory Council (ETAC), ARC provides 
annual support to international delegations of Appalachian businesses. 
Through ETAC's ongoing ``Appalachia USA'' program, ARC will provide 
support this year for a delegation of wood product firms participating 
in a U.S. certified trade show in Shanghai. 2011 was the fourth 
consecutive year that ARC served as a major partner in supporting Trade 
Winds, which has helped send 23 West Virginian companies to Brazil, 
Mexico City, Poland, and Turkey.
    Through counseling and directly working with West Virginia 
businesses and through our collaboration and leveraging services of 
local, state and of the ARC, our West Virginia offices recorded 53 
export successes totaling over $11 million.
    In meeting these needs, however, U.S. companies face challenges to 
exporting, but they don't have to go it alone. American enterprise, 
particularly small and medium-sized businesses have the full support of 
the U.S. government in connecting potential exporters to global 
partners and markets.
    Kanawha (Ka-NAH) Scales and Systems, in Poca, is a world-leader in 
Batch Loading systems for the mining industry. The U.S. Commercial 
Service worked with Kanawha and helped facilitate a representative 
agreement with an Indian coal mining company that eventually led to 
$3.5 million order with a large steel and coal company. Two new full-
time jobs were created within the company to support their growing 
exports to India.
    The Charleston and Wheeling U.S. Export Assistance Centers 
regularly assist West Virginia companies in expanding their reach into 
the global market place.
    We are committed to continued collaboration with rural 
manufacturers and to working with the companies like Kanawha Scales. 
Along with our International Trade Administration sister units, Market 
Access and Compliance, Manufacturing and Services, and Import 
Administration, we are working to further open markets through the 
pending Trade Agreements, provide sector and market intelligence that 
will help U.S. businesses to compete more effectively and to ensure we 
are not subject of unfair competition. At the end of last year, Import 
Administration had approximately 300 Antidumping Duty and 
Countervailing Duty orders in place, covering over 120 products from 40 
countries.
    In addition to President Obama's leadership on the NEI, I would 
like to acknowledge your leadership, Senator Rockefeller, in passing 
the Small Business Jobs Act which was signed into law. This bill 
significantly expanded financing capacity and long-term support for 
SMEs looking to export, which coincides with one of the 
Administration's NEI goals. This law created a new $60 million grant 
program to help states expand their trade and export promotion efforts. 
The State Trade and Export Promotion (STEP) pilot initiative was 
announced in March 2011 and awards for the first year of the grant 
initiative are anticipated this summer. Your work passing this bill has 
provided rural America's manufacturing base a powerful tool to compete 
in the global market place.
    In addition to STEP grants, the Small Business Administration also 
offers loan programs specifically designed to assist rural America's 
businesses. In particular the Rural Lender Advantage initiative and the 
Export Express Loan Program provide local banks with the ability to 
assist small businesses throughout America's heartland. The benefits of 
these programs including simple application processes, expedited 
processing, and loan guarantees of up to $500,000 allowing small 
businesses the opportunity to expand their workforces throughout rural 
communities.
    The Administration recognizes that increasing global trade provides 
opportunities for growing America's SMEs. The Administration is working 
with our trading partners to provide access to new markets: those who 
seek access to U.S. markets must also remove barriers to trade and open 
their markets to U.S. products. This is why the trade agreements with 
Korea, Colombia and Panama are a priority for the Obama Administration. 
More than $10 billion in increased exports of goods alone, supporting 
more than 70,000 American jobs are at stake.
    In West Virginia, manufacturing companies will see increased 
competitiveness and growth in exports as a direct result of the trade 
agreements. In 2010, West Virginia chemical exports to Korea, Colombia 
and Panama totaled $73 million and primary metals manufacturers totaled 
$22 million. The passage of the trade agreements will significantly 
reduce tariffs on U.S. Exports which in most cases will be eliminated 
within 10 years. This will spur growth and significantly improve West 
Virginia's competitiveness in the global marketplace.
    While the trade agreements will allow us to win the future and add 
jobs, we also have our obligation to retrain and reposition American 
workers. Knowing that trade positions American products in the 
competitive global market place also means adjustments for the American 
worker. The Administration is committed to a strong and robust renewal 
of Trade Adjustment Assistance (TAA) that supports workers who need 
training and other services when their jobs are adversely affected by 
trade. TAA is a key component of our comprehensive legislative agenda 
for trade policy. Preparing American workers for the transition into a 
new era of global trade policy is essential to maintaining America's 
economic dominance.
    This Administration's renewed focus on trade through the NEI has 
resulted in exports increasing 17 percent last year to $1.84 trillion--
the second highest in our Nation's history. Last year, the 
International Trade Administration's U.S. Commercial Service assisted 
18,000 companies to export, of which 16,000 were SMEs. As a result 
nearly 5,600 companies exported for the first time or increased their 
exports overseas, 85 percent of which were SMEs.
    I look forward to our working with the manufacturers like those 
found in West Virginia to help create a vibrant, robust, and resilient 
American economy; an economy which produces well paying jobs at home, 
increases our competitiveness globally and helps America lead the way 
in creating global prosperity.
    Thank you again for the opportunity to appear before you today. I 
look forward to answering your questions.

    The Chairman. Thank you, sir, very much.
    Next will be Ms. Judy McCauley, who is the West Virginia 
District Director of the Small Business Administration. 
Actually, Judy McCauley was at one of my roundtables this year. 
This was called ``Teaming To Win,'' and she is very, very good, 
and I am very happy that you are here.
    Please give your testimony.

 STATEMENT OF JUDY McCAULEY, DISTRICT DIRECTOR, SMALL BUSINESS 
                         ADMINISTRATION

    Ms. McCauley. Thank you, Senator Rockefeller. And thank you 
for the opportunity to join you today.
    The Chairman. Pull that mike right up close. Please.
    Ms. McCauley. I have served as the District Director for 
the Small Business Administration since 2004. As a native of 
West Virginia, I will tell you this is an honor and a 
privilege.
    I consider myself lucky. I found a great job in West 
Virginia, a job where I could make a difference. Now, my job 
includes making sure the next generation, like my daughter, has 
the same opportunity.
    In order to allow us to get down to the technical 
questions, I have brought a couple of specialists with us. 
First, I would like to introduce Patrick Hayes. Patrick is our 
regional manager for the U.S. Export Assistance Center. Patrick 
will be visiting our banks today and tomorrow to explain the 
advantages of using our export working capital loans and our 
international trade loans, thus giving the banks a 90 percent 
guarantee.
    Also with us today is Emma Wilson. Emma is our Branch 
Manager here in Charleston, and she is our Senior Lending 
Specialist.
    My background is not in lending. I come from the federal 
contracting arena, where I served as a contracting officer and 
a small business specialist. I have always said, yes, we can 
help you get a loan, but you have to get the work, and you have 
to pay that back. But if we can help you get a federal 
contract, then you have the work, and you will inevitably 
create jobs.
    Exporting works a lot the same way. Last week at our West 
Virginia Export Council meeting, I met the fourth-generation 
owner of Wheeling Truck Center in Wheeling, West Virginia. He 
was telling us about his company and his success with 
exporting.
    I asked him how he got involved in exporting. He told me he 
started an online business to get rid of the old truck parts 
that had been lying around collecting dust. That put him in the 
international trade world. In less than 18 months, he was 
exporting to over 50 countries, and he had to hire two 
additional people.
    Yes, exporting creates jobs. And for Wheeling Truck Center, 
it began simply by creating a website. The demand was already 
there. Wheeling Truck Center just needed a tool to get those 
products to the buyer.
    Our job is to educate the small businesses on ways to get 
their products to the markets and to provide them the tools 
they need to accomplish their goals. I would like to talk a 
little about both.
    Just down the road in Huntington is a business called 
Rubberlite, founded in 1986 by Allen Mayo. Through an initial 
SBA-backed loan of $300,000 of startup capital and then three 
subsequent guaranteed loans during the early stages of 
development, Rubberlite's product line has grown to include 
many innovative products and processes.
    They manufacture high-tech engineered rubber and plastic 
foam. They have an unbelievable array of uses--from shoes to 
bras to trucks and to the Space Shuttle. Rubberlite is in the 
midst of expansion and recently received two more SBA-backed 
loans to expand their facility from 8,000 square feet to 
300,000 square feet.
    They are creating jobs. And with this expansion, they will 
be creating a lot more. All we had to do was give them a few 
tools along the way.
    In addition to financing and technical assistance, SBA has 
an excellent website with free courses, business plan 
templates, and online tools to help entrepreneurs quickly and 
easily find answers to their questions, and it directs them to 
the appropriate resources for additional assistance.
    Our newest online resource--sba.gov/exportbusinessplanner--
features the six steps to export success. This site was 
developed by SBA and the Department of Commerce to help 
entrepreneurs begin exporting.
    But I think our biggest asset in West Virginia is our 
partners. West Virginians are known for their hard work, their 
ethics, and their dedication. We each have specialties, and we 
rely on each other's expertise. But our ultimate goal is the 
same--economic development and creating jobs.
    I admit I still have my personal goal. I want to keep my 
daughter home. I want to ensure that she has the opportunity to 
find a great job so that she can live and prosper in this great 
state. But that takes teamwork.
    The SBA has funded the Small Business Development Centers 
for more than 25 years. Our SBDCs offer existing and future 
entrepreneurs free one-to-one expert business advice and low-
cost training. In West Virginia, we have 14 centers located 
strategically across the state and housed here with Mark, the 
West Virginia Development Office.
    Two weeks ago, the Department of Commerce joined us at our 
state-wide SBDC summit to provide detailed training on 
exporting and their services to all of the SBDC's counselors. 
Senator, the day after you spoke at Teaming to Win, the SBA 
offered 3 hours of training. The first hour was dedicated to 
exporting, with the Department of Commerce as our guest 
speaker.
    Our next event will be on August 25 in Wheeling. Commerce 
wants to bring our experienced exporters together with our new 
companies and our resource partners to help them find mentors 
and the tools they need to begin exporting.
    Yes, Senator, we are collaborating. We have to. Finding new 
markets through exporting offers the greatest potential for 
growth among West Virginia's small manufacturers. The 
individuals that work in this field have heart. They are 
dedicated, and they are making a difference.
    Last year, West Virginia exported $6.4 billion, 34 percent 
over the previous year and has doubled since 2006. We are going 
to double it again by 2015.
    Our problem isn't working together. It is truly our limited 
resources. We have just too small and too few resources. The 
Department of Commerce has two Commercial Services 
representatives in West Virginia, and SBA has eight employees. 
With your help, we can build on the momentum we are seeing to 
ensure that more small businesses like Rubberlite and Wheeling 
Trucking have the tools they need to create and retain jobs 
through exporting.
    So, Senator, how can you help? By doing exactly what you 
are doing today--by serving as our leader, by working with us, 
and by continuing to raise the awareness of the importance of 
exporting. We sincerely thank you for all that you do for us 
and our small businesses.
    [The prepared statement of Ms. McCauley follows:]

        Prepared Statement of Judy McCauley, District Director, 
                     Small Business Administration
    Good Morning, Senator Rockefeller.
    Thank you for the opportunity to join you today. I am Judy 
McCauley; I have served as the District Director for the Small Business 
Administration since 2004. As a native of WV, I will tell you; this is 
truly an honor and a privilege. I consider myself lucky; I found a 
great job in WV, a job where I can make a difference in my great state. 
Now, my job includes making sure the next generation, like my daughter 
has the same opportunity.
    In order to allow us to get down to the technical questions, I have 
brought a couple of specialists with me.
    First, I would like to introduce Patrick Hayes. Patrick is our 
Regional Manager for the U.S. Export Assistance Center. Patrick will be 
visiting our banks today and tomorrow to explain the advantages of 
using our Export Working Capital Loans and our International Trade 
Loans, thus, giving the bank an up to 90 percent Federal guarantee on 
exporting loans. (Patrick has brought folders of SBA exporting 
assistance information for you)
    Also, with us today is Emma Wilson. Emma serves as our branch 
manager here in Charleston and is our Senior Lending Specialist.
    My background is not in lending, I come from the Federal 
contracting arena where I served as a Contracting Officer and a small 
business specialist. I have always said, yes, we can help you get a 
loan but you have to secure work and pay that back. But, if we can help 
you get a Federal contract, you have the work and you will inevitably 
create jobs.
    Exporting works much the same way.
    Last week at our WV Export Council meeting I met the fourth 
generation owner of Wheeling Truck Center in Wheeling, WV.
    He was telling us about his company and his success with exporting. 
I ask him how he got involved in exporting. He told me he started an on 
line business to get rid of truck parts that were lying around 
collecting dust. That put him in the International Trade World. In less 
than 18 months he has exported to over 50 countries and had to hire two 
additional employees.
    Yes, exporting creates jobs. And for Wheeling Truck Center it began 
simply by creating a website. The demand was already there, Wheeling 
Truck Center just needed a tool to get the products to the buyers. 
Working with our resource partners and our tools, SBA can help with 
that.
    Our job is to educate the small businesses on ways to get their 
products to these markets, and to provide them the tools they need to 
accomplish these goals.
    Let's talk about both.
    Just down the road in Huntington is a business called Rubberlite, 
Inc., founded in 1986 by Allen Mayo. Through an initial SBA-backed loan 
of $300,000 for start-up capital and three subsequent guaranteed loans 
during the early years of development, Rubberlite's product line has 
grown to include many innovative products and processes. They 
manufacture high-tech engineered rubber and plastic foams that have an 
unbelievable array of uses--from shoes to bras to trucks and the space 
shuttle. Rubberlite is in the midst of expansion and recently received 
two SBA-backed loans to expand their facility from 8,000 square feet to 
300,000 square feet. Last week I watched them receive an award for 
their exporting initiatives. They are creating jobs and with this 
expansion they will be creating more.
    All we had to do was give them some tools along the way.
    In addition to financing and technical assistance, SBA has an 
excellent website with free courses, business plan templates, and 
online tools to help entrepreneurs quickly and easily find answers to 
their questions and it directs them to the appropriate resources for 
additional assistance.
    Our newest online resource sba.gov ``slash'' export business 
planner features the six steps to export success. This site was 
developed by SBA and the U.S. Dept of Commerce to help entrepreneurs 
begin exporting. It also features direct links to the SBA Export 
Express and Export Working Capital Programs.
    But, I think our biggest asset is our partners.
    West Virginians are known for their hard work, their ethics and 
their dedication.
    We each have specialties and we rely on each other's expertise. 
But, our ultimate goal is the same, economic development, creating 
jobs. I admit I still have my personal goal, remember? I want to keep 
my daughter home. I want to ensure that she has the opportunity to find 
a great job, so she can live and prosper in this great state! That 
takes team work.
    The Small Business Administration has funded the Small Business 
Development Centers (SBDC) for more than 25 years. Our SBDCs offer 
existing and future entrepreneurs free one to one expert business 
advice and low cost training. In WV we have 14 centers located 
strategically across the state and housed by the WV Development Office, 
along with the WV Dept of Commerce.
    Two weeks ago, the U.S. and State Departments of Commerce joined us 
at a state-wide SBDC Summit to provide detailed training on exporting 
and their services to all of the SBDC counselors and employees.
    Senator, the day after you spoke at our annual Teaming to Win 
Conference, the SBA offered 3 hours of training for WV small 
businesses.
    The first hour was dedicated to exporting with the U.S. Department 
of Commerce as our guest speaker.
    Diego also joined us as an instructor for our Veteran's Conference 
this year.
    Our next event will be on August 25 in Wheeling. The U.S. 
Department of Commerce wants to bring experienced exporters together 
with new companies and our resource partners to help them find mentors 
and the tools they need to begin exporting.
    Yes, Senator, we are collaborating. We have to. Finding new markets 
through exporting offers the greatest potential for growth among WV's 
small manufacturers.
    The individuals that work in this field have heart, they are 
dedicated and they are making a difference. Last year, WV exports 
totaled 6.4 billion. They grew 33 percent over the previous year and 
have doubled since 2006. We are going to double them again by 2015.
    Our problem isn't working together. It is our limited resources. We 
are just too small and our resources are just too limited. The U.S. 
Department of Commerce has two Commercial Services representatives and 
the SBA has 8 employees in the state. With your help, we can build on 
the momentum we're seeing to ensure that more small businesses like 
Rubberlite and Wheeling Trucking have the tools they need to create and 
retain jobs through exporting.
    So, Senator, how can you help? By doing exactly what you are doing 
today; by serving as our leader, by working with us and by continuing 
to raise awareness of the importance of exporting. We sincerely thank 
you for all that you do for us and our small businesses.

    The Chairman. Thank you, Ms. McCauley.
    I want to instantly mention something which is important. 
This is being done live also. This hearing is being done live 
in Clarksburg, in Wheeling, and in Martinsburg.
    So I want to say to--and they have crowds there, and they 
have people there. So I want to say to each of them that we are 
very glad that you decided to hook on, and you also--we hope 
that you will send us questions that we can put in the record.
    And we can't communicate back and forth with you as easily 
as we would like, but you are with us, and we appreciate that 
very much.
    Our next witness is Mark Julian. He is Deputy Director of 
the West Virginia--this is the longest title I have ever heard.
    [Laughter.]
    Mr. Julian. With no extra pay, right?
    The Chairman. I am going to give it to you. Deputy 
Executive Director of the West Virginia Department of Commerce, 
its Development Office, and Director of Business and Industrial 
Development for the West Virginia Development Office.
    Now, Mr. Julian, with a title like that, you have got to 
have a lot to say.
    [Laughter.]

                  STATEMENT OF MARK R. JULIAN,

         DIRECTOR, BUSINESS AND INDUSTRIAL DEVELOPMENT,

                WEST VIRGINIA DEVELOPMENT OFFICE

    Mr. Julian. If you remember, I said I was going to need 
more than 5 minutes.
    Senator Rockefeller, it is a pleasure to be here with you 
today.
    And your focus on manufacturing, this is a sector that I 
have been involved with my entire career, and I cannot offer my 
thanks enough to focus on this issue. It has been ignored too 
long.
    We all know that our industrial capability to manufacture 
is vital to our economic health and security of our state and 
our nation. And simply put, it is a job creator. You know, we 
can discuss the multipliers for each specific sector of 
manufacturing, but there is no debate about the value it adds 
to the economy. And I appreciate to be here today to contribute 
to the discussion.
    But I think it is important to reflect on history just a 
little bit since we are here in West Virginia. As we all know, 
energy and manufacturing powered this state from the 1920s on, 
for the world's first petrochemical plant located here in the 
Kanawha Valley, and we soon became over the years home to 
chemicals, steel, glass, metal, and on.
    In the 1940s, most West Virginians worked in goods-
producing industries. However, we all know what the 1980s did. 
For various factors, we were hit hard. One third of our 
manufacturing base was lost between 1979 and 1985.
    Let us fast forward to 2000. There were 75,900 
manufacturing jobs in 2000. By 2008, there were 56,500. In 2008 
to 2009, we lost another 11 percent, but we weren't alone. The 
same period, Ohio lost 18 percent. Pennsylvania decreased 12 
percent. Kentucky dropped 15 percent, and Virginia dropped 11 
percent.
    We are working hard to diversify West Virginia's economy. 
Partnerships that have been mentioned are key to this. 
Government, business, labor, the education community have been 
working extremely hard to diversify our base.
    However, please understand that we have a strong commitment 
to manufacturing. Even in our targeted sector strategies, 
manufacturing is integral to what we do.
    Some of my peers in other states have written off 
manufacturing. We are not willing to do that. It has never been 
a part of our strategy. It won't be a part of our strategy. We 
know how important it is to our history and definitely to our 
future.
    Growing exports are key. It has been mentioned that in 2010 
our exports reached a record level of $6.4 billion. Obviously, 
we must continue to focus on that because it is a great, great 
diversification strategy.
    I am also happy to report that since 2005, we have had more 
than $15.2 billion in new business investments, many of which 
were in manufacturing--medical products, construction 
materials, automotive, building products, printing, specialty 
plastics, fulfillment and distribution, and business services. 
But we must do more.
    The U.S. Department of Commerce recently reported that our 
GDP increased 4 percent in 2010. That was the fifth most 
improved GDP in the nation.
    Critical also to our future is the stability of government. 
West Virginia has done a great job in managing government. And 
I have to tell you, and my colleagues at the Development Office 
will tell you, that as you look to the future, we have a 
significant amount of attention now because of the way we have 
managed government.
    The surpluses that we have, all at the same time of 
reducing corporate net income tax and on message or on track to 
eliminate business franchise by 2014, this is selling very well 
to investors. And again, it is going to take partnerships.
    The workforce. We all know the history of West Virginia's 
workforce and the productivity and the loyalty of our 
workforce. It is well known. But, however, we must continue to 
work and are working hard to diversify our skill sets.
    It is interesting that despite the abundance of labor in 
this country, employers still communicate here and in other 
states that they cannot find qualified workers. We are working 
hard to provide that workforce. To that end, many 
partnerships--the Community and Technical College System, in 
partnership with the Department of Commerce, Workforce West 
Virginia, higher education--are all working together to 
accomplish that.
    And in fact, the CTCS system is currently working to build 
two state-of-the-art advanced technology centers in Fairmont 
and the Kanawha Valley to meet these needs, an investment of 
$30 million. That is very indicative of our commitment to the 
transitional economy we are in and for the skills of the 
future.
    This is vital why? Because 60 percent of the fastest-
growing new jobs in West Virginia will require at least a two-
year degree or some type of certification. We are identifying 
opportunities aggressively. We are working very hard to capture 
them, and we must continue to work together to succeed.
    West Virginia has its foot on the accelerator. But we 
believe it is time to reaffirm our commitment to manufacturing, 
business assistance, workforce development, financing programs, 
and the support of research and technology development. This 
must include state and federal partnerships.
    And I know the budget times are tough, but a key point that 
I want to leave with the Committee is the federal partnerships 
that we have are integral to what we do, what I do every day to 
retain, expand, and attract investment to West Virginia.
    Just to mention a few--the U.S. Small Business 
Administration, their support of our SBDC program and our small 
businesses. 95 plus percent of our businesses are small, 50 or 
less.
    The loan programs. The loan guarantees that they have are 
absolutely critical to encouraging that entrepreneurship and 
that innovation that we are known for.
    The U.S. Department of Commerce. Their support of our U.S. 
Export Assistance Centers in Charleston and Wheeling are 
absolutely critical. Also, the U.S. Economic Development 
Administration within the Department of Commerce works very 
closely with us, particularly in the last year, in doing 
various deals and the need for infrastructure and support to 
make deals happen.
    And also, the National Institute of Standards and 
Technology's support of the Manufacturing Extension Partnership 
Program. And rural development programs, the U.S. Department of 
Agriculture.
    And last, but not least is the federal partnership to 
retrain our workforce for the future, and that is Department of 
Labor's support of the Workforce Investment Act funding, which 
I have to tell you that I keep being advised that there is less 
and less money for that program at, very frankly, a very 
critical, critical time.
    We have many state partners that I have mentioned in my 
written testimony. But again, it is an extreme pleasure to be 
here, to be a part of this discussion, and I look forward to 
any questions.
    Thank you.
    [The prepared statement of Mr. Julian follows:]

Prepared Statement of Mark R. Julian, Director, Business and Industrial 
             Development, West Virginia Development Office
    Chairman Rockefeller, members of the Committee, and other 
distinguished guests, I'm grateful to be here today and for your 
focusing attention on manufacturing innovation, technology and business 
diversification. Our industrial capability to manufacture is vital to 
the economic health and security of our state and our Nation.
    I appreciate the opportunity to contribute to these discussions as 
we review where we have been, assess where we are now, and communicate 
a strategy to take us to where we need to be.
    Traditionally, mining and manufacturing were the engines that drove 
West Virginia's economy. In 1920, Union Carbide Corporation built the 
world's first petrochemical plant in Clendenin, West Virginia. The 
state soon became home to chemical, steel, glass, metal and textile 
manufacturing. In the 1940s, most West Virginians worked in goods-
producing industries, but these blue collar jobs began to disappear in 
the decades that followed.
    The recessions of the 1980s and other economic factors hit West 
Virginia hard. Employment in our steel, glass, and chemical 
manufacturing, as well as mining, fell by a third between 1979 and 
1985. During the 1990s, the economy began to improve, aided by energy 
demands, trade, tourism, the aerospace industry, and an investment in 
informational technology firms and Federal projects such as the FBI's 
fingerprint identification division.
    There were 75,900 manufacturing jobs in West Virginia in 2000. By 
2008, there were 56,500. In 2008-2009, we lost 11 percent of 
manufacturing jobs, but our state wasn't alone in that loss. During the 
same time period, Ohio's manufacturing jobs dropped 18 percent; 
Pennsylvania's decreased 12 percent; Kentucky dropped by 15 percent; 
and Virginia, 11 percent.
    Our state's economy has long been tied to the energy markets, 
rising when the energy markets rise and falling when the markets are 
less than ideal. So in order for West Virginia to reach its full 
potential, it is imperative that we continue working to diversify our 
business base. The need for continued diversification is real and 
urgent.
    Fundamental to that effort is partnerships. Consequently, West 
Virginia's governmental, business, labor and educational communities 
have been working closely to expand and diversify our state's economy 
while continuing our strong commitment to manufacturing which has been 
so important to our history and remains critical to our future.
    Historically, West Virginia has a greater percentage of employment 
in certain industrial sectors as oil and gas, chemical products, power 
generation, metal manufacturing and forest products, to name a few. 
This was confirmed by a 2011 National Governor's Association Study on 
Economic Performance. That same study revealed that we are on focus 
when reviewing our targeted development strategy.
    Today, the key emerging industries in West Virginia include 
biometrics/biomedical technology, advanced energy and distribution, 
automotive, aerospace, business services, chemicals and plastics, 
information technology, printing, tourism, fabricated metals and value-
added wood products.
    Building economic strength in these diverse sectors builds 
stability in the economy--and that is good for all business, large and 
small. We are focused on these targets in our development strategy and 
are pursuing these diversification opportunities daily.
    Equally important are our exports. If asked what West Virginia 
exports, most would say coal, which is critically important, however 
they also include polymers, machinery, wood products, chemicals, 
automotive, and aeronautics, just to name a few. Growing our exports is 
a key strategy for the continued diversification of West Virginia.
    We must continue to aggressively educate state businesses, large 
and small, on the benefits of exporting.

   In 2010, West Virginia's exports reached a record level $6.4 
        billion.

   The state's exports grew by 33 percent over last year, 
        outperforming the U.S. export growth rate of 21 percent.

   Last week, 49 West Virginia businesses received the 
        Governor's Commendation for International Market Entry, 
        honoring companies that have successfully exported to 90 
        different countries just in the past year.

    I am also happy to report that businesses have continued to invest 
in our state. Since 2005, more than $15.2 billion in new business 
investments have been made in West Virginia's economy. For example:

   Alcon, the world's largest manufacturer of intraocular 
        lenses, recently completed its second plant in Huntington, a 
        $25 million investment. Alcon employs more than 800 workers.

   Essroc invested more than $600 million in their Martinsburg 
        facility, tripling their previous production capacity. One-
        hundred fifty people are employed at the facility.

   Toyota Motor Manufacturing West Virginia recently invested 
        $64 million to increase production of its six-speed auto 
        transmissions. Employment at the plant is now at 1,100.

   CertainTeed, a wallboard manufacturer, invested $200 million 
        in their Marshall County plant. The company employs 90 workers.

   Quad/Graphics is an especially good example, as West 
        Virginia's stability and productivity played a large part in 
        their decision to expand. (Over $15 million in upgrades to its 
        Martinsburg plant; added 400 new jobs; total employment of 
        1,000 workers.)

   Kingsford Charcoal invested $22 million in their Tucker 
        County facility that employs 109 people.

   Klockner Pentaplast, a manufacturer of rigid plastic films, 
        invested $34 million in their Raleigh County plant that employs 
        60 people. This location is a ``Center of Excellence'' for 
        them. This plant contains the latest technology available in 
        that sector.

   Macy's chose West Virginia over 157 other locations for its 
        new 1.3 million-square-foot fulfillment center in Berkeley 
        County. This $150 million investment will create 1,200 full and 
        part-time jobs, as well as 700 seasonal positions.

    These investments and many more are helping West Virginia diversify 
and advance in our development efforts.
    It was recently reported by the U.S. Commerce Department's Bureau 
of Economic Analysis that West Virginia's growth in real gross domestic 
product (GDP) increased 4 percent in 2010. West Virginia's GDP was 
$55.992 billion in 2010, up from $53.842 billion in 2009. The state 
ranks fifth for most improved GDP in the Nation. This is good news.
    Also, critical to future development is the management of 
government. The ability to offer businesses a stable and predictable 
investment environment. To that end,

   West Virginia closed its 2010 Fiscal Year with a surplus of 
        more than $102 million; the fifth year in a row with a 
        surplus--without a tax increase.

   The Governor's budget office projects general revenues will 
        grow at better than 7 percent in Fiscal Year 2012 over the 
        current year.

   West Virginia has one of the strongest Rainy Day funds of 
        any state, which will reach 17 percent of the state's General 
        Revenue Fund Budget this year.

   West Virginia is one of only 18 states that have not had to 
        borrow Federal funds to pay unemployment compensation benefits.

    These are all impressive accomplishments that are selling very well 
to investors. This has been accomplished while reducing Corporate Net 
Income Tax rates and the phase out of our Business Franchise Tax.
    Instead of digging in and merely trying to hold on until the 
economy rebounds, we are aggressively promoting our state's stability 
and the many benefits we can offer for business investment. We're in a 
financial position that few states are.
    A key component of our current success and our future opportunities 
is our workforce. West Virginia has been investing in developing the 
skill sets of our work force. Despite the unemployment and available 
workers, employers across the country continue to have trouble finding 
workers qualified to fill positions. Businesses want and need qualified 
applicants with the fundamental as well as specialized skills, who are 
ready to be productive. West Virginia is working hard to provide those 
workers.
    To that end, the Community and Technical College System of West 
Virginia (CTC) governmental agencies such as Department of Commerce, 
WorkForce West Virginia, Higher Educational Policy Commission, and 
other partnering entities are working directly with industry and 
collaborating with each other. Their goals are to develop programs that 
prepare prospective employees with the skills businesses need today, 
and to prepare workers for the occupations that are emerging. In fact, 
the CTC System is currently working to construct two Advanced 
Technology Centers to meet these needs--an investment of $30 million 
dollars. These are being located in Fairmont and the Kanawha Valley.
    This is vital because, as we know, nearly 60 percent of the fastest 
growing new jobs in West Virginia will require at least a two-year 
college degree.
    Rather than view these challenging economic times as something to 
weather, we've been viewing it as strategic opportunity to bring 
attention to West Virginia and what we have to offer. We are passionate 
about our efforts.
    We are identifying opportunities and aggressively working to 
capture them. We continue to work with our established businesses in 
assisting them to succeed and working with our workforce to prepare 
them to compete.
    West Virginia has its foot on the accelerator. We believe it is 
time to reaffirm our commitment to business and manufacturing 
assistance, workforce development, financing programs and support of 
technology development. This fundamentally must include state and 
Federal partnerships and programs. They are important to our efforts.
    Just to name a few of our partners at the Federal level:

   Appalachian Regional Commission

   U.S. Small Business Administration SBDC Program and Loan 
        Programs and Loan Guarantees

   U.S. Department of Commerce--U.S. Export Assistance Centers 
        (Charleston and Wheeling) and U.S. Economic Development 
        Administration

   U.S. Department of Agriculture Rural Development

   U.S. Department of Labor WorkForce Investment Act funding

    Some partners at the state and regional level include:

   Robert C. Byrd Institute for Advanced Flexible Manufacturing 
        (RCBI)

   West Virginia Export Council

   West Virginia Manufacturing Extension Program

   Discover the Real West Virginia Foundation

   West Virginia Tech Connect

   Bioscience Association of West Virginia

   West Virginia High Technology Foundation

   I-79 Development Council's West Virginia Biometrics 
        Initiative

    In summary, West Virginia's future is bright and we are working 
extremely hard to capture every opportunity. Thank you for the 
opportunity to be here today.

    The Chairman. Thank you very much.
    You mentioned, I think, the America COMPETES Act, and that 
causes me to want to say two things before going on to you, Mr. 
Moore. The Commerce Committee is--I don't know if this is 
historically the case but it is very much the case in the years 
that I have been there and particularly--it is extremely 
bipartisan.
    And I know that those of you who are listening or watching 
think that the problem with Washington is that everything is 
politics. And each party wants to get the other, and it is not 
a very pretty sight. And there is truth in that. But that truth 
does not extend to all parts of government, or the legislative 
branch.
    The Senate Commerce Committee is probably the most 
bipartisan of all committees in the Senate. As a result, we 
pump out more legislation than any other committee. I have over 
the next 3 weeks 11 bills--Mr. Kumar, you will be horrified to 
know--that I am going to submit on manufacturing and all kinds 
of things like that.
    Kay Bailey Hutchison, who is the Ranking Member, is from 
Texas, is superbly knowledgeable as a lawyer, as a very 
practiced businesswoman, of what it takes to make things work. 
Not just manufacturing, but everything else.
    We are very, very close friends. I talk to her in Austin, 
Texas, sometimes, and I talk to her at her office a lot, and we 
talk during hearings a lot, which is probably not appropriate, 
but we just do.
    And as a result, we reach out toward each other because we 
know that to get legislation, you have to have accommodation. 
And there is nothing wrong with accommodation so long as you 
are not giving away core principles.
    And we both understand that, and that is why I am very 
pleased that not only Senator Hutchison's staff person is here, 
but also Senator Blunt, who came over from the House.
    I was at Sargent Shriver's funeral. He was sort of my all-
time hero, probably because he got me here to West Virginia, 
but in general. And I saw Roy Blunt sitting to the right in 
front of me on a bench.
    And I went over to him, and I didn't know him, but I said, 
``I have heard a lot of things about you, and they are all 
good. And I really look forward to working with you.'' And that 
is his attitude also. I mean, he is very bipartisan.
    And you have to understand that is a suspect statement when 
you think about Washington, but it is not in our committee. I 
mean, it just simply isn't. That is one of the things that has 
to happen. It doesn't matter who gets credit. What matters is 
that we get results.
    One thing that was mentioned also--and I apologize to the 
two remaining witnesses. But the America COMPETES Act was a 
very good example of that. America COMPETES. I mean, you get 
all these names, right? I mean, all these names, agencies, and 
bills and all that, and nobody knows what they mean.
    Well, America COMPETES, we reauthorized that. And Kay 
Bailey Hutchison and Lamar Alexander, who was Governor when I 
was Governor and whose wife is on my wife's public television 
station--so we are very close friends--Kay Bailey Hutchison and 
myself and Lamar Alexander took a $44 billion bill and made it 
into law.
    I mean, the President had to sign it, that is an important 
formality.
    [Laughter.]
    The Chairman. But we got it done the day before the lame 
duck session ended, or a couple of days before it ended. So the 
House had a chance to pass it, and it was a remarkable thing 
because it was a little bit--it was a $45 billion bill at that 
point, and we were just standing in the center aisle in the 
Senate. And Kay Bailey Hutchison said to me that is a little 
bit rich.
    So I said, well, let us take $1 billion off of it. Will 
that help? And she said that will help. And she said there is 
one little program in it which I think is not really necessary. 
And I called Ellen Doneski, who is sitting over there, and I 
said--who is the head of the Committee--and I said, ``Do we 
really need this?'' She said, ``No, we really don't need 
this.'' So I said that to Kay Bailey Hutchison, and so she 
said, ``I am in.''
    So that left Lamar Alexander because there were five 
Republicans who had holds on the bill, who have holds on all 
bills. And Lamar Alexander has two personalities. One is when 
he is being a part of the leadership, which he is, and also 
when he is being Lamar Alexander, who he also is.
    He was being Lamar Alexander and then became part of the 
leadership. So it was his job to get all five of those holds. 
You understand that any Senator by objecting can prevent a bill 
from being considered on the floor. It is not a good rule, but 
it is a rule.
    And so, he went and he got all of those five lifted, and so 
the bill passed with unanimous consent, no vote taken. The 
House passed it. President signed it. And then that bill does 
extraordinary things because it takes on the subject of 
science, technology, engineering, and math and also a lot of 
other things that we are talking about here today, things that 
we need to do in America, things that we need to get better at. 
And it funds those. It is a 5-year bill.
    And so, I just say that to you to say that there are people 
on the committees who are really trying in Washington to get 
this right, and it is not easy because of all of the 
jurisdictions the different committees have, and they are 
worried about somebody invading their jurisdictions and all 
that kind of thing. But we can get a lot of things done if the 
mood is right and if the people, if the Senators are willing to 
do that. And we are.
    And so, I just say that before I introduce you, Randy 
Moore, and I am very happy that you are here. You are vice 
president of the West Virginia AFL-CIO, the international 
representative of the United Steelworkers of America. Had a lot 
of experience with you, Weirton Steel, a lot of other places.
    Randy was invited--that is you, Randy--due to your role 
with the steelworkers, but more importantly, because of your 
role of what happens when things don't go right. I mean, I 
remember Weirton Steel when there were 13,000 people working 
there, and now there are 1,000 people working there.
    Well, there are reasons for all of that, and so you bring 
the perspective of how do workers adjust? What does TAA mean, 
Trade Adjustment Assistance, when people are put out of work 
because of foreign invasion, so to speak, has taken their job 
away, and what do we do about all that kind of thing?
    So, Randy Moore, you are on.

          STATEMENT OF RANDALL T. MOORE, SUB-DISTRICT

      DIRECTOR, UNITED STEEL, PAPER AND FORESTRY, RUBBER,

          MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND

       SERVICE WORKERS INTERNATIONAL UNION (USW), AFL-CIO

    Mr. Moore. Thank you, Chairman Rockefeller.
    I welcome the opportunity to be here today to testify on 
behalf of my union, the United Steel, Paper and Forestry, 
Rubber, Manufacturing, Energy, Allied Industrial and Service 
Workers International Union.
    The Chairman. Anything else included there?
    Mr. Moore. The United Steelworkers.
    [Laughter.]
    Mr. Moore. The focus of today's hearing is to explore the 
issues that relate to the state of manufacturing in West 
Virginia and the opportunities and challenges presented by 
exporting. In the past 12 years, I have had the painful 
displeasure of watching over 5,000--and mind you, that has 
nothing to do with the steel industry--over 5,000 USW-
represented, family supporting manufacturing jobs disappear in 
West Virginia.
    Keep in mind these employees did not lose the means to 
support their families because of outdated facilities or 
inefficient procedures, chemical plants, or steel processors. 
These employment opportunities have left my state primarily 
because of unfettered free trade and ineffective policies to 
address what should be the top priority of everyone in this 
room today--a forward-thinking approach to supporting those 
jobs that remain and policies that will create new jobs in the 
future.
    These stories of so many plant closings, so many jobs, so 
many families have been told so many times that I sometimes 
wonder if Americans are turning a deaf ear when they hear these 
devastating stories. Sadly, many are forgetting that these 
aren't just today's statistical realities in a global economy. 
There is a human element to these events.
    We are talking about real people and often entire 
communities that are tragically affected. Many of my members 
who have lost their jobs can't reconcile their employment past 
with their new reality--going to a food bank, minimum wage job, 
or, worse, relying upon government programs for their 
existence.
    In my view, to disregard the pain these people are living 
through, slogging through years of doing next to nothing toward 
long-term commitments to revitalize our manufacturing base and 
job creation is both irresponsible and insensitive.
    Our nation is being victimized by free trade ideologues and 
policymakers who want to discuss theory, rather than recognize 
reality. Our trade, tax, and investment policies, the 
globalization of production, and the failure to have a national 
manufacturing strategy helped create this situation.
    New Department of Commerce data shows that nationwide, 
companies cut their workforces in the U.S. by 2.9 million 
during the 2000s while increasing employment overseas by 2.4 
million. The technical and industrial capacity offshored 
quickly became imported goods and a major contributor to our 
crushing trade deficits.
    Between 1998 and 2010, we lost approximately 6 million 
manufacturing jobs, with over 2 million of those occurring from 
2007 through 2009. At the same time, some 57,000 manufacturing 
facilities closed.
    What is often forgotten, those manufacturing jobs that were 
lost led the reduced need for jobs in engineering, designers, 
scientists, and more that has eroded the nation's working 
middle class and dangerously undermined our technical, 
industrial, and innovative capacity. The nation will not be 
able to double net exports, reduce our trade deficits 
substantially, nor meet our economic and security needs unless 
we produce more of what we consume.
    Our nation's future success, the reclamation of the 
American dream, in fact, depends on revitalizing our 
manufacturing sector. We believe that a strategy matters. The 
U.S. needs to recognize that all our major global competitors 
have national manufacturing strategies.
    Advanced developing nations like China, India, and Brazil 
all have one. The leading developed nations like Germany, 
Japan, and the Scandinavian nations all have them. We do not, 
and it is killing us.
    The differences in approach are dramatic. Our competitors 
consciously seek manufacturing as a critical jobs and 
prosperity strategy for their nations. Our blind free market 
approach theorizes seeking cheaper prices for consumers is 
better than jobs and income. They target industries and 
technologies seeking to generate competencies and 
opportunities. We do not.
    Economic success is not measured simply by the price of a 
flat-screen TV, but how well one can feed, clothe, house their 
families, how they can have access to healthcare and education, 
how they can look forward to a secure and dignified retirement. 
On that basis, we are falling further and further behind.
    Other nations align their tax policies and government 
investments to achieve their goals and objectives. Our tax 
policies encourage offshoring, and we quibble over ``Buy 
America'' policies that are less broad than our competitors own 
domestic procurement laws.
    They invest in training and education linked to their 
employment and economic strategies. We invest in training and 
education without clear employment strategies or goals.
    We believe a healthy and robust manufacturing sector is 
central to a sustained economic recovery and to our national 
security. The following elements are essential to a 
comprehensive program and a national manufacturing strategy to 
restore domestic manufacturing.
    Get our trade house in order and enforce our laws. 
Aggressively enforce our trade laws. We need to address China's 
trade violations and establish our own strategic priorities and 
policies.
    A recommitment to investment in infrastructure. America's 
infrastructure needs--energy, roads, transit, bridges, rail, 
water, et cetera. The demands are huge. We have a $2.2 trillion 
infrastructure deficit, according to the American Society of 
Civil Engineers.
    A tax structure that encourages manufacturing investment. 
Eliminate tax incentives and loopholes that encourage financial 
speculation rather than investment, outsourcing and offshoring 
production, and enact tax incentives for companies that produce 
domestically.
    Investment in a 21st century energy infrastructure. We must 
invest in 21st century energy infrastructure technologies on a 
similar scale to our investment in replacing the failing 
infrastructure of the last century.
    Innovation for American manufacturing. The United States 
continues to be the world's engine of innovation, but that lead 
is declining. There is a direct correlation between R&D and 
production, and we must protect our nation's innovative 
leadership.
    And last, but I think very importantly, workforce 
development policy. America and West Virginia continue to have 
the best and most innovative workers. They stay ahead of the 
competition. However, we must constantly upgrade our skills and 
training.
    Revitalizing our manufacturing sector requires that we make 
investments in our people to ensure that they are equipped to 
meet the needs of industry. Now is the time to renew and expand 
investments in our people. Congress must increase access to 
training funds for people who are out of work, as well as those 
seeking to enhance their skills.
    Ultimately, a high-skills workforce must be one whose 
rights on the job and ability to speak up are protected and 
thus made real through strong labor laws and strong unions.
    While the economic crisis that began in 2007 has done 
massive damage to our country, the truth is our problems run 
far deeper and none is more fundamental than the catastrophic 
decline of U.S. manufacturing, which has occurred over a long 
period.
    The health of the economy, the success of our people, our 
national security are intrinsically tied to a vibrant and 
innovative manufacturing sector. We must revive U.S. 
manufacturing as a clear centerpiece of our nation's economic 
and security strategy. This Congress and the administration 
have the opportunity to take steps to restore our nation's 
manufacturing capabilities. Mr. Chairman, the United 
Steelworkers is committed to working with you to do so.
    And once again, I appreciate the opportunity to speak 
before the Committee today.
    [The prepared statement of Mr. Moore follows:]

 Prepared Statement of Randall T. Moore, Sub-District Director, United 
   Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied 
   Industrial and Service Workers International Union (USW), AFL-CIO
    Thank you, Chairman Rockefeller. I welcome the opportunity to be 
here today to testify on behalf of my union, the United Steel, Paper 
and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and 
Service Workers International Union--the United Steelworkers (USW).
    The focus of today's hearing is to explore the issues related to 
the state of manufacturing in West Virginia and the opportunities and 
challenges presented by exporting.
    In the past twelve years, I have had the painful displeasure of 
watching over 5,000 USW represented family-supporting manufacturing 
jobs disappear in West Virginia. Keep in mind, these employees did not 
lose the means to support their families because of outdated facilities 
or inefficient producers, chemical plants and steel processors. These 
employment opportunities have left my state primarily because of 
unfettered free trade and ineffective policies to address what should 
be the top priority of everyone in this room today, a forward-thinking 
approach to supporting those jobs that remain, and policies that will 
create new jobs in the future.
    These stories of so many plant closings, so many jobs, so many 
families have been told so many times that I sometimes wonder if 
Americans are turning a deaf ear when they hear these devastating 
stories. Sadly, many are forgetting that these aren't just today's 
statistical realities in a global economy. There is a human element to 
these events. We are talking about real people, often entire 
communities that are tragically affected. Many of my members who have 
lost their jobs can't reconcile their employment past with their new 
reality--going to a food bank, a minimum wage job or worse, relying 
upon government programs for their existence.
    Our trade, tax, and investment policies, the globalization of 
production, and the failure to have a national manufacturing strategy 
helped create this situation. It doesn't have to be this way. However, 
consistently, when a discussion is presented, and legislation proposed 
on a national level to address this slow moving disaster, the 
legislative approaches are reframed by many of those free trade at any 
costs policy makers who helped facilitate this mess. Those groups 
manipulate the public's view of these proposals by categorizing them as 
nothing more than government intervention that will lead to bigger 
government and cause a disruption of free market forces. In my view, to 
disregard the pain these people are living through, slogging through 
years of doing next to nothing towards long-term commitments to 
revitalize our manufacturing base in job creation is irresponsible and 
insensitive. Our nation is being victimized by free trade ideologues 
and policymakers who want to discuss theory, rather than recognize 
reality.
    New Department of Commerce data shows that nationwide, companies 
cut their work forces in the U.S. by 2.9 million during the 2000s while 
increasing employment overseas by 2.4 million. The technical and 
industrial capacity offshored quickly became imported goods and a major 
contributor to our crushing trade deficits. Between 1998 and 2010 we 
lost approximately six million manufacturing jobs with over two million 
of these occurring from 2007-2009. At the same time some 57,000 
manufacturing facilities closed. What is often forgotten, those 
manufacturing jobs that were lost led the reduced need for jobs in 
engineering, designers, scientists and more that has eroded the 
Nation's working middle class and dangerously undermined our technical, 
industrial and innovative capacity. This nation will not be able to 
double net exports, reduce our trade deficits substantially nor meet 
our economic and security needs unless we produce more of what we 
consume. Our nation's future success, the reclamation of the American 
Dream, in fact, depends on revitalizing our manufacturing sector.
Strategy Matters
    The U.S. needs to recognize that all our major global competitors 
have national manufacturing strategies. Advanced developing nations 
like China, India and Brazil all have one. The leading developed 
nations like Germany, Japan and the Scandinavian nations all have them. 
We do not and it is killing us. The differences in approach are 
dramatic. Our competitors consciously seek manufacturing as a critical 
jobs and prosperity strategy for their nations. Our blind free market 
approach theorizes seeking cheaper prices for consumers is better than 
good jobs and income. They target industries and technologies seeking 
to generate competencies and opportunities. We do not. Economic success 
is not measured simply by the price of a flat-screen TV, but how well 
one can feed, clothe and house their families, how they can have access 
to health care and education, how they can look forward to a secure and 
dignified retirement. On that basis, we are falling further and further 
behind. Other nations align their tax policies and government 
investments to achieve their goals and objectives. Our tax polices 
encourage offshoring and we quibble over Buy American policies that are 
less broad than our competitors own domestic procurement laws. They 
invest in training and education linked to their employment and 
economic strategies. We invest in training and education without clear 
employment strategies or goals.
Innovation Strategy is Key for our Future
    The USW recognizes the critical steps government has taken to 
stabilize the economy by helping ensure the survival of a domestic auto 
industry, investing in needed infrastructure and a diverse efficient 
clean energy economy, securing jobs from those investments with Buy 
America requirements, and putting critical financial reforms in place.
    This work is far from finished. But, today we see Congress mired in 
a debate that we can somehow downsize our way to success. The economy 
doesn't work that way. Congress needs to complete efforts begun last 
year when the House passed a series of bipartisan bills that included a 
National Manufacturing Strategy, currency, rare earth and other 
manufacturing legislation. This year the Administration has proposed 
needed new investments in small business, research and development, 
clean energy manufacturing, and infrastructure.
    Democrats in the House of Representatives recently announced their 
Make It in America Agenda that identifies steps that should be taken to 
revitalize manufacturing and job creation here at home. It's an 
important foundation both parties embraced last year. It should not be 
a partisan issue in this Congress and we hope that Republicans will 
embrace the effort and join in promoting policies that will enhance 
national and economic security.
    We believe a healthy and robust manufacturing sector is central to 
a sustained economic recovery and to our national security.
    The following elements are essential to a comprehensive program, 
and a national manufacturing strategy, to restore domestic 
manufacturing:

   Get our trade house in order and enforce our laws:

    Aggressively enforce our trade laws. We need to address China's 
        trade violations and establish our own strategic priorities and 
        policies. We should view success not as the number of trade 
        agreements that are signed, but by the results they achieve. 
        Our trade agreements should be designed to empower workers to 
        share in the fruits of their labor and enable them to enter the 
        middle class with respect and just compensation for their 
        efforts.

   A re-commitment to investment in infrastructure:

    America's infrastructure needs--energy, roads, transit, bridges, 
        rail, water, etc., the demands are huge. We have a $2.2 
        trillion infrastructure deficit, according to the American 
        Society of Civil Engineers. Not only will spending here employ 
        people right away, it will lay the foundation for economic 
        growth in the future. Funding for infrastructure must be built 
        on a foundation that aggressively promotes, ``Buy American 
        Policies''. Americans want to know that their tax dollars are 
        being used to create American jobs. An improved America is the 
        legacy we should leave to our children and grandchildren.

   A tax structure that encourages manufacturing investment:

    Eliminate tax incentives and loopholes that encourage financial 
        speculation rather than investment, outsourcing and offshoring 
        production, and enact tax incentives for companies that produce 
        domestically.

   Investment in a 21st Century Energy Infrastructure:

    We must invest in 21st century infrastructure technologies on a 
        similar scale to our investment in replacing the failing 
        infrastructure of the last century. And, again, investments in 
        this area must support and promote domestic job creation and 
        supply chains.

   Innovation for American Manufacturing:

    The United States continues to be the world's engine of innovation, 
        but that lead is declining. There is a direct correlation 
        between R&D and production and we must protect our Nation's 
        innovative leadership. Doing so requires that we maintain 
        strong intellectual property protections to ensure that 
        companies have the incentive to make investments in plant and 
        equipment here at home. Increased support for research and 
        development in the United States, coupled with support for 
        testing and deployment of those new technologies in our 
        factories, will ensure that our manufacturing capabilities 
        expand. R&D investments financed with public dollars (grants, 
        tax credits, etc.) must be accompanied by employment 
        accountability requirements.

   Workforce development policies:

    America continues to have the best and most innovative workers. To 
        stay ahead of the competition, however, we must constantly 
        upgrade our skills and training. Revitalizing our manufacturing 
        sector requires that we make investments in our people to 
        ensure they are equipped to meet the needs of industry. Now is 
        the time to renew and expand investments in our people. 
        Congress must increase access to training funds for people who 
        are out of work as well as those seeking to enhance their 
        skills.

    Ultimately, a high skills workforce must be one whose rights on the 
        job and ability to speak up are protected and thus made real 
        through strong labor laws and strong unions.

    While the economic crisis that began in 2007 has done massive 
damage to our country, the truth is our problems run far deeper and 
none is more fundamental than the catastrophic decline of U.S. 
manufacturing which has occurred over a long period.
    The health of the economy, the success of our people and our 
national security are inextricably tied to a vibrant and innovative 
manufacturing sector. We must revive U.S. manufacturing as a clear 
centerpiece of our Nation's economic and security strategy. This 
Congress and the Administration have the opportunity to take steps to 
restore our Nation's manufacturing capabilities. The USW is committed 
to working with you to do so.

    The Chairman. Thank you, Mr. Moore, very much.
    I call now upon Don Gallion, who I have known for 35 years?
    Mr. Gallion. Probably.
    The Chairman. And I have to tell this story on Don because 
it is classic. I first met Don Gallion, who is from Wayne 
County, in what I could gregariously pronounce as kind of a tin 
shed where he was making something, up in Morgantown. And there 
were a couple of light bulbs around. There were a couple of 
workers around. And Don Gallion was around.
    And he just had this idea, and the idea was every time--and 
now you have expanded since then, and I understand that. You 
have become this----
    [Laughter.]
    The Chairman.--huge, international--I mean, it is an 
extraordinary story, Don. I am really glad that you are here.
    But what Don had figured out, Mr. Gallion had figured out--
this is a hearing--was that there are all kinds of airports 
being built all over the country. Probably 1,500 to be built 
yet in China, and it is going to keep on going once the economy 
returns on a worldwide basis.
    And that when you land an airplane in the winter, it is 
probably a good idea that you have something that you insert 
into the airplane which pumps warm air in. That is not such a 
good idea in summer. So, in summer, you have to pump in cold 
air, cool air.
    And Don Gallion had perfected a technology, which simply 
wiped out the competition, and I can't explain how he 
understood that and why he took off. But you can't--this is 
probably the only day this month that Don Gallion will be in 
West Virginia. He travels all over the world, and every place 
that he goes to, he has got all of China locked up. He has got 
pretty much every place locked up.
    Everybody that builds a new airport has to call Don Gallion 
so they can get this system in place. And it is one of the most 
inspiring stories that I know of when an individual Wayne 
County fellow who, on his own, comes up with this idea and then 
takes it on a worldwide basis, exporting it everywhere that 
there is.
    Now with that humble introduction, Don, your testimony 
better be good.

 STATEMENT OF DON GALLION, FOUNDER, FORMER PRESIDENT, CEO, AND 
                     CHAIRMAN, FCX SYSTEMS

    Mr. Gallion. Thank you, Chairman Rockefeller. I appreciate 
that introduction greatly.
    Well, as said, I am Don Gallion, a founder of FCX Systems, 
Inc., which is located in Morgantown, West Virginia, over 24 
years ago. We sell power supplies and air conditioning 
equipment to the aviation industry in 78 countries on all 7 
continents. I also serve as Chair of the West Virginia Export 
Council on which I have been a member for over 21 years.
    West Virginia manufacturers are much like most U.S. 
manufacturers. They are currently on a downturn. Manufacturers 
who are exporting are doing better than those who aren't. This 
is due to the fact that many foreign countries are seeing a 
quicker economic recovery than we are in the United States.
    Excluding the slow economy, the biggest barrier faced by 
manufacturers in West Virginia is tight money. Many 
manufacturers have to turn down work because they can't buy the 
inventory needed to do the job. If cash were available, 
companies could start their recovery quicker and, therefore, 
start our nation's recovery quicker. This would actually start 
creating jobs.
    As far as exporting goes, it is important that we look at 
why exporting needs addressed besides being a good market at 
the moment. It is really simple, two words--global economy. Our 
world is no longer an independent economy, unaffected by the 
rest of the world.
    Today, with our ever-shrinking world, thanks to computers, 
cell phones, jet aircraft, and the Internet, we live in a 
global economy. Our economy is impacted not only by us, but by 
what happens on the other side of the world and vice versa. So 
this means that the world now impacts how we feed our families, 
our jobs, and our markets, just to name a few areas.
    Today, our competitor is no longer someone down the street 
or even across a state or our vast country. Today, our 
competitor is someone half way around the world. If we are not 
selling on his soil, he will be selling on ours.
    We could wake up 1 day to find he has taken our customer 
base, and we are out of business. So unlike several years ago 
when only Fortune 500 companies even considered exporting, 
today we all need to participate in exporting to ensure our 
survival.
    It is my opinion every company needs to export to have a 
chance to survive long term in our global economy. Having 
stated that, it is even more important to help West Virginia 
companies export. The West Virginia Development Office 
International Division is a great source for our West Virginia 
companies. This group operates on only West Virginia funds and 
helps companies make their first or their 100th trade trip.
    West Virginia companies have their hands held and are shown 
the ropes, thus taking the fear out of exporting. They work 
extremely close with the Department of Commerce's USEAC offices 
located in the state. The USEAC group calls on exporters to 
ensure they are export ready, answer questions, help with goal 
keys, and other programs. This group is a great use of federal 
taxpayer dollars.
    The Chairman. What is USEAC, Mr. Gallion?
    Mr. Gallion. USEAC stands for United States Export 
Assistance Centers. Excuse me.
    They do a lot with a little, very little budget. If we want 
to get our money's worth, we should spend more on the 
Department of Commerce. This alone could be the secret to get 
our export sales to where we need them.
    Both of these groups work closely with the West Virginia 
Export Council. This group helps to answer questions, talks 
with future exporters, puts on seminars, and speaks on behalf 
of exporting. Both of the above groups help the West Virginia 
Export Council in all these endeavors.
    The West Virginia Export Council is a volunteer group of 
experienced exporters or related job activities and are 
appointed by the Secretary of Commerce. Their mission is 
simple, to help West Virginia companies export.
    By having all three of these groups, coupled with the SBA 
for export financing, West Virginia does better than any state 
around, even with the limited budget we have to work with.
    I also spent 7 years as head of the National District 
Export Council, working with our 1,600 members and 61 DECs, the 
Department of Commerce, and states all over the country. From 
this experience, I can tell you no one works together better 
and gets more bang for their buck than West Virginia export 
assistance organizations.
    Due to this cooperation and hard work, West Virginia has 
come a long way. In the last 5 years, we have doubled our 
exports from $3.2 billion in 2006 to $6.4 billion in 2010. That 
is saying something.
    While West Virginia is doing well, we still have a ways to 
go to get there, to get everyone onboard. A couple of barriers 
that are slowing us could be stops for new exporters as well.
    The first big barrier is a lack of a level playing field. 
West Virginia companies, as well as U.S. companies as a whole, 
can compete with anyone on a level playing field. That does not 
exist today due to free trade agreements, or the lack thereof.
    First off, every nation has more free trade agreements than 
we do. This makes U.S. companies' products cost more due to 
taxes imposed on their product and not our competitors'.
    This is putting our nation behind and delaying U.S. exports 
and job growth. It is simply solved by approving the free trade 
agreements awaiting congressional approval and insisting we get 
out there and make more trade deals.
    The second barrier is the ability to get our customers 
visas to come to the U.S. to see products they are buying, 
train their service personnel, and conduct meetings. I truly 
understand terrorism and the need to protect our borders, but 
what we are doing now is wrong and not working.
    Our choice for deciding who gets a visa and who doesn't is 
way off base. There needs to be another way. We are losing 
projects and jobs because of this issue. The bottom line is we 
must remove barriers, and we must get our companies exporting, 
for their sakes as well as the sake of our nation.
    Thank you for this opportunity to speak today, and I look 
forward to addressing your questions.
    Thank you.
    [The prepared statement of Mr. Gallion follows:]

     Prepared Statement of Don Gallion, Founder, former President, 
                     CEO, and Chairman, FCX Systems
    I am Don Gallion, a founder, former President, CEO and Chairman for 
22 years of FCX Systems, Inc. which was started February 10, 1987. In 
2009 I stepped down to Senior Vice President of the Company to allow a 
new Investor Company to put their own President in place. FCX Systems 
is a design and manufacturing company located in Morgantown, West 
Virginia. We design, manufacture, and sell power supplies and air 
conditioning equipment to the aviation industry, both military and 
commercially. FCX started exporting in 1988 and currently sells product 
in 78 countries on all seven continents.
    I am and have been a member of the West Virginia Export Council for 
21 years and Chairman of the West Virginia Export Council for the past 
19 years. The West Virginia Export Council is one of 61 DECs (District 
Export Councils) throughout the United States. DECs were formed when 
the President of the United States in 1960 asked the Secretary of 
Commerce to enlist the efforts of U.S. business in enlarging export 
opportunities for American Firms. Responding to the challenge, the 
National Expansion Council was formed. From the recommendations of this 
Council, the President signed an Executive Order in 1973. This order 
directed the Secretary of Commerce to establish District Export 
Councils throughout the U.S. In 1974 the Secretary established the 
first 41 DECs, which West Virginia was one of these. Under the 
Secretary's guidelines, the District Export Councils were created to 
specifically promote Exports in their local communities. This is still 
our mission today: try to help West Virginia Companies to Export. This 
is done a number of ways. We do one-on-one meetings with potential 
export ready companies. We hold seminars and conferences explaining how 
to do certain export-related activities. We speak to groups, schools, 
and organizations about exporting. We visit clients with the West 
Virginia Development Office as well as the DOC offices in the state. We 
also help be the coordinator in our state (West Virginia) to keep all 
the various Export Assistance Help Groups on the same page and working 
together.
    We are extremely fortunate in West Virginia in that all Export 
Assistance groups work together to accomplish the most good for West 
Virginia Companies. We have the State Development Office, Department of 
Commerce (USEAC), West Virginia Export Council, SBA, EXIM Bank, 
universities, and many Representatives' and Senators' Local Offices. 
These are great sources for West Virginia Companies. Unlike other 
states, these groups all work together to help our West Virginia 
manufacturers. This unified approach is very rare and unique to West 
Virginia. I also spent 7 years as head of the National District Export 
Council, spending a lot of time with our 1600 members, Department of 
Commerce, and states from all over the country. From this experience I 
can tell you that no other state comes close to working as well as West 
Virginia does with all its Export Assistance Partners. Other states are 
envious of West Virginia in this function. This working relationship 
allows the most help for the fewest dollars spend and greatly benefits 
West Virginia exporters.
    West Virginia manufacturers are much like most U.S. manufacturers, 
currently on the downturn. Those that have an export piece to their 
business are doing better than those that do not. Many international 
economies are recovering much faster than the United States. FCX 
Systems is currently seeing 72 percent of its future near term business 
potential from overseas. The biggest barrier facing Manufacturers aside 
from a slow economy is tight money. Everywhere I go I hear the same 
complaint. ``I can't get credit.'' ``Credit has dried up.'' ``There is 
no cash for inventory purchases.'' This is holding back companies from 
being able to recover more so than the lack of orders.
    Let's take a look at why exporting is so important to companies 
aside from the fact they are a good market opportunity. It is simple, 
the global economy. Everyone has heard about the global economy more 
times than you care to think about. We have heard it on the TV, in 
newspapers, magazines, radio shows, and business Journals to just name 
a few places. It has had a lot of traction for a number of years. Did 
you ever stop to think about what the global economy really is? Well 
let's dissect it a little. First there is global, which must mean the 
whole world. What about the whole world? What does our economy have to 
do with the whole world?
    Next we have economy. What does the economy really mean? It is a 
word that is used a lot, but what does it really mean? After debating 
this for a sometime, I decided to look it up. I went to the dictionary 
and it said economy is a system of producing and distributing the 
material needs of a society. Therefore, the global economy is telling 
us the world is impacting our system of producing and distributing the 
material needs of our society. Our material needs, our distribution, 
and our society is all now world based. That could be a little scary.
    We all thought we knew what the global economy was all about, but 
when you put in these terms, it is quiet profound. We are dealing with 
a worldwide economy, in which our economy is just a little piece of the 
pie. We no longer have independent economies based solely on local or 
state or even country actions. These actions still impact us, but they 
also impact people half way around the World from us. Those people's 
actions also impact us. This means our ability to work for a living, 
feed our families, save money and even our market is now a world 
affair.
    Today our world is a much smaller place than it used to be. Cell 
phones, computers, faster and faster jet aircraft, and the Internet, 
have all contributed to the smaller world we find ourselves in today. 
Our world has forever changed and will continue to shrink with newer 
and newer technology. It is getting smaller by the day, at least in 
terms of how we travel around it, how we deal with communications and 
create deals throughout the world. It is now easy to see, why today, no 
one can ignore the global Economy.
    Not that many years ago, any company could be content selling 
product in its neighborhood, its state, or at least on a national 
basis. Only large Fortune 500 companies dared to EXPORT. The rest of us 
would never consider it. Today, if a company is not exporting, they 
will wake up one day and find they are out of business. Out of business 
you say, how that can be? It is real simple, thanks to the global 
economy; their competitor is no longer someone down the street or even 
two states away. Today their competitor is half way around the world. 
If they are not selling on his soil, be assured, he will be selling on 
theirs. Some day in the not too distant future, they may wake up and 
find their competitor has taken their customer base. They are suddenly 
left without a business. They can't just sit there and let this happen. 
They produce a quality product that is desired around the world. They 
can and must Export. All companies must export.
    Without export participation, a company will not be a long-term 
player. It is my opinion; all companies must participate in the global 
economy to survive in the long term. You not only need to export as a 
company, we must export as a nation. We have seen our core businesses 
change as the global economy has impacted our competitiveness, but our 
Nation must export more today than ever before. Throughout history, 
Presidents have pushed our Nation to export. Here is what a couple have 
had to say:
    President Reagan--``We have the talent, the skills, and the 
products to compete. We just need to encourage American business to 
take the challenge.''
    President Clinton--``World trade, whether conducted in person, on 
paper, or on-line, remains the cornerstone of America's economic 
growth.''
    Additionally, a cornerstone of President Obama's Economic Recovery 
was to ask American business to double their exports in the next five 
years.
    So it is easy to see that exporting is important to our national 
economy. All our companies make high quality products that are desired 
around the world. They can all export. All we have to do is make an 
effort and reach out to any of the number of West Virginia export 
assistance organizations that are available for help. They need to know 
where to get answers to their questions and they need to take the fear 
of exporting away. We have that to offer, we just need to be sure our 
companies know about it. I previously talked about these organizations, 
but I just wanted to list them with a small explanation of the export 
assistance they provide.
    West Virginia Development Office, International Division--This 
group takes West Virginia companies on trade missions to various 
countries. They take companies to trade shows in other countries as 
well. They call on West Virginia companies to help them with all 
aspects of exporting. They work closely with all export assistance 
groups, but practically with the Department of Commerce Export 
Assistance Centers (USEAC) in Charleston and Wheeling and the West 
Virginia Export Council.
    West Virginia Export Council--They work one on one with West 
Virginia exporters answering any concerns or questions they have. Their 
very experienced membership, consisting of both experienced exporters 
and export-related occupations and are all appointed by the Secretary 
of Commerce, can address any export question or problem that comes 
along. They hold seminars and teach various aspects of Exporting. They 
have conducted a class for the last eight years in conjunction with 
West Virginia University called the Export Management Class. This class 
has helped over fifty West Virginia companies export for the first 
time. It has also trained over 300 students in exporting operations. 
Additionally we talk at schools and other organizations promoting 
exporting. We also contribute funds we raise to help companies attend 
state-sponsored trade trips. We also act as the overseer to all the 
other export groups to see we do not compete, overlap, or head in the 
wrong direction.
    Department of Commerce (USEAC)--These offices located in Charleston 
and Wheeling do a great job for West Virginia. In my opinion this might 
be the best spend Federal dollars to come into our state. If this group 
had more to spend, we could see West Virginia exports rise in 
accordance to the Budget supplied these amazing people. They council 
people, set up Gold Key appointments, get information from overseas 
offices, conduct training, help the Development Office with trade 
missions and shows, as well as speak on behalf of exporting. They also 
work with the West Virginia Export Council, serving as its Executive 
Secretary.
    Small Business Administration and EXIM Bank--Both Groups work 
together and independently. EXIM has the high balances of loan 
available, but also the most red tape. They both offer special loan 
programs for U.S. Companies that export. In some cases they will even 
loan your foreign customer the money to buy your product. Export 
receivable insurance is offered as well giving you the ability to offer 
more favorable terms and increase your export sales.
    The above are the biggest export assistance help West Virginia 
Companies have. It is great and it has brought West Virginia a long 
ways in just a few years to truly understanding exporting. We all still 
have a ways to go to continue this education process, but it is nice to 
see progress. The last five years, West Virginia has outpaced the 
Nation in export growth. See below.

                                                   West Virginia  Export
          Year             U.S.  Export Growth            Growth

                 2006                      14%                      25%
                 2007                      12%                      23%
                 2008                      12%                      42%
                 2009                      14%                      18%
                 2010                      21%                      33%

    As this shows, West Virginia is making big steps in getting West 
Virginia companies to export. As I discussed earlier, President Obama 
has asked the Nation to double exports in five years. Last year West 
Virginia doubled its exports in the last five year period. In 2006 West 
Virginia exported $3.2 billion. In 2010 we had grown exports to $6.4 
billion. So it is easy to see West Virginia is making big strides in 
exporting. This is extremely important when you consider the global 
economy.
    Also it is important when you consider that 98 percent of the world 
customer base is outside the United States. Of all exporters in the 
U.S., 95 percent are small business, 85 percent are selling to only one 
country, and we must not forget, our competitor is now half way around 
the world and we must compete. We must go out and get our fair share.
    Barriers facing exporters are problems that the Federal Government 
needs to address. First we don't get to compete on a level playing 
field. All of our foreign competitors have trade agreements with other 
countries where they trade with each other tax free or nearly tax free. 
Our products are taxed coming into the countries; therefore our sale 
price is higher than our competitors. We need the Senate to approve 
existing trade deals and help U.S. companies create the jobs our Nation 
needs. We need to push the President to negotiate more trade deals and 
give U.S. Companies a fair chance. After all, most of these countries 
enjoy free trade status with the U.S. anyway. So they sell their 
products to us tax free, but we don't get the same treatment while 
selling our products to their countries. We can compete with anyone, 
put not when the playing field is leaning toward our competition. This 
can be very discouraging especially to new companies trying to export 
for the first time.
    Another barrier, we as exporters face is trying to get our 
customers into the U.S. to see the product they want to buy or are 
buying, to train customer service personnel, and to conduct meetings. I 
understand terrorism better than most. I have to worry about it almost 
every day as I travel throughout the world. However, we must put some 
sense back into the visa application process. At the moment it is like 
the bully at the school yard that gets a charge out of beating people 
up because they can. Our agents seem to get a charge by denying our 
customers visas and then refusing to even talk about it. Exporters, me 
included, lose sales every day because we can't get the customer a visa 
to make a legitimate business trip to our country. I lost two sales 
opportunities totaling over a half million dollars this week alone. 
Yes, we need control, but we also must control those dictating visas. 
There must be a better way.
    Both of these laws have a very negative impact on U.S. exporters 
and will slow if not stop new exporters. In summary, West Virginia 
manufacturers are doing well if they are exporting. The need for more 
credit is a big problem for not only West Virginia manufacturers, but 
manufacturers as a whole. We have spent billions of dollars trying to 
create jobs. Surely we can create cash for our nations' banks to help 
free up cash to small business. I believe we created a program to do 
this, but I can tell you, it is not working. We are doing better with 
exports in West Virginia, but we need to continue to push harder for 
more companies to get involved both in West Virginia and throughout the 
country. The Federal Government needs to address the barriers they have 
thrown up for exporters and give us a more level playing field. The 
Department of Commerce is one government agency that is helping this 
Nation's business. Let's quit trying to reduce their budget year after 
year and give them monies they need to not only continue to help 
American business, but expand their programs so they can help even more 
American business. If we try to address these issues, we all will be 
better off.

    The Chairman. Thank you, Mr. Gallion.
    I would like to make a general plea to some kind soul. I am 
sitting in a chair which makes me feel like I am sitting on the 
floor, and I need some kind soul to find somewhere a nice, big, 
fat cushion.
    [Laughter.]
    The Chairman. So I can put it underneath me and be 
comfortable for the very first time. I apologize for that 
interruption.
    [Laughter.]
    The Chairman. Let me just start with you, Mr. Kumar and Mr. 
Julian. It is just a very simple question, which has been 
raised by all the witnesses. What are the first steps a company 
should take to begin exporting, and how can your offices help?
    And don't use government acronyms. Say what they are.
    Mr. Kumar. Thank you, sir.
    I couldn't help reflect on USEAC, and it is not lost on me. 
We go by so many different brand names, which is exactly what 
we don't require. We don't need acronyms, but we do need to 
know that as exporters, we don't need to go it alone.
    And that is what we tried to provide with the U.S. and 
Foreign Commercial Service. We may go with acronyms called 
USEAC here, but it is a comprehensive set of services to make 
sure that exporters don't need to engage in external markets on 
their own. We have trade specialists in your state, in your 
backyard. We have--we call it ``soup to nuts'' because they 
connect with 129 offices across 79 countries.
    And as I heard, Mr. Gallion, you go to 78. We have got to 
change that. We have got to get you to the 79th country, where 
we can provide you support.
    What we need to do is publicize and make people aware. It 
is not the Commerce Department alone. We cannot do what we do 
without the support of the other people around the table.
    And Senator, I hope it came loud and clear that we do this 
through collaboration with the SBA, with the Eximbank, with the 
state economic development agencies. But we need to get that 
message across better to every business that we do.
    We do it through seminars, webinars, meetings such as this, 
and I thank you again. The convening of meetings such as this, 
which is being telecast across West Virginia, is incredibly 
powerful for us to get people to know what we provide. We do 
market research. We do public--we do problem solutions.
    Nothing is too small for the Commercial Service in the 
support of export businesses, whether it is who to contact, 
what forms to fill, to help you if your goods are stuck at a 
customs counter, or, indeed, look at working with you in terms 
of how you can engage in exporting and provide you suggestions 
which country to export to.
    So we are--I am incredibly delighted. When I took this job, 
you had posed me a similar question during my confirmation 
hearings. We are here, and 1,450 of the people across the 
Commercial Service are here to engage with businesses across.
    Again, we do not operate trade in a vacuum. Trade is 
competition. We need boots on the ground, and through leverage, 
we acquire more. But where the Committee can support us is also 
through making sure that the boots on the ground continue to be 
available to businesses not only in West Virginia, but across 
this great country.
    The Chairman. Our people are sometimes a little bit nervous 
about engaging overseas. It is sort of an Appalachian 
characteristic. Not a bad one at that, but in this case, it is 
not as helpful. So that the Assistant Secretary makes that 
point, these services are available.
    Now there is a big gap between saying something is 
available and then having it well enough known or available 
enough to people like young Don Gallions and others who are 
entrepreneurs who have an idea that they think could do well 
overseas, but don't quite make the step to make that 
connection. Could you talk about that?
    Mr. Julian. Yes. You know, Senator, that is an issue 
whether you are talking about exporting, technology adoption, 
or part of the diversification strategy of doing business with 
the federal government or state government, for that matter. So 
it comes back to an education and awareness.
    The partnership that we have with U.S. Department of 
Commerce Export Assistance Centers and our International 
Division is almost seamless. There is a strong partnership 
there, but it is an engagement. It is awareness, which our 
office does a very good job of. But it does get down to 
resources.
    I believe we have two trade specialists that work on that. 
They do an excellent job. We do a lot of visiting with 
companies, direct mail, different strategies of awareness. But 
anything that we can do with you to expand that awareness, to 
get people engaged, to get them to a comfort level because, 
again, it is an issue whether you talk about export or 
technology adoption or whatever strategy you may want to talk 
about to compete and expand their business base.
    The Chairman. You know, it is more difficult perhaps in 
Appalachia than in more international, so to speak, parts of 
the country for people to have an opportunity, let us say, in 
Vietnam or India or in Germany or Great Britain or whatever and 
sort of reach out to say, ``I want that opportunity.'' It is a 
bigger step psychologically in West Virginia than it might be 
in some other state, like in California.
    Does that mean that the Commerce Department and the SBA and 
you have identified these folks and you go after them because 
you think they should be doing this?
    Mr. Julian. Right.
    The Chairman. Or do you wait for them to come to you?
    Mr. Julian. Both ways. But our people, our staff are 
aggressive, and they do an excellent job in understanding the 
company's capability and trying to match up to the markets that 
they research and line up. But again, I can't emphasize enough 
the partnership that exists between the government, the federal 
government and the states.
    But if you can get them engaged and look at their 
capabilities and match up with opportunities, there is no doubt 
that the staff can get them to a comfort level to engage and, 
no doubt, succeed because we are all aware of the quality of 
the product and the commitment of our people here.
    The Chairman. OK, I noticed that, Secretary Kumar, you're 
having a White House Business Council, and the Charleston Area 
Alliance, that you're holding a roundtable on precisely this 
subject this afternoon, to hear directly from West Virginia 
businesses.
    Where will that be?
    Mr. Kumar. Yes, sir, it's later today. It's slated in the 
city to meet with West Virginia businesses.
    The White House, as you may be aware, has made a commitment 
to have almost 500 of these roundtables.
    The Chairman. Right.
    Mr. Kumar. We need to hear directly from the businesses. At 
best, administrations and governments create a framework, but 
we serve the needs of the businesses to create jobs. And this 
is one of those meetings where we go directly.
    But I do want to reference a couple of things here in the 
spirit of this question and the last one. Businesses across the 
Appalachian Region can go to Export.gov to see what is the 
range of services provided by not only the Commerce Department 
or my service, but the entire range of agencies which in some 
way or shape help impact exports.
    The Chairman. Export.gov?
    Mr. Kumar. Export.gov. We also reference CommerceConnect is 
coming to Charleston. It is an attempt to bring together a one-
stop shop, a one-stop window, as you said, to make sure that we 
have one common portal where all the services are detailed.
    In a physical sense, where possible, we will co-locate, not 
only amongst us, but the other agencies of the U.S. Federal 
Government, to come together in one place.
    The third, also in a physical sense, while doing this in a 
portal sense, we do it, and we also have 1-800-number telephone 
services, where people who want to learn about exports can do.
    In addition to all of that, since none of us can do this 
alone, but together America has a potent, leverageable amount 
to services which we can provide, we divide and conquer. New-
to-export companies can be tackled by the SBDC Ms. McCauley 
talked about earlier and also through collaboration with the 
University of West Virginia, where we've actually set up and 
worked with them to set up a spring export course in their 
curriculum.
    So this way we can bring the new-to-export companies, while 
freeing ourselves to concentrate and work with current 
companies in West Virginia and beyond who export, so that they 
can get all the services. We can export the number of exporters 
in the first instance, and yet provide better service to the 
exporters who are currently doing that.
    That is the way we will win the future, which the President 
alludes to, so that the combined resources of the federal 
government and the state government could be leveraged to the 
benefit of U.S. businesses.
    The Chairman. Thank you.
    Mr. Gallion, it strikes me that there are several kinds of 
entrepreneurs in West Virginia. Some, like you were many, 
several decades ago, you were young, you were from Wayne 
County, you had this particular gift, which you may or may not 
have known about, but you weren't Dow Chemical. You weren't 
General Electric. You were Don Gallion from Wayne County, and 
that's one kind of entrepreneur.
    And I'm referring to what the Assistant Secretary has said, 
that we're available, we can help you, we can respond to your 
needs.
    Then there's another kind of entrepreneur, who is more 
practiced, because, perhaps, he belongs to a bigger chemical 
company or a bigger general company, and they know those 
practices. They know the services available.
    How do you crack through to Don Gallion when he was 30 
years old, that these services--you did it evidently, or maybe 
you didn't. Maybe you just did it on your own.
    See, the federal government, it's that old thing, ``I'm the 
federal government. We're here to help.'' That usually draws 
laughter. It doesn't show laughter in this courtroom, because 
it's true.
    How do you respond to what I say?
    Mr. Gallion. Well, basically, to be perfectly honest, the 
Department of Commerce has been a great source for exporters 
for many, many, many years. I mean, when I started exporting, I 
never heard of the Department of Commerce, other than the name. 
As far as what it did, I had no idea.
    Today, they're much more out in the community, more 
focused, more getting the word out, than they did 25 years ago. 
That's not to say that it's perfect yet. We've still got a long 
ways to go. We've still got a lot of companies that we need to 
get to. We've got a lot of people we need to get the word out 
that it's available, that these organizations even exist to 
help them.
    As you said earlier in your comments, when the federal 
government comes knocking at a company's door, sometimes they 
go hide in the basement rather than answer the door. So you 
have to face that problem. But first you have to get them to 
know that they're even going to come to the door.
    And that's one of the big areas that I know that for at 
least the last 20-some years I've been involved in some way or 
fashion with Commerce and exporting is that's been trying to be 
improved. I think we've made great strides or they've made 
great strides in getting the word out. And they've got the word 
out in a lot of ways, not only with their own organization, but 
with other export organizations, like the development office 
here in West Virginia, the Export Council.
    We've all been out there talking to people, letting people 
know about us, know about them, know about what we do, know 
about how they can be helped. And the Assistant Secretary 
talked about teaming with the groups in the state, and that's 
been the key. I think that's been very important, particularly 
in a state like West Virginia where there are not a lot of 
dollars to spend on anything, let alone exporting.
    You have to have a lot of people out there working, beating 
the bushes, talking about exporting. As an example, the Export 
Council even goes to schools. We go to public schools and talk 
about exporting.
    The Chairman. How do you do that? What you tell them?
    Mr. Gallion. We tell them that it's a great opportunity. 
It's going to be part of their future, whether they like it or 
not, because if they're not exporting when they grow up, 
they're going to have real issues. They'll have tough times 
finding jobs.
    It also opens up a dialogue, I think, with mom and dad when 
they get home, in terms of what did Johnny learn in school 
today. Well, we learned about exporting. And dad may suddenly 
say, oh, well let's hear more about this. Maybe this exporting 
thing isn't so bad.
    A lot of people look at exporting as something that's going 
to steal their job rather than create jobs.
    The Chairman. Plus, isn't it also true that West Virginia 
has, in fact, by virtue of the Internet and smart phones and 
all the rest of it, changed dramatically from very young levels 
on up?
    In other words, I can remember going to Horace Mann, I 
think it was here in Charleston, and there was a third grade 
class--would that be about 6- or 7-year-olds, 8- or 9-year-
olds?
    Anyway, they were doing a live conversation with an 
astronaut who was meant to make the final shuttle flight the 
next day. It didn't take off, but that wasn't the point. They 
had a streaming conversation. They were built into sections of 
people who were solving computer problems--these are just 
little kids, and they were solving computer problems. Some of 
them had to make spaceships. And they were incredibly engaged.
    The degree of intensity and the focus of these very young 
children was overwhelming to me, overwhelming. And I've see 
that repeated in other parts of the state in age groups of that 
level.
    So I think they grow up with a much better sense of what is 
out there in the world, don't you?
    Mr. Gallion. Yes, that's very true. I mean, I think 
particularly the Internet connections that are available to 
West Virginia schoolchildren are fabulous.
    I think you, as one individual, have strived hard to help 
make that happen. And I really thank you for that. That's 
helped a lot of school-aged kids throughout our state, even on 
the college level.
    The Assistant Secretary talked about the class that's held 
in conjunction with West Virginia University, our export 
management class. That's a program we've proudly put on now for 
8 years with the West Virginia Export Council, the Department 
of Commerce, and the university working together to make that 
program happen. And it's a program where we put not only 
companies but students in a classroom together and, basically, 
teach them to export.
    You know, we've had over 50 West Virginian companies 
graduate that program and export for the first time. So we're 
pretty proud of that.
    Along with that, we've had about 350 students learn about 
exporting, many of them getting jobs with export-related 
companies or export-related occupations. And we actually 
broadcast that class across the Internet in different locations 
around the state as well. So we're pretty proud of that 
happening also.
    The Chairman. Good.
    Mr. Moore, one of the abiding problems of a lot of states, 
including West Virginia, is the psychological crushing of what 
happens when a major industry closes down. I mean, you can look 
at Weirton Steel, you can look at Century Aluminum, you can 
look at all kinds of different places.
    There's a mayor in a town that I had never heard of in 
Tennessee who lost 1,900 jobs, and he said it was like being 
hit with a nuclear bomb.
    So the whole construct of a worker who goes through that--
and that's not uncommon. I mean, you saw that in the textile 
and sneaker industry in West Virginia.
    People have to rebound. But that's an easy statement to 
make. It's a very hard thing to be able to do.
    And so that brings up the question of, are we, in your 
mind, maybe not for the worker himself or herself, but maybe 
also for that worker, but certainly their children, how do you 
evaluate our ability and our willingness and our resources 
spent?
    There's a lot of talk about it, but I want your view about 
how good it is, on educating people for jobs that exist. I've 
never believed that it was fair to tell a West Virginia 
student, like a college student or a high school student, that 
you have an absolute obligation to stay in West Virginia even 
if you don't have any work. What I've said is sometimes it pays 
to go to another state for 4 or 5 years where you can find a 
job, and then we're working to try to create jobs that will 
match your skill set and other skill sets back here. And when 
we have them, they will come back, because West Virginians 
always come back when they have a chance.
    But how do you see this whole question of training skill 
sets, or not sufficiently doing it?
    Mr. Moore. The first thing we see, Senator, when we go 
through the closures and we start looking for some help and 
assistance to retrain and reeducate and to try to get people 
that have been in one particular industry--and normally were 
dealing with people in their 40s and 50s.
    You know, that's something that's happened to us in the 
state of West Virginia. A lot of our manufacturing industries 
here are old, well-established, well-founded industries. And 
unfortunately, there's not a whole big market out there for 
folks that are in their 50s and late 40s.
    But through the TAA, which you have helped us so much with, 
and we appreciate that, through the TAA, these folks are able 
to sit down and rethink where they want to be or where they 
need to be in life.
    But all too often, what's offered through those classes 
aren't really classes for the majority of the elderly 
population and the not-so-elderly population. We find them 
ending up in the medical field, a whole lot more in the medical 
field. And that's due primarily to the continued loss, I feel, 
of manufacturing jobs here in West Virginia.
    However, I do want to point out that through the 1980s, 
most employers, especially in unionized settings where we did 
have good apprenticeship programs, good government-approved 
apprenticeship programs that were college-accredited, college-
degree programs, we had those for years. When industries 
started cutting, and they had to start cutting as we started 
into this downswing, especially in the steel and metals 
industry, that was some of the first spending levels that were 
cut out as being not essential, as being nonessential at the 
time, which over the years has come back to really, I think, 
cripple the industry.
    And for the manufacturing that we have left, not only in 
West Virginia, but across the country now, where we're trying 
to build back, we have a serious shortfall of skilled people. 
And it's a tough problem to deal with.
    The employer doesn't want to take on that accountability, 
that responsibility. The individuals, when they do have the 
ability to go to some type of school, we find that there is a 
lack of adequate training facilities. I heard here this morning 
they're talking about working on them. I'm glad to hear that.
    I think in this country in general there is a stereotype 
concept that college is only for academics and it's not for 
anything else. And that's far, far, far from truth. We have to 
lose that mentality and look toward skilled workers as we move 
forward with higher levels of education.
    We have to have that. We have to make it more affordable to 
them. We have to do that.
    But until we can stop the bleed, put the finger in the dam, 
so to speak, of jobs going overseas. I'm glad to hear Mr. 
Julian and some of the statistics he gives about our exports. 
I'm glad to hear that.
    We see a little bit of it in the aluminum industry and 
other areas. We see a small amount.
    But the export of our jobs far exceeds the export of 
products here, not only in West Virginia but across this 
country.
    The Chairman. Let's talk about that for a moment, because 
it brings up the very sensitive subject which you referred to, 
and that is that the free trade agreements as being a bad thing 
because they cause jobs to leave.
    The other side of that is that if you don't have a free 
trade agreement--and this is open for anyone on the panel--if 
you don't have a free trade agreement, and I voted for some and 
I voted against some of them, then they're going to put a 
tariff on your goods. If you don't have a free trade agreement, 
they're going to respond by putting a tariff on the goods that 
you try to export, and, therefore, you're going to lose and 
somebody else is going to be able to export, and you can't.
    The other side is that most countries don't play by the 
rules. America is sort of unique that way. And I guess either 
appropriately or inappropriately, naive that way, that we do 
play by the rules. And we are infuriated when people steal our 
patents, which is common practice overseas, when people don't 
meet our standards, which is pretty much impossible for most 
countries to do. Our standards are so high in America. But they 
tear us to shreds.
    So you come down to this situation of, do you want to join 
the opposition and change them by disallowing their right to--
because it's WTO stuff, et cetera--you disallow them to put 
tariffs.
    And that's where I spend my time, in front of the 
International Trade Commission, because of all these tariffs 
that are put on unfairly. And it's often with countries that we 
do not have free trade agreements with.
    So I mean, I see your argument, but I see the other side of 
the argument too, and I'd like to have a little discussion 
about that.
    Mr. Kumar. Thank you, Senator.
    First, on the jobs issue, I just want to make the facts 
clear. Over the last 15 months, 2.1 million jobs have been 
added to the economy. Over the last 6 months, 1 million jobs 
have been added.
    And you're absolutely right, the President has made it 
clear: to win the future, we need to out-innovate, we need to 
out-educate, and connect to markets.
    I think we've heard about the need for education, whether 
it's retraining or just training our children to more 
sufficiently and robustly engage in the markets.
    But let's talk to the free trade agreements. This 
Administration has always stood for free and fair trade. And I 
think that's the resonance which is coming from most of the 
panel members today.
    With respect to Korea alone, $95 million in goods alone 
were exported from West Virginia between 2008 and 2010. Of 
this, chemicals and metals find a large part.
    Upon signing, upon the KORUS, the Korea free trade 
agreement, coming into existence, the duties on chemicals in 50 
percent of cases will be immediately phased out, all the 
duties.
    The Chairman. And the duties are up to what level?
    Mr. Kumar. 6.7 percent is the average, but it goes up to 50 
percent in some instances.
    So immediately upon signing, 50 percent would have no 
duties levied. And the balance would go away in 10 years, which 
is exactly the point you made, is we need to engage in the 
world because other countries--trade is not in a vacuum--are 
signing these deals. And we cannot have American industry at a 
disadvantage, because by signing a similar deal with the 
European Union, we will disadvantage ourselves to the extent of 
3.8 percent, in terms of levees and duties alone.
    So doing this is the right thing. If we look at it in the 
context of agriculture, $67 million of agriculture exports 
spanning poultry, eggs, beef, and dairy from this great state 
to Korea happen. On two-thirds of these, duties will 
immediately go away upon signing.
    I only highlight this as an example of being competitive in 
the marketplace and the advantages which could accrue. So it is 
to ensure--and you, Senator Rockefeller, have taken the 
leadership in the several bills, and you referenced 11 more 
coming in the pipeline. Whether it's Strengthening America's 
Trade Laws, Domestic Jobs Innovation Bonus, Manufacturing 
Reinvestment Act, Currency Exchange Rate Transparency Act.
    The Chairman. What, did my staff give you a note?
    [Laughter.]
    Mr. Kumar. Some of us are well-acquainted with your staff. 
Thank you.
    But the fact of the matter is, these are all efforts to 
protect to make sure that while winning in the marketplace by 
engaging, doing so to ensure that not only is it free trade, 
but fair trade happens.
    I have enough statistics on the other ones, too, because we 
need to ensure that American workers have a free and fair and 
level playing field, because we believe that on a level playing 
field, we do extremely well.
    The same thing happens with Colombia, $14 million in 
exports, manufactured goods, between 2008 and 2010; 87 percent 
of duties will be eliminated in the case of the Colombia free 
trade alone; 90 percent of imports from Colombia don't attract 
duty. This is what you referred to their already having the 
benefit. Why should we deprive American companies of having 
similar benefits as we sign these deals?
    All these additional competitiveness-building measures mean 
jobs in this country. Jobs is our number one priority, and 
exports are seen as a means to jobs.
    In crafting the National Export Initiative, the President 
called upon us to double exports in 5 years. That is a 15 
percent compounded annual growth rate. We are currently running 
at 17 percent. We did 17 percent last year; running rate today 
is 17 percent.
    But the President also said, while creating those exports, 
that we needed to support at least 2 million additional jobs, 
which are well-paying jobs, paying 18 percent more than the 
average manufacturing jobs here at home.
    So these are the right things to do, and we need to put in 
place and make sure that the American companies benefit, we 
engage constructively in the marketplace, and in doing that, we 
create good-paying jobs here at home.
    The Chairman. Thank you. We'll give Mr. Moore a chance to 
respond to that, as I'm sure he wants to.
    There's another major problem, which is patents and the 
outright stealing or leveraging or reverse engineering of 
patents. And it's a common practice, particularly in the Asian 
part of the world, but presumably in other parts of the world 
too, where you come with an idea, they buy your company, they 
offer a good price and then they take all of your ideas and 
they become their ideas. And there are much cruder forms of 
doing it, too.
    The stealing of patents. Patents is what we're talking 
about. It's innovation. It's the endgame of science, 
technology, engineering, and math. It's the endgame of all 
that, to come up with a patent, which is an idea which nobody 
else has, which is exclusively yours, which you build a 
business on. And then you start doing business overseas and 
that patent gets taken away from you.
    Can you address that for a moment, before we get to Mr. 
Moore?
    Mr. Kumar. Glad to, Senator.
    Before taking up my job, I spent over a quarter century in 
corporate America running businesses internationally. I know if 
patents and stealing were not an issue, all of us would be 
exporters today.
    So in the real world, we need to ensure that American 
innovation is protected. And we ensure that through every one 
of our bilateral and multilateral conversations with every one 
of our trading partners, not just one or two countries, to 
impress upon them the need to go with the international patent 
regime and the laws which are in place.
    It's not just paying lip service. Is it is ensuring this 
happens.
    The Chairman. But I can't trust that. I spent a lot of time 
out in the world. And people, they say that, but we don't have 
the people to enforce those laws, whether it's free trade laws 
or patent laws or whatever. We talk about it, but we don't do 
it. Because they belong to the WTO, that doesn't mean that they 
suddenly clean up their act. This is the way they've been doing 
business for centuries.
    Mr. Kumar. Senator, if I may just highlight a few of the 
programs or the approaches, in terms of how this is done.
    First is educating our companies on patent protection. And 
that we do through having several education programs, in 
dealing with 19 different countries, how to go about pre-
exporting protection. The Commerce Department has that. We also 
have a website, StopFakes.gov, which indicates what are the 
challenges you're faced with, how to deal with it, and who to 
contact within Commerce who could help.
    In addition to the education inbound, we also do education 
outwards. With our partners, we have the Commercial Law 
Development Program, CLDP, where we actually teach and work 
with judiciary and law enforcement officers in different 
countries on not only the law relating to patents, but how to 
enforce them, because it's enforcement which is key.
    We have, as I said, toolkits, which is on a country-by-
country IPR basis. And we also have a multilingual twist to 
this now. We do this in English, French, and Spanish. And on a 
pilot basis, we're also engaging in Latin America in Peru, 
rolling this out through the Chambers of Commerce there and the 
government.
    So while patent protection will always be important and may 
not be perfect, there are a number of programs educating our 
businesses on how to engage the services which I mentioned 
through the Department of Commerce and the U.S. and Foreign and 
Commercial Service, where we are able to work with you in 
implementing, affecting, and enforcing this with foreign 
governments.
    So the question is extremely important to us. American 
enterprise is just that. We are enterprising and we have 
innovation, and we need to put in place the mechanisms which 
will work day in, day out.
    The Chairman. Manipulation of currency?
    Mr. Kumar. Senator, it's so recent that I've seen your 
Currency Exchange Rate Transparency Act. It's an important one. 
I can't say that I'm expert in that law. It's fresh, as you 
know. And I know that the Administration is taking a look at 
it, and it's an important issue, which we're working on.
    The Chairman. All right, Mr. Moore, you're more than 
patient, but I have to ask, Mr. Gallion, did you ever have any 
problems with patents?
    Mr. Gallion. We've never had an issue with patent, because 
since we are doing so much business internationally, and in 
order to have an international patent, you have to actually 
spell out exactly how you do what you do for the whole world to 
see. We decided it was better to work with the trade secrets--
--
    The Chairman. I didn't realize that.
    Mr. Gallion. Pardon?
    The Chairman. What's an international patent? I wasn't 
aware of that.
    Mr. Gallion. Yes, there's an international patent that can 
be filed as well as a U.S. patent, if you're doing business 
internationally, which the international patent is recognized 
by most countries, just like the U.S. patents are recognized 
here.
    The Chairman. So you spell out everything that you do?
    Mr. Gallion. You spell out exactly how you do whatever it 
is you do, so it's very easy for somebody to take your patent 
and copy it. You are protected for a number of years, but it 
will come out eventually. And it could go to another country, 
and a lot of other issues that come about with it.
    So we've dealt with trade secrets rather than going the 
patent route.
    The Chairman. But by that time you've established yourself, 
and you just beat the competition.
    Mr. Gallion. Right. We make changes periodically to keep 
our product ahead of the game.
    One thing I might add, if I can, on the free trade 
agreements. I understand the issue Mr. Moore has raised about 
jobs going overseas. But it would be my contention that jobs go 
overseas more from a lack of free trade agreements than with 
free trade agreements.
    Without the free trade agreement, companies will have to 
find ways to compete. And one of the ways to compete is to make 
the product in that country.
    So I really think it's more a lack of free trade agreements 
that take jobs overseas than the actual having free trade 
agreements.
    The Chairman. Mr. Moore, the floor is yours.
    Mr. Moore. Thank you, Senator.
    Mr. Kumar, I do appreciate your remarks about where we need 
to be with the training and education.
    The Chairman. Mr. Moore, could you get up to the 
microphone, please?
    Mr. Moore. Your remarks about fair trade, I appreciate 
President Obama's position for that. We follow the 
Administration closely along those lines.
    I want to make one thing perfectly clear from the 
standpoint of the United Steelworkers Union: We are not against 
free trade. We are against unfair free trade. That's what we're 
against.
    You spoke about the chemical. I didn't catch the numbers 
but you said exported over a 2-year period here from the state 
of West Virginia. You know I find those--I just would like to 
know the numbers that that would've been 10 years ago, when in 
this very valley where we sit right now, as you know Senator, 
was known as Chemical Valley. They're gone. All those jobs are 
gone. For the most part, they're gone.
    I sat through a meeting, took a walk around the facility, 
right down here in Nitro, West Virginia, with an international 
CEO of a chemical company. And he said, ``I want to have a 
discussion with you, Randy.'' He said, ``I want to tell you, 
you have done a tremendous job working with us here. I can't 
say anything about your union except good. I can't say anything 
bad. It's all good. Your safety and health, your productivity, 
your people rise to the occasion. But,'' he said, ``we're going 
to China and there's nothing you can do about it.''
    I said, ``Well, why? What do I say to my members?'' He 
said, ``You can't work for what we're taking this business to 
China for.''
    And I've gone through industry after industry after 
industry with that.
    Now, we can't wait. We can't sit around and wait. I 
disagree with you that we have to export all of these jobs to 
be able to save jobs. I don't understand that thinking.
    We can't sit around and wait. We've got to be innovative, 
but just like the three with South Korea, Colombia, and Panama 
that's coming up, the Steelworkers alone have at risk over 
350,000 jobs in those agreements, especially with Korea, as 
they relate to the metals industry, as they relate to the 
automotive industry, and all ancillary jobs that are tied to 
them.
    So my question is, why do we continue going down the same 
path until we can fix the path? I think everybody in this room, 
if I'm hearing right, says we need free trade, but we need fair 
trade. We need fair trade with countries that have humanitarian 
benefits similar as we do.
    Colombia is deplorable. Their record is deplorable for 
their humanitarian benefits.
    Why do we not try to balance out what we have now, learn 
from that, and work from that, and continue to expand our 
trade, because we have to export our products? We'd sure all 
like to see a lot more products made in America here. We want 
them made here. I think there's a great market and a great 
opportunity that still exists in this country for that. But at 
the same time, the new horizon is to sell across the foreign 
waters. It is.
    The Chairman. And that's of concern, either the three of 
you.
    And there's sort of almost a psychological--maybe I'm quite 
wrong on this and tell me if I am--almost like a psychological 
pressure that if you're in the same business as another company 
is, and you see that company go overseas because of the 
advantages of so doing, that there's more pressure on you to do 
that, or on your board to do that.
    So decisions are made for financial reasons and, by virtue 
of that, don't necessarily include worker reasons.
    How would you comment on that? I mean, is there a sense of 
inevitability? There shouldn't be.
    Mr. Kumar. Senator, America is at its best when we're 
inventive. Let's not forget that the motor car, the airplane, 
and yes, even the Internet and the GPS, were all invented here. 
When we have invented, we have prevailed.
    And that's why this Administration places so much emphasis 
on the need to out-innovate the rest of the world and compete.
    Let me reflect on the two questions and the facts, which 
was requested.
    Our exports--goods from West Virginia to Korea--were $95 
million between 2008 and 2010. I referenced that much of the 
duties which are imposed will go away. In a competitive basis, 
Korea is going forward with free trade with other countries. 
And while the U.S. was Korea's biggest trade partner in 2003, 
we today are the fourth largest exporter to that country. We 
just cannot afford to be passive and see it go away.
    On the other hand, through investments in newer businesses, 
in better technologies--and this great state of West Virginia 
has invested $13 billion in new businesses since 2005. You have 
created newer areas of engagement--biometrics, natural gas, 
reserve and exploitation of natural gas.
    These are the ways we're investing in whatever we are 
investing. We have an obligation to the workers, and that is 
through the TAA and otherwise, in terms of their retraining, 
and ensure that our workers are never at a handicap for 
something else.
    Free trade is a reality. Trade is a reality. And it is 
becoming increasingly global.
    American workers have demonstrated time and time again, 
when we have invented, we have prevailed. We need to build and 
put in place programs which help our workers engage and compete 
in their field. And that's precisely what this Administration's 
policies are meant for.
    The Chairman. And Ms. McCauley and Mr. Julian, can we do 
that, because I'm a very strong advocate for TAA, a very, very 
strong advocate. But that in and of itself doesn't solve a 
problem. That allows a family to eat. It doesn't allow them, 
necessarily--you know, you're talking about 40- and 50-year-
olds not being wanted in industries. Maybe that's not entirely 
true.
    I mean, I know that there are a lot of industries in West 
Virginia that are looking for workers now who have skills and 
experience. And they can't get them. So where's my disconnect?
    Mr. Julian. OK, where do I start?
    Back to Mr. Moore's comments about the mentality of whether 
you're going to get a 4-year degree or a 2-year degree, we do 
need to prioritize technical occupations.
    And one of the things that we've try to do at a state-
level, and I've been involved for the last 4.5 years, is to 
clearly communicate to the educational facilities, particularly 
the community colleges, as to the job creation that we're 
seeing, as to their planning, the clustering that we're seeing.
    And we're doing a better job of that, but we need to 
continue to work on communicating to the workforce that either 
is out of school or looking to retrain of the strategy that we 
have for diversification.
    So our community colleges in particular are working hard in 
clustering their strategies toward job development in their 
regions.
    But back to the Secretary's comments, if you look at just a 
few examples that I mention of the $15.2 billion since 2005 
that the development office has been directly involved in 
project management, a Swiss eye company--you're very familiar, 
Senator, with Alcon in Barboursville, just building their 
second facility in West Virginia. They're going to employ over 
800 people, a highly FDA-regulated facility, the world's 
largest producer of intraocular lenses, and their new insertion 
device plant that physicians will use in that surgery here in 
West Virginia.
    Toyota, we're all familiar with their success.
    A little small facility in Beckley, Klockner Pentaplast, a 
German company, you'll find the latest technology in that 
facility in the world, in that specialty plastics facility. 
Again, a foreign investment.
    I mean, this is the reality of the marketplace. And I go 
back to the Secretary's comments of this transitional position 
we're in, in manufacturing, to where if you go back in 
history--what?--34 percent of the employment in the country at 
one point was manufacturing. I think in doing some research 
last week, I think probably in this country we're to maybe 
around 12 percent of jobs in America are in manufacturing.
    But it's clear that the job creation in that sector is 
those that are technology-based that we need to work harder on 
for the skill sets.
    And West Virginia is a part of that. If you just go through 
the list of investments, and I can provide this committee the 
entire list from 2005, many of which are international, that 
this targeted strategy are in those areas that there is a high 
degree of technology in those facilities.
    It's not the old manufacturing of mass production, but 
highly targeted, very niche kinds of investments involving the 
technology. I mean, that's the path we're on.
    I think we have to focus to get our people trained to 
compete as aggressively as we can that, with the idea that the 
skill sets are going to have to change toward the technology 
curve and the intelligence that Secretary Kumar talked about.
    The Chairman. One of the things we have to do, I feel very 
strongly about--not that that should influence your answer--but 
young people don't believe that manufacturing is their future, 
because they think of manufacturing as huge companies and, 
therefore, they can't possibly get into that. Or they think of 
it as something which is of an earlier part of America.
    When I'm thinking of it and spending the next years and 
years on the Commerce Committee emphasizing manufacturing, and 
I want to say to them, don't think like that, that's a 
stereotype on your part. It isn't a problem with the industry. 
It's a stereotype on your part.
    Now, granted that Toyota, they hired workers from, I don't 
know, 40 of our 55 counties.
    Mr. Julian. It's significant.
    The Chairman. It's extraordinary. And they tend to be in 
their 20s and 30s, yes, because the Japanese like to train 
people in their way of doing business. Then they'll send them 
over to Japan for a while. They send groups of them and then 
have them come back and send more. And so you grant that.
    And you go through that factory and you see incredibly 
motivated, highly productive--and actually, one of the first 
things I thought, Mr. Moore, was that a lot of those employees 
had to be ex-coal miners who had been laid off in the coal 
fields because they had very high technology skills, which you 
have to have now to be a coal miner. And the answer was no, 
there are only three. This was back when they only had 300 
people working. There were only three.
    These were basically young people from rural parts of West 
Virginia who just wanted to work. And they heard about this 
plant and they came to this plant. And this plant has never 
stopped expanding, and it still hasn't stopped expanding.
    I mean, they're going have to run out of the northern 
panhandle before they stop expanding, because they won't let 
them expand in Pennsylvania.
    [Laughter.]
    The Chairman. But you understand my point? Please.
    Ms. McCauley. I think that a lot of the young people that 
you're talking about don't really think of themselves as 
manufacturers as much as they think of themselves as 
entrepreneurs. They're creative. They create. They innovate 
something. And they may send it somewhere else to be originally 
manufactured, or they may just start very small, but they're 
not thinking, ``I'm going to be manufacturer.'' They're 
thinking about an entrepreneurial idea, something they can 
innovate and sell.
    And they do become manufacturers. But that's not the way 
they're trained or that's not the thinking of today, much.
    The Chairman. Mr. Julian?
    Mr. Julian. Yes, you have to ask yourself, where does this 
start? And it starts at home, and as a parent, what do we 
communicate to our child? Have we done enough research as to 
what the job opportunities are?
    At the end of the day, we hope our children get jobs, 
right? So the idea that you're not successful in life unless 
you've got a 4-year degree is really not being fair to that 
child. There are a lot of opportunities.
    Let's go back to my remarks that 60 percent of the jobs in 
West Virginia in the near history will be of a 2-year degree or 
some type of certification. I mean, those are the job 
activities we're seeing.
    But that doesn't mean that in that process that you would 
get an associate degree, that you're not on a career path to 
someday have a 4-year degree to be an engineer or whatever.
    So it starts at home, and I think it's a disservice to not 
emphasize the importance of technical occupations. The idea 
that if some child goes to a vo-tech center, they're not 
successful is really a disservice to the country, to the state, 
to the family, to the child.
    We need to emphasize the importance of technical 
occupations. Those are the job creation activities that we're 
seeing. The skill sets are desperately needed.
    You can go right up to Belle. I mean, DuPont is going to be 
filling over the next few years 100-and-some positions of 
chemical operators. Those are going to require high-end skills. 
Does it require a 4-year degree? Most likely not. But I 
guarantee you it's going to be some level of certification or a 
2-year degree requirement.
    And to the point of manufacturing not being emphasized, I 
saw this constantly in my prior job coming back to the 
development office as chief operating officer of Robert C. Byrd 
Institute at Marshall University. I did it for 13 years.
    And how you get through to kids, we used to bring high 
schools in to let them see modern manufacturing. And we'd have 
a pizza for them and have lunch with them. I can't tell you the 
number of kids that I asked, ``Hey, what did you think?'' It's 
like, ``Man, we had no idea. We thought manufacturers were 
still on dirt floors.'' It's high-tech, some of the highest 
technology equipment that you'll see.
    And that is a motivator for children, the technology. If 
you want to get the kids interested, show them the technology. 
That's their life. That's what they live every day.
    And so back to Judy's point, if you look at many, many of 
the manufacturers that are in West Virginia, many of which we 
worked with at the institute over the years, they're small 
manufacturers, single startups that have grown into nice 
companies.
    And the best innovation, the best product development that 
you see is at that level.
    So I think we need to step back and look at what are we 
promoting, what are we emphasizing to make someone feel like 
they're successful. We're doing a lot of that through the CTCs 
and other efforts to focus on technical occupations and 
communicate clearly as to what these future occupations are, 
because they need guidance. That's their market realities.
    The Chairman. You know, a lot comes down to debt, what you 
owe, loans, student loans. And you don't have to be a graduate 
student to have those. You can have those owning a house and 
out of the job.
    One of the things--I just throw this out, because I'm 
working it through in my mind. I'm very interested in health 
care. This is not directly on subject, but it obviously 
interests me.
    We have a problem in this state and in so many other rural 
states where people decide at a young age in college or in 
medical school that they want to be primary care doctors. They 
want to go into rural West Virginia and they want to work with 
people in rural West Virginia. Or they decide they want to be 
OB-GYNs or they decide they want to be geriatricians, work with 
older people. And so they train in that, and then they go to do 
that and they find that they can't make enough money in that 
compared to the amount of money that they owe for having gone 
to medical school.
    And it strikes me that we're just chopping our head off on 
that, because people are going into fields for which they're 
not as well-trained. They're not necessarily happy. And yes, 
you can make a lot more money as an anesthesiologist than you 
can as a geriatrician. But some people want to be geriatricians 
and want to be primary care doctors. And God bless them, that's 
what we need.
    So one of the things I'm thinking about, and I'm going have 
to wait until this country gets a little bit more prosperous 
again, is that the government--I mean, these people have loans 
of up to $200,000, $250,000, that the government comes to the 
point--and don't think of this as socialism, please--just think 
of this as common sense--that the government pays for certain 
kinds of medical education whole cloth.
    So that people who want to go into primary care, who want 
to go into geriatric medicine, can do so because they won't 
have to worry about paying off a loan.
    And that's kind of, you know, sure that's government 
involvement, but maybe that's for the good of us. I got a bill 
passed, which obviously nobody knows anything about, because it 
can't really take effect for another number of years, but it's 
signed, which said that if you stay in something called public 
service--now what is public service? Public service could be--
you could be a teacher, you could be a firefighter, you could 
be an EMT, you could work at a hospital, you could be a nurse. 
I mean, there are endless definitions of what public service 
is. But if you stay in public service for 10 years, upon 
graduation--and it doesn't have to be the same job, you can go 
to four or five different aspects of that job--all of your 
college loans are forgiven by the government.
    You want people in public service? That's one way to get 
it. People stay away from public service because they think if 
they're going to be a social worker, they're going to work with 
kids with autism and all kinds of other problems, they stay 
away from it, because they can't afford to, but they want to.
    So incentives are important. They're very important in 
guiding decisionmaking for younger people and for people beyond 
that.
    So I don't buy the fact that young people should turn away 
from manufacturing. I'm switching again, but I don't buy that 
fact.
    I'm buying the fact that they are, but I don't buy the fact 
that they should. And I think it's part of our responsibility, 
and part of the reasons that we're having this hearing is to 
get the word out there that manufacturing is good. And yes, 
we've lost a third of our manufacturing jobs, and so have a lot 
of other states. But that doesn't mean it has to be a permanent 
situation.
    So I think that's what we ought to be focused on, bring 
parts of our traditional economy back, buttressed by an entire 
new generation of people who understand the world, who 
understand technology in ways that we never did, and bet on 
them.
    And yes, do some free trade agreements and don't do others, 
maybe depending upon the country and some of their practices.
    But you know, we have to take risks. We have to get out of 
our ideologies a little bit. And this is part of what the 
modern world is about.
    Now look, I'm turning into a preacher, and I don't mean to 
do that.
    [Laughter.]
    The Chairman. But I liked it.
    [Laughter.]
    The Chairman. Look, I haven't gotten into--and you have a 
1:30 appointment, do you not?
    Mr. Kumar. Yes, sir.
    The Chairman. I haven't gotten into the effect on small 
towns, the Century Aluminum, Alcan, 650 workers.
    There was an extraordinary story--did any of you see it out 
there in the audience, in USA Today, about Ravenswood? It's an 
extraordinary story.
    Let's print it up and make it available. How do we make it 
available? Well, we've got your names. That's how we make it 
available.
    [Laughter.]
    The Chairman. I mean all of you there.
    But it was an extraordinary story of what happens to a 
community when somebody makes the decision they're going to 
shut down and move overseas, or they're going to shut down and 
move somewhere else. And it's a cruel story. It's a 
heartbreaking story, but it's a real story. And we have to deal 
with that, as part of all of this.
    Mr. Kumar and Ms. McCauley, I was going to ask you what can 
your agencies do to help small, struggling communities, but 
I've decided that's not a fair question at this point, because 
there's so much to do.
    What I think we ought to understand is that--and I'm going 
to bring this hearing to a close--is that manufacturing, 
adjusting ourselves to training our skill sets, taking the 
enormous advantage that our young people have because of their 
technical ability and their interest in innovation and 
technology anyway, and thus the America COMPETES Act and all 
the emphasis that's going to be put on math and science and 
engineering and technology, so that science teachers and math 
teachers in high schools are trained to be science and math 
teachers. They're not somebody brought in from some other 
field.
    We have to have that. We have to stay up with the rest of 
the world. And it's actually a very exciting prospect, because 
America was on top. We still are on top on a lot of things. 
We're still the biggest economy. But we're facing pressure, and 
we've got a lot of economic problems right now, and so does the 
rest of the world. Ours just seem worse to us, because they 
are.
    But you don't quit because times are bad. You don't quit 
because you only have two SBA people as opposed to 15. You 
don't quit. That's when you have to work harder.
    Any closing comments from the witnesses?
    Mr. Gallion, you look like you have something you want to 
say.
    Mr. Gallion. I really have nothing else to add, at this 
point in time, but I was just agreeing with your comments, sir.
    The Chairman. You see, that's Wayne County Mr. Gallion, 
see?
    [Laughter.]
    The Chairman. Short and to the point, very direct. Moving 
right down.
    Mr. Moore?
    Mr. Moore. Thank you, Senator. I do appreciate an 
opportunity again today to tell you that we appreciate being 
here.
    And there is thriving industry here in West Virginia that 
the Steelworkers work with, and not very far from here, that 
need your help, and we need your committee's help to help us 
open some doors to further expand some export opportunities 
that we do have, especially in the aluminum industry. We'd 
welcome the opportunity to work with you with that. Thank you.
    The Chairman. Thank you.
    Mr. Julian?
    Mr. Julian. Senator, I want to thank you for bringing 
attention to manufacturing. It has been a part of my career 
entirely. And I'll say that any way that we can help you fight 
the good fight, we're here to help.
    Manufacturing has been a part of our history. It will 
continue to be. As I indicated, it's a part of our economic 
development strategy.
    We know the productivity and the quality of our people. We 
are seeing success and our foot is on the accelerator, so any 
help that you can bring to make sure that our partnership 
resources are there, workforce training and all the other 
efforts, we thank you.
    And, again, anything we can do to help you, all you need to 
do is just let us now.
    The Chairman. What occurs to me is the question of, are we 
living up to our obligations to our people? And I think right 
now the answer is no. And, therefore, it becomes important for 
us to turn that around, and that's what this hearing is for.
    Mr. Julian. As you go through the budget discussions, 
hopefully there'll be a surgical knife to make sure that we 
don't cut fundamental programs that are important on a daily 
basis that I mentioned before, that as we work to retain and 
expand and attract investment that are so critical.
    But your ideas, for example, on workforce training and the 
loan issue. I mean, that's the kind of thinking, I think 
outside of the box, that need to be thought about, because 
would you rather do that or pay unemployment? It's an 
investment.
    And if you can get an industrial policy and a workforce 
policy that thinks a little differently, that helps us compete, 
as the Secretary indicated, for those manufacturing jobs with 
the intelligence, the knowledge, the technology. That's where 
the market is moving, that should be our strategy.
    So aligning those policies I think are very critical for 
the United States and, importantly, West Virginia.
    Thank you.
    The Chairman. Do you know what it would cost if the federal 
government underwrote the education of doctors? About $2 
billion a year, maybe a little bit more.
    So it's a radical idea, but is it a wrong idea? And what is 
it that we pay and lose in the way of people who don't get 
health care, because we don't do that, because people decide to 
do something else, and they're not where they're needed.
    So everything is a tradeoff of ideas.
    Ms. McCauley?
    Ms. McCauley. Thank you, Senator Rockefeller.
    I think my main question would be, tell me your ideas on 
what we need to do to better live up to our obligations?
    The Chairman. You want me to do that right now?
    [Laughter.]
    The Chairman. As I'm trying to close down the hearing?
    [Laughter.]
    Ms. McCauley. OK, just your top two.
    The Chairman. I think the main thing is that you don't get 
down.
    Ms. McCauley. OK.
    The Chairman. And that we are going through a horrible 
budget crisis, and heavens knows what's going to happen with 
this debt ceiling thing and the amendments that are attached to 
that, if they're going to be attached. But we face a very tough 
number of years coming. And my attitude toward that is, OK, so 
we've been there before, we'll be there again.
    And we keep fighting, because we believe in our people. We 
believe in what we can do to help.
    Ms. McCauley. Thank you.
    The Chairman. Mr. Kumar?
    Mr. Kumar. Thank you, Senator Rockefeller, for the 
privilege of testifying to this committee. Not a day goes by as 
an immigrant, as someone who immigrated to this country, 
without my realizing that I have the opportunity to live the 
American dream.
    But I do believe, as we spoke on manufacturing, as we spoke 
on the greatness of this country and what it has to offer, that 
we should never forget that 95 percent of the world's 
population lives outside the United States. Our obligation is 
to train and put in place mechanisms for our companies in the 
United States to constructively export and engage with those 
countries.
    That's why I took up the job I do. And I have 1,500 
passionate people who work with me to connect American 
businesses to those opportunities.
    Here in West Virginia, as I reflected on manufacturing, 
there are three companies I'd like to showcase, because we do 
not showcase our successes as we ought to.
    All these three--one of them testified, Mr. Gallion here--
are in the manufacturing field. And they engage. They may not 
be the sexy sectors of manufacturing, but they're commercially 
important, viable sectors.
    FCX, working with our USEAC, was able, through counseling 
some time ago, at the Farnborough aviation show, to connect and 
land a $300,000 export business.
    Swanson in Morgantown, who is a manufacturer and repair 
service of hydraulic cylinders in offshore oil, worked with us 
on a Gold Key Service and International Company Profile, and as 
a consequence, in October last year, landed an initial $1 
million order.
    Now, the big companies generally tend to get the press but 
unknown are the several smaller companies who are the 
foundation of their success. GE Aircraft Engineering works with 
Star Technology adhesives, which have its manufacturing 
facilities here in West Virginia. Through our advocacy center, 
107 F414 engines were exported--a contract to export was signed 
with the Department of Defense of the Indian Government.
    In this export, 492 different parts are sourced from Star 
facilities in West Virginia. Yes, they manufacture screws, 
ducts, and several other parts which go into those engines.
    These are the foundations which build aircraft engines. 
These companies exist here and in many ways would be the unsung 
heroes.
    I made a commitment, as I went through my confirmation 
hearings with your committee, to say that the U.S. and Foreign 
Commercial Service is, like these manufacturers, the best-kept 
secret. And I committed to you that we will make it the least-
kept secret.
    I chose to do that not through marketing, branding, and 
other such initiatives, but through community engagement, by 
seeding our people in the communities where these exporters and 
the companies exist, to work with the other witnesses and folks 
such as these who exist to work with American businesses every 
day.
    We sometimes forget to showcase those successes, and that's 
what can come in the way. I believe we can. I know that the 
budgets are tough. We need feet on the ground, and people on 
the ground can connect inventive American businesses to the 95 
percent of consumers who live outside these United States. So I 
thank you very much.
    The Chairman. Thank you, sir.
    And I would say to everyone in attendance, we welcome any 
ideas you may have, and the record of this hearing will be held 
open for 10 days for you to write thoughts that you may have as 
a result of this hearing, or thoughts that you had coming into 
this hearing which were not addressed at this hearing. And 
there will be plenty of those. But just thoughts that you have.
    That's the greatest source of information. It's not just 
state, local, federal, et cetera, government and entrepreneurs. 
It's what people think, ideas that people have. And I see some 
very smart people in this audience, so we welcome your ideas, 
and I expect to have a large stack of them before long.
    With that said, I'm grateful to everyone. I'm grateful to 
Martinsburg, Parkersburg, and Wheeling for attending this 
hearing also, through live video.
    And you've done, I think, a real service to kicking off the 
idea of not giving up in West Virginia and not giving up on 
manufacturing, not giving up on people, but assuming that if we 
do the right things together that life will be much better. 
That's what we're here for.
    This hearing is adjourned.
    [Whereupon, at 12:45 p.m., the hearing was adjourned.]

                                  
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