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Ark. governor speaks to economic development group

Thu, 03/18/2010 - 2:30pm
CHUCK BARTELS - AP Business Writer - Associated Press

A consultant who advises communities on how to keep their big employers happy told a conference of economic developers Thursday that a close relationship with executives can keep a company from moving.

Eric Canada of Wheaton, Ill.-based Blane, Canada Ltd., said there is a lot of information on economic trends to study online, but that it's not the soundest approach to learning what's new with a local company.

"By the time it is observable (in trend data), it's too late," Canada said during a conference at the University of Arkansas at Little Rock.

"Gathering this information is person-to-person for the most part," he said.

Gov. Mike Beebe, who also addressed the group of economic developers, noted that more jobs are created by existing businesses than by new ones coming to the state.

"If you forget who's already here, you've made a huge mistake," Beebe said.

Canada said economic development organizations need to form networks, so the leader will have eyes and ears throughout the community.

Using the example of a company that intends to consolidate its factories, a community that gets first word about the plan can immediately start touting the advantages of making that city home to an expansion. That would also give more time to involve the state and for an assembling an incentive package.

Canada suggested that communities put together a list of companies that may be vulnerable. For example, with the difficulty in the auto industry, plants that make automobile parts should be at the top of that list, Canada said.

Beebe took note of the Saint Jean Industries auto parts plant in Heber Springs that in January announced it would grow from 180 to 430 workers in a $14 million expansion. The governor said that's an example of how an education system that's nimble enough to train workers on relatively short notice can help employment.

Canada said it's not always easy to pick up that first scent of a company headed for a labor reduction.

"The battle is knowing what to look for," he said.

If personal relationships with local plant managers reveal a possible takeover or some other key development, local officials will want to quickly make contact with upper-level executives at the corporate headquarters. That's where the decision will be made on whether to keep the factory running.

Online research can help in gathering information about public companies.

"But for privately-held companies, there's not much there, unless there's a very overt executive who likes to hear himself talk," Canada said.

Part of the effort in keeping employers up and running amounts to a continuing effort to sell the attributes of the community.

"It's marketing 101," Canada said.

Beebe said Arkansas has done better than all but a handful of states during the recession for reasons that include education. Beebe has repeated for years his mantra that economic development and education go hand in hand.

"The people in our state now get that tie," Beebe said.

That has enabled the state to attract foreign investors who have built factories, a Hewlett-Packard Co. center and the 600-plus jobs that come with Southwest Power Pool Inc.'s announced expansion of its headquarters in Little Rock.

Beebe noted that Omaha, Neb., and Dallas were among the competitors for the Southwest Power Pool jobs, which average more than $80,000 in annual salary. He said the state had to work hard to keep the company in Arkansas.

Focusing on new companies while letting existing companies get away shows "you have no loyalty at all that word would soon get out," Beebe said.

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