When the then US president Franklin D Roosevelt introduced the New Deal in 1933, a series of government-led initiatives aiming to tackle the effects of the Great Depression, few imagined that eight decades later some of his programmes would still be in force. The Tennessee Valley Authority (TVA) act, signed by Mr Roosevelt 81 years ago, is one such programme and it introduced an entity of the same name.

“The technology has changed since the 1930s, but the principles we follow have not,” says Bill Johnson, the president and CEO of TVA, a Knoxville-headquartered electricity provider, while explaining that these principles revolve around improving the quality of life in local communities by attracting new businesses and creating new employment opportunities.


Economic engine

While phrases such as 'good corporate citizen' and 'community development' are popular among most of the US utility executives, TVA's mission does actually differ from other energy providers.

“The reason why we were created in the 1930s was to be the economic engine of the [Tennessee Valley]; providing electricity was a secondary thought,” says Mr Johnson, who adds that this remit remains true to this day. “We are of course glad to have revenue... but I get judged on the number of jobs and capital investment [that TVA attracts]. Nowhere in that equation is the question how much more electricity we sold,” he says. “We work on investments into the automotive original equipment manufacturer sector, which does not use much electricity compared with, for example, steel making.”

Among the other strategic sectors targeted by TVA are data centres, advanced manufacturing and food processing.

Power trips

The differences between TVA and both electricity companies or other economic development organisations (EDOs) are many. While utilities and EDOs tend to operate within one or two states, TVA covers most of the state of Tennessee, as well as parts of Mississippi, Alabama, Georgia, North Carolina, Virginia and Kentucky. And although the majority of TVA's operations and employees are based in Tennessee, according to Spencer Sessions, a target market specialist at TVA, its economic developers have to curb temptations to put investments close to their own backyard. “We have to be agnostic as to which state we put investment in,” he says.

On this topic, Heidi Smith, general manager at TVA's economic development department, says: “Site selection is driven by our clients. They say which criteria are important to them, then we notify communities in our service area and all of them have an opportunity to submit their information.”  

While this process sounds simple, a lot of TVA's work is concentrated upon working with local public officials and teaching them the ins and outs of economic development. “We spend a lot of time on community preparation, [telling people:] 'Here is what your brochure needs to look like', 'here is what you do when you receive a request for proposal', 'here is what your sales pitch should look like',” says Mr Johnson.

Communities can also submit information about lots and buildings available for development to TVA Sites, an online catalogue of sites run by TVA. “Thanks to the clearing house and a library of information on them, our prospective investor can get a lot of details about these properties right off the bat,” says Mr Sessions. “Then when [the investor] narrows down the choice of sites, we can give them engineering schematic and put together 3D renderings, based on company's specific needs.”

TVA also uses its helicopter fleet to show investors around sites in the region, a useful tool to have in its armoury given that the Tennessee Valley spans across 207,000 square kilometres. “We can show you 10 potential sites in two days. By car it would probably take us a week,” says Mr Sessions.

Connection makers

It is not airlifts, however, that have impressed Darius Mir, CEO of office chair manufacturer 9to5 Seating, when it comes to working with TVA. “One of our major considerations was a supply of resin that we use for our products,” says Mr Mir. “TVA introduced us to a company that was within a 20-minute drive from our potential site.” 9to5 Seating's site selection lasted nearly three years and took company representatives to more than 15 states. However, in December 2013 the company announced the opening of a new manufacturing facility in Union City, in north Tennessee, worth $39.5m and bringing with it 510 new jobs.

“If I have a question, I pick up the phone and call TVA and [its staff] help me. We are new to Tennessee [so such things] matter greatly to us,” says Mr Mir.

Job cuts

Investments from companies such as 9to5 Seating fit in well with Mr Johnson's mantra of 'jobs first, revenues second'. But recently Mr Johnson had to make some tough decisions regarding TVA's own workforce. Although federally owned, TVA funds its own operations, and by the end of fiscal year 2015 Mr Johnson is looking to reduce its operating expenses by $500m. In an effort to do so, it was announced in August that the company will decrease its headcount of 12,612 by more than 2000 employees by the end of 2014. Earlier in the year TVA closed most of its employee fitness facilities.

"We have had to take a hard look at changing the way we do business, focusing on our core mission and how we can work safer, better, faster and leaner," said Wilson Taylor, interim vice-president of compensation and benefits at TVA, in a memo to employees after the decision about fitness centres was made.

Keeping an 81-year-old in good health is not the most straightforward of tasks.