On Friday June 27, 2008, the City of San Antonio and Bexar County got a jolt of reality, AT&T Corporation; by far the most lucrative Fortune 100 Company in San Antonio was moving its headquarters to Dallas. (See City officials surprised by announcement of the corporate departure San Antonio Express News, Lack of direct air connections cited as key reason for decision San Antonio Express News and AT&T to relocate headquarters; most jobs staying San Antonio Express News) Citing the lack of direct flights from San Antonio International Airport, AT&T Chairman and CEO, Randall Stephenson, broke the news by telephone on Friday to County Judge Nelson Wolff and Mayor Phil Hardberger. Two days before, Wolff and Hardberger had met with Stephenson, who made no mention of the move, reported the San Antonio Express News. Still shell shocked from the blow, political, business and community leaders vowed that AT&T moving was not as bad as reported. They cited the 5000 jobs AT&T would still have in San Antonio and the number of new corporations wanting to locate to the city.
Most articles I have read are still asking why political and business leaders were caught of guard with this news or what lessons can be learned from this experience. (See Jaime Castillo: There is much to be learned in the wake of AT&T’s departure
San Antonio Express News) However, I must say that AT&T leaving for “better pastures” (/sarcasm) is not surprising. It should not come as a shock to anyone, especially, when AT&T (then Southwestern Bell) pulled the same stunt on St. Louis in 1992. Dallas mayor, Tom Leppert has been courting AT&T behind San Antonio’s back for a year? What is that saying, “Once a cheater, always a cheater.”
The true lesson that every community must take from AT&T’s “out of the blue” departure is that the best medicine against these types of events is to “Grow Your Own!“ One thing my years as an economic developer and now as an economic development lawyer have taught me is that locally owned companies do not leave their home towns, unless you ignore them. San Antonio has done a great job of ignoring local businesses in their attempt to grow their economy. Political and business leaders have forgotten that 80 to 90 percent of the San Antonio economy is locally owned businesses. Instead they have given millions of dollars in incentives to major companies (i.e. Toyota, Microsoft, Washington Mutual, AT&T, etc.) who choose to relocate or locate in San Antonio. Don’t get me wrong; in order to compete in the global economy San Antonio must make economic development incentives available to the multinational corporations, but here is a novel idea, how about growing San Antonio’s own multinational corporations.
There are hundreds of locally owned businesses that have the potential and capacity to become multinational corporations headquartered in San Antonio. These companies have every reason to stay and grow in San Antonio because they have a stake in our community. San Antonio is home to them. Toyota, AT&T, Microsoft and other companies who relocate have nothing to loose if they leave, because this is not home. Locally owned businesses have everything to loose and nothing to gain by leaving. Hopefully, one day we can say that ABC Corporation’s main headquarters is still in San Antonio, with offices all over the world.
However, for this prophecy to come true San Antonio’s political and business leaders must shift their focus from attracting big companies to San Antonio, to growing big companies in San Antonio. If they took just 50 percent of the tax abatement, economic development and incentive dollars that San Antonio flaunts in front of out-of-town corporations and flaunt them in front of locally owned businesses, San Antonio will make up the 700 executive jobs lost to Dallas and attract thousands more jobs to San Antonio. San Antonio must make it easier for locally owned businesses to benefit from the many economic development incentives available through the city and county offices. Moreover, it is a lesson for every Texas community. Look for the next multinational, national, state, or regional corporation within your community and help them achieve their goals. They will always be loyal to your community and you will never have to be shocked by a last minute announcement.