The Greening Of New Mexico

Small business diversity could be the key to fast but sensible growth for the "Land of Enchantment" in the '80s.

Tweet

When he decided to expand his sales effort to the western half of the United States, Allan Thieme looked at plant sites in Arizona, Colorado, Oklahoma, Utah, and even Texas. None had what he wanted.

Then he found Albuquerque, N. Mex. It offered good interstate transportation, plenty of potential employees at wages he could afford, and the promise of better labor relations than he had in heavily unionized Michigan, where he started his now-$8-million company, Amigo, in 1967. A year ago, he followed the lead of companies like Honeywell and Levi-Strauss, and set up shop in Albuquerque.

But 1,500 miles away, Marie Thieme and three of their five children are still working at Amigo's Bridgeport, Mich., plant. There 90 workers turn out the three-wheeled battery-operated "friendly wheelchairs" that Al first designed for Marie when she was diagnosed as having multiple sclerosis. Though Albuquerque is ideal for Thieme's company in many ways, it doesn't provide him with the skilled manufacturing workers or the support operations like machine shops that were so plentiful in Michigan. So he manufactures his wheelchairs in Michigan and assembles those for the western third of the country in Albuquerque.

Albuquerque also hasn't provided him with the money he needs. New Mexico has long had a tight money market, and Albuquerque's reputation as the Southwest's latest boomtown has made some of its banks and investors afraid that too much growth will come too quickly. After 10 months of looking for the $800,000 he needed to build a plant in Albuquerque, Thieme finally gave up. He signed a two-year lease for office and plant space. "If things don't loosen up by the time the lease expires," he says, "I just won't expand as much or as quickly as I'd hoped."

Despite Albuquerque's drawbacks, Thieme remains enthusiastic about the city's potential. He likes its mild four-season climate and friendly people. And he understands why New Mexicans don't want their largest city (population 332,000) to grow too fast. "It's hard working with less money than I'd hoped to find," he says, "but as a businessman with a stake in Albuquerque, I don't want it to become overcrowded and overindustrialized like Denver. I came to Albuquerque to avoid places like Denver and Phoenix."

New Mexico doesn't yet have the scars that neighboring states like Arizona and Colorado bear after two decades of rapid growth: overcorwded major cities, pollution, water shortages, and escalating costs. Until very recently, New Mexico has been a place to ski, to hike, or to search for Indian artifacts, but not a place to do business.

But now, New Mexico's low level of economic development is being seen as a plus rather than a minus. It means relatively abundant and inexpensive land, labor, water, and energy. New Mexico's 78 million acres produce more energy than its 1.3 million people use: The state exports about 60% of its oil and over 85% of its natural gas. As a result, the state is no longer poor -- at least on the books. The oil-and-gas industry alone pours over $1 million a day into the state coffers in land rental fees, royalties, and severance taxes on the extraction of minerals. Taxes have been cut every year since 1972, so that a New Mexican's state and local tax bill is now one of the nation's lowest.

"To be here now is exciting, challenging, and frustrating," says Lee Zink, University of New Mexico economist and president of the Greater Albuquerque Chamber of Commerce. The major challenge faced by New Mexico is to establish a stable, growing economy that doesn't depend solely on the state's natural resources.

One way to meet that challenge is to create a healthier and more diverse small business sector, Zink says. Since the 1940s, New Mexico's economy has depended on local, state, and federal government employment and spending, particularly on the complex of weapons and energy research labs, testing facilities, and air bases that have created a small pocket of wealth in north central New Mexico -- Los Alamos, Albuquerque, and Sante Fe. Over a quarter of New Mexico's 542,000 workers are employed by federal, state, or local government. Another 40% get their paychecks from groceries, restaurants, department stores, specialty shops, car dealers, and motels. In 1980, that left fewer than 200,000 employed in all other sectors -- agriculture, construction, manufacturing, finance, and transportation. Another 40,000 were not working at all. Outside of the boomotowns, where jobs go looking for workers, the unemployment rate is over 20%.

Diversification is vital to New Mexico's growth, and Albuquerque has taken the lead. By 1985, companies like Intel and Motorola will have added about 10,000 manufacturing jobs to Albuquerque's current base of 18,000. And Chase Econometrics predicts the growth will continue: It ranks Albuquerque among the 30 U.S. cities that are likely to have the best job growth during the 1980s.

But this attempt to add more industry will succeed only if Albuquerque develops a small business support structure, such as the machine shops Al Thieme needs. Some in Albuquerque think the key to the city's economic development is to encourage start-ups by people whose technological expertise has been developed in the nearby federal research and testing installations. "We're rich in natural resources and we've mined those," says Raymond Radosevich, professor at the University of New Mexico's Anderson School of Management. "But no one's mined our incredible nucleus of technology. We simply don't have the history of entrepreneurship to go with the technology. People who started in weapons research weren't geared to creating a salable product."

The state is also making efforts to see to it that not all the action is in Albuquerque. "Otherwise," says Jim Covell, head of Albuquerque's industrial development effort, "jobs are in Albuquerque, so people are forced to move here, and we end up with a huge unemployment problem." State economic development people help communities find their strong suits so they can make an effective pitch to out-of-state companies. Roswell, for example, landed a Greyhound bus-building plant by offering the huge hangars of the former Walker Air Force Base, once a major Strategic Air Command operation, and by touting the city's moisture-free climate. Recently, the city won a $22-million federal grant, allowing it to lend low-interest money for expansion of the plant.

 1 | 2  NEXT