An Interview with Amy Klobuchar
U.S. Senator Amy Klobuchar sits down with Enterprise Minnesota President Bob Kill to discuss the past, present and future of manufacturing business in Minnesota.
In last year's State of Manufacturing survey, the number-one concern among manufacturing executives was the cost of health care. What are you thoughts on how to go about controlling the expense of health care for these companies?
I think one of the main problems is that small businesses have been paying so much more for health care than . . . big businesses.They pay 20 percent more across the country on average. I was visiting a company called Granite Gear up in Two Harbors that makes backpacks and
they're now making backpacks for Marines.The [owner] says they're now paying $24,000 a year for a family of four. He said he didn't know if he would've started the company had he known how expensive it was, and Granite Gear employs something like 15 people up there.
Health coverage is a drag on profits and a drag on the entrepreneurial spirit when you're spending that much money on health care.That's why we kept such a focus on health care reform efforts for small businesses.Tax credits with exemptions from certain requirements for small
businesses--mostly tax credits, and creating this exchange of private insurance companies that they can buy into.It is similar to the Federal Employee Health Care Plan.We have 8 million people on it, so we get better deals because we have so many people to leverage.That's the idea
with small businesses--allowing them to combine their buying power so that they can also get better health insurance rates.
The other topic often on manufacturers' minds is jobs.As we all know, they don't get up in the morning to hire someone; they get up in the morning to grow their business so that they can hire someone.What are your thoughts on we could do to
kick-start more growth in the industry?
I agree. We in Minnesota are a diverse economy and our strong small business economy has at least helped us to weather this economic crisis a lot better than some other states, even though it's been incredibly difficult.Our unemployment rate is still below the national average
and a lot of that has to do with our strong entrepreneurs throughout our state.
There are a number of things that have to happen. First of all, I think we need to start talking about these policies, whether it's energy or health care reform in terms of American competitiveness. We want to steer our destiny as a country -- and the way we do that is with a
strong manufacturing base and a strong economy.
For too long, we've been racking up debt and having a consumption-based economy.We need to focus more on reducing government debt, and having a manufacturing economy. We need to produce real things as opposed to just making money off the margins with financial institutions.
Financial institutions are very important in Minnesota as well.But when you look at the accumulation of wealth over the last two decades, so much of it has not been based on actually making things.We have this golden opportunity to do that now.Why?Well first of all, we have a weak
dollar, so there's always these possibilities we'll be exporting some of our goods when 95 percent of our customers are outside of the United States.
Secondly, there's this newfound interest with the new energy economy, in making things and in setting standards in energy efficiency.I was just at Lindsay Window & Door in Mankato and they've seen great success because of the energy efficiency steps that are coming in.I
believe that there is newfound interest in real jobs and really making things in our country, and I mean that, especially in rural areas.Part of it is the energy economy, and part of it is our realization that we need to reconfigure what we're doing and really go back to some basics
in terms of focusing on what we're making.
As far as policy ideas, we want to set energy standards that work and make sure we're doing everything to help small businesses to get in the market.Senator Mark Warner(D-Virginia) and I have been working on some proposals to take some of that TARP money.Most of it should go
to the deficit but we would like to take $40 billion and [give it] to small community banks for loans to small businesses because they are not recovering as quickly as the credit market on Wall Street.
Exports are also vital to growth.Thirty percent of small or medium businesses say that they would like to export if they could, but they don't know how to access some of those markets.Fifty-eight percent of the businesses that do export in the United States export to one of
two countries: Canada or Mexico.That's not true in Europe.They're going all over the place, and taking advantage of the weak dollar.I think this is the time.It's like a business match-dot-com: matching these small businesses with the foreign consumer markets.We have amazing success
stories in Minnesota. Mattracks in Karlstad, Minn. had about five employees and now they have about 50 because they used the Commerce Department's foreign commercial service people and they helped them determine markets from Karlstad to Turkey where they can sell their trucks.That's
a great example.
We believe that small manufacturers have been leaders in this environmental trend because in order to compete globally, they have to be very efficient and that means being green, eliminating non-value added process steps, and eliminating waste.What
are your thoughts on how to advance the sustainability market or the green market?
Well, Minnesota has been ahead on this because . . . with a republican governor and democratic legislature, a near unanimous vote took place on an aggressive renewable electricity standard.That has spawned green jobs from solar to wind to geothermal.It's interesting that our
last decade of growth has been one percent overall, but it has been 11 percent in the green jobs area.That's what we would like to emulate across the country.
Those kinds of jobs are great because one, it's a new kind of job market.Two, it allows us to create our own energy so we're not as dependent on foreign countries that we don't really do business with and that includes biofuels.The third thing is that it is better for
consumers because they can eventually save money in we are producing our own energy.If you have a more fuel-efficient car, it can save you $1,000 a year; that's better.
If we don't start developing in this area, the rest of the world is going to want this.If not for the environment, they're going to want it for their own security and they're going to want it for saving money for their consumers.If we don't develop this kind of technology,
it's going to go to Mumbai or it's going to go to Shanghai, so the next cellulosic ethanol research wouldn't be going on at the University of Minnesota, it would go on at the University in Beijing.Do we want to have the next hybrid car battery factory in Youngstown, Ohio, or do we
want to have it in Helsinki, Finland?Those are the things that we're dealing with in terms of competitive pressure.I see it as not only good for our country to develop our own energy, but it really will allow us to have this competitive step up over other countries if we invest in
certain standards.
During last year's State of Manufacturing survey, a very high percentage of manufacturing CEOs were optimistic about the futures of their businesses. That's a testament to the entrepreneurial spirit, of course.As you travel around to a lot of different manufacturing companies
in Minnesota, how would you describe the mood now?
I think first of all, Minnesota companies had some reserves.They were very frugal and so they've weathered this recession better than other companies.I would say that they see it as a period of stability.We haven't fallen off the cliff that people feared would happen last
year, but we still aren't quite where we want to be.
Consumers are starting to buy but they're nervous. If you talk to the tourism industry, for example, they are not booking ahead of time as much, they are very last-minute.But we are starting to see some glimmers of hope throughout the economy that we didn't see back in the
spring.Part of it is the housing market, the GDP going up, and some credit is starting to get out there.Those are all good signs.
Any last comments about manufacturing in Minnesota?
For too long, people have been as I said making money off of things that aren't real.It's time to go back to what made this country great, which was this manufacturing industry, entrepreneurial spirit, and new ideas and innovations. That's what it's going to be all about, and
I love that Minnesota's medical device industry starting in a garage, and that construction of prototypes for the wind turbine towers that I saw in Porter, Minn. began in a barn.We just have always had this history and this future involving manufacturing.
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