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79–794 PDF 2013

H.R. 5865, THE AMERICAN MANUFACTURING COMPETITIVENESS ACT OF 2012, AND H.R. 5859, 

A BILL TO REPEAL AN OBSOLETE PROVISION 

IN TITLE 49, UNITED STATES CODE, REQUIRING 

MOTOR VEHICLE INSURANCE COST REPORTING 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, 

AND TRADE 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

JUNE 1, 2012 

Serial No. 112–146 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

CLIFF STEARNS, Florida 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

Vice Chairman 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN P. BILBRAY, California 

CHARLES F. BASS, New Hampshire 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

MARY BONO MACK, California 

Chairman 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

CLIFF STEARNS, Florida 

CHARLES F. BASS, New Hampshire 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

G.K. BUTTERFIELD, North Carolina 

Ranking Member 

CHARLES A. GONZALEZ, Texas 

JIM MATHESON, Utah 

JOHN D. DINGELL, Michigan 

EDOLPHUS TOWNS, New York 

BOBBY L. RUSH, Illinois 

JANICE D. SCHAKOWSKY, Illinois 

JOHN P. SARBANES, Maryland 

HENRY A. WAXMAN, California (ex officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Mary Bono Mack, a Representative in Congress from the State of 

California, opening statement ............................................................................. 1 

Prepared statement .......................................................................................... 4 

Hon. G.K. Butterfield, a Representative in Congress from the State of North 

Carolina, opening statement ............................................................................... 21 

Hon. Adam Kinzinger, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 22 

Hon. Gregg Harper, a Representative in Congress from the State of Mississippi, opening statement ................................................................................. 23 

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

of Illinois, opening statement .............................................................................. 27 

Hon. Edolphus Towns, a Representative in Congress from the State of New 

York, prepared statement .................................................................................... 108 

WITNESSES

Hon. Daniel Lipinski, a Representative in Congress from the State of Illinois . 27 

Prepared statement .......................................................................................... 30 

Hon. Mike Kelly, a Representative in Congress from the Commonwealth 

of Pennsylvania .................................................................................................... 34 

Prepared statement .......................................................................................... 36 

Phillip Singerman, Associate Director for Innovation and Industry Services, 

National Institute of Standards and Technology, Department of Commerce . 42 

Prepared statement .......................................................................................... 44 

Zach Mottl, Director of Development, Atlas Tool & Die Works ........................... 53 

Prepared statement .......................................................................................... 55 

Mark A. Gordon, Executive Committee Member, Manufacturing Division, National Defense Industrial Association ................................................................. 58 

Prepared statement .......................................................................................... 60 

Deborah L. Wince-Smith, President and Chief Executive Officer, Council on 

Competitiveness ................................................................................................... 66 

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

Jack Fitzgerald, Owner, Fitzgerald Auto Mall ...................................................... 94 

Prepared statement .......................................................................................... 96 

Joan Claybrook, President Emeritus, Public Citizen, and Former Administrator, National Highway Traffic Safety Administration ................................. 98 

Prepared statement .......................................................................................... 101 

Answers to submitted questions ...................................................................... 111 

SUBMITTED MATERIAL

H.R. 5865, A Bill to promote the growth and competitiveness of American 

manufacturing, submitted by Mrs. Bono Mack ................................................. 6 

H.R. 5859, A Bill to repeal an obsolete provision in title 49, United States 

Code, requiring motor vehicle insurance cost reporting, submitted by Mrs. 

Bono Mack ............................................................................................................ 20 

Letter, dated May 31, 2012, from Mitch Bainwol, President and CEO, Alliance 

of Automobile Manufacturers, to Mrs. Bono Mack and Mr. Butterfield, 

submitted by Mr. Harper ..................................................................................... 25 

(1) 

H.R. 5865, THE AMERICAN MANUFACTURING 

COMPETITIVENESS ACT OF 2012, AND H.R. 

5859, A BILL TO REPEAL AN OBSOLETE 

PROVISION IN TITLE 49, UNITED STATES 

CODE, REQUIRING MOTOR VEHICLE INSURANCE COST REPORTING 

FRIDAY, JUNE 1, 2012 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING AND

TRADE, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 9:37 a.m., in room 

2123, Rayburn House Office Building, Hon. Mary Bono Mack 

(chairman of the subcommittee) presiding. 

Members present: Representatives Bono Mack, Blackburn, Harper, Lance, Cassidy, Guthrie, Olson, Pompeo, Kinzinger, Butterfield, 

Gonzalez, Rush, Schakowsky, and Sarbanes. 

Staff present: Paige Anderson, Commerce, Manufacturing, and 

Trade Coordinator; Gary Andres, Staff Director; Charlotte Baker, 

Press Secretary; Michael Beckerman, Deputy Staff Director; Kirby 

Howard, Legislative Clerk; Brian McCullough, Senior Professional 

Staff Member, Commerce, Manufacturing, and Trade; Gib Mullan, 

Chief Counsel, Commerce, Manufacturing, and Trade; Shannon 

Weinberg, Counsel, Commerce, Manufacturing, and Trade; 

Michelle Ash, Democratic Chief Counsel, Commerce, Manufacturing, and Trade; Felipe Mendoza, Democratic Senior Counsel; 

and Will Wallace, Democratic Policy Analyst. 

OPENING STATEMENT OF HON. MARY BONO MACK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mrs. BONO MACK. The subcommittee will please come to order. 

Good morning, all. 

Last year when I became chairman of this subcommittee, I encouraged my colleagues to join me in an effort to make made in 

America matter again. Since then, we have had hearings, forums 

and some really great discussions on ways to keep American jobs 

and create new American jobs. Now it is time to roll up our sleeves 

and to do our job and pass legislation which will help our economy 

to grow and prosper in the years ahead. 

The Chair now recognizes herself for an opening statement. 

2 

Throughout our Nation’s long history, a growing and robust manufacturing sector has helped to make America great. It has been 

a driving force in our economy since the Industrial Revolution. But 

as our Nation has moved from the atomic age to the space age to 

the information age, manufacturing has not kept up, losing nearly 

6 million American jobs since the beginning of the 21st century. 

Aging, rusting and abandoned factories litter the U.S. landscape. 

Statistics show the manufacturing sector was the hardest hit in 

terms of job losses during the Great Recession. While manufacturing accounts for just a tenth of our Nation’s jobs, manufacturing 

suffered a third of our Nation’s job losses. We have a chance now 

to reverse this trend, and I applaud the hard work of Mr. Lipinski 

and Mr. Kinzinger in developing a bipartisan plan for improving 

manufacturing in the United States. 

The American Manufacturing Competitiveness Act of 2012, H.R. 

5865, calls for two presidential reports to Congress outlining a 

strategy for promoting growth, sustainability and competitiveness 

in the manufacturing sector. The reports are due in April 2014 and 

in 2018. 

The act establishes the American Manufacturing Competitiveness Board, consisting of 15 members, five from the public sector, 

including two Governors, and 10 from the private sector. The five 

public appointments are made by the President while the 10 private sector members are appointed by the House and Senate. The 

Board would be co-chaired by the Secretary of Commerce and one 

of the private sector members. 

The duties of the Board are, one, to advise the President and 

Congress on manufacturing issues; two, conduct a rigorous analysis 

of the manufacturing sector; and, three, develop a national competitiveness strategy which would be made available for public 

comment and submitted to the President. The Board will then develop and publish for public comment a draft manufacturing strategy based on its analysis and any other information the Board determines is appropriate. This strategy will include short-term and 

long-term goals for improving the competitiveness of U.S. manufacturing as well as recommendations for action. 

The second bill before us today, H.R. 5859, repeals an obsolete 

provision in the United States Code requiring motor vehicle insurance cost reporting. I also want to commend Mr. Harper and Mr. 

Owens for their bipartisan work on this legislation. 

Here is the problem: In 1993, NHTSA issued a final rule requiring new car dealers to make available to buyers a booklet containing the latest information on insurance costs. The information 

is updated by NHTSA annually based on date from the Highway 

Loss Data Institute. The information required by this regulation is 

rarely sought by consumers and its value is highly questionable. 

Insurance premiums are based primarily on factors that are unrelated to the susceptibility of damage to a particular vehicle, including the driver’s age, driving record, location and miles driven. Additionally, a recent survey of 815 members of the National Automobile Dealers Association reported 96 percent of its dealers have 

never been asked by a customer to see the insurance cost booklet 

that is at issue. 

3 

Clearly this is yet another example of where the cost of a Federal 

regulation outweighs its potential benefits. As a nation competing 

in a tough global economy, we simply can’t keep doing business 

this way. 

America is at an important crossroads right now. One direction, 

lined by job-killing regulatory hurdles, a punitive Tax Code and indecisive political leadership, will lead ultimately to a further erosion of our manufacturing base and lost prosperity for future generations of Americans. The other direction, where smart policies 

and smart minds eventually intersect, could lead instead to resurgence in U.S. manufacturing, putting millions of Americans back to 

work again and breathing new life into the beleaguered middle 

class. 

Both of the bills being discussed today are a step in the right direction, and as chairman of the subcommittee I plan to bring them 

up for favorable consideration in the very near future. 

Now I am happy to recognize the gentleman from North Carolina, Mr. Butterfield, for 5 minutes. 

[The prepared statement of Mrs. Bono Mack and the proposed 

legislation follow:] 

4 


79794.001

Statement of the Honorable Mary Bono Mack 

Subcommittee on Commerce, Manufacturing, and Trade 

Legislative hearing on H.R. _, the" American Manufacturing 

Competitiveness Act of 2012," and H.R. _, to repeal an obsolete 

provision in title 49, United States Code, requiring motor vehicle 

insurance cost reporting 

June 1, 2012 

(As Prepared/or Delivery) 

Throughout our nation's long history, a growing and robust manufacturing sector has 

helped to make America great. It's been a driving force in our economy since the 

Industrial Revolution. 

But as our nation has moved from the Atomic Age to the Space Age to the Information 

Age, manufacturing has not kept up, losing nearly 6 million American jobs since the 

beginning of the 21" century. Aging, rusting and abandoned factories litter the U.S. 

landscape. 

Statistics show the manufacturing sector was the hardest hit in terms of job losses during 

the Great Recession. While manufacturing accounts for just a tenth of our nation's jobs, 

manufacturing suffered a third of our nation's job losses. 

We have a chance now to reverse this trend, and I applaud the hard work of Mr. Lipinski 

and Mr. Kinzinger in developing a bipartisan plan for improving manufacturing in the 

United States. 

The American Manufacturing Competitiveness Act of 2012, H.R. 5865, calls for two 

Presidential reports to Congress, outlining a strategy for promoting growth, sustainability 

and competitiveness in the manufacturing sector. The reports are due in April 2014 and in 

2018. 

The Act establishes the American Manufacturing Competitiveness Board consisting of 15 

Members, five from the public sector, including two Governors, and ten from the private 

sector. The five public appointments are made by the President, while the ten privatesector members are appointed by the House and Senate. The Board would be co-chaired 

by the Secretary of Commerce and one of the private-sector membcrs. 

The duties of the Board are to: (1) advise the President and Congress on manufacturing 

issues; (2) conduct a rigorous analysis of the manufacturing sector; and (3) develop a 

national competitiveness strategy, which would be made available for public comment 

and submitted to the President. 
5 


79794.002

The Board will then develop and publish for public comment a draft manufacturing 

strategy based on its analysis and any other information the Board determines is 

appropriate. 

This strategy will include short-term and long-term goals for improving the 

competitiveness of U.S. manufacturing as well as recommendations for action. 

The second bill before us today, H.R. 5859, repeals an obsolete provision in the United 

States Code, requiring motor vehicle insurance cost reporting. I also want to commend 

Mr. Harper and Mr. Owens for their bipartisan work on this legislation. 

Here's the problem: In 1993, NHTSA issued a final rule, requiring new car dealers to 

make available to buyers a booklet containing the latest information on insurance costs. 

The information is updated by NHTSA annually based on data from the Highway Loss 

Data Institute. 

The information required by this regulation is rarely sought by consumers and its value is 

highly questionable. Insurance premiums are based primarily on factors that are unrelated 

to the susceptibility of damage to a vehicle, including the driver's age, driving record, 

location, and miles driven. 

Additionally, a recent survey of815 members of the National Automobile Dealers 

Association reported 96 percent of its dealers had never been asked by a customer to see 

the insurance cost booklet that is at issue. 

Clearly, this is yet another example of where the cost of a federal regulation outweighs its 

potential benefit. As a nation, we simply can't keep doing business this way. 

America is at an important crossroads right now. One direction -lined by job-killing 

regulatory hurdles, a punitive tax code and indecisive political leadership - will lead 

ultimately to a further erosion of our manufacturing base and lost prosperity for future 

generations of Americans. 

The other direction - where smart policies and smart minds eventually intersect - could 

lead, instead, to a resurgence in U.S. manufacturing, putting millions of Americans back 

to work again and breathing new life into the beleaguered Middle Class. 

Both of the bills being discussed today are a step in the right direction, and as Chairman 

of this subcommittee, I plan to bring them up for favorable consideration in the very near 

future. 
6 


79794.003

F:ICBO\RPT\H5865_CPT.XML II.hC. 

COMMITTEE PRINT 

SnOWING 'rnE TEXT OF H.R. 5865 AS FORWARmJD BY THE SUBCOMlIUT'fEE 

ON COMMERCE, J.\\.fu"fIWAC'I'URING, AND TRADE, ,TUNE 7, 2012 

112THCONGRESS H R 5865 2D SESSION 

• • 

To promote the growth and competitiveness of American manufacturing. 

IN THE HOUSE OF REPRESENTATIVES 

MAy 30, 2012 

lVIr. LIPINSKI (for himself and lVIr. KINZINGER of Illinois) introduced the following bill; which was referred to the Committee on Energy and Commerce, amI in addition to the Committee on the Budget, for a period to 

be subsequently determined by the Speaker, in each case for consideration of such prO\~sioJls as fall within the jurisdiction of the committee 

concerned 

A BILL 

'I'o promote the growth and competitiveness of American 

manufacturing. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the "American Manufac5 turing Competitiveness Act of 2012". 

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2 

1 SEC. 2. NATIONAL MANUFACTURING COMPETITIVENESS 

2 STRATEGY. 

3 Not later than June 1, 2014, and June 1, 2018, the 

4 President shall submit to Congress, and publish on a pubS lic website, a strategy to promote growth, sustainability, 

6 and competitiveness in the Nation's manufacturing sector, 

7 create well-paid, stable jobs, enable innovation and invest8 ment, and support national security. 

9 SEC. 3. MANUFACTURING COMPETITIVENESS BOARD. 

10 (a) IN GENERAL.-On the first day of each of the 

11 two Presidential terms following the date of enactment of 

12 this Act, there is established within the Department of 

l3 Commerce an American Manufacturing Competitiveness 

14 Board. 

15 (b) MEMBERs.-Members of the Board shall be ap16 pointeel as follows: 

17 (1) PUBIJIC SEC'l'OR MEMBERS.-The President 

18 shall appoint to the Board19 (A) the Secretary of Commerce; 

20 (B) Governors of two States, from elif21 ferent polit.ical parties, after consult.ing with the 

22 National Governors Association; and 

23 (C) two other members who are current or 

24 former officials of the executive branch of gov25 ernment. 

26 (2) PRIVATE SECTOl~ MEMBERS.-

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H.L.C. 

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(A) CRITERIA.-Ten individuals from the 

private sector shall be appointed to thc Board 

in accordance with subparagraph (B) from 

among individuals with expericnce in the areas 

of-

(i) managing manufacturing companies, including businesses with fewer than 

100 employees; 

(ii) managing supply chain providers; 

(iii) managing labor organizations; 

(iv) workforce development; 

(v) finance; 

(vi) analyzing manufacturing policy 

and competitiveness; 

(vii) conducting manufacturing-related 

research and development; and 

(viii) the defense industrial base. 

(B) ApPOINTMENT.-'rhe Speaker of the 

House of Representatives and the majority 

leader of the Senate shall each appoint 3 members to the Board. The minority leader of the 

House of Representatives and the minority 

leader of the Senate shall each appoint 2 members to the Board. 

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4 

(c) TERMINATION.-The Board shall terminate 60 

2 days after submitting its final report pursuant to section 

3 4(c)(3). 

4 (d) CO-GHAIRlVIEN.-'l'he co-chairmen of the Board 

5 shall be the Sccretary of Commercc (or the designee of 

6 the Secretary) and a member elected by the private sector 

7 members of the Board appointed pursuant to subsection 

8 (b)(2). 

9 (e) SUBGROUPs.-The Board may convene subgroups 

10 to address particular industries, policy topics, or other 

11 matters and to take advantage of the expertise of other 

12 individuals and entities in matters to be addressed by the 

13 Board. Such subgroups may include members rep14 resenting any of the following: 

15 (1) Other Federal ag'encies, as the co-chairmen 

16 determine appropriate. 

17 (2) State, tribal, and local governments, 

18 (3) 'l'he private sector, 

19 (f) QUOIwM.-Ten members of the Board shall con20 stitute a qUOl1lm for the transaction of business but a less21 er number may hold hearings with the agreement of the 

22 co-chairmen. 

23 (g) MEETINGS AND HEARINGS.-

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1 (1) 'rIMING AND FREQUENCY OF MEETINGS.-

2 'rhe Board shall meet at the eall of' the co-chairmen, 

3 and not fewer than 2 times. 

4 (2) PUDI"IC HEARINGS REQUIRED.-'rhe Board 

5 shall convene public hearings to solicit views on the 

6 Nation's manufacturing sector and recommendations 

7 for the national manufacturing competitiveness 

8 strategy. 

9 (3) IJOCATIONS OF PUBUC HEARINGS.-The 10-

10 cations of public hearings convened under paragraph 

11 (2) shall ensure the inclusion of multiple regions and 

12 industries of the manufacturing sector. 

13 (h) AI>PLICATION OF FEDERAL ADVISORY COM14 MITTEE ACT.-The Federal Advisory Committee Act (5 

15 U.S.C. App.), other than section 14 of such Act, shall 

16 apply to the Board, including any subgroups established 

17 pursuant to subsection (e). 

18 SEC. 4. DUTIES OF THE BOARD. 

19 (a) IN GENERAL.-The Board shall20 (1) advise the President on issues affecting the 

21 Nation's manufacturing sector; 

22 (2) conduct a comprehensive analysis in accord23 ance with subsection (b); and 

24 (3) develop a national manufacturing competi25 tiveucss strategy in accordance with subsection (c). 

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6 

(b) COMPREHENSIVE A.,."AINSIS.-In developing a na2 tional manufacturing competitiveness strategy under sub3 section (c), the Board shall conduct a comprehensive anal4 ysis of thc Nation's manufacturing sector, taking into conS sideration analyses, data, and other information previously 

6 compiled, as well as relevant reports, plans, or rec7 ommendations issued by Federal agencies, Federal advi8 sory boards, and the private sector. Such analysis shall, 

9 to the extent feasible, address10 (1) the value and role of manufacturing in the 

11 Nation's economy, security, and globalleadershipi 

12 (2) the current domestic and international emi13 ronment for the Nation's manufacturing sector, and 

14 any subsector identified by the Board as warranting 

15 special study for competitiveness or for comparison 

16 purposes; 

17 (3) Federal, State, tribal, and local policies, 

18 programs, and conditions that affect manufacturing; 

19 (4) a summary of the manufacturing policies 

20 and strategies of the Nation's 10 largest trading' 

21 partners, to the extent known; 

22 (5) new, emerging, or evolving markets, tech23 nologies, and products for which the Nation's manu24 facturers could compete; 

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7 

(6) the identification of redundant or ineffective 

2 government programs related to manufacturing, as 

3 well as any programs that have improved manufac4 turing competitiveness; 

5 (7) the short- and long-term forecasts for the 

6 Nation's manufacturing sector, and forecasts of ex7 pected national and international trends and factors 

8 likcly to affect such sector in the future; 

9 (8) the manner in which I<"ederal agencies share 

10 information and views with respect to the effects of 

11 proposed or active regulations or other executive ac12 tions on the Nation's manufacturing sector and its 

13 workforce; 

14 (9) the recommendations of the Department of 

15 Commerce Manufacturing Council, whether such rec16 ommendations have becn implemented, and thc ef17 fect of such recommendations; and 

18 (10) any other matters affecting the growth, 

19 stability, and sustainability of the Nation's manufac20 turing sector or the competitiveness of the Nation's 

21 manufacturing environment, particularly relative to 

22 that of other nations, ineluding23 (A) workforce skills, gaps, and develop24 ment; 

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(B) prQductivity and the extent to' which 

natiQnal eCQnQmic statistics related to' manufacturing accurately measure manufacturing Qutput and prQductivity growth; 

(C) trade PQlicy and balance; 

(D) energy PQlicy, fQreeasts, and develQPments; 

(E) expenditures Qn basic and applied research related to' manufacturing technQIQgy; 

(F) prQgrams to' help small and mid-sized 

manufacturers becQme mQre cQmpetitive; 

(G) the impact Qf Federal statutes and 

regulatiQns; 

(H) the impact Qf dQmestic and internatiQnal mQnetary PQlicy; 

(1) the impact Qf taxatiQn; 

(J) financing and investment, including 

challenges assQciated with cQmmercializatiQn 

and scaling up Qf prQduction; 

(K) research and development; 

(1;) jQb creation and emplQyment disparities; 

(JVI) levels Qf dQmestic prQductiQn; 

(N) adequaey Qf the industrial base for 

maintaining natiQnal security; 

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9 

(0) protections for intellectual property 

2 and the related policies, procedures, and law on 

3 technology transfer; and 

4 (P) customs enforcement and counter5 feiting. 

6 (c) NATIONAL MANUFACTURING COMPETITIVENESS 

7 STRATEGY.-

8 (1) DEVELOPMENT.-The Board shall develop a 

9 national manufacturing competitiveness strategy, 

10 based Oll11 (A) the results of the comprehensive anal12 ysis conducted under subsection (b); and 

13 (B) any other information, studies, or per14 spectives that the Board determines to be ap15 propriate. 

16 (2) GOALS AND RECOMMENDATIONS.-

17 (A) GOAI,s.-The Board shall include in 

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June 7, 2012 (11 :08 a.m.) 

the national manufacturing competitiveness 

strategy short- and long-term goals for improving the competitivcness conditions of the Nation's manufacturing environment, taking into 

account the matters addressed in the comprehensive analysis conducted under subsection 

(b). 

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II.he. 

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(B) RECOMMENDA1'IONs.-The Board 

shall include in the national manufacturing 

competitiveness strategy recommendations for 

achieving the goals provided under subparagraph (A). Such recommendations may propose-

(i) actions to improve manufacturing 

competitiveness to be taken by the President, Congress, State and local governments, and the private sector; 

(ii) actions to improve government 

policies and coordination among entities 

developing such policies; 

(iii) the consolidation or elimination of 

government programs; 

(iv) actions to improve government 

interaction with the manufacturing sector 

and communication regarding the effects 

of proposed or active government regulations or other executive actions on the 

manufacturing sector and its workforce; 

(v) the reform or elimination of regulations that place the United States manufacturing sector at a disadvantage relative 

to other nations; and 

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(vi) actions to reduce business uncertainty, including, where appropriate, finalization of regulations applicable to manufacturers. 

(3) REPORT.-

(A) DRAF'l'.-Not later than 150 days before the date on which the President is required 

to submit to Congress a report containing a national manufacturing competitiveness strategy 

under section 2, the Board shall publish in the 

Pederal Regist.er and on a public website a 

draft report containing a national manufacturing competitiveness st.rategy. At t.he same 

time, t.he Board shall make available to the 

public the comprehensive analysis required by 

subsection (b) and any underlying data or matcrials necessary to an understanding of the 

conclusions reached. 

(B) PuBLIC COMMENT; REVIEw AND REVISION.-A draft rcport published under subparagraph (A) shall remain available for public comment for a period of not less than 30 days from 

the date of publication. The Board shall review 

any comments received regarding such draft re-

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port and may revise the draft report based 

upon those comments. 

(C) PUBUCATION.-Not later than 60 

days before the date on which the President is 

required to submit to Congress a report containing a national manufacturing competitiveness strategy under section 2, the Board shall 

submit to the President for review and revision 

a final report containing a national manufacturing competitiveness strategy, and shall publish such final report on a public website. 

(D) CONTENTS OF REPOHT.-The final report submitted under subparagraph (C) shall, 

to the extent feasible, include-

(i) an estimate of the short- and longterm Federal Government outlays and revenue changes necessary to implement the 

national manufacturing competitiveness 

strategy and an estimate of savings that 

may be derived from implementation of the 

national manufacturing competitiveness 

strategy; 

(ii) a detailed explanation of the 

methods and analysis used to determine 

the estimates ineluded under elause (i); 

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(iii) recommendations regarding how 

to pay for the cost of implementation estimated nnder clause (i); and 

(iv) a plan for how the recommendations included in the report will be implemellted and who is or should be responsible for the implementation. 

8 (d) CONSULTATION; NONDUPI,ICATION OF EF9 FORTs.-The Board shall consult with and not duplicate 

10 the efforts of the Defense Science Board, the President's 

11 Council of Advisors on Science and Technology, the Manu12 faeturing Council established by the Department of Com13 merce, the Eeonomic Security Commission, the Labor Ad14 visory Committee for Trade Negotiations and rl'rade PollS iey, and other relevant governmental entities conducting 

16 any activities related to manufacturing. 

17 SEC. 5. REQUIREMENT TO CONSIDER NATIONAL MANUFAC· 

18 TURING COMPETITIVENESS STRATEGY IN 

19 BUDGET. 

20 In preparing the budget for each of the fiscal years 

21 from fiseal year 2016 through fiseal year 2022 under sec22 tion 1105(a) of title 31, United States Code, the President 

23 shall include information regarding the eonsisteney of the 

24 budget with the goals and recommendations ineluded in 

25 the national manllfaetllring competitiveness strategy. 

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F:ICBO\RPT\H5865_CPT.XML I-I.L.C. 

14 

SEC. 6. DEFINITIONS. 

2 In this Act: 

3 (1) BOAHD.-The term "Board" means4 (A) during the first Presidential term that 

5 begins after the date of enactment of this Act, 

6 the American Manufacturing Competitiveness 

7 Board established by section 3(a) on the first 

8 day of such term; and 

9 (B) during the second Presidential term 

10 that begins after the date of enactment of this 

11 Act, the .i'unerican Manufacturing Competitive12 ness Board established by section 3(a) on the 

13 first day of such term. 

14 (2) PRIVATE SECTOR-The term "private sec15 tor" includes labor, industry, industry associations, 

16 academia, universities, trade associations, nonprofit 

17 organizations, and other appropriate nongovern18 mental groups. 

19 (3) STATE.-The term "State" means each 

20 State of the United States, the Dist.riet of Columbia, 

21 and each commonwealth, territ.ory, or possession of 

22 the United States. 

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79794.017

A()THENTI<'::ATEDfj 

U.\> GOVERNMENT 

INFORMATION 

GPO 

112m CONGRESS H R 5859 2D SESSION 

• • 

To repeal an obsolete provision in title 4B, United States Code, requiring 

motor vehicle insurance cost reporting. 

IN nm HOUSE OF REPRESENTA'fIVES 

MAY 30, 2012 

Mr. ILmPElt (for himself and Mr. OWENS) introduced the following bill; which 

was referred to the Committee on gnergy and Commerce 

A BILL 

To repeal an obsolete provision in title 49, United States 

Code, requiring motor vehicle insurance cost reporting. 

Be it enacted by the Senate and House of Representa2 lives of the United States of America in Cong-ress assembled, 

3 SECTION 1. REPEAL. 

4 Subsection (c) of section 32302 of title 49, United 

5 States Code, is repealed, and any regulations promulgated 

6 under such subsection shall have no force or effect. 

o 
21 

OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH 

CAROLINA 

Mr. BUTTERFIELD. Let me thank you, Chairman Bono Mack. To 

the witnesses today, thank you very much for your testimony. 

Our first bill today, H.R. 5865, the American Manufacturing 

Competitiveness Act, would require the President with the assistance of an appointed board to conduct a thorough analysis and 

then publish a national strategy on how to best promote the U.S. 

manufacturing sector in both 2014 and 2018. 

As we all know, changes in the global economy led to many job 

losses in U.S. manufacturing over the past 3 decades. I think we 

can all agree that we want a stronger manufacturing sector. Manufacturing jobs are high-quality, good-paying jobs. I am heartened 

that the U.S. manufacturing sector has recovered as strongly as it 

has from the recession with what is now 33 consecutive months of 

expansion. But to be truly strong in the area of manufacturing, we 

must plan for competitiveness in the long term. To his great credit, 

President Obama understands this. 

The administration’s manufacturing initiatives fully recognize 

that the future for U.S. manufacturing will only be successful if the 

American people are successful. Every child must have the chance 

to learn math and science and have a familiarity with technology, 

and adults must have the chance to get the education or training 

that will qualify them for the job that they want. 

The administration has published a plan endorsed by a wide variety of private sector leaders promoting advance to high-tech manufacturing. It is Make It In America, manufacturing, extension, 

partnership. It aims to create public-private partnerships to encourage the development of new products that can be manufactured 

here in our country. And it has an ongoing campaign of reshoring, 

also referred to as in-sourcing, where it works with States to encourage companies that outsource jobs abroad to bring them back 

to the United States. These are just a few of the many manufacturing initiatives underway in the Obama administration. 

Today we are discussing a proposal to add to the Federal work 

underway on manufacturing. A National Manufacturing Strategy 

as proposed by the bill before us is already a staple in several other 

industrialized countries around the world. If we go in the same direction, it will be worth our while to ensure that this additional effort compliments steps already being taken. I look forward to working with Mr. Lipinski and all of my colleagues to make sure that 

that is the case. 

Our second bill today would repeal a little known provision that 

requires NHTSA to annually provide auto dealers with a booklet 

comparing the insurance costs associated with different cars consumers might purchase. As any car owner can tell you, a car that 

gets damaged more easily is one that is likely to carry higher auto 

insurance rates for its driver. But when shopping for a car it is not 

so easy to tell how brittle a car is just by looking at it. 

As it is said, information is power and this provision in the 1972 

law, the Motor Vehicle Information and Cost Savings Act, sought 

to give consumers that power. However, very few consumers know 

that this insurance cost information is available to them at the 

22 

dealership and some question whether the format in which NHTSA 

publishes the information is actually useful. Therefore, these booklets are rarely used. These are problems that I would be more than 

happy to work with all of my colleagues to fix them. 

We all agree that regulations that are burdensome or do not 

serve their intended purpose should be revisited. This bill gives us 

that opportunity to do so, revisit a regulation that may not be 

meeting its intended purpose. I hope as we do this review, we do 

not just assume that we must throw away the idea that it is reasonable for consumers to know what type of insurance costs they 

will face if they buy a particular car. 

Madam Chairman, I look forward to discussing these bills. I 

would like to once again thank our witnesses as well as you for 

convening this hearing today. Thank you. I yield back. 

Mrs. BONO MACK. Thank you, Mr. Butterfield. 

The chair now recognizes the gentleman from Illinois, Mr. 

Kinzinger, for 3 minutes. 

OPENING STATEMENT OF HON. ADAM KINZINGER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. KINZINGER. Thank you, Madam Chair, for the time and for 

your diligent work on bringing the American Manufacturing Competitiveness Act before the committee. I would also like to recognize 

the hard work of Gib Mullan, Brian McCullough, Paige Anderson 

and Shannon Weinberg Taylor. 

You know, some things in Congress aren’t partisan, believe it or 

not, and don’t need to be, and this is one of those. It is an honor 

to work with my colleague and friend Congressman Lipinski and 

the other members of the subcommittee on the American Manufacturing Competitiveness Act. I think specifically of Mr. Guthrie and 

Mr. Pompeo. 

Over the past several months in this committee we have heard 

about the importance of creating an environment that will allow 

American manufacturers to thrive in a global economy. We are on 

the brink of a new manufacturing renaissance in this country. The 

only barriers that may impede this renaissance will be government 

created. 

I am worried about the disappearing middle class, the decline of 

the middle class, and I think one of the biggest drivers to the decline in the middle class has been the disappearance of manufacturing from the United States of America. 

In this Congress we have rightly talked a lot about jobs and the 

role government can play in creating or destroying jobs. There is 

no sector in our economy that is providing more highly paid and 

economically advantageous jobs than manufacturing. This has been 

true since the dawn of manufacturing at the turn of the 20th century. 

During an address to Congress in 1912, President Taft said that 

manufacturing concerns are running at their full capacity and the 

demand for labor was never so constant and growing. Following 

World War II, the United States became the world’s strongest economy, and it is no coincidence that we were also the leading producer of manufactured goods in the world. 

23 

The decline of manufacturing from the 1990s until today is due 

in no small part to increased global competition. We must encourage an environment that will allow business to compete globally. 

While we may not be able to predict where the next growth sector 

for manufacturing will be, we should not try to implement a topdown government policy that would benefit manufacturing. We 

should instead insist upon a long-term strategy constructed by private sector and government leaders to focus our attention on the 

challenges inhibiting our global competitiveness. This is an easy 

but necessary step to joining together private interests and public 

in the process of recommending how the government can make 

American manufacturing more efficient, more friendly and more 

competitive, and we can increase the size of the American middle 

class by getting people back to work and bringing our overall rate 

of unemployment down with good high-paying jobs. 

I am excited to discuss this bipartisan legislation today and am 

hopeful that we can work quickly to bring this legislation to a 

markup with broad bipartisan support. Again I would like to thank 

my friend Congressman Lipinski, and I yield back my remaining 

time. 

Mrs. BONO MACK. I thank the gentleman. The chair now recognizes Mr. Harper for 2 minutes. 

OPENING STATEMENT OF HON. GREGG HARPER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MISSISSIPPI 

Mr. HARPER. Thank you, Madam Chair, and I am proud to be the 

lead sponsor with my good friend Bill Owen of New York as the 

lead Democrat of H.R. 5859, a concise one-page bill that will repeal 

an obsolete mandate that costs the taxpayers hundreds of thousands of dollars. 

I welcome the witnesses today. I am glad to have many years of 

automotive retailing experience with Mr. Fitzgerald and Congressman Mike Kelly from Pennsylvania on the panels. I am also proud 

to have Mike as a cosponsor of H.R. 5859. He is no doubt the voice 

for car dealers on Capitol Hill, and I appreciate his support on this. 

Since 1991, the Department of Transportation has been annually 

distributing by mail a document entitled Relative Collision Insurance Cost Information. This information is sent by mail to new vehicle dealers who are required to make the information available 

to perspective new vehicle customers upon request. 

NHTSA has spent hundreds of thousands of dollars distributing 

this booklet over the past 21 years. While this information is of 

value to insurance actuaries, it has been of little to no use to consumers for whom it is primarily intended. A recent survey by the 

National Automobile Dealers Association confirmed what we expected. Out of 800 new car dealers polled, an overwhelming 96 percent of the dealers answered that not a single customer has ever 

asked to see the booklet. I would like to note here that the information will still be available and NHTSA can still provide this information to consumers on their Web site. 

This simple and bipartisan bill, if passed, would show that Congress is serious about efforts to alleviate burdensome and unneeded 

regulations on businesses across this country. The President states 

24 

that it is a priority of his administration to identify and eliminate 

costly, outdated and unneeded regulations, and I say Congress 

should lead now with H.R. 5859. 

I would like to thank the chairwoman for presiding over this important hearing. Madam Chair, I would ask for unanimous consent 

to include a letter from the Alliance of Automobile Manufacturers 

in support of H.R. 5859 in the record. 

Mrs. BONO MACK. Without objection. 

[The letter follows:] 

25 


79794.018

AllianceM~ Mitcn eall'lwol 

-- Pres!dent and CEO 

May31,2012 

The Honorable Mary Bono Mack 

Chainnan 

Subcommittee on Commerce, Manufacturing, and Trade 

U.S. House of Representatives 

Washington, DC 20515 

The Honorable G. K. Butterfield 

Ranking Member 

Subeommittee on Commerce, Manufacturing, and Trade 

U.S. House of Representatives 

Washington, DC 20515 

Dear Chainnan Bono Mack and Ranking Member Butterfield: 

I write today on behalf ofthe Alliance of Automobile Manufacturers (Alliance) in support of 

H.R. 5859, a bipartisan bill introduced by Representatives Harper and Owens, which would 

repeal 49 USC § 32302( c). The Alliance has a strong history of supporting consumer 

infonnation programs; however, the provision H.R. 5859 would repeal is outdated and as a 

practical matter, appears to yield no new or especially useful infonnation for eonsumers. 

The Alliance is a trade association of twelve car and light truck manufacturers including BMW 

Group, Chrysler Group LLC, Ford Motor Company, General Motors, Jaguar Land Rover, 

Mazda, Mercedes-Benz USA, Mitsubishi Motors, Porsche, Toyota, Volkswagen Group of 

America and Volvo. Together, Alliance members account for roughly three quarters of all 

vehicles sold in the U.s. each year. Eight million Americans are employed directly and 

indirectly as a result oftlle manufacture, sale and repair of automobiles. 

H.R. 5859 would repeal the requirement that "passenger motor vehicle dealers ..• distribute to 

prospective buyers information the Secretary develops and provides to the dealers that eompares 

insurance costs for different makes and models of passenger motor vehicles based on damage 

susceptibility and crashworthiness." 

BMW Group 0 Chrysler Group LLC • Ford Motor Company 0 Gen ... 1 Motor. Company 0 Jaguar Land Rover 

Mazda. Mercedes-Benz USA. Millublshl Mot ..... POrlche. Toyota' Volkswagen' Volv. 

1401 Eye Street, N.W, Suite 900, Washington, DC 20005-6562. Phone 202.326.5500. Fax 202.326.5567 

www.autoailiance.org 
26 


79794.019

The National Highway Traffic Safety Administration's (NHTSA) Relative Collision Insurance 

Cost Information Booklet has been published and distributed to dealers since 1991. The data in 

the booklet is not new or unique; rather, it is based entirely on the Highway Loss Data Institute's 

annual Insurance Collision Report, which is already publicly available. NHTSA does not 

separately review the data. The agency also points out that the data may be of limited use to 

consumers, noting explicitly that: 

"In setting insurance premiums, insurance companies malnly I'ely on factors that 

are not directly related to the vehicle itself (except for its value). They malnly 

consider driver characteristics... Therefore, to obtain complete information 

about insurance premiums, you should contact insurance companies or their 

agents directly." 

The Obama Administration also proposed repealing Section 32302(c) in "technical assistance" 

documents it sent to the Hill last year. Tn justifying the proposed repeal, the Administration 

argued, "A prospeetive buyer does not need a brochure from the Federal government to obtain 

[insuranoe] information, sinee insurance agents are trained to provide adviee on how model 

selection affects insurance premituns." 

In short, consumers who want it, have aceess to clear and l'elevant information regarding 

potential insurance costs associated with particular new vehicles. The advent of the internet and 

other methods of comparison shopping for insurance rates have effectively overtaken a statutory 

mandate more than two decades old. That is a good thing for consumers, and H.R. 5859 is a 

rational response to an outdated requirement. 

Thank you for considering the Allianee's views. 

fth 

Mitch Bainwol 

cc; Representative Oregg Harper 

Representative Bill Owens 

2 
27 

Mr. HARPER. Thank you, Madam Chair. With that, I yield back. 

Mrs. BONO MACK. I thank the gentleman. The chair now recognizes Ms. Schakowsky for 5 minutes for her opening statement. 

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you, Madam Chairman. 

I am glad that this subcommittee is holding a hearing to discuss 

H.R. 5865, the American Manufacturing and Competitiveness Act. 

President Obama has overseen the most dramatic increase in employment in the manufacturing sector since the 1990s, and we 

must work to build upon that progress. And I want to congratulate 

my colleague from Illinois, Mr. Lipinski, for drafting and pushing 

and sponsoring this legislation as a means of strengthening Congress’ commitment to American manufacturing. 

A strong manufacturing base is the foundation of our middleclass. Good middle-class jobs ensure that workers earn a living 

wage, that families have clothes on their back and food in their 

stomachs, and that their children grow up in communities with 

good schools and safe streets. A National Manufacturing Strategy 

will help ensure that the goods we buy are made in America and 

that the jobs our economy supports are American jobs. 

I don’t share the same enthusiasm for H.R. 5859. That legislation 

would eliminate valuable consumer information at the point of sale 

because consumers don’t request it. Well, consumers don’t request 

the information because they really don’t know that it exists. We 

should not be in the practice of eliminating valuable information 

because we do a bad job of publicizing it. 

I look forward to working with my colleagues to move forward 

with legislation to bolster our manufacturing base and to reconsidering our actions to remove information from auto dealerships. 

I yield back. Thank you. 

Mrs. BONO MACK. I thank the gentlelady. 

Now we turn our attention to the panel. We will have three panels of witnesses joining us today. Each of our witnesses has prepared an opening statement that will be placed into the record, 

and, as we all know, each will have 5 minutes to summarize that 

statement and their remarks. 

On our first panel we have two of our colleagues, and we welcome you both, the Honorable Daniel Lipinski of Illinois and the 

Honorable Mike Kelly of Pennsylvania. They both represent States 

with histories deeply rooted in manufacturing. 

We are going to go a little bit out of order and recognize Mr. Lipinski first just because we are considering the bills in that order. 

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

your opening statement. 

STATEMENT OF HON. DANIEL LIPINSKI, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. LIPINSKI. Thank you, Chairwoman Bono Mack. I want to 

thank you, Ranking Member Butterfield and members of the subcommittee for holding this hearing today and for inviting me to testify. 

28 

The American Manufacturing Competitiveness Act, H.R. 5865, 

will bring the public and private sectors together to forge an actionable, bipartisan plan to revitalize America’s manufacturing sector. 

I would like to thank my friend and colleague, Mr. Kinzinger, for 

working with me on this bill and cosponsoring this bill, and also 

thank Mr. Pompeo and Chairwoman Bono Mack for their work on 

this bill in moving it forward. 

Manufacturing is critical for our Nation. It is essential for national security so that we don’t need to rely on other countries for 

our defense. Successful manufacturing provides huge numbers of 

jobs. Not to pick on Facebook right now while it is down, but 

Facebook employs about 3,000 people. Boeing employs 172,000 

Americans. Wages and benefits paid in manufacturing are onethird higher than in other jobs. Plus manufacturing has greater 

secondary effects in the labor market, with each job supporting five 

others. As a source of two-thirds of private sector R&D, manufacturing drives high-tech innovations. When we lose manufacturing 

due to outsourcing, we lose the ability to create the breakthrough 

technologies of tomorrow. 

American manufacturing still has great strength and potential. 

It boasts the highest productivity in the world; it employs 11 million people, and produces $1.7 trillion annually. Encouragingly, 

U.S. manufacturing employment has increased by about half a million in the last 2 years. But after the loss of one-third of all U.S. 

manufacturing jobs over the past decade, we have a long way to 

go. This bill will help create the domestic environment that is most 

conducive to America’s private sector taking full advantage of our 

strength to grow American manufacturing. 

Last Congress a similar version of this bill passed the House 

with very strong bipartisan support, 379–38. In this Congress it 

has again attracted bipartisan support and backing from a variety 

of industry, labor and other groups. In addition, conversations with 

members of the subcommittee as well as committee staff have resulted in numerous beneficial changes to the bill. 

To briefly summarize, the legislation creates a Manufacturing 

Competitiveness Board with a strong private sector and bipartisan 

representation. The President will appoint the Secretary of Commerce, two State Governors of different parties and two other 

former or current executive branch officials. Ten private sector representatives will be appointed by House and Senate leaders, three 

by the majority and two by the minority in each Chamber. 

The Board will conduct a comprehensive analysis of the U.S. 

manufacturing sector, covering everything from trade issues to taxation to new markets and technologies. Based on this analysis, it 

will develop specific goals and specific recommendations for achieving those goals. Consolidation of government programs, regulatory 

reforms, improved education and training, better coordination between the public and private sectors, as well as actions taken by 

all levels of government, universities and stakeholders are to be 

contemplated under this legislation. 

To promote follow-up to this strategy, the President’s budget will 

have to state how it is consistent with the goals and recommendations of the strategy. 

29 

Finally, the first strategy is to be completed in 2014 and the second in 2018. 

I want to be especially clear on one point: This legislation is not 

about the government dictating anything to the private sector. It 

is about bringing the public and private sectors together to form a 

bipartisan consensus plan for action that produces an environment 

for American manufacturing to flourish. America lost 6.2 million 

manufacturing jobs between 1998 and 2010. We must adopt smart 

policies that encourage innovation, entrepreneurialism, efficiency 

and investment in American manufacturing. Passing this bill 

would be a good start. 

When I am home, my constituents keep asking me, what is 

Washington doing to help spur job creation? This bill can be an important answer to that question. Seventy-eight percent of Americans favor a National Manufacturing Strategy, including 74 percent of Republicans and 78 percent of independents. Now, many 

Americans don’t think Congress listens and don’t think we can 

work together to get anything accomplished. I hope we can get this 

commonsense, bipartisan bill passed and help America’s manufacturers create the jobs that we need. 

I look forward to answering any questions that you may have. 

[The prepared statement of Mr. Lipinski follows:] 

30 


79794.020

Congressman Daniel Lipinski 

Opening Statement - Hearing on the National Manufacturing 

Strategy Act 

Energy & Commerce Committee 

Subcommittee on Commerce, Manufacturing, and Trade 

June 1,2012 

I would like to thank Chairman Upton, Chairwoman Bono Mack, 

and the members of the committee for holding this hearing. 

The National Manufacturing Strategy Act, now retailored as the 

American Manufacturing Competitiveness Act, H.R. 5865, will 

bring the public and private sectors together to forge an 

actionable, bipartisan plan to revitalize America's manufacturing 

sector. 

1 

Manufacturing is critical for our nation. It is essential for national 

security, so that we don't need to rely on other countries for our 

defense. Successful manufacturers provide huge numbers of jobswhile Facebook employs about 3,000 people, Boeing employs 

172,000. Wages and benefits paid in manufacturing are one-third 

higher than for other jobs. Plus manufacturing has greater 

secondary effects in the labor market with each job supporting five 

others. And as the source of two-thirds of private sector R&D, 

manufacturing drives high-tech innovation. When we lose 
31 


79794.021

manufacturing due to outsourcing, we lose the ability to create the 

breakthrough technologies of tomorrow. 

2 

American manufacturing still has great strengths and potential. It 

boasts the highest productivity in the world, employs 11 million 

people, and produces $1.7 trillion annually. Encouragingly, U.S. 

manufacturing employment has increased by almost half a million 

recently. But after the loss of one-third of all U.S. manufacturing 

jobs over the past decade, we have a very long way to go. This bill 

will help create the domestic environment that is most conducive to 

America's private sector taking full advantage of our strengths to 

grow American manufacturing. 

Last Congress, a similar version of this bill passed the House with 

very strong bipartisan support, 379-38. In this Congress, it has 

again attracted bipartisan support and backing from a variety of 

industry, labor, and other groups. In addition, conversations with 

members of the Subcommittee as well as committee staff have 

resulted in numerous beneficial changes to the bill. I want to 

especially thank Representatives Kinzinger and Pompeo for their 

work with me on this version of the bill. 
32 


79794.022

This legislation creates a Manufacturing Competitiveness Board 

with strong private sector and bipartisan representation. The 

President will appoint the Secretary of Commerce, two state 

Governors of different parties, and two other former or current 

executive branch officials. Ten private sector representatives will 

be appointed by House and Senate leaders - three by the majority 

and two by the minority in each chamber. 

The Board will conduct a comprehensive analysis of the U.S. 

manufacturiug sector, covering everything from trade issues to 

taxation to new markets aud technologies. Based on this analysis, 

it will develop specific goals and specific recommendations for 

achieving those goals. Consolidation of government programs, 

regulatory reform, improved coordination between the public and 

private sectors, as well as actions by all levels of government, 

universities, and stakeholders are all contemplated under this 

legislation. The President's budget must state how it is consistent 

with the goals and recommendations of the strategy. The first 

strategy is to be completed in 2014 and the second in 2018. 

3 

Let me be especially clear on one point; this legislation is not about 

the government dictating anything to the private sector. It is about 

bringing the public and private sectors together to forge a 
33 


79794.023

bipartisan, consensus plan for action that produces an 

environment for American manufacturing to flourish. 

America lost 6.2 million manufacturing jobs between 1998 and 

2010. We must adopt smart policies that encourage innovation, 

entrepreneurialism, efficiency, and investment in American 

manufacturing. Passing this bill would be a good start. 

4 

When I'm home, my constituents keep asking me, as I'm sure 

yours do also, "what is Washington doing to help spur job 

creation?" This bill can be an important answer to that question. 

78% of Americans favor a National Manufacturing Strategy, 

including 74% of Republicans, and 78% ofIndependents. Now 

many Americans don't think Congress listens and don't think we 

can work together to get anything accomplished. I hope we can get 

this common sense, bipartisan bill passed, and help America's 

manufacturers create the jobs we need. 

I look forward to answering any questions you may have. 
34 

Mrs. BONO MACK. Thank you very much, Mr. Lipinski. 

Mr. Kelly, welcome. You are recognized for 5 minutes. 

STATEMENT OF HON. MIKE KELLY, A REPRESENTATIVE IN 

CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA 

Mr. KELLY. Thank you, Madam Chairman Bono Mack and Ranking Member Butterfield. 

I really appreciate having the opportunity to testify. I think it is 

so rare in Washington that people that actually do what you are 

trying to regulate get a chance to come to the table and talk about 

it a little bit. I have grown up in it and it is part of my DNA. We 

started our business in 1953 and employ about 110 people. 

My view on H.R. 5859 is maybe a little bit different than some 

other folks in government, because dealers are actually the ones 

that have to provide this material and they are under penalty of 

law to provide it and there are great consequences financially if 

you don’t. 

Now, when I talk about my experience, I am talking about an 

automobile dealership where I actually sit on the floor, I talk to 

people all the time. We get somewhere between 800 and 900 people 

a month that come into our dealership, so about 10,000 people a 

year come into the dealership to talk about buying a new car. Now, 

I have got to tell you, in my years, starting back in 1967, I never 

talked to one person that came through those doors that said to 

me, hey, by the way, Kelly, I need to look at that information on, 

let me see, what is it, the relative collision insurance cost information. It doesn’t happen. It just doesn’t happen. 

I made a call to the dealership when I was going to testify and 

I asked our guys in the Thursday morning sales meeting, I said, 

do me a favor. Ask our sales force if they have had this experience. 

Now, we have over 250 years of sales experience. Not one person 

in that room has ever talked to a prospective owner about this 

booklet; never been asked about it, never been questioned about it. 

Now, people do want to know what it is going to cost to insure 

their car. And I will tell you what, I have got to tell you, the answer is with the insurance agents. This is an irrelevant piece of information. 

I don’t know if you have this, I would like to submit it to the 

record, the actual booklet that we have to provide, and I will leave 

it for you. But it is kind of interesting, the booklet itself. This is 

what it says. This table presents vehicles’ collision loss experience 

in relative terms, with 100 representing the average for all passenger vehicles. Thus a rating of 122 reflects a collision loss experience that is 22 percent higher, which means a worse cost than average, while a rating of 96 reflects a collision loss experience that 

is 4 percent lower or better than average. Now, it is unlikely that 

your total premium will vary more than 10 percent depending on 

the collision loss experience of a particular vehicle. And it goes on 

to say to obtain completely information about insurance premiums, 

what you need to do is contact your insurance company. 

Now, we were wondering about this, so the staff called NHTSA’s 

hotline last night. And I would like you all to mark this number 

down. It is 888–327–4236. Now, the representative that answered 

the phone has absolutely no idea about this booklet and told our 

35 

staff to call your insurance agent. Now, I got to tell you, there is 

not a lot of things that the current administration and I agree on, 

but the Obama administration seems to agree that this provision 

is without merit, and in their explanatory document accompanying 

their draft highway bill that was presented to the House Energy 

and Commerce Committee as technical assistance, it states that 

the data in the booklet is rarely used and not useful. The administration’s document also stated that a prospective buyer does not 

need a brochure from the Federal Government to obtain this information since insurance agents are trained to provide advice on how 

model selection affects insurance premiums, and I completely agree 

with the administration. 

Now, the other side of the coin is if the dealers don’t provide this, 

if somebody comes in and we don’t have it available for them, the 

fine is $1,000 per occurrence with a cumulative penalty of 

$400,000. Now, I know those numbers don’t mean anything in a 

town like this where we throw around money like it really doesn’t 

matter, and, of course, it doesn’t, because it is not our money, it 

is taxpayer money. But this is a tremendous disservice to taxpayers 

and it is an unnecessary burden on businesses. And it just is amazing to me that we actually have gotten to a point where we are 

having a hearing to rescind or to repeal a law that is so onerous 

and places a burden on job creators that they just don’t need. 

Now, there are some people that say, well, you know what? The 

problem isn’t that the material is useless. The problem is that we 

haven’t told enough people about it. Well, we have cranked out 

more useless pieces of paper in this town than anybody could imagine. 

I appreciate what you are doing, Mr. Harper and Mr. Owen. This 

does release a burden on dealers to provide a piece of information 

that nobody has ever asked for, nobody needs, nobody is going to 

find useful. It does fall on the part of the consumer. They call their 

insurance agent to find out what it is going to cost to insure a car. 

They would hardly look at this piece of material and come up with 

any idea. 

In fact, I am going to leave it. I want you all to look through this. 

Look through this, and you please tell me after you look through 

it what in the world you would gain from this, what information 

you would gain as a buyer that would help you make a decision on 

what your ultimate cost of a vehicle is going to be and ownership 

is going to be. 

So, again, I thank you for the opportunity to come before you. I 

also have been only been here for a year and after. I spent all my 

life on the floor of a dealership so I do know a little bit of what 

I am talking about, and I think that it is time to start listening 

to the people that actually have to abide by these rules to find out 

what possible use this has for the American taxpayer or the American consumer. 

Thank you very much, and I appreciate the opportunity to testify. 

[The prepared statement of Mr. Kelly follows:] 

36 


79794.024

Testimony of 

The Honorable Mike Kelly 

Before the 

House Subcommittee on Commerce, Manufacturing and Trade 

Regarding H.R. 5859, a Bill to Repeal an Obsolete Provision 

Requiring Motor Vehicle Insurance Cost Reporting 

June 1, 2012 

Madam Chairman Bono Mack, Congressman Butterfield, I thank you for holding this hearing. It 

is a privilege to testify in front of you today. 

My family has been in automotive retailing since 1953. I literally grew up in the automotive 

business. I own one dealership in Butler, Pennsylvania with four different franchises, Chevrolet, 

Cadillac, Hyundai and Kia, employing 110 people. 

I support H.R. 5859, a bill to repeal an obsolete and irrelevant mandate that requires the National 

Highway Traffic Safety Administration (NHTSA) to distribute a booklet to auto dealers, like 

myself. These booklets compare differences in insurance costs for different makes and models on 

the basis of damage susceptibility for vehicle. Commonly, this is referred to as insurance 

collision costs. Dealerships must have these booklets available for customers. 

In 1972, Congress passed a law which resulted in the annual distribution of a booklet to every 

new car dealer in America entitled, "Relative Collision Insurance Cost Information." This 

booklet contained information on "comparative insurance costs, based on damage susceptibility 

and crashworthiness." According to NHTSA's regulation implementing 49 U.S.c. § 32302(c), 

the subsection which H.R. 5859 repeals, "each automobile dealer shall make available to 

prospective purchasers, without charge, [the booklet] at each location where he or she offers new 

vehicles for sale." For the past 21 years, my dealerships have received a copy of this booklet. 

I remember receiving this booklet each year. However, I cannot recall a single customer ever 

asking me for a copy of the booklet. Just yesterday I asked my sales staff, which has over 250 

years of combined sales experience, and not one person could even recall a customer asking for 
37 


79794.025

the NHTSA booklet. If someone did ask me or my sales staff for the booklet, we would have 

happily provided it. Ifwe didn't, my dealership would be liable for ruinous fines of$I,OOO per 

violation. with the maximum penalty of $400,000 for a related series of violations. 

When a customer comes into my store to ask what their insurance premium would be if they 

purchased a certain model, I recommend they contact their insurance agent to get a quote. 

Usually the customer's insurance agent can provide a quote over the phone in the showroom. 

This is the same advice that is given in NHTSA's Relative Collision Insurance Cost Inf01:mation 

Booklet. 

Even the Obama Administration seems to agree this provision is without merit. In their 

explanatory document accompanying their draft highway bill that was presented to the House 

Energy and Commerce Committee as "technical assistance," it states that the data in the booklet 

is "rarely used and not useful." The Administration's document also stated that "a prospective 

buyer does not need a brochure from the Federal government to obtain this information, since 

insurance agents are trained to provide advice on how model selection affects insurance 

premiums." I agree with the Administration's analysis. 

While the executive branch is working at a feverish pace to chum out new regulations whose 

costs will be borne by consumer and taxpayer alike, I think Congress should do something useful 

for consumers by spending more time clearing out other statutory flotsam that has accumulated 

over the decades. This provision in particular has been wasting taxpayer money and everyone's 

time since 1991, and no one has really done anything about it until Reps. Harper and Owens 

stepped forward with a bill. I see no reason why we should let this waste go on another year. 

Maybe the money saved from passing H.R. 5859 can be used by NHTSA to advance their 

mission of saving lives and reducing fatalities on our nation's road. Or perhaps it could be used 

to reduce our $1.3 trillion budget deficit by a tiny amount. At a minimum, passage of H.R. 5859 

will ensure these funds are no longer wasted. 

Madam Chairman, thank you for your consideration. 
38 

Mrs. BONO MACK. Thank you very much, Mr. Kelly. 

I do not have any questions of the panelists, but I will recognize 

any of our colleagues that do. 

Mr. BUTTERFIELD. I think I may have one or two for Mr. Lipinski. 

Mrs. BONO MACK. I will recognize Mr. Butterfield for 5 minutes. 

Mr. BUTTERFIELD. Again, Mr. Lipinski, thank you very much 

again for your testimony today and all the hard work you do here 

in the Congress. This isn’t the first time that the Energy and Commerce Committee has taken up your legislation calling on the 

President to prepare a National Manufacturing Strategy. In fact, in 

2010 we reported a different version of this bill out of the full committee by a voice vote and passed it on the House floor under suspension of the rules. Obviously, efforts to promote and revitalize 

American manufacturing are something everyone here can get behind. We were able to work together to get a bill through the 

House before and I am sure we can work together to do it again. 

So I share Mr. Lipinski’s view that we must on an ongoing basis 

do a better job with strategic thinking and planning to maintain 

the competitiveness of the U.S. manufacturing sector. This sector 

is vital to job creation, innovation and even to our national security. 

Nonetheless, I want to acknowledge the Obama administration’s 

increasing emphasis on the manufacturing sector. The first time we 

passed Mr. Lipinski’s bill we weren’t aware of the many manufacturing initiatives that were bubbling up through the administration, and since that time we have seen Congress put even more emphasis on strategic planning and policy making related to manufacturing. 

Let me just share a few examples of what I am talking about. 

At the end of 2009, the Obama administration issued a framework 

describing the state of manufacturing and setting out the administration’s current policies and initiatives. That was year one of the 

Obama administration. 

In mid-2011, President Obama’s science, technology and innovation advisers followed up with another report that prompted him 

to establish the Advanced Manufacturing Partnership to promote 

high-tech manufacturing. This past December, the President created the new White House Office of Manufacturing Policy within 

the National Economic Council to coordinate manufacturing efforts 

across departments. 

Congress in fiscal year 2012, in the 2012 Consolidated Appropriations Act, calls for the Secretary of Commerce to establish a 

task force on job repatriation and manufacturing growth. The accompanying House Report requires the Secretary of Commerce to 

update a 2004 report on manufacturing. It also requires the Secretary to establish an Economic Security Commission to advise the 

administration and Congress on long-term strategic competitive 

manufacturing challenges. So we must all focus on bolstering 

American manufacturing and that we don’t squander scarce government resources on efforts that are redundant. 

Mr. Lipinski, would you agree with me, sir, that any new efforts 

by Congress to promote and grow the manufacturing sector should 

not duplicate existing efforts? 

39 

Mr. LIPINSKI. I certainly agree that we should not be duplicating 

any existing efforts, and I applaud the administration and also 

Congress in the past couple of years, especially Chairman Frank 

Wolf of the CJS Appropriations Subcommittee has requested some 

reports, and I think we have definitely made progress in focusing 

on manufacturing since I first introduced the version of the bill in 

the last Congress. 

One of the purposes of this bill is to try to cut down on redundancy. We have a lot of redundancy already in the Federal Government, and my intention certainly in this bill, and I think we can 

work to make sure that we utilize what is being done already and 

sort of fold that into what will be done with the National Manufacturing Strategy. 

Mr. BUTTERFIELD. Thank you. Will you agree that any new efforts by Congress to promote and grow the manufacturing sector 

should try, to the extent possible, to bring together all of the different moving parts that have been put in place by Congress and 

the White House? Would that be valuable? 

Mr. LIPINSKI. That is one of the big purposes here, is to put together all these moving parts that have already been put in place 

or in motion. 

Mr. BUTTERFIELD. All right. We are going to try to work together 

to make it happen. Thank you. I yield back. 

Mr. LIPINSKI. Thank you. 

Mrs. BONO MACK. I thank the gentleman. 

The chair now recognizes Mr. Harper for 5 minutes. 

Mr. HARPER. Thank you, Madam Chair. 

Mr. Kelly, if I could ask you a question, and you may have had 

the opportunity to review the statement of Joan Claybrook, who 

will testify I believe on the third panel today, and I want to just 

read one portion of what she said and get your response to this in 

one of the paragraphs in her opening statement. Here is what is 

in her letter. It says, ‘‘I can understand why car dealers want to 

keep consumers in the dark about insurance collision cost information. Dealers want to sell the cars they have on their lot. If consumers have access to information about a vehicle that might show 

expensive repair costs and that discourages a sale, the dealer 

might lose a customer and the sale.’’ 

How do you respond to that type of an insult? 

Mr. KELLY. Well, I think that most of those insults come from 

people who have never been in our business and don’t understand 

the relationship between the business owner and the people that 

keep them alive, and that is our customers or our buyers. So anybody that I have ever been in contact with in my business is probably one of the most stable people in that community. And I tell 

people all the time, if you really wonder about the integrity and the 

value of your car dealer, if your son played little league baseball, 

look at whose name is on the outfield fence. If your daughter 

marched in the marching band, look who is in the program. 

So, I mean, it is absolutely—that is foolhardy and irresponsible 

to make that statement. There is absolutely no reason why anybody would want to keep anybody from knowing about the vehicle 

that they want to purchase, and we do provide all kind of information. But the information we try to provide is usually relevant. And 

40 

only again from people who live in some other galaxy do you get 

these kinds of comments. When you are actually on the ground, 

you are face-to-face with people every day and your ability to make 

sure that the checks that you issue every 2 weeks are cashable, 

that relationship that we have with the customer is absolutely critical. 

So I want everybody to be completely comfortable with what they 

buy, and so do all my dealer friends. 

Mr. HARPER. And when you referred to the table, the stuff that 

is here for the collision insurance loss numbers that they keep, a 

consumer is not going to look at that and gain any information. 

They are going to call their insurance agent, just as you said, to 

get the true cost of what that potential vehicle would cost. 

Mr. KELLY. Well, the variables are great, the gender, the age, 

where you drive the car, business or pleasure, where you live. 

There are so many different variables in it, so there is no one size 

fits all. 

Mr. HARPER. And there is no way to create a government document chart that is going to tell the insurance company what they 

are going to be charging for that premium. 

Mr. KELLY. Yes, and I think history would probably show that 

there hasn’t been very many government documents that really 

come to a realistic value of what a vehicle is and the purchasability 

of it. 

Mr. HARPER. Thank you, Mr. Kelly. I appreciate it. I yield back. 

Mrs. BONO MACK. Thank you. The chair now recognizes Dr. 

Cassidy for 5 minutes. 

Mr. CASSIDY. To my colleague Mr. Lipinski, I like the general 

kind—knowing that you thought about this, I ask these questions 

not to challenge, but just to pick your brain. It really seems like 

our manufacturing right now has been driven by natural gas, the 

hydraulic fracturing, that sort of lowered energy cost, decreasing 

input cost, encouraging companies to bring their resources back to 

the United States, and that has actually happened quite independently of a manufacturing policy. In fact, you could even argue that 

it has happened despite the administration’s efforts to inhibit that. 

So I guess my question is, and, again I am not challenging, I am 

just exploring with you, my question here is if we had had a manufacturing policy 4 years ago, it seems like it would have emphasized renewable energy sources. Solyndra, for example, was an example of such a policy, not to knock it, but just to give an example 

of where the administration’s emphasis was, as opposed to what 

happened just by market forces and by private enterprise, where 

hydraulic fracturing took place and now Dow is expanding, 

ExxonMobil is about to build a huge new plant, et cetera. 

So your bill, I guess I am struggling to see if we see that what 

is happening that is good in manufacturing is a result of kind of 

the private sector unimpeded, or despite an impediment, how 

would your bill add to that? 

Mr. LIPINSKI. Well, certainly it makes a difference to have the 

much cheaper natural gas here, and that certainly helps manufacturing. I wouldn’t say that that has been everything that has 

helped spur the creation of half a million manufacturing jobs. But 

what we are looking at here is across-the-board what can be done. 

41 

And I think that the idea of having this board with buy-in from not 

only whoever the administration is in 2014, but also from both 

Houses of Congress, both parties, to look broadly across what can 

be done, energy policy perhaps will be part of that. I would expect 

it to be part of that. But there is a lot more to any sort of manufacturing strategy. 

So I think that if we looked broadly at everything that can be 

done, I think we could be even further along in promoting manufacturing, having more manufacturing jobs. But that is not to say 

that energy policy isn’t part of that. It is part of it, but it is only 

one piece of it. 

Mr. CASSIDY. Then the next thing, again, not to challenge, just 

to explore, if you look McKinsey Quarterly will have white papers 

on what we need to improve manufacturing, the Chamber of Commerce will, I am sure labor unions do, institutes for tax policy. It 

almost seems like we know the answer is out there. Our tax rates 

are uncompetitive, we have, a high debt to GDP, et cetera. How 

would this add to that which is available in the private sector? 

Mr. LIPINSKI. Well, I think we have seen a lack of having a wellcoordinated policy. And a lot of these studies, and there is probably 

a lot of truth in them, but we need to bring all of that together and 

to have action. I mean, that is really the key here. I think there 

is much more that can be done to create the environment for the 

private sector to have the best opportunity, the best incentive to 

create more manufacturing jobs. I don’t think that we have done 

that. There have been a lot of studies, but I don’t think that—many 

of them have not been followed up on, I believe, and this is one way 

to try to make sure that we put out a plan and encourage followup by Congress and by the President. 

Mr. CASSIDY. Thank you. I yield back. 

Mrs. BONO MACK. I thank Dr. Cassidy. And with that, we thank 

both of our panelists for your testimony today and for doing all you 

can to help manufacturing in America and to create new jobs. 

We will have a brief recess as we seat our second panel. I do ask 

unanimous consent from the subcommittee to allow our colleagues 

to sit on the dais as joyful witnesses, but not participants. With 

unanimous consent, you are welcome to join the dais. 

So a brief, brief, brief recess as we put the second panel in place, 

please. 

[Recess.] 

Mrs. BONO MACK. On our second panel we have Zachary Mottl, 

Director of Development at Atlas Tool & Die Works. Next we have, 

not in this order, next we have Mark Gordon, Executive Committee 

member, Manufacturing Division, National Defense Industry Association. Also testifying is Phillip Singerman, Ph.D., Associate Director for Innovation and Industry Services at the National Institute 

of Standards and Technology for the U.S. Department of Commerce. Our fourth witness is Deborah Wince-Smith, President and 

CEO for the Council on Competitiveness. 

Good morning, everyone. You will be recognized for 5 minutes for 

your opening statements. To keep track of time, please look at the 

lights on the timer in front of you. When it turns yellow you have 

one minute left. So if you will please make sure to turn the microphone on and bring it close to your mouth so we can all hear you 

42 

clearly. With that, we will go ahead and recognize you in the order 

you are seated and begin with you, Dr. Singerman, for 5 minutes. 

STATEMENTS OF PHILLIP SINGERMAN, ASSOCIATE DIRECTOR 

FOR INNOVATION AND INDUSTRY SERVICES, NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY, DEPARTMENT 

OF COMMERCE; ZACH MOTTL, DIRECTOR OF DEVELOPMENT, ATLAS TOOL & DIE WORKS; MARK A. GORDON, EXECUTIVE COMMITTEE MEMBER, MANUFACTURING DIVISION, 

NATIONAL DEFENSE INDUSTRIAL ASSOCIATION; AND DEBORAH L. WINCE–SMITH, PRESIDENT AND CHIEF EXECUTIVE 

OFFICER, COUNCIL ON COMPETITIVENESS 

STATEMENT OF PHILLIP SINGERMAN 

Mr. SINGERMAN. Thank you, Chairwoman Bono Mack, Ranking 

Member Butterfield, and members of the subcommittee. I am honored to be here today to share the administration’s strategy to promote growth, sustainability and competitiveness in the manufacturing sector. 

We all know manufacturing matters. As President Obama has 

said, ‘‘An economy built to last demands that we keep doing everything we can to keep strengthening American manufacturing.’’ 

Over the past 2 years, U.S. manufacturers have created nearly 

half a million jobs, the longest period of sustained manufacturing 

job growth since the 1990s. In addition, manufacturing is helping 

us to advance our national priorities. For example, manufacturing 

is a key driver of U.S. exports. In 2011, the United States exported 

nearly $1.3 trillion in manufactured goods, an all-time record, 

which supports Secretary Bryson’s goal of building it here, selling 

it everywhere. 

Last summer’s report on advanced manufacturing by the President’s Council of Advisers on Science and Technology, PCAST, reminded us why manufacturing remains essential. Manufacturing 

that is based on new technologies can provide high quality, good 

paying jobs for American workers. Manufacturing is crucial to our 

balance of trade, representing 60 percent of U.S. exports, and manufacturing drives technological innovation, accounting for 70 percent of private sector research and development. 

The report also made clear that the government should play an 

important role through the development of an innovation policy. 

While the United States should avoid industrial policy, we should 

be aggressively supporting an innovation policy that provides the 

best overall environment in which to do business and fosters the 

development of powerful new technologies. 

The report looked at a broad range of approaches to help sustain 

and grow the sector. In addition to research and development, the 

report looked at such areas as tax, trade, workforce, small business 

and education, and how each helped the manufacturing sector. 

Today I want to briefly highlight the importance of innovation on 

advanced manufacturing. 

In June of last year, the President called for the private sector 

to lead the formation of an Advanced Manufacturing Partnership 

whose purpose is to bring together industry, universities and the 

Federal Government to identify emerging technologies and supVerDate Aug 31 2005 11:24 Aug 16, 2013 Jkt 037690 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 F:\112-14~1\112-14~1 WAYNE
43 

portive policies that will create high quality manufacturing jobs 

and enhance our global competitiveness. 

To complement this public-private partnership, the administration also strengthened the Interagency Organization for Advanced 

Manufacturing. The Advanced Manufacturing National Program 

Office was established at NIST to coordinate Federal agency efforts 

to accelerate the pace of innovation, promote technology transfer, 

and more rapidly integrate technology breakthroughs into the commercial market. This interagency effort currently involves not only 

the Department of Commerce, but the Departments of Energy, Defense, Education, the National Science Foundation and NASA. 

NIST also works in support of manufacturing through its Hollings Manufacturing Extension Partnership Program, MEP, and its 

Technology Partnership Office. MEP is a longstanding public-private partnership whose work leads small and mid-sized manufacturers to new sales, new product development and market expansion. 

In March, the President announced a new initiative, the National 

Network for Manufacturing Innovation, which is a proposed one 

time, $1 billion Federal investment to catalyze collaboration among 

industry, academia, to perform research and development that will 

accelerate innovation for advanced manufacturing, build a stronger 

innovation system, and link innovations more directly to domestic 

production capabilities. The Institutes for Manufacturing Innovation will help bridge the gap between basic research and product 

development, provide shared assets to help companies access cutting age capabilities, and create an environment to train students 

and workers in advanced manufacturing skills. 

The President also announced that the administration will take 

immediate steps to launch a pilot Institute for Manufacturing Innovation based on existing programs and funding within the Department of Defense, partnering withEnergy, Commerce, NASA and 

the National Science Foundation. The key to the success of these 

efforts is partnerships. The leverage from these partnerships enables the share resources and creative spark needed to drive innovation here and at home. 

Madam Chair, in closing let me say how much we appreciate the 

committee’s work in support of a vibrant and dynamic manufacturing sector in the 21st century, and we look forward to working 

with you on legislation to further the administration’s efforts to 

support U.S. manufacturing. Thank you again for the opportunity 

to testify. 

[The prepared statement of Mr. Singerman follows:] 

44 


79794.026

Remarks by 

Philip Singerman 

The National Institute of Standards and Technology 

Associate Director for Innovation and Industry Services 

Before the 

House Energy and Commerce Committee 

Subcommittee on Commerce, Manufacturing and Trade 

American Manufacturing Competitiveness 

June 1,2012 
45 


79794.027

Thank you Chairwoman Bono Mack, Ranking Member Butterfield 

and members of the Subcommittee. I'm pleased to share today the 

Administration's strategy to promote growth, sustainability and 

competitiveness in the manufacturing sector. 

Manufacturing matters. As the President has said, "[An] economy 

built to last demands that we keep doing everything we can to .... 

keep strengthening American manufacturing." 

Over the past two years, US manufacturers have created nearly haIfa-million jobs - the longest period of sustained manufacturing job 

growth since the late 1990s. In addition, manufacturing is helping us 

advance our national priorities. 

Also, manufacturing is a key driver of U.S. exports. In 2011, the 

United States exported nearly $1.3 trillion in manufactured goods -

2 
46 


79794.028

an all-time record -- which supports Secretary Bryson's goal of 

building it here ... selling it everywhere. 

We need to continue to build on this momentum, and indeed the 

Obama Administration is doing just that through a number of new 

initiatives to support U.S. manufacturing. 

Last summer's report on Advanced Manufacturing by the President's 

Council of Advisors on Science and Technology (PCAST) reminded 

us why manufacturing remains essential: manufacturing that is based 

on new technologies can provide high-quality, good-paying jobs for 

American workers; manufacturing is crucial to our balance of trade, 

representing 60 percent of U.S. exports, and it drives technological 

innovation, accounting for 70% of private sector research and 

development. 

3 
47 


79794.029

The report also made clear that the government should play an 

important role through the development of an innovation policy, as 

opposed to industrial policy. The difference is crucial. While the 

United States should avoid industrial policy-making bets on 

particular companies and industries-we should be unabashed in 

pursuing an innovation policy that provides the best overall 

environment in which to do business, that fosters the development of 

powerful new technologies, and that ensures that technology-based 

enterprises have the infrastructure required to flourish here. 

Given the breadth of manufacturing, the report looked at a broad 

range of approaches to help sustain and grow the sector. In addition to 

research and development, the report looked at areas such as tax, 

trade, workforce, small business, and education policies and how each 

either help or hinder the health of the manufacturing sector. 

Today I want to focus on the importance of innovation on advanced 

manufacturing. In June oflast year, the President announced the 

4 
48 


79794.030

formation of the Advanced Manufacturing Partnership (AMP), whose 

purpose is to bring together industry, universities, and the federal 

government to invest in the emerging technologies that will create 

high quality manufacturing jobs and enhance our global 

competitiveness. 

To complement the public-private partnership, the Administration 

also strengthened the interagency coordination for advanced 

manufacturing, and NIST is playing a leading role. The Advanced 

Manufacturing National Program Office was established at NIST to 

coordinate federal agency efforts to accelerate the pace of innovation, 

promote technology transfer, and more rapidly integrate technology 

breakthroughs into the commercial market. NIST is also actively 

working with other parts of the Department of Commerce, as well as 

with other agencies such as the Departments of Energy and Defense, 

and the National Science Foundation to achieve these goals. 

5 
49 


79794.031

In addition, the President has proposed the Advanced Manufacturing 

Technology program -- or AMTech at NIST, which will foster 

industry consortia to tackle research issues that, if solved, would be of 

benefit to the entire sector. 

NIST continues work in support of manufacturing through its 

Manufacturing Extension Partnership program and its Technology 

Partnership office. The MEP is a longstanding public/private 

partnership whose work leads manufacturers to new sales, new 

product development and market expansion, that in tum leads directly 

to the retention and creation of manufacturing jobs in United States. 

NIST's Technology Partnership office is working with federal 

agencies to identify and implement best practices and developing 

more comprehensive metrics to evaluate the performance offederal 

agency efforts to promote technology transfer, in order to better 

leverage the major investments we make in manufacturing R&D. 

6 
50 


79794.032

We are also excited about a new initiative, the National Network for 

Manufacturing Innovation (NNMI), which is a proposed $1 billion 

program to coordinate efforts of the federal government, States, 

industry, and academia to collaboratively accelerate innovation for 

advanced manufacturing, build a stronger innovation system and link 

innovations more directly to domestic production capabilities. 

The NNMI will help bridge the gap between basic research and 

product development, provide shared assets to help companies access 

cutting-edge capabilities, and create an environment to train students 

and workers in advanced manufacturing skills. 

The President's proposal for the Network would create up to 15 

Institutes for Manufacturing Innovation (lMI) around the country. 

The IMIs will bring together industry, universities and community 

colleges, federal agencies, and regional and state organizations to 

7 
51 


79794.033

accelerate innovation by investing in industrially-relevant 

manufacturing technologies with broad applications. 

The President also announced that the Administration will take 

immediate steps to launch a pilot Institute for Manufacturing 

Innovation, based on existing programs within the Department of 

Defense, and partnering with the Energy and Commerce 

Departments, and the National Science Foundation (NSF). The 

NNMI and the pilot are two distinct efforts, but have an important 

relationship between them. The pilot Institute will demonstrate the 

value of the kind of collaborative problem-solving and asset-building 

that could occur on a broader scale with an entire Network of 

Institutes for Manufacturing Innovation. 

The key to the success of this effort is partnerships. The synergy from 

those partnerships enables the shared resources and creative spark 

needed to drive innovation here at home. If we can help the NNMI 

8 
52 


79794.034

model take root, our manufacturers will be better off in this global 

economy. 

We appreciate this Committee's work to ensure that the United States 

continues to support a vibrant and dynamic manufacturing sector in 

the 21 st century and we look forward to working with you on 

legislation to further the Administration's efforts to support U.S. 

manufacturing. 

Thank you for the opportunity to testify, and I look forward to 

answering any questions you may have. 

9 
53 

Mrs. BONO MACK. Thank you very much, Dr. Singerman. 

Mr. Mottl, you are recognized for 5 minutes. 

STATEMENT OF ZACH MOTTL 

Mr. MOTTL. Good morning. Thank you very much, Chairman 

Bono Mack and Ranking Member Butterfield and members of the 

committee, for providing me the opportunity to speak before you 

today. 

Manufacturing is a subject very dear to my heart. I am the 

fourth generation of my family since 1918 to own and operate my 

business, Atlas Tool & Die Works. I work there as the Director of 

Development. I am also Vice President and co-owner of Abet Industries as well as Accushim, Inc. The businesses are located in Lyons 

and LaGrange, Illinois, which are Chicago suburbs in Representative Dan Lipinski’s district. All three companies are my family’s related businesses in precision manufacturing. Our companies make 

various parts and assemblies for the defense, aerospace, telecom, 

electronics, medical, industrial and heavy machinery industries. 

Together we employ around 80 people. 

I also serve as the chairman of the TMA Government Relations 

Committee and vice chair of the association. TMA represents nearly 1,000 small- and medium-sized manufacturers in the Midwest. 

We employ over 27,000 skilled workers. 

As an advocate of the critical importance of a healthy and growing manufacturing sector in any economy, I support passage of the 

American Manufacturing Competitiveness Act of 2012. One thing 

that strikes me about this bill is that it makes no assumptions of 

the best path forward to ensure America is the global manufacturing leader. 

That is important because there are so many diverse opinions of 

what the manufacturing sector needs. Some people feel unfettered 

free trade is a problem, others say it is tax policy and others say 

energy policy or training and workforce development, and still 

some people say the industry is strong and nothing is needed. With 

these varying opinions, all from purported experts, it is very difficult to develop a path forward. Instead, this bill creates a system 

that thoughtfully and methodically evaluates the issues surrounding the industry and it outlines a framework to develop a 

plan for success. 

As a business owner, I know that planning is critical. Plan, execute and review, that is the basic core of any good business model. 

Unfortunately, when an organization doesn’t operate with the plan, 

what happens is a plan to fail. Right now the United States is operating with a plan to fail in the world economy when it comes to 

manufacturing, and that is unacceptable for a global superpower. 

We simply must be the world leader in manufacturing. And why 

is that so important? Manufacturing is a keystone stone industry 

in any economy. Most economists agree that for every sales dollar 

in manufacturing, there are two to three dollars of supporting activities required. This is the highest multiplier effect of any industry. 

In addition, manufacturing creates good jobs that value skills, 

jobs with healthy benefits and jobs where you can find a lifelong 

54 

career. Manufacturing is critical to national defense as well as 

product innovation. 

Finally, manufacturing is one of the fastest growing sectors in 

the world economy. It requires capital investments in land and 

equipment, it requires many factors of production, and, in short, it 

is simply one of the fastest ways to jump-start employment, investment and innovation. 

Many other countries realize these facts. They are constantly and 

actively working to court manufacturers to locate within their borders. We live in a world with many competitors and they look at 

our position with envy. They are working to surpass the United 

States in many areas, and if we ignore what they ever doing and 

neglect to make our own plans, I assure you those competitors will 

succeed. 

Countries like China, Russia, Brazil, Canada, the U.K., and 

many others have a clear and detailed national manufacturing 

strategy. They have decided what critical industries they want 

within their borders and are actively working to foster success. 

They are asking the questions, what can we help you do to be more 

competitive? How can we help you sell more products and create 

more jobs? Whether it is consideration of a VAT versus an income 

tax, adding or removing tariffs and import barriers, providing regulatory relief, requiring domestic production or even low cost loan 

and financing programs, these countries are working in a concentrated and organized effort towards success. 

Furthermore, many of these countries already have developed 

best practices when it comes to supporting their manufacturing 

sectors. The American Manufacturing Competitiveness Act will not 

only bring the U.S. into line with our competitors, but compel us 

to study and learn from them. And this type of benchmarking is 

a standard best practice management technique. 

Ultimately the success of any industry depends on many factors. 

However, our collective will to ensure and achieve success is probably the most important factor. The American Manufacturing Competitiveness Act and ultimately the National Manufacturing Competitiveness Strategy developed in Section D of that act are important first steps to the long-term health and success of our overall 

economy. 

I applaud Congressman Lipinski and Congressman Kinzinger for 

their leadership to develop and sponsor this bill, and I urge you all 

to pass this bill in committee and ultimately the full House. 

Thank you for your time and consideration, and I look forward 

to your questions. 

[The prepared statement of Mr. Mottl follows:] 

55 


79794.035

TESTIMONY OF ZACH MOTTL, DIRECTOR OF DEVELOPMENT, ATLAS TOOL & DIE 

ON THE AMERICAN MANUFACTURING COMPETITIVENESS ACT 

SUBCOMMITTEE ON COMMERCE, MANUFACTURING AND TRADE 

JUNE 1, 2012 

Thank you very much Chairman Bono Mack and members of the Committee for providing me the 

opportunity to speak before you today. Manufacturing is a subject very near to my heart. I am the 

fourth generation of my family, since 1918, to own and operate my business Atlas Tool & Die Works, 

where I work as the Director of Development. I am also Vice President and co-owner of Abet Industries 

as well as Accushim Inc. The businesses are located in Lyons and LaGrange, IL which are Chicago suburbs 

in Rep. Dan Lipinski's district. All three companies are my family's related businesses in precision 

manufacturing. Our companies make various parts and assemblies for the defense, aerospace, telecom, 

electronics, medical, industrial, and heavy machinery industries. Together we employ around 80 people. 

I also serve as the Chairman of the TMA Government Relations Committee and Vice- Chair of the 

association. TMA represents nearly 1000 small and medium sized manufacturers in the Midwest who 

employ over 27,000 skilled workers. 

As an advocate of the critical importance of a healthy and growing manufacturing sector in any national 

economy, I support passage ofthe American Manufacturing Competitiveness Act of 2012. One thing 

that strikes me about this bill is that it makes no assumptions of the best path forward to ensure 

America is the global manufacturing leader. That is important because there are so many diverse 

opinions of what the manufacturing sector needs. Some people feel unfettered free trade is a problem, 

others say tax policy, others say energy policy, and still others say the industry is strong and nothing is 

needed. With these varying opinions, all from purported experts, it's very difficult to develop a path 

forward. 
56 


79794.036

Instead this bill creates a system to thoughtfully and methodically evaluate the issues surrounding the 

industry and then outlines a framework to develop a plan for success. As a business owner, I know 

planning is critical; Plan, Execute, Review. That is the basic core of any good business model. 

Unfortunately, when an organization doesn't operate with a plan, what occurs is a plan to fail. 

Right now the United States is operating with a plan to fail in the world economy when it comes to 

manufacturing. This is unacceptable for a global superpower. We simply must be the world leader in 

manufacturing. Why is the competitiveness of this sector so important? First manufacturing is a 

keystone industry in any economy. Most economists agree that for every sales dollar in manufacturing 

there are $2-3 dollars of supporting activities required. This is the highest multiplier effect of any 

industry. In addition, manufacturing creates good jobs that value skills, jobs with healthy benefits and 

also jobs where you can find a lifelong career. Manufacturing is critical to national defense as well as 

product innovation. Finally, manufacturing is one of the fastest growing sectors of the world economy. 

It requires capital investments in land and equipment, it requires many factors of production, and in 

short is simply one of the fastest ways to jump-start employment, investment, and innovation. 

Many other countries realize these facts. They are constantly and actively working to court 

manufacturers to locate within their borders. We live in a world with many competitors and they look at 

our position with envy. They are working to surpass the United States in many areas and if we ignore 

what they are doing and neglect to make our own plans I can assure you these competitors will succeed. 

Countries such as China, Russia, Brazil, Canada, Germany, the UK, and others have a clear and detailed 

national manufacturing strategy. They have decided what critical industries they want within their 

borders and are actively working to foster success. They are asking the questions, "What can we do to 

help you become more competitive? How can we help you sell more product and create more jobs?" 

Whether its consideration of a VAT vs. an income tax, adding or removing tariffs and import barriers, 
57 


79794.037

providing regulatory relief, requiring domestic production, creating low-cost loan and financing 

programs, or even playing matchmaker between suppliers and customers, these countries are working 

in a concentrated and organized effort towards success. 

Furthermore, many of these countries already have developed best practices when it comes to 

supporting their manufacturing sectors. The American Manufacturing Competitiveness Act will not only 

bring the United States into line with our economic competitors but it will also compel us to study them 

and learn from them. This type of benchmarking is a standard best practice management technique. 

Ultimately the success of any industry depends on many factors. However, our collective will to ensure 

and achieve success is probably the most important factor. The American Manufacturing 

Competitiveness Act and ultimately the National Manufacturing Competitiveness Strategy developed in 

section D of that act are important first steps to the long-term health and success of our overall 

economy. I applaud Congressman Lipinski and Congressman Kinzinger for their leadership to develop 

and sponsor this bill. I urge you all to pass this bill in committee and ultimately the full House. Thank you 

for your time and consideration of this important legislation, and I look forward to your questions. 
58 

Mrs. BONO MACK. Thank you, Mr. Mottl. 

Mr. Gordon, with that, you are recognized for 5 minutes. 

STATEMENT OF MARK A. GORDON 

Mr. GORDON. Madam Chairman Bono Mack, Ranking Member 

Butterfield, members of the subcommittee, thank you for the invitation to speak today. 

My name is Mark Gordon, Director of Defense Programs at the 

National Center of Advanced Technologies and a member of the 

Manufacturing Division at the National Defense Industrial Association. On behalf of the 1,700 corporate members and almost 100,000 

individual members, I am pleased to appear before the subcommittee today to discuss the need for a competitiveness strategy 

to successfully develop a national ecosystem supporting American 

manufacturing. 

There should be no doubt as to the importance of the manufacturing sector to the economic and national security of the U.S. You 

have already heard an impressive number of statistics from multiple speakers. Most importantly, manufacturing means stable, 

high paying jobs for millions of U.S. taxpayers, and these jobs depend directly on the current and future competitiveness of the U.S. 

manufacturing sector in comparison to our trading partners, trading partners which possess national manufacturing strategies 

which aim to boost their competitiveness. 

While the U.S. is competitive in manufacturing today, our essential goal should be to increase our competitiveness to ensure future 

growth in an increasingly aggressive global environment. 

There are many recently published strategic plans, studies, reports and road maps on U.S. manufacturing, all of which focus recommendations on structural barriers, emerging technologies, infrastructure partnering or economic preservation models as vital components that lead to the revitalizing, reshoring or expanding of the 

U.S. manufacturing capability. 

My position is that developing a competitive manufacturing sector requires establishing and maintaining a national manufacturing ecosystem that simultaneously addresses structural limitations such as export control regulations, public and private R&D 

investments, such as advanced materials or processing and fabrication needs, and bridging the gap to successful scale-up and commercialization. 

Given the multitude of existing recommendations and strategies, 

what is required is a balanced approach that sets priorities among 

these mechanisms with the single goal of a competitive American 

manufacturing ecosystem, an ecosystem that proofs fertile enough 

to grow and maintain domestic manufacturing capacity. 

Turning to the specific issue of national security, Under Secretary of Defense Frank Kendall stated earlier this year that essentially the industrial base is part of our force structure and we have 

to treat it like it is, acknowledging the vital role of defense manufacturing and the requirement to actively manage its capabilities. 

The 2012 defense guidance clearly defines strategies built upon 

exploiting our technological advantage, such as advanced electronics, lightweight materials and reduced size, weight and power 

for a broad range of defense systems. The DOD recognizes that 

59 

these technological advances are realized through manufacturing 

technologies, which is why the 2013 defense budget highlights advanced manufacturing as a top priority, along with cyber and autonomous systems. 

However, this strategy or this priority is set within a reduced 

budget environment with pressures on acquisition costs that will 

defer modernization and increase sustainment requirements. Acquisition and sustainment are both supported by the same industrial base which is threatened by these reductions. 

This defense industrial base, which is at the lower tiers, is predominantly small and medium size with commercial and defense 

companies. It possesses a variety of specialized manufacturing capabilities required to produce and sustain defense systems and 

must be managed to ensure readiness and avoid obsolescence. A defense industrial base that is technologically vibrant, highly capable 

and financially fit is in the national interest, and as such the Defense Department is a unique beneficiary of a highly competitive 

manufacturing base because of the reinforcing nature of an economic healthy manufacturing ecosystem on this shared industrial 

base. 

Our endorsement of this bill is based upon a stated objective, 

board membership and duties and a lengthy list of topics to be considered during the comprehensive analysis and strategy development. However, we note that the comprehensive analysis under 

section 4, paragraph C, would seem to require considerable effort 

and no staff budget or board support is currently specified. Obviously, resources will be required commensurate with the expected 

level of effort and will not be left to the private or public service 

board members. 

I am honored to have had this opportunity to provide you with 

the defense industry perspective on the importance of developing 

the needed ecosystem, and speaking on behalf of NDI membership, 

I thank you all for actively supporting U.S. manufacturing policies. 

[The prepared statement of Mr. Gordon follows:] 

60 


79794.038

Testimony 

of 

Mark A. Gordon 

National Defense Industrial Association 

Manufacturing Division 

House Energy and Commerce Committee, 

Subcommittee on Commerce, Manufacturing, and Trade 

June 1,2012 

Hearing on "American Manufacturing Competitiveness Act of 20 12." 

1 
61 


79794.039

Major themes: 

NDlA endorsees this legislative proposal, but notes that as written, the comprehensive 

analysis will require considerable effort, resources will be required commensurate with 

the expected level of effort. 

The U.S. manufacturing sector is vital to the nation's economic and national security, and 

millions of jobs depend directly on our ability to competitiveness in manufacturing. 

Developing a competitive manufacturing sector requires a national manufacturing 

ecosystem that simultaneously addresses structural limitations, technology investments 

and bridging the gap to efficient scale up. 

The Administration is actively pursuing a strategy to guide Federal programs and 

activities in support of Advanced Manufacturing R&D. 

The Defense Department is uniquely dependent upon the u.s. Industrial base to meet 

warfighter and force structure requirements and it must be carefully managed in this 

reduced funding environment 

The FY13 DoD Budget prioritizes advanced manufacturing in order to deliver the 

technological advantage required by the2012 Defense Strategic Guidance. 

The DoD NNMI pilot institute will both lead to a more competitive sector in Additive 

Manufacturing Technologies and prepare the groundwork for a broader network of 

institutes. 

2 
62 


79794.040

Chairwoman Bono Mack and members of the Committee, I am Mark Gordon, Director of 

Defense Programs at the National Center For Advanced Technologies and a member of the 

Executive Committee of the Manufacturing Division at the National Defense Industrial 

Association (NDIA). On behalf of the 1793 corporate members of NDIA including 97,365 

individual members, I'm pleased to appear before the House Subcommittee on Commerce, 

Manufacturing, and Trade today to discuss the need for an American Manufacturing 

Competitiveness Strategy to successfully develop a national ecosystem supporting 

manufacturing, which has significant economic and national security implications for the U.S .. 

There is should be no doubt as to the importance of the manufacturing sector to the economic 

and national security of the U.S., with statistical measures such as 12% of GDP directly related 

to manufacturing and 30% of GDP impacted by manufacturing, 70% of industrial R&D funded 

by manufacturing related firms, the highest economic benefit multiplier of any economic sector, 

and 50% of the country's exports. More importantly, manufacturing means stable, high paying 

jobs for millions of U.S. taxpayers, and these jobs depend directly on the current and future 

competitiveness of the U.S. manufacturing sector in comparison to our trading partners. Trading 

partners which possess national manufacturing strategies which aim to boost their 

competitiveness. The U.S. is competitive in manufacturing today; the goal is to increase our 

competitiveness for future growth in an increasingly aggressive global environment. 

There are many recently published strategic plans, studies, reports and roadmaps on U.S. 

manufacturing, all which focus recommendations on structural barriers, emerging technologies, 

infrastructure partnering, or economic preservation models as vital components that lead to 

revitalizing, reshoring, or expanding U.S. manufacturing capability. By structural barriers, I 

refer to tax policy, environmental regulations or export controls. Other well defined 

recommendations include increased R&D investment in advanced manufacturing, access for 

Small and Medium Enterprises to advanced modeling and simulation capabilities, development 

of regional clusters of shared manufacturing facilities (Industrial Commons) and infrastructure 

needs for commercial scale up. My position is that developing a competitive manufacturing 

sector requires a national manufacturing ecosystem that simultaneously addresses structural 

limitations, investments and bridging the gap to efficient scale up. Given the multitude of 

existing strategies, what is required is a balanced approach that sets priorities among these 

3 
63 


79794.041

mechanisms with the single goal of a competitive American manufacturing ecosystem, an 

ecosystem that proves fertile enough to grow and retain domestic manufacturing capacity. 

The Administration is actively pursuing advanced manufacturing as vital to the future 

competitiveness of the U.S., enabling next generation technologies and markets. The President's 

Council of Advisors on Science and Technology (PCAST) concluded within it's 2011 "Report to 

the President on Ensuring American Leadership in Advanced Manufacturing" that the Nation's 

long-term ability to innovate and compete in the global economy greatly benefits from colocation of manufacturing and manufacturing-related R&D activities in the United States, and 

~esulted in the establishment of the Advanced Manufacturing Partnership to pursue a privatesector response to Federal government efforts. In March of 2012, the National Science and 

Technology Council, continuing the themes from the PCAST Report, published the National 

Strategic Plan for Advanced Manufacturing with five recommendations that guide Federal 

programs and activities in support of advanced manufacturing research and development. In 

support of these recommendations, the President proposed a "National Network for 

Manufacturing Innovation" (NNMI) as a series of 15 public-private partnerships designed to 

accelerate innovation by investing in industrially-relevant manufacturing technologies. The 

Defense Department is leading the development of a pilot institute that will both develop and 

scale up new, innovative manufacturing capabilities and demonstrate the institute concept in 

support of the full network. 

Turning to the issue of national security, Undersecretary of Defense Frank Kendall stated earlier 

this year that "Essentially, the industrial base is part of our force structure and we have to treat it 

like it is," acknowledging the vital role of defense manufacturing and the requirement for 

guidance. The 2012 Defense Strategic Guidance clearly defines priorities built upon exploiting 

our technological advantage while operating within a reduced budget environment. This 

guidance emphasizes presence in the Asia Pacific, increases agile response capabilities, and 

maintains European commitments. These priorities are enabled by advanced technology for the 

warfighter, including advanced electronics, lightweight materials, and reduced size, weight and 

power for a broad range of defense systems. The DoD recognizes these technological advantages 

are provided through advanced manufacturing technologies, which is why the FYI3 Defense 

Budget highlights manufacturing R&D as a priority: 

4 
64 


79794.042

" [000] Invests in long-tenn scientific and technological innovation to ensure that the 

Nation has access to the best defense systems available in the world. High-priority 

research and development areas include: advanced manufacturing, cybersecurity, and 

autonomous systems." 

However, these priorities are set within a reduced budget environment. The FY13 President's 

Budget shows total U.S. defense spending dropping roughly 22% over the period 2010-2017, 

before any additional sequestration reductions. This means that defense affordability concerns 

will remain dominant, with pressures on acquisition costs that will defer modernization and 

increase sustainment requirements. However, acquisition and sustainment are both supported by 

the same industrial base, which is threatened by defense reductions. This defense industrial base, 

which at the lower tiers is predominantly small and medium sized with commercial and defense 

customers, possesses a variety of specialized manufacturing capabilities required to produce or 

sustain defense systems, and must be properly managed to ensure readiness and avoid 

obsolescence. The ideal characteristics of the industrial base sought by the 000 are 

technologically vibrant, highly capable, and financially fit. As such, the Defense Department is 

a unique beneficiary of a highly competitive manufacturing base, because of the reinforcing 

nature of an economically healthy manufacturing ecosystem on the shared industrial base. 

Turning to manufacturing R&D for national security, the Defense Department has a single 

program that is chartered under USC Title 10 to develop and transition manufacturing processes 

and fabrication required for the production and support of Defense Systems: The DoD 

Manufacturing Technology (ManTech) Program. For over 50 years, the ManTech Program has 

been department's investment mechanism for staying at the forefront of defense essential 

manufacturing capability, which has also been spun-off to feed much of the U.S. commercial 

technology advances, including semiconductors, composites, turbine engines, and machine tools. 

Benefits are not limited to technology discovery, but include substantial cost savings. The OSD, 

Navy and Air Force Manufacturing Technology (ManTech) programs have been recently 

recognized by Vice Admiral David Venlet for their outstanding support to the Joint Strike 

Fighter (JSF) program. With a combined investment of less than $20M, their partnership has 

helped produce four manufacturing technologies that are projected to reduce F-35 program costs 

by $1.1 billion over 30 years of production. 

5 
65 


79794.043

OSD ManTech is leading the development of a pilot institute which will not only lead to a more 

competitive sector in "Additive Manufacturing", but also prepare the groundwork for a broader 

network of institutes, which can flourish into a vibrant, sustaining source of technologies, 

manufacturing tools, goods and products. This domestic capability will only grow if the national 

manufacturing ecosystem is structurally sound and fertile with opportunity. The National 

Manufacturing Competitiveness Strategy can provide this ecosystem, lowering barriers, 

encouraging investment and leveling the playing field with our trading partners. 

Our endorsement of this discussion draft language is based upon the stated objectives, board 

membership and duties, and the lengthy list of topics to be considered during the comprehensive 

analysis and strategy development. However, we note that while the comprehensive analysis 

under Section 4, paragraph (c) does consider previously published reports, plans and 

recommendations, the entirety of these topics would seem to require considerable effort, and no 

staff, budget, or board support is specified. Obviously, resources will be required commensurate 

with the expected level of effort, and not be left to the private or public sector board members. 

Chairwoman Bono Mack and members of the Committee, I'm honored to have had this 

opportunity to provide you a defense industry perspective on the importance of developing the 

needed national ecosystem to increase U.S. manufacturing sector competitiveness. Speaking for 

the NOlA membership, I thank you all for actively supporting U.S. manufacturing policies. 

6 
66 

Mrs. BONO MACK. Thank you, Mr. Gordon. 

Ms. Wince-Smith, welcome back to our committee. It is a pleasure to have you here again, and we are recognizing you for 5 minutes. 

STATEMENT OF DEBORAH L. WINCE–SMITH 

Ms. WINCE-SMITH. Thank you, Chairman Bono Mack, Ranking 

Member Butterfield, and members of the subcommittee, for inviting 

me to discuss Representative Lipinski’s bill to promote the competitiveness of American manufacturing in the global economy. 

The Council on Competitiveness is a 25-year-old nonprofit, nonpartisan organization uniquely comprised of CEOs, labor leaders 

and university presidents all working together to ensure U.S. prosperity. 

Under the leadership of our chairman, Sam Allen, the chairman 

and CEO of Deere and Company, the Council is undertaking a 

multi-year U.S. manufacturing competitiveness initiative. Last December we released a National Manufacturing Strategy called 

MAKE: An American Manufacturing Movement. We addressed the 

key issues around talent, technology, investment and infrastructure to develop this action agenda. We are certain that the committee will find this comprehensive strategy useful in its efforts to 

support America’s manufacturing future. 

We know manufacturing is a cornerstone of American independence, economic prosperity and national security. The image of manufacturing as dumb, dirty, dangerous and disappearing is obsolete. 

Today manufacturing is smart, safe, sustainable and surging. It is 

inextricably linked to America’s innovation capacity and a driving 

force leading our technological transformation from high performance computing, modeling and simulation tools in an exascale economy, to materials by design, advanced robotics, sensors, smart automation, and the new additive manufacturing revolution well underway. 

And manufacturing is broader. It is more deeply integrated with 

services and has a higher multiplier effect on the economy than at 

any time in history. The manufacturing enterprise includes research, development, production, sales, distribution, logistics, customer service, marketing and support. 

In short, manufacturing is a full lifecycle system extending from 

the making of physical products to the delivery of premium services. Understanding the full life cycle of production from startup to 

scale-up is essential if we are going to enact policies that will ensure the United States’ long-term success. 

Ms. WINCE-SMITH. OK. The council applauds continued increased 

public and political attention given to manufacturing. America’s 

economic portfolio requires a healthy and growing manufacturing 

sector to tackle the grand macroeconomic problems facing our country, from job creation, sustaining our middle class, debt reduction, 

entitlement reform, to infrastructure investment for the future. 

We urge Congress and the President to develop and implement 

a national manufacturing strategy that unleashes America’s manufacturing potential in a time of great transformation. And we are 

pleased that the American Manufacturing Competitiveness Act of 

2012 is progressing through the House. 

67 

Supporting America’s manufacturing future does not mean an industrial policy of selecting favorite sectors or firms, subsidizing decaying industries, or adopting protectionist policies that inhibit fair 

global competition and trade. These tactics rarely prove effective. 

Instead, the government should focus on creating the right conditions for manufacturing to thrive. This is an imperative given the 

changing dynamic of global competition and the steady rise of 

state-supported capitalism coupled to predatory mercantilist trade 

policies, and targeted intellectual property theft, and pervasive 

cyber threats against our digital networks. 

In this global, knowledge-intensive economy, the competitiveness 

of U.S. manufacturing has never been more uncertain or more important, and so the policy prescriptions must be right. America’s 

economy needs accelerated productivity, faster economic growth. 

Our security requires a deeper, more resilient industrial base. And 

our private sector is deployed and prepared to produce solutions to 

meet national and global challenges in energy security, health, environment, food security, and, as I mentioned, pervasive threats to 

cyber networks. 

Our global economic competitors are aggressively developing and 

implementing robust national manufacturing strategies. They are 

targeting high-value investment, they’re targeting advanced production, and building skilled workforces. 

Today’s hearing is one of many critical steps Congress can take 

to keep America competitive in global manufacturing. This bill lays 

the groundwork and process for creating a national manufacturing 

strategy, and for developing and expanding the essential nonpartisan, public-private partnerships. The council hopes this committee and the full committee will continue to work in a bipartisan 

fashion to move this bill forward through the legislative process. 

Americans have always been pioneers; we are risk takers, and 

we are makers. Our task is to create the enabling conditions for 

21st century innovation and production in scale in America. We 

must establish a business environment, and nurture and grow the 

ecosystem that fosters breakthrough innovations, rapid commercialization and allows firms, both small and large, to succeed in the 

global economy. The council stands ready to work with you to set 

in place the policies needed to ignite a new era of competitive and 

sustainable manufacturing. 

Thank you for this opportunity to be before you, and I look forward to your questions. 

Mrs. BONO MACK. Thank you, Ms. Wince-Smith. 

[The prepared statement of Ms. Wince-Smith follows:] 

68 


79794.044

Chairmen 

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Deborah L. Wince-Smith 

President & CEO 

Council on Competitiveness 

Testimony before the House Energy & Commerce Committee's 

Subcommittee on Commerce, Manufacturing, and Trade 

Summary 

Legislative Hearing 

June 1, 2011 

Compete. 

Council on Competitiveness 

$P1 * 19116-1011* 

WUbiU. 

The U.S. manufacturing sector is a key engine of innovation, wealth generation, job growth 

and national security. America cannot retain its position ofleadership in the global 

marketplace without a robust and vibrant industrial base. 

Although America remains the world's top producer, our nation has surrendered important 

manufacturing sectors. They were not all lost in the pursuit of cheaper labor, or as a result 

of products becoming low-margin commodities. We have lost production of cutting-edge 

innovations developed in America because of tax, regulatory, skill, finance and 

infrastructure limitations that make production elsewhere more competitive. 

The challenges U.S. manufacturers now face are too complex and varied to be solved with 

the isolated policy approaches of the past. Instead, as a nation, we must develop and 

implement a comprehensive strategy that addresses the myriad barriers confronting our 

manufacturers. The following testimony will address several of these barriers, and speak to 

the critical need for a comprehensive national manufacturing strategy in greater depth. 

1500 K Street NW, Suite 850, Washington, D.C. 20005 T 202.682.4292 F 202.682.5150 Compele.org 
69 


79794.045

Page 2 of 10 

Introduction 

Thank you, Chairwoman Bono Mack, Ranking Member Butterfield and Members ofthe 

Subcommittee for inviting me to discuss Representative Lipinski's bill to promote the 

competitiveness of American manufacturing. 

My name is Deborah Wince-Smith and I am the President and CEO of the Council on 

Competitiveness. The Council is a non~profit, non-partisan organization composed of 

CEOs, labor leaders and university presidents working to ensure U.S. prosperity. Before 1 

tum to discuss Representative Lipinski's bill, I would like to take a moment to 

contextualize my remarks. 

The Council on Competitiveness and Manufacturing 

In December of2011, the Council released MAKE: An American Manufacturing 

Movement - a comprehensive national manufacturing strategy. MAKE represents the 

culmination of more than 18 months of exhaustive research that began with the launch of 

the Council's flagship U.S. Manufacturing Competitiveness Initiative (USMCI). Led by 

Samuel R. Alien, Chairman and CEO, Deere & Company; Chairman, Council on 

Competitiveness, the USMCl is a multi-year effort that is beginning a new dialogue on 

the policies and practices necessary to ensure the long-term success of American 

manufacturing. Since its inception, the USMCI has convened a dynamic cross-section of 

America's top private sector leaders, representing the entire manufacturing value chain, 
70 


79794.046

Page 3 of 10 

to develop comprehensive policy solutions that will make the United States the most 

fertile and attractive environment for high-value manufacturing. 

The USMCI builds on the heritage of two landmark Council efforts of the past decade. 

The 2004 National Innovation lnitiative, which identified advanced manufacturing as an 

over-the-horizon issue to be addressed in order to preserve U.S. innovation capacity, and 

the 2009 Energy Security, Innovation and Sustainability lnitiative, that yielded important 

insights about securing the future of U.S. manufacturing. 

The Road to MAKE 

Concurrent with the launch ofthe USMCI in 20 10, the Council and Deloitte released the 

2010 Global Manufacturing Competitiveness Index, a survey of 400 C-suite 

manufacturing executives worldwide on manufacturing competitiveness today, and 

global competitiveness over the next five years. The Index is a ground breaking analysis 

of the decision-making process in the manufacturing sector, and has been a strategic tool 

to advance the Council's work since its release. 

Building on the findings in the 2010 Index, the Council and Deloitte again teamed to 

develop the Ignite report series: a mUlti-part, interview-driven project that captured 

insights from diverse leadership groups across the American manufacturing landscape. 

The first report, Ignite 1.0 - Voice qf American CEOs on Manufacturing 

Competitiveness, was released in February of 20 11, and recorded the input of nearly 40 
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CEOs on the measures necessary to advance U.S. manufacturing. Many of you may recall 

my testimony before this subcommittee in March of 20 II about this important report. 

The second, Ignite 2.0 - Voices of American University Presidents and National Lab 

Directors on Manufacturing Competitiveness was released in August of 2011, and 

highlighted the perspectives of over 30 leaders in higher education and advanced research 

on the role education, research and discovery play in ensuring America's manufacturing 

future. Released in December 2011, Ignite 3.0 - Voice of American Labor Leaders on 

Manufacturing Competitiveness, the third and final Ignite report, featured the insights of 

more than a dozen of America's top labor leaders on the measures needed to reinvigorate 

the domestic economy and encourage growth of well-paying, high-skills jobs in the 

United States. 

Another major thrust for the USMCI is the ongoing "Out-of-the-Blue" dialogue series, 

through which Council members across the country host dynamic manufacturing 

discussions. These strategic conversations have brought together over two hundred 

experts and practitioners from the Council's broader network - including CEOs from 

multinationals and start-ups, research university and community college presidents, 

national lab directors, labor leaders and others. Dialogue topics range from Accelerating 

Commercialization and Deploying Advanced Materials to Increasing Access to Risk 

Capital and Building a World-class Workforce. Participants challenged themselves and 

the nation to re-think what can and should be done to achieve America's full 

manufacturing potential, and their collaboration revealed many unexpected solutions. 
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These efforts, in conjunction with ongoing research by Council staff, were distilled to 

form the Council's MAKE report, and the recommendations it puts forth. 

The Importance of a National Manufacturing Strategy 

Manufacturing is a cornerstone of American independence, innovation, economic 

prosperity and national security. Manufacturing is broader; more deeply integrated with 

services and has a higher multiplier effect on the economy than at any time in history. 

Manufacturing includes research~ development, production, sales, distribution, logistics, 

customer service, marketing and support. It extends from the making of physical products 

to the delivery of services. Understanding the breadth of today's manufacturing is 

essential to develop policies that ensure the United States will be competitive in the longterm. 

Today, there are enonnous opportunities to increase U.S. production and grow exports. 

The digital, biotechnology and nanotechnology revolutions are unleashing vast potential 

for innovation, manufacturing and services. They will enable new business formation, 

product development and job creation. In some cases they will serve as platforms for new 

industries and markets, but strategic government support is essential to fully realize these 

opportunities. 

Supporting American manufacturing does not mean an industrial policy of selecting 

favored sectors or firms, subsidizing decaying industries, or protection from fair 
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competition. These tactics, while used at times, rarely prove effective over the long-term. 

Instead, the government should focus on creating the right conditions for manufacturing 

to thrive, especially given the changing dynamic of global competition and the steady rise 

of state-supported capitalism. 

We applaud the increased public and political attention given to manufacturing. 

America's economic portfolio requires a healthy and growing manufacturing sector to 

tackle the grand macro-economic problems facing the country, like job creation, debt 

reduction and infrastructure investments. To that end, we urge Congress and the President 

to develop and implement a national manufacturing strategy to maximize America's 

manufacturing potential. And we are pleased that The American Manufacturing 

Competitiveness Act of2012 is making its way through the House. 

The Council's MAKE report highlights many of the challenges outlined in The American 

Manufacturing Competitiveness Act of20 12, and calls for a comprehensive and 

integrated set of actions to support American manufacturing excellence. Of the key 

recommendations, MAKE emphasizes the following: 

J. We need to enact fiscal reform, transform tax laws and reduce regulatory and 

other structural costs to fuel the innovation and production economy from start-up to 

scale-up. These policies must improve the rule of law, reduce uncertainty in the business 

climate, encourage risk-taking and ease access to investment capital. 
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2. We must utilize multilateral forums. forge new agreements, advance intellectual 

property protection, standards and export control regimes to grow high-value investment, 

expand exports, reduce the trade deficit, increase market access and aggressively respond 

to foreign governments protecting domestic producers. 

3. We need to prepare the next genemtion of innovators, researchers and skilled 

workers at every level to harness the power and potential of American talent to win the 

future skills race. Production work today is knowledge work. 

4. We must create national advanced manufacturing clusters, networks and 

partnerships, prioritize R&D investments, deploy new tools, technologies and facilities, 

and accelerate commercialization of novel products and services to achieving next~ 

generation productivity through smart innovation and manufacturing. 

5. And we need to develop and deploy smart~ sustainable, secure and resilient 

energy, transportation, production and cyber infrastructures to create competitive 

advantage through next generation supply networks and advanced logistics and systems. 

The adoption of comprehensive, pre-competitive policies - i.e. policies that do not 

provide undue advantage or disadvantage to a particular industry or sector - are of great 

importance to the long-term strength of our nation's manufacturing base. The 
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recommendations above address some of the most pressing challenges facing U.S. 

manufacturers today, and while useful if implemented individually, would have a far 

greater impact if implemented as a suite of solutions, geared to support organic growth of 

the American industrial base while strengthening and deepening critical domestic supply 

networks. Bills like The American Manufacturing Competitiveness Act of2012 are 

important steps on the path towards a national manufacturing strategy; the tool through 

which to integrate otherwise disparate manufacturing policies into a comprehensive 

agenda that empowers America's entrepreneurs, spurs economic growth and ensures our 

national defense. 

Manufacturing is central to the life-cycle process that brings solutions to customers. This 

involves cutting- edge science and technology, design, modeling and simulation through 

advanced computing, systems engineering, testing and verification and the contributions 

of complex supply networks. It also involves a wide range of services and transactions, 

transportation, maintenance and energy, plus the talent of many occupations-all of 

which are in addition to "bending metal." Finns that commercialize new technologies and 

scale production grow faster, are more profitable and create more jobs than do other 

firms, 

Unfortunately, government policies and programs tend to tocus almost exclusively on 

product R&D, technology transfer and, in some ways, early stage commercialization. 

These phases are all critically important, but manufacturing at scale and manufacturing 
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technologies are often not considered a part of the innovation ecosystem. In fact, they are 

often discounted, creating a negative ripple throughout the manufacturing value chain. A 

broad array of government polices, both foreign and domestic, have important impacts on 

the innovation and production process, from research funding to taxes to market access. 

Presently, U.S. policies are not aligned with the full life-cycle perspective of innovation 

that includes production at scale. 

Without strong public and private support for the complete life-cycle innovation and 

production process, the United States cannot maximize the return on its innovation 

investments-a return measured in jobs, growth and tax revenue, Today, foreign 

investors-especially through sovereign wealth funds-acquire production of U.s.-

developed technologies and innovations. Even domestic investors typically condition 

their investment in new technologies on a business plan that directs manufacturing 

abroad. 

The policies, programs, strategies and business models that worked in the past are 

inadequate to secure America's future. Government, business, labor and academic leaders 

must rethink and retool the nation's business environment to seize emerging 

opportunities and address several shortcomings. These goals are best met through a 

national manufacturing strategy. 
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Conclusion 

Our global economic competitors aren't waiting, They are aggressively developing, 

implementing and succeeding with their own national manufacturing strategies, It's time 

to act in our self-interest. 

Americans have always been pioneers, risk-takers and makers. Our task is to set those 

impulses free and embrace production once more. We must create a business 

environment that fosters breakthrough innovations, rapid commercialization and 

manufacturing at scale. Americans have proven adept at rising to the economic challenge 

of their time. Such a time is now for manufacturing-and we stand ready to work with 

you to set in place the policies needed to ignite a new era of competitive and sustainable 

manufacturing. 

Thank you. 
78 

Mrs. BONO MACK. The chair now recognizes herself for 5 minutes 

for questions, and I will direct my first question to Mr. Mottl. 

As we all know that there was a jobs report released today, and 

unemployment rose to 8.2 percent as the sluggish economy added 

only 69,000 new jobs, which was the fewest number in a year. 

These are dismal reporting numbers. 

But can you speak to—you are a fourth-generation, family-owned 

and -operated business. What do you see as the biggest threats to 

your ability to compete? 

Mr. MOTTL. Well, related to the employment number, I can say 

I personally had a 10 percent employment growth last month, so 

we hired eight new people. But in terms of that issue, we have a 

very hard time finding skilled and trained workers right now. We 

are busy, and we have growing demand, and I am just having a 

very hard time hiring people who have the skills to work. Now, I 

think if we had this act in place, maybe some of those issues would 

have come out, and we would have some policy addressing that 

issue. 

The other problem that I see as a manufacturer, you know, having many, many years in business is that we talked about the defense base. About 30 to 40 percent of our business is defense. The 

other large portion of that is commercial. And any small business 

will tell you that they probably have two or three key customers, 

and without those customers they really couldn’t operate. 

I have seen a lot of my larger key customers leave—largely leave 

the country probably due to predatory trade policies where they, 

you know, can assemble products a lot cheaper elsewhere. That is 

my personal opinion. But in terms of how does that affect defense 

base, well, as I lose my large key customers, I am more dependent 

on the defense work or the remaining work that is here. I am less 

competitive serving that because my capacity is not just shared 

over, you know, commercial work as well as defense work, it is now 

more defense related. So it makes me less competitive, and all of 

these issues together, I think, are things that would come out if 

you had a national strategy act to look at this and develop policy 

around that. 

Mrs. BONO MACK. Well, can you speak to specific changes in U.S. 

Policies that you would like to see implemented to help to improve 

the environment? 

Mr. MOTTL. Yes. Specifically, there are some trade issues. I am 

a free market advocate myself, but I think as we integrate into a 

global economy where there is a lot more planning going on and— 

in other economies, and we are trading with people like that, we 

need to figure out how to address that and how to keep our sectors 

competitive with that. 

Specifically tax policy. We don’t have the most competitive tax 

policy here in the U.S. for manufacturers who want to export. From 

my perspective, we trade with a lot of countries who have adopted 

a VAT tax in favor of a lower corporate or eliminated corporate income tax. 

If you look at that in another light, not in manufacturing, you 

might not like that policy, but if you look at that in terms of manufacturing, and exporting and creating jobs, companies that export 

get that VAT tax refunded to them, whereas U.S. companies have 

79 

their income tax and all of their taxes built right into the cost of 

the product, so it makes it less competitive when you export it. 

So some of these policies, if you look at it in the light of manufacturing, look a lot different. 

Mrs. BONO MACK. Thank you. 

Ms. Wince-Smith, the legislation before us tries to avoid creating 

a new government bureaucracy by relying heavily on input from 

the private sector, which is intended to include the full range of 

nongovernmental organizations and nonprofits. It also tasks the 

Board with looking at ways to streamline government processes or 

cut back on unnecessary regulation. 

Can you agree with that approach? Do you want to speak to that 

a little bit? 

Ms. WINCE-SMITH. Yes, I think that is one of the very positive 

elements in the proposed legislation, because the bill recognizes the 

full panoply of private-sector leadership that is required to really 

develop and enact a national strategy that is a systems integration 

effort. So I think the types of expertise identified in the legislation 

are right on. 

In terms of not duplicating and ensuring a smooth-function bureaucracy, we are making a lot of progress in integrating manufacturing in the administration, and I certainly want to applaud the 

efforts of the administration to do that. However, we can do a better job on that, and I think that this national strategy will be one 

more step with congressional involvement to encourage that. 

The defense sector is a huge leader in what we are talking about, 

and yet defense, because of its imperative for national security, 

really, I think, is not fully utilized in the transformation. At the 

end of the day, this manufacturing need is a huge national security 

initiative. 

Mrs. BONO MACK. Thank you. 

I am going to yield back my last 20 seconds and recognize Mr. 

Butterfield for 5 minutes. 

Mr. BUTTERFIELD. Thank you. 

Dr. Singerman, thank you very much for your testimony. I understand that there are a number of initiatives underway as a result of President Obama’s intense focus on manufacturing. This includes initiatives that are underway at the White House, and some 

through the Department of Commerce, and some in other places of 

the executive branch. 

As you might be aware, this isn’t the first time that we have considered Mr. Lipinski’s bill. In the last Congress on a bipartisan 

basis, we reported a different version of his bill out of this committee and passed it through the House, but it never made it 

through the other body. 

At that time we really weren’t aware of all of the things that you 

guys are doing in the executive branch related to manufacturing, 

and now we know. And since that time we also have seen Congress 

push through its own ideas to put more emphasis on planning and 

policymaking related to manufacturing. 

I believe that—let me just skip to the question. Given what you 

know about current efforts to bolster manufacturing, can you 

please share with us your thoughts about how we can make H.R. 

80 

5865 an effective and useful addition to what the Commerce Department and administration already have underway. 

Mr. SINGERMAN. Thank you, Mr. Butterfield, for that question. 

Let me say that I generally concur with the sentiments that have 

been expressed by the committee, and my colleagues on the panel, 

and Mr. Lipinski about his legislation, the importance of manufacturing to the Nation’s innovation ecosystem and to our global competitiveness, and the importance of a national strategy—not a Federal strategy, but a national strategy—in support of advanced manufacturing to identify public and private investments and policies 

to support that. 

But we have been working with Representative Lipinski’s staff, 

have had conversations with them about this legislation, and we 

are delighted to work with the committee as you consider this bill. 

I think a number of the members of the subcommittee raised 

questions about coordination, and the chairwoman raised a question about duplication and bureaucracy. These are issues that I 

think the committee will consider as it addresses this legislation 

moving forward. 

Mr. BUTTERFIELD. What are examples of times when the Commerce Department or, more specifically, the National Institute of 

Standards and Technology work closely with the private sector? 

Mr. SINGERMAN. It is a very good question. We have a Visiting 

Committee on Advanced Technology, which is composed of leaders 

from the academic and industrial sectors. It is a Federal advisory 

committee, so it is a public body. It is a very high-level body, and 

it provides advice to the Under Secretary of Commerce for Standards, Patrick Gallagher, and his management of the organization. 

This Congress in the America COMPETES Act created—directs 

two studies, one by the Department of Commerce on innovation 

and competitiveness capacity. NIST was closely involved in supporting that, and that study was overseen by an external advisory 

board. 

We are also supporting, as I indicated in my testimony, the Advanced Manufacturing Partnership, which is a private-sector-led 

industry and academic group of leading research universities and 

global companies to provide guidance to the administration on the 

development of policy. 

There are several other examples, but those are just a few 

that—— 

Mr. BUTTERFIELD. So you clearly recognize the private sector as 

a stakeholder in this process? 

Mr. SINGERMAN. Absolutely. 

Mr. BUTTERFIELD. And you do that enthusiastically? 

Mr. SINGERMAN. Yes. I would also add the Manufacturing Extension Partnership’s Advisory Committee, also a Federal advisory 

committee, which focuses on the needs of small and midsize manufacturing firms, again, populated by private-sector individuals from 

community colleges, industry, and professional societies. 

So this is really a theme of the administration reaching out to 

the private sector to provide guidance to our activities. 

Mr. BUTTERFIELD. Thank you. I yield back. 

Mrs. BONO MACK. Thank you. 

Mrs. Blackburn is recognized for 5 minutes. 

81 

Mrs. BLACKBURN. Thank you, Madam Chairman. 

Dr. Singerman, I want to stay with you for just a minute on that, 

because you testified that government should avoid industrial policy and making bets on particular companies and industries, and 

should invest in innovation policy to create the best overall business environment. 

Now, I agree with you. I think that picking winners and losers 

is a very bad idea, and frankly, this administration just really 

hasn’t been very good at it. When you look at what has happened 

with Solyndra and Beacon Power and InterOne, all casualties, if 

you will, of the DOE loan program, and that trying to get in here 

and manipulate and pick those winners and losers. So the track 

record there isn’t very good. 

And the purpose of the Advanced Manufacturing Partnership 

that you were just mentioning is to bring together industry, universities, and the Federal Government to invest in emerging technologies. Am I saying this right? 

Mr. SINGERMAN. Yes, that was my testimony. 

Mrs. BLACKBURN. OK. And so the purpose, they will invest in 

these that will create high-quality manufacturing jobs. So my question to you is this: Is that not picking winners and losers in terms 

of which technologies that you are going to back? 

Mr. SINGERMAN. So that is a very important question, and obviously a question that has—— 

Mrs. BLACKBURN. I think the differentiation is very important. 

Mr. SINGERMAN. A very important question and a very important 

differentiation. And the focus of the Advanced Manufacturing Partnership, and I would also say the efforts that we are involved in 

at the National Institute of Standards and Technology, are not focused on funding individual companies. We recognize that one 

needs, as I think other members of this panel have mentioned, a 

balanced and comprehensive approach that looks at trade. 

Mrs. BLACKBURN. OK. Then let me come at it like this with you. 

OK. What are the emerging technologies that you are wanting to 

go for? And then who gets to decide what those technologies are 

going to be? Whose decision is it to pick out and say, all right, we 

are going to go invest in this technology and not this, because in 

this committee we look at the issue of energy, the picking winners 

and losers and trying to go after wind and solar and not an all-ofthe-above hasn’t fared very well. 

So what are the criteria that they are going to base this on, and 

who are going to be the elites that make the decision of what wins 

and what loses? 

See, I like competitiveness, and I like the marketplace making 

these decisions rather than a group of people that have been selfidentified as being pros in this and thinking that they are going to 

self-vet their opinions and arrive at a decision. So I have got a little 

bit of a problem with that one. 

Let me move on. I have got just a minute and a half left. I want 

to talk a little bit about information technology and piracy. In my 

area in Tennessee, we have a lot of auto manufacturing, we have 

financial service applications, health care, entertainment that are 

all dealing with this. So when you look at the issue of competitiveness as far as it relates to intellectual information technology inVerDate Aug 31 2005 11:24 Aug 16, 2013 Jkt 037690 PO 00000 Frm 00085 Fmt 6633 Sfmt 6633 F:\112-14~1\112-14~1 WAYNE
82 

puts and IP protections, I want to know what any of you are doing 

that we can quickly state, and then if the Department and Commerce and the FTC has been helpful or has not been helpful. 

Anyone want to respond? 

Ms. Wince-Smith, go ahead. 

Ms. WINCE-SMITH. Thank you, Congresswoman Blackburn. 

I think this issue of protecting and dealing with the cyber infrastructure is at the top of the list, because virtually every private 

sector and government network is being consistently targeted by 

adversaries, and some even, I think, of our trading partners. We 

have to have an integrated strategy for this and actually the enabling technologies that enable us to both protect and ensure that 

these cyber networks are operational, because everything depends 

on their resiliency and performance. So it is a huge priority for our 

country. 

Mrs. BLACKBURN. OK. Thank you. 

Any addition to that? 

No, OK. Thank you. 

Mr. Mottl, I will just say manufacturing added only 12,000 jobs 

this past month, so I am glad to know where 800 of those jobs were 

added. So it looks like you were the winner in the month. 

Quickly, do you think this administration’s economic policies are 

helping or failing you? Anyone want to answer? 

OK. Go ahead. 

Mr. MOTTL. It was eight jobs, but I wish it was 800. 

Mrs. BLACKBURN. Eight. OK. I thought you said—I misheard 

you, so we will correct that record. 

Mr. MOTTL. You know, related to the administration’s efforts and 

what you talked about picking winners and losers, you know, I 

think we have to have a good overall policy like we talked about, 

a good competitive policy. But in addition to picking winners and 

losers, I think our competitors are doing that, and maybe I would 

argue that what happened with Solyndra and with those industries 

was that we did not do a good enough job supporting them. I would 

say that some of our trading partners—— 

Mrs. BLACKBURN. I would probably take issue with that, and my 

time has expired. So I thank you for the answer. 

Mrs. BONO MACK. I thank the gentlelady. 

And the chair now recognizes Mr. Gonzalez for 5 minutes. 

Mr. GONZALEZ. Thank you, Madam Chair. 

This is my biggest fear. I would be supportive of this bill because 

obviously I was supportive of its last version and such. The issue 

I take is simply I actually see that we are ignoring things that are 

systemic that took over a number of years to develop in this country, and we are facing the consequences now. My problem is we can 

have another commission, we can have another board, but we are 

all—both Congress and the private sector are whistling past the 

graveyard. 

Let me give you my take on things, and I am going to be quoting 

from different articles over a period of time. This is from the Hamilton Project. It was cited in an article in the Post on January 19, 

2012: From 2001 to 2007, investment in equipment and software, 

the kinds of investment that boost productivity and create good 

jobs, declined 15 percent as a share of our GDP. 

83 

Something has been happening out there. Where is our GDP? 

Where do we invest our money? 

The combined assets of conventional banks and so-called shadow 

banking systems grew from a mere $500 billion in 1970 to $30 trillion in 2008. In the 1970s to the 1980s, financial firms comprised 

15 percent of all corporate profits. By 2006, it was up to 33 percent. 

Financial services gradually comprised nearly 62 percent of GDP. 

You better figure out where that money is being invested. 

What we want in the greatest return—to be honest with you, I 

don’t even know where my 401 is being invested. If I was a teacher, I don’t know where my pension—but I guarantee you, it is going 

to be usually in the highest-yielding products out there, which generally do not create jobs in the United States of America. We are 

not doing anything about it. And maybe this is one way that we 

can bring people together and address it. 

This is Harold Meyerson way back on January 5, 2011, in the 

Post: There is a way to look at the recession, that it is institutional, 

that it is a consequence of the decisions by leading banks and corporations to stop investing in job-creating enterprises that were 

key to a broadly shared prosperity. The share of profits of United 

States-based multinationals that came from their foreign affiliates 

had increased from 17 percent in 1977 and 27 percent in 1994 to 

nearly 50 percent in 2006. 

This is Nouriel Rubini in a Post article of September 17, 2010. 

2010. Most policy approaches, including the Obama proposals, have 

tended to subsidize the demand for capital rather than the demand 

for labor. That has the problem backwards. 

In the second quarter of 2010, capital spending reached an annual growth rate of 25 percent. The argument that increased demand for capital leads to greater demand for labor—that is, if you 

buy more machines, you need workers to run them—has not held 

up. Firms are investing in capital goods, equipment, and offshore 

offices that allow them to produce the same amount of goods with 

less and lower labor costs. 

We exceed all other countries in productivity. We do more with 

less, and with the recession, obviously that may have been needed, 

but we have reached the breaking point. To avoid a chronic increase in the unemployment rate, we need to subsidize the demand 

for labor, achieving job creation rather than making it cheaper to 

buy capital, as investment and other tax credits would do. 

And that is the focused approach that goes back to what Mr. 

Butterfield was saying about preparing a workforce to be globally 

confident in products and services that are produced in this country, that can be consumed in this country, as well as exported. We 

are not doing much of that. 

And I thank you for your testimony today, and obviously, I am 

using my 5 minutes to basically set out there what we are all ignoring, both in the private and public sector, and until we come to 

grips what got us to where we are today, we are not going to undo 

it. 

I have 30 seconds, but I do want to ask Mr.—is it Mottl, is that 

how you pronounce that? How were you able to hire eight additional folks? What were the contracts, the nature of the contracts? 

I am real curious about that. 

84 

Mr. MOTTL. Well, primarily we are hiring in the machining and 

turning departments for programming, and these are highly 

skilled, highly technical positions. I have had to increase wages. 

You know, we were initially advertising around $20 an hour. We 

were hiring people at $25 and $26 an hour. We were stealing people from other companies because there is just, quite frankly, not 

a trained labor pool out there. So that is how I was able to find 

those people. 

Mr. GONZALEZ. And where is this demand emanating? I mean, in 

other words, the contracts are coming; is it private, or is it government, local, State? 

Mr. MOTTL. Defense work has driven a lot of my growth right 

now. My telecom business has been shrinking, and we have looked 

for other markets. It has been defense. Also some of our industrial 

products and our heavy equipment. We do a lot of work for Caterpillar, and that has been growing, but it has been defense, some 

heavy equipment, and then some general industrial products for 

export. 

Mr. GONZALEZ. Thank you very much. I yield back, Madam 

Chair. 

Mrs. BLACKBURN [presiding]. I thank the gentleman. 

At this time Mr. Harper is recognized for 5 minutes for questions. 

Mr. HARPER. Thank you, Madam Chair. 

And thank each of you for being here today and giving us some 

insight into what is going on in the manufacturing world. 

Mr. Mottl, I have a couple of questions I would like to ask you, 

if I may. If we benchmark our manufacturing environment and capabilities against our closest competitors, let us say, in other countries, whether that is Germany or China or Japan or others, if you 

were to align those, where would you expect to see the biggest differences between us and those competitors? 

Mr. MOTTL. I would say it is definitely going to be in tax policy. 

It is going to be in education and training. In Germany, they do 

a lot more vocational training, which is given legitimacy along the 

lines of a college degree. I would love to see that here. Also in 

terms of trade and whether it is supporting exports or protecting 

industries that you want to see, I think other countries take a closer look at that. 

Mr. HARPER. What are some of the issues that you see or think 

of as a manufacturer that—of those issues, how would you implement those or make them part of the core of our national strategy, 

particularly on the education issue? I am certainly intrigued by 

that and how we can implement that here. We are seeing it some, 

particularly in my home State of Mississippi, that a lot of the community colleges are taking that approach for job training, and we 

are seeing that. Anything along those lines that you might see? 

Mr. MOTTL. Yes. In Illinois, there are a lot of community colleges 

doing this as well. My association, TMA, also has taken a lead role. 

We have had a historical leg up in this training. They have been 

training since the 1920s. We work with some of the MEPs. I have 

seen some great things out of those programs. 

But again, there is a fractured—there are a lot of different 

groups doing this, and there is no one really comprehensively 

85 

bringing those programs and policies together and saying, ‘‘This is 

the best practice; we are going to go with this program because it 

has really worked.’’ 

Mr. HARPER. Madam Chair, in light of the time restraints, I will 

yield back. 

Mrs. BLACKBURN. The gentleman yields back. 

At this time Mr. Sarbanes is recognized for 5 minutes for questions. 

Mr. SARBANES. Thank you, Madam Chair. 

I wanted to ask Dr. Singerman a question about the scouting— 

Supplier Scouting Program inside NIST. Before I ask you the question, I just want to read a little bit about it to the committee and 

to anyone who is not aware of it, because it is a great success, and 

I want to ask some follow-up questions about how we may be able 

to expand this. 

So within this, you have the Manufacturing Extension Partnership, which is an attempt to work with manufacturers all across 

the country, support their efforts to network and make connections, 

and get real concrete opportunities. 

The Supplier Scouting, which is part of the MEP’s Make It in 

America Initiative, has worked to streamline Federal agency contracting with small and medium U.S. manufacturers. The program 

does this by connecting manufacturers with the procurement offices 

of various Federal agencies and assisting in the expansion and development of the manufacturers’ product offerings to respond to the 

government’s evolving contracting needs. The program has been a 

great success helping to ensure Federal agencies such as DOE, 

DOD, and DOT comply with the various Buy American statutes, 

while simultaneously bolstering the U.S. Manufacturing base. 

For example, in the case of the Department of Energy, of the 83 

Buy American waivers filed by the agency suggesting that there 

were no U.S. Manufacturers to supply their contracting needs, the 

Supplier Scouting Program was able to identify 39 matches between U.S. manufacturers and the Department of Energy, representing a 47 percent success rate. Subsequently, 65 different U.S. 

manufacturers received business from the Federal Government. 

This is business that would otherwise have been shipped overseas. 

And there are other examples of the success. 

Let me ask you a couple of questions. Has there been interest 

from other agencies in entering into the Supplier Scouting partnership similar to that of the Department of Transportation, Department of Energy, or Department of Defense? Are you aware of that? 

Mr. SINGERMAN. Let me answer that by just adding some context 

to your question for the committee. 

The Manufacturing Extension Partnership program has been in 

existence for nearly two decades. It is a public-private, Federallocal program in which the Federal Government provides a third 

of the funding, the private sector provides a third of the funding, 

and State and local governments provide another third of the funding. Every State has a center. Some States have more than one 

center. These are typically—these are nonprofit, often universityaffiliated organizations. These are not Federal employees or Federal organizations. The Federal Government is a partner with local 

organizations. And in the 60 centers with over 400 locations in 

86 

every State, there are approximately 1,400 experts, generally from 

manufacturing backgrounds, who have expertise in various areas of 

specialty and know their industries in their communities. 

And it is through this national network that suppliers are identified for opportunities that the Federal Government and increasingly the private sector have, where they need suppliers, small and 

midsize firms, but are unable to find them. 

We have started to work closely with the Small Business Administration, which has a complementary program working with the 

private sector. 

Representative Sarbanes, you mentioned the Department of 

Transportation. That has been a highly successful program, particularly in the area of high-speed rail, a sector that this country 

has not been a leader in in the past, and there was a perception 

that there were no small firms that could supply material for the 

large construction programs. The MEP program organized well-attended hundreds of small firms at meetings on the west coast, in 

Chicago and most recently in Florida, and has made numerous connections, actual deals, product sales for small firms working with 

the Federal agencies, and, through those, the Federal agencies, 

contracting through large companies to build high-speed rail. So it 

has been an extraordinarily successful program. 

Mr. SARBANES. I am running out of time, but first of all, I wanted to say that I think that Congressman Lipinski’s bill is a terrific 

opportunity to focus us generally on these manufacturing issues, 

but programs like the Supplier Scouting Program can really help 

to bolster that focus. Are there plans to make sure that there is 

continued support financially within the MEP budget for the Supplier Scouting Programs? 

Mr. SINGERMAN. So, the MEP program has ceded these efforts, 

but we have relied upon contracts, if you will, or interagency agreements with the Department of Transportation, Defense Logistics 

Agency, Department of Energy to fund the additional effort that is 

required on a really one-to-one, boots-on-the-ground basis to identify those firms that have the capability or could develop a capability to provide the products and services to these Federal agencies 

and increasingly to private companies. 

Mr. SARBANES. Thank you. I yield back. 

Mrs. BONO MACK [presiding]. The gentleman’s time has expired. 

The chair recognizes Mr. Kinzinger for 5 minutes. 

Mr. KINZINGER. Well, thank you, Madam Chair. And again, 

thank you for—to all of the witnesses coming in. I really appreciate. 

The manufacturing sector has received obviously a lot of attention recently, but it hasn’t always been a focus. I think specifically, 

you know, 10, 20 years ago, I remember hearing members of government saying that, in essence, manufacturing was out of vogue, 

and we have moved beyond a manufacturing economy. 

One portion of this bill that I think is important is it puts in 

place a Presidentially confirmed group of private-sector and government experts that will focus our attention on manufacturing for 

two distinct Presidential terms. 

Do each of you believe raising the stakes in the creation of a 

Board that delivers recommendations to Congress, do you believe 

87 

it will lead to a greater consensus on policies or actions that will 

improve the environment for American manufacturing? 

And we will start with you, ma’am. 

Ms. WINCE-SMITH. I think it will if it is comprehensive. And you 

just mentioned, Congressman, that manufacturing itself meets the 

new definition. It is far broader than the making of something. It 

is this whole complex supply system, the marketing, all of that. If 

we can address all of those issues and ensure that Treasury and 

Justice and other agencies in our government that have such an 

impact on policy are part of this, it will be very successful. 

Mr. KINZINGER. And I think that is a good point. I mean, the reality is manufacturing is not a thing. It is an idea. And to really 

get a grip on the idea and all of the ancillary parts of it and everything that is involved, I think to have people committed to sitting 

around and having a discussion or a talk about the big picture and 

how are we going to put our arms around the big picture and every 

facet of it is better than really kind of muddling through in a, you 

know, piecemeal kind of basis. 

Mr. GORDON. 

Mr. GORDON. I would absolutely agree with that. 

In fact, in the Defense Department one of the things that Congress has already done in the NDAA from 2011 is to establish a 

manufacturing and industrial-based policy instead of just an industrial policy, is manufacturing and industrial-based policy, essentially moving the organization responsible for manufacturing within DOD up four levels, much higher, to the Secretary of Defense. 

In addition to this, you have already heard what I talked about 

in terms of advanced manufacturing now being one of the top three 

priorities for R&D, and the Department’s S2D2, which is a sectorby-sector and technology-by-technology study of what needs to happen in the industrial base. 

Mr. KINZINGER. I would hate to see us in a position where we are 

someday having to buy dumbed-down equipment from other places 

just to defend ourselves against potentially anybody. 

So, Mr. Mottl, welcome, from Illinois, Land of Lincoln. 

Mr. MOTTL. Thank you. Yes, great, great State. 

I would agree with what was said before, and I think the key is 

sustaining things. You know, success doesn’t happen when you 

kind of pop in with an idea and then disappear. You need to sustain it. 

And then the other end of it is action. You know, a lot of these 

recommendations come out of a lot of groups. I am hoping that 

this, like we said, a comprehensive, formal approach, will actually 

lead to legislative action to solve some of the problems, Because 

there are plenty of reports out there right now, but having to all 

come together, and action has not occurred. 

Mr. KINZINGER. I agree with you. 

Dr. Singerman. 

Mr. SINGERMAN. I would only add that I think it is important, 

as has been mentioned by the members of the subcommittee, for 

the private sector to be closely engaged and leading this effort, 

working with the public officials at the Federal and State level. 

Mr. KINZINGER. Now, I saw that the Chicago-area factory output 

fell to a 2 1⁄2-year low in May, showing signs of a slowing economy 

88 

in Illinois. I would argue it is because many of Illinois’ government 

policies are very unfriendly to surrounding States, and just like the 

United States needs to compete with other countries in the world, 

Illinois needs to compete, and unfortunately some of our leadership 

has not gotten that message. 

The State of Illinois is burdened by insurmountable debt that I 

believe is inhibiting manufacturing growth. In our legislation we 

include two governors selected by both parties as members of the 

board. 

Can each of you speak a little bit and actually very briefly, I 

have got about 50 seconds, about the importance of the role of 

State governments in fostering environment for manufacturing and 

growth? 

And we will start with you, Dr. Singerman. 

Mr. SINGERMAN. I would like to speak to that, because we, at the 

Department of Commerce, in this view the role of States as crucial 

in developing a national strategy for manufacturing resurgence. 

And although we agree that the Federal Government should not 

have an industrial policy, I agree with Representative Blackburn, 

States all have industrial policies. Every State picks winners and 

losers. The States that I have been affiliated with, Pennsylvania 

and Maryland, and knowledgeable about other States as well, they 

all have very concrete programs to invest in particular companies 

or loan dollars to particular companies. 

What the Federal Government can do uniquely that States cannot do is provide the context and the R&D funding at a high level 

through the National Science Foundation, through NIST and other 

agencies to provide the basis for the States. 

Mr. KINZINGER. Thank you. 

Just if I may, just very briefly, Mr. Mottl, if you want to address. 

Mr. MOTTL. For example, workers’ comp in Illinois is a huge 

problem compared to our neighbors. It is $1,000 per employee for 

me in Illinois; in Indiana it would be $400 per employee for my 

same coverage. So—— 

Mr. KINZINGER. You are not the only one I hear that from. 

Thank you, Madam Chair. And I yield back. 

Mrs. BONO MACK. I thank the gentleman. 

The chair now recognizes Mr. Rush for 5 minutes. 

Mr. RUSH. Madam Chairman, I want to thank the ranking member, Mr. Butterfield, for holding hearings on these important matters. 

My question is about H.R. 5865. The world today looks like a 

wide-open field in the midst of a high-stakes economic marathon as 

frontrunners, other countries are trying to surpass the U.S. It was 

predicted that this year, this past year, 2011, the U.S. manufacturing industry—it is interesting that our Nation is dominated, is 

on a path to finish this economic marathon in second place after 

China. I certainly hope that this is not the case. But I also feel as 

though unless we change course now, it is probably going to be 

true. 

In the same token, the political unrest and turmoil that we are 

witnessing overseas and even in our own country is clear evidence 

that job creation is a top priority for all of us. 

89 

I understand that the bill that we are considering is a bipartisan 

bill, and I hope, Madam Chair, that in the rewrite of the bill, that 

you have engaged with both sides of the aisle for all the changes 

that I have seen on this bill, as we did when we adopted H.R. 4952, 

during the last Congress. 

America’s manufacturing sector is an important and exceptional 

foundation for the future of our country, considering the fact that 

in 2009 the manufacturing sector employed more than 11.5 million 

people. But the surprising thing about this is although it is significant, when you consider the Nation actually lost 5.8 million jobs 

between 1999 and 2000, then that certainly kind of balances our 

enthusiasm. 

And I agree that our—with my colleagues on the other side that 

we live in a very competitive economic environment that requires 

an aggressive, multifaceted policy agenda to bring our industry 

back to where it was before the recession. 

What I disagree on is the methodology that would lead us to our 

global competitive advantages again. And it is clear that the objective is not just to have a competitive manufacturing industry, but, 

more important, to have an industry that creates jobs here in 

America. 

So that said, Dr. Singerman and Ms. Wince-Smith, what safeguards can we put in place to make sure that the Board created 

by this bill will indeed develop a strategy that is centered on jobs, 

job creation, and competitiveness? 

Ms. WINCE-SMITH. Well, I think in terms of the job-creation opportunity, it is huge, but it has to be addressed in the context of 

the jobs of the future, not protecting the jobs of the past. And if 

we just look at the energy sector alone, where this country is 

poised to really have game-changing capabilities and resources for 

energy security, think of the manufacturing supply chains and the 

added value that will come if we could move out aggressively in 

that particular component of the manufacturing enterprise, energy 

alone. 

I would also add on the job front that if we don’t change, and 

this has been said, our training systems and training in a way that 

recognizes the full component of jobs in 21st-century manufacturing, we will continue to see other nations beat us in the global 

war for talent, which is part of this. So, I think we need to look 

at these issues in the national strategy in a very broad way, but 

recognize the opportunities, not focus on protecting the jobs of the 

past. 

Mr. RUSH. Do you care to respond? 

Mr. SINGERMAN. Yes, sir. 

Just to build off of Ms. Wince-Smith’s comments, in order to create the jobs of the future, we have to invest in research and development now, which creates the infrastructure, the technological infrastructure, that enables companies like Mr. Mottl’s and others’, 

to build products and provide specific services. 

The program that the President announced in March for a national network for manufacturing innovation is designed precisely 

to do that and to solve a very particular problem that has arisen 

over the last three decades, the growing gap between basic reVerDate Aug 31 2005 11:24 Aug 16, 2013 Jkt 037690 PO 00000 Frm 00093 Fmt 6633 Sfmt 6633 F:\112-14~1\112-14~1 WAYNE
90 

search, which the Federal Government properly supports, and applied research, which is the province of the private sector. 

What we find is that there is a growing gap in the middle. Sometimes people call it the ‘‘valley of death.’’ And the purpose of these 

manufacturing institutes is to bridge that valley of death in a public-private partnership. That is the vehicle that this committee has 

been talking about, the mechanism, and that is the institutional arrangement that is conceived of and the development of the manufacturing institutes. 

So, research and development, but in a collaborative, industryled, academic, Federal Government-supported mechanism. 

Mr. RUSH. Madam Chair, I yield back. 

Mrs. BONO MACK. The chair recognizes Mr. Pompeo for 5 minutes. 

Mr. POMPEO. Great. Thank you, Madam Chairwoman. 

And I want to say thank you to Mr. Lipinski for working. You 

came with this legislation to me several months ago and asked for 

my input, and I really appreciate that, and have had the chance 

to try and help shape what we are working on. 

I am often skeptical that another board, another agency will help 

us very far down the road, but I think this is a good step to get 

the private sector engaged and come up with some core principles 

that everyone can rally around. 

Mr. Mottl, I won’t take my whole 5 minutes, but I want to ask 

you a question. 

First, I want to thank you, Ms. Wince-Smith, for mentioning energy. I agree. We have the opportunity with natural gas to change 

America’s manufacturing sector for decades to come here. I wish we 

didn’t have 10 agencies from this President investigating hydraulic 

fracturing today, which puts at risk this very renaissance that you 

spoke to. So I hope you all will take back when you talk to the administration that says this is important, and we don’t need 10 Federal agencies regulating the industry that has regulated at the 

State level for years successfully and done no damage to groundwater anywhere, even according to Ms. Jackson from EPA. 

But that is a bit of an aside, but it is very important from a manufacturing policy standpoint. 

Mr. Mottl, you talked a little bit about the fact that you compete 

with international companies. Sometimes those are planned economies. I came from the same place. I actually was in sort of the 

same business. I ran a company that did CNC milling and lathes. 

I actually—you probably wouldn’t want me to make your part, but 

I won’t hurt anybody around a CNC lathe. 

But then you wandered off into a space that I am a little bit concerned about. I wanted to get your thoughts. You said, well, they 

are planned, so we should do something about that. What is it you 

would suggest? I give you—you talked about in the context of solar, 

and so now this administration has a subsidized solar technology, 

and then now is making it even more expensive at creating a tariff 

barrier for entry of solar products that we now have a belt and suspenders trying to prop up this particular sector. Is that the kind 

of thing that you think helps your business or another manufacturing company, or the kinds of policies that would help? 

91 

Mr. MOTTL. Well, it is a tricky issue, and I can’t say if I would 

agree that that is the right route. I think we need to look at what 

the right route is, bring in experts and figure that out. 

My point being that certain countries will do whatever it takes 

to make that industry compete, and how do we address that? I 

don’t know the exact answer. But they will do whatever it takes. 

From my perspective, why are my largest customers deciding 

that it is no longer competitive to assemble and build their electronics and telecom housings here? It is primarily government policy in other countries who are making it that much more competitive. I have been told that my subcomponents are competitive even 

with China’s labor. I am very efficient—— 

Mr. POMPEO. Sure. 

Mr. MOTTL [continuing]. But when my largest customers simply 

choose to move their entire assembly operations out of this country 

because they say it is no longer competitive to do business here, 

there is nothing I can do about that. 

Mr. POMPEO. I appreciate that. I would just suggest that oftentimes those policies that those countries engage in do impact manufacturing here, but they are really good for American consumers; 

that is, that we end up with affordable projects that people want 

and buy, and products that are very affordable. When we put tariff 

barriers, we are simply driving up the very cost of the thing that 

we want. 

So I can it is tricky, and maybe that is why we can get this group 

together, and they can help us figure a way through this. 

With that, Madam Chairwoman, I yield back the balance of my 

time. 

Mrs. BONO MACK. Thank you, Mr. Pompeo, and thank you for 

your work on this issue. 

And recognize Mr. Guthrie for 5 minutes. 

Mr. GUTHRIE. Thank you very much. Appreciate being here. 

My background is manufacturing. I grew up, my dad worked for 

Ford. When I was in high school, they shut the plant down. So my 

dad decided—he started on the factory floor during the union, 

worked his way through college kind of thing, and after they shut 

the plant down, he said, well, Ford is going to outsource, and I 

know how to make them. Maybe I will start a business and make 

them for myself. 

So he started a business. After I got out of the Army, I worked 

with him until I came here for about 20 years building a business. 

So, I know aluminum die cast factories that do a lot of tool and 

die—tool and die companies. 

And the one thing—and the shock that is always kind of around 

my public policy, things I have been interested in, was I remember 

I showed up for high school football practice the first day of my 

senior year in high school, and people were saying, ‘‘What are you 

going to do this year?’’ And I said, ‘‘Well, I want to go to West 

Point, I want to go to college.’’ I remember a friend of mine saying, 

‘‘Well, I got a friend that can get me on at Ford.’’ And that was 

a legitimate economic decision for an 18-year-old to make in 1981 

in our hometown. If somebody could get you on at Ford, you would 

make more money probably than I would going to college. 

By the time we graduated, the plant was shutting down. 

92 

And so I think you hit the point about trying to find skilled labor 

particularly is that you can make a really good living in the—middle-class living in manufacturing, and I think what we are all longing to bring it back so we can have the high school graduates go 

make a middle-class living, but it is difficult to do that if you don’t 

bring a certain skill. So I think that has got to be an important 

part of the mix, and I think a lot of that happens in State governments and community colleges and technical colleges. 

But people need to know there are $27-an-hour jobs out there. 

You don’t have to go to college to get them, but you do have to 

bring something to the table in order to get that kind of wage. 

So that is just something that has always been on my mind. And 

that is why I love manufacturing, love seeing products made. Not 

just manufacturing. We were doing a hydro down in my district, 

and I was climbing over it the other day. And it is just you see people working and building something that is going to make a difference, and that is important. And I think we need to do what we 

can, if this bill is the right direction to go, to come up with not 

picking winners and losers, but what is the government doing to 

prevent people from winning. 

And that is the question, Mr. Mottle, you said that your assemblers—and that was the problem we had. We made end caps for a 

little electric motor. Well, the electric motor company moved to 

Mexico, and guess where the die castings went about a year or two 

later? To Mexico. So we were able to do—we figured out we have 

to be highly engineered products, and we have to have skilled people build them; if not, the unskilled people will build unskilled 

small products. So that is what we did and have been successful 

with it. 

But when your assembler says, I can’t manufacture here because 

I am not competitive. So some of that is wages, and we don’t want 

to have Chinese wage rates. I have been over there and seen. We 

don’t want to pay those. And that is not building in a country for 

us. I mean, it is better for them. It is lifting some of their people 

up, but that would not lift our people up. 

But what else are they saying? I know wage rates is an issue 

that we need to make sure that—you are paying good wages; you 

just need people that have the skills, that have the productivity to 

demand that. 

So, what are your assemblers—I know assemblers typically have 

a lot of labor. 

Mr. MOTTL. Yes. Actually, particularly in the telecom industry, 

a lot of that integration is fairly automated. It is pick and place on 

circuit boards and assembly. The circuit boards and—— 

Mr. POMPEO. So labor is not driving their decision? 

Mr. MOTTL. I would say it is a portion of that, yes, but I also 

think that there has got to be—again, I am not running their business, I am guessing here, but I think it has to be a lot to do with 

the taxes, tax implications, the cost of capital. I suspect that they 

get some very low-cost opportunities to buy that expensive assembly equipment that automates it and to build those factories to do 

that. And I think they just get a lot more support from sometimes 

other countries that are willing to court them. 

93 

Mr. GUTHRIE. So they are not just moving to China for low-cost 

wages. There are a lot of things. 

Mr. MOTTL. There is a total package. 

Mr. GUTHRIE. Anybody want to talk about that, because if we 

compare ourselves to China, Germany, Japan and our kind of firstworld competitors, and any of you, why does—would we see different that they are doing different that we could do better? Obviously, we have the highest corporate tax rate. You just mentioned 

that. That is obviously something that has got to be fixed if we are 

going to be competitive. But anybody want to talk on any of the— 

let us start from left and go right, I guess. 

Mr. SINGERMAN. I would just like to add that if you look at Germany, which is a high-wage, high-benefit, highly unionized country, they are one of the world’s most dynamic manufacturing in export-based countries. One of the signature activities that they engage in is a very active apprenticeship program. So they have a 

very highly skilled level of workforce. And these are people who 

don’t have to go to college, but are ensured of good-quality manufacturing jobs that are stable over time. 

One last thing. With the German economy, what the government 

has done has created a situation in which during times of economic 

distress, workers are not laid off, but their work hours are reduced. 

So the dislocation to both the individuals and the firms is reduced, 

and when the economies pick up again, they can rapidly ramp up 

their activities without having to go back into the marketplace and 

compete for additional workers. 

Mr. GUTHRIE. And thanks for that. 

Ms. Wince-Smith, I think you had a comment on that. 

Ms. WINCE-SMITH. Well, I would just add another dimension, 

building on the comments about capital cost structure and regulatory environments as being very critical, and we are competing 

on that, that the United States and Brazil are the only two major 

nations that do not have a territorial tax system. So when U.S. enterprises are producing three times the value of all exports in growing markets in the emerging world—and this is good because these 

are customers, and we want to have exports—and not being able 

to repatriate $1.4 trillion in offshore profits because of double taxation, that is certainly something that we need to change. 

And I was very interested that a whole group of Brazilian manufacturers said to their President Dilma Rousseff, we have to get a 

territorial tax system, because Brazil actually owns a lot of manufacturing enterprise in the United States, and they are, interestingly enough, not bringing that money back to Brazil. I hope more 

of it stays here. So that is one thing we need to do is a territorial 

tax system. 

Mr. GUTHRIE. In the time I have, I want to close. And you are 

right. 

Mrs. BONO MACK. The gentleman’s time has expired. Thank 

you—and then some. But thank you very much. 

At this point we do conclude the panel. We are trying to get the 

next panel in before votes start on the floor, so we all appreciate 

very much your testimony today. And with that, thank you for 

being here. We look forward to working with you. 

94 

And we will take a very brief recess while we seat the third 

panel and then begin immediately. 

So, thank you again. 

[Recess.] 

Mrs. BONO MACK. Again, each of our witnesses has prepared an 

opening statement that will be placed into the record. Each of you 

will have 5 minutes to summarize that statement in your remarks. 

And joining us on our second panel are Jack Fitzgerald, owner 

of Fitzgerald’s Auto Mall. Welcome. And the Honorable Joan 

Claybrook, president emeritus of Public Citizen, and former 

NHTSA Administrator. Welcome to you both. Good morning, yes, 

still. Thank you very much for coming. 

With that, Mr. Fitzgerald, you are recognized for 5 minutes for 

your opening statement. 

Mr. Fitzgerald, would please begin your statement? 

STATEMENTS OF JACK FITZGERALD, OWNER, FITZGERALD 

AUTO MALL; AND JOAN CLAYBROOK, PRESIDENT EMERITUS, 

PUBLIC CITIZEN, AND FORMER ADMINISTRATOR, NATIONAL 

HIGHWAY TRAFFIC SAFETY ADMINISTRATION 

STATEMENT OF JACK FITZGERALD 

Mr. FITZGERALD. Thank you, Madam Chairman, Mr. Butterfield, 

members of the committee. I am very grateful for the opportunity 

to be here on behalf of NATA. 

I was a car salesmen starting in 1956. That is a long time ago, 

isn’t it? I have been a car dealer since 1966. And I have lived these 

changes, and on behalf of NAD, I want to say I support 5859 for 

all of the reasons that Congressman Kelly gave. On behalf of Jack, 

I want to say that I was probably cheerleading for this regulation 

in 1972, because I thought, and still think, that even though she 

doesn’t like me, I think she is doing an awful lot for this country, 

she and Ralph Nader, who is a friend of mine. I get along better 

with him; and Jack Gillis, whom I like to think is a good friend 

of mine, too. These people have done good things for this country. 

But remember, if you think back—and I am so old, I remember 

all of these things—but we were rethinking our souls in the 1970s, 

you know, the Vietnam thing. We were relooking at everything. Nobody ever came to this room to do something bad. The people that 

passed these regulations and passed laws, they come here to do 

what you do: the best for the country they can. 

And in those days, we had a lot of work to do in terms of automotive safety, gasoline mileage, overall efficiency of our business. 

So the people that went after us, the industry, they had a war to 

fight. Some of them still fighting it, but they won. Our cars are 

vastly improved, they are safer, they are more efficient. They do 

cost a lot more money, but they are wonderful products. 

So I am not here to say anything bad about Ms. Claybrook or the 

people that got this law. But I would point this out to you. There 

are lots of ways to get information on cars. My favorite is Consumer Reports, by the way, Consumers Union. This is The Car 

Book, written by Jack Gillis, who is a disciple of Ms. Claybrook. 

This one, by the way, was dedicated to you, did you know that? 

95 

Well, if you look at how to shop for insurance in this book, this 

guy gives you—it is a real compilation of useful information for 

consumers. 

I have always been on the consumer side because they buy cars 

from me. That is rocket science, isn’t it? But I believe very strongly 

in supporting all the consumer endeavors, because they buy cars 

from me. And there are a couple of pages here, and there is nothing about using that chart that we are talking about. And the reason for that, I used to get it from the insurance companies before 

the government got involved, and I thought it was kind of neat. 

You know, it would tell you, purported to tell you if the car you 

are buying is going to have more damage than the next car that 

you might choose. The problem is it is all historical and it is arcane, and if you are not an engineer—Ms. Claybrook has made herself into an engineer. She has studied stuff that I would never get 

to and my customers would never get to. 

It just didn’t do anything for me. And I used to get the booklets 

from them. The Highway Loss Data Institute would send that stuff 

to you for free, or they did years ago. I imagine now you just get 

it online. I used to get it in the mail and I would make copies of 

it and give it to my salesmen and say, tell your customers about 

things like this. They will appreciate it. Well, I don’t think my 

salesmen understood it, I think I probably misunderstood it, and 

I know the customers just didn’t care. They didn’t respond a bit. 

So, I did not purposely conceal it from them. If you look on my 

Web site, you will see I don’t conceal anything. I would put Consumers Report on there, except they won’t let me. But we tell them 

everything. That is how we do business. That is how I have always 

done business. And there was no concealing of this information 

from my customers. 

I want to say I think that this country owes a debt of gratitude 

to Ralph Nader and his army, of which she was one of the leaders, 

for moving the ball down the field to make us take safety seriously. 

There is no reason for people to be dying in cars. I am alive today 

because the government demanded that we have seatbelts in cars, 

shoulder harnesses. And the car that I total lost was a former car 

driven by Senator Byrd from Virginia. I used to be a Ford guy and 

I got the cars from Ford. This was a big Lincoln Continental. I hit 

an Oldsmobile 98. And I survived just fine because it had an interlock on it and I couldn’t not use the seatbelt. 

So I will ever say a word in opposition to people who take on the 

effort to try and improve safety and improve efficiency in our automobiles. It is a tough job. But this regulation is a waste of money. 

And what is really historic is that you all are going to do something 

about it. 

Mrs. BONO MACK. Mr. Fitzgerald, we need you need to wrap up. 

I am sorry. We have a vote on the floor. We need to have you conclude, please. 

Mr. FITZGERALD. I am very grateful to you for considering this. 

I have been in this town since 1935 and this is the first time I ever 

heard of anybody repealing a regulation. I think it is wonderful. I 

think it is historic. I celebrate it, and I congratulate you for being 

willing to do it. I thank you. 

[The prepared statement of Mr. Fitzgerald follows:] 

96 


79794.054

Testimony of 

Jack Fitzgerald 

Dealer 

Fitzgerald Auto Mall 

North Bethesda, MD 

Before the 

House Subcommittee on Commerce, Manufacturing and Trade 

Regarding H.R. 5859, a Bill to Repeal an Obsolete Provision in 

Title 49, U.S.C, Requiring Motor Vehicle Insurauce Cost Reporting 

June 1,2012 

Madam Chairman, Ranking Member Butterfield, my name is Jack Fitzgerald. I have been 

selling cars since \956, and I have been an auto dealer since 1966. I am the owner of Fitzgerald 

Auto Mall, with dealerships in Maryland, Pennsylvania, and Florida. I employ 1,200 people. 

I commend this subcommittee for holding a hearing on H.R. 5859, a bill introduced by 

Representative Harper of Mississippi and Representative Owens of New York to repeal a 

provision in Title 49 that requires the National Highway Traffic Safety Administration (NHTSA) 

to provide to new car dealers information "that compares insurance costs for different makes and 

models of passenger motor vehicles based on damage susceptibility and crashworthiness." To 

implement this mandate, NHTSA annually sends to new car dealers a booklet entitled, "Relative 

Collision Insurance Cost Information." According to NHTSA, dealers are "responsible for 

reproducing and maintaining a sufficient number of copies of the booklet in showrooms, so that 

the booklets can be given to prospective purchasers of new vehicles." The data in the booklet is 

compiled by the Highway Loss Data Institute (HLDI), and NHTSA does not verify the data. 

I support passage of H.R. 5859. First, the information in the booklet is largely useless to inform 

the buying decision of new car purchasers. For example, according to NHTSA, the booklet 

"does not indicate a vehicle's relative safety for occupants." Thankfully, test data relating to 

vehicle crashworthiness that consumers can easily compare by looking at the window sticker is 

available under the New Car Assessment Program (NCAP). 

Additionally, the information in the booklet is completely irrelevant to many new car buyers. 

According to NHTSA, "If you do not purchase collision coverage or your insurance company 

does not use the HLDI information, your premium will not vary at all in relation to these 

rankings." 
97 


79794.055

Moreover, the data in the booklet is retrospective, and doesn't necessarily correspond with the 

new models that have been substantially re-designed for current model years. Accordingly, the 

few consumers who do access the information in this booklet could be misinformed by relying 

on data that is not applicable to current models. 

In a nutshell, the information in the booklet is of no use to those drivers who do not purchase 

collision coverage, may contain inaccurate information about the model a prospective car buyer 

is considering, and is only a small factor overall when an insurance company sets its premiums. 

Perhaps this is why NHTSA counsels consumers to "contact insurance companies or their agents 

directly" to "obtain complete information" about what a new car buyer would actually pay in 

insurance costs, as such information will not be found in this booklet. 

Finally, a recent survey by the National Automobile Dealers Association found that 96% of 

dealers cannot recall any customer ever requesting a copy of the booklet. I have been selling 

cars the entire time this law has been enforced, and I cannot recall, nor can any member of my 

staff recall, any customer ever asking for this booklet. 

For the past 21 years, NHTSA has spent hundreds of thousands of dollars to produce and mail a 

booklet practically no one ever asks for that contains information generally unhelpful to new car 

shoppers. Congress should relieve NHTSA of the burden of complying with this unnecessary 

statutory mandate by passing H.R. 5859. I note that this bill in no way impedes NHTSA from 

publishing on its website this data for anyone who wants to access it. 

While the savings and burden on business of this statutory mandate may be relatively small, 

NHTSA will continue to distribute this booklet in perpetuity unless Congress acts. Passage of 

H.R. 5859 will put an end to this obsolete provision. 

I commend Representatives Harper and Owens for identifying government waste and taking 

steps to end it. [hope Congress will continue to work on a bipartisan basis to clear out the 

statutory deadwood we all pay for. H.R. 5859 is a good start, and I encourage Congress to 

identify other obsolete or job killing rules that deserve repeal or revision. 

Madam Chairman, I urge passage ofH.R. 5859. Thank you for your consideration. 
98 

Mrs. BONO MACK. Thank you very much. 

Mrs. Claybrook, you are recognized for 5 minutes, please. 

STATEMENT OF JOAN CLAYBROOK 

Ms. CLAYBROOK. All right. Thank you very much for the opportunity to testify this morning. I am here to oppose this legislation 

to repeal the important consumer information law, subsection C of 

title 29, section 32302. What this does is provide consumers with 

comparative information about motor vehicle makes and models on 

the costs of repair damage, crash damage. 

Auto dealers are attacking this as wasteful and obsolete. And 

while I appreciate Mr. Fitzgerald’s kind comments, I do disagree 

with him on this legislation. Dealers claim that the consumer never 

asks for the booklet that it is printed by the agency, the National 

Highway Traffic Safety Administration, and sent to dealers each 

year. 

First, let’s lay to rest the issue of the absence of consumer requests for this booklet. I have no doubt that consumers don’t ask 

for the booklet. They don’t ask for the booklet because they don’t 

know it exists. How could they ask for something they don’t know 

anything about? 

The consumer information requirement has suffered from a 

veritable conspiracy of silence. Neither the dealers nor NHTSA 

make any effort to inform consumers about its existence or usefulness. It is a self-fulfilling problem. The real question is whether 

consumers want information about differences in insurance costs 

for different makes and models of vehicles based on differences in 

damage susceptibility and crash-worthiness. 

Has the NADA ever surveyed consumers to ask this question? 

Apparently not. Would anyone in this room want to speculate 

about how consumers would respond to that question? There is no 

doubt that consumers want accurate information about the cost to 

repair a vehicle they are considering buying because repair costs 

are a huge part of the expense of owning a car. 

Consumers are concerned about car insurance and repair costs, 

just like they are concerned about gasoline prices. Every Member 

of Congress knows how sensitive consumers are about that. Why 

hasn’t the gas tax been increased in recent years despite the funding of the needs for the funding of the Highway Trust Fund? It 

hasn’t because Members don’t want to touch a sensitive consumer 

issue. But they are willing to eliminate this particular requirement 

of consumer information. 

It is interesting to note that in today’s economic cost information, 

such as vehicle damageability, it is all the more important, because 

consumers are struggling to stay afloat financially. Indeed, NADA 

just last month attacked NHTSA’s fuel economy standards saying 

that they cost too much and make cars unaffordable. But while the 

dealers are willing to attack fuel economy standards on cars, they 

ignore cost savings to consumers as they try to eliminate this requirement. 

And there is no doubt that the best place for consumers to get 

and evaluate collision damage information is at the point of sale, 

at the dealership. That is why the Congress passed the law in 1992 

99 

requiring dealers to distribute it. That is why the gas mileage requirement booklet is to be at the dealership. That is why in 2005 

Congress added a requirement that information about NHTSA’s 

new car assessment crash test be listed on the Monroney price 

sticker so that consumers would have this information available 

when they went to buy the car. What new information does Congress or NADA possess that is persuasive and documents that consumers don’t want such information at the point of sale? 

It is important to remember that a satisfied consumer is a repeat 

consumer and dealers, as Mr. Fitzgerald mentioned, should be putting their consumers first. Dealers claim that the current law is a 

waste of money, but their bill would have NHTSA continue to collect and publish the comparative collision cost information and 

probably just publish it on the Internet, but not have it at the point 

of sale. 

Much of the cost of this program rests with NHTSA’s collection 

and analysis of the information, and not with sending a copy to 

each dealership. I would say that in 1991 in the proposed rule 

NHTSA said that the economic effects of the requirements are 

minimal and no consumer auto dealer or anyone else objected to 

the cost of the distribution. 

Having NHTSA put the information on the Internet, as the Alliance of Manufacturers suggested yesterday, will do little to inform 

consumers in the throes of deciding which car to buy when they are 

in the showroom. Technical and price information must be available to the consumers at the point of sale, and I know that Mr. 

Fitzgerald is aware of the importance of that. 

The dealers claim that the current law is obsolete, but what is 

obsolete about getting collision insurance cost information by make 

and model when you buy a new car? As NHTSA pointed out in its 

proposed rulemaking, insurance data applicable to the collision portion of the insurance premium provided by the HLDI information 

on average represents 40 to 50 percent of the total premium cost 

to a car buyer. 

The dealers’ primary claim for eliminating the statutory requirement is that consumers aren’t asking for the information, and that 

is an issue that is totally within the control of the dealers themselves. This attack by the auto dealers on consumer information 

about collision damageability is not the first time that NADA has 

tried to stop this program. As noted in the March 5, 1993 rule, 

NHTSA asked NADA to allow the agency to use this list of dealerships to expedite the mailing of the insurance cost booklet to the 

dealers but NADA declined to cooperate and NHTSA was forced to 

get the information from the Department of Energy consumer gas 

mileage guide. 

Also with regard to the obligation of dealers to make consumers 

aware of the insurance booklet, in 1993 NHTSA stated to ensure 

consumer awareness of the availability—— 

Mr. HARPER [presiding]. We are over time, if you can finish. 

Ms. CLAYBROOK. OK, I will. Thank you very much. 

I would just say it is very important that consumers get the information from NHTSA, and that NHTSA could improve this information substantially and has not done so, nor have the dealers recVerDate Aug 31 2005 11:24 Aug 16, 2013 Jkt 037690 PO 00000 Frm 00103 Fmt 6633 Sfmt 6633 F:\112-14~1\112-14~1 WAYNE
100 

ommended that it be improved, and I would suggest that that is 

another important piece of this. 

Thank you very much for letting me testify. 

[The prepared statement of Ms. Claybrook follows:] 

101 


79794.056

Statement oOoan Claybrook 

President Emeritus, Public Citizen and 

Former Administrator, the National Highway 

Traffic Safety Administration 

Before the Subcommittee on Commerce, 

Manufacturing and Trade, Committee on 

Energy and Commerce 

U. S. House of Representatives 

Washington, D.C. 

June 1, 2012 

On H.R. 5648, a bill to Repeal Subsection (c) ofTitle 49, Section 32302 

Madam Chair and Members of the Subcommittee, my name is Joan Claybrook I am 

President Emeritus of Public Citizen and former Administrator of the National 

Highway Traffic Safety Administration. 

I am here today to testify in opposition to the proposed bill to repeal an important 

consumer information law, subsection (c) of Title 49, Section 32302. This section of 

the statute provides consumers with comparative information, across vehicle makes 

and models, on the cost to repair crash damage. Auto dealers are attacking it as 

obsolete and wasteful. Dealers claim that consumers never ask for the booklet that 

is printed by the National Highway Traffic Safety Administration (NHTSA) and sent 

to dealers each year listing "Relative Collision Insurance Cost Information". 

First, let's lay to rest the issue of the absence of consumer requests for the booklet. I 

have no doubt that consumers don't ask for the booklet. They don't ask for it 

because they do not know it exists. How could they ask for something they don't 

know anything about? 

This consumer information requirement has suffered from a veritable conspiracy of 

silence. Neither dealers nor NHTSA make any effort to inform consumers about its 

existence or usefulness. It's a self-fulfilling problem. The real question is whether 

consumers want information about differences in insurance costs for different 

makes and models of passenger vehicles based on differences in damage 

susceptibility and crashworthiness. 

Has the National Automobile Dealers Association (NADA) has ever surveyed 

consumers to ask this question? Apparently not. Would anyone in this room want 

to speculate about how consumers would respond to that question? There is no 

doubt that consumers want accurate information about the cost to repair a vehicle 

they are conSidering buying because repair costs are a huge part of the expense of 

owning a car. 

1 
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79794.057

Consumers are concerned about car insurance and repair costs just like they are 

concerned about gasoline prices. Every member of Congress knows how sensitive 

consumers are about gasoline costs. Why hasn't the gas tax been increased in 

recent years despite the funding needs of the Highway Trust Fund? It hasn't 

because members don't want to touch such a consumer sensitive issue. And yet, 

members are willing to eliminate consumer access to key information about vehicle 

damageability costs, most likely because consumers are not aware of this program. 

It is interesting to note that in today's economy cost information such as vehicle 

damageability is all the more important to consumers struggling to stay afloat 

financially. Indeed, NADA on April 3D, 2012 attacked NHTSA's fuel economy 

standards alleging that increased costs will make new cars unaffordable for millions 

of buyers with lower incomes. But while dealers used cost to attack fuel economy 

standards, but ignore cost savings to consumers as they attack HLDI ratings. 

And there can be no doubt that the best place for consumers to get and evaluate 

collision damage information is at the point of sale-at the dealership. That is why 

the Congress passed this law in 1972 requiring dealers to distribute the information, 

and why in 2005 Congress added a requirement that information from NHTSA's 

New Car Assessment crash tests be listed on the Monroney price sticker on each 

new car now sold-so that consumers would have the information before making 

their purchase, while they are considering all the factors, including price and safety 

performance. What new information does this Congress or NADA possess which is 

persuasive and documents that consumers don't want such information at the point 

of sale? 

I can understand why car dealers want to keep consumers in the dark about 

insurance collision cost information. Dealers want to sell the cars they have on 

their lot. If consumers have access to information about a vehicle that might show 

expensive repair costs and that discourages a sale, the dealer might lose a customer 

and a sale. 

But it's important to remember that a satisfied customer is a repeat customer. 

Unfortunately, the reaction of dealers is not to inform and help their customers. 

Instead, they just want to eliminate such information from the point of sale with the 

misleading argument that consumers don't request it. 

Dealers claim the current law is a waste of money. But their bill would have NHTSA 

continue to collect and publish the comparative collision insurance cost information, 

and merely publish it on the internet, not have it at the point of sale. Much of the 

cost of this program clearly rests with NHTSA's collection and analysis of the 

information-not just with sending a copy to each dealership. In its 1991 proposed 

rule, and 1993 final rule, NHTSA determined that the economic effects of the 

requirements "are minimal". It stated that shipping costs would be about $2.50 per 

dealership. I would also point out that in comments to the NHTSA docket on the 

1991 proposed rule, no com menter, including the auto dealers, specifically 

2 
103 


79794.058

addressed or objected to the costs of any of the distribution options outlined in the 

proposed rule. 

If dealers want to cut the government costs of distributing the information, they 

could receive it bye-mail and reproduce copies in their dealership for pennies. Why 

have the dealers not made this recommendation? In fact, NHTSA in its 1991 

proposed rulemaking on this issue suggested such an alternative-either having the 

manufacturer or trade associations representing dealers make the booklets 

available to dealers or have the government supply a sample booklet to each dealer 

which would make copies for consumers. 

Having NHTSA put the information on the internet will do little to inform consumers 

in the throws of deciding which car to buy when they are in the showroom. 

Technical and price information must be available to consumers at the point of sale 

to be effective. 

The dealers claim the current law is obsolete. But what is obsolete about getting 

collision insurance cost information by make and model before you buy a new car? 

As NHTSA pointed out in its proposed rulemaking in 1991, insurance data 

applicable to the collision portion of the insurance premium, provided by the 

Highway Loss Data Institute (HLDI), on average represents about 40 to 50 percent 

of the total premium cost. The dealers' whole claim for eliminating the statutory 

requirement rests on consumers not asking for the information at the dealership, an 

issue that is totally within the dealers control and authority to remedy. 

This attack by the auto dealers on consumer information about collision 

damageabiIity is not the first time the NADA has tried to undermine this program. 

As noted in the March 5, 1993 final rule, NHTSA asked NADA to allow the agency to 

use its list of dealerships to expedite mailing the insurance cost booklet to dealers 

but NADA "declined to cooperate". Finally NHTSA was forced to get the dealer list 

used by the Department of Energy to distribute the "Gas Mileage Guide." 

Also, with regard to the obligation of dealers to make consumers aware of the 

insurance cost booklet, NHTSA agreed with Advocates for Highway and Auto Safety 

in 1991 comments on the proposed rule that Sec. 201(e) "affirmatively encourages 

the dissemination of insurance cost information to consumers". In its 1993 final 

rule NHTSA stated that "To ensure consumer awareness of the availability of the 

information, dealers may choose to follow the procedures similar to those they 

currently use for displaying the EPA "Gas Mileage Guide" or may utilize wall posters 

or other media displays in the dealership to announce that the information is 

available." (Emphasis supplied). I would be interested to know if any dealership 

that is a member of NADA displays the booklet as NHTSA intended. 

In comments to the NHTSA proposed rule of September 13, 1994, Advocates for 

Highway and Auto Safety stated that "NHTSA has an obligation to assure that 

comparative damageability cost information is provided to potential purchasers at 

3 
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79794.059

vehicle dealerships. Advocates has anecdotal information that indicates that the 

insurance cost information is not being made available to consumers in many 

showrooms. This is exacerbated by the fact that the general public is not even 

aware that the information should be available from the dealer. The agency should 

investigate the availability ofthe cost information and require that dealerships 

display and distribute the information to consumers. Only through such action can 

the agency assure that the cost information will be provided to all consumers and 

that it will be factored into consumer purchasing decisions. Assuring that insurance 

cost information is seen and obtained by every prospective purchaser will advance 

the agency's information policies." 

Apparently NHTSA ignored this sage advice while the dealers continued to avoid 

affirmatively providing it the information to consumers. 

It is important to note that the HLDI data show significant differences among makes 

and models of vehicles, but NHTSA's booklet explains that insurance prices vary 

based on other data as well and that consumers should check with their insurance 

company on the costs of coverage overall. That alone is important information for 

consumers to have and to consider in buying a new car. 

In addition, consumers would benefit from NHTSA testing of bumper and overall 

vehicle damageability performance. Such performance data by make and model 

(similar to New Car Assessment Program (NCAP) data on safety performance) 

would be a great addition to NHTSA's HLDI booklet. Rather than falsely tear down 

the existing information available to consumers, the NADA should suggest ways in 

which such consumer information could be improved. The dealers could start by 

providing a copy of the booklet with the comparative damageability information to 

each customer. 

Overall, reputable polls show that consumers crave specific and clear information 

about the performance of vehicles before making a purchase. The efforts of the auto 

dealers to deny ready access of consumers to damageability data runs completely 

contrary to what consumers in fact want. 

Let me suggest the dealers respect their customers and work to get them more 

vehicle performance information, and support safety improvements for consumers, 

rather than automatically opposing government programs that help families make 

the second most expensive decision most consumers will make in their lives. 

Thank you for the opportunity to testify. 

4 
105 

Mr. HARPER. Thank you both for your testimony. I will now recognize myself for 5 minutes for questioning. 

If I could, Ms. Claybrook, certainly thank you both for being 

here, but in your opening statement, your remarks, you stated that 

there was a veritable conspiracy of silence on this. And I guess my 

question would be, this law goes back to 1972. They were supposed 

to have this by 1975. You were the Administrator from 1977 to 

1981. It is not implemented. NHTSA doesn’t issue a final rule to 

implement this mandate until March 5, 1993. So how do we call 

it a veritable conspiracy of silence when NHTSA didn’t even implement it for more than 20 years? 

Ms. CLAYBROOK. Well, that is the conspiracy of silence, because 

they didn’t actually implement the law. And I will say that in the 

absence of having the insurance information available, which finally got produced by the Insurance Institute for Highway Safety 

with its HLDI program, it is called, then finally there was information available to use. But the Department of Transportation did not 

have such information available and did work during my administration to try and figure out how to do that. 

Mr. HARPER. But you would agree that delay did include 4 years 

with you as the Administrator of NHTSA? 

Ms. CLAYBROOK. It did. It did. I would have liked to have been 

there longer and I would have taken more care of it. 

Mr. HARPER. When you look at the information, and this information that we are talking about, which is a very small part of our 

regulatory structure here, when we are looking at it, it is just 

measuring and showing the actual property damage, the cost of the 

repair for that vehicle. It doesn’t factor in the other things such as 

bodily injury or things of that in the insurance picture, is that correct? 

Ms. CLAYBROOK. That is correct. It could, but the law does not 

require it to do that. But the crash worthiness data is available 

with the new car assessment program that NHTSA implemented 

that I started, and it is in fact in the 2005 law now at the dealership itself also on the Monroney price sticker. 

Mr. HARPER. But the information that we have in the booklet 

that NHTSA prepares is not verified information. They just use the 

information that is provided by the Highway Loss Data Institute, 

is that correct? 

Ms. CLAYBROOK. The Institute for Highway Safety, which is the 

insurance industry. 

Mr. HARPER. Right. Which in that they include all the factors of 

costs that might impact, not just the crash, the repair cost of the 

cars, but the other things that are on there also. 

Ms. CLAYBROOK. Right. They do. 

Mr. HARPER. And so this is why we are looking at this one regulation that is just a minor point that really doesn’t tell us. And 

even in the information that NHTSA prepares and you are certainly familiar with on here, it clearly states that therefore to obtain complete information about insurance premiums, you should 

contact insurance companies or their agents directly. 

Ms. CLAYBROOK. Right, that is correct. And I think that that 

alone is a great piece of information for the consumer to have. And 

I know that Mr. Kelly, who testified earlier, said that he tells peoVerDate Aug 31 2005 11:24 Aug 16, 2013 Jkt 037690 PO 00000 Frm 00109 Fmt 6633 Sfmt 6633 F:\112-14~1\112-14~1 WAYNE
106 

ple to call their insurance agent. But in fact most dealers don’t do 

that. 

Mr. HARPER. I yield back my time, and right now I will recognize 

Mrs. Schakowsky for questioning. 

Ms. SCHAKOWSKY. Thank you so much. I appreciate your actually 

charming testimony, Mr. Fitzgerald, and I wanted to say that I 

think I have been a consumer advocate for about as long as Ms. 

Claybrook has been and we have worked together on many things, 

and I have to tell you, I was not aware of this document, and now 

having become aware of this document, I am even more interested. 

And let me give you an example. 

I am looking at a copy of it now, nicely color coded, which actually the NHTSA one is not, and perhaps the presentation of that 

document could be made more consumer friendly so people would 

understand. 

But if I am buying a car, let’s say I had a teenage driver so insurance costs are really very expensive. And I look at the Chevy 

Malibu, and for all coverages it is at a 94, which is below the mean 

in terms of the various safety features and the collision costs, et 

cetera. And in the same category of four door models is the Kia Optima, which is 134, so above the mean in the cost, and that is 38 

points difference. And when I look at bodily injury liability, the difference is 56 points between the Chevy Malibu and the Kia Optima. I would be interested to know that so that I could be forewarned. 

So my question really to you, Ms. Claybrook, is can you tell us 

exactly what are the benefits to the consumer of having, and I 

think in a much more consumer friendly way, at the point of sale 

this kind of information? To me it seems very important. 

Ms. CLAYBROOK. Well, I think that the information that NHTSA 

publishes could be drastically improved, and particularly in the collision area. When you buy a new car, you buy collision insurance. 

Ms. SCHAKOWSKY. Right. 

Ms. CLAYBROOK. And so 40 to 50 percent of the premium is collision insurance of your new car. So that is why this is important, 

because it is going to tell you that there is going to be vast differences between collision insurance for one model versus another 

model. 

Ms. SCHAKOWSKY. Right. 

Ms. CLAYBROOK. That is the real importance of this in this particular format. 

I issued a standard for a 5-mile-an-hour no-damage bumper. It 

was eliminated by the Reagan administration. It is now 2 1⁄2 miles, 

which doesn’t mean much of anything. It allows damage. So if 

there were a really strong regulation, which there should be, to 

protect vehicles in damageability, this would be less important. But 

there isn’t. This is the only thing that is available to the consumer 

on damageability of the vehicle. That is why it is so important. And 

I am disappointed that the—— 

Mr. HARPER. If the chair may interrupt just to inform, we only 

have a minute left for votes on the floor. If you would like, we can 

come back. 

Ms. SCHAKOWSKY. No, we don’t need to come back. I think that 

the point has been made, and certainly in the written and the oral 

107 

testimony, that this is useful consumer information if it is made 

more accessible I think to consumers. 

Ms. CLAYBROOK. I think that rather than eliminating it, I think 

it would be much more important for NHTSA to bite the bullet and 

make it more useful. 

Ms. SCHAKOWSKY. I agree. Thank you. 

Mr. HARPER. The gentlelady yields back. I want to thank each 

of you for being here today, and remind members they have 10 

business days to submit questions for the record and ask the witnesses to please respond promptly to any questions that you may 

receive. 

The hearing is now adjourned. 

[Whereupon, at 11:55 a.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

108 


79794.060

Statement of Rep. Ed Towns (NY-10) 

Before the U.S. House of Representatives 

Energy and Commerce Committee 

Subcommittee on Commerce, Manufacturing and Trade. 

Friday June 1,2012 

Thank you Chairman Bono Mack and Ranking Member Butterfield 

for holding this legislative hearing today on two bi-partisan bills 

offered by our colleagues, H.R. 5865, the "American Manufacturing 

Competitiveness Act of 2012, and H.R. 5859, a bill repealing motor 

vehicle insurance cost reporting. 

I am proud to have supported an earlier version of the "American 

Manufacturing Competitiveness Act" that passed out of this 

committee by voice vote in the last congress. Our economy has been 

slowly but steadily improving over the course of the past several 

months. According to Peter Hooper, an economist at Deutsche 

Bank, positive trends are developing in consumer spending, 
109 


79794.061

employment and in the stock market. Our unemployment rate has 

steadily been improving from a high of over 10 percent in 2009 to 

where we currently stand at 8.2 percent. Manufacturing has heen a 

major component in this turnaround however we must do more to 

ensure the future of these johs in the American economy. In 2010, 

the U.S. manufacturing sector made up 11.2% of the economy and 

employed approximately 11.5 million workers. Unfortunately 

manufacturing in the U.S. economy is smaller than it once was; in 

1979 manufacturing made up 21.3% of the economy and employed 

over 19.5 million Americans. Given these statistics I fully support a 

call to action hy this Congress and the Administration to focus on a 

manufacturing strategy that will keep the American manufacturing 

sector viable for year to come. I helieve H.R. 5865 is a positive step 

in the right direction toward this goal. I would like to thank you 

Chairman Bono Mack and Ranking Member Butterfield for your 

hard work on this legislation. I also would like to thank 

Congressman Daniel Lipinski and Congressman Adam Kinzinger 

for championing this legislation. I look forward to our upcoming 
110 


79794.062

markup in which I hope this legislation can be further improved 

upon to ensure American job growth and competitiveness in 

manufacturing remains a vital part of our economy. 

H.R. 5859 is a bi-partisan measure that removes a provision 

requiring motor vehicle cost insurance reporting. NHTSA has been 

providing this information to motor vehicle dealers since 1993. 

Unfortunately, few consumers know that this information exists and 

is available to them, therefore the value of this information is highly 

questionable. 

The President has sought to identify the least burdensome tools to 

relieve businesses from regulations. I believe H.R. 5859 offered by 

my colleagues Congressman Gregg Harper and Congressman Bill 

Owens achieves this goal by repealing this obsolete provision that is 

severely underutilized. 

Thank you Madam Speaker, I yield back my time. 
111 


79794.063

Answers to questions submitted to Joan Claybrook 

by the House Commerce Subcommitee On Commerce, Manufacturing and Trade 

Questions from The Honorable Mary Bono Mack 

Question 1: What is the relationship between safetyjcrashworthiness and damage 

susceptibility? Isn't it better for a vehicle to crumple and absorb more damage rather than 

be stiffer and transfer more energy to the occupants? Is there any way to distinguish 

between damage susceptibility that is needed for superior crashworthiness and damage 

susceptibility that is a nuisance? 

Response to Question 1: Of course designed-in safety is the most important 

characteristic for any motor vehicle. But the ability of the vehicle to absorb the 

energy of a crash instead of the occupant at higher impact speeds is not 

contradictory with prevention of damage susceptibility in low speed crashes. 

Repair bills of$2000 to $4000 for a 5 to 10 mile an hour crash in which occupants 

are rarely injured are unnecessary and can be prevented with proper bumper, 

materials and front and rear end designs. If a bumper is damaged in a 30 to 50 mph 

crash and the occupant survives, there will be little complaint about the repair cost 

of the bumper, especially in comparison to the likely other damage to the vehicle 

expected in a crash at that speed. By comparison, in low speed collisions, which are 

far more common of an occurrence and significantly less injurious to occupants, 

bumpers and other vehicle components should be designed to minimize the cost of 

repair. But low speed crashes should not result in widespread damage and huge 

repair bills which are also costly for the purchase of insurance. 

Question 2: How would you advise a member of your family or other consumer to weigh 

crashworthiness and damage susceptibility in making an automobile purchase? 

Response to Question 2: I don't think crashworthiness and damage susceptibility 

are contradictory as stated above. Crashworthiness addresses higher speed impacts 

that could involve serious injury or death, while damage susceptibility refers to the 

amount and cost of damage a vehicle sustains in lower speed impacts, which 

generally do not involve the potential for serious injury. Both these issues are 

important to consumers and should be considered in the purchase of a new vehicle. 

Safety performance in serious, higher speed crashes is a major consideration. 

However, when comparing cars with similar safety performance, damage 

susceptibility should definitely be considered as a cost that is likely to be incurred 

over the life time of the vehicle. Unfortunately the current 2.5 miles-per-hour (mph) 

federal bumper standard is useless and should be upgraded to at least 5 mph, and 

preferably 10 mph, the test easily passed by NHTSA Research Safety Vehicle (RSV) 

in the 1970's. 

Question 3: How do you respond to the assertion that the insurance data provided under 

current law is potentially misleading for newer car models, given that damage susceptibility 

and crashworthiness are not necessarily correlated and in fact may have an inverse 

relationship? For example, based on NHTSA's 2012 Relative Collision Insurance Cost 

Information, a Kia Forte 4 door has a rating of 100 and a 4 door Ford Focus has a rating of 

104, meaning the Ford Focus is susceptible to more damage. Yet when a consumer looks at 

the respective safety ratings on Safercar.gov, it appears the Ford Focus has a higher star 
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rating for safety. How would you advise a consumer to evaluate the information? Which 

information should a consumer use to make a purchase? 

Response to Question 3: First, safety and damage susceptibility do not have an 

inverse relationship as I explain in question 2 above. Safety protection is needed in 

all crashes, including particularly high speed crashes. Damage susceptibility is 

primarily protection against high repair costs in low speed crashes. 

Second, in all purchases consumers must make choices. The issue I have raised on 

behalf of consumer organizations with the Subcommittee is that consumers cannot 

make choices unless they have the information and the most important place to get 

the information is at the point of purchase-Le., at the dealership. That is why 

Congress in the 1970's required the vehicle damage insurance cost information to 

be available at the dealer. The dealer only had to receive the booklet from NHTSA 

and make it available to the consumer-a minor task to say the least. But the 

dealers are fighting giving the information to consumers when they sell cars. Yet 

they have not fought the requirement~ for giving consumers information about gas 

mileage and the NCAP information on the window sticker. I still don't understand 

why the dealers oppose giving consumers all relevant information for their new car 

purchase. 

Questions from The Honorable G.K. Butterfield 

Question 1: 

Supporters of H.R. 5859 argue. that the insurance cost information provision at 49 U.S.c. 

32302(c) is not needed because the New Car Assessment Program (N-CAP), also known as 

"Stars on Cars," provides the only information consumers need to effectively compare 

vehicles. I commend the creation of N-CAP, which occurred during your tenure at NHTSA, 

but I understand that N-CAP rates crash performance and not damageability. 

Question 1.a.: Is that the case? Do you believe consumers would benefit from an additional 

damageability comparison? 

Response to Question 1.a.: You are correct. NCAP rates only safety and not 

damageability. Consumers would certainly benefit from additional information that 

compares damageability among makes and models because cost of repair is a major part 

of the overall cost of owning a vehicle. Moreover, independent testing has shown that 

there are major differences in repair cost from vehicle model to model among similar 

types of vehicles, and these differences in costs to repair are not apparent from just 

looking at the vehicle. 

Question 1 continues: 

A major source of dissatisfaction with the current law is that the insurance cost information 

provided does not easily translate into damageabiJity ratings and it is not particularly easy 

for the average consumer to understand. If you look back at the 1972 law, it seemed to be 

concerned with damage to vehicles that have been involved in only minor collisions. 

Question 1.b.: Is there better information that would help consumers evaluate 

damageability risk? The Committee Reports for the 1972 law discuss the value of a bumper 

standard to minimize damage from low-speed crashes. If there were a more robust bumper 

standard, would we still need insurance cost reporting? 

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Response to Question 1.b.: You are correct. The 1972 law anticipated NHTSA would 

issue a bumper standard to minimize damage from low-speed crashes. In fact, I issued 

such a no-damage 5 mph bumper standard in 1979. But unfortunately it was cut back 

to 2.5 mph in 1982 and has not been changed since. A strong no-damage 5 mph 

bumper standard would reduce the need for damage cost information for consumers. A 

10 mph no-damage bumper standard is feasible and would be preferable. Of course 

there are also other parts of the vehicle, such as fenders, hoods and doors that are very 

expensive to repair from low speed crashes so insurance cost information is always 

helpful, but it would be far less essential if we had a strong 5 mph no-damage bumper 

standard. 

Question 1.c.: My understanding is that minivans and SUVs are not required to meet the 

bumper standard. What happens when a car and an SUV hit at five miles an hour? Should 

car and SUV bumpers be more compatible so minor collisions do not result in large property 

damage to the vehicles? 

Response to Question 1.e.: Minivans and SUVs are not required to meet any bumper 

standard and thus the consumer has no protection at all. While cars have to protect the 

vehicle safety systems in a 2.5 mph crash, and the bumpers have to be within a certain 

height range off the ground, SUVs, Minivans and pickup trucks are not required to meet 

even these weak specifications. When a car and an SUV or Minivan crash, the car usually 

suffers extensive damage because the larger vehicle's bumper is higher than the car 

bumper and it misses the car bumper and strikes the softer car exterior parts, causing 

extensive damage. There is no federal compatibility standard for different size 

passenger vehicles but there should be and we urge the committee to require NHTSA to 

issue a federal no-damage bumper and a federal height compatibility standard that 

applies to all light vehicles (under 10,000 pounds gross vehicle weight). This would 

substantially reduce damage and insurance costs to vehicles in lower speed crashes. 

The compatibility standard would also significantly reduce passenger injuries when 

larger vehicles strike cars in higher speed crashes. 

Question 2: 

Congress enacted the Motor Vehicle Information and Cost Savings Act with an expectation 

that providing insurance cost information at the point of sale would create a market 

incentive for manufacturers to produce cars that are more resistant to damage and less 

expensive to repair or service. We know reporting or disclosures can affect change; that is 

precisely what happened when NHTSA introduced "Stars on Cars." 

But that market incentive has not occurred in this case. Supporters of this bill say that 96% 

of the time, consumers do not ask dealers to produce insurance cost information and it is 

partly because they don't even know it is available. NHTSA's final rule only requires dealers 

to make the information available upon request. 

Question 2.a.: How would you respond to these findings? Do you think the insurance cost 

reporting requirement would be more effective if dealers had to hand a copy to each 

consumer? 

Response to Question 2.a.: Yes, insurance cost reporting would be far more effective if 

dealers had to provide each customer with the damageability cost information. Today 

most consumers don't even know it's available. 

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Question 2 continues: 

Supporters of this bill argue that the information as presented isn't going to help someone 

decide between one car that got a 105 rating and another car that got a 110 rating. 

Quest jon 2 b : Can you briefly explain why this information is helpful before you sign on 

the dotted line? Could the information help consumers avoid purchasing a motor vehicle 

that is among the worst offenders? 

Response to Question 2.b: Consumers are entitled to have information to make their 

own choices. For some consumers safety is paramount and they will always choose the 

safer car. But for others, a small difference in the safety and damageability ratings could 

give them a larger range of choices among makes and models. 

Also, because manufacturers respond to public information about their vehicles, having 

this information readily available to consumers will cause them to improve their 

vehicles' ratings on damageability. 

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