• With: South Carolina Gov. Nikki Haley

    This is a rush transcript from "On the Record," May 23, 2012. This copy may not be in its final form and may be updated.

    GRETA VAN SUSTEREN, FOX NEWS HOST: What was she thinking? Or worse, is this how she always thinks? A South Carolina union leader caught on camera, the AFL-CIO leader beating a pinata with Governor Nikki Haley's face on it!

    (BEGIN VIDEO CLIP)

    UNIDENTIFIED FEMALE: But I won't say (INAUDIBLE) it looks like a tough little girl here.

    UNIDENTIFIED FEMALE: Whack it hard.

    UNIDENTIFIED FEMALE: All right. Y'all ready? Wait until the face comes around and whack her!

    (CHEERS)

    UNIDENTIFIED FEMALE: Give her another whack! Give her another whack!

    (CHEERS)

    UNIDENTIFIED MALE: Hit her again!

    UNIDENTIFIED FEMALE: Hit her again!

    UNIDENTIFIED FEMALE: Whack her again! That's what she needs!

    (END VIDEO CLIP)

    VAN SUSTEREN: Governor Nikki Haley joins us. Good evening, Governor.

    SOUTH CAROLINA GOV. NIKKI HALEY: Hey, Greta. How are you?

    VAN SUSTEREN: Good. I know you're tough. I know you can take t. But I must admit that I've been flooded with a lot of e-mails and there's a lot of outrage tonight because we're, hopefully, trying to get this closer to a time of discussion and debate. You're getting hit in the head as a pinata. Your thoughts on it.

    HALEY: It's creepy! I still hurt every time I see it. But this is what I will tell you. This is not typical of South Carolinians. This is typical of union thugs. And I will tell you in, the past week, the Dems have come after me with a racial slur and the union thugs have hit me with a pinata.

    But all it does is it makes my heels taller, my heels sharper so that I can kick harder. I'm not going to stop beating up on the unions. I'm not going to stop beating up on the Democrats for wasteful spending. And I'm going to keep on fighting for the things I fight for. I'm a lot tougher than that. I'm going to keep on kicking.

    VAN SUSTEREN: Well, you know, I actually think that the -- you know, the Democrats in South Carolina should be somewhat, you know, embarrassed tonight because, you know, there's a whole long discussion with the Democratic Party that there's a war on women. And so the first thing out of the box, they have a very public display of a woman hitting another woman in a pinata. Obviously, it's a facsimile of you. It's not you.

    But that -- you know, that whole bit about war on women, that -- you know, that argument sure is deflated when you see things like this.

    HALEY: Well, you know what it shows is the war on women has been nothing but a distraction. That's their whole goal. They don't want anybody talking about President Obama's record on debt. They don't want anybody talking about President Obama's record on his spending and how out of control Washington is.

    What I will tell you is our record in South Carolina -- we're going to keep fighting the unions. I'm going to keep being a union buster. We're going to keep talking about tax relief and we're going to keep bringing in jobs to South Carolina.

    There's a reason South Carolina's the new "it" state and it's because we're a union buster and it's because we continue to be fiscally responsible and business-friendly. And there's nothing the Democrats or the unions can do to make me change that.

    VAN SUSTEREN: All right, do you know this woman, by the way? Have you ever spoken to her?

    HALEY: No, I haven't. And if I have, I don't remember. At this point, I hope I never come across her. But you know, I have found it interesting that she said she had no regrets. And I think it's very typical of the unions. They don't have regrets for what they do.

    But I think there is a reason there were only about 10 or 12 people at her party. And that's because people in South Carolina, they don't respond to activity like that. They don't relate to people like that. There is a reason why associates of companies in this state don't want to be involved with the unions. And I think she explained that better than I ever could.

    VAN SUSTEREN: You know, I guess what I thought if you guys had had a run-in, I would be sort of, like, Oh, OK, well, you know, it's -- but I mean, the fact that you don't know her, or at least you have no recollection of meeting here -- I mean, it becomes so gratuitous and it, you know, becomes so -- you know, it becomes something deeper in the sense that, you know, it just shows that, you know, it's shirts against skins, so to speak.

    You know, it's, like, you know, this is just -- there's to be no effort to try to work towards resolving problems. This is just going to be whose side are you on and here's the baseball bat.

    HALEY: Yes. And the thing is, this is the same group that will talk about civility and the same group that will talk about, you know, wanting me not to talk about unions.

    The thing is, I'm explaining, you know, from a policy standpoint, why I think unions aren't needed in South Carolina. They're going at me with a baseball bat. It just shows the stark difference between businesses and unions and how they handle -- unions tend to bully and they boss and they try and get their way. And I think that we're just talking about a policy standpoint from a business sector that it's just not good.

    The video -- the way everybody's enjoying it is creepy, at best. But it's not something that's going to change me. I think it's got people fired up. And I think it's showing the unions exactly for what they are.

    VAN SUSTEREN: All right, let me talk about South Carolina for a second. Your unemployment rate is in April is 8.8 percent. It just sort of ticked down one tenth of a point since March from 8.9 to 8.8, which is - - I mean, which is good. But I think the thing that I want to focus on is that this is the ninth consecutive month when it has ticked downward.

    And I'm curious, you know, what you attribute it to, you know, because, you know, many other states are watching. Is it good fortune? Is it the Boeing going into South Carolina? I mean, what's -- what's sort of been the -- so is it -- that's the right direction for nine months. So what's -- what's your secret?

    HALEY: It's the magic combination of keeping the cost of doing business low in South Carolina, getting the workforce better trained and ready, and being one of the lowest unionized states in the country. I mean, you look, Greta, in his past year-and-a-half, we've become the number one tire-producing state in the country. We build planes. We build cars. We build tires. We build more ATVs in this state than any place in the world.

    There is a reason, and it's because we actually understand what it takes for businesses to make a dollar. We know that if they make profits and cash flow, they will hire more people and expand. And bottom line is that's what businesses are looking for.

    And we're not pulling businesses from just out of state. We've got a company that came in from Mexico. We've got a company that came in from China. We're pulling them from out of the country, and that really shows that we're doing something right.

    VAN SUSTEREN: Two-part question. Why are you above the national average so much? What's your explanation for that? Because the national unemployment is lower than that. And secondly, I -- you know, I -- as I do with all guests, I looked at your Twitter account, and you have WNS is coming into South Carolina with 750 jobs. What is WNS?

    HALEY: WNS -- they do all kinds of accounting services. They do all types of backup services, whether it's insurance or banking or anything else. It'll be a 300-feet phone center, but it will be working around the clock. And what we are bringing is pharmaceuticals and manufacturing and research and development, we're bringing in IT. We're bringing in all kinds of things and we're diversifying.

    What I will tell you is 8.8 is higher than what I want it to be. What I will also tell you is it's ninth month drop in a row. And we're going to keep on dropping and it's because we are open for business. We continue to talk about the things that businesses care about. And we continue to keep associates involved with their companies, and it's making a difference. And we're going to keep on bringing that number down.