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Remarks at Hexcel Corporation, Salt Lake City, Utah

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AS PREPARED FOR DELIVERY
Thursday, April 18, 2013
CONTACT OFFICE OF PUBLIC AFFAIRS
202-482-4883

Deputy Secretary of Commerce Rebecca Blank
Remarks at Hexcel Corporation, Salt Lake City, Utah

Thank you, Dave, and Mayor Winder.  It’s a pleasure to be here in the Salt Lake City area with all of you.

I also want to thank everyone here at Hexcel for that great tour.  I’m delighted to be here with Hexcel’s employees as well as business leaders who have added back thousands of jobs in this region in recent years.  And I understand there are also a number of leaders in higher education in the audience.        

To build on the recovery we’re seeing in places like this, the President has said that we must make America a magnet for manufacturing.  We are poised to do that.

Manufacturing has been one of the top drivers of GDP growth since 2009. After a decade of losing manufacturing jobs, we’ve now created a half-million new manufacturing jobs over these past three years.

For instance, this region’s manufacturing sector was hit by the recession, but it is starting to come back.  You’re working to reinvigorate manufacturing, drive innovation, and boost America’s global competitiveness.

Many years ago, state and local leaders saw the need to develop a good plan for Utah’s future.  They were trying to figure out where the jobs of the future would be – not an easy task. 

Economic development leaders began to look at the future of aviation, and saw the potential for good jobs in advanced composites. They also saw that highly-skilled workers were coming out of Utah’s colleges and universities. And – with the help of the Commerce Department – Utah’s budding composites industry began to raise its visibility at trade shows abroad.

As this community began to identify and build economic assets, high-tech firms in the advanced composites industry took notice. 

And today, with over 20 advanced composite companies employing more than 10,000 workers in Utah it’s clear that those early decisions are paying off.  People are finding good jobs here, helping lift middle-class families back into prosperity after a deep recession.

We need more stories like this across the nation.  We want to grow more 21st-century manufacturing hubs.  So the big question we need to ask today is this: How can other communities learn from the success that has happened in places like this? 

For starters, we need to realize that the old models of business investment don’t work anymore.  Decades ago, a big company would pick a city, build a plant, and then make investment after investment to support production. 

If they needed research, they built their own labs. If they needed a new part in their manufacturing process, they’d build a new factory down the road. If they needed their workers to learn new skills, they’d set up their own training programs.

But then, as companies went global, that kind of vertical integration largely disappeared.  They began outsourcing research, supply chains, and labor.  At the same time, many manufacturers moved out of U.S communities, leaving a big hole in the ecosystem of too many local economies. 

Here’s the good news: Many global manufacturers – both based here and abroad – are now looking to come back to the U.S., to expand operations here, or to invest in the U.S. for the first time.

They see low domestic energy costs and a stable supply of energy. They see a rising U.S. competitive edge in labor costs and productivity. They see our consumers buying again and our economy growing faster than others. They know that U.S. research universities are the best in the world, and can be a partner in developing new products. And they see many other longstanding strengths, such as our strong intellectual property protections. 

I believe that the U.S. has a real comparative advantage in attracting new manufacturing investments in the next 5 to 10 years, and American communities need to be ready to attract these investments.

To do this, communities need to put together strategic plans that will build on the assets they already have.  What does this mean?  Let me give some examples.

First, we need to build the right physical infrastructure so that businesses can connect with suppliers and customers.

For example, I know that West Valley City and other local governments are working to meet the infrastructure needs of several new facilities and expansions from firms like Hexcel, Boeing, ATK, ITT, and others.

Second, local research institutions need to be ready to partner with companies that want to stay at the cutting edge of new technologies.

For example, I know that the University of Utah won a 12-million-dollar grant from the National Science Foundation in 2011 to help create a new advanced composites research center. 

Third, we need a growing flow of skilled workers, trained in our local colleges and vocational institutions. 

Again we see this happening at several state and local colleges, such as Davis Applied Technology College. 

Asking communities to make these sort of up-front investments, building the economic ecosystem that will attract outside investment, is a big job, especially for communities that have experienced an outflow of older manufacturing jobs, or a deep recession. So we’re working to make sure that the federal government helps support these efforts.

That’s why, under the new budget that the President announced a week ago, the Commerce Department is going to play a more active role than ever in helping attract more manufacturing investment to the U.S. 

Let me talk about two new programs to make this happen.  The first is designed to partner with U.S. communities and the second works mostly with foreign-owned businesses to persuade them to make their next investment in the United States.

First, I’m pleased to announce that the President has proposed a new program called the Investing in Manufacturing Communities Partnership – the IMC.  This is an Administration-wide initiative led by the Commerce Department with support from other federal agencies.  Through the partnership, we are going to improve the way we use federal resources for economic development, specifically working to make American communities more attractive for business investment.

Through IMC, we will challenge communities to coordinate their regional economic development efforts.  We want them to think strategically about making their own targeted investments that will, in turn, create the best possible environment for business investment.

We want to encourage local and regional leaders to develop a long-term vision for their community, asking themselves some tough questions:

  • Has the community taken full stock of its local assets, resources and comparative advantages?  Does it know what industries and technologies are most likely to be attracted to those local resources?
  • Can the community do more to foster partnerships across its public and private sectors, local foundations, and research and training institutions?
  • Are there a few key new investments – in infrastructure or in local institutions – that will make the community even more economically attractive?
  • And, has the community pulled all of this together to create a strategic plan which it is actively marketing to the industries and companies looking for places to expand their business?

If the answers to those questions are “Yes,” the federal government wants to be a partner. 

Under the President’s proposed budget, the Commerce Department would provide $113 million in funding support – matched with funds from local public and private sources – to co-invest in key projects that can help attract manufacturers and build supply chains.  Projects could include a new research or tech transfer program, a major physical infrastructure improvement, or a workforce development initiative.  We’ll be looking for communities that can leverage our various resources and funding opportunities to help win that next big business investment from a manufacturer.

But even before that, I’m pleased to say that the Commerce Department’s Economic Development Administration plans to kick off an initial round of up to 25 awards of about $200,000 each.  These awards – called “implementation strategy” grants – will encourage more cities and states to build a plan for how they can become a magnet for future manufacturing investments.  We want to incentivize more communities – especially those that have been hard hit – to think as proactively about economic renewal as Utah has.   I’m pleased to say that solicitations for these 2013 awards will be released in the coming weeks.

At the same time that we work with communities on the ground through IMC, we also need to step up our international outreach. Firms and investors around the world need to know that there has never been a better time to invest in the U.S.

That’s why a second request in the President’s new budget is to fully support SelectUSA, which reaches out to businesses around to world to promote the value of investing in the U.S.

Since its inception just two years ago, SelectUSA has helped attract billions of dollars in investment to our shores.

Our SelectUSA team includes commercial service officers based abroad who are helping foreign businesses learn more about investing in U.S. cities and regions.  And SelectUSA includes U.S.-based folks who work closely with state and local economic development agencies to help them make connections with potential investors.  We also help new investors get their questions answered about federal regulatory issues as they build their business in a U.S. community. 

All of our competitors around the globe are actively working to attract investment into their nations.  For too long, the U.S. didn’t work at this, because we just assumed we didn’t need to.  We had no national program designed to attract inbound investment.  But in this increasingly competitive global economy, we have to be as aggressive as others in bringing investment to our shores.   

That’s why the President is proposing $20 million to support the SelectUSA program.  This will allow us to hire more folks both nationally and internationally – professionals who will empower governors and local leaders who increasingly find themselves competing with a foreign city or country for investment dollars. 

We’re moving forward now because the opportunities are too big to ignore.  That’s why, this week, I’m announcing plans for the first-ever SelectUSA Investment Summit to be held in Washington on October 31 and November 1. 

At the summit, we will bring together economic development leaders from across the U.S. with investors from around the world. 

If you’re interested in learning more, go to SelectUSA.gov

In closing, our objective is clear. 

We want to position more American communities to do what you’ve already done here – to attract more investments and more good jobs by building on the assets you already have.  Given our increasingly attractive energy situation in this country, our stellar research universities, as well as our many other strengths, we can make our nation a powerful magnet for high tech and advanced manufacturing in the years ahead.

We want companies like Hexcel to keep building and expanding in U.S. towns and cities.  Because when that happens, our middle class will grow stronger, our economy will thrive, and the next generation will see opportunity in their future.

Thank you all.