Tuesday, December 04, 2007

Retention Story

In spending much of the last three years on the road, visiting 300+ towns in 44 states, I’ve seen some incredible successes. From a pure investment and job creation standpoint, Columbus, MS has stood out and I’ve written about them several times. Creating 3,000+ jobs (paying $50,000 to $75,000 each) in rural MS with over $3 billion in new investment within the past three years is truly incredible! But, I learned as much about how they retained an older company in their community which was instructive in how they have been so successful in also bringing in new business.

I made sure that I wasn’t late to hear the story of Baldor from Joe Max Higgins, CEO of the local ED, Allegra Brigham, CEO of the local utility, and Tim Weston, manager of ED for TVA.

If Joe Max weren’t in ED he could probably make a good living in comedy and story-telling. He has a very unique and colorful way of relating important information in an interesting way. He told about Baldor Electric, “They are NYSE Company that is 87 years old, with over $800 million in sales. We celebrated their 40th year in Columbus in 2005. They had gone through seven different expansions during that time and grown into 160,000 sf with 250 employees.”

“They came to us wanting to build a new 300,000 sf plant that was expandable up to 600,000 sf. This would have been a $21 million investment in phase 1 and created 150 to 175 new jobs. The major complication was that they didn’t want to write off their old building because of the impact they felt it would have upon their stock price, so we had to put together a $1.2 million package which equaled the value that they had the old building on their books.”

“We were about to close when we announced that we had been chosen as TVA’s first mega-site location. Baldor was not pleased to be across the street from what could be a huge new manufacturer. They let us know that they were going to look elsewhere.”

Allegra piped in, “We went from being ecstatic at being named as a mega-site to one of despair at losing one of our major employers and not knowing if we would ever land something at the mega-site.”

Joe Max and his team didn’t despair but developed a plan to build the new Baldor plant in another location, giving the company the option of opting out if they didn’t like who might occupy the mega-site.

Tim Weston made some very interesting observations from seeing Columbus’ change in the past five years, “Columbus was always viewed as the town with lots of potential. But it never lived up to that potential. Joe Max shook things up and today they’ve got five certified economic developers, more than some states!”

Tim also pointed out the beauty of competition, something we see every day, “When Joe Max shook up Columbus, Tupelo which had always been top dog, got concerned and stepped up their economic development efforts. If it wasn’t for him, Toyota would have never landed in Tupelo.”

Competition, Retention, Recruitment….it’s a wonderful game we’re in!

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