In North America, a number of generations ago, most families lived in the rural area, now many of us live in urban areas. Although, with high speed internet, the rural areas are attracting people from the cities. The rural areas have less people which is both good and bad – it is good because you can learn who the people are, if you are a city person it can be bad because they all learn who you are. In the city, there are seemingly fewer interactions even though there is more people. If you live in one of the rural towns, ideally you would like to see a company locate and prosper in order the town survives and maybe even grows. The book Capitalism Comes to the Backcountry by Bryan Palmer, between the lines, Toronto, 1994 is about one of those rural towns – Napanee and the Goodyear Tire plant. If you look at any shopping mall parking lot you will see a variety of cars with Goodyear Tires and many will know of the Goodyear Blimp from Sporting events – flying overhead to give the overview of the event.

When any plant comes to a town, before they arrive one of the attractions of the town is access to land at low prices. Generally after the plant arrives the projections of the benefits of the plant sends prices higher for the short term, then real estate prices level off because the benefits of stability does not necessarily translate into rapid growth. Another aspect is the workplace – some companies have unions, some prefer not to have one. When Goodyear moved to Napanee, the number of people in a unionized job was very low and Goodyear closed an union plant to open a non-union plant.

With every industrial location there are government dollars to help – all there levels of government assist in plant locations – from infrastructure dollars to tax abatements to training to grants locating in “underserviced” areas. Depending on the government of the day and timing to elections, the grants, bonds or forgivable loans can and be and generally are very generous.

Linking to dividend paying companies, when these companies expand the government helps and this is when you will wear two hats – as  an investor you want your company to take advantage of every grant or government assistance possible; as a tax payer you may wonder why your company needs government money. Generally your investor side wins out. In order for your company to take advantage of every opportunity, relocating some operations to the rural area, but not too far from an urban area is good thing to do. The goodwill in the rural area will translate to stable operations for the first 10 years and if the company is a good corporate citizen even longer.

There are more questions than answers, till the next time – to raising questions.