MPR: Could Business Have Done More to Save Honeywell

Could Business Have Done More to Save Honeywell?
By Martin Kaste

Business leaders are asking themselves if there was anything the state could have done to keep Honeywell from leaving Minnesota. The general consensus is no. For one thing, Honeywell kept its merger plans secret from state officials until the last minute. But some people inside and outside government say the state should take Honeywell's sudden departure as a warning of things to come.

COULD THE STATE have done anything to keep Honeywell in Minnesota? Governor Ventura doesn't think so.

Ventura: What could you do? That's a corporate decision. That's not government's place to be meddling in. As long as there's no anti-trust or things like that going on, that's not government's place to be meddling in a corporate decision like that.

Ventura doesn't think the Honeywell merger is a sign of bad things to come for the Minnesota economy. But at least one former state official, former chairman of the Metropolitan Council Curt Johnson, says the Honeywell move should serve as a warning that Minnesota can't take its prosperity for granted.

Johnson: We've been so good for so long without having any strategy in Minnesota, that there's a tendency to think that we don't need one. And it just might be that the 21st century is going to require us to know where we're going, how we're making investments, how we're using the public-policy framework to help us push one thing along rather than another.

Johnson says Minnesota needs to be more methodical about determining which industries are - or should be - the state's strength, and then concentrate on finding ways to keep them here.

Ventura's director of planning, Dean Barkley, says the departure of the Honeywell headquarters is an isolated incident, and does not necessarily point to a decline in Minnesota business; nevertheless, he says the administration understands the need for a comprehensive economic strategy. According to Barkley, the governor is proving that with his commitment to building certain kinds of infrastructure.

Barkley: You know, if we don't have a good airport, if we don't have a good light-rail system that every other major city has, that's why I'm so glad the governor fought for that. We have to have that kind of amenity, but they're all tied to economic development.

Barkley says the administration also plans to improve desirability of the state's work force by offering high school students more technical and vocational training, to funnel them directly into high-paying jobs in high-tech industries.

The catch, of course, is that vocational schools and light-rail systems cost billions of dollars - tax dollars. The business lobby has argued for years that Minnesota's high tax rates contribute to what they call a bad business climate, driving companies to lower-tax states. The Legislature responded by cutting corporate taxes last year and upper-tier income taxes this year.

Duane Benson, head of the Minnesota Business Partnership, says the business climate has improved, but he says taxes still could come down some more.

Benson: Now I'm not laying the blame or the cause for Honeywell leaving, or Norwest, or Pillsbury's headquarters or Fingerhut or any of those solely on those climate questions, but they're probably part of the equation somewhere. And I would hope that this does act as a wake-up call for policy-makers and the general population of this state to say, are we doing what we need to be doing to keep the economic engine of this state strong.

Benson says he hopes the governor will organize an effort to plan a statewide economic strategy for the next century; a strategy Benson says should encompass everything from education priorities to taxes. In the shorter term, Benson says elected officials should try to avoid being taken by surprise by the next corporate pull-out. He says the way to do that might be as simple as visiting local companies and telling them that if they're thinking about moving out, they should give the state government a call first.

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