71 positions to be cut as Tennessee shifts economic development focus

71 positions to be cut as Tennessee shifts economic development focus

April 20th, 2011 by Andy Sher in Local Regional News

Tennessee Gov. Bill Haslam speaks during a meeting of the Chattanooga Times Free Press editorial board.

NASHVILLE - Gov. Bill Haslam today unveiled a new state economic development strategy that he and his jobs chief Bill Hagerty say prioritizes "strategic" recruitment of targeted industries, focuses more on helping existing businesses expand and directs attention to less developed rural areas.

"My top priority is for Tennessee to be the No. 1 location in the Southeast for high-quality jobs," Haslam said, noting his "Jobs4TN plan" is "a blueprint for doing just that."

By leveraging existing assets, "we will be able to attract new businesses to the state while helping our existing businesses expand and remain competitive," Haslam said.

But Republican Haslam's economic plan will also result in 71-position cut at the state's Department of Economic and Community Development, which Hagerty heads.

Some 60 workers in local planning will be fired because the state plans to shift responsibility for most planning services to local governments.

The plan also represents a departure from the approach used by his predecessor, Democrat Phil Bredesen.

Bredesen focused on high-profile efforts that resulted in major coups, especially in Chattanooga and Southeast Tennessee with the $1 billion Volkswagen assembly plant in Chattanooga and the $1.45 billion Wacker Chemical polysilicon plant in Bradley County.

Speaking earlier this week to Times Free Press reporters and editors, Haslam said he does not intend to "Monday morning quarterback" on Bredesen's dealings.

Volkswagen, he said, generated a "lot of additional job growth potential" not just for future expansions of the 2,000- employee plant but in terms of VW suppliers locating in Southeast Tennessee.

"The Volkswagens of the world get a lot of attention and they should because they create a lot of jobs, but there's a whole lot of other jobs created by folks who don't get much attention," the governor said.

Economic and Community Development Commissioner Hagerty and Haslam said large companies consume large amounts of time and money.

"The ones who do get the attention are the big companies that show up from out of state with a team of consultants, saying 'We're calling on 40 states. We're going to narrow it down to eight or six and we're going to have a bake off and they're trying to pump the incentives as high as they can," Hagerty said.

Haslam said "it's a buyer's market for companies out there" and it is often less expensive to help existing companies expand.

The Haslam plan, the first of his "top-to-bottom" reviews of government to bear fruit, prioritizes "key clusters" of jobs and existing businesses.

In economic development lingo, a cluster is a geographically proximate group of interconnected companies and associated institutions in a particular industry that include producers, suppliers, universities and trade associations.

It establishes regional "jobs base camps" to spread economic development across the state and invests in innovation.

Another part would reduce business regulation.

Officials says they will now focus business development efforts on six "key" clusters. They include the automotive industry; chemical products and plastics; transportation, logistics and distribution services; business services; health care and advanced manufacturing and energy technologies.

All six have ties to Chattanooga and Southeast Tennessee. For example:

  • Automotive: Volkswagen, one of two auto manufacturers now operating in Tennessee, is producing its Passat car at the company's $1 billion plant at Hamilton County's Enterprise South Industrial Park. Several supplier plants are located there as well.
  • Advanced manufacturing and energy technologies: Alstom Power Inc. has a Chattanooga plant that manufactures turbines and other high-technology components for nuclear, coal and gas power plants. Wacker Chemical is opening a Bradley County facility that will manufacture polysilicon used in solar power panels.
  • Transportation: Chattanooga is home to trucking companies U.S. Xpress and Covenant Transport.
  • Chemical products and plastic: DuPont and Invesco have plants in Chattanooga that manufacture nylon. BASF, also located in Chattanooga, makes chemicals for the carpet industry. Olin Chemical manufactures chlorine at its Charleston plant in Bradley County.
  • Business services: Chattanooga is trying to establish itself as a high-tech center with its municipal electric service, EPB, offering one gigabit broadband to residential and business customers alike. Convergys and T Mobile have major call centers in Chattanooga.
  • Health care: Chattanooga is headquarters to the state's largest health insurer, BlueCross BlueShield of Tennessee. Fillauer LLC is a leading manufacturer, distributor, and central fabricator of orthopedic and prosthetic devices.

Read more in tomorrow's Times Fress Press.