Dean Barber

And They Will Prevail

In Places on June 23, 2013 at 7:59 am

RATTLESNAKE ISLAND, LAKE ERIE – Whether we like it or not, too often perception becomes reality. That’s just the way it is.

So to change reality, you work on perception. This is a marketing guidepost in selling just about anything from corn flakes to Cadillacs. If you are an economic development organization, your product is the state, region, county, city or town that you represent.

Naturally, most economic developers would want me and other site selection consultants to view their product with favor. When I was an economic developer, I was constantly thinking of ways to establish relationships and influence site selection consultants and corporate decision makers. But there were times when I felt akin to a used car salesman.

“I’m telling you, this building is a real creampuff. Just look at those dock doors and cranes. Pretty sweet, huh?”

So it was smart, really smart, when the economic developers essentially got out of the way to let the business people do the talking for Northwest Ohio. At that point, I felt I wasn’t so much being sold as being informed. And being informed always helps me overcome pre-conceived notions.

(Yes, it’s true. Even all-knowing “objective” site selection gurus can have their biases.)

From the Horse’s Mouth

So the Toledo-based Regional Growth Partnership, a regional group representing 17 counties, worked up an itinerary in which eight other consultants and me heard from the horse’s mouth so to speak. (We would later frequent a bar called Mr. Ed’s at Put-in-Bay, but we’ll touch on that later.)

We heard from executives from three Fortune 500 companies — Owens Corning; Owens Illinois, Marathon Petroleum Company – all of which have corporate headquarters in the region. We also heard from execs at First Solar Corporation; North Star Bluescope Steel Corporation; Sauder Woodworking and PRO-TEC.

From our Toledo-based companies, we learned that this was a small-town/big city with everything within a 20-minute drive. Inching along in congested traffic simply does not happen. But on a more telling note, we learned that Marathon Petroleum had an epiphany as a result of a devastating flood in 2007 in Findlay, 50 miles to the south of Toledo.

In the aftermath, the company could have chosen fight or flight. It chose to fight and remain a committed partner to the community. Bill Conlisk, manager of administrative sevices at the company, said the people made the difference.

“Bottom line, we are in Findlay because we like the workforce and the work ethic. The flood reaffirmed our faith in Northwest Ohio,” Conlisk said.

The Biggest Elephant

As a site selection consultant, I have learned that every community everywhere has a motivated workforce. I have also learned that from Maine to California, from Canada to Mexico, that everyone has a “central location.” The economic developers have told me so.

But when I hear major employers talk of a skilled workforce, of a loyal workforce, well, I am going to sit up and listen. I was also hearing, surprise, surprise, that they were operating non-union.

For me, it was the biggest elephant in the room — that union legacy of Toledo.  Yes, unions did at one time hold court here and could make life quite miserable for a company not willing to cooperate. And by cooperating, I meant companies where management was unwilling to essentially roll over and give the unions what they demanded.

But those times are gone. Today, most unions understand that they must cooperate with management if a company is to compete, much less survive. Even more galling for union leadership, many workers, especially younger workers, today are skeptical that unions provide any meaningful value at all.

Union influence has been on the wane for decades now in this country as union membership has dropped to a record low. In the private sector, it’s now down to 6.6 percent. And in the Toledo MSA, it’s at 6.9 percent.

The truth is that if a company pays a competitive wage and communicates with its workers, the chance of it getting a union today is quite remote. That’s just the way it is.

It’s true in Toledo and Northwest Ohio, and in neighboring Indiana and Michigan, states that have been historically the cornerstone to our nation’s industrial might. But the times, they are a changing.

Indiana stunned many observers in January 2012 by becoming the first Midwestern manufacturing bastion to become a right to work state. Even more shocking, Michigan, the virtual birthplace of industrial unions in the U.S., followed suit earlier this year.

More Perception than Reality

That now puts the onus on Ohio, which has privatized its state and regional economic initiatives under a Jobs Ohio banner, funded by liquor sales. Economic developers cannot help but look at their neighbors and wonder how many more looks they might get if only. For Northwest Ohio, that is especially true as the region borders both Michigan and Indiana.

For the record, I believe this right-to-work advantage is more perception than reality, but here again perception becomes a reality.  I will advise a corporate client that the advantages to a right-to-work state are rather miniscule.

Sometimes they listen and sometimes they do not. If they insist that the search area be limited to only right-to-work states, well, they are paying the freight.

For the uninitiated, in a right to work state, if a majority of those of working on a shop floor vote in favor of creating a union, you as an individual working there are not forced to join it. You can, essentially, opt out if you so choose.

Prediction: If Ohio Gov. John Kasich, who over-reached early in his first term back in 2011 and got his ears boxed when he tried to restrict collective bargaining rights of Ohio’s 350,000 public employees, gets a second term, he will push for right-to-work status.

Will it happen? I hope so, for no other reason than perception. In the end, this is a marketing ploy, to keep up with the neighbors pure and simple. The reality would probably be more looks by expanding companies.

No Palate for Unions

But if you take all the right to work stuff off the table, time and again I heard from manufacturers, courtesy of the RGP, that it was quite possible to operate non-union in Northwest Ohio. Heck, two steelmakers – North Star Bluescope Steel and PRO-TEC. – are doing it.

“If you treat people with respect, you get it back,” said Brian Vaughn, president of PRO-TEC, based in Leipsic. The company recently hired 80 workers for a new $400 million, state-of-the-art continuous annealing line for processed steel used primarily by the automotive industry.

Vaughn said workers at the plant are disinterested on the prospect of unionization.

“They certainly don’t seem to have a palate for it at all,” he said.

The same goes at North Star Bluescope Steel, a mini-mill in Delta, Ohio, turning out flat-roll products. 

“We are very beyond the issue of union and non-union,” said Rich Menzel, vice president of human resources at North Star. “We are at a point where our employees would never sign a card. We are thinking of being a world-class workforce.”

NorthStar has gone 4 ½ years without loss time due to an injury, and has a better attendance record than anyone in its industry.

“We believe we have the best possible workforce anywhere,” Menzel said.

On a site selection project, companies, particularly a manufacturers, will often have some general ideas on where they need to be based the location of customers and suppliers. My job is to hone the search down to those probably places where success can be optimized.

A Deep Bench

The human resources factor is critical. And if I am representing a manufacturer, I’m looking at communities where there has been a tradition of manufacturing, where there is a deep bench of talent and where there is a pipeline for future talent.

Just as most communities tout their workforce as being smart and motivated, they also point to their community colleges as the principle trainers for a future workforce.

The key, of course, is how linked in that community college really is to the needs of local industry. Are the educators and business people in fact talking and are they speaking the same language?

There are 22 community colleges in Ohio, four in the northwest region. I get the sense, and this would be something that I would want to further investigate, that these schools are in fact reaching out to local companies to meet their training needs.

Most of the liaisons and trainers at these community colleges have industry backgrounds and understand the language of manufacturing. They are not faculty-lounge types with no real-world experience.

“Academics bog things down,” said Jim Drewes, director of Custom Training Solutions at Northwest State Community College based in Archbold. “We are here to help.”

Satan’s Workshop

I wrote most of this blog while staying on Rattlesnake Island in Lake Erie, a beautiful if myth-shrouded place that served as a haunt for rum-runners during Prohibition. (They would smuggle the hooch down from Canada via boats.)

The place still retains this aura of secrecy and you can imagine that mobsters used it as a place to get away and relax. It’s the perfect spot to quietly reflect upon the gangland hit that you ordered or participated in.

I do know that the 85-acre very private Rattlesnake Island stands in stark contrast to another island, Put-In Bay, only a 20-minute boat ride away. Put-In Bay is the Key West of the Midwest, party down central, where rock and roll pulsates from the many nightclubs near a central park lining the marina.

At one point, we – the staff of the RGP and the consultants – having become consummate drinking buddies, ventured to a pool area behind Mr. Ed’s. As one of our more adroit hosts correctly put it, we were “at the epicenter of Satan’s workshop.” Shocked and appalled by the promiscuous behavior of the young people there, we only stayed a few hours, all the while contributing to Jobs Ohio funding.

Brave Words for a Brave People

Around these islands, emblazoned on flags and T-shirts, you will see the words, “Don’t Give Up the Ship.” Those same words were on the battle flag of the USS Niagara in 1813, when it was part of a nine-ship fleet that engaged six British warships. The 2 ½ hour battle would have been visible, at least initially, from Rattlesnake Island.

Ironically, American Commodore Oliver Hazard Perry had given up his ship, the USS Lawrence, which had become a hulking wreck as a result British gunfire. He transferred his surviving crew to the undamaged Niagara. The American fleet prevailed, which probably means that Toledo and Cleveland are not part of Canada today.

And while Ohio, with its manufacturing tradition, did take the full brunt of the Great Recession, it is clear that no one here gave up the ship. The fight continues for better jobs and a better future for future generations. And they will prevail.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm in Plano, Texas —http://www.barberadvisors.com He can be reached at 972-767-9518 or atdbarber@barberadvisors.com

If you work for a company seeking site selection consulting or an economic development organization in need of counsel, ask for our separate brochures (pdfs) outlining how we can help. All requests for information will be considered confidential.

© Unauthorized use of this blog is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Dean Barber and Barberbiz with specific direction to the original content.

 

 

 

 

 

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  1. Obviously I left one day too soon!

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