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The great Northwest: entrepreneurial families lead region to state, national stardom - not to mention economic prosperity.

DON TYSON IS quick to answer when he is asked how northwest Arkansas became such a phenomenal success story.

"I think more than anything else there have been opportunities to make money in northwest Arkansas," says Tyson, chairman of mighty Tyson Foods Inc. in Springdale. "I think you had a lot of entrepreneurship in northwest Arkansas, plus you had the tremendous work ethic of the people."

Ask anyone in northwest Arkansas the reason for the region's success, and "people" will probably be the response.

This notion is not just some platitudinous blurb from a chamber of commerce brochure. How else do you explain the likes of Sam Walton, Red Hudson, Don Tyson, J.B. Hunt and John Cooper, all of whom created a significant economic impact for a small, agriculture-based corner of Arkansas?

Don Tyson's father, John, practically originated the breed. He arrived in Washington County with an old truck, half a load of hay and a nickel in his pocket. He only stayed because he didn't have enough money to reach his final destination, Fort Smith.

Those were the lean years for the Tyson family. John Tyson etched out a living hauling fruits to market and chickens to Chicago to sell. But he worked hard, and by the early 1940s he had opened his first hatchery.

"My daddy's first feed mill was a No. 10 scoop shovel and a floor," Tyson says.

Today the company has sales of $4.2 billion and more than 45,000 employees. It has diversified into beef, pork and seafood and has hundreds of millions of dollars in sales overseas to places like Japan, Hong Kong and Russia.

The Tyson story is mirrored throughout northwest Arkansas by companies like Wal-Mart Stores Inc., Hudson Foods and J.B. Hunt Transport Services Inc. -- firms that rose from meager beginnings to national prominence. Many other relatively young companies in the area have bolstered the regional and state economy.

Sitting in his office at the Bank of Fayetteville, President John Lewis agrees with the people factor.

"A lot of us who have been around here for a long time have discussed why this area has become what it has economically," Lewis says. "We really didn't know why the area mushroomed the way it has."

Changing Times

On the wall is a picture of Lewis' great-grandfather, his grandfather and his aunt in 1909, standing in front of TABULAR DATA OMITTED the building which housed the family's hardware store back then and is now home to the bank. Block Street in downtown Fayetteville is nothing more than a dirt road.

A cow stands in the foreground of the photo, a far cry from the hustle and bustle that is occurring outside the window today. Young professionals shop at exclusive stores, lunch at one of the many restaurants and stream in and out of this bank, as well as at Worthen National Bank of Northwest Arkansas, just across the town square.

"The conclusion that we came to was the people," Lewis says. "What we had in the '50s and '60s was a nucleus of really bright, hardworking people with vision. What we've seen is not a miracle, but just what happens when good people work hard."

Roger McMennamy, president of Cooper Communities Inc. in Bella Vista, says growth in the area's entrepreneurial enterprises was significant.

"It took the vision of people like Sam Walton to be able to see that there was a bigger horizon than just this little piece of Arkansas," McMennamy says. "He saw it, J.B. Hunt saw it, Don Tyson and his family saw it and so did John Cooper. There have just been a lot of very visionary people in this corner of the world."

People like J.B. Hunt, who had to drop out of school in the seventh grade to help support his family. A former truck driver, Hunt moved here in 1969 with five trucks and seven refrigerated trailers. He had the quixotic notion of building a trucking company in a hard-to-reach area surrounded by mountains, with no major interstates and whose biggest road was two-lane U.S. Highway 71.

Today, his eponymous trucking firm in Lowell is the nation's largest irregular route truck carrier, posting $912 million in revenues and employing more than 11,000 people. The company's fleet consists of more than 7,000 trucks and 17,000 trailers.

"I honestly believe that we've been fortunate to have some really hardworking entrepreneurs who have been capable and have had the desire to build a good company," says James T. "Red" Hudson, chairman of Hudson Foods in Rogers. "Desire is the key thing. Nothing is more important than 'want to,' and we've been fortunate enough to have people in the area with that ingredient."

Hudson is no slouch himself. He began his career at what is now Hudson Foods but at that time was a division of Ralston Purina Co., making $32.50 a week. Even after 26 years, he was only earning $30,000 a year.

"I had always wanted to start my own business," Hudson says. "I was running this operation for Ralston Purina Co., and they put it out for bid. I didn't have a lot of capital, but I had acquired some things over the years, a few head of cattle, some Ralston Purina stock and an insurance policy.

"So I sold everything I had, the cattle, my stock, I cashed in my insurance policy and turned everything I had into cash and leveraged that up. I was thrown out of a lot of nice banks. I was literally laughed at about my plans and how I was going to put it together because it was impossible.

"We did $32 million that first year. Along the way there were an awful lot of times where it would have been easy to throw in the towel. In the early days we came close to not being able to survive.

"Last year we did $809 million and the year ending this month we were around $900 million. And hopefully, with the good Lord willing, we'll do $1 billion next year."

A Visionary for Resorts

Then there's John Cooper Sr., who carved an entire community out of 36,000 acres of rural Ozark acreage.

"John Cooper was one of those visionaries," McMennamy says. "He started an industry, building retirement-resort communities, one that ended up being very sizable nationwide.

"He plowed the ground for mass marketing of lots and homes. We were the first to use direct mail marketing for that type of product; we were the first to offer mini-vacations to bring people in."

Or finally, the granddaddy of them all, the near mythic Sam Walton, who turned a small five-and-dime store in Bentonville into the world's largest retailer, with $55 billion in annual sales, nearly 2,000 stores and 500,000 "associates."

"One thing about Sam Walton was that he was one of the hardest-working people I've ever known," Hudson says. "He expected his people to work hard, too, but not harder than he did."

Indeed, Walton once tried to retire but found he couldn't. Maybe he missed the famous Saturday morning management meetings or the 12-hour days. Or possibly, he just couldn't break old habits and old ideals that die hard.

J.B. Hunt is the same way.

"I used to do it because I had to," Hunt says. "Now I do it because I want to. It's like breathing -- you never quit until you quit."

A significant portion of the success of present-day northwest Arkansas can be attributed to these five people and the corporations they have created.

"Wal-Mart has grown from being a little retailer to the largest in the world," McMennamy says. "Hunt has grown from a small trucking firm to one of the nation's largest and Tyson has grown from a small chicken farming operation to one of the nation's largest food concerns."

He adds that nothing has had a greater impact on the area like the "Big Three," a common designation for Wal-Mart, poultry and trucking in northwest Arkansas.

Multiple Opportunities

That impact has manifested itself in several ways. First, in the opportunities at those companies themselves.

"Two people in the office told me just the other day that they like working here because of the opportunity to advance," Hunt says. "We're growing at about 25 to 50 percent a year, and when you do that it just creates a lot of opportunity. When you go to work here, you have the opportunity to advance tomorrow."

In addition to the chances at advancement with the major firms in the area, the growth in turn has presented opportunities for other businesses.

"I think the opportunities to make money in the area, with the major companies in the area and also as an entrepreneur, has brought people here," Tyson says.

"There have been a lot of spin-off jobs from the Big Three," says Raymond Burns, executive director of the Rogers Chamber of Commerce. "We look at the Big Three as an industry, and for every manufacturing job you have you create two more non-manufacturing jobs. Corporate headquarters have the same effect. It's raised our spendable income, our per capita personal income, because of the number of high-level jobs it's created."

This creation of wealth has in turn led to further economic development that wouldn't have been possible in the past.

One example is the Champions Golf and Country Club in Rogers. This upscale development not only features exclusive lots, but a premier club, tennis and swimming facilities, and a Don Segrist/Bruce Lietzke-designed golf course.

Another example is the Walton Arts Center in Fayetteville, which provides a venue for world-class entertainment. The new-found wealth in the region also has led to other less dramatic but just as important spin-off businesses.

"The area has changed from a primarily rural, agricultural area to a more metropolitan one," says Don Walker, president of The Bank of Bentonville, "primarily because of the tremendous growth in those companies. It's helped the restaurant business, the hotel business, the car dealers, the retail market, and that has been a driving force of change in the area."

Lucrative Attraction

Bella Vista Village was also a driving force in the local economy, bringing in millions of dollars from out-of-state residents who decided to retire in the area.

"We typically draw from people out of state who have to be reasonably affluent to be able to afford to move once they've retired," McMennamy says. "And when they come they bring their wealth with them, and it goes into banks and stores and the local economy.

"Look at the growth of The Bank of Bentonville, for example. In 1972, the bank had assets of about $20 million. Currently they have in the range of $380 |million~ to $400 million and about half of those are in the Bella Vista branch. I believe that has helped fuel the growth in the rest of the area and helped provide the impetus for the infrastructure to help these entrepreneurs grow their businesses."

According to a study by Wayne Miller of the Cooperative Extension Service at the University of Arkansas, Bella Vista Village contributed 2,529 jobs and generated $42.2 million for Benton County in 1992 alone. The community is only about 9 percent of the population of the county, but contributes more than 22 percent of the total property assessments for the county.

While much of the growth in the area can be attributed to the success of Wal-Mart, Hudson, Tyson, Hunt and Cooper Communities, there have been other factors.

Northwest Arkansas began evolving in the late '50s and early '60s. Daisy Manufacturing's decision to relocate its plant from Plymouth, Mich., to Rogers in 1959 is generally seen as the initial kickoff for the area's growth spurt, which continues today.

A few years earlier, John Cooper Sr., had opened his first retirement community in Arkansas. In 1965, he founded Bella Vista Village.

In 1962, Sam Walton opened his first Wal-Mart in Rogers. In 1966, the Beaver Lake Dam was completed, creating a lake with 30,000 acres and a tourism industry, as well as a clean water supply for the entire region and hydroelectric power.

Those Were the Days

Prior to that, the area's primary claim to fame was the University of Arkansas in Fayetteville and the local Ozark flavor.

The economy was basically an agricultural one. The region once was the nation's leading supplier of apples, but that dried up in the dust bowl of the '30s. Chicken farming was the new successor.

The main source of entertainment was the Highway 71 Drive-In, then located on the outskirts of Fayetteville at the present-day site of Fiesta Square shopping center, or the local Friday night football game. The population in the two-county area was 130,000, according to the 1960 U.S. Census, and that pales to the combined 210,900 population 30 years later.

It was an idealistic existence, something akin to Mayberry. Like the fictional town, the local policeman was someone you went to high school with, the downtown merchant knew you by name and the social event of the year was the church picnic.

"The truth is, while I'm proud of northwest Arkansas and I like the growth and it's been a wonderful thing to me, if I could I'd roll back the clock to 1965," says David Mathews, former state representative, prominent area lawyer and close supporter of President Clinton. "Life in Rogers in 1965 was as close to the perfect life as you could get. Everyone knew everyone, everyone cared about everyone.

"The biggest controversy in town was whether Rogers was going to beat Bentonville in football. It was just a kind of idealistic time."

But while the area still seemed like small-town America, market forces were beginning to produce a change. The area benefited greatly from the general exodus to the Sunbelt by many companies in the 1970s and 1980s.

Literally hundreds of factories and thousands of employees moved to the region as industries relocated and expanded in the South. But here again, one of the main factors was the people.

Hard Workers

Arkansas, a right-to-work-state, was able to provide a good, cheap labor source to prospective companies. Also, the workers, coming from ancestors who carved out an existence in a harsh environment, were instilled with a work ethic that was an employer's dream.

"This area was settled by a kind of unique people in that they came over the mountains," Lewis says. "They're hard-working -- you know, a day's work for a day's wage. And Cass Huff |owner of Daisy Manufacturing~ saw that, and you started getting companies like that to come in to take advantage of the cheap, good labor."

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Tyson adds: "In those days there weren't many folks in town, and the population lived out on small farms. Those folks are just great people when it comes to working hard."

Another factor was the area's low tax burden and cost of living. Arkansas ranks 49th in the nation in overall per capita tax burden. In 1993, the composite cost of living index for the Rogers, Springdale, Fayetteville Metropolitan Statistical Area was more than 10 percent below the national average.

"When I was driving a truck 42 years ago I worked for a company out of Dallas," Hunt says. "At that time there were 14 major truck lines in Dallas, and today there's not really a major truck line in Dallas. And you go somewhere else and find there are very few big truck lines left in any big cities. The big truck lines are in rural communities. It's cheaper, taxes are cheaper, property's cheaper, labor's cheaper and so is everything else related to it."

Four Distinctive Seasons

The climate also was attractive to companies fleeing the harsh weather of the Northeast, which raised transportation costs and led to a higher rate of employee absenteeism. The area's climate has made the area attractive not only to businesses, but also to people who are looking for a better quality of life.

It is no accident that Fayetteville consistently is listed as one of the best places in the United States to live. The climate and scenic beauty of the area always are listed as major reasons.

TABULAR DATA OMITTED

The climate and scenery is the major attraction of Bella Vista Village, allowing nearly year-round golfing but also four distinctive seasons. It also has made it easier for employers to entice people to relocate to the area to work.

"I think northwest Arkansas is just different," Hunt says. "Its climate, the attitude, the four seasons, it's not polluted. It's hard to get here, and it's hard to get out of here. When you get here, you can't leave because there's nowhere to go.

"We've got 100 people all over the United States traveling for us. I bet I can pick up the phone and call them and 95 of them will move here. Not just because this is the corporate office, but because of the area."

The climate, coupled with the creation of Beaver Lake, also has led to the creation of another booming industry for northwest Arkansas: tourism. The lake boasts 30,000 surface acres of water, 483 miles of shoreline and 615 camp sites.

The area had always been rich in Ozark culture and folklore, with events like the War Eagle Arts and Craft Fair bringing in tourists from all over the country. The creation of Beaver Lake by the Army Corps of Engineers not only produced a good, clean water supply and hydroelectric power, it also ignited a tourism boom that today brings in nearly $300 million annually to Benton and Washington counties.

Population Center of the Country

This general shift in the center of population to the central United States has been a boon to the area not only because of the companies that relocated here as part of the shift, but also in giving northwest Arkansas-based companies a competitive advantage by being closer to the markets.

"While transportation is our greatest Achilles' heal, we overcome it by virtue of the fact that we are in the population center of the United States," Mathews says. "That's why trucking companies are here. That's why it makes sense for Wal-Mart, the world's No. 1 retailer, to be here. While it's a little hard to get out of here, you can get in a car and within an hour have access to the interstate highways to any place in the country."

The region also benefits in trade because it's located about midway from Canada and Mexico.

Educational Enhancements

Undoubtedly, the University of Arkansas has contributed significantly to growth in the area. The university pumps $120 million into the local economy every year in salaries and wages. In addition, last year the university brought in $32.6 million with 820 research grants awarded to the university.

The university also brings in tens of thousands of students who in turn spend their parent's hard-earned dollars on apartments, books, clothes, beer and everything else associated with college life. The same is true of football and basketball fans who come from all over the state to watch the Razorbacks play.

The university has also helped the area businesses make more money through its outreach services, applying its expertise in everything from poultry sciences to computers to the local firms.

Dumb Luck

Finally, much of the current boom in the area can be attributed to just dumb luck. Much of the poultry industry's growth can be attributed to the health kick of the '80s after studies found it to be better for people than beef or pork.

"I can remember when the per-capita consumption was less than 5 million chickens a week," Hudson says. "Today it's about 115 million a week. Today we're consuming upwards of 75 per capita a year. We filled a need, economically and nutritionally."

Tyson is a little more blunt.

"I guess that's pretty good luck, huh?" he says.

If it's the people who have made this area flourish, it is also the people who help it remain the same quaint Ozark region it always has been.

For years, it wasn't uncommon to see Sam Walton, the wealthiest man in the United States, driving around the square in Bentonville in his old pickup truck.

"I don't know of another place in the entire world where it really doesn't make a difference how much you got or how little you got," Hunt says. "It really doesn't matter if you work in the chicken plant or the jewelry store; if you're good at what you do, then you're respected."
COPYRIGHT 1993 Journal Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Author:Tobler, Christopher
Publication:Arkansas Business
Date:Oct 11, 1993
Words:3446
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