Nashville whispers ($800 million & 10,000 employees)
Dell expects to hire 1,000 manufacturing and technical-support employees by year's end and another 2,000 within five years. But the whisper number among public officials is that number could reach as high as 10,000 in five years as Dell launches an aggressive campaign to dominate the consumer and small business segment.
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Dell Computer finds echoes of Central Texas in new expansion site
By Jerry Mahoney
American-Statesman Staff
Published: May 8, 1999
NASHVILLE, Tenn. -- It is known for its music scene, a large population of college students and a vibrant economy. A river flows past downtown and the tree-covered hills beyond.
Sound familiar?
Dell Computer Corp. executives say part of the reason they chose Nashville for their first U.S. expansion outside Texas was that Middle Tennessee reminds them of Central Texas.
"It has a culture that is very similar to Austin," Vice Chairman Kevin Rollins said this week when Dell announced it would build a major satellite campus in Nashville. "It had the same kind of natural affinity for us as a company."
Strategically, Nashville gives Dell quicker access to markets in the heavily populated eastern half of the United States, said Paul Bell, who oversees Dell's Dimension PC line, which will be shifted to Nashville beginning this summer.
But other cities offered that, too.
"Let's pay Austin a compliment," said Bill Baxter, the 45-year-old commissioner of the Tennessee Department of Economic & Community Development who got to know Dell executives in the past six months. "They were looking for another Austin."
Of course, the cities weren't exactly separated at birth.
Austin is South-by-Southwest. Nashville is the Old South. A plaque near the Tennessee State Capitol reminds visitors that the United Daughters of the Confederacy was founded in Nashville in 1894.
Grits are a staple of Nashville buffets, but Directory Assistance doesn't have a single listing for a Starbuck's coffee shop. And if the 15 or so managers that Dell expects to transfer to Nashville like serrano and poblano peppers, they'd better plan on growing their own.
Standing near a small bin of wrinkled jalapeños, a produce manager at a large Nashville grocery store seemed puzzled by questions about other varieties of peppers.
"Sometimes I get 'em in; sometimes I don't," he said.
But the similarities between the two cities are hard to ignore, from the presence of nationally ranked universities to the hot, muggy summers.
As cities on the move, Austin and Nashville also struggle with tight labor markets. Middle Tennessee's unemployment rate, like Austin's, is less than 3 percent. In fast-growing Austin, that has provided a challenge for employers with more jobs than the people to fill them.
But Bill Fox, a researcher at the University of Tennessee's Center for Business and Economic Research, said he doesn't believe that will be a problem for Nashville if the new jobs associated with Dell are added gradually.
"It is a tight labor market, but it's also the fastest-growing market in Tennessee," he said. "Where there's jobs, people will come."
Like Austin, Nashville has its own Williamson County to compete with for jobs. Williamson County, Tenn., which is south of Nashville, is the fastest-growing county in the state, Fox said.
The Tennessee capital, like Austin, is concerned about giving up jobs and population to surrounding counties, whose residents come downtown to enjoy the city's amenities and use public services and roads that their own taxes don't support. When Dell moved its corporate headquarters from Austin to Round Rock five years ago, it upset many Austin political and business leaders.
Unlike Austin, there is virtually no high-tech industry in the region, other than some small software companies. But that will change dramatically with Dell's arrival.
"It's a 'Good Housekeeping Seal of Approval,' " crowed Mayor Phil Bredesen, the two-term mayor who played a major role in luring the erstwhile Houston Oilers to Nashville. "Dell's locating here helps to focus attention on us as a city that can support technology, too."
Dell expects to hire 1,000 manufacturing and technical-support employees by year's end and another 2,000 within five years. But the whisper number among public officials is that number could reach as high as 10,000 in five years as Dell launches an aggressive campaign to dominate the consumer and small business segment.
And many of Dell's 40 or so suppliers will follow it here, adding more jobs. A Dell-financed study by the Center for Business and Economic Research at the University of Tennessee in Knoxville estimated that short-term construction jobs, 3,000 Dell jobs and hiring by Dell suppliers and others will add up to 8,550 jobs over five years. The economic impact is estimated to be $800 million, generating $47 million in sales tax revenue for the state, Fox said.
Beginning this summer, Dell will shift to Tennessee all production, technical support and service of its Dimension PC, a computer targeted at consumers and businesses with fewer than 400 employees.
"I really love these jobs," Bredesen told the Metro Council when he briefed members on the incentive package he negotiated with Dell -- a package exceeding $40 million.
The Dell campus will be Nashville's first big manufacturing plant since a Ford Motor Glass facility opened here in 1955.
"They're aggressive, no question about that," Bredesen said about Dell. "They wanted incentives, they wanted assurances and they wanted things done yesterday." |
