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- What it takes to create economic growth in Memphis, tonight, on Behind the Headlines.
[intense orchestral music] I'm Eric Barnes of The Daily Memphian, thanks for joining us.
I am joined tonight by Gwyn Fisher.
She is the new, relatively new, Chief Economic Development Officer for the Greater Memphis Chamber.
Thanks for being here.
- Thanks so much Eric, glad to be here.
- Along with Bill Dries, reporter with The Daily Memphian.
You took the job, I guess it was announced in December or January?
- Okay, but 10 years plus, with the state economic development.
So you've been in this business, in this kind of, these efforts for quite some time.
We never had a chance to have you on the show before, but just a general question as we start.
The state of the local economy and the prospects for growth when we're coming off, there's still sort of a COVID hangover.
There's fears of a recession of some sort, that's a high interest rate environment, other challenges in Memphis that it's had for a long time, and yet also all these very positive things going on.
Y'all recently announced a steel plant coming into Memphis, and of course the big, big Ford plant right outside Memphis and all the following effects.
So that mixed bag, how do you look at where Memphis is right now?
- Incredibly positively.
You know, Eric and Bill, our economy, I would say, is on fire.
We are building an economy of innovation.
Our pipeline is incredibly robust and we are gonna see some exciting growth in a lot of our key industries through the course of 2023.
So we're incredibly excited.
We're bullish and we're definitely busy.
- Is that move beyond, I mean, for almost as long as I've lived here, which is 25-plus years, we were America's distribution center, built around FedEx and obviously, the warehousing, the rails, the trucking companies, the proximity of Memphis to the rest of the country and through the airport, the rest of the world.
Is that still the driving force in terms of what you look at in terms of helping companies expand and helping companies recruit and grow into Memphis?
- That logistics prowess really does remain one of our best assets.
We are known around the world for that.
But more than 80% of our project pipeline right now is in advanced manufacturing.
And that's a real testament to our workforce, particularly the diversity of our workforce.
We have the largest concentration of black manufacturing talent, largest concentration of female manufacturing talent.
So when you pair that diversity with our infrastructure and logistics strengths, it's a winning combination.
- Let me bring Bill in.
- And you all just put out some year-end figures on this very thing, and it showed a pretty sharp increase in advanced manufacturing jobs for 2022 in Memphis.
- That's correct.
We saw our total gross regional product grow by more than 18% in the last 4 years.
And a lot of that is driven by growth in advanced manufacturing jobs.
That's accounting for, I wanna say about $12 billion of our gross regional product.
- So define for us the difference between just manufacturing and advanced manufacturing because advanced is a step up.
It's more complex, involves more technology, right?
- You've touched on one of the real hot topics in economic development, that is what is advanced manufacturing.
And we generally consider it the, it's about 50 NAICS codes.
What we mean by that are those that pay higher wages and generally require a higher skillset, a more technical skillset.
Although the argument can be made all advanced, all manufacturing at this point is advanced manufacturing.
But by that we really mean those high quality, high wage jobs that are the mission of the chamber.
- Right, is that a national trend or are other areas seeing their advanced manufacturing increase?
Or is this something that's unique to Memphis and maybe a function of the economy being so dominated by logistics for so long?
- I think we are definitely winning in this space, but with some of the federal investments in the CHIPS Act and things like that, we're going to see more advanced manufacturing growth across the country, Memphis intends to lead the pack.
- How much of this, you worked for, Bill Haslam, the previous governor, in the economic development division of the state.
He put through, and I remember talking to him about it, the Drive to 55 and there was getting 55% of the adult population at least a two-year degree and pushed through the legislation that everyone in Tennessee is guaranteed at least a two-year degree without the cost of tuition.
There might might be loans, Pell Grants, state money, whatever that is.
How much does that come into play?
I mean, again, with Ford, and I ask that because for years, as long as I've been doing this show and covering Memphis and living in Memphis, people have talked about, we have all these open jobs, not enough skilled and trained workers.
You're talking about more sophisticated manufacturing jobs, we're not talking about "Just driving a forklift."
How is that pipeline of people and what has made the difference in terms of having enough people for these jobs and these companies that are coming in?
- It's really interesting.
The programs you talk about, the state's Drive to 55, the Tennessee Promise and Tennessee Reconnect, those are significant competitive advantages on the national landscape.
Very few states offer anything like that.
And when you pair it with our commitment here in the Memphis region to accelerated skills training, matching that with industry credentials, that sets us apart from other communities across the state and really around the country.
So we have the programs in place, we have the people in our communities, and then you add in that diversity superpower that is our region and it's a winning combination.
- It's interesting, the diversity, again, over time that in some time, some conversations we've had around this table, diversity requirements, requirements for minority and women-owned businesses were viewed by some as a burden, some as an impediment.
Even people who would sit here and say, look, I want more minority and women-owned businesses to have more business, to have more contracting and subcontracting and so on.
But when we put those requirements in, that makes us less competitive with other communities.
And so we can't have hard and fast requirements around those, we can only do goals and so on.
And that has been debated a lot in the economic development incentives, the tax incentives and so on.
You're now saying that's a huge advantage.
What has changed and how does that, can you give specific examples of how that plays out?
So what we have seen more and more when companies reach out to us to inquire, solicit information, they're considering Memphis for, let's say a new factory.
They're asking more and more questions about the diversity composition of our workforce because as we've seen nationally, really internationally, companies are making more public commitments to diversity.
And we have what they're looking for.
And so our conversations with these companies are very honest.
Quite frankly, you can't hire your way to your diversity goals where you are now, you've gotta skate to the puck.
And that's gonna be right here in Memphis where we have this high quality, diverse, talented workforce.
- One more before I go back to Bill.
I've heard from people that Ford really got that because Ford's roots are in Michigan and roots around Detroit, another very diverse city, with high, I don't think it's a majority black city, but it's close to that, that they really got that in terms of coming to Memphis, has that been your experience as well?
And the Blue Ford jacket today was a good call.
- This is actually my chamber blue, thank you very much.
Thank you very much.
I think Ford was really impressed with that and they are so excited and have really been fantastic partners in engaging in our workforce discussions and preparing for Blue Oval City.
And it takes one glance at Memphis to understand this is our superpower, this diversity is really what they're looking for and we have it.
- So the discussions have been ongoing about supporting industries or supporting plants that might support Blue Oval City.
How is that going and what does that look like in terms of some of those supporting players being within the city of Memphis?
- We're really excited in that space.
I think we'll start to see some great announcements in the coming months of suppliers being selected and choosing to locate here in this area.
One of the most important things that we can do as a community is to focus on site development.
You've got to have the industrial sites with the appropriate infrastructure for these suppliers to locate on.
And that's where we're investing a lot of time and effort.
- And one of those sites that's been much discussed for years, even before Blue Oval came up, is the old Firestone tire and rubber plant in north Memphis.
And as I understand it, some folks have come to look at that, right?
- We have actually shown a number of sites across the city.
Really looking at, Memphis has a lot of assets, we've got the water, we've got very flat land.
The biggest thing we're looking at right now is electrical infrastructure.
We're seeing more and more of what we call superusers.
Projects that are gonna draw down a lot of power.
So Firestone, we have sites really throughout the city, and that's part of our goal, is making sure that our site development efforts look in every corner of our city.
We want this prosperity to be where folks can live, work and play in the same area.
- And as all that's going on, you announce that a new steel plant is coming here and the city has some history with that.
Birmingham Steel was here for a bit.
Nucor has been here as well.
Is that a result of those earlier investments and earlier experiences or is it something completely different?
They were just?
- It absolutely is, Bill.
MSS Steel Tubes is a great example of the kind of economic development we'd like to see.
It's foreign direct investment, meaning a company coming in from another country.
Why is that important here?
When companies come in, that's new money into our economy, that's growing the pie for everyone.
They're a fantastic high quality company and real evidence of a growing bench strength in metals manufacturing.
To your point about we have a long history in that space and we're excited to grow our bench strength there.
- You mentioned electricity and power.
The city went through a big conversation and it really in many ways still continues about whether, how long it could, should, will continue with TVA as the primary supplier of electricity.
TVA is a big part of the Ford plant.
I think it provided the economic development incentive specifically to the steel tube plant that just came in.
Were you glad that MLGW decided, did not decide to leave TVA?
- We're always excited to be a part of these conversations because electrical and utility infrastructure is gonna be crucial moving forward.
And TVA remains one of our community's most important economic development partners.
So we're thrilled to continue to work with them and continue to work with MLGW to prepare for these jobs of the future.
- When you talk about the superusers, we had Doug McGowan on a month ago, not even a month ago, maybe it was a month ago.
He's a month into the job, barely weeks into the job, and there's huge power outages, one of the worst power losses from TVA.
We had the rolling blackouts here, we also had water issues.
But when you talk about bringing in these advanced manufacturing companies, and you said that some of them are superusers of electricity, was that a red flag for some of the companies you're talking to, when TVA goes down in a storm?
- Companies are always considering utility certainty when looking at communities and we have actually a very great story to tell in that space, recent weather notwithstanding.
This area has over 99% reliability.
We have redundancies built into our system, so we tell a really strong utility story.
And specific to MLGW, again, people can see the show, Doug, you know, there's in the middle of trying to harden the infrastructure a lot of that is focused on residential uses, but are you glad about Doug and your relationship with Doug in terms of emphasizing electricity to businesses?
How is that?
- We are thrilled.
MLGW has always been a strong partner.
We are looking forward to working closely with them, as I mentioned, on the site development to identify sites that could be superusers, have plans in place to get those sites ready.
As you know, construction timelines are getting shorter and shorter as we move through the pipeline.
And so we are just thrilled about the future.
We see exciting things coming for Memphis and the entire region.
- On the shorter timeframe, I would imagine that when somebody gets financing for a project, especially given all of the speculation about where the national economy's going, prospects of a recession, the prospects that will be short of a recession, I would imagine that they're eager to get that project built as soon as they've got the money and the banker got the commitment from the lenders.
- They really are excited.
Blue Oval City is a great example of that.
Traditionally, automotive factories could take 3, 4, 5 years to produce.
And we're looking, we sort of took that playbook and threw it out the window, and are looking at a significantly shortened timeline, so you're absolutely correct, Bill.
Projects are moving faster, timelines are shorter, that speed to market and our ability to meet business' needs in that space is critical to our success.
- So much of our local discussion in Memphis about how the city is doing economically, ultimately is gonna come back to the question of crime.
So how much do you hear from prospects about crime in Memphis versus crime problems in other areas that they may look at?
Is this something that they look at and say, well, that's not for us.
- We don't shy away from that conversation and we are in constant contact with the businesses that we are recruiting.
And recently I was in Tucson, Arizona at the International Economic Development Conference and we were amazed and astounded at how much Memphis was really held up as a model of resolve and resiliency.
And so we are in constant contact, we're having those conversations and they are generally very positive.
- So they're obviously aware of what's going on here in that regard and in other cities that they may be looking at.
Is there a way that they look at it though for their specific purposes, that is maybe different than the discussion that Memphians have among themselves about what to do and what not to do in that regard?
- When companies are considering Memphis and really any location, they're looking for certainty.
Economic certainty, stability.
They wanna know if they make a billion dollar investment somewhere that they can be there for a long time.
And that's what our conversations are centering around, and Memphis really shines in that space.
We can provide that level of certainty.
Companies understand that we have the workforce, they're going to get the support they need to be successful here.
So that's really how our conversations are playing out.
- How much of a role do incentives play, especially with the economic conditions?
Are they more important than maybe they were five years ago or less important?
- Incentives are just a part of the game.
But we find, I would say 99 times out of 100, it's that workforce that companies are really looking for and that's the conversations we're having.
- So the incentives are nice, but they're not necessarily what drives the decision?
- Absolutely correct.
Incentives are simply, again, part of the business of economic development, but a community's ability to provide a diverse, skilled workforce, solid, certain infrastructure, those are what win the game for us.
- We mentioned you were at the state, you were the West Tennessee Regional Economic Development representative.
That was probably not officially your title, I'm sorry.
- Greater Memphis Regional Director.
- Okay, thank you.
And so dealing with the legislature a lot, dealing with the governor's office, dealing with all these different parts and pieces.
The legislature itself is a big, right now the big asks at the legislature, for arenas, for all kinds of funding in the state.
It's the game every year.
There are a lot of legislators that don't like Memphis.
In various parts of my life, I've spent a lot of time up there, seen you up there when I was more involved with the Tennessee Press Association and so on.
They just don't like Memphis, they don't get Memphis.
I mean, you're talking a lot.
I mean the overwhelmingly the legislators are rural Tennesseans, they maybe haven't been to Memphis.
They have perceptions of Memphis that can be very negative in terms of poverty and in terms of crime.
How much do those perceptions and some of those perceptions are real, right?
We do have a crime problem, we do have a poverty problem.
How much is that an impediment from an economic development point of view when the state is a huge funder and tax incent-or, supporter of economic development efforts?
- You said it, Eric, some folks may not get Memphis, and that's a function of us telling our story.
We have opportunities to tell our story in a way that is clear and compelling and it is an amazing story.
So I think the more we can do that, the better our results will be.
It's why we execute on things like our MEM to NASH program that we have coming up next week, where we are taking business leaders up to Nashville to tell that story.
You can't support what you don't know and understand.
So that's what we're doing a lot of.
- The incentives game is often, the state is a big part of that.
What kind of state incentives to get, manufacturing, anything in and cities do and utilities, we talked about all that.
How much does, I mean there's some controversial bills going through, proposals going through the state legislature around social issues, around trans rights, around HIV funding, around abortion.
Some companies, in the same kind of vein, if you talked about companies who are looking to increase their diversity, there are companies who do not want to be in places that are going down that road in terms of some of these social issues that tend to be on the right side of things.
Are you hearing that from companies that you're trying to get to come to Memphis that, hey, I love the incentives, I love the location, I love that Ford's there.
I love the blues and the barbecue and the basketball.
I love all that.
I don't like what's going on with trans rights.
I don't like what's going on with abortion.
I don't like what's going on at the legislature in terms of the social issues.
- The conversation's not that simple.
When we are talking to companies that are considering in the Memphis area, what they're looking for, as I've said, is that level of certainty.
If they're investing a billion dollars, they want to be certain.
Economic development is about relationship building, about getting them here and having them see our assets and what a wonderful place to be we are.
So it's a complex and ongoing conversation and Memphis and the state as a whole continue to be very successful in that area.
Five minutes left.
- We talked about Memphis to Nashville.
I wanna talk about that probably in a more literal sense.
There's a lot of discussion about some kind of light rail line, which there might be some federal funding for between Memphis and Nashville.
What do those kind of transportation projects offer in terms of economic development?
- Transportation and infrastructure projects can be real game changers.
For example, last year, 72 million tons of commodities moved to and through the Memphis area.
Can you imagine what we could do to that number with a third bridge?
And people talk about the third bridge.
We believe it's an infrastructure imperative and it's not just a regional priority, it's truly a national priority.
As a nation, our ability to move people and goods will define our future economic success.
- And so when you talk about a third bridge, is that in addition to the Memphis-Arkansas and Hernando de Soto or is it a replacement for one of them?
And I believe there's also been some discussion about if you have a auto bridge that you should also have some combination of rail with it as well.
We're talking about expanding our capacity to move goods and services and that is in the form of a third bridge, so that when you take that future picture of Memphis, we're now looking at three bridges instead of two.
- You mentioned with utilities.
Where would that bridge go?
I mean, what I mean is that where you guys?
- That's for people smarter than me.
[all laughing] - That won't necessarily be the most popular decision.
With just a couple minutes left, you mentioned water use and utilities and water, that we do have this incredibly clean and what has always been described as abundant water source that is compared to many places and particularly out in the west, much, much cheaper, right?
But it's also, we had Sarah Houston from Protect Our Aquifer on, we've had her on before, just weeks ago.
It is not an unlimited source and it is, as Sarah would say, a precious source in the sense it has to be managed.
How do you have those conversations with people who come in and say, oh wow, cheap clean, really good water.
I just want to put a drill into the water, which you can do as a, I think, as a homeowner or a business in Memphis, there's not a lot of regulation about how you go into the water and pull as much as you want out of it.
How do you have those conversations where, yes, this is a great competitive advantage, but we want you, or do you say you need to be a good steward of that water as well?
- We really find that companies that are considering this area, part of what they like is that coming to Memphis allows them to be good environmental stewards.
We have this wonderful asset and what we are hearing is they wanna be our partners in managing precious assets like that.
And it's actually an advantage for us.
- With just a minute left here, if you're not gonna tell me where you want the bridge to go, I can't imagine you're gonna tell me who you think the mayor should be, but it is a big year in terms of Jim Strickland is termed out.
It's a very, increasingly competitive and complicated race for city mayor.
How will you guys?
Will you guys be funding?
Will you guys be donating?
Will you be picking a winner in terms of who you want to see as the next mayor?
What's the role of the Chamber in that?
- You know, you're right.
I'm not gonna tell you.
[all laughing] - I know, I know.
But what is that role though?
- The Chamber will continue to serve as the voice of business and we are really looking forward to engaging with the candidates and understanding where they fall on the issues.
And I think 2023 is gonna be an exciting year for the city.
- When you hear from businesses from the membership, what are those main issues that they bring to you?
Is it tax incentives and workforce, or is it crime and safety and poverty?
- The issue's gonna vary from the business.
But what they're all looking for really is certainty and a positive economic climate.
And I think that's something a lot of folks can agree on is an important recipe for success.
- With again, just a minute left, how much do you do in terms of, sometimes a project will come to Memphis, but it'll end up in Haywood County as in the case of the Ford plant or it'll end up in Mississippi.
And even though it's using, it's contributing somewhat to the greater area, how do you balance that of businesses that are coming to the Memphis area versus the Memphis or Shelby County city limits?
- The first thing we do is recognize that we are a region and we will rise and fall as a region.
And the second is to focus on that site development.
I can't put businesses where I don't have sites, so that's gonna be really important going forward.
- Most of the sites around Ford, I mean, most of that's gonna be outside the city of Memphis though, right, I mean up near.
- We do have some opportunities within the city limits.
He mentioned the Firestone site.
There's other land available.
So we really envision wins inside the city limits.
We're outta time.
Thank you very much.
Appreciate you being here.
Thank you, Bill.
Thank you for joining us.
Join us again next week where we'll have a conversation about affordable housing with a couple folks.
If you missed any of the show today, you can get the full episode on YouTube or on WKNO or you can get the full podcast of the show on iTunes, Spotify, Daily Memphian, or wherever you get your podcasts.
Thanks, we'll see you next week.
[intense orchestral music] [acoustic guitar chords]