How to keep a kid in school: Give him a job

Moderated by Rick Badie

We devote today’s discussion to a Carroll County cable manufacturer that has opened a factory for troubled teens. The youths spend eight hours a day in company classrooms and work four hours a day, earning above minimum wage. Read how this novel concept produces high school graduates with workforce skills, and how it’s spread statewide.

Help profits by helping others

By Stu Thorn

In 2001, I became Southwire’s third CEO and the first who was not part of the shareholder family. I was blessed to join an inspiring culture with a tradition of community stewardship.

Unlike my predecessors, though, the money I directed into charitable contributions wasn’t mine, so I figured it would be best to propose criteria that might help guide future giving. I came up with three.

First, give locally. World hunger is a critical problem, but Southwire’s contributions would be a drop in the ocean. Second, give talent. We have amazing people. By sharing them, along with our money, the impact would be so much more powerful. And third, support causes that have some positive benefit for Southwire.By contributing to initiatives that help our bottom line, we generate incremental profits to fund even more community involvement — a virtuous circle. Shareholders, along with our Board of Directors, were concerned about that third criterion since it sounded a little selfish, but they agreed to let me experiment.

That led to our recent focus on education. Southwire’s competitive advantage depends on the knowledge and quality of our people. They are what make us unique.

We were especially concerned about Carroll County’s drop-out rate. At that time, one in three students starting first grade in the county would not finish high school. We hire only high school graduates, so every student who drops out reduces the size of the workforce we can draw from to drive our growth. We got together with community leaders, including the Carroll County schools administration, to partner and tackle this problem.

From that alliance, “12 for Life” was born.

It took some investment to get started. Southwire bought a local building and outfitted it to perform real manufacturing functions. The school system provided transportation and teachers. Together, we created a factory with a school house built right inside, and we staffed it with struggling high-school students who met three standards: poor grades, poor attendance and poor financial support. We wanted to increase the graduation rate, and that required us to focus on kids likely to drop out.

Carroll County schools, through the Georgia Work-Based Learning Program, began to count time worked in this factory as part of the school day. We agreed to pay the students well above minimum wage. The rest of their school day was spent in the classroom learning a traditional curriculum supplemented by life-skills training (for example, why their paychecks were smaller than they expected — taxes!) Employees volunteered to be mentors, and we provided tutors when needed.

In seven years, we have graduated more than 850 kids who would probably have dropped out. The county’s graduation rate has jumped by 10 percentage points. The community has enjoyed more productive (and less dependent) citizens. And we, in addition to building our workforce as intended, have made money on the operation. The students are productive, motivated and proud they are part of a profitable business, not a charity. Everyone benefits. The small investment needed to get things going has already generated a very tangible and sizable payback.

Michael Porter, the well-known Harvard business professor, has cited 12 for Life as a leading example of what he calls “shared value” or “doing well by doing good.” Sir Richard Branson is a little more blunt. He calls the concept, “Screw Business as Usual.”

All I can say is, if it works for us in Carroll County, it can work for you. If you are an employer of any size in any industry, Southwire and Great Promise Partnership — a statewide initiative dedicated to fostering this program — would be more than willing to help you gain similar advantages. Give us a call, increase your profits, help your school system and help your community. Best of all, help some kids become productive adults.

What’s not to like, and who’s not to like it?

Stu Thorn is president and CEO of the Southwire Co. in Carrollton.

Partner to give kids a chance to succeed

By Mike Beatty

Walk into a “12 for Life” facility. See motivated young people working under the direction of adult supervisors, and you will realize something very special is going on.

I made my first visit more than four years ago while commissioner of the Georgia Department of Community Affairs. I spoke with students who shared with me their life-changing experiences. They entered the program behind academically, discouraged, often parents themselves and well on their way to becoming more of Georgia’s high school dropouts.

Through participation in 12 for Life, these students were able to graduate with futures as bright as their smiles. It was apparent to me that Southwire — under the leadership of Stu Thorn and his team led by Mike Wiggins and Richard Miller — had found a solution. They built a bridge to help these youth move from a culture of failure to a climate of success, thereby circumventing a cycle of poverty. Not only do the youth benefit by earning paychecks and graduating, but Southwire earns a profit due to the productivity of their student employees.

Later, I met with Commissioner Brian Owens of the Georgia Department of Corrections who had partnered with Monroe County Schools to institute a successful, scaled-down version of 12 for Life in Forsyth. With Ron Jackson, commissioner of the Technical College System of Georgia, and Hank Huckabee, chancellor of the University System of Georgia, we formed the Great Promise Partnership and asked Thorn to be the board chair. We instituted a successful two-year pilot with nine sites that replicated the 12 for Life process. It was extremely successful. None of our 100-plus seniors dropped out of school; 89 graduated.

Under the leadership of Stu and our board members including my DCA successor Gretchen Corbin, we are now working with more than 30 communities to place youth in meaningful jobs where they earn paychecks, help their families and finish school.

Operations as diverse as HON (office furniture), PPI (industrial products), Beaulieu of America (carpeting), Honda Lock (automotive), Caterpillar (construction equipment) and Atlanta City Hall are up and successfully running. Other companies are soon to follow. Some even plan to share common facilities assembling, for example, pallets. This is a true Team Georgia effort with the support of Gov. Nathan Deal, Atlanta Mayor Kasim Reed and other leaders statewide.The partnership’s goal: to develop a sustainable, flexible model that is saleable throughout the state and yields benefits for businesses, communities, schools and young people.

A well-trained workforce is essential for economic growth. Companies that participate will see profits go up, along with production and morale. Communities will see a pipeline of motivated, educated and skilled citizens. We believe we have the potential to help thousands of young people graduate from high school, go to college, join the military or enter the workforce full-time.

This strategy is a bottom-up, locally driven approach that engages the community in advocating and promoting these young people for the betterment of all. Our Marquee Community designation will provide recognition and incentives for communities who go to bat for these youth.

Last week, I had the opportunity to visit 12 for Life when First Lady Sandra Deal was there with Arne Duncan, the U.S. Secretary of Education. I heard eight inspired young people tell how 12 for Life enabled them to be the first in their families to graduate from high school. Duncan and his staff were mesmerized and wanted to know how 12 for Life could be replicated nationwide.

Southwire, along with a growing list of innovative companies, have stepped up and given us a successful model that works. Now all we need is for other enlightened companies to do the same. So many young people, hungry to be part of the American Dream, are still waiting for their chance.

Great Promise Partnership is committed to making their dreams come true. Are you? If so, please contact us at www.gppartnership.org.

Mike Beatty is president and CEO of the Great Promise Partnership.

Ga’s bright forest future

By Lynn Michaelis

In an economy that has been as unpredictable as the World Cup, a classic contender may become the reigning champion. Given current conditions in the U.S. and overseas, the next 10 years could very well be the “decade of forestry.” Georgia’s abundance of trees could position the state to reap rewards.

First, housing starts are expected to increase now that the job market is improving. Household formations have been far below the historic average because of the U.S. economy’s anemic pace. Job and income growth, particularly for adults under 35, have been slower than in past recoveries. Millennials have been reluctant to form households or buy homes.

But look for that to change over the next two years. Housing starts will climb above 1.5 million units annually from the current 1-million-unit level by 2017.

Second, China’s demand for lumber will remain high over the next 10 years as the country builds vast metropolises. The Chinese also are showing interest in container log shipments from the South.

Major timber-producing regions will be unable to meet the strongly growing demand over the next five years. The housing rebound and Chinese exports mean North American lumber production needs to increase by 13 billion board feet by 2017-18.

The Canadian lumber industry, however, cannot expand; it’s shrinking. Canadian lumber capacity will drop from a peak of 39 billion board feet to under 31 billion board feet over the next few years; the pine beetle has destroyed millions of forest acres, or about half the commercial pine forest in British Columbia.And because the U.S. Pacific Northwest ramped up its harvest after 2007 to meet China’s log demand, it hasn’t seen a large build-up of timber inventory. Western lumber production could increase by 3 billion to 4 billion board feet, but that still leaves a big gap to fill.

Georgians should feel optimistic and confident about the future of the forest products industry because:

Unlike the U.S. West, Southern timber inventory has increased and will support sustained growth in lumber production. Georgia has 24.3 million acres of timberland, strong infrastructure, experienced foresters and two vibrant ports.

• As the housing market improves, the U.S. West and Canada will not be able to fill the demand for lumber and logs. High mill margins in Southern sawmills plus ample timber supply will push lumber production above its previous peak of 19 billion board feet in 2005.

• Pellet mills are part of the picture. The Southern wood pellet industry didn’t exist in 2005. This year, close to 8 million tons of pellets will be produced. By 2017, production will approach 11 million tons. Over the past six years, Georgia’s pellet mills grew from zero to nine. More are being built. Places like Hazelhurst, Sandersville and Waycross are becoming biomass producers.

Although bustling Atlanta’s gleaming office buildings may seem a long way from the state’s quiet forests, those trees are one of the largest industries in Georgia, pumping $29 billion a year into the economy and paying more than $600 million in taxes. Georgia’s forestry future has plenty to cheer about.

Lynn Michaelis is president of Strategic Economic Analysis.


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