here for PDF format
for participants' responses to this interview.
Paul J. Wagner and Chip Laingen, business leaders
Civic Caucus, 8301 Creekside Circle, Bloomington, MN 55437
Friday, March 19, 2010
Verne C. Johnson, chair; David Broden, Janis Clay, Marianne Curry, Paul
Gilje, Jim Hetland (phone), Tim McDonald, John Mooty (phone), Jim Olson
(phone), Wayne Popham (phone), and Bob White
A. Context of the meeting--Last
week in discussion of a possible statement on principles that the Governor
and Legislature ought to consider in budgeting, members said we've not had
sufficient input from the business community. David Broden contacted two
associates who graciously agreed to meet with us on short notice.
B. Welcome and introductions--Verne
and Paul welcomed and introduced Paul J. Wagner, chairman and CEO
of Minnesota Wire, suppliers of cable to high tech companies, and Chip
Laingen, director, communications, for Minnesota Wire. Both hold
positions in defense contracting. Wagner is chairman and CEO of Minnesota
Defense Military Interconnect Solutions and Laingen is executive director
of the Defense Alliance of Minnesota.
Wagner is a native of St. Paul, graduate of Cretin High School and St.
Thomas University. He's been with Minnesota Wire since 1985, became
president in 1992 and CEO in 2000. Wagner founded the Defense Alliance of
Minnesota, a regional industry network serving defense and homeland
security. Laingen, a 21-year veteran of the U. S. Navy, was born into a
Foreign Service family that lived in three foreign countries. His hometown
is Bethesda, MD. He's a 1983 graduate of the University of Minnesota NROTC
program. He holds an M.A. in public affairs from the U's Humphrey
C. Comments and discussion--During
Wagner's and Laingen's presentations and in discussion with the Civic
Caucus, the following points were raised:
Recent business expansion--Minnesota
Wire has two major installations, a 30,000 square foot building in Energy
Park, St. Paul with 130 employees and a 60,000 square foot building in Eau
Claire, WI, with 250 employees, Wagner said. About 125 of those employees
were hired within the last few months as part of the company's expansion
for a $6 million federal sub-contract.
Wagner said Laingen brings talent to the business that
perfectly complements Wagner's role as a do-er. Laingen knows much more
about public policy.
2. Amazing changes in Minnesota's business environment over 21 years--Laingen
said he left Minnesota in 1983 and came back in 2004 after retiring from
the Navy. He was amazed at the changes in the Minnesota business
environment during that time. He recalled that the state in 1983 had many
more companies that were actually manufacturing products in Minnesota. By
2004 the scene had shifted dramatically. We still have major businesses,
but they are much more involved in services today. Back then, the top
five employers were major manufacturers – today they the top five are the
federal government, the state government, the University of Minnesota,
MNSCU, and counties, cities and municipalities. That is a disturbing
3. An "unfriendly" state for business—“Minnesota
is an unfriendly state for business across the board,” Laingen said.
Minnesota is a beautiful place to live and raise children. His kids attend
the newest high school in Minnesota in Woodbury. Our quality of life isn't
sustainable in the long run. Amenities are deceptive; they don't provide
value on their own merits. You need business, technology and
4. Characteristics of an unfriendly business atmosphere--Laingen
outlined three reasons affecting the state's business:
(a) high individual and corporate taxes
(b) the state doesn't invest in high technology in
(c) absence of collaboration among parties that
should be working together
5. De-emphasis on defense industries--Control
Data, Sperry Univac, Honeywell were all big in defense here, but no more.
Interestingly, we do have a large number of smaller plants that affiliated
with major national defense-oriented companies, such as Lockheed Martin.
Those companies have plants all over the nation. But Minnesota lacks
political and governmental leadership to compete with states such as New
York and Pennsylvania. Moreover, our tax climate and cost of living don't
provide us with any advantage. Wagner said he recently visited with a
dozen other CEOs, all of whom said they'd expand elsewhere, not in
Minnesota. These CEOs all are good friends of his from his youth. They
still hunt and fish together.
6. Hard-nosed decision process needed on expansion--Wagner
said he welcomes competition among states. It was a no-brainer when
Minnesota Wire expanded to Eau Claire. When expansion is contemplated the
labor, materials and overhead expenses for different locations are closely
compared side by side. One gets a clear result. In the most recent
expansion, this past winter, there was no question that the expansion
would occur in Eau Claire, WI, not in St. Paul.
7. Minnesota rewards fairness, not risk--Laingen
cited a case years ago where the University of Minnesota ran a test
project that rewarded budgetary savings; if a department achieved its
mission, and saved money at the same time, it was given a portion of the
savings to spend on anything it wanted. Employees were highly motivated;
everyone inside was happy with the result. But others were concerned about
equity and fairness, so the idea was halted.
8. Failure to think regionally--A
tremendous opportunity exists for a high-tech corridor from Fargo to
Minneapolis to Milwaukee to Chicago, Laingen said. Minnesota would need
to think regionally and get its governmental-business environment more in
line with states like Wisconsin. "But we're hopelessly out of sync," he
9. "Release the Entrepreneurs!"
--Wagner distributed a statement he prepared on the importance of business
leaders taking initiative. He contrasted Minnesota business with that of
Israel: "There, I found a bold sense of straight talk, a desire for
hard-nosed negotiation and an obvious impatience that translates to
speed-to-market. Most of all, Israeli companies tend to do business with a
spirit of independence; a go-it-alone attitude that doesn't wait for a
bailout to provide opportunity.
"Now is not the time for us to expect government to change the
playing field quickly or to wait for opportunities to come our way because
someone else might fail. It is time to exert leadership and create
opportunities that are in line with our abilities and entrepreneurial
We can learn from our neighbors in Wisconsin--Marianne
Curry reminded the group of a broad-based business improvement effort in
Wisconsin known as "COWS". Curry provided the following explanation of
The creation of the Center on Wisconsin Strategy (COWS) for innovation and
jobs came out of the University of WI providing leadership in 2004 when it
first applied for IRS 501(c)(3) status. The strategy covers Budget and Tax
Policy, State and Local Policy, Economic and Workforce Development
(training or re-training) and the creation of the Center for State
Innovation to examine state policy, provide technical assistance,
coordination and collaboration.
COWS serves as a clearinghouse of progressive state policies for use by
state executives, policy makers and the media (similar to DEED's charge).
It also includes consideration of work and wages, not just any jobs but
quality jobs. It provides extensive research on manufacturing job
retention and enhancement through the Advanced Manufacturing Project, a
consortium of suppliers and manufacturers. It also co-founded the Apollo
Alliance, a national campaign of labor, environmental, and civil rights
organizations to create jobs through energy efficiency in communities
across the U.S. Biennially, COWS publishes a report card on work, wages,
labor market trends and other issues related to working family security.
Web site is
Laingen also mentioned Texas that has a strong business strategy involving
a broad group of interests, including the academic community, business and
Does anti-war bias contribute to federal research dollars going elsewhere?--A
few years ago the University of Minnesota was bringing in about $720
million in federal research dollars every year. We're now down to $520
million and might lose some of that, he said. Laingen said the U of M
isn't in the top ten nationally for research institutions. Noting that
search of a new "U" president will begin shortly, Laingen urged that
candidates should be quizzed on their approach to encouraging federal
contracts and R&D dollars, particularly from the Department of Defense,
which by far eclipses any other agency.
Minnesota is cool towards defense spending, Laingen claimed,
because of a strong anti-war bias that carries over to research and
development at the U of M. Much federal defense R & D is directly
applicable to peacetime purposes, he said, citing a contract his firm
received for stretchy wire, technology that will be commercialized into
medical and consumer markets like wearable electronics.
A hard fact about Minnesota elections--producing frequent
turnover in the state's congressional delegation-- doesn't help the
state's political muscle in competition with other states, Laingen
observed. Our elected officials rarely end up as senior, influential
leaders on key budget or policy committees. That is just one reason this
state ranks 47th in the return on federal tax dollars.
12. Positive movement toward helping business is evident--Laingen
cited a couple of legislators now working for change in state policies
toward business--including a proposed angel-investor tax credit for
encouraging new entrepreneurs. He also cited positive recent contacts
with legislative leaders on this issue because there are some who are
waking up to the impending crisis of the loss of Minnesota’s technology
13. Reviewing the functioning of Minnesota's Department of Energy and
Economic Development (DEED)--Laingen
believes a close look is needed at DEED, to evaluate whether the state's
economic development strategy needs streamlining and more focus. DEED has
some highly-competent staff, but there's a lot of redundancy and overlap,
he said. More emphasis on measureable results is needed, he said.
Support needed for new recommendations on science and technology--Laingen
served as a member of the Minnesota Science & Technology Initiative, a
volunteer task force authorized by the Legislature last year, that
submitted recommendations for moving forward on permanent change to the
state’s approach to science and technology policy to the Legislature in
January 2010. Its four key proposals:
--Create and fund a permanent structure for science and technology
strategy and oversight, collaboration and planning
--Provide tax incentives to encourage research and development
plus investment in innovation
--Fund mechanisms that attract and retain technology companies and
technology-oriented individuals to Minnesota
--Create a small business investment program
that uses insurance money for early-stage investment, known generically
across the country as CAPCO.
The report is available online at:
Urgent need for changes in public policy toward economic development--Laingen
outlined five areas where he believes change would help business greatly:
--Reward efficiency and innovation
--Reward success; don't water down investment by
worrying about fairness.
--Reduce government rules and regulations
--Support regional efforts at collaboration
He emphasized that he considers the state's current strategy to be
"broken". He said he's not encouraged by what he has heard so far from
candidates for Governor. Candidates aren't expressing a boldness that he
believes is needed.
behalf of the Civic Caucus, Verne thanked our guests for being with us