Category Archives: Business

Arkansans of the year

Business, Business and economics, Inspirational, State government

arkansasFlagBy Steve Brawner
© 2015 by Steve Brawner Communications, Inc.

Time magazine names a “Person of the Year.” Sports Illustrated has a “Sportsperson of the Year.” Who are the Arkansans of the year?

In politics, it’s not even close. On issue after issue, Gov. Asa Hutchinson either achieved his objectives or appointed a study commission to buy time to achieve his objectives. He wants to continue but change the private option, the controversial program that uses Medicaid dollars to buy insurance for lower-income Arkansans, so he asked the Legislature to fund it two years while a replacement can be found. That’s what’s happened – so far. He and the State Board of Education butted heads over the Common Core-related PARCC exam. He wanted to replace it; the Board wanted to keep it. It’s gone. In the debate over the Religious Freedom Restoration Act, Hutchinson was perhaps the only elected official who pleased (too strong a word?) both sides. His signature education issue, requiring high schools to teach computer coding, has resulted in 4,000 students taking a class. The only downside to Hutchinson’s year is that next year can’t be this good.

Honorable mention: Baker Kurrus, superintendent, Little Rock School District. A non-educator in one of the state’s most high-profile education jobs, he’s trying to smooth ruffled feathers while telling hard truths. Does the Little Rock school superintendent belong in the “politics” category? He certainly does at the moment.

In business, I’m going with Donnie Smith, president and CEO of Tyson Foods. He and his company were questioned last year when Tyson bought Hillshire Brands for $7.7 billion. That was a lot of money, but buying the makers of Jimmy Dean Sausage and Ball Park Franks expanded Tyson’s already considerable reach. Tyson’s operating income rose 37 percent this year to $2.25 billion, and its sales of $40.6 billion are an increase of 9 percent over last year. That’s not chicken feed.

Honorable mention: George Gleason, CEO of Bank of the Ozarks. The $800 million purchase of Georgia-based Community & Southern Bank was the largest bank buy in Arkansas history and made Bank of the Ozarks an instant major player in Georgia. Full disclosure: I own a journalist-sized amount of stock in the company – meaning, not much.

In health care, I’m making New Hampshirite John Stephen an honorary Arkansan. Hired by the Health Reform Legislative Task Force to consult on reforming Medicaid, he and his firm, The Stephen Group, have offered information, insight and solutions, and as a result have much influence over Arkansas policymakers. They’ve argued the state shouldn’t completely ditch the private option while also shining a light on Medicaid’s problems. When he speaks, lawmakers listen, and he’s been speaking a lot.

Honorable mention: Hospital CEOs Troy Wells (Baptist Health), Dan Rahn (UAMS) and Chad Aduddell (CHI St. Vincent) are leading three of the state’s big institutions in a consolidating industry. You know how other areas of the economy such as banking and retail are increasingly dominated by a few players? It’s happening in health care, too.

In sports, it’s Brandon Allen, Arkansas Razorbacks quarterback. Has an athlete ever made such a quick turnaround from supposed “choker” to “clutch”? After missing late-game passes early in the season, he’s become one of the SEC’s most reliable quarterbacks and was one of the main reasons the Razorbacks won five of their last six games.

Honorable mention: Bret Bielema, Razorbacks football coach. He stuck with Allen and never lost faith in the team even when some were losing faith in his coaching ability. The Hogs have improved every year since he was hired.

In charities and nonprofits, The CALL and Project Zero are finding foster and adoptive homes for kids who really need them. The issue attracted attention this year when a report detailed problems with the state’s foster care system, and when Hutchinson spotlighted those children’s needs at his faith-based summit. Since 2007, The Call has brought 758 foster and adoptive families into the system, its website says, with more on the way. Project Zero, meanwhile, raises awareness through its Heart Gallery photos of waiting children.

Honorable mention: Too many great ones to name.

So who is the Arkansan of the year? There’s no way for me to know. What seems noteworthy today will be forgotten tomorrow, while seemingly minor events will have lasting consequences. (“Baby born in manger” probably didn’t make many headlines.) Maybe the names I’ve listed were important, or maybe they were just important to me.

At any rate, that’s my list. What’s yours?

Cuba: Carrots and sticks

Business

By Steve Brawner
© 2015 by Steve Brawner Communications, Inc.

There are two ways in politics to change behavior: power and influence. Power is the stick – using your greater strength to make someone do what you want them to do. Influence is the carrot – encouraging them to want to do it themselves. Sometimes you use both.

We’re somewhere in the middle of all that when it comes to Cuba, as shown in recent weeks by Arkansas’ political leadership.

As a congressman, Gov. Asa Hutchinson supported the Cuban embargo, and as undersecretary of the Department of Homeland Security he was part of an administration that enforced it.

But American policy – and American attitudes – are changing. This summer, President Obama announced the two countries were re-opening diplomatic relations that had ended in 1961. Many people who usually disagree with him don’t this time, including many Arkansans. The U.S. embassy is now open there, though the 55-year-old trade embargo will remain until Congress ends it.

Last week, Hutchinson returned from a trip to that island nation saying it’s time to gradually end the embargo as Cuba modernizes its economy and politics – especially when doing so would give Arkansas’ rice, poultry and pork producers access to a large, nearby market.

Hutchinson is hardly alone in this viewpoint. Traveling with him were business leaders from Tyson and Riceland Foods; Randy Veach, president of Arkansas Farm Bureau and a Mississippi County farmer; Dr. Donald Bobbitt, president of the University of Arkansas System, and others. In June, the Arkansas State Chamber of Commerce coordinated a trip to Cuba for about 40 Arkansans.

Two other Arkansas political leaders have been outspoken in support of more open relations with Cuba. Sen. John Boozman has passed through a Senate committee a bill that would allow goods to be sold to Cuba on credit rather than cash only, which is a challenge in an impoverished nation. He also is co-sponsoring the Freedom to Travel to Cuba Act, which would loosen travel restrictions but hasn’t moved much since its introduction. Rep. Rick Crawford, whose eastern Arkansas 1st District depends on agriculture, also supports opening up trade with that country.

On the other side is Sen. Tom Cotton, who opposes ending the embargo. He says a change in policy only rewards a dictatorship that hasn’t changed itself, and won’t have to change because it’s being propped up by trade with the United States. Cuba must become freer first, he says.

So Hutchinson, Boozman and Crawford’s position could be summarized as, “After 55 years of mostly stick, it’s time for more carrot.” Cotton’s position is, “Stick with the stick. The carrot becomes available if Cuba changes.”

Power is the language everyone understands, and sometimes it makes sense to use it. It’s not possible to come and reason together with the ISIS beheaders in Syria and Iraq. However, power should be focused on threats, which Cuba no longer is now that it’s lost its Soviet benefactor. Now it’s just a poor country with a population of 11 million – 1/29th the size of the United States.

Exercising influence is softer, subtler and harder. Sometimes the effort merely masks weakness, sometimes it can be an excuse for inaction, and sometimes it fails miserably. But it can do things that power alone can’t always do. Through influence, people enact permanent change because they realize it’s unquestionably in their best interest, not because they are trying temporarily to avoid the pain you inflict.

Consider what a more open relationship with Cuba would bring. American companies would flood the island. Local entrepreneurs who under communism have eked out a living through their wits would use their talents to become job creators. When 84-year-old Raul Castro dies or steps away from power, his successor will face great pressure to continue raising Cuba’s living standards. Because an international business can’t be run without the internet, Cuba will become increasingly wired, and, unlike China, it won’t have the means to control it. Missionaries will descend on that hungry Caribbean nation 90 miles from Florida’s Key West. Churches will sprout, as they have throughout China, and the Cuban government will not be able to stop it even if it tries.

Hutchinson, Boozman, Crawford and Cotton all want Cuba to reach that place. They only disagree about the right path. Stick with the stick? Or offer some carrots – and rice, and poultry, and pork, and ideas?

Water, water everywhere, but not enough below

Business, Business and economics, State government

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

It makes up about 71 percent of the earth’s surface and about 60 percent of the adult human body. All our lives, it’s been available in abundance, particularly in Arkansas, and it still is, but we’ll have to change the way we obtain it. And it won’t be cheap to make that change.

I’m talking, of course, about water. Arkansas consumes about 11 billion gallons a day – enough, over a year’s time, to cover every inch of the state 4.2 inches deep.

Eighty percent of that amount is used for agricultural irrigation, according to a draft of the Arkansas Water Plan 2014 Update. Updates are completed every couple of decades by the Arkansas Natural Resources Commission.

The report ranks thermoelectric power second in water use, at 11 percent. Drinking water makes up only 3.5 percent. According to Ed Swaim, the commission’s water resources division manager, almost as much water is used for flooding fields for duck hunting (a yearly average of 259.2 million gallons a day) as is used in all manufacturing (291 million gallons a day, and dropping).

About 71 percent of Arkansas’ water comes from underground, and that’s a problem, because we’re using up groundwater far faster than the water cycle can replenish it. Currently, about 8.7 million acre-feet per year are being pumped, but the water can only be replenished at a rate of 1.9 million acre-feet a year, Swaim says.

That means water tables are falling, fast, and have been for a long time. Farmers are drilling their wells deeper and deeper to get the same water.

Unlike some states, Arkansas can solve this problem fairly easily. Conservation measures will help some. More importantly, the state is covered with rivers, lakes and streams. We have so much surface water that, according to the Water Plan, the state can meet its needs by simply diverting surface water for crop irrigation. The Water Plan says we have enough to do this without detracting from water-bound transportation or harming fish and wildlife – an assertion with which not everyone will agree. Arkansas can meet its needs without even touching the mighty Mississippi River, which would be a headache because that river borders other states.

The Water Plan estimates it would cost between $3.4 billion and $7.8 billion to do this, which would come from a variety of government funding sources and user fees. In other words, the farmers would pay for part of it, and then pass on the costs to consumers. Arkansas’ annual agricultural production is valued at $9.7 billion, according to the plan. Without water, it would be a lot less.

In his book “The Seven Lamps of Architecture,” the English critic John Ruskin wrote, “Therefore, when we build, let us think that we build for ever. Let it not be for present delight, nor for present use alone; let it be such work as our descendants will thank us for, and let us think, as we lay stone on stone, that a time is to come when those stones will be held sacred because our hands have touched them, and that men will say as they look upon the labor and wrought substance of them, ‘See! this our fathers did for us.’”

The quote is displayed on a placard on the second floor of the Arkansas State Capitol – a building still as sturdy as when it was completed a century ago.

Not to be too negative here, but we don’t talk much about building for forever these days. Today’s thinking is more about making the monthly payment on the 15-year and 30-year bank note. On a larger scale, problems aren’t solved so much as patched temporarily. Much of our political system, and indeed our economy, is based on buying time – until the next election or the next harvest or the next quarterly report.

In this case, Arkansas has a growing threat to its economy and way of life – current and especially future. For a while, farmers can keep just drilling deeper. But at some point, the wells will go dry.

So we’ve got a problem, and we’ve got a solution – an expensive one. But what choice is there? There’s plenty of water around us, and not enough beneath us.

“That girl” makes good money as a welder

Business, Business and economics, Education, State government

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

If you were asked to describe a welder, it probably wouldn’t be much like Tori Huggins.

The 29-year-old graduated Hendrix College in 2007 an All-American in basketball with a degree in theatre and kinesiology – and $40,000 in debt she couldn’t repay.

“I was that girl that went back to my parents’ house, living in the basement,” she said.

Many years earlier, Huggins had been singed by a spark while her dad was welding and refused to go anywhere near the activity again. But during college summer breaks, she’d done some basic welding in a boat factory in her hometown of Clinton, and she continued working there after college.

After a tornado destroyed the factory, she decided to get serious about welding and discovered she loved it. Soon she was traveling the country working in nuclear power plants and earning enough to pay off her debt in three years. She bought a car and a house in Conway.

Today, she teaches welding at the Plumbers and Pipefitters Joint Apprenticeship Center in Little Rock, a state-funded program where 12 students learn a skill that in 18 weeks will take many of them from minimum wage backgrounds to $18 an hour. She tries to encourage more women to follow her example. Classes are free and also available in Fort Smith and El Dorado. The school’s phone number is 501-562-4482.

Huggins this past Tuesday shared her story during a panel discussion at Jobs Now, a summit sponsored by the Arkansas State Chamber of Commerce. Before an audience of 500, she wore a smart business suit and spoke confidently alongside her fellow big shots on stage.

The conference’s purpose was to consider ways to match unemployed and underemployed Arkansas workers, like Huggins once was, with the tens of thousands of skilled trade jobs that are remaining unfilled and those that will be available as older workers retire. Steve Williams, CEO of Maverick Transportation, said he had parked 100 18-wheelers because he couldn’t find reliable drivers. That job starts at $52,000.

Two common mentalities clearly need to go by the wayside.

One is that learning a trade is somehow inferior to going to college. Too often, young people are encouraged to make good grades so they can get a scholarship – and if they don’t go to college, well, maybe they can get a job in construction or something. Skilled tradesmen often earn higher salaries than college graduates, and their jobs require no less brainwork.

“We don’t put in nuclear powerhouses by being a bunch of idiots,” Huggins told me. “You’ve got to know offsets, you’ve got to do fractions and multiplication and all this stuff, and at times even a little bit of calculus here and there.”

The other outdated attitude is that “getting an education” means leaving home for four years after high school. Colleges and universities should be oriented toward nimbly moving students of all ages to employability in an ever-shifting economy. Moreover, as Dr. Glen Fenter, president of Mid-South Community College, said during the panel discussion with Huggins, all students should graduate high school with a job skill, not just a diploma.

Some of this is already happening – the state-funded Plumbers and Pipefitters Joint Apprenticeship Center being an example. At Northwest Arkansas Community College in Bentonville, some students, instead of earning credit hours, obtain certificates that move them straight into jobs with Walmart and its suppliers. Many high school students take concurrent credit classes that shorten their college careers. At Maumelle High School, students declare a “pathway” and leave school with a marketable skill.

How do we get more of this? Joe Quinn, Walmart’s senior director of pubic affairs and government relations, said in the panel discussion that the next governor should make workforce development a signature issue.

Both Asa Hutchinson and Mike Ross have shared ideas on the campaign trail. Hutchinson favors economic development plans tying together high schools and two-year-colleges based on regional opportunities. Ross has called for sending reports home with eighth and 11th grade students projecting common careers and salaries when they enter the workforce. “Too many people today are going to college and getting degrees in what makes them feel good rather than where the jobs are,” Ross told school board members this summer.

That’s sort of what happened to Huggins, but in a good way. She got a degree that made her feel good, and now she has a career that makes her feel good.