Tyson Foods, the nation’s largest meat processor, says pending budget cuts or the so-called sequester threatens to disrupt its supply chain.

Trade groups have been vocal about the impact on meat inspection as the U.S. Department of Agriculture and its Food Safety Inspection Service will face worker furloughs if the $85 billion cuts take effect on Friday (Mar. 1).

Last month the Obama Administration warned the FSIS could have to furlough all employees for approximately two weeks.

Tyson’s chief operating officer Jim Lochner told analysts yesterday (Feb. 26) that meat inspection is mandated by law and a federal requirement.

“We will have to see how USDA handles the field staff because the supply chains are essentially set up for generally around a 5-day production cycle,” Lochner said.

He says if furloughs are extended over a period of time to have one day out, it will put a kink in the pipeline, creating some negative influences along the supply chain.

Lochner said both sides of its supply chain could likely feel the burden, as live animals would back-up in the system and products would be delayed getting out to consumers, creating a high degree of market disruption.

He said the probability of that happening is low.

“I do believe USDA Food Safety will work to find a way around this issue because it would impact both consumers, processors, retailers, foodservice, as well as livestock producers,” Lochner said.

Secretary of Agriculture Tom Vilsack said if the sequester is triggered, every budget line item at the USDA will have to be reduced somewhere in the neighborhood of 5% to 6%.

Vilsack has said there may be a degree of flexibility for those parts of the USDA with “lots of lines,” but in agencies such as FSIS, where most funding is for food safety inspection personnel, there may be no recourse with regard to furloughing personnel.

The White House says USDA's meat safety agency would have to furlough its 8,400 inspectors for the equivalent of 15 days to compile the savings required under the automatic cuts. But those days off could be structured in various ways.

Tyson chicken competitor Sanderson Farms said recently the impact from furloughed inspectors could wreak economic and environmental havoc on the poultry industry.

CEO Joe Sanderson told analysts during a Feb. 21 earnings call that holding birds in houses for just two or three extra days greatly increases feed costs and bird mortality.
He said birds coming out hatcheries have no where to go for three or four days because the grow-out houses are still full.

“What do you do with 160 million chicks a week? Are you going to destroy eggs or macerate baby chicks, that becomes an animal welfare issue,” Sanderson told analysts.

“We’re supposed to have our best and brightest up there in Washington. I’m hopeful they will work something out,” Sanderson said.

An internal memo from Walmart US CEO Bill Simon circulated throughout the company Wednesday (Feb. 27) announced that Tom Mars, executive vice president and chief administrative officer, will exit the company March 13.

There was no reason given for Mars' departure in the memo obtained by The City Wire and Wal-Mart has publicly declined comment.

Mars has been with Wal-Mart for 11 years and served as general council during the period under scrutiny for violations of the Foreign Corrupt Practices Act.

From 2002 to 2009, Mars was involved in an investigation into bribery allegations regarding a Wal-Mart store built near the Mexican pyramids, according to company emails released in earlier this year by Congressional members. Internal emails mentioned in a New York Times'April report connect Mars to the matter as the senior corporate lawyer who briefed top executives such as Mike Duke  in 2005 on the Mexican bribery allegations.

For example, an email from Mars in October 2005, provided Duke with a memo summarizing the allegations with a note saying: "You'll want to read this. I'm available to discuss next steps."

The federal investigation into the matter is heating up as Kimco Realty Corp, a U.S. shopping center operator, also announced Wednesday that it been subpoenaed by the Securities and Exchange Commission with regard to possible FCPA violations involving Wal-Mart Stores.

In 2009, Mars was promoted to his recent role overseeing real estate and financial services for U.S. stores, the shows and events team as well as the company’s labor relations organization.

As the chief administrative officer, Mars has been accountable for business strategy alignment across Walmart U.S., including responsibility for all large events such as the Year Beginning Meeting, Holiday Meeting and Saturday Morning Meetings. 

Simon’s memo states, “Since joining Wal-Mart, Tom has been a champion for diversity and inclusion in every aspect of the business. In 2007, Tom received the American Bar Association’s Spirit of Excellence award in recognition of his significant achievements in promoting a diverse workplace.”

According to Wal-Mart’s website, Mars practiced law in Northwest Arkansas prior to joining the retailer. He served as an associate of the Rose Law Firm from 1986 to 1988, where he worked for former First Lady and former U.S. Secretary of State Hillary Clinton in the firm’s litigation section.

Mars moved to Northwest Arkansas in 1988 where he practiced commercial litigation for the next 10 years. In 1998, Arkansas Gov. Mike Huckabee appointed Mars to serve as director of the Arkansas State Police. Mars served as state police director until 2001, when he stepped down to return to the practice of law.

He is chair of the National Council of La Raza’s Corporate Board of Advisors and a member of the National Urban League Board of Trustees.

Mars attended law school at the University of Arkansas where he finished first in his class and served as editor-in-chief of the Arkansas Law Review. Thereafter, he served as a law clerk to U.S. Judge Monroe McKay on the U.S. Court of Appeals for the 10th Circuit.

At a Feb. 12 meeting of the Fort Smith Board of Directors, a lawyer and consultants representing Whirlpool said possible cancer-causing chemicals in the ground around its former Fort Smith manufacturing facility had not spread. But the Whirlpool representatives were notified by the Arkansas Department of Environmental Quality (ADEQ) 20 days prior to that presentation that trichloroethylene (TCE) was not necessarily contained.

Asked by Director Pam Weber what the risk was of contamination spreading at that meeting, Greg Gillespie of ENVIRON International Corp., a company hired by Whirlpool to deal with the contamination, made a very direct claim.

"(It's) minimal, because it has not moved," he said.

But according to a Jan. 22 letter to Whirlpool's Robert Karwowski, director of Environmental, Health and Safety, the ADEQ said that claim was not necessarily accurate.

"The information provided in the RRMP and previously submitted progress reports indicate that the concentration of TCE in the off-site monitoring wells exceeds the Maximum Contaminant Levels as well as the Regional Screening Levels and the contamination plume appears to still be moving," said ADEQ engineer Mostafa Mehran.

When contacted today (Feb. 28) regarding the letter from ADEQ, Gillespie said he would have no comment.

"I'm not at liberty to discuss that," he said. "I have to ask that you contact Whirlpool directly for that."

When asked if he would attend the Board's March 5 meeting to address the matter before a vote is taken on the proposed well ban, Gillespie said he would attend.

"I will be there and if asked, (the letter) will be addressed," he said.

City Director Keith Lau said the information presented by Gillespie and Whirlpool's Fayetteville-based attorney Robert Jones III to the Board on Feb. 12 was a lie.

"I'm not going to trust anything that they say because of this," Lau said.

Lau said the letter having been sent to Whirlpool on Jan. 22 was troubling to him since 20 days later, Gillespie and Jones made their presentation to the Board claiming the contamination had not moved and banning well drilling in the area would be the best solution.

"They tried to present to the Board that (a groundwater drilling ban) was going to solve the problem," he said. "So I have a problem with that whole thing."

During the Board's study session, Jones said Whirlpool had done everything it could to clean up the contamination and keep it from spreading.

But as Lau alluded to, the ADEQ suggested two additional remedies in order to control the problem — evaluate using a trench on-site as a groundwater control and evaluate using a vertical barrier as a remedy for on-site soil.

Neither recommendation was mentioned during the Feb. 12 Board meeting.

Lau said if the decision was his, the vote for the groundwater well ban would not even happen.

"They left us with an abandoned manufacturing facility, took production out of the country and left us with a problem," he said. "I can't see the Board of Directors voting for this. If it were me, I would pull it off the agenda. It would not even be an option."

City Administrator Ray Gosack took a softer tone regarding information Whirlpool presented to the Board.

"I'm not sure I agree that it was completely contrary to everything presented at the meeting," he said. "Whirlpool presented a lot of information. We've not heard Whirlpool's response (to this letter)."

Gosack said it was not the city's job to put in to place environmental policy or enforce environmental policy on Whirlpool. He said the city's job is simply to protect citizens from potential harm.

"Our interest is protecting the public's health and safety," he added.

That was exactly why Lau said the ban on groundwater drilling may not be enough to protect citizens.

"(TCE) is a known carcinogen. That's all you have to know," he said.

When reached for comment, Mehran said he was not able to speak to the press.

A call to Whirlpool's media relations department in Benton Harbor, Mich., was not returned.

Calls to Jones were not returned. He did respond to a text message, saying, "Please call 269 923 7405." The number was Whirlpool's media relations number.

Jones did not respond to a second text specifically asking for a comment on the ADEQ letter.

Link here for a PDF of the ADEQ letter.

Donnie Smith, who assumed the role of CEO for Tyson Foods in January 2009, candidly told hundreds of business professionals Thursday (Feb. 28) that by the end of 2008 the meat giant had dug a $1.8 billion hole and struggled to emerge.

That seems a long way back for a meat giant who’s credit rating and share price has fully recovered from historic lows hit five years ago.

Smith was the keynote speaker at the weekly Business Summit held at Cross Church in Rogers on Thursday and made no bones about what it took to get Tyson Foods back on track.

“You have to begin with the end in mind, spend a lot more time looking out of your windshield and way less time staring through the rearview mirror. That’s why the windshield is way bigger,” he said with a laugh.

“People wanted to talk about how we got there and how this could happen to Tyson Foods,” Smith said. “Who cares how we got there. We couldn’t just keep looking through the rearview mirror, we had to focus on where we needed to be.”

Smith shared his insight on the unconventional decisions made to get Tyson back on track. He said the company didn’t necessarily follow traditional wisdom, but like the Biblical David, looked for its own way to slew the giant it was facing.

He said Tyson subscribed to MTMTTMT -- making the main thing, the main thing, Smith said the company focused on three big rocks – culture, clarity and communication.

While he admitted Tyson needed to restore customer relations, improve operational efficiencies and improve its credit ratings, Smith said the company first looked at itself, much like the dreaded way an overweight person knows they need to get on the scale.

“We got real honest with ourselves and decided to focus on our team first, instilling trust and the permission to fail in a climate that had previously allowed fear and intimidation to rule. Leaders have to trust their people,” Smith said.

Though Smith heads up a global workforce of more than 115,000 people, he doesn’t see himself at the top of a business pyramid.

“Our business structure is more like a peach tree. I am the roots and it’s those folks making and selling our products who are real the stars. Management leadership is there to facilitate and serve,” Smith said humbly.

He spent more than two years visiting Tyson plants in a pick-up truck making sure every last employee had complete clarity about three core tenants with respect to Tyson’s corporate culture: What we do, What we believe and How we behave.

Today Tyson Foods’ balance sheet is strong, its share price is just off historic highs and the company is back in favor with its customers, growing marketshare in chicken, beef and pork.

Smith said with the cyclical nature of the meat protein business there’s always potential for catastrophic events on the horizon, but managing distractions and focusing on those few big rocks day in and day out are key in any turnaround situation.

He puts the success of Tyson’s turnaround clearly on the shoulders of everyone employed. Smith said the company got very clear with every last employee about why their job is important, how it is to be done and how that performance will be measured.

These messages are revisited regularly in multiple communication channels and Smith says “every team member knows it’s okay to goof up but not goof off.”

Smith knows the only way Tyson’s success can perpetuate is if there's a well tailored succession plan in place at all times.

“We subscribe to 3D 3V,” he said.

That’s three levels below every management job there has to be three viable candidates in various stages of training to assume each management job if needed.

“Think about that. It ranges from my job down to a shift manager in a plant. That’s takes a lot of work, training and focus but we are committed to it because we believe in three to five years that will bring forth a wealth of quality leaders to perpetuate Tyson’s continued growth,” Smith said.

Lastly, Smith said believing in your team and making sure every member is intimately connected to the game plan is crucial to finding success on the field, even when someone upstairs calls an audible.

In yet another blow to the Fort Smith regional economy, 150 jobs will be leaving Van Buren with the production to be incorporated into an Allens canning operation in Siloam Springs.

The closure in Van Buren is effective Friday (Feb. 28). The company’s Van Buren warehouse operation will remain open.

It is unclear how many jobs will be added in Siloam Springs as a result of the move. However, the move by Siloam Springs-based Allens will help a Northwest Arkansas economy that is one of the hottest in the country in terms of employment.

December’s jobless rate in Northwest Arkansas was 5.1%, up compared to 4.6% in November but below the 5.7% during December 2011.

The size of the Northwest Arkansas regional workforce during December was 235,174, down from the 237,860 during November, but almost 3,500 larger than the 231,708 during December 2011.

The number of employed during December was 223,228, down from 226,883 in November. The December employment was more than 4,700 jobs higher than the 218,463 in December 2011.

VAN BUREN, COMPANY HISTORY
Consolidating the canning operations comes more than 30 months after Van Buren operations were expanded.

In June 2010 the company announced a more than $20 million expansion that included a $13.5 million investment in the company’s Van Buren operation. The $13.5 million investment in Van Buren expands the company’s capacity to process sweet potatoes.

In March 2012 the company announced it was selling a majority of its frozen vegetable operations to focus on its core business of canned and Southern-style frozen brands. The French company, Bonduelle Group, was expected to buy four of Allens’ six frozen vegetable operations. No financial terms were released.

In 2006, Allens entered the frozen vegetable segment by acquiring the Birds Eye brand products. It opened its canning business in 1926.

FORT SMITH REGIONAL JOBS PICTURE
The move by Allens comes at a time when the employment situation in the region is anything but positive. Economic conditions in the Fort Smith metro area worsened in December, with the workforce shrinking by more than 1,800 and the number of employed shrinking by more than 1,000 compared to December 2011. The December figures are the most recent provided by the U.S. Bureau of Labor Statistics. January numbers are set for a March 22 release.

The unemployment rate for the region rose to 8.1% in December, up from 7.6% in November, but below the 8.5% in December 2011.

December was the 48th consecutive month the metro jobless rate has been at or above 7%. It was also the sixth month during 2012 that the jobless rate was at or above 8%. The number of employed during December fell to 115,793 from 117,761 in November. The December employment was also below the 116,847  in December 2011.

In the fast changing world of omnichannel retailing, brick and mortar giants like Wal-Mart Stores Inc. have made forward leaps in the past year to woo digital shoppers away from online magnate Amazon.

A new study released by Placed Inc. on Thursday (Feb. 28) seeks to quantify the impact of Amazon on brick-and-mortar retailers and yields some surprising results along with the expected casualties of the "showrooming" phenomenon – where shoppers visit a brick and mortar store to check out a product then shop and make the purchase online.

“The study clearly shows that showrooming is more than media hype and a real problem that retailers need to address. By putting a number to showrooming, retailers can start to better understand the impact, and take action based on data versus anecdotes and assumptions," said David Shim, founder and CEO of Placed.

Though Best Buy and Target ranked in the top 8 by retail risk, it's specialty retailers Bed Bath & Beyond and PetSmart which top the list, according to the 10-page study.

The Aisle to Amazon Study highlights one’s ability to connect the digital and physical worlds through mobile devices. The study sought to find out where Amazon customers shop in the physical world regardless of showrooming habits.

Headlining the list, 25.2% of Amazon customers visited a Walmart store in January, followed by 10.7% shopping Target, 7.7% also choosing Walgreens and Best Buy gleaning 4.8%. These results are not too surprising given Wal-Mart is the nation’s largest grocery chain with some 4,000 stores.

The study also segmented Amazon customer by their spending levels. Consumers who spent $100 in the past three months at Amazon also showed a propensity to visit a warehouse club. Roughly 52% of Amazon customers said they also shopped at Costco.

Analysts say this is not unexpected as warehouse shoppers have a higher median income than those consumers shopping discounters such as Wal-Mart and Dollar General.

Costco members for instance have a household income of $96,000, compared to $60,000 for Target and $40,000 for Wal-Mart, according to Chris Horvers, retail analyst with J.P. Morgan.

Other brick and mortar retailers attracting Amazon big spenders in January include Victoria’s Secret, T.J. Maxx. PetSmart,Target and Bed Bath & Beyond.

Wal-Mart did not make this list, according to the study which surveyed roughly 15,000 respondents.

SHOWROOMING AISLES
The threat of showrooming has frustrated big box giants in the past. Best Buy and Target have announced permanent Amazon price matching policies since the start of this year to combat showrooming.

The results from the study confirm these retailers face some of the strongest threats of showrooming in their aisles. Showroomers were 20% more likely to visit Best Buy than an average consumer and 15% more likely to visit Target.

“We are very pleased with our digital channels, as online and mobile sales grew faster than industry averages," Target CEO Greg Steinhafel said during the Feb. 27 earnings call. "As a result of our efforts to improve the website throughout 2012, key performance metrics are meaningfully improved, and our mobile sales and traffic are growing at a triple-digit pace off a much smaller base.”

“Following the launch of free wireless in all of our stores in the fourth quarter, Target.com was, by far, the site most commonly accessed by guests while they were shopping in our stores,” he said.

Target plans to continue investing in a robust multichannel experience this year for its customers and says mobile purchases now constitute more than 7% of its digital sales, and mobile traffic is now more than 25% of the retailer’s overall digital traffic.

Walmart, which does not price match Amazon, was the relative “safest” of the three retailers with showroomers. The study found showroomers were 10% less likely to visit Walmart compared to Target and 15% less likely compared to Best Buy.

In fact, several other specialty retailers face a stronger threat of showrooming, according to the study.

Bed Bath & Beyond ranked as the most at-risk retailer with showroomers – 27% more likely to visit the home goods retailer. The top 5 at-risk retailers were rounded out by PetSmart (25%), Toy ‘R’ Us (21%), Best Buy (20%) and Sears (19%).

AMAZON PRIME
Expedited delivery has been a hot topic in the brick and mortar world since Amazon began offering its “Prime” subscription, which allows for free, two-day shipping with no minimum order.

Wal-Mart experimented with same-day delivery during the holiday season in a few metro areas and gives free shipping for certain minimum online orders but has not come close to matching “Prime” on a consistent basis.

That said, Wal-Mart did not rank in the top 10 retailers at risk from Amazon “Prime”, according to the study.

Amazon “Prime” members were 45% more likely to visit Costco and 35% more likely to visit Dick’s Sporting Goods and Target was 18% more likely to see “Prime” members shopping in their stores.

Office Depot and Staples both ranked within the top 10 as the office supply retailers faced a strong likelihood of “Prime” members in their aisles.

“Prime” members that displayed showrooming tendencies were 30% more apt to roam isles at Barnes & Noble than average customers and 19% more likely to do so at Target.

Oklahoma City-based OGE Energy Corp., parent company of Oklahoma Gas and Electric Company (OG&E) and OGE Enogex Holdings (Enogex), posted 2012 net income of $280 million, up over the $263 million in the 2011 period.

Total revenue for the regulated utility was $1.3 billion, slightly ahead of the $1.2 billion in 2011.

However, per share revenue during 2012 of $3.58 missed the consensus estimate of $3.71.

The company said its 2012 income increase was was primarily the result of gains from  utility investments, transmission revenue from new projects, new customer growth and production tax credits related to wind farms.

For the fourth quarter of 2012, the company posted net income of $43.5 million, just ahead of the $43.2 million in the 2011 period. The per share earnings of 39 cents per share were below the consensus estimate of 47 cents per share.

Total revenue for the quarter reached $862.1 million, below the $885.2 million during the 2011 period. Of the revenue, $465.5 million came from electric utility business, with $396.6 coming form the natural gas business.

"Execution of key multi-year initiatives was our focus for 2012," Pete Delaney, OGE Energy chairman, president and CEO, said in a statement issued Wednesday (Feb. 27). "At the utility, we completed our smart meter deployment on time and under budget, and made appreciable progress in our transmission build out, which contributed to our strong utility earnings.  At Enogex, we continue to develop our existing acreage dedications, which should provide gathering and processing volume growth for years to come."

Shares of OGE (NYSE: OGE) closed Thursday at $57.91, down 32 cents. During the past 52 weeks the share price has ranged from a $61.39 high to a $50.23 low.

Arkansas’ annual average jobless rate fell from 7.9% during 2011 to 7.3% during 2012, according to a report released Friday (Mar. 1) by the U.S. Bureau of Labor Statistics (BLS).

However, January delivered a more than 41% increase in the number of lost jobs in Arkansas related to mass layoffs.

In the U.S., annual average unemployment rates declined in 46 states, rose in 2 states, and were unchanged in 2 states. The U.S. jobless rate declined by 0.8 percentage point from the prior year to 8.1%.

Three states had unemployment rates of 10% or more in 2012. Nevada again had the highest unemployment rate at 11.1%, followed by California at 10.5% and Rhode Island at 10.4%. North Dakota, at an annual average of 3.1%, had the lowest jobless rate among states for the fourth year in a row. Nebraska had the second lowest at 3.9%, and South Dakota was third at 4.4%.

Oklahoma had an annual average rate in 2012 of 5.2%, down from 5.9% in 2011. Missouri’s annual average jobless rate fell from 8.4% in 2011 to 6.9% in 2012.

THE ARKANSAS PICTURE
Although Arkansas’ annual average jobless rate declined, December marked the 47th consecutive month Arkansas’ jobless rate has been at or above 7%. (December is the most recent report on state jobs data. The January jobless rate and employment report is set for release on March 18.)

Employed Arkansans were an estimated 1.258 million in December, down 8,725 jobs, or 0.6%, compared to November 2012. The BLS estimate shows 12,576 fewer Arkansans were unemployed in December than December 2011. However, the number of unemployed in December fell to 96,173 compared to 107,128 in December 2011.

The workforce size shrank from an estimated 1.363 million in November to 1.354 million in December. The workforce totaled 1.378 million in December 2011. December was the first time Arkansas’ workforce size fell below 1.36 million since September 2010.

MASS LAYOFFS
A Feb. 26 report from the BLS shows there were 15 mass layoffs reported in Arkansas during January accounting for 1,963 initial claims. The number of claims are up compared to the 19 mass layoffs accounting for 1,389 initial claims in January 2012.

A mass layoff is one in which at least 50 jobs are lost.

In Oklahoma, with a significantly larger population than Arkansas, the three mass layoffs in January created 241 initial claims, fewer than the six mass layoffs and 443 initial claims in January 2012.

Nationwide, January mass layoff claims increased after two years of declines. Following are the mass layoff figures between January 2010 and January 2013.
• January 2013: 1,528 layoffs; 144,517 claims (jobs)
• January 2012: 1,705 layoffs; 141,703 claims (jobs)
• January 2011: 2,558 layoffs; 246,463 claims (jobs)
• January 2010: 2,860 layoffs; 278,679 claims (jobs)

“In January, the manufacturing sector accounted for 31 percent of mass layoff events and 37 percent of associated initial claims in the private economy,” noted the Feb. 26 BLS report. “Within manufacturing, the numbers of mass layoff claimants were  highest in transportation equipment and in food.

Manufacturing jobs in Arkansas during December totaled 155,500, down from the 157,000 in November and down an estimated 500 jobs compared to December 2011. Employment in the once booming manufacturing sector fell in 2011 to levels not seen since early 1968. The June jobs figure is more than 33% below the January 2001 sector employment of 236,000.

Tyson Foods announced Friday (Mar.1) plans to close a small processing facility in Springdale as it continues to find ways to increase operational efficiencies.

The 68 hourly workers were notified this week and have been offered jobs at other Tyson Foods locations in Northwest Arkansas, according to an email statement from spokesman Gary Mickelson.

“Due to changing demand for certain specialty products, we’ve suspended operations at our small processing plant on Ford Avenue in Springdale. The plant has been operating for more than 15 years and once served as Tyson’s research and development pilot plant,” Mickelson said.

He added that most of the products made at the plant have been relocated to other facilities or consolidated to better meet the needs of Tyson customers.

The meat giant has not yet decided what it will do with the building.

After a slow start and some less than kind comments from both parties about tactics, progress is being reported on contract negotiations between the International Brotherhood of Teamsters and Arkansas Best Corp.

The two groups met this week in Kansas City to come to a new labor agreement.

The existing labor contract will expire March 31 for the about 7,500 Arkansas Best employees represented by the Teamsters. The largest subsidiary of Arkansas Best is ABF Freight System, one of the largest less-than-truckload carriers in the U.S. Most of the 7,500 are drivers but the union membership also includes dockworkers, mechanics and office staff. Arkansas Best employs more than 10,000.

Existing contract terms were agreed to in 2008 as part of a National Master Freight Agreement (NMFA) with which Arkansas Best, YRC and other trucking companies participated.

“Some progress has been made in that the company has withdrawn its initial proposal and has agreed to work from the existing agreement,” noted a Mar. 1 statement from the Teamsters. “The parties also reached tentative agreements on various non-controversial items  during the week just concluded.”

Arkansas Best declined to comment on recent negotiations.

On Jan. 17, the Teamsters said Arkansas Best officials “seek to undo 50 years of bargaining history and completely rewrite the current agreement.” The Teamsters complained that Arkansas Best said it required cost savings to be competitive in the less-than-truckload industry, but didn’t have analysis of its proposals.

Gordon Sweeton, the Teamsters official co-chairing the ABF negotiations, said in the Jan. 17 Teamsters statement that “the failure of the Company to  have the cost analysis of its specific proposals at its fingertips strongly suggests that the Company was not prepared to engage in legitimate bargaining and that its proposal is simply an overreaching effort designed to bludgeon worker rights.”

But in a statement issued late Friday (Mar. 1), Sweeton said negotiations were on track based on the Teamster perspective.

“We think it is a step in the right direction that the company has agreed to bargain from the existing contract and address proposals in a more traditional manner,” Sweeton said. “But with just a month to go before expiration, the company needs to get realistic on the core issues that remain open.”

According to the Teamsters, negotiations will resume the week of Mar. 11.

Not only are the parties negotiating a labor contract, they are opposing sides in a closely-watched lawsuit.

Arkansas Best has twice sought legal action against the Teamsters as part of a $750 million lawsuit. Arkansas Best alleges that wage deals between the Teamsters and YRC, a competitor of ABF Freight, violated the NMFA. The NMFA, implemented April 1, 2008, was designed to create equal labor costs and other benefit payments among trucking companies with drivers represented by the Teamsters.

The lawsuit, first filed in November 2010, was recently dismissed a second time by U.S. District Court Judge Susan Webber Wright (Eastern District of Arkansas). On Oct. 29, 2012, Arkansas Best appealed the case again to the United States Court of Appeals for the Eighth Circuit (St. Louis). The Circuit has once appealed in favor of Arkansas Best.

Zeek Miller, a 25-year-old waiter in Northwest Arkansas, hasn’t cashed a tax refund check for the past two years as it has been garnished by the federal government for delinquent student loans.

He’s among the growing class of young consumers struggling to repay an average $26,600 in student loan debt.

A Feb. 28 report released by the Federal Reserve Bank of New York found that student loan debt in the United States is now approaching $1 trillion, and is the only kind of household debt that continued to rise throughout the Great Recession.

Student debt almost tripled between 2004 and 2012 and stood at $966 billion as of December 2012. During those years the number of borrowers increased 70% as did the average balance owed per person.

The study cited several reasons for the escalating loan balances:
• More people chose to attend college and graduate school when the economy tanked in 2008 and jobs could not be found;
• Students are staying in school longer and completing fewer hours in a year’s time but borrowing each year they are in school; and,
• Students have taken advantage of lower repayment rates as borrowers delay payments through deferments and forbearances.

REPAYMENT REALITIES
The higher burden of student loans and higher delinquencies may affect borrowers’ access to other types of credit and the performance of other debt, according to Joel Doelger, spokesman with Credit Counseling of Arkansas.

“Students have to be careful about the debt they take on while in college, but for many the reality hits once the are asked to start repayment,” he added.

He said a young consumer facing $26,000 or more in student loan debt is like having a second car payment and it can crunch budgets for several years after graduation.

Sarah Chapman, 26, received a rude awakening awakening six months after she graduated from LSU in 2009.

“The government consolidated all my loans into one payment which was convenient and they put me on a seven year payoff term. Needless to say, I couldn't afford the payments. I extended to the loan to 14 years because the interest rate was low and the payment affordable,” she said. “I've been paying them since early 2010 and I still feel like the amount owed never decreases.”

Angela Marie, a social worker who lives in Ohio, says she’s not ashamed of the $46,000 in student loan debt she accumulated over the years. But she recently started to repay the debt.

“I am a social worker (bachelor’s level) who graduated in 2007. The only thing that I have going for me is that the government has a ‘forgiveness’ program. If I pay every month for 10 years straight never missing a payment, then the rest of my loan is forgiven."

Marie says the catch is the monthly payment runs $300, which is hard to cover with a $14 per-hour job.

She says the reality is if she doesn’t pay the $300 per month, her wages will be garnished because of the time the loan has already spent in forbearance.

HIGHER DELINQUENCIES
The student loan report found about 17% of borrowers were past due on their student debt by more than 90 days in 2012, a large increase from under 10% in 2004.

Roughly 44% of borrowers are not yet in repayment phase, because a large percentage of students chose forbearance and deferral options which are made available to borrowers facing financial difficulties.

The transition rate of borrowers in repayment from current to delinquent has been rising since 2008 from around 6% to nearly 9%.

High levels of student debt delinquency reduces young borrowers’ ability to secure other types of credit, Doelger said.

Scott Hoyt, senior economic director with Moody’s Analytics, said in a phone interview, that student loan debt is slightly under 10% the size of mortgage debt in the United States, but he agrees that delinquency rates are trending higher for the student loans. He says this will mean a certain percentage of young Americans won’t be able to purchase a home or secure other lines of credit until they first eliminate some of their college loans.

In terms of overall impact, Hoyt said the student loan delinquencies don’t pose a serious threat to the macro economic recovery given they are much smaller in scale when compared to housing debt.

He said more than 80% of student loans are also guaranteed by the Federal Government, not private banks. These delinquencies could add to the federal deficit, but Hoyt doesn’t see the rise in bad debt causing much havoc in the overall financial markets.

The University of Arkansas continued its success this year in graduate student business plans, reaching the finals in each of the last two competitions in which it competed.

EverClean Coating Solutions, which has created a self-cleaning coating technology for solar panels that improves efficiency, advanced to the final round and placed third at Cardinal Challenge 2013, the University of Louisville Business Plan Competition.

The team took home a $3,000 cash prize on Feb. 16.

On Feb. 23, ParadigMed, which manufactures a cost-effective device for adult male circumcision in an outpatient setting, pushed into the finals and finished fourth at the Spirit of Enterprise Graduate Business Competition, hosted by the University of Cincinnati’s Center for Entrepreneurship. PardigMed won $1,000.

The university has managed to advance to the finals in each competition it’s competed in this year. On Jan. 26, Picasolar, which has developed a patent-pending process to improve the efficiency of solar cells, won the grand prize at the 2013 IBK Capital-Ivey Business Plan Competition, held at the Richard Ivey School of Business at the University of Western Ontario.

“The results this year have been outstanding,” said Carol Reeves, associate vice provost for entrepreneurship. “The University of Arkansas continues to succeed on both a national and international stage.”

The University of Arkansas has fielded competitive graduate student teams at state, regional, national, and international business plan competitions since 2002. During the past decade, students have almost $1.4 million in cash at these competitions.

The EverClean Coating Solutions team members are Bill Ryan and Manish Phogat, master in business administration students and Corey Thompson, a doctoral student in engineering.

Stephen Kayode and Tara Mink, both in the executive MBA program at the Walton College founded ParadigMed.

The teams formed their business plans in the New Venture Development graduate course taught by Reeves.

A fourth team, HomeDx, is working to develop the first over-the-counter influenza test that will be distributed through large retail channels. HomeDx will compete at the Global New Venture Competition on March 13 at the University of Nebraska-Lincoln.

With just a few weeks under his belt as the first executive director of the Arkansas Aerospace Alliance, Chad Causey outlined on Wednesday (Mar. 6) an agenda that includes getting the newly independent group moving forward with more members and increased industry awareness.

The alliance held the 2013 Arkansas Aerospace Summit at the Fort Smith Convention Center, with about 250 attending according to Robin Pelton, a manager with the Arkansas Economic Development Commission (AEDC).

Causey was named to the post in February and one of his first jobs, he said, is to “make it more of an independent entity” that “works in conjunction with the AEDC to grow in the industry in Arkansas.”

ALLIANCE HISTORY
Data from Arkansas officials indicates that the state’s aerospace and aviation industry has about 180 companies, employs more than 9,000 Arkansans and accounts for annual exports of more then $1.8 billion.

The alliance was formalized in November 2012, and was a trade association supported by the Arkansas State Chamber of Commerce. The group now has an interim board with new bylaws and is working to be a fully independent group.

Prior to signing on with the alliance, Causey was a senior associate and counsel at Little Rock-based Noble Strategies. Causey practiced law in Jonesboro and was chief of staff to former U.S. Rep. Marion Berry, D-Gillette, where his work focused heavily on transportation and infrastructure issues. Causey also was the Democratic nominee for the First District Congressional seat in 2010.

INDUSTRY AWARENESS
Causey said most people think of agriculture as the state’s big exporter rather than aviation. In 2012, the alliance says, Arkansas’ aerospace related exports of $1.8 billion placed the state 12th in the nation.

“This industry is important to this state and we want to make it a not so well-kept secret,” Causey said during an interview after his remarks to the audience.

In addition to growing the alliance membership and increasing awareness of the industry’s economic impact, Causey said advocacy and industry support are alliance goals.

With respect to support, Causey said the industry must work better with public schools and higher education to provide better job training for the industry. STEM (Science, Technology, Engineering and Math) schools are a “big help” with training, Causey said, but he is eager to incorporate “project-based learning” into a STEM school in which a real-world challenge in the aerospace industry is addressed by students.

Causey said the alliance also has to become an advocate for the industry among the state’s elected lawmakers and constitutional officers. To date, Causey said Gov. Mike Beebe and members of the Arkansas Legislature are supportive of the industry. He wants to use that support to seek, for example, tax reforms that could “be a beneficial impact on not only aerospace, but also on advanced manufacturing.”

BUSINESS TO BUSINESS
The summit included several sessions in which smaller Arkansas-based suppliers to the larger aerospace companies could meet with “the procurement people” in those large companies, Pelton explained.

Companies at the summit included Airbus Americas, BizJet, Dassault Falcon, Lockheed Martin and NASA.

“This gives them (small company owners/managers) a chance to meet one-on-one with the people who can make the (purchasing) decisions,” Pelton said.

On Tuesday, during a pre-summit workshop, a small business training workshop was held that focused on “Teaming & Strategy Development to Capture Federal Contracts.”

GENERAL AVIATION SUPPORT
Causey, and Grant Tennille, AEDC executive director and Wednesday’s luncheon speaker, said airport infrastructure and general aviation support is also part of promoting the industry.

David Krutsch, airport manager at the Rogers Municipal Airport, is not likely to object to such promotion.

Krutsch said the airport, which is home to several corporate jets owned by Bentonville-based Wal-Mart Stores Inc., returned to good growth in 2012.

“Virtually all benchmarks of activity were up,” Krutsch said, adding that fuel sales were up 6%, with around 125 aircraft based at the airport. “We picked up several aircraft last year that are now based there.”

More than 100 people work at the numerous companies with operations at the airport, Krutsch estimated.

He said the airport is also embarking on “a plan for future growth” that includes a focus on “supporting the many small businesses” that use the airport.

“We’re trying to maximize the airport’s economic contribution to the community,” Krutsch said.

Former U.S. Air Force Brig. Gen. Robert Mansfield Jr., and Arkansas Economic Development Executive Director Grant Tennille offered in separate interviews similar formulas for what is needed to grow the aerospace industry in Arkansas: Education support, infrastructure and incentive support and awareness.

Mansfield and Tennille were in Fort Smith on Wednesday (Mar. 5) at the 2013 Arkansas Aerospace Summit.

Based in Fort Worth, Texas, Mansfield is executive director of the Center of Aviation and Aerospace Leadership with Embry-Riddle Aeronautical University. He said the U.S. and global aviation sector have seen rough years, but he is optimistic on the sector’s future.

“We’re going to see growth. Moderate, and probably spotty,” Mansfield said after his 2012-2013 industry report during a Wednesday morning summit session. “Everything hinges on how our national economy and the global economy recovers. ... There is a huge pent-up demand” for new airplanes and aviation and aerospace products.

SPACE-FOCUSED BILLIONAIRES
Mansfield said emerging technology and uses for unmanned aerial systems in the U.S. will drive industry growth “once national standards are in place.” Also, the growing number of billionaires – like Elon Musk with SpaceX and Amazon founder Jeff Bezos with Blue Origin– funding or directly involved in space ventures will fuel industry growth.

“They are absolutely going to get us into space because they have the billions,” Mansfield said, adding that investment by billionaires will create numerous opportunities for support companies.

The Dragon capsule developed by SpaceX has twice successfully delivered supplies to the International Space Station.

Arkansas is in “a good position” to be a player in capturing aerospace industry growth because the state ranks high – 12th nationally in terms of the value of aerospace exports – in industry output. Such rankings generate awareness within the sector.

“To the (aerospace) companies that (Arkansas ranking) says,’Well, there is an infrastructure here,’” Mansfield said.

ARKANSAS AWARENESS
Arkansas, according to Mansfield, also has the 19th largest “aviation cluster” in the U.S., and the size could be a big tool in industry recruitment and retention if industry and state officials work together on growing the sector.

“Arkansas appears, I think, to have the basis to draw more growth by building off its cluster,” he explained.

Also, Arkansas is centrally located in the U.S., and is “close enough to aviation alley” – a band of aerospace companies and suppliers located between San Antonio, Texas, and Wichita, Kan. – to benefit from industry growth, Mansfield said.

But to capture the growth he sees on the horizon, Mansfield said “the groundwork needs to be laid now” by state officials. In addition to the usual incentives and creating a competitive business climate, the groundwork includes building global awareness of what Arkansas has to offer. He advised that Arkansas officials frequently attend the international airshows and global conferences in Europe, the Middle East and other global aviation centers.

“Arkansas has to be known. ... The market isn’t always going to automatically come here, especially in a global economy,” Mansfield said.

BETTER CONNECTIONS
Tennille, the state’s jobs chief, said a top priority is capitalizing state resources to “grow the Arkansas (aerospace) industry at a faster rate than some of our sister states.”

Like Mansfield, Tennille sees signs of improvement in the sector, and believes Arkansas officials must better connect education with industry needs, do more to improve the physical infrastructure at Arkansas airports and do a better job of ensuring state tax codes and regulations “aren’t out of step” with the industry.

He cited a recent example in which a company planned to fly aircraft to Arkansas for evaluation prior to a transaction. The transaction wasn’t taking place in Arkansas, but state sales tax code was unclear on the tax liability, and company officials wanted to know if they could bring the planes to Arkansas or instead fly them to another state. AEDC officials worked with the Arkansas Department of Finance & Administration to resolve the matter. But the uncertainty could have been a deal killer.

“It opened my eyes that maybe, unintentionally, we have things in the tax code that are unclear” for the aerospace industry, Tennille said, adding that Arkansas needs to ensure similar “tax treatment” for aerospace companies as compared to other states.

WORKFORCE SUPPORT
There is more work to be done, but Arkansas “has the beginnings of a workforce that can provide you with all the skills you need,” Tennille told the luncheon audience.

However, he said state officials “desperately need” guidance from industry officials on real-time workforce needs. Tennille said “incredibly close communication” between the industry and education providers will help get the most out of state resources and provide training that best fits workforce demand.

“We need to get much closer to just-in-time (job training) for you,” Tennille explained.

And like Mansfield, Tennille said Arkansas has an advantage in being centrally located.

“We are an easy hop from both coasts,” he said.

An advantage Tennille cited that no one else mentioned was that Arkansas is a right-to-work state. In an interview prior to his luncheon address, Tennille admitted it may not be popular to mention right-to-work within aerospace circles, but labor costs are a big factor in expanding or relocating aerospace production.

“The cost of labor is a huge question ... considering the low margins in the industry,” Tennille told the crowd.

A more than $2 million expansion project at Lake Fort Smith State Park first announced during the 2012 The Compass Conference has been completed, according to a statement from the Arkansas Department of Parks & Tourism.

Located almost halfway between Fort Smith and Fayetteville, the park is eight miles north of Mountainburg on U.S. 71.

State Parks Director Greg Butts said the 10 new cabins at Lake Fort Smith State Park are now available to rent. Five of the cabins house one bedroom and clock in at 896 square feet, while the other five will consist of two bedrooms at 1,152 square feet. The cabins were designed by Tim A. Risley & Associates of Fort Smith, with Steele Development, of Bentonville, handling the construction.

Funded by Amendment 75, Arkansas’s 1/8-cent conservation tax, the one-story cabin designs are reminiscent of the 1930s WPA style – with some of the stone used being reclaimed from the original park site. Each cabin includes a great room with wood-burning fireplace, high definition satellite TV, kitchen, and dining area. At the back of each cabin is a large, elevated covered deck with a woods view. On the ground level below are a picnic table and grill.

“The park is a first-class recreational destination. And, these cabins will provide quality overnight accommodations for park guests,” Butts said in the statement. “With the opening of these 10 new cabins, we have now replaced all the facilities that park visitors enjoyed through the decades.”

The project totaled $2,146,536, which also included road and parking area paving and utility work.

To meet the needs of visitors with disabilities, two cabins — a one-bedroom cabin and a two-bedroom cabin — are barrier-free designs. Tubs are not offered in these two barrier-free cabins. Instead, the bathroom in the one-bedroom barrier-free cabin features a roll-in shower. The two-bedroom barrier-free cabin features a roll-in shower in one bathroom and a walk-in shower in the other.

In the four other one-bedroom cabins (those that not barrier-free), the bathrooms feature spa tubs. In the other two-bedroom cabins (those that are not barrier-free), one bathroom features a spa tub and the other bathroom has a walk-in shower.

“With the 10 new cabins, we’ve brought back the look and feel of the WPA style while increasing their size and the amenities they offer,” he said. “We have created new places for new experiences, and we now have new cabins that will be passed from generation to generation,” Lake Fort Smith Park Superintendent Ron Gossage said in the statement.

Lake Fort Smith State Park is one of the 52 state parks administered by the State Parks Division of the Arkansas Department of Parks and Tourism. A partnership between the City of Fort Smith and the Arkansas Department of Parks and Tourism (ADPT), the park reopened in May 2008 at its new site on the western side of Lake Fort Smith.

The park closed in January 2002 to be relocated from its original site due to the enlarging of Lake Fort Smith and Lake Shepherd Springs into a single reservoir to meet the future municipal water needs of the Fort Smith area. The City owns the 258-acre park and leases it to the ADPT. Fort Smith officials provided $12 million to fund the new park, and the Arkansas funded another $10 million from Amendment 75.

In addition to the cabins, the park includes 30 campsites, group facilities including a dining hall and two group lodges with kitchenettes, picnic sites, a pavilion, swimming pool, marina with boat rentals, boat launch ramp, trails, playground, and a visitor center with exhibits and a meeting/classroom.

Wal-Mart says it is serious about a campaign to “Empower Women” through business initiatives.

As part of a five year, $20 billion commitment to the cause the retail titan unveiled an online destination through Walmart.com that gives shoppers who want to buy unique and interesting products the opportunity to do so while supporting small women-owned businesses around the world.

More than 200 items, from jewelry and iPad cases to coffee beans and apparel, will be sold on the "Empowering Women Together" section of Walmart.com, the world's largest retailer said Thursday (March 7), on the eve of International Women's Day.

The products come from nine countries including Cambodia, Haiti and the United States, and include a $9.88 Women's Bean Project soup mix and cornbread mix gift set and a $20 dress from the Rwandan women's company Gahaya Links.

With each purchase, consumers lift and empower the women behind these products to create new jobs and improve both their own lives and the lives of their families and communities. At launch, Empowering Women Together will offer shoppers more than 200 items from 19 businesses in nine countries.

The effort aims to connect shoppers in the U.S. with quality products made by women-owned businesses from around the world, said Andrea Thomas, senior vice president, Walmart. 

"In doing that, it helps achieve so much more,” Thomas added.“Walmart can also help these suppliers gain experience with buying trends, scaling, product development and acumen they need to build their businesses."

Roughly half of the 19 featured businesses are global and nine are based in the U.S. In this initiative Wal-Mart also aims to double sourcing from international suppliers run by women.

A once dying language last modernized nearly 200 years ago has been given new life in the 21st century, with some hoping it pushes beyond 3,000 the number of people who are fluent in the Native American tongue.

The comeback of the Cherokee language, translated into written form in the early 1800s, has been fueled by the work of the Cherokee Nation, based in Tahlequah, Okla.

According to Roy Boney, a language technology specialist with the tribe, the push for a reemergence of the language was introduced by tribal leaders, who introduced the Cherokee Nation Immersion Charter School for students from 3-years-old to 7th grade.

"I was hired several years ago to develop materials for the school," Boney said. "They started off in (pre-Kindergarten) and they got to the older grades and needed some technology."

In searching for solution to the school's technology problem, Boney and his colleagues in the tribe set out on a mission to find technology that could be blended with the Cherokee language.

"We started searching for a solution to that problem and we discovered the Apple included a Cherokee font and keyboard on their desktops since 2003," he said.

That led the tribe to work with Apple for inclusion of the language on both the iPhone and iPad devices, Boney explained.

CHEROKEE ON WINDOWS
In continuing the tribe's quest for more and better technology for immersion classrooms, a partnership was developed with Microsoft to translate the Windows operating system into Cherokee.

"We learned about localization — to translate their software into another language," Boney said. "We started that project last year and Windows 8 came out in Cherokee."

According to Carla Hurd, the Local Language Program's senior program manager at Microsoft, Cherokee was the first Native American language to be included in the operating system.

"There are some indigenous languages, like Maori in New Zealand and Welsh, but the point of Cherokee is it's the first Native American language we've ever done," she said. "It's very notable."

Lois Leach was one of the native Cherokee translators to work on the project. She said the work was long and exhausting, lasting for nine months. Leach said she clocked around 2,000 hours on the project, which she worked on during evenings and weekends in addition to working her full-time job.

‘FOLDER’ ISSUES
Leach said she and other translators were initially unaware of how big of a project they were involved in.

"We really didn't think it would be this widespread," she said. "At first, it was just a project were working on. But when we finally did see when it was launched into the computer itself, it was really something. We could not see that far, really, I don't think."

One of the challenges faced by the many translators, both Cherokee staff and volunteers, was developing new words and phrases in Cherokee for simple objects on a computer.

"This was really (about) getting into the meanings of things and what we had to do to guide somebody through the computer. It was not that easy," Leach said.

An example of an English word without a Cherokee equivalent was "folder."

"Folder — it just said you are putting papers in a container," she said.

IMMERSION TRAINING
Boney said when all was said and done, Leach and the team of translators provided Microsoft with nearly 180,000 terms and phrases that were included in Windows 8.

He said even though the operating system is being used in the immersion school and is available for free for Microsoft users, there is still amazement by individuals in and out of the tribe regarding Windows 8 in Cherokee.

"People are in awe to see our language in technology," he said.

While the Windows 8 project was a long, grueling project, this is just the first of many projects to spread the usage of the Cherokee Nation's native tongue beyond its 3,000 speakers.

The translation team is working on projects with Google, Facebook and Apple in order to expand the language beyond eastern Oklahoma and parts of North Caroline, Boney said.

TRIBAL HISTORY
He believes the tribe’s history is one of the reasons Cherokee is seeing a resurgence as a language.

"What's been interesting about a lot of this work is historically, the Cherokees were unique in that we had one man (Sequoyah) develop the writing system. That developed a curiosity in the language. A lot of people have heard about it and fascinated by it. We have our own writing system and we have a unique writing system," Boney said. "I think that's part of the appeal, is getting that writing system into technology because it is unique."

Hurd said she was unable to disclose whether Microsoft would be releasing any more Native American language versions of Windows due to company policies.

"We're always looking to expand our language set, whether that's Native American or not," she added.

Leach said she was thrilled to be a part of the Windows 8 project and was looking forward to more translation projects in the future.

"To me, I guess that's really a good thing because it's needed in our culture because they were getting to where they were forgetting it," she said.

Julie Hubbard, communications supervisor with the Cherokee Nation, said individuals across the Fort Smith and eastern Oklahoma region interested in learning Cherokee could attend a class from 5:30 to 7:30 p.m., in Evening Shade, Okla., on Monday evenings from now through May 6. Classes are free and open to the public.

Link here for more information on technology and the Cherokee language.

A review of economic conditions and the potential to move closer to U.S. energy independence with more use of natural gas are the planned highlights of the 2013 The Compass Conference.

The luncheon conference is set for Friday, April 12, 2013, at the Fort Smith Convention Center. Tickets are $35 each, or $325 for a table of 10. Reservations can be made by calling 242-2800.

“As always, benefit Bank is honored to sponsor the upcoming Compass Conference,” said Rod Coleman, a member of the Benefit Bank Board of Directors. “The bank and stockholders desire to bring to the attention of Fort Smithians the ongoing growth that Fort Smith is experiencing. We are excited about the opportunity to showcase the contribution that the natural gas industry makes to the River Valley and all those who live and work here.”

Jeff Collins, economist for The Compass Report and The City Wire, will review the 2012 economic highs and lows and preview 2013 economic conditions. Collins conducts the data collection and analysis for The Compass Report, which is presented by Fort Smith-based Benefit Bank. The fourth quarter report is set for release prior to the April 12 Compass Conference. (Link here for more information on The Compass Report.)

The Compass Report is the only independent economic analysis of the Fort Smith regional economy. The report measures four leading and four current economic indicators to provide a grade for a regional economy.

“We continue to be pleased each year with the response to The Compass Report and the conference. Information is important in good or bad economic times, and we believe The Compass Report is a great information resource to the thousands of small and large businesses in our market area,” said Patricia Brown, chief operations officer for The City Wire.

NATURAL GAS PANEL
As part of the annual The Compass Conference, there will be a panel discussion on the potential impact natural gas could have on the federal, state and local economies. An obvious impact is the real possibility of moving nearer or reaching energy independence through much broader use of natural gas to power vehicles and generate electricity.

The panelists are:
• Mike Callan, president, Arkansas Oklahoma Gas Corp.;
• Dr. Jeff Collins, partner in Streetsmart Data Services;
• Bill Hanna, president, Hanna Oil & Gas; and,
• Kelly Robbins, executive vice president of the Arkansas Independent Producers & Royalty Owners.

Efforts are being made to include on the panel C. Michael Ming, Oklahoma Secretary of Energy.

BROADER CNG ADOPTION
In Arkansas, one of the first adopters in using and promoting CNG is Fort Smith-based Arkansas Oklahoma Gas Corp., a natural gas utility with roughly 60,000 customers in western Arkansas and eastern Oklahoma. AOG President Mike Callan recently said the more than $2 difference per gallon between gasoline and CNG “certainly accelerates a pay-back” on the upfront costs of conversion.

Nationwide, there is a growing movement to convert private and public fleet vehicles to use CNG.

Truck manufacturers like Navistar, Volvo and Kenworth have greater displacement natural gas engines which will be rolled-out in 2014 and 2015, thereby permitting natural gas carriers to carry heavier and longer loads than is now available. Service and maintenance facilities are also being upgraded to handle natural gas engine operation and repair.

Oklahoma Gov. Mary Fallin (R) and Colorado Gov. John Hickenlooper (D) were leaders in what became a 22-state “bipartisan” effort to convince major automakers to build more affordable compressed natural gas vehicles. Arkansas joined the effort in late 2012.

Oklahoma officials have also worked with the private sector to encourage construction of CNG stations. The state is expected to have 100 CNG fueling stations by the end of 2013, well ahead of the 31 stations in 2010. According to the industry, 100 stations would allow CNG users to travel anywhere in the state.

The value of building permits in Fort Smith, Greenwood and Van Buren were a combined $6.609 million in February, down 2.75% compared to $6.796 million in February 2012.

At this same time in 2012, building permits had risen more than 3% based on strong activity in residential construction across Greenwood and Van Buren. For the first two months of 2013, permit values in the three cities are down 2.86% compared to the 2012 period.

The largest permit in the three cities in February of this year was issued to a new mini storage facility to be built at 6300 Massard Road in Fort Smith. The permit for the facility totaled $950,000.

FORT SMITH
The city of Fort Smith issued 146 permits during the month of February with a total value of $5.327 million, up 1.06% compared to $5.271 million in February 2012.

The 93 new residential permits issued by the city totaled $2.259 million, up from the Feb. 2012 total of $1.952 million for nine new residential permits.

GREENWOOD
Permits issued during February in Greenwood totaled $458,825, a decrease of 14.28% from $535,315 in Feb. 2012. Four permits were issued last month, two residential permits, one commercial permit and an accessory building permit.

VAN BUREN
The city of Van Buren issued 41 building permits totaling $824,000 in February, a 33.12% decrease from $1.232 million in Feb. 2012. The permits included 10 single family residential permits, one duplex permit and 14 permits for a building containing five or more units.

2012 RECAP
Combined values in the three cities during 2012 were $157.32 million, compared to $201.079 million during 2011. The 2012 value is above the $149 million in 2010, but below the $164 million during 2009.

Fort Smith closed 2012 with the largest share of valuations, logging $136.428 million (a one-year decline from $179.288 million of about 23.9%), while Van Buren was the next largest with $12.282 million (a one-year decrease from $12.39 million of approximately 0.87%). Greenwood posted an additional $8.609 million, which was down slightly from last year’s $9.461 million (down about 9%).

The 2012 figures were compared against a $28.5 million permit for the construction of a Mitsubishi wind-turbine assembly plant at Chaffee Crossing. The plant has been mothballed by the company. Even without that permit, the Fort Smith metro area lagged when compared to 2011 showing a decrease of around 8.8%.

Businesses large and small across Northwest Arkansas plan to invest $808 million in expansion efforts adding 965 new jobs by 2015.

This data was collected in a group business retention effort shared by the Chambers of Commerce in Fayetteville, Springdale, Rogers, Bentonville-Bella Vista and Siloam Springs and overseen by the Northwest Arkansas Council.

Mike Harvey, chief operating officer for the Council, and a team from the local chamber offices shared the information on Thursday (March 7) in the comprehensive report and brief press conference. Harvey said the chamber economic teams met with a combined 459 local businesses during 2012 and one third of them are planning expansions over the next three year period.

“We don’t have any year-over-year data yet, but I can tell you that businesses seem to have snapped back sharply in the past year after three years of being cautiously optimistic,” he said.

SILOAM SPRINGS IDEA
The business retention effort is the only one of its kind around the state, according to Perry Webb, CEO of the Springdale Chamber of Commerce. He credited Wayne Mayes and the Siloam Springs Chamber of Commerce for leading the way as they began business retention efforts back in 2009.

Mayes, CEO of the Siloam Springs chamber, said it was a key effort for the “little brother” Siloam Springs because of its position outside the main Interstate 540 corridor.

Each business visited by their local chamber completed a comprehensive survey that rated a number of metrics including: challenges, strengths, hiring projections and future business expansion. That data was then compiled and entered into a computer program “Synchronist” and the results were analyzed by Harvey and the chamber economic teams. Harvey said the group spent about $10,000 to purchase the software program and there is an annual renewal cost of about $1,500.

Harvey said the strengths cited by the companies outnumbered the weaknesses by a 2:1 ratio as businesses generally have a favorable opinion of the local economic climate.

The chamber representatives agree the face-to-face interaction with their local business owners was invaluable and well worth the average 4-hours per company investment. The chambers each invested an average of roughly 1,700 hours toward this project last year.

EXISTING BUSINESS SUPPORT
Steve Cox, economic development director for the Rogers-Lowell Chamber, said the payoff isn’t always instant but you have to plant and water those organic seeds if they are to bear fruit in the future.

“I visited a company back in April of 2012 and they didn’t really have any expansion plans at the time, but we made the contact. Then they called me in January to say they had planned a $10 million investment hiring up to a dozen people and could we give them some help. If I hadn’t made that contact they probably wouldn’t have called us for help with incentives and zoning,” Cox said.

Webb added that between January 2010 and December 2012 there were 40,000 jobs created in Arkansas, 44% of those jobs were located in the NWA metro area.

The group agreed the organic job growth that largely comes from business expansion is key to future population growth. Harvey said roughly three out of every four jobs created comes from an existing business. Lance Eads, economic director for the Springdale Chamber, said during one of his visits last year he encountered a business that needed a larger location to allow for growth opportunities.

“We also ran across another fellow who was trying to sell out and retire from his business. We got these two owners together and they were able to work out a deal that allowed both to accomplish their goals,” Eads said.

He also said one company was sourcing some labor from a high school outside the area. We were able to get him in contact with our local school system who was able to add the kind of training he needs for his business within Springdale schools.

SAFETY, SALES FORCE ISSUES
Chung Tan, economic director in Fayetteville, said one of the key concerns uncovered among visits to the city’s industrial park was safety.

“Now that many of those companies are ramping up to three shifts from two they were concerned about safety during that overnight hours. We were able work with the city and install several traffic lights and the city has budgeted to build a sidewalk throughout the park this year,” Tan said.

She said drilling down to the micro level with the local businesses also showed that a large percentage of them are selling product abroad.

“We are able to work with them and help provide some assistance and training by connecting them with the Arkansas World Trade Center. This has been good,” Tan said.

Jayne Lowe, director of retention with the Bentonville-Bella Vista Chamber of Commerce, called on offices of just one person all the way to multinationals.

“One main concern I saw from some small businesses is that they are having a hard time attracting and retaining a quality sales force because there are so many vendor sales opportunities at high levels of pay,” Lowe said.

Tom Ginn, vice president of economic development at the Bentonville-Bella Vista Chamber said, he encountered a tech company that employed a majority of folks who were software engineers and out-of-country residents. He said these workers obtained visas and secured an Arkansas driver’s license while here. But with the crack down from Homeland Security it was taking much longer to get the work visas renewed which was also triggered  the driver’s license renewal which could be done in Little Rock.

“They were loading up a van load of workers several times a month and headed to Little Rock for the driver’s license renewals. Each time the lost a day of productivity and the cost of travel,” Ginn said.

The chamber worked with the Department of Motor Vehicles and now there is someone in Bentonville who can do the license renewals, alleviating the need to travel to Little Rock and allowing the local company to be more productive.

Harvey said the chamber groups would see another 450 businesses year as the retention efforts continue.

Mayes said each year gets easier and bears more fruit at least that has been the case in Siloam Springs since their efforts began in 2009.