Companies Discover the Benefits of Reshoring to Arkansas

15 May, 2014

By: Governor Mike Beebe

For more than half a century, Arkansas has been a leader in manufacturing and that expertise continues today as the industry becomes increasingly focused on 21st century advanced manufacturing jobs returning to the U.S. from overseas. As companies look to develop more products “Made in the USA,” they are discovering the benefits of coming home to Arkansas.

Production costs overseas are rising, while Arkansas continues to be a state with one of the lowest costs for business. Arkansas has the fourth-lowest cost of doing business among all states according to CNBC’s  Best States for Business 2013 report. In addition, Arkansas’s workforce, highly regarded for its productivity, also ranks among the top 10 in the CNBC report.

Northwest Arkansas is becoming the center of one company’s commitment to grow U.S. manufacturing and encourage the creation of U.S. jobs.

In January 2003, Walmart announced plans to buy an additional $50 billion in U.S. products in 10 years. The nation’s largest retailer, which calls Arkansas home, plans to accomplish this goal by working with suppliers to:

  • Increase the company’s purchase of U.S. manufactured goods
  • Source “new to Walmart” U.S. manufactured goods
  • Reshore the manufacturing of goods currently purchased.

Walmart’s U.S. Manufacturing Summit held in August 2013 in Orlando, Florida, was attended by nearly 1,500 government officials and suppliers who met to discuss ways to create jobs, restore communities and drive economic growth. Walmart’s 2014 summit will be held in Denver, Colorado, August 14-15.

Following the summit, Redman & Associates, a leading manufacturer of ride-on toys, was the first Walmart supplier to announce plans to open a new manufacturing and distribution facility in Rogers, Arkansas, that will produce six-volt battery-powered ride-on toys exclusively for Walmart. Redman, based in Bentonville, is investing $6.5 million in the facility, which will employ 74 people.

“This agreement was a direct result of conversations held at our recent U.S. manufacturing summit,” said Bill Simon, president and CEO for Walmart U.S. “It reinforces our belief that we can revitalize American manufacturing and help rebuild the middle class with good-paying jobs that will allow employees to be part of the American dream again.”

Arkansas has the tools that help businesses succeed. Just look at its other homegrown Fortune 500 companies headquartered in the state: Dillard's, Murphy Oil, Tyson Foods, J.B. Hung and Windstream. They are among more than 100 Fortune 500 parent firms located in Arkansas.

“Americans want to buy manufactured goods made in America,” Arkansas Governor Mike Beebe said. “With rising business costs overseas, Arkansas has the ideal location and workforce for companies looking to manufacture and distribute products throughout the U.S. and the world.”

Arkansas’s central location makes getting products to worldwide markets easier and more cost-efficiently than ever before. When shipping on land, Interstate 40 runs from North Carolina on the east to California on the west and runs straight through the middle of Arkansas. Interstate 30 provides easy access to markets and ports in the southwest, including Texas and Mexico. There is also Arkansas’s state-of-the-art railroad infrastructure comprising three Class I systems: Union Pacific, BNSF Railway and Kansas City Southern Railway. Union Pacific operates major yards in Little Rock and Pine Bluff, along with a locomotive repair facility in North Little Rock. Arkansas also has 22 smaller railroads operating over its more than 2,700 miles of track.

If you prefer other modes of distribution, make note of the two major commercial airports in Central and Northwest Arkansas as well as the commercial passenger service available at six regional airports throughout the state. Also, a network of water transportation along the Arkansas River contains ports in Little Rock, North Little Rock, Pine Bluff and Fort Smith, in addition to Mississippi River terminals in Osceola, West Memphis and McGehee.

Arkansas boasts several available sites ranging in size from as little as 10 acres to more than 10,000 acres. Arkansas has more than 500 available buildings that range from 2,423 square feet to 1.4 million square feet.

Employers throughout the state consistently give favorable ratings to Arkansas workers for their work ethic, skills, productivity and low turnover rates. Businesses find few problems in recruiting quality, reliable workers to meet their needs.

Arkansas’s goal is to develop one of the nation’s most job-ready populations. To succeed in today’s global economy, it is imperative that Arkansas have a workforce plan that focuses on increasing educational opportunities at all levels and improve the technical skills required by knowledge-based and advanced manufacturing employers. To help the state improve its workforce, the Arkansas Economic Development Commission (AEDC) has a variety of programs to meet the needs of both employers and employees.

Arkansas Works is a collaborative effort among leaders in education, economic development, community and businesses led by Governor Mike Beebe. Inspired by the Governor’s Summit on Education and Economic Development  Arkansas Works is the state’s strategic initiative to coordinate education, training and economic development in Arkansas communities as a way of ensuring that Arkansas continues to provide a highly qualified and educated workforce for the future.

Arkansas’s Career Readiness Certificate (CRC) is a collaborate effort among AEDC and six sister agencies. The program matches employers with prospective employees by comparing the skills required to do the job with the skills that assessed applicants currently possess to determine if the applicant is a good match for the job. Arkansas employers are currently using the CRC Program and report positive hiring, training and retention statistics over the existing systems that have been used.

AEDC’s Business and Industry Training Program is designed specifically to aid new and expanding businesses and industries find qualified employees. Through the program, AEDC works with businesses to help recruit qualified workers, provide pre-employment training for new hires, implement on-the-job training for both new and existing employees and implement train-the-trainer programs.

The Existing Workforce Training Program provides financial assistance to Arkansas's businesses and eligible consortia of businesses for upgrading the skills of the existing workforce to adapt to new or altered technologies and/or acquire new skills needed to remain competitive and economically viable. Training is for full-time, permanent employees who work at least 30 hours a week and are subject to Arkansas's personal income tax. Reimbursements are calculated according to a set of scoring criteria.

The state’s 44 colleges, universities and technical institutes work closely with local employers to create company-specific training programs, ensuring all Arkansas companies have a strong, educated workforce in place.

Arkansas’s incentives are nationally competitive, understandable and easy to use. Arkansas works with new and existing industries and will focus on each business' specific needs to provide a tailored incentive proposal for the project.