To Save or Pave: That is the Question

Sometimes ideas trickle out from my brain as a result of things that I am working on. Sometimes these ideas are obvious to most other people, but still represent a great revelation to me.

My aha moment this past week came while investigating and writing about efforts to transform the SS United States, the last of the great ocean liners, into what I hope will become a mixed-use development somewhere along the East Coast. As a result of my fact gathering, I came to the conclusion that one man’s preservation is or can be another’s man’s obstruction or even folly.

Now this should be obvious in the world of commerce.  Some daft little field mouse holds up a construction project because it had the audacity to actually live in the place where men want to put a parking lot. Some real estate developer in the never-ending quest to build and profit wants to put a shopping center on a Civil War battlefield. These tensions between preservation/conservation and business, well, they just happen.

As a site selection consultant who no doubt has displaced some critters with the building of manufacturing plants and distribution centers, I have to be careful about what I say henceforth so that I do not come off as someone who is “against progress.”

Such an incendiary charge rivals only that of beating your wife, or in the case of some unfortunates, being beaten by your wife. (What do you want me to cook for you tonight, honey?)

A Time and a Place

I have to think that most of us would agree that there is a time and a place for preservation just as there is a place for reasonable regulation. (But I recently met an economic developer representing a southern state who postulated that there should be no regulation of business in any matter whatsoever. It is rare for me to happen upon true idiots.)

The problem with preservation is that we often do not agree on individual cases. For example, I think Civil War battlefield preservation is something that should be embraced by our nation, because it goes to the very heart of who we are or became as Americans.

We continue ad nauseum to argue and debate the causes of the “late unpleasantness” as some of my friends in Alabama would call it, or “the War of Northern Aggression” as the more bold would assert. (I learned a long time ago not to participate in such conversations as they can quickly descend into something akin to duels.)

But both sides would agree that battlefield preservation, on the historic ground where their ancestors fought and died, is a worthy cause. And I would agree.

I Like Whistle Pigs

And keeping in my preservationist mold, I am also in favor of national parks, state parks, wildlife refuges, bald eagles, blue herons, California condors, and wild horses. Heck, I even have affection for the less majestic critters – possums, ground hogs (aka whistle pigs) and armadillos to name a few.

But I am not in favor of what happened to my brother, who while living in California maybe 10 years ago or more, had to apply to the state for permission to have a dead or dying oak tree cut down in his backyard. Heck, I don’t care if the tree was healthy or not, it was his backyard.

“Jim,” I told him when I was living in Birmingham. “If you lived in Alabama, I would be over this afternoon with a chainsaw. And we would have firewood for the winter.”

There is something to be said for property rights, and I think we sometimes forget that.

Having said that, I do believe in preserving and conserving our natural and cultural resources, because these precious things that will often speak about us as a people. And I think that is pretty important. That’s why I like to cast my eye on mountains and rivers, old home places, battlefields and historic buildings. It’s even why I go poking around junky antique stores.

And now, my eyes have been further opened about preservation and conservation. Now, one day I hope to  see and walk along the decks of the SS United States, the last of the great ocean liners. She had a stellar 17-year career, before being taken out of service in 1969. She still holds the record for the fastest transatlantic passage, set on her maiden voyage in 1952.

I would encourage you to read the story, soon to be published by the good folks at Site Selection magazine. You may agree that is one very worthy preservation effort. I hope this ship finds a fitting home and remains with us because, again, she speaks of us and to us as Americans.

My Ox or Your Ox

Yet, this whole notion of preservation might also be viewed in terms of whose oxen are getting gored. If preservation stymies your development plans, then you might see it as another just hurdle, a real pain in the backside that has to be dealt with. Truly, I sympathize and can relate.

But I also know of a story that is still being told today in Birmingham, Ala., a place that I called home for many years. Well before I moved to Birmingham, the historic Birmingham Terminal Station was torn down in 1969. I have seen pictures of it, and old photos of it were still hanging on the walls of Birmingham restaurants when I moved away in 2007.

The old train station was something to behold, an architectural masterpiece, covered in intricate tile work and featuring a skylight of ornamental glass. But it was demolished in the name of progress for a redevelopment project that never took place.  Essentially, the preservationist lost out to what amounts to empty ground today. Now no matter how you cut it, that is a tragic story. I think your most hardened business people in Birmingham, (and most of them are not hard at all), would agree.

This whole idea of historical and cultural preservation is also an economic development story or a strategy, as historic buildings and neighborhoods can serve as a focal point for increased commerce. Indeed, some communities have come to embrace the concept with good results.

In the case of historic port cities such as Savannah, Ga., or Charleston, SC., it is the historic charm that makes them both drawing cards for tourists. We want to see, touch and feel history. And savvy business people know that we’ll pay good money to do just that.

The point is that economic development and preservation do not have to be in opposition to each other. Sometimes, they can truly complement each other. Sometimes you can preserve/conserve and make a buck, too, as a result.

You, Too, Can Be Smart

A very trendy word and concept of late is “sustainable,” which means different things to different people, but it’s almost always a good word to sprinkle in your professional conversations to show that you are in the know. Here are a few examples that may help you get noticed at your next business reception.

Good example: “Sustainable development is crucial for economic competitiveness.” Or try this one on for size: “Historic preservation is, in and of itself, sustainable development.” Or finally, “Development without a historic preservation component is not sustainable.”

I guarantee you that if you start saying those things in the right setting, and people will flock around you and start nodding, even if they don’t have a clue what you are saying. But you can also blow your chances at being viewed as wise and on the cutting edge. Don’t say this: “Hey, George, how was that sustainable hot dog that I gave you? You know, it was recycled from egg cartons and old sneakers.”

But as I mentioned, people involved in preservation efforts and economic/real estate development do not have to be at each other’s throats. Sometimes very workable solutions can be found by just bringing the right people together, even if they have divergent interests, or maybe I should say, especially if they have divergent interests. Just give them ground rules – no cussing, biting or gunplay – and get out of the way.

Or sometimes all you need is a good charrette, which brings me to another story.

A Good Charrette is Hard to Find

I was living in Birmingham and was in the midst of my first stint at being the all-knowing and wise, sage-like consultant. I had just left the Economic Development Partnership of Alabama. So we’re talking the late 90s.

So I got this telephone call from a woman who said that she was with the local regional planning commission and that she wanted me to come to a charrette.

I cleared my throat and mumbled, “Excuse me, maam, a what?”

“A charrette,” she replied. “We want you to come and participate.”

“Well, thank you very much for the kind invitation, but the stringband that I’m in, well, we only play old hillbilly music. We don’t know any French music.  But I might be able to put you in touch with fellow  who plays cajun fiddle.”

“No, no, no, Mr. Barber. A charrette is a creative planning session to develop ideas  to address problems plaguing our community. We would like to get your views on how to solve the traffic problem along on U.S. 280.”

“I would widen that sucker.”

“Sir?”

“I would widen it. You know, add some more lanes. People are sitting in their cars moving at snail’s pace, because the dang road can’t handle the traffic volume. So I would just go ahead and add more lanes.”

“Well, that certainly is a novel idea,” she said. I could tell that somehow she was dissappointed. Maybe she wanted me to save it for her upcoming charrette.

“So when is this char-rette going to happen?”

“We don’t quite know just yet, but we’ll be back in touch with you soon,” she said. Now, it seemed like she was in a hurry to get off the phone.

Well, I thanked the lady for her call, but, you know, I never heard from her again.  Maybe I should have suggested a charrette on how to go about planning for future charrettes, as this certainly was a subject of great importance that deserved years of proper study.

I do believe that road was eventually widened.

Dean Barber is the principal/owner of Barber Business Advisors, LLC., a site selection and economic development consulting firm based in Plano, Texas. He can be reached at 972-767-9518 or at dbarber@barberadvisors.com Please visit our website at www.barberadvisors.com

Is an All-of-the-Above Energy Strategy Really Happening?

As manufacturers, economic developers, and site selection consultants have come to know, the latter often serving as a go-between to the former, energy costs can be a make or break factor in deciding where a future plant may be located. And depending on the industry sector, energy costs can represent a huge portion of total overall costs.

And for the nation as a whole, the cost and availability of energy can have huge ramifications for our economy. When gas prices at the pump have us wincing, it usually means that we have less disposable income to spend on other stuff. And Lord knows we need our stuff.

High gasoline prices can actually have a chilling effect on the economy as it directly relates to consumer activity in how we budget and thereby act. (You can bet just about every president in the past 30 years is well aware of this.)

In the last few weeks, prices at the pumps have been dropping somewhat as the energy analysts tell us that oil supplies have built up worldwide. Still, I tend to think that high energy prices will be a fact of life for us a very long time.

But the United States is probably in much better shape than most industrialized nations around the world. It would appear that new oil and gas field discoveries are taking place with some frequency and that new technologies now permit us to get to it.

Depending who you read and what you believe, which is often the hard part, we have anywhere from 100 to 300 years of oil and gas reserves and probably even more with coal. But coal is being viewed is the red-haired stepchild, partly because of the environmental costs associated with it and the booming shale-gas production.

Electric utility companies now favor powering their generating plants with natural gas, which is trading at its cheapest in a decade as hydraulic fracturing opens up previously inaccessible reserves. Consumption of coal to generate electricity will fall 5 percent in 2012 to less than 900 million tons, a 16-year low, according to the U.S. Energy Information Administration.

A new analysis from Bloomberg posits that era of U.S. coal-fired electric power generation will effectively end as new federal regulations from the Environmental Protection Agency limiting carbon dioxide emissions from fossil plants take effect.

The new U.S. EPA rules, rolled out last month and open for public comment until June 12, will effectively ban the construction of new coal-fired power plants because the CO2 emission rates required of fossil plants are so strenuous that no conventional coal plant could meet them, according to Rob Barnett, author of the Bloomberg report.

And while EPA designed the rules to accommodate fossil fuel plants equipped with carbon capture and storage (CCS) technology, the Barnett report said such plants probably will not be built unless Congress provides incentives to defray their higher construction and operation costs.

Meanwhile, existing coal-fired power plants, many of which date to the 1970s, will continue to face pressure to close as other environmental regulations target coal pollutants like nitrogen oxides, mercury and particulate matter.

Fewer coal-powered generating plants and less demand will mean a cut in production of 21 million tons of coal for mining companies in Appalachia, an area covering 12 eastern states and home to 85 percent of U.S. coal mines, according to Doyle Trading Consultants in New York.

There are contrarian views. One analyst predicts that natural gas prices will rise to the point that coal companies will once again find a price advantage.

“Since natural gas competes with coal in its main usage – power generation (93 percent of the coal produced in the U.S. goes toward this usage), natural gas rising will first eliminate the present dispatch switching from coal to natural gas, increasing coal volumes. Then, as natural gas continues higher, coal prices will follow to some extent, increasing the coal mining industry’s profits,” wrote analyst Paulo Santos.

Is he right? He might be. I’m no energy analyst even if I am playing one this week. But I have to believe that if EPA’s new rules truly are the gamechanger,  then coal, while it may be part of the our energy mix for some time to come, is on a long downward slope.

Energy policy has been and will remain a political football. Even though both Democrats and Republicans are now singing the praises of all-of-the-above energy strategy, which includes nuclear, both sides remain suspicious of one another.

Republicans do not believe that Democrats really want to go after the nation’s fossil-fuel resources in a big-time way, whereas Democrats distrust Republicans’ commitment to renewables and energy efficiency.

With natural gas prices at historically low prices, which is a tremendous boon to manufacturing, I have to also wonder about the future of wind and solar energy, at least in the short term. Please understand that I am not opposed to these renewable energy sources. Rather, for them to have a viable future, they must make economic sense. In that regard, I also question if an all-of-the above energy strategy is really taking root. Natural gas may be trumping all other options.

“It is true that natural gas may push solar and wind power out of the picture, but if that happens, it is because natural gas is simply such a great, economic fuel source,” wrote Frank Fisher, a Houston-based attorney who consults for the oil and gas industry. “There is certainly nothing to complain about when it comes to good, financially viable fuel sources, particularly when America has that fuel in such abundance.”

I think Mr. Fisher probably has it right, the abundance and the lower cost of natural gas may thwart efforts develop wind and solar projects, at least under current market conditions. But as you know, things can change. Still, I have to think that if you use what you most have in a responsible and judicious manner (Many energy experts believe the greatest gains in the U.S. toward reducing its reliance on foreign oil will result from energy efficiency), then by all means leverage your strengths.

And the more I read about our oil and gas reserves in this country, particularly on the gas side, the more I think we have strengths to leverage. Indeed, it would appear that we are one very rich energy-resourced country. If we can only all agree on how to access, use and conserve it in responsible ways, well, we’ll be doing just fine.

A Memorable Phone Call

Life cannot be all serious and neither can this blog. I have been railing lately on some rather weighty business subjects and I will do so again. But sometimes you are thrown a curve ball that can either make you mad or make you laugh. Generally, I would recommend that latter as it can add years on your life.

I got a good belly chuckle earlier in the week when I received a telephone call at 7 one morning. On the end of the phone was an Asian woman with such a heavy accent that I had to ask her in a gentle manner to repeat herself a second time so that I could understand what she was saying.

It turns out that she thought, because of the name of my company – Barber Business Advisors – that I could assist her in starting, I kid you not, a barbershop.

It took me a few moments to comprehend all this. At first, I was thinking, was hoping in fact, that she represented an expanding Asian company that wanted my site selection consulting services for a new plant project in North America. But that was not the case.

After it dawned on me what she was asking, I told her that I knew nothing about the barbershop business, although it was soon time for me to visit one. I explained to her that my last name was Barber and that I helped companies, principally but not limited to manufacturers; find optimal locations for future operations.

She understood this and apologized. My response, despite the fact that I was still on my first cup of coffee, was “No problem and best of luck to you.” (I should have directed her to her local economic development organization for startup services, but again, I was still on my first cup.)

Afterward (after my third cup), I really got a big kick out of this. Who knows, maybe she inadvertently showed me a way to diversify and broaden my consulting business. She also sort of kind of cut me down to size, and I have to thank her for that. Can’t put on too many airs.

Save Our Ship

As many of you know, I have on occasion written on a freelance basis for Site Selection magazine about a number of projects, none of which I have been intimately involved in my role as a consultant. And I have a good relationship with the editors. (Although one might question whether a good relationship with an editor is even possible, and I say that as a former editor. Typically, their dogs like them.)

Without spilling the beans, very soon you will be able to read about a rather unique project to site and transform the former ocean liner SS United States into a mixed-use project somewhere along the eastern seaboard of the United States.  Wherever this 1,000-foot vessel goes, it could become a major tourist attraction, although the thought is that it can become so much more than that.

I’m working the story right now, and it’s going to be a good one. So there is your teaser. If you want to learn more, and you should because I am telling you so, then be watching the online magazine for Site Selection magazine.  It is THE magazine of corporate real estate strategy and area economic development. http://www.siteselection.com/

And just remember that I am THE blogger who holds himself up as a site selection consultant, an energy analyst (at least this week) and freelance magazine writer. But I do not do hair.

Dean Barber is the principal/owner of Barber Business Advisors, LLC., a site selection and economic development consulting firm based in Plano, Texas. He can be reached at 972-767-9518 or at dbarber@barberadvisors.com Please visit our website at www.barberadvisors.com

A Company That Gets It

You have to understand that as a former newspaperman, I have a skeptical if not cynical nature. I do not always believe what I am told. I cannot help it. Sometimes I have to dig for information to confirm that what I am being told is true.

(Actually, this “prove-it” mentality serves my clients very well in my role as a site selection consultant.)

So often in business and as in life, we hear people saying what sounds like the right things, but they are not backing their words with action. They’re not walking the walk. They’re just talking.

Bison Gear and Engineering Corp. gets it. This manufacturing company, based in St. Charles, Ill., practices what it preaches. And I, dear readers, will always find that refreshing.

The company’s message – people matter. What’s in their noggins matter; that they keep learning matters; that they be creative and be problem solvers on the shop floor matters.  Bottom line: People are an investment. People make business thrive. People are the solution.

The company philosophy: Learning must be followed by practice. Hands-on practice.

If only more businesses, particularly those manufacturers who bellyache that they cannot find and keep good people with skills, were to take this to heart. If only they were to grow their own as Bison Gear does.

“I was brought up that if you are going to complain about something, you better be trying to do something about it,” said Chairman Ron Bullock, whose company makes electric and gear motors.

Recognizing the Good

While I tried to push him to join me in making an incendiary remark or assessment of American manufacturing, Bullock is too much of a gentleman and maybe too much of an optimist to do that.

“There are companies that do not have talent development as a part of their strategy,” he said.

That’s about as far as he would go, and I respect that. After all, the man was elected chairman of the Manufacturing Institute, a foundation affiliated with the National Association of Manufacturers, back in March. He can’t come off as the wild-eyed pistol waver like me.

As many of you know, I have been ranting and raving, even frothing at the mouth, at the idea, which I believe is true, that many U.S. manufacturers have cut back or no longer even offer in-house training. But I have blathered on too much about this in recent weeks. I need to move on.

So this blog celebrates the fact that we still have many good manufacturing companies in our country that are committed to investing time and money in their employees for the purpose of  having them learn and grow their technical skills at the workplace.  Furthermore, this latest blog also demonstrates that I am fully capable of being nice and recognizing the good in others  … if only I must.

Better Plus Better Equals Better

Companies such a Bison Gear have the foresight to promote a culture of learning with the understanding that there are eventual rewards.  In some ways the financial balance sheet is the easy part, said Bullock.

“But it’s the human resources balance sheet where you can see tangible results that helps you grow your sales and effect your bottom line, because you are providing a better value proposition to your customers,” he said.

In other words, a better workforce results in better products, better sales, better safety and better serving the customer. All contribute to profitability.

“If you look at it as an expense category, yea, we’re spending money, but it’s an investment that pays results. We have improved productivity by 31 percent since we started with this talent program in 2008. In 2011, our quality level was the best ever. We see improvements in safety levels and we have grown sales,” Bullock said.

I first learned of Bison Gear, which is a relatively small company employing only 300 people, last month while attending a workforce development conference in Fort Worth sponsored by North America’s Corridor Coalition, Inc.

Sylvia Wetzel, chief learning officer for Bison Gear, was one of the speakers. I was intrigued initially by her job title, but then by her remarks on how her company attempts to up the ante in helping its employees learn and grow while on the job.

She said that Bison prefers to hire new, entry level workers who have earned the ACT National Career Readiness Credential (NCRC), because it gives the company a better idea of their work readiness and desire. At a minimum, the company requires applicants to pass the applied math portion of the NCRC as a pre-employment qualifier.

But once hired, the learning does not stop there. The company encourages, indeed provides financial incentives for employees to enroll into self-directed training modules that are accredited by the Manufacturing Skill Standards Council and focus on production processes, safety, quality and maintenance awareness.

About 10 percent of the production workforce now wear ID badges showing that they have attained the status of a “Certified Production Technician.”

“It puts them into more of an elite category within our organization,” Ms. Wetzel said. It also results with further financial reward and dinner with the CEO.

Besides focusing inward on better preparing existing employees on a continuing learning journey, Bison Gear also has reached out in the community at the high school and community college level.

Pizza As Bait

This past week, about 60 juniors and seniors from three high schools were inside the plant as part of a program sponsored by the Illinois Math and Science Academy. Bison Gear challenged the students to find a working mechanism for the company’s new brushless servo motor, ServoNOW. The purpose was to give them a better understanding of how to solve real world problems, Bullock said.

“Hands-on, problem-based learning is the best way for young people to learn math and science,” Bullock said.

“These students did a phenomenal job coming up with ideas for possible applications for our product,” Ms. Wetzel said. “We gave them pizza and they got to actually see and put their hands on what it is like to be in a manufacturing environment and find solutions to engineering problems.”

Bullock said it was because of his personal background but also some apparent shortcomings that prompted Bison Gear to reach out to educators.

“I benefitted from a great public school system education. I had four years of math and science as well as machine shop and drafting in high school. And I got some real good mentoring and coaching from people who were working in manufacturing. And so it became a lifelong passion for me,” Bullock said.

“What I saw over time was that we would bring kids in and they would have high school diplomas, but that they couldn’t successfully complete a shop math test that we gave them that I wouldn’t have gotten out of eighth grade if I couldn’t have done that level of math. So we knew there was something wrong here.”

Reaching Out to Both Students and Teachers

The company contacted the school systems and made headway with educators on the need for more math and science in the classroom. In doing so, they extended a welcoming hand to both students and teachers.

“I think one of the big problems that we are not producing teachers who have majored in the math and science disciplines. And so you wind up with maybe with someone who was an English major trying to teach math. You need to have the right people in the right seats on the bus,” Bullock said.

“So we are not only offering internships for students but also what we call externships for teachers to help them pick up some skills by working and applying math skills during their summer vacation. They can qualify for additional education credits and improve what they are doing in the classroom, and it gives us an opportunity to shine a light on what great careers there are in manufacturing today.”

Career Readiness vs College Readiness

Bullock contends, and I believe he is correct in his view, that the emphasis has been to push young people to a four-year college with the hope that somehow, someway that a career with result.

“What I think has happened over time is that we have too much emphasis on college readiness, without equal emphasis on career readiness in our school systems,” Bullock said.

That does not mean that post-secondary education is not needed for young people. Quite the opposite. It simply means there may be a better alternative for some young people other than a four-year college degree.

“What we are trying to do is bring a little more light to the fact that over the next decade, something like only 22 percent of the jobs that will become available will require a four-year degree,” Bullock said. “But in manufacturing, every job requires some level of post-secondary training, because highly sophisticated advanced manufacturing requires it, because this is how we have survived.”

The typical college graduate now leaves a four-year school with $25,000 in student debt. Bullock says the costs are becoming prohibitive, and yet there is another way to achieve a middle-class income. Vocational training classes at community colleges are an option worth exploring for those not inclined to go to a four-year school.

The Earn While Learn Option

“We’re saying earn while you learn,” Bullock said. “The model that we are promoting is that you need to get yours skills up to a level where you can qualify for an entry level position at a company like ours in manufacturing. Then you have a variety of different career paths that are available to you in which you can take advantage of in-house education and tuition reimbursement programs.”

If we are going to retain a healthy, vibrant middle class, there has to be another path, at least a viable option for young people coming out of high school. Everyone cannot or probably should not go to college to study courses that will land them, if they are lucky, a job in a service industry sitting at a desk. There has to be a better way, another way at least for some.

I majored in journalism, business and beer at the University of Wisconsin. It made sense at the time.

Today, I’m not sure what I would do if I could roll back the clock and start all over again. Manufacturing is very different now than when I was smashing my fingers and toes in a dimly lit grey iron foundry back in the 1970s. Attending the university served as my escape.

But now I would advise a young person to at least investigate the alternatives. Manufacturing can be a rewarding career but only if you embark on a path to keep learning. Technology does not stand still and neither should you.

Or you can take the easy path. Write a blog and call yourself a consultant. Yea, that’s the ticket.

Dean Barber is the principal/owner of Barber Business Advisors, LLC., a site selection and economic development consulting firm based in Plano, Texas. He can be reached at 972-767-9518 or at dbarber@barberadvisors.com Please visit our website at www.barberadvisors.com