3:00 P.M., EDT
MODERATOR: I’d like to welcome everybody to our facility today. Long known as the steel city, Pittsburgh witnessed the collapse of its signature industry only to transition into one of the country’s top centers for life science, research and technology, and one of America’s greenest locales.
Today, the New York Foreign Press Center is proud to present the governor of Pennsylvania, the president and CEO of Bayer Corporation, and a representative of Pittsburgh’s G-20 Partnership. Together, they will discuss Pittsburgh’s role as the host city to the summit and Pennsylvania’s role in national issues. It is with great pleasure that I introduce Governor Edward Rendell, Bayer CEO and President Greg Babe, and Pittsburgh’s G-20 Partnership, Bill Flanagan.MR. FLANAGAN:
I appreciate it. Good afternoon, everyone, and thank you very much for attending today. This is an exciting time for the entire Southwestern Pennsylvania region as well as Pennsylvania as a whole, and we’re very pleased to be here on behalf of the co-chairs of the Pittsburgh G-20 Partnership, Pittsburgh Mayor Luke Ravenstahl and Allegheny County Chief Executive Dan Onorato.
The partnership is a local public-private partnership that was formed within days of the announcement that the G-20 was coming to Pittsburgh. It’s now made up of more than 100 organizations and thousands of volunteers who have been working for the past several months to provide a clean, green, and welcoming setting for this important global conversation. The mayor and the county executive led a similar briefing to this one in Washington, D.C. this morning.
We’re extremely pleased to have Pennsylvania Governor Ed Rendell leading the team here with us in New York this afternoon. This is actually the first time that the heads of state representing the G-20 countries will meet outside a national capital – first Washington, then London, and now Pittsburgh, Pennsylvania. Pittsburgh was chosen to host the event for some very particular reasons, and we’re going to explain today what we think those reasons are and why it makes such perfect sense to bring the G-20 to Pittsburgh.
So I’d like to begin by thanking the Foreign Press Center for hosting us this afternoon, and again, thanking all of you for joining us. I also would like to point out some people in the room who also are our expert resources about what’s been happening in Pittsburgh in recent years, and I would encourage you, when we wrap up, to seek them out because they can answer additional questions about the Pittsburgh transformation.
First, Craig Davis, who is the vice president of sales and marketing with VisitPittsburgh. They were a founding partner along with the Allegheny conference in Pittsburgh of our partnership. Craig and his team work to promote the region for visitors and conventions, and he can tell you about Pittsburgh’s growth as a visitors’ destination, but he can also answer your questions about coming to Pittsburgh to cover the summit and help you with any travel planning.
Also joining us today is Tom Sokolowski, director of the internationally acclaimed Andy Warhol Museum in Pittsburgh, which has mounted exhibits in most of the G-20 countries. And as you may know, the Warhol has been selected as an official venue for the summit. On Friday, September 25th
, the museum will host the luncheon for the spouses of the heads of state.
We’ve also got Susan Koger. Seven years ago, Susan came to Pittsburgh to attend Carnegie Mellon University. As a student, she and her husband-to-be co-founded ModCloth, a small internet-based clothing business. After graduation, they could have gone anywhere in the world, but they decided to stay in Pittsburgh. They’re now averaging 2 million visitors a month to modcloth.com, and their company employs more than 85 people.
So feel free after our program to talk with Craig and Susan and – as well as Tom. They all have great stories to tell about what’s been happening in Pittsburgh in recent years. I’d also like to point out Ted Martin, who I believe many of you met on your way in. Ted is representing the governor today and can help you with any follow-up regarding the Commonwealth of Pennsylvania. Sean Bannon, who hopefully most of you – there he is in that corner – have also met is representing the Pittsburgh G-20 Partnership and he can help with any follow-up interviews in Pittsburgh, or also to help facilitate your visit to cover the summit.
And now let me turn to our speakers for this afternoon. We’re pleased, as I mentioned, to have Pennsylvania Governor Ed Rendell here to talk about the economic transformation not just in Pittsburgh, but the commonwealth. And as you heard, we’ll also hear from Bayer Corporation President and CEO Greg Babe. But first, it’s my pleasure to introduce Pennsylvania Governor Ed Rendell and – whose administration has played a remarkable role in this decade in really bringing Pittsburgh back sort of into the global economy and as a place that’s very appropriate to host the G summit.
Thanks, Bill. Good afternoon, everyone. We were all very proud and pleased when President Obama selected Pittsburgh as the site for the G-20 summit. And he didn’t spell out all of his reasons. He spelled out some. But I think in part, it’s because Pittsburgh is truly a renaissance city that has experienced a great renaissance.
If you asked people about Pittsburgh 10 or 15 years ago, they would have said steel and smog. Well, there’s still steel in the Pittsburgh region. In fact, we have the largest Coke-producing facility in the United States of America down at Clariton in the suburbs of Pittsburgh, but there is no smog. And truth be told, many of the great steel factories that went on for blocks and blocks and blocks as far as the eye could see, those steel plants are gone. But they’ve been replaced in a remarkable renaissance by a combination of green jobs, life science jobs, recreation, entertainment – Pittsburgh has undergone a remarkable transformation.
It used to be when you came out of the tunnels that are above Pittsburgh and you looked at the city skyline, you couldn’t see a bloody thing because the smog from the steel plants was so thick. Now, you see a view that USA Today has said is the second most impressive view – skyline in the United States of America. So it’s truly a renaissance city in so many different ways.
But I think President Obama gave a little bit of hint to his thinking. And as you know, President Obama has made the development of the green economy one of the cornerstones of his Administration. And when he announced Pittsburgh as the host of the summit, he mentioned the great track record that Pittsburgh and Pennsylvania have in developing the green economy.
In fact, the Pittsburgh region has been a true leader in many things. They boast 39 leadership and energy and environmental design certified buildings among the top 10 for cities in the country. Those are called lead-certified buildings, and that means that they are environmentally sound, but they have virtually no carbon footprint. Thirty-nine of them are in Pittsburgh. In addition, Pittsburgh has – and it will be the host of a number of G-20 events – their convention center, the Pittsburgh Convention Center, is the only lead-certified convention center in the United States of America.
But that’s not all of the commitment that the city of Pittsburgh and the region has made in the Commonwealth of Pennsylvania. Pennsylvania, in the six years since I became governor, has invested almost a billion dollars in creating a clean energy economy. We’ve developed 560 projects that have produced already over 10,000 green energy jobs, and we’ve become a leader; our advanced energy portfolio standards. We were the 22nd
state to adopt them, but they are the most aggressive when it comes to solar photovoltaic standards.
And we are now a leader in energy conversation. We just passed a bill last year that requires our utilities by 2015 to conserve 3 percent of the energy that they are now putting out. And if everyone in the world conserved 3 percent of the energy we were currently using, we wouldn’t have to worry about increased production. And it is a crucial part of what I think has to be a worldwide strategy towards energy. But we are now a leader in energy conservation – solar, wind, geothermal, hydro, biodiesel, biomass and ethanol itself. And we are working on a – to develop a carbon capture, and storage technology with – cooperatively with other countries which could make the word – the phrase “clean coal” no longer an oxymoron. It could unlock the power of coal for not only the United States of America and the commonwealth, but for the entire world.
So I believe it is fitting that we are here in – because Pennsylvania and Pittsburgh really are capitalizing on Senator Obama’s vision for the country. Pennsylvania is also the fastest-growing state in international business development, number one in the country. We have – in the six years that I have been governor, we have tripled our investment, and we’ve done it because of a program called World Trade PA, where the commonwealth puts over $20 million a year behind aiding our smaller and midsized businesses learn how to export their products in different foreign countries.
The bigger businesses don’t need government’s help. They have lawyers and staff people who can do all that. But our smaller and midsized businesses, particularly manufacturing businesses, don’t know how to do it. And the expertise exists in World TraFde PA, and it has allowed us to triple our imports. Our exports total 34.4 billion last year, up nearly 18 percent where the average for the U.S. was an increase of 11 percent in exports.
Pittsburgh is also a hub of that international activity. In Pittsburgh, there are more than a hundred billion dollar-plus global companies either headquartered or with a significant presence in Pittsburgh or the Pittsburgh region. There are also more than 300 foreign-owned companies operating and having a significant presence in the Pittsburgh region. For Pennsylvania, we would have – if we were a standalone nation, we would have the 18th
largest economy in the world.
We have a gross state product of $531 billion. And our increased trade and also the increased foreign investment here comes from the fact that we have 30 – in 31 countries, we have business representatives. Not only export representatives, trade representatives, but representatives whose job it is to attract investment to the commonwealth. That’s the most of any state in the nation. For example, we are the only state in the nation to have an office in India, and we actually have two offices in India.
But lastly, I think Pittsburgh was chosen because of its incredible diversity and the incredible record it has achieved in recent times. There are some people who say that manufacturing is dead in America. That’s not so, and hopefully it never will be so, but Pittsburgh is a hub of advanced manufacturing, and there are about a hundred thousand workers who are employed in the Pittsburgh region in manufacturing and advanced manufacturing with companies like Bayer. And you’re going to hear from Bayer – our Bayer CEO and Lanxess CEO in a minute.
Eaton, GlaxoSmithKline, Consumer Healthcare, Koppers, Mylan, Nova Chemicals, H.J. Heinz, PPG Industries – of course, U.S. Steel and Westinghouse Electric, two of the most famous worldwide companies. It’s also still a hub of financial and business services – Mellon, Citizens Bank, Federated Investors, Highmark, PNC. And two of the world’s 10 largest law firms are headquartered in Pittsburgh – K&L Gates and Reed Smith.
Energy – as I’ve said, Pittsburgh has a very strong presence in the new emerging green energy economy. Pittsburgh also, though, is a center for research innovation and healthcare and life sciences. Pittsburgh’s health service sector has almost tripled in size since 1979, creating more than 100,000 jobs and building on a legacy of biomedical innovation to create a robust industry network that’s cultivating life-saving technologies and advanced medical devices, regenerative medicine and pharmaceuticals. Of course, that legacy dates back to the time that Jonas Salk, as a young student at the University of Pittsburgh Medical Center, came to work to develop a vaccine to combat hepatitis, and in fact, developed a vaccine that rid the world of the scourge of polio.
UPMC, the University Medical – the University of Pittsburgh – UPMC, the University of Pittsburgh Medical Center has grown to be the largest employer in Western Pennsylvania with over 50,000 employees, and it has an $8 billion global enterprise. UPMC has facilities all over the world – Qatar, Turkey, Italy, and many, many countries throughout the world. And it is truly a global leader. UPMC has partnered with General Electric in developing health information technology which we believe will change the face of the healthcare delivery system in this country.
Information and communications technology – Pittsburgh region is home to significant – 1,600 technology firms employing over 32,000 people, companies like Google, Intel, Mastech, Apple have significant presence in the Pittsburgh region. In education and research, Pittsburgh stands almost second to none. The region has 35 universities and colleges, two world-class universities and research centers – University of Pittsburgh and, of course, Carnegie Mellon University, renowned around the world. It’s also a great place for arts and culture. Mr. Sokolowski can tell you about that afterwards.
And just listen to a few of the rankings that Pittsburgh has received lately. The Economist ranked Pittsburgh the most livable city in the United States and 29th
worldwide; doesn’t say much for the United States being – having livable cities, but number one in the United States of America. Pittsburgh’s has been ranked sixth out of the top 10 up and coming technology cities by Forbes Magazine. Forbes also ranked Pittsburgh as one of the 10 cleanest cities in the world. Pittsburgh’s been ranked among – sixth among the top 10 cities for job seekers and 13th
best city for young professionals. And it’s been rated in the top five places to raise your kids in 2009 by BusinessWeek.
So Pittsburgh’s a city that’s on the move. It’s done great things. It’s transformed itself. It’s using research and technology and education and life sciences and green energy to replace what used to be solely a manufacturing economy. But that manufacturing economy is still there. And the diversity of this economy has allowed Pittsburgh to be one of the regions that has best forestalled the impact of the worldwide recession. In your press package, there is a Time Magazine article from October of 2008 that says “Finding One Economic Bright Spot on Main Street,” and it’s all about how Pittsburgh had weathered the recession and continues to weather the recession better than virtually any American city. So we’re proud to have the G-20 in Pennsylvania and the commonwealth. We’re extremely proud to have it in Pittsburgh. I hope all of you will have a great time and a great experience covering the G-20, and I look forward to answering some of your questions.
Bill. MR. FLANAGAN:
Thank you, Governor. As Governor Rendell said, what’s happened in Pittsburgh is the product of really 25, 30 years of ongoing investment leadership from the state, from government, but especially from the private sector. We’ve built on the best of what we had – our industrial heritage – but we’ve also innovated and invested in new industries. And Bayer Corporation is an example of a foreign-own country that’s been a big part of that investment in our community. They really straddled both those worlds. As a material science company, a manufacturer, that’s the best of Pittsburgh’s past, but also is a very innovative research-driven company. That is where Pittsburgh is today and where we’re headed in the future. And so I’m very pleased to welcome the President and CEO of Bayer Corporation, Greg Babe. MR. BABE:
Thank you, Bill. Good afternoon, and thanks to all of you for taking some time to join us here today and learn a bit about Pittsburgh and why G-20. The governor has said that we were very pleased and very proud whenever the – when President Obama announced that Pittsburgh was going to be hosting the G-20, but I think there were an awful lot of others who were just surprised. And so I think the – what many of us know is that if he had announced New York, New York City, of course, the great city that’s hosting us today, that would have been very clear. Chicago, his hometown, probably equally clear. But Pittsburgh, Pittsburgh, Pennsylvania probably best known as a rough and rugged steel town, that was once described as “hell with the lid off” by author James Parton, what could it possibly offer?
And I think that you’re going to learn a lot of that today, but you’re going to learn a lot of that as you cover the G-20. And it’s going to start with what the governor has already described. As you drive through Fort Pitt tunnel and see the skyline of Pittsburgh, it’s not all what you’re going to be expecting. It’s not at all what any visitors have expected. They’ve expected to see a steel town – gloomy, dirty. That’s not Pittsburgh. The Pittsburgh that you see from the very beginning is going to grab you with its panoramic skyline, as soon as you drive through one of our tunnels into the city. We’ve come a long way since the steel industry collapsed in the ‘70s, and we’ve really transformed from a gritty, rustbelt town to a truly vibrant 21st
century center for culture and international business.
The G-20 is going to take place in what’s known as Pittsburgh’s downtown cultural district. Since 1984, the Pittsburgh Cultural Trust, which is a nonprofit arts agency and real estate and economic development engine, has transformed this section of the city from a depressed section of the city, with only two cultural venues, into a superlative 14-block area in the heart of downtown. The cultural district now features more than 14 cultural facilities, public parks and plazas which enriches the lives of Pittsburghers as well as worldwide arts aficionados alike, and+ it brings in millions of tourist dollars to Pittsburgh every year. But that’s just one other example of what makes Pittsburgh and what is a hallmark of Pittsburgh’s renaissance.
So it’s really that – no wonder, in our – certainly from our perspective as Pittsburghers, why we have so many accolades recently. And the governor has mentioned many of those already from the most livable city rating from The Economist, Forbes magazine naming Pittsburgh as the tenth cleanest city in 2008, on and on. And we’re very proud of all of those things, and we still feel that Pittsburgh is still yet to be discovered by many. The governor highlighted the international business community in Pennsylvania in the commonwealth, as well as in Pittsburgh. And we’re still proud today that the – Pittsburgh has – is home to the headquarters of eight Fortune 500 companies.
Our primary industries have shifted from steel, although, as it was said, it is still there. But we’ve shifted from primary industries of steel and iron and glass to finance and to high technology. Technology – high technology is represented by chemistry, material science, robotics, healthcare, nuclear engineering, and biomedical research.
According to the Pittsburgh Technology Council, the total annual payroll of the region’s technology industries, taken in aggregate, exceeds $10 billion. Their corporation is a subsidiary of Bayer AG, which is an international healthcare, nutrition, and innovative materials group which is based in Leverkusen, Germany. We are proud to have called Pittsburgh home since planting our roots there in 1958, so over 50 years. That was – that happened when Mobay Chemical Company, which was a Bayer joint venture, Bayer AG joint venture with Monsanto Chemical, relocated its offices at that time from St. Louis.
The Bayer executives at the time who made that decision were impressed with the region’s vibrant universities which were strong then, just as they are strong today; by a highly motivated and educated workforce, which is still there today; ready access to Europe and excellent hospitals. Now there are also there’s – the lure, of course, the legend that says that the German executives were also drawn to the – Pittsburgh’s river environment and its hilly terrain, which is very similar to Leverkusen, a city which is situated on the east side of the Rhine in between Cologne and Dusseldorf in an equally hilly region. And I really believe that, and I have some proof of that, because so many of the families who have relocated here over those years have decided to stay here in Pittsburgh and to call Pittsburgh home.
We had the – over the many years, Mobay and several of the other Bayer companies merged into Miles. And then finally, in 1995, we became Bayer Corporation. The North American operations for Bayer consist of about 25 percent or make up 25 percent of the global group sales, which amounted to $48 billion in last year.
As the governor mentioned, we’re also joined by some other international chemistry giants that call Pittsburgh home, such as BASF, Lanxess, NOVA Chemicals and PPG. Taken together, that chemistry industry in the region accounts for 8,700 physicians. And with that leverage, we believe that we create at least five times that number of positions for each one of our jobs, so that in total, we have an expectation – or excuse me, a population of about 68,000 jobs focused in chemistry in the region. And in addition to creating jobs, those companies have created and generate hundreds of patents every year.
Pittsburgh’s companies, like Pittsburghers themselves, are imbued with a strong sense of community. We know that strong companies build strong communities and vice versa. This is underscored by the wide range of educational, social, and cultural organizations that our respective corporate foundations and our employee volunteer and giving programs support. What’s more, the region’s high-tech companies and excellent universities provide fertile ground for industry, government, and university partnerships to advance important technological innovation. One excellent example is nanotechnology – the science of manipulating atoms and molecules up to 80,000 times smaller than the width of a human hair.
Nanotechnology is ideally suited for a multidisciplinary cross-industry model. It was in that context that a group of interested stakeholders in Pennsylvania joined together to form the Pennsylvania NanoMaterials Commercialization Center in 2006. The center was created under the auspices of the Pittsburgh Technology Council initially as a consortium of four Western Pennsylvania-based companies – Bayer Material Science, Alcoa, PPG Industries, U.S. Steel, and three universities – the University of Pittsburgh, Carnegie-Mellon University, and Penn State.
The Center, which was recently featured in an article in the Financial Times plays a key role in accelerating the commercialization of nanomaterial research to create products that are critical in meeting the commercial and defense needs of the United States. We use our funding to bridge the valley of death phase of development between proof of concept – the proof of concept stage –and the production of a customer-relevant prototype product.
The current portfolio consists of 12 projects, and a new funding round is – has recently opened. As examples, we’ve funded Pennsylvania-based nanotech start-up companies like Plextronics, which is developing organic solar cells, and Crystalplex, which is involved in energy-efficient LED lighting. These projects are tackling the twin challenge of reducing our country’s carbon footprint, as well as making our – making us more energy independent.
I really believe that what we have created is – as a regional development model can and should be replicated across all of the United States. I’m confident that our country and our industry would be better for it. Nanotechnology going further along that line, can be a real game changer in wind power. For example, a standard wind turbine blade now is around a hundred feet in length. That’s about as big as you can practically build them, because each blade weighs about 13 tons. They’re made of epoxy and carbon-filled composite and they’re hollow on the inside. You can actually walk from one end all the way to the other end of a wind turbine blade.
The biggest potential for nanotechnology in wind turbines has to do with weight reduction. And 13 tons times three blades on a turbine is 39 tons, which is an awful lot of weight. But if you add just 40 pounds of carbon nanotubes into each blade, you can reduce that weight by three tons per blade. This means that you can increase the overall diameter of the turbine to 400 to 500 feet and make the turbines much more efficient. At our Bayer MaterialScience business in Pittsburgh, this is an exciting area of growth for us.
Last month, we were selected to receive a $750,000 grant from the U.S. Department of Energy to support development and testing of advance composite technologies and resonant fusion processes for larger, more efficient and more powerful 1.5-plus megawatt wind turbine blades. The project, called Carbon Nanotube Reinforced Polyurethane Composites for Wind Turbine Blades – never anything simple with those guys – is an initiative to help develop and accelerate development of advanced wind turbines, but also with a focus on overcoming technology barriers to broader applications. Carbon nanotubes can also be used to strengthen light metals like aluminum and magnesium. If you include carbon nanotubes into aluminum, for example, you get the same light weight, but with the strength of steel. This could be – this could allow for lighter automotive engine blocks or drivetrain components and much, much more.
Pittsburgh and its people have played an inimitable role in the industrial growth of America, and we’ll have an increasingly important role to play solving many of the pressing issues that are going to be discussed at the G-20 summit. We have answers, technology solutions to a lot of these issues. Innovation and collaboration coupled with a can-do attitude are what Pittsburgh enterprises and the people who work for them do best.
Through bad and good economic times – and we’ve seen both – they’ve demonstrated to the world just how ingenious and how enterprising they are. So they’ve shown, in the words of our President Obama, that yes, we can.
Thank you very much. MR. FLANAGAN:
Thank you, Greg. I just want to – we mentioned that the Andy Warhol Museum is going to be one of the official venues. I’d just like to ask Tom Sokolowski to take two minutes just to tell you about the Warhol – it’s actually got a global presence – and also, I guess, the significance of the selection of the museum as a venue. MR. SOKOLOWSKI:
Good afternoon. You’ve heard about the growth and transformation in Pittsburgh and largely, that’s been an artful act. And art is often the place where that transformation, which then leads to business and economic growth, begins because artists will move into a place that no one else would countenance, and it happens all over the world.
When I came to Pittsburgh 13 years ago, the North Shore of Pittsburgh, which is now our most glamorous tourist attraction, had nothing but old, broken-down buildings, et cetera, and the Warhol Museum. Now, we’ve spurred two major sports stadia, art museum, burgeoning artist studios, restaurants, three hotels, and that all is because of the museum of a crazy, weird guy, as many people still call him, who left Pittsburgh, Pennsylvania to create a new form of art.
Well, one of the things the Warhol Museum does is take this uniquely American art form and send it around to the world. And as Bill said before, we’ve had shows, and sometimes multiple times, in 15 of the 19 countries. In Korea, we’ll have a major show in just a few months. In Canada, we will have three or four big shows in Italy, just to pick an example.
One thing I’d like to point out, however – we’ve talked about the art institutions and our great companies like Bayer, but we haven’t talked about individuals. Pittsburgh is a place that young artists like Ms. Koger can come, perhaps work part-time as a chef in a greasy spoon or doing what have you, but then spend most of her time making her art. Sadly, even in the great capitals of art like New York or London or Paris or Tokyo, that is physically not possible anymore. Pittsburgh is a place that if you tell people from all of your countries that they want to live practice their art and be able to show it, whether it’s music or theater or visual arts, come there.
Among the art organizations in town – as we’ve redded up, as one of our famous former mayors would say, meaning cleaning up and getting ready for the folks to come and visit – we’ve created a new slogan. And you’re the first to see it, which is: Pittsburgh is art. And I hope that if you come to our city, and when you come to our city, you’ll see that, that the economic growth of $350 million a year that comes from cultural and educational organizations comes from the arts. We’ve transformed the city into something that’s quite miraculous. And with the collaboration of business and the arts, it’s a new kind of Florence, a new kind of renaissance. So come and see what we’ve done. Pittsburgh is art. PARTICIPANT:
Mark, should I turn it over to you for the Q&A? MODERATOR:
Thank you. And just so everybody understands, what we’re going to do is take a question from one side of the room, a second question from the other side of the room and then one from Washington, and we’ll keep – we’ll continue in that pattern. And in the interest of giving everybody an opportunity to ask their questions, I’m going to ask that you ask one question and we’ll come back to you if there’s time for a follow-up. QUESTION:
Good afternoon. I have a question for the governor. MODERATOR:
Your name and organization? QUESTION:
Oh, my name is (inaudible). I work for a Dutch daily newspaper (inaudible).
Mr. Governor, thanks for being here. The whole renaissance story is – sounds very interesting. But I’d also like to know how you’re actually doing in this present economy. I looked at some numbers, and I would like to ask you also to repeat those numbers back to us.
Can you tell us something about the unemployment rate and the number of bankruptcies in Pittsburgh? And I know you’re going to be saying that that number is lower than elsewhere in the U.S., but I’d also like you to tell me why it’s actually rising. GOV RENDELL:
Well, it’s rising because the effects of the recession keep rolling out. And in Pennsylvania, we are still a very significant manufacturing state. And so many of our smaller manufacturing plants – and it’s interesting, people think of manufacturing as being located in your big, urban centers, and that may have been so at the turn of the century, but – at the turn of the 20th
century – but in the 21st
century, most manufacturing in Pennsylvania is in smaller rural counties. And most manufacturing is not in thousand-worker plants or 2,000 workers like Harley Davidson in York, but most of it is in 100 to 500 worker plants that are the hubs of the town, and in some cases, in the smallest counties, in the entire counties.
And so many of our manufacturing companies produce products for the automobile industry that were subcomponents of the automobile industry. Even Lanxess – there’s a companion corporation – produces a lot of materials for the automobile industry or the housing industry, because we’re probably the best hardwood state in the United States. Some other governors might disagree.
But we probably have – the Pennsylvania hardwoods are the finest hardwoods in the world. In fact – and there are businesses who will take Pennsylvania hardwoods that used to be manufactured into furniture in Pennsylvania – ship them to China now, have them turned into furniture in China, and ship them back to the U.S. for sale. That’s how good Pennsylvania hardwoods are. Because we’re such a hardwood state, so much of our manufacturing went into the home building industry as well. And there are no two industries that have been harder hit in the U.S. than industries or manufacturing plants that provide services to the housing industry and services to the automobile industry.
But having said that, I do have to put a plug in for Pennsylvania and for Pittsburgh. We have been decidedly below the U.S. unemployment rate all throughout the last 13 months of the recession, a full point or a point and a quarter below the unemployment rate of the country. And in my 70 – last 72 months as governor, Pennsylvania has been lower than the national unemployment rate for 71 of the 72.
We have been rated by Site Selection magazine as one of the only states in the union that have been in the top five in the last five years for new business starts or business expansions. And part of that is because, as Greg said and as Bill said, the state has been very aggressive in putting dollars into spurring that growth, into cleaning up our infrastructure. For example, when you come into the Pittsburgh airport, in the old days, all of the land around the Pittsburgh airport were brownfields and unsuitable for development. No company wanted to come in because companies these days are looking for shovel-ready sites that they can stick a shovel in that don’t have environmental problems. We’re working with the county executive and with a lot of state money, we’ve cleaned up all of those sites. They are shovel-ready to go, and one after another are being developed.
So our aggressive economic initiatives have caused us to be in better shape than most of this country; notwithstanding the fact that so much of our manufacturing was keyed into the automobile and housing industry.PARTICIPANT:
Governor, if I could just add one little fact – Pittsburgh fact to go along, we actually tracked job openings in the 10 counties of Southwestern Pennsylvania. We have our own website, Imagine Pittsburgh, and last week there were 30,000 open jobs; that’s up from 20,000 open jobs at the beginning of the year, and it’s been growing about 1,000 a month and actually bumped up by several thousand over the past month. So it’s anecdotal. It doesn’t – you can’t find it in the macro numbers. But on that level, we’re seeing increasing demand for workers, especially skilled workers in Southwestern Pennsylvania.QUESTION:
Hi. My name is I Ching Ng. I’m a reporter of Asian Weekly magazine. I’m very interested in – this is a question for all of you, so how do you – investment from China, and how do you collaborate and compete with Chinese companies, whether in life sciences, architecture, and different industries?GOV RENDELL:
Well, basically by having our trade representatives and our investment representatives throughout China. We have a very large presence in China and we’re trying to get Chinese investment here in the U.S. I may get this wrong – Solar Tech, Dr. Shi’s company. I’ve spoken to Dr. Shi twice on the phone and once in person, and we’ve tried to get them to set up their eastern – they’re coming into the U.S. to do what they do – have done so successfully in China. And we’re working on trying to get them to set up their operation, their base of operation, here in Pennsylvania. We’ve shown them three different sites. So that type of contact.
And I try to be personally involved in development, particularly at a major scale, like with someone – an entrepreneur like Dr. Shi. So that’s – through our trade reps, they find us the opportunities. We continue to export. There are a number of Pennsylvania companies that export – Cigna, one of our big healthcare and insurance companies, has a big presence in China, as you know, a lot of our pharmaceutical companies. So there’s a great interchange and we try to continue that. Obviously, China is – I think, eventually will outstrip the United States as being the number one place for consumer products. It’s just a matter of time before that happens.
And there’s great technology in China, and we want to be the beneficiaries of that technology over in the U.S. as well.QUESTION:
My name is (inaudible) and I’m from (inaudible) television (inaudible) of Pakistan. My question is: What are your goals (inaudible) to derive – what kind of benefits do you plan to derive out of G-20 conference? Is it like an Olympic Games which runs into losses, or some gains (inaudible) for the United States? Thank you.MR. FLANAGAN:
I can speak from the standpoint of Pittsburgh. I mean, one of the remarkable opportunities, unlike the Olympics, we haven’t had to invest several billion dollars to host this invest, although thanks to the support from the state and the public sector, as well as the White House, we have the resources that we need to pull this one off.
What’s remarkable is the degree of attention and exposure we’re getting around the world, the fact that all of you would come to hear a presentation about Pittsburgh this afternoon is really a terrific opportunity for us. And we’re hoping that that’s going to translate into additional interest around the world in Pittsburgh. We think there are investment opportunities for companies that are looking for expansion and relocation opportunities within the United States. We think there’s opportunities for mutual business relationships where Pittsburgh companies want to invest overseas and find opportunities as well. We’ve found that overseas investment has been very good for Pittsburgh. We’ve had a number of companies who have built factories – China comes to mind – and it’s actually increased employment in Pittsburgh at the engineering and headquarters level once they begin to operate overseas. So we think there’s a lot of opportunity there.
I mentioned the 30,000 open jobs. We literally are looking for people right now. We need close to 2,000 engineers in Southwestern Pennsylvania. We need more than a thousand accountants. We need thousands of people in medical devices and life sciences, very skilled people, and those jobs are posted on imaginepittsburgh.com. So we’re hoping, within the United States especially, that people will now begin to think about Pittsburg as a place that can offer a terrific career opportunity as well. And hopefully that will translate this.
And I know, speaking for Craig Davis, my colleague from VisitPittsburgh, we also hope that if Pittsburgh does a terrific job of pulling off the Pittsburgh summit, it’s going to encourage others around the world who are looking for a terrific venue for other conferences and conventions to consider Pittsburgh as well. So we think there’s a lot of potential return on the investment the community and the commonwealth is making in this event.MR. BABE:
If I could just add –MR. FLANAGAN:
Oh, sure, Greg.MR. BABE:
I’ll add one comment to that as well from the private sector, and what I would hope that we will see is a residual benefit from this is that a heightened awareness to the outstanding universities which are well-known and to the infrastructure, and so that we can attract more start-up companies. As an innovative company, a company that lives on our innovations and our discoveries on a day-to-day basis, we would like to have more entrepreneurs, more start-ups, and more of that sort of activity in the city of Pittsburgh. And I hope that that’s something that we’re going to see as a result of this.QUESTION:
My name is Diego Senior from Caracol Radio in Latin America. This is a question for the governor. Basically you mentioned about – you mentioned the importance of free trade over here. You mentioned the importance of free trade for your state. As you know, the Obama Administration and the Bush Administration have been trying to pass on Congress foreign trade agreements with Colombia and with South Korea. Are you for or against these kind of agreements and are they good for Pittsburgh itself?GOV RENDELL:
Well, I am basically a free-trader. I supported NAFTA and I supported opening up trade with China when President Clinton did it. But I think the United States has an interest in making sure that free trade is also fair trade. And there are things in the agreement with Korea for our auto industry, for our beef industry that we’re not satisfied give us a level playing level. And a level playing field means that American products have the same opportunities in those countries as those countries’ products would have in America.
And as for the Colombian trade agreement, there are a lot of people, myself included, who believe if America is going to give a country the benefit of a priority trade agreement, that we have the right to insist that the workers in that country be treated with basic human dignity. And I think that should be a part of everything we do in trade. There’s no right to have a free trade agreement with the United States. That is a right that’s given by the American Government. And we have the ability to condition that right upon certain basic human rights, human dignity for workers across the world.
So I think those are legitimate concerns. That doesn’t mean that I’d be against those agreements, but those are legitimate concerns that I think need to be worked out. There’s no question about it. As I said, I think China is a wonderful, wonderful, wonderful economic partner for the United States. But I think that they have to do more to police the theft of intellectual property, for example, that occurs in China. So there are things that have to be worked out.
I think we all understand the benefits that flow from free trade, but free trade has to be balanced and there have to be the same type of requirements on both sides of the negotiation.QUESTION:
I’m Prakash Swamy, I write for the Indian and the Caribbean media. You talk about having two offices in India, and most of the (inaudible) here would like to work with India on some of the business opportunities. Could you say what your state is planning to work with India on promoting a business? Thank you.GOV RENDELL:
Well, our then-Secretary of the Department of Community and Economic Development, Dennis Yablonsky, who now works as – what’s his title?PARTICIPANT:
He’s the CEO for Greater Pittsburgh Regional Alliance. He left the state to go work – he headed a trade mission to India just about two and a quarter years ago, and we’ve already gotten one or two cooperative agreements and increased exporting in India and two or three Indian companies that are looking at different sites in Pennsylvania. And that was about 2 – I think it was 2007 – 2007.QUESTION:
I only have a brief question. I am (inaudible). I understand that the decision to change the venue from New York to Pittsburgh was made relatively late. I’d just like to know how this actually went, who called who, when was this?MR. FLANAGAN:
I know a little bit of the story. Actually, you might want to pull Craig aside from VisitPittsburgh as well, because he got pulled into it very quickly. As I understand – I’m looking at Craig because he’s going to fact check me as I go here – the call came to the mayor’s office at first. And Craig – why don’t – do you want to – you are closer to it than I am. Yeah, it’s just too complicated. Get the middleman out of the way.MR. DAVIS:
Well, to be very honest with you, we can’t answer the reason why it was – we don’t even know that it was originally supposed to go to New York. That wasn’t given to us.
We were told to be at a meeting of – a secret government group wanted to meet in Pittsburgh. And the – yeah, as the governor said, that’s always trouble – the mayor’s office was there, our county executives office was there, and the operations of our convention center were there. And VisitPittsburgh was pulled in because we needed to know, and they needed to know, if there are other things in the city at that time that would be in competition with the G-20 in terms of having the physical space to put it in.
So when that was resolved, it was within, I would say, a day or two that it came to Pittsburgh. And we were told at the end of that particular meeting that we should – we would be prepared for the G-20. And it is my own feeling that it was our green convention center, as was described earlier, that I think brought it over to Pittsburgh.QUESTION:
When was this? MR. DAVIS:
At the end of May, yes.QUESTION:
I’m Marti Wong (ph) from China Xinhua News Agency. Governor, would you like to say something about your preparations on the security aspect? Thanks.GOV RENDELL:
Well, actually, that – sorry, we don’t have the mayor or the county executive here, because what the commonwealth’s role has been in security is basically providing a good share of the money to cover the cost. Pittsburgh, like a lot of American cities today because of the recession, is struggling financially, this Pittsburgh city government, and they just didn’t have the funds to cover all of the police overtime and the additional police. The Pittsburgh police force is not big enough to do this task by themselves, and they have to bring in additional police from other cities and locales.
So the state – we have provided $5 million for their overtime, as well as allocating 1,500 state policemen – state – members of our state police to their force. But they’re also bringing in police from as far away as New York City and other places, particularly police who’ve had experience in security at large events.
The federal government has supplied $17 million towards that security. So it’s $24 million and the 1,500 state police are free. I mean, the state is picking up the cost for that. No, not free, but free to the city of Pittsburgh. And I think Pittsburgh will have more than enough police to handle the needs. And of course, they’ve studied all of the security preparations at other G-7s and G-20s and have decided what they think the proper complement will be. You never really know how many demonstrators are coming. You don’t know that until the last minute.
But I think you plan for the worst-case scenario. And when I say worst-case scenario, understand that in America, we pride ourselves in not only allowing demonstrations, but I think – we think that demonstrations and the espousal of different points of view are part of a great tradition that had founded this country. But at the same time, large groups can get out of control, can be unruly, and you have to have the proper security to protect storefronts, to protect just ordinary citizens, to protect passing cars and buses and things like that. So I think we will be prepared. We will be prepared.QUESTION:
I’m sorry to hijack this – I really apologize, but I really appreciate the opportunity you’re giving us. And a lot of reporters have actually already – are having trouble finding a place to stay. And this is an actual problem because you want us to report on it, right?GOV RENDELL:
No, no question.QUESTION:
But private citizens are not stupid either, so they’re offering their houses for $10,000 a night.GOV RENDELL:
Don’t do it.
So what does that say about Pittsburgh? Are you actually ready for this?GOV RENDELL:
Well, I think I’m going to let the folks from VisitPA say this. Look, Pittsburgh is not traditionally a large convention city. It has a mid-size convention center and its niche is for mid-size and smaller conventions, so it doesn’t have the same type of hotel rooms that – forget New York, that Philadelphia has. But I thought when the G-20 was organized, based on other turnouts, there was more than adequate enough hotel rooms to cover the expected need.MR. DAVIS:
I don’t mean to upstage you but --GOV RENDELL:
No, please.MR. DAVIS:
The fact remains that there are 22,000 rooms in the metropolitan statistical area of Pittsburgh. And I’m surprised to hear you say that you can’t get rooms, because I do know if you go on to any of the travel websites, that there are plenty of rooms available still. So the governor was correct, we are a mid-sized city, but you can find rooms. And you can find rooms within a few miles of the G-20 site.
We can talk afterwards. I can give you help. Sure.MODERATOR:
And with that segue, we’re just going to break now. And if you have any additional questions for one-on-one interviews with some of the people that are here, please take a few moments for this one opportunity before they have to depart. Thank you.
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