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Remarks at Detroit Economic Club National Summit, Detroit, Michigan

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Tuesday, June 16, 2009

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Secretary of Commerce Gary Locke
Remarks at the Detroit Economic Club National Summit
Detroit, Michigan

Hello everyone.

I want to thank the Detroit Economic Club for inviting me to speak here.

When I first saw the promotional materials for this summit, I noticed the tagline: a “gathering to define America's future.”

It’s the right place to focus. Today, I want to talk about how President Obama and Congress have been working to revitalize American manufacturing and our economy; and about new measures the Department of Commerce is taking to create jobs here in Michigan and across the country.

But before I get to that, I want to talk a little bit about where we are.

We have come through a scary time, and I know anxiety remains.

But we stand here today with a cautious optimism that we have avoided the abyss. Since the day he took office, President Obama has taken extraordinary action to stabilize credit and housing markets and stimulate our economy.

Despite extraordinary challenges, we’re hanging in there.

And the American people have maintained the resilience and fortitude that have always been our hallmark.

I saw those traits on full display a few weeks ago when I was 90 minutes west of here in Holt, MI. Local business leaders and employees came out for a town hall discussion at the auto parts supplier, Dakkota Integrated Systems.

What I heard from the people in that audience was unvarnished pride in their work and complete confidence that the products and services they provide can compete anywhere in the world.

Yes, they were anxious. But they weren’t panicked. I walked out of there reminded of that old saying about the virtue of “keeping your heads about you while everyone else is losing theirs.”

The people of Holt are keeping their heads – and so are a lot of other folks in this region, including Governor Jennifer Granholm, who is doing so much to help Michigan overcome this once-in-a-generation crisis.

I want to commend Governor Granholm for the work she's been doing to diversify Michigan's economy; creating thousands of new jobs in renewable energy and advanced battery development, and helping to turn this state into a mecca for film production.

But people here in Michigan and throughout the Midwest still need some help.

And the Obama Administration, and the Department of Commerce – which I lead – intend to provide it.

From President Obama on down, we are fully committed to revitalizing America’s automotive and manufacturing base.

We wouldn’t have intervened with GM and Chrysler, and put taxpayer money on the line, if we didn’t have confidence they could emerge stronger and more competitive.

President Obama has said repeatedly that we don't intend to run auto companies. Our goal with GM, as it was with Chrysler, is to get it out of bankruptcy as quickly as possible and leave the day-to-day decisions to the private sector managers.

To help expedite the process, President Obama has tasked Ed Montgomery – a well-respected economist and key member of our auto task force – to be the point man for assisting GM, Chrysler and affected communities here and throughout the Midwest.

Of course, the issues with GM are part of a deeper downturn that has afflicted the entire American automotive and manufacturing sector for years – and that reached critical mass with the recent financial crisis.

Manufacturing employment in the United States has been steadily declining since the 1950s. Once accounting for one third of our jobs, manufacturing now claims just 1 in 10.

Much of this is due to long-term structural trends like increased productivity, efficiency, competition from abroad and the growth of the knowledge and service sectors.

But for too long, American businesses – particularly our manufacturers – have been fighting against systemic imbalances that make it tough for them to compete and create new jobs.

A healthcare system that leaves almost 50 million Americans without care; and is riddled with inefficiencies that pile backbreaking costs on small and large businesses alike.

An education system that isn't preparing our kids or retraining workers for the jobs of the 21st century.

And decades of mismanaged energy policy that puts our environment in peril, and leaves American businesses – especially our automakers – vulnerable to unpredictable price swings in the oil markets.

President Obama's ambitious 2010 budget sets a blueprint for remedying these problems, and legislative efforts on healthcare and energy are already underway.

And the budget also creates opportunities to help local communities leverage their own strengths, which is why the president set aside $100 million to promote the formation of regional economic clusters.

These prescriptions will ultimately benefit our job creators and help revitalize American manufacturing.

That is important for this region and this country.

Manufacturing is a major contributor to American innovation; comprising two thirds of our nation’s research and development spending.

It is also a vital source of good family wages, as manufacturing employees make 13% more than the average for all other workers in America.

If we are to transform the way we use energy in America and around the world, it will depend on wind turbines, solar panels, advanced batteries and electric cars designed and built in places like Detroit.

And there is something about manufacturing that truly embodies the character of America. We are a nation of tinkerers, of builders, of makers. When I was a bit younger, there was nothing I enjoyed more than spending a weekend under the hood of my buddy’s Ford Galaxy, changing the clutch and the breaks, rebuilding the transmission.

The people in this city, and millions more around the country, I'm sure can relate.

Manufacturing probably won't ever again account for a third of our jobs. But working with our hands and building innovative new products for the world will always remain an important part of what America is.

President Obama's efforts to reform healthcare, education and energy policy are part of a long-term effort to create better infrastructure for a strong economy.

But this time of crisis also demands a short game. People, businesses and communities need immediate and targeted assistance.

The Recovery Act passed earlier this year provided states with billions of dollars to extend the social safety net, including funding for as many as 20 additional weeks of unemployment benefits. The act also included $100 billion in funding and loan guarantees to encourage and support manufacturing in America.

There are also existing programs that have been ramped up to help affected communities, especially in the Midwest, such as Trade Adjustment Assistance, which provides crucial support for displaced workers, from training and wage insurance to health benefits.

Throughout the federal government, agencies are mobilized to provide vital assistance for America’s manufacturers and their workers.

Thanks to the Recovery Act, the Small Business Administration has been able to increase loan guarantees from 75 to 90% on their biggest loan program and have also waived a variety of borrower fees.

There are the DOD’s Procurement Technical Assistance Centers, which help educate small businesses on how to compete for defense contracts, and can play a key role in helping automotive suppliers diversify their customers.

There’s the Department of Labor's innovative WIRED program, which is integrating economic and workforce development activities in 40 regions across the country.

And then, there is the Department of Commerce, which is operating on the same long-short track as the president. We're providing critical assistance to communities affected by this economic crisis, while at the same time helping lay the groundwork for the jobs of the future

You know, I'm sometimes asked what exactly Commerce does. It can be a tough question to answer because this department does so much in so many different places.

We touch ordinary Americans in ways obvious and obscure every day:

From the weather satellites of the National Oceanic Atmospheric Administration; To the global offices of the International Trade Administration; To the many communities that are able to attract companies with new industrial and business parks built with funding from the Economic Development Agency grants; To the Bureau of the Census, which next year will put 1.5 million people to work counting every American in the country.

There are 12 agencies and bureaus within the department and more than 50,000 employees.

But one of the benefits of being a cabinet secretary is that you get to set priorities. And what I see when I look at the Department of Commerce is a federal agency singularly equipped to help American businesses grow and to create jobs

We have tools to help businesses at every point in the cycle – from the birth of an idea, to the standing up of the company with that idea, to finding markets once that idea has been transformed into a product or service.

Imagine for a moment that you are getting a business off the ground to design smart electrical meters for the new smart grid.

You might begin your interaction with Commerce by working with our National Institute of Standards and Technology, which just recently announced an initial framework of standards to make sure all smart grid technologies are interoperable across the country.

Once you develop your particular technology for smart grid meters, you’ll depend on Commerce’s Patent and Trademark Office to protect your intellectual property from competitors.

When you’re ready to start manufacturing your meters, you’ll want to link up with Commerce’s Manufacturing Extension Partnership, which joins with state and local organizations to help companies drive gains in efficiency and productivity.

As you're ready to hit the market, you’ll want to take advantage of the various tax credits and loan guarantees that President Obama has made available for companies that are helping to drive efficiency and alternative energy.

But you’ll also want to visit the Commerce Department's International Trade Administration, which can educate you about the emerging smart grid opportunities in places like France and Germany and will actually find clients for you, and help set up new business meetings.

And if you do start operating in foreign countries, the Department of Commerce will work to protect your intellectual property and market access, because we are focused on making sure foreign governments comply with U.S. trade laws abroad; and ensuring U.S. companies aren't competing against foreign products here at home that have been illegally subsidized in foreign countries.

This is an amazing array of tools the Department of Commerce has, that have achieved impressive results over the years.

But we can do better.

In the few short months I’ve been at Commerce, I’ve already noticed a serious shortcoming with our resources. I’ve seen how hard it can be for businesses to tap into them.

The Commerce Department has over 1,200 offices throughout the United States – and over twenty in Michigan alone. It’s not surprising that entrepreneurs and business owner can find it a bit confusing.

It shouldn’t be that way. Main Street business owners should be spending their time worrying about meeting payroll and keeping their customers happy, not figuring out how to navigate federal bureaucracies.

Instead, government needs to bring services and solutions directly to those creating and sustaining jobs.

That is why today I would like to announce a new Department of Commerce initiative to make our services easier for you to access, and we’re going to launch this pilot program right here in Michigan.

Within the next few weeks, I’ll be dispatching a team of Commerce experts to begin preparing the launch of a veritable “one stop shop,” that will provide a single point of contact for every Commerce program available to business owners.

This initiative will work with state and local agencies, academia, labor and other key stakeholders to provide a unified, integrated resource to grow and sustain jobs.

To get our “one stop shop” up and running, I have tasked the Director of Commerce’s successful Manufacturing Extension Partnership, Roger Kilmer.

For this initiative to thrive, it’s critical to have leadership that understands both the broad array of Commerce programs and services, and the needs of business and manufacturers.

With 35 years of government service and over 15 years with the Manufacturing Extension Partnership – the last four as Director – Roger brings the extraordinary combination of government and business expertise needed to make this effort the huge success that I know it can be.

The MEP has been one of Commerce’s best programs over the years. Since its inception in 1988, a nationwide network of 400 MEP field offices and centers has worked with over 400,000 companies to improve productivity, technology adoption and opportunities for growth.

In fiscal year 2007 alone, the MEP helped create over $5 billion in new sales for partner businesses.

Roger is already working to staff this new initiative with an interdisciplinary team from across Commerce’s many agencies. The team will consist of experienced business experts; each of whom will be cross trained on the wide breadth of programs and activities that the Commerce Department and other federal agencies have to offer.

By the end of this summer, our goal is to have places in the Detroit area that possess every bit of Commerce expertise, education and access that a business could possibly need.

Instead of business owners endlessly navigating the Internet or driving around Michigan trying to figure out whether they need help from Commerce’s Commercial Service or Export Assistance Centers or our Minority Business Development Agency, we’re going to put it at their fingertips in one place.

Our on the ground experts will be responsible for assessing a businesses’ full spectrum of needs, whether it's access to capital, infrastructure needs, export promotion, or innovation. Our team will be a vital partner for Michigan business owners, sometimes leveraging several different federal programs at once to help companies grow and create jobs.

Months ago, President Obama said it was his goal to create a more responsible and responsive government. Commerce’s new effort to bring resources directly to those business owners who need them, will strive to embody those ideals.

If our Detroit-area pilot program is successful – and we are confident it will be – then Commerce will begin replicating our efforts throughout the Midwest and communities all across the United States who are facing economic challenges.

I am looking forward to coming back here in a few months to see the progress that I know Roger and his team will have already made. And I pledge to you today that I will personally monitor it.

This is a critical priority for the department and for the people of Michigan, and with the challenges ahead of us, it’s crucial we get it right.

Thank you.