Getting the Talk Right

Now the discussions Gov. Bredesen is hearing are about education and training, as he conducts a series of "Hands on Tennessee" meetings across a state that does not want to lose its manufacturing heritage or advantage.
        "If there's a single common theme, it's the desire of people for help in the training area," both at the citizen and corporate level, he says. "A corollary of that was a lot of interest in the whole K-12 system."

Amit Shankardass (inset), solution planning officer, ClientLogic Oak Ridge Has More Than One Powerhouse Customer service support company ClientLogic, a subsidiary of Canada-based Onex Corp., has added 160 employees in Oak Ridge to bring its payroll to 510. That's just a smidgen of the 12,000 associates the company employs at 47 locations worldwide. The Nashville-based division employs more than 150 at its headquarters, and Amit Shankardass, the company's solution planning officer, says both locations have plenty to offer.         For global headquarters, he says, Nashville, "first and foremost, is an affordable place to have a business, in terms of property, real estate, etc. It's also affordable to have employees, because it's one of several states that has no state income tax – that makes it desirable in attracting talent."         "Oak Ridge has been a great place to have a call center," he says. "It's the fifth-largest city in Tennessee, the housing cost is 89-percent of the national average, and it has one of the lowest tax burdens, making it affordable for employees. It's a great business climate for a call center in particular."         The area's 45,000 high-tech workers don't hurt either, and the entire business climate is enriched by the presence of Oak Ridge National Laboratory and the University of Tennessee in nearby Knoxville.         "What's driving [the expansion] is the expansion of a current business relationship," explains Shankardass. "Whenever we bring in a client, we go through a site selection process, and in this particular case, we serve them out of two locations, and we had to decide which to ramp up based on available capacity, available skill sets and labor pool. Oak Ridge is great for technical support, and this client is a technical client, hence the choice in Oak Ridge."

        But one system Bredesen wants to see improved is the state's extensive network of technology centers and community colleges.
        "I need to get that system working hand-in-glove a little better," he says. "We happen to have a system here in which the technical centers and the community colleges are totally separate areas of the higher education system. So one thing I need to do is to get them working together much more tightly. Second, there certainly is a desire on the part of some businesses to have training dollars to use in their internal training operations. Obviously [those dollars] don't do double duty for us in terms of the higher education system, but that's something we have to respond to."
        For his part, Mullis sees Tennessee following the lead of both North Carolina and South Carolina in fostering more advanced technology training.
        "Europeans and Asians had that stronger skill base forever because they had more education than we had," he says. "I don't know of one plant in the U.S. where we didn't have to bring in people [from overseas] to train people in the U.S. And second, most of that equipment is foreign equipment. In food processing, for instance, 95 percent of that equipment is European."
        Another area in which Gov. Bredesen sees the state becoming more active is the development of industrial parks, through public-private partnerships. As for incentives, Bredesen was glad to see passage of a headquarters tax-incentive bill earlier this year. But he says playing the state-vs.-state incentives sweepstakes can quickly lead to a slippery slope, and he prefers seeing money go toward education and infrastructure.
        "I think these days you have to do some things to get people to the table, but I don't ever want to be in the position where we're seeing if we can put up more money than Mississippi or Kentucky to get a plant. I used to say when I was mayor that if the federal government would pass a law or amendment that forbade us from [offering incentives], it would be a good thing. As long as it's there we need to be competitive."
        In May 2003, the Tax Foundation ranked Tennessee 10th in state business tax climate, based in part on the relatively low 6-percent single corporate rate, and high rankings in individual income taxation (none) and fiscal balance. Bredesen thinks addressing those basics is a key part of his job.
        "So much of industrial recruitment is getting 'the talk' right about a state," he says. "Tennessee had benefited for a long time from good talk and good momentum, and then we went through four years of budget disasters and rock throwing at the capitol, and that hurt our competitiveness in much more fundamental ways than people realized. When I got here, I thought one of the best things I could do for economic development was to have a nice smooth budget year. Tennessee has an honestly balanced budget – no smoke and mirrors, no deferrals. Business people look at that, and I think they want to operate in an environment where their state government looks like they're not the Keystone cops and know what they're doing. If I were a businessman – which I used to be – in any state that has a huge budget crisis, I'm going to sit there and say 'Boy, I'm a rich target for new taxes.'
        While some governors like to work deals as a closer at the 11th hour, Bredesen says he likes to work as "an opener."
        "This job has many advantages to it, and one of the big advantages is people return your phone calls," he admits. "We've used that just to get in the door. One thing I think really helped was made clear by Dennis Cuneo of Toyota, who told us that while this was a change of administration and party in Tennessee, from the outside you didn't see a change. The outgoing governor, Governor Sundquist, took me to visit a number of people they had been working with to formally hand over the reins. We honored the deals made by the previous administration, and that's what people are looking for."