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A struggling Sam's Club refocuses on treasure hunt deals, daily values

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story by Kim Souza
ksouza@thecitywire.com

Sam’s Club executives are focused on more “newness” everyday in the 650 clubs across the country in hopes of improving the lackluster financial performance that has labeled it the laggard in Wal-Mart’s retail portfolio.

Sam’s club delivered a 0.4% comp excluding fuel and 3.8% comp decline including fuel, results that continue to frustrate Wall Street and Wal-Mart management in the first quarter of fiscal 2016. CEO Rosalind Brewer recently told the media that this year will be one of investment and testing new ideas that pack value into memberships and bring more excitement into the club shopping experience.

During a recent tour of the Sam’s Club in Bentonville, management unveiled several new merchandising plays in the retailer’s turnaround game plan.

TAKING RISKS, TECHNOLOGY
Sam’s Club merchant teams were told to take more risks on items and to turn over the merchandise in quick fashion so that there is “more newness, more often.” For instance, the housewares department had 35% new products in spring 2014. This year 85% of items are new to the clubs. Women’s apparel is nearly 100% new merchandise season to season and men’s is roughly 75% new merchandise, according to club management.

Technology is another area of the club where buyers have taken some risks. Selfie-sticks were one of the most popular items sold at Sam’s Club in recent months. Chief Merchandising Officer Charles Redman said he was initially concerned with how many selfie-sticks were procured, but the clubs were able to move the merchandise making the item the top seller for the holidays.

The electronics merchant teams for online and physical clubs attended the consumer electronics show in January and found new items they are rotating into the clubs each month of this year.

One of the ways Sam’s Club merchants are gauging interest among members is with a new electronics catalog for Sam’sClub.com. Management said the first catalog featured a drone on the cover which retailed at $1,141 and it sold well enough to merchandise it the 600 clubs this year.

Redman said Sam’s Club members are first adopters of technology and merchants are always looking to stay ahead of the curve. In the last year, 4K television was one of the items Sam’s Club invested in for its members. He said 4K television makes up about 11% of U.S. television sales today, but at Sam’s Club it’s more like 20% of television sales. Management expects it will be as much as 50% of their television sales this year. Sam’s merchants are looking to add a 4K Blu-Ray player and a camcorder by the holiday season of 2015.

Management said televisions average between 8% and 10% price declines each year, but at Sam’s Club its average selling price is up because of the higher ticket 4K television sales.

Another tech area Sam’s Club is positioning itself is in the 3-D printing space. The retailer carries the MakerBot 3-D printers in all of its clubs as of this month. While the technology is still in its infancy, Sam’s Club execs say the device has sales potential. The company has tested the market with MakerBot and while it’s not a major part of retailer’s sales this year, units are selling. They said local schools are purchasing them to try an unlock student creativity. Architectural firms are buying them to create 3-D renderings for proposed projects and design firms are purchasing them to create product prototypes.  

Sam’s said its members are responding to this product and that will help the retailer learn its way through this technology.

‘SHOCKING VALUES’
Sam’s Club recently launched a new online daily deal to its members through an email notice. The items are labeled “Shocking Values” and range from lobsters to Big Green Egg Ceramic Grill. The items offered are bigger ticket items from a $59 Cleveland Wedge Golfing Iron to a $5,299 Breitling Chromatic GMT Wrist Watch.

Sam’s Club management said offering deals on large ticket items help members to realize the value in their membership. 

“Our members consider each visit to their neighborhood club and SamsClub.com a treasure hunt for unexpected savings, and Shocking Values is a new extension of that experience,” said Jamie Iannone, president and CEO of SamsClub.com.

Members can find the daily deal via logging on to the retailer website, checking the mobile app or they can sign up for a daily email notification.

Sam’s Club said the featured items are hand-picked, well-known brands which are chosen based on members’ interests, top trends and popular selling items across a wide range of categories including electronics, apparel, home decor and outdoor/garden. These deals are for a limited time with limited quantities.

TASTE & TEST
In the fresh food and health and wellness areas of the club members will see more demonstrations this year as the retailer plans to “taste and test” new product offerings before the purchase.

Adding more than 30 new organic food items to the mix was a big step made earlier this year given Sam’s Club has just 95 different organic items out of roughly 6,000 total items in the entire big box format. Brewer said the addition of more organics was a direct response to what members wanted and it’s also one of the metrics being used to draw more millennials to the Sam’s Club format.

Fresh food is another push by Sam’s Club as members may purchase freshly made dinner entrees ranging from chicken parmesan to chicken enchiladas with sides and salad offerings as well. Club management said meal solutions are popular with a wide range of members who seek quality, portion control and value.

Carol Spieckerman, CEO of newmarketbuilders, applauds Sam’s Club efforts to ramp-up organic and gluten-free items. 

“These are the types of actions that drive trip frequency and have the potential to make Sam’s a destination for fill-in trips and bulk-buying stock-ups on staples,” she said.

ANALYSTS REACT
Investment analysts who watch Wal-Mart are hoping the changes help the Club’s finances.

“Sam’s Club performance has been frustrating but we hope that management’s focus on merchandise assortment, marketing, member rewards, and e-commerce investment will drive future traffic and ticket improvement,” noted Budd Bugatch, analyst with Raymond James & Associates.

Spieckerman said the biggest danger for Sam’s Club is the myriad programs and promotion launched over the past few years could create confusion for members.

“So Sam’s is smart to simply and clarify programs like Click and Collect (rebranded as Club Pickup) ... It will take time for the awareness of these changes to take hold, particularly with shoppers for whom Sam’s isn’t top-of-mind, but Sam’s deserves credit for driving continuous improvement,” she said.

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Wal-Mart works to correct ‘Made In USA’ label problem

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story by Kim Souza
ksouza@thecitywire.com

Whoops. The Truth in Advertising group has found more than 100 items sold on Walmart.com that were incorrectly identified as “Made in the U.S.A.” The news comes just more than a week before the retailer’s Manufacturing Summit and Made in the US Open Call in Bentonville.

Bonnie Pattern, executive director for TINA.org (Truth in Advertising), told The City Wire that when the organization first reached out to Wal-Mart on June 22 the company’s initial response was to blame manufacturers.

“Then they said it was a coding error and a small glitch in their system which they are working to correct,” Pattern said. “Now we see Walmart.com starting to make some changes in their website. Some of the mislabels we identified have been taken down. Wal-Mart should have better quality control and in this case it was sorely lacking.”

Wal-Mart spokesman Kory Lundberg said the retailer was working on simplifying two entry processes into one that should help alleviate confusion around a product’s origin.

“We are continually working to improve our website listings and information. We are undertaking a more extensive quality assurance review to help eliminate these coding errors. Based on our initial internal review, we believe these errors are limited to a small percentage of items and we are confident in the overall integrity of the information on our website,” Lundberg said.

The last thing Wal-Mart would want to do is to undermine the work that is being done bring more awareness to “Made in the USA “ and support the return of manufacturing jobs onshore, said Jason Long, CEO of Shift Marketing Group.

“The scrutiny is unfortunate as Wal-mart is trying to do good here. It’s impossible to vet every third-party product for Made in USA and I believe the majority of consumers understand that. Hopefully Wal-Mart can explain this clearly and put a quick end to the story,” Long said.
 
Wal-Mart also said the badges attached to online items such as “Made in the USA” or “Woman’s Economic Empowerment” are being taken down from the website for the time being because of some incapability with various search engines.Lundberg said Wal-Mart customers like the badges because it’s easy for them identify products that align with certain causes. He said the retailer is working on another solution which will replace the badges.

“We are very excited about the progress we are making on our 10 year, $250 billion commitment to buy products that support American jobs. Just over two years in, we are on target to meet our goal and are seeing some great results,” Lundberg said. 

Wal-Mart officials said in October 2014 there were 150 projects being worked. Recent successes touted by Wal-Mart include a $16 million hosiery plant in Hildebran N.C., and a $21 million investment by Korona Candles in Dublin, Va. In Chicago, Ferrara Candy has re-shored some of its production from Mexico, creating more than 100 jobs in the community. 

“As sensational as Truth in Advertising’s findings may seem initially, there are quite a few mitigating variables at work. At this point, it is unclear how many of the offending made in USA ‘labels’ were affixed to products or simply improper designations given to products on Wal-Mart’s website,” said Carol Spieckerman, CEO of newmarketbuilders.

She said given Wal-Mart’s diverse supplier base and the complexity of its online platform, either scenario could occur without nefarious intent on Wal-Mart’s part.

“The timing could definitely cast a shadow over its upcoming Manufacturing Summit. At the same time, the summit gives Wal-Mart the opportunity to amplify its response to the problem, so hopefully the message will be honed by then. This is the latest story to showcase the pitfalls of radical transparency in retail,” Spieckerman added.

Wal-Mart is not the first retailer to face scrutiny over improper “Made in the USA” claims.  Best Buy and Costco each have items listed on the TINA.org alert database.

Wal-Mart does require its suppliers to present signed certification that a product meets the Federal Trade Commission definition for Made in the USA. As more product manufacturing is slowly coming onshore it is possible that some new inventory held at Wal-Mart could now be made in the U.S., while the retailer also still has some of that product inventory made elsewhere.

Five Star Votes: 
Average: 3.7(3 votes)

Odds build against reinstating business license fees in Fort Smith

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story by Michael Tilley
mtilley@thecitywire.com

An informal survey of the Fort Smith Board of Directors places the odds against the city reinstating a business license fee to cover a shortfall in the city’s pension contributions for police and fire employees.

The fee was dropped more than 30 years in exchange for business support of a sales tax increase.

According to City Administrator Ray Gosack, the city’s LOPFI (police and fire pension) fund will be insolvent by 2021. And that insolvency was pushed from 2019 to 2021 by a recent Board vote to reduce benefits under the pension plan.

During a June 23 study session, the Board looked at three options on reinstating a license fee. The first option could generate $1.976 million. It would collect $20 per employee for businesses with employees from 1 to 500. The fee would be capped at $10,000.

The second option could raise at least $1.435 million with a plan that would charge a business $20 per employee from 26 to 500 employees with a cap at $10,000 a year. Businesses with 25 or fewer employees would not pay a fee.

The third option would charge a flat fee of $150 for all businesses and raise an estimated $761,550 a year. The cost to manage all three options is estimated to be $107,000 a year.

The City Wire on Monday asked members of the Board, including Mayor Sandy Sanders, about the feedback they have heard from the business community and if they support any of the license fee options.

Director Tracy Pennartz, who said June 23 that a license fee is a “viable option,” said all options should be on the table but preferred “making further cuts to the 2015 Budget before taking any action on the revenue raising options.”

Director and Vice Mayor Kevin Settle does not support reinstatement of the business license and does not believe it should be an option in addressing he pension shortfall.

Director George Catsavis does not support reinstatement and says it should not be an option.

“The feedback I have received from several business small and large has been unsupportive of this fee. Some say it will hinder future business growth in Fort Smith (and) some say it would create a financial burden. I look forward to working with the board and input from the citizens to achieve reasonable cost saving measures In the near future,” Catsavis said in his response to The City Wire.

Director Keith Lau said the business community is against reinstating the license, and he doesn’t support any of the options.

“I want to see cuts to the general fund of 3%. The city is going to have to show the public serious real cuts in expenses/spending before they will support any fee or tax increase,” Lau noted.

However, he believes all options should remain open for discussion.

“I think we should make 100% sure we know how much it will cost to fix the fire and police retirement problem. Then make real cuts to drop our expenses, then build the gap between cuts and costs. If we can't fix with cuts then we will need to increase fees. My fist choice is to raise franchise fees and as last resort add a business license fee,” Lau explained in his response to The City Wire.

Raising franchise fees is another option presented to the Board by city staff. The proposal would increase franchise fees on electric, telephone and gas from 4% to 4.25%, and increase franchise fee on cable from 4% to 5% to generate $554,000 a year – maximum rate state law allows.

City staff is expected to present refined options during a July 14 study session. The Board could vote on other options to address the pension shortfall at a July 21 board meeting.

Five Star Votes: 
Average: 5(2 votes)

Fayetteville-based EquityNet finding success with crowdfunding effort

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story by Todd Jones, courtesy of Talk Business & Politics

EquityNet is a Fayetteville-based company that has operated a leading crowdfunding platform since 2005. The company’s platform membership has grown to more than 120,000 including entrepreneurs, investors and companies throughout North America.

The company has been featured in top media publications such as Forbes, Entrepreneur, The Wall Street Journal, The Chicago Sun Times and The San Francisco Chronicle.

Recently, EquityNet announced that its platform has surpassed raising $300 million in funding for thousands of entrepreneurs “making EquityNet one of the industry’s leading business crowdfunding platforms.”

Talk Business & Politics’ Todd Jones recently had the opportunity to ask the company’s CEO, Judd Hollis, about the state of crowdfunding.

TB&P: What is the state of crowdfunding from your company’s perspective?

Judd Hollis: We’ve seen a real evolution in crowdfunding over the past few years, and there doesn’t seem to be any signs of it slowing down. In fact, the global crowdfunding industry grew 167% in 2014 with $16.2 billion raised in funding. That’s up from $6.1 billion in 2013. Many within the crowdfunding industry predict that the global crowdfunding industry will reach $34.4 billion this year, and there are expectations that it will surpass the global venture capital market, which invests around $50 billion annually, within the next two years.

TB&P: What are you seeing in Arkansas and how has it changed over the past 10 years?

Hollis: While EquityNet is a company that serves North America as a whole, we do have a large amount of activity from Arkansas-based companies. We’ve seen a tremendous amount of growth within the state since we started 10 years ago. During that time, Arkansas really has become a hotbed of entrepreneurial activity.

The Arkansas Science and Technology Authority and the Arkansas Development Finance Authority’s Arkansas Venture Capital Investment Trust funds, as well as organizations like Innovate Arkansas, Startup Arkansas, and Startup Junkie – to name a few – have all been essential to that growth. Arkansans have an innate entrepreneurial spirit and now have a well-developed ecosystem to nurture that. It’s one of the reasons the Northwest Arkansas region, for example, is recognized as a top area for business and careers by Forbes and a “best small city for startups” by Businessweek.

TB&P: Where do you see EquityNet evolving in the next several years?

Hollis: Well, there are several different flavors of crowdfunding, but EquityNet is – and will stay – focused on helping entrepreneurs raise capital for their startups and small businesses as opposed to, say, charities or donation crowdfunding for something like disaster relief. In that regard, we will maximize our market share and presence within the business crowdfunding industry as we continue to grow.

We also plan to take advantage of upcoming rules and regulations that will make business crowdfunding more accessible to the average American. Title III, for example, will take the number of investors in America from around 5 million to 50 million controlling trillions in capital. This will of course have a direct impact on the entrepreneurs here in Arkansas as it will allow Arkansans to invest directly in companies within their communities.

TB&P: The Securities and Exchange Commission (SEC) is considering final rules on crowdfunding that would allow smaller companies to offer and sell up to $50 million in securities over a 12-month period to fund startup activities. Essentially, the unanimous vote by the SEC commissioners opens the door for equity crowdfunding ventures to offer investment opportunities to anyone willing to put up to 10% of their net worth in a startup, without being an accredited investor. Do you have an opinion on where this is headed?

Hollis: It looks like this is referring to Title IV of the JOBS Act. We think Title IV is a great step in the right direction, but ultimately, Title III (which rules have yet to be issued) is really what will help a lot of companies find success in crowdfunding as opposed to what Title IV and previous rules from the JOBS Act have done in the past. Title IV is great, but it’s really better suited to a certain segment of businesses. In short, we think Title III will affect a broader range of companies and investors.

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Most Arkansas stocks post share price declines through June 2015

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story by Kim Souza
ksouza@thecitywire.com

It’s been a tough six months for most of the publicly held companies based in Arkansas, with just five of the 17 tracked by The CIty Wire showing a share price gain from Jan. to June 30. The story was the same for large market indices.

The Dow Jones Industrial Average stood at 17,619.51 at the market close June 30, down 1.2% from the 17,832.99 close on Jan. 2. The industrials slid 156 points during the quarter from the 17,776.12 reading on Mar. 31, a quarterly decline of 0.88%.

The leading Dow Jones stock for the past two quarters was Walt Disney (21.18%) and Wal-Mart Stores (-17.42%) was the greatest decliner.

The broader index S&P 500 index fared slightly better closing the first half of 2015 at 2,063.11, a fractional gain of 0.24% over the Jan. 2 close at 2,058.20. This is the smallest half-year gain on record going back 1928. The S&P 500 index slid 0.23% during the second quarter from the 2,067.89 reading recorded March 31.

The NASDAQ had the best performance, up 5.3% for the year so far and up 1.75% for the second quarter.

Analysts have said the default by Greece on its $1.7 billion payment due to the International Monetary Fund at midnight Tuesday (June 30) has weighed heavily on Wall Street in recent weeks.

LENDERS LEAD
That said, CNBC reports the banking sector rose 7.7% in the first half of this year, second only to health care’s advance of 8.4%.

Among the Arkansas stocks the financials also were the biggest winners led by Bank of the Ozarks. The Little Rock-based Bank of the Ozarks had the largest share gains this year, up 23.84% January through June. Pine Bluff-based Simmons First and Conway-based Home Bancshares also gained a little traction in the first half of this year each up 15% between Jan. 2 and June 30. Harrison-based Bear State Financial broke that trend, falling 8.88% in the first half of 2015. 

The Arkansas banks continue to expand their footprints outside the Natural State with key acquisitions in the past year. Analysts approve of a growth strategy based on diversification of assets.

Bentonville-based America’s Car-Mart is a hybrid used auto dealer/finance company and aligns best with the financial sector. Car-Mart’s stock is down 7.69% in the first half of 2015. Car-Mart management is pleased with company’s financial balance sheet and steady growth this year despite the lagging response from Wall Street. The small-cap company has had a volatile ride over the past 52 weeks ranging in price from $35.68 to $57.55.

BUILDING BLOCKS
The national construction sector rose 7.7% in the first half of this year lead by improving housing numbers. El Dorado-based Deltic Timber is a supplier of lumber to multiple industries including housing and construction. 

For the first half of 2015, Deltic Timber’s stock price fell 1.32% to $67.64 as of June 30. The company’s shares began the year at $68.36. Over the past 52 weeks the share price has ranged from $58.05 to $70.29. The one-year target price estimate for Deltic Timber shares is $68, according to Yahoo! Finance.

RETAIL WOES
The broad national retail sector rose just 2.5% in the first six months of 2015. One analyst referred to the segment as “schizophrenic,” noting that for every winner there is a loser. 

Little Rock-based Dillard’s and Bentonville-based Wal-Mart have each had a rough first half, losing share value of 13.63% and 17.42%, respectively, between Jan. 2 and June 30.

Between the first quarter end on Mar. 31, and June 30 Wal-Mart shares are down 8.9%.

Over the past 52 weeks Wal-Mart shares have traded as high as $90.97 and as low as $70.78. Recent share pressures on the stock stem from a cautious earnings outlook for the back half of this year amid heavy investments in wage increases for hourly workers and e-commerce infrastructure. 

Little-Rock-based Dillard’s shares are trading lower on the heels of lower than expected earnings and declining store comp sales. Shares closed June 30 at $105.19, down from $136.51 at the close of the first quarter. The company’s guidance for fiscal 2015 indicates significant cost pressures for the year, which might hurt the bottom line in the back half of the year.

TRUCKING MIX
The transportation sector on the whole was a laggard, losing more 11% in the first two quarters of 2015. Among Arkansas trucking lines the performance for the first half of 2015 has more losers than winners.

Tontitown-based P.A.M. Transportation Services was the clear winner as its share price grew 9.63% through the first six months of the year. Shares closed June 30 at $58.05, which was a slight increase from the $57.27 price to end the first quarter.

P.A.M. management continues to repurchase its shares which is helping support the stock price. The company announced this week that it’s increasing the purchase offer from up to 80,000 shares, or about 1.1%, of its outstanding common stock, to up to 150,000 shares, or about 2% of its outstanding common stock.

Lowell-based J.B. Hunt Transport was one of the losers but shares are down just 1.32% since Jan. 2. Shares closed the second quarter at $82.09 which was down 3.91% from the $85.40 closing price end the first quarter.

RBC Capital analyst John Barnes upgraded the rating on J.B. Hunt on June 10 from sector “perform” to “outperform,” while raising the price target from $92 to $105. He expects the company to post better results in all its four divisions in the back half of the year.

With the trucking industry facing a capacity crunch within a competitive sector, Barnes also expects continued modal conversions to rail. In addition, with rates expected to rise in the intermodal market, J.B. Hunt should see meaningful margin growth in its intermodal division.

"Furthermore, we believe that the company's dedicated division is poised to see more robust growth as truck capacity tightens and shippers again become more focused on procuring consistent capacity," Barnes stated, while adding that he expected to see "steady growth in both the brokerage and TL (truckload) divisions."

Van Buren-based USA Truck and Fort Smith-based ArcBest (formerly Arkansas Best Corp.) turned in double-digit losses through the first two quarters of 2015.

USA Truck shares closed June 30 at $21.23, down 23.87% from the closing price of Jan. 2. The stock price fell more than 23.33% from the closing price of $27.69 on Mar. 31. The majority of the negative move on the stock came after the announcement that CEO John Simone took a medical leave of absence on May 7 related to strokes that have affected his speech. 

ArcBest took the bottom spot among Arkansas trucking companies for the first half of 2015. The shares closed the first half of 2015 at $31.80, a loss of 30.69% from the start of the year. Between the first quarter close of $37.89, and June 30, the shares lost 16% of its value. Analysts with Zacks noted earlier this month that the slump shouldn’t surprise investors, as the transportation company has seen eight negative revisions in the past few weeks and its current year earnings consensus has moved lower over the last 30 days. There could be more trouble down the road. Merrill Lynch Bank of America analysts downgraded ArcBest shares to underperform on May 29.

OIL LOSSES
It’s no surprise that oil related stocks have reported lower share performance this year amid the lowest commodity oil prices in recent decades. El Dorado-based Murphy Oil and Murphy USA are down 17.66% and 17.72%, respectively, in the first half of 2015.

Murphy Oil closed out the first half of 2015 at $41.57, which was also lower than the $46.60 recorded at the end of the first quarter.

The volatile oil exploration and production companies like Murphy Oil have been hit the hardest, as their fortunes are tied to commodity price fluctuation. Oil prices seem to have stabilized over the past two months after sinking to a 6-year low of under $44 a barrel earlier this year. The commodity has largely been range bound in the $50-$60 level since early April – a price OPEC considers "fair."

Murphy USA, the gas station operator, closed the first half of the year at $55.82, down more than 17% since Jan. 2. Between the first quarter and end of the second quarter Murphy USA share values declined 22%.

TECHNOLOGY LAGGARDS 
The national technology sector has fared well this year rising 18% in the first six months of the year, lead in part by Apple up more than 13% year to date. The two Arkansas-based tech companies were among the losers in the giant and diverse sector. Little Rock-based Acxiom closed the first six months at $17.58, a loss of 11.49% in share value since the year began Jan. 2.

Acxiom shares slid backward between the first and second quarter final trading days. Shares stood at $18.49 on Mar. 31, falling 4.92% through the second quarter which ended June. 30.

Windstream also tumbled. The Little-Rock-based telecom company closed out the first half of 2015 with a share price of $6.38, down 23.13% from $8.30 at which the company’s shares closed on Jan. 2.

Five Star Votes: 
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Study: Consumers favor ‘Made in USA’ products over sustainability

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story by Kim Souza
ksouza@thecitywire.com

American consumers continue to rally their support around “Made in USA” products with 45% admitting that such a label is “extremely” or “very” important to them, according to a new survey by Fayetteville-based Field Agent.

The mobile research study was conducted with 500 U.S. adults spanning all income brackets and educational levels ahead of what will be the country’s 239th birthday on July 4.

Field Agent reports that nearly 8 in 10 of those surveyed expressed that buying “American Made” products was at least moderately important to them, with just 11% of respondents admitting that buying products “Made in the USA” was not important in their shopping decisions. The overwhelming majority of consumers who do identify with the products made in America said they consider it important to shop at stores that also demonstrate a commitment to American-made goods.

“Americans say they value those products, brands and retailers that choose to make and/or sell goods made here at home. If the price is right and the quality is there why wouldn’t consumer’s chose American-made products,” said Field Agent CEO Rick West.

It’s easy for consumers to talk patriotism but voting with their dollars is another matter, which is why Field Agent asked the respondents if they ever purchased one product over another because they preferred the American-made. In all, 63% answered “yes” which suggests that the American-made designation does have the ability to steer attention away from one product or brand and onto another, the study notes.

BETTER LABELING NEEDED
That said, respondents also said many times identifying American-made products is difficult. More than not, the respondents believe retailers could do a better job displaying  American-made merchandise. West said there are opportunities for retailers to display American-made products much like they have drawn attention to organic and gluten-free items.

Another finding in the study is that “Made in America” is not the top priority among shoppers today, but it does rank in the top five behind quality, price, customer service experience but ahead of sustainability concerns.

“Retailers today have to know that American-made product labeling and displays could be the tipping point for more product sales, in much the same way it was ‘green-minded’ or sustainable items over the past few years,” West said.

He reiterated that if the competitive price and quality are there in an American-made product, consumers will likely chose it over a like product made elsewhere – at least at a time when there is more awareness and effort being made to create and support American jobs.

CELEBRATING PATRIOTISM     
Consumers aren’t just showing patriotism by buying American-made products, they are also planning to celebrate the nation’s birthday in a big way this year.

In a separate report by National Retail Federation and Prosper Insights & Analytics, 156 million Americans plan to take part in Independence Day celebrations spending an average of $71.23 per household, a few bucks more than last year. Americans are expected to dole out $6.6 billion this weekend around Independence Day celebrations. Higher spending is linked to lower gasoline prices compared to year ago.

"Consumers this summer and for the 4th of July will take advantage of lower gas prices to head to the beach or get together with family — something they've had to think long and hard about in recent years with higher energy costs and limited budgets," said Pam Goodfellow, consumer insights director at Prosper Insights.

About 43% of Americans will watch fireworks or attend other community events. Another 12% will go to a parade and 9% have planned to travel or take a vacation.

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Employment rising in Fort Smith area, but remains below pre-Recession level

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Editor’s note: This story is a component of The Compass Report. The quarterly Compass Report is managed by The City Wire, and sponsored by Arvest Bank. Supporting sponsors of The Compass Report are Cox Communications and the Fort Smith Regional Chamber of Commerce.

Employment in the Fort Smith metro was up more than 3,200 jobs in May compared to May 2014, but the number of jobs in the area remains well below pre-recession levels.

Fort Smith’s metro jobless rate was 5.9% in May, up from 5.7% in April, and lower than the 6.2% in May 2014, according to figures from the U.S. Bureau of Labor Statistics. May’s data is subject to revision..

The number of employed in the Fort Smith region totaled 114,596 in May, down from 114,943 in April, but up 3,217 jobs compared to the 111,379 employed in May 2014. The number of employed in the metro area is down 8.6% compared to the revised high of 125,426 in June 2006 – or 10,830 fewer jobs than the peak metro employment.

Metro area employment averaged 111,588, below the average of 122,993 in 2006.

The size of the Fort Smith regional workforce during May was 121,766, down from 121,885 during April, but better than the 118,798 during May 2014. The labor force reached a revised high of 132,004 in June 2007, meaning the May workforce size is down 7.75% from the peak number.

All of the eight metro areas in or connected to Arkansas had jobless rate declines in May compared to May 2014, and all had jobless rate increases compared to April. During May, the lowest metro jobless rate in the state was 4.3% in Northwest Arkansas and the highest rate was 7.7% in the Pine Bluff area.

FORT SMITH METRO NUMBERS
Unemployed persons in the region totaled an estimated 7,170 during May, up from 6,942 during April, and below the 7,419 during May 2014.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 23,200 in May, up from 22,700 in April, and below the 23,400 during May 2014. Employment in the sector reached a high of 24,700 in December 2007.

The Fort Smith area manufacturing sector employed an estimated 18,000 in May, down from 18,100 in April, and below the 18,100 in May 2014. Sector employment is down 36% from a decade ago when May 2005 manufacturing employment in the metro area stood at 28,200. Annual average monthly employment in manufacturing has fallen from 27,900 in 2005, 20,700 in 2010, and to 18,100 in 2014.

Employment in the region’s tourism industry was 8,900 during May, down from 9,100 in April and below the 9,300 in May 2014. The sector reached an employment high of 9,300 in May and June of 2014. Annual average employment of 9,100 in 2014 was a new record for the metro sector.

In Education & Health Services, employment was 16,500 during May, unchanged compared to April and May 2014. Employment in the sector reached a record 16,700 in October and December of 2012.

In the Government sector, employment was 18,400 during May, up from 18,300 in April and unchanged compared to May 2014.

NATIONAL NUMBERS
Unemployment rates were lower in May than a year earlier in 346 of the 387 U.S. metro areas, higher in 36 areas, and unchanged in five, noted the broad BLS report.

The U.S. unemployment rate in May was 5.5%, up from 5.4% April and down from 6.3% from a year earlier. Arkansas’ jobless rate was 5.7% in May, unchanged from April and down from 6.2% in May 2014.

Oklahoma’s jobless rate during May was 4.3%, up from 4.1% April, and down compared to 4.6% in May 2014. The Missouri jobless rate during May was 5.8%, up from 5.7% in April and below the 6.2% in May 2014.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
May 2015: 4.3%
April 2015: 4%
May 2014: 4.7%

Fort Smith
May 2015: 5.9%
April 2015: 5.7%
May 2014: 6.2%

Hot Springs
May 2015: 5.9%
April 2015: 5.7%
May 2014: 6.3%

Jonesboro
May 2015: 5%
April 2015: 4.8%
May 2014: 5.7%

Little Rock-North Little Rock-Conway
May 2015: 5.1%
April 2015: 4.8%
May 2014: 5.6%

Memphis-West Memphis
May 2015: 6.6%
April 2015: 5.9%
May 2014: 7.3%

Pine Bluff
May 2015: 7.7%
April 2015: 7.4%
May 2014: 8.4%

Texarkana
May 2015: 5%
April 2015: 4.9%
May 2014: 6.2%

FORT SMITH METRO AREA HISTORY
Past annual average unemployment rates
2014: 6.2%
2013: 8%
2012: 8.1%
2011: 8.8%
2010: 8.5%
2009: 8.3%
2008: 5.1%
2007: 5.2%
2006: 4.8%
2005: 4.6%
2004: 5.2%
2003: 5.6%
2002: 5%
2001: 4.4%
2000: 3.7%

Five Star Votes: 
Average: 5(1 vote)

Manufacturing expands in June for 30th straight month, Arkansas sees gains

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story by Wesley Brown, courtesy of Talk Business & Politics
wesbrocomm@gmail.com

Economic activity in the manufacturing sector expanded in June for the 30th consecutive month, and the overall economy grew for the 73rd consecutive month, according to a monthly survey of the nation’s supply executives.

The report, issued Wednesday by the Institute for Supply Management Manufacturing Business Survey Committee, shows that the June purchasing managers index, or PMI, registered 53.5%, an increase of 0.7 percentage point over the May reading of 52.8%. The New Orders Index registered 56%, an increase of 0.2 points from the reading of 55.8% in May. The Production Index registered 54%, 0.5 percentage points below the May reading of 54.5%.

The Employment Index registered 55.5%, 3.8 points ahead of the May reading of 51.7%, reflecting growing employment levels from May at a faster rate. Inventories of raw materials registered 53%, an increase of 1.5 percentage points from the May reading of 51.5%. The Prices Index registered 49.5%, the same reading as in May, indicating lower raw materials prices for the eighth consecutive month.

Comments from the panel indicate mostly stable to improving business conditions, with the notable exception relating to the oil and gas markets. Of the 18 manufacturing industries, 11 are reporting growth in June in the following order: Furniture & Related Products; Wood Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Fabricated Metal Products; Chemical Products; Paper Products; and Computer & Electronic Products.

The four industries reporting contraction in June are: Petroleum & Coal Products; Primary Metals; Plastics & Rubber Products; and Machinery.

Meanwhile, the Creighton University Mid-America Business Conditions Index for May, a leading economic indicator for a nine-state region stretching from North Dakota to Arkansas, climbed for June.

Indices over the past several months have pointed to positive, but slow economic growth over the next three to six months for the region.

The Business Conditions Index, which ranges between 0 and 100, rose to 53.0 from 50.4 in May. The regional index, much like the national reading, is pointing to slow growth through the third quarter of 2015.

“Much weaker business conditions for firms tied to energy are restraining the overall reading. Weaker conditions were particularly evident in Oklahoma and North Dakota, two energy-producing states. This weakness is spilling over into metal manufacturers throughout the region,” said Ernie Goss, economist and director of Creighton University’s Economic Forecasting Group in the Heider College of Business.

In Arkansas, the June index climbed to 50.4 from May’s 49.8. Components of the index from the monthly survey of supply managers were new orders at 51.6, production or sales at 51.9, delivery lead time at 50.0, inventories at 51.6, and employment at 48.2.

“Durable and nondurable producers in the state report soft but positive growth in business activity for the month,” said Goss.

Manufacturing jobs in Arkansas during May totaled 154,400, below the 154,900 in April and above the 153,800 in May 2014. Employment in the manufacturing sector fell in 2014 to levels not seen since early 1968. Peak employment in the sector was 247,300 in February 1995.

Regionally, the employment gauge remains in a range indicating slightly negative to stagnant job growth for manufacturing and value-added services firms in the region. The job gauge advanced to a weak 49.1 from May’s 48.3. This month, supply managers were asked about the hiring situation at their firms.

“There was very little change from last year,” Goss said. “Approximately four of 10 firms in both surveys expected to hire additional workers in the second half of the year. From the June 2015 survey, only 7.1% anticipate layoffs in the year ahead which is down from 10.4% in June 2014.”

The wholesale inflation index for June sank to 64.9 from May’s 69.1. Goss said the strong U.S. dollar and global economic weakness are keeping wholesale inflationary pressures at modest levels.

Looking ahead six months, economic optimism, as captured by the June business confidence index, expanded to 59.9 from May’s 58.3.

“Improvements at the national level in housing, retail sales and hiring pushed supply managers to raise their expectations about future economic conditions,” Goss said.

Five Star Votes: 
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The Video Wire: Bordello, bikinis, burgers, beer and bleeps

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Reports about sizeable increases at Miss Laura’s historic bordello, a disturbing story about a bikini car wash fundraiser in Fort Smith and a bleeping bleepfest  are part of Dawson Meadows’ report this week.

He also reports on things to do in the region, including grilling burgers, drinking beer and blowing stuff up.

The Video Wire is a collaboration between The City Wire and Things To Do In Fort Smith.

Five Star Votes: 
Average: 2.8(4 votes)

The Supply Side: IcyBreeze ready for Walmart.com, testing in Sam’s Club

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story by Kim Souza
ksouza@thecitywire.com

Editor’s note:The Supply Side section of The City Wire focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by The City Wire and sponsored by Propak Logistics.

It’s been a busy first year for Dave Yonce, serial entrepreneur from Tulsa, and partner Andrew Jenkins who soft launched a patented cooler that also works as personal air conditioner. In other words, it’s another one of those “only in America” devices that keep you and your beer cold.

Yonce, an avid outdoor enthusiast and family man, was camping with his kids in the near-100 degree summer heat a few years ago. He wondered why the family ice chest keeping drinks and food cold couldn’t also double as a personal air-conditioner. The result is the IcyBreeze, which is made in Bixby (near Tulsa).

Working with local designers Yonce came up with a prototype and began working on local production. Jason Shackelford, marketing director, joined the company a year ago. He said Yonce has a technology background having already sold-off at least one startup venture and is always dabbling in more. But now that the IcyBreeze invention is resonating across multiple sectors — from pilots who fly small aircrafts to soccer moms, tailgaters and pet enthusiasts — the small company is working to get the product in front of more consumers.

“It’s been a very exciting year for this startup company. We set up our own manufacturing center in Bixby and also bring in parts from Kansas and Arkansas to assemble and finish the products in Bixby which uses temporary workers to make large production runs as needed,” Shackelford said.

He said a large production run was made earlier this year and product is being sold at multiple online retailers as well as in Sharper Image stores, and a local lumberyard in Tulsa also is carrying the product. Much of the past six months has been spent working to get the product placed with more retailers.

“We met the Wal-Mart and Sam’s Club teams earlier this year at a trade show. They have been so good to work with us. We were asked to pitch the product in Bentonville to a group of shareholders visiting in early June for the shareholder events. One executive in the group bought one on the spot, which was incredibly exciting for us. That was also the first week that the product began its Road Show demo in Sam’s Club,” Shackelford said.

The hydrid drink cooler/personal air conditioner is now part of a Road Show swing through 48 Sam’s Clubs this summer that stretch from Arizona to the Florida coast and includes Northwest Arkansas. Shackelford said the product was recently added to several online sites including Bass Pro Shops and Amazon. IcyBreeze recently obtained a Wal-Mart vendor ID and will soon be placed on Walmart.com.

Shackelford said the company has come a long way since it purchased a used motorhome and he took the product on the road from January through May logging 20,000 miles going to trade shows, outdoor events and other venues where he could let consumers see the product. 

“Seeing is believing with his product. It can be incredibly hot outdoors and when you turn on the air conditioner which is embeded in the top of the cooler, and flex the hose upward the cool air will blow up to 35 degrees colder than the air outside,” Shackelford said.

If it’s a humid 95 degrees the unit, when filled with two quarts of water and ice, will blow air at 60 degrees. It also will keep drinks and food cold at the same time. The battery-powered unit will operate from two to seven hours. There are also adapters that allow the unit to be plugged into vehicle power plugs and 110 electrical plugs for patio use.

Shackelford said the units retail anywhere from $349 and $425 depending on the power plug options, but in all Sam’s Clubs the $375 Flurry Model which includes the 12-volt charging adapter for use in cars is being offered to members for $298 starting July 2. He said the promotion was something the company worked out with Sam’s Club to help provide more value to their members.

One interesting use for the IcyBreeze coolers the company had not originally considered was for cooling pets inside cars while their owners dine inside restaurants. 

“My graphic artist today is working on a sticker to go on the automobile that lets a passersby know the pet is not sitting in a hot car, but it’s being cooled by an IcyBreeze air conditioner. Our customers have asked for this because they don’t want people to think they are abusing their pets and we are happy to help,” Shackelford said.

He said sales are growing with each retailer they sign on and the company expects to sell at least 10,000 units this inaugural year which is a great first step.

Five Star Votes: 
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Fort Smith attorney pushes back against ending use of Rebel mascot

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story by Michael Tilley
mtilley@thecitywire.com

Fort Smith attorney and former Fort Smith Public School Board member Joey McCutchen is pushing back against the effort to change the Southside High School mascot. He says ending use of the Rebel mascot “will not do anything to improve race relations.”

A committee of the Fort Smith Public School Board on June 23 voted 6-0 to end use of the Rebel mascot and not use “Dixie” as the school’s fight song. The push for a mascot change is one of many around the country in which racially charged imagery and Confederate symbols are being removed from public spaces or removed from store shelves.

Southside High School was formed in 1963 and over the years there have been several challenges to the use of the Rebel mascot. One of those happened in the late 1980s when a school board committee pushed to change the mascot. The effort failed to gain support from a majority of those then on the Board.

The Board is expected to vote July 27 on the committee’s recommendation to change the mascot.

FOIA REQUEST
McCutchen served on the School Board for six years during the 1990s. He’s an owner in the Fort Smith-based law firm of McCutchen Buckley, is a Southside High graduate and has a daughter who is a member of the Dixie Belle drill team at Southside. On Thursday (July 2) he filed a two-page Freedom of Information Act request for 11 sets of documents related to the Board’s action on the mascot change.

In an interview with The City Wire, McCutchen says the Board did not follow the law in discussing and voting on the issue. He said two Board members told him that discussions were held about the issue prior to the June 23 meeting. McCutchen visited with school officials on June 24 to protest the action.

“We’re entitled to see the entire spectrum of the process, and not just the final results,” McCutchen said.

School Board President Dr. Deanie Mehl said the June 23 action is not a violation of the law. She said it was a “preliminary vote,” with the public discussion and public vote set for July 27. Mehl said the Board is “expanding the citizen participation” at the July 27 meeting by not limiting total topic discussion to 15 minutes. Anyone who wants to address the issue may speak, although each speaker has a three-minute limit.

McCutchen wants more than an apology or any legal remedies available if it is ruled the Board did violate Arkansas’ public meeting laws. His goal is to convince the Board to keep the mascot and “retain our Southern heritage.”

“I’m going to do everything I can to change their minds,” McCutchen said.

RACE RELATIONS CONFERENCE
He sees a distinction between heritage and race. He said he has worked with many African-American boys and men over the years to provide them personal help and legal advice. McCutchen said he knows the type of discrimination they face.

“I’ve given a lot of time and effort to mentoring African-American youngsters through the years. ... Changing the mascot will not do anything to improve race relations,” he said.

He plans on organizing in the near future a community “race relations conference” in Fort Smith to talk about the “real” issues of race and discrimination.

“There are deeper issues that need to be looked at. I think you cheapen the important topic of racism ... by just taking away the mascot,” McCutchen said.

In a June 24 interview with The City Wire, Mehl said she recognizes the tradition and heritage of the mascot but said such traditions and heritage don’t translate to a bigger world.

“Unfortunately, when we get outside the River Valley, Dixie and Johnny Reb have a very different connotation ... and that’s not what Fort Smith is,” Mehl said. “I don’t think Fort Smith is a community that endorses prejudice.”

Five Star Votes: 
Average: 3.5(6 votes)

Arkansas fiscal year tax collections up 3.7%, surplus totals $191.6 million

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Arkansas’ fiscal year certainly ended on a positive note with a $191.6 million surplus thanks to total collections of $6.47 billion, up 3.7% compared to the previous fiscal year and above the budget forecast by 1.1%.

The report, issued Thursday (July 2) by the Arkansas Department of Finance and Administration, showed that total collections were $228.1 million more than the previous fiscal year. The fiscal year is the fifth consecutive year for revenue increases. The previous fiscal year surplus (July 2013 - June 2014) was $78.7 million.

“The fiscal year ended above forecast and above the budgeted amount as a result of improving growth in gross revenue (collections) and lower-than-expected payouts from Income tax refunds and other deductions. One-time deposits also influenced year ago comparisons,” noted the report.

The one-time revenue totaled $65.5 million. The surplus would have been $126.1 million without such revenue.

Individual income tax collections for the fiscal year totaled $3.188 billion, up 2.5% from last year and 2.2% above the budget forecast. Fiscal year sales and use tax collections were $2.197 billion, up 1.1% compared to last year and 0.7% below the budget forecast. Income taxes and the sales and use tax collections are the two primary sources of state revenue.

Corporate income tax revenue for the fiscal year is $493.1 million, up 12% compared to the same period in the previous fiscal year, and up 3.4% over the budget forecast.

The fiscal year also ended on a good note. Total collections in the June report were $670.3 million, up 8.7% compared compared to June 2014, and 9.4% above the forecast.

OTHER TAX COLLECTIONS
Alcoholic beverage
July 2014 - June 2015: $55.1 million
July 2013 - June 2014: $53.2 million

Games of skill
July 2014 - June 2015: $47.3 million
July 2013 - June 2014: $39.5 million

Tobacco
July 2014 - June 2015: $218.5 million
July 2013 - June 2014: $219.2 million

Insurance
July 2014 - June 2015: $169.3 million (reflects one-time deposit of $51.1 million)
July 2013 - June 2014: $118.4 million

COLLECTIONS HISTORY

Tax collections during fiscal year 2014 (July 2013-June 2014) totaled $6.242 billion, up 0.5% above the previous fiscal year and up just 0.2% compared to budget estimates. The year marked the fourth consecutive year of revenue increases. The fiscal year ended with a budget surplus of $78.7 million.

Tax collections during fiscal year 2013 (January 2012-January 2013) totaled $6.214 billion, up 4.9% above the previous fiscal year and up 2.5% compared to budget estimates. One result of the gains was a budget surplus of $299.5 million.

Arkansas tax collections reversed a negative two-year slide in the 2011 fiscal year, with collections up 4.5% in the January 2010-January 2011 period. State tax collections for fiscal year 2011 totaled $5.673 billion, up 4.5% above the $5.43 billion in the 2010 period.

The biggest declines in the 2009 and 2010 fiscal years were with individual income tax collections and sales and use tax collections.

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Boozman gives GOP weekly address, Cotton critical of Cuban embassy news

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story from Talk Business & Politics, a content partner with The City Wire

Congress may have been in recess for the 4th of July holiday, but members of the state’s congressional delegation were in Arkansas this past week talking to voters and discussing issues.

The following is a breakdown of the week that was for Arkansas’ congressional delegation.

BOOZMANDELIVERS WEEKLY GOP ADDRESS
The political week started early as Sen. John Boozman, R-Ark., gave the weekly Republican radio and television address last weekend.

During the address, Boozman spoke about national security and defense issues.

“In an era where we face growing challenges from China and Russia as well as the persistent threat of terrorism, Republicans and Democrats alike say they want the United States to maintain its military dominance,” he said. “However, those words must be matched with action. We must take the necessary steps to protect our country from the evolving dangers facing our nation and its citizens and continue offering security to those people who face tyranny and oppression around the world.”

COTTON: CUBAN EMBASSY IDEA ‘BEYOND TROUBLING’
This weekend, Sen. Tom Cotton is slated to be on ABC’s This Week with George Stephanopoulos to discuss Iran.

An announcement this week by the Obama administration to open a U.S. embassy in Cuba drew opposition Wednesday from U.S. Sen. Tom Cotton, R-Ark.

Supporters of the idea have said opening relations with the Communist nation will create new markets. Meanwhile, opponents have said the idea placates longtime leaders Fidel and Raoul Castro.

“President Obama’s continued appeasement of dictators around the world is beyond troubling. Since the President announced initial discussions with Cuba in December, there has been no change in the Castro brothers’ behavior. Yet we continue to reward them with unearned concessions, weakening our hand against our adversaries around the world. What kind of message does this send to the ayatollahs in Iran during this delicate period?” Cotton said. “The United States must stand squarely on the side of the Cuban people and do everything in our power to weaken the brutal rule of the Castro regime. Rest assured, I will work with my colleagues to block funding for a new embassy and confirmation of a new ambassador until there is real, fundamental change that gives hope to the oppressed people of Cuba.”

COTTON: U.S.-VIETNAM TRADE IS KEY
Cotton, on Tuesday, spoke about trade during the opening of the Vietnamese trade office in Bentonville. The future of trade between the United States and Vietnam is three-fold, Cotton said during the speech.

“The first is on trade. As evidenced by the opening of this office, our nations have made great progress on our trading relationship. Those bilateral efforts must continue,” Cotton said.

“Second, our nations must continue to deepen military cooperation. We have seen China take aggressive action to compromise Vietnam’s interests, particularly with Beijing’s claims to large portions of the South China Sea. This is deeply concerning,” he added. “Third, the United States and Vietnam must continue our productive and open dialogue regarding democracy and human rights.”

FARM BUREAU’S VEACH NAMED TO USDA TRADE COMMITTEE
Arkansas Farm Bureau President Randy Veach, a cotton, soybean and corn farmer from Manila (Mississippi County), was appointed Tuesday to the United States Department of Agriculture’s Agricultural Trade Advisory Committee for Tobacco, Cotton and Peanuts.

Veach, a cotton, soybean and corn farmer from Manila, was appointed by Secretary of Agriculture Tom Vilsack and U.S. Trade Representative Michael Froman. Another Arkansan, Dow Brantley of Brantley Farming Company of England (Lonoke County), was named to the Agricultural Policy Advisory Committee.

Veach and Brantley are among 130 appointees to the six ATACs and the Agricultural Policy Advisory Committee. The appointments run through 2019.

HILL ANNOUNCES SECOND GOLDEN FLEECE WINNER
And the winner is … the Social Security Administration.

U.S. Rep. French Hill, R-Little Rock, on Thursday announced the Social Security Administration was the second recipient of the Golden Fleece Award. The award, originally created by then-U.S. Senator William Proxmire, D-Wisc., was given due to a recent SSA Office of Inspector General Audit.

The audit showed that nearly four million beneficiaries of SSA disability programs were given $16.8 billion in overpayments, Hill said. Hill sent a letter to Carolyn Colvin, acting Social Security Administration Commissioner, to present the award and called on her to work with him in “eradicating this type of inefficient and ineffective spending.”

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Number of Arkansas private option enrollees up June, cost per person dips

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story by Steve Brawner, courtesy of Talk Business & Politics
brawnersteve@mac.com

The number of enrollees in the Medicaid private option reached 218,376 at the end of June, an increase of about 4,000 from May, when it totaled 214,461. The number of Arkansans deemed eligible reached 254,749 in May, an increase from 250,799 in April.

Total costs for the program were just under $105 million in June, or $480.67 per enrollee – a reduction of 94 cents from May, when the total average cost was $481.61.

The total cost represents a combination of premiums and cost sharing reduction payments, which is the money paid by the state to offset some of the co-pays that otherwise would be paid by consumers. Those co-pays vary according to a recipient’s income. In June, premiums represented $76.5 million, or $350.28 per person, while cost sharing reductions were $28.5 million, or $130.39 per person. Federal funds are used in both categories.

The number does not include so-called “wraparound” costs for transportation and other expenses. New numbers are not yet available for June but averaged $4.23 per person. That cost has decreased each month this year. If the wraparound cost were to stay constant for June, it would equal $484.90.

Created by the Legislature and Gov. Mike Beebe’s office in 2013, the private option uses federal Medicaid dollars to purchase private insurance for lower-income individuals. Arkansas received a federal waiver from the Obama administration to enact it. Under the terms of the waiver, total monthly costs, including the wraparound, must be no more than $500.08, or the state could be required to refund part of the difference.

The private option was passed and then reauthorized in 2014 by a coalition of Republicans and Democrats, many seeing it as a way to expand access to health care without increasing the Medicaid rolls. A Gallup poll released last summer found that Arkansas had the nation’s steepest drop in its uninsured rate – from 22.5% in 2013 to 12.4% in 2014. Some Republicans see it as a way for the state to reform health care entitlements.

But many Republican legislators oppose it as an expansion of government with unsustainable future costs. While federal funds currently pay for almost all the program’s costs, the state will begin paying 5% of the cost in 2017 and 10% by 2020.

Legislators this year voted to authorize the private option through 2016, when it is supposed to end. Meanwhile, they created a legislative task force to consider overall health care reform, including the private option.

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Hillary, Huckabee face an uncertain Arkansas electorate in 2016

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story by John Brummett, courtesy of Talk Business & Politics

Editor’s note: The author of this article is a regular columnist for the Arkansas Democrat-Gazette. This story first appeared in the July-August issue of Talk Business & Politics magazine. Link here for the digital version of that issue.

Arkansas, ever a peculiar place, either has two presidential candidates or none, unless you could say, as you probably can, that it has one more than it has the other.

Hillary Clinton, a native Chicagoan, left Arkansas in January 1993 to join her husband in residence in the White House. She, and he, now live in Chappaqua, N.Y., but are residents of the world, really.

Mike Huckabee, from Hope, left Arkansas not long after losing his bid for the Republican presidential nomination in 2008 and landing a nice-paying gig as host of a Saturday night talk and entertainment show on Fox News. By 2011 he had built for himself and his wife Janet a big Ramada Inn-looking mansion within yards of the gulf waters on the Redneck Riviera in Florida, where, by the way, the state charges no income tax.

So the question for these purposes is whether there is a true Arkansas candidate in the presidential field. Is there a significant continued relationship with Arkansas for either of these candidates? Is there significant residual favorite-son or favorite-daughter identification and support in either case?

The best and fairest answer seems to be that Huckabee has a stronger continuing personal presence. And it is that he also enjoys the advantage of the state’s having gone wholesale Republican since he left, and in a way he could not influence himself in nearly a dozen years as a minority governor.

And there is new polling to confirm that.

MAKING A CASE FOR DAD
Sarah Huckabee Sanders, Mike and Janet’s daughter and campaign manager for her dad, makes a case, and not a bad one, that her dad is still at least partly Arkansan. For one thing, Sarah herself lives in Little Rock and has bestowed grandchildren, including one born this spring, on the proud Huckabees, who continue to maintain a residence in North Little Rock and spend occasional evenings there.

Hillary, on the other hand, has a granddaughter who lives in Manhattan in a $10 million block-long apartment – the longest apartment in the city, it is said. Hillary has no residence in Arkansas, and, in fact, lived only briefly in the state in anything other than public housing.

Huckabee has placed his presidential campaign headquarters in Little Rock. Hillary’s campaign headquarters is in Brooklyn. Huckabee announced his candidacy in Hope, perhaps to advance his theme as a veteran Clinton rival. Hillary announced her candidacy on Roosevelt Island on the East River in New York City.

Huckabee was governor of the state recently enough – for nearly a dozen years until January 2007 – that he still has a sufficient number of appreciative associates and patronage recipients in Arkansas to have put together in early June a series of well-attended fundraisers in the state.

Official hosts of those events included every current statewide constitutional office-holder and congressional delegate except U.S. Sen. Tom Cotton, an always-special case. Cotton is financially and philosophically tied to the economically conservative Club for Growth, which sees Huckabee as a big-spending populist. And Cotton is rather clearly ambitious for himself, though apparently not in the presidential context for 2016. The vice presidential context might be another matter.

Even Gov. Asa Hutchinson, once considered a rival of Huckabee for state Republican preeminence, has signed on as an endorser of Huckabee, though it’s probably for convenience. Formally aligning with a home-state associate who may not last long in the presidential race gives Hutchinson an excuse not to choose now among fellow Republican governors running or perhaps to run – Chris Christie of New Jersey, Scott Walker of Wisconsin, John Kasich of Ohio, Bobby Jindall of Louisiana and Rick Perry of Texas.

Two current constitutional officers – Attorney General Leslie Rutledge and Treasurer Dennis Milligan – are close former associates of Huckabee. Rutledge worked for Huckabee’s governor’s office and Milligan’s chief of staff is Huckabee’s brother-in-law. Lt. Gov. Tim Griffin works now for Huckabee’s campaign as a consultant, though, as Griffin publicly insists, he is unpaid.

LONGTIME SUPPORTERS
The Huckabee fundraisers were hosted otherwise mostly by usual suspects, such longtime Huckabee-ites as Lisenne Rockefeller, Johnny Allison, Steve Landers, Ed Bethune and Rick Caldwell.

Perhaps the most notable host was the multi-millionaire class action lawyer from Texarkana, Johnny Goodson. He has become perhaps the state’s most active political money man and power broker. That’s up to and including being married to Courtney Goodson, the justice on the Arkansas Supreme Court likely to run next year for chief justice.

“He’s a personal friend. He’s been very kind to me,” Goodson says of Huckabee.

He explains that their relationship is a Texarkana thing, based largely on mutual friends and going back to Huckabee’s early-1990s stint as pastor of the Beech Street Baptist Church there.

It also is possible that Goodson, once identified as a Democrat, is performing the perfunctory motions of supporting Huckabee because of the coalescence around the former governor of the state Republican establishment, which his wife will need in her supposed nonpartisan race for chief justice in a newly Republicanized state.

It probably should be noted that daughter Sarah helps Huckabee with his continued Arkansas ties. While he’s been entertaining in New York and living on the beach and traveling to give speeches, she has run a Republican consulting business in Arkansas and worked for John Boozman, French Hill and others.

By Sarah’s planning, Huckabee spoke at a series of rallies last fall for the overwhelmingly victorious Republican ticket. His help might not have been needed or even of much consequence. But it was appreciated.

Hillary, on the other hand, has only remnants of remaining personal relationships in Arkansas, where the politics has roamed far from the domination, or even the influence, of her husband. Her closest and dearest Arkansas associates – her parents, Diane Blair, Vince Foster – are deceased. She is said to stay somewhat in touch with Ann Henry of Fayetteville and Patty Howe Criner of Little Rock.

Otherwise, her chief political friends operating in her behalf in Arkansas seem to be Bob Nash, who worked for Bill as governor and president, and Sheila Bronfman, a long-time Clinton associate and political consultant in Little Rock who, among other things, coordinates the “Arkansas Travelers,” who famously ventured to New Hampshire for Bill in the troubled winter of the “Comeback Kid” in 1992.

“Political camp for adults” is how Bronfman says the Traveler experience has been described.

ORGANIZATIONAL MEETINGS
Bronfman says she and Nash and others have helped put together small grassroots organizational gatherings for Hillary supporters in Little Rock, Fayetteville, Texarkana, Russellville, Hot Springs, Helena and Conway. Actually, the Hillary campaign – adopting the Barack Obama ground-game model – has been holding such gatherings across the country.

Bronfman says about half the people attending have been unknown to her, a confirmed Clintonite since 1978. House parties around the state on the occasion of Hillary’s formal announcement were hosted mostly by people she didn’t know, Bronfman says.

That’s a good thing, and by design. The New York Times has explained that Hillary is basing her campaign more on Obama’s experience in 2008 and 2012 than her husband’s in 1992 and 1996. She is running to appeal to a narrower leftish base and devoting efforts early to organizing from the grassroots with new and younger blood. (Those gatherings are to be distinguished from a briefing conducted for about 70 or 80 confirmed and veteran Clinton insiders, aides and donors at a private residence in Little Rock in early May by John Podesta, former chief of staff to Bill and now Hillary’s campaign chairman. He reportedly laid out national strategy and stressed the need for early donations and ground-level organizing, but didn’t commit any particular effort in Arkansas.)

Hillary likely won’t be competitive in Arkansas if she gets to the general election, as expected, regardless of the Republican nominee, who, most people predict, won’t be Huckabee. But Arkansas Democrats say she can raise money here, line up workers here for deployment elsewhere and generally buoy the beleaguered state party by energizing the base.

In fact, Hillary will speak July 18 at the state party’s Jefferson-Jackson Day Dinner at Verizon Arena. She will generate dollars for the party. She will create buzz. She will bring energy. She will fire up old friends and true believers. Beyond that, though, there seems to be a schism of sorts among Arkansas Democrats – one that’s a little generational, actually – about the lingering umbilical cord linking the gloried Clinton heritage in Arkansas and the contemporary focus of a generally devastated state Democratic Party.

THE POST-CLINTON ERA
It is about whether and how to negotiate what seems to be the post-Clinton era. Dale Bumpers is within days of his 90th birthday. David Pryor is 80. Bill Clinton and Mike Beebe push hard against 70.

There are exasperated younger Democrats – not to be identified for obvious reasons in the seeming heresy they express – who complain about the party’s self-destructive unweaning from past glories, even a continuing obsession with them, while the party has collapsed and the Arkansas Republicans have advanced and elected a new generation – Cotton, Griffin, Rutledge.

The Republicans are electing 30-somethings and the Democrats are having appreciation dinners for yesteryear’s superstars. At least that’s how some see it. Some Democratic activists – younger, mostly – say the party needs to set about rebuilding from the county level up, and by promoting rural Democratic officials in addition to higher-profile younger ones in Little Rock such as state Reps. Clarke Tucker and Warwick Sabin. They say that any surviving notion that Hillary's presence on the ballot in 2016 will revive happy days is sadly misguided.

She'll do better than Obama, but probably no better that Al Gore, who lost the state and thus the presidency, most trained Arkansas political observers agree. Indeed, even Bronfman, chief among the unreconstructed Clintonites, agrees that the last election cycle proved that there is no applicable Clinton magic anymore in the state.

“Bill did everything he could,” she says.

He came to the state time and again to speak at rallies, to keep his word to Democrats who’d waged their campaigns with his promise of timely help, and Democrats got utterly creamed.

That’s why, Bronfman says, it’s wise that Hillary is running a different kind of campaign and organizing from the bottom up to attract new people.

Even so, Bronfman says she has a list of about 600 persons signed up to be “Arkansas Travelers” and go to New Hampshire or Iowa or elsewhere for Hillary. She says she never had more than 550 or so signed up at any one time for Bill.

There are some mostly younger Arkansas Democrats who think a continued reliance on the Clintons as a source of hope and optimism is at risk of destructive perpetuation through Hillary’s presence on the ballot in 2016. Bronfman says she accepts the political reality and is inclined to believe Hillary can’t win Arkansas ... except, she stresses, for that ever-present factor she calls “you never know.”

She recalls that she and everyone else assumed throughout 1991 that George H.W. Bush, fresh from the war victory liberating Kuwait, could not possibly be denied a second term. In a few months, she was celebrating that her friend Bill Clinton had beaten him.

For the time being, though, the latest polling shows with great clarity that everything points to a better climate in Arkansas for Huckabee – and not so much for him personally as for any Republican – than for Hillary, or for anyone associated with Obama or running by his model.

THE SURVEY SAYS
In a survey of 1,183 voters conducted June 8-11 by Talk Business & Politics along with Impact Management Group and Hendrix College, respondents – 80% robo-called and 20% participating online – provided this snapshot of the Arkansas electorate:
43% said they’d vote in the Republican primary March 1 and 30% said they’d vote Democratic that day.

Obama’s approval-disapproval rating in Arkansas remains in previously unencountered territory in terms of unfavorability, with 33% of respondents approving and 63% disapproving.

Hillary Clinton’s approval rating is 38% and her negative 53%.

Huckabee’s approval rating is 47% and his negative 35%.

In head-to-head competition, Huckabee defeats Hillary by 51-37%.

But a generic Republican candidate actually beats Hillary by a wider margin, 50-33%, than the 14-point one that the semi-home state GOP candidate Huckabee can fashion.

Clinton picks up four percentage points herself, and peels one point from the opposition, when paired against Huckabee specifically rather than any old Republican candidate. The empirical data thus confirms the anecdotal. Arkansas is a Republican state now, first and foremost because of the uncommon popularity of Obama, to whom Clinton is tied.

"I still see one more anti-Obama election in Arkansas," says Richard Bearden, head of Little Rock-based Impact Management.

Obama won't be on the ballot in November 2016, but he'll still be in office and the news, still irking for whatever reason nearly 70% of Arkansas voters.

The Floridian Huckabee is not overwhelmingly popular in Arkansas in a personal sense. He is less popular than a generic Republican, in fact. But that association alone – Republican, that is, not native Arkansan – gives him powerful advantages in the state of his grandchildren.

That’s especially so when he is paired against a New York woman who was Obama’s secretary of state and is running a campaign like Obama’s.

Five Star Votes: 
Average: 5(1 vote)

AEDC’s Mike Preston bullish on Arkansas, eager to improve state’s image

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story by Rex Nelson, courtesy of Talk Business and Politics

Editor’s note: This story first appeared in the July-August issue of Talk Business & Politics magazine. Link here for the digital version of that issue.

Mike Preston, the new executive director of the Arkansas Economic Development Commission, sits in his fourth-floor office overlooking Capitol Avenue in downtown Little Rock on a sunny late-spring afternoon, sipping from a can of the energy drink known as Red Bull.

He’s talking about the changes that were made when he was at Enterprise Florida, Inc., the public-private partnership between Florida businesses and state government that focuses on job creation.

“We put Enterprise Florida on steroids,” Preston says. “Wait. That’s probably not the best term. Let’s just say we put Enterprise Florida on Red Bull.”

He takes a swig from the energy drink as he prepares to head to the airport for yet another flight and yet another economic development mission. Life has been a whirlwind since Preston became one of the country’s youngest state economic development directors at age 31 in early April, just as the regular session of the Arkansas Legislature was coming to an end.

Preston, a graduate of the University of Florida, had an early interest in state government and politics. At age 19, he began working for a Florida state representative, who would go on to become the speaker of the Florida House of Representatives. After college, Preston became the chief of staff for a state senator who represented Gainesville (where the university is located) and several surrounding counties.

‘EXCITING STUFF’
“As his chief of staff, I was always out in the district,” Preston says. “I was at the chamber of commerce breakfasts, the civic club luncheons, all of those things where you’re expected to have a presence. I also got to work on economic development projects and became familiar with the efforts of Enterprise Florida. I remember thinking to myself: ‘This is exciting stuff. This is really interesting.’”

Preston didn’t hesitate when he was offered a job with Enterprise Florida in late 2008. In 1996, when Lawton Chiles was governor, Florida became the first state in the country to place economic development and business image marketing in the hands of a public-private partnership. Chiles believed the increased participation of business leaders in economic development would help Florida more quickly diversify its economy, which was based on agriculture and tourism. Chiles wanted Enterprise Florida to operate like a business with a board made up of appointed members and a group of investors representing corporations with a strong presence in the state.

The Great Recession, which gained momentum throughout 2008, hit Florida particularly hard as the state’s real estate bubble burst. Preston soon became frustrated with his career choice.

“We were sitting there with 12 percent unemployment in 2010, and I questioning whether I had made the right move,” he says.

Preston’s attitude began to change in November 2010 when former hospital executive Rick Scott was elected governor. Scott, a Southern Methodist University graduate who specialized after college in health-care mergers and acquisitions, put together a $6 billion bid in 1987 to purchase HCA, the Tennessee-based hospital firm founded by Drs. Thomas Frist Sr. and Thomas Frist Jr., the father and brother of former U.S. Sen. Bill Frist. When the offer was rejected, Scott and Texas billionaire Richard Rainwater started a hospital company called Columbia, which finally made a successful bid for HCA in 1994. Scott left the company in 1997 with $10 million in cash and $300 million in stocks and options. He became a venture capitalist and moved to Naples, Fla., in 2003.

SWOOPE’S VISION
Scott, an aggressive businessman, hired Gray Swoope in February 2011 to serve as Enterprise Florida’s president. Swoope, who had once worked at AEDC, had been the executive director of the Mississippi Development Authority since 2004. Swoope was the jobs czar for then-Gov. Haley Barbour of Mississippi. Among his coups was landing a Toyota assembly plant for northeast Mississippi that most people had thought was going to Marion, Ark.

“I consider Gray the top economic development official in the country,” Preston says. “I bought into his vision, and he put me on his management team.”

Enterprise Florida helped generate more than $10 billion in capital investment in the state and played a role in the creation of more than 147,000 jobs under Swoope’s leadership. The defense contractor Northrop Grumman brought 1,800 jobs to Florida, and Hertz moved its corporate headquarters and 700 jobs there. Those were among the projects on which Preston worked. Swoope announced in early March that he would leave Enterprise Florida to head a Tallahassee-based economic development consulting firm known as VisionFirst Advisors. Barbour is the VisionFirst chairman.

“It was a good time,” Preston says of the Swoope era at Enterprise Florida. “We were landing the type of projects that would actually change things for the better.”

DEMANDING SCHEDULE
A headhunter contacted Preston about the Arkansas job. He had heard Swoope talk positively about his time in Arkansas. Preston, a political junkie, also knew about Gov. Asa Hutchinson. But he had never been to Arkansas until he flew to Little Rock to meet with Hutchinson earlier this year at the Governor’s Mansion.

“We visited for more than an hour,” Preston says. “I got the same feeling from him that I got from Gov. Scott: That this is a man who loves his state and has a plan in mind to make it better.”

The job offer was extended, the recently married Preston accepted and life has been a blur ever since. During a recruiting trip to California with Hutchinson and Acxiom founder Charles Morgan, Preston says he woke up in his hotel room one morning wondering where he was. That pace doesn’t seem to be letting up. At the time of the interview, Preston was preparing to accompany Hutchinson to the Paris Air Show, where Arkansas would have a booth for the first time.

Asked about his first impressions of Arkansas, Preston says: “The people who live here are some of the friendliest people I’ve ever been around. They come up to you in the grocery store and talk to you. They’re passionate about their state. You especially see that kind of passion from entrepreneurs such as Charles Morgan. He went to California with us just because he wants to help his state attract more high-tech jobs.”

The largest Arkansas companies – Walmart, Tyson Foods, J.B. Hunt, Dillard’s and Murphy Oil among them – weren’t recruited by AEDC from other states. They were built by Arkansas-based entrepreneurs. AEDC, in fact, is headquartered in the building that long housed the Dillard’s corporate offices. Preston is well aware that helping homegrown companies succeed is as much a part of his mission as attracting new firms. He wants to use Arkansas business leaders such as Morgan to help spread the gospel of Arkansas.

“What I learned on our trip to California is that people in other states don’t have any idea about the things we’re doing here,” Preston says. “We have to do a better job of communicating with business decision-makers in places such as New York, Illinois and California. Once they hear our story, I think they will like what they hear.”

60TH ANNIVERSARY
In addition to telling the Arkansas story outside the state, Preston plans to travel to all parts of Arkansas and hear what business leaders think of AEDC and the job it’s doing. He says, “I need to figure out what they think we do well along with the things they think we can do better.”

Preston inherits an agency that’s celebrating its 60th anniversary this year. In 1955, the Legislature created the Arkansas Industrial Development Commission to bring industries to a state that was rapidly losing population. Gov. Orval Faubus appointed Winthrop Rockefeller as the first AIDC chairman. Rockefeller, a billionaire New Yorker, had moved to the state a couple of years earlier to escape the Manhattan media spotlight that had shown brightly on him since a messy divorce.

The state had six congressional districts in those days. Under the original legislation, there was to be an AIDC commissioner from each congressional district along with the president of the Arkansas Bankers Association, who would serve as an ex-officio member. In addition to Rockefeller, the original commissioners were W.W. Campbell of Forrest City, Earl Harris of Rogers, Leon Kuhn of Texarkana, William Smith of Lake Village, Elmer Yancey of Searcy and ABA President Louis Hurley of El Dorado.

Rockefeller, who had fallen in love with his adopted state, took on the chairmanship with gusto. He created a group known as the Committee of 100 to raise $200,000 to supplement the $75,000 AIDC budget. Business leaders from every county were asked to give $100 each. On April 1, 1955, Rockefeller announced that the first industry had been lured to Arkansas – Gay Apparels Inc. of Cotter. By the end of the year, 123 industries with 5,090 jobs had been brought to Arkansas. The first full-time director of the AIDC, Bill Rock, began work on July 1, 1955.

STOPPING OUT-MIGRATION
The state was desperate at that point to halt out-migration. In his book “Arkansas in Modern America,” historian Ben Johnson of Southern Arkansas University declares that the state’s “most dramatic net loss was its people.”

Writing for the autumn 2005 issue of the Arkansas Historical Quarterly, the late Donald Holley of the University of Arkansas at Monticello described out-migration as “the largest domestic event of the World War II era and postwar Arkansas.”

“Pioneers emigrating mostly from Tennessee, Alabama and Georgia settled the state in the first half of the 19th century,” Holley wrote. “After the Civil War, Arkansas continued to gain population from in-migration. The state government, planters and railroads encouraged settlement during this period, soliciting people from as far away as China, Germany and Italy. Unfortunately, good land soon ran out, leaving many of the state’s rural areas overpopulated in relation to arable soil. The earliest out-migration, beginning in the 1890s, was in part a response to this fundamental problem. Population losses continued in the first two decades of the 20th century. In the 1920s, Arkansas lost almost 200,000 people, a record high to that point. Migration slowed slightly during the depressed 1930s, but by the 1940s, when the national economy shifted to war production, the migration stream that had previously been a steady leak turned into a torrential flood. Arkansas, in fact, lost population in every decade between 1890 and 1970.”

In the 1950s, Business Week had a story headlined “Why do Arkansans vanish?” Holley wrote: “It was a valid question, and the answer was easy – the lack of well-paying jobs. Arkansas’ most significant export was not lumber, cotton or bauxite but people.”

One Arkansas native who had left the state told the Business Week reporter: “There’s nothing for me back home. They are talking about a new factory, but I don’t think they’ll get it. I don’t think any college graduates have ever come back to town since I can remember.”

CHANGING THE IMAGE
In the 1940s, Arkansas experienced the third largest population loss among the 48 states, trailing only Oklahoma and Mississippi. In the 1950s, Arkansas’ out-migration percentage trailed only West Virginia. No state lost a greater proportion of its people than Arkansas did from 1940-60, leading to an inferiority complex among those Arkansans who stayed behind. Rockefeller used his own money to try to change that self-image.

“The absence of this vast pool of workers created severe labor shortages, especially in agriculture,” Holley wrote. “These shortages remained critical even after the war and destroyed the old, inefficient plantation system, which had always been based on cheap labor. In postwar Arkansas, the number of sharecroppers and tenant farmers plunged so significantly that by 1959 the agricultural census stopped collecting data on them. In the same period, the number of farms declined but the average size of farms increased.”

Rockefeller worked with Dun & Bradstreet to come up with a list of 30,000 companies that the state needed to call on. By 1961, every company on the list had been contacted. The Legislature increased the annual AIDC budget to $575,000 in 1957, enabling the commission to triple its staff. By 1960, manufacturing employment had increased by almost 50 percent from five years earlier.

Rockefeller was elected governor in 1966 and went on to serve a pair of two-year terms. During the agency’s 15th anniversary celebration on April 1, 1970, at the Marion Hotel in downtown Little Rock, the governor noted that he had a hard time finding workers in the early 1950s when he began building his ranch atop Petit Jean Mountain.

“It was at that point that I became interested in industrial development as a means of reversing the outflow,” he said. “I accepted the appointment as the first chairman, and for eight years we interlaced our industrial brokerage function with some rather exciting exploration of regional development concepts and community action programs. I was convinced of the need to scatter industries in our smaller towns rather than let them pile up in a handful of urban areas. Arkansas is currently growing at a rate far exceeding that of the nation as a whole. Working under the scatter approach, we have generated some 3,000 new and expanded industries representing more than 145,000 new jobs.”

The chairman of the commission at the time was banker Herbert McAdams. He described the previous 15 years as a period of growth “so explosive that it is difficult to find proper words that describe it. At a time when Arkansas was seriously losing population because of a lack of jobs for its people, we brought those jobs in.”

Frank White, who served as the AIDC director from 1975-77, would be elected to a single two-year term as governor in 1980. In a 1977 column, White wrote: “Having traveled more than 142,000 miles promoting the state, I find there is an enormous misconception of what Arkansas actually is. In November 1976, I was quoted by the state’s news media as saying the biggest problem we are faced with today is overcoming the Arkie image. This was not meant in a negative way for I am proud of our state’s folk culture heritage. But the frequently stereotyped image of Arkansans as backwoods, undereducated hillbillies or the racist image that still persists because of the Central High School incident in 1957 does not accurately portray what our state is. … The future is limited only by our leadership and our attitude.”

DIVERSIFYING THE ECONOMY
Preston doesn’t have to face the overall out-migration problems that plagued the state 60 years ago. Yet rural counties in large parts of eastern and southern Arkansas continue to lose population.

There’s also the challenge of having a marketing budget that is far smaller than those in most of the states against which Arkansas must compete for projects. Preston believes his political experience – he was Enterprise Florida’s vice president for government affairs and spent much of his time at the state Capitol in Tallahassee – will help him convince Arkansas legislators that changes need to be made.

“Economic development is a team sport,” Preston says. “We have to recruit legislators to be a part of that team. There are things we need to do. Our corporate income tax structure is outdated. We need to take a look at the size of the governor’s closing fund and other incentives. Incentives will never make a bad deal good, but they will make a good deal better. We need to attract companies in areas like biotechnology so more of the students in Arkansas will want four-year degrees and go to work for such companies. We want to further diversify our economy and find better ways to ensure a trained, skilled workforce to satisfy the job needs of that diversified economy.”

With that, Preston takes another swig of Red Bull and is off to the airport to catch his flight. Just as Winthrop Rockefeller and Frank White before him, he has a state to sell.

Five Star Votes: 
Average: 4.3(4 votes)

Simplicity drives some CEOs to wear personal, company uniforms

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story by Kim Souza
ksouza@thecitywire.com

Business legends Steve Jobs and Don Tyson did it, and their successors Tim Cook and Donnie Smith also do it. That is they dressed down, so to speak, as CEOs and wore  the same personal or company “uniform” each day. Simplicity is a common reason CEO’s choose to wear the same thing.

Corporate governance expert Alan Ellstrand, a professor at the University of Arkansas, said the uniform can be a unifying tool. He said executives who choose to dress down do it for various reasons, from being part of the culture, to personal choice based on efficiency.

The billionaire Don Tyson, former CEO and chairman of Tyson Foods, donned the Khaki pants and shirts with the Tyson Foods logo stitched in red on the front left shirt pocket even throughout his retirement years. When Don Tyson rang the bell on Wall Street many years ago, he wore the same Khaki uniform which analysts remember decades later. 

Today, Tyson Foods CEO Donnie Smith also wears a Khaki uniform that Tyson employees in processing facilities and driving trucks also wear most of the time. Smith once told the media he liked the thought of not having to decide what to wear every day and there were a simplicity associated with wearing the Khaki. 

Ellstrand said just like Sam Walton who wore the signature ball cap, CEO’s use uniforms to help employees better relate to them on the worker level.  

The dress for success days have given way to “simplistic styling” which is why FaceBook CEO Mark Zuckerberg wears grey t-shirts with black hoodies. Perhaps Zuckerberg took a page from Albert Einstein’s playbook. Einstein reportedly bought several variations of the same gray suit so he wouldn’t waste time each morning deciding what to wear.

Personal branding expert and author William Arruda said executives like the late Apple CEO Steve Jobs and now Apple CEO Tim Cook wear what they did and do to be comfortable. He said comfort also leads to confidence. A byproduct of wearing the same thing everyday can also become a trademark look and brand building tool.

That was the case for Walton, who was known to give away his trademark ball caps to employees and customers. This week Walton’s ball cap is on display in the Smithsonian Institute’s Business Enterprise exhibition that spans 200 years of U.S. business history.

Wal-Mart’s new CEO for its U.S. division, Greg Foran, frequently wears the navy blue polyester vest that store employees are required to wear. He donned the vest during the retailer’s recent shareholder’s meeting.

“Uniforms can be also inspirational for the frontline workers. Perhaps that’s why Wal-Mart and Tyson CEOs often choose to wear uniforms like their large workforces. This can send a signal to the masses that if they work hard and things break right for them that they too, can move up the ladder,” Ellstrand said.

On a deeper level, he said CEOs wearing common uniforms or simple attire can help strengthen corporate culture demonstrating a commitment and while it’s a small thing even little things can make a difference.

President Barrack Obama told the Vanity Fair early in his presidency that he decided to alternate black and blue suits, which makes up nearly his entire dress wardrobe seven years later. The reason he gave was that deciding what to wear everyday was one less decision he wanted to make.

Five Star Votes: 
Average: 5(2 votes)

Public charter sought for ‘Future School of Fort Smith,’ seeks 2016 opening

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story by Michael Tilley
mtilley@thecitywire.com

Fort Smith business leaders, working with the Fort Smith Public School District and the University of Arkansas at Fort Smith, are moving forward with a plan to open by August 2016 a public charter school for students in grades 10-12.

Trish Flanagan, founder of the effort to create Future School of Fort Smith, said the group has planned public meetings from 6 to 7:30 p.m., July 9, 16 and 28, at the Elm Grove Community Center. The group is encouraging students, parents and educators to attend.

Info from Flanagan shows that they hope to have the charter application to the Arkansas Department of Education’s (ADE) Charter Authorizing Panel by the end of this summer. They plan to complete presentations to the ADE and get the charter approved by the end of 2015. If all goes well, student recruitment would begin in the spring/summer of 2016.

According to the Arkansas Public School Resource Center there are 20 open-enrollment public charter schools in Arkansas with more than 4,000 students.

“As a cross-sector partnership between the Fort Smith Public School District, the University of Arkansas at Fort Smith and local businesses, Future School will be a tuition-free, public school determined to embolden students to identify interests, cultivate relevant skills and connect to real world learning, graduating with three years of workforce experience,” noted a statement from Flanagan. “As the first Big Picture Learning school in Arkansas, our Learning Through Internship (LTI) model, guides students to develop their strengths and passions while also preparing for in-demand employment opportunities.”

Flanagan said the proposed school would be a unique asset for Fort Smith.

“We will be one of the only charter schools across the nation to partner with the local school district, higher education and business to support our students. Building on a solid foundation provided by local schools, we strive to be an example of cooperation, innovation and champions of student voice,” she said in a statement.

Flanagan has experience also in connecting education to the business and entrepreneurial worlds. She has 14 years experience working as an educator working with communities around the United States and abroad. She is the co-founder of Noble Impact, a K-12 education initiative integrating public service with an entrepreneurial mindset. Noble Impact is supported by Steve Clark, founder of Fort Smith-based Propak Logistics.

Prior to starting Noble Impact, Flanagan led the University of Arkansas’ Social Entrepreneurship Pilot Initiative.While completing a concurrent master’s degree at the Clinton School of Public Service and the Walton MBA Program, she co-founded Picasolar, an award-winning (MIT-DOE Clean Energy Prize) solar company.

School benefits touted by the group include:
• Partner with local schools to build and improve new instructional approaches like project-based classrooms and integrated technology to offer a diverse range of options for students and families;
• Students work with advisors and mentors to identify their unique interests and design internships with local businesses and community organizations to explore potential careers;
• Help students to build “a real-world tool box” to be better positioned for career, vocational and college pathways; and
• Students work on standards‐based team projects to develop problem‐solving and communication skills as well as necessary mindsets such as empathy, determination, curiosity, and resilience.

Sam Sicard, president and CEO of Fort Smith-based First Bank Corp., said the school will create a “problem solving” learning environment.

“Future School of Fort Smith will provide a unique learning environment, fostering critical and creative thinking skills, as well as entrepreneurial and independent thought. The School will enable high school students to engage in real-world problem solving through partnerships with all community stakeholders. These are the skill sets our employers need, and these are the same skill sets needed for those who aspire to be job creators,” Sicard said in a statement.

Partnership with the University of Arkansas at Fort Smith provides a dual credit option for students of the proposed school.

“As an active partner, we are eager to help them incorporate college level dual credit so that students will graduate from Future School with both practical knowledge and a University of Arkansas – Fort Smith college transcript in hand,” said UAFS Chancellor Dr. Paul Beran.

The group is looking for a temporary building to lease for 1-2 years that is preferably near UAFS. The space should house about 100 students the first year, with growth up to 300 students by year three.

Link here for a two-page flyer from Future School of Fort Smith about their proposed new public charter school.

Five Star Votes: 
Average: 3.5(2 votes)

Economic developers focus on Walmart manufacturing summit (Updated)

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story by Michael Tilley
mtilley@thecitywire.com

Editor's note: Story updated with comments from AEDC Executive Director Mike Preston and other changes throughout.

More economic development officials from around Arkansas are expected to attend the third year of the high-profile Walmart “Manufacturing Summit” now that it is being held in Bentonville, said Joey Dean, vice president for economic development at the Little Rock Regional Chamber of Commerce.

Dean, who also worked more than 10 years with the Arkansas Economic Development Commission, said the event provides unique access to companies with an incentive to relocate or build new operations in the U.S.

“There are a good number of folks from Arkansas who are going to be there. Wal-Mart has always been generous to give us a good amount of booth space,” Dean said.

Shawnie Carrier, president of the Arkansas Economic Developers (AED) and chief of staff at Arkansas State University, also is attending the summit. Carrier said having the summit in Bentonville is a “perfect opportunity” for Arkansas economic development officials to show off their state to prospects. Carrier, who also serves as the executive director of the Delta Center for Economic Development at ASU, said more AED members are attending than in past years because the summit is in Bentonville.

Wal-Mart Stores Inc. announced in 2013 a pledge to buy $250 billion in U.S. made products in 10 years. The Boston Consulting Group predicted that the $250 billion investment would create one million jobs, including jobs in manufacturing and related services.

The 2015 Walmart U.S. Manufacturing Summit is themed “Investing in American Jobs,” and is set for July 7-8. The event will be held in the Arend Arts Center at the Bentonville High School. Arkansas Gov. Asa Hutchinson and Walmart U.S. CEO Greg Foran are scheduled to speak. Also expected to attend is Harry Moser, founder of the Reshoring Initiative, a group founded in 2010 to help manufacturers and others in the supply chain find cost-effective ways to return production to the U.S.

Orlando, Fla., hosted the first summit, with the 2014 summit held in Denver.

Michelle Gloeckler, executive vice president, consumables and health and wellness and U.S. manufacturing lead, said the summit will be different this year in that Walmart will also hold an “open call” with companies who want to put their products on the shelves of the world’s largest retailer. Gloeckler also said the open call will be different in that Walmart will meet only with companies who have products “that are ready to go.” In previous years the open call meetings between Walmart buyers and potential vendors included meetings to pitch product ideas.

Dean doesn’t see the open call change – essentially attracts vendors with established operations – as an obstacle. He said new vendors may need larger operations as they grow sales with Walmart.

“Those new sales could necessitate additional locations ... so I think we are going to benefit more from leads that are not currently manufacturing in the U.S. but are interested in reshoring their manufacturing efforts,” Dean said, adding that Arkansas can “can compete with any other state” on industrial park availability, wages and workforce.

And they will compete. The summit also attracts hundreds of economic development officials from at least 30 states who are all pitching their industrial parks and labor demographics.

Mike Preston, executive director of the Arkansas Economic Development Commission, said he and Gov. Hutchinson are focused on making the most out of the event.

“The key is to get our name out there and get our hat in the game,” Preston told The City Wire during a Tuesday afternoon stop in Fort Smith. “Having the Governor there and having him speak also sends a loud message.”

As Carrier noted, Preston said having so many potential prospects come to Arkansas for an event presents a unique chance to pitch what the state has to offer. He said they have several meetings lined up Wednesday with existing and potential Walmart suppliers.

Arkansas has not scored well with respect to landing new operations from Walmart’s reshoring drive. The first big Arkansas news was a deal between Walmart and Rogers-based Redman & Associates to produce toy components. Then Walmart U.S. CEO Bill Simon and Arkansas Gov. Mike Beebe attended the Oct. 7, 2013, event announcement. However, that deal, which was expected to create 74 new jobs, has fallen through.

Fayetteville-based Hanna’s Candles has seen a big bump in sales from the effort. PolyTech Plastic Moldings in Prairie Grove and Jarratt Industries in Fayetteville have also benefited with their plastic taco plate product that Walmart now pushes to stores through 49 distribution centers.

But many of the reshoring-related deals have landed in North Carolina, Ohio, South Carolina, and Wisconsin.

That reality doesn’t bother Dean. He said state and community economic developments know the process of working the “automatic leads” gathered at the summit from Walmart vendors requires patience.

“This doesn’t happen overnight. Companies don’t reshore overnight. So patience is the key in any economic development program, and it is certainly needed here,” Dean said.

He also said part of his job is to encourage companies in Arkansas to take advantage of the reshoring effort.

“Those of us who do this (economic development) around the state have to make sure there is an awareness, that there is an opportunity to participate in this and to participate in the open call.”

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Arkansas, Oklahoma Governors defend 10 Commandments monuments

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Arkansas Gov. Asa Hutchinson on Tuesday (July 7) defended a plan to place a 10 Commandments monument on State Capitol grounds, while also on Tuesday Oklahoma Gov. Mary Fallin said she will appeal a recent decision by the Oklahoma Supreme Court that requires removal of a 10 Commandments monument on that state’s Capitol campus.

The 6-foot tall monument in Oklahoma was installed in 2012 and paid for by a Republican state representative. Controversy has surrounded the installation, with the Satanic Temple applying with Oklahoma officials to also place a monument on Capitol Grounds. The proposed monument features a 7-foot tall goat-headed creature that is flanked by children on both sides. Satanic Temple spokesman Lucien Greaves said the monument would “complement and contrast the Ten Commandments monument that already resides on the North side of Oklahoma City’s Capitol Building.”

In a 7-2 ruling, Oklahoma Supreme Court justices said the 10 Commandments monument was “obviously religious in nature” and violated a state law banning religious symbols on state property.

Republican leaders in the Oklahoma Legislature said they will pass a resolution that would repeal the state’s Constitutional ban on faith-based monuments on state property. Fallin said she also plans a legal challenge.

“The Ten Commandments monument was built to recognize and honor the historical significance of the Commandments in our state’s and nation’s systems of laws. The monument was built and maintained with private dollars,” Fallin said in a statement. “It is virtually identical to a monument on the grounds of the Texas State Capitol which the United States Supreme Court ruled to be permissible. It is a privately funded tribute to historical events, not a taxpayer funded endorsement of any religion, as some have alleged.”

Fallin said the Court’s decision was “was deeply disturbing to many in our Legislature, many in the general public, and to me.” She said Oklahoma Attorney General Scott Pruitt has filed for a rehearing before the Oklahoma Supreme Court.

“During this process, which will involve both legal appeals and potential legislative and constitutional changes, the Ten Commandments monument will remain on the Capitol grounds,” Fallin said.

Prior to the Oklahoma court ruling that the 10 Commandments monument must be removed, Greaves had said Arkansas is “appealing” as the next place to erect a satanic monument on Capitol grounds.

Earlier this year the Arkansas General Assembly approved a plan to use private money to place a 10 Commandments monument on State Capitol grounds. The bill was sponsored by Sen. Jason Rapert, R-Conway. Rep. Kim Hammer, R-Benton, who cosponsored the bill, said it was patterned after other states including Oklahoma.

During a Tuesday morning press conference at the Arkansas State Capitol, Gov. Hutchinson defended the Legislature’s placement of a monument to the Ten Commandments because of the Commandments’ historical significance. He said he would have a problem with Hindu- and Satanic-related monuments.

“The Capitol grounds, we want to be careful as to what monuments and designations go there,” he said in this report from Talk Business & Politics. “I think the secretary of state has historically been careful. … We don’t want just every group putting a statue on the Capitol grounds. We want it to be exclusive, we want it to be reasoned, we want it to be reflective, and I think that’s one of the reasons it went through the legislative process.”

He said any new monument would have to go through a process where it was approved by the secretary of state or the General Assembly.

The U.S. Supreme Court has a mixed record on the issue. In 1980 the court struck down a Kentucky law requiring the 10 Commandments be posted in public school classrooms. Later, the court said 10 Commandment monuments on courthouse grounds in Kentucky represented “an unmistakably religious statement” and thereby were unconstitutional.

More recently, the U.S. Supreme Court ruled that a 10 Commandments monument in place for more than 40 years on Texas State Capitol grounds could remain. Justice Stephen Breyer, who voted to retain the monument, said the display was “borderline.”

“These recent decisions mean that – outside the school context – there is no bright-line test for Ten Commandments cases,” noted a statement from the Anti-Defamation League. “Rather, the legality of these displays will be decided on a case-by-case basis. Many of them will be found unconstitutional.”

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