When Volkswagen officials visited Tulsa earlier this year to examine the quality of life in Oklahoma, officials believed the state had a legitimate chance as the site of the company’s first electric vehicle battery plant.
But when news broke that Volkswagen picked Canada instead, it marked the third time in less than three years that a major company had passed over Oklahoma.
In 2020, Oklahoma tried to entice the electric vehicle company Tesla to open a factory in Tulsa. But key Tesla executives said they would prefer to live in Austin,Texas.
Last year, it was Panasonic. Oklahoma tried to lure the Japanese-based company to build a battery plant in Pryor using a nearly $700-million incentive package. But, even this massive amount wasn’t enough to compete with larger incentives offered by Kansas.
Some officials blame a combination of a lack of qualified workers, infrastructure and incentives that haven’t kept pace with other states. Others say Oklahoma’s conservative politics are holding the state back, including a near-total ban on abortion and pending legislation to restrict gender-affirming care.
A new bipartisan select committee in the Oklahoma state Senate will look to examine some of these root causes.
“I share a frustration with a lot of my colleagues that we keep being considered for these things, and it’s an honor to be considered, but that honor only goes so far,” said Senate Pro Tempore Greg Treat, R-Oklahoma City, who is creating the committee. “Finishing second place or getting a participation trophy is not good enough.”
The committee will be similar to one created by former Oklahoma City Mayor Ronald Norick in 1992 after United Airlines chose Indianapolis over Oklahoma City for its headquarters. That effort led to Oklahoma City launching the MAPS program, which has funded improvements for schools, sports and entertainment facilities in the city through a series of temporary sales tax increases.
The Senate committee, made up of 10 Republicans and two Democrats, will meet for the first time Tuesday. Brent Kisling, executive director of the Oklahoma Department of Commerce, will likely be one of the first witnesses. Kisling believes Oklahoma lacks adequate “shovel-ready sites with water, wastewater, electric, gas, fiber and roads,” to attract companies, he said in an emailed response to The Frontier. Oklahoma also needs to invest more into developing its workforce, he said.
At a hearing on economic development at the Oklahoma Capitol last year, Department of Commerce officials told legislators that local municipalities in the state need to be able to show they have the infrastructure necessary to support 5,000 jobs.
The state Legislature has tried to address some of the problems with a new $250-million fund created in 2022 intended to fuel economic development throughout Oklahoma by improving infrastructure at industrial parks and rural airports.
But Oklahoma’s workforce problem is a little harder to solve. Some of the companies that have passed on locating in Oklahoma didn’t have faith in the state’s ability to provide enough workers, Kisling said.
While a growing number of people are moving to Oklahoma from other places, the state still needs to add 140,000 new workers on top of projected population growth over the next decade, Jennifer Springer, director of Business Development at the Commerce Department, told lawmakers at the hearing on economic development last year.
“This has always been a problem for Oklahoma. We simply have not had the capacity to produce a workforce sufficient for these industries and firms,” said Keith Gåddie, a longtime political observer and associate dean of the Gibbs College of Architecture at the University of Oklahoma.
Kinnee Tilley, the Vice President of the Oklahoma Manufacturing Alliance, said the organization is creating apprenticeship programs across the state to grow the number of skilled workers.
This will help when companies look at Oklahoma and see there are workers who already have the training, she said.
“I feel like we’re really investing our time, talent and ability in helping manufacturers grow their pipeline,” Tilley said.
Oklahoma has also lost out to states that have offered more lucrative incentive packages, which can include millions or even billions of dollars in tax breaks and other subsidies.
Oklahoma has worked to ensure its incentives are performance-based, meaning a company doesn’t receive them until it meets certain performance measures, Kisling said. And while that works for the state’s benefit in protecting its assets, it’s not always the best choice for the company.
Panasonic was eligible to receive millions of dollars in tax breaks in Kansas before the battery plant was up and running. The company’s incentive package from Kansas would eventually exceed $1 billion, compared to the competing bid of nearly $700 million from Oklahoma.
When Volkswagen chose Ontario over Oklahoma, the company became eligible for billions in incentives from both the United States and Canada. According to the Financial Times, Volkswagen is eligible for up to $10 billion in U.S. incentives under the Inflation Reduction Act that was passed last year. The exact incentive package Canada offered is unknown, but according to Reuters, the country has agreed to help the company secure access to raw minerals needed to make the batteries.
Kisling said in the future, Oklahoma might need to consider offering companies incentives up front to compete with other locations. While it’s not without risks, the upside could be worth it, he said.
Meanwhile, Democrats in the Legislature say they believe Oklahoma keeps getting passed over because of the state’s conservative social policies. They referenced the Republican-controlled state’s hardline stances against abortion and access to health care for transgender people.
Rep. Monroe Nichols, D-Tulsa, places some of the blame on State Superintendent Ryan Walters’ attacks on public schools and teachers.
“Anybody who reads the newspaper, as they’re looking into the state and doing their due diligence, what do they see? They see a public education system led by somebody who works every day to dismantle it,” Rep. Monroe Nichols, D-Tulsa, said. “… I would understand that somebody’s doing their due diligence, we would select elsewhere.”
House Minority Leader Cyndi Munson, D-Oklahoma City, said she believes Oklahoma needs “lawmakers to stop making laws that limit access to healthcare for women and transgender Oklahomans” in order to attract more companies.
But Republicans and other officials told The Frontier that while these points make good sound bites, they are not based in fact. They pointed to states like Texas, South Carolina and Florida, which are also conservative but still land major companies.
“Our culture matches much more closely with those economic growth states than those that are slowly dying,” Kisling said.
While social issues might not be the main deciding factor, they can create an “easy out” for companies looking to move here, Gåddie said.
“If you’ve got a global corporation that is concerned about the look of things and actually is concerned about the quality of life all their employees will have, sometimes Oklahoma makes itself tough to sell and that’s a shame,” he said.