Good morning, MBA readers,
Just over a year and a half into the job, Gov. Mike Parson is already keen on underscoring the “victories” of his tenure. His second State of the State address Wednesday struck a celebratory note, and a summary of his fiscal year 2021 priorities starts off with a section entitled “Celebrate the Wins.” While these “wins” establish Parson as an economy-minded executive, they are not all without critics.
A major point of pride in Parson’s speech was his workforce development initiative, a core part of his agenda since taking office. Parson said that his efforts to provide job training to Missourians have propelled the state to No. 2 in the U.S. for apprenticeship programs. At the core of this milestone is a philosophy on education as a whole: “We need to move away from the stigma that not having a college degree is a failure,” Parson said, “when in fact there are many other excellent education and job training opportunities.”
Parson’s emphasis on investment in K-12 education and technical training follows decades of steadily declining state support for public colleges and universities. Last week, one Missouri university leader lamented before lawmakers that some of his professors may be financially better off working at Walmart instead of teaching.
A portion of Parson’s speech was dedicated to lauding employers that either moved to Missouri or invested in operations in the state. Such acknowledgments included Bayer, General Motors, Waddell & Reed, the U.S. Department of Agriculture and Nucor Steel.
The governor also touted $84 million in Medicaid savings, but noticeably absent from this discussion were drops in health care coverage and a push to force a vote on Medicaid expansion. Both were driving points of the Democratic response to Parson’s address, delivered by Missouri Auditor Nicole Galloway, who is running to unseat Parson in November. With over 100,000 people dropped from Missouri’s Medicaid rolls last year, Galloway said, the state is making cuts to the program that are too aggressive. She took aim at both Parson and the Republican-controlled legislature for not addressing the drop in health care enrollment.
Parson’s address ended on a forward-looking note, with the governor proposing a $100 million cash operating fund to give the state more financial flexibility.
Scroll down to read more about the 2020 agenda for Missouri’s top executive and other business-related news from across the state.
Investors, analysts anxious about Sprint merger roadblocks
As lawyers delivered closing arguments Wednesday in the trial over the proposed merger of T-Mobile and Sprint, shares of the Overland Park, Kansas-based wireless company were trading at a more than 40% discount to T-Mobile’s all-stock offer. Investment analysts said the market is “getting more pessimistic” after a federal judge applied for an extended review of the settlement last week. (Wall Street Journal)
Boonville hospital abruptly closes amid compliance woes
Pinnacle Regional Hospital in Boonville announced Wednesday that it would close its doors the same day, citing problems with the Missouri Department of Health and Senior Services. The hospital, owned by a company by the same name that’s based in the Kansas City area, said it couldn’t afford to fund upgrades needed to bring the facility into compliance with state standards. (Boonville Daily News)
Chesterfield-based packaging company acquired by California investment firm
Pretium Packaging has been acquired by California-based investment firm Clearlake Capital Group from Genstar Capital. The packaging company, which had 2018 revenue of $380 million, employs around 1,500 people. (St. Louis Business Journal)
Two KC law mergers rank in top 15 nationally
According to an annual ranking of M&A involving law firms, the merger between Kansas City-based Lathrop Gage and Minneapolis-based Gray Plant Mooty was the third-largest in the country in 2019. Another local deal, between Kansas City firm Spencer Fane and Houston-based Zimmerman Axelrad Stern & Wise, tied for 15th. (Kansas City Business Journal)
St. Louis board officially ends airport privatization study
A city board terminated a contract on Wednesday with a team of consulting firms hired to advise on the privatization of St. Louis Lambert International Airport, which Mayor Lyda Krewson withdrew support for late last month. The city still has yet to withdraw a preliminary federal application to allow local officials to consider leasing the airport. (St. Louis Post-Dispatch)
KC’s Hunt Midwest to expand to Louisville
The real estate company announced plans for a 322,000-square-foot industrial building in Louisville. Most of the properties in the company’s industrial portfolio are in the Kansas City area, but Hunt Midwest also has properties in Texas. (Kansas City Business Journal)
Cultivation Capital leads $2.5 million funding round for Utah startup
The St. Louis-based venture capital firm led a seed funding round for Swell, which makes software designed to help small businesses improve their online rankings. It is popular among dental clinics, working with more than 1,700 of them. The funding is expected to help the company to grow its presence in other sectors. (St. Louis Business Journal)
Bud Select named St. Louis BattleHawks’ official beer
The St. Louis BattleHawks of the upstart XFL football league announced that Anheuser-Busch will be the team’s “official malt beverage provider” and Bud Select its official beer. (St. Louis Post-Dispatch)
Four St. Louis properties sold in nationwide deal worth nearly $1 billion
The four industrial properties were sold along with more than 100 others across the country by Dallas-based Sealy Strategic Equity Partners to New York-based DRA Advisors. The four buildings, which total 1 million square feet of space, are located in St. Louis County. (St. Louis Business Journal)
I am confident that the state of our state is STRONG and by working together, we will be ready for an even better future. #MissouriSOTS
— Governor Mike Parson (@GovParsonMO) January 15, 2020
That was the start of a 78-tweet barrage posted to Gov. Mike Parson’s Twitter account Wednesday during his annual State of the State address, which centered heavily on economic issues. The undeniable star of the speech was Parson’s workforce development initiative, which was mentioned nine times in the text of the speech and another five times in subsequent tweets. Parson began his remarks touting the program and said that it has enrolled 42,000 Missourians to date. Another highlight was the state’s investment in infrastructure, which Parson said will yield about $350 million for the state economy and help Missouri compete with neighboring states. Various companies got shoutouts in the tweet series, including GM, which promised to invest $1.5 billion in its Wentzville plant, and Nucor Steel, which plans to add 250 new jobs in Sedalia.
Say that again
“We pay our adjuncts $1,600 a semester, which comes out to about $100 per week. They could make more working at Walmart.”
That’s Dwayne Smith, interim president of Harris-Stowe State University, who recently told state lawmakers that his school is in desperate need of more state funding, St. Louis Public Radio reports. The historically black school in St. Louis has around 30 full-time faculty and relies heavily on 150 part-time instructors who feel a sense of duty to teach there. But, Smith said, the school can’t rely on the kindness of its faculty forever. He added that the school’s facilities are in poor condition with some buildings nearing 100 years old. Harris-Stowe’s struggles mirror that of other public universities in the state. Since 2000, Missouri funding for higher education has plummeted from $12,500 per student to just $6,727 this fiscal year. To make up the difference, Missouri schools have raised in-state tuition and fees by 60% since 1999, per KCUR.
That’s how many temporary workers will get full-time jobs this year at 14 General Motors factories in the U.S., including Missouri, the Associated Press reports. The workers will start at $21 to $24 per hour, plus benefits. Over time, these workers will earn the top wage for full-time GM production workers of $32.32 per hour. The promotions are part of the contract agreement between the company and the United Auto Workers union last year.
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The Kansas City-based automation startup has inked a new partnership with LG Electronics USA to roll out a “smart apartment” program, the Kansas City Business Journal reports. Homebase has been working with LG for about a year to develop the first phase of the program, which integrates LG smart appliances with Homebase’s smart apartment management technology. Homebase will debut its new program at a luxury senior living community in the Kansas City area. Residents will be able to control their LG appliances, unlock doors, set the thermostat and pay rent via the Homebase app. The partnership with LG, the South Korean electronics giant, is expected to boost Homebase’s credibility and move the company toward enabling smart buildings to learn and manage themselves.
It’s been a pleasure doing business with you this morning.