Hagel Stepping Down as U.S. Defense Chief

U.S. Defense Secretary Chuck Hagel is stepping down from his post after 21 months in office amid tension with the White House over policy and how it’s presented to the public, officials said.

Possible replacements include former Deputy Defense Secretary Ashton Carter, Michele Flournoy, a former undersecretary of defense, and Senator Jack Reed, a Rhode Island Democrat and West Point graduate. The nominee to replace Hagel won’t be named today, said a White House official who asked for anonymity to discuss a personnel matter.

Hagel, 68, a former Republican senator from Nebraska, is leaving the administration under mutual agreement after a series of meetings in the past few weeks, said a defense official, who spoke on condition of anonymity to talk about personnel matters.

Hagel was confirmed by the Senate in February of last year after a contentious process that saw many of his former Republican colleagues line up against him.

“On paper, Hagel looked perfect for the job -- a war hero, a former Senator, a successful entrepreneur,” said Loren Thompson of the Lexington Institute in Arlington, Virginia. “But his confirmation hearings did not go well, and his temperament proved ill-suited to such a politically sensitive job.”

Reshaping Forces

Hagel’s time at the Pentagon has been focused on the reshaping of the U.S. armed forces in the face of budget cuts. He’s been in the spotlight recently because the rise of Islamic State in the Iraq and Syria has forced the U.S. military to re-engage in the Middle East.

Defense officials said Hagel had been marginalized in the administration. One defense official said Hagel had stopped speaking up at White House meetings because White House aides with less experience in military affairs than the wounded Vietnam War veteran often ignored what he said.

Instead, he took to phoning the president after returning to his Pentagon office to shoot down what he considered bad ideas.

Hagel’s Clashes

Senior members of Obama’s national security team, often considered insular by Defense and State Department officials, clashed with Hagel over U.S. strategy in Syria and in countering the Islamic State. His public appearances, where he at times appeared out of step with the White House, also raised concerns, according to one official, who spoke on condition of anonymity to talk about internal discussions.

Hagel chafed at the centralized White House control of public statements and messaging, which aides said made it more difficult for him to articulate his thoughts, officials close to the defense secretary said.

According to administration officials, Hagel began speaking with Obama in October about leaving the administration, given the typical post-midterms transition.

Hagel’s departure was first reported by the New York Times.

Hagel, a decorated Vietnam war veteran, was picked by Obama to replace Leon Panetta in 2013 as the Pentagon’s leaders. The choice was criticized by Hagel’s fellow Republicans over his past opposition to unilateral sanctions against Iran, his comments about the influence of what he once called “the Jewish lobby,” and his opposition to the 2007 U.S. troop surge in Iraq. Hagel faced an onslaught of criticisms from Republicans at his confirmation hearing.

War Critic

While Hagel as Senator supported the resolution authorizing the war in Afghanistan in 2001, he became critical of the prolonged U.S. counterinsurgency effort and the troop surge there.

In choosing a Republican as defense secretary, Obama followed in the path of Democratic President Bill Clinton, who picked Republican Senator William Cohen of Maine for the job in his second term. Through much of Obama’s first term, he keptGeorge W. Bush’s defense secretary, Robert Gates, in the job.

Hagel’s nomination marked only the third time that a Cabinet nominee required 60 votes to overcome a filibuster on the Senate floor, according to Betty Koed, the chamber’s associate historian.

They were President Ronald Reagan’s 1987 pick for Commerce Secretary, C. William Verity, and President George W. Bush’s 2006 choice of Dirk Kempthorne to be Interior Secretary. Both overcame the higher vote threshold to win confirmation.

Under a Senate rules change earlier this year led by Senate Majority Leader Harry Reid, it takes only a majority of senators -- rather than 60 -- to confirm all executive and judicial nominees, except for those to the Supreme Court.

Senator Mitch McConnell of Kentucky, who will become majority leader when Republicans take over control of the chamber in January, has criticized the rules change, though hasn’t said whether he will seek to reverse it.

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“Chuck has helped transition our military and bolstered” U.S. standing around the world, President Obama says at the White House.

• Obama says Hagel understands military like few others; “he’s been in the dirt and he’s been in the mud”
• Says Hagel had devoted himself to military for decades
• • “You’ve always given it to me straight and for that I will always be grateful,” Obama says to Hagel
• Hagel says leading Defense Dept is “greatest privilege of my life” and is proud of accomplishments
• Calls him an “exemplary” defense secretary
• Hagel stepping down from his post after 21 months in office amid tension with the White House over policy and how it’s presented to the public, officials said

“The President needs to realize that the real source of his current failures on national security more often lie with his administration’s misguided policies and the role played by his White House in devising and implementing them,” Sen. John McCain says in statement.

• McCain: “Excessive micro-management” from White House makes defense secretary job more difficult
• McCain says he and Chuck Hagel have “often seen eye to eye on our biggest national security challenges,” citing Syria, Afghanistan, Islamic State, rising China, sequestration
• NOTE: McCain poised to be Senate Armed Services Cmte chairman in January; ran against Obama for president in 2008

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This update was brought to you with intelligence by Bloomberg Government

Congress Should Support Trade Authority

President Obama should be able to secure renewal of fast-track negotiating authority for trade agreements in spite of clashes over his immigration policy, says, Commerce Secretary Penny Pritzker.

• “I think they are two separate issues; the reason it will pass is because the trade agreements are really important” for “continued economic growth in the United States,” Pritzker says, speaking from Global Entrepreneur Summit in Marrakesh, Morocco
• “There is enormous support on the Hill”

U.S. Trade Representative Michael Froman also said this week that he still hopes for bipartisan support in Congress on granting the White House the authority to fast track trade deals but added the timing was up to lawmakers. Some experts say trading partners will not put up their best offers if Congress can later pick apart the deal and that the lack of TPA is slowing down Pacific trade talks. However, some trade negotiations with limited scopes are still taking place and major deals are being announced, such as the recent Information Technology Agreement.

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What They’re Saying: Breakthrough in Negotiations of the WTO Information Technology Agreement (ITA)

11/14/2014 - 10:00am

“Last night, we reached a breakthrough in our ongoing efforts to expand the Information Technology Agreement. This is a WTO agreement that eliminates tariffs on high-tech products among 54 economies, including the U.S. and China… This is encouraging news not just for the U.S.-China trade relationship, it shows that the U.S. and China work together to both advance our bilateral economic agenda, but also to support the multilateral trading system.” -U.S. Trade Representative Michael Froman

Following the 2014 Asia-Pacific Economic Cooperation (APEC) Leaders’ Meeting, President Obama and United States Trade Representative Michael Froman announced a major breakthrough in negotiations with China to expand the scope of goods covered by the World Trade Organization (WTO) Information Technology Agreement (ITA). The ITA will eliminate tariffs on information technology products, and the bilateral agreement between the U.S. and China will allow for the resumption and swift conclusion of negotiations for the first major tariff-cutting deal at the WTO in 17 years. A successful ITA expansion would allow for an increase in Made-in-USA exports to growing markets without the imposition of burdensome tariffs, and would support tens of thousands of good-paying U.S. manufacturing and technology jobs. To learn more about how the ITA will support economic growth at home and abroad, please click here.

Below are reactions to the announcement:

• Senator Ron Wyden (D-OR), Senate Finance Committee Chairman: “The original Information Technology Agreement helped grow companies big and small in Oregon by eliminating overseas tariffs on high-tech products almost two decades ago,” Wyden said. "Today's news of an agreement with China will pave the way for a successful ITA expansion deal, which means more good-paying jobs by opening global markets to Oregon manufacturers and exporters of advanced semiconductors, high tech medical equipment and other products.” [11/11/2014]

• Senator Orrin Hatch (R-UT), Ranking Member of the Senate Finance Committee: “After more than a year of stalled negotiations, the Administration’s progress with China to zero-out tariffs on information technology products, like medical devices, is welcome news. Expansion of the Information Technology Agreement would be a big win for American manufacturers, including many in my home state of Utah, who would then be able to increase their global footprint on cutting-edge technologies. Given the recent progress achieved on international trade policy at APEC, it is imperative the President now work with Congress in a bipartisan way to help pass Trade Promotion Authority. Renewal of this job-creating initiative will empower our nation to negotiate a high-quality Trans-Pacific Partnership trade agreement that will grow the economy, benefit the American people and achieve the goals of Congress.” [11/11/2014]

• Linda Dempsey, Vice President of International Economic Affairs, National Association of Manufacturers (NAM): “Expanding the agreement to include ‘new technologies is critical not just for manufacturers of this equipment but for all the manufacturers that consume these technologies to make them more productive and globally competitive. The NAM applauds the administration's leadership and persistence in moving these negotiations forward and looks forward to the conclusion and implementation of an expanded ITA as quickly as possible’.” [11/11/2014]

• Myron Brilliant, Executive Vice President and Head of International Affairs, U.S. Chamber of Commerce: “With economic growth disappointing in many countries, news of a breakthrough in the ITA negotiations is more than welcome. The ITA has been one of the most successful trade pacts in history, spurring growth and innovation across a host of cutting-edge industries. With so many new products created since the ITA was concluded two decades ago, expanding the agreement’s coverage is imperative. With trade in tech goods surpassing $4 trillion annually, the commercial significance of these negotiations is obvious. As stated in our goals coming into Beijing, a deal on the ITA is key to the success of China’s APEC year. We congratulate the U.S. and Chinese officials who have pushed these negotiations through a difficult stage and, hopefully, brought success within reach.”  [11/10/2014]

• Gregory Gilligan, Chairman, American Chamber of Commerce in China: “This latest breakthrough – combined with the deal announced the previous day on extending the validity of visas for businesspeople, students and tourists – demonstrates how cooperation can create long-term benefits to the business interests of both countries.” [11/11/2014]

• John Frisbie: President, U.S.-China Business Council: “Making a positive breakthrough on the ITA this week sets the tone for more ambitious agreements that are in discussion.” [11/11/2014]

• Bruce Mehlman, Executive Director, Technology CEO Council (TCC): “This agreement represents a major breakthrough in global trade for the high tech sector. The information technology sector has changed dramatically in the 17 years since the ITA first went into effect. By updating the product scope and eliminating tariffs on more than 200 new products, a new and expanded ITA will support thousands of new manufacturing and technology jobs here in the U.S. and infuse billions of dollars in revenue to the global economy. We applaud the persistent efforts of President Obama and his Administration, including U.S. Trade Representative Michael Froman, as well as the Departments of Treasury and Commerce to move this agreement forward and keep ITA expansion as a top economic priority. We look forward to the swift completion of the final ITA agreement as soon as possible.”  [11/11/2014]

• Gary Shapiro, President and CEO, Consumer Electronics Association (CEA): “It took hard work, and compromise on all sides, but today's breakthrough announcement from Beijing on the ITA marks a major path forward. President Obama, Ambassadors Froman and Punke, and their team at USTR have worked tirelessly over the past week to find a way forward. We commend them, Chinese hosts of APEC and leadership in Beijing for reaching a mutually acceptable path forward to continuing, and swiftly concluding, ITA discussions in Geneva. Today's breakthrough offers not only a strong deliverable for APEC leaders, but also a chance to advance the success of the World Trade Organization itself." [11/11/2014]

• Gregg Melinson, Senior Vice President for Corporate Affairs, Hewlett Packard (HP): "The Information Technology Agreement (ITA) is an extremely significant trade pact for the high-tech sector, and we applaud the announcement of a deal which will expand product coverage and eliminate burdensome tariffs. This move will support and grow jobs throughout our industry, and we applaud the USTR and President Obama for driving this important trade expansion in Beijing this week." [11/11/2014]

• Fred Humphries, Vice President of U.S. Government Affairs, Microsoft: “Microsoft welcomes the news from the APEC Leader’s meeting on the expansion of the Information Technology Agreement (ITA).  This is a significant and important development for China and the United States.  Microsoft will continue to work in support of ITA expansion as final negotiations are concluded in Geneva.” [11/11/2014]

• Brian Toohey, President and CEO, The Semiconductor Industry Association (SIA): "The ITA has played a central role in helping the U.S. semiconductor industry drive innovation, create jobs, lower consumer prices and connect communities throughout the world. Today's agreement between the U.S. and China to expand the ITA is a hard-fought victory for the U.S. semiconductor industry and a big win for the U.S. economy and consumers around the world. We look forward to all ITA countries finalizing a deal as soon as possible."[11/11/2014]

• Rich Templeton, Chairman, President, and CEO, Texas Instruments (TI): “Lowering barriers to trade advances innovation and growth for our companies but more importantly can expand the global economy. We see this as a true win-win for the participating countries and a needed boost for rules-based trade under the WTO. President Obama and Ambassador Froman deserve a great deal of credit for achieving this important breakthrough.” [11/11/2014]

• Jeff Campbell, CISCO: “The agreement between the United States and China to expand the scope of the Information Technology Agreement represents a major breakthrough in the global trade agenda. This agreement is expected to eliminate duties on over 200 information and communications technology (ICT) product categories, representing approximately $1 trillion in annual global ICT sales. Now that the U.S. and China have reached agreement, we hope negotiators will resume talks early next month at the World Trade Organization in Geneva to expand the bilateral agreement to include more nations.  In doing so, this will help expand access to affordable technology, which will help improve standards of living and economic development around the world.”  [11/11/2014]

• Senator Chris Dodd, Chairman and CEO, Motion Picture Association of America (MPAA): “MPAA commends the United States and China for reaching a crucial agreement on expanded product coverage in the negotiations to update the Information Technology Agreement (ITA). Once concluded, this agreement will encourage the growth of the U.S. and global motion picture industries by eliminating costly tariffs -- some as high as 30% -- on a wide range of digital and optical media and storage devices used in worldwide motion picture production, editing, distribution, and exhibition. MPAA is grateful for the hard work and leadership of President Obama, U.S. Trade Representative Michael Froman and the USTR team, who have worked tirelessly to narrow the differences with China to reach an understanding which will lead to a commercially significant agreement. MPAA also applauds China for contributing to the resumption of negotiations. We encourage all ITA participants to seize the momentum created by this agreement to resume and rapidly conclude the negotiations." [11/11/2014]

• Steve Mollenkopf, CEO, Qualcomm: “I am very pleased that dialogue between the United States and China has resulted in a breakthrough understanding that will give a much needed boost to negotiations to expand the product coverage of the WTO Information Technology Agreement. Modernizing the list of products that will receive duty-free treatment under an expanded ITA will generate significant benefits for the information technology industries and consumers globally. In particular, the inclusion in the ITA product landscape of MCO semiconductors will catalyze new innovations, investment, jobs, global trade flows and consumer choice. Qualcomm encourages all WTO members to build upon this momentum and conclude ITA expansion negotiations at the earliest opportunity this year. I applaud United States Trade Representative Michael Froman and Chinese Minister of Commerce Gao Hucheng, and their teams, for their hard work and leadership.” [11/11/2014]

• Intel: “We applaud the work that the United States Trade Representative (USTR) has done at the Asia-Pacific Economic Cooperation (APEC) to support America’s technology industry. The breakthrough bilateral agreement between the United States and China to expand product coverage of the Information Technology Agreement (ITA) enables the swift conclusion of a deal at the WTO that will cut tariffs on an estimated $1 trillion in annual global sales of information and communications  technology (ICT) products.  An expanded ITA will be a major win for the global information economy and ICT consumers around the world.  Fair and open trade creates job growth, increases innovation and strengthens the global economy.” [11/11/2014]

• Telecommunications Industry Association (TIA): “The Telecommunications Industry Association (TIA), the leading association representing the manufacturers and suppliers of high-tech communications networks, today commended the White House and the Office of the U.S. Trade Representative for their leadership in breaking the impasse to resume the negotiations to expand the World Trade Organization (WTO) Information Technology Agreement (ITA)… The breakthrough to resume the negotiations to expand the Information Technology Agreement would not have been possible without the tremendous amount of hard work by the White House and the Office of the U.S. Trade Representative over the past year. It has been 17 years since the original ITA was concluded, and TIA is very pleased to see that the ITA expansion negotiations are back on track.” [11/11/2014]

• Advances Medical Technology Association (AdvaMed): "AdvaMed strongly supports expansion of the ITA and we are pleased to see the agreement reached by the leadership of China and the US.  We hope that this will lead to continuation of a robust negotiation and swift passage of an expanded agreement. The ITA has the potential to reduce tariffs for several innovative medical technologies, benefitting manufacturers in the US, China and other countries.  Even more importantly, the agreement will lower healthcare costs and increase patient access to life-saving and life-enhancing technologies." [11/11/2014]

• BSA / The Software Alliance: " ‘Updating the ITA to better account for these advances will remove tariffs on hundreds of billions of dollars’ worth of additional goods,’ BSA CEO Victoria Espinel said by email in response to a query.” Reuters: U.S. tech, software industry cheers China IT trade deal progress [11/11/2014]

• Information Technology & Innovation Foundation: "Among the likely winners would be U.S. makers of semiconductors, medical products such as MRI and CT machines, and software and video game developers, said Stephen Ezell, senior analyst at the Information Technology & Innovation Foundation think tank. ‘It’s a win-win trade agreement that will benefit information and communications technology manufacturers and services firms across the Americas, Europe, and Asia, while also benefiting all consumers globally and raising global GDP by as much as $190 billion annually,’ he said by email.” Reuters: U.S. tech, software industry cheers China IT trade deal progress [11/11/2014]

• Japan Electronics and Information Technology Industries Association: “The Japan Electronics and Information Technology Industries Association, an industry body whose 280 members include Sony Corp. , Panasonic Corp. , Sharp Corp. and Toshiba Corp. , welcomed the deal. “We were waiting for this since the discussion between China and the U.S. stopped last November,” the group said. ‘If the discussion reopens in Geneva and the tariff elimination is expanded, it would be positive for the JEITA and Japan’s IT and electronics industry.’” Wall Street Journal: Global tech firms stand to gain from tariff drop [11/11/2014]

• Information Technology Industry Council (ITIC): “‘This is particularly important for economies without credit cards,’ said John Neuffer, senior vice president for global policy at the Information Technology Industry Council in Washington. ‘They can go to the local kiosk and buy cards’ that let them download software.” Wall Street Journal: Global tech firms stand to gain from tariff drop [11/11/2014]

• Micron: “Mark Durcan, Micron’s chief executive, said the new agreement ‘will certainly benefit all of us who conduct business and manufacture on a global basis, and we commend all the parties involved in reaching this milestone.’” Wall Street Journal: Global tech firms stand to gain from tariff drop [11/11/2014]

• U.S. Chamber of Commerce: “The Chamber has worked over the past two years to build support for an ambitious expansion of the ITA. We’ve traveled to Geneva repeatedly to meet with negotiators from dozens of countries, and we’ve raised it as an issue in missions to foreign capitals (especially Beijing, as Chinese officials had been reluctant to eliminate many tariffs). The Chamber was one of 82 top business groups from dozens of developed and developing countries that in September issued a statement calling for action…The Chamber has said repeatedly that a deal on the ITA is key to the success of China’s APEC year, and so it is. It’s also a big win for the U.S.-China relationship, with benefits for consumers and industries worldwide. We congratulate U.S. Trade Representative Michael Froman, Deputy U.S. Trade Representative Michael Punke, as well as the Chinese officials who have pushed these negotiations through a difficult stage and, hopefully, brought success within reach.” U.S. Chamber of Commerce: Trade Pact to Slash Taxes on $1 Trillion in Goods [11/11/2014]

• Information Technology Industry Council (ITI): “ITI applauds the sustained effort by President Obama and his team at USTR for their unrelenting efforts to achieve this deal and break the logjam…With this bilateral deal to expand product scope, a number of important goods will now be included in the final round of talks, such as next-generation semiconductors called MCOs, a range of medical equipment, a wide array of sophisticated measuring devices, and point-of-sale cards to download software and games. These additional product lines will add significant commercial value to the overall agreement.” Information Technology Industry Council: Breakthrough Achieved on Information Technology Agreement: Next Stop, Geneva [11/11/2014]

U.S. Payrolls Grow Nine Months in a Row

Employers have together added 214,000 workers to U.S. payrolls in October. This marks the ninth consecutive month the number of people with jobs in the U.S. has been increasing. Correspondingly, the jobless rate has dropped to the lowest level in six years as the American economy is powering through the global economic slowdown. The previous month's growth is now known to be 256,000 new jobs -- more than was initially estimated -- according to the latest figures from the Bureau of Labor Statistics. Including the latest numbers, the jobless rate has fallen to 5.8 percent, even as more people are entering the labor force. This is boosting the share of the population working to the highest in five years.

“Despite all the talk about the global economy, the U.S. domestic economy seems to be doing fairly well,” says John Silvia, chief economist at Wells Fargo Securities LLC

The underemployment rate -- which includes part-time workers who would prefer a full-time position and people who want to work but have given up looking -- declined  30 basis points to 11.5 percent, the lowest since September 2008.

However, other economists warn against becoming overly optimistic just yet because the “labor force participation rate” — a measure of how many Americans are working as a percentage of the overall labor force — is still a very low 62.8%, nearly the lowest level since the recession of 1978.

As the forces of Schumpeterian creative destruction (innovation & entrepreneurship) are continuing to drive economic growth, these processes are also destroying the value of established companies and even laborers that had previously enjoyed some level of monopoly power. It remains to be seen what will happen to labor’s share of national income relative to capital’s share — an issue at the heart of the growing debate around rising inequality.

The U.S. Department of Labor is continuing to promote the growth of good jobs by sharing best practices from subject matter experts. Recently, they hosted Dr. Zeynep Ton (pictured above), who teaches operations management at the MIT Sloan School of Management and authored the book, The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs and Boost Profits. After studying retail operations for more than a decade, Professor Ton has been finding that some of the most successful businesses are choosing to make significant investments in their employees — and making a lot of money doing it.

During her recent research presentation, Dr. Ton said, “Offering good jobs is a choice that’s available to all retailers – small, large, regional, national, public private if you want to move our economy more towards a good jobs economy that works for all, we have to think about not just the wages and benefits, but look at the work itself, because as I examine different companies – from Costco to QuikTrip — what I found was they weren’t just paying their people more, they were designing the work differently. They were designing the work so their employees are more productive, so they are more engaged, so they contribute more, so their job is more meaningful — there is more dignity in their job. Good jobs — in my research and the research of others — good jobs equal good work.”

U.S. Investing in Advanced Manufacturing

Launching this week, several executive actions are aiming to strengthen the economy through advanced manufacturing.  The Departments of Defense, Energy, Agriculture and NASA are announcing more than $300 million in new investments into three key technologies that are being called crucial to the industrial competitiveness of the United States: 1.) advanced materials including composites and bio-based materials, 2.) advanced sensors for manufacturing, and 3.) digital manufacturing.

The executive actions are building upon the recently-published report by the Advanced Manufacturing Partnership -- a national council of 19 leading CEOs, labor leaders, and university presidents co-chaired by Andrew Liveris, CEO of Dow, and Dr. Rafael Reif, President of MIT, collaborating with more than 100 industry and academic experts.

The final report is recommending measures that are encouraging innovation,  securing the talent pipeline, and improving the business climate. Click here to see the full .pdf, or view embedded below.

Chaired by Andrew Liveris, President, Chairman, and CEO of the Dow Chemical Company, and Rafael Reif, President of the Massachusetts Institute of Technology, the AMP Steering Committee includes:

• Wes Bush, Chairman, CEO and President, Northrop Grumman Corp.
• Mark Schlissel,  President, The University of Michigan
• David Cote, Chairman and CEO, Honeywell
• Nicholas Dirks, Chancellor, University of California, Berkeley
• Kenneth Ender, President, Harper College
• Leo Gerard, International President, United Steelworkers
• Hon. Shirley Ann Jackson, President, Rensselaer Polytechnic Institute
• Eric Kelly, President and CEO, Overland Storage
• Klaus Kleinfeld, Chairman and CEO, Alcoa Inc.
• Andrew Liveris, President, Chairman, and CEO, The Dow Chemical Company
• Ajit Manocha, Senior Advisor, GLOBALFOUNDRIES
• Douglas Oberhelman, Chairman and CEO, Caterpillar Inc.
• Annette Parker, President, South Central College
• G.P. “Bud” Peterson, President, Georgia Tech
• Luis Proenza, President, The University of Akron
• Rafael Reif, President, Massachusetts Institute of Technology
• Eric Spiegel, President and CEO, Siemens Corp.
• Mike Splinter, Executive Chairman of the Board, Applied Materials Inc.
• Christie Wong Barrett, CEO, Mac Arthur Corp.

For more information about the Advanced Manufacturing Partnership, please visit:http://www.manufacturing.gov/amp.html

Colorado Gubernatorial Energy Forum

LIVE - SENATORIAL AND GUBERNATORIAL ENERGY FORUMOCTOBER 14TH FROM 9:45 am TO 12:30 pm

The candidates will provide their views on the future of the Colorado energy economy, followed by a moderated Q&A session. A panel discussion focusing on the opportunities for Colorado business and jobseekers in the energy industry will also be held.

This forum is sponsored by:

Colorado Business Roundtable Consumer Energy Alliance Colorado Energy Coalition Vital for Colorado Farm Bureau Colorado South Metro Denver Chamber Colorado Motor Carriers Association Grand Junction Area Chamber of Commerce Action 22 - Giving voice to Southern Colorado Metro North Chamber of Commerce AABE - Denver Area Chapter Colorado Women's Chamber of Commerce CACI - Colorado Association of Commerce & Industry Denver South Economic Development Partnership Western Slope Club 20

U.S. Net Energy Imports at Lowest Level in 29 Years as Domestic Production Keeps Booming

Net energy imports, as a share of U.S. energy consumption, continue to fall due to increased domestic production in areas such as the Bakken Basin, Marcellus Shale region, Eagle Ford shale, and the Permian Basin.  Last week, the Energy Information Administration (EIA) reported net imports have declined to 10.9% for the first six months of 2014 — the lowest level in almost 30 years. Total domestic energy production is currently outpacing the United States ever increasing energy consumption, helping lessen dependence on energy imports, says EIA analyst Allen McFarland.

He continues by breaking out each source of growth by energy type, "The increase in total energy production was almost entirely concentrated in petroleum and natural gas. Petroleum accounted for 52% of the 2014 year-to-date increase, natural gas for 27%, renewable energy for 9%, and nuclear electric power for 2%. In contrast, total coal production fell 1%. The increased liquids production reflects the use of advanced drilling methods, including hydraulic fracturing and horizontal drilling."

Full report published by the EIA:

Total U.S. net imports of energy as a share of energy consumption fell to their lowest level in 29 years for the first six months of 2014. Total energy consumption in the first six months of 2014 was 3% above consumption during the first six months of 2013, but consumption growth was outpaced by increases in total energy production. These changes led to a 17% reduction in net imports compared with the first six months of 2013.

Total energy consumption increased every month in 2014 compared with the same month in 2013. However, 81% of the total increase in consumption came in January and February, reflecting the effect of colder weather during the polar vortex. Natural gas accounted for 55% of the 2014 year-to-date increase, coal for 24%, renewable energy for 12%, petroleum for 8%, and nuclear electric power for 3%. Of the total natural gas consumption increase, the residential and commercial sectors accounted for 69% of the gain, again reflecting the cold winter, while 30% of the increase came from the industrial sector, continuing a long-term trend toward higher industrial use of natural gas.

The increase in total energy production was almost entirely concentrated in petroleum and natural gas. Petroleum accounted for 52% of the 2014 year-to-date increase, natural gas for 27%, renewable energy for 9%, and nuclear electric power for 2%. In contrast, total coal production fell 1%. The increased liquids production reflects the use of advanced drilling methods, including hydraulic fracturing and horizontal drilling. These techniques have led to higher production in areas such as the Bakken Region, Marcellus Region, Eagle Ford play, and Permian Basin, and have greatly increased U.S. oil and natural gas production.

Total energy imports in the first six months of 2014 fell 6% compared with the first six months of 2013, almost entirely because of decreasing petroleum and natural gas imports, which fell 6% and 5%, respectively. Total energy exports increased 8% compared with the first six months of 2013. The increase was almost entirely the result of a 21% increase in petroleum product exports.

Marissa Mayer, The Old School Manager, vs. Ricardo Semler, The Participation Age Leader

Mayer manages to the Lowest Common Denominator. Semler leads to the Highest Common Denominator. The difference is dramatic. Last year, the CEO of Yahoo, Marissa Mayer, created shock waves throughout the tech world by dictating that “work from home” was no longer permitted. She summarily herded everyone back into the Office Day Care Center to be closely supervised like seven year olds. A few years earlier, a large multi-national company headquartered in Brazil named Semco, threw a party for their leader, Ricardo Semler, to commemorate his 10^th anniversary of not making a decision.

Managing to The Worst vs. Expecting the Best

LCD Management (lowest common denominator) asks, “What’s the most incompetent or laziest thing somebody could do?”, and then creates an environment to make it hard to get away with it. In contrast, HCD Leadership asks, “If given a clear vision, what is the best possible thing people could do without being managed?” HCD leaders then create the kind of environment that will attract self-motivated, self-managed achievers. Both of them are self-fulfilling prophecies.

LCD Managers create an environment where people will live down to our worst expectations of them. HCD leaders understand that the art of leadership is to know how few decisions the leader should make.

Ricardo Semler is perhaps the best, low-profile CEO leader in business today. Mayer is a high-profile CEO manager, using personal superpowers to hold everything together - for now. As a result, the futures of Yahoo and Semco are going in dramatically different directions.

Centralized Decision-making vs. Everyone is Capable

LCD managers assume they are the most motivated, qualified, committed, invested, and experienced. With all those superstar qualities, it would be foolish to have others making decisions. That’s why they are paid the big bucks. Mayer is infamous for regularly having a few dozen people waiting outside her office for hours, as she solves problems and makes decisions for them one at a time.

HCD Leadership believes most people are inherently motivated, qualified, committed, and invested, and that they make better decisions than someone in a hierarchy.  Semler doesn’t make decisions anymore because decisions are made where they will be lived out. Stakeholders throughout the company are responsible for Semco entering a variety of industries and growing dramatically year after year, from $4 million 29 years ago to $1billion+ today. As an HCD leader, instead of making decisions others can make, Semler is free to ask questions, cast vision, and work with others to build the future of the company.

Superpowers vs. Delegation

Mayer is a supermanager – which allows her to get away with a lot in the short term. But it is not sustainable. When she goes, the energy goes. She has entrenched herself in decision-making, making her nearly indispensable. While at Google, Mayer pulled 250 all-nighters in five years and held up to 70 meetings a week. She sleeps four hours a night. In contrast, Semler trained others to make decisions. There are now six co-CEOs who rotate leadership every six months, allowing Semler to function at the highest levels of leadership and not make decisions. As with any great leader, he has worked hard to get out of the way. He is fully dispensable, while nobody could replace Mayer.

The Results Are In

Semco gets hundreds of unsolicited resumes every month, and no one leaves. In the worst 10-year recession in Brazil’s history, revenues grew 600%, profits were up 500%, and productivity rose 700%. Innovative Stakeholders have taken them into profitable industries they could have never dreamed of entering, and they continue to grow exponentially. And unlike Yahoo, Semco hasn’t told people how or where to work for over three decades.

LCD management may get quick, short-term results, but Yahoo’s future will never look like Semco’s – it’s too reliant on a very high-profile, LCD superhuman manager. Very impressive in the short-term, but very old school.

Conflict Between Hamas and Israel Unfolding in Gaza

 If Ever the World Needed a Statesman or Stateswoman, It's Now!

If ever an issue defies a solution and challenges the concept of collaboration to its very core, it's the conflict between Hamas and Israel that is unfolding in Gaza. In fact, a person is hard pressed to imagine a confrontation more intractable. What we're witnessing has deep, deep roots in history, religion, identity, land and the very right of existence. It is filled with such resentment and sense of grievance from generations of conflict that any hope for finding a middle ground often seems both futile and hopeless. As a result the debate has polarized. It is characterized as black and white, with each side pointing to clear evidence of how the other side is at fault for what is a terrible situation. Somehow, somewhere, somebody has to rise above the conflict and help find a two-state solution that meets Israel's right to exist in peace, while providing a stable, independent and viable homeland for Palestinian people. If ever the world needed a statesman or stateswoman, it's now.

For a glimpse of the suffering, especially the many children in Gaza who are victims of an adult world dominated by people in positions of power incapable of goodwill, you can watch this video.

Uganda Women Leadership Conference, Part 1

Two days ago at Entusi, one of the women leading the “Bring Back Our Girls” campaign from Nigeria told her story at the Second Annual Women’s Leadership Summit. Florence wants to know why the world community can activate vast pools of resources in an international search to find a missing airplane and the tragic disappearance of hundreds of people with families and friends who want them home; but is not as inclined to activate and engage those same resources to find hundreds of missing girls in Nigeria with family and friends who also want them home.  

And at the end of her very compelling, impassioned talk the women sitting around the table all reacted differently. Not surprising as we had a most extraordinary delegation of women leaders this year from Uganda, Rwanda, Nigeria, Colombia and the United States. Some shed tears; some were angry; some were vocal and others were very quiet and reflective. But here’s the deal. When you cut through all of the emotion that filled the room on this very extraordinary morning on Lake Bunyonyi in Southern Uganda, there was one common thread that tied us all together. And that was hope. And it dominated us.

I started to think back on my month here in East Africa teaching an interactive graduate class with students from the University of Colorado Denver and hosting our Second Women’s Leadership retreat at Entusi. And with each story and each interaction, hope seemed to be the common theme this time around at every stop.

We found hope when we ventured into the Katanga slums, where the absence of public health is almost as pronounced as the raw sewage that runs through the community. And I ran into a family I have known there for years. The mom invited us into their home. Her two-year old daughter wanted a balloon animal and her elderly Mom needed some medicine as she is dying of cancer. But what she really wanted me to know is that she just got a job. And in the midst of the chaos in which this family lives, this woman had hope.

We found hope when we traveled North to Lira and visited with the young adults who are former child soldiers. Despite the tragedy and despair rooted in their past, many of them are moving on with their lives. One girl is in her senior year of high school and over lunch we told her that we were going to support her to pursue her career in nursing when she graduates. Walter moved back with his mom and is finishing high school in the village where he is originally from.

And everywhere in Kampala, despite the poverty and corruption and typical dysfunctions of the developing world, hope was there as well, albeit subtly. It was at Halals, where my Muslim friend Eddie runs the best local restaurant on the planet. Business is good and the rice, beans, g-nut sauce and chipatti’s are to die for. Based near the slum, you can feast over an amazing meal and orange Fanta and get out the door for less than 5,000 schillings ($2 USD). Simon has graduated from college after four years of support from the Global Livingston Institute and has his first job working for an international business. Martina is in her final year of college and is going to help manage the new campus that we have acquired in Kampala.

U.S. Customs and Border Protection.

 

Johann Winks is the Assistant Port Director of Trade with U.S. Customs and Border Protection at the Area Port of Denver at Denver International Airport.  Winks recently meet with ICOSA and shared the following information and resources.

The department is responsible for guarding nearly 7000 miles of land border shared with Canada and Mexico.  Along with guarding nearly 2000 miles of coastal waters, as well as 9500 miles of maritime border in partnership with the U.S. Coast Guard.  They also secure and facilitate trade and travel.

Import specialists at customs can assist companies with understanding laws, regulations, quota restrictions and reduced rates of duty.  The U.S. Customs and Border Protection daily ensure U.S. regulations and laws.  The following list of four services/resources they offer is worth consideration.

The Harmonized Tariff Schedule (HTS) classifies everything that comes into the United States.  HTC is a global classification system that is able to describe most comedies across the world.  It applies tariff rates and specific statistical categories to all merchandise coming into the United States.  More detailed information is provided at the U.S. Customs and Border Protection’s website; http://www.cbp.gov/xp/cgov/trade/trade_programs/duty_rates/.

The Generalized System of Preferences is a U.S. trade program designed to promote economic growth in the developing world by providing duty free entry.  It covers 4800 products and benefits 129 countries and territories.  A list of these products can be found at; http://www.cbp.gov/xp/cgov/trade/trade_programs/international_agreements/special_trade_programs/gsp_gen_system/.

Formal entry forms must be filed if merchandise coming into the U.S. is valued over $2,000 and a customs agent or airline should fill it out.  This form and several others can be found at; http://www.cbp.gov/xp/cgov/toolbox/forms/.

Go to the local Customs and Border Protection office to find out what items are restricted to bring into the U.S. such as animals, animal bi-products, firearms, plants and embargoed items including artifacts from other countries, toys and children items.  Contact information can be found at; http://www.cbp.gov/xp/cgov/toolbox/contacts/.

Related articles

• Head of U.S. Customs and Border Protection resigns (cnn.com)

The U.S. Department of Commerce and Frederick Exports

 

Martha Butwin, Senior International Trade Specialist at the U.S. Department of Commerce’s Denver Export Assistance Center facilitates exporting goods and services for a variety of companies.  The Gold Key Service program (starting at $700) serves as a starting point for companies working towards exporting.  The International Partner Search (starting at $550) pairs companies who are potential partners.  Each program starts with questioners to determine a match.  An international company profile is prepared to reduce the amount of scammers.

Butwin recalls the high point in her career as working with partners, Project C.U.R.E. and CAP World Wide to provide not only medical supplies but life supplies to Afghanistan people.  To view the video “From Colorado to Kabul”, visit: www.theicosamagazine.com/videos

For more information, visit: www.export.gov

Zach Frederick, founder of Frederick Export, an export management company attributes five practices for sustainable success: 1. Management must buy into exporting, 2. Global pricing parody, 3. Knowing industry contacts, and 4. register your trademarks in every country you export to is vital, (as company control can be lost to a distributor), 5. Qualify the leads.

For more information, visit: www.frederickexport.com

Related articles

• Trade News: Exports Creating New Jobs; Resources & Tools Offered (worldtradedaily.com)

US Trade Representative Mike Froman

Trade, while full of complex issues, is an important part of the global economy and key to furthering economic growth.  It is currently an interesting time in the world of international trade.  US Trade Representative Mike Froman came to address an audience at the Brown Palace Hotel, and he spoke on a number of aspects of trade.