New Fortune 500 list contains only one Kansas City company
06/04/2014 11:48 AM
06/04/2014 9:21 PM
The Kansas City area has never been a stronghold for Fortune 500 companies, but this year the metro has only one, down from three last year.
Though Cerner may be launching a $4 billion-plus office campus project and our big engineering firms, Black & Veatch and Burns & McDonnell, are hiring professionals by the score, the center of the local business universe, at least according to Fortune, is a nondescript office building at 9000 W. 67th St. in Merriam.
That’s where Seaboard Corp., a low-profile, international agribusiness and transportation firm, has its headquarters. It’s home to fewer than 250 employees, but it’s the area’s only Fortune 500 company, ranked 386th, up from 411th last year. Even Omaha, less than half our size, has five firms among the fortunate 500.
The Fortune 500 list ranks publicly traded U.S. companies based on their revenues, and this year the cutoff for the top 500 companies was $4.955 billion. Seaboard, according to Fortune, had $6.67 billion in revenues last year.
The two area companies that were dropped from last year’s list were Sprint and YRC.
Sprint, which was ranked 87th last year, was cut because it doesn’t qualify as a U.S. company since SoftBank of Japan acquired 80 percent ownership. YRC, which had been ranked 498th, dropped off the list because its revenues didn’t make the $4.955 billion cutoff.
High-flying Cerner recorded revenues of $2.91 billion last year.
Seaboard greeted the news that it was the Kansas City area’s only company on the list in appropriately low-key fashion.
“Climbing the Fortune 500 list is a testament of the dedication and hard work of the entire Seaboard Corp. family,” Steve Bresky, Seaboard’s president and CEO, said in a statement.
The No. 1 company on the 2014 list was Wal-Mart, followed by Exxon Mobil, Chevron, Berkshire Hathaway and Apple.
Private companies such as Hallmark, which said its 2013 revenue was $3.9 billion, aren’t counted in the rankings.
Making the Fortune 500 list is more about bragging rights, but there are real ramifications. Larger firms tend to provide more civic leadership, more philanthropy and more jobs.
“In general, the loss of firms that are headquarters of large national and international firms does matter to a region in terms of the talent available to it, spinoff businesses and civic involvement,” said Frank Lenk, director of research for the Mid-America Regional Council.
From an investment point of view, Jon Braatz, a principal at Kansas City Capital Associates, said being on the Fortune 500 list is not a big deal.
“From a civic standpoint, I think the more Fortune 500 companies, the more the bragging rights you might have,” he said.
Among regional cities, Kansas City had little to boast about when it came to this year’s Fortune 500.
Omaha had five firms that made the 2014 list, including Berkshire Hathaway. The St. Louis area had nine, Minneapolis-St. Paul had 17, and Des Moines and Oklahoma City had two each. O’Reilly Automotive, based in Springfield, was ranked 390th.
Over the years, former Fortune 500 companies in Kansas City have included H&R Block, Farmland Industries, Interstate Brands, Butler Manufacturing, Marion Laboratories and, for a brief period, Embarq, the traditional phone company spun off by Sprint.
In 1989, the area hit a recent high point when five firms were listed: Farmland, Interstate Brands, Marion Labs, Butler and a firm based in Misson Woods called Marley Co. Most years, however, the number has been three or four.
But simply making the Fortune 500 list is not an indicator for the importance of a firm to its community.
For example, while Wal-Mart is a dominant force in the economic and cultural world of the Bentonville region, Berkshire Hathaway employs very few people in Omaha and is far from the largest donor to civic causes there.
Seaboard is relatively unknown in Kansas City civic and business circles, but other local firms that did make the Fortune 1000 list such as Cerner, H&R Block, Kansas City Southern, Great Plains Energy and DST are active players that employ far more people.
Garmin isn’t counted by Fortune because it has been based in Switzerland since 2010, but it, Block and DST all topped $2.6 billion in revenue.
“We have several firms in the Fortune 1000 that are some of the most dynamic and fastest growing in the region,” said Bob Marcusse, president and CEO of the Kansas City Area Development Council.
“Twenty-five years ago, the Fortune 500 list meant a whole lot more than today because so much more of the vitality of the U.S. economy now comes from smaller companies.”
And while Sprint may have dropped off the Fortune 500 list because of its new ownership by Tokyo-based SoftBank, that doesn’t mean its importance to the community is gone.
“It’s irrelevant to Sprint’s success. We had more than 55 million customers and operating revenues of $35.5 billion in 2013,” said spokeswoman Melinda Tiemeyer.
“Our leadership is, and always has been, fully committed to supporting Kansas City community and civic organizations.
“A magazine, no matter how well known or prestigious, has no bearing on our presence and commitment to this community.”