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Landing R&G Sloane: how did Little Rock reel in 500 jobs and a $25 million plant?

The best employment news to hit central Arkansas in years began with a simple telephone call to the Little Rock offices of the Arkansas Industrial Development Commission.

Dick Heil, industrial project manager at AIDC, fielded the routine inquiry from a Los Angeles consulting firm.

It was March 13, 1991.

The relocation scout on the other end of the line, David Jarvis of CB Commercial, got to the point quickly.

Jarvis asked for an information packet for an unnamed client. He told Heil to save the sales pitch.

Just the facts, Dick.

Heil obliged.

The state employee made a note of the contact and dutifully mailed out standard information on the state's transportation network, tax structure, enterprise zone laws, labor pool, industrial training programs, financing options and climate.

Last month, that quick query turned into the biggest industrial announcement in Little Rock since Dillard Department Stores Inc. said it would open a new distribution center in 1985.

R&G Sloane Co. of Sun Valley, Calif., with annual sales of more than $80 million, will make its home in the Little Rock Port Industrial Park.

The company will build a $25 million plant on a 100-acre site and hire up to 460 area workers to make plastic pipes, fittings and related products.

About 40 key employees will move to Little Rock from other R&G Sloane plants to manage the 500,000-SF complex, scheduled for completion in November 1993.

"This facility will give Little Rock's economy a real shot in the arm," says Mayor Sharon Priest.

It's a needed shot for a city that has performed poorly in the field of industrial recruitment.

City officials agreed to ante up $1.5 million for the economic boost. They promised to dig into Little Rock's economic development fund to pay for road work, utility connections and a railroad spur at the R&G Sloane site.

The city also will issue $24 million in industrial revenue bonds to finance the plant and equipment. R&G Sloane will repay the bondholders.

The Little Rock Port Authority had made another major announcement in December 1990 when Babcock & Wilcox Co., nationally recognized as a leader in the field of steam generators and boilers, confirmed it would occupy the vacant Castle Equipment Co. facility. B&W made a $10 million capital investment and eventually will create 350 jobs.

A third large company also is considering the Port Industrial Park. Following a six-year search, Bethlehem Steel Corp. reportedly has narrowed its choices to Little Rock and Memphis, Tenn. Hanging in the balance are 500 jobs. An announcement is expected this summer.

Meanwhile, the Port Authority and the Greater Little Rock Chamber of Commerce are continuing efforts to attract additional prospects. Chamber officials are looking for between 200 and 500 acres for a new industrial park to complement the authority's complex.

Making The Cut

A month after AIDC received that initial phone call, R&G Sloane's relocation consultant contacted Heil again.

This time, Jarvis spent a bit more time on the phone. He wanted to arrange a three-day visit to Arkansas.

Jarvis flew to Little Rock and toured the city. He also went to northeast Arkansas in order to check out Jonesboro.

Why wasn't northwest Arkansas considered?

The region is booming economically. But its low unemployment rate proved to be a double-edged sword. Availability of labor was a prime consideration for Jarvis.

Jarvis was impressed by both the work ethic and the availability of skilled workers in central Arkansas.

"Up until that point, we still didn't have any idea who the company was," Heil says.

The corporate veil was lifted after Jarvis left the state. AIDC officials then began weekly "can we do anything to help?" phone calls to California.

In early May, three R&G Sloane executives -- Dale Ogle, president; Mike Hogan, vice president of manufacturing; and Peter Sage, vice president of human resources and administration -- visited Arkansas. During the two-day tour, the state's industrial recruiters learned the R&G Sloane shopping list had been narrowed to Little Rock; San Antonio, Texas; and Tulsa, Okla.

The three executives met with Gov. Bill Clinton before heading to Tulsa, where tragedy struck.

The group was preparing to leave Oklahoma. Hogan and Sage became concerned when the usually punctual Ogle failed to show up. Their worst fears were realized when they found the 64-year-old president in his hotel room, dead from a stroke.

Executive headhunters immediately began looking for Ogle's replacement.

Hogan and Sage, meanwhile, continued their site search. In July, they returned to Little Rock and toured five central Arkansas sites. They also interviewed a dozen plant managers during a three-day period.

The R&G Sloane executives were impressed with what they heard from area plant managers and civic leaders.

As an added test, they asked for a list of manufacturers that had set up shop in recent years and called one with no advance warning. The favorable response sold Hogan and Sage on central Arkansas.

"We saw a good example of a community working hand in hand with business to bring in industry," Sage says.

Little Rock tentatively was selected as the city in which R&G Sloane would consolidate its four existing plants. Other company officials still had to add their blessings, however.

Chairman Fred Pundsack arrived in Little Rock for a 36-hour stop a few weeks after Hogan's and Sage's July visit.

The president of Entex Corp., R&G Sloane's parent company, came to Little Rock in late October. Jean-Louis Pierard spent about 18 hours in the city. Accompanying Pierard was Bill Smith, who accepted the R&G Sloane presidency two days after the visit.

In January, Smith returned for a final look prior to a meeting of the Entex board. The board would have the final say.

Sage called Heil at home on Sunday, Feb. 16, to share the good news.

R&G Sloane would consolidate operations at Little Rock.

Earlier Efforts

Although R&G Sloane first contacted AIDC officials in 1991, the search for a new home began shortly after the company was sold to Entex in 1988. Entex, a private international plastics firm based in Paris, bought out co-founders Richard and George Sloane.

Operations were divided among four plants -- Sun Valley and Bakersfield, Calif.; Cleveland; and Tecate, Mexico.

The total work force numbered 650. An estimated 150 jobs will be phased out with improved equipment at Little Rock.

None of the four existing plants are operating at capacity. The American plants are all at least 25 years old.

"We decided it behooved us to go to a central part of the United States and create ... a new plant with lots of automation," Sage says.

The economies of scale will add up to millions of dollars in annual savings.

Three states -- Arkansas, Texas and Oklahoma -- were in the hunt from start to finish. Kansas, Nevada and Arizona were given early consideration.

The company began eliminating possible locations using a list of 18 criteria. The criteria included climate, state-local government cooperation, availability of skilled labor, state-sponsored training programs, taxes and transportation.

Employees at the four plants were told of the relocation plans in 1990 when the list was narrowed to Arkansas, Texas and Oklahoma.

"We decided we weren't going to hide it from them," Sage says. "We wanted our employees to have enough time to look for other employment options."


Employees' initial reaction was divided as to whether the consolidation actually would take place.

Once it became certain there would be a central location, the speculation changed to who would remain employed and who wouldn't.

Seventy-five employees were invited to move to Arkansas. About 40 are expected to accept the offer.

The fact that more employees were not included in the move led to accusations that R&G Sloane was trying to bust its unions.

The Teamsters union represents workers at the company's Cleveland plant. The United Auto Workers union represents employees at the Sun Valley plant.

"Pay is not the issue, and the unions aren't the issue," Sage says.

Continuing to do business in California was an issue.

The bureaucratic review process in that state can delay the granting of a construction permit for six to eight months.

The state also holds companies accountable for the pollution emissions of employees. That means only a part of a plant's work force is allowed to drive to work. Management must provide incentives such as car-pooling allowances, free bus tickets and even bicycles.

"These are the kinds ... of things we have to deal with," Sage says.

From a management perspective, California was building roadblocks for businesses.

And Arkansas was rolling out the red carpet.

In October, a four-man Arkansas delegation flew to California to help R&G Sloane work out the logistics of selling its three American plants and financing the new plant. The delegation consisted of Heil, Little Rock City Manager Tom Dalton and two attorneys from the law firm Friday Eldredge & Clark, Price Gardner and Robert Beach.

Gardner and Beach helped put together a complicated plan to minimize the federal tax consequences of selling existing plants. They then aided in developing the city-sponsored bond issue.

"Everyone was impressed with the spirit of cooperation," Smith says.

Little Rock and Arkansas came out on top this time.

Now, the focus shifts to the next round in the industrial recruitment wars.

Four-Pronged Attack

Greater Little Rock Chamber Of Commerce Targets Service Sector

The Greater Little Rock Chamber of Commerce has targeted the service sector as the next battleground in the economic development wars.

Chamber officials recently unveiled an economic development strategy that centers on white-collar jobs. The two segments of the service sector that are growing the fastest are business and professional services.

"Service-sector development is where the new jobs will be in the 1990s and beyond," says Curt Bradbury, who chairs the chamber and Little Rock's Worthen Banking Corp.

The chamber wants to reduce Little Rock's oversupply of office space, diversify the city's white-collar employment base, generate more tax revenue and accelerate the growth of household income.

Walter E. Hussman Jr., publisher of the Arkansas Democrat-Gazette, will direct the new economic development program. Hussman will be assisted by chamber subcommittees devoted to office development, site development, research and Southern California marketing.

Jim Moses, president of AMR Real Estate Inc., is chairman of the office development subcommittee. The subcommittee is gathering proposals from marketing strategists for a plan to attract regional and national corporate offices to Little Rock. Research will identify the area's strengths and weaknesses before the marketing plan is developed.

Moses says Little Rock has not done enough to attract white-collar jobs. Trips are planned to Mobile, Ala.; Louisville, Ky.; and Nashville, Tenn., to learn what has been done in those cities.

Robert East, head of the Robert East Co., chairs the site development subcommittee. The subcommittee is searching for a 200- to 500-acre site for a new industrial park. East hopes to have a site selected by the end of the year. Meanwhile, subcommittee members are developing options for financing land acquisition and development.

"The competition is so intense that you have to have lots of choices," East says.

Bill Strange, industrial development manager for the Little Rock Port Authority, chairs the Southern California marketing subcommittee. The subcommittee will coordinate a fall campaign designed to attract companies from the Los Angeles area. The group will identify companies looking to escape stringent government regulations, over-crowding, water shortages and crime.

"We're looking to put together a full-court press ... with teams that could spend a week out there following up recruiting leads," Strange says.

No one has yet been appointed chairman of the research council. The subcommittee will act as a resource liaison, providing reports on demographic trends and other data.
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Title Annotation:R&G Sloane Manufacturing Company Inc.
Author:Waldon, George
Publication:Arkansas Business
Date:Mar 9, 1992
Previous Article:Holding their own: bank holding companies perform well again in net earnings per share.
Next Article:A listing of new businesses in Central Arkansas.

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