June 27, 2016 Global Virginia: An Exclusive Interview with Terry McAuliffe

Volume 19 | Issue 2

If you didn’t know about everything Virginia offers business and industry, Gov. Terry McAuliffe is ready to turn your head around. From ince

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The state that gave the country a series of firsts – the first colony, the first business venture, the first president of the United States – is climbing ladders in the 21st century to be foremost in business and industry: It was Virginia that helped put the continent on the map in the 17th century – and Virginia that will broaden that map into the 21st century.

Through a strategic network of partnerships, programs and smart moves to promote workforce development, Virginia’s officials have traveled sea to shining sea, and beyond, to get out the word about its attractive business climate and to tout the state’s winning programs for new and existing business ventures. Move over furniture, coal and textiles – your grandchildren, cyber technology, human genome sequencing and clean energy platforms, have become the upstarts of the new Virginia economy.

That is not to say that the Commonwealth of Virginia does not hold dear to its past. But as Gov. Terry McAuliffe pointed out in a recent interview, “I want Virginia to be the first name on the globe in bioscience, cyber security, data analytics, renewable energy and a range of other emerging industries. We are making great progress but we still have work to do in order to lay the foundation we need in terms of training our workforce, incubating Virginia companies and attracting new ones to lead in these key industry sectors.”

He can do it, with the second largest number of tech workers of any state in the U.S., in addition to the data centers and IT infrastructure in place because of the location of both the Pentagon and the Central Intelligence Agency (CIA) in Virginia.

In healthcare, the burgeoning field of human genome sequencing offers “huge growth opportunities” for the state, and in the area of energy, the governor stresses Virginia’s importance in future production of renewable energy components for equipment such as wind turbines. “I want them built in Virginia,” he said of the turbines, adding, “I want to be the energy governor.”

Why Business Is Bright
There are many parts that contribute to Virginia’s widespread business success, McAuliffe pointed out. Among these:

• Low tax structure
• Low energy costs
• Construction of the Atlantic Coast pipeline, an interstate natural gas pipeline that will serve multiple public utilities and, thus, the energy needs of both Virginia and North Carolina.
• Dulles International Airport, offering an integrated multi-model transportation system. McAuliffe proposed last December a $50 million investment to enhance Dulles’s competitiveness, calling it “one of Virginia’s premier economic assets.”
• Port of Virginia, the deepest port on the East Coast, and the only East Coast port with Congressional authorization for 55-foot depth channels.
• Two major rail carriers: CSX and Norfolk Southern.

McAuliffe, who took office in January 2014 as the Virginia’s 72nd governor, said he has launched an ambitious 370 economic development projects, representing $11 billion in new capital. Combine this with a 4.1 percent unemployment rate, the lowest since July of 2008, representing an overall 41-year low, McAuliffe is on track toward a mission of growing and diversifying the state’s economy. “My goal is to keep that momentum going,” he said.

The Democratic governor remarked that he is “the most traveled governor in the United States,” with 15 trade missions. His intent is to put Virginia front and center to foreign businesses seeking to locate operations in the U.S. “I go where the customers are,” he said.

From Jamestown to China
Early entrepreneurs came a long way in their pursuit of the perfect business model, and while The Virginia Company’s fate has long been recorded in the annals of history, it is what came after – some 400 years after – that has best realized Virginia’s role in the promise of the new world.

Indeed, state officials have gone far and wide to tout Virginia’s business friendliness, visiting Shandong Province, China, late in 2015, to meet with representatives of the Shandong Tranlin Paper Company, who chose Virginia for the siting of a $2 billion plant along the banks of the James River in Chesterfield County. The venture will bring 2,000 jobs to the region.

The investment is seen by county officials as staggering – “twice as large as all investments from 2006 to 2013, the most lucrative period in Chesterfield history,” it was reported in the Richmond Times-Dispatch.

Virginia is on China’s radar in other areas as well. In 2013, Virginia-based Smithfield Foods, considered the world’s largest hog farmer and pork processor, was acquired by China’s biggest meat processor, Shuanghui International Holdings, for $4.7 billion, the largest acquisition ever of a U.S. company by a Chinese firm. In addition, a 2012 trade deal sent $300 million in Virginia soybeans to the country.

McAuliffe’s modern trade route across the globe does not stop in China, however. Making trade visits to Japan, Korea and Cuba, he has singularly made Virginia’s growth with foreign trade a revolutionary achievement, turning heads and minds of corporations who sought to locate elsewhere. Such was the case with automotive leader ELDOR Corporation, which is investing $75 million into its first U.S. production plant in Botetourt County, creating approximately 350 new jobs. “ELDOR Corp hadn’t thought about America,” McAuliffe pointed out, until the governor convinced them otherwise.

“Virginia is particularly business-oriented, with its pro-business laws, Port of Virginia access, logistics and infrastructure,” said Pasquale Forte, President/CEO of ELDOR Corporation at the time the plant announcement was made. “We found a community of genuine and collaborative people, focused on supporting investment in a practical way and with great commitment. The community has welcomed us with a professional attitude, but also with respect and friendship.”

To enhance the attractiveness of Virginia as a place to do business, the Virginia Economic Development Partnership worked with Botetourt County and the Roanoke Regional Partnership to secure the project for Virginia. Gov. McAuliffe approved a $3.2 million grant from the Commonwealth’s Opportunity Fund to assist Botetourt County with the project.

“As far as the international market there was $36.1 billion last year in business trade to Virginia,” McAuliffe’ noted. “We are now the largest exporter to Cuba, moving ahead of North Carolina.”

McAuliffe added, “Studies show that 81 percent of new business will occur outside of the U.S. You can’t do business on the phone. You need to be eyeball to eyeball and show what you can do.”

With that in mind, the governor and his many economic associates, scored another win for Virginia, when AccuTec, manufacturer of high-quality specialty, medical and professional blades and tools, announced a $5.37 million investment in expanding its manufacturing operation in Augusta County. According to reports, Virginia competed against several other states for the project, which will retain 138 jobs and create 53 new jobs.

Again, The Virginia Economic Development Partnership proved its value, working with Augusta County and the Shenandoah Valley Partnership to secure the project for the state. Gov. McAuliffe also approved a $125,000 grant from the Commonwealth’s Opportunity Fund to assist Augusta County with the project.

Brewing Up Business
The governor highlighted other projects as more evidence of Virginia’s competitiveness in the business market, including the siting of two craft brewing operations in the state. Deschutes Brewery, for one, is building an East Coast production brewery at the Roanoke Centre for Industry and Technology – the estimated $85 million project, which will use $3 million from the Commonwealth’s Opportunity Fund, is expected to bring 108 jobs to the area.

The Richmond Times-Dispatch reports that the Roanoke region “has been a finalist in campaigns to lure craft brewers Sierra Nevada Brewing and Stone Brewing.” Stone also chose Richmond and will operate a 220,000-square-foot facility there. Sierra Nevada located in the Asheville area.

Altogether, that makes for 144 craft breweries that are calling Virginia home, adding to the diversity of the state’s industrial base.

“The process we are involved in right now is diversifying our economic development efforts to grow in industries that are not as reliant on the federal government as our economy has been in the past,” McAuliffe said.

Getting To Work On Workforce
With all of this ambitious business activity taking place, it stands to reason that Virginia needs to bolster its workforce to meet the challenge.

“Every governor deals with this issue – it’s a complicated morass of laws and money,” McAuliffe said. “Over the last two years we have streamlined our workforce development programs and signed bills into law. Virginia is now a model for workforce development.”

Among those bills is HB 1986, which makes several changes to the Virginia Board of Workforce Development, including adding, “as an area of policy advice to the governor, issues to create a business-driven system that increases the rates of attainment of workforce credentials and jobs.”

In less than a decade, Virginia will need to replace over 930,000 retiring workers and fill another 500,000 new jobs. About 50-65 percent of those opportunities will be specialized, skilled, and technical jobs. This is why a top priority has been to increase the number of people attaining workforce credentials. Virginia’s publicly funded workforce system, comprised of 15 local Workforce Investment Boards (WIBs) and 24 state programs administered by eight state agencies, serve about a million Virginians each year, from middle school to retirement age.

Virginia’s public workforce development system is a network of 24 programs spanning eight agencies organized under four Secretariats. These represent more than $360 million in state and federal spending to align efforts and outcomes with the needs of business and industry and develop skilled workers for critical demand occupations.

The governor’s challenge to workforce agencies and programs, in Executive Order 23, is to achieve an additional 50,000 STEM-H workforce credentials in the next three years. In addition, the Virginia Business-Higher Education Council, the Virginia Chamber of Commerce and the Council on Virginia’s Future have conceived the first-ever, long-term state goal of having nearly 500,000 employees in Virginia with business demanded workforce credentials by no later than 2030. The current number stands at about 165,000.

“What we’ve done is taken this morass of laws and turbo-charged workforce development,” McAuliffe said, adding, “If you’re not doing it, you won’t be a part of it.”

Virginia, he said, now has “a comprehensive plan for jobs and wages and engaging education institutions – it is the most competitive workforce development plan in the country.”

“I meet with my economic cabinet once a week, we go through every project that we can potentially go after,” the governor said, adding that “our greatest asset is our people. Virginia is home to the hardest-working, best-trained and most dedicated workforce on Earth. I have devoted a great deal of focus to enhancing that advantage so that we can continue to compete in a growing global economy, but there is no doubt that the families who call Virginia home are the best selling point we can offer companies who want to locate and grow a business here.”

And McAuliffe is firm on the state’s forward movement. “I ran for governor on economic development. I have my foot on the gas and I’m not taking it off.”

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