Dallas area has fewer public companies, but it hasn’t affected jobs
14-May-2011Dallas Morning News
By Eric Toberson
May 14, 2011
For an economy that’s outperformed most others, North Texas has seen a surprising decline in the number of publicly traded companies.
The region featured 200-plus companies in The Dallas Morning News’ annual list as recently as 2005. This year’s edition tracks 131, down from 137 a year ago.
Fewer companies based here translates into fewer decision-makers, fewer high-level jobs and perhaps a tougher environment for charities looking for corporate sponsorships. But top business leaders say that the region continues to thrive and that the decline isn’t worrisome just yet.
“If it’s a one- or two-year thing, it’s not a concern,” said Jim Oberwetter, president of the Dallas Regional Chamber. “If what we’re seeing is a real trend, then it’s something to be concerned about.”
What matters more in his mind are how many jobs come from the companies rather than the raw number of firms based here. He notes that Hewlett-Packard Co.’s acquisition of Plano-based Electronic Data Systems Corp. gave it room to expand operations here, and while North Texas may be losing a headquarters, many more jobs could flow from the transaction.
“HP could easily add 3,000, 4,000 more jobs here,” he said. “That’s the kind of growth potential here that makes me less concerned about the total number of companies.”
Myriad reasons explain the decline in the number of public companies based in North Texas.
Recession sent some into bankruptcy or to a point where they couldn’t meet requirements to stay listed, such as Blockbuster Inc.
Some, like Fort Worth’s Burlington Northern Santa Fe Corp., were bought by other companies and taken private. Some, like Dallas-based insurer Gainsco Inc., decided that being publicly traded wasn’t all that useful; it’s in the process of delisting its shares.
A surge of mergers in the computer services industry also took big names such as EDS and Plano-based Perot Systems Corp. off the board in recent years. In this last year, some fast-growing local firms such as Fort Worth’s AmeriCredit Corp. were bought.
Meanwhile, the constantly changing energy sector sees giants like Exxon Mobil Corp. swallow smaller companies such as XTO Energy Inc . Others, like Encore Energy Partners LP, continued a gradual trend of energy-focused companies moving from North Texas to Houston.
LOOKING FOR MORE
Companies such as MoneyGram International Inc. have relocated to North Texas in recent years, but economic development officials hoped to attract far more, considering the state’s tax advantages, the region’s stable workforce and low cost of living.
Texas’ Enterprise Fund, which focuses on economic development, has targeted its efforts to bring more companies to all areas of the state through letters sent to hundreds of companies in higher-tax states such as Illinois and California, said Lucy Nashed, a spokeswoman for Gov. Rick Perry.
Perry’s office points to job creation in North Texas through the Enterprise Fund — 490 jobs created at a TD Ameritrade facility in Fort Worth, for example — as recent wins.
“We’ve worked hard to create an environment here in Texas where individuals can risk their capital and receive a good return on their investment through our low taxes, reasonable and predictable regulatory climate, fair legal system and skilled workforce,” Nashed said.
Generally, the state’s efforts don’t specifically target publicly traded companies, but rather all job opportunities that could help Texas.
“We have a great story to tell,” Nashed said, “and the state continues to actively recruit employers of all sizes, both domestically and from around the world, to grow or move their businesses to Texas and create quality jobs for Texans.”
The Dallas chamber has redoubled its efforts to lure companies here, and Oberwetter said recent trade missions to California and Illinois were promising.
One factor that hamstrings the region’s efforts to woo companies is the lack of a unified approach among the area’s cities.
Dallas, Fort Worth, Plano , Arlington and Irving often work separately to recruit businesses and occasionally against each other in bidding for new jobs, Oberwetter said.
“We appreciate all of the activity that individual groups do for the region, and we work with them virtually every week, but the name cities will always be Dallas and Fort Worth. And because of that, we are often the portals that companies from around the U.S. or the globe use as the entry points,” he said.
While Dallas and Fort Worth have frequently taken separate approaches to economic development, the two are cooperating on a trade mission to Australia as part of the Qantas Airways service launch this year, he said. The two will cooperate again on a follow-up trade mission later this year.
“There’s a growing feeling that we need to work together,” he added.
D/FW PART OF THE DRAW
The drop in publicly traded companies hasn’t been a factor in how prospective companies size up the region, said King White, president of Site Selection Group in Dallas.
Dallas seems to be attracting more regional division offices and North American headquarters for foreign firms that take advantage of the direct air service from Dallas/Fort Worth International Airport, White said.
“Those are the kind of assets that bring the most jobs,” he said. Indeed, the region’s job market has proved sound in the face of the weak economy, though it has yet to approach the peak of 2008.
The North Texas metropolitan statistical area tracked by the Texas Workforce Commission showed a slight drop of 1,000 total nonfarm jobs in 2010 from 2009, according to its statistics. The area remains 111,100 jobs behind the 2008 peak employment before the recession took hold, the commission data shows.
White said he expected more companies to relocate to North Texas. But he believes the region will be especially attractive to technology-based firms looking for a new home for operations, and not just for lower-paying developments such as call centers.
Still, White said, the factor that civic boosters should focus on isn’t the quantity of companies but the quality of their job creation. “North Texas is always going to have among the lowest costs of the first-tier cities,” he said. “You have to look at the job creation factors.”