Hey Birmingham, it’s not people versus business here

Don Erwin

Today’s guest columnist is Don Erwin.

In the last thirty years Birmingham has lost one company after another.

There’s an old saying among economic developers that “It’s easier to keep an existing business than to find a new business to replace it.”

There’s no doubt it’s hard to replace businesses when they leave.

Some collapsed and dissolved

  • Just for Feet 1999
  • Vesta Insurance 2006
  • Meadowcraft 2009

Some were acquired by other companies

  • Parisian 1996
  • Citation Corp. 1999
  • Birmingham Steel 2002
  • SouthTrust 2004
  • Alabama National BanCorp 2006
  • AmSouth Bancorp 2006
  • Compass Bancshares 2007
  • Colonial Properties 2013
  • Energen/Alagasco 2014
  • Protective Life 2015
  • Golden Enterprises 2016

Some companies relocated

  • Caremark RX to Nashville in 2003
  • Torchmark to Texas in 2006
  • Saks to New York in 2007
  • Biocryst headquarters to North Carolina in 2010

Our losses included five Fortune 500 headquarters.

The first fifteen years of the 21st century were a disaster for Birmingham, but they were difficult for everyone. Between 2000 and 2015, fifty-two percent of the companies on the Fortune 500 listing either went bankrupt, were acquired, or ceased to exist.

Perhaps we could have kept some of these companies if Jefferson County hadn’t gone bankrupt, if downtown had looked better at the time, or if we’d had better political and business leadership. Perhaps.

Given all the companies lost, Birmingham is fortunate its population and economy have remained as stable as they have. Many cities have fared far worse.

Things have turned positive in recent years. Downtown Birmingham’s revitalization has made the City and Metro a more attractive place for companies to call home, and we have better political leadership. People are enthusiastic and positive about Birmingham, and that makes a difference.

Vulcan Materials and Encompass Health are close to breaking into the Fortune 500. Perhaps we’ll soon have three Fortune 500 headquarters in Birmingham.

Often, when businesses are acquired, even if they keep a presence in the city, many functions are moved to the new headquarters city. Protective Life was acquired by Dai-Ichi in 2015 and Shipt was acquired by Target in 2018, but in both cases the acquiring companies kept headquarters functions in Birmingham.

We should do everything we can to keep our companies—as well as recruit new ones.

The City of Birmingham’s motto is “Putting People First.” I wonder what businesses think of that motto when they consider locating in Birmingham. Do they feel they will be put last?

Businesses can’t vote, and perhaps that explains the motto, but politicians should always remember that businesses can vote with their feet.

People and businesses shouldn’t be put in competition with each other. People create demand for businesses’ goods and services, and they supply labor for business. Businesses provide jobs which generate income for people, and directly or indirectly, business taxes and fees generate almost ninety percent of the operating revenue of the City of Birmingham.

We help new companies startup, and we try to attract companies to locate here, but we should never take our current companies for granted. We have many great companies in Birmingham, and we need to always let them know we appreciate them and want them to prosper.

Headquarters companies are special, because a company’s upper management tends to live where the company is headquartered, and businesses tend to be most philanthropic where they’re headquartered. Medical Properties Trust is a great example. Their Birmingham workforce is modest, but their philanthropic impact is tremendous. Witness their recent five-year sponsorship commitment for the Children’s of Alabama Indy Grand Prix.

Other smaller companies cumulatively generate many jobs and much tax revenue and help give Birmingham its uniqueness.

Working to retain businesses is not as glamorous as starting new ones or chasing big investment projects, but it’s essential work. Businesses need to know we will help them with their issues and keep taxes and regulations reasonable.

Birmingham’s future depends on retaining, creating, and attracting new companies.

Don Erwin was an economic developer for twelve years. He is the author of Buffalo Hunting in Alabama, a novel about the competition among cities and states to attract economic development projects. He lives in the Birmingham metro.

David Sher is the founder and publisher of ComebackTown.  He’s past Chairman of the Birmingham Regional Chamber of Commerce (BBA), Operation New Birmingham (REV Birmingham), and the City Action Partnership (CAP).

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Invite David to speak for free to your group about how we can have a more prosperous metro Birmingham. dsher@amsher.com.

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One thought on “Hey Birmingham, it’s not people versus business here”

  1. Good, sobering report, Mr. Erwin!
    I agree, corporate decisions are made by people…the Chiefs and the Indians!
    Don’t you know that the researchers check out everything….. cost of living, public education, crime rates, housing markets, entertainment, transportation,
    taxes, labor market, parks and recreation, health facilities, government support….and much more! I have worked in Commercial Real Estate here since 1952 and witnessed the good and the bad. Birmingham is making a run, but many changes and improvements are needed to get the MAGIC back in BIRMINGHAM! Our city, county and state leaders must adopt laws, regulations and attitudes that are PEOPLE FRIENDLY! For example: REMOVE THE OCCUPATIONAL TAX…NO TAX ON GROCERIES…REGULATE THE UTILITY COMPANIES THAT OVERCHARGE…PROVIDE CLEAN AND SAFE STREETS …LANDSCAPE..
    ALLOW FOOD TRUCKS EVERYWHERE. Because the real big business decision makers are THE PEOPLE… their employees, their families, and hopefully, our new neighbors!

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