Your Expansion is Political

From the Desk of the Editor in Chief

Covering the successes and setbacks of economic development groups vying for your expansion projects (and the jobs they will create) sometimes obscures a fact: The economic development process is deeply political. Usually, the politics stay with the politicians and the economic developers (some of whom, at the highest levels, are politically appointed), but large projects can draw executives at the growing company into the fray.

We have a prime example in our midst: the winning bid for a new batch of Air Force refueling tanker aircraft made by, nominally, Northrop Grumman. Nevermind the 25,000 U.S. jobs it will create, whether in Alabama (where the tankers will be assembled) or Ohio (where the GE-sourced engines will be produced); the main company behind the deal is EADS, the European corporate parent of Airbus. You can safely bet that EADS and Northrup Grumman, back in 2005 when they chose Alabama in preparation for their bid, used a location decision matrix that covered a lot more than just labor costs and land prices. The other bidder, Boeing, has appealed the decision with the support of politicians concerned about the national origin of our defense contractors (or at least, concerned with the appearance of their concern for such).

Your project probably isn’t quite as large, but don’t forget to pay attention to the political implications. Will the location you choose cause offense to your customers or the other communities where you’re an employer? Your decision may resonate unexpectedly outside the area you’ve chosen.

Karim Khan