1.800.ARKANSAS

Arkansas Inc. Podcast: Gov. Asa Hutchinson

 October 18, 2021

In the latest episode of the Arkansas Inc. Podcast, Arkansas Governor Asa Hutchinson talks with Secretary of Commerce Mike Preston about economic development, workforce, and international travel.

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TRANSCRIPT

Asa Hutchinson:

This is Asa Hutchinson, Governor of Arkansas, and you're listening to the Arkansas Inc Podcast.

Speaker 2:

Welcome to the Arkansas Inc Podcast, where we discuss the latest topics and trends in economic development with subject matter experts and influencers from across the nation and around the world.

Mike Preston:

Welcome to the Arkansas Inc Podcast. I'm Mike Preston, Arkansas's Secretary of Commerce and Executive Director of the Arkansas Economic Development Commission. Today, we have a very special guest on the podcast, Arkansas Governor Asa Hutchinson. Governor Hutchinson is the 46th Governor of the State of Arkansas. And we like to refer to him as a CEO of our state. He's won recognition for the state as a leader in computer science education. His administration has led efforts to pass legislation, providing a total of more than $250 million in income tax relief for 100% of Arkansans with more on the way. He led the first comprehensive effort to transform and trim state government since 1972. And Governor Hutchinson has been a tremendous champion of economic development.

Mike Preston:

Since January, 2015, the Arkansas Economic Development Commission, through Governor Hutchinson's, leadership has signed incentive agreements with 546 new and expanding companies. These 546 projects have resulted in approximately 25,000 new jobs for Arkansans and these companies have invested a collective total of $10.9 billion of capital into our state. His experience has established him as a national resource for his expertise on trade, energy, national security, and education. The Governor is the current chair of the National Governor's Association. He's the former co-chair of The Council of Governors and the former chairman of the Interstate Oil and Gas Compact Commission, Southern State's Energy Board and the Southern Regional Education Board. Governor Hutchinson, welcome to the Arkansas Inc podcast.

Asa Hutchinson:

Mike, it is great to be with you, and it is really super to be talking about economic development, jobs, and all those things that I ran for governor to work on.

Mike Preston:

Governor, again, thank you for joining us. So let's dive right in and talk about economic development. So why has economic development been so important to you during your time as governor?

Asa Hutchinson:

Well, it's been important because I see that as the linchpin of our success, whether you want to improve education, you need to have a growing economy. You need to have a spirit of growth so that you have additional revenues that can support education. If you want to focus on public safety, we can be successful in all of those areas. If our economy is growing and expanding, and because of that, we have more people working with better paying jobs. And so I see that as just critical to the wellbeing of our state. And it's also a little bit of my history that I grew up on a farm up in Northwest Arkansas and people who worked on the farm also had to have a separate job. Because you couldn't make your living just off the farm. And so we always look for factory jobs or employment that you can have some side income besides just the farm income.

Asa Hutchinson:

And I remember that my dad had to leave on a Monday morning to go over to Tulsa because that was the closest job he could find. And he worked there during the week and came home and you never forget things like that. And to me, it's important that people of Arkansas, that love our geography, they love their community, they need jobs there. And so all of that is about family, it's about community, it's about growth.

Mike Preston:

What a great story. And it's really evident to show that how things have come full circle. Now you have people coming from Oklahoma to Northwest Arkansas to go to work because that's where the jobs are.

Asa Hutchinson:

Well, it is. And I recall, of course, I've been in politics and public service for a long time. And the story 10, 20 years ago was that our high school graduates or our college graduates, they would be going to Kansas City, Dallas for employment. And we would lose them. We would educate them, but their best paying jobs were not in Arkansas. That has totally reversed. It is reversed. And you're right. You know, we have folks from Texas, Austin, Tulsa, everybody coming here to work because we're creating jobs, they're creating jobs elsewhere, but Arkansans can stay here. There's plenty of opportunity here.

Mike Preston:

Well, Governor, I know we've had a lot of big economic development wins during your administration. Some of these will be generational and jobs will be here for a long time. What are a couple that, you know, stick out to you as some of your favorites, or, you know, just maybe how the project all came together that you'd like to, to talk about and share with the audience?

Asa Hutchinson:

Well, you know, probably one of the most memorable to me is the first. You always think about, well, what was our first great success and whenever I was in a debate, they asked me, well, what are you going to do your first day in office? And I said, I'm going to call six CEOs from around the country on my first day in office, invite them to come do business in Arkansas. And I made that pledge. And so I did it. And of course you provided me, Mike, your team, you know, six names of companies. And I made those calls on the first day. And on the first day I called Ron Cohen, who is the CEO of SIG Sauer, great firearm manufacturing company, historic in name from New Hampshire. And I said, have you ever thought about doing business in Arkansas or the south? And he said, no, I haven't.

Asa Hutchinson:

Well, one year later after that, they announced their first expansion in the south, which was creating an ammunition manufacturing facility in Jacksonville. And it started a small number of jobs, 50, but it's grown, it's grown, they've got more contracts because the great workforce here. And so SIG Sauer in the firearms industry has been transformational in terms of us being able to market Arkansas as a premier location, to manufacture firearms. We've got others Remington and we've got some really specialty firearms company up in Berryville. That's a homegrown Arkansas, but that's been special to see the growth there. And then also as you know, Mike, and that when I recruited you, you said that you like to compete and you like to win. And it's always a special joy whenever you're competing with other states and you can win. And even the investment that we have with Simmons Industry up in Gentry, which is over a thousand jobs, and we had to compete with other states for that, and it's a significant investment, but it also is the most modern, advanced, technologically sound investment for a new facility.

Asa Hutchinson:

And that was over 1500 jobs of $300 million investment, but we had to compete with Oklahoma and other states for that success. So those are just a couple, but there's man, and every one of them that we can win makes a difference for our families in Arkansas.

Mike Preston:

Well, Governor, I appreciate that and proud of all those announcements and wins and, and that our SIG Sauer story is just fantastic. And Ron Cohen is a great individual and they've continued to grow their company since that, that one phone call that you made. And as he said, 50 jobs originally, now, I think they have about 400 jobs in Jacksonville and are just bursting at the seams there and could expand even further. And I'm sure the listeners would enjoy hearing this. Those calls do go well, but sometimes they don't go so well. And, and we get told no. So I recall that first day that we might have put one in front of you that was a European company. Don't remember if it was French or German but no one on the other end spoke English.

Asa Hutchinson:

Yeah. It was actually a Japanese company.

Mike Preston:

Okay.

Asa Hutchinson:

And we, we talked to their CEO and yeah, he didn't speak English. So, and I say that this is sometimes you do calls of someone who is very, very interested.

Mike Preston:

Yeah.

Asa Hutchinson:

In coming to Arkansas or expansion. So it's a hot lead, but then everybody who's in sales understand cold calls as well. And so that's good to do sometimes, you just call them up and say, Hey, I'm the Governor and have you thought about doing business in Arkansas and not everyone's a success, but everyone is important and it might lead to success down the road.

Mike Preston:

That's right. Well we've always made sure now that if language barrier, we have an interpreter on the line or handy just in case we need it. So Governor, as we go out and sell Arkansas, and you're the lead salesperson from the state whenever you go, what do we tell companies or perspective people coming to our state, why come to Arkansas? Why is Arkansas a good place to do business?

Asa Hutchinson:

The most important thing that sells Arkansas is the relationships that we have. That we're a state that we like to know the Governor, we know the Secretary of Commerce. And so businesses can call the top and say, we've got a problem can you get it fixed for us? Or can you address this issue? And so that's why it's important for the Governor to make a call to the CEO because they understand immediately we're accessible. We want them here. And just the knowledge that we want their business in Arkansas means a lot to them. And then we sell Arkansas because we've got a workforce that is skilled, particularly in manufacturing, they're hard working, they have farm backgrounds, many of them, and they understand work.

Asa Hutchinson:

And that's the critical link for any business or industry is knowing that they're going to have a reliable workforce. And then we're at, we're very friendly in terms of regulation. I've geared all of my cabinet and our environmental quality folks that regulate some of the industry to make sure that we're in partnership with business. And not treating them like the enemy. If they become a bad actor, that changes things. But that kind of cooperative spirit means a lot to the businesses that we recruit.

Mike Preston:

So we touched on this a little bit, and that's your passion for computer science education, all the work that you've done there. Talk to us a little bit about what has been done on computer science education, and then maybe how we've been able to benefit from that out in economic development, and really use that as a selling point for Arkansas, that we're leading edge. Cutting edge for computer science education in that pipeline of talent.

Asa Hutchinson:

Well, it starts with the fact that every company you recruit is really a technology company. Now they might be in manufacturing, but they'll be used robotics. And robotics they need to have people that understand software, computer science, the technology of it. If they're in agriculture, they're using software. And so computer science translates into every industry that you recruit and they understand the need to get workers that not only can work a machine, but also can understand the software that might go with that machine. So it's really an advantage for us. Secondly, when Arkansas is known nationally in any education category, that's a great story.

Mike Preston:

Correct.

Asa Hutchinson:

And people appreciate that success. And so our computer science initiative has far exceeded my expectations in terms of the students who take it, that embrace it, they're trained, but also the fact that it helps us to recruit technology companies, but also sends a good signal to any company that's looking to locate because of that investment in education. And it has really helped us in becoming a real micro hub of technology companies in central Arkansas, particularly in Northwest. And I know other parts of the state to really working on that, but we've had success in actually technology companies moving from California to Arkansas because of that talent and the opportunities here.

Mike Preston:

Well Governor, I, as an economic developer, I really appreciate that. I knew that was initiative that you had early on and our team has, has really bought into that and leveraged every way we can to sell Arkansas, sell that point. So kudos to you and your vision for bringing that in and making that part of your platform and the administration it's helped our job in economic development made it that much easier. Shifting gears a little bit. I know that on everyone's mind for last 19 months now is obviously the pandemic and COVID 19. And we were kind of just getting into the COVID and there were so many uncertainties and businesses were closing and people were not sure what to do. We were all getting a lot of calls from businesses saying, would you classify us as essential.

Mike Preston:

We have to stay open. We can't shut down and we're looking at it, and I remember you turned to me and you, from that point, I say, coin, the phrase said, Mike, in Arkansas, all business is essential and you made that decision. And it was a tough decision at the time, but you kept our economy going. You took a very data driven approach and measured approach and, and how you managed during the pandemic to assess the needs of the health pandemic that we're in, but also the economic crisis. So talk to us a little bit about that decision and keeping businesses open and what that's meant for Arkansas businesses and kind of how our economy is now faring better than a lot of our competitors around us who didn't take that same approach.

Asa Hutchinson:

Well, time and time again, you'll see industries that just the fact they didn't have to close. And everybody was worried when the pandemic started and shoppers were not going out, but just the ability to stay open meant that they had, they had a future in their business. They didn't have to close, they didn't have to lay off their workers. And so it made a big, big difference whenever we kept our economy going and we had to defend it nationally. I wanted to explain it because I was convinced it was the right decision that I made at the time. And I think as history looks back on this pandemic that we'll see that those states that stayed open, that kept their economy moving, and didn't try to delineate essential and non-essential businesses really got off to a much better start. Whenever we started coming back out of the pandemic and creating jobs again.

Asa Hutchinson:

Also just wanted to add whenever the pandemic hit in March of 2020, you and I had just returned from India, our first trip over there. And we had a great company that was ready to locate their manufacturing facility in Arkansas. The announcement was all ready to go. Well, obviously they couldn't travel when the pandemic hit and that project went by the wayside. So we did lose some projects because of that pandemic. And I'm just thrilled to be able to get back to making those calls again, supporting your team's effort and economic development. A fact that we can look back and say, you got a much greater chance of keeping your businesses open here. We're not putting in the mandates that other states have done in terms of businesses as a good signal for them. They know it's a business friendly state, but also one that wants to support them in staying open and balancing that with the public health needs that are obvious.

Mike Preston:

And so, you know, coming out of the pandemic, a lot of states find themselves in a financial crisis in their state. And they're having to use the Cares funds or the Art funds to fill budget gaps and budget holes. Talk to us a little about how we've performed as a state, because we just had the new numbers come out last month. And I believe it's 31 consecutive months now that we've beat our revenue projections. So we have funds that we've put aside into our savings account, into restrictive reserve. We're looking at doing more tax cuts. Talk a little bit about the financial strength of a state and maybe what does that mean to a CEO who's looking to move his or her company into a state that the state is a good player as well. And how important that those, the having good numbers in that area is.

Asa Hutchinson:

That's something that I market. Whenever I talk to the CEOs, I tell them that the state has a surplus. We're not going to be running deficits. And particularly whenever the business is located in a state that doesn't have those balanced budget practices that resonates in their ear. Because whenever you're running a deficit in many states, that means that they're going to have to address that. At some point it could be raising taxes. So whenever we're consistent in balancing our budget, we create a surplus here. They know the state is a reliable partner. That's going to be steady in their path. It's also not going to have to cut back on education.

Asa Hutchinson:

Even Oklahoma that had the downturn, they had to cut education expenses. Arizona got in trouble on that. And we've been steady even during the pandemic. Each year, our invest when education has increased. So that solid partnership is encouraging to CEOs and you're right. It's been remarkable. Whenever I became governor, we had $0 in savings. And now we have $1.2 billion that's been accumulated even through this pandemic. We've lowered taxes during that time, and we're going to lower taxes again. And so it's a great partner, and it's a signal that we manage our state from a budget standpoint, which means we're applying some good business principles to state government.

Mike Preston:

Well, Governor you've been very proactive in marketing and recruiting the state and shown a willingness and a commitment to travel and go outside even our country to do so. And I think prior to the pandemic, we were averaging about three international trips per year, usually two that were further away and one, maybe Mexico and Cuba a little bit closer. Just tell me a little bit about some of the experiences that you've had on those trips and what does that mean to be able to sell Arkansas around the world and anything in particular that you're looking forward to now that we're able to travel again in places that we're going to go as a state and really help promote and push our brand awareness.

Asa Hutchinson:

Well, and that's it. It's about marketing the state. And it's really important for me as Governor, as CEO to be out there with my key administration officials, because we make the connections. We tell them about Arkansas and Arkansas is quite frank is just not New York and California that everybody's heard of. They know where they are and know what what's there, but we have to get in front of them and tell them what incredible state that we have. And when we do, they understand it. And without any doubt, our experience has been that whenever they have an expansion opportunity, Arkansas will be on the list to consider. But whenever you look at what we offer, I think the key thing is that people are surprised at the global connections and the global outlook that a state like Arkansas has.

Asa Hutchinson:

Whenever you identify Walmart and Tysons that are global enterprises, our agriculture that goes all over the globe, you can look at Dassault Falcon Jet, you look at our Aero defense industry, all of that people understand, and they say, wow, there's a global presence right there in Arkansas. That's got a global outlook and it's a good place that they can do business. So we have to be out there though, because we're competing with a lot of other states that have a significant presence as well. And lesson from my time as Governor over the last seven years, is that it pays off. It pays off great dividends for our state.

Mike Preston:

Governor, we all thank you as Arkansans for your willingness to do that. And being on these trips with you, I know how grueling they are and exhausting and forgive us because we always overbook the schedule and we don't leave many gaps in there. But one thing we always try to do when we make it to a new country is to play a little basketball. You and I share a love of basketball. And we found it very helpful. And when we go to countries and we talk about diplomacy by basketball. Just tell us a little bit about maybe how that originally came about and any story that you might have that you'd like to share about playing basketball somewhere else in the world.

Asa Hutchinson:

Well, one of the first trips that we did was to Cuba and I was the first Governor to go there after we restored diplomatic relations. It was an exciting time there. And of course, we want to market our agricultural products to a country that needs our product, there in Cuba. But my staff knew I liked basketball and said you want to play a pickup basketball game, we play pickup.

Mike Preston:

Right.

Asa Hutchinson:

And I said, sure. And so I knew I was in trouble though. They dropped me off at the Cuban National Sports Arena and you and I walked in there and they had the Cuban National team warming up at both ends of the court. They had referees in uniform and they had the international media there. And I said, it's too late to walk out. But we played, there were three Cubans assigned to our team.

Asa Hutchinson:

We're the two gringos there. And they bring the ball down. Of course, I turned to the basket to shoot, and I noticed that all five Cuban defenders backed up. And I said it's great to be governor of Arkansas, but called a timeout and said, you can foul. And we had a great game, but what we learned from that is that sports is a good way to make connections, human connections with other countries. And they appreciated that. And so we've made a habit of playing. And so we're international basketball stars now. We've played in Japan and Germany and Israel. We've played all over the globe, all pick up basketball and we haven't got injured, but we've made a lot of friends during that. And it's helped us in our economic relations as well.

Mike Preston:

We have. And Governor again, thank you for that. And we usually leave whoever host country is, or host game with a signed basketball with a Razorback or a Razorback Jersey. So they'll remember something about Arkansas. And I think that always is special for folks. So governor thank you for your time today, and I'll, I'll, I'll let you have the last word maybe about what do you see for the future for Arkansas? Do you see some emerging trends or technologies or industries that we need to really focus on coming out of the pandemic and really setting the stage for the next five, 10 years in economic development? I feel like we're in a really good position. We've got some areas that we're working on in workforce development through some of our art funds. If we can kind of set the stage for what's next, what do you see coming?

Asa Hutchinson:

I see a great opportunity in advanced manufacturing with our steel industry that we have, that's the most technologically advanced steel industry in the world. Whenever you look at the start that we have in aero defense industry, and we, you look at the supply chain. Also, we have a supply chain and automobile manufacturing. What we don't have is an OEM or a manufacturing plant for automobiles or other type of advanced manufacturing. And so I think that's the opportunity for us. And because we do have that supply chain here, we got the experience in it and our location is fantastic.

Mike Preston:

Yes.

Asa Hutchinson:

Being in the center of the country, where you have access to the Texas markets, you got access to the east market. And the other advantage that we have is that the people of Arkansas were so wonderful in passing issue one, which is an investment in our highway infrastructure.

Asa Hutchinson:

And that's another distinguishing point for our recruitment is that not many states have the commitment to maintaining our infrastructure, our bridges, and our roads, which is critical for industry coming in, getting it to their market. It's critical for our farmers. It's also critical for our manufacturing. So, that's the opportunities that we have. We're going to grow in technology. We're going to grow in advanced manufacturing. There's a great opportunity coming out of the pandemic to return more of that from overseas, because we see the problems in our supply chain. So great opportunities. We're in perfect position here in Arkansas, and we're going to be knocking on doors.

Mike Preston:

Well, Governor, thank you. And I guess one last one. I know that I said that was the last one, but you've recently been named as the Chair of The Governor's Association. I know that's kind of a unique and really just a great experience and opportunity for you, but it's meant a lot of national exposure. Maybe just tell us a little bit about some of the opportunities that you see and how you're able to promote Arkansas through that platform and that title that you now have.

Asa Hutchinson:

Well, it brings a lot of opportunities just to showcase what we're doing. I was in Denver and we had a regional meeting of governors and we showcased Arkansas. And what we're doing in computer science and technology growth. I'm going to have a meeting at the governor's residence later this fall, where we're going to talk about coding and what we're doing. And, the NGA ask if Governor Inslee could join for that from Washington state. So, that's the home of Microsoft and the fact that they're coming here. Those are the opportunities that come from me being chair of the NGA. And it's a great time for me personally, but it's also a unique opportunity for Arkansas to broadcast a little bit more what we're doing. NGA, the National Governor Association, it's bipartisan. And if we need anything in America today, it's that we can work together and governors try to demonstrate that. On issues that we can agree upon. And we're going to make sure that America sees the work of the Governors through the NGA.

Mike Preston:

Well, Governor, thank you for that when we're all proud as Arkansans that you serve in that role and represent us so well in that and all the work that you do. So thank you for joining us today. It's certainly been a pleasure. You've been listening to the Arkansas Inc podcast. And this is Mike Preston, Secretary of Commerce for the state of Arkansas and Executive Director of the Arkansas Economic Development Commission. For more information about AEDC visit Arkansas edc.com and connect with us on LinkedIn, Twitter, Facebook, and YouTube. Thanks for tuning in. Governor, thank you.

Asa Hutchinson:

Thank you.