My Name is Mike Galiazzo and I'd like to ask all of you to join me...for the reason that we are here at this reception tonight...in a toast. We have with us tonight Tony Greszler from Mack Truck. Tony, who will be speaking shortly. But I'd like ask you to please stand and join me...because we want to toast tonight. And I also want to throw in, even though I'm representing the state of Maryland, I want to give credit to the state of Maryland and to AB Volvo/Mack Truck deal, for today's signing ceremony in Hagerstown. And thank you very much, Mack Truck. (Applause).

And Tony if you would come up here and say a few words, I’d appreciate it.

Tony Grezsler – Mack Truck Powertrain

Well it isn’t everyday that you get to be part of a ceremony where you are authorizing approving $150 million investment in our manufacturing capability in Maryland, and I'm very pleased that today we are doing just that. I'd like to say that actually it is about $150 million in the manufacturing side, and $35 million is actually for research and development facilities, which will be dedicated to diesel engine power plants and in particular to emissions improvement and efficiency improvement in the diesel engine. And then wherever we go after we are done with diesel engines, which we haven't quite figured out yet.

But, we are very excited to have this kind of investment and to have a commitment from AB Volvo which is our parent company at Mack Truck and to have them commit to our facility and to recognize the quality of the work that’s done there, of the labor force in Maryland, and really the strategic position that we have geographically to service the needs of AB Volvo Corporation. Probably, I think I would be remiss not to thank a few people. An interesting story is that Senator Sarbanes is the neighbor of the Ambassador to Sweden. As such he got involved with understanding what we were doing, AB Volvo being a Swedish corporation, and began letting the Governor's Office know what was going on, and how we could use some help. And then Governor Ehlich became very involved and looking for ways they could help, which was very important to us. Senator Mikulski helped out as well with that. And the other guy who was really important was Aris Melissaratos from Maryland DBED who really explored the ways that the state of Maryland could come with packages to help us out. And collectively, along with a lot of work, of course, by tons of other people who I can't mention we've been able to make this commitment to this investment, and a commitment to maintain our manufacturing and development facility in Hagerstown. So, I want to thank you all for being here and thanks to the folks that have helped. (Applause).

Peter Gourlay – Vice President, World Trade Center Institute - WTCI

Well that you very much Tony and Mike. Once again we've got a great turnout for Maryland Manufacturing. Good evening, and welcome to our program. We have been working at this for quite some time, and I think the timing of this is absolutely fantastic in the fact that Phil, you are just returning from a nanotechnology conference in Chicago - how timely is that. And with this museum of manufacturing's past, let's look to the future and talk about what we are going to discuss tonight.

I'm Peter Gourlay, I'm the Vice President of the World Trade Center Institute and also an international business columnist for Manufacturing Today magazine. For background, just so you understand why the World Trade Center Institute is sitting here at this table, we are actually an interesting player that is involved here. Many Maryland companies do business not just in Maryland, but all around the world, and we have 3,000 clients that we work with to provide international business education, which is such a critical component to helping Maryland be competitive overseas. So we’re a non-profit international business organization that works very, very closely with Mike Galiazzo and the Regional Manufacturing Institute and this is a wonderful opportunity for us to demonstrate partnership with your organization here today. Our goal basically is to make Maryland firms more competitive to succeed overseas.

Before we even start the program, though I think it's very important that we take a moment and recognize Alliance engineering who is our premier sponsor tonight. Without Alliance Engineering stepping up to the plate, this event would not have taken place. I'd like to take a moment and just thank Jim Burnette and Alliance Engineering. (Applause).

I'd also like to thank our sponsors from the Regional Manufacturing Institute and our long time partner from DBED, the Department of Business and Economic Development, who has been such a critical partner from the state in providing vision for Maryland manufacturers. We also are doing something really interesting here tonight. I don't know if you've seen what we call "cooperating partners" up here. Very often you don't see organizations cooperating in tandem, and we've really assembled a great group of academia, trade associations, government organizations at the State and National level. And this is wonderful model to kick off the future of Maryland manufacturing that other states should take a very close look at.

I also want to draw your attention to tonight's program. If you take a look at the flip side of the program there are a couple of events that you may be interested in, and I just wanted to make sure you are aware of those. This Friday we actually have a very, very interesting program as part of the “Inside Series.” For those of you that haven't heard about the Inside Series, it is a nationally acclaimed "best practices" series that the World Trade Center Institute and the Regional Manufacturing Institute have been doing with major Maryland manufactures around the state where the actually showcase their lessons learned to help small to medium sized companies do business in a more competitive way. And Washington Labs is one of these very, very unique companies in Gaithersburg, Maryland that is a piece of the supply chain. They are involved in what you may think of in terms of the UL stamp for global testing. The real interesting thing is that not only are you going to listen to Washington Labs in terms of what they do and the latest technologies that they are aware of, but Hughes Network Systems is going to be the featured speaker at that event on Friday. So, if there is anything there that clicked and sounds interesting, please talk to our World Trade Center people and we'll get you signed up for that event.

There is also another piece of information here that you might be interested in picking up before you leave. March 31st we are hosting once again, the very successful Maryland's International Leadership Awards, where we recognize a champion within a company in Maryland that has taken their firm to new global business heights. If you are interested, you think you've got a good candidate, and you want to nominate them, please pick up that form. All nominations are due by the 16th of January. We are really excited that Governor Ehlich has agreed once again to join this event, the 31st of March at RTKL in Maryland. So please mark your calendar for that.

Now, let me transition to our good friend and our partner from the Regional Manufacturing Institute. This gentleman actually was awarded a unique award, I think we had it for the first time ever, and it really exemplified partnership. This is a visionary leader, somebody who believes passionately in Maryland manufacturing, and we are so, so happy, Mike, to be your friend, and be your partner. And thanks for everything that you have done for Maryland Manufacturing. (Applause).

Mike Galiazzo:

Thanks Peter. I'd like to also, Tony, I also want to again thank you for those wonderful comments. And if folks here didn't know, the Governor, and Aris, and Ed Miller and several other key high ranking officials from Maryland were out at Mack Truck today, out at Hagerstown late this afternoon. And I was recently made the Maryland State Manufacturing Coordinator, and I made a strategic decision not to jump in the car and go out there. So I'm glad because I have a chance to be here with this group tonight. And I guess they probably, but we do expect that Aris may be here shortly, but we do have a representative and I'm going to introduce him in a minute.

Let me just say a couple of things. Working with manufacturing in Maryland is truly a pleasure because the people that are involved in the venture are changing what's happening in Maryland…are truly world class folks. I've been fortunate in my role in learning probably in the last few months more than I knew in the last 6 years about the kind of efforts that are going on, particularly with research and development and technology. That it is as though the arena of manufacturing, and what we’re going to be looking at down the road is so different from what we've known that it is truly a thrilling opportunity. I think in many ways we should be considering ourselves pioneers. When Peter talked about the folks that were part of what tonight is all about, I think that's the essence of this formula for success that we are going to see here in Maryland. It's not partnership in the old way, it's partnership in a way in which we all come together and meld and merge. …in a way that we take our best talents and we find those solutions to some problems that almost seemed unsolvable. And I think this new culture, the culture of working together, in a way to find new and different approaches: to be imaginative, to be creative, and to be innovative. They have to be the hallmark of what's going to make us successful in Maryland.

When we met recently with Bruce Mehlman who used to work for our speaker tonight, he talked to us and he questioned us to say, "What would manufacturing look like in 2006 and maybe beyond?". And I think that was an excellent challenge, and we need to continue to do that because the kind of folks that we have behind this program tonight ,and the others that couldn't be here, I'm convinced that we have the fabric, we have the willingness to do things in Maryland that have not been done anywhere else. If Secretary Melissatos was here, I'm not even going to try to steal his speech, but you all who have heard him understand that the vision that he has provided to us is around that research base, that federal labs base, that university base. And in pulling together the rest of us who have been...and the rest of you that have been involved in that manufacturing base with those bases for success. It's a different kind of culture, we are all sitting at the table, and as Mike Green and I talked one night, we are all in it together.

At this time it is my pleasure to introduce Maryland's number one technology guru, a gentlemen, interestingly enough, who I met when RMI did a program at a place called "Business Monkey". Several years ago I met Chris there and fortunately Aris Melissaratos, selected Chris to be Maryland's State Technology Coordinator. And all of you who have had anything to do with Chris understand that we have a true dynamic leader in this man. And we are so fortunate to have him. So tonight, Bruce, I’m asking Chris to please come up and introduce our speaker tonight. Chris Foster, Maryland State Technology Coordinator. (Applause).

Chris Foster – Maryland State Technology Coordinator

Thanks Mike. I felt kind of bad earlier when the microphone was acting up and I didn't jump up here and fix it right away. I have to tell you, certainly I want to welcome everybody here tonight on behalf of the Governor and the Secretary who are certainly in transit. I know Aris would love to be here and hopefully will make it pretty quickly. It's actually an exceptional pleasure for me to be here tonight because actually I grew up in the trucking and farming industry. And I remember so vividly one of my Dad's prized possessions, I think until I even went off to college, was his little chrome ashtrays with his chrome bulldog on top of it from his Mack Truck.

And a lot of people, maybe even some of you in this room are really proud of that first paycheck, or that first dollar that you earned. Maybe you even have it framed somewhere. My Dad started out as a truck driver, driving in industry, and then one day he saved and worked, and worked, and bought his first truck. And that ashtray for that Mack truck, which was his first truck, which ended up building a family trucking business was in our household for many, many years. So thank you for being here in Maryland.

Along those lines, certainly industry and manufacturing is something that is extremely important to all of us. And as Mike mentioned earlier, the Secretary has a unique vision. He has a tremendous broad background across industry. And it's rare that you see that anywhere in the world. It's exceptionally rare to see that in civil service and government. I've had the pleasure to work with him for several years. Every once in a while you run across someone like that. About 8 or 9 months ago when I took this job, I had the pleasure to run across a second person who was very similar to that. It seemed that almost every event I went to at the federal level, or the state level, or the regional level....and one of my favorite topics, of course, being nanotechology, and several other topics that I love...even reverse trade missions, people coming from foreign countries... it seemed like everywhere I went to I ran into Under Secretary Bond. And he and I have gotten to know each other a little bit over the last 8 or 9 months. And I was extremely impressed with his diversity and knowledge, and that broad view of everything. But also an in-depth understanding of how it impacts the economy, how it impacts the future of where the United States is going. How strategically important technology is to manufacturing and the jobs here in the United States. And in fact, nanotechnology being one of my favorite topics, and the Secretary just coming from an event in Chicago, I'd like to share with you that I was pleasantly surprised 2 days ago when I picked up what is considered, in my opinion, THE trade journal for nanotechnology...it's an international journal called, "Small Times", and they kind of had the Who's Who of nanotechnology in the world, and I don't know if you know, but you were listed as one of the top leaders globally as a spokesperson for nanotechnology. Congratulations.

It's absolutely fantastic to have Under Secretary Bond here tonight and it's my pleasure to introduce our speaker tonight, Under Secretary Phil Bond. (Applause).

Undersecretary Phil J. Bond – Undersecretary for Technology – U.S. Commerce Department

Well Chris, thank you. It's always great to be with Chris. We DO run into each other a lot, and I've had a chance to compare notes and talk technology. And let me tell you that Maryland has somebody that knows technology and they are lucky to have Chris willing to serve the State and its fine people.

Good to be with you again Chris, good to be with our sponsors. I want to thank them tonight. Good to be with some current friends, and to meet some new friends. Especially want to thank Congressman Nick Smith for being here, joining us tonight as well. In this great venue, just a phenomenal testament to the great heritage of manufacturing in this state, but also on this great occasion, with the announcement today. So, thank you for inviting me to join you for this occasion.

We come together in unique and unprecedented times. Three years ago, three years ago, the economy took the tip and nosed dived into recession. Two, two years ago, terrorists attacked - in a cowardly fashion - our homeland. At the same time, cowardly corporate execs attacked our confidence in our system. One year ago, we were compelled to defeat a ruthless dictator who not only was making war on his own people, but making war on the very idea of freedom, with a special target on America.

And yet today, through perseverance, and no shortage of innovation, America stands proud and unbowed. In fact, I think in many ways, stronger than before. We stand united, united incredibly across the country against terrorism.

As for the terrorist target, remember what that was. our economic institutions...last week it was announced that our economy grew by 8.2 percent in the third quarter...the largest gain since 1984. Businesses are investing in equipment again. There is a resurgence, more our citizens are working. And perhaps in this intervening time, THE single most unsung hero through all of this, this time of difficulty, has been manufacturing. This sector of our economy hit harder and longer than any other sector of the economy, arguably.

It reminded me of the old saw that President Kennedy use to use when talking about the farmer. In that case, that the farmer told him he really hoped he could break even this year because he needed the money. Not dissimilar to what many manufacturers have been through. And yet, we can stand here tonight and know that manufacturing is on the comeback trail. Manufacturing productivity posted a 9 percent gain for the third quarter of this year. You know better than I that the Institute for Supply and Management Index jumped to 62.8 in November. Biggest jump, and highest mark in about 20 years, up from just 57 in October. The number of hours of manufacturing employees that they worked increased during this past month. These are all good news items, and we embrace that good news.

At the same time, we don't ignore the fact that we are going to continue to undergo structural challenges. Globalization, globalization of manufacturing is here, it will continue, and it will result...it has resulted in and will continue at least in the short term in a production capacity excess. At least for the short term we know we are going to have that excess. We also know that on a world wide basis, demand is too low. And when you combine an overcapacity with a demand that is too low you have incredible price pressures that you know better than I.

These trends will continue unless the rest of the developed world embraces, aggressively embraces a growth strategy. In fact earlier this year, Secretary Evans at the World Economic Forum in Switzerland challenged developed countries to do exactly that. To focus as much attention and energy on growth as they do on social programs - so that we can begin to see the kind of growth in demand to match the capacity to get people back to work again. We see now at least a glimmer of hope in Europe and Japan beginning to inch toward growth.

So unique and challenging times. The key question now is, "How will manufacturers compete in this 21st century?".

Exactly the question we tried to tackle a few months ago at the Department of Commerce when we invited in a number of experts from multiple disciplines and backgrounds, looking at the future face of manufacturing. To explore what the future possibilities would be, how America could continue to win. The first thing that this group of experts did was to say; well we have to clarify the definition. What do we mean when we talk about manufacturing? To many people of course, it means the hands on effort on the floor of the factory...what happens in that factory. However, our group of experts stressed that really was not the proper way to look at it. You probably know where I'm going. Instead they said it is critical to think of manufacturing as the integrated model of ALL the activities required to deliver a product to the customer.

Increasingly they observed, and you know, this means that the activities don't take place in a single firm, but rather in a supply chain or even a virtual network. Think of Dell computers, John Deere tractors, cars made by American Honda. These companies operate through networks that connect many kinds of manufacturing companies. They connect to service firms, they connect to transportation operators, and wholesalers even, to the retail level. Many producers that once performed all of these functions, in house, and now outsource them to specialists in each of those areas. In finance and accounting, in design, assembly work, marketing, even as it was mentioned here in the case with the Mack Trucks work...R&D work. Therefore our experts stressed that manufacturing needs to be understood as a system acting as a whole to deliver a product to a customer. Like the Mack Truck example, great example here at home. As they build trucks for, excuse me, building the diesel engines, of course, for Volvo trucks North America. Another example locally here, Nurad Technologies, right here in Baltimore, a significant contributor to advanced airborne antennas for the Department of Defense. Or Applied Data Systems in Columbia, partnering with such household names as Microsoft and Intel to provide embedded systems for medical devices. So, finding #1 was that manufacturing is a system. Finding #2 was that cost still counts, but it is not the sole differentiator. As global pricing pressures continue, and they will, they force competitors down to the lowest price. So today we see customers increasingly around the world looking for something beyond just price, looking beyond defect free products, looking for timeliness, for customized functionality, for technological sophistication, and a total customer solution. All of this done of course with no reduction in quality and no increase in price. Mission impossible. But not exactly. Look around Maryland. That's exactly what MedImmune has been doing since 1988 in the healthcare industry. That's what Swales Aerospace from Beltsville has been doing since 1978 for that industry. Focus on the customer is what has enabled Phoenix Technologies to grow up over in Garrett County working with the likes of GE, ConEd, and Westinghouse.

To be competitive with these new determinants means increased levels of what I care about, technology, innovation, creativity. Our group of experts concluded that to effectively compete against our low wage commodity producers and at the same time to sustain our high wage base so that we don't get locked into a competition that we never want to enter which is: Who can pay the least. To avoid that we have to focus, they said, on 6 keys for success. Let me offer them to you tonight with the understanding that you already appreciate these challenges and probably have arrived at these conclusions already.

Number 1: Unique Flexibility and Speed to Market. Manufacturers who are more nimble and bring new designs and products to market first will succeed. They will leverage flawless execution with more advanced technologies to deliver greater speed to market. We have the need for speed, and Congressman, the need for speed goes to our public policy making process too. We need the speed in all of our processes.

Secondly, new and reforming supply chains or virtual organizations. We are going to see “coalitional manufacturing.” People coming together for a specific product, or a niche market to capture a targeted opportunity, and then quickly dissassemble and form a new coalition for a new opportunity.

Number 3: Higher Productivity will still be Important and will still enable lower cost per unit. That can offset some percentage of the wage discrepancy that we compete against. In fact, in some estimates productivity advantage of the US economy over the other OECD countries accounts for up to 3/4 of our per capita income gap.

Fourth: Unique Intellectual Property. Manufacturers increasingly are looking for unique technologies or competencies. It could be a process or it could be the product itself. And emerging technologies will continue to open up new opportunities, new manufacturing job creation, whole new industries. This is where we get into nanotechnology. This is where Maryland is so incredibly well positioned for the biotechnology, new products, new manufacturing processes. And of course, to do this, the advantage we will have that low cost competitors will not be able to incorporate these new technologies as quickly as we should be able to.

Fifth of Their Six Points: Was that Higher Value Added to Customer Products is Still Key…, of course. We have always known this. Value is what sells the product. A great example here locally to show that here in the US to show that it can be done...Hutchinson Technologies of Hutchinson, MN., the worlds leading supplier of disc drive suspension assemblies. They maintain higher wage operations here in the United States, even though a majority of their customers are in Asia. They do this, one reason they are able to do this is co-location of their development assets right with their customers. Full partnership, side by side. IBM, using a similar stategy and winning semiconductor contract manufacturing back to New York, away from Taiwan. So it can be done.

Number 6: Higher Quality Products will Enable Price Differential in Some Products. True product quality gap among producers world wide is closing. It's a given. True also, is that global manufacturers all around the planet are trying to implement quality process management. That said, it is still true that higher quality products will continue to command greater margins, especially in the newly introduced technologies. Quality differentials, more technologically advanced products, precision machines, measurement devices, biotech, pharmaceuticals, these are the things Maryland and the United States are positioned to lead on, and that can provide those higher margins we need to lead to higher wage jobs.

Well taken together these 6 represent an incredible challenge. If your company is going to set out tomorrow to tackle all 6, what a challenge. How will many of you succeed in this? I believe that you will succeed as we go through a paradigm shift that focuses on ideas more than it does on the physical products. This is returning to a theme that I already touched on, but it's going to be about flexibility and speed throughout the manufacturing enterprise. Decreasing the time we take to move things, in your case from the University of Maryland lab to the market place. From the research universities, through the tech transfer process, into the market place as fast as humanly possible. Data, information, and knowledge, those are going to be the keys and they will underpin the entire spectrum of activities that take place in production.

This means, of course, that more will be demanded of workers. A broader range of workers will probably interact with customers as they are co-located or whatever it may be. This means new management, knowledge management technologies. Capturing workforce know how as it's developed on the run, in virtually real-time to take advantage of a new breakthrough. And that means intensive knowledge management will become a new competitive asset for American companies.

To do all of these things is a huge challenge for the private sector. In the public sector, we have a challenge too. We need to join you in a comprehensive approach, a comprehensive approach to make sure that we stay on the competitive edge. That's why Secretary Evans called for comprehensive efforts to design what he called a government that is doing all it can to create the conditions for your success.

In that regard, the department held 20 round table discussions around this country with such industries as aerospace, auto and auto parts, biotech, semiconductor industry, chemicals, pharmaceuticals, plastics, tool and die manufacturers and many others. We had a mix of large and small, women and minority owned businesses, all trying to come together to share their views and what their reality was like, the challenges they saw, and what their partners in government should be trying to do. This is being brought together in a report for the Secretary. It will be out the first part of next year.

That report, I can tell you, provides a few things. It will provide an overview of the economic context, both domestic and international, confronting US manufacturing. It will identify many of these global trends that shape the world we live in. It will document the immediate priorities that we heard from manufacturers around the country, most of whom reinforce this need to look to the future and invest in the activities that have given us a competitive edge and can give us an edge in the future.

Finally the report sets out some recommendations. Let me focus for a moment on those if I can. The recommendations will start by responding to a call we heard loud and clear in every single round table, and that was for greater focus from the U.S. Government. And so there will be created an Assistant Secretary of Commerce for Manufacturing and Services-as President Bush announced on Labor Day, and that will drive this administration's manufacturing initiative forward.

The recommendations then address the challenges that we heard from our manufacturers, both domestically and internationally. But these recommendations, I want to stress, start from this premise. They start from the premise that it is you, it’s our manufacturers...your actions in the market place, that will define success, that will spur growth, create jobs. The government's role is not to interfere and set the conditions as much as possible for your success and then to foster that.

So let me tell you a little bit more about the recommendations. They come in a number of strategic areas:

The first sets of recommendations are addressing how we can enhance the federal government focus - the creation of the new position - there will be other recommendations in that regard.

The second set is on creating conditions for overall economic growth, so that the rising tide lifts manufacturing as well.

Third, we looked at lowering the cost of manufacturing in the U.S., those cost wedges that you have to build into your product price In fact, just today NAM and MAPI put a study out on that showing the cost differential from a number of factors. You know them better than I, that confront, uniquely confront American manufacturers.

The forth set of recommendations will highlight the importance of our commitment to innovation, that is critical to success in the future.

The other critical notion, reflected in our sponsorship here tonight, open markets, trade, we'll have some recommendations there.

The sixth set of recommendations will focus on small and medium sized manufacturers who have a unique set of challenges. And then the final set, really looking toward the future, on how we strengthen education, re-training, life-long learning, and economic diversification.

You've been patient to listen to me tonight as I outline some of these things. Let me try to close, if I can, by painting a picture of what I think the future can and will be like. To achieve this, we are going to have to play on our strengths, namely the innovation of our people, our companies, and increasingly nimble public institutions. And even as I say that I recognize that we have no monopoly on innovation. When I travel around the country, around the world, or when I host visitors from other countries they always want to talk about our tech transfer process - how they can be as entrepreneurial as America, how can they be as innovative as America. Everybody around the globe is focused on innovation, so we have no monopoly...but we do, I believe, and some advantages and the ingredients to control our own destiny.

First, our people. With the right policies I believe the U.S. workers can move to a place where they're pursuing really life-long learning. Where they are engaged and excited about life-long learning, enhancing their skills as they go along. That we can be not only the most productive people, but the most creative, the most agile, the most sought after employees in the world. In fact, this administration has already recognized this fact, and established an inter-agency working group on applying technology to life-long educational and learning. And because we understand the private sector is going to be key to that, it's co-chaired by Commerce along with the Department of Education. For good or for bad, I'm going to be the co-chair of that working group. I look forward to creating that kind of life-long education that is going to be technology intensive, taking advantage of our comparative advantage.

Well, people, that's our first advantage.

Our second ingredient is our technological foundation and the great research capabilities this country has. With the right policies and incentives, these partnerships - that you see played out here locally - can be the key to create entirely new industries. The speed to market, from research lab to the market place is going to create whole new industries we can't think of. In biotech, certainly, in nanotechnologies, all kinds of new products, new processes, so that not only can we be competitive, but we can begin to export to the rest of the world. U.S. manufacturing, “made in the U.S.A.” and begin to even reverse our trade balance…imbalance.

Well the final ingredient, really is just the resilience of the U.S. marketplace. Let’s not forget, this is the target of every, virtually every company in the world - they want in the U.S. marketplace. We only have 5% of the world's people; 25% of the world's wealth. And it's our free market system that has made it the envy of the world and it is fast becoming the model of the world. This too is going to be a great advantage to us; it has proven so in the past, it will in the future.

I'm bullish, very bullish about the future of it. We've been through an incredibly tough time, your sector has been an unsung hero, but we are going to go forward. We are going to educate our workforce better than the rest of the world, and we are going to see a world, I believe, where we create new industries with new high value-add, high waged jobs. Where families can pursue the American dream, pursue peace and prosperity, a better future for their kids, and a future where our children can take the baton from us and based on more innovation and more education, do the same in their generation before passing on to the next generation of Americans. That is the American story, all through our history. If you look at it through the prism of innovation, that is the American story. And with your leadership and the success of the announcements like the one announced today, YOU are going to write the next great chapter in that American story.

Thank you, thank you for having me here tonight and for your leadership. (Applause).

Mike Galiazzo:

Well, thank you. You were talking about a system as a whole and I'm very happy to hear you mention the point about education, training, because obviously that we are very tied in with that and it's very timely because I want to introduce to you one of our sponsors tonight from our local community college. The Community College of Baltimore County received a 2.9 million dollar grant from NSF to work with our industry on those very issues. And they are right over here - Mike Netzer - from the community college And they created what's called a TIME Center, or what we call, because they are working closely with the industry, with state government, and it's called Technology and Innovation in Manufacturing Education. And one of the very first projects, because they just got the grant, but tonight's program and your words and being videotaped to be used for faculty to learn about the future of manufacturing and also the comments that we are going to get from our board today. So I just wanted to let you know that. I want to thank you folks from the TIME Center.

At this time I'd like to introduce that great visionary of Maryland Business and Economic Development, my good friend, our good friend Aris Melissaratos.

Aris Melissaratos - Maryland Business and Economic Development

Thank you Mike. Good evening ladies and gentlemen. My apologies for being late. I'm going to spend a couple of minutes thanking some people, congratulating others, and giving you a few minutes of my panels' scheduled response to Phil's comments.

First of all, Secretary Bond, thank you for being with us this evening. Thank you for laying out not only a vision for where we are going in national manufacturing strategy, but for also giving us content for our sponsored research programs. So this is very good, we are getting off to a great start.

I'd also like to thank the President of Secretary Evans, for the vision to finally create an Undersecretary for Manufacturing for this Nation, and recognizing the importance that manufacturing will play in whatever it is that we do...as a nation as we go forward to continue to excel in the global marketplace, and live up to our position as THE power in the world...across all spectra; across all measurement technologies.

And thank you for all of you that are here this evening. Because I noted earlier this morning that we have these relatively frequently. You know, every four to five weeks, or even more frequently than that we have a couple hundred people gathering together to talk manufacturing. And that is a tribute to what you all believe, and the fact that we are working together to integrate our systems to figure out how we are going to create a new standard for Maryland, and American manufacturing.

And thanks to the sponsors, to the World Trade Center Institute, to RMI, and to all the other institutions that are contributing to bringing this crowd together. Mike, Debbie...thanks to all of you.

Today has been a great day for manufacturing, because I bring you regards from Governor Ehlich, who just finished touring a magnificent, relatively old factory in Hagerstown that builds some of the very best power trains for large trucks in the world. The Volvo Mack Truck factory after the event that we celebrated today, that denotes a $115 million dollar investment - 99% of it dedicated to improved quality, and improved productivity, and incredibly improved emissions. Diesel engines will reduce emissions by 90 to 95%. And to achieve that, congratulations Mr. Gentzler, thank you very much for talking your corporate parents into making that significant investment. Because your boss from Sweden assured us that the facility ...the testing facility...the design facilitation facility...that will allow you 50 thousand points of measurement on emissions out of those incredible engines will probably be the best in the world…better than his in Gothenburg.

So it is great news that we’ll have that kind of a world class operation in our state in Maryland. And I've said it before to this group, but certainly I was delighted to talk to Denis Leblond, chief executive of the operation in this country but even more delighted to talk to a gentleman named Moe Kaiser , the UAW President up there because Moe [Maurice] Kaiser and his counterparts at UAW Broening Highway Assembly or GM Broening Highway Assembly and at GM Power Train the Allison Facility in Eastern Baltimore County gave me and the Governor the opportunity to talk to GM upper management in Detroit last week about Maryland's number one work force, and how labor management relations in this, not "right to work state", are better than any "right to work state" in our vicinity. And how we have enlightened both sides to recognize that it takes togetherness understanding, and common goals and common to achieve global competitiveness. And our people are doing that, and we don't need to fool with the politics of changing to a "right to work state", as long as you recognize what the challenge is, and how to go about it.

So, we have manufacturing in Maryland, it's alive, it's well. It's only 7% of the workforce and maybe we'll be able to keep it there because as you've heard from Phil and from others. the statistics are turning around...we're stabilizing it.

But the future of Maryland's manufacturing is about the systems approach that Secretary Bond made as number one point in the discussion. It is about integrated systems, it is about agile systems, and it's about systems that understand every aspect of the economy and every aspect of society. So as we integrate all of the education systems and the quality of life, and what it takes to compete on the global marketplace, we will find our standard.

What did we promise GM? And…Phil...we need a lot of help from you to achieve this one! We promised GM that we are about architecting a manufacturing system in Maryland that will be the best in the world. That we are at the beginning of working with the commerce department and creating an urban manufacturing initiative that will involve a diverse set of ethnicities, a diverse set of populations throughout this great state, integrating higher ed and community colleges and pre-K through 12 system, integrating the best manufacturing processes which, by the way, we remind them this goal standard from materials and processes in the world manufacturing come right from NIST. And we are developing partnerships with NIST. We even do social gatherings with the directors of NIST and get them with our chancellor of the university system - around challenges such as nanotech, and biotech. So Armond Diment is committed to working with Maryland .

And the challenge is up to all of us here. Because I'm saying to NIST and I'm saying to you Phil: Maryland manufacturing needs to shine so strongly that inevitably NIST uses Maryland manufacturers as their global showcases. (Applause).

You know we are too close to NIST to pass up that opportunity...too close. And we have so much excellence across industries, across processes. Yeah it maybe only 7% of the workforce, but 7% is an excellent 7%. In their industries they are excelling, whether they are making cups, or assembling cars, or doing medical testing instrumentation. You know whether it is in Teletec, or Mac Trucks, or Garden State Taning, or GM power train, or Solo Cup, no matter who the manufacturer is.

And then it dawned on me in the sales pitch to General Motors that we in Maryland are putting in place for GM and the auto industry, the supply chain of the future. Because if their investment in fuel cells will materialize, if Ballard makes it. If protonic chain membranes make it. It is likely that a Maryland company WL Gore….not AL Gore….WL Gore. (laughter) If the governor’s staff thought I was talking about Al Gore…Aris, what are you doing talking about Al Gore? No, No, no guys...it's WL Gore. Probably one of the world foremost materials companies that employs 2000 people in Cecil County that will more than likely be the producer of the protonic chain membrane when that fuel cell succeeds.

So given that the supply chain of the future is here...given that the intellectual property generators are all here, because after all Phil, I don't know if you knew it or not ... we kind of keep this from Washington...1/3 of all federal research is expended in Maryland. One third. 9 Billion, out of the 27. It's not a bad position to be in. But, we've got too much going for us not to succeed in convincing ourselves that we are an integrated system that we are putting together the economy of the future, that the knowledge-based economy will allow specialty manufacturers to succeed. And will allow us to control how products get produced around the world. So, integrating all of our assets, from this magnificent port behind us, to the education system that gives us the best workforce in the country, to these magnificent federal laboratories and federal institutions that throw so much money our way, to the great research institutions both in the federal labs in our great universities system, public and private, that allow us to lead the world in biotech and nanotech in everything that is the future. We can tie all that together and excel in manufacturing once again.

And as the new Secretary of Manufacturing gets appointed, I can assure you that working with you and him, Phil, (or her), we will make Secretary Evans and the President very proud. Because American manufacturing will come back and Maryland manufacturing will lead the way because of our research, development, and engineering strengths that allow us to produce the best products in the world.

So, that is my response to the challenge you have given us . Thank you for the help that I know is coming....and welcome to Baltimore.

Jim Burnette – President of Alliance Engineering

Well that's a tough act to follow. Thank you very much. My name is Jim Burnett, I'm the President of Alliance Engineering, and to pay enough to get your name that big, you get one of these. Somebody called me the Jerry Springer of the rest of the show so here we go.

What we're going to do right now is get a response...and we're going to try to keep it to five minutes based on the amount of time we have spent so far. Let me introduce the panelists: Susan Ganz, President and CEO of Lyon Brothers, Mike Green, Plant Engineering Manager of Unilever, Barbara Biller, President of Intelitech, Tom Gallagher, Plant Manager of General Motors Power Train that you just heard about, and Tony Gressler, Vice-President of the now famous Mack Truck. Once again, Mack Truck has been around for years, but it is getting a lot of press. So what we are going to do is try to hold their comments and, Aris, I'm assuming that was your comments...just checking. I know you've had a busy day...I know you had a busy day.

So what we are going to do is to hold this to about 5 minutes for comments on what they've heard. Then we are going to open it up to questions from the floor and I do have one special guest out here I am going to introduce and get a couple of comments from. So let's just start with Susan. You're first.

Susan….you’re first.

Susan Ganz – President and CEO of Lion Brothers

Hello. Thank you. Hi, good evening everyone. Indeed I think Secretary Bond’s comments were right on. When you talk about “it's "innovate or perish" that is the...that is where we are. Essentially at the end of the day...I wish this was a conversation at 2016, in fact, instead of 2006 because many of us are going to have the challenges of managing through a transition in what we do. So far we have been focusing on productivity, on cost, and other, and now the challenge on manufacturing managers is to focus on the revenue generating side of things. The product innovation, process innovation. Essentially it changes the culture. We go from a series of people who are used to managing facilities and managing things in our backyard, to managing multinational entities. Managing things that are innovation. With that, one needs to then become an investment manager. And I don't mean just our capital expenditures. We become investment managers of intellectual property. In that, this is a territory where many of us are unfamiliar, it's new ground. And so in transitioning our thinking, we're transitioning our framework and in transitioning out frameworks, it's important to transition our thinking. And with that to transition the culture and the alignment of our organizations.

So I think his points about this are right on. There are essentially at the end of the day, probably a handful - 5 or 6 - manufacturers who remain here who don't have to. In the short term transition. Niche businesses, those that have national security interests at heart, and those are essentially strategically linked in the value chain. But essentially, all of us have this challenge. The question is what is the timeframe for each of us and what does that mean to all of our entities. I think that we encourage this fact because we have a community that's innovative or creative - we are a people that by nature are open and flexible. And so, by nature, in order to create the organizations that have to be nimble and flexible, we start with who we are as a people. The freedoms, the agility, and we think inward before we think outward. We collaborate. I think that what you'll see over the next few years is the development of manufacturing clusters. The development of research clusters. They can be literal, they can be virtual - it doesn't really matter - but the ability to cooperate and truly do this in a partnering way. So, I'm encouraged by what you've said.

Phillip Bond Response to Susan Ganz:

There is one thought there that I hope everyone will find encouraging. This last point that Susan was making about...starting with our people. On a recent trip to China, meeting with a minister over there, the conversation turned to education. And , of course, we are used to looking at their technical accomplishments and rankings in computer competition and all kinds of other things...and looking at them with envy. His questions to me were all about our education system, how can they, China, come up with a system to have the kind of creativity- all your students are so creative- is exactly this point that we start with. That is a huge comparative advantage in this nimble future that we are going to move into. Others are more regimented in their training, and so forth, and in their technical accomplishment are great, but the rest of the world yearns to be as creative as America.

Mike Green - Plant Manager - Unilever

Let me just say a couple of things I've heard tonight. A couple of observations. First of all, Phil Bond looks in great shape. So I have to assume he uses key performance indicators to watch his weight and his calorie intake, and he consumes the appropriate amount on a daily basis I have to assume, Aris, however…leaves me totally breathless, and has the appearance of a wide receiver, occasionally a linebacker. So I would like to coin a new phase tonight to celebrate Aris, and that's Aristech. When you talk about what he's trying to do I find myself, almost had the feeling I was sitting in Tokyo with a TPN Consultant from a major Japanese University. I don't have to do this, I'd just like to pass along some learnings...and I'm thinking, Aris is going me the learnings. And what I got out of was the energy and the sense of pace. Did you notice how out of breath he got as he talked? That wasn't because he walked a long distance from the car, or drove for 2 1/2 hours to get here. That was because he has a thing that you all need to have, passion and passion is what manufacturing really is all about. And for the American businesses that were here during the war years, that had wives building ships in our harbor, Liberty ships, there is one still sitting in the harbor today. I wasn't around in those days, I was watching old movies about Spitfires and Hurricanes in Northern Ireland where I was brought up in a place that made the Titanic. And we all know what happened to the Titanic.

So just imagine you are writing the story for manufacturing, and it wasn't about the local community college, a national university, a research center, a nano or a next technology. Instead it was about rewrite the story of the Titanic, but it doesn't sink. How would you write that story? That's what the Undersecretary is trying to do, and that's what Aris is succeeding in doing. And both of them are going to be successful because they have something in common. They start from different perspectives and end up with that same passion that many manufacturers have to have. If you don't feel it...I had to go tonight to buy a shirt and tie - because I don't wear them very often - and I forgot my sizes - and I was standing in the corner store in downtown Baltimore and in walks the previous assistant secretary - and we are sitting talking – and he was buying a shirt too - I got one that fitted. Anyway, my point about that is - I talked to the KPI's I talked about energy - I talked about personal commitment. if you don't have those things you might as well just go and buy a Starbucks - because that's what's needed.. If you think about the Starbucks line, it wasn't that many years ago when i first came to America - people were drinking a cup of large black liquid - it was very hot - talking about games that I didn't understand and men wore trousers that looked like women and played under lights and swung this little piece of wood and missed 50% of the time and that was good. Missing 50% of the time is considered ok. If you did that in manufacturing you might as well hang it up - You have to hit it 99% of the time. So manufacturing's got an edge that economic and commerce doesn't need to really practice. We have to be really good at what we do. So the things that I think - my perspective and I totally agree with the undersecretary - we're talking about value propositions, we're talking about whether you’re in Northrop Grumman making awesome technical innovation or whether you’re in Sweetheart Cup making a simple paper cup. Or whether you might be in a global company making Dove Soap and Wisk and Surf and all detergents - hopefully you're buying that and not the other guys No disrespect Debra. You have to have a value proposition. If you're going to pay a buck fifty or three fifty for coffee - that used to cost you 25 cents - it better have some value or at least perceived value - so the second thing that I think is important is the global aspect of the business - you can no longer manufacture if you're thinking locally.

You have to manage locally but think globally. So one of the things I'd like to tell you about is a company just outside of Annapolis that sells soldering irons to the Unites States Navy, and delivers them to the dock cheaper than China, and pays 22 bucks an hour. Now you do the math, do the math, they are only 30 minutes away and they are globally competitive. Think about how you reduce cost and still pay a high labor ticket. We're very fortunate we have contract employees at Alliance. It's a partnership that was sealed on the back of an envelope. I walked out of a board meeting with three directors and left the local area manager to present what he does in the factory and he said, " well I can't believe you walked out of the room,". And I said, "I don't need to be there, you're doing the job". It's a matter of trust.

So if you have employees that are talented and you’re paying a high labor rate, and you've got passion, you've got some of the ingredients needed to win. But you're still not going to get there because the offense and defense won't play together. You sit down with agendas. Agendas don't get results. What gets results is united thinking, and a common purpose and a set of values. Now you saw the passion, but if you look carefully you also saw the determination. And it wasn't arrogance, it was determination to be successful and be the best. It started with the Undersecretary, he's going to be talking to the President and the Secretary. And you are going to hear about this probably in February. And the President is going to have some passion with his cowboy boots on. But there is going to be passion there.

The third thing that I think is important is how you do this. If you are creating a value proposition, you have to do it in a very lean way. Now when I think about lean accounting everybody thinks that has something to do with a diet at a spa. Lean accounting, lean manufacturing is all about making what we do understandable to the people that do the work. If the only person that understands the finances is the CFO, you've got a problem, and I've got a car to sell you. And guess what you're stock is going to do next month? So the employees have to be engaged, and when you get them engaged they have awkward questions. Why are you wearing a tie today when I've got a problem down on the floor? If you're note at the motor, you're in the wrong place. You've got to be down where the action is, where the product is being converted from raw materials that are virtually worthless to a finished product that commands a premium price. How would you like to go into Starbucks and pay 4 bucks for the cup, a buck fifty for the cap, 20 cents for the stirrer, and 10 cents for the little tray, and had no coffee in it? I wouldn't think that would be a very good value. It might be the best paper cup available, it might be the greatest plastic cap, but it's totally bloody worthless. You try bringing that home to your wife and see what she says. I tried it a few times. I went to a McDonalds one time and asked for a plain cheeseburger. Do you know what I got? A piece of cheese inside a burger, inside a breadroll. So communication is important. Employees have to understand what the business is all about and how to drive the results. You will get cheeseburgers with no meat if you’re not careful, and if you're not aligned with your colleges, if you have agendas you won't win. You can't have all of the organizations with their own agenda. You have to have a united umbrella agenda which is about Maryland, USA, and success. And anything less than that ain't going to cut it. Just pack up and head home. It's been a nice dinner. We're not talking about trends, we're not talking about programs of the month, we're talking about a passionate belief, like our linebackers in the Ravens. If you think some of you are going to cross that line every single quarter and score I've got another car to sell you. I've got a whole fleet of these cars out here, it's called old manufacturing ways. The old way of doing economic development, it's all out in the back parking lot. They're rusting. If you want to see the new ways, you get some Aristech, a little bit of Bond, is that James Bond? And the last item, I think is focused improvement. The Undersecretary mentioned focus, and one of my pillar responsibilities is focused improvement. I have to convince people in the factory that the top five major losses are the ones we should work on - not the ones they think are important. The ones that drive major losses away. And somehow do that without capital investment and do that without assets. Assets are bad. People are good. So those are the things that will represent what the factory of 2006 will look like. It will be a totally different place. When you walk into it, you'll see things we saw in Washington. You'll see Genie which make a lift platform - starting out making improvements and three years later, are the consultants for Boeing. And they create Boeing's need to single piece flow. If you went into Boeing six years ago, there were flotsum and jetsum planes all over the place - there was no strategy. If you go there today, you'll see planes going through there on the Toyota production system. If you talk to Genie, they'll be demanding not to make the product because the British sales reps had ordered 500 and are not selling more than 2. And the manufacturing guys are saying "I looked at the sales forecast and you know what, it's fake. So I refuse to make it." And nothing happened. They still had 492 sitting in the lobby a year later. So Jim, I've exceeded my time - but...and you warned me about that...but I think the three key points are: the energy, the resilience - if we don't get it right the first time, don't cry over spilled milk, and the alignment - if you have an agenda, throw it in the garbage, it needs to be re-written. The agenda is all about ArisTech, united approach to make it successful and taking a risk. And if you can't do those things, then probably re-think your business strategy.

Barbara Biller – President IntelliTECH

Another tough act to follow. I might throw out some other "A" words. I'm the president of a small company. We are a manufacturer of precision filling and packaging machinery. Very tough market, very competitive, been around for a long time. So, why do we think we are going to be competitive and make an entrance and a strong presence in that market. It's all about agility, and ability.

We are an agile company on a couple of levels and I will say I was trying to understand why I was invited here this evening and I think for one reason, I might be a poster child for some of the excellent Maryland programs for small businesses. On the agility aspect, we were looking and have probably re-invented the company twice in our 8 years of being in business. We starting out as an engineering and services provider; transformed to a services provider and a prototype machine builder for some of our customers who cannot be named and then have moved into manufacturing our own equipment for the biotech industry. We have identified that integrated supply chain and the strong Maryland support of the biotech industry and the growth here, we are trying to position ourselves as one of the players in that integrated supply chain. And that's all been due to agility and being able to identify opportunities. One of the Maryland programs - Strategic Positioning Program - we took advantage of to help us do some marketing research to get to buy a marketing study that was out there on some equipment in the market. Maryland was a big help to us - as a small company.

So, agility in order to be able to identify market opportunities - and as a small company, we are able to reform, re-invent ourselves to address those and go after them.

Ability ties right into the workforce development aspect. Through our growth over the last 8 years, one of our strong emphases has been on workforce development and I'm proud to say that our very first employee is still with us today. He's doing a very different job in function, but also through the state of Maryland in Partnership for Workforce Quality, we have gotten significant training grants that have helped us to continue to develop our workforce in the areas where we wanted to pursue markets and technologies.

Another key aspect, and it goes along with the passion is just having the pursuit for excellence. Just saying that I saw the term coined today - they are calling it "fusion management" now so, all of you that are interested in the term of the day. That is ISO 9000/2000 registration and making sure your standards are up to par. It's capturing the energy of all of these initiatives; the Baldridge criteria. Maryland has partnered with the US Senate Productivity and the Maryland State Quality Awards. They use the Baldridge criteria and I encourage you to look at that criteria and I challenge you as key corporate folks to apply for that award. Put yourself up to that criteria and see how you match up.

I had the privilege of being accepted to be an examiner this year - it was a large devotion of time and effort. I learned so much as an examiner and had the opportunity to look at what an applicant was doing. You can't help but measure yourself against that and say "Boy, how are we doing this? What could we do better? Do we measure up to the Baldridge criteria?"

Lean, we talk about lean. I had the opportunity to work for a large manufacturer many years and was very excited about their pursuit of lean principles not only on the shop floor, but above the shop floor. Lean works not only, you'll see fantastic results on the shop floor - it then starts to extend it's fingers beyond the shop floor. So once you're starting to eliminate waste on the shop floor, you'll see all of the waste above the shop floor and you can use the same principles there.

So, my company is focused on this continued pursuit of excellence.

Now, some of the barriers that we have as a small company and where I would like to see some partnership - obviously with government:

Market Penetration. But we couldn't be located in a better spot for what we're trying to - for the market we are trying to enter - and Maryland is a great location for that. And I told you a little bit about the Strategic Positioning program.; Unfortunately, I dont think that program is still active anymore - so, I might challenge our legislators to take another look at that. And consider opening it back up. We are challenged with global competitiveness. We have some very good organizations - here locally - the World Trade Center Institute has lot of opportunities consulting and availabilities that are there for us to use. The Maryland Export Assistance Network - Maryland State has a great opportunity for folks to use - they give you 8 hours of free time to get your toe in the water and your step in the door. But, there is a great network there - that's there to support small businesses.

Access to capital is another issue from a small business perspective that we are challenged with. And Maryland has some good financing programs and I had the opportunities to meet Bob Hannon before I came up here and shared some notes with him on that. I have some struggles with that program, but I don't Bob might be able to assist me with that - so, Bob, I might call you on that one.

Tax legislation - I think some very good things were done this year and President Bush shared them at the local visit at the Home Depot in Halethorpe. Section 201/202 increasing bonus appreciation - increasing the small business ability to expense up to $100K of capital equipment. Machinery that we build - the equipment that we build falls right into that target dollar value. So, for us that was a great opportunity for businesses to be able to invest in capital equipment and get the bonus this year from tax incentives. However, on the Maryland side - as I have learned, Maryland chose a decoupling modification to disallow that at the state level. And while small businesses and companies get it at the Federal IRS level, it would be nice if they got it at the Maryland level too. It would be kind of an added bonus and incentive.

R&D expenses - because as we talk about technology and innovation, R&D is a huge part of that. And company's abilities to invest in R&D will be critical to our success. From a small business perspective, we struggle with what are allowable expenses and I know this might be a tough thing to throw out, but a review of the definitions and maybe some liberalization there would be a benefit to small business for R&D expenditures.

What do I see for a manufacturer to be competitive for 2006? I see much that these folks see. Where I think U.S. firms will be successful isn't maybe a new manufacturing environment, the new face of manufacturing. It's going to be a clean, and that's with a "C" and an "L", manufacturing environment and it will be the biotech industry, it will be the electronics sectors where there will no longer be the grease, the oil, the nasty smoke stacks. It will be a cleaner environment and for us to now embrace biotechnology as the face of manufacturing for the future also. I think to be competitive you will need to be and strive to be a “world class” firm. With strategic partnerships in this integrated supply chain and I don't mean just within businesses and companies, I think between businesses and the community where we take an active role to support some of these educational initiatives. One of my pets is a program called, Project Lead the Way, and it is an engineering curriculum designed by a non-profit organization, and is aimed for the high school, public school system. We need to educate our kids and get them to have the taste for engineering and technology. And to do some of those things, they just need to try it. It needs to be out there for them in the school system. But also an integrated supply chain between industry, academia, and the government - that we all have a working partnership. And approach these kinds of forums with open minds for ideas.

And finally that skilled innovative workforce. Workforce development, the life-long learning is going to be critical for our folks. We kid that some of the things we do, we've designed, developed, built concept models for folks in 8 months or less. Largely, I came from the defense sector where we worked on multi year programs. So to have a concept, build that, deliver it to a customer, and have them satisfied with requirements in 8 months is incredible. It's a lot of energy, it's a very exciting environment, but I've found that if we engage our workforce, we have got the best folks that will rise to a challenge with innovation and great ideas, but they want to be engaged and also those living wages. We can be competitive and still pay living wages to folks that they are beyond wondering where am I going to get the money to eat, live, those kind of basic necessities. Where they are then engaged and excited by the work that they do.

So that is how I see the vision for manufacturing.

Tom Gallagher, Plant Manager General Motors Powertrain

Good evening. I just want to share with you some general thoughts I heard from the Secretary this evening. Certainly they validate the direction, the approach that was taken in the launch of our facility. For all that don't know, we manufacture transmissions for the heavy duty pickup truck market. It is a really an historically - when you look at the industry we compete in - it is traditional manufacturing. And what we've done really is apply the skill sets and the key initiatives that were discussed. Which really is a business planning model to driving competitiveness in not only traditional marketplaces but also future marketplaces.

We've seen an evolution in our product in the short history we've had in the development lifecycle of that product to meet the customer's needs. Being customer focused, and providing value within the value stream is key. And we service General Motors, but this same product is used for a variety of other OEM customers worldwide. And so we apply those lessons learned and the key initiatives to do things such as, we recently have announced changes in our product that will enhance the overall efficiency and effectiveness of that in a vehicle. The transmission mated with the diesel engine has just been recently announced to reduce over 50% in nox emmisions. As well as a 10% fuel efficiency, that is within the current model year. So changes and innovations are occurring at a very rapid pace and in a manufacturing environment we must respond.

I think, I really focus on three categories that were key initiatives in our launch, and our continued focus on our customer. And it begins with partnerships. We launched with partnerships that were state based, local community based and also the UAW. And that ensured that baseline competitiveness and understanding, we all have mutual interests and aspirations for the success in our business. And so linking with those key institutions, and those key stakeholders in the business are very critical in the evolution of your business lifecycle. And I speak to one of the true partnerships that we had in our launch really was the educational program, keyed with the Community College of Baltimore County in developing our workforce. And what that’s really meant is not only the transition from a traditional work environment to one where it is very innovative and technology used throughout our workplace, but that's really created a culture of continuous learning, which is so critical. And that evolution in our, really our experienced workforce, developing those skills and applying them on a day-to-day basis is clearly a power.

And that drives the next point which is a link to your workforce driving the competitiveness right down at the workplace. Our competitiveness is in our people. We always really speak to one of our key points when we have visitors to our facility. Manufacturing is a people business. And a lot of people think of it as a technology business, or exclusively a business about capital equipment or the building you may be in. Those same things exist worldwide. The competitiveness of your workforce, the innovation of your workforce drives your ensured profitability and your competitiveness in a global economy.

And so how we develop, really what is a lean manufacturing based pool system environment where you drive innovation in the workplace is really what our business has been launched on and we continue to challenge ourselves. We see cost pressures as you do in your business, and we see needs to innovate and develop and make changes. So our abilities to incorporate that in our business models on a daily basis are key.

And then the other key thing is customer focus. And it really becomes some of the key things that were discussed - I really focus on our ability- lead time is really the key factor in your competitiveness. And how we can be competitive in a really our nation's economy and serving in a manufacturing base. Our local economy is identifying the needs of your customer base and responding in a quick manner. And if you have a quick and agile work environment where lead time is focused on and you don't have batch manufacturing, you have a pool system environment for your customer, you can be responsive, cost effective, and you can be the leader. And those are the key things that we are completely focused on because what we are is, and our facility is a small manufacturer within the largest manufacturing company in the world. And, when you focus on what our key initiatives are they come back to the people. And the focus of our customer and meeting those daily needs.

So, it's all about value stream mapping and understanding really who your customer is, and how you are going to best service that customer, and being in a nimble environment, taking advantage of your size because often when you’re small you can be very agile and quick to the marketplace. So, those are some key things and we are going to see continued evolution in our business as hybrid technologies come to see evolution. And so our business lifecycle of the products that we make are going to be far shorter and so we need to launch and innovate changes quickly to serve that growing marketplace and be the world's leader. Because our focus is to be the world's leader in automatic transmissions and propulsion systems. That's the world leader…so considering those factors that's our drive and our focus.

So, we're ready for the challenge.

I'll try to do my best. I think most of the things have been said but I did want to probably just build a little bit on the experience we recently had, which is: Why are we investing here today? And many of the things that have been said play right into that. In particular some of Phil's comments.

Certainly, we aren't going to compete on wages with many of the countries in the world, and we don't want to do that. So how do we pay a living wage, a decent wage to people here and compete with countries that are paying far less? I think that's one of the key things we look at. And one of the ways we do that is Phil's first point which is flexibility. And it's flexibility to me in two areas - one is manufacturing flexibility to run low inventory and yet deliver a high variety of product on short lead time when customers need it because today everything goes quickly, nobody wants inventory and inventory costs money. So that's one of the big reason you have manufacturing, and particularly assembly, in this country and in this location because we can be flexible and we can do the job quickly. And if we lose that then there is no reason to do it here.

We need to be flexible on what we deliver to customers and by being close to the customer, by understanding their needs, by meeting those needs quickly before a foreign competition even understands what they are, we can supply value added that our customers are willing to pay for, and that we can sell profitably.

If we look at some of the other factors, certainly we need to be very efficient and manufacturing productivity is certainly a huge factor that drives our economy and keeps us going. It is one of the reasons our manufacturing workforce declines because we frankly make more product with less people and continue to do that. But we have to, to stay competitive, we have to be more and more efficient, which means we have more automation, we have more built in quality systems, we can't afford to make mistakes, we have to do it right and we have to do it quickly, and we have to do it at a low cost.

So to do that, one of the key factors are the people that do the work have to know how to work with the kinds of equipment that we have, which is highly automated, a lot of the work becomes maintenance and set-up, it's...there's not so much need for people to feed pieces into machines anymore, you can automate that, but you still need the people that know how to set it up, know what tools and equipment we need to begin with, and can make all this work and keep working. So, the education of the people is a huge factor.

Certainly how we work with the people is crucial. We can't afford to have people who are not contributing to how we improve our process, and we can't afford to have processes that don't seek ways to pool all of the inputs of everybody that works in the manufacturing facility because everyone of them has value that they can add to how we can do things better. So we are constantly seeking cooperative ways to work together so that everybody’s ideas can be factored in, that they can all make a difference to our improvement. And that means we have to constantly be learning - everybody has to be learning - and we talk about a learning organization, that's at all levels in the shop floor, and throughout the manufacturing, engineering and product engineering organizations.

The supplier partnerships are absolutely crucial. We look for our suppliers to contribute to the design, the development, testing, the manufacturing process, the delivery, and integration of the whole system. And we can't do it alone, and that's suppliers both locally and all over the world. We have to use the best supply base no matter where they are to be competitive.

So I think if you put all of that together you come up with enough value added that says it makes a lot of sense to manufacture right here and do it profitably, and do it in a way that you can continue to grow and sell a product that customers are willing to come and pay for. Thanks. (Applause)

Congressman Nick Smith – U.S. Congressman from Michigan

Very briefly.

Jim Burnette has advised me over the last dozen or so years on some issues. I'm chairman of the Research Subcommittee in Science. And, so I want to a little bit, follow up on Barbara's point on where we go with our seed corn, our education, and our kids coming up. But, my committee overseas the National Science Foundation, I knew Rita Caldwell like Maryland, but Aris, one-third? So that's NIST and DARPA,

Aris: (inaudible),

Congressman Smith: OK, let me be sort of just the commercial, and that's what do we do about our education. In the international testing our kids in math and science test lowest in the world. What do we do, what do you do to start helping with K through 12 education? Maybe college education. How do we get more kids and more parents interested in having their kids do a better job in math and science?

What we did in my NSF Authorization Bill that the President recently signed is we put in 200 million dollars for a math science partnership, trying to figure out what are better ways to teach, what are better tools to use, what are better innovations to try to get kids interested in math and science.

So, it seems to me that government can't just do it alone, it's got to be you that use the engineers, that use the science, that use the research probably, that's going to end up developing better products that people of the future want to buy and developing better ways to increase our productivity improvements. It seems to me that research at least has got to be one of those keys.

Jim, everybody, thank you for being here. The way it looks in the future I think has got to be the excitement, it’s got to be the innovation, it's also got to be how we inspire more of our kids in the early grades and through high school to be part of math and science and this new technology.

Jim, everybody, thank you very much. I'm glad to be here.