In the highly competitive retail climate suppliers and retailers that reach out to Latina shoppers stand to reap huge rewards among this growing demographic, according to Enedina Vega, publisher of Meredith Hispanic Media

Vega shared internal research about the Latina demographic to a room full of suppliers at the Bentonville Chamber of Commerce WalStreet Partnership Series held Monday (Jan. 27).

With retailers facing stagnant sales growth, one of the more immediate opportunities on the horizon involves capturing market share from the burgeoning Hispanic population. The U.S. Census estimates by 2050, Hispanics will number 133 million — 30% of the U.S. population. By 2015, Hispanics will control $1.5 trillion in annual spending.

Vega said Latino shoppers already number 52 million and their annual incomes are growing at a healthy clip. She outlined three target areas where suppliers and retailers could wield influence with this savvy demographic: beauty; baby registry; and food.

“The Latinos are a younger demographic, two of three are under the age of 35. One in six Americans is a child, but one in four Hispanics is a child,” Vega said, an indication that the Latino families are growing a faster rate than the overall U.S. population.

BEAUTY SALES
Vega said Latina shoppers spend more on beauty products — cosmetics, perfumes and  haircare — than the general population. She said they are typically brand loyal, but also outlined a couple of opportunities for suppliers who want get marketshare in this category.

“It’s important that suppliers understand the way Latinas view seasonal changes with their make-up, color pallets as well as fragrances,” Vega said.

They also have distinctly different needs for day and night, two other opportunities that suppliers have to market specific products.

While celebrity endorsements do go over well with the Latina demographic, Vega said they also appreciate simplification which is why the Clinique brand — and it’s three step process — resonates so well with Latinas.

The appeal of in-store displays matter to the Latina demographic, which is another opportunity for suppliers to work with big box retailers to present cosmetics in more of a department store setting.

But perhaps the most important aspect of marketing beauty products to Latina shoppers is a combination of coupons and free samples.

“They love buy-and-try propositions, and suppliers who furnish those opportunities along with educational tips will likely be rewarded,” Vega said.

BABY REGISTRY
One in four children born today are Hispanic, and that will become one in three by 2030, so marketing to Latina moms offers huge upside potential, according to Meredith’s research.

Vega said 37% of the Latina shoppers surveyed by Meredith with kids under 2 years old, used a baby registry, and 54% said they plan to use one. One interesting dynamic to the Latino’s use of baby registries is that they tend to register much later — third trimester or even post natal. This is uncharacteristic of the general population who tends to register in the first trimester.

Vega said this delayed reaction is cultural in nature as many Latino households don’t wish to bring baby items into the home before the baby arrives because it can be considered bad luck.

“Knowing this, and marketing to the Latina mom with a congratulations note early in the pregnancy but then continuing to speak to her through the third trimester is key,” she added.

Sears, Wal-Mart, Target and Baby’s R Us ranked as top tier physical store retailers where Latina moms said they typically register. However, Walmart.com fell to the bottom tier against diapers.com, Amazon and other purely online players. Vega said this is an opportunity for Walmart.com and its suppliers to reach out to the Latina moms with products, coupons and free samples late in the third trimester and even post natal.

FOOD CATEGORIES
Meredith research found that 45% of Hispanics are shopping for food at supercenters like Wal-Mart. Also, 70% said they shopped at Wal-Mart, with a higher average basket purchase given the larger families.

Vega said Latina shoppers appreciate value and read the food labels just like the general population. She said 50% are purchasing organic products. Pasta, whole-wheat versions, brown rice and whole grain options are very much in demand by Latina shoppers, according to Vega.

“The Latina consumer is still cooking dinner and she appreciates and uses recipes. This is a departure from previous generations who didn’t write specific instructions, rather using a little of this and a pinch of that,” Vega said.

She said Latina shoppers are very much “foodies” and 58% of their food purchases center around pleasing children and husband. They shop for all types of products, seeking to diversify away from traditional ethnic foods more often, favoring items like Greek yogurt, energy drinks, bottled water, ice cream, fruit  and soy milk.

One other important marketing element for the Latina shopper is reaching her in Spanish, while she is likely bilingual, Vega said there is are retrospective movement in place among Latino families.

“They will speak English almost exclusively until they have children of their own, then we see them reverting to speaking Spanish at home, trying to ensure that future generations don’t lose the language. Latina moms see that as something they can give their children, an advantage for them. More so than perhaps any other large ethnic group in the U.S., the Hispanics are holding on to their culture longer,” Vega said.

Full-scale chemical oxidation treatments of a chemical plume in south Fort Smith will not happen until Spring 2016 while a soil monitoring station will be installed in an occupied residence. The two items were revealed in the latest report filed by Whirlpool Corporation.

Late Friday (Jan. 24), the company submitted a revised work plan to the Arkansas Department of Environmental Quality that it said would meet the requirements of ADEQ's Remedial Action Decision Document (RADD) issued in late December 2013.

Whirlpool has spent much of the last year going back and forth with ADEQ on which measures would properly address a spill of trichloroethylene (TCE) at the facility, with Fort Smith residents watching from the sidelines. The company has admitted that the degreasing agent it used until the 1980s, which the Environmental Protection Agency has said is a carcinogen, leaked into the groundwater and is now in a plume that covers a large area at the facility and in the neighborhood to the north.

The company said the revised work plan submitted Friday was a revision of a July 2013 work plan it had submitted prior to the final RADD issuance last month.

The plan, outlined by Corporate Vice President of Communications and Public Affairs Jeff Noel, includes what he calls five key steps — pre-design, bench scale testing, pilot scale chemical oxidation injection treatments, design refinement, and expanded chemical oxidation injection treatments.

The pre-design phase was already initiated by Whirlpool in December and has been ongoing through January, according to the revised work plan document. The pre-design leads directly into the bench scale testing, Noel said.

"Based on results from the pre-design activities,a  thorough bench scale screening of oxidants is completed," he wrote. "The bench scale testing will screen oxidants using actual soil and groundwater from the Whirlpool site generating data needed for the more rigorous onsite pilot scale testing."

The pilot scale testing will take place in a location known as "Area 1." According to an accompanying map included with the revised work plan, Area 1 is located directly on the north side of the now-shuttered Whirlpool facility between the parking lot and Ingersol Avenue. A location known as "Area 2" lies next to Ingersol's westbound lane. "Area 3" lies less than a half-block north of Area 2.

"The (pilot scale chemical oxidation injection) process allows for verification and potential improvement of oxidant performance and delivery methods specific to site conditions before moving to expanded design and implementation," Noel wrote.

The chemical oxidation injection will include injecting chemicals directly into the ground in order to neutralize the TCE chemicals already found in groundwater below the surface.

The design refinement phase will make final design recommendations for eventual chemical oxidation in all three locations, known as the expanded chemical oxidation injection treatments.

"Phase I of the expanded implementation is currently planned to include oxidant injections at the three locations using methods determined to be most effective and least disruptive to the community," Noel wrote. "Phase II implementation is expected to build on Phase I by further reducing any remaining COC (constituent of concern) concentrations in the three target areas thereby enhancing the effectiveness of the ongoing MNA (monitored natural attenuation)."

While the pre-design and bench scale testing have already begun, full implementation of phase I is not scheduled to take place until Spring 2016, with phase II beginning a year later, according to Noel's submitted report to ADEQ. When a previous six month monitoring period has ended, an evaluation will determine if additional chemical injections are needed.

Previous documents have indicated 2018 as a likely date for completion, though no mention of that date was made in the latest work plan, with Noel simply stating, "The soil cover will be installed after completion of all ISCO injections."

In addition to revising the company's work plan with ADEQ, Whirlpool indicated that it would install additional soil gas monitoring that "will provide additional lateral coverage over the off-site groundwater plume area." One of the planned locations is "an occupied residential building."

"The idea is to install additional soil gas monitoring points at locations that have higher potential for vapor intrusion to occur compared with other locations in the area," Noel wrote.

The company did again stress "that there is no unacceptable vapor intrusion risk from the Site," adding that the "objective of this soil gas monitoring component is to provide additional assurance that the off-site groundwater plume north of the Site does not present a concern for vapor intrusion into the indoor air of the buildings overlying the plume."

At both the residential location, as well as another off-site location, the monitoring points will be installed at two depths, he said.

"The first will be installed just above the groundwater surface to characterize the soil gas due to volatilization of the TCE from the groundwater. The second monitoring point will be installed at a depth approximately midway between the groundwater surface and the ground surface, or at least five feet bgs (below ground surface), to characterize the degree to which TCE in vapor from the groundwater is or is not migrating to the shallower depth."

ADEQ must still approve Whirlpool's latest work plan.

Van Buren is still feeling the effects of the Great Recession, as evidenced by a mix of sales tax figures, number of building permits issued and other factors. The assessment was part of Mayor Bob Freeman's eighth state of the city address, an annual update on the status of the second largest municipality in the Fort Smith region.

During his update on the city's status, Freeman highlighted a few key points. First among them was the amount of county sales tax the city receives. The figure has been flat during the last three years, only rising $10,843, or 0.0049%, from 2011 to 2013.

In the last seven years, the only massive increase in the city's sales tax receipts, county or otherwise, was in 2008 — the result of building supplies and other materials being purchased for repairs and rehabilitation of properties following a hail storm that caused damage throughout much of the city.

Regarding building permits, Freeman noted how activity had stalled in certain sectors as a result of the downturn in the economy during the last five years, a slump the Fort Smith region — Van Buren included — has been slow to come out of.

"I can remember as a member of the planning commission, numbers were much higher as far as plats and activities we were having," he said. "This is just a result of the economy, but numbers are pretty level. A little bit of increase as far as the plats are concerned."

Even though Van Buren saw an increase of 38.96% in building permits issued last year, much of the activity was either municipal-related, such as the city's newest fire station, or commercial-related, with the mayor specifically highlighting the upcoming CVS Pharmacy to be built at the intersection of Fayetteville and Rena Roads at a cost of $1.283 million and the upcoming expansion of the Legacy Heights Retirement Center.

Among the major capital projects underway or near completion, the mayor said the widening project on Rena Road was nearing completion, though not giving a specific time.

"My wife and I drove it on Sunday again. It's really close to completion. The biggest issue is getting that last layer of asphalt on it and that's going to be weather dependent. And we're really not pushing for that right now because we want to get it down when the weather's good. And we're close to getting Rena Road completed, a project that's been promised to the community since the 1980s, actually."

The revelation of further delays comes about two months after the Arkansas Highway and Transportation Department's expected completion date of Thanksgiving had already come and gone.

One milestone the city is looking forward to in the year to come is the completion of the Interstate 540 rehabilitation project, which is expected to take 15,000 cars per day off Van Buren streets and back on the interstate.

The city is also looking to install signalization at the intersection of 26th Street and Kibler Road, in addition to working with Crawford County on the replacement of the Pevehouse Road bridge, an area prone to flooding during rain events.

Freeman said the city is also moving forward with a variety of projects funded by a one cent sales tax approved by voters in 2012, including a new police department, an already under construction fire station and a new senior center. Prior to Freeman's address, the city council approved the acceptance of a bid from Crawford Construction for the building of the city's new police department for $3.568 million. The facility will be located at the top of Log Town Hill, at the site of the former Sherman's Grocery store.

The mayor referred to his first state of the city address seven years ago, recalling that the only capital project he could speak of was the city's new library. Alderman Donna Parker said it was the success of that project that lead voters to approve the current slate of projects, which includes parks improvements across the city.

"I like the fact that you brought up seven or eight years ago, when you first did (a state of the city address)," she said. "The library was the only item on here, and in my opinion that's what started the citizens realizing that the half-cent can really work wonders and create something in our city that we're so proud of. So it was a first step."

It was a sentiment echoed by Freeman.

"That was a great eye-opener for our community. I agree with you."

As for what the future holds for leadership in Van Buren, Freeman declined to discuss whether he would seek a third term in the mayor's office, which would result in another four state of the city addresses during his tenure.

"No comment at this time. I'm sitting behind a city seal. I'm not going to do it."

In other business, the city council approved a revised budget for 2013. According to Freeman, the revised budget replaces budget estimates with actual FY2013 year-end totals, essentially closing out the books for the previous year.

Freeman also presented a key to the city of Van Buren to Alderman David Moore, commemorating his 25 years of service on the city council.

Retail insiders and consultants to Wal-Mart Stores have told The City Wire the annual job elimination drill at corporate headquarters has been ongoing for the past two months with several hundred jobs between Wal-Mart and Sam’s Club home office operations being shaved from the payrolls as fiscal 2014 winds to a close.

The underlying reason cited for what some sources say are deeper than normal home office job cuts is tight budgetary constraints as the retailer’s fiscal year ends Jan. 31. Numbers from numerous sources contacted by The City Wire indicate a job cut and/or hiring freeze range between several hundred and up to 1,000.

There has no been release of this information from the company, and there seldom is where Wal-Mart is concerned as this is generally chalked up to routine annual job re-evaluation. As an employer of some 2 million, the retailer sees an active turnover rate, even at the upper income levels in the corporate office.

The last time Wal-Mart made a home office layoff announcement was 2010, when the retailer trimmed 300 jobs from the corporate payrolls. In January 2009, between 700 and 800 jobs were cut in the corporate office.

“As you probably know we haven’t announced any home office organizational changes since 2010 and we aren’t planning any broad announcements this year. It’s correct to say that individual departments look at their teams on an ongoing basis to ensure the structure is consistent with the strategy but the numbers you are suggesting is not anything I’m aware of,” Wal-Mart spokesman David Tovar noted Monday (Jan. 27) in an email.

Wal-Mart was asked to substantiate the number of open positions recently pulled from job listings and to quantify their recent home office layoffs, but the retailer said they have nothing planned like the “rumored cuts and speculation.”

The retailer is within its 30-day quiet period mandated by the federal Securities and Exchange Commission for speaking to the media on sensitive issues ahead of earnings. Wal-Mart Stores Inc. will report its fiscal 2014 earnings on Feb. 20.

Three independent consultants interviewed by The City WIre on Monday said they knew of internal streamlining underway at Sam’s Club and Wal-Mart corporate offices. Sam's Club CEO Rosalind Brewer recently revealed that the Wal-Mart division is laying off 2,300 workers as the warehouse club seeks to reduce the level of middle managers. The staff reduction is roughly 2% of Sam's workforce, and is the largest staff reduction by the retailer since 2010.

At Sam’s Club, the membership and the marketing units have been consolidated into one department eliminating several positions with that synergy. At Wal-Mart corporate some downsizing is also underway through attrition, pulled open positions (aka, hiring freeze) and position terminations.

“Those impacted are typically given 60 days notice, and told that they can apply for open jobs within the company,” one of the consultants explained.

Bill Simon, CEO of Walmart U.S., has said at any given time the retailer has between 15,000 and 50,000 jobs open. There are roughly 10,000 corporate jobs in Bentonville between Sam’s Club and Wal-Mart and their ancillary operational units.

Two former retail executives, who spoke on condition of anonymity, said they knew several individuals with more than 25 years of service who were recently informed that their home office positions were being eliminated.

Ron Loveless, a former Sam’s Club and Wal-Mart executive, told The City Wire that all brick and mortar retailers are under pressure as they are losing share to more online players. He said this is the time of year when retailers scale back their payrolls, and home office positions are not immune from that purge. Although Loveless said he has not personally heard of any major home office cutbacks at Wal-Mart and Sam’s Clubs at this time, those recently announced in club operations were likely needed.

“Wal-Mart and Sam’s Club are making substantial investments in their online operations and continue to hire people as they should. I wouldn’t be surprised if there is some downsizing of other departments as a result,” Loveless said.

He also praised the management teams of Wal-Mart and Sam’s Club, saying if cuts are being made, they likely are justified during the challenging times for the retail sector.

Analysts with Kantar Retail have said Wal-Mart is struggling with its mature brick-and-mortar formats, and they expect the retail giant to face flat to 2% same-store sales for the foreseeable future.

Wal-Mart U.S. has reported negative same-store sales for the past two quarters and Sam’s Club continues to underperform its major competitor Costco.

Arkansas’ jobs numbers were anything but positive in December, with the jobless rate of 7.4% up from 7.1% in December 2012. The labor force in December was down 1.47%, the number of employed fell 1.81%, and the number of jobless rose by 2.9% compared to December 2012.

Arkansas was one of just six states to post a year-over-year jobless rate increase, according to the report issued Tuesday (Jan. 28) by the U.S. Bureau of Labor Statistics.

Arkansas’ labor force was an estimated 1.327 million in December, up slightly compared to November, but down compared to 1.347 million in December 20102. The year-over-year comparison shows almost 20,000 fewer in the Arkansas labor force.

The number of employed in Arkansas during December was 1.229 million, above November employment of 1.226 million, but down compared to the 1.252 million in December 2012. The number of employed in Arkansas has dropped by 22,684 between December 2012 and December 2013.

The number of unemployed was an estimated 98,510 during December, down from the 99,080 in November, but up 2.77% compared to the 95,732 in December 2012.

Arkansas’ annual average jobless rate fell from 7.9% during 2011 to 7.3% during 2012. Also, December marked the 59th consecutive month that Arkansas’ jobless rate has been at or above 7%.

ARKANSAS SECTOR NUMBERS
In the Trade, Transportation and Utilities sector — Arkansas’ largest job sector — employment during December was an estimated 253,100, up from 252,400 in November and ahead of the 248,400 during December 2012.

Manufacturing jobs in Arkansas during December totaled 154,700, unchanged compared to November and below the 155,000 in December 2012. Employment in the manufacturing sector fell in 2012 to levels not seen since early 1968. Peak employment in the sector was 247,300 in February 1995.

Government job employment during December was 215,100, down from 215,200 in November and below the 216,200 during December 2012.

The state’s Education and Health Services sector during December had 176,500 jobs, down from the 176,600 during November and up from 173,000 during December 2012. Employment in the sector is up more than 25% compared to December 2003.

Arkansas’ tourism sector (leisure & hospitality) employed 103,400 during December, down from a revised 103,700 during November, and above the 102,900 during December 2012. At a revised 103,700, the November employment tied a record for the sector that was first reached in January 2013.

NATIONAL DATA
The BLS report also noted that 42 states had unemployment rate decreases from a year earlier, six states had increases, and two states had no change. The national jobless rate during December was at 6.7%, and was down from the 7.9% in December 2012.

Island had the highest unemployment rate among the states in December at 9.1%. The next highest rate was in Nevada at 8.8% and Illinois at 8.6%. North Dakota again had the lowest jobless rate at 2.6%.

The December jobless rate in Oklahoma was 5.4%, unchanged compared to November and up from 5.1% in December 2012.

Missouri’s jobless rate during December was 5.9%, down from 6.1% in November and down compared to 6.6% in December 2012.

On Monday, federal lawmakers announced that an agreement on a U.S. farm bill had been made. The move includes a variety of changes that Senate and House members have opposed, and an upcoming vote on the measure could make for headlines in Arkansas' U.S. Senate race.

U.S. Rep. Tom Cotton, R-Dardanelle, is campaigning to unseat U.S. Sen. Mark Pryor, D-Ark., and previously voted against the farm bill. Pryor has supported the legislation.

The farm bill that will emerge from a conference committee would, according to the U.S. Senate Committee on Agriculture, Nutrition and Forestry, reform numerous agri programs and eliminate almost 100 programs that are considered duplicative.

Other aspects of the bill, according to the Senate committee, include:
• Repeals the direct payment program and strengthens risk management tools;
• Strengthens conservation efforts to protect land, water and wildlife for future generations;
• Maintains food assistance for families while addressing fraud and misuse in SNAP;
• Reduces the deficit by billions of dollars in mandatory spending;
• Strengthens and modernizes crop insurance programs;
• Provides a livestock disaster assistance program;
• Consolidates 23 conservation programs into 13 programs; and
• Seeks to boost export opportunities for U.S. farmers.

A primary point of dispute with the Farm Bill has been over the Supplemental Nutrition Assistance Program (SNAP), which is commonly referred to as the food stamp program. Senate leaders and the White House have objected to the deeper cuts in SNAP funding. House members, particularly more conservative members of the Republican caucus, have said the SNAP cuts did not go far enough, even calling for separate consideration of the program outside of the scope of farm bill. Cotton was one of the House members to call for SNAP to be considered separate from a farm bill.

“The bipartisan farm bill conference agreement maintains critical assistance for families while stopping fraud and misuse to achieve savings in the Supplemental Nutrition Assistance Program (SNAP),” noted a statement from the U.S. Senate Committee on Agriculture, Nutrition and Forestry. “The farm bill agreement closes a loophole being used by some states to artificially inflate benefits for a small number of recipients. Additionally, the bipartisan agreement stops lottery winners from continuing to receive assistance, increases program efficiency, cracks down on trafficking, fraud and misuse, and invests in new pilot programs to help people secure employment through job training and other services.”

In 2013, Pryor voted for the Senate's version of the bill. Cotton voted against the measure initially in the House, but voted for a second version that was steered to the conference committee. Cotton was the only member of Arkansas’ six member Congressional delegation to vote against the initial bill. Republicans U.S. Sen. John Boozman and Reps. Rick Crawford, Tim Griffin and Steve Womack voted for the bill.

“I had hoped this bill would be good for Arkansas farmers and taxpayers, but it turned out badly for both. President Obama’s failed policies have turned what should be a Farm Bill into the Food Stamp Bill, expanding by $300 billion a food-stamp program riddled with fraud and abuse,” Cotton said in his statement after voting against the bill.

The House is expected to vote on the conference farm bill as early as Wednesday (Jan. 29) with the Senate expected to follow.

Pryor said he will vote for the bill that emerged from the conference committee.

“I’m pleased to see that the conference committee has reached a bipartisan agreement. I hope my colleagues in the House will turn off the politics and help us get this bill over the finish line. Our agriculture sector — which contributes $17 billion to Arkansas’s economy alone — needs certainty to stay strong and thrive,” Pryor said in a statement.

Caroline Rabbitt, communications director for Cotton’s office, said the Congressman does not have a statement about the bill because he “is still reviewing the legislation.”

In the past two months, Cotton’s Congressional office has sent mailers to 4th District constituents outlining his reasons why he believes a farm bill should not include funding for SNAP.

The Arkansas Farm Bureau said it will not issue a comment until after the vote.

The Van Buren Chamber of Commerce of today looks drastically different than the chamber of 2007. When Jackie Krutsch came to the organization more than six years ago, she brought with her a vision that she hoped would transform the direction of the chamber and expand its presence in the community.

During a time when many chambers took hard hits from the national recession, Krutsch has managed to help the organization prosper. Her commitment to see Van Buren live up to its fullest potential has had a positive impact on not just the city, but the region, as a whole.

Krutsch assumed the role of executive director in 2007, after spending eight years at Leadership Fort Smith. She approached the job with a philosophy of "if you do business in a community, you should be a member of that community and support business organizations that support you."

BUILDING RELATIONSHIPS
Krutsch moved full-steam ahead with a goal to strengthen long-standing and forge new relationships with area businesses, leaders, citizens, schools, and organizations. She immediately began collaborating with local leaders to help map out plans for the region's economic future.

"One of the areas that we were lacking very sorely was in the realm of economic development and the 'go to' person or office," said Van Buren Mayor Bob Freeman. “When Jackie became the director of the Chamber, I had someone that stepped up to help in the area of economic development.  We have had a great relationship and have also developed a great working relationship with the Fort Smith Regional Chamber and other regional partners. We both will tell you we are not where we need to be but we have come a very long way."

Krutsch has played an important role in several major projects, including the chamber's involvement with the Western Arkansas Regional Intermodal Transportation Authority. Otherwise known as RITA, the authority formed in 2009 with the "broad goal to maximize the use of all forms of transportation — rail, barge, air, interstate — so as to reduce shipping costs and increase service options for regional business and industries."

"We have supported RITA since its conception," said Krutsch. "We work in cooperation with the city and county to assist in RITA's efforts and progress."

In addition to her contributions to the RITA project, Krutsch also serves on the board of the Western Arkansas Planning and Development District, which "assists western Arkansas communities with the planning for and development of local and regional programs and projects," through a wide-range of services.

EDUCATION FOCUS
Krutsch knows that any successful long-term growth plan also includes preparations for upcoming generations. For this reason, she has worked with the Van Buren School District to help connect community leaders with today's students.

"Under Jackie’s leadership, the chamber has become involved with public schools in a very proactive fashion," said VBSD Superintendent Dr. Merle Dickerson. "The Chamber sponsors a Friday Lunch with groups of senior level students to connect them with community leaders. The lunches are a popular event with the seniors. They get to have lunch with a successful local business person and interact with him or her as they talk about what it takes to be successful after high school and college. The Chamber also sponsors a banquet at the end of the year for students who have demonstrated responsibility in a number of ways."

Krutsch is pleased by the chamber's renewed focus on education.

"We have a very strong education committee who helps with our Arkansas Scholars Program and the senior business lunches," said Krutsch. "These unique experiences give students the opportunity to interact with today's leaders. They can share about what employers are looking for,  how  to prepare for the workforce, and even discuss what is proper attire for an interview.”

In an effort to further strengthen chamber relations with the community, Krutsch also opted to bring the existing Leadership Crawford County program under her organization's umbrella in 2011. The group, which was previously ran by a group of committed volunteers, educates and challenges potential leaders to the needs and opportunities in Crawford County, with the goal of increasing their involvement in the community.

"It was a win-win for all," said Krutsch. "Not only did it provide a permanent and secure home for Leadership Crawford County, but it also gave us the opportunity to educate members on the goals of the Chamber and expand our friend-base."

MEMBERSHIP GROWTH
Despite the Chamber's steady progress in the areas of economic development and collaborative partnerships, growing the membership base proved to be a very difficult task.

"We had less than 300 when I started and hovered around the 350 mark for several years," noted Krutsch.

She and her board decided it was a time for a change and began planning a large-scale recruitment. In November 2013, the Chamber hosted a major membership drive, which involved more than 180 volunteers. Participants divided up into teams and combed the community rounding up new members. The project took nearly a year to prepare, but the work was well worth it. The result was a 90% increase in membership, with 290 members signing on during the event.
"We are in a great position now," said Krutsch. "The drive helped us build up human capital, which is key in remaining a proactive chamber."

FUTURE PLANNING
Though modest about her accomplishments, Krutsch is very proud of the goals the Chamber has been able to achieve in recent years.

"I am most pleased with how the chamber has been able to influence the culture of business leadership in Van Buren," said Krutsch. "In helping them to realize they can be proactive and not reactionary."

Mayor Freeman agrees.

"She and the Board have redefined the direction and the focus of the chamber in a very effective and positive way," noted Freeman.

As part of the its plan to see the organization and city grow, the Van Buren Chamber of Commerce has partnered with The Center for Economic Development from the University of Arkansas, Little Rock Institute for Economic Advancement (IEA) to conduct a comprehensive community assessment. The study will provide the chamber with demographic information, including projected population, income and household values, sales tax capture and leakage data, and other key economic and social information, to help provide the city an accurate snapshot of itself.

"This will direct us in doing some real strategic planning," said Krutsch. "It will assist in determining priorities for the next five plus years."

KRUTSCH FEEDBACK
Despite the obvious impact that Krutsch has had on the community, those close to her will quickly note that she remains humble about her role in all of the progress.

"She is the first to  send the success of anything we do to someone other than herself," remarked Janie Simmons, executive assistant at the Van Buren Chamber of Commerce. "She will tell you that any Chamber success is due to the volunteers and staff we have, but I will tell you that without her committed leadership it would not be the strong and vibrant organization that it is today."

Community leaders echo Simmons' thoughts.

"Jackie does not let the grass grow under her feet. She is always planning for the future and at the same time executing the plan for today," said Mayor Freeman. "Although she is not from nor lives in Van Buren, her passion for the community is obvious and very contagious. She is very good at developing and strengthening relationships with our corporate citizens, as well as small business owners and non-profit organizations.  Jackie also has the ability to reach out to people and get them involved in activities with passion and enthusiasm.”

Dickerson said he appreciates her focus on building relationships.

“She sees the 'big picture' and she establishes relationships with people in Crawford County, the River Valley, the State Chamber, and local and state government. She knows that it will take all of us to move our community and state forward,” Dickerson said.

Krutsch's dream for the Van Buren Chamber of Commerce is now a reality, with the organization experiencing record growth, and reaping the benefits of new partnerships with surrounding cities and associations. While many of Krutsch's goals for the chamber have come to fruition, she knows her work is far from over.

Northwest Arkansas’ nonfarm job growth percentage ranked No. 11 in the nation last year out of 372 metro areas, according to figures posted Tuesday (Jan. 28) by the U.S. Bureau of Labor Statistics. The Jonesboro region wasn’t far behind with a rank of 14.

The Northwest Arkansas area is up compared to a rank of 33 in 2012, and Jonesboro improved from a rank of 152 in 2012.

Fort Smith ranked 34 in 2013 with a 2.91% gain in nonfarm jobs between December 2012 and December 2013; Hot Springs ranked 342 with a decline of 0.53%; Jonesboro ranked 14 with a 3.82% gain; Little Rock-North Little Rock ranked 191 with a 1.01% gain; and Pine Bluff ranked 343 with a 0.55% decline.

Following is how each metro area ranked in 2012 and 2013 in terms of percentage growth in non-farm jobs.
Fort Smith
2013: 34
2012: 327

Hot Springs
2013: 236
2012: 342

Jonesboro
2013: 14
2012: 152

Little Rock-North Little Rock
2013: 191
2012: 243

Northwest Arkansas
2013: 11
2012: 33

Pine Bluff
2013: 343
2012: 371

The top five metro areas in terms of percentage job growth between December 2012 and December 2013 were:
1. Naples-Marco Island, Fla. (7.72%)
2. Sebastian-Vero Beach, Fla. (6.54%)
3. Columbus, Ind. (6%)
4. Midland, Texas (5.73%)
5. Flagstaff, Ariz. (5.62%)

NORTHWEST ARKANSAS ANGLE
The Northwest Arkansas Council uses a 12-month moving average model– crafted by the W.P. Carey School of Business at Arizona State University – with the BLS jobs numbers that boosts Northwest Arkansas’ ranking to the 4th spot. The statement from the Northwest Arkansas Council said the Fayetteville-Springdale-Rogers MSA equaled its best job growth ranking in the past 25 years based on the moving average data. It also ranked fourth nationally in 2001.

“Northwest Arkansas is one of the nation’s premiere job growth regions, and the statistics verify it,” Mike Malone, president and CEO of the Northwest Arkansas Council, said in a council statement issued Tuesday. “What’s exciting about this news is that it comes at a time when we know more jobs are on the way. We know Redman and Associates, South Coast Baking and American Tubing will add larger numbers of jobs this year on the heels of the more than 1,500 jobs added by Serco in 2013. We also know there are many Northwest Arkansas companies that will be adding jobs in 2014.”

Kathy Deck, the director of the Center for Business and Economic Research in the Sam M. Walton College of Business at the University of Arkansas, said the employment growth in Northwest Arkansas is broad-based.

“All of our employment sectors are showing year-over-year growth,” Deck said in the statement from the Northwest Arkansas Council. “That kind of positive environment means that new and existing companies have enormous opportunities to thrive because of a strong regional customer base and increasing incomes.”

NON-FARM FIGURES
Following are the Arkansas metro non-farm jobs data issued Tuesday (Jan. 28) by the BLS. The numbers are preliminary and do not include topline information on labor force, total employment, the number of unemployed and the unemployment rate. The complete metro data for December will be released Feb. 5.

Fort Smith
December 2013: 120,300
December 2012: 116,900

Hot Springs
December 2013: 37,400
December 2012: 37,600

Jonesboro
December 2013: 54,400
December 2012: 52,400

Little Rock-North Little Rock
December 2013: 349,000
December 2012: 345,500

Northwest Arkansas
December 2013: 224,400
December 2012: 215,500

Pine Bluff
December 2013: 36,200
December 2012: 36,400

Also on Tuesday, the BLS reported state jobless data. Arkansas’ December rate was 7.4%, up from 7.1% in December 2012. Arkansas was one of just six states to post a year-over-year jobless rate increase. December marked the 59th consecutive month that Arkansas’ jobless rate has been at or above 7%. Link here for more on the December jobs report.

The Fort Smith Convention Center saw a drop in the number of events it hosted in 2013, but that did not stop the event center from having one of its best revenue years since opening.

According to figures presented to the Fort Smith Board of Directors on Tuesday (Jan. 28), the number of events hosted in 2013 was 237, while 2012 marked 256 events. The difference from 2012 to 2013 resulted in a 7% drop.

Even though the number of events declined, figures presented Executive Director Claude Legris of the Fort Smith Advertising and Promotion Commission showed $651,157 in revenues for the year 2013, up 4.3% from 2012's total of $624,428. Much of the difference, Legris said, can be tied to the convention center beverage service, which includes alcohol sales.

Highlighting the revenue directly tied to concession and catering, Legris said the convention center had $69,408 in sales during 2013, a 70% jump from 2012 when concession and catering only brought in $40,930.

"A lot of this is in our alcohol sales. It took us a while to come up with the right procedures, the right equipment. We did have to make purchase of cash registers, a portable safe ... things of that nature. So we also had to get our procedures down. But you can see that we're picking up steam here," Legris said, highlighting the nearly 100% jump in revenues from the fourth quarter 2012 to fourth quarter 2013, when sales went from $9,685 to $18,258.

The 2013 numbers for the convention center mark its fourth best year since the convention center has been in operation, losing to 2010's figures by just more than $30,000 in revenue, Legris noted:
• 2010: $681,007
• 2008: $672,136
• 2007: $657,863
• 2013: $651,162.

During questioning from the Board, City Director Keith Lau inquired as to whether the closing of the Phoenix Expo Center (a result of Health Management Associates locating its new service center at the site of the expo center) impacted the convention center. He specially pointed to fourth quarter revenues, which showed a 46.37% increase from $139,032 in 2012 to $203,504 in 2013.

"Partly, yes," said Tim Seeberg, manager of the Fort Smith Convention Center. "We probably picked up a lot of that fourth quarter business in the last six months of the year. While my staff was worried we wouldn't meet our numbers, I was pretty confident because the phone lines were ringing. ... And a lot of that was due to the expo going away. (It) certainly helped."

Even with the convention center posting one of its strongest years, the revenues will not be enough to make the facility a standalone outfit running at a profit.

The approved budget for the convention center last year was $1.535 million, though the approved budget for 2014 is only $1.507 million. While a sign that the convention center expects to continue posting strong numbers in the year to come, the city will still subsidize the operation at the tune of $855,553.

Questioned about the convention center's profitability, Legris said directly that the city would have to continue fronting the cost of the convention center.

"The convention center does not post a profit by itself. It is a cost to this city, so it is subsidized by the city each year."

But he pointed to the total amount of sales tax collected (hospitality taxes on hotel rooms, meals, etc.) as a result of events held at the convention center — $1.327 million — and the total economic impact of events held at the convention center — a $34.19 million impact — as proof that the investment from the city is a worthwhile expense.

"From what we can see, there's going to be operating deficit for last year. But there's the return — $34 million."

It’s a long way from Burlington, Vt., to Springdale, but the communities do have something in common, according to Ben & Jerry’s chairman Jeff Furman. Both areas are rich with businesses that invest in building community spirit.

“I want to know how I get a Jones Center in my community,” Furman said as he took the stage Tuesday (Jan. 28) as part of the Serve2perform.com speaker series, hosted at the Jones Center by the local start-up Grandslam Performance Associates (GPA).

Furman was one of the three founders of Ben & Jerry’s and quite comfortable to the represent the “&” in the company brand name. He served as legal counsel for his friends Ben Cohen and Jerry Greenfield who took a $5 correspondence course on ice cream making from Penn State University in 1978, tweaked a business plan from a pizza operation, pulled together $8,000 in savings and a $4,000 bank loan to open the first Ben & Jerry’s ice cream shop.

He said by the mid 1980s the company was struggling as none of the three had any real business expertise but they decided it was time for a change and they decided to run the business differently – in a socially responsible way. 

In a interesting move the company raised needed capital by selling shares to citizens of Vermont, because they wanted to bring the community inside where together they could lobby for change as well as operate in a sustainable fashion.

“Businesses have a responsibility to give back to the world. What we do matters, it does make a difference. If you believe in it, speak up about it, or what’s the use in believing,” Furman said.

MAKING MONEY
Ben & Jerry’s CEO Jostein Solheim said people always want to know if being socially responsible really makes money. Solheim joined Ben & Jerry’s in 2010 and shared his insights on the unique business plan during the Serve2perform.com event Tuesday.

“Today we are a really big business operating under Unilever and an unusual board arrangement allows us to continue much the way we always have, with our focus on social change,” Solheim said.

He said while some may see a value-based businesses as a houseboat, not really a good business, nor a good boat, that is not the philosophy at Ben & Jerry’s.

“We’re a sail boat. We can sail around the world without refueling as we are 100% sustainable in our operations. Ben & Jerry’s is one of the best performing ice cream companies in the world — top line and bottom line,” Solheim said.

He said Ben & Jerry’s exists to bring the power of business to the social and environmental justice struggle. Without that focus, the business would have closed long ago. Solheim said one important key to the company’s success has been the passion and shared vision of the founders. 

He said people often ask him why the serious purpose and the wacky, silly names for the ice cream flavors, as the two seem at odds. He answers that fun is a main ingredient in the company's day-to-day recipe for success.

“We make sure the people who make the ice cream, supply the raw materials and distribute the product also share our vision,” he said.

One of the proudest accomplishments Furman has is the company’s stance on worker pay. He said the average pay for an ice cream maker in Vermont is roughly $16 per hour, nearly twice the minimum wage.

“I have always advocated for paying a livable wage because it makes a difference,” Furman said. “We work with suppliers and franchisees that also share our same values.”

Solheim said often when people get upset by a position or stance the company makes on a social issue, the more ice cream they sell.

SERVE2PERFORM
“We were delighted to get Jostein Solheim and Jeff Furman to launch our speaker series. Unilever, which acquired Ben & Jerry’s in 2001, was the sponsoring company that made it happen,” said GPA founder and CEO Adam Arroyos.

He said the speaker series, which will run every other month, is an opportunity for the growing membership at GPA to gain insight from world class business professionals.

GPA is a start-up launched in 2012 by Arroyos that provides a wide range of mentoring and professional development programs for soft skills. Such skills include being able to leverage professional aptitude to the fullest, grow professional networks, acquire new learning experiences and engagement opportunities. GPA has four employees and many affiliate partners such as the Jones Center, which hosted Tuesday’s event.

He said businesses lose between $450 million and $550 million annually from lost productivity, because 70% of workers are disengaged, according to the Gallup Poll Employee Engagement study published in 2013.

The largest employers in Northwest, Wal-Mart, J.B. Hunt and Tyson Foods have all joined various levels of GPA’s service programs. Arroyos said the response has been amazing as business membership continues to expand with companies like Corning, Unilever and Softtek, as well as local organizations like the Boys and Girls Clubs of Benton County and the Northwest Arkansas Council.

Sales tax revenue rose 5.6% across Northwest Arkansas’ four largest cities in January. Bentonville, Rogers, Springdale and Fayetteville cumulatively received more than $4.293 million in sales tax revenue, compared to $4.065 million a year ago.

Individually, Rogers posted the largest increase up 14%, while Bentonville and Springdale posted year-over deficits and Fayetteville’s revenue was flat compared to the year-ago period.

January’s revenue reflects sales tax collected in November, creating a two-month lag in the reporting. Each of these cites collect a 2% sales tax. One percent is devoted to bond repayment and the remaining 1% goes into the cities’ general fund. This report reflects the latter 1%.

January 2014 Revenue
Rogers: $1.245 million, up 14%
Fayetteville: $1.463 million, up 0.8%
Springdale: $808,255, down 4%
Bentonville: $776,256, down 12%

The dip in Bentonville collections came of the heels of a record increase in December. Denise Land, finance director for the city said 2013 was a very good year, with collections 16% over budget projections. 

Duncan Donuts and Taziki’s Cafe recently opened in Bentonville, while Cracker Barrel and Chipotle Grill are under construction with openings expected in the first quarter. Several liquor stores have also opened in recent months helping to keep tax money local as well.

Rogers continues to post record revenue month after month and new construction sites along Interstate 540 near Pinnacle Hills remain active bringing more restaurants to the city. Chuy’s opened this month to big crowds reporting up to 1.5-hour waits most nights. Twin Peaks and the Longhorn Steakhouse are also underway with openings in the coming months. Baby Gap is also coming to Pinnacle Promenade, according to health department permits.

Activity in Washington County has been less robust, but the new Walmart Supercenter in west Springdale is slated to open later this year.

Springdale city officials said they were cautious with the budget last year, collecting some 3% more than budgeted. Mayor Doug Sprouse recently told The City Wire the city would stay close to those same projections in 2014.

Fayetteville reported near flat revenue for the month, but for the entire year tax revenue rose 2.84% to $18.043 million, from a year ago. Fayetteville is a major holiday shopping destination but inclement weather in December likely dented sales tax collections, according to some city officials. Those numbers won’t be out until next month.

With $10.825 million in revenue through November, the city sales tax collections were running within 1% of the budget, according to city records.

Sales tax revenue is closely tied to consumer sentiment, because consumers don’t typically spend as much money when they are concerned about their jobs or the overall economy. U.S. consumer confidence fell in November to a seven-month low as Americans grew more pessimistic about the labor market.

“Consumer confidence declined moderately in November after sharply declining in October. Sentiment regarding current conditions was mixed, with consumers saying the job market had strengthened, while economic conditions had slowed. However, these sentiments did not carry over into the short-term outlook,” Lynn Franco, director of Economic Indicators at The Conference Board, noted in a Nov. 26 report.

When looking ahead six months, Franco said consumers expressed greater concern about future job and earning prospects, but remain neutral about economic conditions. 
All in all, with such uncertainty prevailing, Franco warned that 2013 could be a challenging holiday season for retailers.

SALES TAX REVENUE (12-months)
Fayetteville
2013: $18.043 million
2012: $17.544 million
2.84%

Rogers
2013: $14.286 million
2012: $13.179 million
8.4%

Bentonville
2013: $10.103 million
2012: $9.436 million
7.07%

Springdale
2013: $10.469 million
2012: $10.266 million
1.97%

President Barack Obama delivered his fifth annual State of the Union address to a joint session of Congress Tuesday night (Jan. 28) in Washington, and Arkansas members of the House and Senate are responding to the President's speech.

The speech was wide-ranging, touching on economic inequality, re-shoring of jobs from foreign countries to America, and conflicts and dilemmas around the world.

Obama pushed for passage of a bill sponsored by U.S. Sen. Tom Harkin, D-Iowa, that would raise the federal minimum wage to $10.10 per hour, saying it would provide the income needed for a parent working full-time to provide an income for his or her family. Even if Congress does not act, Obama said he would use an executive order to raise wages for federal contracted workers.

"And as a chief executive, I intend to lead by example. Profitable corporations like Costco see higher wages as the smart way to boost productivity and reduce turnover. We should too," he said. "In the coming weeks, I will issue an Executive Order requiring federal contractors to pay their federally-funded employees a fair wage of at least $10.10 an hour – because if you cook our troops’ meals or wash their dishes, you shouldn’t have to live in poverty."

President and CEO Matthew Shay of the National Retail Federation said raising the minimum wage would do nothing but "create minimum opportunities.”

“If you want to create minimum opportunities, then raise the minimum wage. We welcome the president’s focus on the economy and jobs, but a minimum wage hike runs counter to that goal. Raising the minimum wage would place a new burden on employers at a time when national policy should be focused on removing barriers to job creation, not creating new regulations or mandates. It’s simple math – if the cost of hiring goes up, hiring goes down."

He went on to highlight how few individuals working in the United States today are actually classified as minimum wage.

“Fewer than 5 percent of hourly workers are paid the minimum wage. It’s really a starting wage that allows teen-agers or others with little job experience to enter the workforce. A mandated hike in labor costs would negatively impact businesses that employ people in entry-level jobs and ultimately hurt the people it is intended to help. This isn’t economic theory – when the minimum wage went up in 2009, half a million part-time workers lost their jobs. That’s a risk our economy can’t afford to take.”

Obama also said he would direct Treasury Secretary Jack Lew to create a new retirement plan called MyRA, a way for individuals without an employer-sponsored retirement plan to invest in safe, government-backed debt and eventually roll the item over into a traditional IRA.

"Let’s do more to help Americans save for retirement. Today, most workers don’t have a pension. A Social Security check often isn’t enough on its own," Obama said. "And while the stock market has doubled over the last five years, that doesn’t help folks who don’t have 401ks. That’s why, tomorrow, I will direct the Treasury to create a new way for working Americans to start their own retirement savings: MyRA. It’s a new savings bond that encourages folks to build a nest egg. MyRA guarantees a decent return with no risk of losing what you put in."

At the same time, he encouraged Congress to do more to encourage saving for retirement.

"And if this Congress wants to help, work with me to fix an upside-down tax code that gives big tax breaks to help the wealthy save, but does little to nothing for middle-class Americans. Offer every American access to an automatic IRA on the job, so they can save at work just like everyone in this chamber can."

The President also urged Congress to fund transportation and infrastructure needs, using money saved from his non-specific tax plan to finish planned projects.

"Moreover, we can take the money we save with this transition to tax reform to create jobs rebuilding our roads, upgrading our ports, unclogging our commutes – because in today’s global economy, first-class jobs gravitate to first-class infrastructure. We’ll need Congress to protect more than three million jobs by finishing transportation and waterways bills this summer. But I will act on my own to slash bureaucracy and streamline the permitting process for key projects, so we can get more construction workers on the job as fast as possible."

The American Truckers Associations wasted no time responding to Obama's statements on transportation and infrastructure.

“While we appreciate President Obama making reference to the need for infrastructure investment, we remain disappointed in the continued lack of specificity when he discusses funding,” ATA President and CEO Bill Graves said in a press release. “While it is critically important to the nation that Congress and the administration come together on a multiyear highway bill this year, we believe that until the administration puts forward a serious, user-based funding proposal we will risk going over the Highway Trust Fund 'fiscal cliff' in the near term and be woefully underfunded to meet the longer term needs of the nation.”

ATA Chairman Phil Byrd, himself a trucking executive, attended the speech and said the plan lacked detail.

“It was an honor to attend the State of the Union, but the president’s proposal was sorely lacking in details and comes up short of what the nation needs to maintain our economic competitiveness. Trucks use our roads and bridges to move more than 70% of the nation's freight and if do not address our infrastructure deficit the system will soon become a drag on our economic recovery and hinder our future growth.”

Obama's speech also dove into the issue of bringing jobs back to America from countries such as China, which had seen an influx of millions of jobs during the first part of the new century. The trend is changing as fuel and labor costs have risen, leading some companies to return manufacturing and other types of jobs to the United States.

"(F)or the first time in over a decade, business leaders around the world have declared that China is no longer the world’s number one place to invest; America is. That’s why I believe this can be a breakthrough year for America. After five years of grit and determined effort, the United States is better-positioned for the 21st century than any other nation on Earth."

Progress depends upon Congress and the President finding middle ground, Obama said.

"In the coming months, let’s see where else we can make progress together. Let’s make this a year of action. That’s what most Americans want – for all of us in this chamber to focus on their lives, their hopes, their aspirations. And what I believe unites the people of this nation, regardless of race or region or party, young or old, rich or poor, is the simple, profound belief in opportunity for all – the notion that if you work hard and take responsibility, you can get ahead."

Obama reminded Americans that combat troops had left Iraq and about 60,000 had already departed a conflict the administration has been attempting to wind down since Obama became president in 2009.

"After 2014, we will support a unified Afghanistan as it takes responsibility for its own future. If the Afghan government signs a security agreement that we have negotiated, a small force of Americans could remain in Afghanistan with NATO allies to carry out two narrow missions: training and assisting Afghan forces, and counterterrorism operations to pursue any remnants of al Qaeda. For while our relationship with Afghanistan will change, one thing will not: our resolve that terrorists do not launch attacks against our country."

Members of the Arkansas Congressional delegation quickly responded to Obama's speech. Following are the complete texts of each member's response to the State of the Union.

• U.S. Sen. Mark Pryor, D-Ark.:
"Overall, I’m disappointed with the President’s State of the Union address because he was heavy on rhetoric, but light on specifics about how we can move our country forward. I’ve always said that I’ll work with the President when I think he’s right, but oppose him when I think he’s wrong. That’s why I’ve opposed his policies on gun control, the Keystone Pipeline, military action in Syria, regulatory overreach on our farms — to name a few — and why I’ll continue to oppose his agenda when it’s bad for Arkansas and our country. I had hoped he would strike a more bipartisan tone because, if recent history shows anything, red vs. blue is dead end politics. We must work together if we want to get things done and strengthen our economy."

• U.S. Sen. John Boozman, R-Ark.:
"President Obama’s policies have resulted in 5 million Americans losing their health insurance under Obamacare, a stalled economic recovery, high unemployment, and increased income inequality. These are problems he created. We need to ask ourselves, are we better off today?

“The President continues to ignore the results and consequences of the failed policies of his presidency. While he is calling for a ‘year of action,’ his intention is clear – to circumvent Congress. Pursuing executive actions to push through his agenda is a troubling trend. The American people sent their elected officials to Washington to represent their needs and the President should not ignore their voices.

“Our country is made up of a resilient workforce that wants a hand-up, not a hand-out. We need to promote policies that will strengthen our economy, encourage innovation and endorse methods to help our businesses expand and grow in order to put hardworking Americans back to work. Congress is ready to act. Awaiting action on Senate Majority Leader Reid's desk are dozens of job-creating, commonsense bills.

“As Arkansas families are finding themselves cash-strapped because of increasing regulations including the compliance with higher premiums, deductibles and canceled health care coverage under Obamacare, the President continues to pick winners and losers and decides who has to follow the law. Congress is ready to act to institute real reforms and that begins with dismantling the Affordable Care Act and creating a health care system that is accessible, fair, affordable and flexible.

“I’m ready to act on the behalf of all Arkansans, and all Americans, to institute real reforms to ensure a social safety net for those most in need, create opportunities for workers, address our ever-growing debt, and restore our standing in the world. I call on the President to start solving these problems instead of creating new ones.”

• U.S. Rep. Tom Cotton, R-Dardanelle:
"Tonight we heard more of the same empty promises from President Obama. But what we didn't hear was an apology for Obamacare, his unworkable law that's making healthcare more expensive and life harder for Arkansans. Real solutions won't come from more of President Obama's big government policies,  Arkansans deserve a leader who will fight to get government out of the way, cut our deficit, and rein in spending."

• U.S. Rep. Rick Crawford, R-Jonesboro:
“Tonight Arkansans heard from the President about his priorities for our nation.  Unfortunately, he continues to avoid addressing the biggest problem holding back economic growth – the ever-growing debt crisis.  It is sad that President Obama continues to insist that it makes sense to rush ahead with trillions of dollars in new entitlement spending while Social Security and Medicare remain in fiscal distress and the national debt is hurtling toward unsustainable levels increasing economic uncertainty. “

• U.S. Rep. Tim Griffin, R-Little Rock:
“The President promises to make this year one of action, but getting things done will require more than just words. In his State of the Union address, he again invited critics of Obamacare to suggest ways we can improve our health care system, but 50 days later, I’m still waiting for his response to my letter detailing nine key proposals. On this issue and others, it’s time for President Obama to step up and work with Congress to make things happen. My colleagues and I in the House are also willing to work with him to grow the economy and spur job creation, by approving critical infrastructure projects like the Keystone pipeline and passing tax reform that makes our code fairer, flatter and simpler.  With so many Americans hurt by Obamacare or struggling to find work, I hope President Obama means what he says and will turn his words into real action.”

• U.S. Rep. Steve Womack, R-Rogers:
“Tonight, President Obama called for a year of action and asked whether we in Congress are going to ‘help or hinder’ America’s progress. Unfortunately, I’m afraid our nation can’t take much more of the top-down, government-expanding ‘action’ and “progress” for which he’s calling. I know for certain that Arkansas’s Third District can’t; I hear it from you, my constituents, day after day.

“You have told me you need policies that allow you to hold the keys to your success instead of promoting the status quo, that grow the economy and not the federal government, that enable you to create jobs rather than make doing so a disincentive, and that empower you to achieve your goals and the American dream without holding them back with red tape. That’s what we’ve been working on in the House, and that’s the America to which I’m committed. I will continue to work with my colleagues – and hopefully President Obama – to find solutions to these problems – the problems you face – and to create more opportunity and a stronger America.”

Democrats and U.S. Sen. Mark Pryor, D-Ark., will do all they can to make political hay with U.S. Rep. Tom Cotton’s vote Wednesday (Jan. 29) against the federal farm bill. And while Cotton, a Republican from Dardanelle, was the only member of Arkansas’ U.S. House delegation to post a ‘No’ vote, and while the bill was supported by the politically powerful Arkansas Farm Bureau, the political lines of the farm legislation are not as clear or as straight as the rows of a freshly planted soybean field.

Cotton and Pryor are locked in what has already become a testy and nationally-watched race for the U.S. Senate seat. Polls suggest that Pryor is vulnerable in his bid to seek a third term in the Senate.

The House approved the bill 251-166 on Wednesday. The bill is now expected to soon move for a Senate vote. U.S. Reps. Rick Crawford of Jonesboro, Tim Griffin of Little Rock and Steve Womack of Rogers – all Republicans – voted for the bill. Like he did with the initial House farm bill, Cotton voted against the latest version of the bill.

What was approved by the House was a compromise – conference report – between a farm bill package approved by the Senate and a different farm bill approved by the House.

A primary point of dispute with the farm bill has been over the Supplemental Nutrition Assistance Program (SNAP), which is commonly referred to as the food stamp program. Senate leaders and the White House have objected to the deeper cuts in SNAP funding. House members, particularly more conservative members of the Republican caucus, have said the SNAP cuts did not go far enough, even calling for separate consideration of the program outside of the scope of farm bill. Cotton was one of the House members to call for SNAP to be considered separate from a farm bill.

The farm bill that emerged from a conference committee is designed to, according to the U.S. Senate Committee on Agriculture, Nutrition and Forestry, reform numerous agri programs and eliminate almost 100 programs that are considered duplicative.
Other aspects of the bill, according to the Senate committee, include:
• Repeals the direct payment program and strengthens risk management tools;
• Strengthens conservation efforts to protect land, water and wildlife for future generations;
• Maintains food assistance for families while addressing fraud and misuse in SNAP;
• Reduces the deficit by billions of dollars in mandatory spending;
• Strengthens and modernizes crop insurance programs;
• Provides a livestock disaster assistance program;
• Consolidates 23 conservation programs into 13 programs; and
• Seeks to boost export opportunities for U.S. farmers.

PRYOR RESPONSE
Pryor was quick to praise the House for approving the bill and quick to chastise Cotton for again being Arkansas’ only vote against the bill.

"This farm bill means good jobs and economic security for families across Arkansas, and I’ve stood beside my Republican colleagues John Boozman, Rick Crawford, Steve Womack and Tim Griffin to get this bipartisan bill done for the people of our state,” Pryor said in a statement. "In voting against the farm bill, Congressman Cotton once again sided with his special interest allies, the same Washington groups spending millions on his campaign that urged him to oppose the farm bill. It’s reckless and irresponsible for Congressman Cotton to put his own ambitions ahead of what's best for Arkansans, and the people of our state deserve better.”

Pryor noted several provisions of the bill that, if approved by the Senate, will protect Arkansas farmers. The provisions include prohibitions against the Environmental Protection Agency requiring landowners to acquire an additional permit to manage runoff from forest roads; makes the Livestock Disaster Assistance Program permanent to help Arkansas ranchers hit by severe weather or other natural disasters; and better promotes Arkansas farm products to foreign markets.

FARM BUREAU PUSH
The Arkansas Farm Bureau, which advertises that it represents more than 195,000 Arkansas farm families, supported the bill and lobbied for its passage. However, Bureau President Randy Veach, a row crop farmer from Mississippi County, said in a bureau statement that the bill wasn’t perfect.

“This is far from a perfect bill, but we do welcome the certainty it brings to farmers and ranchers,” Veach said in a statement issued after the vote. “Having a five-year program, as opposed to year-by-year or ad-hoc programs, was imperative, particularly as we go about making planting and livestock decisions for the coming year.”

He also said the farm bill preserved “the historic connection” between agri and federal nutrition programs.

“We believe that is a natural, and obvious, connection, where the production of food and the feeding of those in need are appropriately connected,” Veach said.

COTTON’S FARM VIEW
Cotton stuck to his belief that the bill is a budget buster and is not a good bill for Arkansas’ agri industry. He issued the following lengthy statement to explain his vote.

“Growing up on a farm in Yell County, I learned a simple lesson: you can’t spend more than you take in. That’s why I’ve worked hard to protect Arkansas taxpayers and that’s why I can’t support the food-stamp bill. This bill spends too much and leaves Arkansas farmers with too little. Arkansas farmers will receive barely 0.5% of its bloated $956 billion price tag — half of what they received in the 2008 bill. Also, it imposes unfair regulations on livestock producers, opening all Arkansas farmers to retaliatory tariffs. That’s one reason most livestock groups oppose the bill, as do countless Arkansas farmers I’ve heard from. And even a small dip in crop prices from the bill's historically high target prices could leave taxpayers on the hook for tens of billions of dollars.

“This bill can only be called a food-stamp bill when nearly 80% of its funding doesn’t support farmers. Food-stamp spending has grown by 86% under President Obama and enrollment is at a record high, while 70% of adults who receive food stamps have been on the program for more than 5 years. Yet this bill fails to make real reforms — lacking even common-sense work requirements that would provide job training to able-bodied adults receiving food stamps.

“Arkansas taxpayers cannot continue to foot the bill for President Obama’s failed policies and Arkansas farmers shouldn’t be held hostage to President Obama’s runaway food-stamp program. I will continue to fight for policies that support Arkansas farmers and protect Arkansas taxpayers.”

POLITICAL COVER?
Cotton could have some political cover from prominent national trade associations who opposed the bill. Those groups include the American Meat Institute, the National Cattleman's Beef Association, the National Chicken Council, the National Pork Producers Council, the National Turkey Federation and the North American Meat Association. Springdale-based Tyson Foods is a member of the National Chicken Council.

The core objection is several rules in the bill that the aforementioned beef and poultry groups say will harm their portion of the national agri industry. The new rules from the Grain Inspection, Packers & Stockyards Administration (GIPSA), which is a branch of the U.S. Department of Agriculture, would create “a trial lawyers bonanza,” according to the National Cattlemen’s Beef Association (NCBA).

“Under the new definitions in the proposed rule, “competitive injury” and “likelihood of competitive injury” are re-defined and made so broad that mere accusations, without economic proof, will suffice for USDA or an individual to bring a lawsuit against a buyer (packer or processor),” the group noted on its website.

The NCBA also alleges that new GIPSA rules placed in the new farm bill remove economic incentives to produce higher quality beef products. The group also says the new farm bill will reduce the U.S. GDP by $14 billion, put 104,000 Americans out of work, increase retail prices by 3.33%, and reduce consumer demand by 1.68%.

“This Administration has already taken over the financial industry and the auto industry. They’ve passed a government-run health care plan and have taken over the student loan industry. Now the government is trying to dictate the way livestock producers market their animals,” notes the NCBA.

The groups also opposed Country-of-Origin labeling (COOL) rules they say will open the meat markets up to costly trade tiffs with Canada and Mexico.

"North American Meat Association is extremely concerned that Congress has refused to resolve these critical issues. Without these provisions, we are forced to aggressively oppose the Farm Bill," NAMA CEO Barry Carpenter said in a Jan. 28 statement. "This failure to address COOL also makes it imperative that the U.S. government push the WTO to expedite its process in order to provide the certainty necessary for the industry to move forward." 

WOMACK’S CONCERNS
Although he supported the bill, Womack, a Republican from Rogers, criticized GIPSA in his statement (see video below) prior to the vote.

Womack noted in his Floor speech: “Because of the senate’s my-way-or-the-highway attitude, we are considering a conference report that does nothing to address an out-of-control agency, GIPSA, from imposing on companies regulations that go well beyond Congressional intent. Because of the Senate’s all-or-nothing approach, we are considering a conference report that will subject american industry and companies to retaliatory tariffs.

“For me, it would be easy to vote against this conference report. But unlike my Senate counterparts, I recognize that – in divided government – each side has to find common ground. Ultimately, this report – like many of the other bipartisan agreements that have been signed into law – moves the ball forward by making much-needed reforms to federal programs and reducing spending.
 
“That’s why, in the end, I will support it.”

Analysts and retail experts anticipate strong, charismatic leadership from Doug McMillon when he takes the reins from Wal-Mart Stores Inc. CEO Mike Duke on Saturday, Feb.1.

Not to take anything away from the success of Duke’s tenure, but McMillon is faced with the task of moving the retail juggernaut through what some believe is one of the most transformational periods in retail history.

Just 47-years old, McMillon is among the 71% of incoming CEOs to be promoted from within, according to a study by Booz & Company. The study also found that one in four CEOs promoted since 2012 worked exclusively for that company.

Michael Exstein, and analyst with Credit Suisse, gave McMillon a favorable nod on Wednesday (Jan. 29) when he upgraded Wal-Mart shares to “outperform” from a “neutral” position. (Credit Suisse conducts investment banking business with Wal-Mart and is compensated accordingly.) He said over the past several years, Wal-Mart has responded to its changed place in the competitive environment, rather than its historic place of setting the retail agenda for much of the industry to follow. 

Exstein and other retail experts outlined key areas where they think McMillon might focus his energy to produce the greatest results for shareholders, public perception and the retailer’s 2.2 million employees.

“The ‘fill-in’ trip, exposure to gasoline, and one-on-one customer marketing are among the recent issues that Wal-Mart has lacked a head start in,” Exstein said. “We expect McMillon to delineate plans for a small store format and the acceleration of its roll out,  to rationalize the international operations and to recommit to general merchandise, where business is increasingly up for grabs as some big box retailers continue to close stores.”

Analysts see McMillon as a “cool character” and one who pays attention to details.

“I do not think Doug see’s himself as a caretaker,” said Faye Landes, retail analyst with Cowen & Co.

She said companies chose CEOs “on their ability to move the needle forward and effectively handle anything that might come out of the blue. Doug is a very appealing leader.” (Landes in an independent analyst, with no holdings or compensation received from Wal-Mart Stores.)

MOVING THE NEEDLE
“While comparable store sales have been challenged, there are a lot of close-in opportunities that can move the needle,” said Jason Long, CEO of Shift Marketing Group.

He said as Wal-Mart finally seems to be making a serious commitment to their small store format, he wonders if Walmart stores may be as common as Starbucks in the not too distant future. Long said as other big-box retailers are shuttering stores, there is an opportunity for Wal-Mart to benefit.

Carol Spieckerman, CEO of New Market Builders, agreed. She said Target, once viewed as a major competitor to Wal-Mart, is faltering and this could be the time for Wal-Mart to reach out to Target customers.

“There is a short window of opportunity for Wal-Mart here, but they would have to move quickly,” Spieckerman said.

Exstein said Wal-Mart has been distracted by the immediate need to address several company-specific issues related to the merchandising, technological, and operational aspects of its business. As Mike Duke successfully tackled these issues during his tenure, McMillon is now in a position to make more strategic changes.

JUGGLING PERFECTION
The retail CEO of the future is one that must be able multitask like no other, according to Spieckerman. She said as the digital, mobile, physical and social aspects of retail collide, an effective leader for a company as complex as Wal-Mart will expend a lot energy “keeping the pins the air.”

To Wal-Mart’s credit, she said, they have been agile, testing multiple initiatives at once and then rolling them out with little fear of failure – especially after they made the investments in @WalmartLabs.

At the same time, Wal-Mart is often singled out for low wages, something Spieckerman said is somewhat unfair as hourly retail worker jobs industrywide have lagged other sectors. 

“Wal-Mart is very good at redefining the argument, and I expect this will continue,” she added.

Cameron Smith, CEO of Cameron Smith & Associates, said it’s not that employee sentiment is at a concerning low, but it could be better.

“That being said, this is Doug’s forte,” Smith added.

Another area in which McMillon is deemed proficient is having the knack of empowering the leaders beneath him. Spieckerman said this will be a huge advantage if McMillon can mobilize effective leadership below on many different simultaneous tasks and have them report up to him.

“The company has become quite diverse in recent years, a radical change from the traditional buyers and merchants, adding software developers, marketers, IT engineers and content creators. Getting this diverse group on the same page will be a big job,” she  said.

E-COMMERCE GAINS
The experts in this report agree that Wal-Mart’s commitment to e-commerce has the most potential to grow company sales long term. Exstein said McMillon is poised to benefit by the commitments to information technology and e-commerce under Duke’s tenure.

Smith said with the ease of price shopping today, Wal-Mart’s Everyday Low Price strategy can’t compete alone in the growing omichannel world. He said the headline could read, “Doug’s biggest challenge will be to bring Wal-Mart into a leadership role on omnichannel" as they are estimated by some to be two years behind Amazon.

“Wal-Mart has earned the right to be compared against Amazon, and there is huge opportunity here if Wal-Mart continues to leverage its physical scale,” Spieckerman said.

In the November 2013 call with investors, Wal-Mart said investments in e-commerce would impact earnings about 10 cents a share. As Wal-Mart has 3.24 billion shares outstanding, that figure suggests Wal-Mart’s global investment in e-commerce this year is in the range of $324 million.

The retail giant expects to grow e-commerce sales to $10 billion through end of fiscal 2014, which is Jan. 31. Online sales were $7.7 billion during fiscal 2013.

INTERNATIONAL EFFICIENCIES
McMillon, in his international boss role, has focused during the past five years on improving efficiencies within the diverse international operations.

Conversion to Everyday Low Price strategies in Brazil and China has not been without its challenges. Factor in regulation changes in India and the dissolution of its partnership with Bharti and expansion in Canada, and there is no rest for the weary.

Exstein said Wal-Mart has yet to rationalize its lower-return international division, but the opportunity is likely approaching as the Foreign Corrupt Practices Act (FCPA) investigation nears conclusion.

“McMillon is uniquely qualified to initiate this rationalization having previously overseen the international division, and he appears realistic in holding this segment to higher levels of performance standards. Rightsizing the segment would enable Wal-Mart to reallocate incremental capital toward higher-return initiatives domestically, including refocusing on general merchandise and coming up with an integrated gasoline strategy,” Exstein said.

DATA SHARING
In this time of massive data gathering, Spieckerman said Wal-Mart faces key decisions about how they share this new Big Data with suppliers going forward. She said McMillon helped to pioneer vendor-managed systems at Wal-Mart years ahead of other retailers. The Retail Link system gives suppliers up-to-date transparency access which can be used to better manage shipments and sales data.

But the data now collected on shopper preferences, brand awareness and price sensitivity goes several layers deeper.

“How much of the data will Wal-Mart hand over to suppliers? Will they charge for it or will they expect suppliers to share all the data they are collecting as well?,” Spieckerman asked. “Many of the larger consumer packaged goods suppliers are already involved in direct-to-consumer operations, further blurring the lines between supplier and retailer.”

RISKS TO SUCCESS
Exstein listed several risks that pose a threat to his firm’s upgrade of Wal-Mart shares. He said failing to act decisively when addressing issues such as the Foreign Corrupt Practices Act, efficient small store expansion and shoring up productivity in the international arena could keep Wal-Mart from re-establishing its industry leadership.

Exstein said other retailer FCPA issues have typically settled within two years, which is where Wal-Mart finds itself.

Lack of food inflation also threatens Wal-Mart’s net margins, which is why the retailer is prepared to focus on general merchandise. 

Lastly, negative headlines regarding general business practices, labor issues and healthcare costs could create some headwind for Wal-Mart shares. That said Exstein does not think media headwinds – bad publicity – will ultimately inhibit Wal-Mart’s forward progress.

Shares of Wal-Mart Stores (NYSE: WMT) closed Wednesday (Jan. 29) at $74.10, down 57 cents in heavy volume. During the past 52 weeks the share price has ranged from a $81.37 high to a $68.13 low.

Wall Street’s one year target price of Wal-Mart shares is $83.77. Exstein is more optimistic and has raised his Wal-Mart target price from $80 to $87.

A long pause ensued after Democratic gubernatorial candidate and former Arkansas Congressman Mike Ross was asked his thoughts about President Obama’s State of the Union address. Ross rolled a cough drop around in his mouth and stared ahead for a few seconds before replying: “I think that, you know, it needed more substance.”

Once the reply was formed, Ross was on his message.

“What I didn’t hear, and what I think this country really needs right now is for someone to say, ‘It’s time to put partisan politics aside.’ The extremes in both parties have created partisanship and dysfunction in Washington,” Ross said during a Wednesday afternoon interview with The City Wire. “It’s time for people to start talking to one another instead of at one another. And that’s really what my campaign for governor is all about. I’m not running to be governor for the Democrats and I’m not running to be governor for the Republicans. I’m running to be governor for all the people in Arkansas.”

Ross, the presumptive Democratic nominee for Arkansas’ next governor, was in Sebastian County on Wednesday (Jan. 29) for his first significant campaign swing through what is considered a Republican part of the state. It’s also a second home of sorts to Republican Asa Hutchinson, his likely opponent in the November general election to determine who follows the term-limited Gov. Mike Beebe (D).

In the 2006 gubernatorial election, Mike Beebe defeated Hutchinson by capturing almost 56% of the vote. Hutchinson garnered just short of 41% of the statewide vote, but beat Beebe in Sebastian County by a 51-47 margin.

HAMILTON HOUSE HANDPRINT
Ross’ first public campaign stop on Wednesday was at the Hamilton House, a location in Fort Smith where children are brought who may have been abused. At Hamilton House, children can meet safely with legal and law enforcement authorities and may receive medical and therapeutic help.

Jackie Hamilton, executive director of Hamilton House, leads Ross on a tour. She shows him the hundreds of handprints on the wall, with each handprint made by a child who came through the center. She tells Ross that Hamilton House is one of 13 in the state, but is likely the busiest in the state. They had 447 cases the first year, with 749 in year two and 702 cases last year. For each child they see and protect from further abuse, Hamilton said there are around nine children who are living in an abusive environment.

Hamilton also told Ross about laws needed to better protect the children, such as a law to “tighten the confidentiality rules” so that the testimony of children is not used in a way that harms the child or other innocent family members.

“You raised several things that need to be addressed legislatively,” Ross said, adding that if elected he would be committed to working with all groups to “get the rules tightened.”

Ross, along with Sebastian County Sheriff Bill Hollenbeck, placed their handprints on a “Helping Hands” wall within the Hamilton House office. And while Ross’ message is one of political bipartisanship, he did joke that he did not want red paint for his handprint.

‘I QUIT MY JOB’
The next stop was George’s restaurant in Fort Smith. The group of politicos at George’s included Rep. George McGill, D-Fort Smith, and Lee Webb, a member of the Arkansas Economic Development Commission.

Ross visited each table. Hubert Blankenship of Van Buren was quick to express his displeasure with Congress and the federal government.

“If you think you’re fed up with Washington, I quit my job,” Ross responded, referring to his decision to not seek re-election to Arkansas’ 4th Congressional District. “I’m tired of the extremes on both side.”

With the next campaign stop set for Greenwood and time running short, Ross’ sweet tea and what remained of his burger and fries were packaged to go.

Ed Wilkinson, president of Greenwood-based Farmers Bank and a former Arkansas legislator who served with Ross in the Legislature, introduced the gubernatorial candidate to a crowd of around 35 gathered in the bank’s board room. The crowd included Dr. Paul Beran, chancellor of the University of Arkansas at Fort Smith.

Wilkinson informed the crowd that Ross was a fifth generation Methodist with a son preparing for seminary.

“Mike Ross is about as Methodist as you can get,” Wilkinson said, followed by crowd laughter.

Ross said he and his wife, Holly, have careers outside of politics. Holly works as a pharmacist in Prescott.

“We’re normal people. We still work for a living,” Ross said.

On the theme of working, Ross said Arkansas’ workforce training programs should again include a “vo-tech style” of skills training. He said “college, the military or the minimum wage” shouldn’t be the only options facing young Arkansans or those forced to look for new jobs.

PRIVATE OPTION POLITICS
Between the Farmers Bank stop and a visit to the Greenwood city offices, Ross talked briefly with The City Wire about Arkansas’ private option plan and Obamacare – two issues likely to be key debate points during the race.

In the 2013 Arkansas General Assembly, a bipartisan group of state lawmakers, led by Republicans Sen. Michael Lamoureux and Rep. Davy Carter, worked with Gov. Beebe to push through a plan that allows Arkansas health officials to steer Medicaid expansion funds from the Affordable Care Act – aka Obamacare – into private health insurance plans. Arkansas officials obtained permission in early 2013 from federal officials to use Medicaid expansion money promised in the federal health care law to subsidize insurance for low-income Arkansas workers. The money would help currently uninsured citizens who earn up to 138% of the federal poverty level to obtain insurance. By some state estimates, that universe could include as many as 250,000 Arkansans.

The funding for the private option narrowly passed both chambers of the Arkansas General Assembly in 2013 and is expected to come up for renewal funding in February 2014.

The more conservative Republican members of the Arkansas Legislature are seeking to block funding for the plan, a move that could leave the state without a mechanism to process increased federal funding of the Medicaid program in Arkansas.

Hutchinson recently said claims of benefits from the private option plan are the result of “fuzzy math.” During the Wednesday interview, Ross was quick to take exception with the attacks on the private option plan.

“I was offended by that,” Ross said of Hutchinson’s fuzzy math remark. “And I think the majority of the people in Arkansas were offended by that. I trust Gov. Beebe, and when he says that it’s going to save the state $89 million, I believe him. Plus, I’ve looked at the numbers ... And so, who are the people going to believe? Are they going to believe a career politician lobbyist who has been running for statewide office for 28 years? Or are they going to believe a governor who has got the highest job-approval rating of any governor in America who has said he is never running for anything ever again?”

But Ross also acknowledged the private option connection to Obamacare.

“Obamacare has never been popular in Arkansas. I understand that. That’s why as a Congressman I voted against it four times and voted to repeal it 23 times. But look, this is not Obamacare. This is an Arkansas solution written by Republicans and Democrats in Arkansas that’s going to make healthcare available to a quarter million people that are trying to do the right thing and stay off welfare but they are working the jobs with no benefits. And it’s going to save the state of Arkansas $89 million dollars a year. I mean, it’s a no brainer. So anybody that would oppose that (Arkansas’ private option) is opposing it not based on public policy. Their decision has to be based on nothing more than raw politics.”

Ross is scheduled to campaign in Fort Smith and Van Buren on Thursday. Members of his campaign staff said Ross plans to make “frequent trips” to the Fort Smith area during the next nine months.

Casey Wilson, a poultry grower near Huntsville, Ark., said three of his seven houses are heated with propane gas and with two-week old birds and frigid temperatures he is quickly burning through the fuel supply.

“I don’t even want to think about what it’s going to cost when I have to call the fuel man. I won’t have enough to last this flock,” Wilson said, Wednesday evening (Jan. 29).

The average tank holds about 1,000 gallons per poultry house. Wilson said if he has to buy more fuel, it won’t be a full tank at the higher prices.

He’s not alone.

National Chicken Council President Mike Brown said his trade group is working with federal agencies, organizations and stakeholders to help alleviate the spot shortages being experienced with very tight supply reported in 31 states, including Arkansas.

Poultry is big business across the south, and areas from Arkansas to Georgia have been hit with frigid temperatures during the past two months.

“NCC fully understands that adequate residential heating must be the first priority, but, at the same time, it will be important to work to minimize the potential disruption to the food supply, especially animal agriculture. Chicken companies are not placing baby chicks in growout housing unless there is an assured supply of propane. NCC’s animal care/welfare guidelines call for the chicken during growout to be comfortable and free of stress from a harsh environment, such as a growout house being too cold,” Brown said.

Arkansas Attorney General Dustin McDaniel issued a consumer alert Wednesday to inform Arkansans about the cause of the spike in prices and to offer advice to those who are affected.

Spot wholesale propane prices have rallied $3.987 per gallon across the Midwest states this week, according to the U.S. Energy Information Administration. The price jumped 138% during January. The spot residential prices across the Midwest rose to $4.202 per gallon this week. 

The AG’s office said it has received dozens of calls about the price surge.

“I share the concerns about the high cost of propane, and I hope that these prices are only an anomaly because of the extremely cold temperatures and supply shortages. The retail price of propane is based largely on supply and demand, just like any free-market commodity,” McDaniel said. “However, we will continue to monitor propane prices for possible price gouging and look for other ways to assist consumers.”

Last week, Gov. Mike Beebe declared a state of emergency in Arkansas because of the propane shortage. During the state of emergency, the state’s price gouging law is in effect. That law prohibits businesses from increasing prices more than 10% unless the increased price is directly related to costs imposed by a supplier or because of higher labor and materials costs.
 
If propane retailers or distributors reach agreements with competitors on prices, that is price fixing. Federal and state antitrust laws prohibit fixing of prices. Any consumers with direct knowledge of price fixing of any commodity, including propane, should contact the Attorney General’s Consumer Protection Division.

Wilson said local poultry growers are already operating on razor thin margins and there is no room from doubling propane and fuel prices. Poultry houses will likely sit empty before farmers go into more debt, he said.

Net income during 2013 for Fort Smith-based Arkansas Best Corp. was $15.8 million, much better than the $7.7 million loss in 2012 and the most the company has earned in a year since 2008. The per share earnings of 59 cents also blew past the consensus estimate of 47 cents per share.

Full year revenue for the transportation holding company was $2.299 billion, up more than 11% compared to the $2.065 billion in 2012. The largest subsidiary of Arkansas Best is ABF Freight System, one of the largest less-than-truckload carriers in the U.S.

Fourth quarter net income was $10.3 million, a big shift from the $7.9 million loss during the same quarter in 2012. The per share earnings of 38 cents also beat the 31 cents per share that was the consensus estimate among the analysts who follow the company.

However, the company had to deduct $1.435 million from fourth quarter earnings for expenses related to the new collective bargaining agreement with the International Brotherhood of Teamsters. That charge and other smaller accounting changes pushed recording fourth quarter net income to $8.4 million, or 31 cents per share.

"After a very challenging year in which we negotiated and implemented a new five-year labor agreement with the International Brotherhood of Teamsters, I am very pleased to report that ABF Freight ended the year with solid profitability, substantially reversing the unacceptable trend of losses in 2012," Judy McReynolds, Arkansas Best President and CEO, said in the report issued early Thursday (Jan. 30). "While that lengthy process was ongoing, we continued to make important strategic investments in our emerging businesses, all of which reported increased revenues and are well positioned for additional growth in 2014."

The company is also reducing the number of terminals it operates. In the conference call with analysts, McReynolds said ABF reached agreement with the Teamsters to consolidate 21 small terminals into nearby larger facilities.

Combined with the 8 terminal consolidations that occurred in the second half of 2013, this change of operations will result in reducing the total number of ABF Freight facilities to 248,” McReynolds noted in a transcript provided by Seeking Alpha.

Work to consolidate the terminals is set to begin in the first quarter of 2014.

Brad Delco, a transportation industry analyst with Little Rock-based Stephens Inc., has said a complete “rationalizing” of the ABF terminal network could ultimately generate up to $32.5 million in annual savings for Arkansas Best, with each terminal closed saving the company just short of $1 million.

‘MORE STABLE ECONOMY’
Arkansas Best Corp. officials announced Oct. 30 that the ABF National Master Freight Agreement was ratified by the Teamsters’ ABF National Negotiating Committee. The new contract covers about 7,500 employees of ABF Freight System who are members of the union. Most of those workers are drivers.

The company has said the agreement will result in savings of between $55 million and $65 million a year. The savings come from an immediate 7% wage reduction that is recovered by the fifth year of the contract. The wage and benefit reductions were set to begin Nov. 3. The company was also able to negotiate for flexibility in work schedules and work across job classifications. Most of those workers are drivers.

The company said an increase in business resulting from “a more stable economy,” and higher shipping rates boosted fourth quarter earnings. The federal Bureau of Economic Analysis on Thursday reported its “advance” estimate that the U.S. GDP grew 3.2% in the fourth quarter compared to the third quarter. GDP was up 4.1% in the third quarter.

Tonnage shipped during the quarter was up 2.7%, and full year tonnage was up 3.4%. Shipments per day increased 5.6% in the quarter and were up 3.3% for the year. Billed revenue per hundredweight was up 2.3% in the quarter, but up just 0.1% for the year.

McReynolds said in the morning call with analysts that the company was able to renew contracts in the fourth quarter with a 4% increase. However, the company is estimating $4 million in lost business from the January winter storms that hit much of the country.

BUSINESS DIVERSIFICATION
Company officials are also making progress on their goal to diversify their revenue stream by boosting business through their non-asset (businesses other than ABF Freight) divisions. For the year, ABF Freight generated $1.761 billion in operating revenue, or 76.6% of total operating revenue. The percentage is down from 82.5% during 2012. Growing overall revenue while reducing the percentage of revenue from ABF better insulates the company from negative events in the less-than-truckload sector.

“For full year 2013 together, Arkansas Best's emerging non-asset-based businesses demonstrated strong, positive increases in revenue and operating margins and produced positive cash flow,” the company noted in the earnings report. “Because of continued growth throughout the year, these businesses now represent 25% of total consolidated revenue and contributed significantly to Arkansas Best's operating results.”

The value of diversifying revenue is evident when comparing operating income of the segments. For example, ABF Freight generated 76.6% of the revenue during the year, and 52.5% of the operating income. Panther Logistics, the second largest subsidiary of Arkansas Best, generated 10.7% of operating revenue, but cranked out 36.4% of the total operating income among the five subsidiaries.

SEGMENT NUMBERS
• ABF Freight
Operating income
2013 (January-December): $10.033 million
2012 (January-December): -$19.8 million

• Panther (premium logistics freight services)
Operating income
2013 (January-December): $6.956 million
2012 (January-December): $2.402 million (Panther was acquired in June 2012)

• Domestic/Global transportation management
Operating income
2013 (January-December): $2.973 million
2012 (January-December): $3.013 million

• Emergency/preventative maintenance
Operating income
2013 (January-December): $3.274 million
2012 (January-December): $1.935 million

• Household goods moving
Operating income
2013 (January-December): $1.85 million
2012 (January-December): $692,000

Arkansas Best shares (NASDAQ: ABFS) closed Thursday at $33.40, up $1.18. During the past 52 weeks the share price has ranged from a $35.96 high to a $9.62 low.

Wal-Mart’s board of directors has outlined the pay structure for the two highest ranking CEOs recently promoted from within the company ranks. The contract details were spelled out in filings with the Securities and Exchange Commission on Wednesday (Jan. 29).

CEO Doug McMillon will take the retailer’s reins on Feb. 1 earning a base salary of $1.2 million per year, subject to an annual adjustment. McMillon will also continue to be eligible for an annual cash incentive under the company's management incentive plan, based on performance criteria.

For fiscal 2015, McMillon’s target cash incentive payment under the plan will be 320% of his base salary, with a maximum possible payout of 400% of his base salary.

Equity based compensation of 48,710 shares of restricted stock will be awarded annually, vesting in three years. This perk is valued at roughly $3.6 million at the present share price of $74. Also on Jan. 24, McMillon received two additional stock awards in connection with the promotion. The first valued at $4.5 million will vest on Jan. 31, 2015. The second award vesting on Jan. 31, 2016 has an approximately value of $5.2 million around the $74 share price. Each of these stock compensation awards are contingent on performance goals being achieved.

Last year CEO Mike Duke, set to retire Feb. 1,  earned a total compensation of $20.69 million, including $13.6 million in stock awards, $4.37 million in bonus incentives and a base salary of $1.315 million.

As CEO of Walmart’s International division, McMillon earned total compensation of $9.56 million last year, including a base salary of $929,748, bonus pay of $1.55 million and stock awards of $6.5 million.

David Cheesewright will take over the control of Walmart’s International division on Feb. 1 earning a base salary of $1.150 million, subject to annual adjustments, to be paid in Canadian dollars.

Cheesewright will continue to reside in Canada, but also maintain a home in Bentonville, according to company sources. He received a one-time $2 million payment related to his transition back to the United States and the elimination of certain allowances and tax equalization associated with his prior expatriate positions. He is also eligible to receive an annual cash incentive based on performance goals achievement. His target cash incentive payment under the plan will be 240% of his base salary, with a maximum possible payout of 300% of his base salary.

Equity-based compensation of approximately $1.5 million in restricted shares will also be earned. These shares vest in three years.

Cheesewright is set to receive an annual equity award valued at $4.5 million ($74) per share over the next three year period, pending certain criteria are met.

Addition stock awards given in connection this promotion involved 38,634 shares that will vest on Jan. 31, 2015 and 43,808 shares that vest on Jan. 31, 2016. These two stock awards have present-day values of $2.85 million and $3.24 million, respectively.

The Jones Center is an energy cow eating up almost $570,000 in annual utility costs. The lights alone burn through $30,000 per month. But that’s about to change with help from the Walton Family Foundation as the center undergoes an energy makeover expected to shave $150,000 in annual utility costs.

Mike Gilbert, chief operating officer for the Jones Center, said working with Walmart and the Walton Family Foundations on this project has proved invaluable because Walmart understands the importance of efficient and sustainable operations.

“Our energy conservation measures are key to our sustainability as utilities are 50% of our operating budget,” Gilbert said.
 
Using a $3 million grant for the Walton Family Foundation initiated in November 2012, the Jones Center is in the midst of converting from a steam boiler system to a hot water boiler system for heating the 220,000 square foot building. Gilbert said steam is very expensive to produce and the center runs two large boilers which requires around the clock maintenance personnel. The conversion will trim an estimated 2,500 hours in personnel costs and include substantial utility savings as well.

He said the center is also implementing new building controls, which will allow them to more narrowly isolate lighting and utility costs according to use. 

“It’s like each room has its own air conditioner, we have a chill plant that circulates the cold water throughout the building. There are air handling units scattered throughout the building that generate and circulate cold air the duct system. Each room has a temperature sensor that re-tempers the air to that individual room. When the lights come on the system kicks in gear, so we are not heating and cooling areas that an in not use,” Gilbert said.


He said they are finalizing the building control design now and expect bids on power capacitors by Friday (Jan. 31) with a contract awarded the first week of February.

Gilbert said steam boiler conversion will take place over the summer so that the energy savings will be seen in the fall of this year.

“The long term effects of these savings will mean more services to the local community. For example, being able to offer $4 per-square-foot rent at the Center for NonProfits, or helping to keep our corporate lease and growing membership rates low and competitive in this market place,” said CEO Ed Clifford.

PAST SUCCESS
Gilbert said when the Center for NonProfits in Rogers was acquired by the Jones Trust in 2008, it was Walmart and the Walton Family Foundation who provided $2.5 million of the $3.56 million spent toward an energy makeover. The city of Rogers also provided $200,000 for energy conservation measures at the former St. Mary’s Hospital site.

Gilbert said the energy updates at the Center for Nonprofits were completed in 2009 and the building operates at the lowest cost per square foot of all the buildings in the Jones Trust, approximately 17% more efficient than the others.

In July 2013, Gilbert said they implemented energy improvements and building controls at the JTL Shops facility and the health education building of approximately $500,000, with an anticipated savings of $46,000 per year.

“Our work at the Center for Nonprofits was accomplished with Clear Energy of Fayetteville. Clear Energy was referred to us by Wal-Mart as they have done a great deal of energy work with Wal-Mart over the years,” Gilbert said.

Kevin Thornton, senior communications officer for the Walton Family Foundation, said the Jones Center leadership brought them a solid plan to improve operational efficiencies to ensure longevity and the foundation felt compelled to help, as did the Endeavor Foundation and others.

“Our foundation mission is to help enhance the quality of life in the community. The Jones Center is an asset with a critical connection in this community,” Thornton said.

Little Rock-based Bank of the Ozarks announced Thursday that it has entered into a definitive agreement and plan of merger with Summit Bancorp, Inc. and its wholly-owned bank subsidiary Summit Bank.

Bank of the Ozarks will acquire the Arkadelphia-based bank for $216 million.

Summit Bank operates 23 banking offices and one loan production office in nine Arkansas counties. At December 31, 2013, Summit Bank had approximately $1.2 billion of total assets, $778 million of loans and $994 million of deposits.

The move will push Bank of the Ozarks to nearly $6 billion in total assets.

Summit Bank originated from a charter granted in 1996 to Horizon Bank of Columbia County, Ark. In February 2000, its name was changed to Summit Bank and expansion began throughout southwest and central Arkansas.

“I’m proud of the organization we’ve built over the past fourteen years at Summit Bank and equally proud to join forces with Bank of the Ozarks. We are very pleased to partner with one of the nation’s most respected banking organizations,” said Summit Bank Chairman and CEO Ross Whipple.

“Today, two premier Arkansas banking organizations, who share very similar philosophies and cultures, are joining to create an even more powerful banking franchise for our customers, employees and shareholders,” said George Gleason, Chairman and CEO of Bank of the Ozarks. “Bank of the Ozarks has built its Arkansas presence primarily in the northern and central parts of the state, while Summit Bank has built a strong presence primarily in southwest and central Arkansas. The synergies created by combining these two complementary, high performing community banks are significant.”

“Given the similarities in our cultures and business models, this combination should be very positive and a smooth transaction for our combined customers and employees. Our customers will undoubtedly benefit from our expanded offices and product offerings,” Gleason added.

DETAILS FOR SHAREHOLDERS
Both bank’s boards have approved the deal.

Under the terms of the agreement, each outstanding share of common stock of Summit will be converted, at the election of each Summit shareholder, into the right to receive shares of the Bank of the Ozark’s common stock, plus cash in lieu of any fractional share, or the right to receive cash, all subject to certain conditions and potential adjustments, provided that at least 80% of the merger consideration paid to Summit shareholders will consist of shares of the company’s common stock.

The number of company shares to be issued will be determined based on Summit shareholder elections and the company’s ten day average closing stock price as of the fifth business day prior to the closing date, ranging between $43.58 per share and $72.63 per share.

Upon the closing of the transaction, Summit will merge into Bank of the Ozarks. Completion of the transaction is subject to certain closing conditions, including customary regulatory approvals and the approval of the shareholders of Summit. The transaction is expected to close by the end of the second quarter of 2014.

Following closing of the transaction, Ross Whipple is expected to serve on the board of directors for Bank of the Ozarks bank and holding company.

Bank of the Ozarks said this is the company’s 11th acquisition since March 2010 and the largest in its history.

Bank of the Ozarks acquisition of Summit Bank adds another dimension to consolidations in Arkansas’ banking sector. Last year, Home Bancshares closed on a $286 million acquisition of Liberty Bancshares. Simmons First National Bank acquired Metropolitan National Bank for $53.6 million.

Bank of the Ozarks shares (NASDAQ: OZRK) were priced around $62.30 in late afternoon trading, up more than 7%. During the past 52 weeks, the share price has ranged from a $64.75 high to a $36.17 low.