tv Politics and Public Policy Today CSPAN February 23, 2016 12:00pm-2:01pm EST
agencies to ensure that we can reduce the backlog on new construction but also get us out from underneath some of the older builds that have maintenance costs that have so yous ray jous because they're so old. if u rear trying to maintain a build that's 90 years old, the maintenance is much more than a building that's ten years old. we need to really clearly look at where are we going with construction in the future. and then try to align that $60 billion, what can we carve off of that. if we have these other opportunities afforded to va in the future. >> very good. >> i think by far recruiting and retention. the independent assessment clearly highlighted some leadership deficiencies within the department of veteran affairs that everybody recognizes needs to be fixed needil immediately. if you've got a skeleton crew,
you're not going to have people serving vat rans. you've got a leadership crew not willing to make desuggestion and it contributes to whistle-blower retaliation, people being dissatisfied with their jobs. we've got to get the positions filled. i heard the secretary talk a little bit about reviewing the infrastructure to find out how many positions are needed. we can't make that decision. pi thael ooh have to make the assessment. if the people filling those positions that have been pulled from other positions, those positions will go back. it's a ripple effect. we have, like i said, roughly 50% over the vha landscape of leadership that is either in a temporary position or vacant. if those individuals that are filling in those leadership positions are just plugging the gaps so that the operation can move forward, their positions are now vacant. it's a very difficult situation that needs to be fixed and it needs to be fixed immediately. >> yes, sir. >> thank you, senator.
and if i could comment on the vba portion which is my area of oversight. our serious concerns lie within the amount of personnel they've requested for vba to process the appeals. we think 1,000 should be dedicated to processing appeals only. not necessarily saying we need to hire 1,700 new fte for that program specifically but to temper that with hiring on a temporary basis, maybe portion of that so that once we get the backlog managed and the inventory managed we may not need all of those people. also within vrne, one of the most programs in the va. you put them back into the workforce. how does the program continue to increase each fiscal year, yet their staffing levels do not. that's a major concern for us. >> thank you, mr. chairman. thank you, guys.
>> thank you, senator bozeman. i want to thank the secretary for staying. thank you for your testimony today and to the vsos we depend heavily on what you have to say and your participation activity as we all work together for the veterans. thank you for your testimony today and thank you for what you do. we really want to tray to take action by the end of march and have a consolidation of bills put together to give the flexibility of the direction and the flex about to the secretary and make sure we make a move forward on reducing the backlog of claims not by cutting people's ability to make them out but by streamlining the process. we thank you for your testimony and we stand adjourned.
the tricare program to start paying enroll lee fee. the hearing starts at 2:30 eastern and you'll be able to watch it lye here on c-span3. coming up later, hillary clinton in south carolina. she attends a discussion on civil rights and police misconduct. joining her at the event, the mothers of fray vonn martin and eric garner. we'll have it live from columbia, south carolina. later tonight, results from the nevada republican presidential caucuses. we'll show you who won and have candidate speeches live tonight. on our companion network c-span. [ applause ] every election cycle we're reminded how important it is for citizens to be informed. >> to me c-span is a home for political junkies and a way to track the government as it happened. >> it's a great way for us to stay informed.
>> there are a lot of c-span fan os the hill. >> there is so much more that c-span does to make sure that people outthe beltway know what's going on inside it. the nation's governors gathered here in washington over the weekend for the national governor's association winter meeting. one session focused on how states encourage international business investment. this lasts about 90 minutes. good morning. welcome to this meeting. i'm going to turn it over to our moderator, john law. >> thanks very much. good morning. welcome to this panel of the national governor's association.
what matter to firms. i'm a partner at mckenzie's public sector practice and we have the privilege of working with governors and state leaders across the country on health care infrastructure, higher education, public safety, pensions and government operations and i.t. i have the unique privilege of leading our economic development practice which means i work with governors and their economic development teams on their most ambitious jobs and competitiveness initiatives. the premise of this morning's manual is quite simple. states focus disproportionately on company retraction, retention and expansion. governors spend a lot of time doing this. so what actually matter to companies as they decide where to locate and where to invest? and what should states do therefore to ensure that there is competitive as possible in attracting those companies? this discussion and this debate
is obviously an age old one but this particular thread of the conversation began a few months ago in october at the nga's trilateral summit in colorado springs. it was there that my colleague led a discussion with several governors starting with a fai y ly provocative negotiation. the incentive is dead, long live the incentive. this is conversation that we've been having based on observations we're seeing across the country. there's been a move away from an overreliance on subsidies and incentives in attracting companies. instead many states have been building more broad, more deep economic ecosystems in their states. incentives of course have not gone away. but they've rather been deployed more strategically in order to support more sustainable growth
and job growth. which brings us back to the two big fes for this panel. what actually matter to companies when they're deciding where to locate and what should the states do to meet their needs. or what can states do to maximize the return on investment when they're trying to attract companies? to help answer these questions we have a stellar set of panelists this morning. director of internal affairs, we have jim fraser, vice president for government relations at dallas usa, anne par da los, we have donavon johnson and last but not least we have leslee alexander, international director for the tennessee department of economic and community development. but before getting to the panelists, i want to frame the discussion a little bit more. for give me, i'm a consultant, i
can't help but put data on power point slides. i want to share with you a little bit of the research that we've done. a few years ago we did a survey of over 2900 global company executives. we asked first the reasons for why these executives and their companies were seeking new locations. by far and away the number one reason was to reach new markets or customers as you can see on this chart. no other answer came even close, including, i might add, seeking locations that had a lower cost profile. we also asked these executives what criteria they used to choose specific locations. the most important, again, by far and away, was the size and growth potential of a local economy. that's what executives cared about. half of the executives also cared about key components like
talents and the availability of an industry cluster. rounding out the top five were infrastructure and then local politics and regulation. this is what matters to companies. i would just note that what is not on this slide is that 14% of respondents, 14% only, said that the lack of incentives were a reason why they did not choose a location. it did not make the list, in other words. so how are states in providing the features that executives are looking for. one imperfect indicator is what the states spend their budgets on to promote economic competitiveness. we pulled together some state data -- state expenditure data from a number of source, including the national association of state budget officers, the national science foundation and others. as you can see here, states spend a lot per capita on higher
education and transportation. exactly what executives are looking for. far behind is how much they spend on incentives and rnd. however you'll also note that that where there's the largest growth in terms of spending over the past several years, rnd leads the pack. transportation is there in second place and then finally you have incentives and hugher education. so it would seem we could conclude that states are in fact aligning their investments with what companies seem to be wanting. however, i would say that these numbers also show that incentives are not dead. they are in fact growing in size. but anecdotally, i would also say that what we've seen is much more of a strategic deployment of symptoms than a tool to build up the broader ecosystems that drive growth and that companies are attracted to. i would now like to turn it over to my private sector colleagues to say a few words about what they're doing and their
reflections on this topic. first up is frank ervin, iii. >> thank you, john. good morning, everybody. i'm glad to be here. mag that is glad to be here. i'm senior director of government affairs at magthat international. before we start the conversation i just wanted to give you a couple of facts to create a little credibility about what we're going to talking about, say what magna is. i come to washington, d.c. and talk about magna. it's the largest company nobody knows anything about. we're 59 years of growth. ranked as the largest automotive supplier in north america, the second largest in the world, the most diversified automotive supplier in the world and we supply every auto maker in the world some kind of parts in some part of what they do in the automobile sector.
our global presence, we're in 29 countries, have 139,000 employees, we have 305 manufacturing plants around the world and we're at $36.6 billion company. more importantly in the united states we employ about 21,000 people and we have 53 manufacturing plants in the united states spread out over 12 states including tennessee and missouri. we're happy to be there. but the key i think is that the 14 to 16 rnd centers that we have also in the united states, our expenditure in the united states last year in rnd was about $300 million of our total expenditure around the world. so rnd is very important to the automotive industry and where we're going. at magna, our global capacities, engineering and services, product systems, different product systems and also vehicle assembly. we actually aseemable vehicles
in austria. we assemble 200,000 vehicle as year for bmw, chrysler and porsche. we have -- our core competencies are very varied and diversified. we have camera based driver assistance products for safety, closures, mirrors, power train, plastic interior seating and do the contract manufacturing and we're number one globally in just about every sector with the exception of seating where we're number four. that's a little bit about magna and i'll turn it over to jim from dallas. >> thank you. it's also a pleasure to be here. i'm jim fraser. i handle our relations at the federal, state and local levels. so the diversity of what i get to look at on a day-to-day basis
varies dramatically. globalably we have in 56 countries. we've seen a lot of growth over the past number of years. one of the things that i'll mention, it's hard to see on the bottom but we invest a tremendous amount of our revenues back into rnd. $67 million annually. so rnd, we're a high-tech company so the investment that we put in research and development is significant. here in the u.s. we have a footprint of 23,000. 13 states. the interesting point of is we've been here 200 years. the tallas footprint has been here for some time but the name has not. i think we're on the growth potential for us in the u.s.,
though. the diversity of what we do is interesting. these are the market segments we serve globally, ground transportation, security which goes into the cyber world as well, defense, aerospace and also space. globally we're active in the market segments. and you can see underneath that it goes into a little more in-depth on some of the things we do. we're big on connectivity and the highlight is really the connectivity part. it's staying connected a all about data and sharing, data protection as well, a big issues for us in the cyber world. you can see who we are and what we do in the u.s. $2.2 billion in the u.s. for our 2014 revenues. similar for last year and $17 billion or $18 billion globally. we can see where a good solid percentage of the group's annual revenues. a couple of quick thoughts on the things john mentioned.
i know we'll get into a discussion later on. i think when we look at how we're trying to grow in the ugs and the factors that really matter us to, i don't think anything is surprising on the factors that we hut in. i think growth potential where we see the potential investment for tallas, everything we do is driven by our strategy. how do we grow. where does it make sense for us to grow. i think also our workforce. we have very highly skilled jobs, a lot of engineering talent that we need. and having that available workforce working with the states to provide training for our employees. we have an intensive internal training as well. the proximity to the customers, a supply chain, say in the aerospace world, that's very important for us to be a part of the community. but like so many other companies do, we want to be invested in our communities well. the relationships matter.
federal, state and local engagement for us is very important. the relationships with the g governors and their staffs, that all really matters for us. i take a lot of meetings where we don't have a presence now but as we hope to grow it's important to establish the baseline relationship first and then grow into the opportunities as they come forward. it's a vitally important topicing for all of us in the room. i'm pleased to be a part of the discussion. >> thank you for the introduction. jim, in particular, thank you on the thoughts of what criteria matter for you. thank can you say a little more about what you look at in terms of criteria? what pops out for you? >> sure. one of the things that pops out and we have to be cognizant of is the oem. we have to make sure that because we sell the-to-the oem we're not a consumer driven
company. we have to be where the original equipment manufacturers are. sometimes it's sticky because depending on the commodity or the whatever part that you supply at that time to that vehicle, you're required to be in two different circles of what we call just in time circles. one is if it's a really urgent requirement such as a seat or something like that, we're required to be in a 25-mile circle from the manufacturing plant. you got to draw that circle around and we have to be inside that circle. if it's not a critical component, one that can be inventoried to a point of maybe three day to a week, you have to be in 125-mile circle of the plant. you have to be within that circle and if not, the oems will actually charge you a logistics penalty for not being inside the circle. you have to be very careful. but you look at the state -- we do a demographic study of where
we want to be. within the circle, sometimes outside the circle but most of the time in it, we look at the state we want, we do the demographics and the first thing we look at is the standard of living for our employees. making sure that we can get the talent that we need there but also that we can get the workers that we need there and make sure that that talent is educated to a point that we can bring them into the plant, train them, make sure that they stay there. our turnover in the united states is less than 1%. and we do that because we take good care of our employees. then we also look at, you know, obviously the economic part of what -- where we're going to be and we talk to the states and we look at, you know, how the state can help us mitigate the huge capital investment we have to make. when we invest in a plant, the normal -- probably the lowest that we do is $100 million. so that's a huge investment.
it's a long term investment and we have to be careful where we are with it. >> makes a lot of sense. both of you talked a lot about the importance of r and d in your business and you threw out some very large number, $675 million a year on r and d. do you work with states on r and d thinking about the r and d agenda for your companies? >> i think you have to work with the states. we work closely with the states. especially on the automotive side. i snow jim has some on his side. in the out motive side, you've got to start working with the states because of where the technology in the automotive business is going. autonomous vehicle, connected vehicles, especially you have to have permission to test autonomous vehicles in most states and you've got to have some place to test them. some people look at the autonomous vehicle and say, is that the vehicle, the driverless vehicle. autonomous vehicles are not
necessarily 100% driverless vehicles. they're going to move to that. we're 10 to 15 to 20 years away from driverless vehicles. but we've got systems in vehicles now, automatic stop where you don't have to put on the brake if the vehicle senses a vehicle very, very close to you. it stops on its own. those systems are coming into play. there are many, many new technologies that are coming into the automotive industry. and the other thing that really gets us is we have to be some place where we can do this r and d because the federal government is requiring that we go to 54 miles a gallon by 2025. and both the industry and the department of energy have already stated you're only going to get there three way, number one is transmission, turbocharged transmissions, number two is lightweighting of vehicles and number three is electric vehicle. that is the only way you can get the technology to get to 54 miles a gallon by 2025.
r and d is very important in the automotive industry because we can see the technology going forward and we need to do it right here in the united states. >> absolutely. i agree. r and d is at the core of all that we do. at the m.i.t.xd media lab in boston, an innovation center. we have a team of five there. but their mandate is to work with all of our businesses u.s. and globally to drive this initiative forward, how does r and d come into play. a lot of what's going on in digital transformation is at the core. we invest heavily in that but the relationship at the local level is very important. one aspect i've mention in addition to that is globally we have 30 or so cooperative relationships with universities on cooperative r and d projects. we love to bring in the best and brightest from the universities that can help us move our initiatives forward. in the u.s. that's very true as
well. a lot of those are centered around where our current locations are. but i think as we grow that we're also looking where else do they have centers of excellence that we can help create the cooperative relationships that establishes a presence for us or an interest in an area that we might not have been focused on before. that can help grow the relationship as well. r and d is core to what we do. >> we've heard a little bit about regulatory relief for r and d in addition to the incentives. you also mentioned talent a lot and relationships with universities. can you speak a little bit about the relationships you can with local universities, public universities in terms of developing talent and making sure that the talent has the skills you need. >> i think it goes further than that. you to go further. today i think you have to get back into the high school and
junior high school and start young people off from that point and engage and articulate to them that this industry or this manufacturing industry is not bad anymore. okay? it's not where you go in and you got a nice, you know, shirt on, you come out with a grease shirt on. it's not that way anymore. if you look at a body stamping plant, you have 300-ton presses that have 12 stories high, we have to dig 6-foot trench to hold the press in the floor. you look at all of the body work going around. and i remember when i worked at chrysler a long time ago, i was in a spot welding jungle where you the spot welding gun and you were spot welding the vehicles. that's not done by humans anymore. in one plant that's a mill your square foot plant with 1,000 employees, there are 1750 robots
in that plant. and all of the people do that work there basically is control the robots. so you've got to have people that can control the robots. having said that i think you have to go back and you have to create programs for high school, even junior high but really in high school moving into the college area to show them that this is the expertise they need and the core competencies that they need to get into that. and that being, you know, being either an engineer but also an operator, a robot operator is a good living. and you can make a lot of money and live comfortably with it. we go that way and then we create also the university programs where we do a lot of apprenticeship programs and bring in college, young people from college every year to work in all of our facilities. >> jim mpl we do the same thing.
eni agree with frank's comments. it goes past the universities. on the university side we have internshipance the cooperative relationships. we sponsor robotics competitions where the university teams take part. we give our engineers the opportunity to work with the college students to help them further their projects. globally to manage our corporate social responsibility we have an organization call the tallas foundation. it's still relatively new. but one of their primary focus areas is on s.t.e.m. education. there are examples of those here in the u.s. we work with them to get them excited about science, technology, engineering and m t math, the skills that our technologies need. if i had to characterize what we do in the communities -- and i'm sure this is the same for most companies. we want to be part of the community. we want to be involved. we want to -- education, the
local high schools, the community, giving back to the communities. we do a lot of charitable work globally but we also do a lot locally where it focuses on the issues that mat tore the communities. we think it's important to not only be good corporate citizens but to bring that to where we live and work. it's a big area for tallas. >> how much do quality of life factors matter to you as you think about the communities that you choose? obviously you will be investing in these communities in large ways as a large employer going forward. but even before you choose a community to move into, how much does quality of life actually matter. it's something we haven't discussed yet. >> i think quality of life is very important. the work life balance that we hope to have for all of our employees, the opportunity is there in the communities. it's a partnership with the local community. it's very important to us. it's a factor. there are a lot of factors that go in. the one thing i wanted to
mention, i didn't want to lose sight of this. incentives are still important, they matter in the bigger picture of what we look for when we invest or grow in an area. that doesn't mean that we won't be growing elsewhere in the near term future. but i think again it goes back to the relationships that you have in the communities, the quality of life. is it an area that's supportive of foreign direct investment as well. being a global company we bring in employees from all over the world and we hire very much in the local communities. but it has to be the right quality of life, a community that's welcoming and receptive and supportive of the foreign investment. that's very important to us. >> i agree. and moving into quality of life is very important. so when we do the demographics of where we might put a location, that becomes -- we look at what the cost of living is and what kind of employees.
because most of the employees that we put into a facility are going to come from that local area. but getting back and to expound upon the incentive part, i always come back and talk about incentives in a way that i think is positive. and i try to make it positive. it's not about incentives. it's about the return on the investment that this state is going to get from what we put in there. when we -- you know, i'll give you an example. we have one state, it's a large -- we're large in the state and we have 26 manufacturing plants and over the years since -- and i'll go back to 2009 when the auto industry kind of went down. since 2009 that state has granted us $26 million in incentives. and -- but if you go back from 2009 to today, our capital investment just for expansions and new pants, $780 million. so i went back and said, okay. what are you getting back for
this. what do you really get back for this. i think one of the key parts is what people sometimes don't understand is what goods and services that come from putting that plant in that city or that state goes for. so in 2014, in the same state where we have 29 manufacturers, we went back and looked at all of the goods and services purchased by that plant, by 29 plants in that one state from that state's vendors. it was $1.6 billion in one year. anybody can talk about the incentive part that you want. and understanding the intense capital investment. when you're investing $100 million to put a plant in, you're investing $100 million within four years because it takes two years to put the building up and you've got to start production. basically it's not a corporate
give away. it's mitigating the capital expenses you have to put in, plus get the employees in, plus get them trained, get them ready to go and making sure that the vendor base that you buy goods and services from are right there. >> terrific. i want to move on to our state colleagues. but before we do that i'm going to put you on the hot seat. what is one or two pieces of advice that you would give to state economic developers in their roles as folks try to attract your companies and your dollars? that's one or two pieces of advice you would give them? >> i think the biggest thing is to bring all facets or what you need for infrastructure together. make sure that the state economic development people are there at the table but also make sure that the utilities are there. i think the one biggest problem we may have and sometimes face is that we like what we see and we're ready to go and then we
find out that the utility doesn't have the leg tripower to that area and all of the sudden you find out you to build a substation. that substation is $5.5 million. the advice i would bring is to bring everybody together, come out with a plan and a program and let's not negotiate. let's just sit on the table and tell everybody, let's do this, you do this, i'm going to do this. that's the way it's going to be. >> team sport and partnership. >> that's right. >> terrific. >> similar to that, i think getting the highest levels of government in your state involved. the governor's engagement, the economic development agencies, working with the local partners. when we see a team come in that has a lot of focus from top to bottom and really looking to, how do we create this partnership, how do we help you come in, how do we help you grow. looking short term and longer term. having the top level engagement, the buy-in -- i've seen in so
many great examples in this meetings i've had, that's very important. also, take a look at the companies that you're talking to as well. understand who they are and where they are and where their growth potential could come from. that little bit of home work beforehand comes in as we've already gotten past the introductions, we can get into the substance of the meeting. this is how we can work together and help you grow. we have -- a lot of state economic development agencies is european offices as well. that kind of engagement is great. they come to our paris headquarte headquarters. understanding how the company is structured, knowing we have a u.s. presence that exists with working that through is helpful to make the discussions when we get the chance to meet really productive. >> that's great. common theme around doing your home work, doing the intelligence, being prepared and knowing the full range of the needs of the company is really important. i want to turn it over now to
ann pardalos to give us a few men comments. >> i'd like to take the opportunity to thank mark brady and his team at the national governor's association and primarily not only for the extended relationship that we've had through the state's international development organization but also for convening this fantastic and very informational important panel. thank you again. very well done and we really appreciate your partnership throughout the years. i want to take this opportunity to familiarize those of you who may not be all too familiar with missouri. i am from missouri. although there's some people from missouri as well, too, as a matter of fact in our state. but nonetheless, we're the show
me state. and the show me state throughout the years, missourians have been defined literally by their stalwart, their nonflinching, a lot of time mostly conservative. but usually incredulous character. today we like to call that common sense, as a matter of fact. so one of the things that i really want to talk to you about today is a little bit of common sense and how we at the missouri department of economic development approach foreign direct investment, even domestic investment expansions within the state and how important that is, you know, with regards to everything that we do. it's that common sense, once again, that literally had us look inwards and put together a strategic plan, if you will, for the department moving forward. and governor nixon actually was, you know, the huge proponent about it. he was very big on making sure that number one, we had a
strategy in place but number two, that we were following the strategy and making certain that we were addressing all of the needs that needed to be addressed. so just very briefly to kind of talk to some of the items as a matter of fact that were brought up by our true private sector panelists, on the slide here you'll see just very cue economic indicators. but i wanted to take an opportunity as well to kind of tell you a little bit about, you know, some of the other key advantages that we have in the state of missouri that are not readily available or recognizable too. and to that point, you know, we are, as i said earlier, you know, right smack-dab many the middle of the united states. our location is key to the success of the state of missouri. it's location, location, location. if you lack at the state of missouri, within 600 miles of
our state are 52% of all of the manufacturing plants in the united states. that's critical. in addition to that, though, we have a, you know, extensive interstate system that spans all across the state, just like many other states do, of course. but we're kind of fortunate we've got the scenic route 66 in ours. in addition to that, though, we also have a rail system that's one of the largest ones in the country. 4,000 miles of track. 17 freight railroads as well, too. 17 public river ports in the state of missouri, both on the missouri and the mississippi river. and last but not least, you know, two international airports. so if companies are looking to hit either one of the coasts within one day's time, we've got them covered from the state of missouri specifically. in addition to that, though, one of the other key assets that we
truly believe the state of missouri has is our large and productive workforce. that's been talked about a lot today. we have literally placed a lot of resources in training, education. it's critically important. we want to make sure that the workers in missouri do have those skill sets, do have the education, the background that they need, the technical skills for the jobs of the future because that's where we're going, as a matter of fact. it's critically important for us in that regard. in addition, though, we also understand, you know, how vital it is that we expend resources in that regard. you know, our customized jobs program in missouri, or on-the-job training program as well are national models. we're very, very proud of that activity and such as well, too. in addition, though, you know,
some other key information with regards to the state of missouri, our key clusters. ed a advanced manufacturing. these two gentlemen right here, advanced mfrgs is critical. automotive sector is very important. want to time-oout the governor more time. the first thing that governor nixon did was to make certain that the automotive industry -- he put together a task force that was going to address the issues facings the sector back in 2008-2009. critically important. it's because of that, you know, and the focus that we placed on the automotive sector that literally has led to $1.7 billion worth of investment from two of the largest, you know, u.s. manufacturers, the eems. but in addition to that, over 66
suppliers including magna, thank you very much. the automotive industry, we literally led the resurgence in the state of missouri. we're a truck manufacturer. we're number two now in the country in regards to truck production in the state of missouri. we're very very proud of that in regards to that cluster. biosciences, hugely, hugely important in our state. energy as well too. so with regards to these clusters, we have some of the most important, you know, corporate leaders in the world located in our state. as i mentioned, we make everything from f-150 truck to f 15 military aircraft in our state. hallmark cards to lindt chocolates. in missouri we literally do it all. we have a diverse economy that's
founded on manufacturing, founded also on professional services and then of course with regards to tourism and agriculture. not to bely l or agriculture sector by any means. we're a large agriculture state. and the ag technologies are critically important to us. so just to kind of round things off here, you know, we've talked a little bit about talent and how important that is. we've realized that is very important in missouri. we've got talent in missouri. as a matter of fact of our workers, 3 million of missouri's workers, you know, like over, just over half of the population of missouri, highly educated with a degree of some sort. but in addition to that we have 140, you know, degree-certifying institutions in the united
states. so education, again, critically important. also with regards to that, the interesting thing is we were kind of above the national norm. there's more educated people in the state of missouri than there is nationally. that's another factor that we're very, very proud of and we want to make certain that we continue to invest in education so that we move the dial in that regard. lastly, we're a low tax state. we have a low cost of living state. in addition to that, we have low energy costs as well, too, which is critically important to companies, you know, all the time. we are a very stable state at the same time. aaa bond rating, one of only four states over 50 years. we balance the budget in missouri. we make certain that our financial house is always in order. and we make certain that, you know, we're taking care of business in a responsible and
commonsensical manner once again. with all of these great advantages, as a matter of fact, that we just discussed in the state of missouri, it's no surprise that fag bearings, kawasaki, toyota and magna calm missouri home. i'm very excited to be on the panel and to have this discussion and literally continue looking for ways that can can address the business models and the business needs of companies as we work with them to locate in the state. >> wonderful. thank you, ann. i would like to turn it over to donavon johnson. >> thank you, john. i appreciate the opportunity to be here and thank you to the national governor's association for the invitation to represent the great state of north dakota. i'm with the north dakota trade
office and we deal with export-related issues in the state of north dakota. we also partner with economic development finance through commerce which is somewhere we fall under also with fdi, foreign direct investment. and so we take a team approach to what we try to achieve. north dakota is somewhat of a unique state. have a little bit of information just as ann did on the state on where we are, what we do. and we're considered a rural state. so we have some of the advantages, maybe some disadvantages that people look at as it relates to how we operate, what we have as natural resources, what we have simply as resources available. one of the facts about north dakota is we are the geographical center of north america. so if companies want to be geographically centered in north america to do business, north
dakota is it. and there's plenty of places to expand. but how we approach foreign direct investment, investment into the state is we look at what our sfretrengths are and s into our strengths. we know we're not going to be a fit for everybody and that's okay with us. we're not looking for companies who want to get a five-year lease into north dakota through the use of incentives and then when that's done they decide they're going to leave and go somewhere else. so when we talk about who we are, what we are, we talk about our strengths. and i want to highlight just some of those. our governor and his team have done a tremendous job in leading our state as relates to all of the states in the country. and so we have economic strength that we are proud of. we out-surpass all states in gdp growth. that's north dakota. we're the top economic performer
in the nation since 2000, the year 2000. we, according to 24/7 wall street who ranks north dakota as the best run state in the natio years running. we are constitutionally balanced budget state just as anne mentioned and we also have funds that are set aside for future needs and generations. in our mindset we aren't here just for today, we are also here to plan for tomorrow. that's important to us. on the slide it shows some other things that we're involved in also. number one growth and number in revenue of women-owned business in the nation, that's in north dakota. so we look at our strengths and we try to identify that and say how are we going to approach companies or investors that want 6y come into north dakota based on who we are. so what can we offer to investors coming into us?
well, i think somebody had mentioned before the idea of having highly skilled labor force. we do have that. we have 21 public and private universities and technical schools in north dakota. but in addition they are able to quickly adapt to the needs of the changing workplace. so if somebody is coming in and they need something, we can talk about industries. for instance, when energy came in, the need for welders became huge. guess what, like a lot of states we didn't have as many welders as we should have. but our technical schools were able to adapt pretty quickly and develop that skill. another example is one of our universities developed a four-year engineering degree because of need of energy within our state. another example is the unmanned aircraft systems. and i'll talk a little about that in a minute in the state of north dakota. the need was significant.
developed a four-year program on unmanned airport operations the first one in the nation. and so we can adapt fairly quickly to what the workforce might need and what's going on. another thing is we offer a person-to-person introduction and get to know you on all levels of government. whether it's from the legislators all the way up to the governor's office. we're a small state. we will get to know you, and you will get to know us. it's that simple. you can access the decision makers. so i know that was brought up a little bit here before that topped on down. and meeting with the correct individuals that might assist in making decisions, we offer that. so many times you're walking around the state and it's on a first-name basis. run into people in restaurants or setting conference, that's
just how we operate. that's a real advantage. in yesterday's economic development committee session, kevin plank who is the chairman and ceo of under armour was here, and did a tremendous job by the way. but one of the things he said that the states need to have as a priority is an entrepreneurship environment. well, it just so happens that according to a recent university of nebraska, lincoln, study, north dakota is the number one entrepreneurship environment in the nation. so, again, we look at what our strengths are. i say all these to say i think it's important for states to identify, and anne has mentioned this also, identify what your strengths are. and sell into those strengths. if somebody's looking for a port on the ocean, north dakota isn't going to be it. okay. you know, if somebody's looking for an environment where the temperatures don't get below
freezing, again, north dakota is not going to be it. if somebody is looking for quality of life and ability to enjoy four seasons and all the natural resources that we have to offer, north dakota has a lot to offer. so it comes down to what you're looking for from that standpoint. we border an international market. if you or your company thinks that's important, we have great inroads. in fact, port coming into north dakota is the fourth busiest highway port in the nation open 24 hours a day. so there's a lot of traffic that comes through that way. we have a low cost of operation also, just as anne mentioned. low tax. the highest corporate tax rate is 4.31%. so we have been busy reducing taxes, not increasing them. and we've done that to a significant degree. how do we attract fdi into the
state? for any of those at the session yesterday, at the same economic committee, important for states to attract if they want to i'm happy to say north dakota is following those examples. he must have read our notes. marketing campaigns, we have aggressive marketing campaigns that go out and target industrys that are appropriate to where we're at and who we are. aerospace and aviation is huge, so we may have to do some talking from that standpoint, but we start looking at those type of things. what do we have to offer? we start looking at we have overseas offices and contractors that assist us in identifying leads, possible companies that might be moving in our direction. and those are play scenarios
that north dakota is strong from an export market standpoint. we engage our exporters into the process. they're the ones that are traveling a lot, visiting various countries, markets, representatives and we engage them into what we're doing. it's so important to meet foreign delegates on a face-to-face basis and establish that level of trust and build that relationship with them. that is key to when you're dealing with a foreign investments coming in here. we host government dignitaries in our state frequently. we want to showcase, not quite the show me stas, bte, but we w to showcase who north dakota is. and we are consistently doing that. again, because of the size of our state, we have the opportunity to introduce them to the decision makers. so when they go back, they are bringing back a message that says here's what's available, here's what can happen. here's what you can do. we encourage partnerships with universities for research and
development. because again, we can react. the universities and colleges and technical schools can react to what needs to happen with them. we provide workforce development grants and training. and if that's needed, we do that. and of course we have significant and numerous financial economic incentive programs that are available to assist. we also have a very unique structure. we have the bank of north dakota that can offer unique financial assistance. it's the only state-owned bank in the nation. so we get to do some things that are unique to everybody else. if it did you waoesn't fit a mon go to the bank of north dakota and say how do we make this work for the benefit of the state? so we look at all these things from that standpoint. as far as industries, agriculture is still number one. we lead the nation in 14 different commodities as far as
growth, agri business, advanced machinery. we have global headquarters in the state of north dakota as it relates to agriculture manufacturing. so that's really key. energy is a second industry. and energy is made up of obviously oil. we're the second largest producing state in the nation. natural gas, bio mass, coal and wind power. so we have a lot of opportunity for both the fossil fuels and the trend to more green energy that's available in our state. and that's available to us. two other areas that are really strong, we have a lot of diversified industries but i want to highlight technology as one of them. we have a strong biotechnology field and industry in the state of north dakota. most people wouldn't realize that. and literally interacts all over the world on a global market basis.
i don't know if anybody knows that microsoft's second largest campus is in north dakota. so, again, a very strong tech o technological state. the unmanned aircraft systems industry, boy, talk about an industry that is just starting off. you know, a lot of people referred to it as the wild west as it relates to the uas industry. recently or a couple years ago the faa selected six test sites across the u.s. to develop and do some testing and research to develop rules and regulations to integrate the unmanned aircraft vehicles into the manned air space. north dakota is one of those six test sites. and i am not hesitant to say that we lead this effort into the research and what's going on. and what does this do? this attracts a significant amount of interest. so, again, i'm coming back to we look at what our strengths are, and we sell into our strengths.
in one of only six test sites in the nation there isn't a lot of competition that can come up against us. we have an air force base -- u.s. air force base in north dakota that only flies drones. and we have the first private development on 217 acres on this air force base that is going to be used for commercial development. we have additional companies that are coming in boast dmth domestically and foreign coming into the region. give you an example in october 2015, just a few months ago, did a mission to the nordic countries as it related to the uas industry. and as a result of that trip -- that's five months ago. we have a finnish company expanded into north dakota on the u.s. industry, we are hosting in the next couple weeks several other companies that are coming to north dakota and want to partner or locate in north dakota because you're looking at
literally a multibillion dollar industry in the u.s. and north dakota is a gateway to that marketplace. so we look at that. we have success stories. wind power, the danish company looking for an area to bring in manufacturing plant, and after due diligence, research and stuff looked at north dakota and decided to locate there. and we did use some additional bonds to make that happen, but part of that process of expansion and growth. frank, as you said, it's been a tremendous return on investment for us. that's one of the things we look at. we don't want to just give money away. we have a limited budget like everybody else. what can a company invest into the state and the local community? and what can we as a state invest into them? it's a partnership. sears aircraft is manufactured in north dakota. it's the airplanes, single
engine airplanes with a parachute on it. in case you look at it that way. they needed some capital. so they ended up selling their company to a chinese company, got the capital and the chinese company then is going to take an industry leader and introduce that aircraft into their general aviation asian market. stot oil. large norwegian company, wanted to get involved in the shale production in the u.s., came in and bought a company in north dakota. so in conclusion, again, what we look at is who is a good fit for north dakota, how can we benefit them, how can they become part of the community, how can it be long lasting? you know, all the positive things that come about through that process. north dakota is fertile ground to use an agricultural term. and we can actually say from north dakota that we're from the government and we're here to help you.
thank you. >> thanks very much, donovan. leslie alexander, international director for tennessee department of economic commitment and development will wrap us up here in terms of introductory comments. >> thank you, jon. so, leslie alexander with the state of tennessee. i want to say thank you to our governor who is a big proponent of obviously foreign direct investment into the state of tennessee, but also workforce development. and our commissioner of economic and community development, randy boyd, was first tasked before he came to the state with developing a stronger workforce, identifying how to develop a stronger workforce. but i'm going to hold those two things on the side and talk a little bit about our strengths as a state as that's what we're here to do as well. but also talk about some of the similarities. we're talking about the united states of america here as well, and foreign direct investment
into the united states. one thing i love about the panel and my colleagues here is that, yes, we are all landlocked. and so when you look at it from a logistics perspective, we provide a really unique perspective. we're not on the coast. we don't have a big port for someone to come into. we logistically have very unique attributes. and tennessee has one of those 600-mile radius attributes, but we also happen to have memphis. which in talking about things like microsoft, we have the most exports with microsoft as a result of them having a facility there. so we have some really unique attributes throughout the state, which is one of the things i see some similarities as well between the three of us sitting up here. but onto some more specifics about tennessee, we are the volunteer state. so that goes hand in hand with me commending my colleagues here about some of their attributes as well. similarities between us are along the ideas of industrial
machinery, advanced manufacturing i should say, i.t. but you've also heard a common theme of agriculture and commerce, which is what our state is best known for. so when we look at what we try to draw into the state from, again, the west side with memphis, tennessee, we have a lot of advanced manufacturing around medical devices. but also a lot of opportunity there where we have some clients who may manufacture a device, ship it out, in 24 hours it comes back because it's completed its job, it's cleaned and again shipped back out again. so because of the logistics opportunity with federal express, fed ex, and memphis, we have some really strong attributes to the state. in middle tennessee we continue the theme of medical devices and health care management with hca based there. and so we have these strongest -- we have more beds -- hospital beds managed out of middle tennessee than anywhere else in the world. and along with that we draw in
the tier two and tier three parts of it. to hit on i.t. and those opportunities, if you look at tier two and tier three within the hospital management components, you really look at the fact that i.t. is everywhere in this world. so we think of autonomous vehicles is just sort of what we talk about now. so to move on to the east side of the state, we get more into our agricultural. but again, we do have that combination of, again, advanced manufacturing and health care management on the east side of the state. to talk some about automotive, we're happy to have up in east tennessee in clinton 1,200-plus people at a magna facility. and it wouldn't be but for our tier two and tier three businesss that we have established either as a result of great opportunity we have in tennessee with some large headquarters there with volkswagen, nissan, gm being in the state, we also have a strong relationship with those other companies that feed into that. and have some resuring
possibilities and initiatives that have been going on. so when we look at the industries across the state, we can look at health care, advanced manufacturing, automotive, we have aerospace as well, imbra air from brazil has their manufacturing facility and repair facility based in nashville, tennessee. so along with all of those various industries that we have, some things you may not think about as advanced manufacturing would be ceramics. we've recently had a lot of activity in tile making companies from europe landing in tennessee. and so these companies are looking at the ball play in the west of the state and then the feld spa that's in our mountains. that speaks again to the unique attributes in tennessee. that's just sort of an overall picture of some of our clusters and the things we work on there. we also have, and this feeds into some of the things we've been talking about is the workforce development component of which i'm very proud of. getting back to our governor and
our commissioner, we started a couple years ago a thing called the tennessee promise. and so any graduating high school student in tennessee is guaranteed a two-year education vocational and technical studies for free. so if you graduate from high school, you get into this program called tennessee promise, and then there's people like myself who are your mentors. and we hold your hand and make sure you make it through. and we do this with the guidance of the companies who have landed in our states. on a larger picture, we've just recently worked with nissan to develop a workforce development system for them specifically, but in general we are consistently going out into the field and talking with our companies to see what needs they have. and i can tell you in a state like tennessee there's a lot of them. we are a very rural workforce. along with those come some of the challenges. we have a huge broadband initiative going now.
we have a huge rural initiative going now to make sure that the pads are set, the infrastructure's available so that when our companies come and look at a site, they know that their needs will be met. and so from a statewide perspective there are a lot of challenges as all of us have in the more rural communities of the united states, but in general i think that tennessee with over 10,000 jobs created last year from foreign direct investment and then with over 125,000 all created by foreign direct investment, i think we can provide a lot of opportunities. on a smaller note as far as what do we do internationally from the trade office, which my colleagues work with me on, we recently had an initiative going to israel. a governors-led business mission. and we took some of our main health care start-ups over there, talked with other health care start-ups on ways that we can scale up. and how can we bring together some opportunities with some bilateral trade opportunities. and so we see foreign direct
investment as truly a full circle with trade where if you can show somebody that you can take their product back out but also provide the resources they need on the ground, then that's something that we can help you with in tennessee. so, again, we're the volunteer state. and we're here to do for you in the international community what you ask us to do. and we're quick to jump as well. so think about us with our workforce 360 and the opportunities for students to get on the demand what they need as far as education goes that suits the workforce needs and our companies' needs. and to add to that we also provide transitional support if we have a company coming in and a company going out and the people in those communities need to transition from what they had been doing traditionally, we provide workforce development for that as well. so in closing i have to mention entertainment and whiskey, of which are some of our larger benefits in the state of tennessee. we are proud home to the country
music hall of fame and all things country music. so that's why our tourism is huge for us, without saying. but we have attributes in the east with the beautiful smoky mountain national park, which is also home to some of our best music. but we also have jack daniels, so i hope you all are fond of it and enjoy it when you have a chance. whiskey is one of our largest exports. and as you can see canada, mexico, china, japan and belgium are our top markets. but again, we do have that interesting factor with fed ex being based in memphis 24/7, 365 that thing is running and moving product out and into the united states. and we are home to that. and we are very proud of that. so thank you again for letting us be here today. i appreciate it. >> wonderful. thank you very much, leslie. toipt get into a few questions now for our state colleagues. thank you very much for all your comments. it really warmed my heart to hear about the strength based
approach to attracting companies and investments. be it your geographic location, to infrastructure that you've built out to country music and jack daniels. it doesn't get better than that, right? what i want to ask you a little bit is about the process for attracting some of these companies. and specifically i'd love for each of you to speak a little bit about how does your governor get involved, and also a little bit about, donovan, you spoke to how you involve legislators. i think for this audience it would be wonderful to hear a little bit about how you think about involving your executive and your legislative branch as well in the economic development game. anne, do you want to start? >> sure. john, thank you for that. the state of missouri we have 13 foreign offices. that global network is managed by myself and my team on a daily basis. so we work with our local staff to make sure that they are
reaching out to various companies within that particular market that they're based in. so leap generation is literally what the main purpose of that particular -- of our global office network is. in addition to that though we work very closely with our sister agency the missouri partnership. the missouri partnership helps to do actually the marketing for the state of missouri, but in addition to that also the project management. so when the leads come in, we of course then hand them over to the project managers. and we work in tandem together to make sure that we're addressing the needs of the company. interestingly enough though those foreign offices are also in charge of governors trade missions, in charge of trade shows, international trade shows we do on a regular basis we take companies to. for example just last month we had, you know, 12 missouri companies at arab health in dubai. and we were able to not only
generate export sales there but we were also in a position to garner leads, investment leads. because these international shows, and we tend to focus on the ones that are the industry leaders, if you will, or the top show in the sector. so what happens is you have, you know, leading corporate -- you know, a leading corporate presence there. so you have companies that are from all over the world that are probably, you know, very high within the sector. so it helps for us to generate leads in that regard. but to further address your question with regards to the governor. you know, i've been doing this for a long time, john, interestingly enough. and i won't tell you how long exactly, but i've worked for many, many governors. governor nixon has literally -- you know, i can't even say the
stamina this man has is just amazing. but he's tasked us and he's really helped us with some additional resources to be in a position to, you know, go after every deal that we possibly can, work with as many companies as we possibly can, make certain that, you know, we are bringing those projects home. once again i'm going to tout the common sense approach, but the governor has led trade missions for us. he's gone to various trade shows for us. and he just has not stopped with regards to that activity. i'll give yu a perfect example. and because frank is sitting here, you know, governor nixon was in canada a couple of years ago. and one of the very first things that we did is we met with magna. and one of the reasons we did that is because we knew that this was, you know, in the pipeline. we were working with the corporate executives. and the governor was in a position to literally help close the deal for us. so it was critical. and we tried to engage the
governor as often as we can in those types of situations. nobody sells the state better than the ceo of the state, and that's the governor. i mean literally. when we talk about the legislature, however, then we get into some kind of, you know, unique situations. because every legislative leader represents a particular district in their state. so sometimes the challenge that i see sometimes what happens is the overall state requirements, needs, necessities with regards to economic development, are not always the priority of each of our legislative leaders. you know, that's par for the course because like i said, they represent a certain district, they represent a certain community. and so it's very important that they focus on those needs first. and maybe then to the greater good of the state. what i will say though as far as
missouri is concerned, when it comes to economic development, when it comes to foreign direct investment and when it comes specifically to engaging with companies, we have really set -- and actually this is a testament to the governor, he set a bipartisan kind of approach to making sure that the state is represented properly in that regard. so, you know, once again governor's a huge cheerleader for us and very, very important with regards to our efforts in economic development. >> leslie, thanks. >> sure. to close the deals, we want to bring in a company, he's definitely at the table. i think of recent wins we've had in our administration, bringing baa r bret ta down to tennessee, under armour, they all came because the governor was there and he
showed that this was very important. and there are the incentives, we have the incentives, but it is the return on investment. so how can tennessee satisfy the needs of a company when they come to us? and that is where the ceo, you know, makes the close. i think on the legislative side, john, when you think of how the legislature supports the different ideas, as you say, anne, i look at west tennessee and there's a large -- we have a whole africa in april. and we have a huge movement for, you know, bettering our relationships with the continent. and so if it weren't for the legislatures from west tennessee promoting that, then we wouldn't have that continued relationship going with the trade missions in and out of tennessee in that regard. in east tennessee we have the music again and the whiskey. so our legislature see the benefits of those things and developing those attributes as far as export goes. but when you look at the foreign
direct investment piece, andy carellas takes some of our groups from the state level into federal level across the pond. we work with our federal partners, work with the state international development organization, counsel state governments, we don't work in a silo. i think it's the working together and collaborating to make sure that you get into different communities, different cultures, new ecosystems, new business ecosystems with your strengths and your certain clusters to learn more about what those opportunities are back and forth. >> i don't know, frank and jim, if you had any thoughts around your meetings with governors and legislators what works, what might not work as well. any reflections on that? >> i think it's very important that when you're going to invest money in a state that you have a chance to meet and talk to the ceo of the state. it gives you kind of a feeling how it's going to go as we move along.
it's very important to talk to the legislators in the state, especially when itñi comes to wt they're going to take a look at the next session because we've had a lot especially foreign investment companies. we've had a lot of states that come up with different potential laws. especially when it comes to how you report state income taxes that are contrary to diverse as opposed to single entity company. i think if you don't have that conversation, you find yourself down the road in a big problem. >> i agree with frank's comments. i think establishing that relationship really with the governor the key leaders in the state legislature, establishing that level of trust and commitment on both sides is really critical to making the relationship grow from there. >> that's great. donovan, you mentioned the unique situation you have with the bank of north dakota. has there been any examples where you've been able to deploy
that in an innovative way and it's been a real difference maker for companies? i'd love to hear more about that. >> yeah. so it's very interesting that the only state in the nation having its own bank, but there are some restrictions and things even in the banking world that you can and cannot do in there. you know, without probably going into the specifics on the type of assistance and stuff, the things that can be done is the bank of north dakota works as a support system to the banks in the state. they're not a competing entity. and that's one of the things the legislature makes sure does not happen. so the local bank is comfortable operating within north dakota. if the local bank cannot perform, cannot provide, cannot meet the need of somebody in the state or particularly somebody new coming into the state, that's where the bank of north dakota can get involved. and that can be through loans or
guarantees. they could be direct loans. could be financial guarantees to the local lender. could be some kind of grants that might be available. the opportunity is there to structure something that meets the need of the company without having to go through a lot of different gyrations or hoops. aga again. you're talking specific example. there's another company from norway wanted to relocate to north dakota. been very successful in norway, sold the business there and wanted to come to the u.s. and start it, came to north dakota. went to a local bank, new company, we don't feel comfortable, doesn't meet their criteria, et cetera, bank of north dakota got involved. they call me asking what do you know about this, so i gave them my information, met the people
and had been involved with them. said here's what i know about them, but like anything else you have to do your due diligence. but because it's unique, the local lenders weren't willing to give a loan to the start-up from norway, bank of north dakota steps in and says we can make that happen. we can do something like that. so that gives us a real edge. >> wonderful. and, donovan, lastly i would love to hear from you what's worked well and in particular what hasn't worked well in the past in your relationships with companies? and i'd love for jim and frank to actually comment on that in terms of from their perspective how they see this. any examples or past experiences, or scars even around what's particularly worked well or hasn't particularly worked well in your dealings and relationships with companies? >> i'll start. i think workforce is a challenge
especially for rural states here in the united states. that's why we developed the workforce 360 program. because we had identified we were losing companies. we've been able to land them, but they were then leaving because they couldn't get the right employees to the plate. so we now have an opportunity to talk with companies as they're looking to develop a program to suit their needs. so just as the money might take four years to spend, two years to build the facility, within those two years you can train your workforce up to man that facility. and so that's the approach that we're taking to resolve a concern that is not unique, i think, to tennessee, it's unique to a lot of rural communities throughout the united states. >> and have you found good participation from the companies when they come in terms of co-developing curriculum? >> absolutely. absolutely. that's part of why we're focusing on the tech piece and the vo tech piece because within 24 months you have someone enter and exit with a new skill set.
so we're working with all our technical colleges throughout tennessee and the southeast. it's really a cross border collaboration we see going on. and we have that a lot in the southeast. we have a canadian in southeastern united states relationship where we look at developing opportunities in the workforce to feed into the system. >> wonderful. donovan, any thoughts on what went particularly well in the relationships or what hasn't worked well? >> well, i think we all probably have our instance where it hasn't worked so well. we kind of bury those maybe a little bit and hopefully learn from them. >> right. >> we don't want to just air our dirty laundry. but, you know, due diligence on the part of the state is also. it's one thing for a company to come to your state and you get all excited about the prospect of something happening. and it is exciting. the local community, the state and in particular again go back to the state of north dakota, which isn't a large state to start with and go, wow, isn't this great. however, what does it mean?
is it going to be long-term? is it going to be lasting? what it's going to cost us. how about the relationship with the local community and various individuals that make recommendations. you know, all these things come into play. so i think when you look at it we definitely have positive experiences. no doubt about it. but i think i mentioned earlier before in north dakota, again i can only speak for us, we're not looking for somebody to want a five-year lease in real estate in north dakota just because we can give a lot of incentives. we're looking for somebody who actually wants to be in north dakota and can assimilate their business and people and take our people and our citizens and put them to work and be productive and effective. i think that's so critical in what you're doing. do due diligence on both sides. yes, exciting, welcome, got this lead, fantastic. let's talk about it. and then bring the decision
makers together to say does it work, does it make sense. >> john, i just want to add, you know, like one thing to everything that leslie and donovan said. and i agree wholeheartedly. obviously we all have great and positive experiences. the fact that, you know, a company like magna i'll pick on frank again comes in and hires the employees that they hire. that to us is like the greatest, you know, feeling in the world, someone's got a job. on the flip side of that though, i think what we see a lot of times as well too is, you know, those middle red flags that go up occasionally when a company comes to us and all they really care about is an incentive package. that, you know, just to kind of throw it back on the private sector a little bit, i mean, that raises flags for any state. you know, and anyone that's, you know, in this line of business or even if it's a consultant to be quite honest with you, because quite frankly, you know,
it goes to what donovan had mentioned. it's that commitment. in other words, we don't want a company to come in, you know, set up shop and then all of a sudden five years after, you know, the incentive program has expired or even less time than that, all of a sudden leaves to go find a better incentive package. so that probably, you know, that whole side and that whole perspective are probably some of the battle scars that maybe we've kind of encountered throughout the years with regards to this. >> right. and building out the ecosystems. >> exactly. >> the clusters. >> exactly. >> not just a one and done deal. >> absolutely. >> about cost. >> exactly. >> frank, jim, any reactions to that? >> well, ink i think i'm going tell you what doesn't work. >> please. >> you know, we council economic development professionals all the time. what does not work are long-term tax credits, they are terrible and never get collected on.
i don't know how anybody budgets for that 12, 20 years out. i think what you have to look at and i agree you look at if you do the due diligence on a project, the project and the reason for, quote, incentives, whatever you're doing is to mitigate the capital expenditure investment on the front end. i kind of see if you got a program that goes more than five years, and somebody's asking you for something more than five years, you're probably wrong because they're probably not going to be around for five years from now. they're going to sign a five-year lease and be gone. so, you know, what we say is, look, we're trying to mitigate some costs up front. we're trying to get people trained to get them ready to go and get them ready to work. let's talk about something that is good for the community, good for the state and good for us to help mitigate that loss. i think that we sometimes forget as companies but everybody that when you talk about getting people to come there and having some kind of incentive to come
there, you're still spending taxpayer money. and those taxpayers look for return on investment number one, but if you're going to be a good corporate citizen, you can't have a 30-year incentive plan. it just doesn't work. the two don't go hand in hand. and the real question becomes is you're looking to get a foot hole for the project and a long-term goal. we want to grow in five to ten years. so if you got a long-term incentive program with a state, the question is how are you going to come back when you're growing asking for something else again when taxpayers are saying well, wait you got a 20-year plan on the initial investment. so we tell them to shorten that program up. make it easier to manage from both sides by the way. and make it easier and make the corporation and the company look more like a good corporate citizen. that's the way we look at it. >> that's great. >> one challenge i'll add, the process takes time.
we have an internal process. it's often market driven. i know the states obviously have a process they have to follow to. stay in for the long haul. i wish things were easy and we could move forward so quickly. but sometimes that isn't the case. but make that commitment for a long-term relationship. it may take years to see that come to fruition, but i think it's important. i wanted to add another thought on a positive note, how you enable these relationships there's a lot of different ways to do it. first, i want to echo the comments to mark and the national governors association for making this discussion come together. i think it's really important discussion we have to continue and grow. i think flst a lot of different ways, select usa summit has been successful in bringing global companies together to promote investment in the u.s. the air shows that have been mentioned, trade shows, great opportunities. there's also a group in washington called the organization for international investment, they have an fdi front lines coalition. they support u.s. subsidiaries and global companies. they bring together companies like mine with state and local economic development agencies that are all trying to do the
same thing. we're all trying to grow and invest. and those relationships there's a lot of different ways to do it. a few examples very positive things that are happening and the focus is my colleagues on the panel have mentioned on foreign direct investment, very, very important. wonderful. >> i love to open it up to the audience if there are any questions from the audience as well. and the remaining time if anyone has a question, i'd be very happy to entertain it. yes. please. can you use the microphone just right there? thank you. >> hi. i'm from china daily. first i think you're very well represented panel. my question is related to china. it is for the three economic officer. so would you elaborate a little bit on the overall status of investment from china? because chinese investment has been in the -- in recent years compared to other countries. are there any particular characteristic of chinese investment and what you have
done or plan to doñr to reach o. i know ms. johnson has mentioned the aircraft taken by avic from china. it has been doing very successfully. if you can add on top of that, that would be great. thank you so much. >> sure. be happy to do that. thank you for the question. we actually have an office in china. and we consider very strong marketplace for obviously what comes out of north dakota. that's how that started. obviously when you do that there's a reciprocal agreement, relationships that develop from that standpoint. china is a huge market, no doubt about it. and there are certainly opportunity that's available in north dakota. we have an eb-5 regional office in north dakota. and china is a huge market to develop for investors coming
into north dakota to invest in the companies. so they may or may not bring their own company in, but they will bring capital into north dakota to invest into existing companies. proponent. we have in the trade office a program that we call export assistance. so we take graduate level students from various countries internationally. and we place them within companies in the state of north dakota to assist in there to work on a part-time basis and we subsidize that from the trade office. but speaking on china, we have students from china who come here, work with the companies, understand what they're doing, where they're going, what their goals are. they want to remain potentially, or they want to go back to china. and so that relationship really is strengthened between our companies here, the state of north dakota, who we are, the university structure and what's happening back home in china. we have a lot of things we work with from that perspective to
strengthen that relationship. >> with regards to the state of missouri we have two offices actually in china. our primary office is located in shanghai and we also have an office in hong kong. to that end we have probably had i'd say about four or five traditional investments from china in the state of missouri. what we have been see iing, and once again being one of the landlocked states and being in the midwest, you know, we tend to be a flyover. so a lot of investment coming in from china. what we have noticed of course it's been on the coast. so we hadn't -- they hadn't quite made their way yet in regards to expanding market share in the united states to be able to locate in the midwest. that having been said as well too what we have seen though from china and literally for probably about the last decade
is a lot of investment with regards to property. just like tennessee has nashville, we of course have branson, missouri, the live music capital of the world. and interestingly enough we have a great deal of investment in that entertainment sector from the chinese. and we continue to build upon relationships as donovan has mentioned. we continue to market the state of missouri, continue to, you know, try to recruit chinese investment, traditional investment as far as, you know, manufacturing facilities, et cetera. but i think also that we're just not there yet. the midwest, you know, as a region is just not there yet with regards to chinese investment. >> any thoughts. >> i'd have to say as well from the tennessee perspective, we have a long-term relationship culturally with china from
tennessee with the trade mission back in the '80s that took a whole group over to investigate how can we share cultures. and we've had consultants working with the state off and on over the years. but we did most recently the administration just before this administration took a large group over for more business focus mission. as a result we established a foreign direct investment office as well as a trade office in shanghai. so we've had those ongoing relationships over the years. we are currently looking for new foreign direct investment office right now in china. and that's an active search right now. but i think most recently what we have had is that entertainment piece. and so we've hosted at the nashville film festival an inbound trade mission just starting last year from china with the ministry's support obviously. and we brought over six producers, film producers. they are bringing another grou ,
again this march to the nashville film festival and in turn we're looking at going over there. we have a great asset with the film industry and the entertainment industry in general. but abigail washborn has been working with china in a less formal participation bringing some chinese music to tennessee. and again, taking some of our folk music over there. and so we're engaging in some of these activities that have been going on unofficially and kind of crystallizing them and saying these are true opportunities for cross cultural relationships and developing business between the two areas. >> wonderful. thank you. i'm mindful of time. and i'm afraid we have to wrap this up. thank you all so much for this rich discussion. i might highlight that we heard about market strength and supply chains, the importance of growing market and a good supply chain. we heard a lot about talent and workforce development as a key atractor. we heard about infrastructure. and, yes, we did hear about incentives.
but we also heard about the process, how internally it's a team sport. you need to align all the players internally to make sure that you attract the companies properly. we also heard about how it's a long-term partnership on both sides, and both sides see it as something that you co-invest into. and the incentives, when they do come into play, they're about growing clusters, increasing competitiveness and ultimately about creating more jobs. again, i'd like to thank the nga, mark brady. i'd love to thank frank, jim, anne, donovan and leslie for being such a great panel this morning. thank you all very much for your time. [ applause ]
coming up this afternoon on c-span3, proposed changes to the defense department's health care program. the pentagon budget request includes a proposal who require retirees to use tricare fees could be between $350 and $900 a year. the senate armed services subcommittee on personnel hearing begins at 2:30 eastern. we'll have all of it for you live here on c-span3. coming up later, hillary clinton in south carolina. she's had a discussion on civil rights and police misconduct. with her at the event the mothers of trayvon martin, sandra bland and eric garner. and that gets underway at 6:15 eastern today live from columbia, south carolina, here on c-span3. later tonight results from the
nevada republican presidential caucuses. we will show you who won and who lost. and we'll also bring you candidate speeches. it's live tonight on our companion network c-span. [ applause ] every election cycle we're reminded how important it is for citizens to be informed. >> to me c-span is a home for political junkies and a way to track the government as it happened. >> i think it's a great way for us to stay informed. >> there are a lot of c-span fans on the hill. my colleagues, they're going to say i saw you on c-span. >> there's so much more that c-span does to make sure that people outside the beltway know what's going on inside it. how can we best get people to pay attention to wasteful spending? so we tend to find things that are interesting, little different, easy to understand because the government is so large an organization like cagw has to cut through a lot of the noise and other things that are
going on, members of congress talking about wonderful things they're doing and try to get people to be more involved and make it a little more personal so that they understand the impact on them and their families and their children and grandchildren. >> sunday night on q & a, thomas shatz talks about his organization's efforts to bring attention to wasteful federal spending. citizens against government waste also publishes the pig book which compiles the organization's list of unauthorized government programs. >> we worked with a bipart sisa group of congress came up with us for a definition offense what was then called pork barrel spending, and really still is, eventually became the term earmarks. and we went through all the appropriations bills and started the pig book. i believe the first year was about $3 billion and went all the way up to $29 billion in 2006. and every year that we can find earmarks in the appropriations
bills, we release a congressional pig book some time around april or may. >> sunday night at 8:00 eastern on c-span's q & a. president obama today announced a plan to close the guantanamo bay prison facility and to transfer the remaining detainees to their home countries or to military or civilian prisons. here's a look at some of the president's announcement this morning. >> secretary of defense ash carter as well as his team working in concert with the office of management and budget. today the department is submitting to congress our plan for finally closing the facility at guantanamo once and for all. it's a plan that reflects the hard work of my entire national security team. so i especially want to thank ash and his team at d.o.d., this plan has my full support. it reflects our best thinking on
how to best go after terrorists and deal with those who we may capture. and it is a strategy with four main elements. in our fight against terrorists like al qaeda and isil, we are using every element of our national power. our military, intelligence, diplomacy, homeland security, law enforcement, federal, state and local, as well as the example of our ideals as a country that's committed to universal values, including rule of law and human rights. in this fight we learn and we work to constantly improve. when we find something that works, we keep on doing it. when it becomes clear that something is not working as intended, when it does not advance our security, we have to change course. for many years it's been clear that the detention facility at
guantanamo bay does not advance our national security. it undermines it. this is not just my opinion. this is the opinion of experts, this is the opinion of many in our military. it's counterproductive to our fight against terrorists because they use it as propaganda in their efforts to recruit. it drains military resources. with nearly $450 million spent last year alone to keep it running. and more than $200 million in additional costs needed to keep it open going forward for less than 100 detainees. guantanamo harms our partnerships with allies in other countries whose cooperation we need against terrorism. when i talk to other world leaders, they bring up the fact that guantanamo's not resolved.
moreover, keeping this facility open is contrary to our values. it undermines our standing in the world. it is viewed as a stain on our broader record of upholding the highest standards of rule of law. >> the president from earlier today. a quick reminder that we have that hearing on changes to the military health care system coming up in about 45 minutes. that's at 2:30 eastern here on c-span3. right now though, a conversation fromm this morning's "washington journal" looking at china's recent military buildup in the south china sea. >> joining usus now, robert dai of the wilson center. he's the kissinger institute ono china, u.s. director for that part of the wilson center. thanks for joining us. >> thanks for having me. >> we bring you onto talk about a portion of the world called the south china sea, its importance not only to china but the u.s.about can you set it up for us what'st important not only about the portion of the seaev by why it' important to china particularly and why everybody has an
interest in it? chin >> it's important to china aimed claimed hinese have since 1947 that this is part of their territory. they draw a line around almost the entirety of the south china sea, an area about the size of the caribbean. and say at the very least all the land features in here in their associated territorial waters belong to china. for us it's important because since world war ii america has t beenhe the p primary guarantor t peace in this area through our h military deployments there. and it has been that umbrella which has allowed other countries in the area, including south korea, japan, china itself, to focus not on an arms race but on economic development. so we have seen ourselves as the protectors of the global common, and the peace which china now to many americans seems to be claiming for itself. lopm >> you said economic en development, is that because of trade issues involving this portion of the world? >> right. most of the world's trade goes through the south china sea. this is trade on which obviousld china as the world's premiere trading nation is highly dependent for its energygy es, supplies, increasingly for food supply and for much of its
trade. also the tiger asi economies, a the countries of asia which arew so importanthi economically and populous that the obama administration announced the rebalance asia. most interests lie in that region where we remain despite china's growth the redominant d military power andom we think ie in everyone's interest that we retain a major strategic role. >> some of the headlines we've o been seeing aboutf this portio of the world recently is the moving of equipment out there military equipment.eq can you tell us what's going on? why it's important to know? >> there are a couple different. islandnd groups in the sea.a. there are the spratlys, the paracel islands, very few are habitable. of th china claims all of these as its sacred territory and is building them up as bases both for as china would say providing international public goods like relief if there's a hurricane or disaster relief.they a but they're alsore equipping th
for military use with radars, rr with strategic antiballistic missiles, with runways. and so this is of concern to us. because it's a projection of chinese power into contested lat regions. othereris nations also claim th islands in the seas that china k claims. >> by the way, if you want to ot ask our guest about the activities of what's going on south china sea, china issues overall 202-478-8000. so when it comes to its military cape abilities, against whom, who are the main concerns? >> well, the main concern of course is the united states, but also its alliance system. now, when i say that's the main concern, i don't mean china is arming up to go to war with the united states. that is not the case. china wants to be able to what h guarantee its own security environment. china depends on these what are called sea lions of communication. and i've said for its energy, f for itsood an food, for its ownu it now has the ability to the build up of its military
guarantee the security of these lines. and it wants to be the guarantor. doesn't want the united states to be the guarantor.it this is what any large country in china's circumstances would probably do, but it is a challenge to the u.s. andnd u.s systems with japan, south korea, the philippines.taiwan, we are allied with thailand and australia-new zealand in the si area. comes to equipment being reported, are there specifics about the type of seeg military equipment we are talking about? >> we arear e partincreasingly missiles which are part of china's anti-access aerial denial strategy. our strategy for forced projection in the region has been based on aircraft carrier battle groups, floating platforms with air wings to provide security.y. china has the ability to take them out with land-based missiles. that's part of what the e is a deployments are lsabout. they are also part of what's called maritime domain ch awareness. china hass legitimate security interests in the area. sai they want toli know what's goint
on. who's flying, who's sailing. there are two parts to the story. there is legitimate use of equipment and military use which is deeply concerning not to chio the united states but to china'h neighbors. >> if a ship wants to travel through the waters they have to get specific permission from the country. >> not yet. >> these are mostly e international waters. these are the global commons under the u.n. convention on law of the sea.law of so all commercial ships can sail through that freely. it's not entirely unregulated, but theyey don't need permissioa as your question implies. we believe military ships from any nation can sail through the waters without needing permission. china saysitar commercial y shie yes.ble with military ships, they are deeplye uncomfortable with. china would like to be the main strategic actor. the argument we have is here.f china isn't proposing to cut off trade. china seems to be saying that the free dom of navigation by commercial ships should be a by privilege that's granted as a
boon to the worthy by china which is presenting itself as the dominant area. >> mm-hmm. >> we believe it should be a right guaranteed under international law to all. that's what a lot of the ith us arguments come u down to. om >> our guest with us until the end of the program.w calls lined up from al.h robert al is in new york. democrat line. your on with robert daly. go ahead. >> good morning. when was the last time china actually attacked anybody first? and the other question would bey more or less is china actually our friends?ed anybo >> excellent questions. china has not attacked anybody h really since theen 1970s when ie attacked vietnamese in the bord paracel islands and had a border war with vietnam. so china has not been militarilu aggressive in terms ofildi attag
other nations. what it's been doing is building out islands, putting in ng commitment, increasing its capability if there is conflictr to fight effectively. is china our friend? this is an extremely complicated relationship.nd it's been both cooperative and hina' competitive. the united states and most of from china's neighbors benefitted greatly from china's rise, particularly economically. most of the countries in the asia-pacific region have china has the major trading partner no which benefitted them .tting m now that china is getting more aggressive militarily and strategically since 2010, the -e more threatening, not rade aggressive, for your question. a lot of the countries value thr trade relationship with china. they don't want to threaten that. they prefer theeferred united a a balancer to china's power strategically. they prefer the american formulr in terms of politics and military power and they want a a good relationship. with china. china is in many ways our a partner. in many ways a
looming add server tear -- adversary. what we try to do is put a thumb on the coop are a tiff side of the relationship and emphasize m that over the competitive. that's harder to do. ca >>ller let's hear from bob from maryland on the independent line. >> yes. i'm korean-american. i keep a close eye on what's going on in korea. i don't know if americans are rr aware of how china is really putting pressure on south koreae against the possibility of bringing the thaad system to protect itself against north korea's possible missile tests including nuclear missile tech. i mean, what is the u.s. government really doing about
it? i mean, right now. because china is really, really putting a lot of pressure on south korea not to bring it e se although it already has a similar system that can, you know, do the same against the korean peninsula. i want to hear something about that. >> sure. the united states has wanted our ally south korea to deploy, as you said thaad, terminal high altitude area defense. this is a system which is aimed at knocking out, as you say, nuclear weapons or high altitudv ballistic missiles before they land in south korea.a we have wanted to deploy that in south korea for a while for south korea's defense as well ae the defense of the american bases there. and south korea has been wary of that. they have been warming up tobech china. south korea has been w drawinga closer to china under the leadership of president park inr
south korea andy general secretary xi in china. xi in c south korea has been moving away from japan, close er to china while maintaining the alliance. that changed in january and february when north korea first conducted another nuclear test and then launched another icb -y intercontinental ballistic missile. president park gave a speech thd saying this fundamentally eployi changes our relationship. they are in close talks with us about deploying the missile o system which china objects to very strongly. what's worrying about this is china has been more active in combatting south korea's desire to protect itselflf with the thd missile system than in present o ing north korea from conducting ballistic missile tests.tercon right now it appears south korea isis leaning toward deploying t system despite chinese pressure. we don't know that for sure. >> 202-748-8000 for
independents. 202-748-8002 for republicans. republican line. >> i was curious why i have not heard the united nations getting involved in this. that should be really one of th. prime organizations of interest. >> you're talking about united t nations sanctions againstst nor korea? >> not just sanctions but involvement. getting people there and talking or getting involved some way. >> right. >> it would be extra national. getting involved. ast >> that's been the default model over the past several decades for dealing with various kinds of north korean provocations. te it's been seven weeks since the test of a nuclear weapon and the u.n. security council has not yet acted. they need unanimity among the permanent members including china. they have been talking about sanctions -- worldwide sanctions
rather than sanctions by individual countries. that's delayed. it is furthermore clear that china, which is north korea's lifeline, will not sign on to any sanctions regime which does what we would like the regime to do which is cause the north u koreanp th government, kim jong to give up that. they would bring kim jong un toa his knees. does china won't let that happen. china has an interest in a stable north korea.ey do no they don't want a great in flux of north korean refugees across the border. millions of people they couldn't handle. china likes to have north koreae as atw buffer between it and th united states allied with south korea.ied so china will guarantee north korea's lifeline. that means even if the u.n. s aa comes up withnc a sanctions package which i believe it willt it won't be strong enough to achieve what we want to achieve. this is why countries including japan, south korea, and the koe united statesa, individually are also impose ing sanctions.
>> democrats line, ca massachusetts. hunter, good morning. >> good morning.. thanks for having me on. i know the u.s. had a massive forward presence in the south china sea.ommand there are at least ten -- five to ten military command ships in port there. and multiple navy ships, aircraft carriers and destroyers roaming about.cy i'm wondering if china were to implement the policy and start kicking everybody out of there the u.s. would know far beforehand. >> yes. >> what's the fear if china were to implement the policy? stated >> so, china has stated several times they do not want to kick n the united statesa out of the western pacific or the south china sea.e they recognize there is a rule . there for the united states. they know they can't achieve that. as you say correctly it's goinge to be a gradual build-up that we already see coming. at the same time we see a shiftn
over theta horizon in the balan of power. remember china has an enormous advantage of proximity in the he south china sea. a t they have a tremendous advantage of will -- their desire to carry out strategic goals and they ar. the gap in military ss capabilities a study by csi s in washington, commissioned by congress concluded by 2030, china will have an aircraft carrier battle group within a half day's sail of any crisis point inof the south china sea. they are going to have more capabilities right there that we are goinga prescr to have to re in some way. this is not necessarily a prescription for warfare. n the other thing is even though, as you say, we have more submar capability until the area now, c we have submarines, we have military bases, we have aircraft carrier battle groups, we have a growing number of assets. all of the weapons don't help us to counter china's very intelligent