Showing some love for your only Fortune 500 company
Posted on January 25, 2008
Five companies that trade on major exchanges call our valley home. Only one Fortune 500 company is among that slim list. Advance Auto ranks 478 of the largest public companies, with about $4.7 billion in revenue.
Four others public companies, all on the NASDAQ, produce a combined $200 million in revenue. They are RGC Resources, Optical Cable, Valley Financial and Luna Innovations.
Of the smaller public companies, two are tied to the region. RGC and Valley provide gas and financial services, respectively, to people who live close by. The other two are not. Optical Cable and Luna Innovations sell their wares worldwide. And, of course, there is no real reason for the only Fortune 500 company to stay in Roanoke. Advance Auto operates about 5000 stores nationwide.
So far, this is pretty boring information to the average resident of the Valley. But, what if one of the three companies that don’t rely on the region were to leave? If Optical Cable leaves town, about $45 million in revenue and 200 well paying jobs go with it. But, if Advance Auto pulls out, it could mean $4 billion and about 2000 jobs. What would that mean for the region?
It’s been 25 years since our beloved N&W became Norfolk Southern and left town. For those who have moved to Roanoke since then, there is a curious void left by that departure. The welcome center is a shrine to the heyday when the railroad fueled the region’s growth. When Advance Auto leaves town, if they do, there probably won’t be as many remnants of the auto parts culture. But there will be a void.
The fear that Advance Auto may leave Roanoke began when their latest CEO was announced. Darren Jackson would seem to be the perfect fit for everything Roanoke is trying to accomplish, At 43, he would be an icon to young professionals. After working his way through the ranks at Best Buy to become CFO, he would be bringing a wealth of experience and a likely entourage of talent to the Valley. Unfortunately, Mr. Jackson has no interest in moving to Roanoke.
After being named CEO, and being gifted 110,000 shares of Advance Auto stock, Darren calmly announced that he would be staying in Minneapolis. This young, fully minted millionaire CEO said he would rather stay where the talent is and build his company from there. After all, he’s got Best Buy and Target right next door. If he came to Roanoke, he would have to recruit his talent to a town where their options would be limited if they left the company. They certainly wouldn’t have two other Fortune 500 retail companies to jump to if the going got rough.
And that’s the enormity of the problem that Roanoke if facing if the last of the big public companies leaves the valley. Public companies tend to cluster. The law firms, ad agencies, accountants and other professional support that develops around public companies help to attract others. That’s what is happening in Minneapolis and not in Roanoke. It’s difficult to develop the national caliber expertise in those professional services without large amounts of market capital lying around.
Minneapolis is surprisingly one of the most developed advertising communities in the nation. Granted, Best Buy recently awarded their $200 million advertising account to BBDO, a New York agency. But, there are several world-class advertising and design firms in Minneapolis that have been able to cut their teeth on big national clients. There is still a lot of work for both Best Buy and Target being done in their hometown. The same is true for Advance Auto. Several local firms have had the good fortune to work on projects for the company. However, the bulk of their advertising is done by an agency in Texas that specializes in retail.
Attracting Fortune 500 headquarters is not a game that’s easy to get into. A lot of times, it requires incentives that cost local tax payers a lot of money. However, when those companies are good corporate citizens, it also means that the standard of living rises for the entire community. The arts get funded. School systems have more money. New retail establishments come to town. The injection of investors’ money from around the world into the local economy is a boost that cannot be replicated by any other means. That is the power of a public company.
Watching the last Fortune 500 company leave is a lot like losing a professional sports franchise. Once it goes, it’s difficult and expensive to replace. You see relics of it around town and you miss it. You’re filled with regret that you didn’t do more to keep it around. And, you look jealously at the city that stole your team– the city that was willing to build a new stadium and sell bundles of season tickets.
The best we can hope for is that Advance Auto doesn’t leave town like the Baltimore Colts left for Indianapolis. They loaded up their trucks and left in the middle of the night. When the fans woke up, their team was gone. They didn’t have anywhere to go on Sunday afternoon. Their stadium stood empty. They felt dejected.
This Valentines Day, maybe the city needs send a great big “Be Mine” to its last Fortune 500 company. Maybe a truck full of chocolate delivered to Darren Jackson’s home in Minneapolis wouldn’t hurt either. Either way, there could be some heartbreak involved.
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