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U.S. Department of State

Diplomacy in Action

From Steel Town To Tech Hub: Pittsburgh's Turnaround Attracts 400 Foreign Owned Firms

Rich Fitzgerald, Allegheny County Executive; and Christina Cassotis, CEO, Pittsburgh International Airport
New York Foreign Press Center
New York, NY
January 26, 2018




Date: 01/31/2018 Description: Foreign Press Center Briefing New York - State Dept ImageMODERATOR: Hi, everyone. Good afternoon. Thanks so much for joining us. We are very, very pleased to have Rich Fitzgerald, who is the executive of Allegheny County, Pennsylvania, and Christina Cassotis, who is the CEO of the Pittsburgh International Airport, with us today. They are going to make some opening remarks and then, per usual, we’ll open the floor for questions.

Just a few housekeeping items before we start. Today’s briefing is on the record. When they’re done and we open the floor for questions, please state your name and your media affiliation. And with that, let me turn it over.

MR FITZGERALD: Well, thank you, and thank you for joining us today. I’m Rich Fitzgerald, the county executive of Allegheny County, in which the biggest urban center is Pittsburgh. It’s a county of about 1.25 million people, of which about 300,000 live in the city of Pittsburgh.

We were very proud a week ago to be named one of the top 20 Amazon HQ2 winners of the competition, or the continuation. As you may know, 238 cities in North America put in for HQ2 and the 50,000 jobs and the five-plus billion dollars’ worth of investment and the 250,000 room nights and all the great economic impact that will come about with that, and the fact that Pittsburgh was one of the – the only older, industrial, rust belt, steel-town city to make that, and there were a lot of great cities that weren’t included, like Detroit and Cleveland and Kansas City and Milwaukee, et cetera. And we’re going to show the steel-town turnaround renovation of what Pittsburgh has become from where we were about 30 years ago when the steel industry collapsed and we lost over 200,000 jobs in a four-year period.

So, Christina.

MS CASSOTIS: Thank you. Thank you for being here. I’m Christina Cassotis and I’m the CEO of Pittsburgh International Airport. And like the community that Rich represents, the airport also went through a tremendous loss when US Airways pulled out its hub in the year 2004. And while the community in the Pittsburgh region had turned itself around and diversified its economy, the airport had not kept pace, and so therefore there was a real issue in being able to meet the needs of the business and leisure community and for Pittsburgh’s ability to grow. So we’re going to talk about how we’ve turned the airport around as well.

MR FITZGERALD: Yeah, and part of that – and we can provide this to you – the video that we provided to Amazon in our Amazon bid is called “Future Forged for All.” And what we want to make sure is any economic growth is for all, for all people, not just folks at the top of the economic ladder, but that it’s inclusive and it brings all people’s economic improvements forward. So if we could figure out how to do this.

MODERATOR: Okay. If you want to just say next when you want to go to the next slide, the technician in the back will --

MR FITZGERALD: That’s easy to do. I don’t have to press.

MS CASSOTIS: You don’t have to press a button.

MR FITZGERALD: So what you see is the steel-town turnaround, and I mentioned about our geographic – about the MSA, the 10-county region, is about 2.4 million people. We’re within about 8.8 million people of the entire – many of the people in the U.S., in the Northeast, the gross regional product, the income per capita, which is higher than our peer markets because of a lot of the technology companies, like Google and Uber and Apple and Amazon and – that are already there. You see we’re within an eight-mile – eight-hour drive of the international airport that Christina runs. Fifty-three percent of the U.S. buying income is in that area. So we’ve very centrally and geographically located for the Midwest and the Northeast part of the U.S. Next.

1900, we powered the world. We built the world. We had more wealth in Pittsburgh than they did in New York City and Chicago because of the steel industry and what Andrew Carnegie was able to do. In 1901, Andrew Carnegie formed United States Steel. It became the first billion-dollar corporation. And in the 1940s, Pittsburgh produced more steel than Germany and Japan combined. Next.

Public-private partnership. In doing all that manufacturing and that steel, we kind of did some bad things to our environment. The air was so bad that you – we turned our streetlights on at noon because it was so dark all day long. We were polluting our waters. Our beautiful rivers were really turned into big sewers in many ways. So the Allegheny Conference came together – the corporate community, public-private partnership – to clean up the air. Pittsburgh had the first air-quality control, long before the EPA came along. So it’s something that we’re pretty proud of. And you can see those two pictures of the Golden Triangle, the point, as we call it, where the three rivers come together – the Allegheny, the Monongahela – to form the Ohio, the forks of the Ohio, which is where the First World War was fought, and then in the bottom what it is today. Next.

We also – we’re big on innovation, which is really where we’ve come. Dr. Jonas Salk found the – pioneered the polio vaccine back in the ‘50s. That was developed at the University of Pittsburgh. Under that arrow that you see, that’s the Cathedral of Learning, the University of Pittsburgh Center, and on both sides of it is Carnegie Mellon University. One side was Carnegie Tech, which Andrew Carnegie formed in 1900, and is driving a lot of our innovation; and on the right is Dr. Spock, who also was at the University of Pittsburgh. Next.

Then in the 1980s, it all collapsed. Steel went through a major renovation. We lost 200,000 jobs in a very short period of time. Our unemployment hit almost 20 percent in 1983, and our population loss in the 1980s was over 250,000 people. It was a devastating time and we were literally on our knees. And what we were good at exporting before the 1980s was steel, and what we got good at exporting after the 1980s was young people. Our young people would grow up in Pittsburgh; there were no jobs; they had to leave for other places around the country and around the world. Next.

But we built a strong foundation. We diversified. We were all into steel at that point, and when that went away, when that – we had all our eggs in one basket, and when that basket broke, as you saw, we were absolutely devastated. We’re now – we still make steel, advanced manufacturing. We have energy. We have the largest deposit of natural gas in North America under our feet, the Marcellus shale, and we’ll talk about that in a little bit.

Financial business services. Mellon, the Mellon bank operation and PNC, two of the biggest financial centers in the country, are located here in Pittsburgh. Health care – a lot of the innovation. I talked about Dr. Jonas Salk, but there’s a lot of transplantation with Dr. Starzl. Medical technology that comes out of the University of Pittsburgh Medical Center and Pitts Med School, and then what CMU has done around robotics and IT. The first driverless car was developed in – at Carnegie Mellon University by a man named Red Whittaker, and now we’re leading the world with autonomous vehicles, with Uber and Ford and Argo AI and Delphi. There’s about four or five different operations that are developing driverless, autonomous cars right on the streets of Pittsburgh. Next.

And then you can see some of the things that have driven Pittsburgh’s renaissance. The University of Pittsburgh on the left, UPMC, one of the largest medical places in the world, and then Carnegie Mellon University leading the way with Google and Uber and Microsoft and Intel and Apple and Facebook and Amazon that are all located and headquartered right around that great university. So – and you see some of the other organizations that bring a lot of them to – a lot of those folks together is located there. Next.

And we have not forgotten about the quality of life. Because of some of that old money, that old industrial wealth that was created, we continued to invest in our arts and our culture – world-class symphony, world-class ballet, world-class opera, major league sports teams, biking trails, the brownfield remediation that you see taking old industrial sites, outdoor recreation, using those great rivers now, instead of an industrial pipeline, as a recreational and attraction for people in quality of life. And green buildings, sustainability, climate change. Those are things we take very seriously. We have the greenest NHL hockey arena in North America. We have the greenest convention center in North America. And PNC just cut the ribbon and opened a skyscraper, the greenest skyscraper in America, right in downtown Pittsburgh. We take the environmental impacts and what’s going on very seriously, and it’s something that we consider.

Those riverfront trail – the riverfronts now are lined with trails, and you can take a bike ride from downtown Pittsburgh to Washington, D.C., and be on a riverfront the entire way. It’s a 335-mile trip that many people take. Some do it in a couple of days and some take a little bit longer, but it’s just a reflection of what we’ve done with our riverfronts and attracting people, because a lot of our economic development strategy is around attracting talented people who want to live in a place with a great quality of life. Next.

Talking about Pittsburgh and how we’ve changed. If you look at that red line, that’s the demographic of the U.S. The average age is 41 years old. In the state of Pennsylvania, which is the blue line, the average age is around 38. But look at that yellow line. We’re becoming younger and more sophisticated – 32 years of age, 33 years – I think it’s 32.8 actually – and it keeps getting younger as younger people are drawn to Pittsburgh and moving to Pittsburgh as our demographic is really tapping into that Millennial talent that’s happening here in America. Next.

This is a major change in where Pittsburgh was. Thirty years ago, you could get a job by graduating from high school and walking down the steps and getting a job at the steel mill, probably walking down with your dad carrying the same lunch pail that he carried. And then when that changed, obviously we lost a lot of things. So 30 years ago we had the least educated workforce in the 25-to-34-year-old range in the country. One generation later, 30 years later, we’re number three in the country behind Boston and Washington, D.C., and the highest educated workforce of post-graduate degrees in Pittsburgh. And again, you see that with robotics, with artificial intelligence, and a lot of things that we talked about. Next.

Construction boom. We’re growing again. After losing all those folks, we’re starting to see major investments in our infrastructure, in new buildings, new residential, retail, commercial, R&D are all coming back. And the natural gas phenomenon is really driving a lot of it as well. Next.

Our health care. Major – two major health care organizations, Highmark AHN and UPMC just announced a couple of months ago UPMC’s going to be investing $2 billion in new facilities around vision and rehabilitation, around heart transplantation, and cancer treatment. And AHN is investing a billion dollars in new medical technology. So we’re in eds and meds, we’re energy, we’re robotics, we’re artificial intelligence, we’re finance – we’ve very diversified our economy. Next.

And then it’s just some of the epicenter of manufacturing, some of the big companies. Arconic is a spinout of Alcoa. GE we all know about, and then all the other things that are going on around manufacturing. Next.

And then the financial sector, as we talked about, with BNY Mellon, a lot of major law firms and back office that was again grown over those years of industrial might still remain in Pittsburgh. Next.

And then I talked about the largest supply of natural gas in North America is right in – right in the heart of Pittsburgh. So it covers a multistate area with Ohio, eastern Ohio, northern West Virginia, western Maryland are also part of it. But right in that red dot where Pittsburgh is and where Allegheny County is, that’s really where we’re starting to provide a tremendous amount of natural gas to the country and to the world. Next.

And then Shell recently announced a $7 billion petrochemical plant, Royal Dutch Shell. It will be the first petrochemical plant out of the Gulf of Mexico region. The other petrochemical plants in America are in Louisiana, Texas, et cetera. So they will have – because of the – one of the first slides you saw about the population center and manufacturing, Shell will have a major, major competitive advantage in providing the feedstock for all the plastics that we all use as part of our life right now. We estimate there may be two or three other petrochemical plants that will be built in the area because of the Marcellus shale and what we have. Next.

And then growing. It’s a year of growth. We’re going to invest in our airport. Christina, who came to Pittsburgh three years ago and at a time when we weren’t connected to the country and we weren’t connected to the world. We used to have a hub. US Airways was our hub, and then in 2004 we lost that hub. So we went from over a hundred cities you could get to directly to 37. Well, over the last three years, Christina and her team have taken that up to 73. So we’re now connected to more places in Europe, we’re now connected to more places in North America, and the airport is kind of catching up to the growth and revitalization that we have had.

Christina, do you want to talk a little bit about the airport a little and the investment we’re going to make there?

MS CASSOTIS: Sure. So as Rich stated, we had to figure out and we have spent the last three years proactively positioning Pittsburgh International Airport as a gateway into this revitalized economy of Pittsburgh and the region. And that is not an easy thing to do when you’re trying to bring airlines in to markets that they left. So we have seen a tremendous amount of growth, almost 100 percent over the past three years in terms of the number of destinations. But what we have done is figured out how to transition from a hub market to an origin and destination market. How do we make sure that the service we’re bringing in is serving the needs of the Pittsburgh community and the community that wants access to Pittsburgh?

So we have actually secured quite a bit of international attention for this because our turnaround has been so dramatic, and we have reinvented the way that we do business at the airport. We are much more market-driven. We are much more focused on competition, on benchmarks, on international best practice. And that has led to a number of newer services, like Qatar Airways putting in twice-weekly all-cargo with a 777. They’re serving us with a 777 twice a week from Doha through Atlanta, and we are hoping to grow that service in order to provide more international logistics capabilities for the region. And next slide.

We have actually – last year we secured Air Transport World’s airport of the year designation. For 45 years this publication has been awarding the airline industry awards for airline of the year, airline CEO of the year, et cetera. Four years ago they started with airport of the year, and the first one to win it was Singapore, then it came to London terminal two – Heathrow terminal two, then it was Hong Kong, and then it was Pittsburgh.

So we’ve had quite a dramatic turnaround. It has been fascinating to be part of and watch, and we’ve done that by partnering with the community, with the business community, the leisure community; with government, non-government organizations; the philanthropy community. And one of the things that we’ve been able to do is really push forward on innovation. Up there you’ll see a bullet that talks about the myPITTpass program. We’re the only airport in the United States where you can go through security without a boarding pass so you can actually go through and visit the shops and restaurants. It’s amazing for some people to think that people want to spend time in an airport, but in Pittsburgh, they do. You can visit the shops and restaurants and you can meet people directly at the gate, Monday through Friday from 9:00 to 5:00. You actually walk up to a counter, present your photo ID, we run you against a no-fly list, you go through security just like you were a flying passenger, and then you are free to move about the air side terminal. So we launched that in September of last year in close coordination with the Transportation Security Administration, and we are monitoring that program. Seems to be successful so far. People in our community love it.

And we have also announced a $1.1 billion terminal modernization program. Yesterday we kicked off with the request for qualifications for architects to design this terminal. We are going to right-size the airport and make the transition from hub to OND airport complete. I’m happy to talk about that in more detail.

I talked a little bit about the awards that we won from Air Transport World Magazine. Actually, CAPA also named us regional airport of the year last year, so we were very happy with that, and then there were some readers’ choice awards with Travel and Leisure Magazine and JD Power and Associates. So we now see ourselves as a partner with the community, enabling the community’s revitalization, and no longer be – no longer acting like a drag on the community. So it’s been an exciting three years. We have a lot more planned and we are looking forward to continued success.

MR FITZGERALD: Next.

MS CASSOTIS: (Laughter.) We’re done.

MR FITZGERALD: Oh, that is it?

MS CASSOTIS: I think that’s it.

MR FITZGERALD: And I think the important part that I want to maybe stress on the airport that Christina talked about – we view the airport as part of a broader economic development strategy. Not just a place where you can go out and fly from point A to point B, but as part of working with our tech community, working with our chamber of commerce, working with our convention and visitors bureau, so all government and private sector working together. It’s a comprehensive strategy of helping grow the region in a more sustainable way and then using the Marcellus shale – and I want to go – just real quickly on the Marcellus shale, we own about 8800, almost 9,000 acres of land at Pittsburgh International Airport. When we lost the hub, we lost a lot of our revenue and were almost in a point where we couldn’t pay the bills. We decided to go out for RFP and lease that land for royalties of drilling of national gas on our airport.

Consol won the bid, Consol Energy, and are going to be paying us roughly around $500 million over the next 20 years in those royalties. They also spent about $500 million in building out and drilling and doing the infrastructure, and it has created a revenue stream that allows us to bring somebody like Christina on board to allow us to do a lot of these investments. And with the Shell cracker plant just being – the Shell petrochemical plant being just a few miles down the road from that airport, the synergies of what’s happening out there is a big part of where we go.

So with that, we’ll open it up for some questions that you might have. I think we’re at the end, right? Was I --

MS CASSOTIS: Yeah, that’s it. We’re done.

MR FITZGERALD: Okay. All right.

We answered them all, right? (Laughter.)

QUESTION: Could you give me more details on the industry – the specifics. I mean, this – I just wonder, the steel industry is still the number one, or just is dramatically changing?

MR FITZGERALD: It’s --

MODERATOR: Can you just state your name and your media affiliation?

QUESTION: Yeah, yeah. I see, thank you.

MR FITZGERALD: So your question – I want to make sure I heard it right – is about the – like steel no longer being there? Is that what you’re --

QUESTION: Yeah.

MR FITZGERALD: What I will say is we still make steel. We still have steel mills. Not very many. A few remain, but years ago in that steel mill, there might be 15,000 people that worked in that steel mill. That same steel mill is still operating with maybe 300 or 400 people. Automation has really allowed them to continue to operate profitably and more efficiently, provide the same tonnage of steel that they made in a much – with less people. So when those folks got displaced, we lost – we had population loss.

We have reinvented ourselves in many ways around technology, around next generation – autonomous vehicles, robotics, the things that we talked about. So we’re drawing in and keeping a more educated and skilled workforce, because that’s what industry – that’s what our companies are asking for. And one of our challenges is on the education and skill set, is to provide the skills for the younger population as they’re exiting school, that they have the right skills to be able to fill the needs of the jobs that are out there. And that’s one of the challenges that we have in our region.

Yes.

QUESTION: So what have you done as the city – as the country government to attract those young people?

MR FITZGERALD: Well, I think what Pittsburgh has been very good at is partnering. So we partner with the public and private sector. We work with our companies and our corporations – what do you need? What do you need to grow? A better transportation system, more connections to places like Frankfurt. We have an awful lot of German companies that are based in Pittsburgh that could not get directly to Frankfurt, Germany, so they were asking for business to be better by connecting them. They need better skills for their IT workers. They need better skills for the building trades and the welders and the technicians that are out there; the chemists at UPMC and the biologists.

So we invested a lot in training. We invested a lot in quality of life to attract and retain the talented generation that’s coming out of school now that, quite frankly, could live anywhere in the world and make their products and make their companies grow anywhere. We want them to do that in Pittsburgh.

Yes.

QUESTION: Hi. My name is Kawachi with Nikkei.

MR FITZGERALD: Hi.

QUESTION: So what is your pitch to Amazon? (Laughter.)

MR FITZGERALD: So our pitch to Amazon is multifaceted. Number one, we’ve got CMU in Pitt – great technology. A lot of the Amazon employees have come out of Carnegie Mellon’s software engineering school and out of the Tepper Business School. Lot of their C-suite – so there’s a talent pipeline, a tech pipeline that comes out right there in Pittsburgh.

Secondly, they’re going to want 50,000 people to move there or stay there. You’ve got to have a real quality of life. You’ve got to have the arts and culture, you’ve got to have the trails, you’ve got to have the parks, the amenities that make it a wonderful place to live.

Third, for all of that quality of life, we have affordability. The $800,000 house in Seattle still only costs $200,000 in Pittsburgh. So the affordability aspect of getting all that quality of life is tremendous. And then you need sites. Where are they going to build a campus for 50,000 people? Well, a lot of our industrial sites that used to have steel mills on them that are brownfields have been cleaned up and have been remediated, but they haven’t been developed yet. So 10 years ago, they weren’t ready to go; 10 years from now, there will be some other development on there. But right now, we have some prime real estate sites that are very close to our universities, close to that tech pipeline talent that I talked about.

And then the other part of it that I think’s important is wherever Amazon goes, they’re going to impact a community. And they’ve had some pushback sometimes even in Seattle, because 40,000 people have grown there very quickly, and there’s been in some ways maybe some disruption. Pittsburgh could handle that. Pittsburgh used to have 700,000 people living in the city; we now have 310,000 people. Allegheny County used to have 1.6 million people; we’re a little over 1.2 million. So we have the infrastructure to be able to absorb 50,000 Amazon workers, there may be another 100,000 support workers, without impacting us in a negative way.

And the other thing that I think we’re really good about is we partner. We work in a collaborative way. So working with someone like Amazon, they could have a partnership that really makes sense for them on the public, private, university, our philanthropic community, our workforce, our labor unions. So I think all of those things coming together make Pittsburgh a really good choice for Amazon.

QUESTION: To follow up, in that case you’ve seen some change in your demographic maybe past --

MR FITZGERALD: We have.

QUESTION: -- 10 years or so?

MR FITZGERALD: Yes.

QUESTION: Especially, I mean diversity – diversified – I mean, like, how do you see that?

MR FITZGERALD: Yeah, we were probably one of the least diverse communities for about 25 or 30 years, again, because nobody was moving here from – to Pittsburgh from anywhere. There was no draw bringing people in because there weren’t jobs and opportunities. In fact, it was just the opposite; people were leaving.

It’s really been over the last five to ten years that Pittsburgh has really become a magnet for folks from Asia, from Europe, from South America. Our Latino population has grown, our Asian population has grown. Starting from a low base, but one of the highest rates of growth in the country. And again, it’s because of the opportunities and it’s because in the welcoming nature.

One of the things that our mayor, Mayor Paduto, and myself, we spend a lot of time wanting people to know you’re welcome in Pittsburgh. We want you in Pittsburgh. From wherever you are from around the world, Pittsburgh’s a welcoming community and we welcome you to our – to where we – where we are.

QUESTION: Yes. Bengt Oestling from Finnish Broadcasting Company. I wanted to ask because President Trump today told the world that foreign companies are welcome to USA. So do you have any foreign companies now? What kind? I saw that the Finnish Metso was leaving.

MR FITZGERALD: We have many – we have many foreign companies, from Germany, for example. I was – I mentioned companies like Bausch and Siemens and Bayer and Covestro and LANXESS. We primarily for many years were European-centric, that – from a century ago, that’s where folks came to Pittsburgh, from Eastern Europe and Ireland and Italy and Germany. But now, it’s changing.

We’re growing companies particularly among many tech companies from Asia, from India. We have a large and growing Indian population that’s thriving in Pittsburgh. So we’ve been – regardless of what the administration talks about, we’ve been a welcoming community from around the world for many years. And a lot of it has been driven by our universities, around healthcare, around technical – the technical revolution that’s come about in Pittsburgh.

QUESTION: I have another question about the airport.

MS CASSOTIS: Yes.

QUESTION: Why did you (inaudible)?

MS CASSOTIS: Really, because the community wanted that. So what – when this airport was built 25 years ago in order to be a mega-hub for U.S. Airways, the community in Pittsburgh was very proud of it. It was a leader in – I understand that compared to the European airports we have some work to do to catch up, but at the time, this – Pittsburgh International Airport was seen as a leader in retail, food/beverage, sort of having a shopping mall environment at an – in an airport. And people would go out and they would meet people from around the world, and they would feel that it was next – it’s not like there were five airports you could go visit in the city. There was one, and people really enjoyed it.

And so I would hear a lot of I wish we could get back out to the air side. I’d like to see what’s happening out there. We have a very interesting partnership with one of the philanthropic institutions, The R.K. Mellon Foundation, which is spending millions of dollars representing the arts culture and economic aspects of the community right at the airport. So there are museum displays, there are very unique technology innovations going on out at the airport. People want to see it. And because not everybody flies all the time, they kept saying, “Can we get out there?”

So we partnered with TSA and we expanded on a pilot program that we’ve had for some years with the Hyatt Hotel. If you stayed at the Hyatt Hotel at the airport, you could get a pass to go airside to get dinner or whatever. That worked for a long time. There were never any incidents. And we said, can we try this on a permanent basis? So that’s why we did it – in answer to the community’s request.

QUESTION: Hi. Alexey Osipov from Komsomolskaya Pravda, Russia. Of course, to be focused on the top priorities like banking, energy, IT, it’s very easy and probably very simple. What about the small businesses?

MR FITZGERALD: Well, most of these companies that are growing around technology are small businesses. Carnegie Mellon and the University of Pittsburgh commercialize research and development and spin out about 40 to 50 companies per year. And they typically start out as one or two people who’ve developed an idea, and they start to grow.

There’s a company called Duolingo that falls into that category that came out of Carnegie Mellon. Argo AI was just a couple of folks that started the robotics program, and then Ford partnered with them and is going to invest a billion dollars over the next five years on autonomous vehicles. So they start out small, and one of the reasons they stay in Pittsburgh is the quality of life. They could go anywhere with the great idea and the great initiatives that they have, but they’ve maybe been at the – one of our great universities for four or five or six years and kind of fall in love with the place and want to stay.

So they put down roots and they develop their products, and they develop a company, some of which become very, very successful. Not every one of them does. But it’s an ecosystem of collaboration. We have a place called Nova Place that was an old urban mall that never really satisfied, right on our North Shore of Pittsburgh. There’s 270 different organizations that are – they might – they might rent a cubicle, they might rent a chair, they – but they’re in there collaborating, and they hang out at the coffee shop together and they share ideas. And they – it’s a different kind of a work environment than I was used to growing – coming onto the workforce 30, 35 years ago. So there’s an ecosystem of people who are younger, are more tech savvy and kind of collaborate together in what they’re doing, and that’s – Pittsburgh’s become a real hub for that.

QUESTION: Mengda Li from Shanghai Observer and Jiefang Daily. Since you just keep – keep on – you’re talking about the dramatic demographic changing in recent years. Can we put a wide eyesight on the, like, Pennsylvania state and on the so-called belt – rust belt? So do you think the – is that Pittsburgh city is an exception among these other areas and also with the situation of Pittsburgh nowadays where somehow raise – a wider – the gap of the difference – the difference of the average classes?

MR FITZGERALD: Yeah, it’s a challenge, and it’s really – there is a gap between the haves and the have nots, and a lot of it’s around skills and education and the ability to – the ability to access the kind of jobs and opportunities that you can get when you work for some of the companies that I talked about. A lot of – if you don’t have those skills, in many ways you’re left behind. And that’s why when we talk about our Amazon bid, we say it’s a future forged for all, and “for all” is the part that we really want to emphasize, because we want to invest in skills for the folks that don’t have those skills, so that they can access those opportunities.

But you’re exactly right when you talk about Pennsylvania. There are parts of Pennsylvania that are being hollowed out, that are – that people are leaving, because those opportunities aren’t there. And for us, right around our innovation centers, around our universities, around our health care, our eds and meds, it’s become a magnet drawing people in from some of those other areas, from – not just from Pennsylvania but, quite frankly, from around the country and around the world, because most people go where there’s opportunities. It happened a hundred years ago in Pittsburgh and it’s happening again at this time.

QUESTION: Follow-up question. My name is Taka Sato from NHK Japanese TV. So do you believe that the turnaround happening in Pittsburgh from steel to the IT, from steel to the service industry could be the model for other – other county within so-called rust belt? And one more question is about the airport. I love Pittsburgh airport because there is a statue of Franco Harris.

MS CASSOTIS: Oh my god, you’re right.

QUESTION: Statues – I love it. But, to be honest with you, that – in general, the qualities of the U.S. airport is not the first (inaudible), as you put it. So what will be your future landscape of your – the airport?

MS CASSOTIS: Yes. So --

MR FITZGERALD: Why don’t you do the airport? Go ahead.

MS CASSOTIS: Okay. So I’ll let Rich answer whether or not we’re leading the rust belt cities, but from the perspective of the airport, first of all, I think it’s fascinating that you know about the Franco Harris statue. It’s the most famous part of our airport, and every – we might have to send it out for cleaning and I’m going to have to put up a big sign that says it’s coming back, because people are going to miss it. We are going to – our airport was built as a mega-hub with a big X, which is where all the gates are, then there’s a train, and then there’s a landside terminal.

That train cost us a lot of money. We have too many gates; it’s too big. So we are going to build the terminal right up next to the gates, like Abu Dhabi has done, like Mexico City has done. And then we’re going to take out the train and the other landside terminal. So the modernization of that airport will allow us to build an entirely new landside terminal and allow us to be market leading, and allow us to catch up with the rest of the world when it comes to how we process passengers, how we take care of passengers, how we – how we have the ability inside that terminal to move things around as technology changes. So we expect to become a leader in airport design because we can build a landside terminal – we call it big box, loose fit. So as technology changes, and fewer people check in, then we can take those check-in counters and turn them into something else.

If there are advances in biometrics that allow for security screening to be a lot more user-friendly than standing in long lines for an hour, then we will be able to accommodate that because we will have just one big area that we are moving around. Today, our terminal sits on four levels, and two – and we have roadways on both sides. It’s not the – it’s not the easiest terminal to navigate. Our security checkpoint today is too small and our international arrivals – our Customs and Border Protection, where you enter the U.S., is wrongly placed, right? So we’re going to fix all of that when we build the new terminal and that will be – we will start construction next year, and we will be finished three years later.

MR FITZGERALD: And as far as is this a model, I don’t know, but I think what – we invested in the assets that we have. Carnegie Mellon and university – and the University of Pittsburgh are two examples of a great collaboration. We were lucky to have a couple of great leaders, the chancellors and presidents of those universities over the years, that really worked on economic development; not just their own student population and alumni, but they really were part of the broader community. I think Pittsburgh, because we fell so far and were in such economically desperate straits, we had to try a new way of doing things. So we did invest in technology, we did invest in quality of life. And I think having the Marcellus shale too, I mean having the largest deposit of natural gas in North America under our feet, certainly not everybody can replicate that. That’s just kind of the fortunes of what you have.

So having those wonderful rivers, three major rivers, coming through our town. Building off of those assets in a positive way is – not everybody can do that. Every city’s different. Some people have other assets. If you live on the coast, you’ve got the ocean. We don’t have an ocean, but we want to be able to maximize the assets that we have. So I think you just have to look at what you have, everybody work together in a partnership and try to move forward with, again, what you have.

QUESTION: Excuse me.

MODERATOR: Yes.

QUESTION: One more small question for Christina.

MODERATOR: Yes.

QUESTION: Is there any Chinese investment or Chinese company in your airport?

MR FITZGERALD: Yes.

MS CASSOTIS: We are – we are – I am leaving on Sunday to head to China, as a matter of fact, in two days. We are working with Chinese airlines and tour operators to try to bring a nonstop charter flight from China to Pittsburgh, and that would be a pretty unique program in the U.S. So Rich and I were in Beijing last year.

MR FITZGERALD: Yup.

MS CASSOTIS: And we’re working to move that forward. We see China as a tremendous opportunity for economic development. There are no Chinese companies doing business on the airport right now, but that doesn’t mean that we’re not trying to figure out a way to have that happen.

MR FITZGERALD: We have – I’m sorry.

MS CASSOTIS: We also – as part of the 9,000 acres that we sit on – we sit on a very large land mass – in terms of airports in the U.S., we’re the seventh largest. We have a lot of real estate development that goes on around our periphery, and so we are looking for companies to make investments in – at the airport that would benefit the community, and we’re certainly talking to companies from all over the world to do that.

MR FITZGERALD: We have 20,000 Chinese Americans who live in Allegheny County and are very – and growing in a big way, some – about 10,000 concentrated in and around our university centers and another 10,000 or so located up in the northern part of Allegheny County. It’s a large and growing and a very vibrant community that’s very active in a great, great positive way. We celebrate Chinese New Year and all the things – the great festivals that occur, like a lot of the ethnicities of Pittsburgh, kind of, that have come together over the years. So it’s really a natural for us to do more business, more trade, more interaction with China, and I see it’s something that’s going to really grow over the next few years.

MR FITZGERALD: Yep.

QUESTION: My name is Dai Nagasawa. I’m with Jiji Press, a Japanese news agency. My question is: How do people in Pittsburgh feel about Mr. Trump’s policy? As you explained, Pittsburgh was a steel town and Trump is trying to curtail the import of steel from foreign countries. So now, people in Pittsburgh is not related to steel industry compared with before, but how do you – what do you feel about the President policy?

MR FITZGERALD: Well, I will go back to the last election in 2016 which – in which President Trump was elected. He carried Pennsylvania by a small margin, but when you look at Allegheny County, for example, and the city of Pittsburgh, they didn’t vote for President Trump. He lost Allegheny County by – I think it was 16 or 17 points, which is probably one of the largest margins of any presidential – whether it was Obama, whether it was Gore, whether it was Kerry, Bush, those races. So there’s kind of a disconnect that’s occurring all over the country if you look at it, if you look at urban areas that overwhelmingly are turning blue and more rural areas that are overwhelmingly turning red. We’re no different in western Pennsylvania than other parts of the country.

Steel imports has been an issue that we have fought long before President Trump came on board, whether it was President Obama, whether it was President Bush, whether it was President Clinton. The United Steel Workers, for example, are headquartered in Pittsburgh, right in downtown Pittsburgh, and have a large presence and care about not just steel in Pittsburgh, but steel all over North America and all over the world. So whether it was the Commerce Department under President Obama enforcing the trade regulations, whether it was – again, going back, this has been kind of a battle that we want to make sure that we enforce trade deals that have been made so that our workers, quite frankly, get a fair shake. So this is nothing new in western Pennsylvania, and regardless of who’s in the Commerce Department, we hope that they’re enforcing the regulations that are there.

Having said that, this is a midyear election that’s coming up. One of the major – the first special election for Congress is happening in western Pennsylvania, partly in my county in an area that President Trump won by, I believe, 20 points in the 18th congressional district in Pennsylvania. It’s a very competitive race and I think it’ll probably tell a lot about where the politics of the country will be as we go into November and the midyear elections.

Yes.

QUESTION: Can you tell me a little bit about minimum wages? Because --

MR FITZGERALD: Yes.

QUESTION: -- as you know --

MR FITZGERALD: Yeah, the minimum wage, I believe, is too low nationally, a little over $7 an hour. It’s – you certainly can’t support a family or have a quality of life with that kind of a wage. A lot of us are trying to push for at least $12 an hour, maybe $15 an hour. I know the governor of our commonwealth, Governor Wolf, has been very adamant about pushing that. There’s often a battle between both sides on what’s – where that goes. But one of the things in Pittsburgh, I think, because of the growing economy and the labor shortage, we’ve seen wages been pushed up – not for everybody, but for a large segment of the population.

But it really – whether it’s legislation around minimum wage or whether it’s upskilling folks so that they have the skills needed to really get the better jobs that pay is a strategy that we’re implementing.

QUESTION: At this point, what do you see average?

MR FITZGERALD: Pardon? What is the wage?

QUESTION: What is – yeah.

MS CASSOTIS: Average wage.

MR FITZGERALD: I believe it’s seven – is it 7.75?

MS CASSOTIS: In Pittsburgh?

MR FITZGERALD: No, in Pittsburgh – well, it’s national. In the state – it’s not a – Pittsburgh does not have the ability, I’m sorry, legally to set a minimum wage.

QUESTION: Oh, okay.

MR FITZGERALD: That’s a state – the state of Pennsylvania --

MS CASSOTIS: Pennsylvania, right.

MR FITZGERALD: -- can do that, and then there’s a national minimum wage, and I – you got to help me out on that. It’s 7-something, yeah, yeah. Anyway.

We get them all?

MODERATOR: (Off-mike.)

MR FITZGERALD: Oh. Go ahead.

QUESTION: I’m sorry. I forgot to introduce myself. My name is David Hwang with Maeil Business Newspaper from Korea. I just wondered, do you think that Pittsburgh is providing better service compared with other major cities? I mean, in terms of administration service or other – the tax incentives, for example?

MR FITZGERALD: The services that – the municipal and county governments, I guess is probably tough to compare. We like to say that we are investing in – certainly in education and skills and in good jobs, the kind of economic growth that can benefit people. But we know we want to balance that against the taxes that make it – make us competitive and allow us to compete with other regions in the country. So my bias is we try to bring market-driven aspects to government, whether it’s the airport, whether it’s our transit system, whether it’s our parks, whether it’s economic development. We want to be customer-driven, customer-oriented so that we’re providing the best value at the lowest cost as we can, and it’s a challenge that all governments have and it’s certainly a challenge that our government has.

MODERATOR: Any last questions?

MR FITZGERALD: Thank you. Thank you for coming and let us talk about our city and brag about our – about Pittsburgh a little bit, so --

QUESTION: Hope to see you (inaudible).

MR FITZGERALD: -- thank you for joining us.

MODERATOR: That concludes today’s briefing. It’ll be – it’s on the record and I will share the transcript as soon as it’s available. Thank you.