Thursday, January 20, 2011

HSBC Layoff Announcement Highlights Delaware's Failing Business Climate

Today's announcement by HSBC to shed 500 jobs at its New Castle, Del. site highlights Delaware's failing business climate.  What drove HSBC to discontinue credit card and collections at this site, may only be a partial truth.  What was not report in the News Journal article, was whether HSBC is shifting those functions to another state or country.

Since HSBC did not outright state it was divesting the entire credit card operation, the likeliness of shifting these jobs to another state or country are pretty high.  And that is a bad story for Delaware and for New Castle County. The next follow-up to this story should be why did New Castle County and Delaware governments fail HSBC to make such as decision. 

The questions that need to be answered are:

  • What did Delaware or New Castle County not do, that others states or countries do to prevent another recurrence?
  • What did the Delaware Department of Economic Development not do to retain those jobs?
  • What factors did HSBC utilize to evaluate why to shed those jobs?
Governor Jack Markell, New Castle County Executive Paul Clark and Delaware Economic Development head Alan Levin have a daunting task ahead in trying to understand what happened here.  Not only do they need to be held accountable for this action by a private employer in our governments inability to have a favorable business climate, but they need to put in stop-gaps to prevent another firm from doing the same thing.

Delaware may have the top bill in legal ranking nationwide that supports our business community, but this alone is not enough.  Delaware needs businesses and jobs for every Delawarean that wants a job.  The Tax Foundation's 2010 state rankings on business friendliness  may have Delaware ranked 8th nationally but state and county budget shortfalls will lead to higher taxes in 2011 and beyond.  Delaware's education ranking by the American Legislative Education Council as 19th best in the nation is a call for dire improvement to create an educated workforce.

Another facet to Delaware's ailing business climate could be that marketing (or lack thereof) of what Delaware has to offer businesses.  A September 2010 report by Development Counsellors International, and independent firm that analyzes business friendliness for governments submitted a report to Delaware's Department of Economic Development.  The report highlights Delaware's weaknesses and challenges.  Some highlights includes Delaware's weaknesses on infrastructure, small labor pool, high cost to establish business and lack of incentive to conduct business in Delaware.  The challenges include addressing the same weaknesses, as well as overcoming more competitive incentives from other states and having more business zones with established commercial sites.

Delaware and New County Government leaders facing a daunting task, and we can only hope they have the knowledge and fortitude to get us out of this conundrum.  Delaware's workforce is reeling from bad political decisions and state and county coffers are suffering as a result.  Until Delaware focuses on jobs and job retention, this picture will not improve.  Delaware and New Castle County needs leadership and leadership now.


  1. HSBC lacks direction. To blame yourselves is a waste of your time. Attract more stable businesses.

  2. Imagine that you were chosen to present a comprehensive overview of the need for business ethics to be a part of corporate life in the United States. Your job is to show how and why Business Ethics must be a critical piece of today's corporate culture for the good of both corporation and society.

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