WATERLOO - Touring the VGM headquarters in Waterloo with Congressional Democratic candidate Bruce Braley, possible presidential candidate and former Virginia governor Mark Warner touted the company as an example of what it will take to compete in the 21st century.

"What you've got here is a world-class company," Warner said. "As the world economy becomes more global, what we've got to show is, if some of the high-tech jobs are going to China and India, why can't some of them stay here?

"If we can build it in Bangalore, we oughtta be able to build it in Waterloo, Iowa."

VGM is in the midst of building 60,000 square feet of extra office space, to accommodate growth that should add 135 employees over the next few years. That was part of the tour.

VGM employs 400 people, most of them in Waterloo. Ninety-five percent of the home medical equipment maker's customers are outside of Iowa.

Warner said the federal government needs to provide incentives to keep companies like VGM in the United States - not money incentives, but policy incentives.

"We live in a very competitive world. India and China are not playing for second place," Warner said. "We need to make sure we have the best-educated, most innovative work force."

He said the federal government needs to make education a priority, even issue a national challenge to spur educational growth - much like President Kennedy's call to put a man on the moon led to an increase in math and science instruction.

"Like it or not, we live in a world where our greatest currency is our intellectual capital," Warner said. "There's always going to be somebody in the world willing to work for a cheaper wage rate. We've got to work smarter."

Mike Mallaro, VGM's chief financial officer, said he invited Braley and Warner for a tour when he learned Warner would be in the area.

Warner is in Iowa testing the waters for a possible presidential run in 2008 and to help raise money for Iowa Democrats in key races.

Contact Jeff Wilford at (319) 291-1423 or jeff.wilford@wcfcourier.com.