Sprint, Boulevard Brewing, and now KC Southern. Why are hometown businesses fleeing?
The coming sale of Kansas City Southern railroad to Canadian Pacific has rattled those seated in boardrooms and at kitchen tables across our community.
Local business leaders don’t seem worried about the new owner. There’s a general belief that the local KC Southern office will remain more or less intact for a while.
Workers, however, are terrified. “Employees at KCS and their families are so scared about their future with the company,” an employee’s spouse said in an email, “knowing that if this transaction goes through hundreds of them will most likely be out of a job.”
Their fear is completely rational. The region is dotted with families who believed their jobs were safe, only to watch them vanish after mergers and acquisitions.
Let’s call the roll: Sprint. DST Systems. Waddell & Reed. Applebee’s. Boulevard Brewing. The Kansas City Board of Trade. All were once important names in corporate Kansas City, now run from some other place or gone, taking jobs (and home values and tax revenues) with them.
The deal needs regulatory approval, and will face some pushback. Environmentalists fear Canadian Pacific is buying KC Southern so Canadian energy companies can get around President Joe Biden’s cancellation of the Keystone XL pipeline and ship tar sands oil — the dirtiest oil in the world — to the Gulf of Mexico by rail instead.
If the deal goes through, though, Kansas City officials must once again face reality: Companies with deep local roots continue to fade away, costing the community more than just tax revenue and employment opportunities.
Businesses alone can’t make a city prosper, but committed local companies can help. Twenty-five years ago, for example, local business leaders were instrumental in the effort to save and rebuild Union Station.
Who would fill that role today?
“It’s a sad trend that’s been chipped away for a long time,” said one local business recruiter.
Others I talked with concede the pattern, but seem less worried about it. Takeovers are unavoidable, they said, particularly with publicly traded firms. And Kansas City has never been a hotbed of Fortune 500 CEOs lighting each other’s cigars at fancy restaurants.
The region remains strong in construction and engineering. A broad-based economy suffers less when any single business relocates, or gets new owners. All true.
So is this: The days when a city’s fortunes depended on “five white guys in a room,” as one area leader put it, are long gone, and we should be thankful for that.
Businessmen (they’re almost all men, which is a topic for another day) are rarely good at nitty-gritty politics. They grow impatient with the give-and-take required for democracy to work. They don’t like transparency. They don’t like reporters asking pesky questions. Egos clash with egos.
And — let’s face it — corporate CEOs make mistakes. Lots of them. David Stanley was considered a leading titan of the local business community in the 1990s, until his Payless Cashways building materials company crashed and burned.
But a healthy business community, with recognized leaders invested in the long-term health of a city, can make a difference.
Kansas City Southern has been part of that community. Maybe, in the years ahead, not so much.
How to fix this? Few major companies are interested in fully relocating their corporate headquarters to Kansas City. The weird culture-war politics in Missouri and Kansas make attracting them here much harder.
Some see hopeful signs in John Sherman’s purchase of the Royals: Ownership of that big league franchise remains, for now, in local hands.
But the real answer lies in growing and expanding small existing firms, or finding new ones already here. Handing out millions in incentives to a company in another place isn’t smart.
Kansas City cannot rely on the business community for its success. Better neighborhoods, less crime, stronger schools and racial justice are more important.
But the region will be weaker without corporate leaders who believe in this city enough to live here, and to make it better.
