Reed Hall, who Gov. Scott Walker named the new executive director of the Wisconsin Economic Development Corporation last month, outlines the group’s jobs and business agenda.
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Reed Hall Named CEO of the WEDC
Frederica Freyberg:
But first, Governor Scott Walker has picked a new CEO to run the state's job retention and recruitment agency. Reed Hall was already in that role as the interim head of the Wisconsin Economic Development Corporation. Thanks very much for being here.
Reed Hall:
It’s my pleasure. Thank you for having me.
Frederica Freyberg:
We wanted to start right out by saying thatGovernor Walker has called the WEDC wildly successful. What metric can the public use to judge the success of the WEDC?
Reed Hall:
Last year– Our first fiscal year, ended last July. We’re just getting all the audited numbers in, and the first annual report has been out. We invested over $500 million in programs in the state of Wisconsin helping job growth, either in loans or grants, bonds, tax credits. So there’s been a lot of good, positive things that have been done by the staff at WEDC in its first full year of operation. Now we’re at the 18-month period.
Frederica Freyberg:
So if we invest that kind of money, what kind of return have we gotten on that investment?
Reed Hall:
Our investments are long-term, but we can count 24,000 jobs that have been impacted by our programs. Our loans frequently are contingent on job growth over the future, so that is not a one-year project. That could be a five-year project. So we think the investments that we’re making will pay dividends not only, they have paid dividends, but they will pay dividends in the future.
Frederica Freyberg:
What in your mind is the most effective tool for growing jobs and the economy in Wisconsin at this point in time?
Reed Hall:
I think it's a multitude of things. Our grant program seems to be successful. I think our loan program is successful. We’ve instituted a new program, a Shovel-Ready Project, where industrial sites are certified as ready for development in Wisconsin. I think that’s going to lead to a great deal of success. Hopefully, the capital program that the legislature will approve will provide needed funding for start-up companies. We need to nourish, not only start-up companies, but existing companies. We need to encourage companies from outside of our immediate borders to transfer their operations to Wisconsin. And we certainly need to look specifically at the Pacific Rim. That’s where the growth is. I think the number is going to be $23.5 billion worth of exports by Wisconsin companies last year. We need to encourage more of our Wisconsin companies to be able to export their product overseas.China, Mexico, Canada are our top three markets.And we need to encourage investments from those companies in the United States, specifically in Wisconsin.
Frederica Freyberg:
What sectors do you think that we should be focusing on?
Reed Hall:
There seems to be an insatiable demand for our agricultural products and our manufacturing products. Those are the two big things. You look at cheese, milk products, cranberries are a big export item. We’re making specific wood products in northern Wisconsin that are sold in China across the– Our labor force is such that we produce products that are of such superior quality that other people want them, thank goodness. Certainly our manufacturing products, whether it’s Oshkosh Truck or the Mining Company operations. Many, many, many manufactured products and great demand across the world.
Frederica Freyberg:
Now, the Wisconsin Economic Development Corps. Has had a lot of negative headlines in its, kind of, short existence, like losing track of millions of dollars in state loans. Is that due, in your mind, to kind of, structural problems or leadership?
Reed Hall:
Well, there are many reasons for that. I think in the conversion from commerce to WEDC, the group that was initially responsible did not follow our loan portfolio as adequately as necessary. We went from 300 employees down to 50 in Wisconsin Economic Development Corporation. Inherent in such a downturn in staff you’re going to have some issues arise. But we run something like a bank. We aren’t a true bank, but I think you’ll find our future to be much more like a bank, where we’re paying much more attention to our loan portfolio, our grant portfolio, our tax credit portfolio. That’s going to require a new computer system, and we have the RFP out next week on that. We’re working with Wisconsin Bankers Association on preparing that. We’re also bringing in a new chief financial officer, and a new vice-president for credit risk. Those three things together, I think, will allow us to be much more productive in following our loan portfolio.
Frederica Freyberg:
What is your own experience with economic development?
Reed Hall:
Well, I was with the Marshfield Clinic for 34 years. I was general counsel for 24 and 10 as executive director. When I joined the clinic in 1976 there were 145 physicians. When I left there were just under 800. Our staff had grown to 7500 individuals working in the state of Wisconsin. So that’s one of the things that I point to. I think nourishing existing companies in the state of Wisconsin, good companies that can grow and add staff, is part of my experience. I’ve previously served on the Forward Wisconsin board of directors, which is the forerunner of this organization now. I’ve had the pleasure of serving on the Wisconsin Manufacturers and Commerce board and executive committee, very instrumental in business growth in the state of Wisconsin.
Frederica Freyberg:
Speaking of these, kind of, home-grown companies, keeping them here, growing them here, this week there’s been major disappointment, as you know, expressed over a school software contract being given to an out-of-state firm, resulting in the loss of hundreds, perhaps thousands of current and potential jobs in the Stevens Point area. The bidding process was disrupted after WEDC made a preliminary offer of tax breaks to this in-state vendor. So what is your comment on that contract that did not in fact go to a Wisconsin company?
Reed Hall:
Well, it’s unfortunate. We’re working hard to attract Minnesota businesses to Wisconsin and this turned out to be the reverse. I am not totally familiar with the process that the Department of Administration used in granting the contract to the Minnesota company. I’ve talked to the chancellor of UW-Stevens Point, and I think he’s reflected the disappointment that Portage County has in that decision. There’s going to be a hearing, an appeal process within the Department of Administration. It’s unfortunate. But to avoid any appearance of impropriety, I think it’s probably best that we not try to advantage one company over another within WEDC. It would be nice to think that we could encourage our Wisconsin businesses, but apparently that’s not the appropriate process. I’ve always had a lot of confidence in Skyward and the product that they delivered, but it was a decision by DOA and the Department of Public Instruction. I wasn’t part of the review process. So I can speak that it’s unfortunate we lose those quality jobs to the state of Minnesota. I hope we don’t lose the entire company to another state. That would be very counterproductive. The process isn’t over, so I trust that there will be a full and fair review process within DOA on that decision.
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