Live from Music Row Thursday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – host Leahy welcomed all-star panelist Clint Brewer in studio to comment upon the rise in new businesses re-locating from liberal states to Tennessee and the role of the state funding board.
Leahy: We are joined in studio by our good friend all star panelist, Clint Brewer. Clint, you were with the Economic and Community Development Department back in the Hagerty days and made some news today.
The governor and Commissioner Rolf have announced a new deal for Fiber On manufacturing down in Columbia. Fiber On is a subsidiary of Fortune Brands Homes and Security. They say that it will create 310 new jobs over the next five years.
The company is founded in North Carolina. It is described as a leading US manufacturer of wood, alternative decking railing and cladding. It prides itself on serving customers with high quality, eco-friendly products. Our friend Andy Ogles was pleased.
The mayor of Maury County. Maury County, of course, that bastion of freedom, the turbocharged engine of economic growth. He said, “Companies are increasingly taking note of the strategic location, business-friendly environment and high quality of life to select Maury County as their location of choice.”
What I don’t see here is in our story, and we haven’t had this revealed, what sort of economic incentives did Tennessee provide to Fiber On to come to Maury County. Is that standard practice?
Brewer: Yes. Until you get a contract done for those, it’s hard to announce them now. What can happen, Mike, is it can to a board. There’s a board in state government called state funding board.
And I am not current enough with it to know what that amount is. But if it crests a certain amount dollar-wise, then it has to go to the state funding board for pre-approval and there can be a disclosure there.
Usually, if it’s a significant economic incentive package, it will go to the state funding board. And that disclosure typically happens within a matter of weeks to months after the announcement.
Leahy: But until that time, I guess the Tennessee General Assembly will approve a budget. X amount of money goes to economic development.
Brewer: That’s right. The program is called the fast track program, and it’s a grant program. It does job training. So a lot of people think of these as economic incentives. It’s not just giving cash to the company.
You train the workforce with it so the money is flowing to programs that go back to Tennessee and that it trains the workforce. It can go to infrastructure to support the facility.
Let’s say it needs a piece of new road or sewer or water to stand up the facility, it can go to public infrastructure that doesn’t just benefit that facility, but can be used for other facilities in the area.
And then there’s a third leg to it where it actually can defray some of the costs if they have to move people or relocate equipment.
Leahy: I would like to see every deal, the dollars and the breakdown identified publicly at the time the deal is announced. What would be the reason not to do that?
Brewer: It has to do with their legal ability to do it if a deal is not in a contract then it’s not actually official, and this is just a matter of people knowing how to access the system.
Journalists, again, should monitor the state funding board. They should also monitor the transparency side of the department.
Leahy: If we did more of our own homework, we might be able to discover more sooner. Is that what you’re saying?
Brewer: That is correct, Mike.
Leahy: So in other words, Leahy, get your guys to work. (Laughs)
Brewer: Yes. There are ways to there’s a disclosure there. You can find it if you want it.
Leahy: All right. So the gauntlet has been thrown down, and we’ll have our team go out and scrutinize all these deals. Speaking of deals just in general.
I think if it’s disclosed and you know what it’s about, I am less opposed to these kinds of deals, although, in principle, I think there has to be no money going to these guys. But that’s a longer discussion. Here’s something interesting.
In Ohio, Governor Mike DeWine, very unpopular among Republicans. He’s a Republican. Very popular among Democrats. And things people consider as a purely political ploy because he’s got a primary challenger, Jim Renacci who’s more of a Trumpian kind of guy.
They’ve got a primary there in May. Here’s a story from the Columbus Dispatch. Intel plans to spend $20 billion building a massive semiconductor chip manufacturing campus in central Ohio.
The DeWine administration says the deal will generate more than 20,000 jobs and add about $2.8 billion to Ohio’s annual gross product.
But the governor declined to answer specifics about the incentives Ohio offered to entail to make the Buckeye State more attractive than, wait for it…the 39 other states that competed for the project. Semiconductor chips in Ohio. These are like two general ideas that usually don’t go together in people’s minds.
Brewer: Oracle’s main campus going on the riverfront in Nashville was something people didn’t think would ever happen. What you’re seeing is you are seeing aspects of the tech industry fleeing California.
Leahy: A very good point.
Brewer: This has been happening for some time. Going back decades. Plus, you can see an influx of companies from California. Specifically from California, Illinois and New York.
And they’re coming to states like Ohio, like Tennessee, other Southern states, in particular, Texas that have right-to-work laws on the books and have business-friendly environments.
Leahy: Very interesting. Very interesting.
Brewer: People think it’s the incentives but really the incentives are the last part of the deal.
Leahy: But they’re part of it, typically. Economic development has to do with the workforce. Do you have the workforce? Number one? Number two, do you have a site?
And number three, do you have the correct business environment from a regulatory standpoint for that industry? Those are really the most important things.
Leahy: Workforce, is that the most important element of it?
Brewer: Oh, absolutely. Yeah.
Leahy: I would think so, because if you’re going to make chips, you better be able to make chips that work right?
Brewer: You’ve got to have the head count. Right? You’ve got to have the population to support it. And then you’ve got to have a system.
And the state in question, the partner government, if you will, has to have a system where they can actually train people or participate in that training. Tennessee is terrific at training people.
Leahy: Yes. I think that’s one of the many reasons to come to Tennessee.
Brewer: So your listeners will be particularly interested in this. They’ve probably noticed in the last five to seven years several high-profile firearms manufacturers are coming to the state.
I was directly involved in the recruitment of Barretta under Senator Hagerty. And then Smith and Wesson, just located in East Tennessee. Interestingly, talking about workforce, a lot of the skills required to make firearms are also the same skills required to make automobiles.
Leahy: Ah ha!
Brewer: Metallurgy, machine shop techniques. It’s a lot of the same coatings. We learned that in our recruitment of Baretta is that a lot of the same skill trades that happen in automotive can be very quickly transferred to firearms.
Leahy: Let me add to that just a little bit. If you look at one of our friends and advertisers the Glock Store, which I don’t know if you’ve been to it yet, but they’re fantastic. They moved here from California.
Brewer: They did.
Leahy: And not only do they sell Glock parts, I think they’re the biggest nonmilitary distributor of Glocks and glock parts in the country, they make specific Glock parts. And you know how you make them? You get one of these things called a CNC machine. I’m sure you are aware.
Brewer: Oh yeah.
Leahy: A CNC machine basically is used in the manufacturer of primarily, I guess, metal parts.
Brewer: That’s right.
Leahy: And those metal parts are used in making automobiles and making guns and gun parts. And it’s interesting, one of the reasons that they came here was because, oh, there is a bit of a manufacturing base and skill set to understand how to operate a CNC machine.
Brewer: It’s also interesting that one of the biggest advocates for the firearms industry locating here has actually been Barrett Firearms. If people aren’t familiar with that, Barrett Firearms is in Rutherford County, and they created one of the most technologically innovative rifles the American military has ever used which is a 50 caliber rifle typically used in sniper situations. And it’s very hard to make.
Leahy: And you need people who have the skillset and we have them. And we’re getting more in Tennessee, more to our advantage.
– – –