November/December South Carolina Business by South Carolina Chamber of Commerce

Count on us as a bright spot in South Carolina’s future.

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November/December 2011 Volume 32, Number 6

FEATURES

The solution to South Carolina’s long-term infrastructure needs.............................................................18

Moving South Carolina into the top tier in the nation.......................................................26 Solving a taxing problem.....................................................32

South Carolina Chamber of Commerce 1301 Gervais Street, Suite 1100 Columbia, South Carolina 29201 800.799.4601 www . scchamber . net

M P resident & C hief E xecutive O fficer

Small business success key to state’s employment growth...........................................36

The NLRB’s impact on business in the coming decade..............................................................42 Are you ready for the next decade of social media?.......................................................................44

Brain drain: Transferring knowledge to a new generation..............................................................50

V ice P resident of P ublic P olicy & C ommunications DARRELL SCOTT A ssociate V ice P resident of C ommunications

JULIE SCOTT M ulti M edia C oordinator MATTHEW GREGORY G raphics & W eb A dministrator BOBBY BAKER

Planning for the future with Personal Pathways.................................. 8 Controlling health care costs in the coming decade............................ 9 The sky’s the limit.............................................................................. 11

OTIS RAWL

Charting the next decade of port investments.................................. 12

M SOUTH CAROLINA BUSINESS MAGAZINE E ditor MATTHEW GREGORY A rt D irection & D esign TIM MCKEEVER / TMCA INC. P roduction & P rint C oordination TMCA INC. D igital I maging & P rinting R. L. BRYAN COMPANY

42 Always in play 2011 Business Leader of the Year...............54

Engineering success 2011 Public Servant of the Year............78

44 D E PA RT M E N T S

Answering the call of duty 2011 Sergeant William Jasper Freedom Award Winner..................82

Message from the Chairman................. 3 Dick Wilkerson

South Carolina’s 25 Fastest-Growing Companies.......................................... 74

Message from the President.................. 4 Otis Rawl

South Carolina Chamber of Commerce Leadership........................................... 86

South Carolina Top 100...................... 60

Pinnacle of Leadership......................... 90

South Carolina Big 50.......................... 68

Advertiser Index................................... 89

C over M ike B ise

STATE CHAMBER

The opinions and views expressed by the contributors to this publication do not necessarily reflect the opinions and views of the South Carolina Chamber of Commerce, its staff or members.

A dvertising S ales CONVERGING MEDIA LLC DEIDRE MACKLEN 803.318.3923

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November/December 2011

with Distinction

Copyright © 2011 by the South Carolina Chamber of Commerce and Converging Media LLC. All foreign and U.S. rights reserved. Contents of this publication, including images, may not be reproduced without written consent from the publisher. Published for the South Carolina Chamber of Commerce by Converging Media LLC. 803.256.3010

A M e ss a g e f r o m t h e C h a i r m a n ~ D i c k W i l k e r s o n

Building a statewide business strategy

hen Michelin was searching for a place to establish its presence in the United States almost 40 years ago, South Carolina was an obvious choice for a variety of reasons—an educated workforce, the Port of Charleston, extensive rail and highway infrastructure, and a strong technical college and university system. For all of these reasons, Michelin continues to grow its footprint in this state. Today, South Carolina not only competes with surrounding states such as North Carolina and Georgia, but also competes globally to attract new business and expansion of investments from existing companies. South Carolina must continue to adopt measures to ensure businesses are successful in this global economy. As the unified voice of the business community, the South Carolina Chamber of Commerce’s goal is to collaboratively address key issues for the state’s economic competitiveness that are reflected in the Competitiveness Agenda. We need an overall, comprehensive strategy for the state of South Carolina. This strategy for the state of South Carolina must address key issues including: taxation, health care, economic development, workforce development, energy and the environment, and infrastructure. The South Carolina Chamber is collaboratively addressing these issues in the short and long term in order to make substantive policy changes. Of course, the ultimate goal of a statewide business strategy is to grow wealth for South Carolinians and create and retain jobs. The current per capita income for our citizens remains about 82 percent of the national average, and our state unemployment rate hovers above 11 percent. In any statewide business strategy, we must answer some key questions: What is our vision for South Carolina’s citizens, and what role will business and government play? Paramount to any strategy for the coming years is the state’s tax structure. The achievement of true comprehensive tax reform will provide the solutions to other issues in the Palmetto State, like education. As any business leader knows, the current tax structure is non-competitive to recruiting and retaining businesses. Tax policy is critical to companies deciding to open, expand or locate in South Carolina. Decisions are based largely on competitive rates, predictability and stability. South Carolina manufacturers currently pay the highest industrial property taxes in the country, while all other business properties pay the seventh highest property taxes. I believe the business community, alongside our partners, must create the tenets of what comprehensive tax reform looks like with predictable, stable and competitive rates. Any time we talk about the future of economic development, we have to consider the quality of the state’s workforce. Developing a highly-skilled and welleducated population is integral to increased job opportunities and security with dynamic companies doing business in South Carolina. The private and public sectors must work together to ensure workforce needs are addressed and strategies successfully implemented. We are making strides in the Palmetto State, and the business community’s commitment is encouraging our improvements. Every day, businesses all over South Carolina are doing their part and getting involved in their communities through educational partnerships. Michelin’s Challenge Education, Sonoco’s PULSE (Partners for Unparalleled Local Scholastic Excellence) Program and Colonial Life’s support of South Carolina Business Week are changing the future landscapes for thousands of students. Businesses large and small must continue to do their part over the coming

decade to ensure we continue to improve the quality of our workforce. Policy decisions will play an important role in education and workforce development. Early childhood education goals should include statewide four-year-old kindergarten and third grade reading proficiency. Strategies must be developed to focus on parental training and preparing children for learning before they reach elementary school. We must continue to support programs that work, like the implementation of the Education and Economic Development Act (EEDA) and funding for the SmartState Dick Wilkerson is chairman emeritus of Program (endowed chairs), Michelin North America and the chairman of while also expanding education the 2010-2011 South Carolina Chamber of options with reforms to charter Commerce Board of Directors. schools. As we look toward the next decade, the state must examine higher education affordability and its impact on our young adults’ futures. At the same time we are building a 21st century foundation for our tax and education policy, it is equally important that we build the infrastructure to accommodate a 21st century economy. We need to ensure the funding is there to do the planning for – and eventual dredging of – the Port of Charleston to receive the “mega-ships” that will be moving through the expanded Panama Canal beginning in 2014. There is no more important infrastructure project in South Carolina than the Port of Charleston. We need the business community of the state, and our entire political leadership, to work together to accomplish this critical task, and we need to do it now. With a clear roadmap before us, I believe we will not only improve the business climate in South Carolina, but also the state’s image beyond our borders. Perception is sometimes reality to those who are not familiar with our great state. It is imperative that we provide a clear vision for the state so that we can continue to move in a positive direction. Our goal should be to make South Carolina the best place to live and work – not just for ourselves – but for future generations of South Carolinians.

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A M e ss a g e f r o m t h e P r e s i d e n t ~ O t i s R a w l

Gearing up for the next 10 years of business

good business leader has the ability to look at current trends and make sound decisions about the future of his or her business. Hindsight is 20/20, and while it’s easy to be a Monday morning quarterback, it takes experience, planning, talent and sometimes good luck to keep a business running in this fast-paced 21st century.

For instance, take a look at the first decade of the 2000s. There were many factors impacting business that no one could have predicted, including September 11th, the banking crisis and the Great Recession. While it would be nice to hop into a DeLorean and take a glimpse into the future, we’re limited to taking it one day at a time. So how can we make good business decisions for the next decade without knowing what opportunities and challenges are heading our way? That’s the idea behind the theme of this year’s November/December edition of South Carolina Business and the 32nd Annual Summit: Fast Forward: Defining the Next Decade. What are the key business issues that will have an impact on the global competitiveness of South Carolina in the coming decade? Earlier this year, the National Labor Relations Board (NLRB) filed a complaint against Boeing calling for the company to open a second 787 facility in the state of Washington to remedy what it called an illegal transfer of work to non-union facilities in North Charleston. The business community was quick to point out the NLRB was overstepping its bounds. If we allow decisions like where a business locates to be dictated by others, we are establishing a dangerous precedent that will open the door for businesses to be micro-managed by outside entities. The current administration should be applauding job creators instead of suing them. In September, the South Carolina Chamber of Commerce, along with the United States Chamber of Commerce, filed a lawsuit against the NLRB challenging the new rule requiring businesses to post notices explaining employees’ rights to unionize. South Carolinians know and understand their rights as employees. That’s why in last year’s election, 86 percent of voters said they want to maintain their right to a secret ballot in union elections, while only 2 percent of South Carolinians are dues-paying members of unions. The South Carolina Chamber is committed to keeping South Carolina union-free. In order for South Carolina to stay competitive, port expansion also must remain a top priority for the state. With the Panama Canal expansion estimated to be completed in 2014, larger ships will be able to sail directly to and from

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the U.S. East Coast. To accommodate these larger ships, Charleston Harbor must be deepened to 50 feet. While Charleston is currently the deepest port in the Southeast, New York, Baltimore and Norfolk are already at 50 feet. Steps in the right direction have already been taken, with funding secured for a harbor deepening feasibility study. However, South Carolina’s business leaders must keep port expansion in the forefront and remain competitive with other state ports. While controlling health care costs has always been a struggle for employers, the federal Patient Protection and Affordable Care Act (PPACA) will continue to alter the health care landscape, especially when major components of the law go into effect in 2014. For instance, employers with 50 or more employees that do not offer coverage and have at least one full-time employee receiving a premium subsidy will be assessed a penalty of $2,000 per employee (excluding the first 30 employees). Because of this and other changes taking effect, many businesses are being forced to rethink health care insurance. In order to help businesses, the South Carolina Chamber has established a health care working group comprised of industry experts who will analyze the changes and make recommendations to our members in the coming months. We are fortunate to have made many strides in recent years reforming an employment security commission that overpaid hundreds of millions of dollars to workers who were terminated for misconduct, making significant reforms to workers’ compensation insurance, capping punitive damages in civil lawsuits and making a number of educational advancements, including the passage of the Education and Economic Development Act, now called Personal Pathways to Success. In the years to come, let’s make it our goal to lead the country in economic development. Given the setbacks caused by the recent economic downturn, the playing field has been leveled. At the end of the next decade, let’s emerge as the nation’s premier business destination. If we make the right decisions today, we can lead the pack tomorrow.

November/December 2011

Otis Rawl is president and chief executive officer of the South Carolina Chamber of Commerce.

TRANSFORMING THE BUSINESS LANDSCAPE

The Best Lawyers in America®, the oldest peer-review publication in the legal profession, includes 13 Haynsworth Sinkler Boyd, P.A.’s attorneys as “Lawyers of the Year” in its 2012 edition.

LEFT TO RIGHT

John Tiller - Best Lawyers’ Charleston, SC Product Liability Litigation Lawyer of the Year; Tom Gottshall - Best Lawyers’ Columbia, SC Product Liability Litigation Lawyer of the Year; Todd Smyth - Best Lawyers’ Charleston, SC Medical Malpractice Law - Defendants Lawyer of the Year; Derrick Quattlebaum - Best Lawyers’ Greenville, SC Litigation - ERISA Lawyer of the Year; Donny Dial - Best Lawyers’ Columbia, SC Tax Law Lawyer of the Year; Tara Nauful - Best Lawyers’ Charleston, SC Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law Lawyer of the Year; Robert Galloway Best Lawyers’ Greenville, SC Public Finance Law Lawyer of the Year; Theodore DuBose - Best Lawyers’ Columbia, SC Public Finance Law Lawyer of the Year; Bill Boyd - Best Lawyers’ Columbia, SC Mergers & Acquisitions Law Lawyer of the Year; Paul Trouche - Best Lawyers’ Charleston, SC Public Finance Law Lawyer of the Year; Matt Utecht - Best Lawyers’ Greenville, SC Medical Malpractice Law Lawyer of the Year; Sam Mabry - Best Lawyers’ Greenville, SC Product Liability Litigation - Defendants Lawyer of the Year; Dewey Oxner - Best Lawyers’ Greenville, SC Health Care Law Lawyer of the Year

At Haynsworth Sinkler Boyd, P.A., we are proud to have these attorneys recognized as “Lawyers of the Year” in Charleston, Columbia and Greenville, South Carolina.

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Planning for the future with Personal Pathways

ith high school forthcoming, I sat down with my middle school guidance counselor to take the first steps in laying the groundwork for my future. Where did I plan on going to college? What did I plan on studying? What did I want my career to be? At the time, these seemed like questions that no eighth grade student should have to answer. However, I soon learned that with such a high degree of competition in our nation’s system of higher education and in our job market, planning ahead is everything. From my first Individual Graduation Plan (IGP) meeting as a 13-year-old student to the moment I walked across the stage at my high school graduation, the South Carolina Personal Pathways to Success program put me on the right track. If nothing else, that first meeting with my guidance counselor in eighth grade gave me a few things to think about. Personal Pathways took my academic interests and personal passions and put a label on my proposed area of interest, otherwise known as a career cluster. While the category “Government and Public Administration” seemed quite broad, I was happy to know I was headed in the right direction after participating in my middle school’s mock trial program for the past two years. The Personal Pathways program didn’t force me into wishing to become a lawyer. It simply opened my eyes to what was already there based upon my personal interests. For my high school education, I chose to enter a dual-enrollment program, the Scholars Academy, on the Coastal Carolina University campus. With a full selection of honors, advanced placement and college classes at my disposal, I was able to both pay full attention to graduation requirements and go beyond those requirements. Through IGP meetings, I planned a high school schedule that included public speaking, Latin and Advanced Placement Comparative Government, courses that would help me grow accustomed to the type of classes I will take in college as I prepare to attend law school. High school continued, and I began having more serious discussions with my guidance counselor about college and what I wished to study. Knowing

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I had a scheduled, yearly IGP meeting gave me the time and foresight to plan ahead. I would look through Coastal Carolina University’s course catalog and choose courses that would be in my best interest. When it came time to actually sit down with my counselor, we would talk about the way in which my schedule was preparing me for my future education and career. As an upperclassman, I was able to move beyond simply uttering “lawyer” when I was asked about my future plans. The Personal Pathways program had trained me to think prospectively. I had the knowledge to say what specific type of law I planned on entering, what I would need to study in college, what type of student organizations would provide me with the knowledge and training I would need and what type of specific skills I would need to hone over the years. Looking at where I am today, I have Personal Pathways to thank for much of the preparation I was provided with in high school. This program not only allows students to plan for their future, but also teaches them how to think about their future. The Personal Pathways program may be a work in progress within many areas of the state, but with the right resources and guidance, many students now have the opportunity to find their own personal pathway to success.

November/December 2011

Trenton Smith is a graduate of North Myrtle Beach High School and was awarded the S. Hunter Howard Jr. Scholarship at this year’s South Carolina Business Week.

Personal Pathways to Success provides educational and career planning resources that bring together all South Carolinians – students, parents, educators, and employers.

R o bb y K e r r

Controlling health care costs in the coming decade

slow evolution in health care has been underway as the regulations of the Patient Protection and Affordable Care Act (PPACA) begin to take effect. However, the pace of change is about to accelerate as the major components of the law go into effect in 2014. These changes are sure to dramatically transform how employers and employees think about heath care coverage over the next decade. The PPACA has a myriad of new rules that affect employers in a variety of ways, but here are five that will fundamentally change the rules of the game.

States must create health insurance exchanges. An exchange is a new place where individuals and small employers can competitively shop for insurance. Individual states are responsible for exchanges, but the federal government will set them up for states that do not have plans of their own by January 2013. Beginning in 2017, states may allow employers with more than 100 employees to purchase coverage in the exchange. Employers will have a significant stake in the outcome of exchanges since they offer an alternative to employees for their coverage. Individuals may receive a tax credit to offset the cost of premiums. Individuals who purchase coverage through an exchange may be eligible for a credit ranging from 2 percent to 9.5 percent of their household income. To qualify, the individual’s income must be between 138 percent and 400 percent of poverty and not be offered employer sponsored coverage. An individual can still qualify if their employer offers coverage. The individual must not be enrolled in the plan. The employer’s plan must have an actuarial value of less than 60 percent, or the employee share of the plan’s premium must exceed 9.5 percent of family income. Employers may face penalties. Contrary to what many think, the PPACA does not mandate that employers offer health care coverage. However, large employers (50+) will be subject to

a penalty if one or more of their full-time employees receive a premium credit through the exchange. If an employer does not provide coverage, the penalty is $2,000 per full-time employee (excluding the first 30 employees). If an employer offers coverage, the penalty is the lesser of the above or $3,000 per employee that receives a credit. Contrast the potential penalty with the average annual 2010 premium for employer sponsored health insurance of $5,049 for single coverage.

drop their coverage as a result of the PPACA. It’s hard to predict the accuracy of such estimates since their outcome is dependent on so many factors. Employers will need to develop scenarios to test the financial and social implications of all their options in order to determine the true opportunity costs at play. Beyond the obvious elements of current cost of coverage and penalties, employers should weigh the impact of existing tax deductions, future excise taxes, medical inflation on subsidy thresholds, wage increases to make Individuals face penalties for not employees whole, recruitment and retention, benefits purchasing insurance. package changes and moving to defined contributions. If an individual does not purchase insurance Regardless of whether employers retain or coverage, he or she will have to pay a tax penalty. drop coverage, they will still have a vested interest in The annual penalty starts out small at $95 and rises controlling costs since penalties and taxes will likely be over time to $695 for each raised to cover any government The purpose of the uninsured family member up under-estimates. More to maximum of $2,085 or 2.5 importantly, in order to make PPACA and its exchanges the best decision, employers will percent of household income. This somewhat modest penalty is to expand coverage. It have to assess their long-term coupled with guaranteed ability to contain health care coverage may cause individuals remains to be seen if it will costs. to forego buying insurance until For these reasons, the they need it. The result would be effective in controlling South Carolina Chamber of be less supporting revenue for Commerce’s Health Care ever-increasing employer plans. Working Group has begun to identify and benchmark best health care costs. Employers face an excise practices in health care. Over tax on “Cadillac plans.” the next several months, the Not scheduled to go into effect until 2018, a 40 working group will be identifying proven cost saving percent nondeductible tax will be levied on the annual initiatives as well as continuing to isolate cost points that value of an employer’s plan that exceeds $10,200 for drive medical inflation. individual coverage and $27,500 for family coverage. Though the rules of the game are certainly Currently, these values are indexed to the consumer changing, one rule will stay the same. Whether directly price index. As long as health care costs outpace or indirectly, employers will be responsible for funding inflation, employers may someday find themselves much of our health care costs, and they should insist on being taxed on “Chevrolet” plans. getting the best value for that expense. Faced with these radical changes, employers are confronted with a complex and difficult question. As the government begins to step in, do they feel obligated to continue a primary role in providing essential health benefits, or do they yield this responsibility to the state? There have been several studies indicating that as many as 30 percent of employers will

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Robby Kerr is the president and founder of Kerr & Company, a private consulting firm.

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Red Frog Events, based in Chicago, Illinois, accepts the $10,000 prize after being named the DREAM BIG Small Business of the Year 2011.

THIS COULD BE YOU! Make your business’ BIG DREAM come true. Apply for the DREAM BIG Small Business of the Year Award and get the chance to win a $10,000 cash prize! 75 Blue Ribbon Award® winners will be named on March 1. All award winners will be recognized at America’s Small Business Summit on May 22 in Washington, D.C.

Apply today at www.uschambersummit.com/award. Help celebrate the U.S. Chamber’s 100th anniversary by joining more than 600 business owners from across the country at America’s Small Business Summit 2012, May 21–23. Network, gain political insight, and speak out for small business on Capitol Hill. Go to www.uschambersummit.com for event details and group discounts.

Frank Hefner and Nevan Phillips

The sky’s the limit

n the early 1990s, South Carolina successfully attracted BMW to the state, boosting economic development in the Upstate area. BMW also enhanced South Carolina’s name recognition worldwide. Now, nearly 20 years later, South Carolina has successfully attracted another major manufacturing company to the state, Boeing, adding to the state’s roster of highprofile international companies. How has Boeing’s arrival to South Carolina affected the Lowcountry and the state as a whole? The construction phase of Boeing’s plant has an estimated cost of $872 million, with a total capital investment by Boeing estimated to be more than $1 billion. The initial direct investment of the $872 million, before any Dreamliners have completed production in the facility, has been estimated by Miley and Associates to create 5,725 jobs directly, 1,883 jobs indirectly and 2,277 jobs induced, for a grand total of 9,885 jobs. The total labor income from these jobs is estimated to be $413 million. Even though most of these jobs will be related to the construction industry, jobs will be created across professional, retail, health care and automobile sectors. Once the facility is up and running, real estate, transportation and computer industries also will see a significant impact from the creation of new jobs. Once Boeing’s facility has reached full capacity, projected employment is estimated to be around 3,800 full-time workers. Due to this increase in employees and economic activity, the direct annual output on Charleston and its surrounding areas is estimated to be more than $4.5 billion. This direct impact will then have indirect and induced impacts of more than $1.4 billion, resulting in a total impact of $5.9 billion for Charleston and the surrounding areas per year. In addition to the new full-time workers, it is estimated there will be another 11,478 jobs permanently supported by indirect and induced effects. Following the pattern of BMW and other manufacturers that have located to the state, once the facility is at full operation, a network of companies supplying parts and services to the Boeing plant will develop across the state. The economic climate has changed since BMW, and each manufacturing enterprise has unique features that will determine just how and when this network will develop.

With the National Labor Relations Board’s lawsuit, regulatory uncertainty has been added to the forecast, and this uncertainty may affect the development of the network of various suppliers and ancillary businesses that will eventually locate to South Carolina. Suppliers will come, but it will be over the course of several years. The positive economic impacts of BMW’s South Carolina plant beyond the actual plant did not happen in a day, and neither will Boeing’s. Delivery of the first 787 Dreamliner took place in early October from Boeing’s Washington facility. It will still be several months before the North Charleston facility will deliver its first 787. Boeing has more than 50 airlines waiting for delivery of the Dreamliner, guaranteeing a steady stream of business for the company. The facility is one of only three locations in the world for the final assembly of wide-body jets. Boeing is the nation’s largest exporter by value of goods sold abroad. Similar to BMW, the business is expected to accelerate rapidly over the course of the next 10 years. Just as BMW gave heavily to Clemson’s automotive program, Boeing has given more than $2.3 million in charitable donations in South Carolina and has already partnered with Trident Technical College, which offers four airplane-related degrees or certificates. There is no doubt South Carolina will see the positive economic impact of Boeing’s new facility. With the soaring of the first 787 Dreamliner, the number of jobs and aerospace-related industries in the Lowcountry and South Carolina will soar, too.

Boeing has more than 50 airlines waiting for delivery of the Dreamliner, guaranteeing a steady stream of business for the company.

Frank Hefner, Ph.D. is a professor of economics at the College of Charleston, and Nevan Phillips is an MBA candidate at the College of Charleston.

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C o m p i l e d b y t h e S C S PA

Charting the next decade of port investments O

ne of the biggest tools in South Carolina’s economic development arsenal is its ports system. Shipping volume through South Carolina ports increased Q3 2011 – Charleston Harbor deepening feasibility study phase begins. The U.S. Army Corps of Engineers will examine potential environmental impacts to deepen the harbor as well as what depth provides the best cost-benefit results. Maj. Gen. Todd Semonite of the Corps has committed to an expedited study schedule of about half the typical time for feasibility.

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across all business segments in fiscal year 2011. Container volume through the Port of Charleston rose 8.3 percent in the fiscal year that ended June 30, with

1.38 million 20-foot equivalent units (TEUs) handled. The South Carolina State Ports Authority (SCSPA) has already made investments that will only enhance

Q3 2011 – Columbus Street Terminal improvements complete.

Q3 2012 – North Charleston Terminal improvements complete.

Q4 2012 - Q1 2013 – New terminal operating system goes live.

To accommodate consolidating the port’s container business in two terminals and shifting the BMW operation to the Columbus Street Terminal, the SCSPA invested $25 million to install additional rail infrastructure and raise and pave the terminal. BMW exports more than 60 percent of its production in South Carolina from the Port of Charleston.

Improvements to the container terminal include $6 million for a new interchange area to support gate improvements and $725,000 for a new rail infrastructure.

The SCSPA is implementing the NAVIS terminal operating system at its two container terminals in the port of Charleston. This state-of-the-art IT system represents a $22-million investment, which will replace four existing internal and customer interface systems.

November/December 2011

the economic power of the port in the coming years.

Q1 2013 – Charleston’s new cruise terminal opens. The new terminal is the first step in the Union Pier Concept Plan, which includes the redevelopment of 35 acres for public and private, non-maritime uses.

Q4 2013 – Estimated completion date for upland fill contract for Navy Base Terminal.

Q4 2015 – Estimated completion date for harbor deepening feasibility study.

The terminal will require between five and six million cubic yards of fill material, much of which could be sourced from an off-shore disposal site.

Based on the results of the study, the Corps will make its recommendation on depth before entering the construction phase.

Q1 2019 – Estimated opening of Phase one of Navy Base Terminal. The 171-acre Phase One includes two ship berths and associated yard area. At build out, the 280-acre terminal will boost container capacity at the port by 50 percent.

August 15, 2014 – The Panama Canal’s new, expanded locks will be completed and open for business. This multi-billion expansion project ushers in a new age for international shipping, where larger ships can sail directly to and from the U.S. East Coast through the Panama Canal. This underscores the need for a deeper Charleston Harbor.

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November/December 2011

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our state â&#x20AC;&#x201C; whether youâ&#x20AC;&#x2122;re growing soybeans or a new technology. At McNair our focus for over 40 years has been providing legal services needed for our business clients to grow and prosper in South Carolina. Southern Business & Development named us FIRST among ten law firms experienced in economic development in the South. So if you are considering starting or expanding a business give us a call.

The solution to South Carolinaâ&#x20AC;&#x2122;s long-term infrastructure needs By Kristine Hartvigsen

S o u t h C a r o l i n a B u s i n e ss |

November/December 2011

D a n B a r n e s / W e n d e l l F r a n k s / S l o b o M i t ic / D e n n i s G u y i t t / S C S PA

fficials continue to debate infrastructure priorities year after year, but no new stretch of roadway, length of rail or series of underground pipes will cohesively and unilaterally benefit all citizens in South Carolina unless a collaborative, strategic, long-term infrastructure plan is produced as a result of meaningful dialogue among decision-makers from all divisions involved. That’s the sentiment expressed by one of the newest members of the governor’s cabinet. “Without sounding alarmist, there are no comprehensive plans in the state that address the holistic transportation requirements that affect commercial freight movement,” Transportation Secretary Robert St. Onge insisted. “We need a plan.” St. Onge envisions agencies such as the South Carolina State Ports Authority (SCSPA), the state Departments of Commerce and Transportation and others working together to produce a 10- to 20-year plan to guide the allocation of scarce resources to priority projects, not through the narrow lens of a single agency but from a much wider, multi-modal perspective. A 2004 University of South Carolina Moore School of Business study concurred with this assessment, stating: “Growth-induced problems are compounded by uncoordinated or insufficient funding for transportation and other infrastructure, a lack of affordable housing options and a failure to adequately protect key environmental resources.” The Moore School report recommended the creation of a shared vision for quality growth with a “statewide institutional framework” that encourages comprehensive planning. The report anticipated that South Carolina’s population could grow by as much as 1.1 million people by 2025, with outwardly expanding urban areas increasing roadway congestion and significantly lengthening work commutes. It called the state’s roads and other transportation systems “woefully inadequate to accommodate this increased demand.” Overall, the report estimated the need for $86 billion in new infrastructure capacity by 2025. Of additional concern is the study’s assertion that only 75 percent of needed resources would be available through known funding sources. As of early September, the South

Carolina Department of Transportation had $847 million in outstanding contracts but only $47 million in the bank. The imbalance came as a result of what St. Onge told lawmakers was a “perfect storm” created by poor construction business elsewhere and favorable weather conditions that expedited contractors’ work focus on road projects. The agency was overwhelmed with unexpected invoices all at once while it was transitioning to a new accounting system. Port prepares for mega-ships Fiscal Year 2011 was good for the Port of Charleston, with container volume increasing nearly 8.4 percent and noncontainer volume (such as automobiles) by a whopping 22 percent. Cruise ship business more than tripled to 178,518 passengers. SCSPA operating revenue rose by 11.5 percent over last fiscal year to $124.6 million. In its 2012 budget, SCSPA projects a 6.6 percent increase in container volume and is planning $82 million in capital projects. “Here in South Carolina, our seaports have been a deciding factor for major investments for decades. Many of the state’s largest employers – and many smaller ones – are involved in international trade through our ports. Site selectors look carefully at a state’s transportation network, labor force, available incentives and resources and at the ports to make their decisions,” SCSPA President Jim Newsome said. “Over the next decade, the South Carolina Ports Authority plans to invest about $1.3 billion in new and existing terminals. This plan includes a new container terminal – the only permitted port terminal currently under construction on the East Coast, major improvements to existing facilities, technology upgrades and a new cruise terminal.” Right now, the most compelling infrastructure issue for South Carolina is deepening Charleston Harbor. With the Panama Canal in the process of expanding to accommodate s c c h a m b e r. n e t |

The most compelling infrastructure issue for South Carolina is deepening Charleston Harbor. With the Panama Canal in the process of expanding to accommodate even larger “post-Panamax” ships by 2014, the race is on to better receive the mega-ships along the East Coast.

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Myrtle Beach is the largest tourist destination in the country without an interstate running to it.

even larger “post-Panamax” ships by 2014, the race is on to better receive the mega-ships along the East Coast. These ships already call on the Port of Charleston, but their window of access is limited to only two hours a day, based on the tides. “There is no more critical project to our economic future than harbor deepening,” Newsome said. “Big ships aren’t just a thing of the future. Already, ships too large to transit the Panama Canal are calling on the Port of Charleston with the help of the tides. These big ship calls will increase their frequency in the coming years, necessitating the need for a deeper harbor that can accommodate these ships under any tidal condition, 24 hours a day.” Newsome praised Sen. Lindsey Graham and Congressmen Jim Clyburn and Tim Scott for their support of the proposed harbor project. In August, Sen. Graham said, “Failure is not an option. The harbor is a lifeline to South Carolina, and $350 million is needed to deepen the port. If we don’t do this, we are saying large ships cannot come here. It will be the end of the Port of Charleston and a blow to the economy. We would not be able to recover.” Sen. Graham noted that South Carolina ports are responsible for one in five jobs in the state, and expansion should be a national priority to keep South Carolina competitive internationally. The South Carolina Department of Commerce recently reported that 2010 exports totaled more than $20.3 billion in goods sold to 192 countries. The number represented a 23.2 percent increase over 2009 and ranked South Carolina 17th in the United States. Certainly all regional ports are competing for postPanamax business, including nearby Savannah. Newsome says Charleston has the clear advantage, and the U.S. Army Corps of Engineers recently concluded that Charleston would provide the best return on investment. “Our project has a smaller environmental footprint,” SCSPA spokesman Byron Miller added. “Savannah is a river port. We actually have a harbor here with less channel area needing deepening. Also, it’s an entirely saltwater harbor. With the Savannah River, you get into freshwater and wetlands issues. Ours is a much easier-to-realize project for a number of reasons.”

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South Carolina Department of Commerce Secretary Bobby Hitt sees infrastructure as fundamental in the big picture of growing business in the Palmetto State. “South Carolina’s location on the East Coast certainly helps attract investment, but that wouldn’t matter without solid supporting infrastructure,” Hitt said. “We have to build on our foundations and make sure we continue to meet the needs of new as well as existing businesses. We want to make sure the Ports Authority is ready in 2014 to handle the increased number of ships coming into South Carolina. That also means, among other things, making sure the road and rail access to the port will be able to handle the increased traffic. All of that will be very important in making sure the Port continues to be an asset in recruiting companies.” “Charleston’s status as having the deepest water in the South Atlantic, and the economies of scale that can be realized by deploying big ships here bodes well for our future” said Newsome. Tourism on the rebound Generating more than $14 billion annually, as many as one in 10 jobs statewide and more than $1.1 billion in state and local tax revenue, tourism is a consistent economic engine for South Carolina. In February, Duane Parrish, the new director of the South Carolina Department of Parks, Recreation and Tourism (PRT), projected that South Carolina tourism would grow about 10 percent over the coming two years. He remains optimistic that, despite post-recession challenges, the state soon will realize strong tourism numbers. “The recession has certainly had impact on tourism,” he said. “As a hotelier, I personally experienced one of the worst years ever in 2009. While things have improved, we still have a long way to go. I always believe people will vacation, it’s just that question of how far, how long and how much. We have an opportunity to make the best of difficult times. Things are improving, just slower than most would like.” “We are presently between 7 percent and 8 percent (in tourism growth) for 2011,” Parrish continued. “If we don’t make the 10 percent increase for 2011, we will certainly be close. I also believe 2012 should be a double-digit improvement year.” Insofar as infrastructure priorities that directly will support tourism are concerned, Parrish feels that the completion of I-73 into Myrtle Beach should take precedence. The planned connector has been controversial, with supporters arguing it’s essential for growing area tourism and opponents insisting existing roads can be modified to handle the traffic and that new construction will disturb important wetlands. “Myrtle Beach is the largest tourist destination in the

country without an interstate running to it,” Parrish said. “Steady traffic flow is critical to its success. Hurricane season happens to coincide with the peak tourist season, which is an even more compelling reason for the completion of the interstate, because it will become essential for evacuations as well. Traffic is a frustration now, and I don’t want it to get worse.” “Economic analyses suggest visitation to the Myrtle Beach area could increase 7 percent to 10 percent with an interstate connection,” said Brad Dean, president of the Myrtle Beach Area Chamber of Commerce. Other infrastructure projects, he added, call for more money than is currently available. “Yet there is no industry that delivers a better return on investment to South Carolina taxpayers than tourism.” Parrish sees air service to key destinations as a second priority. He said the continued recruitment of additional air carriers is critical to tourism’s growth. “Southwest Airlines has increased the number of passengers using the Charleston airport by 25 percent and over 30 percent at the Greenville/Spartanburg Airport. This has been instrumental in attracting more conference business to both locations,” he said. ”Conferences comprise a large chunk of tourism business, and supporting air service is essential. Southwest answered that question for Greenville and Charleston. Columbia needs that same kind of success.” Part of Parrish’s game plan for PRT is to switch spending of some external marketing dollars to in-state promotion. The move is a first in the agency’s history, but as more citizens are traveling shorter distances to get away, it makes sense to reach in-state audiences. He also will focus on keeping interstate welcome centers open seven days a week. Water and sewer critical With up to 40 percent of the state’s population living in rural areas, it’s important to consider infrastructure needs in lesspopulated locations, which many job-providing industries find attractive for building. House Minority Leader Harry Ott, a farmer from St. Matthews, is a longtime supporter of the state’s Rural Infrastructure Bank. “You wouldn’t believe it, but water and sewer are the most limiting factors in growing rural South Carolina,” Rep. Ott said. “Most of the towns and communities that have sewer have no more capacity to add systems. If you don’t have access to sewer, you are dead in the water.” Rep. Ott added that outside companies that might build in rural South Carolina will look elsewhere if water and sewer systems are not adequate. That could come at a steep price to jobs and economic recovery in rural areas. A 2009 report from the American Society of Civil

Engineers (ASCE) found South Carolina’s drinking water infrastructure “needs an investment of $1.25 billion over the next 20 years.” Furthermore, it identified $698 million in needed wastewater infrastructure improvements. “We have to look at investing in the future if we are going to grow rural South Carolina. We have to be able to access more money to put in new, larger systems to be ready for industries that want to locate in rural South Carolina,” Rep. Ott said. “It’s just a matter of us putting the right priorities in place. We have to grow this (rural infrastructure) bank over time. I think it would be an investment in the future.” The state Budget and Control Board estimates that, in the next 10 years, South Carolina’s population will grow about 8.5 percent to more than 5 million people. Infrastructure – from transportation to utilities to broadband – must keep pace if South Carolina is to remain competitive. “We fundamentally have too much to accomplish and not enough resources to accomplish it,” St. Onge said. “That is a common theme.” As infrastructure needs have been identified at every corner of the state, the age-old principle of home rule still resonates among local jurisdictions in South Carolina that favor local assessment and control of infrastructure needs. “As part of their focus on encouraging economic growth, South Carolina cities and towns are particularly interested in local funding flexibility to prioritize and manage their infrastructure needs from roads and bridges to sewer and wastewater treatment,” said Reba Campbell, deputy executive director of the Municipal Association of South Carolina. “While some counties in the state have opted go to the voters with a penny capital projects sales tax to fund local infrastructure projects, cities currently are not able to make that same option available within municipal boundaries. In these times of shrinking dollars from the state and federal governments to fund infrastructure, we would like to see voters have the option of approving a penny sales tax to fund local infrastructure projects they deem priorities within city limits.” By virtue of the state’s existing transportation infrastructure, many supply chain businesses have established distribution centers here, including Walmart, s c c h a m b e r. n e t |

A 2009 report from the American Society of Civil Engineers (ASCE) found South Carolina’s drinking water infrastructure “needs an investment of $1.25 billion over the next 20 years.”

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Before you dive in, you’d better know exactly how deep the water really is.

See time-lapse video of simultaneous 8,000 TEU ship calls.

The deepest channels in the Southeast are in Charleston, South Carolina, the only port in the region that routinely handles 8,000+ TEU post-Panamax ships drafting up to 48 feet. With the expansion of the Panama Canal coming in 2014 and even more big ships on the way, you need a post-Panamax supply chain to reduce risk and cost. And you can only realize the benefits of these ships in a port capable of handling fully loaded ones. So before you take the plunge, visit PortCharleston.com.

The state Budget and Control Board estimates that, in the next 10 years, South Carolina’s population will grow about 8.5 percent to more than 5 million people. Infrastructure – from transportation to utilities to broadband – must keep pace if South Carolina is to remain competitive. UPS, Walgreens and Tire Kingdom. Orangeburg County and a Dubai company, Jafza, have been nurturing the development of a major distribution center for years and recently opened the first structure of its planned $700 million Global Logistics Triangle, the 16,000-square-foot Santee Enterprise Center. Easy access to the state’s ports and interstates continues to attract business and industry, and the state must keep pace in terms of infrastructure growth. Department of Transportation Secretary St. Onge is excited about a pending partnership led by New Carolina and its transportation/logistics industry cluster. “We are hoping that Commerce, SCSPA and DOT will come together and collectively fund a study, probably using the South Carolina university system,” he said. “We will use New Carolina as a vehicle to join industry partners together to inform this important planning work. There has to be a mechanism where Jim Newsome (SCSPA) and I clearly agree on the priorities from his vantage point. Bobby Hitt from Commerce already is on board. The whole state needs to be part of a regional plan and design.” St. Onge estimated that a comprehensive plan could be developed within two years, and whatever emerges must be “both strategic and functional.” “Obviously, funding is an issue,” PRT’s Parrish said. “But you are not going to stop growth. You can only manage it.” Kristine Hartvigsen is a freelance writer based in Columbia, S.C.

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10/17/11 1:01 PM

USC School of Medicine–Greenville welcomes students August 2012 As an academic institution, Greenville Hospital System University Medical Center (GHS) trains medical professionals in hopes of easing projected shortages of doctors, nurses and other health workers. Starting August 2012, GHS will serve as campus home for the charter class of medical students at the new USC School of Medicine–Greenville.

Why is this considered a “prescription for success”? Because the best way to ensure a workforce of health professionals is to “grow them yourself.” Students and residents often settle where they are trained, which means GHS can help meet the medical needs of our growing community.

ghs.org

110504

Since 1984, AFL has manufactured over 680,000 miles of fiber optic cable right here in South Carolina—that’s enough cable to wrap around the world 86 times! We provide the engineering expertise, technologically-advanced products, and superior service for telecommunications, broadband, and data centers as well as the emerging markets of oil and gas, medical and industrial – just to name a few! With 600 employees right here in the Upstate, we’re proud to call South Carolina home.

www.AFLglobal.com

Dedicated people. Dedicated energy. “Our customers are counting on SCE&G to provide clean, reliable energy for the future. As South Carolina business and industry continues to grow, so does the demand for more electricity. We believe nuclear power is the right choice to meet the state’s future energy needs.” SCE&G’s two new nuclear reactors will fuel economic growth in South Carolina. As many as 3,000 jobs will be created during construction and up to 800 permanent positions when the plants begin operating. Visit scnuclear.com for more information.

Jeff Archie, Chief Nuclear Officer

Moving South Carolina into the top tier in the nation By Jim Reynolds

S o u t h C a r o l i n a B u s i n e ss |

November/December 2011

S 4 4 4 4 4

outh Carolina is competing for jobs and investment not only with North Carolina and Georgia but also with Germany, China and Brazil. To compete and win in the global knowledge economy, our state must have top tier education performance and a world-class workforce. To accomplish that, we must set high goals and map out strategies that will get us there. That is why the South Carolina Chamber of Commerce established 2020 Education Goals in 2009 that will put South Carolina in the top tier of states in education performance. There are five strategies required for us to get there.

Prepare children to succeed in school. Increase the pipeline of high school graduates prepared for college and careers. Align higher education to economic development strategies. Connect adults to education and training. Develop a culture of valuing education.

Outlined below are the strategies and actions being implemented in South Carolina that will enable our students and adult workforce to become globally competitive. 1. Prepare children to succeed in school, and focus on reading proficiency for all students from kindergarten through graduation.

hirty-eight percent of third-graders in South Carolina read below grade level. Students who cannot read proficiently fall behind in all subjects, and most do not catch up. Fewer than 75 percent of all students make it to graduation. Research tells us that 85 percent of brain development happens from conception to age three. Interacting with parents who are talking, making eye contact, reading, nurturing, providing stability and safety are critical components to an infantâ&#x20AC;&#x2122;s healthy brain development. High stress and toxic environments for infants can impair brain development, causing those children to struggle in school. A number of states, including Georgia, are restructuring government to create departments of health and education for children 0-5 that pool all resources into one organization focused on helping parents prepare their children for success in school. Pottsdown County, a pilot program in Pennsylvania, reduced the percentage of first-graders in special education from 21 percent to 3 percent. 4-K preschool needs to be available to all at-risk children. In addition, summer reading programs for students reading below grade level and for students in poverty prevent reading skill regression between grades. These reading programs will help close the achievement gap and increase the number of students mastering their course work as they progress from grade to grade. Michelin employees tutor students in reading in Title One schools near its plants. This is a best practice that is being shared with all South Carolina Chamber Thirty-eight percent of third-graders in South Carolina read below grade member companies. level. Students who cannot read proficiently fall behind in all subjects,

and most do not catch up. Fewer than 75 percent of all students make it to 2. Increase the pipeline of students graduating from high school graduation. ready for college and careers through the EEDA, known as Personal Pathways to Success. inety-eight percent of all high school students now have an Individual Graduation Plan and have chosen a cluster of study based on their career goals. Josh Gates at White Knoll High School chose Science, Technology, Engineering and Math as his cluster of study and is majoring in Aerospace Science. Following college and graduate school, his career goal is to become an astronaut. Every high school in South Carolina has adopted an at-risk program vetted by the Clemson National Dropout Prevention Center. Last year, 31,000 of the most at-risk students in the state were enrolled in one of those programs, and 91 percent of those students successfully completed their year, advanced to the next grade and did not drop out of school. From 2008 to 2010, South Carolinaâ&#x20AC;&#x2122;s dropout rate fell by 22 percent, from 8,032 students per year to 6,265.

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Darnell Williams was in the bottom quartile of his class at Swansea High School and on track to drop out. After entering the Jobs for America’s Graduates program, he stayed in school, raised his academic performance to the top quartile of his class and graduated in June 2010. Williams is now enrolled at Midlands Technical College majoring in business and plans to become an entrepreneur. A natural leader, Williams now mentors inner-city youth in a Gang-Out program. Last year, businesses provided 127,000 extended work-based learning opportunities to students, allowing them to spend a day with a successful career mentor and test drive their career goals. The 12 Regional Education Centers connect employers to students and foster seamless education and career planning in local communities. All public colleges and universities in our state now have articulation agreements, and sctrac.org provides online information on college course transfers. A transfer student at Coastal Carolina saved 15 credit hours by using the SCTRAC program. Under the Commission on Higher Education’s Course Alignment project, college professors are working with high school teachers to better align high school curricula to college course work, preparing students for a seamless transition to college. 3. Align higher education to statewide economic development strategies. he SmartState Endowed Chairs program mandate is the creation of well-paying jobs and enhanced economic opportunities in knowledge-based industries for all South Carolinians. There are now 38 SmartState Endowed Chairs, world-class scientists and engineers at MUSC, USC and Clemson. $400 million has been invested in South Carolina from corporate, private and federal sources, with an additional $600 million in commitments. To date, 5,000 high-paying, knowledge-based jobs have been created in our state along with a host of new startup companies. FirstString Research, a startup company from the Regenerative Medicine Center, is developing therapeutics for scar prevention and tissue regeneration. The company’s first commercial product is a topical gel that prevents scars. South Carolina lags the nation in the percent of adults with a two- or four-year degree. With an increased emphasis on college and careers, from 2000 to 2010, the state has experienced a 33 percent increase in two- and four-year college enrollment. The South Carolina Commission on Higher Education’s New Front Door project is creating new, accessible pathways that make it easier for adult learners to prepare themselves for career-relevant postsecondary education and training. South Carolina is creating a knowledge network/stackable certificates system that makes it easier for adult learners by tying literacy, adult education, workforce training and college preparation into a coherent whole with a dual focus of education and career advancement. The first pilot program is in Cherokee County where Adult Education partnered with Spartanburg Community College and Nestle to provide stackable education and workforce certificates. Additional pilots are planned for the Pee Dee and Charleston regions.

In 2010, businesses provided 127,000 extended workbased learning opportunities to students, allowing them to spend a day with a successful career mentor and test drive their career goals.

4. Connect adults to education and training so their knowledge and skills stay current with technology and the demands of global competition. n South Carolina, 500,000 working age adults do not have a high school credential, and many in the workforce are not regularly upgrading their knowledge, skills and computer literacy. While South Carolina has a high rate of unemployment, there are more than 50,000 jobs going unfilled because employers cannot find workers with the technical skills needed to perform those jobs. By increasing access to testing sites, Adult Ed students also earn more than 10,000 WorkKeys® Career Readiness Certificates each year. To meet the workforce needs of the next decade, South Carolina must double the number of adults earning GEDs to 15,000 per year and connect those GED earners directly into technical colleges for job training and employment. More than 155,000 South Carolinians have earned WorkKeys Career Readiness Certificates, more than any other state except Georgia. WorkKeys is the common language between educators and employers, certifying a person’s mastery level of foundational knowledge required by all jobs in the economy. WorkKeys tests measure competency in reading for information, locating information and applied math. The scores range from three to seven, and a national database of job profiles provides a guide to score levels necessary for every job in America, from cashier to CPA, from plumber to electrical engineer, from line supervisor to CEO. Employers can recognize,

The Adult Education Office of the South Carolina Department of Education has increased the number of GEDs earned annually from 4,364 in 2004 to 7,749 in 2010 and now exceeds the national GED pass rate.

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November/December 2011

request or require a WorkKeys score as part of their hiring process, and many South Carolina employers are using the WorkKeys system for staff development and promotion. There are 360 QuickJobs courses at the technical colleges in South Carolina. These courses last three to six months and are designed to prepare adults to fill high need jobs identified by employers. The jobs and training cover a full spectrum, including skilled trades, the IT industry, health care and manufacturing, and thousands have completed the courses and found new careers. “Besides having my son 10 years ago, enrolling in the welding program at Midlands Tech was the best thing that has happened to me. Before completing the 24-week welding program, I was making $500 per week. Now I’m on pace to make $100,000 per year,” said Cory Mickle, a welder at Carolina Energy/Westinghouse. Apprentice programs have a dramatic impact on productivity and quality. Four years ago, South Carolina had 777 registered apprentices. Georgia and North Carolina had 8,000 and 10,000. After implementing an apprentice program at Roche Pharmaceuticals in Florence and seeing its impact, Don Herriott concluded, “If your competitor has an apprentice program and you don’t, in 10 years, you will be out of business.” Three years ago, the South Carolina Technical College System started Apprenticeship Carolina to help businesses cut through the bureaucratic red tape and start up registered apprentice programs that meet their needs. Today, South Carolina has 3,007 registered apprentices in industry sectors including advanced manufacturing, health care, technical services and IT, and one new program is being added every week. 5. South Carolina must develop a statewide culture of valuing education. he recession and high unemployment in South Carolina has put a spotlight on the value of education. The unemployment rate for college graduates is 4.3 percent versus 14.3 percent for those without a high school credential. Students and families are getting the message – drop-out rates are down 22 percent, and college enrollment is up 33 percent in South Carolina. When parents invest in job training through WorkKeys, apprenticeships and QuickJobs and then earn better jobs and more money, they tell their children to complete their education. When students see the relevance of school to their career goals, they understand the importance of graduating and going on to two- and four-year colleges. For more than 10 years, business, education and government leaders have partnered to put a priority on education and workforce development. The innovations we have developed and the resources we have committed are paying off. The U. S. Chamber of Commerce now ranks South Carolina 18th in the nation in preparing its workforce for the knowledge economy. We are moving towards the top tier. To achieve our goal, we must continue to champion what is working, and we must continue to innovate. We must implement a plan to prepare children for success in school and dramatically improve the reading proficiency of all our students. We must transform our K-12 system from assembly line education to learning tailored to the individual student in a manner that measures mastery, not seat time, and utilizes technology to provide access for all students. Our tax system must be transformed to provide adequate and sustainable resources for K-12, two- and fouryear colleges and endowed chairs. We must be disciplined to fund strategies and programs that produce the best outcomes for our students and adult workers. We have proven to ourselves South Carolina can successfully innovate and significantly improve education results. The South Carolina Chamber’s 2020 Education Goals provide the benchmark metrics for keeping us focused on the goal of top tier education performance and a globally competitive workforce.

To achieve our goal, we must implement a plan to prepare children for success in school and dramatically improve the reading proficiency of all our students.

Jim Reynolds is the chief executive officer of Total Comfort Solutions and the incoming chairman of the South Carolina Chamber of Commerce Board of Directors.

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Bank of America is proud to support the South Carolina Chamber of Commerce. Like individuals, businesses are members of the community too. The most extraordinary enterprises take this connection to heart, doing what they can to help their neighborhoods grow. Bank of America is pleased to invest in the South Carolina Chamber of Commerce for its active community involvement and appreciation of its important role in advancing the public good.

Visit us at bankofamerica.com

ÂŠ 2011 Bank of America Corporation SPN-101-AD | ARD1J1U2

Whether your color is garnet or orange,

No doubt, USC and Clemson are bitter rivals on the gridiron. But when it comes to saving South Carolinaâ&#x20AC;&#x2122;s environment, combined both schools make a top-ranked team. Clemson and USC are committed to being green. In fact, both schools are leaders at reducing emissions building energy-saving facilities involving students and faculty

recycling more buying local food

Even the big grudge game is green. The University of South Carolina has teamed up with Santee Cooper to ensure all the electricity needs for the annual rivalry game on November 26, 2011, in Columbia is produced by Green Power. Green Power is clean, renewable energy generated from resources right here in South Carolina. We invite Gamecock and Tiger fans everywhere to join their schools in being green. It has the power to change South Carolina and the world. College Sustainability Report Card 2011

For more insight, visit www.scgreenpower.com.

Solving a taxing problem

W • • •

hen Act 388, the property tax/penny sales tax swap, went into effect in January 2007, South Carolina’s unemployment rate stood at less than 6 percent. Today, even as the national unemployment rate is stabilizing, South Carolina’s unemployment rate stands almost two full points higher and is on the verge of surpassing 11 percent. Obviously, the primary responsibility for the dramatic surge in joblessness falls on the Great Recession and not any particular piece of legislation. But Act 388, as a symptom of a deeper illness afflicting our state, might explain some lingering questions:

Why is South Carolina suffering more than the rest of the country and more than any of our neighboring states? Why, when businesses are slowly beginning to reinvest across the country, are they reluctant to invest in our state? Why must a state whose political leaders pride themselves on creating a “business friendly environment” continually pass special legislation to attract major job-creators to the South Carolina?

Act 388 perfectly illustrated the dangerously unpredictable nature of investing in South Carolina. The legislature promised the “tax swap” would be revenue neutral and would not affect businesses in the state. Of course, when the recession hit and sales plummeted, states and communities had to look furiously for a new revenue source to tap. Within two years of Act 388’s passing, more than $250 million in property tax burden shifted onto the business community and cost the state well over half a billion dollars. As the economic downturn wears on, who knows how many more dollars businesses will have to pay in taxes, or how much longer (if ever) it will take for the tax swap to become revenue neutral. Meanwhile, businesses are looking to make long-term investments into states with a fair and stable business climate. As such, Act 388 illustrates only the tip of the iceberg. An honest appraisal of South Carolina’s tax code shows not that our state has generally low or high taxes but

S o u t h C a r o l i n a B u s i n e ss |

November/December 2011

Why S.C.’s

broken tax system is bad for business By Mike Fanning

rather a schizophrenic assortment of both excessively high and unreasonably low taxes. • Want to buy a house? Move to South Carolina, which boasts the fifth lowest residential tax rate in the country. • Want to buy an industrial or commercial property to start a business and bring jobs? Buy somewhere else, as South Carolina boasts the highest industrial tax rate and the seventh highest commercial tax rate in the country. • Of course, for a state that tries to attract retirees and people looking for vacation homes in our many beautiful places, you’ll see almost no smiling faces when they realize they pay tax rates often 150 percent higher than in neighboring states like Georgia, North Carolina, Tennessee and Virginia. • Want to buy a Lear Jet or a Lamborghini? Buy it in South Carolina, as we’ll only tax you $300 on your millionaire toy, the same as we’ll charge Joe Six-Pack buying a $5,000 Hyundai. Did Act 388 lower taxes for South Carolinians? Certainly – for some. But it did nothing for most, raised taxes for others and unexpectedly and unfairly shifted the burden of paying for South Carolina core needs to the business community. And that, in short, is the story of South Carolina’s current tax code, if something so ungainly and irrational can even be described as code. It contains neither rhyme nor reason, it favors the needs of the few over the needs of the money, it applies temporary fixes to permanent problems and permanent fixes to temporary problems and it was built, piece by piece, special legislation by special legislation, with no oversight or accountability. In the 1980s, Hurricane Hugo devastated much of South Carolina. The legislature responded to the immediate crisis by passing a variety of relief funds and tax exemptions to help our state recover. In the 1990s, the

essence, is how South Carolina’s tax “code” came to be. The $300 cap on automobile sales is perhaps the most egregious example of this unfortunate tendency to react to a specific crisis and forget all about reasonable readjustments once the crisis is past. In 1984, both North Carolina and Georgia had caps on sales tax applied to cars. When our legislature decided to fund that year’s Educational Improvement Act by raising the sales tax from 4 percent to 5 percent, the car sales lobby demanded a cap for their support. Thus, for well over 25 years, the sales tax on vehicles in South Carolina has remained exactly the same ($300), while both Georgia and North Carolina have eliminated their caps. According to the Tax Realignment Commission (TRAC), established by our own legislature, “a resident purchasing a $6,000 car pays an effective sales tax rate of 5 percent – a rate that is 10 times higher than a resident buying a car that costs $56,000, whose effective tax rate in South Carolina is just 0.54 percent – a tax rate 10 times less on a car that costs 10 times more.” This is a cap that gives away $152 million of taxpayer dollars every year. Not only that, but that same cap applies to yachts ($5 million more), jet planes ($1.2 million), RVs ($8 million) and mobile homes ($26.6 million). If you could figure out a way to put four wheels on a $16,000 pair of alligator skin Gucci boots, you could likely talk South Carolina into fitting them under the cap. Of course, none of this is to pick on automobile dealers (or yacht and Lear dealers). Just like any business owner, it’s their duty to make sure their best interests are served. Of course, thanks to the law of unintended consequences, it’s not always easy to perceive our best interests. While a low cap on auto purchases might well help sell cars, South Carolina’s business property tax rate is the fifth highest in the nation. On my last visit to a car dealership, I couldn’t help but notice they owned a few acres of property. If we eliminate or raise the cap on cars, while lowering our excessive business property taxes, car dealers will pay no more in taxes while saving millions they spend in lobbying to

Charleston Naval Base closed, causing serious damage to the local economy. In response, the legislature passed a number of exemptions to help restore the livelihoods of Charlestonians and the commercial prospects of the area. However, unlike the much derided federal program, our legislature forgot to include many sunset clauses. As a result, people are still receiving subsidies dating from Hugo, and tax exemptions specifically designated to help Charleston recover from a decade’s old crisis are still in effect. And that, in s c c h a m b e r. n e t |

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the wisdom of its three-legged stool tax structure (property, income and sales), in which we enjoyed lower overall tax rates, while better weathering economic storms. With Act 388, we lopped off one leg of the stool (property tax) and now rely exclusively on sales and income taxes for almost 90 percent of our General Fund. And our legislature continues to make rickety tinder wood of the remaining two legs, with exemption after exemption. South Carolina’s industrial property tax is the nation’s highest, while our primary residential property tax is the fifth lowest. Our top rate income tax is 13th highest in the country, but 41 percent of South Carolinians pay no income taxes at all. Our sales tax is among the highest in the nation and two cents higher than our neighbors, but we collect less than we exempt. Even as more and more of our state’s population moves closer to the state lines (more than 41 percent of our residents live in border counties), our state charges a 6 percent sales tax, while North Carolina charges 4.75 percent and Georgia charges 4 percent. When families in North Augusta and Fort Mill decide to buy new dining room sets, will they do it across the street, or will they go a few miles up the road to save almost 30 percent in sales tax? Just four years ago, we showed our current and prospective business community that a “revenue neutral” bill, supposed to have no impact on businesses, could cost them $250 million in just two years. We are reduced to begging each new business to come to our state with a platter of fresh incentives because they know the rules could change at a moment’s notice because of new legislation passed by the taxidermy lobby (another tax exempt “service”). So far, South Carolina’s legislature has planned for today while ignoring tomorrow. It has thrown incentives at one business while forcing others to take up the slack. It has tried to patch a crumbling house one crack at a time instead of investing in a new and solid foundation. South Carolina needs true, honest and comprehensive tax reform. We must lower overall tax rates and make South Carolina a truly competitive state. We must restore the stability of our three-legged stool by modifying Act 388 to reduce the huge property tax disparity, lowering income tax exemptions and

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For well over 25 years, the sales tax on vehicles in South Carolina has remained exactly the same ($300), while both Georgia and North Carolina have eliminated their caps.

South Carolina boasts the highest industrial tax rate and the seventh highest commercial tax rate in the country.

A n t h o n y S e e b a r a n / K . N o g a m i

preserve an exemption that no longer provides any competitive advantage to our state. We got ourselves into this mess by tacking on exemption after exemption without looking at the bigger picture, and we can’t get ourselves out by attacking one of two high-profile exemptions like the car tax cap. For our state to be truly competitive, and to be fair to owners of each and every business across the state, our legislature needs to completely, uniformly, fairly and rationally overhaul our tax code. Most of us know about Act 388 and the car tax cap, but few people know about the 80+ sales tax exemptions in South Carolina. We don’t tax 70 percent of the cost of a portable toilet or 50 percent of the cost of a modular home. We don’t tax phones or phone cords purchased from telephone companies, twine and paper used for newspapers (or even the sale of newspapers), supplies for dry cleaners or the dry cleaning costs of cruise ships, automatic cleanout systems for chicken cages, AM radio stations, asphalt taken out of the state or concessions at the Pig on the Ridge festival in Ridgeway. Meanwhile, we do tax the other 30 percent of a portable toilet and the other half of the modular home. We tax phones from Walmart, strings for flying kits, paper for your child’s notebook, sales of magazines, supplies for Laundromats, dry cleaning for gloves to manually clean chicken cages, sales of FM radio stations, the asphalt you use to pave your driveway and concessions at the State Fair. Think of it this way: While you’ll pay sales tax on the Twizzlers you sneak into the movie theater, you won’t pay any on the fresh popcorn you get at the concession stand. While no one has commissioned a study to measure the precise cost of these exemptions, economists estimate it costs the state at least somewhere in the range of a $1 billion a year – possibly significantly more. Our state continues to give away another $1 billion in taxpayer money each year, rather than reducing the tax rates for everyone. Who can even keep up with all these exemptions? We need government agencies to administer and enforce compliance. And with a tax code as archaic and impenetrable as South Carolina, a recent study showed that our state had to spend more than 25 cents for every dollar in taxes it collected. South Carolina’s tax code is bad business for the consumer and bad business for business. However, it’s fantastic business for the lobbyist, the campaign staffer and the government bureaucrat. South Carolina desperately needs businesses to invest in our state and bring real jobs to average South Carolinians. But our tax code doesn’t help to do that. Each exemption that attracts one business to our state keeps another one away. Every loophole here creates an unnecessary surcharge there. So, why isn’t our “business friendly” state attracting businesses? Why are we suffering more from the recession that the rest of the country and the rest of our neighbors? Because our tax code, truly, is friendly to no one, even those who think particular exemptions are worth keeping. While South Carolina’s overall tax burden is low, the entirely unpredictable nature of its tax code is a disincentive to businesses and individuals alike. Economists once praised South Carolina for

South Carolina needs true, honest and comprehensive tax reform. reducing our rates across the board, while eliminating most of South Carolina’s more than 200 sales and service tax exemptions (which the TRAC report believes could allow us to reduce our sales tax to 3.5 cents, lower than both North Carolina and Georgia). We must increase competitiveness by creating an attractive tax structure (overall rates lower or equal to surrounding states) that encourages businesses and individuals to move to and invest in our state. We must create a fair, honest and transparent tax code, with each new tax-related legislation approved by an independent body to prove it will specifically and uniquely bring more jobs, investment and revenue than existing businesses. Each exemption must be introduced as a separate bill with all sponsor names, each exemption must have an enforceable mechanism that captures exempted revenue, and each bill must contain a four-year sunset clause. We must stabilize revenue and ensure that South Carolina can balance its budget and provide core, quality-of-life services that make our state attractive to businesses and individuals. We hear too often that our state’s taxes are too high or that our state is simply broke. But the truth is our state is not broke; our system is. It’s time for South Carolina’s legislature to stop listening to the special interests, reform our tax code, reduce our rates and bring jobs back to this state. Mike Fanning, Ph.D. is the executive director and spokesman for ROAR (Reduce Our Awful Tax Rates), a statewide coalition dedicated to reducing tax rates and improving the quality of life for South Carolinians through comprehensive tax reform. To add your voice to the growing roar, join the contact list at roarsc.com.

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Small business success key to state’s employment growth By Sandy Mau

atrick Baxley had just one day’s notice that he was taking over the family residential electric business, essentially switching from electrician to owner overnight. But in just a few short years, Baxley achieved steady gains in sales and service—enough to garner first-runner-up status for South Carolina’s 2011 Small Business of the Year. Baxley was already taking care of payroll and a handful of other administration functions, but most of his job experience involved time on the company’s service trucks. Suddenly, he needed to manage a business that was losing three out of five employees to other employment. “The first place I sought out for help was the South Carolina Small Business Development Center (SCSBDC),” Baxley said. “Bob Pettit was the first person I went to, and he gave me a lot of really good counsel. Every time I went, it was almost like going to a shrink—I could say everything I was going through. He could look at my business from a numbers standpoint, while I was looking at things from a craftsman’s standpoint. I had to learn to look at my numbers like the owner, not the worker.” James R. “Bob” Pettit serves as Columbia-based manager and business consultant for SCSBDC, a statewide organization that provides consulting services to small and medium-sized businesses via more than

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15 locations across South Carolina. Supported by a consortium that includes Winthrop University, Clemson University, South Carolina State University and the University of South Carolina’s Moore School of Business, the offices work with small business owners to problem-solve and overcome the many challenges entrepreneurs and legacy business owners like Baxley encounter every day. “We are here to advance South Carolina’s economic development by helping entrepreneurs grow successful businesses,” Pettit said, adding that his office alone, which serves seven counties, saw more than 400 clients in the first eight months of 2011. Pettit, an engineer by trade, was thrust into computer software design in his first job out of college, designing business programs for a textile firm in Florence. When the textile industry moved offshore, he used his know-how to start his own successful software business. Twenty-five years later, Pettit sold his successful business and began mentoring startup and small business owners through SCSBDC. One-on-one confidential counseling is the heart of Pettit’s work. From setting up a business’s legal structure to acquiring business licenses, wading through the regulations that can affect small business, assessing credit, defining a market for the business and writing a credible business plan, SCSBDC provides the expertise that can help startup business owners navigate a clear

November/December 2011

path to success. Most services are free. Business growth = new jobs Why the focus on helping small and startup businesses get off the ground? It has long been accepted economic wisdom that small businesses are the locus of job creation in the economy, estimated by one often-quoted study as accounting for 82 percent of all new jobs. While economic development activity

D ouglas P. W oodward , P h .D.

to land big branch enterprises like Amazon or Boeing grab the headlines, research shows small businesses are a larger source of job creation across the nation. Recent research featured in The Review of Economics and Statistics has confirmed the primacy of job creation via small firms (defined as those employing fewer than 20 employees) over large firms, but with a significant caveat: Small firms also come with a high failure rate, so they account for a larger share of job destruction. Weighing job creation against job loss in these entities together, it appears that small companies create jobs at a net rate of 2.9 percent each year—still a higher rate than larger organizations. In South Carolina, job creation by small business is even higher than the national average: More than half of net job gain in South Carolina is created by small businesses. “They are job generators,” said Douglas P. Woodward, Ph.D., director of the research division at the Moore School of Business and lead author of the 2011 report, High Impact Firms in South Carolina. “We won’t have employment creation without a healthy small business sector.” Springboarding from national research that examined the characteristics of the fastest-developing firms—called by MIT economist David Birch “gazelles”—Woodward and his team took a closer look at South Carolina entrepreneurial activity among what he terms “high-impact firms.” These job creation engines may be small or medium-sized enterprises, but they are characterized by strong sales growth and develop from a South Carolina base. “These three percent of all firms accounted for two-thirds of net job creation during the 2004-2008 period we examined,” Woodward said. “If you took these firms away from the economy, we’d really be hurting--even in the good economy examined for this study. You really need these firms to continue to be successful if you want job creation.” A close look at the study reveals common characteristics of high-impact firms. One key finding harkens back to South Carolina’s 2005 Competitiveness Initiative study conducted by the Monitor Group, which concluded that the state should focus its economic development efforts on activation of innovative “clusters,” or geographically close groups of interconnected companies in a particular field. The 2011 high-impact study delved deeper and found that traded clusters—those with products and services traded outside the local economy—are among the most successful. “These are the dynamic parts of the economy,”

Patrick Baxley

Woodward said. “They bring in revenue from outside of our state. What we want to look at next is how many of these have really scaled up to a high level of sales that grows over time. “Our belief is that clusters enable firms to grow and survive because of the synergies they nurture,” he added. “You can reach a critical mass, and that helps to increase the size of these businesses. A geographic cluster can make a difference in survivability for these firms.” Whether a business is home-grown also plays a s c c h a m b e r. n e t |

role in job creation for the long-term, Woodward said— especially for high-paying, executive positions that build as businesses scale up. “That’s where I think we’re weak—where we need to focus our economic strategy in developing our firms,” he said. “Even compared to our neighbors in North Carolina and Georgia, we don’t see a lot of these firms grow as national champions with international markets. We’re trying to look at having more successful champions in this state, who keep their headquarters here when they grow.”

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Information sources for South Carolina’s small and startup businesses

South Carolina Small Business Development Center SCSBDC aids small business startup ventures and assists in the growth of small businesses. It is supported with federal, state and private funds and open to any present or prospective small business owner, generally without fee. scsbdc.moore.sc.edu SC Business One Stop SC Business One Stop is the official South Carolina business web portal, putting state agency information relevant to small business owners in one place. It enables anyone with an existing business or anyone starting a new business to file permits, licenses, registrations or pay taxes. scbos.sc.gov SC Launch SC Launch offers qualifying companies commercialization support, guidance and seed funding. It is open to seed and early-stage South Carolina-based advanced technology companies. launch.scra.org Gene King

Scaling up: Challenges abound One tough roadblock to nurturing more highimpact businesses into the $25 million to $30 million annual sales bracket—the point where national and international trade ties take off and high-salary managerial talent comes into play—is the state’s lack of a large population center. South Carolina lacks a single large population center, the foundation for home-grown business (think Starbucks in Seattle or Whole Foods’ Austin base) to explode on the national or international scene. “There have to be consumers who can drive the sales base for the business to become competitive,” Woodward said. “We’re less urbanized than Georgia with Atlanta, or North Carolina with Raleigh. We have smaller metropolitan areas. I think we need to think hard about that to discover how to help businesses scale up and become more successful.” While the lack of a single high-population, urban demand base is a challenge specific to South Carolina, other oft-cited challenges are not. According to the Pepperdine Private Capital Markets Project’s fall 2011 study of more than 7,500 businesses with revenues of less than $5 million, 35 percent noted that “increased access to capital” would be the change most likely

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South Carolina Department of Commerce The Department of Commerce offers information about business assistance, financing, small business regulation and the Small Business Regulatory Review Committee. sccommerce.com Greenville Chamber of Commerce NEXT NEXT is an initiative to nurture the startup and growth of knowledge-based companies that own intellectual property and have high potential for national and international growth. greenvillechamber.org/next.php South Carolina Chamber of Commerce Small Business Committee The Small Business Committee educates small business owners about legislative and regulatory issues and motivates them to advocate for their peers across the state. scchamber.net

to spur small-business job creation. More than 1,600 business owners responding to the survey said they sought a bank loan in the past year, but fewer than half were successful. SCRA’s SC Launch program was established to support and invest in promising emerging technology companies. According to CEO Bill Mahoney, his organization “works to bridge the gap for promising companies so they can advance beyond initial stages of development and into a viable company with a commercialized technology. This, in turn, creates quality jobs for South Carolinians. SC Launch companies have made significant contributions to the knowledge economy and pay salaries that are well above the state’s

November/December 2011

per capita income. Also, by seeing these companies through startup phases, they have often been able to reach stability and have gone on to secure over $140 million in follow-on funding.” Funding was also cited by SCSBDC’s Pettit as a top challenge for the business owners he sees. “I think there’s more funding today than there was three to six months ago,” Pettit said. One reason may be recent federal funding for small business loans made available under the State Small Business Credit Initiative. Some $18 million in federal dollars is now accessible for small business loans, provided private lenders match $10 for every $1 in federal money loaned.

According to Gene King, managing director of WRSequence LLC and chair of the South Carolina Chamber of Commerce’s Small Business Committee, the number one reason for business failure he sees is undercapitalization. King, a successful entrepreneur himself who currently works with small to middle-sized businesses to find avenues for growth and expansion, said most startups begin with money from the owner’s own pocket—and the next financial transition point may be even tougher to cross. “If you have the passion, the tenacity and persistence, then you go to family and friends for funding. They will either give you the money, loan you the money or you will sell them a small piece of your company for equity,” King said. “The next potential transition is going to ‘angel investors’ or a venture capital fund, depending on the strength of your business plan and what you’re doing.” Steps become more sophisticated after that, most likely requiring expert assistance. “That’s why the business plan is one of the most important things you have to have, and it has to be well thought out from the beginning,” said King. “It’s where most people need to slow down and think through every process, hurdle, deliverable and contingency they can think of so they’ll have an edge on everyone else to make that plan work. You have to live that plan—it’s your bible--and think through all the marketing issues, the value proposition of the company, what is it you’re going to do more or outsell more than anyone else. What is your brand, what is the value of the company, what does your company stand for?” The South Carolina Chamber’s Small Business Committee works to educate small businesses about the policy and regulatory issues that can affect their business growth, and motivate small business owners to actively advocate for their peers across the state. The educate/motivate/activate mantra is working to engage small business owners themselves in the task of improving the overall business climate in South Carolina. Tweaking South Carolina’s small business climate According to most, the policy climate for small business is positive in our state. The Small Business & Entrepreneurship Council’s 2010 Small Business Survival Index ranked South Carolina in the top 10 of states with a positive policy environment for entrepreneurs. “It’s probably as good as anywhere you’re going

to find,” Woodward said. “We have lots of programs to help small business. Where we’re lagging behind is in scaling up these locally-based firms.” King agreed. “I have no criticism for anyone at the state level because I think everyone is trying to do everything they can. A lot comes down to the individual business owner’s passion to be successful.” Small changes in policy could help. According to Garry Powers, chair of the New Carolina Entrepreneurship Task Force and director of Economic Development Initiatives for CTC Public Benefit Corporation, the state’s high growth rate among small businesses points to an overall good climate, “but there are several things going in the wrong direction, especially in the area of property taxes. South Carolina now has the highest property taxes for manufacturing in the country. Over time, as counties have been less able to raise residential property taxes, more and more of that burden gets shifted to businesses, and that’s not good for our state.” Powers also noted that oftentimes smaller, homegrown businesses are less able to take advantage of some of the incentives offered to attract larger businesses into the state. “The lack of larger, tech-heavy, home-grown companies in South Carolina is a significant challenge because these larger companies typically provide the breeding ground for the next generation of entrepreneurs,” Powers said. “We have created a little more than a handful of $25-million-plus manufacturing or other technology-based companies in South Carolina during the last 25 years. If we hope to build a stronger economy, we need to generate more home-grown ‘anchor’ firms. Then, you will see a significant increase in entrepreneurial activity in the state.” Powers pointed to new developments designed to do just that: the South Carolina Department of Commerce is filling two new positions for staff that will be focused on nurturing home-grown, high-growth business. “They’re also developing a Web-based portal that will be the primary online presence for helping small business find resources, from financial programs to business assistance programs,” he said. That kind of one-stop-shopping could be a big help for small business owners like Columbia Electric Services’ Baxley, who are often tasked with the fullrange of small business responsibilities and have little spare time to research the assistance that is available. Because it is publically funded, SCSBDC isn’t allowed to advertise its services and depends on networking via chamber of commerce events and other speaking s c c h a m b e r. n e t |

Garry Powers engagements. Baxley learned about this valuable resource by word of mouth. King noted that bringing all the information into one place that is easy to access would be a valuable asset for South Carolina. Doing what it takes to nurture small business is worth the effort, Woodward notes—especially after three years of economic decline feeding an unemployment rate that now seems mired in double digits. “There’s always an element of unpredictability in the economy, especially if you’re looking at entrepreneurial activity, and there’s not a lot you can do about that,” Woodward said. “We just want to make sure that when these entrepreneurs are successful, they stay here. If it all comes down to jobs, we want more of the legacy startups. There are a lot of entrepreneurs who think they want to start a firm and grow it to the point where they can sell it—but they’re not generating a lot of jobs. “In South Carolina, we are in a favorable position for international business and growing markets because we’re on a coast and have a port,” he continued. “Those new growing markets and our potential growing sales are going to be in Brazil and China. But for most emerging firms, the market is going to start local and then grow from there.” Sandy Mau is a freelance writer based in Columbia, S.C.

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The NLRB’s impact

on business in the coming decade B y J a m e s H . F o w l e s , III a n d T o d d S . T i m m o n s

he National Labor Relations Board (NLRB) has issued a new rule requiring employers to post a National Labor Relations Act (NLRA) rights notice in the workplace. To some, it is just another poster, but to others it is a harbinger of things to come that could spell big trouble for employers. The new NLRA poster is just the first major change of concern. The second deals with the NLRB’s new “appropriate bargaining unit” definition, one that provides unions the ability to organize smaller parts of larger workplaces creating mini-unions. The third deals with proposed NLRB election rules, which reduce the time for an election once a union files a petition. Finally, the U.S. Department of Labor (DOL) wants to increase the reporting requirements applicable to pro-company efforts in a union campaign. The unmistakable goal with all these changes is to reduce an employer’s ability to respond effectively to a union campaign. Employers must post the NLRB notice by January 31, 2012 in a conspicuous location and on a company website if they typically post policies and procedures there. A foreign language requirement also exists. The NLRB’s website contains additional compliance information, including a link to the final rule and answers to FAQs. Many might question why employers are upset about a simple poster. The poster is not as simple as it seems:

6 In comments to the rule, the NLRB made clear its concern over the decline of

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American unions and its desire to encourage organized labor in the United States. 6 Federal agencies rarely, if ever, create a posting obligation for employers without Congressional authority. No such authority exists in the NLRA. For 70 years, the NLRB has only required a posted notice when an employer commits an unfair labor practice (ULP). 6 The NLRB buried a statement telling employees they also have the right not to unionize or engage in protected activity at the bottom of a laundry-list of other items. When asked by business groups to make the statement more prominent, the NLRB merely paid lip service to the request. 6 The poster attempts to reduce a decadesold law with complex interpretations into an 11” x 17” space. Predictably, it fails to do so with any precision. Because the poster is silent as to pitfalls of engaging in certain forms of concerted activity, it may confuse workers, causing them to take unprotected actions that are subject to lawful discipline. This, in turn, could also increase the number of frivolous ULP charges filed by workers. Basically, the poster educates employees on how to form unions, bargain collectively and strike, while commensurately increasing the costs and risks for employers legally stating their positions on unions. The Board’s overreach does not stop with the notice rule. In Specialty Healthcare and Rehabilitation Center of Mobile, 357 N.L.R.B. No. 83, decided August 26, 2011, the NLRB did away with the traditional rule for defining bargaining

November/December 2011

units in non-acute health care facilities. The NLRB instead will apply a “community-of-interest” standard for bargaining units, a standard the NLRB contends is the same one already applicable to other workplaces. Yet, for all employers, the NLRB’s majority appears to have created a much heavier burden than one would consider “traditional.” Employers may now have to prove an “overwhelming community of interest” with employees not in a union-sought unit before the NLRB would expand the unit to include these other employees. As stated bluntly by Member Brian Hayes in a vigorous dissent, “The majority purports to apply ‘traditional community-of-interest’ principles in making unit determinations for nonacute health care facilities. However, their definition of these principles is far from traditional and will have the intended dramatically different results in appropriate unit determinations for all industries.” Given the above, the potential ramifications of Specialty Healthcare are almost legion: * This new approach will result in the proliferation of smaller, more potentially fractured bargaining units and “single job” units even though other employees excluded from those units share common interests. * This new approach brings into question whether an employer can ever successfully oppose any petitioned-for unit. In other words, the NLRB could simply recognize almost any unit proposed by a union unless the employer proves that those excluded have an “overwhelming community of interest.” * With the smaller units arguably now available, unions are more likely to reach

the required showing of interest (30 percent of the employees in the petitioned-for unit sign authorization cards) and force a union election. * A union can also “cherry-pick” particular units, and use those units as a foothold from which to campaign in other job classifications. * If the union wins, the employer then faces bargaining with several small units, each attempting to “leap frog” over the other with their terms and conditions of employment, likely resulting in bargaining impasses and strikes. * Finally, labor tensions might rise with small bargaining units existing side-by-side with groups of competing union or non-union employees. Employers should be concerned about two other proposed rules, one from the NLRB and one from the DOL. The proposed NLRB rule would establish a framework for “quickie” union representation elections. Under new, so-called “quickie elections” within as little as 10-21 days from the date of the union petition, and with critical unit composition and voter eligibility questions deferred until after the election, employers will be hard pressed to communicate views and opinions about unions with employees. The second proposed rule, one from the Department of Labor, is more of the same – an attempt to “chill” the ability of employers to lawfully communicate with employees. This goal is furthered by expanding the definition of persuader activity by limiting the current “advice” exemption.

This limitation will force employers, under threat of criminal penalty, to comply with more cumbersome disclosure and reporting requirements. Employers would have to fill out reports on their consultants, attorneys and other professionals advising them in a representation election. Consultants and law firms would have to report as well, not just when they communicate directly with employees as in current law. The consultants and outside attorneys would have reporting obligations where none existed before. They would be obligated to provide information to the government on all labor relations work performed for all clients, regardless of whether the work is actually related to persuader activity. Moreover, the breadth of the reporting obligations will give the DOL, the NLRB and unions a powerful tool to attempt to gain access to information traditionally protected by the attorney-client privilege. The new NLRA poster rule is just the beginning. In the coming years, employers must be aware that the deck has been stacked in favor of organized labor to severely limit the ability of an employer to respond to an organizing attempt. As a result, employers should consider proactive measures to educate their supervisors and employees - before a campaign begins - on all aspects of organized labor, especially the impact such a third party may have on a company’s competiveness. Otherwise, South Carolina’s traditionally low unionization rates may be a thing of the past. James H. Fowles, III is a shareholder, and Todd S. Timmons is an associate in the Columbia, S.C. office of Ogletree, Deakins, Nash, Smoak & Stewart P.C. s c c h a m b e r. n e t |

J a m e s H . F o w l e s , III

T o dd S . T i m m o n s

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Are you ready for the next decade of social media? By Social Media Club Columbia

S o u t h C a r o l i n a B u s i n e ss |

November/December 2011

“W

Akin Bostiani

Almost half of all active Twitter users access the service through a mobile device, with a whopping 16 percent of all new users starting on a mobile device.

e’ll never stop sharing our memories or getting lost in a good book. We’ll always cook dinner and cheer for our favorite team. We’ll still go to meetings, make home movies and learn new things. But how we do all this will never be the same,” states one of the latest commercials for Apple’s iPad. Apple CEO Steve Jobs has left us with tools and technology that have forever changed the way we connect with people and share information. Do you remember when the wildly popular Motorola RAZR was introduced? That was less than a decade ago in 2004. Who would have thought then that we would be able to hold the power of a computer and the ability to connect with anyone, anywhere in the palm of our hands? Along came Steve Jobs in 2007 with his announcement of the iPhone. The iPhone was a game changer, allowing us to capture and share information in the form of videos, photos and words through social apps and a touchscreen -- putting us in charge of creating the news and choosing how we receive it. The other players in the mobile market soon followed suit with app-based platforms and touchscreens. Back then, you may have known social media as the user-generated content of Web 2.0, and you may have been on MySpace or Blogger. Mobile technology has bridged the gap between the limitations of Web 2.0 at the confines of your desk to the world of social sharing possibilities on-thego. Almost half of all active Twitter users access the service through a mobile device, with a whopping 16 percent of all new users starting on a mobile device. More than 350 million of 800 million active Facebook users access the service through a mobile device. The iPhone 4 is the most popular camera for uploading photos on Flickr with more than 16,179,186 items uploaded, proving we no longer need to wait to upload our photos from a point-and-shoot camera to a computer to share quality photos and videos. It’s clear that mobile technology will continue to dominate and shape the s c c h a m b e r. n e t |

future of social media. So, where do things go from here? While new tools and services will continue to be developed, existing tools and services will continue to integrate third party and native services and streamline processes. It will become so seamless, we won’t even realize when we are and when we aren’t using social media. Maybe we won’t even call it social media. There won’t be a question whether or not you’re doing it any more so than it’s a question now whether or not you have a telephone or an email address. We’ll continue to try out new services, with increased hesitation and resistance, but we’ll lose interest and move on more quickly if we don’t see value and resort to using the tools where we’ve already established our networks. In the future, we are expected to do more with less. The mobile technology of the future will determine how that happens. Facebook and Google may build it, but consumers will be in control of what thrives and what flops. They’ve tried, tested and hyped third party services and integrations, but much of the hype is just that – hype. We’ve seen many of those services like Google Wave come and go because as time-conscious consumers, we are forced to choose wisely where we spend our time. It only makes sense that in the future we will spend it fewer places once we figure out where that value is delivered most effectively, rather than wasting time switching between services and juggling distractions. Ask five people about the future of social media, and you’ll likely get five distinctly different answers. Ideas about the future of social media range from the mundane to bizarre sci-fi fantasies. Just this September there were articles posted on The Syfy Online Network about how researchers at Princeton have figured out how to use functional MRI scans to tell what’s on your mind, and researchers at UC Berkeley have figured out how to extract and play video of what you’re picturing in your mind. Neither of these techniques have been fully perfected to an exact science, but fast forward into the future and partner that with social media for some scary possibilities. It’s safe to say that social media is no longer just a fad. If you still haven’t jumped on the bandwagon, the time is yesterday. Your competitors are whizzing by you and connecting with those clients and customers you want. They’re building relationships and providing value, whether through customer service, information pro vided, special offers or giveaways. Social media has become deeply woven into the fabric of our society and the way we communicate today -- and it is changing at light speed. The future of social media is today. Where are things headed, and how can you keep up? Social Media Club Columbia has some insight on each platform along with useful tips and tools. If you’re already behind and feeling overwhelmed, here are some simple, actionable steps you can take today to get caught up before social media evolves in the coming decade.

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November/December 2011

12/23/10 10:16 AM

GETTING STARTED

Facebook “Build a page – or if you already have your business set up on Facebook as a profile, change it to a business page. Too many businesses are still making this mistake. There are so many more options for a page than a profile that there’s no good reason for not making the switch. Plus, you don’t risk the chance of having Facebook disable your profile for violating their terms of service. After that, focus on content. Post links, photos and videos, then let your fans spread the word and allow the platform to do what it’s built to do. – Rick Stilwell

Twitter

Blogging

“Set up an account, find the most influential people in your area and start interacting with them. Be honest and sincere about what you do and say, and people will follow you. – Chip Oglesby

LinkedIn “This is one of the easiest things you can do. Set up your profile, search for groups and organizations you’re involved with and join those groups. Then, send people in your network connection requests. If you’ve worked with or done business with those you’ve connected with, post a recommendation if you had a good experience. Hopefully, they will do the same in return. Be sure to claim your company profile, and update the information. Much information is delivered by email, but you can customize email delivery settings, including volume and frequency.” – Mandi Engram

“Your blog is your home base for content that you can post through all of your social media outlets, and it helps with search engine optimization through cross linking to your website and social media sites. First, pick a blogging platform. WordPress, Blogger and Tumblr are all easy to use and set up, with tons of options for posting on the go. If your posts are content heavy, WordPress or Blogger will best suit your needs. If you are willing to learn or already have someone on your staff with technical skills, Wordpress allows for more customization. If your posts are short, concise and photoheavy, opt for Tumblr. Research keywords, and link to other relevant sites and content. Post information your audience will find useful. This is much easier than it sounds, so don’t assume this is something you have to outsource. Take a free crash course online through Hubspot’s Inbound Marketing University, and you’ll be well on your way to content creation, audience growth and a boost in website traffic!” – Mandi Engram

Gowalla and Foursquare

LinkedIn is one of the easiest things you can do. Set up your profile, search for groups and organizations you’re involved with and join those groups.

TOOLS, TIPS AND TRICKS

“Create a user account under your business name and claim your location(s). This will allow you to monitor visitor traffic and send custom check-in messages for free. This will also allow you to assess the value in offering a check-in special before paying for a campaign.” – Will McCain

Everything from third party tools to content to timing can be critical factors in your success or failure. Here’s the lowdown on what we’ve learned to be most helpful along the way.

YouTube and Flickr “If you don’t already own one, purchase an inexpensive, easyto-use video camera - or even use the one on your mobile device - and start capturing video. People like to see real videos and photos by people like them. Set up a YouTube account to share your videos, favorite others that interest your audience, use the links to share them through your other social networks or add them to your website. As for photos, creating a Flickr account is easy and allows people to view and download photos you have taken. Set up collections and sets to organize photos, and use your account as an online scrapbook of business projects, events and successes.” - Sarah Katherine Shearin s c c h a m b e r. n e t |

“If you manage multiple business accounts use separate applications to manage personal and professional profiles. It is a great way to queue your brain into being in the correct mindset for each profile. In an age when nothing can be deleted off the Internet, no one wants to post a message to the wrong account.” – Will McCain “For my own personal engagement, lists on Twitter, lists on Facebook and circles on Google+ help keep everything relatively organized. Filter the fire hydrant so you don’t miss the good, relevant stuff.” – Rick Stilwell “Tip: Take time to build engagement on Facebook, Twitter and Foursquare. If someone says something, be sure to respond to them, even if it’s just to say thanks.” – Chip Oglesby

2. 3.

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“It’s so important to track and measure your results, not just for reporting, but so that you know what you’re doing right and where you can improve - in real time. This is also especially helpful if you’re resharing relevant content created by others that doesn’t link to your website. You can’t track those clicks in your website analytics, but you can in HootSuite. If it is something that is on your website, it’s worth the extra few seconds to grab that link and include it in your post. You can get incredible results by making a habit of this.” – Mandi Engram “Don’t take the easy way out and auto-post the same message to all of your social networks. Each network is different, and they each require different language, character limits and content types. Take the time to customize your message to each audience.” – Sarah Katherine Shearin

FIND BALANCE Now that you’re caught up, what do you do now? First things first: The focus shouldn’t just be social media. In a world saturated with technology and constantly evolving tools, traditional media still matters. Make them work together. As much as things have changed and will continue to change, much will remain the same. In this day and age, people expect hyper-targeted content and delivery. Target your message for each of your audiences, but be consistent throughout. Social media is an outlet to extend that messaging and continue the conversation that you started offline online. Determine your goals and how you plan to reach those, then how you will measure your results through each method. Don’t set them in stone. You’ll find out what works and what doesn’t along the way, as well as new and improved tools for measurement. “Businesses must have a web first strategy. All of your bases need to be covered online, and you must make sure that you own your digital presence,” said Chip Oglesby. That means it’s time to take control of your web presence through your website, search engines and social media. Make sure your content is accurate, up-to-date, user-friendly and easily accessible through multiple outlets and on multiple devices. It doesn’t have to be expensive. Just start doing it, and you won’t have to worry about what’s next because you’ll be able to anticipate and be at the forefront of what’s coming. Social media is an incredibly important vehicle for providing fresh, relevant content and as a customer service and communications tool to connect directly with prospective and existing customers. It puts your finger on the pulse of what people are talking about at that very moment and opens up an opportunity to connect directly with your audience and know what they’re saying about your brand. “Sometimes things you think will be a hit aren’t, and sometimes things you think will bomb don’t. That’s the beauty of social media - it can save you from making those mistakes

S o u t h C a r o l i n a B u s i n e ss |

and allow you to fine tune your message when it comes to other more costly marketing and advertising efforts. You don’t get that two-way relationship with traditional advertising, but it’s important to maintain a balance between traditional and new media to create awareness, make connections and keep a captive audience engaged throughout the process,” said Mandi Engram. It’s not too late to get started with social media, but the longer you wait, the more quickly you will fall behind the competition. In a level playing field where you don’t have to pay to play, there’s no excuse. It’s important to take notice of some new or niche tools and know who’s using them. Chances are your target audience is using one or more of the mainstream networks, but they may transition to newer or more niche networks. “With the juggernauts of Facebook and Twitter clearly not going anywhere soon, I am seeing more niche networks with smaller but loyal user groups. People naturally have circles of friends - online and offline - based on shared interests. Google+ has taken this approach by giving us one place to manage these friend groups. Time will tell if they had the right implementation of the idea,” said Will McCain. All in all, there is no right or wrong way to do things with social media, and we don’t know what the future holds. The most important thing is to take the first step and get on the path -- you’ll figure out what works and what doesn’t work for you along the way. No question is dumb, so don’t be afraid to ask questions. We’re all learning as we go, and there are people out there willing to help. Social media clubs are popping up all over South Carolina for that reason, so get online and find one nearby at socialmediaclub.org/localchapters. Social Media Club Columbia includes Mandi Engram, Will McCain, Chip Oglesby, Sarah Katherine Shearin and Rick Stilwell. The goal of Social Media Club Columbia is to provide a community resource for connecting, networking and educating others about social media. For more information, visit smccolumbia.com.

November/December 2011

The most important thing with social media is to take the first step and get on the path – you’ll figure out what works and what doesn’t work for you along the way.

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Brain drain

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November/December 2011

Transferring knowledge

to a new generation By Jim Gray

Sigrid Olsson/PhotoAlto/Corbis

ince the beginning of the 21st century, business leaders have often acknowledged the forthcoming exodus of baby boomer talent and the ensuing risks to their enterprise’s organizational capacity and capability. Many have decried the urgent need for a human capital strategy to address this inevitable crisis. Unfortunately, few have incorporated strategies or processes to reduce or offset the potential “brain drain” feared by many. Statistics are daunting: • By 2020, 16 percent of the U.S. population will be age 65 and over, up from 12 percent in 1999. • According to the U.S. Bureau of Labor Statistics, 50 percent of federal employees and 70 percent of federal senior managers were eligible to retire in 2010. • In 2008, median tenure for employees age 55 to 64 was 9.9 years, almost four times the 2.7 years for workers age 25 to 34. More than half of workers age 55 and older had been with their employers for 10 years or more compared with only 10 percent of those ages 30 to 34. • Twenty-eight percent of employees in the nuclear power industry will be able to retire in five years, while 18 percent of young employees leave after just a few years on the job. • Twelve years from now, 50 percent of nurses will be at or beyond retirement age. • Nearly two-thirds of the engineers in the petroleum industry have retired, and the pipeline to replace them is drying up—there is a record low number of students in petroleum engineering programs. • Lost Knowledge: Confronting the Threat of an Aging Workforce (Oxford University Press, 2004) found that 78 percent of respondents age 55-59 are working or looking for work, as are 60 percent of 60- to 65-year-olds and 37 percent of 66- to 70-year-olds. Across all three age groups, roughly 15 percent have accepted retirement benefits from a previous employer and have then chosen to return to work or are seeking work. • In some areas, science and technology changes occur so quickly that even young employees leaving a company may take with them information that can’t be easily replicated, including critical knowledge of external systems, social networks or new-product development. There are many ways for an organization to identify, store and transfer knowledge. Some strategies will work better in one organization than another. Some may not be appropriate for specific types of content. The challenge is to identify and develop complementary ways to manage and transfer knowledge in an organization. In 2003, the Tennessee Valley Authority (TVA) had a median age of 47. With one-third of their employees planning to retire within five years, attrition potential was high, and the inherent risks of losing the knowledge retained by many long-term employees who planned to depart was quite distressing to top management. TVA’s HR department developed and refined a simple process to identify the knowledge and skills that were at risk of being lost forever. Their knowledge retention program involves an annual survey asking basic questions. With these surveys, TVA’s human resources professionals can identify employees who, according to their supervisors, hold critical knowledge and skills. After the interviews, HR staff members grade each employee’s skills and knowledge on a five-point scale. A score of five points means transferring and retaining the employee’s skills and knowledge

s c c h a m b e r. n e t |

Mentoring, coaching and passing knowledge to others is a skill difficult for employees of all generations to master, and it won’t happen automatically. That’s why organizations need to ensure that baby boomers are motivated to mentor or coach others to ensure that their knowledge remains with the organization once they choose to leave.

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should be a top priority. TVA then asks key employees to take on some new roles as consultants, instructors and mentors, which in turn will instill a sense of ownership and pride in their work. Retiring employees are intrinsically rewarded recognizing their own ability to “leave a legacy.” To get deep, tactical knowledge, 3M identifies business scenarios that can throw a wrench in day-to-day plant operations. After the situations are identified, each department at 3M creates groups of experts -- including production, maintenance and engineering employees previously involved in comparable situations -- to relate their experiences dealing with a similar event. Employees then have facilitators ask them questions and use software to map out their diagnosis of what happened. 3M’s searchable knowledge base, called Maven, makes the job information gleaned from 2,000 technical-service engineers across the globe accessible to all 3M employees. That’s a huge business advantage in an industry where about 30 percent of the U.S.-based technical-service engineers are set to retire in the not-so-distant future. IBM’s Learning Marketplace effort combines mentor and apprentice training with a searchable database filled with best practices and useful information. IBM identified important business sectors likely to see the highest number of retirements in the near future. After IBM identified high-priority business units, members of a department asked pertinent experts in those units to mentor new employees as well as other employees looking to change jobs or pick up knowledge. Apprentices log on to the Learning Marketplace site to ask mentors questions. The dialogues are stored on the site. American Cancer Society relies on another approach to allow retirees to continue to impart their knowledge. The society encourages retirees to stay on as volunteers or to remain on-call if a current employee wants to tap their expertise. Roger Parish, founder and president of Spectrum Consulting Group, compares the “undocumented knowledge” that escapes many organizations when employees leave to warm air escaping from a poorly ventilated building during winter. He points out that important tasks like fighting forest fires require undocumented knowledge. “You can’t teach that in classes. You have to get people out there with a mentor, with the live stuff, to explain how they make decisions,” said Parish. While leadership and technical competencies need to be transferred, traditional ways of transferring expertise-- including formal training, on-the-job learning, observation, work progressions and structured assignments--may not be sufficient for transferring these types of knowledge. Instead, this process often requires accelerated mentoring and one-on-one interaction. To address this challenge, leaders should focus on identifying the knowledge, skills and relationships essential to senior workers’ job performance. This information may include company history, values and work processes as well as relationships with key stakeholders and decision-making criteria. For example, the relationships on which one professional relies to generate sales revenue are the result of years of building trust and can’t be passed easily to a successor. Succession management can help to transfer knowledge, but the process takes time. Phased retirements also help, but some companies’ cultures are not always supportive. Increasing the supply of replacements for departing senior employees may be an appropriate goal, as well as slowing retirements to close or reduce talent gaps in leadership and executive positions. Some HR professionals experiment with creating consulting arrangements with retirees that allow them to mentor their replacements, but the sporadic availability of the retirees sometimes prevents incumbents from getting information or advice when it is needed. Others develop talent pools over time in order to be prepared to deploy knowledgeable talent to critical business needs. Mentoring, coaching and passing knowledge to others is a skill difficult for employees of all generations to master, and it won’t happen automatically. That’s why organizations need to ensure that baby boomers are motivated to mentor or coach others to ensure that their knowledge remains with the organization once they choose to leave. The first step is to ensure that baby boomers are aware of the expectation that they need to transfer knowledge. If positioned effectively, asking

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November/December 2011

baby boomers to share their knowledge should be seen as a compliment—a sign the information they have amassed throughout their careers is meaningful. Then, once the goals are in place, organizations need to create processes and promote skill sets that allow this transfer to occur effectively, such as by deciding whether the knowledge transfer will occur formally or informally and who will receive the information. With NASA’s recent announcement of a scaledback operation, retiring or exiting engineers are taking with them the knowledge, experience and judgment needed to recreate a moon landing. Archives of research and blueprints of rocket boosters are lost. To put another human on the moon, NASA will have to start from scratch. That’s just one example that author, researcher and consultant David DeLong can cite of the effects of the loss of the huge number of highly skilled professionals and managers within the next several years as the baby boomer generation reaches retirement age. There are several barriers to keeping employees and tracking down their knowledge before they leave. DeLong points out that there is often no clear ownership of the problems – is it an HR problem, a management problem or a documentation problem? DeLong also suggests that companies need to look for creative ways to keep younger people engaged while they hang on to older workers. While both groups may want flexible work schedules and work/life balance, younger employees may become resentful if they can’t see a path for advancement through the company. That path might appear to be clogged with older workers. Unfortunately, tough economic times often mean tighter budgets and fewer people, alongside the need for more compelling products and services, expert employees and mistake-free performance. In this environment, how we train and develop employees and how we share what we know with newer or successor employees as well as customers, vendors and other stakeholders is critical. While knowledge transfer strategies appear complex, many of these strategies have elements that are simple and can be incorporated without major investment. However, time is of essence with the war on talent entering a new and international dimension. HR professionals must assess processes that are compatible with their own cultures and champion an efficient and effective implementation of a knowledge transfer process. A workable process will help ensure their organization’s capacity and capability will be postured to meet and beat their competition.

evolve to meet the needs of the people, business, industry and

Jim Gray is president of Jim Gray Consultants, a human resources and business transitioning firm in Charleston, S.C.

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2011 Business Leader of the Year ~ Pamela Lackey ~ 54

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November/December 2011

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By Julie Scott

photograph by pat crawford

amela Lackey, AT&T South Carolina president, says she was her “daddy’s boy” as the firstborn of two girls, opening guns and cowboy suits for Christmas when she was young. Lackey loved being outside and excelled in many sports, but she was especially fond of golf. As a young child growing up in Tuscaloosa, Alabama, it was on the golf course with her father where she learned a valuable lesson she carries with her to this day.

Always in play

2011 Business Leader of the Year ~ Pamela Lackey ~

uring her summers, Lackey would accompany her father and his friends to play a round of golf every morning at 7 a.m. before he went to work. When she first began the game, her dad’s buddies would try to help her by moving the golf ball out of precarious situations, whether it was a sand trap, a wooded area or the rough, but her father would say, “No, no, she’ll never learn unless she plays it where it lies.” It was that lesson – to play it where it lies – that she thinks about often in business and in life. In each, there are no shortcuts. “He made me learn how to move from where I stood. We can’t change the past, but we can take the present realistically where it is,” Lackey said. Born on April 30, 1953 in Meridian, Mississippi, Lackey cherishes those days on the golf course with her father. He worked for the postal system and also served in the Air Force. Her mother, a stay-at-home mom until Lackey and her sister went off to elementary school, began to study nursing as the kids grew up, while her father continued to advance his career. With everyone hard at work studying around the kitchen table each night, Lackey learned the importance of being prepared. “We spent evenings around the kitchen table, everybody studying. My father was always applying for a promotion within the postal system, and there was always a test you had to take,” Lackey said. “We’d call out flash cards to him. That’s why I prepare so much for things I do in the business world.” Lackey’s mother and father were her mentors, and they expected hard work. Often arriving home with a 100 on a test, Lackey’s mother would congratulate her but also ask about the extra credit points. She expected the best, and Lackey feels her strong will to always be prepared is a direct result of the love and support her mother gave her during her studies. Her parents also made life fun for Lackey and her younger sister. On warm days, her parents would pick them up from school in the afternoon with a boat on the trailer behind the car. The girls would change into their swimsuits in the backseat and

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go straight to the river for an afternoon of skiing. In school, Lackey enjoyed the puzzles in her math problems and fully expected to major in mathematics at the University of Alabama. But, after feeling unprepared for a calculus exam due to an instructor’s teaching style, she began to examine education. Soon after, she graduated with a Bachelor’s in Education and a Master of Library Science and an Ed. S in school media supervision. Lackey moved to South Carolina in 1980, where she worked in Greenville schools. In 1987, she moved to Columbia fully expecting to continue her work as an elementary school library media specialist. A colleague suggested she apply for a job that was open at the State Department of Education as a library media consultant for South Carolina. Soon after her interview, she was hired and worked at the State Department of Education for a decade in numerous roles. One of those roles was under then State Superintendent Barbara Nielsen, a policy position that took her work to the State House alongside the General Assembly. This new kind of educating came naturally to Lackey, and soon she was working alongside BellSouth’s public policy employees to secure technology funding in schools. This led her to a public policy position at BellSouth, now AT&T South Carolina. Since then, she has had a huge hand in creating the state’s business climate, and that means a lot to her. “If you can help people understand what you are trying to accomplish from a business climate perspective, and you can help them understand why it’s not only good for business and employees but also why it’s good for their constituents, that’s the key,” Lackey said. “Lobbyists are educators. If they are not good educators, they are not good lobbyists.” In her role as an educator, lobbyist and leader in the business community, Lackey knows firsthand the challenges and opportunities facing South Carolina. First, she believes South Carolina has a lot of work to do from a tax perspective. “When I say comprehensive tax reform, I mean a system that is fair to everyone – businesses, citizens and consumers. That’s what I think is missing in the discussion,” Lackey said. “People don’t recognize those three categories overlap, so you can’t just achieve tax reform that supports one perspective.”

November/December 2011

AT&T South Carolina remitted $208 million in taxes last year, $23 million more than it pays in payroll. Lackey admits tax reform will be a tough issue in the coming year that will take a lot of discussion to balance the system. “We can do it though,” she said. Another issue close to Lackey is South Carolina’s port system. She was appointed to the South Carolina State Ports Authority Board by Governor Nikki Haley this year and said the port is a huge part of moving the state forward in the coming years. “The single most important driver we have over the next decade is the port. We have a great natural resource that we need to take full advantage of,” Lackey said. “The goods and services we import and export impact just about every business in the state. It’s important for all of us.” She believes the South Carolina General Assembly is business friendly. “It’s been my experience that the General Assemblies and governors of this state have understood what it takes to get us moving forward. They are very receptive,” Lackey said. South Carolina House Speaker Bobby Harrell has worked alongside Pamela Lackey for many years. “Pamela Lackey’s background in education, her experience with public policy and her excellent communications knowledge make her a valuable asset to South Carolina’s business community. I have enjoyed working with her for many years on issues that have positively impacted the landscape of this state, and I look forward to working alongside her in the years to come,” said Speaker Harrell. She said one positive for her telecommunications business is a General Assembly that recognizes there are a lot of companies providing telecommunications services in different ways. Technology has evolved, and companies start at different places in different times. Lackey said the South Carolina legislature has recognized that rules need to support the different types of companies providing communications services while ensuring the same rules apply to everyone. Lackey loves the telecommunications business, and it is a great time to be at the helm of AT&T South Carolina. “How many times do you communicate or access entertainment during the day? People want it everywhere they live and work. We want to provide that and do it better than anyone else. That is our goal,” Lackey said. AT&T’s wireless broadband network traffic has grown by 8,000 percent over the last four years, and it is not expected to slow anytime soon. In fact, AT&T expects that in the first five weeks of 2015, its network will handle the amount of mobile data traffic carried in all of last year. AT&T has 21 retail stores in South Carolina and is investing s c c h a m b e r. n e t |

heavily in the state, with more than $675 million upgrading the network spent in the past three years. Some exciting news for AT&T is the pending T-Mobile acquisition, which is currently awaiting approval from the Federal Communications Commission and the U.S. Department of Justice. When it is approved, over the next six years, 97 percent of Americans will have access to 4G mobile broadband services, which means really fast broadband for users, making smartphones as fast as desktops. What will the acquisition mean for South Carolina businesses other than an immediate increase in service quality? “It means there will be an additional 1.5 million people who can now do business with you online and who you can do business with. It will happen very quickly and is good for the business climate in South Carolina,” Lackey said. “It is huge for the whole state.” Lackey is most proud of the company’s charitable giving. In 2010, AT&T South Carolina gave $1.8 million in grants and contributions to advance South Carolina, with a great emphasis on education. Nationally, it has committed $100 million to high school completion rates. And in South Carolina, the Pioneers, made up of current AT&T employees and retirees, gave more than 142,000 volunteer hours back to their communities. Lackey also contributes greatly to philanthropy in South Carolina, serving on the boards of the South Carolina Chamber of Commerce, United Way of the Midlands, Central S.C. Alliance, Governor’s School for the Arts, Hollings Cancer Center Advisory Board and Palmetto Business Forum. Over the next decade, Lackey believes the business community and state leaders must focus on what each person can do about specific problems today. She uses education and workforce development as an example. “A retired AT&T employee wanted to make an impact in his retirement, so he did something he had always wanted to do. He signed up to be a bus driver. He feels he has had more of an impact on education there than he did in his career,” she said. “He has the opportunity to have oneon-one conversations with students every day about the impacts of their decisions and the paths they are choosing.” This Do One Thing initiative carries over to AT&T South Carolina, where employees are encouraged to choose one thing they can do to positively impact their own health, well-being or the environment. One employee no longer prints emails or long documents. Another waits to start her car engine until she is ready to back out of her driveway. If you ask Lackey the best part of her day, she does not hesitate. It is her time with her husband, Gary. They begin

N o v e m b e r / D e c e m b e r 2 0 1 1 | S o u t h C a r o l i n a B u s i n e ss

and end each day together at their home in Columbia. She looks forward to her time with her five We’ve helped businesses succeed through the Great Depression, grandchildren as well, who range from ages the recent recession and every market in between. 6-28. Over the years, Lackey has learned For 86 years, Elliott Davis has advised businesses on how valuable lessons that to run efficiently, grow wisely, be more profitable. Led by relate to her golf games with her father years ago. Firm Managing Shareholder Rick Davis, our team provides She believes understanding where people are coming everything from audit and tax solutions to highly specialized from is so important. advisory services across the spectrum of industries. “I just think you have to understand fully engaged: for you what people’s circumstances are, how they work best and how South Carolina • North Carolina • Georgia • Virginia to accommodate that,” www.elliottdavis.com Lackey said. And retirement? Though it is not in the near future, Lackey has some ideas on how she 200 East Broad Street • Greenville, SC 29601 • 864.242.3370 would spend her time. An avid reader, she will read all those books she has neglected over the years, which she keeps listed in her SCBusiness_4.625x5_OverviewAd (R. Davis) w bleed marks.indd 1 9/27/2011 1:30:12 notebook. PM She will also continue perfecting that Fast Facts about golf game, as she says Pamela Lackey she is most relaxed on • Favorite spot in S.C. – Palmetto Bluff the course early in the • Favorite Book – Charlotte’s morning. Web by E.B. White If she tried to fast • Favorite thing to do on the forward, her plans for weekend: Play golf the coming decade are • People might be surprised to know that: “I played Dorothy too hard to predict, she from the Wizard of Oz in the said, but she will work United Way kickoff last as long as she is having year.” fun. And, she is having • If you could travel anywhere a blast. in time, where would you go? “I would want to see South Carolina in 10 years. I would fast forward.” Unfolding adjacent to the University of South Carolina’s 200-year-old Julie Scott is the • Pet Peeves: People who don’t academic campus in Columbia, Innovista is becoming a place to associate vice president follow through. live, learn, earn and play—the nexus of new knowledge developed in of communications University research laboratories in partnership with start-up companies at the South Carolina and expanding industry. Chamber of Commerce. © 2011 Elliott Davis LLC © 2011 Elliott Davis PLLC

Rick Davis, CPA Firm Managing Shareholder

Coming soon to Innovista is a new home for the internationally recognized Darla Moore School of Business. Contact Ann Marie Stieritz, Director of Business Solutions Innovista, University of South Carolina stieritz@mailbox.sc.edu • 803.777.2510

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November/December 2011

Fearlessness wins. Uncommon wins. Original wins. Dynamic companies in South Carolina know how to win in today’s economy. Like companies heralded in the Grant Thornton South Carolina 100TM, we understand that status quo may have won in the past, but the rules have changed in business today. Maybe that’s why so many dynamic companies - in the Carolinas, the U.S. and around the globe – turn to Grant Thornton for premier audit, tax and advisory services. For more on how Grant Thornton helps dynamic companies in today’s economy, visit us at www.GT.com/SC100.

Audit  Tax  Advisory Mark Ballew T 803.231.3045 E Mark.Ballew@us.gt.com 1320 Main Street, Suite 500 Columbia, SC 29201

Grant Thornton LLP presents

In association with the South Carolina Chamber of Commerce, the 27th annual ranking of the stateâ&#x20AC;&#x2122;s largest privately owned companies.

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November/December 2011

his year marks the 27th edition of the Grant Thornton South Carolina 100TM (The South Carolina 100 TM), the only ranking of the state’s largest privately held companies. The South Carolina 100 is compiled by Grant Thornton LLP under the direction of Mark Ballew, audit partner, in cooperation with the South Carolina Chamber of Commerce. Dynamic companies share five traits: innovation, expansion, talent, culture and agility. The Grant Thornton South Carolina 100 private companies certainly embody these traits. Collectively, these companies generate almost $18 billion in revenue and employ more than 80,000 workers. Privately held companies continue to experience a great deal of change. While the total revenues of the 2011 South Carolina 100 were almost $18 billion, for only the second time in the history of the ranking, the list has less than 100 companies (the last time was 2009). The top 10 companies are as follows: Milliken & Company (No. 1); The InterTech Group Inc. and Affiliates (No. 2); J M Smith Corporation (No. 3); Southeastern Freight Lines Inc. (No. 4); Piggly Wiggly Holdings LLC (No. 5); Ellett Brothers LLC (No. 6); Hilex Poly Co. LLC (No. 7); Carolina-Eastern Inc. (No. 8); Mount Vernon Mills Inc. (No. 9); and Dearybury Oil & Gas Inc. (No. 10). The top 10 changed with the addition of Dearybury Oil & Gas Inc. at No. 10. While

Southeastern Freight Lines Inc., Ellett Brothers LLC and Hilex Poly Co. LLC moved up one, four and two places, respectively. Twenty-three of the companies are manufacturers, representing $7.5 billion in revenues or about 42 percent of the total revenue. Employees of South Carolina 100 manufacturers account for approximately 34,200 workers or 43 percent of the jobs represented in the survey. Twenty-four of the companies are wholesale distribution companies with $6.2 billion in revenues and approximately 8,700 employees. This year, there are five companies in the ranking either for the first time or after an absence. They are Dearybury Oil & Gas Inc. (No. 10); IH Services Inc. (No. 39); Greenville Meats Inc. (No. 71); Commercial Foodservice Repair Inc. (No. 79); and Chicora Affiliates LLC (No. 90). The companies with significant rank increases for 2011 are Arnold Construction Corporation, up 35 places; BFG Communications, up 18 places; Industrial Packaging Supplies, up 17 places; Wolverine Brass Inc., up 15 places; and The Ritedose Corporation, up 12 places. ISO Poly Films Inc., Thompson Industrial Services LLC and West Oil Company Inc. are all up 11 places. Up 10 places are Environmental Express Inc.; Epting Distributors Inc.; Southern States Packaging Company; Southern Weaving Company; General Wholesale Distributors LLC and Sumter Packaging Corporation. Participation in the South Carolina 100 is voluntary,

and companies are ranked based upon their net revenues for their most recently completed fiscal year. To qualify, companies must be privately held, headquartered in South Carolina and cannot be a subsidiary of another company. Financial institutions, insurance companies, real estate and other brokerages, health care organizations and companies primarily engaged in retail are not eligible for the South Carolina 100 listing. The people in the independent firms of Grant Thornton International Ltd. provide personalized attention and the highest quality service to public and private clients in more than 100 countries. Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd., one of the six global audit, tax and advisory organizations. Grant Thornton has 50 offices in the United States and services dynamic companies in South Carolina, the United States and around the globe. To learn more about this year’s survey, please contact Mark Ballew, audit partner in Grant Thornton’s Columbia office, at (803) 231-3045 or mark.ballew@ us.gt.com. Grant Thornton’s web site address is GrantThornton.com. For more information on the Grant Thornton South Carolina 100, including prior year rankings, go to gt.com/sc100.

T h e 2 7 th A n n u a l S o u t h C a r o l i n a 1 0 0 ® No. Company City CEO Business Description MORE THAN $1 BILLION 1 Milliken & Company Spartanburg Dr. Joseph M. Salley Manufacturer of textile products and chemicals 2 The InterTech Group Inc. North Charleston Anita G. Zucker and Manufacturer of high-performance polymer and and Affiliates Jonathan M. Zucker elastomeric materials and composites, electronics and financial services 3 J M Smith Corporation Spartanburg William R. Cobb Wholesale distribution of pharmaceutical and computer hardware, software and data processing services; robotic pill dispensing machinery $100 MILLION TO $999 MILLION

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4 Southeastern Freight Lines Inc. Lexington William T. Cassels Jr. 5 Piggly Wiggly Holdings LLC Charleston David R. Schools 6 Ellett Brothers LLC Chapin F. Hewitt Grant

Motor freight transportation Wholesale grocery distribution Wholesale distributor for shooting, hunting and marine products

7 Hilex Poly Co. LLC Hartsville Stan Bikulege 8 Carolina-Eastern Inc. Charleston Alton Phillips

Manufacturer of plastic bag and film products

9 Mount Vernon Mills Inc. Mauldin W. David Hastings 10 Dearybury Oil & Gas Inc. Spartanburg C. W. Dearybury Jr.

Manufacturer of apparel fabrics, upholstery fabrics, napery and chemicals

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Distributor of fertilizer, agricultural chemicals and seeds

Distributor of petroleum products

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T h e 2 7 th A n n u a l S o u t h C a r o l i n a 1 0 0 速 No. Company City CEO Business Description 11 Edens & Avant Columbia Terry S. Brown 12 The Ben Arnold-Sunbelt Ridgeway Kevin J. Karcher Beverage Company of SC LP 13 Medical Services of Lexington Ronnie L. Young America Inc. 14 Blanchard Machinery Columbia Joe Blanchard Company 15 Southeastern Paper Group Spartanburg E. Lewis Miller Jr. 16 Ogletree, Deakins, Nash, Greenville Kim F. Ebert Smoak & Stewart P.C. 17 Consolidated Systems Inc. Columbia Bradford L. Pemberton 18 M. B. Kahn Columbia William H. Neely Construction Co. Inc. 19 Prestage Farms Camden Dr. Ron Prestage of South Carolina LLC

Spirits and wine wholesale distributor

Health care services; rental and sale of home medical equipment and supplies Sales, rentals, parts and service for Caterpillar machines and engines Wholesale distribution of paper and janitorial supplies Professional services, labor and employment law

Manufacturer of steel building products Commercial, industrial, institutional, general construction management services Live turkey production

20 JHM Hotels Greenville Hasmukh P. Rama 21 Metromont Corporation Greenville Richard H. Pennell Jr.

Hotel development, ownership and management

Distribution to convenience stores throughout SC, NC, GA and TN

Thomas & Howard Columbia Jeff S. Leischner Company Inc.

23 Spartanburg Forest Greer Stephen Michael Products Inc. 24 Cox Industries Inc. Orangeburg R. Michael Johnson 25 West Oil Company Inc. Hartsville Lex West 26 Thompson Construction Sumter Greg A. Thompson Group Inc. 27 The Mungo Companies Irmo Steven W. Mungo 28 Pearlstine Distributors Inc. Charleston Larry Lipov 29 Diamond Hill Plywood Darlington John C. Ramsey Company Inc. 30 Terminix Service Inc. Columbia M. A. (Lex) Knox Jr.

Retail shopping center owner and developer

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November/December 2011

Manufacturer of precast and prestressed concrete products

Pressure treated lumber and related products

Manufacturer and distributor of treated lumber products, including outdoor wood products for the residential, commercial, industrial and utility markets Distributor of petroleum products Industrial and commercial construction

Residential and commercial land development and homebuilding Wholesale distribution of beverages Wholesale distribution of building supplies/materials and manufacture of specialty plywood Termite and pest control services, moisture control, repairs and insulation

T h e 2 7 th A n n u a l S o u t h C a r o l i n a 1 0 0 ÂŽ No. Company City CEO Business Description $50 MILLION TO $99 MILLION 31 G & P Trucking Co. Inc. Gaston G. Clifton Parker Transportation of freight by truck 32 Loxcreen Company Inc. West Columbia John Wayne Parrish Jr. Manufacturer/distributor of aluminum and plastic extrusions and building products 33 Shealy Electrical West Columbia Bill DeLoache Wholesaler of electrical products Wholesalers Inc. 34 CafĂŠ Enterprises Inc. Taylors Steve Bruce Casual dining restaurant company 35 Springs Creative Products Rock Hill Derick S. Close Wholesaler of retail fabrics, packaged crafts and Group LLC specialty fabrics 36 Defender Services Inc. Columbia G. Hollis Cone 37 Dilmar Oil Company Inc. Florence Gray & Earle Atkinson 38 The Ritedose Corporation Columbia Umesh Dalvi 39 IH Services Inc. Greenville Ryan D. Hendley 40 Greystar Real Estate Charleston Robert Faith Partners LLC 41 H. G. Reynolds Company Inc. Aiken Jeffrey G. Reynolds 42 Cregger Company Inc. West Columbia Morris Cregger 43 Southern States Packaging Co. Spartanburg Michael L. Lyon 44 T & S Brass & Bronze Works Inc. Travelers Rest Claude I. Theisen 45 Spirit Telecom Columbia Robert M. Keane 46 The Yahnis Company Florence Ken Emery 47 First Sun Management Corporation Clemson Joseph J. Turner Jr. 48 CoLinx LLC Greenville Donavan A. Louis 49 General Information Services Inc. Chapin Raymond Conrad 50 Merritt Veterinary Supplies Inc. Columbia Robert M. Mims Jr. 51 ISO Poly Films Inc. Gray Court Jon T. McClure

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Service contractor for housekeeping, security, mechanical, yards and ground, and job staffing Wholesale distributor of petroleum products and fluid reclamation Contract pharmaceutical manufacturer Industrial and commercial contract maintenance services and staffing One of the largest investors and operators of multifamily real estate assets in the United States with a fully integrated, national platform General contractor Wholesale distribution - plumbing and HVAC products Industrial converter of paper and paperboard Manufacturer of institutional faucets Internet, data and voice services Distributor of beer and non-alcoholic beverages Restaurant franchisee Warehousing, transportation management and e-commerce for premium brand industrial manufacturers Employment screening and HR onboarding solutions Distributor of veterinary supplies, drugs, equipment and pet food in the Southeastern U.S. Manufacturer of polyethylene film

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T h e 2 7 th A n n u a l S o u t h C a r o l i n a 1 0 0 速 No. Company City CEO Business Description 52 The Beach Company Charleston John C. L. Darby

Full-service real estate company - including development, property management, leasing and sales/commercial and residential

53 Thompson Industrial Services LLC Sumter Greg A. Thompson Provider of integrated industrial cleaning and facilities support services in Southeastern U.S. 54 Whit-Mart Inc. Charleston Gary P. Whitman Restaurant operator L E S S T H A N $ 5 0 M ILLIO N 55 McNair Law Firm P.A. Columbia David J. Tigges Legal services 56 Augusta Fiberglass Coatings Inc. Blackville John Boyd 57 Whaley Foodservice Repairs Lexington Wells F. Whaley 58 BFG Communications Bluffton Kevin Meany 59 Gateway Supply Company Inc. Columbia Sam P. Williams Jr. 60 Industrial Packaging Supplies Fountain Inn Jerry W. Murdock 61 Arnold Construction Corporation Columbia Ben D. Arnold 62 Epting Distributors Inc. Lexington James L. Epting Jr. 63 ElDeCo Inc. Greenville Allen McKinney 64 Wolverine Brass Inc. Conway Lloyd W. Coppedge

Fiberglass reinforced plastics Commercial foodservice equipment parts distributor; service for commercial cooking equipment Marketing services, including strategic promotions, field marketing, digital and creative services Wholesale distributor of plumbing and HVAC products Wholesale distribution of packaging materials General contractor - commercial and multi-family; licensed in SC, NC, VA and GA HVAC distribution Electrical contractor Manufacture, sale and distribution of quality plumbing products

65 IMIC Hotels Columbia E. L. (Bert) Pooser Jr. 66 Park Place Corporation Greenville Jimmy Orders 67 GMK Associates Inc. Columbia Thomas P. Monahan 68 General Wholesale Greenville Tee Hooper Distributors LLC

Developers, owners and operators of hotels, marina and restaurant and storage facilities

69 Gregory Electric Company Inc. Columbia Robert E. Livingston Jr. 70 Dillon Provision Company Inc. Dillon Dan Bozard 71 Greenville Meats Inc. Greenville Dan Sloan 72 Palmetto Synthetics LLC Kingstree Henry M. Poston 73 American LaFrance LLC Summerville Torben Von Staden

Electrical contractor

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November/December 2011

Manufacturer of mattresses, box springs and foundations Architectural, engineering, design-build, construction services and interior design Distributor of HVAC systems to contractors in South Carolina

Wholesale meat distributor Beef, pork and poultry processing and distribution Manufacturer of synthetic fibers Manufacture and distribution of a comprehensive line of fire vehicles and highly engineered cab chassis products

T h e 2 7 th A n n u a l S o u t h C a r o l i n a 1 0 0 速 No. Company City CEO Business Description 74 Southern Weaving Company Greenville Ron Mohling

Design, development and manufacture of industrial woven products

75 Trehel Corporation Clemson Will Huss Jr. Design and building contractor specializing in commercial, institutional, multi-family and ecumenical facilities 76 H. R. Allen Inc. Charleston Herbert R. Allen Jr. Electrical and mechanical contractor 77 Waldrop Inc. Spartanburg Bill Caldwell Industrial, commercial, mechanical contractor; residential and commercial HVAC service 78 Dove Data Products Inc. Florence Richard B. Coxe Manufacture and distribution of computer printer supplies 79 Commercial Foodservice Greenville Kurt Herwald One of the largest providers of support services for Repair Inc. convenience store industry, other retailers and restaurants 80 Sumter Packaging Corp. Sumter Benjamin DeSollar Custom manufacturer of corrugated boxes, industrial packaging and provider of contract packaging and fulfillment services 81 AME Inc. Fort Mill Gregg S. Campbell Industrial contractor; fabrication and crane rental 82 GBS Building Supply Inc. Greenville Bob Barreto Distributor of building materials and services to small to home builders, remodelers and home owners 83 Yeargin Potter Shackelford Greenville R. Lynn Yeargin General contractor - Commercial / Industrial construction Construction Inc. 84 Environmental Express Inc. Charleston Dennis Pope Leading developer, manufacturer and distributor of environmental laboratory equipment and consumable supplies for commercial, governmental, industrial and academic laboratories worldwide 85 Martin Engineering Inc. White Rock Whitney Delbridge General contractor 86 New South Construction West Columbia Jim Sobeck Distributor of construction supplies Supply LLC 87 J. L. Anderson Co. Inc. Wallace Robert S. Rogers, III Brick manufacturer - wholesale and retail sales of brick and masonry products 88 Companion Professional Columbia Terry M. Floyd Information technology consulting group dedicated to Services LLC providing innovative and cost-effective IT solutions 89 Hawthorne Services Inc. Charleston Bruce Stoehr Aviation and airport management and operations 90 Chicora Affiliates LLC Myrtle Beach Don J. Smith Residential and commercial sales; residential and HOA property management; land development 91 Southland Log Homes Inc. Irmo Kenneth S. Sekley Manufacturer and distributor of custom log home materials 92 Chernoff Newman LLC Columbia 93 C. Ray Miles Construction Co. Inc. Lugoff

W. Lee Bussell Sr.

Integrated marketing communications

C. Ray Miles

Heavy road construction

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November/December 2011

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Accounting and More.

Partners, from left: Bill Pouncey, John Creech, David Fryer, Anne Ross and Bill Quattlebaum

Started as a sole proprietorship in 1934, J.W. Hunt and Company, LLP, today has grown in size and expertise to be one of the Midlands areaâ&#x20AC;&#x2122;s largest accounting firms with a staff of 17 CPAs and accountants. Does your business need assistance with accounting, auditing and management? Maybe you personally need estate and tax planning advice. Our diversity makes us generalists and allows us to draw from a wide range of expe-

rience serving locally owned businesses, publicly traded companies, financial institutions, auto dealers, construction companies, not-for-profits and governmental entities. We know how important personal attention is for our clients, thanks to the referrals we receive. To learn more about our attention and expertise, visit www.jwhunt.com or contact any partner at 803-254-8196, or via email on our website.

C o m p a n y, llp

Middleburg Office Park

1607 St. Julian Place l PO Box 265 l Columbia, SC 29202-0265 803-254-8196 l www.jwhunt.com

J.W. Hunt & Company LLP presents

In association with the South Carolina Chamber of Commerce, the ranking of the stateâ&#x20AC;&#x2122;s major employers.

S o u t h C a r o l i n a B u s i n e ss |

November/December 2011

fter a three-year hiatus, the South Carolina Big 50 has returned. The South Carolina Big 50 ranks private, public and foreign-affiliated companies by the number of employees on their South Carolina payrolls as of July 1, 2011. All companies with operations in South Carolina are eligible for the South Carolina Big 50. However, the ranking might not include all major employers in the state because the list is tabulated according to participant responses received. Participants were asked to provide their employment figures, location of corporate headquarters and products and services. Individual company employment figures are not published in the South Carolina Big 50. Results reported for this 2011 issue of South Carolina Business represent approximately 206,000 employees, down 2,000 from approximately 208,000 in the 2008 issue. Unlike the South Carolina 100 and South Carolina’s 25 Fastest-Growing Companies, the South Carolina Big 50 includes company subsidiaries and divisions (both public and private), and parent companies do not need to be located in South Carolina. The South Carolina Big 50 includes financial institutions, insurance companies, retailers, retail establishments, hospitals and health care organizations. The South Carolina Big 50 excludes government agencies and organizations. The top company remained the same as in 2008 , with Walmart Stores Inc. continuing to be ranked at No. 1. BI-LO LLC remained No. 2, while Greenville Hospital System moved from No. 5 to No. 3.

Thirteen new companies not on the last list are represented in this year’s rankings. They include: Lowe’s Companies Inc., headquartered in Mooresville, North Carolina, ranked No. 8; Wells Fargo and Company, headquartered in San Francisco, California, ranked No. 9; Dollar General, headquartered in Goodlettsville, Tennessee, ranked No. 16; Robert Bosch LLC, headquartered in Farmington Hills, Michigan, ranked No. 17; HCA South Atlantic Division, headquartered in Charleston, South Carolina, ranked No. 19; Target, headquartered in Minneapolis, Minnesota, ranked No. 21; Duke Energy, headquartered in Charlotte, North Carolina, ranked No. 22; Walgreens Co., headquartered in Deerfield, Illinois, ranked No. 23; The Home Depot, headquartered in Atlanta, Georgia, ranked No. 24; Piedmont Medical Center, headquartered in Dallas, Texas, ranked No. 42, Blackbaud Inc., headquartered in Charleston, South Carolina, ranked No. 44; Colonial Life & Accident Insurance Company, headquartered in Columbia, South Carolina, ranked No. 46; and Staples Inc., headquartered in Framingham, Massachusetts, ranked No. 50. The South Carolina Big 50 is compiled by the South Carolina based public accounting firm of J.W. Hunt & Company LLP, in cooperation with the South Carolina Chamber of Commerce, under the direction of Anne H. Ross, CPA. Realizing that business employment figures fluctuate constantly, the South Carolina Chamber encourages top employers to participate in the South Carolina Big 50 each year to ensure accurate rankings. To learn more about this year’s survey or to be included in the survey for 2012, contact Anne Ross at 803-254-8196 or aross1@jwhunt.com.

The 2011 South Carolina Big 50® No. Company Headquarters CEO Business Description 10,001-30,000 employees 1

Walmart Stores Inc.

Bentonville, AR

Bill Simon

Retail stores

BI-LO LLC

Mauldin, SC

Michael Byars

Grocery retailer

Greenville Hospital System

Greenville, SC

Michael Riordan

Health care

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4,001-10,000 employees 4

Palmetto Health

Columbia, SC

BlueCross BlueShield Columbia, SC David Pankau of South Carolina

Health insurance services and employee benefits

Michelin North America

Dick Wilkerson

Tire manufacturer and seller

BMW Manufacturing Co. LLC Munich, Germany

Norbert Reithofer

Automobile manufacturing

Lowe’s Companies Inc.

Robert Niblock

Home improvement retailer

Wells Fargo San Francisco, CA John G. Stumpf and Company

Diversified, community-based financial services

Spartanburg Regional Healthcare

Spartanburg, SC

Lisa Owens

Health care

Roper St. Francis Healthcare

Charleston, SC

David Dunlap

Health care

Lexington County Health Services

West Columbia, SC

Michael Biediger

Health care

Greenville, SC

Mooresville, NC

Charles D. Beaman Jr.

13 SCANA Corporation Cayce, SC Bill Timmerman s c c h a m b e r. n e t |

Health care

Regulated electric and natural gas operations

N o v e m b e r / D e c e m b e r 2 0 1 1 | S o u t h C a r o l i n a B u s i n e ss

The 2011 South Carolina Big 50® No. Company Headquarters CEO Business Description 14

Verizon Wireless Greenville, SC Carolinas/Tennessee Region LP

Lowell McAdam

Wireless communications

MAU Inc.

Augusta, GA

William Hatcher

Staffing, recruiting and HR services

Dollar General

Goodlettsville, TN

Richard Dreiling

Discount retail

2,501-4,000 employees 17 Robert Bosch LLC Farmington Hills, MI Peter Marks

Automotive components, industrial drive and control products

Piggly Wiggly Carolina Company Inc.

Charleston, SC

David Schools

Wholesale/Retail supermarkets

HCA South Atlantic Division

Charleston, SC

Teresa Finch

Health care

20 Milliken and Company Spartanburg, SC Dr. Joe Salley

Specialty chemical, floor covering and performance material manufacturer

Target

Minneapolis, MN

Gregg Steinhafel

Retail

Duke Energy

Charlotte, NC

James Rogers

Electricity

Walgreens Co.

Deerfield, IL

Gregory Wasson

Pharmacy

The Home Depot

Atlanta, GA

Frank Blake

Home improvement retailer

NHC – National Healthcare Corp.

Murfeesboro, TN

Robert Adams

Long-term/Rehabilitative health care

American Services Inc.

Greenville, SC

Henry Harrison

Contract security, staffing and janitorial

Louis Rich – Kraft Foods

Northfield, IL

Irene Rosenfeld

Food processing

28 URS Corporation Aiken, SC M.M. Koffel

Engineering, design, construction, nuclear waste cleanup

2,001 to 2,500 employees 29

AT&T

San Antonio, TX

Randall Stephenson

Communications

Self Regional Healthcare

Greenwood, SC

James Pfeiffer

Health care

Providence Hospitals

Columbia, SC

Sister Judith Ann Karan

Health care

32 The Timken Company Canton, OH James Griffith

Highly engineered bearings, power transmission solutions and high quality steels

1,501 to 2,000 employees 33

Bank of America

Charlotte, NC

Brian Moynihan

Banking and financial services

Tuomey Healthcare System

Sumter, SC

Jay Cox

Health care

Sonoco Products Company

Hartsville, SC

Harris DeLoach Jr.

Consumer and industrial packaging

BB&T of South Carolina

Winston-Salem, NC

Kelly King

Banking and financial services

Nucor Corporation

Charlotte, NC

Daniel DiMicco

Steel products and solutions

First Citizens Bancorporation Inc.

Columbia, SC

Jim Apple

Banking and financial services

39 Eaton Corporation Cleveland, OH Alexander Cutler

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November/December 2011

Electrical/hydraulics components and systems, truck and auto drivetrain systems, aerospace fuel

The 2011 South Carolina Big 50® No. Company Headquarters CEO Business Description 40

Bridgestone Firestone Aiken County Facility

Nashville, TN

Gary Garfield

Passenger and light truck tire manufacturer

41 Pilgrim’s Pride Corp. Greeley, CO William Lovette

Fresh, frozen and further processed chicken products

Health care

Piedmont Medical Center

Dallas, TX

Charles Miller

1,000 to 1,500 employees 43

Oconee Memorial Hospital Inc.

CMY

Jeanne Ward

Health care

44 Blackbaud Inc. Charleston, SC Marc Chardon

Software and services for non-profit organizations

Time Warner Cable of South Carolina

Communications

Colonial Life & Accident Columbia, SC Randall Horn Insurance Company

Charlotte, NC

Glenn Britt

Voluntary insurance, benefits communication and enrollment services

47 Kimberly-Clark Corporation Irving, TX Thomas Falk

Manufacturer of family and personal care consumer branded products

Defender Services Inc.

Columbia, SC

G. Hollis Cone

Staffing, janitorial and security services

Schneider Electric

Paris, France

Jean-Pascal Tricoire

Switchgear, switchboard, critical power

Staples Inc.

Ronald Sargent

Office supplies retailer

Framingham, MA

RLI_SCBM_top25_print.pdf

Seneca, SC

10/12/11

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S o u t h C a r o l i n a B u s i n e ss |

November/December 2011

nce again, The Capital Corporation has the honor of presenting South Carolina’s 25 FastestGrowing Companiessm. This highly anticipated ranking has honored some of South Carolina’s most promising companies. Since its inception in 2002, 139 companies have had the distinction of being ranked as one of South Carolina’s 25 Fastest-Growing Companies. This year’s winners are a diverse sampling of exceptional businesses covering a broad spectrum in terms of size and industry sector. These businesses span the breadth of South Carolina. The Lowcountry claimed 15 of the winners, followed by the Upstate with 14 and the Midlands with six. New to the roster this year are companies in Hanahan and Chapin. “I look forward to this event every year. The achievements of these privately and publicly owned businesses and their contributions to the state’s

economy never cease to impress me, especially the companies that have made the list in the last few years as the country has struggled with a tumultuous economy. They are a testament to exceptional business acumen and leadership,” said Dan Adams, president and chief executive officer of The Capital Corporation. Top ranked Barling Bay, located in North Charleston, is not new to this ranking, as it occupied the No. 3 slot last year. First-time entrant Southern Tide in Greenville made its debut in a big way by ranking No. 2. Levelwing Media rose from No. 6 last year to take over the No. 3 position. Joining The Capital Corporation as presenting sponsor this year are Dixon Hughes Goodman LLP as co-sponsor, the South Carolina Chamber of Commerce and Greenville Magazine, Greater Pee Dee Business Journal and Greater Columbia Business Journal as media sponsor. The 2011 rankings were determined using a

Criteria for South Carolina’s Fastest-Growing Companies Nominations for South Carolina’s 25 Fastest-Growing Companies 2011 were accepted between June and August 2011. Participation was open to public and private non-governmental entities representing any business or industry sector provided they met the following criteria: (a) Headquartered in South Carolina; (b) In operation for at least three full fiscal years; and (c) Revenues of at least $3 million ($50 million in assets for financial institutions) in the most recent reported year.

proprietary weighted equation tied to increases in gross revenues (or assets) and full-time employment. Submissions were compiled, evaluated and ranked by a review panel from The Capital Corporation. Interviews and site visits were conducted by representatives of The Capital Corporation and Dixon Hughes Goodman LLP. To learn more about South Carolina’s 25 FastestGrowing Companies, visit thecapitalcorp.com, or contact Cristina Schleifer at 864-672-8400.

Ranking Methodology South Carolina’s 25 Fastest-Growing Companies 2011 rankings were determined by using information submitted for the three most recently completed fiscal years at the time of nomination. Rankings were based on a weighted equation factoring in growth in revenues (or assets) along with increases in full-time employment. Submittals were compiled, evaluated for completeness and ranked by a review panel from The Capital Corporation in cooperation with the South Carolina Chamber of Commerce. The Capital Corporation tabulated the South Carolina’s 25 Fastest-Growing Companies 2011 list based solely on responses received.

2 0 1 1 S o u t h C a r o l i n a ’ s 2 5 F a s t e s t - G r o w i n g C o m pa n i e s sm

I n d u s t r i a l A r t & D e s i g n

# Company

Started Top Executive Location Industry

Description

1. Barling Bay 2004 Bob Bush North Charleston Engineering and consulting services

Security, research and development, management and administration company

2. Southern Tide 2006 Jim Twining Greenville

Collection of lifestyle apparel

Consumer products – apparel

3. Levelwing 2002 Steve Parker Jr. Charleston Advertising, media and technology

Full-service digital advertising agency and data-driven marketing solutions firm

4. Select Health 1995 J. Michael Jernigan Charleston Insurance of South Carolina

Operator of the state’s oldest and largest Medicaid plan

5. Thomas Glover 1981 Thomas E. Glover Jr. Inman Information technology Associates Inc.

Provider of IT system and network evaluations for medium to large corporations

6. Pegasus Steel LLC 2007 Anthony Deering Goose Creek Manufacturing

Professional heavy steel fabrication service center

7. Human Technologies Inc. 1999 Herbert W. Dew II Greenville Human resources

Fully integrated employment solutions company focusing on recruiting, hiring and HR services

8. Returnable Packaging 1998 Brian Laffler Greenville Packaging Resource Inc

Provider of returnable packaging for auto, appliance and assembly facilities

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2 0 1 1 S o u t h C a r o l i n a ’ s 2 5 F a s t e s t - G r o w i n g C o m pa n i e s sm # Company

Started Top Executive Location Industry

9. SCRA 1983 Bill Mahoney North Charleston

Description

Applied research and Leader of federally-funded research technology development; projects and supporter of technology economic development startups

10. Dennis Corporation 2005 Dan Dennis Columbia Professional services

Licensed engineering, surveying and construction management firm

11. Lindbergh & Associates LLC 1982 James A. (Tony) Price North Charleston

Architecture, engineering, land planning and surveying firm

Professional services– architecture/engineering

12. Customer Effective 2003 Scott Millwood Greenville Professional services Solutions Inc.

Customization and implementation of CRM software

13. Rhythmlink International LLC 2002 Shawn Regan Columbia Medical manufacturing

Neurodiagnostic accessory manufacturer

14. UEC Electronics 1995 Rebecca Ufkes Hanahan

Engineering, rapid prototyping, assembly and manufacturing business

Engineering and manufacturing

15. Arnold Construction Corp. 1995 Ben D. Arnold Columbia Construction

Construction company specializing in design-build delivery systems

16. eGroup Inc.

Technology solutions provider

1993

Michael Carter

Mt. Pleasant

Information Technology

17. Hagler Systems Inc. 1996 Bob Hagler North Augusta Manufacturing

Manufacturer of dredging and mining equipment

18. Williams & Fudge Inc. 1986 Gary L. Williams Rock Hill Finance

Financial firm that manages and collects defaulted student loans and accounts receivables

19. JH Global Services Inc. 2003 Jane Zhang Simpsonville Manufacturing

Importer and distributor of STAR brand electric golf carts, golfing accessories and industrial products

20. Chancel Builders Inc.

Commercial general contractor

2005

McKenzie R. Jordan

Myrtle Beach

General contractor

21. Infinity Marketing 1993 Tony Williams Greenville Marketing Solutions Inc.

Media, creative and interactive marketer

22. Triplett-King & Associates Inc. 1997 Merritt King Rock Hill Professional services – engineering

Engineering consulting firm specializing in bridge design, construction inspection and management

23. Carolina Filters Inc. 1968 Richard Coles Dwight, III Sumter

Provider of filters and green technology

Industrial/Commercial services

24. General Information 1966 Raymond Conrad Chapin Professional services Services Inc.

Premier recruitment, hiring and background screening services

25. Sabal Homes LLC 2005 R. Matthew Jones Mt. Pleasant Homebuilding

Homebuilder with extensive background in land acquisition, product development, construction and customer service

S o u t h C a r o l i n a B u s i n e ss |

November/December 2011

S o u t h C a r o l i n a B u s i n e ss |

November/December 2011

2011 Public Servant of the Year S.C. H ouse M ajority L eader K enny B ingham

Engineering success By Matthew Gregory

P at C r awf o r d

hen Kenny Bingham’s twin daughters started kindergarten in 1994, his wife, Jennie Lynn, decided she would apply for a nurse position at their school in order to be on the same schedule as the kids. Wanting to know if the school district would fund the position, Bingham decided to attend a Lexington School District Two Board of Trustees meeting. During the meeting, board members discussed a construction project using bond money to renovate a gym, which would cost just as much as building a brand new facility. After the meeting, Bingham approached a few of the board members and offered some suggestions. When Bingham returned for the following month’s meeting, he discovered the board had taken his advice. He was later approached by school board members and encouraged to run for school board. He won the election in 1996 and was named chairman of the school board in 1998. This experience and his two years on the City of Cayce Planning Commission gave Bingham his first taste of improving his community through public service. Little did he know these experiences would spawn a political career that would result in him representing the people of South Carolina House District 89 (Lexington) for more than a decade and being named the Majority Leader of the South Carolina House of Representatives. Not long after beginning his service as chairman of the school board, people began to urge Bingham to run for the House of Representatives. “I said, ‘You’re crazy! There’s no way I’ll do that,’” said Bingham. “Every time I’ve said I’ll never do something, I’ve ended up doing it, so I quit saying it.” Born in Cayce in 1962 to William and Marylynn Bingham, he spent much of his free time helping out at his father’s engineering company. He quickly learned the importance of having a strong work ethic from his father, who is a civil engineer. “We would go out to the job sites in the summer. If I wasn’t in school, I was working,” said Bingham.

His parents also taught him the importance of family. “Dad’s father died when he was three. He never had a stable home environment. He would be separated from his brother because they had to stay with different family members and couldn’t always be housed under the same roof. Because of this, he always wanted family to be together,” said Bingham. Bingham’s childhood is filled with memories of spending time with his brother, William Jr., and his sister, Terri. Today, Bingham continues to believe in the importance of family, cherishing time with his wife and two daughters, who attend Furman University. His busy schedule as a legislator, business owner, church deacon, father and husband ties him up all week. He reserves Saturday and Sunday for family, only attending weekend events and meetings if they are absolutely necessary. When it was time to choose a career, Bingham’s father made it easy for him. While Bingham thought about becoming a fisherman, his father told him he would pay for him to study engineering at the University of South Carolina, which sounded good to Bingham. He graduated in 1984 with a bachelor’s degree in science and civil engineering. He ended up going into business with his father and brother as a co-owner of American Engineering Consultants Inc., a Cayce-based firm that specializes in effective and efficient solutions for water management, from storage to treatment to distribution. The company handles wastewater treatment plants, civil site design, solid waste management handling, survey and road design. The majority of the firm’s clients are in the Midlands. A member of the House Ways and Means Committee, Bingham’s small business experience has made him an advocate for businesses at the State House. In 2011, he voted to support numerous pro-business initiatives that were included in the South Carolina Chamber of Commerce’s Competitiveness Agenda, an annual list of the business community’s legislative priorities. Under Bingham’s leadership, the General Assembly passed unemployment insurance (UI) tax relief. In 2010, the General Assembly passed legislation restructuring the

s c c h a m b e r. n e t |

N o v e m b e r / D e c e m b e r 2 0 1 1 | S o u t h C a r o l i n a B u s i n e ss

2011 Public Servant of the Year ~ S.C. House Majority Leader Kenny Bingham

South Carolina Department of Employment and Workforce (DEW) and recalculated the unemployment insurance rates to rebuild South Carolina’s UI Trust Fund in an effort to begin paying back the nearly $1 billion debt owed to the federal government. “The reality of it is that the money had to be paid back whether we did anything or not. It’s a trust fund – whatever goes out has to be put back in,” said Bingham. “We could allow the federal government to dictate how we paid it back, and in that situation, the people who did not use the fund were going to have to pay a disproportionate share of the tax liability going back. We didn’t want one business having to subsidize another business because that is not a business model. That is a socialistic model.” Bingham quickly recognized the problem after taking over the budget subcommittee that handles unemployment insurance. He began the process of educating other legislators on the problem, working across the aisle with House Minority Leader Harry Ott (Calhoun) and Representative Gilda Cobb-Hunter (Orangeburg). He also worked closely with Senator Greg Ryberg (Aiken), who chairs the Senate Labor, Commerce and Industry (LCI) Committee that held numerous hearings on the more than 40 potential tax relief scenarios for employers. “It was going to affect our businesses in South Carolina and our ability to attract new businesses if we did not fix this issue. A lot of other states are dealing with this issue now, but we jumped on it early,” said Bingham. The General Assembly agreed to provide

S o u t h C a r o l i n a B u s i n e ss |

$146 million to pay down a portion of the federal loan and made other changes to reduce businesses’ UI tax bills by 25 percent. “Kenny Bingham is highly respected by his peers in the House of Representatives for his ability to successfully tackle complex issues as he did this year with unemployment insurance tax reform. He truly understood how serious of a concern this issue was for our state’s economic climate, and he worked with all members of the legislature for the good of businesses in our state,” said South Carolina House Speaker Bobby Harrell. “Representative Kenny Bingham proved invaluable during the last two years of debate on unemployment insurance reform. His leadership role in the House and his adherence to the principle of fairness for both employers and employees led to dramatic changes in the system that will benefit South Carolina and its workforce for years to come,” said Senator Greg Ryberg. Bingham was also a huge advocate of tort reform, which was passed this year. The new law includes a cap on punitive damages greater than $500k or three times the compensatory damages as well as an appeals bond cap, revisions to the statute of repose for construction cases and a requirement that the attorney general must approve civil actions by circuit court solicitors. “We have been very successful at reforming our tort laws so they are fair to those people who need their day in court but also fair to businesses so that when they come to South Carolina, they aren’t scared people are going to sue them fraudulently and unnecessarily. We worked very closely with the South Carolina Chamber and other groups to make this happen,” said Bingham. Looking ahead to the next decade of business in South Carolina, Bingham recognizes port expansion

November/December 2011

as an important step for expanded economic development opportunties. “We have to deepen the channel into Charleston, and we have to have dual rail access because those are the two key elements to getting bigger ships here. The widening of the Panama Canal is going to really open up the East Coast ports and make a tremendous difference in commerce. The good news is I think many of my colleagues understand that concept,” said Bingham. Bingham also believes that port expansion is futile without the proper infrastructure. “You can bring all the ships and containers you want, but you have to have a way to get them out. Dual rail certainly helps, but we also have to have our roads,” he said.

Bingham agrees with the business community that comprehensive tax reform must be a top priority going into the 2012 legislative session. He believes antiquated tax incentives are part of the problem. “When you give out tax incentives based on what used to be good years ago, and you have no way of getting rid of them, it becomes a problem,” he said. In an effort to determine the best method of achieving comprehensive tax reform, Bingham appointed

a republican caucus tax study committee headed by Rep. Tommy Stringer (Greenville). He is optimistic the committee will come up with a solution and said it is a top priority for House Republicans in the next legislative cycle. He cites the fact that businesses consider tax codes when deciding where to locate as a driving force behind the importance of making comprehensive tax reform a reality. Bingham believes South Carolina must continue to advance education and workforce development in the coming decade. His time

serving on the school board taught him that no two children learn the same. “The more options you give parents, the more successful children will be. The number one thing to get children welleducated are moms and a dads who are involved in their education,” said Bingham. While he is quick to point out the issues that will define the next decade in South Carolina, Bingham is less certain about his own future. He said he will gladly serve in the House of Representatives as long as his constituents want him there. When his time in the House ends, he said he will not be overly concerned. Instead, he will find another way to give back to his community. “There are four areas of life that are important to me – family, church, business and community service,” said Bingham. “Any one of those items can consume all of your time. The art of life is balancing all of those things and keeping your priorities in order.”

Fast Facts about Kenny Bingham • • • • • • •

Favorite spot in South Carolina: His home in Cayce Favorite movie: The Godfather Favorite book: The Bible Favorite thing to do on a weekend: Spend time with family People might be surprised to know… “I love to cook, and I’m pretty good at it.” Song playing on his iPod: Anything from the 1970s by Journey, Styx and the Bee Gees. Pet Peeve: People not calling you back

Matthew Gregory is the multimedia coordinator at the South Carolina Chamber of Commerce and the editor of South Carolina Business.

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S o u t h C a r o l i n a B u s i n e ss |

November/December 2011

2011 Sergeant William Jasper Freedom Award Captain Ted Pitts

Answering the call of duty

P at C r awf o r d

ed Pitts was a member of the South Carolina House of Representatives who was voted into office four times by his Lexington constituents. While running a promising campaign for lieutenant governor in 2009, Pitts withdrew from the race and decided not to run for re-election in the House for an important mission. As a captain in the South Carolina Army National Guard, Pitts was being deployed to Afghanistan. “The reason I signed up for the National Guard after Sept. 11 was to go when I was needed, and I was needed,” said Pitts. Born outside of Lexington in 1972, Pitts’ childhood revolved around sports. In addition to Pitts’ younger brother, Walt, and older sister, Margaret Anne, there were always plenty of kids around to play sports thanks to his mother’s daycare business on the family property. His father was his little league coach, and every other year Pitts would be on the same team with his brother, who was 14 months younger. The brothers developed a friendly rivalry that continued into college, when Pitts played football at Presbyterian College and his brother played for Vanderbilt. Pitts majored in biology and obtained a minor in secondary education. He always had an interest in politics, but he never planned to have a future as a legislator. “I wasn’t class president in high school. I wasn’t in the Young Republicans Club. There are no politicians in the family. It wasn’t something I planned on doing. It just kind of happened,” said Pitts. When Pitts was elected to the House of Representative in 2003, he defeated an opponent who was a long-serving representative. Since Pitts ran against someone he thought had been there long enough, his plan was to not stay in the seat for an extended amount of time. “I thought 10 years would be good, and then I would let somebody else have a turn. A new set of eyes and fresh ideas is a good thing. I theoretically had term-limited myself to 10 years,” said Pitts. Pitts served until 2010, when he had to leave his House seat and forego his race for lieutenant governor to be deployed Afghanistan

with the National Guard. In addition to halting his political career and putting his real estate job on hold, Pitts was leaving behind his wife, Christina, and his two kids. “I joined because after Sept. 11, I felt the need to do something,” said Pitts. “I think the Guard is a great place to be. We’re truly citizen soldiers. You can continue your life and when your country needs you, they have access to you, and you have the training to be deployed.” After training for six weeks in Camp Atterbury in Indiana, Pitts, a medical operations officer for the 1/178th Field Artillery Battalion, and his fellow soldiers began their deployment January 3, 2010. Pitts’ mission in Afghanistan did not require his expertise as a medical officer. Instead, Pitts served as the officer in charge of Camp Dubs in Darulaman, Afghanistan, just south of Kabul. Located at the camp were 300 to 500 soldiers from every branch of service, nine different countries’ coalition forces, high-ranking U.S. military officials and civilian contractors. Pitts oversaw everything from the maintenance of the facility, work with construction contractors, the coordination of troops and relationships with the nearby population. If someone was going to shoot rockets at the camp, the best place for them to shoot from would be the nearby village. To avoid conflict and maintain good relations with the nearby village elders, Pitts and his fellow soldiers would travel to the village and talk with villagers. During one of these visits, Pitts’ interpreter told him one of the village elder’s men wanted to know why one of the soldiers was not partaking in the tea,

s c c h a m b e r. n e t |

N o v e m b e r / D e c e m b e r 2 0 1 1 | S o u t h C a r o l i n a B u s i n e ss

2011 Sergeant William Jasper Freedom Award ~ Captain Ted Pitts

candy and nuts they had graciously offered. Pitts asked the soldier why he was declining their hospitality, only to learn the solider was avoiding the food and beverage because he considered it unclean due to the way it was prepared. “He didn’t think they would notice. In light of a conflict breaking out, I told him to drink his tea and eat some candy and nuts,” said Pitts. In addition to missing the ability to successfully manage his real estate work at Grubb & Ellis | Wilson Kibler during his more than 10 months of deployment, Pitts longed for the comforts of home and gained a new appreciation for life in America. He missed his wife and kids, only getting to communicate with them via an occasional Skype session. He also missed the small things, like American food, as a good hamburger and steak were nowhere to be found. Still, Pitts said it could have been a lot worse. There were not small arms conflicts

S o u t h C a r o l i n a B u s i n e ss |

around his camp. Instead, the biggest threat was improvised explosive devices (IEDs) and people with suicide vests. Some of the soldiers stationed at Pitts’ camp lost their lives to these explosive attacks. “We had three incidents where we had memorial services on our camp. That’s tough,” said Pitts. “I have a lot of respect for not only those people who gave their lives but those who were right next to them who had to go back to work the next day.” Pitts’ experience in Afghanistan definitely heightened his senses. “The first time you’re interacting with a local or driving through an unfriendly environment, you’re more aware of your surroundings. You see a lot more things,” said Pitts. Even after Pitts returned to America on November 17, 2010, he continued to pay more attention to his surroundings. When driving in downtown Columbia, he now notices when a construction worker is walking on top of a building. He even pays more attention to trash on the side of the road, a callback to his training that taught him anything could be an IED. When Pitts returned home, his military service didn’t end. He currently serves as an officer candidates instructor at Palmetto Military Academy, and he continues to give up one weekend a month and two weeks a year for training as required by the National Guard. Pitts quickly returned to the political world, as Governor Nikki Haley, who Pitts worked with during his time in the House of Representatives, offered him a job as deputy chief of staff, where he oversees legislative and cabinet affairs. Pitts is able to call on his experience in the House of Representatives while handling the governor’s legislative relationships and trying to get legislation passed. “I am in a position to help further things that I think make South Carolina a better place

November/December 2011

to live,” he said. Pitts and his wife recently welcomed their third child, and Pitts is grateful he doesn’t have to see his newborn via Skype. He remains empathetic of soldiers who can’t be home when their children are born. “You see a lot of stresses it puts on the family of soldiers. It’s truly a sacrifice for more than just the person who goes. I would argue it was more of a sacrifice for my wife than for me,” said Pitts. Pitts has no regrets about leaving his House of Representatives seat or giving up his lieutenant governor campaign, and he doesn’t spend his time wondering what might have been. Despite the sacrifice he made for his country and the time he continues to give to the National Guard, he doesn’t include himself when discussing the heroics of soldiers. “You see people who do dangerous things every day, and they do it because they’re told by our country to do it. They don’t ask any questions,” said Pitts. “They do it because the leadership of this country feels like that mission is important. You’re just i n awe of the men and women in uniform who are doing this hard work.” Matthew Gregory is the multimedia coordinator at the South Carolina Chamber of Commerce and editor of South Carolina Business.

139 years of financial knowledge shared daily. Winner of 19 Greenwich Excellence Awards for Business Banking, more than any other financial institution, for the second year in a row.

Member FDIC. BBT.com ÂŠ 2011 Branch Banking and Trust Company. The 2010 Greenwich Associates competitive benchmarking survey is with companies with sales of $1MM to $500MM and is based on more then 25,000 interviews.

You see a police car. We see a police officer named Hal who works closely with fire departments and EMS, who knows every business owner downtown, who can name every city street and who buys 12 snow cones on Saturdays even though his T-ball team has never won a game. www.citiesmeanbusiness.org

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Vision Statement The South Carolina Chamber of Commerce is the unified voice of business and premier advocacy organization in the state. The South Carolina Chamber creates prosperity for all citizens through an economy of increased productivity and global competitiveness. Mission Statement The mission of the South Carolina Chamber of Commerce, as the single, unified voice of business, is to enhance the quality of life for all South Carolinians. The South Carolina Chamber leads the way in achieving global competitiveness and ultimately increasing prosperity for our citizens by: • Creating a shared, collaborative vision for South Carolina; • Increasing productivity through an educated and highly-skilled, capable workforce; • Advocating a balanced, predictable tax and spending system; • Fostering a favorable climate among our members and their diverse employees; and, • Promoting the positive impact of a successful business community on our citizens.

South Carolina Chamber of Commerce Leadership S outh C arolina C hamber of C ommerce B oard of D irectors 2011-2012 H Executive Committee member

H Chairman Mr. Jim Reynolds CEO Total Comfort Solutions H Chair-elect Mr. Michael Brenan President BB&T, South Carolina

H Mr. George Acker Vice President, South Carolina Duke Energy Carolinas

H Past Chair Mr. Dick Wilkerson Chairman Emeritus Michelin North America H Treasurer Mr. Chris Barras Executive Director Ernst & Young

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H General Counsel Mr. Charles “Ted” Speth II, Esq. Shareholder Ogletree, Deakins, Nash, Smoak & Stewart P.C.

Mr. Jimmy Addison Sr. Vice President & CFO SCANA Corporation Mr. Charles Beaman Jr. President & CEO Palmetto Health Ms. Rita Berry President/CEO Greater Summerville/Dorchester County Chamber of Commerce

November/December 2011

Ms. Stacy Brandon Senior Vice President Bank of America Mr. James Brogdon Jr. Executive V.P. & General Counsel Santee Cooper Mr. Jeff Brown Senior V.P. & Chief Marketing Officer, Marketing & Branding Colonial Life Ms. Sharon Bryant EVP Division Executive First Citizens Bank Dr. Fred Carter President Francis Marion University

Mr. Allen Creighton V.P. EHS & Corporate Compliance FUJIFILM Manufacturing USA Inc.

H Ms. Sharon Henderson Manager/EEO and Diversity Savannah River Nuclear Solutions LLC

Mr. Charles Dalton President & CEO Blue Ridge Electric Cooperative

Ms. Mary Anne Jacobs Senior Director, Public Affairs Time Warner Cable

Mr. Rick Davis Managing Shareholder, Greenville Elliott Davis LLC

H Mr. Josef Kerscher President BMW Manufacturing Co.

Mr. Walter Davis Vice Chairman CertusBANK N.A.

H Mr. Gene King Managing Director WRSequence LLC

Mr. Richard Dillard Director, Public Affairs Milliken & Company

H Ms. Pamela Lackey President, S.C. Operations AT&T

H Ms. Sara Fisher Senior Executive V.P./COO NBSC

Mr. Ray Lattimore President & CEO Marketplace Staffing Services Inc.

Mr. William Floyd, Esq. Partner Nexsen Pruet LLC

Mr. Harry Lightsey III Member McAngus, Goudelock & Courie LLC

Mr. Greg Guerra Exec. V.P., Product Management and Business Development Spirit Telecom

Mr. Steve Matthews Shareholder Haynsworth Sinkler Boyd P.A.

A PIPELINE TO A

STRONGER ECONOMY

Corporate South Carolina knows a good thing when it sees one. That’s why hundreds of companies across the Palmetto State invest in the Governor’s School for Science & Mathematics.

GET SMART. HIRE SMART. BUILD SMART.

Mr. Scott Middleton Owner Agape Senior

More than just the state’s leading STEM educator, GSSM is a proven gateway to our knowledge economy. Our SmartJobs initiative builds career connections with some of the brightest, most innovative people we know—our alumni. GSSM supporters—members of our Business Leadership Council Network—can post medical, engineering, technology and other top jobs directly to our alumni base— 80% of whom remain in these fields after college graduation. Invest in GSSM and invest in South Carolina.

A Lasting Impression On The Community. Bridgestone Americas is committed to being an engaged corporate citizen in all the communities we call home. Be it through our corporate partnerships with organizations like Habitat for Humanity and United Way, or our local support of boy scout troops and community clean-up efforts, being involved is an important part of our business.

Bridgestone Aiken County 1 Bridgestone Parkway Graniteville, SC 29829

BROUGHT TO YOU BY SCGSSM.ORG

To invest in GSSM or for more information on SmartJobs, call 803-252-9152. s c c h a m b e r. n e t |

Find out more at www.BridgestoneAmericasCSR.com

N o v e m b e r / D e c e m b e r 2 0 1 1 | S o u t h C a r o l i n a B u s i n e ss

South Carolina Chamber of Commerce Leadership Mr. Brian Newman Sr. Vice President Honda of South Carolina Mfg. Inc.

Mr. Andy Satterfield Managing Partner Jackson Lewis LLP

Mr. Jean-Louis Vanderstraeten President and CEO FN Manufacturing LLC

H Mr. James I. Newsome III President & CEO South Carolina State Ports Authority

Ms. Cristina Schleifer Marketing & Communications Director The Capital Corporation

Mr. Craig White Vice President Self Regional Healthcare

Mr. David S. Pankau President & CEO BlueCross BlueShield of South Carolina

Mr. Kenneth Seeger SVP & President, Community Development MeadWestvaco

H Mr. Gary Williams VP of Human Resources Mount Vernon Mills Inc.

Mr. Robert Pearce Jr. Attorney Smith Moore Leatherwood LLP

Mr. Pete Selleck President, Truck Tire Business Michelin North America

Mr. Arthur Perry II President & CEO 2AM Group

Mr. Jack Shuler Chief Executive Officer ArborOne Farm Credit

Mr. Gene Wise General Manager Target Distribution Center, Target Corporation

Dr. Ronald W. Prestage DVM/Managing Member Prestage Farms

Mr. Ron Smith Principal McMillan Pazdan Smith Architecture

Mr. Mark Propst General Manager The Timken Company

Mr. John Uprichard President FGP International Inc. dba Find Great People

Mr. John Worley Sr. CEO Zeus Industrial Products Inc. Mr. Greg Yorston Area Vice President Waste Management of South Carolina

South Carolina’s NESA Region

Has It All

Results you can rely on

 Average annual wage rates lower than the U.S. overall  Electrical/construction costs lower than national average  ReadySC, a division of the SC Technical College System, screens, recruits, and trains employees – free of charge – to ensure a trained workforce on the first day of operations  The Southeastern Institute of Manufacturing and Technology (SiMT), an advanced state-of-the-art manufacturing training facility, is located in the region

Building Stronger Roots in South Carolina

 A wide variety of industrial properties available  Tax credits of up to $8,000 per job  A superb quality of life

Wouldn’t you like to be a part? North Eastern Strategic Alliance P.O. Box 100547 Florence, S.C. 29502 (843) 661.4669 info@nesasc.org www.nesasc.org

TRC expands in the southeast with the acquisition of RMT Environmental. With this acquisition, TRC strengthens its resources in site remediation, air pollution control, EHS management, and solid waste throughout the Carolinas and Georgia. For more information, please visit www.trcsolutions.com

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November/December 2011

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A dvertiser AFL.......................................................................................................... 24

I ndex

NESA....................................................................................................... 88

Alliance..................................................................................................... 1

Orkin....................................................................................................... 49

AT&T....................................................................................................... 15

Palmetto Health.........................................................................Back Cover

Bank of America..................................................................................... 30

Pegasus Steel LLC.................................................................................... 72

Barling Bay.............................................................................................. 77

PDQ South Injection................................................................................ 89

BB&T....................................................................................................... 85

RhythmLink International........................................................................ 71

BlueCross BlueShield........................................................Inside Back Cover

Robinson McFadden & Moore PC........................................................... 46

BP Barber................................................................................................ 52

Sabel Homes LLC.................................................................................... 66

Bridgestone............................................................................................. 87

Santee Cooper........................................................................................ 31

Collins & Lacy.......................................................................................... 35

Savannah River Nuclear Solutions................................... Inside Front Cover

Dixon Hughes Goodman........................................................................ 14

SCE&G.................................................................................................... 25

Duke Energy............................................................................................. 6

S.C. Governor’s School for Science & Mathematics................................. 87

Elliott Davis.............................................................................................. 58

S.C. Ports Authority................................................................................. 22

First Citizens Bank................................................................................... 16

S.C. Technical College System................................................................. 53

GrantThornton........................................................................................ 59

Self Regional Hospital.............................................................................. 41

Greenville Hospital System...................................................................... 23

Southern Tile........................................................................................... 66

Haynsworth Sinkler & Boyd....................................................................... 5

Sonoco...................................................................................................... 7

IMIC Hotels/Inn at USC............................................................................ 40

The Capital Corporation.......................................................................... 73

Innovista Partnership............................................................................... 58

TRC......................................................................................................... 88

J.W. Hunt & Company............................................................................ 67

UEC Electronics....................................................................................... 89

Lindbergh & Associates........................................................................... 52

U.S. Chamber of Commerce................................................................... 10

McNair Law Firm, P.A.............................................................................. 17

Wells Fargo & Company.......................................................................... 81

Municipal Association of South Carolina................................................. 85

Youngs Plantation................................................................................... 40

NBSC...................................................................................................... 46

DESIGNING, MACHINING AND MANUFACTURING For more than 30 years, PDQ has been the onestop source for custom molded injected parts. Call us today at 843-672-3582 or visit our web site, pdqsouth.com, to see how we help with your next manufacturing project.

Vertically Integrated Electronics including Design, Prototype, and Production of: • • • •

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Aerospace Industrial Government Medical Entrepreneurial

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PDQ South InjectIon technologIeS, Inc. Pageland, SC sales@pdqsouth.com

N o v e m b e r / D e c e m b e r 2 0 1 1 | S o u t h C a r o l i n a B u s i n e ss

Pinnacle of Leadership Summit

$25,000-$34,999 BlueCross BlueShield of South Carolina Michelin North America, Inc. Milliken & Company Wells Fargo

Peak

$15,000-$24,999

AT&T BB & T Duke Energy Carolinas Eaton Corporation Fluor Corporation Progress Energy Santee Cooper South Carolina Electric & Gas TD Bank, N.A.

Crown

$5,000-$14,999

A. O. Smith Water Products Company AbitibiBowater Inc./dba Resolute Forest Products Aflac Group Akebono Brake Columbia Alcoa Mt. Holly Allied Air Enterprises Inc. Amick Farms, LLC AnMed Health Bank of America BD Diagnostics, Preanalytical Solutions BI-LO, LLC. BMW Manufacturing Co., LLC The Boeing Company Bojangles Restaurants, Inc. Bon Secours St. Francis Health System Bose Corporation Bridgestone Americas Canal Insurance Group CareCore National Carowinds CenturyLink CertusBANK N.A. CH2M HILL Charleston Place Hotel CMC Steel South Carolina Colonial Life Continental Tire North America Covidien Healthcare Cytec Carbon Fibers, LLC

S o u t h C a r o l i n a B u s i n e ss |

Darlington Raceway Delta Dental Dixon Hughes Goodman LLP CPAs Domtar Eastman Chemical Company Elliott Davis LLC EnergySolutions, LLC First Citizens Bank Fisher & Phillips LLP FN Manufacturing, LLC Force Protection Industries, Inc. Founders Federal Credit Union FUJIFILM Manufacturing U.S.A., Inc. General Electric-Southeast Region Google Inc Grant Thornton LLP Greenville Hospital System Gregory Electric Company, Inc. Haynsworth Sinkler Boyd P.A. Honda of South Carolina Mfg., Inc. Honeywell Aerospace-Greer Hospitality America, Inc. Husqvarna Outdoor Products International Paper The InterTech Group, Inc. Jackson Lewis LLP Jarden Applied Materials Johnson Controls KapStone KENTWOOL Kimberly-Clark Corporation Kingston Plantation - Kingston Shores Koch Companies Public Sector, LLC Kraft Foods Lexington Medical Center Liberty Life Insurance Lockheed-Martin M. C. Daniel, Inc. MAU (Management Analysis & Utilization, Inc.) McAngus, Goudelock & Courie, LLC McNair Law Firm, P.A. MWV MeadWestvaco Medical University of South Carolina Monster Worldwide Nan Ya Plastics Corporation Navistar/Pure Power Technologies NBSC Nelson Mullins Riley & Scarborough LLP Nestle Prepared Foods Company Nexsen Pruet, LLC Norfolk Southern Corporation Nucor Steel - South Carolina Oconee Medical Center Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

November/December 2011

Palmetto Health PARC Management LLC Parker Poe Adams & Bernstein LLP Pella Corporation Piedmont Natural Gas Piggly Wiggly Carolina Company Prestage Farms Regions Bank of South Carolina Robert Bosch Corporation, LLC Roche Carolina Inc. Roper St. Francis Healthcare Savannah River Nuclear Solutions, LLC SC Hospital Association Schaeffler Group USA INC SCRA Sealed Air Corp. Select Health of South Carolina, Inc. Self Regional Healthcare Sexton Dental Clinic Mark Richard Sonoco Products Company South Carolina Education Lottery South Carolina State Ports Authority Southeastern Freight Lines Spirit Communications Springs Global US, Inc. Sunbelt Rentals T & S Brass & Bronze Works, Inc. Target Distribution Center Target Corporation TBC Brands Time Warner Cable The Timken Company United Parcel Service University of South Carolina URS VERIZON Wireless Wal-Mart Stores, Inc. Womble Carlyle Sandridge & Rice PLLC World Acceptance Corporation WSI- Savannah River Site Zeus Industrial Products, Inc.

SouthCarolinaBlues.com

Staying Strong for South Carolina The economic landscape of the Palmetto State has changed since BlueCross was formed to provide health coverage to working-class South Carolinians. Textile mills have shuttered, banking headquarters have come and gone, and now small businesses are struggling under tough financial times. Yet one company still stands tall after 65 years … BlueCross BlueShield of South Carolina. And our success is South Carolina’s success. As a highly diversified corporation of more than 40 companies, BlueCross employs more than 8,000 South Carolinians in 1,200 different job types.

As an innovator in health care delivery, BlueCross has offered new products and services that have evolved over time to improve access to and the quality of the health care our customers need. And as a community investor, BlueCross is heads and shoulders above other organizations. To date, our Foundation has allocated more than $30.1 million to address health care issues for our state’s most vulnerable populations, including the uninsured and underinsured. Since our founding in 1946, BlueCross has offered security, stability and strength to the people of South Carolina. And we plan on doing it for many more years to come.

Sixty-Five yearS BeneFiting South Carolina BlueCross BlueShield of South Carolina is an independent licensee of the Blue Cross and Blue Shield Association.