Tuesday, April 21, 2009

Fred Smith Has "Conversation" with Memphis City Council

FedEx chief talks about the economy, the city's strengths, and taxes.

Posted By on Tue, Apr 21, 2009 at 5:15 PM

FedEx CEO Fred Smith offered the Memphis City Council a vision Tuesday that includes public safety, playing up Memphis’ strengths, and a cautious approach to consolidation.

Speaking at the invitation of Chairman Myron Lowery, Smith met for an hour with the council in executive session and gave his opinions on a wide range of subjects. It was the first time Smith has met personally with the council since the expansion of the Liberty Bowl and the building of the Pyramid in the late 1980s.

Saying America is going through the worst economic challenge of his lifetime, Smith said “I’m pretty optimistic longer term and reasonably optimistic in the nearer term” because businesses will have to start replenishing their inventories later this year.

That was the starting point for his first piece of advice.

“The source of all wealth and material well being comes from the private sector,” he said, and government can only provide citizen safety, efficiency, public education, and economic opportunity.

He suggested Memphis “pick your spots” and play up health care, biomedical research, tourism, higher education, and transportation and logistics. He said the city school system probably has too many schools for the number of students it has, but he said several times that he was making no recommendations and realizes the council has to take the political heat. Asked if he ever considered going into politics, he said “never.”

On consolidation of city and county government, he seemed to favor a single mayor but separate school systems and other operating divisions, much like FedEx has separate operating divisions.

“In business, you can centralize into mass inefficiency” and lose your feeling for the market, he said.

He praised the Memphis Zoo, to which he has personally contributed several million dollars, and Shelby Farms as “world-class” amenities.

He is staunchly opposed to raising taxes. “I don’t think Memphis needs more taxes. What Memphis needs is more economic activity.”

Council members were respectful but not awed. When Smith noted that Nashville has benefited from a surge in economic activity, councilwoman Barbara Swearengen War pointed out that Nashville also has consolidated government.

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