Brown has a B.S. in Information Systems Management from Central Washington University.  She is also heavily engaged in our community.  Jean is a past president of the Selah Chamber of Commerce, has served on the Central WA Home Builders Association Board of Directors, and volunteers for several local causes.

Please help us welcome Jean to our New Vision team.

The planning effort will unfold next month and be guided by a steering committee. Each County Commission is appointing people to this body – if you would like to participate please click here to get the County’s application for serving on local Boards and Commissions. People interested in serving should apply to the County by May 25^th as the Commissioners plan to make steering committee appointments by the end of May.

The steering committee will help kick off the project in June. A college student working under the supervision of Dr. Roy Savoian will be developing a profile of the regional economy over the summer. This work will help the team identify the area’s economic attributes as well as its key strengths, weaknesses, opportunities and threats.

The planning team will then stage public forums in the fall so the public can comment on the region’s economic climate and identify strategies that help revitalize the area’s economy. A list of key economic development projects will also be developed and prioritized later this year.

The two-county plan that EDA identifies as a “Comprehensive Economic Development Strategy” (CEDS) will be completed early in 2013.  Hopefully the effort will allow us to build new alliances that help grow the regional economy.  One of the benefits of completing a CEDS is that the Feds typically look carefully at the plan when making economic development investments in Washington state and throughout the Northwest.  The plan should also help us identify strategies that help us come out of the Great Recession with a bang.

GE makes actuators in Yakima, which are key landing gear components on many planes. The company also produces hydraulic fuses and other parts locally. Sieber said that holdback bars used to secure military jets to the aircraft carrier are a unique product that is made nowhere else in the world. GE sells its components to all the big aerospace companies including Boeing, Airbus, Bombardier, and Lockheed Martin. About 35 percent of the plant’s production is for the military.

The company’s employment has fluctuated from 200 to 360 over the last decade. The Yakima plan hit a low point after the 9/11 terrorist attacks. Employment has increased steadily over the past few years, as the company benefits from growth in the aerospace sector.

The facility tours allowed our group to see how big parts are machined and how the smallest components are assembled. Along the way we all saw how GE’s parts are tested and examined rigorously. Maintaining quality control in the aerospace industry requires constant vigilance – the smallest parts and processes are documented carefully.

We are very fortunate to have GE Aviation in Yakima. The company purchases thousands of dollars worth or goods and services from local businesses. GE also employs a highly skilled workforce that spends a lot of their hard earned dough locally. These impacts stack up – a manufacturer like GE supports hundreds of other jobs in Yakima.

GE is also our biggest and most visible aerospace company. We relish the fact that GE is doing well in Yakima.  They are a great community booster and give us confidence that other advanced manufacturing firms can thrive in our Valley.

Jenny Mae’s Gluten Free Bakery  just moved to a new location in Yakima at 730 North 16th Ave.  The new store gives them a lot more space at a more accessible location.  Owner Jenny Simmons said they said they are currently developing online sales capacity.  She is also serving more restaurants and getting her product into Food Coops.  Jenny has been growing the business carefully to make sure they have all their business bases covered.

Cascade Animal Care has also relocated to a larger facility at 1504 South 36^th Avenue near the Yakima airport.  Owner Bruce Noyes says his business is growing steadily – he has added five more employees since winning 3^rd place in our 2010 contest.  Bruce says he is doing a lot more wholesale business and is pleased that his retail customers are optimistic about their sales and the general economy.  Noyes has also added more product offerings.

2011 contest winner Washington Vision Therapy is thriving.  Dr. Ben Winters explained that his customer base has grown by over fifty percent since last fall.  He is trying to carve out more time for his business while not becoming a foreigner to his family and friends.  Winters is very optimistic about the future and has longer term plans to open more vision therapy clinics.

Milt Geffen Moves Into Grandview Facility

Hop Central Brewing and Milt’s Original Gourmet BBQ Pellets also won prizes in our 2011 contest.  Karl and Carol Vanevenhoven are still moving forward with their plans for a commercial brewery.  They are moving forward according to their award winning plan and hope to be open for business later this year.  Milt Geffen moved into his Grandview production facility prior to the start of our contest last fall.  He is getting lots of interest in his product and concurrently working to secure funding that can help him grow and sustain his business.

We know quite a few of our Enterprise Challenge contestants from the first two years are also doing well.  We are pleased that the Enterprise Challenge is geared towards helping everyone involved as opposed to just our cash prize winners.  Providing entrepreneurs and small business owners the educational seminars, the coaching, and our judge’s feedback helps ensure they get the support they need as they launch new ventures here in the Yakima Valley.  To learn more about the Enterprise Challenge, click here (and we will have 2012 contest information up soon!).

New Vision has done a lot over the last three years to help company recruiters soften the landing for key employees coming to or considering the Yakima Valley for good  job opportunities (ex. specialized websites, trained welcome ambassadors, etc.).    We are now working with the Yakima Valley Human Resources Association to identify key factors affecting local employers’ ability to attract new technical and professional employees from outside the area.

Our team has developed an electronic poll to generate input on workforce recruiting and placement issues. The survey takes 5-10 minutes to complete and we are encouraging our investor members to take the poll.  We plan to compile the results in June and hope the input generated will help us pinpoint company and community issues that affect professional employee recruitment (and retention). Our ultimate goal is to identify core issues affecting “talent attraction” and identify some options or strategies to address these challenges.

Attracting and keeping talented workers is a national issue.  Many cities and regions across the United States are realizing that their future economic aspirations are tied directly to the quality and quantity of their workforce. In Yakima County’s case we will undoubtedly be impacted as the baby boomer generation retires.  We also grapple with the fact that many of our bright children and young people leave the Yakima Valley after high school or college.  On a positive note, Yakima County has a relatively youthful population so our potential supply of future workers is much larger relative to many areas of the United States.

How well we develop a talent pipeline by both attracting new people to the Valley and educating our local residents will determine how well many of our companies perform in the years ahead.  Hopefully our survey will yield new insights that can be used with our partners to better develop or attract the talent we need for a vital regional economy.

Locally most of our schools are dabbling with STEM initiatives. Some school districts like Toppenish and East Valley are implementing these initiatives with the help of Project Lead the Way grants and teacher training support. Other districts are using other funds and resources to support STEM education. The bottom line though is that the resources to support STEM are rather limited and scattered. As a result local schools are doing their best to advance STEM learning but forced to do it in a rather piecemeal way.

First the game has changed.  Recruiting new industry is important but it is no longer the be all end all of economic development.  The smartest communities, ours included, are putting more emphasis on growing local jobs through entrepreneurship and local industry assistance.

Second, we have realized that being in a slower growing area can have its advantages.  The recession has been relatively easy for us compared to experiences in boom towns Las Vegas, Bend, and Boise.
Exporting matters like never before.  Evidence clearly shows that  companies serving foreign markets have weathered the recession better than their counterparts.  With 95 percent of consumers now living outside the United States, international business will clearly be more important to our community’s health than ever before.

Educational attainment will be the key to realizing our region’s long term economic opportunities.  It is great to help local employers attract new talented people to our community BUT we must do more to develop this talent locally.  As our economy rebounds and our baby boomer generation continues to retire, we have enormous opportunities to realize economic progress through education.  We must all find ways to support and help our local schools improve.  The stakes are high, and the consequences are not pretty if we fail.

And finally we need to keep the faith.  Our collective actions can make a difference and there is light at the end of the tunnel.  Your faith in New Vision certainly gives us the confidence to lead our Valley’s economic revitalization efforts.  And we thank you for your ongoing support.

We will miss Tammy but we hope she enjoys her new job in Spokane. We have little doubt that she will be successful in this position – Tammy is a very talented professional.

New Vision is filling Tammy’s position over the next 4-6 weeks.  People interested in this position can obtain a job application packet by contacting our office at 575-1140 or newvision@ycda.com.  The position closes next Monday April 2nd.

Horizon’s Transformation
This was clearly an unsustainable situation so Glenn initiated a business transformation plan that addressed a number of key challenges:

• Horizon transitioned to a single fleet type (the Q400) – perfect for the missions we fly (fast, fuel efficient, comfortable, easy on/off {which means shorter ground times})
• The company turned all reservations over to its parent Alaska Airlines to develop tighter controls over flights and operating expenses;
• Horizon as a brand is going away.  It is too expensive to support two brands within the national aviation industry.  Horizon the company will still exist but Alaska Airlines will become the single identify for the airline.
• We eliminated unprofitable flying – eliminating service to Idaho Falls, Flagstaff AZ, Prescott AZ, Arcata CA and Redding CA.
• Horizon streamlined operations, including outsourcing heavy maintenance work, recognizing what is and is not our core competency.  And
• We achieved long term labor contracts with our pilots and mechanics.

As a result of these changes Horizon air is not profitable.  Now that the changes at Horizon are having their desired impact, the company is now focusing on an initiative they are calling “Hassle Free Customer Experience” where Alaska and Horizon are going to review all aspects of what they do in an effort to reduce the stress of air travel.  Simply put, Alaska and Horizon want to be the easiest airlines in the world to do business with.  Johnson indicated there are great opportunities to improve customer service, particularly in terms of technology, like texting information to your smart phone, printing your own baggage tags at home (like you print your boarding pass now) and speeding up the TSA process. 

Aviation Challenges
Glenn shifted gears to discuss the aviation industry and indicated the last ten years has been extremely challenging.  He relayed a great quote from Warren Buffet about the airline industry:

“The worst sort of business is one that grows rapidly, requires significant capital and then earns little or no money. Think airlines. If a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down!”  

In addition to being capital intensive, airlines are extremely competitive, labor intensive, highly regulated and very highly taxed – more than cigarettes and liquor.  On top of this airlines are extremely sensitive to the price of oil, which has quadrupled in the past decade (that’s an increase of close to 1 BILLION dollars per year for Alaska).

As a result of these challenges, 100 domestic airlines have declared bankruptcy or stopped flying in the last 35 years .  Alaska was the 28^th largest airline in 1978  – now they are the seventh largest primarily because companies in the 8th through 27th  position either failed or were acquired.  American Airlines is the latest to go bankrupt, leaving Alaska as the only “legacy” airline to not file Chapter 11.

Lessons and Principles Learned
Johnson shared eight key lessons from operating through a challenging decade:

1. be completely customer focused – travelers vote with their wallets;
2. Put the right people in the right jobs – your leadership team and the tone at the top are critical.  Also be realistic and optimistic with employees.   Tell people what you know, when you know it, and avoid speculation.
3. Create a sense of urgency.  Don’t worry about perfection … just get the direction right and get started.
4. What you measure gets done.
5. Focus on what you can control.
6. Work on only one or two big ideas at a time.
7. Develop strategic partnerships to increase your relevance.  Alaska represents 4% of the airline industry but through partnerships we provide transportation to 750 destinations from Yakima.
8. Be adaptable and ready to capitalize on opportunities when they arise.  Alaska capitalized on opportunities to serve Hawaii and have done very well as a result.

He also shared four simple principles which I think are outstanding for everyone:

• Don’t buy things you can’t afford.
• Don’t borrow money you can’t pay back.
• Don’t do deals you don’t understand, and
• If it doesn’t seem right, it probably isn’t.

Yakima Air Service
During our question and answer session Johnson responded to a key question about air service to and from Yakima.  Someone in the audience asked when we might get a fourth flight to Seattle back.  Johnson responded that the three flights from Yakima are currently running about 75 percent full.  When we can increase our load factor towards 80-85 percent, the company is in a better position to consider adding flights.  Johnson reminded everyone that with current occupancy levels out of Yakima, Horizon stilll has 75 unsold seats every day.

All in all it was another great annual meeting for our organization, primarily because Johnson did  such a great job telling the story of Horizon and the airline industry.

Ed Byrne, CEO of Peninsula Packaging, said: “The Packaging Plus transaction expands our geographic footprint and increases the breadth of our product offering. We are very excited to be in Yakima and will be adding new equipment and employees to the operation almost immediately.”

Peninsula is a great company and we are pleased to see them expanding in Yakima and creating 25 new jobs.  They are a perfect fit for our area given the magnitude of our agriculture industry.

More About Peninsula Packaging, LLCPeninsula Packaging is a leading provider of custom thermoformed plastic packaging products targeting the fresh produce and bakery markets. The Company has fully integrated operating platform, which includes extrusion, thermoforming and labeling at its two production facilities located in Exeter, California and Wilson, North Carolina. Peninsula provides custom tooling design services, responsive customer service and rapid order turnaround to customer group of leading produce growers, bakery companies and grocery retailers. The Company’s products are environmentally friendly, using recycled materials and renewable energy. For information about Peninsula, please visit  www.penpack.net.