I have to take back my previous post. It looks like while I was ranting, Governor Beebe was actually listening to Jerry Adams behind the scenes and working quietly to bring 1200 tech jobs to Conway. So I take it back in the face of a job well done.
The Governor, and (cough) the Legislature, and the city of Conway did a good job. Now its up to the people of Arkansas to come through and make Hewlett-Packard's endeavor a successful one.
Hewlett-Packard did not send these jobs to India, they took a chance on Arkansas. Let's show them that it was a great move.
Thursday, June 19, 2008
Saturday, June 07, 2008
Goodbye Alltel, Goodbye Jobs
Little Rock-based Alltel has been bought out by New Jersey's Verizon. Corporate executives will receive something like 3 years of pay as they exit stage left. Arkansas just gets to watch.
This sort of thing happens every day in Dallas, New York, or California and they hardly notice. Thats because the loss of one corporate headquarters amongst hundreds is not a huge blow. But its different in Arkansas.
There are very few large corporations headquartered in Arkansas. Sure we have the world's largest corporation up in the northwest corner, but its the exception, not the rule. Alltel is perhaps the most well known of the (non-labor intensive) Arkansas corporations. Losing it is going to be a huge blow.
I feel sorry for Alltel corporate employees right now. They are probably hoping that Verizon will keep things going somewhat like they have in the past. That almost never happens. Verizon was primarily interested in Alltel's rural wireless network and its customer list. It's not particularly interested in its corporate workers. Verizon will be looking for "synergies"....which means "how many of these people are doing stuff our employees can do".
There are not a lot of real corporate type jobs in most of Arkansas. Alltel was one place you could build a career. Where will 3,000 corporate-type employees go?
Alltel as we know it will, at best, massively shrink....and at worst, go away. The blow to Little Rock, Central Arkansas, and Arkansas, are immeasurable. Restaurants in the area will lose the dynamic Alltel workforce as customers. The housing market will suffer as homeowners head off to urban centers looking for jobs. Vendors who supply toilet paper, pens, cleaning supplies, and computer ink to Alltel will suffer. Business travel into Little Rock will decrease.
Arkansas has been a labor intensive state. Alltel and Acxiom have been exceptions to that rule. Those two corporations were sort of the hope of the future. That future is not looking too bright right now. The loss of Alltel is a major step backwards.
Truth is that we have an unhealthy white collar job market in Arkansas. We worry so much about the next 200 shoe factory jobs but don't spend a lot of time figuring out how we can create the next Alltel or Acxiom and implementing that.
Texas has a fairly vibrant economy...why do thousands of companies headquarter there but not Arkansas? The answer is uneducated workforce and taxes.
Texas has no income tax, we do. When an executive in Arkansas gets a windfall he establishes a home in Dallas to avoid Arkansas income taxes. We give Texarkana a break on Arkansas Income taxes to keep a few businesses on our side of State Line Avenue.....how about giving the rest of Arkansas a similar break? If it helps Texarkana wouldn't it help the rest of the state? If not, why not?
As for education, our major universities are increasing tuition this year. Our available funds for education are decreasing. The credit market crisis makes getting student loans that much harder. Can we not educate our kids? Perhaps find some way to get tuition DOWN instead of UP for a change?
The party in charge of Arkansas probably needs to take the loss of Alltel seriously. The horse is out of the barn, but might want to close the door anyway so more don't get out. Some of your most productive citizens are going to be jobless. There are not enough jobs of that sort in the state to absorb them. They will have to leave...or become less productive. Unless we change the way we do business.
This sort of thing happens every day in Dallas, New York, or California and they hardly notice. Thats because the loss of one corporate headquarters amongst hundreds is not a huge blow. But its different in Arkansas.
There are very few large corporations headquartered in Arkansas. Sure we have the world's largest corporation up in the northwest corner, but its the exception, not the rule. Alltel is perhaps the most well known of the (non-labor intensive) Arkansas corporations. Losing it is going to be a huge blow.
I feel sorry for Alltel corporate employees right now. They are probably hoping that Verizon will keep things going somewhat like they have in the past. That almost never happens. Verizon was primarily interested in Alltel's rural wireless network and its customer list. It's not particularly interested in its corporate workers. Verizon will be looking for "synergies"....which means "how many of these people are doing stuff our employees can do".
There are not a lot of real corporate type jobs in most of Arkansas. Alltel was one place you could build a career. Where will 3,000 corporate-type employees go?
Alltel as we know it will, at best, massively shrink....and at worst, go away. The blow to Little Rock, Central Arkansas, and Arkansas, are immeasurable. Restaurants in the area will lose the dynamic Alltel workforce as customers. The housing market will suffer as homeowners head off to urban centers looking for jobs. Vendors who supply toilet paper, pens, cleaning supplies, and computer ink to Alltel will suffer. Business travel into Little Rock will decrease.
Arkansas has been a labor intensive state. Alltel and Acxiom have been exceptions to that rule. Those two corporations were sort of the hope of the future. That future is not looking too bright right now. The loss of Alltel is a major step backwards.
Truth is that we have an unhealthy white collar job market in Arkansas. We worry so much about the next 200 shoe factory jobs but don't spend a lot of time figuring out how we can create the next Alltel or Acxiom and implementing that.
Texas has a fairly vibrant economy...why do thousands of companies headquarter there but not Arkansas? The answer is uneducated workforce and taxes.
Texas has no income tax, we do. When an executive in Arkansas gets a windfall he establishes a home in Dallas to avoid Arkansas income taxes. We give Texarkana a break on Arkansas Income taxes to keep a few businesses on our side of State Line Avenue.....how about giving the rest of Arkansas a similar break? If it helps Texarkana wouldn't it help the rest of the state? If not, why not?
As for education, our major universities are increasing tuition this year. Our available funds for education are decreasing. The credit market crisis makes getting student loans that much harder. Can we not educate our kids? Perhaps find some way to get tuition DOWN instead of UP for a change?
The party in charge of Arkansas probably needs to take the loss of Alltel seriously. The horse is out of the barn, but might want to close the door anyway so more don't get out. Some of your most productive citizens are going to be jobless. There are not enough jobs of that sort in the state to absorb them. They will have to leave...or become less productive. Unless we change the way we do business.
Thursday, April 24, 2008
Kudos to the Gov
Kudos to Governor Beebe and the Legislative Council. It is not often I can say this, but the State of Arkansas reacted quickly and efficiently to the Arkansas student loan crisis. The Governor offered the SLA an $80 million dollar loan from the state coffers to help the Authority get through this credit squeeze. This will enable it to offer student loans in the fall as normal.
Fast, decisive, and smart action by the government of Arkansas. This is such a rarity that I am in shock.
Fast, decisive, and smart action by the government of Arkansas. This is such a rarity that I am in shock.
Sunday, April 13, 2008
No Child Left Behind
The agency in Arkansas that provides funding for college loans is unable to acquire money to loan because of the freeze up of the credit markets. It normally sells bonds to raise the cash but nobody is buying student loan bonds.
The state and federal levels need to make this priority one. We can't wait around here because unless something is done, students for the fall semester are not going to be able to get loans. Once you drop out of the college money pipeline you are pretty much out of the pipeline. We can't lose a couple of years worth of kids for this to get corrected.
Companies can also step up. Colleges are prime recruiting grounds and its in their best interests to help take up some slack. The admirable Murphy Oil Company has done just that. Other companies need to follow Murphy Oil's lead. Large wealthy corporations in this state that traditionally do well during recessions can play a big positive role here also.
For what it's worth, these are loans so the buyer gets the money back...they are pretty much guaranteed by the US government so the risk is moderated also. No time to waste.
The state and federal levels need to make this priority one. We can't wait around here because unless something is done, students for the fall semester are not going to be able to get loans. Once you drop out of the college money pipeline you are pretty much out of the pipeline. We can't lose a couple of years worth of kids for this to get corrected.
Companies can also step up. Colleges are prime recruiting grounds and its in their best interests to help take up some slack. The admirable Murphy Oil Company has done just that. Other companies need to follow Murphy Oil's lead. Large wealthy corporations in this state that traditionally do well during recessions can play a big positive role here also.
For what it's worth, these are loans so the buyer gets the money back...they are pretty much guaranteed by the US government so the risk is moderated also. No time to waste.
Saturday, April 12, 2008
Something Wrong
Consumer spending goes down....what is the natural reaction of corporations across the United States? Fire more consumers and cut their own business spending.
When consumer confidence decreases.....create more consumer fear by firing more people and decrease the earnings of other corporations by slashing your own spending. It is a built in negative feedback loop that increases the depth and duration of a recession. It is the symptom of a flaw in the system and a lack of imagination.
The way the system is arranged, you can't blame a corporation for acting in its own short-term financial interests...even though those individual actions poison the entire business environment when viewed holistically. Companies are caught in a Prisoner's Dilemma with their competitors where they must be the first to slash and burn.
What we can blame corporations for are their actions during the "Boom" portion of the "Boom and Bust" cycle. When a recession comes and you must lay off thousands of workers.....chances are that you did not manage your workforce correctly during the good times. When a recession comes and you must slash costs......you were probably not managing your costs appropriately during the good times. If your earnings collapse at the start of a recession.....chances are you did not plan appropriately for a downturn. During the "Boom" its an orgy. During the "Bust" its a bloody massacre. That is not leadership.
Most companies have learned the hard way to develop a good plan for emergency disaster recovery. Similarly, every company should have a good emergency economic preparedness and sustainability plan designed to weather an 18-24 month economic downturn with minimum impact to itself, its employees, and its community. If every company in the United States adopted such an effort I guarantee that it would lessen the depth and duration of a recession to some degree and help everyone.
If corporations are unwilling or unable to work in concert to recession-proof themselves and their workforce then it should be required as a Generally Accepted Accounting Procedure, or encouraged by government.
Every CEO who hopes to sell products or services to someone has a direct interest in not seeing unemployment rise throughout the system.
A commitment to recession-proofing, combined with lean management during the "Boom" part of the cycle would go a long way toward dampening the "Bust" part of the cycle. If you keep inefficiencies out of the the system during the binge times...you have less to purge during the bad.
When consumer confidence decreases.....create more consumer fear by firing more people and decrease the earnings of other corporations by slashing your own spending. It is a built in negative feedback loop that increases the depth and duration of a recession. It is the symptom of a flaw in the system and a lack of imagination.
The way the system is arranged, you can't blame a corporation for acting in its own short-term financial interests...even though those individual actions poison the entire business environment when viewed holistically. Companies are caught in a Prisoner's Dilemma with their competitors where they must be the first to slash and burn.
What we can blame corporations for are their actions during the "Boom" portion of the "Boom and Bust" cycle. When a recession comes and you must lay off thousands of workers.....chances are that you did not manage your workforce correctly during the good times. When a recession comes and you must slash costs......you were probably not managing your costs appropriately during the good times. If your earnings collapse at the start of a recession.....chances are you did not plan appropriately for a downturn. During the "Boom" its an orgy. During the "Bust" its a bloody massacre. That is not leadership.
Most companies have learned the hard way to develop a good plan for emergency disaster recovery. Similarly, every company should have a good emergency economic preparedness and sustainability plan designed to weather an 18-24 month economic downturn with minimum impact to itself, its employees, and its community. If every company in the United States adopted such an effort I guarantee that it would lessen the depth and duration of a recession to some degree and help everyone.
If corporations are unwilling or unable to work in concert to recession-proof themselves and their workforce then it should be required as a Generally Accepted Accounting Procedure, or encouraged by government.
Every CEO who hopes to sell products or services to someone has a direct interest in not seeing unemployment rise throughout the system.
A commitment to recession-proofing, combined with lean management during the "Boom" part of the cycle would go a long way toward dampening the "Bust" part of the cycle. If you keep inefficiencies out of the the system during the binge times...you have less to purge during the bad.
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