Dean Barber

Oh, to Be Back Home Again

In Uncategorized on January 13, 2013 at 7:30 am

I don’t care how efficient your manufacturing operations might be, the human factor must always be factored.

World-class automakers in Alabama – Mercedes-Benz, Honda, and Hyundai – well understood this as they shut down their production lines for the national BCS championship football game between University of Alabama and the University of Notre Dame.

The Mercedes plant in Tuscaloosa County canceled its night shift because of the big game. At the Hyundai plant in Montgomery, all three shifts were off on game day. For the Honda plant in Lincoln, Ala., night shift employees put in extra hours on Friday so to be able to watch the championship game Monday night.

No doubt the Germans, Japanese and the Koreans have learned that in Alabama, football is not just a game, but it’s an all-encompassing way of life in which you must identify with one of two camps, whether you like it or not. More on that later.

Now I should make no bones about it — I love Alabama. I lived in Alabama for about 25 years and found it an incredibly beautiful place with very nice people, most of whom want to make you family if you only let them. This hospitable, welcoming attitude comes in spite of a history that can be or at least should be painful for anyone with a brain.

The courage to remember

To this day, Alabamians, black and white, wince at old newsreel images of fire hoses and German shepherds unleashed in Birmingham on people who were seeking basic rights that are taken for granted today. Back in the early 1960s, Birmingham was “Bombingham,” where homes and churches were systematically bombed to wage terror on those who dared to ask for equal rights for all.

During the Civil Rights struggle, people died, not just in Birmingham or Alabama, but all over the South, where segregation and white supremacist policies were the law. The worst came on Sept. 15, 1963, when four little black girls were killed with the bombing of the 16th Street Baptist Church. Like Newtown, Conn., this was a senseless and evil act.

Today, there is a very good civil rights museum that sits across the street from the church, attempting to document and  make sense, if that is possible, of man’s inhumanity to man. In that sense, every city, town and village in this great country of ours could probably house its own museum. But Birmingham had the courage to build it and remember.

I left Alabama about six years ago, but will return later this month for a speaking engagement with a regional economic development group. I am really looking forward to coming “home” again, to see old friends and get an update on the statewide economic development scene there. Much has changed, as the former Alabama Development Office is no more, replaced by a Department of Commerce, which is typical of most states.

But I would have to liken economic development in Alabama and the rest of the South for that matter to SEC football – fast and furious, especially when compared to much of the country. As both a practitioner of economic development and representing the interests of corporate clients, I have sometimes found a certain lack of urgency, almost a degree of disinterest, in economic development in other regions.

Mind you, that is changing. Indiana and Michigan have seen the light, becoming the latest right to work states (as has been the case for many southern and western states), all in a play to become a more business friendlier place. I look forward to be meeting next month with executives with the Michigan Economic Development Corporation to learn more about their new initiatives.

North vs. South all over again.

But still, and this is a generalization that can be proven wrong with countless of individual cases (so please curb the urge to prove me so mistaken), economic development is more process-oriented in the Midwest and the Northeast when compared to the South.

In the South, the prevailing attitude is “let’s make a deal.” Tell us what you can bring to the table and we’ll be right back at you to tell you what we can do to help. In the meantime, let’s go get some barbecue. It’s a business negotiation among friends, sweetened with sweet tea, cornbread and just about anything fried.

By its very nature, there’s a bit of a horse trading or gun slinging ethos taking place, usually all on the up and up and sanctioned by state and local governments. In the South, more so than anywhere else, economic developers are empowered to be dealmakers.

I could probably name you a dozen economic developers in Alabama who have the authority to give away land in their respective publicly-owned industrial parks if that is what it takes to win a viable project that would bring good-paying jobs to their communities. (Naturally, any such offer would depend on the size and scope of the project and need the approval of a governing body.)

Whereas, in other parts of the country, that is almost unheard of, particularly so if there are no publicly-owned industrial parks in existence. In certain jurisdictions, I have encountered a mindset that has been something to the akin of this: “Fill out these 30 pages on what your corporate investment will be in our state, and we’ll get back to you in a few weeks to let you know if we might be able provide you with any incentives in any form.”

Compare this antiseptic, bureaucratic approach to a more business friendly way of doing things, characterized by a less intrusive tax bite and regulatory climate and favorable wage differentials, and you begin to understand why there has been a historic megatrend for decades for capital investment shifting from North to South. (And from the United States, with its onerous regulatory climate and where corporate taxes rank among the highest in the world, to offshore.)

Fit goes beyond costs

Having said all that, sometimes – and this is something difficult for some economic developers to get their head around – sometimes, it makes for good business sense  to locate a future capital investment in a higher-cost locale, depending on the proximity of customers and suppliers and the technical nature of the product or service. (And here I am making the case for re-shoring in some circumstances.)

There can be beneficial tradeoffs to higher costs in terms of talent pool and supply chain. Sometimes, depending on the company and its needs, that right location actually could be San Diego or Boston or New York. Believe it or not, Alabama, Arkansas, Texas or Louisiana (or insert your state here) are not always the right choice. Actually, I think most economic developers do understand that “fit” encompasses many factors and can go beyond costs alone.

In my role as a site selection consultant, if I am serving a corporate client well, I should harbor no prejudicial thinking on where that better place may be until or unless we delve deep into the true drivers of an expansion project. (Which is the subject of a corporate brochure that I am currently writing.)

You’re going to have to choose

What I am about to tell you might be a slight exaggeration, but not by much. If you were to move to Alabama, a new friend would probably approach you at some point for a private talk that you would need to take to heart. It happened to me.

New Friend: “You know, we are really glad you are here in Alabama (even if you are a Yankee), and we hope that you have a wonderful life here. But you should know that you’re going to have to choose between Alabama or Auburn on who you are going to root for.”

You: “What?”

New Friend (smiling): “You’re going to have to choose between Alabama or Auburn. (Your friend’s voice now lowers ominously). And we’ll give you six weeks to decide.”

You: “Whoa, whoa, whoa. I went to the University of (Insert school here, Wisconsin in my case.) I don’t have a dog in this fight. I don’t really care to choose.”

New Friend (no longer smiling and now with maniacal stare): “Six weeks.”

As I did not want to be hated by everyone, I made my choice. I chose the Crimson Tide of Alabama, but I continued to associate and be close friends with those from the Auburn camp.

(I even secretly rooted for Auburn except when it was pitted against Alabama in the “Iron Bowl,” that annual matchup that divides the state now far more than race or politics. In Alabama, when graduates of Alabama and Auburn marry each other, that’s called a “mixed marriage.”)

And while I am now a proud Texan, a historic place of big dreams and, well, just about big everything, I am so looking forward to coming “home” to Alabama, even if for a little while. So even if you do no quite understand what I am about to say, please understand that I have to say it. It’s been inbred in me now.

ROLL TIDE!!!

Dean Barber is the principal 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 http://www.barberadvisors.com

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  1. Dean, as always very insightful and “nail on the head” accurate. In my current position as Community Development Planning Manager, I manage a team who basically executes projects that the Long Range Planning Department brings forward, including economic development-oriented projects. As such, I do get involved in our economic development discussions. Ease of entry into a market or region is certainly a consideration, and it speaks to the political leadership of the region. If the political leadership suffers from unrealistic expectations (either by expecting that regulations and policy don’t hinder business activity, or even simply unrealistic expectations of what could be developed/established given the reality of the region), even the best of plans will not produce. As always, this sort of thing becomes political, and nobody wants to hear that their political vision does not work. That being said, a core element of economic development has to be educating the elected and appointed governmental leadership of what can and cannot work in their region. Not sure exactly how to pull that off, but it is certainly something to think about.

  2. Nice job, Dean. You know I especially enjoyed the football references…made me homesick! Roll Tide!!

  3. Thoughtful post, Dean. As you mention, Michigan is the newest right-to-work state. We’re also getting rid of the outdated personal property tax, streamlining and eliminating burdensome regulatory processes, and we’re making a wide array of economic development tools available to all Michigan businesses. Looking forward to finally meeting you in person next month and sharing more about Michigan’s business-friendly climate. Dusty- Manager, Site Location Services, Michigan Economic Development Corporation.

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