Tennessee Using Calif. Power Crisis as Recruiting Beacon

Tennesseans have gained a reputation as legendary hunters and trappers. Their latest quarry: California businesses.

In one of the most aggressive efforts yet to capitalize on the Golden State’s energy woes, 20 economic development officials from Tennessee descended on Southern California this week to meet with local companies considering a move or an expansion.

Californians would be wise to shelve the Beverly Hillbillies jokes. The Tennesseans have come loaded for bear. Their $85,000 effort included visits to 35 companies, promises of all-expense paid trips to the Volunteer State for Southland executives and a lavish cocktail reception at Spago.

“The last thing a businessperson wants is uncertainty,” said Alex Fischer, Tennessee’s economic development chief, speaking by cell phone on his way to the Beverly Hills shindig Wednesday evening. “This is a unique opportunity for us to use the power situation as an entree.”

Intentional or not, his double-entendre is appropriate. Out-of-state business recruiters are looking to eat California’s lunch by wooing companies fed up with expensive, unreliable electricity.

Local businesses have been inundated with energy-related recruiting letters in the wake of last summer’s rolling blackouts. A just-released UC Irvine survey, for example, showed that 44% of Orange County manufacturing executives polled say they’ve received such pitches, while one-third of them are considering moving at least a portion of their operations elsewhere over the next five years.

Michigan has sent glow-in-the-dark mouse pads to prospects. Chamber of Commerce officials from Raleigh, N.C., mailed batteries. Even Fischer’s agency, the Tennessee Department of Community and Economic Development, couldn’t resist sending 3,000 flashlights to kilowatt-weary manufacturers, reminding them that “the lights are always on in Tennessee.”

The gags may be cute but whether they’re effective remains to be seen. Companies don’t make decisions to relocate lightly, quickly or based on a single factor such as electricity. It’s a relationship game that can take months or years to yield a payoff. If California withstands this summer’s predicted blackouts and the electricity situation stabilizes, the energy issue could quickly lose steam as a recruiting hot button.

Besides, California is used to rivals poaching on its turf, said Fred Main, senior vice president with the California Chamber of Commerce. He said California’s powerful economy, huge population and sunny climate present such huge obstacles for competing states that it’s not surprising that they would try to exploit the power crisis.

“They need those flashlights to find their cars to dig them out of the snow,” he said.

But it’s no joke to the folks from Tennessee, who say the flashlight gimmick yielded nearly three dozen solid prospects--enough to convince them to hit the road to persuade local executives that the grass is greener on their side of the Mississippi.

Fischer said state and local economic development officials from across Tennessee began fanning out across the Southland for office visits on Monday. He declined to reveal names of the prospects, in part to keep rival suitors away from them. But he said Tennessee is particularly interested in recruiting manufacturers serving the automotive, rubber, plastics and publishing industries, as well as companies looking for a distribution hub in the mid-South.

California Technology, Trade and Commerce Agency Secretary Lon Hatamiya said his agency is well aware of competitors’ cheap shots regarding California’s energy troubles. But he said his troops have chosen to focus their efforts on promoting conservation to help the state’s businesses weather the crisis rather than waste time pointing out rivals’ obvious weak spots.

Hatamiya acknowledged that Tennessee has upped the ante with its swarm campaign, the largest recruiting effort playing off the electricity crisis that he has seen so far. But he said it will take more than the lights flickering to scare scrappy California entrepreneurs.

Other states “want to take advantage of our disadvantage,” Hatamiya said. “But we’ve been through earthquakes, fires, floods, mudslides, you name it, and always come back stronger.”

For their part, the Tennessee recruiting delegation wants California officials to know they’re willing to help out where they can.

“We’re serving good California wine at the [Spago] reception,” Fischer said. “So we’re helping your wine industry.”