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BEAL AEROSPACE TO HIRE LOCALLY AND PAY COMPETITIVE SALARIES
by VIBusiness Staff

NASA Space Shuttle
NASA Space Shuttle
     Testimony of Attorneys Marjorie Rawls Roberts and Marise James on behalf of
     Caribbean Space Technologies, LLC and Beal Aerospace, LLC before the Committee of the Whole,Legislature of the Virgin Islands
     July 23, 1999, 5 P.M. AST
     
     President of the Senate and Other Distinguished Senators.
     
     In addition to addressing the specific issues related directly to the Land Exchange Agreement before this Committee today, we would like to take this opportunity to address an issue that seems to have received a good bit of publicity recently - all of it unwarranted. The issue concerns the employment opportunities for residents of the Virgin Islands that Caribbean Space Technologies and Beal Aerospace plan to provide with the implementation of their World Headquarters on St. Croix.
      First, with this testimony we would like to address our numbers of employees, benefits associated with employment, scholarships, and charitable commitments, all of which were discussed in detail during our public hearing before the Industrial Development Commission (IDC) last October 9, 1998, and in subsequent meetings with IDC staff.
      Second, we would like to describe some of our activities, which will identify Virgin Island residents (and former residents) to work at these companies and will develop the next generation of scientists, engineers, and business people through cooperation with the territory's schools and university. We will then discuss what we believe to be the source of the misinformation regarding Beal Aerospace's and Caribbean Space Technologies' policies for hiring nonresidents.
      Finally, we close by emphasizing that the existence of highly trained persons on St. Croix was a key factor in the decision of these companies to establish their World Headquarters here.
     
     Employment, Benerits, Scholarship, and Charitable Commitments
     
     Caribbean Space Technologies, which is the aerospace consulting company and land owner for the companies' World Headquarters, and Beal Aerospace, which is the aerospace assembly company, have committed to employing no fewer than 145 people at the end of their second year of operations in the US Virgin Islands. Caribbean Space Technologies and Beal Aerospace are committed to providing competitive salaries to all their employees and will provide equal pay for equal jobs, regardless of whether an employee is a Virgin Islands resident or non-resident. The 145 newly created jobs are what the IDC approved in Executive Session, and what we understand is now on Governor Tumbull's desk for his approval. As you are aware, IDC law requires at least 80 percent of these jobs be held by Virgin Islands residents, or a minimum of 116 positions. Further, at least 20 percent of the managerial and technical jobs must go to Virgin Islands residents. Moreover, under Virgin Islands law an IDC beneficiary that employs nonresidents is required by law to train residents to fill the positions held by nonresidents and cannot lay off a resident employee or reduce the work week of a resident employee to provide employment for a nonresident. Thus it is clear that the vast majority of the jobs will be held by Virgin Islands residents. It is also clear that we intend to comply with all that the law requires.
     
      In addition to the commitment to employ 145 persons at the end of two years of operations, both companies have also agreed with the EDC to a number of special conditions related to the employment opportunities provided to Virgin Islands residents. Both Caribbean Space Technologies and Beal Aerospace will be providing their employees with a 401(K) retirement plan with an employer contribution, health and dental insurance, life insurance, and long-term disability insurance. In fact, the companies will provide their employees with the same benefits that are provided to employees in the affiliated research and development facility - Beal Aerospace Technologies - and they have provided the IDC with a copy of the Beal Aerospace Technologies employee handbook setting out all the benefits in detail.
      Beal Aerospace and Caribbean Space Technologies have also publicly committed to scholarships and internships. Beal Aerospace and Caribbean Space Technologies will contribute an aggregate of not less than $30,000 annually to Virgin Islands students for studies germane to Beal's operations in the Virgin Islands. The companies also will provide students with internships and summer jobs. Additionally, they will recruit, train, and provide jobs to Virgin Islands students majoring in the fields of engineering, manufacturing, mathematics, business, and other relevant areas as an express condition of their IDC benefits, which they offered to do as part of their applications.
      On the non-profit front, Caribbean Space Technologies will contribute not less than $10,000 annually to the St. Croix Vocational School. Beal Aerospace and Caribbean Space Technologies will together contribute a minimum of $15,000 to tax-exempt organizations operating throughout the territory or operating solely on St. Croix once the Beal manufacturing operations commence, and $10,000 before then.
     
     Activities to Identify Potential Employees
     
     Caribbean Space Technologies and Beal Aerospace are going to have to fill all of the positions that will be created with the location of its World Headquarters on St. Croix. Moreover, it should be noted that Caribbean Space Technologies and Beal Aerospace could hire more than 145 people once operations are at full scale, and that they could hire many more than 80 percent Virgin Islands residents at all levels. Although operations will likely not commence for a minimum of three years following the receipt of a zoning change or variance, CZM and Federal permits, and a construction phase in which at least 250 people will be employed either directly or thorough contractors - the companies have already solicited and received more than 100 resumes from Virgin Island residents (and a few former residents seeking to return) with a broad range of skills, ranging from rocket science to accounting to computer skills to manufacturing skills to secretarial skills. Representatives from Beal Aerospace have also solicited resumes via the government officials and private citizens with whom they have met, and have indicated their interest in collecting resumes in public forums.
      Before concluding that the Virgin Islands could provide a suitable work force, representatives of the companies made a number of trips to St. Croix. They met with many St. Croix residents. Beal Aerospace has also made contact with former residents of the Virgin Islands in appropriate fields on the US mainland, and with people at the University of the Virgin Islands who have tracked the progress of UVI graduates in the fields of science and math. Let us give but two examples. We have spoken with Ed Thomas, Jr., who heads the Physics Department at Fisk University in Nashville, Tennessee, and who has consulted for aerospace agencies, to provide us with names as we proceed. We have spoken with Dr. Roy Watlington at UVI - a former rocket scientist who chose the Virgin Islands over the minuteman program in the early 1960s - and have been excited by his many continued contacts with UVI graduates in the aerospace fields.
      Moreover, Beal Aerospace has brought one Virgin Islands scientist to visit the Frisco facility, with the idea of hiring him to work in the research and development facility and then be "on the ground" in St. Croix when the facility opens here -ready to assume a senior management position with key knowledge of the company and its rockets.
     
     Cooperation with the St. Croix Educational Complex and UVI
     
     Caribbean Space Technologies and Beal Aerospace also want to ensure that there are lots of Virgin Islands residents down the line - in 10 or 15 years - to work at its World Headquarters. Towards this end the companies have already undertaken several exciting initiatives.
     
      First, we have provided support to the St. Croix Educational Complex by reoutfitting the laboratory there - spending more than $30,000 on equipment selected by Ann Marie Gibbs and her colleagues.
      Second, we have worked closely with administrators, professors, and other key representatives of UVI and have committed in writing to UVI to working with UVI to provide opportunities for student internships during the summer and academic year, providing information and seminars on science and math careers in industry, and exploring possible areas for collaborative research projects with UVI faculty.
      Third, we are sponsoring an essay contest on St. Croix, with the topic being "Why the Development of Space is so Important", and received 55 entries. Our distinguished team of five judges - UVI-St. Croix professors Stewart Ketcham, Karen Caldwell, and Alan Lewit, Rosa White, Coordinator for the Science Curriculum for St. Croix and the Official VI Space Ambassador as appointed by then-President Ronald Reagan, and Ann Marie Gibbs, the incoming science department head for the Educational Complex -- have almost completed the judging. The ten winners will each receive $500 in cash. We anticipate this contest will ignite interest in the worlds of engineering, physics, mathematics, and other similar fields.
     
     Basis of Misinformation
     
     Much of the confusion to date about the hiring needs and the make-up of the particular positions for Caribbean Space Technologies and Beal Aerospace appears to stem from the distribution of a partial copy of the applications for benefits submitted to the IDC, which information was specifically requested by the IDC. We have indicated in various public forums that the applications being disseminated were incomplete, out-of-date, and, taken alone, do not reflect our public statements during our EDC hearing, subsequent submissions to the IDC, the many resumes that we have received since last September, the information that we have gathered regarding the many processed trained individuals on St. Croix, or our overall strong commitment to hiring Virgin Islands residents and former Virgin Islands residents.
      Under the IDC statute, an applicant is required to indicate how many jobs it will provide at the end of one year, and how many of those jobs will go to residents and non-residents respectively. Frankly, this is not an appropriate litmus test for a company such as Beal Aerospace, since it will take from two to three years to be fully operational. Additionally, the Virgin Islands does not currently have businesses in the aerospace field and therefore it will be necessary to train people in the appropriate skills. Please also keep in mind that the companies will be seeking to bring back former residents of the territory who have left the territory because they could not find meaningful employment here.
      When we initially submitted our applications to the IDC, we did so with a four-year printout of the specific jobs that we realistically anticipated would be the minimum number of people we would employ over that time frame, with salaries and job titles. We indicated that we would fill at least 80 percent of those jobs with Virgin Islands residents, and that we hoped to fill many more.
      Nevertheless, IDC law does not look at each applicant on the basis of its specific industry and required that our application materials focus on a specific point in time - one year after operations commence -- and break down the jobs between residents and nonresidents to the extent that we could, knowing that operations would not commence for at least three years from the hearing date. Thus, at the IDC's request we did that in a subsequent submission - which apparently is the document causing the confusion. Looking to at least three years down the line and looking to possible training programs for Virgin Islands residents, we identified seven jobs that probably could not likely be immediately filled by current residents. Bear in mind that former Virgin Islands residents, even people born in the territory, do not count as Virgin Islands residents under the IDC law, and Beal hopes to reverse the "brain drain" and bring some of these people back. Andrew Beal would also be moving to the territory to work in his World Headquarters and as the CEO his salary would be significant. Several other key individuals would be required to come to the territory to train Virgin Islands residents for a year -and thus are also reflected as non-residents at the end of one year.
      However, Beal Aerospace, Caribbean Space Technologies, and the IDC collectively realized that this picture was simply not reflective of the employment benefits provided by companies such as Beal Aerospace and Caribbean Space Technologies to the people of the Virgin Islands. We subsequently worked with the IDC to have commitments on a timetable that is more appropriate for these companies - two years after operations start. These are reflected in the recommendations now on the Governor's desk.
     
     Commitment to Employment of St. Croix Residents
     
     Finally, we would like to add a few additional points.
     
      First and foremost, the fact that St. Croix has process trained individuals was a key factor in Beal deciding that it wanted to locate its World Headquarters here. Beal executives such as Andrew Beal, Edward Sedacca, and Brad Oates have spent almost two years researching the location of the World Headquarters on St. Croix. Beal executives have met with executives from other companies on St. Croix about how they have met their hiring needs and have been excited by the fact that St. Croix has a well-trained, highly educated, enthusiastic workforce. This excitement has been amply enforced by the resumes that we have received and the contacts that we have made in St. Croix over the past year.
      Second, no successful businessman would consider setting up his world headquarters in St. Croix, making a tremendous investment before he earns any income, without being confident that he could meet his hiring needs at all levels from Virgin Islands residents.
      We would be glad to respond to any questions that you might have.
     

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