Many of the nation’s industrial sectors saw major declines in the first quarter of 2014 as 16 of 22 industry groups contributed to the 2.9% decrease in U.S. economic activity, according to a quarterly report from the U.S. Bureau of Economic Analysis (BEA).

The bellwether industry data from the U.S. Department of Commerce is derived from last month’s GDP report showing the U.S. economy fell nearly three points in the first quarter of 2014, following an increase of 2.6% in the fourth quarter of 2013.

Overall, both private services- and goods-producing industries contributed to the decrease, while the government sector increased slightly. Durable-goods manufacturing; wholesale trade; and agriculture, forestry, fishing, and hunting, all key contributors to the Arkansas economy, were major factors in the GDP decline.

The new report from the U.S. Department of Commerce’s statistical arm could also put a damper on last month’s news that Arkansas’ economy grew 2.4% in 2013. At the time, John Shelnutt, head of the Arkansas Department of Finance and Administration’s Economic Analysis and Tax Research division, called the sources of growth in Arkansas “a little unusual.”

He said the state experienced robust gains in the service and agriculture sectors, but saw contraction in construction and manufacturing. But the most unusual source of growth came in the mining sector, which saw a huge decline in 2012 as natural gas prices and low rig counts buffeted the Fayetteville Shale.

“That is a little odd because it is a volatile sector where (growth) doesn’t persist year after year, or multiple years,” Shelnutt said. “It could be seen as a one-time contribution. It is a rebound from the negative year in 2012, but goes beyond a simple recovery.”

Other recent signs of a downturn in Arkansas came in a June 24 report from the U.S. Commerce Department indicating that personal income fell 0.2% in the first quarter as earnings for state workers failed to keep pace with inflation and Arkansas farms lost more than $1 billion.

And to add fuel to the fire, the first quarter downturn across the U.S. was not limited. Overall, 19 out of 22 industry groups contributed to the 5.5 percentage points downturn in real GDP; the leading contributors to the downturn were wholesale trade; professional, scientific, and technical services; and durable-goods manufacturing.

Here are some other highlights of the BEA report:
• Growth in real value added slowed for nondurable-goods manufacturing in the first quarter; however, the industry group contributed the largest positive offset to the decrease in real GDP in the first quarter. Nondurable-goods manufacturing, which includes petroleum and coal product manufacturing, increased 15.1% in the first quarter of 2014, after an increase of 18.6% in the fourth quarter;

• Professional, scientific, and technical services turned down in the first quarter, decreasing 6.5% after increasing 5.9% in the fourth quarter. Professional, scientific, and technical services includes industries such as legal services, engineering, and administrative management and management consulting services; and

• Federal government turned up 3.2% in the first quarter—its first increase since the second quarter of 2011.

Economists are split on the direction the economy is heading. There is a school of thought that blames the rough first quarter numbers on harsh winter weather that crippled the U.S. economy for weeks. Other economists predict the financial markets will lose steam and are awaiting other indicators of second quarter performance.

This is only the second time that the BEA has published quarterly GDP by industry statistics. The first release was on April 25, 2014, spanning the period 2005 through the fourth quarter of 2013. Previously, BEA published these statistics only on an annual basis, so businesses and policymakers had a much longer wait for such information.

Generally, GDP statistics are monitored closely by businesses to help them make decisions about whether to boost hiring and to expand capital spending. Real gross domestic product, or GDP, is the output of goods and services produced by U.S. workers.

A study released July 22 by the University of Arkansas this week said research showed that charter schools provide a greater return on investment and are more cost effective than traditional public schools. The head of Arkansas' largest education trade group said the study only tells part of the story.

The study was released by the university on Tuesday and was said to have included research of schools in 28 states.

"The national report, titled 'The Productivity of Public Charter Schools,' found that charter schools deliver on average an additional 17 points in math and 16 points in reading on the National Assessment of Educational Progress exam taken by students for every $1,000 invested," the university reported on its website. "These differences amount to charter schools being 40 percent more cost-effective in math and 41 percent more cost-effective in reading, compared to traditional public schools."

One of the university's education professors said there were two primary reasons for claiming that charter schools were more cost effective than public schools.

“Across all states, we found charter schools to be more cost-effective than their traditional public school counterparts for one of two reasons: they either generate higher student achievement at a lower cost or they generate equal to slightly lower student achievement at a much lower cost,” said Patrick Wolf, Distinguished Professor and holder of the Twenty-First Century Chair in School Choice at the University of Arkansas. “Now that we know how well schools are using the public funds they receive, it would be fascinating to see what charters could accomplish if they had close to equitable funding.”

But Tom Dooher, executive director of the Arkansas Education Association, said Friday (July 25) that the study was flawed for several reasons.

"First, I think the readers need to know who funded the project — the Walton Family Foundation. They are pro-charter school advocates. So there is a bias going into that," he said.

Dooher also said the study only reviewed math and reading test scores and did not look at the "whole child."

"We know that a child is much more than a test score," he said, adding that public schools are tasked with providing a full curriculum and set of extra-curricular activities, such as arts, athletics, band and more, which contribute to some of the increased costs that may have been included in the study.

Dooher said limited extra-curricular activities coupled with the fact that charter schools are not necessarily under a mandate to accept and educate all children within district boundaries play into why the study is not an "apples to apples" comparison.

Even though he said the study was not a fair comparison, the university said the study compared "two similar students, one attending a charter school and the other attending a traditional public school. ROI (return on investment) calculations then factor in dollars invested in a school, academic achievement and projected lifetime earnings – to see which school type 'pays off' over time in terms of the economic benefits from increased learning."

“This study is path breaking and is likely to spearhead a new and important policy debate,” said Eric Hanushek, Senior Fellow at the Hoover Institution at Stanford University, who reviewed the report’s methodology and key findings. “Until the 2008 recession, schools largely acted as if they were immune from considering finances and returns on expenditures, but we now know that this is no longer possible. This timely study invites a more rational discussion of policy choices, not just with respect to charter schools, but also in a wider context.”

But Dooher said a larger study needs to be conducted over the long-term before any policy discussions take place. He said that Art Rolnick, former director of research and public affairs at the Federal Reserve Bank of Minneapolis, conducted a study that showed a real emphasis should be placed on early childhood education in order to increase return on investment and cost effectiveness in education.

"He did a 16- to 20-year study and started with children in early childhood. He found that when you educate the whole child, you get a 16% better return rate on that child," Dooher said, adding that overall welfare costs and incarceration rates proved to be lower, as well.

"You can't take a one year snapshot of one test that looks at a child's reading and math score. You need to look at the career of a child. If you want the answer on the return on investment, you need to look at the career of a child."

Dooher said charter schools have not been in existence long enough for a study of significance to yet exist and added that until charters take on any and all students just as public schools must do by law, any studies would continue to be fundamentally flawed.

"Look, it makes for a good headline and it makes charter schools feel good about what they're doing, but it does nothing to tell us how well they're doing," he said. "I think what we need to make sure is that the public has an understanding of what do they want schools to produce? And once we have that understanding and ask that question, then we can understand what we want our kids to look like when they graduate. Once we have that, we can study to see if we're getting what we want. But to say are we doing that cost effectively is not an apples to apples comparison."

Tyson Foods announced late Friday (July 25) plans to shutter three of its processing facilities as it streamlines its prepared foods segment ahead of the anticipated merger with Hillshire Brands.

The meat giant said a total of 950 jobs will be impacted with these closures by mid next year:
• 450 jobs Cherokee, Iowa, plant to be shuttered Sept. 27;
• 
300 jobs Buffalo, N.Y., plant closing by mid 2015; and

• 200 jobs Santa Teresa, N.M., plant closing by mid 2015.

Tyson said in a press release that the closings will enable the meat giant to use more of the available production capacity at some of its other prepared foods plants. 

“This is a very difficult decision since it affects the lives of our team members and their families,” said Donnie King, president, prepared foods, customer and consumer solutions for Tyson Foods. “However, these plants have been struggling financially. After long and careful consideration, we’ve concluded it no longer makes business sense to keep them open.”

The planned closures are due to a combination of factors including changing product needs, the age of the Cherokee facility and prohibitive cost of its renovation and the distance of the Buffalo and Santa Teresa plants from their raw material supply base in the Midwest. In addition, the closings will allow the company to shift some of the production and equipment to other, more cost-efficient Tyson Foods locations, according to the release.

All three plants have been part of Tyson Foods since 2001, when the company acquired IBP Inc.

The Cherokee plant, which Tyson Foods leases, has produced processed meats since 1965. It makes deli meats, hams, Canadian bacon and hot dogs.

The Buffalo facility produces hot dogs, sausage and hams. It first opened in 1969 and operated as Russer Foods until 1999, when it was acquired by IBP.

Santa Teresa makes a variety of cooked products including dinner meats, diced ham and roast beef. The facility was built by John’s Brothers and opened in the spring of 1982. It became part of IBP in 1994.

In the past year, Tyson Foods has expanded its deli meat capacity in the Houston, Texas plant. That was on top of the Hillshire Brands operations for deli meats and hotdog facilities in Kansas City, Mo.; St. Joseph, Mo.; Zeeland, Mich.; New London, Wisc.; and Claryville, Ky. Hillshire also operates sausage processing plants in Tennessee and Alabama. In total, Hillshire operates 11 separate meat processing plants on top of four non-meat facilities.

Tyson CEO Donnie Smith estimates that when the merger is complete, the companies will see $300 million in synergies in the first three years, which would be primarily gained from operational and supply chain efficiencies. Tyson has agreed to pay $63 per share for Hillshire Brands, a deal worth $8.55 billion.

Tyson management will answer questions about the pending merger and plant closures Monday morning during the company’s third quarter earnings call with analysts.

The meat giant noted in its release that affected workers will be encouraged to apply for openings within the company and also will be invited to job fairs Tyson Foods plans to host. In addition, the company intends to work with state officials to ensure employees are informed about unemployment benefits and any potential re-training opportunities.

The metamorphosis of Tyson Foods is well underway as the meat giant sheds its chicken operations in Brazil and Mexico to Brazilian-based JBS Holdings for $575 million and continues its own acquisition of Hillshire Brands. Both deals are expected to close by the end of the year.

Also on Monday, (July 28) Tyson Foods reported adjusted third quarter earnings of 75 cents, below Wall Street expectations of 78 cents per share. Net income for the quarter attributable to continuing operations was $260 million, just above the $249 million for the same quarter in 2013.

The company adjusted earnings by factoring out $29 million in fees (5 cent per share gain) related to the Hillshire Brands acquisition and $49 million in costs (8 cent per share gain) related to the closure of plants in Iowa, New Mexico and New York. The adjustment also includes removing $40 million (11 cent per share gain) for a tax benefit. Tyson had total sales of $9.682 billion in the third quarter ending June 30. Sales revenue improved from $8.731 billion a year ago, on higher meat prices. Sales topped the consensus analyst estimate of $9.47 billion.

"With $0.75 adjusted EPS, this was a record third quarter," Donnie Smith, Tyson Foods' president and CEO, said in the earnings statement. "Overall, our results were in line with our expectations. The Chicken segment could have performed better had it not been for isolated issues at a couple of plants. The Beef segment finished the quarter remarkably well after a difficult start. The Pork segment had a record third quarter despite tight hog supplies due to the PED virus. The Prepared Foods segment had a disappointing quarter primarily due to the continued run up in pork raw material inputs.”

Total revenue hit $27.475 billion for the first nine months of the company’s fiscal year, 7.8% higher than the $25.48 billion during the same period in 2013. Net income for the first nine months is $727 million, ahead of the comparable $517 million in 2013.

"We are nearing the end of what looks to be the best year in our company's history," Smith said. "We're looking forward to closing on the Hillshire acquisition before the end of our fourth quarter, and we're excited about combining the protein industry's best marketing and operations talent into one team. We'll be ready to start the new fiscal year together and anticipate delivering Tyson's sixth year in a row of strong earnings and operating income and also achieving our goal of at least 10% EPS growth in 2015."

INVESTOR APPROVAL
Investors approved of the Tyson results and added commentary on the pending merger with Hillshire Brands sending shares nearly 5% higher in early trading Monday. Shares (NYSE: TSN) were trading at $41.45, up $1.91 on high volume in the morning session. 

Tyson also announced plans to issue 24 million shares of its Class A common stock and 30 million tangible equity units with a stated $50 value, comprised of prepaid stock purchase contract and a senior note due July 2017, backed by the meat giant.

Net proceeds of this equity offering combined with additional debt financing and cash on hand, will help finance the previously announced acquisition of The Hillshire Brands Company and to pay related fees and expenses. Smith said Tyson remains committed to its investment grade rating and will working diligently to de-leverage its balance sheet from debt taken on to finance the $8.55 billion purchase of Hillshire  Brands. He expects the Hillshire acquisition to be accretive to earnings in 2015.

Fitch recently maintained Tyson Foods “stable” rating following the announcement of the Hillshire deal.

"Fitch views the pending acquisition of Hillshire as in line with Tyson's strategy of expanding in prepared foods and value-added products," according to Fitch analysts. "Pro forma for the acquisition, prepared foods will increase to 18% and 20% of Tyson's revenue and operating income, respectively, from 9% and 5% during the last 12 months ended March 29, 2014."

Fitch also expects Tyson to report its fifth-consecutive year of strong operating performance. The ratings firm said that Tyson's diversification and synergies with Hillshire Brands will help the bottom line despite mixed market fundamentals.

Not all analysts think the Hillshire deal is a slam dunk for Tyson investors. Robert Moskow, analyst with Credit Suisse recently downgraded Tyson stock to underperform, citing the “excessive premium paid to Hillshire Brands investors”.

“We certainly see how Tyson's offer to acquire Hillshire Brands at a 70% premium can create value for investors if they have a seven, ten, or twenty-year investment horizon. Unfortunately, most investors don't have the luxury of investing with such a long-term view,” Moskow noted.

SEGMENT INCOME
Operating income in the chicken segment was $195 million during the fiscal third quarter, below the $215 million in the same quarter of 2013.

Smith told analyst during the earnings call Monday, that demand for fully-cooked chicken products outpaced the company’s production capacity hindered by a fire in one plant and outdated equipment in another facility. He said Tyson has been buying more chicken on the open market to fill customer orders amid its own production shortfalls.

“We are completely out of fully-cooked capacity. We have ordered new equipment and are also bringing two more lines into production in the coming months. We expect our own production to be back to normal by the second quarter of 2015. This temporary disruption will reduce our return of sales by 1.2% to 2% in the fourth quarter,” Smith told analysts.

He said consumers are wanting more fresh retail chicken and Tyson plans to increase its processing capacity in this area in the coming months with increased companywide capital spending in 2015 to $900 million.

“We expect our chicken segment to fully recover in 2014 to a 10% return in sales. We feel good about the future. Grain costs are down, the products with the most demand are those with the highest margins,” Smith said.

Tyson’s beef segment income was $101 million, down from $114 million in the third quarter of 2013. The company cited fewer live cattle processed during the quarter as the reason for the decline.

Smith said Tyson expects adequate cattle for its operations which are located in the grain belt. He said retail beef prices continue to escalate. They have risen 10% in the past four weeks.

Tyson’s pork segment posted operating income of $128 million, almost double that of the $67 million in the 2013 quarter. Rising pork demand and higher pork prices contributed to the improved quarter for the segment. Smith said pork prices are up 23% in the past four weeks, and Tyson has been able to manage through the PED virus concerns better than expected.

The prepared food segment lost $50 million during the quarter compared to a $24 million gain in the same quarter of 2013. The loss was blamed on higher raw material costs of $95 million and investment in “growth platforms.”

Smith said the closure of the prepared foods facilities announced July 25 was part of the effort to streamline the prepared foods operations ahead of the Hillshire merger. 

“The closures were necessary to improve our cost structure, we are shifting the product mix to other, more efficient facilities. We continue to look for ways to improve the operational efficiencies in our private label products given we are facing higher costs of raw materials. We expect a positive outlook for 2015,” Smith said.

He told analysts that this segment would benefit from $225 million in synergies next year from the merger with Hillshire Brands. Those synergy savings are expected to top $500 million by year three.

“Combining Tyson’s legacy business with Hillshire branded business, it’s pretty easy to see to supply chain, purchasing and logistics synergies. Closing the 3 plants add to that.
This does not include marketing synergies and product innovation gains, which provide more upside,” Smith said.

INTERNATIONAL CHANGES
The company’s international segment lost $15 million compared to a $5 million gain in the 2013 quarter. 

Last quarter Tyson said it was disappointed with its Brazilian operations and it had cleaned house replacing management from the president to the field supervisors after several missteps.

Smith said at the time, “We have the right people in place there (Brazil) and expect this business to turn around in the back of this year.” 

On Monday, Smith said Tyson’s decision to sell its Latin American operations to JBS and Pilgrim’s Pride is a way it can quickly generate $575 million to help offset the cost the Hillshire acquisition. This deal is expected to close by the end of 2014.

"Although these are good businesses with great team members, we haven't had the necessary scale to gain leading share positions in these markets," Smith said. "In the short term, we'll use the sale proceeds to pay down debt associated with our acquisition of Hillshire Brands. Longer term, we remain committed to our international business and will continue to explore opportunities to extend our international presence."

Tyson de Mexico is a vertically integrated poultry business based in Gomez Palacio in North Central Mexico. It has three plants and employs more than 5,400 team members in its plants, offices and seven distribution centers. Tyson do Brasil operates two production plants in Santa Catarina and one in the state of Parana. Tyson do Brasil employs 5,000 team members.

Tyson Foods still plans to sell U.S.-processed chicken in Mexico. Part of the sales will include a “co-packaging” deal with Pilgrim’s Pride, which is a subsidiary of JBS.

Tyson’s three poultry plants in China, and the 5,000 people employed in Asian poultry operations, will not be sold. Smith said China continues to improve slowly. 

“We are now processing 100% company controlled in China today,” he added.

P.A.M. Transportation Services Inc. posted record quarter earnings behind 8.5% more loads hauled and a roughly 1.4% rise revenue per mile, before fuel surcharges. 

The Tontitown-based trucking firm reported net income of $4.945 million, or diluted earnings per share of 62 cents for the quarter ended June 30. These results compare to net income of $2.682 million, or diluted earnings per share of 31 cents a year ago.

Wall Street consensus for the quarter was 34 cents, on revenue of $105 million. Actual revenue for the second quarter totaled $104.34 million, including fuel surcharges. Revenue slid 5% from $104.40 million reported in the year-ago period.

For the first six months of 2014, P.A.M reported income of $6.3 million on revenue of $202.16 million, compared to $2.225 million on revenue of $204.38 million in the same period of 2013.

The solid earnings failed to impress investors as shares of P.A.M. Transportation (NASDAQ: PTSI) were trading at $34, down about 1% on the day. For the past 52 weeks the share price has ranged from a high of $34.90 to a low $11.26. The share price has already risen 65% this year from $20.75.

"We are very pleased to announce another quarter of improved results. The earnings per share results attained so far this year represent a 200% increase as compared to the same period last year. ... Also, considering that we are only halfway through the year and have already exceeded the net income posted for the entirety of last year, we are further satisfied that our strategic plans are maturing,” CEO Daniel Cushman noted in the release.

Cushman said the company continues to diversify some of its business away from the auto industry. 

“Our Automotive, Mexico, Expedited, and Dedicated divisions all continue to grow and improve financially. We continue to seek opportunities that we believe are driver friendly and as a result, we have increased our driver count despite the difficulties in the driver market,” Cushman added.

He said the automotive freight is generally very consistent and we are able to recruit and maintain drivers in this division. 

“Our Expedited Division continues to grow, and now comprises approximately 20% of our overall revenue. This division is very diverse and very service sensitive. By the nature of the business, we keep drivers moving and they get the miles they desire. We've focused on loading the expedited loads where they land, and as a result, we are experiencing positive trends in reducing deadhead,” Cushman said.

The company’s Mexico division is also growing because the lanes generally represent a long length of haul that drivers like, he said.  

"We have always had a lot of automotive dedicated business. In the past, we have had limited success in securing dedicated business outside of the automotive area, but within the last nine months we have been more successful in the diversification of our dedicated customer base. Again, this is freight that typically appeals to drivers,” Cushman said.

He said the company continued to move assets to its better performing divisions and away from the random freight business which is its lowest performing division.

"The majority of the growth in our more profitable divisions has come primarily at the expense of our random fleet. The resulting decrease in our random fleet has made it difficult to support our customer base that only has one way business. We are working hard to find ways to bring this type of customer more solutions. Our brokerage division is obviously one way that we can support our customers. We are making progress but this continues to be a great opportunity,” Cushman added.

P.A.M.’s brokerage and logistics segment produced revenue of $5.229 million in the recent quarter, down 12% from the prior-year period.

The company trucks logged 53.67 million miles in the quarter, down 7.5% from a year ago. There were 73,268 loads transported, up 8.5% from the second quarter of 2013. P.A.M. averaged 1,437 company-owned trucks and utilized 341 owner-operated trucks in the quarter.  Company-owned fleet numbers are down from 1,471 and owner-operated trucks rose from 321 in the year-ago quarter.

A survey by a prominent gay rights group asserts that large numbers of gays and lesbians in Arkansas report having been the victims of discrimination and harassment. The group is now pushing for legal protects for the LGBT community in the state with support from one prominent Democrat, but a Republican member of the Arkansas legislature is saying not so fast.

In the survey released Monday (July 28) by Human Rights Campaign — the largest such survey conducted of LGBT (lesbian, gay, bi, trans-gendered) individuals in Arkansas' history, the group said — a fourth of all respondents reported employment discrimination, while another 37% described harassment in the workplace.


The report from HRC notes that 38% of LGBT households earning less than $45,000 annually have experienced workplace harassment, while 43% of respondents said they had been harassed at "public establishments." The reported said 45% of those surveyed experienced harassment of some sort at school, with 44% saying that harassment was most common in high school. A full third of LGBT students in rural areas reported being harassed on a weekly basis at their schools.

"To address these disparities, earlier this year, HRC launched Project One America," a press release from HRC said. "With the goal of improving the lived experience of LGBT people, Project One America will work to change hearts and minds, advance enduring legal protections, and build more inclusive institutions for LGBT people from the church pew to the workplace."

As part of its work in the state, HRC on Monday named Kendra Johnson as state director for HRC Arkansas, where Project One America Director Brad Clark said she would work with Arkansas' elected officials to affect change in the state's hearts and minds and laws.

“Kendra has the vision to create a strong Arkansas community by working with various local leaders across the state,” Clark said. “She has the experience to bring LGBT Arkansans the respect and dignity they deserve.”

Jerry Cox, executive director of the Arkansas Family Council, said even though the survey from HRC may show that individuals feel as though they've been discriminated against, he said to his knowledge there has not been a single reported case of an individual being discriminated against "or thrown out of a restaurant because they were go."

"It's a solution in search of a problem," he added.

Rep. Greg Leding, D-Fayetteville, said the results of the survey show that Arkansas should advance some sort of legal protections for the LGBT community though he doubts such legislation will occur before his time in the legislature is up at the end of 2016.

"I do think we need to take some action. However, I don't think any legislation would stand a chance in the current (Republican-controlled) legislature," he said. "I think nationally, we clearly see opinion trending toward acceptance and equality. I think that's just the arch of the universe with past struggles. We're moving in that direction. Arkansas has lagged, but even here I see us moving in that direction (toward acceptance)."

But Rep. Stephen Meeks, R-Greenbrier, said passage of a law targeted at prevention of discrimination against gays and lesbians would create "special protections" that were unnecessary.

"I guess that would be my question, is what special protection do they need? There are already anti-discrimination laws that are available. I don't see where they would see that they would need special protections."

But Leding pointed to laws he said were specifically designed to discriminate against gays and lesbians as part of the reason why protections were needed.

"Obviously, I'm a pretty big proponent of doing away with the 2004 constitutional ban on marriage equality," he said. "The law forbidding unmarried couples from adopting, even though it didn't name gay couples, that's who they were targeting. And that's been repealed."

Arkansas'ban on gay marriage was ruled unconstitutional of Pulaski County Circuit Judge Chris Piazza, though it is not binding pending an appeal of the ruling. But the decision to stay Piazza's ruling did not come before hundreds of gays and lesbians married at courthouses across the state.

Where Leding said action needs to take place is locally, where city and county ordinances could be passed that would hopefully spur representatives of those communities in the legislature to act on a statewide level.

Leding's own city of Fayetteville is considering an ordinance that would protect LGBT citizens in the community from discrimination, according to a report from the Arkansas Times. Leding said even without the bill having passed, the conversation it has sparked within the Fayetteville community is a positive step forward for LGBT citizens in the city and in Arkansas.

"It has sparked some debate here in the community," he said. "I believe the mayor has expressed support. I know members of the council have. I've heard some mixed comments, too. Some in the business community think it is necessary. Some don't. But I'm glad the community is having the conversation, regardless of whether it passes or not. I think something could be done on a statewide level, certainly after I'm gone. But what will help drive that change more quickly is local communities passing ordinances similar to what's under consideration here in Fayetteville. That helps move things up the ladder."

But for all the talk of equal rights for gays and lesbians, Meeks said being a member of the LGBT community is a choice and therefore should not be afforded the same anti-discrimination protections as other groups, such as African-Americans.

"Laws should apply equally and fairly to everyone. This is why I would disagree. There are current protections in place, like for race. We can't decide our race or nationality. Those are things we have no choice over. These other things, people have a choice as far as their sexual preferences, so forth. So if we keep making these special exemptions or rules for these groups, where does it end?"

Wal-Mart’s decision to promote Greg Foran to CEO of Walmart U.S. was a surprising move to analysts given Foran does not have the U.S. retail experience that other execs within the company possess.

The retail giant passed over Duncan Mac Naughton, who has overseen U.S. merchandising for Walmart since 2010 and has more than three decades of experience in U.S. retail. Rosalind Brewer, CEO of Sam’s Club, also has U.S. retail experience dating back to 2006.

When a company chooses a successor for a top job, those who were deemed in the tournament running are apt to leave the company soon after a decision is made, according to Alan Ellstrand, professor at the University of Arkansas. Ellstrand’s expertise is in top management teams and corporate governance.

His comment was made last week following the resignation of Bill Simon as CEO of Walmart U.S., noting that Simon was passed over for the top CEO job going to Doug McMillon. Other Wal-Mart watchers and insiders now predict this could soon be the case for Mac Naughton.

BYPASSING LIEUTENANTS
"In our view, this choice presents a substantial learning curve and showcases a clear change in direction of the division, for him to successfully bypass all of Bill's lieutenants such as Chief Merchandising Officer, Duncan Mac Naughton,” Deutsche Bank analyst Paul Trussell wrote in a research note.

Given that Foran was just promoted to head of Asia less than three months ago, Faye Landes, analyst with Cowen & Co., said this implies that the most recent move was not in the works at that point.

“We will probably never know the backstory on this —  it seems likely that the company knew or at least strongly suspected that Simon would leave, but maybe they originally had someone else in mind as head of U.S," Landes added.

Ellstrand said when Jack Welch stepped down from General Electric in 2001 there were a number of well-qualified people in the running for the position. But soon after Jeffery Immelt was chosen, the others exited the company.

“It’s usually better for both parties, when this happens because that person passed over can’t help but feel that the company is going in a different direction,” Ellstrand said.

Not everyone believes there will be more changes at Wal-Mart under the direction of Foran. Budd Bugatch, analyst with Raymond James & Associates, notes that Wal-Mart’s mission under Doug McMillon’s leadership has been to right the ship.

“Wal-Mart’s prescription is pretty much the same across the world with their everyday low cost, low price policy. They really live that, and I think that’s one reason why they feel comfortable bringing Foran in to run the U.S. business,” Bugatch said.

WAL-MART TALENT POOL
Carol Spieckerman, CEO of NewMarketBuilders, said Wal-Mart is not the first U.S.-based retailer to tap a global executive to run its business.

“One of the more high-profile examples of a global executive taking the helm of a U.S.-based retailer is Hubert Joly, who at this point appears to be executing quite an impressive turnaround at Best Buy,” Spieckerman said.

She also notes that it hasn’t been that long ago that Wal-Mart was considered an end-of-career move, but more recently the retail giant has emerged as a talent incubator.

“I can’t remember when Walmart has had such a well-rounded stable of executive talent among its ranks and, although it’s a nice problem to have in retail, not all of those executives can count on enjoying a continual upward career trajectory within Walmart. Even those who may be in line for ongoing taps may get itchy, particularly given the number of high-visibility openings that exist in retail right now,” Spieckerman said.

Competitors Target and Dollar General are each in the market for a new CEO.

“Duncan Mac Naughton and others have a real shot at boosting their careers elsewhere and no doubt Walmart has anticipated a degree of executive attrition,” Spieckerman said.

The race to win the frugal, cash-strapped consumer got a little more heated on Monday (July 28) with Dollar Tree’s $8.5 billion blockbuster offer to acquire struggling discounter Family Dollar Stores.

The pro forma company will create a network of 13,000 stores with combined annual sales of $18 billion and present a bigger threat to Dollar General and Wal-Mart – a company in the midst of a small store expansion of its own.

Wal-Mart has planned to build 400 stores in fiscal 2015, giving it about 4,700 stores in various formats within its U.S. operations. Dollar General, the odd man out in the dollar area, has roughly 11,000 stores.

Jim Cramer, a contributor with CNBC, said Dollar Tree is the best operator in the small discount dollar channel and is buying the worst of the three. Though Dollar Tree’s business model is quite different from Family Dollar, Cramer believes the merger is a positive move

The company plans to maintain each brand. Dollar Tree CEO Bob Sasser, who will lead the combined entity, said the two chains have little overlap. Executives said they don't plan to close stores but may turn some Family Dollar stores into Dollar Trees, or vice versa, where the existing stores are underperforming.

"Industry trends and outlook are positive for the combined businesses with low and middle income customers continuing to look for ways to balance their budgets and stretch their dollars," Sasser said.

Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors, recently said: “Wal-Mart is in for big trouble for staying true to its insular corporate culture (one where it believes it's doing everything correctly) and failing to pay a premium to acquire instant square footage and name reorganization inherent to Family Dollar.”

Sozzi said as soon as the Dollar Tree/Family Dollar deal closes in early 2015, Wal-Mart will find the clock start for a competitive firestorm. He cautioned that a monster dollar store will have been formed that is closer to the economically-sensitive customers in rural and urban markets that view a trip to Walmart as expensive.

Sozzi also said a monster dollar store will also create synergies, an estimated $300 million to start.

“I expect more as the Dollar Tree cleans up the operational mess that is Family Dollar) to price its merchandise more competitively (especially doing the holidays), counteracting Walmart's ongoing efforts to reduce prices for food and consumable products. Here come the weekend circular price wars,” Sozzi said.

Gene Urcan, managing director of the Capello Group, said the dollar store merger could force Wal-Mart to be more aggressive in its rollout of small stores. For Dollar General he see the deal as a net negative.

Dollar General previously vetted the deal, but chose to grow its footprint organically, so the announcement that Dollar Tree made the offer was surprising to Jason Long, CEO of Shift Marketing Group.

“With 2,000 more stores than Dollar General suddenly there’s a new gorilla in the room. I don’t think any of this has much of an impact on Wal-Mart who has already put their own small store plan in motion,” Long said.

He believes the Wal-Mart could benefit from Dollar store closings that result from the deal, adding that there will likely be fewer closings than if Dollar General was the suitor.

Carol Spieckerman, CEO of NewMarketBuilders, was not surprised to hear that Dollar Tree made the offer.

“I can’t think of a better owner than Dollar Tree. Of the big three dollar stores, Dollar Tree stands out on a couple of important fronts. It operates multiple formats and understands how to flex format attributes for specific markets and customer segments and it’s the only dollar chain that is taking digital seriously,” Spieckerman said.

She adds that the multiple formats should make the assimilation of Family Dollar’s locations relatively seamless but it’s digital awareness that presents the most promise, and the biggest threat to Dollar General and Wal-Mart.

“For example, if Dollar Tree were to follow Walmart, Staples and others by building out an online marketplace filled with items from third-party sellers, its thousands of stores could potentially serve as pick-up locations for those items, greatly increasing the productivity of its fleet and generating additional income from its marketplace sellers,” Spieckerman said.

Walmart U.S. CEO BIll Simon was recently asked about the retailer’s appetite for acquiring a competitor in the dollar discount space. He said Wal-Mart Express with site-to-store, ship-to-store, full grocery, gas and pharmacy can drive the same sales as three to five Dollar Stores. He said the hybrid Neighborhood Market can drive the sales of 10 Dollar Stores, and both models make better use of capital given their reduced building costs.

Shares of Wal-Mart Stores and Dollar General dipped lower on the news. Wal-Mart stock (NYSE: WMT) closed at $75.71, down 26 cents rallying back from the $75.36 intraday low. For the past 52 weeks Wal-Mart share price has ranged from $81.37 to $71.51. Shares are down 3.73% since the first of the year.

Dollar General shares (NYSE: DG) closed at $55.56, down a nickel on the day. Shares rallied back from a intraday low of $53.78 following the Dollar Tree announcement. For the past the 52 weeks the share price of Dollar General stock has ranged from $65.99 to down to $52.40. Year-to-date shares are down 9.13%.

The biggest winners of the day were Family Dollar investors as shares rose nearly 25% to $75.74 per share. The deal made by Dollar Tree is $74.50 per share, a 23% premium over the Family Dollar’s share price on Friday (July 25).

Shares of Dollar Tree rose 1.2% on the news closing Monday at $54.87.

City directors from Barling and Fort Smith were given their first opportunity to ask questions regarding plans by the Fort Smith Public Schools to construct a third high school in Chaffee Crossing, an events complex near the airport and realign the district's grades during a joint meeting of the two cities and the Fort Smith School Board following a regularly scheduled meeting of the school board.

Dr. Benny Gooden, superintendent of the district, started the presentation to the two cities' board of directors by telling the elected officials that the plan decided on by the school board was about having a roadmap for the future.

He said on average, the district had large-scale construction projects about every 50 years, noting the construction of what is now Northside High School in 1928 and Southside High School in 1963. The last new school to be constructed in the district, Gooden added, was in 1986 when Euper Lane Elementary School was built to replace Echols Elementary after its sale to what was then Westark College.

Since that time, he said the district had seen ups and downs in student enrollment, but Gooden noted that enrollment began to show consistent growth and in many years rapid growth which has lead the district to have enrollment studies conducted that have shown as many as 17,500 students enrolled at Fort Smith's various schools by as late as 2030.

"If you look at that projection, it doesn't matter how many years you use. You're going to be there. Those of us who are living today need to be giving some thought, making some preparation to where we want to be at that time," he said.

Gooden also told the city boards that planning for the new school had begun with fervor in about 2009, when the school board determined that additional secondary school space was necessary to meet the needs of the district. While it did not necessarily mean construction of a new high school, Gooden said the "boldest" of the ideas on the table was to build the new school, which would allow the district to move freshman into the high school buildings and relieve overcrowding at the junior highs with the eventual option to relocate sixth graders out of elementary schools when the need arises. All told, he said the option would serve the district's needs for about 20 to 25 years.

"It gives you lots of options with, as we said, one big project," Gooden explained.

Conservative estimates for construction of a new high school place the project at about $65 million, with Gooden previously explaining that the district could seek a millage rate increase from 4.5 mills to 6.5 mils, though he would not commit to a figure when asked by Barling City Director Bill McMahan whether the district had decided how much of an increase to request from voters in an election that could come as early as May 2015.
www.thecitywire.com/node/31246

"The answer is no and the reason is we want to make sure that we can get a real number about the state, how much money we get from the state before we start calculating and throwing a number out there. Because when you throw a number out there, it's set in stone already. We want to wait," Gooden told McMahan.

Fort Smith City Director Keith Lau asked what steps the school board had taken to address concerns from the business community regarding a third Fort Smith high school. The group, including First National Bank President and CEO Sam Sicard, had questioned earlier this year the need for the proposed school and questioned ongoing costs.

"The concern that we have is with all the operational costs of a third high school," Sicard told The City Wire on Feb. 25. "We don't know what the operational costs of Northside and Southside (High Schools) are, but we guess it's a pretty large number. As students increase, you'll increase operational costs."

Gooden said the school board had hired Preston Smith with Business Information Systems of Kansas City to conduct the study for the district after putting out a request for proposal and receiving submissions.

"Obviously the purpose of the study is to satisfy people who didn't think we'd done our homework before, I suspect. Most of the questions that he's going to answer are things that we've already been through but he's going to a give us a second opinion, if you will. Actually, a third in some cases because we've already had two. But he's going to do a good job of it, I'm confident, and I will be surprised if he validates everything we did because that's what consultants do. We'll get a different opinion. But what we're going to get from him is these are options you have, this is where you're going in the future. It's not unlike consultants that you guys use."

Lau noted that the desire of the school board to raise the millage will come less than a year after the library will have asked for a millage increase, and also noted that the city was likely to raise water and sewer rates later this year as part of its ongoing investment as part of a consent decree in negotiations with the U.S. Department of Justice associated with the city's violation of the federal Clean Water Act.

With the possibility of a third increase in service fees and taxes on Fort Smith area residents in less than a year, Lau asked Gooden what the district's option B would be should a millage vote fail and a third high school becomes feasibly unrealistic.

"Plan B's adding some classrooms at every one of these campuses, that's plan B. It has to be," Gooden said.

"Keep in mind, you can only put so many students in each classroom," School Board President Jeannie Cole added.

"Yeah, because we're not going to violate the class size standards," Gooden added. "That will be plan B is adding on classrooms at every campus."

Cole noted that the earliest opening for the proposed third high school would be 2018, with the first possible graduating class walking across a stage as early as 2020.

Van Buren residents will have a contested mayoral election this year and the race is going to look an awful lot like the 2010 election after Van Buren Alderman Max Blake confirmed Tuesday (July 29) his entry into the campaign again incumbent Mayor Bob Freeman.

The two men previously faced off in 2010, with Freeman taking 56% of the vote to Blake's 44%.


Speaking to The City Wire, Blake said he was running for mayor to make a difference in the community and to "move Van Buren forward," adding that he was not running due to anything specific Freeman had done or not done in office during the last nearly eight years.

"It was laid on my heart four years ago and it's still there. And I have a lot of people encouraging me, people who voted for me last time. This time, I looked at it harder. I wanted to do it for the right reasons and I believe I am."

Blake said his campaign would focus on economic development in the city, adding that even though a large number of Van Buren residents work and shop in Fort Smith, there was no reason the city could not develop areas including the downtown and Lee Creek Road to draw more spending and tax revenue to the community.

He said in the case of Lee Creek Road, its location intersecting with Interstate 40 was a prime location for commercial development of some sort, including a truck stop. Blake said such an establishment would be convenient and would allow Van Buren to take advantage of the nearly 9 million vehicle movements along the interstate in a given calendar year.

The Drennen Scott House, a Van Buren historic site managed by the University of Arkansas at Fort Smith, is located near downtown and he said the city should be fully marketing the facility in order to draw visitors looking for culture who may visit Crystal Bridges in Bentonville or the planned Marshals Museum in Fort Smith.

But he said the key with targeting an area for development or trying to market one of the community's historic sites is to make the pitch to investors and business leaders, something he said has not been happening.

"It's just going out and you know, knocking on some doors and representing ourself and representing the citizens of Van Buren."

Blake not only envisions commercial growth, but other growth including the possibility of an aquatics center like the facility open in Alma and the other larger facility under construction in Fort Smith. He said sidewalks and other basic amenities are in need, as well. As for how to pay for such projects, he said once new businesses open and sales taxes start rolling in, the projects would be funded without having an increase in sales taxes.

Other development areas that demand attention from city leaders include the riverfront and U.S. Highway 64 on the east side of town, which he said will take cooperation from the public and private sectors to see full realization of any river developments.

In announcing his run for mayor, Blake said his platform on jobs and economic development in the community was not simply about challenging an incumbent mayor but about taking a vision and trying to make it a reality for a community that he has been a part of for the last 28 years.

"I've tried to tell everybody that this isn't about somebody being bad or good. I just want everybody to understand that this isn't about me saying somebody's bad or good. It's just something that I feel like that I can do and it's been laid on my heart to try and I'm committed to it. I've lived here a long time. And you can ask most people (who have) lived here this long. It's time."

Blake and his wife have two daughters. Prior to serving on the Van Buren City Council, he served on the Van Buren Housing Authority Board of Directors.

A new Talk Business & Politics-Hendrix College survey of 1,780 likely Arkansas voters shows U.S. Rep. Tom Cotton, R-Dardanelle, with a 44-42% lead over two-term incumbent Democratic Sen. Mark Pryor.

The poll, which was conducted July 22-25 across all four Congressional districts, has a margin of error of +/-2.3%.

Q: In the race for U.S. Senate, the candidates are Green Party Candidate Mark Swaney, Democratic Senator Mark Pryor, Libertarian Nathan LaFrance, and Republican Congressman Tom Cotton. If the election for U.S. Senate were today, which candidate would you support?
4%      Green candidate Mark Swaney
42%    Democratic Senator Mark Pryor
3%      Libertarian Nathan LaFrance
44%    Republican Congressman Tom Cotton
7%      Undecided

“Our latest poll indicates this race is still extremely competitive with neither candidate near 50%,” said Talk Business & Politics Editor-in-Chief Roby Brock. “With the daily pounding each campaign is administering to the other, with the barrage of ads flooding the airwaves from both sides, Cotton and Pryor seem to be drafting off one another.”

Two previous Talk Business & Politics-Hendrix College polls showed the race within the margin of error but with Pryor in the lead. In October 2013, shortly after Cotton entered the race, Pryor held a 42-41% lead. In April 2014, Pryor had a 45.5-42.5% lead. The Libertarian and Green party candidates each settled at 2% in the April survey.

The narrow lead in the Talk Business & Politics-Hendrix College poll is similar to that of a poll released July 9 by Little Rock-based Impact Management that showed Cotton with a 47%-43% edge over Pryor. The poll had a margin of error of +/- 2.72%.

DEMOGRAPHIC TRENDS
In the latest poll, three critical demographics provide insight on how the high-profile Senate campaign is unfolding.

First, Cotton is winning handily among Independent voters. Cotton leads Pryor by a 49.5-33% margin. But Pryor has a clear advantage with female and African-American voters, keys to victory that his campaign has emphasized. Pryor leads Cotton among female voters by a 45-40% margin and he leads Cotton 73%-16% among African-Americans.

Another key demographic are voters 65 and older. Both campaigns are vying for this age group known for consistent turnout, but also a segment of the population that has floated in its loyalty between Democratic and Republican candidates. Cotton leads Pryor 46-42% in the 65+ voter age group.

“This poll indicates what we all have known for quite some time, that this is going to be a very competitive race until the end, and GOTV (get out the vote) will most likely decide the winner,” said Clint Reed, strategist with Little Rock-based Impact Management Group, which works traditionally with GOP candidates.

“One point on emphasis is that Cotton consistently wins ‘independent’ votes by a hefty margin. Since 2010, these ‘independent’ voters have buoyed Republican candidates in Arkansas and that advantage continues to hold to form,” Reed added.

“If this poll had sampled African-American voters at the turnout we saw in 2010 — and there’s every reason to believe it will be higher this time — then Mark Pryor is solidly ahead,” said Robert McLarty, Democratic campaign strategist with Little Rock-based Markham Group.

“Ultimately, turnout will dictate the outcome and I feel confident that voters this year will respond to Mark Pryor’s message versus the reckless voting record of Tom Cotton. Mark Pryor would win if the election were held today, and he’ll win in November,” he added.

ANALYSIS

Dr. Jay Barth, professor of political science at Hendrix College, helped analyze the survey results.

The high-stakes race for the U.S. Senate remains locked in a near dead heat 100 days before Election Day. Our last survey showed U.S. Senator Mark Pryor with a marginal lead. This survey, with a sample of nearly 1,800 Arkansans, shows a similar marginal lead for Congressman Tom Cotton (44% to 42%).

It will take more time to see if this marks any legitimate shift in Cotton’s direction or, instead, remains statistical noise in a race that has been airtight for months. In all likelihood, fall debates (still in discussion) mark the next major opportunity for either candidate to create space in the race.

In examining the cross tabs in the survey, expected patterns emerge.

A gender gap continues to express itself in the race with Pryor leading among women (45% to 40%) but Cotton is running up a much larger lead among men (49% 37%). The poll was weighted to match the turnout in the last mid-term election (2010), but the Cotton campaign hopes that it can create a November electorate that is closer to even in terms of gender composition.

In terms of partisanship, each candidate has coalesced fellow partisans, although Pryor is running slightly more strongly with Democrats than is Cotton with Republicans. Importantly, Cotton has established a solid lead with independent voters (49.5% to 33%).

Cotton’s small lead is driven by his support among white Arkansans (47% to 39%). Pryor is showed to be gaining the votes of just under three-quarters of African-Americans with Cotton actually performing relatively strongly among this group (16%). The Democrat’s campaign hopes to both increase the share of the Arkansas vote that is African-American (although this sample is similar to our April survey of the race that showed Pryor ahead) as well as increasing the share of the African-American vote won by Pryor to margins more historically seen.

Finally, some important geographical divisions are showing themselves. While Pryor has a solid lead in the central Arkansas 2nd Congressional District (48% to 42%), Cotton leads in the other three congressional districts with a strong lead in the 3rd Congressional District (45% to 37%), a solid 46%-41% advantage in the 4th Congressional District he represents in Congress, and a marginal lead in the 1st Congressional District of east and southeast Arkansas.

After millions of dollars of spending and many more millions to come in the closing months of the campaign, it all adds up to an exceedingly close race in a contest that may well determine control of the U.S. Senate. (Editor’s note: Dr. Barth has been a financial contributor to the Pryor campaign.)

METHODOLOGY & DEMOGRAPHICS
This survey was conducted by Talk Business Research and Hendrix College on Tuesday-Friday, July 22-25, 2014. The poll, which has a margin of error of +/-2.3%, was completed using IVR survey technology and through live contact calls.

Approximately 18% of the voters in our sample were contacted via cell phone with live callers. This is in response to the increased reliance by voters on cell phones. Additionally, we applied our standard weighting to the poll results based on age, gender, and Congressional district.

The economy may be improving for Wall Street firms furnishing cheap capital to  corporate America at large, but a recent poll compiled by Sam’s Club and Gallup indicated two-thirds of new microbusiness owners rely on non-retirement, personal savings as the lead source of funding for their businesses.

Of the small, upstart business owners surveyed, 43% use credit cards and one in five use money from friends and family. The Sam’s Club/Gallup Microbusiness Tracker also found that despite new and alternate funding sources for small businesses, less than 3% of microbusiness owners use government loans, 2.4% have used small business loans and another 1.9% used crowd-funding to support their business venture.

The quarterly survey of 1,004 U.S. firms with five or fewer workers also found U.S. microbusinesses started in the past year are 30% more likely to use personal savings to maintain their business than a mature company owner. Microbusiness owners reported that in the past 12 months, two in five microbusiness owners (40.4%) have had to dip into personal or retirement savings to improve their bottom line, while 42% have increased the price of their goods and services, according the Sam’s Club/ Gallup poll conducted in May. 

MIXED CONFIDENCE
The Sam’s Club survey also explored the emotional and economic concerns of the country’s smallest businesses that employ one out of every 10 Americans. The survey reveals that more than half (54.9%) expect the economy to worsen, yet 70% are energized by their work and 65.2% are confident they have the talent to grow their company in the future. Confidence is also reflected in their perception of the future and their impact on the community.

As a group, 71% are confident in their company’s future and 67% feel they have a positive impact on their community.

“Despite concerns over worsening economic conditions, U.S. microbusiness owners are confident in nearly every dimension of work and life. This vital segment of the U.S. economy is passionate about their choice to pursue a small business venture and unwavering in their commitment to serving consumers with an intense focus on quality no matter how many other factors or challenges they may face,” Rosalind Brewer, president and CEO of Sam’s Club, noted in the survey report.

RETIREMENT ANXIETY
One of the few areas of emerging anxiety for microbusiness owners is a concern about long-term investments with 43% indicating they are worried about retirement.

The survey revealed other surprising findings about putting money away for the future.
The more you make the more you worry, according to the survey. Nearly half of microbusiness owners generating $50,000 or more in revenue (44%) are anxious about saving for retirement, compared to those making less than $10,000 (42%).

Having a nest egg weighs more heavily on female microbusiness owners, with 47% of women, compared to 41% of men, concerned about retirement savings.

Geographically, business owners near the East Coast are the most nervous about the saving for the future (49%) while Midwest microbusiness owners are the least apprehensive (39%).

The chancellor of the University of Arkansas at Fort Smith said several top-level administrators recently departing the university are signs the university is hiring the right individuals and developing them professionally and intellectually.

According to Director of Public Information John Post, the following individuals have left UAFS in recent months:
• Former Provost Dr. Ray Wallace, hired as chancellor of Indiana University Southeast;
• Former STEM College Dean Dr. Mark Arant, hired as provost at Northeastern State University;
• Former Vice Chancellor for University Advancement Dr. Marta Lloyd, hired as executive director of the Winthrop Rockefeller Institute;
• Former Vice Chancellor for University Relations Mark Horn, retired; and
• Former Public Relations Director Sondra LaMar, retired.

Dr. Paul Beran, chancellor of UAFS, said he hired driven individuals for the university's various leadership positions and provided opportunities for growth, some of which lead to the individuals choosing to leave the university. But speaking from personal experience, Beran said it is part of the development of academic professionals.

"Well, you help people to self-actualize. I didn't really plan on everybody self-actualizing more or less simultaneously, but people have to take opportunity when the iron is hot," he said. "I mean, personally I've lived in five states and have been a dean, a vice president, a president and a chancellor in four different states. So, I moved in order to take advantage of the next level and the next step."

As part of the professional development offered at UAFS, Beran said his leadership team has been given training and development opportunities through the American Association of State Colleges and Universities, while faculty have been sent to professional development training and seminars.

While he does not view the departures from the staff as a negative — Beran said he actually planned on Wallace eventually taking a president or chancellor position when he hired him eight years ago — Beran said he is working to hire the right people and providing the opportunity for promotion and advancement within UAFS without having individuals necessarily needing to leave for another college or university. He pointed to several examples of individuals being able to advance in their careers as a result of some of the recent departures.

"I've reached into the 20, 30 and early 40-something pool pretty extensively over the last several years. I have brought my athletic director, Dustin Smith, who worked with me as a young man in advising and got a masters degree in sports management and he came here as a assistant AD, and now as athletic director in his mid-30s. Sitting right here with me is John Post, who came here as an assistant and we've promoted him to the public information director," he said. "Dr. Elizabeth Underwood, who he works for, is someone who I went to about two years ago who we brought here as the director of alumni and she had just finished a doctorate in public (policy) at the University of Arkansas (in Fayetteville). … I saw the potential in her to go to the next stage which is to work with me directly to manage legislative affairs and now she's moved into oversighting public information, as well as all our FOIA requests."

He also pointed to Dr. Georgia Hale, who was recently promoted to Wallace's former position, noting that she had promoted her way up through a variety of positions at the university during Beran's time as chancellor.

"I could see her expertise and when Dr. Wallace got the call to be chancellor at a different institution, he turned things over to her and had a very good leaving and I could see her leadership ability and that's when I, without search, invited her to step into the position," Beran said.

And even though the transitions taking place at UAFS are "a natural part of the collegiate experience," Beran acknowledged the interest the community could have with the news of several high profile departures from the administration and noted that with the change from a community college to a university meant more than just adding four-year degrees, but continually adding new members of the community.

"The other piece of this that people don't really take into consideration is I think when people looked at the institution as WestArk, there probably was more longevity at WestArk. And I think there is, in general, maybe more longevity at community colleges primarily because you have so many people who are engaged and invested in the community in which the college is. When you become a university, you have a much broader regional, statewide and really national vision that longevity at one particular institution becomes less significant."

While information on turnover and retention rates for administrative-level staffing at universities and UAFS in particular are not reported, Beran said the departures should not cause concern because the individuals leaving UAFS are doing so for bigger positions versus leaving for similar positions, which he said would likely be a sign of unhappiness.

"I guess what it comes down to is the real question is, 'Am I concerned?' And the answer is no," Beran said. "Because we've got the stability, we have layers of stability to continue to create opportunities."

Family Dollar will soon shutter seven underperforming stores across the Natural State – a move resulting in up to 70 lost jobs.

Three of those Family Dollar locations are located in Northwest Arkansas and one is in the Fort Smith metro area, according to Bryn Winburn spokeswoman with Family Dollar. The company is in the process of being acquired by Dollar Tree in an $8.5 billion deal.

Winburn said Family Dollar is taking decisive action to position the company to be more successful in an adverse operating environment. She said after a full assessment, 370 of the retailer’s 8,246 stores were tagged as underperforming.

“We currently operate 115 stores in Arkansas. Over the next several weeks, we plan to close 7 underperforming stores. Each of our stores employs between 8-10 team members, and we will do everything we can to reassign impacted team members to nearby stores,” Winburn said.

The following stores are slated for closure by August 31.
• 1328 North College Ave. in Fayetteville
•  514 W. Centerton Blvd. in Centerton
• 113 East Pridemore Drive in Lincoln
• 230 Cloverlead Plaza in Van Buren

During a conference call Monday (July 28) Dollar Tree CEO Bob Sasser said the two dollar store chains had been in merger talks for several months. He expects the deal to close early next year, pending approval by Family Dollar shareholders and regulatory scrutiny.

Sasser told analysts during the call that the banners would remain in operation with the exception of underperforming stores. He said in some cases Dollar Tree locations could become Family Dollar and vice versa. The pro forma company will have more than 13,000 locations with a growing footprint in Canada as well.

The two chains operate with very different models, Family Dollar is mostly located in rural areas and offers a wide variety of discounted merchandise at low opening price points. Dollar Tree operates in strip centers within urban areas and sells all merchandise at $1. CNBC contributor Jim Cramer said the two banners are like an apples and oranges comparison. 

“I am a huge Dollar Tree fan, they operate clean, well-run stores and are a great venue for purchasing seasonal merchandise. Family Dollar can benefit from Dollar Tree management. Together they will also be able to create synergies and help to negotiate better pricing on logistics and supplier pricing given their combined scale,” Cramer said.

Some analysts believe Wal-Mart might pick up some of the slack in the rural areas where Family Dollar stores are closing, given the retail giant is in the midst of rolling out more Express Store formats this year and next.

Decatur, a town of about 2,000 residents, has been earmarked for a new Walmart Express, the third small format built along Arkansas 59 by the retail giant. With the closing of the Family Dollar in Lincoln, Wal-Mart might see another opportunity fir ab Express Store or a Neighborhood Market.

Wal-Mart recently opened a Neighborhood Market in Centerton and will soon open a supercenter there, also.

Superior Industries announced early Wednesday (July 30) that it would close its Rogers wheel manufacturing plant as “part of an initiative to reduce costs and enhance its global competitive position.” The closure will result in the loss of 500 jobs, with the plant expected to end operations by the end of the year.

The company’s plant in Fayetteville will remain open, with some of the work from Rogers being shifted there and to operations in Chihuahua, Mexico. Company officials said the move would result in a $15 million per year labor cost savings. Average local wages at Superior Industries range from $55,000 to $80,000 annually, according Glassdoor.

“This action follows a comprehensive review of the company’s cost position in what continues to be an intensely competitive environment,” Don Stebbins, who joined Superior in May 2014 as its president and CEO and member of the Board of Directors, said in the statement. “Our board and management team remain focused on building an efficient, operationally stronger organization that can compete effectively with manufacturers around the globe. We appreciate the contributions of our team members at Rogers and will be providing assistance to them during the transition process”

Superior noted in June of 2013 that its U.S. facilities were unable to keep pace with the demand out of Detroit. Management said the plants in Rogers and Fayetteville faced capacity restraints and ran far less efficiently than their sister facilities in Mexico.

Kerry Shiba, chief financial officer for Superior Industries, said in June 2013, the challenges in the local plants related to their older age, equipment reliability and they are less adaptable to the “increasingly challenging product mix” in orders it gets from its two largest customers Ford and General Motors.

Despite retooling the Rogers plant in 2013, and a hefty $18 million capital investment last year in the two local plants, the company said it continued to lose some marketshare because it could not keep pace with demand. The company said most of the $18 million was earmarked for the larger Fayetteville plant, perhaps another hint that the Rogers facility’s days were numbered.

In 2013, the company said it squeezed 800,000 extras wheels from the two plants but that was not enough. Soon after, the company broke ground on its fourth facility in Mexico hoping to recapture some additional market share.

At $125 million, the new plant in Mexico will produce up 2.5 million wheels a year, giving the company 20% more capacity.

The closure is a huge blow to the Northwest Arkansas employment sector that continues to lose higher paying manufacturing jobs, despite a few recent announcements related to Wal-Mart’s U.S. manufacturing jobs initiative. Manufacturing employment in Northwest Arkansas was an estimated 26,300 in June, down from 26,500 in June 2013, and well below the 33,300 in June 2004 – a more than 21% drop in the 10-year period.

Wall Street analysts said Tuesday that they are concerned about the increasing capacity in the auto industry over the past few years. Adam Jonas, auto analyst with Morgan Stanley, said that the auto market's five year run of expanding production and profits is peaking.

"We're pulling forward from the future and it's worrisome" Jonas said.

The industry has added back 120% to 130% of the capacity lost during the recession, according to Jonas. 

“The current boom in auto production in Mexico is an example of the new surge in supply heading to U.S. showrooms,” he said.

Auto dealerships across the country report brisk sales that have them worried there won’t be enough automobiles coming to keep pace with the average 16.5 million units sold annually. 

In the first quarter of 2014, Superior reported lackluster earnings as its biggest customers, Ford, General Motors, Chrysler and Toyota worked through unsold inventories. The company reported net income of $4.8 million for the first quarter, flat with the year-ago period.

Net sales for the 2014 first quarter decreased 11% to $183.4 million from $206.4 million in the comparable period a year ago. However, the company’s gross profit improved to $15.6 million for the 2014 first quarter from $13.5 million in 2013, while the 2014 first quarter gross profit margin improved to 8.5% of net sales from 6.5% last year.

The gross profit margin improvements were attributed to lower labor costs and improved operational efficiencies.

Superior Industries will report its second quarter earnings on Thursday (July 31.)

A continued decline in the size of the workforce and the number of employed edged the Fort Smith metro jobless rate to 6.4% in June compared to 6.3% in May. The rate was lower than the 8.2% in June 2013, but the number of employed in the region fell 2.24% in the 12-month period.

June’s data is subject to revision in future reports from the U.S. Bureau of Labor Statistics.

The size of the Fort Smith regional workforce during June was 126,822, down slightly from 126,971 during May, and well below the 132,323 during June 2013, according to figures released by the U.S. Bureau of Labor Statistics. The labor force reached a revised high of 140,253 in June 2007, meaning the June workforce size is down 9.57% from the peak number.

The number of employed in the Fort Smith region totaled 118,751 in June, down from 118,929 in May, and an estimated 2,726 jobs below the 121,477 employed in June 2013.

Six of the eight metro areas in or connected to Arkansas had jobless rate increases in June compared to May, but all had jobless rate declines compared to June 2013. Northwest Arkansas and central Arkansas jobless rates in June were unchanged compared to May. During June, the lowest metro jobless rate in the state was 4.9% in Northwest Arkansas and the highest rate was 8.7% in the Memphis-West Memphis area.

FORT SMITH METRO NUMBERS
Unemployed persons in the region totaled an estimated 8,071 during June, up from the 8,042 during May, but well below the 10,846 during June 2013.

The Fort Smith area manufacturing sector employed an estimated 18,400 in June, up from 18,200 in May, and unchanged compared to June 2013. Sector employment is down almost 36% from a decade ago when June 2004 manufacturing employment in the metro area stood at 28,500. Also, the annual average monthly employment in manufacturing has fallen from 28,900 in 2005, 19,200 in 2012, and to 18,300 in 2013.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 24,400 in June, up from 24,300 in May, and above the 23,700 during June 2013. Employment in the sector reached a high of 25,700 in December 2007.

Employment in the region’s tourism industry was 9,600 during June, down from 9,700 in May and above the 9,400 in June 2013. The sector reached an employment high of 9,800 in August 2008.

In Education & Health Services, employment was 16,300 during June, down from 16,500 in May and below the 17,000 during June 2013. Annual average monthly employment in the sector has steadily grown since 2005 when it reached 14,000. In 2012 the average was 17,000, but fell slightly to 16,800 in 2013. Employment in the sector reached a record 17,300 in October 2012.

In the Government sector, employment was 18,800 during June, down compared to 19,700 in May and unchanged compared to June 2013.

NATIONAL NUMBERS
Unemployment rates were lower in June than a year earlier in 359 of the 372 metropolitan areas, higher in 10 areas, and unchanged in three areas, noted the broad BLS report.

The U.S. unemployment rate in June was 6.1%, down from 7.5% from a year earlier. Arkansas’ jobless rate was 6.2% in June, down from 6.4% in May and down from 7.6% in June 2013.

Oklahoma’s jobless rate during June was 4.5%, down from 4.6% in May, and down compared to 5.5% in June 2013. The Missouri jobless rate during June was 6.5%, down from 6.6% in May and below the 6.8% in June 2013.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
June 2014: 4.9%
May 2014: 4.9%
June 2013: 6.1%

Fort Smith
June 2014: 6.4%
May 2014: 6.3%
June 2013: 8.2%

Hot Springs
June 2014: 6.5%
May 2014: 6.4%
June 2013: 7.9%

Jonesboro
June 2014: 6%
May 2014: 5.8%
June 2013: 7.5%

Little Rock-North Little Rock-Conway
June 2014: 5.8%
May 2014: 5.8%
June 2013: 7%

Memphis-West Memphis
June 2014: 8.7%
May 2014: 7.5%
June 2013: 10%

Pine Bluff
June 2014: 8.6%
May 2014: 8.4%
June 2013: 10.5%

Texarkana
June 2014: 6.3%
May 2014: 6.1%
June 2013: 7.5%

FORT SMITH METRO AREA HISTORY
Past annual average unemployment rates
2013: 8%
2012: 7.7%
2011: 8.3%
2010: 8.2%
2009: 7.9%
2008: 4.8%
2007: 5.3%
2006: 4.9%
2005: 4.5%
2004: 5.2%
2003: 5.5%
2002: 5%
2001: 4.2%
2000: 3.7%

A new Talk Business & Politics-Hendrix College survey of 1,780 likely state voters shows Republican Asa Hutchinson with a 46-41% lead over Democrat Mike Ross in the Arkansas Governor’s race.

The poll, which was conducted July 22-25 across all four Congressional districts, has a margin of error of +/-2.3%.

In the race for Governor, the candidates are Democrat Mike Ross, Republican Asa Hutchinson, Libertarian Frank Gilbert, and Green Party Candidate Joshua Drake. If the election for Governor were today, which candidate would you support?
41% – Democrat Mike Ross
46% – Republican Asa Hutchinson
3% – Libertarian Frank Gilbert
2.5% – Green candidate Joshua Drake
7.5% – Undecided

“This current state of the race is obviously good news for Asa Hutchinson and if some of the trends in this poll continue, it will become his race to lose,” said Talk Business & Politics Editor-in-Chief Roby Brock. “However, I view the Governor’s race as much more fluid and lacking in definition than the Senate race. With neither candidate breaking 50% at this point in the campaign, I won’t be surprised to see the race go in any direction over the next three months.”

Two previous Talk Business & Politics-Hendrix College polls have shown this potential gubernatorial match-up to have volatility.  In October 2013, a hypothetical race between the two candidates showed Hutchinson with a four-point advantage over Ross at 41-37%. In April, our survey suggested the race was a dead heat with Ross leading 44-43%. The Libertarian and Green party candidates each settled at 3% and 2% respectively in the April survey.

INSIGHT
In the latest poll, several key demographics provide insight on how the Governor’s campaign is unfolding.

Like the U.S. Senate race, Republican Asa Hutchinson has a comfortable lead with independent voters. Hutchinson holds a 50-32.5% lead over Ross among indies.  Hutchinson is leading Ross among male voters by 48.5-39% and has a one point lead among female voters 44-43%. Hutchinson also leads 47.5-43% among voters age 65 and older.  Conversely, Ross is doing very well with African-American voters, winning this voting bloc by a 70-18% margin.

“Asa is in a very solid position at this point. To me, It is difficult for anyone to dispute that Hutchinson leads in this race,” said Clint Reed, strategist with Little Rock-based Impact Management Group, which works traditionally with GOP candidates.

“I have seen a steady stream of public and private polling showing Asa ahead. Hutchinson continues to outpace Ross among Independent voters (+17), he leads among white voters (+10), he is doing very well among seniors, and there is no significant gender gap in this poll,” he added.

“This a very healthy, broad base of support to begin the final thrust of the campaign. The DGA and Ross recently spent almost $2 million collectively to define Asa, but Asa still maintains a significant lead. Take all of this and add in the mix that Ross’ early money has evaporated. Every single piece of evidence shows that Asa Hutchinson has the momentum in this race,” Reed said.

Robert McLarty, Democratic campaign strategist with Little Rock-based Markham Group, offered a different perspective.

“Mike Ross has never run for statewide office, so his name ID is still relatively low across the state and still has some room to grow. Asa Hutchinson’s lead at this point is most likely the result of his high name ID from his four decades of running for statewide office, but it’s got to be troubling to the Hutchinson campaign that he still can’t seem to break 50 percent,” McLarty said.

“Just like in the Senate race, this polling sample under-represents African-Americans as 8 percent of the electorate, when the real number is closer to 12 percent. This sample also has Ross at 70 percent with African-Americans, and based on historical trends, African-Americans are likely to break 90–10 for Ross, which would make the head-to-head actually 45 Asa, 44 Ross,” he added.

“In addition, I feel confident that Mike Ross will begin to show support among the key voting block of women voters. This poll has Ross and Asa essentially tied among women, but that will change as we get closer to Election Day once his plans for pre-kindergarten, job creation, domestic violence and child abuse start to reach voters,” McLarty said.

ANALYSIS
Dr. Jay Barth, professor of political science at Hendrix College, helped analyze the survey results.

The results from our survey of Arkansas voters show a lead for Republican Asa Hutchinson in the governor’s race that is just outside the margin of error. In our last survey, a statistical tie was shown between Hutchinson and Democratic nominee Mike Ross. Thus, Hutchinson seems to have grown a small lead in the race moving into the last 100 days of the contest.

The patterns across key demographic, geographic, and political groups track those seen in our results in the U.S. Senate race.

First, as in the Senate race, a gender gap is showing itself in the race. Among men, the Republican has a sizable lead (49% to 39%) while a near dead heat is show among women (Hutchinson leads 44% to 43%).

Second, Hutchinson leads strongly among white Arkansans (49% to 39%) while Ross, the Democrat, leads solidly among African-Americans (70% to 18%). That said, our polling in the last couple of cycles shows a consistent chunk of African-American voters supporting Republican candidates, a marked difference from the recent past. While the percentage is still a distinct minority, in a close race an underperformance by Democrats among a group of voters that the party has relied upon consistently could spell real difficulties.

Like Senator Mark Pryor, Ross leads in the Second Congressional District, but trails by a large margin in the Third Congressional District (50% to 36%) and by single digits in the other congressional districts.

Because Ross did represent the Fourth Congressional District in Congress for a dozen years, his small disadvantage there is notable. However, it should be noted that the district was reconfigured significantly in the post-2010 redistricting and Ross never ran in much of the area that now falls in the district.

Finally, expected patterns show themselves among partisan groups. Ross is running slightly better among his fellow partisans than is Hutchinson but both have shored up their bases nicely. While Ross can afford some deficit among independent voters on election day, he cannot survive the kind of lead now shown by Hutchinson among that group of voters (50% to 33%). That is the key to what is now a very small, but real lead for Hutchinson. (Editor’s note: Dr. Barth has been a financial contributor to the Ross campaign.)

METHODOLOGY & DEMOGRAPHICS
This survey was conducted by Talk Business Research and Hendrix College on Tuesday-Friday, July 22-25, 2014. The poll, which has a margin of error of +/-2.3%, was completed using IVR survey technology and through live contact calls.

Approximately 18% of the voters in our sample were contacted via cell phone with live callers. This is in response to the increased reliance by voters on cell phones. Additionally, we applied our standard weighting to the poll results based on age, gender, and Congressional district.

It was just more than a month ago that Fort Smith business and civic leaders said a concept similar to North Little Rock's Arkansas Innovation Hub was needed in the area and now the Fayetteville and Fort Smith public libraries have plans to introduce one aspect of the AIH concept.

Expansion proposals for the Fayetteville and Fort Smith Public Libraries include plans for “maker spaces,” which Fort Smith Public Library Executive Director Jennifer Goodson described as "when the library provides tools and training to allow people to make or create something from imagination to production. In this space, you create, invent and learn."

At the Fort Smith library, Goodson and the library's board of directors have proposed a plan to raise Fort Smith's millage rates by two mills in order to add $2.8 million to the library's operating budget which would allow it to invest in technologies to take maker spaces from concept to reality. It would have to be approved by Fort Smith voters in an election set for Aug. 12.

"In our particular space, we've talked about a 3-D printer, a good quality video camera and software, maybe a green screen. And we've talked about VHS conversation equipment," she said. "If we're successful (with the millage vote Aug. 12), it will include talking to the public and seeing what other things are possible. The emphasis is on technology."

At the Fayetteville library, Executive Director David Johnson said the library's dream is to purchase the old Fayetteville City Hospital and develop it as a library expansion with a large maker space included, with a total price tag between $50 million and $55 million. He said the purpose in creating maker spaces is not to necessarily be a business incubator, but to provide up to date services expected of a library in the 21st century.

"I think you see a lot of that coming around in the last decade, where there's more of a movement to that kind of activity," he said. "As libraries have shifted to more of a community space to meet and congregate, activities like maker spaces have bubbled to the surface."

Johnson said the addition of maker spaces to serve age groups from young to old and socio-economic levels from rich to poor is in keeping with the demands of the community and provides equal opportunities for learning and if an individual needs the space to improve or expand offerings for his or her business — like the occasional use of a 3-D printer — then that is what the Fayetteville library is hoping to offer with the maker spaces.

"When you look at what (groups) our library serves, it transcends all economic levels. It's the great equalizer. We tear down all barriers. We try to provide the community with all the different types of resources that they say they want or that we recognize support activities here in the community."

Goodson said while the plan has not been for the library to be a business incubator on the scale of North Little Rock's Innovation Hub, she said maker spaces at libraries like Fort Smith's can fill that need until either a private sector solution comes forward or a public-private partnership comes about to provide funding and support for such an effort.

"We've not had those formal discussions, but the library has had a long history of partnerships. Whenever we have the opportunity, we try to partner with groups to broaden our resources. We'd anticipate doing that with the maker spaces, as well," she said.

In Fayetteville, Johnson said informal discussions have taken place between the library and the Fayetteville Chamber of Commerce regarding the maker spaces proposed for the library campus in downtown Fayetteville and possibly housing a full business incubation center, but so far nothing formal has come from the talks.

"There's been some conversations about maybe the Chamber of Commerce or people doing that innovation, incubation space. There's been talk about having that in the library expansion. We're open to any ideas and suggestions with anyone who would be willing to work out a deal," he said. "They acknowledge what the library does is free access to the community. If we could work out something unique, I'd be willing to listen and see if we could make it work. I've had some conversations with the Chamber of Commerce about that opportunity, but it is just a high level discussion. There has been no conversation beyond, 'Hey, what do you think of this idea?'"

Even though Fort Smith is moving forward with its plans with the Aug. 12 vote, so far Johnson said the Fayetteville library has not determined what route it would take to fund the admittedly ambitious plan. He said the library building and adjoining parking deck were constructed through a three-quarters of a cent sales tax that was in place for the library for 18 months. It raised $18 million, plus the library raised private funds – with major support from Jim Blair – to supplement the sales tax. But he said the tax option is unavailable as the three-quarters of a cent sales tax is currently in use for long-term projects in the city.

"We will have to explore other options, possibly a millage increase or a capital campaign. There's been no decision yet," he said. "There's no clarity on how we're going to do that. But as soon as we do, we'll get it in front of the community to see if they want to help us. That conversation with the community is ahead of us."
Whatever option the library pursues in its attempt to make the $50 million plus expansion with a maker space a reality, he said the public will likely see more local libraries entering the maker space marketplace due to the services it can provide citizens.

Goodson said maker spaces popping up at libraries across the nation show that libraries could have more of an impact locally than just reaching people with the written word.

"The beauty of the library is that it can be an economic engine. It could allow entrepreneurs to get the hands-on training to get going, to get the spark they need to get started. But it can also be a space for people to exercise creativity. It can be economic and incubating, but it doesn't have to be. And that's the nice thing about the public library. It meets as many of those needs as possible."

Two prominent attorneys who have been in the news in recent weeks and months due to their legal wrangling with the city of Fort Smith have joined forces to create a new law firm.

Attorneys Matt Campbell and Joey McCutchen, along with William Buckley, have created the law firm McCutchen, Buckley, Campbell — The Law Firm.

"Our purpose is to impact the lives of our clients and citizens in our communities, and to do it one person, one moment, and one interaction at a time," McCutchen said in an e-mail to The City Wire. "We do that by protecting clients' livelihoods and legal rights against any infringement, whether from catastrophic injuries from a business's violation of safety rules or from government overreach in our communities."

McCutchen, on behalf of client Jack Swink of Fort Smith, filed a lawsuit July 1 that alleged the city of Fort Smith violated the Arkansas Freedom of Information Act by polling city directors by telephone about whether or not to remove items from a meeting agenda. He has previously been involved in litigation against the city regarding other alleged violations of the Arkansas FOIA.

Campbell, who lives in Pulaski County, is legal counsel in a whistleblower lawsuit against the Fort Smith Police Department and revealed in a post on his Blue Hog Report blog allegations that the Daily and Woods Law Firm — the city's contracted legal counsel — had charged for services not performed and overcharged for others. City Attorney Jerry Canfield has denied the allegations.

Campbell said while he and McCutchen have been involved in legal disputes with the city in recent months, the law firm's focus would be about more than just government transparency.

"I want to do more personal injury and I want to be able to focus the rest of my practice in terms of consumer protection and civil rights. A one stop shop for helping people," Campbell told The City Wire. "Joey had the same mindset. He wanted to do personal injury. And I think that would be the primary driver of the firm, but there are other (areas of practice) they want to focus on, too."

Campbell partnering with McCutchen — essentially merging his Pinnacle Law Firm with McCutchen's law firm — came about following the departure of McCutchen's former legal partner Chip Sexton. Any lawsuits being fought by the attorneys in the firm will be unaffected by the formation of the new company, which became official last week, Campbell noted.

And even though the two men partnering in practice may appear like combining oil and water due to Campbell's liberal political leanings and McCutchen's conservative leanings, McCutchen said he and Campbell have long been involved in similar causes, such as tort reform.

"I was aware of Matt's reputation in the legal community and I was impressed with the thoroughness and credibility that Matt showed in his reporting on the Blue Hog Report, as well," he said. "Following our discussions about how to best fight against the impeding 'tort-reform' efforts in Arkansas, I think we both quickly realized that working together as partners would be beneficial to our clients and the people of Arkansas generally."

Campbell added that with any political persuasion, there will always be some level of agreement.

"I've said for a while that if you go far enough left or far enough right, you meet up on the other side and find some stuff to agree on. … We're not too far apart, at least as far as open and transparent government."

Campbell said he would work in Fort Smith two days each week for the foreseeable future and spend the rest of the week at the firm's office in North Little Rock.

Fort Smith-based ArcBest (formerly Arkansas Best Corp.) appears to be on its way to two consecutive years of positive financial results, with net income for the first six months of 2014 at $12.015 million, a big improvement over the $8.517 million loss during the same period in 2013.

The transportation holding company reported early Thursday (July 31) second quarter net income of $17.208 million on revenue of $658.646 million. Excluding a one-time pension charge, the net income was $17.764 million, or 65 cents per share. The per share earnings missed the consensus estimate of 72 cents, but revenue beat the estimate of $642.6 million.

Total revenue for the first half of 2014 totaled $1.236 billion, better than the $1.097 billion during the same period of 2013. Most of the company’s revenue and income is derived from ABF Freight, one of the nation’s largest less-than-truckload carriers. Net income during 2013 was $15.8 million, much better than the $7.7 million loss in 2012 and the most the company has earned in a year since 2008.

“Our second quarter results improved significantly from both the first quarter of 2014 and the year-ago quarter, which was welcome news as we emerged from the harsh winter weather earlier this year,” ArcBest President and CEO Judy McReynolds said in the earnings statement. “As the economy picked up in the second quarter, ABF Freight experienced better pricing conditions and also saw the positive impact from the new labor agreement, while Panther reported one of the strongest quarters in its history. We are also seeing more customers buying at the enterprise level, when they require two or more ArcBest services. We are focused on taking advantage of all opportunities to better serve customers with holistic solutions across the supply chain.”

UPDATED INFO:During the Thursday morning call with analysts, McReynolds said an improved pricing environment helped boost the second quarter numbers. She said a 5.4% general rate increase in late March was applied to 35% of freight business in the second quarter, and there was a 3.2% average increase on negotiated contracts during the quarter.

ArcBest Chief Financial Officer Michael Newcity said the second quarter was “the most profitable quarter in six years.”

However, several analysts expressed concern about rising costs on the ABF side. For example, “fuel, supplies and expenses” for ABF were $93.277 million in the quarter, up 13.14% compared to the same period in 2013. The expense increase was higher than the 10.3% gain in revenue for the division.

Bill Greene, an analyst with Morgan Stanley, said the numbers “caught everyone by surprise at how little leverage their was to the very good top line.”

McReynolds said part of the problem is the hiring of new dock workers and other laborers required to handle the growth in shipments. She said 13.5% of the ABF total workforce has less than 1 year experience, compared to 4% in past years. She said productivity among new dock workers was 20% below that of experienced dock workers. An example of the productivity loss is that shipments per yard hour were down 4.4% in the quarter.

ABF has doubled “training and mentoring” and expect productivity will improve through the year and after one year experience there should be “a significant productivity jump.” Many of the new workers were hired beginning in February.

Another problem was equipment repair and maintenance costs above “historical levels,” according to McReynolds. Part of that increase results from fewer new equipment purchases in 2013 because of uncertainty related to labor contract negotiations with the Teamsters. However, $60 million in planned revenue equipment purchases, to include 444 new road tractors, should reduce maintenance costs in future quarters, McReynolds said.

DIVERSIFIED REVENUE
Although ABF Freight still accounts for a bulk of the income and revenue at ArcBest, Panther Expedited operating income was $4.358 million in the second quarter, well ahead of the $1.506 million during the second quarter of 2013. More impressive is that the operating income for the logistics subsidiary during the first half of 2014 is $7.722 million, much higher than the $642,000 in the same period of 2013 and not much less than the $10.653 million for the much larger ABF Freight division.

Panther was acquired in June 2012 for $180 million.

“The hard work we have done over the last few years to better position ABF Freight and to grow and invest in our emerging businesses is reflected in today’s results,” McReynolds said. “It is particularly gratifying to see Panther achieving such strong results after two full years as an ArcBest company.”

In addition to returning to consistent profitability, an ArcBest goal has been to diversify the revenue stream. During the second quarter, non-ABF Freight (non-asset) revenue was 27% of the total, ahead of the 24 during the 2013 quarter. And that mix has more than doubled in less than three years. Revenue from the non-asset-based operations was 17.8% of the 2012 total revenue for 2012, and just 10.6% in 2011.

SEGMENT NUMBERS Q1-Q2 2014
ABFFreight
Operating income
2014 (January-June): $10.653 million
2013 (January-June): –$17.052 million

Premium Logistics (Panther)
Operating income
2014 (January-June): $7.722 million
2013 (January-June): $642,000

Domestic/Global transportation management (ABF Logistics)
Operating income
2014 (January-June): $1.389 million
2013 (January-June): $1.023 million

Emergency/preventative maintenance (FleetNet)
Operating income
2014 (January-June): $2,101 million
2013 (January-June): $1.522 million

Household goods moving (ABF Moving)
Operating income
2014 (January-June): –$218,000
2013 (January-June):  $717,000

The company provided the following notes about key changes – many allowed by the new labor agreement with the International Brotherhood of Teamsters – and conditions within its ABF Freight division.

• An improving economic environment and business growth at ABF Freight contributed to an additional 6% of second quarter daily freight tonnage versus the same period last year.

• Tightening network capacity combined with improving pricing trends and a lower cost structure resulted in better operating margins.

• Total second quarter revenue per hundredweight increased by 4.2% over last year and increased 6.9% versus first quarter of this year.

• ABF Freight secured better freight rates and account pricing improvements amid broad LTL and truckload industry pricing strength.

• ABF Freight benefited from the previously announced network consolidation of 30 terminals that began in July 2013 and was completed in mid-March of this year.

• ABF Freight is now able to use purchased transportation – a flexibility component of the new ABF Freight labor contract – which has helped improve network operations.

• The level of savings from network changes as well as the expected incremental margins on revenue growth were not realized as ABF Freight brought on a significant number of new dock employees to handle the shipment growth. The company said the process will improve as the new employees complete training and gain experience.

Shares of ArcBest (NASDAQ: ARCB) closed Wednesday at $42.29. During the past 52 weeks the share price has ranged from a $45.68 high to a $19.40 low.