Virginia Business Editor's Blog Paula Squires, Managing Editor From the most influential business leaders to small businesses and the startup entrepreneur, Virginia Business covers the landscape. We strive to be a must read publication for people who want information and analysis on business trends.

Executive perks become more transparent
Paula Squires
Apr. 4, 2007
With the proxy season in full swing, there’s good news for shareholders who want to know about executive perks: They’ll be easier to find. Under the Securities and Exchange Commission’s new disclosure rules, companies filing proxies (starting with the fiscal year ending on or after Dec.15, 2006) must disclose perks costing more than $10,000, a lower threshold than a previous requirement of $50,000, or 10 percent of total annual compensation. So, expect to see more print on benefits such as financial planning, home-security systems, club dues and the personal use of company cars or aircraft.

Another trend that’s gaining traction: giving shareholders a say on executive pay. In February, the Columbus, Ga.-based insurance giant Aflac Inc. became the first U.S. company to approve a plan that will let shareholders vote on the pay of its top five executives. The vote would be advisory and nonbinding. Unions, investor advocates and shareholders are pushing for this change at many other companies, including Northrop Grumman, the Los Angeles-based defense contractor that owns the Northrop Grumman Newport News shipyard.

The trend indicates shareholders’ growing impatience with excessive CEO compensation. In recent years, some executive paychecks have risen at rates far above corporate earnings. Public backlash against CEO pay also has moved to the Congress. The House of Representatives is expected to vote this month on legislation proposed by Barney Frank, D-Mass, chairman of the House Financial Services Committee, that would require publicly traded companies to include a nonbinding advisory shareholder vote on executive pay in their proxies, beginning in 2009. While shareholders couldn’t set limits on pay, they could weigh in, with their approval or disapproval.

The Shareholder Vote on Executive Compensation Act also calls for an advisory vote by shareholders if companies award “golden parachute” pay packages to departing executives. The advisory shareholder approach on executive pay is already in place at publicly traded companies in Britain and Australia. Wonder if they came across any bosses with $10,000 shower curtains there?

Fed Bank president advocates clearer monetary policy
Robert Powell, Editor
March 30, 2007
The nation’s central bank should do more than shift gears on interest rates, says the president of the Federal Reserve Bank of Richmond.

Jeffrey Lacker told the Virginia Association of Economists meeting in Richmond on Thursday night that the Federal Reserve Board should try to influence the public’s expectations of inflation by issuing clear statements of its policy and setting a national inflation target. Such steps, he said, would enhance the Fed’s credibility and help stabilize prices. The Fed and public should not be lulled into complacency by the low inflation that the country has enjoyed since the 1980s, he added.

“Central banks are as responsible for the behavior of inflation expectations as they are for the behavior of inflation,” said Lacker, who was the sole voice in the Fed advocating higher interest rates during the last four meetings of its Open Market Committee last year.

One person in the audience who appreciated Lacker ‘s points was Neil Murphy, professor emeritus at Virginia Commonwealth University. He recalled working for the Fed in 1965 when monetary policy was a closely guarded secret. In fact, former Fed employees would become “Fed watchers” who would interpret the board’s actions for companies. Murphy sees Lacker’s suggestions as part of a move toward more openness at the Fed begun in the 1990s. “You give up a little flexibility, but it’s worth the price to gain the benefits,” he said.

Murphy and two other economists interviewed at the meeting, Ann Battle of the Virginia Economic Development Partnership and Barry Pfitzner of Randolph-Macon College, were optimistic about the continued growth of Virginia’s economy despite national concerns about growing foreclosures in the sub-prime mortgage market. A shakeup in the sub-prime market ultimately could be positive, said Pfitzner, if it weeds out lenders who were making bad loans. “It teaches a lesson that needs to be learned.”

Battle pointed out that Virginia’s economy is somewhat cushioned from the shocks of the national economy because of the proximity of federal government jobs in Washington and the vast number of federal contracts held by Virginia companies.

Of more concern was the long-term effects of inadequate funding for programs such as Social Security and Medicaid as more than 75 million baby boomers move toward retirement. “I don’t think Social Security is going to do much for me in retirement,” said Battle.

A surprising compromise
Jessica Sabbath, Special Projects Editor
March 27, 2007
What a difference a year makes.

Let’s picture the General Assembly’s status last year. The Republican-controlled General Assembly was deadlocked. Conservative and moderate Republicans couldn’t decide whether new taxes and fees where necessary to fund the state’s aging transportation system. A 60-day session turned into a 246-day marathon. Legislators went home with empty hands.

Now, let’s look at this year. On the last day of the 2007 General Assembly session, the legislature approves a mammoth transportation bill in a close Senate vote. (Amazingly, the session finished on time.) Gov. Timothy M. Kaine says the bill is inadequate for ignoring rural Virginia and taking money from the state budget that funds schools, social services and public safety. Some expected he would propose a statewide tax or fee increase but — as Kaine said during his Monday announcement — that would have meant an immediate death in the House of Delegates.

So when Kaine announced his proposal, which uses less money from the general fund by dedicating one-third of an existing tax on auto insurance premiums for transportation, it was…surprising. Surprising because there wasn’t a statewide fee increase proposed. Surprising because it asked to borrow $500 million more than the Republican plan. And most of all…surprising because Kaine and Republicans leaders seemed to support the same bill.

The legislature meets next Wednesday to act on Kaine’s amendments and vetoes. Some of the bill will likely be changed, but the tone between Republican leaders and the Democratic governor is radically different than what we’ve heard in years. It’s just unfortunate that this conciliatory tone will last only a short time — elections are just eight months away.

Knowledge workers – Virginia’s got ‘em
Paula Squires
Mar. 27, 2007
Which U. S. metro area has the most “knowledge” workers? San Francisco? New York? How about Washington, D. C.? There is more knowledge, aka “creative” workers, in the Washington area than in any other metropolitan area of more than 1 million, according to a new report from the Greater Washington Initiative, a research and economic development marketing organization.

That means about 1.1 million people work in fields such as professional services, information technology, education and research, media arts and design, and health care. More than a quarter of them — about 300,000 — are employed in Virginia’s Fairfax County. So, it’s no wonder Fairfax is hosting the National Conference on the Creative Economy in October.

As defined by the study, a “knowledge” worker refers to people “who use, analyze, and develop ideas and information in their daily tasks at work.” Nearly all of the professions in which they are employed require a college degree. That’s one of the reasons these workers are seen by many observers as major influences on regional economies.

Some cities see catering to the “creative class” as the path to revitalization. Author Joel Kotkin, a recent speaker at the Hampton Roads Economic Development Alliance, offers a dissenting viewpoint in a commentary in our April. He believes cities must focus on providing jobs for the middle class.

Traffic jam may be over for road funding
Paula Squires
Mar. 27, 2007
It looks like Virginia may finally be getting a $3 billion fix for its aging transportation network. After a months-long stalemate on the funding issue, Democratic Gov. Timothy M. Kaine has proposed amendments to transportation legislation that apparently have the support of Republicans in the General Assembly. Nothing is certain until legislators return to Richmond next week to act on Kaine’s changes to bills passed during the regular session. But for now it looks like the politicians took the high road. They stepped up and provided leadership on a crucial issue — the job they were elected to do.

Ladies who launch
Paula Squires
Mar. 8 , 2007
Sounds like the name of a movie, and a good one at that. However, it refers to a national networking group that assists women entrepreneurs. With 45 franchises in cities across America, Canada and one in Cape Town, South Africa, the network continues to grow as more women start businesses. In fact, firms in which women-hold a majority ownership are growing at twice the rate of all other companies in the United States.

So it’s no wonder they’re looking for a network of like-minded individuals. Ladies Who Launch offers coaching, online programs and incubator programs. In Virginia, Richmond has a local chapter headed by Central Virginia leader Susie Galvez.

For seven years, Galvez owned and operated Face Works, a Richmond day spa. Tonight, she’ll begin leading her first four-week incubator session. Nine women have signed on for what Galvez says is a weekly, two-hour session that encourages women to realize their business dreams. “Women do business different than men,” she says. “We sound board, we risk credit card debt, we do things as a team, and we want everyone to win.”

Cost for the incubator is $299. For more information, check out the group’s Web site at www.ladieswholaunch.com. or contact Galvez at 804 364-7113.

Women in business
Paula Squires
Mar. 8 , 2007
Talk about a nice banner headline. McLean-based Gannett Co. Inc. made the 2007 Top 10 list of best companies for women executives. In Richmond two hospital systems, Bon Secours Richmond Health System and Virginia Commonwealth University Health System, were recognized among the top nonprofits.

Those are the findings of this year’s list of Top Companies for Female Executives compiled by the National Association of Female Executives, the largest women’s professional and business association in the country. Gannet, a media company, was the only public company in Virginia that made the list, while Sallie Mae in Reston, (a student loan provider) was recognized among companies that NAFE cited as “the best of the rest.”

To make the top 10, companies had to have a minimum of two women on the board. In addition, the companies completed an application that looked at the number of women in their senior ranks as well as policies that support women’s professional growth. What made companies stand out was a commitment to giving women experience in profit and loss operations. “P & L experience — running operations, sales and other revenue generation — is a resume essential for those hoping to lead in business, but women are significantly less likely than their male peers to have access to this experience,” Betty Spence, NAFE’s president, said in a statement.

While women have gained top corporate support jobs in such areas as human resources and communications, there’s still plenty of room in the corner office. As NAFE points out, women comprise only 16 percent of corporate officers and 15 percent of board members at America’s largest companies. The other companies in the top 10: Aetna Inc., Allstate Insurance Co., Colgate-Palmolive Co., General Mills Inc., IBS Corp., Liz Claiborne Inc., Marriott International Inc., MetLife Inc. and Patagonia Inc.

Global real estate?
Paula Squires
Feb. 21 , 2007
In the next three to four years, expect to see more commercial real estate companies go global. "If Procter & Gamble can sell toiletries to the entire world then why can't a company sell real estate to the entire world?" Indeed, the barriers are already falling.

So says Marc Louargand, managing director and chief investment strategist for Hartford, Conn.-based Cornerstone Real Estate Advisers, a company with nearly $10 billion in public and private investments. Louargand was in Richmond Wednesday as the keynote speaker for a program sponsored by the Virginia Commonwealth Real Estate & Land Development Program.

In an interview, he said companies such ProLogis - a San Francisco provider of distribution facilities - have already moved into the European and Asian markets.

Louargand told Richmond real estate professionals that the U.S. economy is in a mid-cycle slowdown, much like the one in 1995. Still, with Virginia's employment and population growth, the commercial real estate market here is positive through much of the state, he said.

Louargand also sounded a warning about condominiums. Currently, there's an oversupply nationwide, which could slow down a recovery. Whether projects will survive will depend largely on how they were financed and if they can be converted successfully to rental units.

Power play?
Paula Squires
Feb. 8 , 2007
Business leaders are monitoring the state legislature’s efforts to end electric deregulation. You can’t deregulate the supply side without competition, and not many companies have rushed in to beat Virginia’s low electric prices since the state passed a restructuring law in 1999.

But how long will Virginia’s overall energy prices remain low — the ninth lowest in the country according to a recent Forbes.com analysis? That’s the thorny question. Rate caps on electric prices charged by Dominion Virginia Power, the state’s largest electric supplier, are scheduled to come off at the end of 2010. If the state doesn’t re-regulate electricity, then some business and consumer groups fear rates will spiral up, much like they have in other states that threw off state control in favor of deregulation only to learn that the market wasn’t robust enough to keep prices competitive.

The state’s Senate and House have approved different versions of legislation that would return some price-setting authority to the State Corporation Commission. Dominion doesn’t want a reprise of the state-regulated monopoly model. It favors a hybrid approach, one that restores some power to the SCC, while giving the energy company more flexibility to respond to a changing market.

While the legislation shakes out in a conference committee, this much is clear: Energy will be one of the defining business issues of the 21st century. Large Fortune 500s, such as General Electric, are already spending big bucks to develop alternative forms of power as demand soars to meet the needs of developing economies such as China’s. Meanwhile, energy companies are scrambling to build a new generation of nuclear, coal and natural gas plants, as well as other alternative and renewable forms of energy.

In the coming months, Virginia Business plans a major package on energy. Stay tuned.

"Mad Money" coming to Darden School of Business
Paula Squires
Feb. 6 , 2007
Tomorrow CNBC's lively television investment show, "Mad Money with Jim Cramer," films live from the University of Virginia's Darden School of Business. U.Va. is one of several campuses Cramer is visiting across the country as part of a back-to-school tour. "I love taking my program out of the studio to college campuses where I can teach and interact with the next generation of traders," he says. The show will be broadcast from the school's Abbott Center Auditorium in front of an audience of 400 students. It airs at 6 p.m. Monday through Friday and again at 11 p.m. For the uninitiated, "mad money" refers to funds people have to invest after they pay bills and set aside money for retirement. In other words, whatever is left in the "change jar."

Travel industry executives call for improvements to country's travel system
Paula Squires
Feb. 1 , 2007
America is a great place to visit and do business - if you can get into the country. Since the terrorist attacks of 9/11, overseas travel to the U. S. has dropped 17 percent, causing a loss of $93 billion in economic activity, $15 billion in taxes and 200,000 jobs, a group of travel industry executives said yesterday in Washington, D. C.

What's needed is a legislative overhaul that would keep security checks in place, but modernize a system that now has wait times of as long as 100 days for travel visas. "America is experiencing a travel crisis, one that hurts our economy, national security and global standing," said Steven Porter, president of Intercontinental Hotels Group and chairman of the Discover America Partnership.

The partnership's plan recommends $300 million in new funds to speed up visa processing to 30 days and create a more efficient and welcoming system at major ports of entry, particularly the 12 airports (including Dulles-Washington International in Northern Virginia) where 80 percent of the country's international visitors arrive. The funds, said the executives, could largely be raised through travel user fees.

"This is about our image, our vitality and our world competitiveness," Jay Rasulo, chairman of Walt Disney Parks and Resorts, told members of the travel industry during his keynote address at the annual luncheon of the Travel Industry Association. For more information on the plan, click here.

Smithfield Foods starting a trend?
Paula Squires
Feb. 1 , 2007
Less than a week after Smithfield Foods said it would phase out confinement crates for pregnant pigs, a second major pig producer plans to follow suit. Over the next decade Maple Leaf Foods Inc., Canada's largest pig producer, says it will eliminate the crates for pregnant sows and convert to a group housing system.

The Humane Society of the United States hails the actions by the largest pig producers in the U.S. and Canada as nothing less than "an animal welfare revolution in the North American pork industry" because it means an end to the use of "these cruel crates," the society said in a statement.

The power of thinking small
Paula Squires
Jan. 26, 2007
Small businesses continue to be an important part of Virginia's economy. These entrepreneurial ventures provide jobs, creative services and products, and some grow to be leaders in their industries.

In our annual salute to small businesses, Virginia Business honored four regional winners of our Small Business Success Story competition at a luncheon yesterday at the University of Virginia's Darden Graduate School of Business Administration. We profile the winners in our February issue. The overall state winner (hint: a Southwest Virginia company that will turn your head in a nanosecond) appears on the cover.

Thinking "outside the crate"
Paula Squires
Jan. 26, 2007
Virginia-based Smithfield Foods Inc. is getting positive buzz over its decision to phase out the use of confinement crates over the next 10 years for pregnant sows. The Humane Society of the United States characterized the announcement as "perhaps the most monumental advance for animal welfare in the history of modern American agribusiness," and immediately challenged other U. S. pork producers to follow suit and to beat Smithfield's timeline.

"With the tidal wave of corporate and public opinion building against gestation crates, it's time for the pork industry to end the use of these cruel confinement devices," Wayne Pacelle, president and CEO of the humane society said in a statement.

Voters in Florida and Arizona already have approved ballot initiatives to ban gestation crates, and the society may support similar campaigns in other states during the 2008 elections.

Under Smithfield's plan, breeding sows will be housed in group pens, rather than small confinement stalls. The change, says the society, will give sows some freedom to move and a chance to socialize with other pigs during their 16-week pregnancies, a big improvement over not being able to turn around for months.

In a statement at its Web site, Smithfield says it made the change because of customer feedback. "During our 70 years in business, we have always been sensitive to the concerns and needs of our customers, and they have told us they feel group housing is a more animal-friendly form of sow housing," said CEO C. Larry Pope. "While this will be a significant financial commitment for our company over the next ten years, we believe it's the right thing to do."

A taxing question
Paula Squires
Jan. 12, 2007
With the general assembly debating the pros and cons of raising taxes to finance transportation, now is a good time to see just how taxed Virginians really are. In 1982, the average per capita tax burden in a Virginia city or county was $812. By 2005, it was $1,474, or an 82 percent increase. Those figures come from an annual survey of local tax rates done by the University of Virginia’s Weldon Cooper Center.

What’s behind the big jump? The expansion of public education, emergency communications, and federal and state spending mandates have all played a role, the report says. And if it wasn’t for the efficiencies of information technology, government spending would probably have grown more.

Based on the real estate property tax, the five localities with the highest tax rates in 2006 were the cities of Portsmouth, Petersburg, Richmond, Norfolk and Roanoke. Localities with the lowest rates included the rural counties of Brunswick, Mecklenburg, Highland, Northumberland and Grayson.

Same old, same old?
Paula Squires
Jan. 9, 2007
Gov. Timothy M. Kaine has reintroduced a package of legislation to fund improvements to Virginia’s transportation network, but it’s mostly drawing yawns. The plan would boost some taxes — primarily the titling tax on vehicles from 3 to 5 percent — generating more than $850 million annually. Anti-tax House Republicans panned Kaine’s effort, saying it was a tired reprise of the package he floated during the General Assembly’s protracted session last year. See this month’s January cover story for a full explanation on the stalled transportation debate.

With the short legislative session opening on Jan 10, here is one editor’s crystal ball prediction: Expect mostly style, but not much substance. Politicians are too busy gearing up for the November elections when all 140 House and Senate seats are up for grabs. Conservatives are fielding intra-party challenges to so-called “liberal” Republicans who voted with Democrats two years ago to support a $1.4 billion tax increase under Democratic Gov. Mark R. Warner. And Kaine is building a war chest via fundraisers to campaign against conservative Republicans he says are standing in the way of progress.

We’re number one, again!
Paula Squires
Jan. 8, 2007

Virginia began the New Year with a nice accolade. Education Week rated the state No. 1 as a place for giving children the best opportunities to succeed. The report based its assessment on 13 categories including family income, parents with a college education and preschool enrollment.

The top showing follows Virginia’s No. 1 ranking by Forbes.com last year as being the best state in the nation for business. Seems like the Old Dominion’s profile is rising as a competitive place to live and work. To find out more about how Virginia stacks up, read our March cover story. In our annual State of the State story, we’ll look at many measurements to see where Virginia really stands.  

We’re No. 1, but for how long?
Paula Squires
Dec. 8, 2006
That was the topic du jour at a Richmond conference yesterday sponsored by the Virginia Chamber of Commerce. To remain competitive, business leaders talked about improving health care, work-force training, transportation and education.

In a cautionary tale of what happens when a company loses its competitive edge, a Ford Motor Co. executive (watch video) discussed the massive restructuring of one of the nation’s top automakers. Ford is slashing 38,000 jobs and closing 14 plants nationwide — including its F-150 truck assembly plant in Norfolk — to stem multi-billion dollar losses.

“This is a bittersweet visit to Virginia,” Joseph R. Hinrichs, vice president for North America manufacturing for Ford, told the crowd. Just six years ago, Ford was making about $10 billion a year, he said. Then the market shifted. Prices for raw materials, such as steel, doubled. Gasoline prices spiked. People stopped buying Ford’s gas-guzzling sport utility vehicles and trucks and opted for smaller cars. Meanwhile, Asian automakers kept the pressure on, adding more new models to the market.

Plus, the 104-year-old company had more retired workers than active ones. In fact, Hinrichs said that for every truck or car Ford manufactures, the company spends $1,000 on legacy health care and retirement costs. “High fixed costs, low margins, extra capacity — it was a classic case of economics 101,” said Hinrichs.

While Norfolk was one of Ford’s most efficient plants — and the site of a $350 million automated retooling just a few years ago — it will close in late 2007, largely because of high transportation costs due to its landlocked location.

As Ford moves forward with a leaner work force and more new, innovative cars, Hinrichs offered some advice on staying competitive. He said Virginia should focus on education, particularly on the technical side; transportation with adequate flow capability on roads so businesses can easily move parts and products, a skilled workforce and economic development incentives. “Incentives are a must, and you need to be ready to go when people come.”

Stay tuned. Virginia Business will provide more coverage on competitiveness in its March issue.

Virginia Secretary of Commerce and Trade Patrick Gottschalk talked about the state's economic assets at the Virginia Conference on Economic Leadership, sponsored by the Virginia Chamber of Commerce (watch video).

Generous gift for U.Va.
Paula Squires
Dec. 7, 2006
Businesswoman and philanthropist Sheila C. Johnson of Middleburg has pledged $5 million to The Curry School of Education at The University of Virginia, in hopes that “Virginia will become a catalyst in improving early childhood education.”

During the announcement of her gift yesterday at the office of Gov. Timothy M. Kaine, Johnson said more needs to be done to prepare children for education, particularly those with special needs. “Too many are falling through the cracks … It’s because we’re not stepping up to the big V out there — value. They’re in brick and mortar buildings that are falling apart. We are sending a negative message to them.”

Johnson’s gift will create a center for human services at the 101-year-old Curry School, where she serves as a board member. The center will offer four diagnostic clinics that specialize in communication disorders, reading and literacy, counseling and career development and clinical psychological services. Named in Johnson’s honor, it’s expected to enhance Curry’s public outreach efforts to 7,500 children and families a year.

In thanking Johnson, U.Va. President John T. Casteen said the new center “will enable the school to reach even more persons in need.” The gift from Johnson, a former teacher and co-founder of Black Entertainment Television, comes at a time when the university is trying to raise $3 billion for capital improvements. Including her pledge, the tally yesterday stood at $1.2 billion.

Johnson’s largesse also put the spotlight on Kaine’s efforts to expand the state’s pre-kindergarten program. The largest contributor to Kaine’s campaign last year, she supports the idea of universal pre-K, saying early intervention helps prevents problems later on in youth such as drug use and sexually transmitted diseases.

Johnson is CEO of Salamander Hospitality, a lifestyle company that includes fresh food markets and a soon-to-open resort and spa in Middleburg. After initial opposition by some residents, the project is set to move forward. Land for the spa in Loudoun County was recently annexed into the town of Middleburg. Besides the resort, plans for the 340-acre project include a town square, some residential housing, and a health-care clinic.

Construction will begin in 2007, with a completion date of 2009. Johnson also is president and general manager of the Washington Mystics of the Women’s National Basketball Association, and she holds a minority interest in other Washington sports teams. Her wealth stems from the 2000 sale of BET to Viacom for reportedly $ 3 billion, proceeds that she and ex-husband, Robert Johnson, split following their divorce. Last fall, she remarried William T. Newman, chief judge of Arlington

The Queen is coming
Paula Squires
Nov. 16, 2006
Her Majesty, Queen Elizabeth II, is coming to Virginia in May 2007. She and her husband, Prince Philip, Duke of Edinburgh, will be on hand to help commemorate the 400th anniversary of the first English settlement at Jamestown, the governor’s office reported Wednesday.

If a queen and her prince are willing to cross the Atlantic for a lesson in history, why aren’t more Americans interested? Virginia is steeped in history, yet attendance at some historical attractions is dropping. Will a 400th birthday bash with royal celebrities boost the numbers? For a closer look at what’s happening at some of Virginia’s historical museums, see our January issue.

Old media meets new media
Paula Squires
Nov. 14, 2006
Helen Thomas came to Richmond last week as a keynote speaker for a conference on new media. “The Art of Noise: Leveraging the Best of New Media,” was a daylong event where editors could rub elbows with bloggers, pod casters and multimedia gurus.

Yet, Thomas stood out as an icon of the old media — a tireless White House correspondent who has covered every president since John F. Kennedy. So Thomas was just what the conference needed: a salty dose of historical perspective.

While conference goers talked up the benefits of reporting news across many platforms, she talked about journalism’s mission: to seek truth, to report it accurately, to get both sides. This diminutive, 86-year-old woman who has traveled the world observing the American presidency made me remember why I got into journalism in the first place.

“Just the facts, m’aam. That’s what they taught us at U.P.I.,” she recalled. For six decades, Thomas has been reporting them and letting the chips fall where they may, something she says the press seems to have backed away from since 9/11.

These days, technology is changing the way the media delivers news. Our role is changing, too. There’s a democratization, if you will, of the news with citizens shooting video and posting it on Web sites such as YouTube, and independent bloggers sometimes being the first to break stories. As Helen notes, there’s a danger if we allow immediacy to trump accuracy. And let’s keep asking tough questions. Because if we don’t, who will?

Latest tack against BRAC: a lawsuit
Paula Squires
Nov. 8, 2006
Virginia's not giving up the Navy's master jet base in Virginia Beach without a fight. The state and Virginia Beach have filed two federal lawsuits in the U.S. District Court for the District of Columbia challenging the legality of the Base Realignment and Closure Commission's (BRAC) order that threatens to close Naval Air Station Oceana, the resort city's largest employer.

At stake is 12,000 jobs and an economic impact from the base estimated at more than $1 billion. "… The BRAC panel clearly overstepped its mandate," Gov. Timothy M. Kaine says in a statement announcing the legal action.

Earlier this year, the Defense Department's inspector general ruled that Virginia Beach had not met BRAC-ordered requirements to keep Oceana, which raised the possibility of moving the jets to Cecil Field in Jacksonville, Fla.

The lawsuits take issue with the authority of BRAC or the president to move the base from Virginia to Cecil Field, which is no longer a military installation. Private developers have redeveloped much of the Florida site, and Jacksonville voters on Tuesday rejected a referendum calling for a return of the Navy jets.

Virginia also contends that it and the city of Virginia Beach have complied with BRAC recommendations to prevent further encroachment by development near the base. "These lawsuits are the next step towards doing what is best for Virginia Beach, the commonwealth, and the nation, by securing the base at Oceana," says Kaine.

Copies of the lawsuits can be found at these links:
Commonwealth of Virginia v. Rumsfeld

Commwealth of Virginia v. Gimble

Back to pen and paper?
Paula Squires
Nov. 8, 2006
When I went to vote in Chesterfield County on Tuesday, I was astounded by the new voting method. Forget about computerized voting or the punch-with-a-stylus method previously in use at my precinct. Instead, voters were told to fill in the dots beside candidates' names with a black pen. "Stay in the lines," the instructions said.

On the way out, I asked an election official, "What's with the pen and paper?" "It's because of all those chad problems that happened in Florida," he said. Who could forget those pregnant chads - small, stubborn pieces of paper that hung on like baby fat after being punched, causing huge headaches in the 2000 presidential election? Still, I wondered, this is an improvement? What if people colored outside the lines? What if the pen bled or the ink smudged, and the line extended to the next circle, causing confusion about a voter's intent?

Seems like a strange way to mark ballots during a U.S. Senate race so tight that a recount is surely on the way. If any of you readers have more information on this, let me hear from you.

Going home
Paula Squires
Nov. 2, 2006
For some of my growing up years, my family lived in Portsmouth. My first job out of college was as a staff writer with The Virginian Pilot. But it had been a while since I’d visited my old hometown. So when I returned for a conference recently, I was wowed by Portsmouth’s renovated waterfront and downtown.

The luxurious Renaissance Portsmouth Hotel & Waterfront Conference Center offers a commanding view of the harbor and Norfolk’s skyline. From my room, I was entertained simply by watching tugboats usher large ships in and out of berths at the nearby naval base.

Within walking distance is the Virginia Sports Hall of Fame, where visitors can check out displays about the state’s top athletes. If interactive sports is more your thing, you won’t be disappointed. On the second floor, visitors can kick a soccer ball around or time a fast pitch. My best effort: 29 miles an hour.

The best bargain has to be a $1 dollar paddle-boat ride across the Elizabeth River to Norfolk’s Waterside. There’s plenty to see and do, including the opportunity to tour (for free) a battleship, the USS. Wisconsin. It’s nice to see improvements when you go home. Portsmouth, I’ll be back.

For more information, visit the city's Web site at www.visitportsva.com

State’s largest public/private partnership moves ahead
Paula Squires
Nov. 2, 2006
Things are clicking along for Virginia’s major technology initiative. As Northrop Grumman moves to modernize the state’s IT infrastructure, construction is under way on a new, $23 million IT facility in Russell County in Southwest Virginia. The 101,000-square-foot project will eventually provide more than 400 high-tech jobs, with employees providing data backup and recovery and help desk services for the state.

Also going up is a $35 million, 192,000-square-foot operations center in Meadowville Technology Park in Chesterfield County that will house 600 workers from Northrop Grumman and its state partner, the Virginia Information Technologies Agency (VITA). The 10-year, $2 billion contract — the largest in Virginia’s history — took effect July 1. What remains to be seen: how much money will this deal save us and will service really be superior? Stay tuned.

To find out more about the partnership, check out www.vita.virginia.gov

Allen touts manufacturing efforts
Jessica Sabbath
Oct. 20, 2006
During a day full of campaign stops, Republican Sen. George Allen on Oct. 20 visited the headquarters of packing and paper products manufacturer MeadWestvaco Corp., Richmond's newest Fortune 500 company. MeadWestvaco recently relocated to Richmond from Stamford, Conn. Allen toured the company's temporary headquarters, located in the former Capital One building in Henrico County. His guide was John Luke, the chairman of MeadWestvaco who also is chairman of the National Association of Manufacturers (NAM).

The tour gave Allen the chance to tout the "Senate Competitiveness Caucus" he created this past winter and his ideas on improving the economic climate for American businesses. The caucus focuses on a wide range of issues including lowering the cost of health care, making the 2001 tax cuts permanent and reducing the country's energy dependency on foreign countries. "A key issue for our competitiveness and our national security is energy security," Allen said after his tour. "We need more of our energy - oil and natural gas - produced here in this country." (Virginia Business will examine the state's business climate for manufacturers in its November issue.)

Luke touted Allen's support for manufacturers. While he was governor, Allen worked with the company to expand its Covington plant and traveled to Poland and the Czech Republic to help open international markets for Virginia companies. Allen was one of 52 senators who received the "NAM award for Manufacturing Legislative Excellence" based on his voting record on specific issues identified by NAM as important for manufacturers for the 109th Congress.

Allen faces Democrat Jim Webb, an author and former Navy secretary in the Reagan administration, in what polls show is a statistical dead heat for the Nov. 7 election. The race has attracted national attention with President George Bush and former President Bill Clinton coming to Virginia on Oct. 19 to help raise money for Allen and Webb, respectively.

Leading the way
Paula Squires
Oct. 18, 2006
What happens when you put two icons of international womanhood together on the same stage with Virginia’s first lady Anne Holton to discuss women in leadership? When the icons are internationally known poet and author Maya Angelou and social justice leader Jehan Sadat, the result is an opportunity to soak up their collective inspiration, courage and, in Angelou’s case, razor-sharp wit.

The women spoke last week at a symposium at Radford University after the inauguration of Penelope W. Kyle. She is RU’s sixth president and the first woman to head the school.

Angelou started the session with this gentle zinger: “Women have always led. Some of us have been intelligent enough to let the other group think they are leading.”

In response to a question about her most difficult challenge, Sadat talked about the assassination of her husband, Egyptian President Anwar Sadat, 25 years ago. Moments after he was shot and killed at a parade, Sadat whisked her grandchildren to safety. Then she conferred with the country’s prime minister. “I told him, ‘You have to leave now and take care of Egypt, because my husband is gone.’” It wasn’t until she was in a car with her family, recalled Sadat that she let her emotions out. “I was screaming and crying with my children.”

Through the years, Sadat has continued her husband’s legacy of peace. She married at 16, returned to college in her 40s, and fought for social, economic and educational opportunities for illiterate Egyptian women. In many parts of the world today, she says illiteracy remains the biggest barrier to leadership for women.

Some other nuggets from the symposium:

“The fact that we can be anything doesn’t mean we have to be everything all the time.”
– Anne Holton, a lawyer and juvenile judge before becoming first lady.

“Humans are more alike than unalike … We want to work, to love someone and be loved in return, to have children and safe streets.”
– Maya Angelou

No relation
Paula Squires
Oct. 18, 2006
People have been asking lately if I’m related to James A. Squires. He’s a senior vice president for financial planning at Norfolk Southern Corp. and the man Gov. Timothy M. Kaine selected to chair the governor’s new Transportation Accountability Commission.

I’m not related to Squires. Nor would I want his job. He will head a 15-member commission charged with assessing the efficiency of how Virginia uses state funds for transportation. Just try to get 15 people to agree on anything, much less a political hot potato such as money for transportation. Seems to me that the General Assembly could use a lesson in accountability. So far they have let voters down by not moving on a new state plan for transportation.

Demystifying real estate
Paula Squires
Oct. 11, 2006
This year’s cooled down housing market — reined in largely by higher interest rates — is still expected to go down in the history as the third best year for single-family housing sales. So says someone who should know, Frank E. Nothaft, chief economist for Freddie Mac. He was one of the speakers at the annual Real Estate Trends Conference sponsored by Virginia Commonwealth University on Oct. 10 in Richmond.

The event draws hundreds of real estate professionals who turn out to hear industry forecasts by national speakers. For Virginia, there was some good news. The state’s default rate for delinquent mortgages stands at 0.23 percent, below the national average of 0.75. Yet housing affordability is a concern, said Nothaft, particularly in Northern Virginia where high home prices have forced low to middle-income residents to move farther out to buy a home, which contributes to the area’s growing traffic congestion as they commute back in for jobs.

Some other tidbits: The condo conversion craze has peaked. According to Nothaft, the peak came in 2005 and has dropped off sharply since with some projects being cancelled in previously hot markets such as Florida and Las Vegas. For more coverage on what to expect from commercial real estate during 2007, check out our upcoming real estate section in December.

Women and networking
Paula Squires
Oct. 9, 2006
Get a group of women together, and they have no problem gabbing on a wide range of topics. In fact, I’d say women are born networkers. They understand the importance of getting the name of their business or employer out there. In the past, though, getting access to some traditional networks, such as exclusive clubs or that trip to the golf course, has been a challenge.

Today there are many ways to plug in. Professional groups, conferences and the golf course offer opportunities to mingle and make new business contacts. Online, there’s a site devoted to networking for women’s businesses—eWomenNetwork.com. It connects and promotes women-owned businesses on the Web and sponsors local, regional and national conferences. For a membership fee of $290, women can post a profile and photo about their business at the Web site, which gets more than 200,000 hits a day, according to Susan Wight, a regional executive director for eWomen based out of Leesburg.

In its seventh year, the eWomen Network “hosts thousands of meetings a year in about 100 cities,” she says, and members can attend at a reduced rate. National sponsors include Microsoft, American Airlines, Red Door Spas, Office Depot and American Express.

Not so fast
Paula Squires
Oct. 6, 2006
So you want to be your own boss and own a franchise. Sounds good, but tread carefully. The number of franchises and complaints about them are on the rise in Virginia. In the past two years, the State Corporation Commission has handled 22 complaints, compared to six for the previous two-year period. Some of the complaints: that principals allegedly provided false information to prospective buyers or used aliases when selling their franchises. Sounds like they didn’t want to be located later--- not a good sign when buying a business. To see if a franchise is registered in Virginia and to check its record with state regulators, visit the SCC Web site at www.scc.virginia.gov.

What’s in a name?
Paula Squires
Oct. 4, 2006
Would you do business with a company named Getloaded.com? More than 23,000 of the country’s trucking companies have registered with this Richmond-based firm. Getloaded in this context has nothing to do with strong drink. Rather the name refers to the company’s Internet-based matching service for freight and trucks. It helps nearly 40,000 companies post more than 140,000 loads per day across the U. S. and Canada. Then loads are matched with trucks that can provide needed transportation.

We’re talking some strange hauls, here. Trucking company members have moved everything from Shamu the Whale to four circus tigers, a load of bees, and an army truck with a tank on it. Founded in 1999, the company strives to provide instant access to trucks and freight by using a secure computer platform. No wonder so many customers are signing up to get loaded and get on down the road.

Electric deregulation
Paula Squires
Sept. 26, 2006
Nearly seven years after Virginia passed electric restructuring, there’s virtually no retail competition. The fundamental problem, reports the State Corporation Commission, is that prevailing wholesale prices are much higher than expected. So far, rate caps in Virginia (in effect until Jan. 1, 2011) have protected customers from changes in electricity costs. Yet caps are expiring in other states — they come off in Texas on Jan. 1 -- and lots of people will be watching. Will electric prices increase once they are subject only to market forces? The SCC’s sixth annual report on the status of restructuring is available at the agency’s Web site.

‘ Energy train wreck’
Paula Squires
Sept. 26, 2006
Dominion CEO Thomas F. Farrell II says the U. S. could be headed for an “energy train wreck” if it doesn’t act soon to develop a balanced public energy policy. In a speech this month to the World Affairs Council of Richmond, Farrell applauded the Virginia General Assembly for passing a “forward-looking” energy bill during this year’s session. It includes provisions for offshore gas exploration, clean-coal technology and the creation of a statewide energy plan. “That is good news for the Commonwealth and its citizens and should be an example for Washington, D.C.” said Farrell.

Currently, the U.S. restricts development of domestic oil and gas resources in what Farrell sees as the country’s “Achilles heel” in terms of energy policy. “We are a nation rich in natural resources, yet we restrict access to large tracts of it. I know of no other country with similar limitations.”

A copy of Farrell’s speech can be found at Dominion’s Web site. Richmond-based Dominion is one of the country’s largest producers of energy.

The business of sports
Paula Squires
Sept. 22, 2006
If there’s any doubt about the power of big-name college football to drive a local economy, check out Blacksburg during a home football game. It’s a sea of burgundy and orange as Hokie fans converge on this college town. Students, alumni, families and guests pack restaurants, stores, parking lots and hotels. Some area churches even get in on the action by leasing out their parking lots for the day to out-of-town visitors. So you can tailgate and support a good cause.

It doesn’t matter if Tech takes on an easy contender such as last week’s Duke Blue Devils (score: 36-0) or a tough opponent (Clemson awaits on Oct. 28), more than 60,000 fans turn out at Lane Stadium.

For more on the business of sports, check out our October cover story on NASCAR. It’s doing more business in Virginia than even the Hokie bird.

Success isn’t a straight road
Paula Squires
Sept. 22, 2006
The road to the top is seldom straight. In fact, a career detour can be a blessing. Take the case of Texas Senator Kay Bailey Hutchison. During a national conference for business women this week in Washington, Bailey says she was bent on getting a job as a lawyer straight out of law school. “But Texas law firms weren’t hiring women back then.” So, she applied for a job as a television news reporter and covered the state’s legislature. The experience led her to run for state office at age 28. Later Hutchison went on to become Texas’ first female in the U. S. Senate.

Today, she’s the country’s fifth highest-ranked Republican senator, and her name appeared on Pink magazine’s recent list of nine women with a good shot at the presidency. Pink, an Atlanta-based woman’s business magazine, sponsored the conference which drew about 500 women.

Riding the rails
Paula Squires
July 13, 2006
Ever wonder what it would be like to drive a locomotive? Visitors to Norfolk Southern Corp.'s museum can find out. Opened last fall to the public, the museum sits just off the lobby of the company's corporate headquarters in downtown Norfolk. It's an interesting place, filled with 175 years worth of railroad memorabilia: nails, spikes, lanterns -- even menus and china from days when railroads routinely served fine meals.

The biggest draw, though, is the chance to play engineer. In a black, scaled down version of a locomotive cab, a simulation takes visitors through the paces. After moving a throttle, the train moves forward. Looming ahead is a mountain, but a voice explains how to set the dynamic break, similar to downshifting in a car. Another lever throws sand on the track for greater traction. The best part: pulling the train's whistle. Visitors leave with a sense of the skills required by Norfolk Southern to operate 21,200 route miles in 22 Eastern states. The nation's fourth-largest railroad employs 30,000 people, with about 200 of them working from the headquarters building at Three Commercial Place.

Downtown
Paula Squires
July 13, 2006
Speaking of Norfolk's downtown. . . I haven't walked around here in a while, and during a recent assignment, I was struck by the city's vibrancy. Businesses, small eateries, and coffee shops line the streets. Ship attractions at Norfolk's waterfront beckon visitors, their flags flapping in the breeze. Going up is a new 20-story tower for Trader Publishing Co., a publisher of classified automotive advertising as well as new residential construction. If Richmond needs ideas on its continuing downtown renovation, it should look to this seaside city where outdoor mermaid sculptures reign and you can easily find a good cup of coffee.

Moving up
Paula Squires
July 13, 2006
Catherine West, one of Virginia's most senior female executives, has left McLean-based Capital One Financial Corp. to become COO of J.C. Penney Co. In taking this job, West must feel like she has come full circle. Her maternal great-grandfather and grandfather worked in the retail industry, serving as president and executive vice president, respectively, of Marshall Field & Co., Chicago's venerable department store.

West is the former president of Capital One's U.S. Card business, one of the company's largest divisions, with more than $47 billion in managed loans. In her new job in Plano, Texas, West, 46, will oversee stores, logistics, supply chain operations and property development initiatives. J.C. Penney, one of America's largest department stores, plans to open 27 stores in 2006 and an additional 150 stores in 2007-2009.

West was one of the women Virginia Business profiled last year in a special report on how women business executives were doing in Virginia.

Out from the shadows
Paula Squires
July 5, 2006
Generally, chief financial officers toil behind the scenes. Yet, CFOs from around the state were front and center at a recent gala in Richmond recognizing their financial leadership. In a first for Virginia Business, we sponsored the CFO of the Year award, recognizing winners in three categories: public companies, Gracia C. Martore of Gannett Co. Inc. in McLean; large private companies, Robert A. Broermann, Sentara Healthcare in Norfolk; and small private companies, Timothy W. Lawson of CCS-Inc. in Christiansburg.

You can read their profiles in this month's issue along with a cover story on why, post Sarbanes Oxley, some people think the CFO's job is the toughest in corporate America. At last week's gala, though, people came to celebrate. The group from Care Advantage in Richmond arrived in a limo to root for its CFO, Michelle Wharham. She was given flowers, a tiara for the day and basked in the well wishes of her colleagues.

The CFOs I talked with said they like their jobs. Even with more stringent regulations, they feel they are making a difference in helping their companies reach goals - even if they do have to pinch some pennies from time to time.

Patriotic partnership
Paula Squires
June 28, 2006

Maybe it's the built-in structure. Or the chance to start a business with a catchy name. Two Men and A Truck, International. What military guy could resist a moving company with a name like that?

At any rate, veterans (both men and women) are taking advantage of an opportunity to invest in small business franchises. VetFran, a program offered by the International Franchise Association, provides discounts and other incentives. More than 200 companies are participating with the IFA. Those from Virginia include Norfolk-based Geeks on Call America, ExxonMobil Corp. in Fairfax and Liberty Tax Service in Virginia Beach. According to the Washington, D.C.-based IFA, nearly 500 vets have purchased franchises so far. Among 22 Virginia vets, auto care and business support have been the most popular businesses. For more information, check out the IFA's Web site at www.franchise.org.

The "new retirement"
Paula Squires
June 28, 2006

Forty-five percent of the nation's retiring baby boomers say they never plan to stop working - at least not completely. Instead, they'll redefine "retirement" in new ways, by working as a consultant, starting a business, or staying on with their current employer in some capacity to retain health care benefits. At least, those are the findings of a recent survey done by Merrill Lynch.

What ever happened to the lazy retirement years? Actually, there's a book out now entitled "The Joy of Laziness: Why Life is Better Slower and How to Get There." And guess who's reading it? My 21-year-old daughter, who's a year away from college graduation. Maybe the next generation has already figured out that it's okay to have down time, unlike their manic boomer parents.

Good news for small businesses
Paula Squires
June 28, 2006

It's going to be easier for small businesses to purchase health care coverage. Thanks to new legislation signed into law earlier this month by Gov. Tim Kaine, businesses with fewer than 50 employees can pool together and collectively purchase health insurance.

Small businesses had lobbied for this change as a way to rein in costs and make insurance coverage more affordable for employees. While serving as Virginia's lieutenant governor, Kaine called for a study, keeping the issue in the public eye. At this year's General Assembly, it garnered support from both sides of the political aisle. Funny what a little bi-partisan cooperation can do. Wonder if the assembly will hold that thought when it tackles transportation funding later this year.

Sign of the times
Paula Squires
June 22, 2006

Smokin' it's not. In fact, the new Marriott Hotel and Conference Center in Newport News is 100 percent smoke-free. Hampton Road's newest meeting space opened last week across from the picturesque fountains at Oyster Point's City Center. The mixed-use project, along with the posh 11-story hotel, is changing the look and feel of Newport News, long known for its massive shipyard. If you are planning a visit, leave those cigars at home. Do bring a laptop. The upscale, 256-room Marriott offers wireless throughout.

One of the hotel's most striking amenities: a 6,500-square-foot rotunda. It's very Virginian in design and a nice place to relax with a drink, a vice that hasn't been outlawed …yet.

Avoiding bad hires
Paula Squires
June 22, 2006
Years ago, when interviewing with a metropolitan daily newspaper--the defunct Richmond News Leader - prospective reporters were required to take a timed spelling and grammar test. I'll never forget the word that struck terror in my heart: obituary. The Richmond Times-Dispatch hired me (no test required), so I never learned if I botched the tricky, double-vowel word. At any rate, tests are back.

In a tight job market, companies are spending more to hire the right people. Some require background screenings and personality tests. Do you consider yourself a team player, a brown noser or a serial killer? To learn more, check out our upcoming story in July's quarterly Workplace section.

Keeping the farm
Paula Squires
June 22, 2006
It took three months of overtime and a July 1 deadline staring them in the face, before state legislators finally passed a two-year, $74 billion biennial budget. Small business advocacy groups like one result of this year's lengthy budget process: the repeal of Virginia's estate tax on estates valued at $2 million or more. The change will cost the state an estimated $140 million a year in lost revenues, but make it easier for families to pass farms and small businesses to the next generation. If Gov. Tim Kaine signs the bill, Virginia will join a majority of states in taking the death tax off its books, effective July 1, 2007.