Gov. Bill Haslam talks about his first 100 days in office during an interview on Wednesday in Nashville. Haslam is laying off 60 at the state Department of Economic and Community Development as part of an overhaul of the agency's mission. (AP Photo/Mark Humphrey)
NASHVILLE — Gov. Bill Haslam said Wednesday he is restructuring state economic development efforts to put more energy to help existing businesses create jobs and less into luring big national or international prospects such as Volkswagen to Tennessee.
“My top priority is for Tennessee to be the No. 1 location in the Southeast for high-quality jobs,” Haslam, a Republican, said when introducing his “Jobs4TN plan.”
Other changes include reducing the Department of Economic and Community Development’s staff by 71 positions, or 35 percent, including 60 layoffs in the regional economic planning office.
Speaking earlier this week with Chattanooga Times Free Press reporters and editors, Haslam and his jobs chief, Bill Hagerty, said shifting focus to existing companies is not a repudiation of former Democratic Gov. Phil Bredesen’s strategy.
Bredesen and his economic and community commissioner, Matt Kisber, pushed a number of high-profile projects, including Volkswagen, whose $1 billion, 2,000-employee plant at Enterprise South industrial park is beginning to roll out Passats.
“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,” Haslam said.
Hagerty said 85 percent of new jobs are created by existing Tennessee firms. Large companies consume large amounts of time and money in terms of incentives, he said.
Big companies often “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.
“It’s not that we won’t continue that activity, but you’re going to see this department focused extensively on existing businesses simply because that’s where the jobs are,” said Hagerty, a venture capitalist who once worked at an international business consultant.
“That may not bring the headlines that a major out-of-state relocation brings, but this is what we’re going to focus on to bring the jobs.”
Haslam focusing on regional job creationDuring a Times Free Press editorial board meeting, Gov. Bill Haslam, R-Tenn., discussed how his administration will focus on job creation from existing businesses and rural regions of the state.
A Chattanooga Democrat was critical of Haslam’s plans.
“I’m certainly concerned that we are cutting the jobs of the people who are trying to create jobs,” said Sen. Andy Berke, D-Chattanooga, alluding to the layoffs at the Department of Economic and Community Development.
Hagerty said local governments should be responsible for regional planning efforts, with such planning mostly benefiting medium-sized counties, while larger counties have their own planning offices.
Berke also cited state efforts that brought Volks-wagen and VW suppliers to Chattanooga, the $1.45 billion Wacker Chemical polysilicon plant to Bradley County, Amazon to Hamilton and Bradley counties and Alstom Power’s $300 million investment in Chattanooga in 2008.
“[Economic and Community Development] has had a strong record over the past several years,” Berke said. “We can continue to attempt to bring in jobs while we focus on growing the businesses we already have.”
House Majority Leader Gerald McCormick, R-Chattanooga, cited Hagerty’s observation that most jobs are created by existing businesses.
“That’s been some of the complaints I’ve heard over the last few years: ‘You guys are out spending all this money bringing in foreign companies when we got our homegrown companies that could expand here and provide more jobs,’” McCormick said.
“I just think it [Haslam’s strategy] is a refocusing on the local businesses.” McCormick said. “I think it’s building on what the Bredesen administration [did]. They did a great job of recruiting businesses from all over the world.”
Sharing the wealth
Bredesen left office in January after eight years in which Tennessee lured more than $34 billion in investments and nearly 200,000 jobs.
“You can’t fault where we have been because we’ve had some absolutely great successes,” said Deborah Woolley, president of the Tennessee Chamber of Commerce and Industry. “But there has been a feeling that it has been a kind of a ‘have and have-not’ split in the state and some of our more rural and remote areas haven’t had the same growth.”
In February, 20 months after the official end of the Great Recession in June 2009, joblessness rates remained above 10 percent in 75 of Tennessee’s 95 counties.
Haslam said he intends to focus on clusters of interconnected companies and associated institutions and will divide the state into nine “job base camps” to develop localized strategies, an idea Woolley supports.
“I think by putting together regional strategies, it lets you concentrate on individual markets and makes you focus on what you may need to do to upgrade or fix problems in an area,” Woolley said.
In Southeast Tennessee, the new jobs base camp will include Bledsoe, Bradley, Grundy, Hamilton, Marion, McMinn, Meigs, Polk, Rhea and Sequatchie counties.
Haslam said that, going forward, the state will use a “different matrix” to measure the costs of recruitment.
“We can tell you to the dollar what those jobs cost,” Haslam said.
Haslam has promised “top-to-bottom” reviews of all state operations, examining what agencies are doing and whether it makes sense for them to carry out certain functions.
Staff writer Dave Flessner contributed to this story.
Andy Sher is a Nashville-based staff writer covering Tennessee state government and politics for the Times Free Press. A Washington correspondent from 1999-2005 for the Times Free Press, Andy previously headed up state Capitol coverage for The Chattanooga Times, worked as a state Capitol reporter for The Nashville Banner and was a contributor to The Tennessee Journal, among other publications. Andy worked for 17 years at The Chattanooga Times covering police, health care, county government, ...