Youre not going to have people serving vat rans. Youve got a leadership crew not willing to make desuggestion and it contributes to whistleblower retaliation, people being dissatisfied with their jobs. Weve got to get the positions filled. I heard the secretary talk a little bit about reviewing the infrastructure to find out how many positions are needed. We cant make that decision. Pi thael ooh have to make the assessment. If the people filling those positions that have been pulled from other positions, those positions will go back. Its a ripple effect. We have, like i said, roughly 50 over the vha landscape of leadership that is either in a temporary position or vacant. If those individuals that are filling in those leadership positions are just plugging the gaps so that the operation can move forward, their positions are now vacant. Its a very difficult situation that needs to be fixed and it needs to be fixed immediately. Yes, sir. Thank you, senator. And if i could comment on the vba portion which is my area of oversight. Our serious concerns lie within the amount of personnel theyve requested for vba to process the appeals. We think 1,000 should be dedicated to processing appeals only. Not necessarily saying we need to hire 1,700 new fte for that program specifically but to temper that with hiring on a temporary basis, maybe portion of that so that once we get the backlog managed and the inventory managed we may not need all of those people. Also within vrne, one of the most programs in the va. You put them back into the workforce. How does the program continue to increase each fiscal year, yet their Staffing Levels do not. Thats a major concern for us. Thank you, mr. Chairman. Thank you, guys. Thank you, senator bozeman. I want to thank the secretary for staying. Thank you for your testimony today and to the vsos we depend heavily on what you have to say and your participation activity as we all Work Together for the veterans. Thank you for your testimony today and thank you for what you do. We really want to tray to take action by the end of march and have a consolidation of bills put together to give the flexibility of the direction and the flex about to the secretary and make sure we make a move forward on reducing the backlog of claims not by cutting peoples ability to make them out but by streamlining the process. We thank you for your testimony and we stand adjourned. This afternoon on cspan 3, a hearing on proposed changes to the defense Departments Health programs, the pentagon budget request for next year requires a proposal for the retirees using the Tricare Program to start paying enroll lee fee. The hearing starts at 2 30 eastern and youll be able to watch it lye here on cspan3. Coming up later, Hillary Clinton in south carolina. She attends a discussion on civil rights and police misconduct. Joining her at the event, the mothers of fray vonn martin and eric garner. Well have it live from columbia, south carolina. Later tonight, results from the Nevada Republican president ial caucuses. Well show you who won and have candidate speeches live tonight. On our companion network cspan. [ applause ] every election cycle were reminded how important it is for citizens to be informed. To me cspan is a home for political junkies and a way to track the government as it happened. Its a great way for us to stay informed. There are a lot of cspan fan os the hill. There is so much more that cspan does to make sure that people outthe beltway know whats going on inside it. The nations governors gathered here in washington over the weekend for the National GovernorsAssociation Winter meeting. One session focused on how states encourage International Business investment. This lasts about 90 minutes. Good morning. Welcome to this meeting. Im going to turn it over to our moderator, john law. Thanks very much. Good morning. Welcome to this panel of the National Governors association. What matter to firms. Im a partner at mckenzies Public Sector practice and we have the privilege of working with governors and state leaders across the country on health care infrastructure, Higher Education, public safety, pensions and Government Operations and i. T. I have the unique privilege of leading our Economic Development practice which means i work with governors and their Economic Development teams on their most ambitious jobs and competitiveness initiatives. The premise of this mornings manual is quite simple. States focus disproportionately on company retraction, retention and expansion. Governors spend a lot of time doing this. So what actually matter to companies as they decide where to locate and where to invest . And what should states do therefore to ensure that there is competitive as possible in attracting those companies . This discussion and this debate is obviously an age old one but this particular thread of the conversation began a few months ago in october at the ngas trilateral summit in colorado springs. It was there that my colleague led a discussion with several governors starting with a fai y ly provocative negotiation. The incentive is dead, long live the incentive. This is conversation that weve been having based on observations were seeing across the country. Theres been a move away from an overreliance on subsidies and incentives in attracting companies. Instead many states have been building more broad, more deep economic ecosystems in their states. Incentives of course have not gone away. But theyve rather been deployed more strategically in order to support more Sustainable Growth and job growth. Which brings us back to the two big fes for this panel. What actually matter to companies when theyre deciding where to locate and what should the states do to meet their needs. Or what can states do to maximize the return on investment when theyre trying to attract companies . To help answer these questions we have a stellar set of panelists this morning. Director of internal affairs, we have jim fraser, Vice President for Government Relations at dallas usa, anne par da los, we have donavon johnson and last but not least we have leslee alexander, International Director for the Tennessee Department of economic and community development. But before getting to the panelists, i want to frame the discussion a little bit more. For give me, im a consultant, i cant help but put data on power point slides. I want to share with you a little bit of the research that weve done. A few years ago we did a survey of over 2900 Global Company executives. We asked first the reasons for why these executives and their companies were seeking new locations. By far and away the number one reason was to reach new markets or customers as you can see on this chart. No other answer came even close, including, i might add, seeking locations that had a lower cost profile. We also asked these executives what criteria they used to choose specific locations. The most important, again, by far and away, was the size and Growth Potential of a local economy. Thats what executives cared about. Half of the executives also cared about key components like talents and the availability of an industry cluster. Rounding out the top five were infrastructure and then local politics and regulation. This is what matters to companies. I would just note that what is not on this slide is that 14 of respondents, 14 only, said that the lack of incentives were a reason why they did not choose a location. It did not make the list, in other words. So how are states in providing the features that executives are looking for. One imperfect indicator is what the states spend their budgets on to promote economic competitiveness. We pulled together some state data state expenditure data from a number of source, including the National Association of state budget officers, the National Science foundation and others. As you can see here, states spend a lot per capita on Higher Education and transportation. Exactly what executives are looking for. Far behind is how much they spend on incentives and rnd. However youll also note that that where theres the largest growth in terms of spending over the past several years, rnd leads the pack. Transportation is there in second place and then finally you have incentives and hugher education. So it would seem we could conclude that states are in fact aligning their investments with what companies seem to be wanting. However, i would say that these numbers also show that incentives are not dead. They are in fact growing in size. But anecdotally, i would also say that what weve seen is much more of a strategic deployment of symptoms than a tool to build up the broader ecosystems that drive growth and that companies are attracted to. I would now like to turn it over to my private sector colleagues to say a few words about what theyre doing and their reflections on this topic. First up is frank ervin, iii. Thank you, john. Good morning, everybody. Im glad to be here. Mag that is glad to be here. Im senior director of Government Affairs at magthat international. Before we start the conversation i just wanted to give you a couple of facts to create a little credibility about what were going to talking about, say what magna is. I come to washington, d. C. And talk about magna. Its the Largest Company nobody knows anything about. Were 59 years of growth. Ranked as the largest automotive supplier in north america, the second largest in the world, the most diversified automotive supplier in the world and we supply every auto maker in the world some kind of parts in some part of what they do in the automobile sector. Our global presence, were in 29 countries, have 139,000 employees, we have 305 manufacturing plants around the world and were at 36. 6 billion company. More importantly in the United States we employ about 21,000 people and we have 53 manufacturing plants in the United States spread out over 12 states including tennessee and missouri. Were happy to be there. But the key i think is that the 14 to 16 rnd centers that we have also in the United States, our expenditure in the United States last year in rnd was about 300 million of our total expenditure around the world. So rnd is very important to the Automotive Industry and where were going. At magna, our global capacities, engineering and services, product systems, different product systems and also vehicle assembly. We actually aseemable vehicles in austria. We assemble 200,000 vehicle as year for bmw, chrysler and porsche. We have our Core Competencies are very varied and diversified. We have camera based driver assistance products for safety, closures, mirrors, power train, plastic interior seating and do the Contract Manufacturing and were number one globally in just about every sector with the exception of seating where were number four. Thats a little bit about magna and ill turn it over to jim from dallas. Thank you. Its also a pleasure to be here. Im jim fraser. I handle our relations at the federal, state and local levels. So the diversity of what i get to look at on a daytoday basis varies dramatically. Globalably we have in 56 countries. Weve seen a lot of growth over the past number of years. One of the things that ill mention, its hard to see on the bottom but we invest a tremendous amount of our revenues back into rnd. 67 million annually. So rnd, were a hightech company so the investment that we put in research and development is significant. Here in the u. S. We have a footprint of 23,000. 13 states. The interesting point of is weve been here 200 years. The tallas footprint has been here for some time but the name has not. I think were on the Growth Potential for us in the u. S. , though. The diversity of what we do is interesting. These are the Market Segments we serve globally, ground transportation, security which goes into the cyber world as well, defense, aerospace and also space. Globally were active in the Market Segments. And you can see underneath that it goes into a little more indepth on some of the things we do. Were big on connectivity and the highlight is really the connectivity part. Its staying connected a all about data and sharing, Data Protection as well, a big issues for us in the cyber world. You can see who we are and what we do in the u. S. 2. 2 billion in the u. S. For our 2014 revenues. Similar for last year and 17 billion or 18 billion globally. We can see where a good solid percentage of the groups annual revenues. A couple of quick thoughts on the things john mentioned. I know well get into a discussion later on. I think when we look at how were trying to grow in the ugs and the factors that really matter us to, i dont think anything is surprising on the factors that we hut in. I think Growth Potential where we see the potential investment for tallas, everything we do is driven by our strategy. How do we grow. Where does it make sense for us to grow. I think also our workforce. We have very highly skilled jobs, a lot of engineering talent that we need. And having that available workforce working with the states to provide training for our employees. We have an intensive internal training as well. The proximity to the customers, a supply chain, say in the aerospace world, thats very important for us to be a part of the community. But like so many other companies do, we want to be invested in our communities well. The relationships matter. Federal, state and local engagement for us is very important. The relationships with the g governors and their staffs, that all really matters for us. I take a lot of meetings where we dont have a presence now but as we hope to grow its important to establish the baseline relationship first and then grow into the opportunities as they come forward. Its a vitally important topicing for all of us in the room. Im pleased to be a part of the discussion. Thank you for the introduction. Jim, in particular, thank you on the thoughts of what criteria matter for you. Thank can you say a little more about what you look at in terms of criteria . What pops out for you . Sure. One of the things that pops out and we have to be cognizant of is the oem. We have to make sure that because we sell thetothe oem were not a consumer driven company. We have to be where the original equipment manufacturers are. Sometimes its sticky because depending on the commodity or the whatever part that you supply at that time to that vehicle, youre required to be in two different circles of what we call just in time circles. One is if its a really urgent requirement such as a seat or Something Like that, were required to be in a 25mile circle from the manufacturing plant. You got to draw that circle around and we have to be inside that circle. If its not a critical component, one that can be inventoried to a point of maybe three day to a week, you have to be in 125mile circle of the plant. You have to be within that circle and if not, the oems will actually charge you a logistics penalty for not being inside the circle. You have to be very careful. But you look at the state we do a demographic study of where we want to be. Within the circle, sometimes outside the circle but most of the time in it, we look at the state we want, we do the demographics and the first thing we look at is the standard of living for our employees. Making sure that we can get the talent that we need there but also that we can get the workers that we need there and make sure that that talent is educated to a point that we can bring them into the plant, train them, make sure that they stay there. Our turnover in the United States is less than 1 . And we do that because we take good care of our employees. Then we also look at, you know, obviously the economic part of what where were going to be and we talk to the states and we look at, you know, how the state can help us mitigate the huge Capital Investment we have to make. When we invest in a plant, the normal probably the lowest that we do is 100 million. So thats a huge investment. Its a long Term Investment and we have to be careful where we are with it. Makes a lot of sense. Both of you talked a lot about the importance of r and d in your business and you threw out some very large number, 675 million a year on r and d. Do you work with states on r and d thinking about the r and d agenda for your companies . I think you have to work with the states. We work closely with the states. Especially on the automotive side. I snow jim has some on his side. In the out motive side, youve got to start working with the states because of where the technology in the automotive business is going. Autonomous vehicle, connected vehicles, especially you have to have permission to test Autonomous Vehicles in most states and youve got to have some place to test them. Some people look at the Autonomous Vehicle and say, is that the vehicle, the driverless vehicle. Autonomous vehicles are not necessarily 100 driverless vehicles. Theyre going to move to that. Were 10 to 15 to 20 years away from driverless vehicles. But weve got systems in vehicles now, automatic stop where you dont have to put on the brake if the vehicle senses a vehicle very, very close to you. It stops on its own. Those systems are coming into play. There are many, many new t