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- Well, we have definitely hit our summer stride here in the Carolinas.

I'm Chris William.

Welcome to the most widely watched and longest running program on Carolina business, policy, and public affairs, seen every week across North and South Carolina for more than three decades.

There is something about summer that takes some of the anxiety out of those things that vex us, but the beat of business and the issues of the day still do bang on and we will unfold some of those things with our panelists.

And later on, she is the Chief Executive Officer of one of the largest and busiest airports, not just in the country, not just in the Carolinas, but the world.

CEO of Charlotte Douglas Haley Gentry joins us later and we start right now.

- [Announcer] Major funding also by Blue Cross Blue Shield of South Carolina, an independent licensee of the Blue Cross and Blue Shield Association.

And Martin Marietta, a leading provider of natural resource-based building materials, providing the foundation on which our communities improve and grow.

(exciting music) On this edition of Carolina Business Review, Tim Boyum from Spectrum News, Mark Farris of the Greenville Area Development Corporation.

And special guest, Haley Gentry, Chief Executive Officer and Aviation Director at Charlotte Douglas International Airport.

- Hello, welcome to our program.

Mark, welcome back.

Tim, good to see you again.

- [Tim] You too, sir.

Thank you.

- You guys look healthy.

Happy summer.

You doing anything fun?

- Trying to spend time at the beach, but this politics keeps me at work.

(laughs) - Funny thing about that.

Do you get to the beaches?

I know you're an economic development guru, but do you ever go down and get your feet in the sand?

- Absolutely.

We're in the mountains a lot as well, so we have that luxury of being, you know, almost halfway between the mountains and the beach.

- You know, we all talk about going to the beach.

Do you have a favorite beach?

- Cherry Grove is where I grew up.

And so I have feelings about that beach and end up there.

North Myrtle Beach, primarily North Myrtle.

- [Chris] What about you, Tim?

- I got married on the outer bank, so I gotta pick that one.

(Tim laughing) - Okay, yeah.

What are you gonna say?

Well, gentlemen, welcome.

Tim, I've gotta ask you this question.

Long simmering debate around, a decision about affirmative action, higher ed.

And of course not, not gonna be surprising to you, but for viewers, I just wanna repeat that Supreme Court of the United States has struck down the idea of affirmative action, specifically at Harvard and UNC Chapel Hill.

This was a big one, I think.

In North Carolina, what's the sense of, it was already a bit of a strained relationship between higher ed and the general assembly.

How's that unfolding?

- Yeah, it's gonna be interesting.

I mean, it is a very partisan issue.

You may not think it necessarily is, but it's very partisan in the response that we saw from Republicans and from Democrats.

We saw the president and the governor come out against the decision.

UNC Chapel Hill basically said, you know, "We'll follow the rules."

But I think there's a sense in the Republican side that the university system and the governor are gonna try to find ways to still make race some part of the admissions process, maybe not technically.

You know, there was a thing of where you could, as part of your essay write about how you've overcome something related to race, you know, so I think it could lead to lawsuits down the long run.

And depending on how UNC Chapel Hill sets its policies, there's no question that the general assembly could step in.

- Do you think this becomes in North Carolina, with a gubernatorial race, do you think it becomes polarized in the race next year?

- I don't think there's any question.

I mean, I think everything's polarized.

You know, what we had for lunch today is gonna become polarized in the gubernatorial election.

There are so many other issues, though.

I don't know how high it's going to go up that chain.

You know, in North Carolina there's talk about school choice issues and vouchers and all kinds of education issues.

So we'll see what part plays in that.

It's real hot right now, but the 2024 election is still a ways off in the voters' minds.

- Mark, affirmative action question around.

If Supreme Court makes a ruling, it can radiate out into other things.

So does this now become more scrutiny on businesses' DEI or affirmative action in hiring processes?

Would you expect that this becomes now an issue where businesses start to look at what they're doing, what would be compliant, maybe where they could exploit?

- I think they would've a lot of questions about how actually it does apply to some of their programs.

Obviously DEI programs a lot of times are based on those numbers.

And so it's gonna be interesting to see how far it spreads out.

- Tim, what do you think?

Same thing in North Carolina.

Does this become a business scrutiny issue?

- I mean, it potentially can.

I mean, these rulings sometimes, especially when people believe they might be vague or whatnot, they wonder how they'll, you know, trickle down to other issues in other areas of business.

The Supreme Court's made a lot of major rulings recently, and so I think there's gonna be, there's doors open for further lawsuits and further issues and potentially how businesses tackle that too.

So there's a lot of wait and see, I think, with a lot of these cases.

- Economic development cost, not just cost of funds and interest rates going up, Mark, but inflation.

It's stubbornly high.

We all expected it probably would stay high for a long time.

Is that a real headwind on economic development for you?

- It's not slowed things, Chris, in the Carolinas, I think.

But certainly if you think about cost of land, it's doubled and it's getting more difficult to find larger tracts of property.

Lease rates.

You know, we're now looking at $6, $7 for manufacturing lease rates.

A couple years ago they were, you know, $3.50, $4.

So cost of materials and construction, you know, have doubled.

Some of those are starting to come down now, but absolutely, it's been a huge impact almost every facet.

- You gonna have another record year?

- We think so.

I think South Carolina in general has a lot in pipeline and Greenville County specifically is doing really well.

So a lot of diversification in terms of the business type, not so much manufacturing, at least in our area, but certainly the mobility industry is exploding in South and North Carolina in terms of battery plants, Scout Motors in Richland County, South Carolina, that's a key project for us.

So yeah, I think it's gonna be another great year.

- Tim, a one off for North Carolina, Dr. Jeff Cox was named as the head of the community college system.

Seemed to be well liked by many people.

And not just in education, but also in economic development and business and just policy in general.

What's the read you get?

Do you think Jeff Cox is gonna usher back in, that's probably not the right way to say it, but you think Dr. Cox will preside over a new era of growth in the community colleges and, let's make it interesting, are community colleges going to have a new relationship with higher ed?

- I think potentially, yes.

I mean, that discussion's been sort of bubbling and no one really wants to totally address it because they're hard conversations, right?

I mean, the community college system used to really be known as sort of retraining workers, you know, the textile workers for a new manufacturing.

And when there's job losses 'cause of recessions, they retrain.

But really a lot of these jobs that are important that we really need because of labor shortages or the needs can be done at community colleges.

And so I think there's a discussion about the role between the university system and the community colleges and what they can do.

You know, university enrollments have been dropping in a lot of places all over the country.

And so how does that relationship blend together?

They always play nice publicly.

I've had 'em both out on my show, the systems, but it is a sort of a conflicting, you know, future, I think, for them and how they work together.

And the legislature will play a huge role in that because they're very influential on it.

- You know, can North Carolina learn something from Tim Hardy in South Carolina technical college system?

- I think so.

The technical college systems in South Carolina have embraced working with public universities, public and private schools.

and I think if you look at programs, for example, Clemson University has a bridge program, whereas you enter into Tri-County Tech you're actually guaranteed admission into Clemson a couple years later.

So it's those kind of innovative programs that are gonna be important.

And of course, you know, Tim talked about it, a lot of the jobs don't require four year degrees.

A lot of companies are even changing their requirements in terms of some of those more technical advanced manufacturing jobs that we're starting to see more and more of that are careers, not just jobs.

- By the way, in North Carolina, it's happening too, where they're changing requirements for state jobs that used to require four year jobs.

So, I mean, some of that's already happening even within the state jobs in North Carolina.

- Well, yes, and in addition to that, Mark, you talked about Clemson, making that kind of a fast lane.

Does USC do it, does College of Charleston do it?

I mean, are they all kind of falling into that?

- I'm sure a lot of universities have those kind of connections with the technical schools.

I don't know specifically, but I'm sure it's a pattern that's gonna continue, especially given the cost of college and, you know, the direction that's heading.

- You know, Tim, and final question, and then we're gonna bring our guest on.

You know, as you talked about, the requirements in the credentialing for jobs, I think one of the things around the Apple relocation in North Carolina was exactly that.

We're not looking for four years necessarily.

We're looking for good workers that are credentialed the way we need them.

Are you getting that sense from some of the other new economic development announcements?

- Yeah, no question about it.

And you know, in North Carolina you mentioned the battery, you know, the electric batteries and electric vehicles, that's a big deal in North Carolina too.

And you know, we need thousands of people to fill these roles and they want them to be North Carolinians, not people coming in from other parts of the country.

So I think there's gonna be a huge emphasis on that.

But again, you're talking about institutions and changing the way that we do things and so it's sometimes not always easy to turn that ship around and go in a different direction, but I don't think they're gonna have a choice.

- Yeah, okay.

Thank you guys.

We're gonna bring our guest on.

Before we do that, he's been on this program before.

Kody Kinsley is the secretary of the Department of Health and Human Services in North Carolina.

He follows a pretty well-liked secretary in Dr. Mandy Cohen, who's going to DC for the CDC job.

So Kody Kinsley comes back on the program.

And also the largest, if not the largest, certainly one of the largest public utilities in this country, chairman and CEO Lynn Good also will join us again on this program.

Charlotte Douglas is widely known for being one of the most important economic development assets in the Carolinas, hands down, that's an easy one.

But if you spent any time traveling through it, you have seen major construction over the past couple of years.

At least now, but also a fourth runway.

There is also a fifth runway as part of a plan process.

Joining us now is the Chief Executive Officer and Aviation Director of Charlotte Douglas International Airport, Haley Gentry.

Madam Director, nice to have you on the program again.

- Great to be here.

Nice to see you.

- Haley, let's start with the easy one.

Seventh busiest airport in the world.

All the construction's going on.

What's your goal?

You want to be the first busiest?

This is a lot of capacity you're building, right?

- It's great for this region, the capacity that is occurring at the airport.

And much of that is built on the fact that this region is thriving.

Also built on the backs of the growing hub.

It's really a good thing for economic development in this area.

- Do you get, for a long time, Charlotte Douglas has been an asset that the city enjoyed, the county enjoyed, and still does, by most measures.

Do you get all of the support you need for all of the growth, not just from the FAA, but local tax revenue or whatever way you seek to get that support?

Has there been one area that you could use more of?

- Well, I think regardless of whether you're on the left or the right, the one thing that everyone can agree on is a great airport and what it brings to this community.

The value of the airport is very well understood by this region.

We fly both flags out front for North and South Carolina and we really benefit from a lot of great congressional support as well as the economic developers of both states.

I can tell you that the city has been great on watching the airport grow.

They have specifically provided us things that have been unusual, particularly since Covid, that have allowed us to do our mission and really accomplish all that needs to happen.

- [Chris] What would be unusual that you wouldn't expect?

- I think, for one, recognizing that our department is a little bit different than other city departments and supporting that either through pay or structured hours differently.

It's very difficult when you have the backs of the region on you, during Covid, to try and make everything just like every other city entity.

And our city recognizes that.

Our council, our mayor, our manager, they're very supportive of what needs to occur in our environment to get the work done.

And that was definitely the case during Covid.

- [Chris] Tim, question.

- I'm curious about the competition between airports and how much that is, really.

And I live in the triangle area and it seems like there's a press release every week about one of these new budget airlines flying direct to, you know, New York or wherever.

Is there high competition between airports like that or is there so much growth that there's, you know, more on the plate for everybody than we could possibly have?

- Well, I think in terms of a hub, there are two kinds of cities.

Those that want a hub and those that have a hub.

And I think the market that you're talking about, there is a lot of competition in.

That is a non hub airport.

North and South Carolina have tremendous air service in tremendous airports.

10% of the state's gross domestic product in North Carolina is brought together by airports.

So what they do not have, though, is a hub.

And I think that's what sets Charlotte apart.

You could combine all of the air service airports in North and South Carolina and it would still not equate to what's going out of Charlotte.

So that kind of, I think, adds perspective.

I think the service model that you're discussing is extremely important.

It meets a need.

You think about what's in the triangle, there are a lot of students there.

They need low fare carriers.

It's a great opportunity to provide a service, but it is a different service.

- [Tim] Interesting.

- [Chris] Mark.

- Haley, a minute ago we were talking about labor skillsets.

Those employees and certainly most of our companies are mired in the problem of finding those kind of folks.

Certainly the airport's probably not exempt from that.

What are some of the things the airport's doing to address that?

- Well, labor has been a tremendous issue coming outta Covid regardless of your industry.

Probably the biggest thing that has occurred and is different in the airport is how do you run an airport from home?

You don't.

We're a work from work place.

And so I think that wave of people exiting the market who really wanted to do something different that was not available until Covid occurred, that has leveled out.

Wages have increased.

You're seeing that across the board.

Whether you work for a food beverage or retail provider or whether you work for an airline.

All of those areas we are seeing tremendous increases in.

And of course that results in tremendous increases on the consumer side.

So I think that recruitment is going to be a topic that does not stop for us.

There's never been so much focus on human resources, in my 30 plus year career there, that I ever recall.

And it is something that we talk about constantly.

And then of course you have the pilot and the mechanic shortage for the airlines.

That is tremendous.

Very few kids go to meet with their guidance counselor and they say, "Hey, you wanna be a pilot, you wanna go into aviation?"

They're saying "Here, what about this technical school or this four year school?"

So we're spending a lot of time on workforce development.

How do we get our message out sooner?

How do we capture the interest of potential students and future employees?

It's really changing how we think about our business in the community on a daily basis.

- So on the back of all what you just described, Haley, you've also had inflationary cost, especially when you're building hard assets, which you're doing.

How have you pivoted to manage that?

And then how do you, as you try to manage the budget on the construction, how do you make sure that your enplaned cost per flyer stays competitive with the rest of the country or better than the rest of the country?

- Well, it is better than the rest of the country.

(panelists laughing) I'd be remiss if I did not comment to that while we were here.

But our cost per enplaned passenger is around the $2 mark, which is the lowest in the country.

It is really a product of our overall labor costs.

The region in general compared to many other areas of the country, as well as what it takes us to operate our facility.

And our facility, if you've been there, we are constrained in certain areas.

We do not not have trams that go from terminal to terminal.

It is a very accessible, walkable, less expensive to operate facility.

So you combine those things and that helps you get your cost per enplaned passenger.

We're proud of that, though.

We feel like there's a lot of thought, there's a lot of fiscal conservancy that goes into that and there's a long history of really thoughtful, futuristic planning that has laid the foundation for that.

In terms of cost and construction, it is, we're seeing it everywhere.

We're seeing supply chain issues.

We're seeing things that two years ago when they were put in some things as much as 500% and 1000% more now.

So we expect that to continue.

In terms of how we have handled it, we were extremely fortunate to receive Covid funding.

Federal covid funding.

Many airports during this time had to lay off employees.

Many of them had to close parts of their terminal building.

American Airlines, our hub operator, they really doubled down on operating Charlotte and Dallas Fort Worth and as a result of that our passengers came back much quicker.

So the quick return of passengers really fostered us to get our engine running faster than a lot of the other airports throughout the country.

So that cost could not have been met if we had not had the federal funding.

Federal funding for us will be exhausted this year.

There's a lot of controversy about the federal funds and how Congress has rescinded some of those funds back.

That's not an issue for us because all of our money is programmed to be spent this year.

- So I'm curious about the growth factor and the challenge of planning for that.

Because a lot of people will do big upgrades and then they'll sit back and enjoy it for a while.

But you know, you go to Raleigh or Charlotte and it's like as soon as one thing's done, you start seeing something else and it's costing a lot more than you expect.

And the technology's changing all the time too.

How challenging is it not knowing exactly where growth's gonna go, how fast?

Or is it really just a numbers game and you project from there?

- Well, I can tell you right now if we had 20 more gates in Charlotte they'd be full tomorrow.

The cost to operate in Charlotte, the demographics, and the increase in our passenger activity is really, you know, the perfect recipe for an airline either to expand or to start service here.

In terms of how we plan and manage, our plans have plans have plans.

We've been planning for years, that's something that we do really good.

I think the harder thing to do and where we have really had to concentrate our effort is how do you pivot that plan?

And you talked about the construction.

We do not have the luxury of closing our facility.

I know people think we're torturing them at times when they come.

Like, is this some sick game?

That door was open yesterday, now it's closed today.

But I can assure you, there is a method to the madness.

And I think that, someone asked me once, "What happens when there's no more construction?"

We have a problem when there's no more construction.

The construction is not going to end as long as this region continues to thrive like it is.

- [Chris] Okay.

Mark?

- Speaking of that, construction, Haley, in economic development we traditionally have talked about tractor trailers and rail service, but almost every company that we work with now ask us about logistics and distribution by air.

And it seems like it's exploding.

A lot of companies that we've talked to do that almost exclusively with their finished products, ship by air.

Does Charlotte have the capacity to embrace that?

- We do.

We have a thriving cargo area.

We have most of what we call the integrated carriers, which is your door to air, door to truck to air.

We have Amazon.

This community likes Amazon.

I can tell you that aircraft comes six to eight times a day to Charlotte.

But in terms of long-term capacity, we are building a new runway right now that will give us additional airfield efficiency, but it's also opening up a different area of our airfield for future development.

We envision the cargo operators that we have moving to a different area and that's gonna allow us to have some expansion.

Logistics in the Carolinas, I mean, just hop on an interstate, you can see it.

It's really good business.

It's good business for the airport as well.

Also have the rail yard, Norfolk Southern Rail Yard, which runs through the middle of the airport.

There is no specific synergy between things getting off the railroad and getting onto an aircraft.

But there is synergy in terms of this community and what's going out in our foreign trade zone, which is there at the airport, and those two operators.

- We have two minutes left.

I want to ask you about this, what seems to be this pandemic phenomenon called bleisure.

What is bleisure?

- Bleisure is a combined business and leisure traveler.

And we've been surveying our passengers.

It is real.

And what that really looks like is, and just a visual, dad is in the parking lot with his business backpack, making sure he's got all his stuff.

And then he came in the minivan with his family.

And there are three children that get out and his wife gets out and they have huge suitcases.

And instead of going for a business trip or a week long vacation, they're going for a month.

And they stay somewhere because dad has the ability to work from home now, so home can be anywhere in that situation.

We're seeing more and more of that.

It's impacting what they buy when they're in our terminal building.

It's impacting how long they stay in our parking lots.

We've had really a shift in our passenger demographic.

And bleisure is a big part of that.

- Is that an additional cost to you to build out or is it just more of a realization to manage around?

- Well, now we're managing around.

If anyone's tried to park at the airport recently, you know we've changed our parking process.

The best way to park at the airport is to buy your parking online when you buy your ticket.

It's going to be cheaper.

The key for us being the operator is we know when you're coming and we know how to manage the assets that we have and we know how to ensure you have a parking space.

That's a direct effect of a bleisure traveler and the shift in the industry.

- We have a minute left.

I just wanna ask a quick follow up.

So you are unique in that you literally, you literally are working with the same employer that you started your career with.

What kind of insight does that give you as now CEO of the place you started your professional life with?

- Well, I know I'm a bit of an odd duck in that regard.

- [Chris] And we have about 30 seconds.

- But, you know, the airport I knew right away I loved the environment.

It's something different every day.

It's an opportunity to be a small part of something much bigger that makes a difference in this community.

And it changes all the time.

And I think that's why all of us love to go to the airport.

There's something different all the time and it certainly has kept me coming back for 30 years.

- Yeah, well it's worked.

Haley, thank you for your leadership.

And I think beyond Charlotte, the region is lucky to have you in that position and the stability that you bring, so thank you.

- Thank you.

- Yeah, nice to see you again.

Mark, thanks for making the trip to Greenville, 'cause I know it's not easy.

- Thank you.

- We always appreciate, and I'm in Greenville, South Carolina.

Tim, nice to have you back.

- Nice to be back.

Thanks for having me.

- Until next week, goodnight, have a good weekend.

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