November 6, 2008

GEF: First Up: John Rhodes on Corporate Site Selection

Carroll Andrew Morse

PROVIDENCE, RI -- A view of the business cycle…

  • Companies Start
  • Companies Grow
  • Companies Mature
  • Companies either disappear or they figure out how to continue.
If they can’t figure out how to make more with less, they disappear.

Operating costs are less of an issue for businesses early in the life cycle. Margins tend to be higher.

The Southeast has lost 100,000 manufacturing jobs since 2000. They’re offering free land to try to attract business, e.g. the textile plant nobody wants anymore. The SE is facing same problems we did decades ago, because they’re in the same point in the life-cycle that the NE was at in the past.

What to do: Create sites that are at a level of readiness to attract businesses, BUT the meaning of “readiness” changes, depending where you are in the life cycle.

You need places to catch the businesses that come out of business incubators, sites that are bigger than traditional incubators, but smaller than major production facilities. Call them mega-incubators. Let growing companies focus on building their business, and not on doing building management.

A state needs spaces that match the life cycles of its businesses. If a state provides those options, it can grow the companies that are here.

Strikes against Rhode Island…

  • High taxes
  • High energy costs
  • High unionization
  • Not strategically placed for U.S. Distribution.
Where do our businesses fit in the life cycle?

MORE, Mr. Rhodes, specifically on unions:

“The unions best day could be in the future, if they help make their companies more productive, so they can pay you more”.

There are companies that fear unions. If labor can figure out a way not to be feared, things can improve for everyone.

If labor locks into one way of doing work, the company will get stuck at some phase in the life cycle and eventually “disappear”.

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When do we get to the finger-pointing??

Posted by: Monique at November 6, 2008 9:08 AM

Did someone say Unions and efficiency in the same breath?

Posted by: Mike at November 6, 2008 11:21 AM
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