First Person: Lexington and Louisville Mayors Form a Strategic Economic Development Partnership
By leveraging combined assets, the two cities aim to create a stronger workforce and further the region's position as an advanced manufacturing hub.
Fischer: Louisville and Lexington are Kentucky's two largest cities. Now we have a partnership to help the whole region, which we call the Blue Grass Economic Advancement Movement (BEAM). Louisville and Lexington are about 60 to 70 miles apart and we share a lot of the same assets. Our belief is that we can grow our regional economy more effectively than just focusing on our own city economies, which we will certainly do, but there are areas of overlap.
Gray: This is all about translating good business practices into government. What do we do in business? We reach out. We find allies. We collaborate. Occasionally, we will collaborate as we compete. But in this case, Lexington and Louisville have much more to gain by collaborating.
Who are some of the players helping to make BEAM a success?
Fischer: We have a board or steering community that consists of approximately 24 people who represent leaders in education from the university and technical college level, as well as representatives from manufacturing businesses. Below that we have work groups that are doing the research and working with the Brookings Institution template. All of that is designed to better prepare us to be the leading region in the world for advanced manufacturing.
Why now? Was there something specific in the timing or the current economic climate that motivated this collaboration?
Gray: Part of the timing is due to the coincidence of our both being elected at the same time, and both having business experience and entrepreneurial backgrounds. We come at this from similar experience and backgrounds, and points of view, and we recognize that it is imperative to think globally and competitively these days.
Fischer: One of the imperatives for America is that we need to restore these middle-income jobs that we have lost as manufacturing has been offshored. You are starting to see companies that offshore bring these products back. GE is a prime example. We have two products from Mexico and one from China that GE has brought back to Appliance Park. It is important that these middle-income jobs come back into our country. That is only going to happen if we are able to produce at world-class levels of productivity and quality and safety. We are developing a system that makes sure that we are at that level.
What are your goals/objectives for this partnership?
Gray: To create more and better jobs.to grow the pie.to raise the visibility of Central Kentucky as a place that has talented people as well as opportunity.
Is advanced manufacturing the core focus, or are there other industries that you are targeting?
Fischer: When we scan the assets that are unique to our region, advanced manufacturing is one of those areas. In Louisville we have two major Ford plants. One of those assembly plants was an economic development deal of the year last year in terms of its expansion for the Ford Escape with over $1 billion of investment and 3,500 new employees. There is also a Ford truck plant here and the General Electric Appliances headquarters is in Louisville. In the Lexington area, you have Toyota's North American headquarters, Lexmark, and other companies as well. We also have all of the supplier networks that feed into these organizations.
Gray: Advanced manufacturing is clearly a target because we have almost 100,000 jobs between the two MSAs committed to manufacturing, with major employers such as Ford and General Electric and Toyota. So that clearly makes sense, because we have a critical-mass-driven model.
Economies don't recognize political boundaries. What we know is that our economy in Central Kentucky is already linked together through our industrial cluster that is focused on advanced manufacturing. Will other industries be affected by this? Yes, of course. Both Lexington and Louisville are heavily influenced by our university system and they have significant seats at the table here.
Are there any specific programs that Louisville and Lexington have initiated related to education or improving education and training for the work force?
Gray: Right now, we are in the data collection phase of the project. We are expecting the lead initiatives to emerge in October. Those lead initiatives are very likely to include an elevated focus on education and work force development and preparation.
Will education play a key role in your strategic approach to growing the advanced manufacturing base?
Gray: Yes, of course. Examining the preparation skills required in today's work force is an essential component of our process. We are examining the expectations and needs of manufacturers and companies to determine how the work force development needs are being met. Meeting those needs and filling the gaps within our educational system is emerging as a key focus.
Specifically, how do you plan to elevate your educated and skilled work force for today's advanced manufacturing jobs?
Fischer: The objective is to identify the needs of the customer, such as the automotive or the appliance industry, and their need for factory maintenance personnel. That is not just someone who carries a wrench around. Now it is someone that is a skilled computer diagnostician and technician.
We also want to see more research and development-oriented jobs here. To do that, we have to have the Ph.D. type of research capacity that is required. So, it is working with companies to understand what their needs are and either fine-tuning existing programs or developing new programs so that manufacturers are getting the type of work force that they need.
For example, we are opening a lab here in conjunction with Argonne National Labs that will focus on long-life batteries that will be used in automobiles. The University of Kentucky and University of Louisville are working on a joint strategic plan to ensure that the needs of that research facility are met with their students coming out of the Ph.D. programs.
Even though you are still in the early stages, do you have any success stories to highlight?
Fischer: It is too early to point to any job increases. But, what BEAM has done is brought everybody to the table to discuss and identify needs. So, there is some new territory being covered there. While that sounds very basic, one of the challenges that we have as a society is that people tend to operate too much in silos. We are breaking down the silos between government, business, education, and foundations and nonprofits so that we can make sure that everyone's resources are targeted on the problem. I'm very pleased with that progress.
What are some of the strengths that Louisville and Lexington offer companies?
Gray: We have tremendous technology strengths as a result of our automotive cluster. The Toyota production system, for example, is a problem-solving system. It is an example of advanced technologies, and it has influenced many public- and private-sector enterprises. That enhances our productivity as a region.
Fischer: Number one is the central location. Two-thirds of the country is within a day's drive of our location. UPS' global air hub is located in Louisville. Our work force is geared toward the needs of advanced manufacturing. We have a continuous-improvement-oriented mission with BEAM relative to advanced manufacturing. Our cost of living and operating a facility here is among the lowest in the country as well. So, it's a good combination of good location, quality, and cost.
Do you have any other initiatives that you plan to launch as part of this collaboration?
Fischer: We are not one of the bigger states. We need to be very good at partnering with our cities within the state so that we can be flexible, nimble, and quicker to respond to the customer. I would hope that this would be the first of many initiatives that we can do with Lexington.
Has it been difficult to put aside your rivalry and work together to achieve economic growth?
Fischer: Not at all. People see our athletic competitions as fun, but they are not the major part of life in terms of creating jobs and providing for our families and creating opportunities. If anything, it has made it easier because of the times we have spent in good-natured competition. We compete vigorously on the athletic field and the basketball court, but off of that we should be working together every day to grow our economy.
Ford Motor and South Korea-Based SK Innovation Plan Kentucky and Tennessee Electric Battery Vehicle Plants