Knipfing’s Notes: Time to lay off Mississippi?February 9th, 2013 at 10:30 am by Dick Knipfing under Knipfings Notes
We need to cut Mississippi some slack.
It used to be that when some awful statistic about education, or welfare, or DWI, etc. came out about New Mexico, a smart aleck would invariably pipe up with, “Thank God for Mississippi.” The point being that Mississippi’s numbers in most categories could be counted on to be worse than ours.
Those smart alecks now need to zip their lips. Job growth numbers that we reported last Monday show that New Mexico was the only state in the Southwest that lost jobs last year.
Obviously Mississippi is not in our part of the country, but Mississippi gained jobs last year. Not many, but they were in plus territory.
We were negative 0.6 percent with a net loss of 3,300 jobs.
Much of the rest of the nation, including Mississippi, moved forward. We slid back.
Federal spending is a major issue. We rely on it, and there’s less of it.
Los Alamos has already lost hundreds of jobs. Sandia saw spending cuts coming and budgeted so that it will not have to lay off or furlough anyone … for now.
And, what about the bases? Is another round of base closings on the radar?
Kirtland survived a close call in 1995. With more than 20,000 jobs and a $4 billion annual economic impact, it is the 800-pound gorilla.
Private sector signs are worrisome too. Intel which has 3,300 employees and a $350 million payroll at its Rio Rancho plant reported a 27 percent drop in fourth quarter in corporate profits.
There are no signs yet that the Rio Rancho plant is facing reductions. But …?
Intel has some of the same problems as Hewlett Packard, its Rio Rancho neighbor. HP opened a large service and call center two years ago promising 1,200 jobs by the end of 2012. That goal was not reached, and last month HP cut 200 jobs here.
Both companies have traditionally been heavily dependent on personal computer sales, but the PC market is shrinking because of the rapid growth of iPhones, iPads and other hand-held devices. Very smart people run Intel and HP, and they probably will adjust. We hope.
And, there’s another unsettling development. We reported last week that Forest City Enterprises, the co-developer of Mesa del Sol, the “city within a city” planned for a vast area south of the Sunport, has been quietly trying to sell its stake in the project for some time.
Maybe even more unsettling, Forest City hasn’t been able to find a buyer. City officials said we shouldn’t worry, that the project is still on track. But this week comes word that Mesa de Sol’s vice president of development has been laid off.
There are bright spots. Late last year Eclipse Aerospace announced it is has resumed manufacturing the small, $2.4 million Eclipse-550 jet. Building from the ashes of its failed predecessor, Eclipse Aviation, the new company had about 150 people on its payroll in November and expected to add as many as 75 more jobs this year.
Eclipse is also trying to land an Air Force contract that could be a really big deal. The Air Force is looking for a new basic-level jet trainer, and Eclipse feels the 550 is a perfect fit.
Two other aviation firms, avionics maker Bendix-King and tactical air services company Air USA, have picked Albuquerque to relocate. Combined they are expected to create several hundred jobs.
Efforts continue to attract more of those companies. We have many assets that are attractive to them, not the least of which is our weather. New Mexico’s great year-round flying conditions led the military to build training bases around the state during World War II, and they continue to be a key factor for most businesses that focus on flight.
The overall economic picture though is more dark clouds than sunny skies. Both Republican Gov. Susana Martinez and the Democrats who control the Legislature have offered plans to boost the economy.
Martinez’s is centered primarily on cutting the corporate tax rate to attract businesses. Arizona, Colorado and Texas all have significantly lower rates than ours. That puts us at a disadvantage.
The Democrats’ economic/jobs package calls for $97 million in shovel-ready capital projects to stimulate the construction industry and put people to work with the idea that their spending will create more jobs. Some Dems are also pushing for a statewide boost in the minimum wage from $7.50 an hour to $8.50.
There will be endless arguments about the benefits of each package. It’s not clear what will finally pass. But, there’s not much new in either to provide a burst of creative energy capable of shaking the state out of its deep doldrums and put us on a sustainable, nongovernment economic growth track.
However, someone is working on that. New University of New Mexico President Dr. Robert Frank is trying to make the state’s flagship university an economic engine. It’s already a force because of its payroll and the products and services it buys at its main campus in Albuquerque and branches around the state.
But Frank envisions something more. Much more. He’s looking to develop genuinely effective partnerships among the university and its talented faculty, private business and local government. He believes such partnerships could foster and grow ideas and technologies that will create real jobs and stimulate a vibrant economy.
Last September, just a few months after he took over, Frank hosted an economic summit. That has already generated movement. Community leaders from both the private and public sectors recently went to Gainesville, Fla., to see how the University of Florida’s highly acclaimed Innovation Square project works
News 13′s Katie Kim also went there. She’ll show and tell what it’s all about, and the promise it holds for New Mexico, in an On Special Assignment report later this month.
Long-time network news anchor, reporter and commentator Howard K. Smith once said while commenting on some long forgotten world crisis, “The worst probably won’t happen. It seldom does.” But New Mexico’s economic issues are pressing.
The question is whether the UNM initiative and other traditional economic-development efforts can move quickly and effectively enough to drive off the dark clouds before one, or more, of them bursts.