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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 

( 

(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

JOHN D. ROCKEFELLER IV, West Virginia, Chairman 

DANIEL K. INOUYE, Hawaii 

JOHN F. KERRY, Massachusetts 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK R. LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas 

CLAIRE MCCASKILL, Missouri 

AMY KLOBUCHAR, Minnesota 

TOM UDALL, New Mexico 

MARK WARNER, Virginia 

MARK BEGICH, Alaska 

KAY BAILEY HUTCHISON, Texas, Ranking 

OLYMPIA J. SNOWE, Maine 

JIM DEMINT, South Carolina 

JOHN THUNE, South Dakota 

ROGER F. WICKER, Mississippi 

JOHNNY ISAKSON, Georgia 

ROY BLUNT, Missouri 

JOHN BOOZMAN, Arkansas 

PATRICK J. TOOMEY, Pennsylvania 

MARCO RUBIO, Florida 

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 

(III) 

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 

(1) 

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 

2 

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. 

3 

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. 

4 

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, bestpaying 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. 

5 

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 

6 

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 

7 

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 

8 

— 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 worldwide 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 mediumsized 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 

9 

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. 

10 

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 

11 

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) 

12 

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 startup 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 SBAbacked 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. 

13 

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 ValVerDate Nov 24 2008 13:00 Mar 20, 2012 Jkt 073381 PO 00000 Frm 00017 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\73381.TXT SCOM1 PsN: JACKIE
14 

ley, 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 

15 

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. 

16 

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. 

17 

• 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 millionsquare-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. 

18 

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. 

19 

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 

20 

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 

21 

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. 

22 

Economic success is not measured simply by the price of a flatscreen 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 

23 

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 

24 

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. 

25 

• 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 

26 

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. 

27 

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. 

28 

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 

29 

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.’’ 

30 

President Clinton—‘‘World trade, whether conducted in person, on paper, or online, 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. 

Year 

U.S. 

Export Growth 

West Virginia 

Export 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 competVerDate Nov 24 2008 13:00 Mar 20, 2012 Jkt 073381 PO 00000 Frm 00034 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\73381.TXT SCOM1 PsN: JACKIE
31 

itor 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. 

32 

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. 

33 

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 

34 

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 

35 

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 solvVerDate Nov 24 2008 13:00 Mar 20, 2012 Jkt 073381 PO 00000 Frm 00039 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\73381.TXT SCOM1 PsN: JACKIE
36 

ing 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 

37 

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-soelderly 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. 

38 

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. 

39 

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 wellpaying 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. 

40 

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 

41 

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. 

42 

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 

43 

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? 

44 

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, thereVerDate Nov 24 2008 13:00 Mar 20, 2012 Jkt 073381 PO 00000 Frm 00048 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\73381.TXT SCOM1 PsN: JACKIE
45 

fore, 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. 

46 

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. 

47 

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 welltrained. 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. 

48 

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? 

49 

[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. 

50 

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 

51 

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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