Thursday, June 19, 2008

Hello Hewlett-Packard, Hello Jobs

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.

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.