Press Room

Kansas trumps Louisiana on Forbes list

Wichita Business Journal – by Emily Behlmann

Thanks to Forbes magazine, we got an unexpected comparison on Thursday between Hawker Beechcraft Corp.’s home state of Kansas and the state the company has considered moving to, Louisiana.

And if Forbes’ Best States for Business list is to be believed, Kansas should win by a landslide in a competition for jobs.

The Forbes list puts Kansas as No. 10 on the list, with especially high marks for its regulatory environment and economic climate.

Louisiana, meanwhile, sits at a dismal 44th place.

The Sunflower State especially exceeded its Hawker jobs competitor on rankings for labor supply — Kansas ranked 18th and Louisiana 50th.

It suggests Wichita Mayor Carl Brewer might have been right when he recently told the Wichita Eagle that Louisiana doesn’t have the skilled aviation work force that Kansas does.

But if so, what’s up with Hawker’s consideration of Louisiana?

It could, of course, have something to do with the hefty incentives the state has offered if Hawker moves its operations to Baton Rouge.

But Jason Hickey, president of national site selection firm Hickey & Associates LLC, told the Wichita Business Journal that long-term benefits, rather than short-term incentives, are the real factors companies consider when deciding where to do business.

Those long-term factors could include availability of a qualified work force and the cost of that labor.

The Forbes list suggests Kansas has a qualified work force in the bag.

Labor costs are factored into Forbes’ overall business costs ranking, and on that count, Kansas trumps Louisiana, but not by much. Kansas ranks 23rd for business costs, while Louisiana ranks 25th.

So is Hawker’s threatened move really only about labor costs?

That could be, some analysts have suggested to the Wichita Business Journal, especially because of the strength of the aviation machinists unions.

Phil Wilson, president of the Labor Relations Institute, says it’s more than just the higher wages union workers typically earn that cost businesses. It’s the cumulative effect of higher wages, larger pension and benefit plans, strikes and contracts that can protect problem workers from being let go.

“”Unions, when they’re in there, can create a lot of problems for a company,”” he says.

But now the pressure’s on the local union to vote in such a way that a majority of Hawker jobs stay here. And they’re likely to take a pay cut in the process, reducing Hawker’s overall labor costs.

 

http://www.bizjournals.com/wichita/blog/2010/10/kansas_trumps_louisiana_on_forbes_list.html?s=print

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