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State of Repair - Extended Version

6 Leaders Discuss Power & How to Fix Hawaii

(page 4 of 8)

Matsumoto: I’ll tell you one way that we can try to address this. For a long time, I think our government was a lot more interested in helping local businesses. If you took a governmental sector, in terms of opportunities, a lot of major contracts have been awarded to major companies. The local companies have been outbid, outmaneuvered, for one reason or another, and not necessarily because they couldn’t do the job. Yes, maybe they couldn’t offer the lowest price, but you have to look at the total package, in terms of what is the benefit of giving the award to a local player as opposed to somebody from the Mainland who’s just going to hit-and-run and that’s it. I think that is a big problem. I was just talking to a contractor yesterday who was telling me about how they lost a government contract to some multinational company. Later on, people connected to that institution asked the manager and he said, “Well, we don’t do that kind of stuff.”

Cayetano: The government, their constraint, is the need for transparency. That’s why you have this big process where the lowest bidder supposedly gets the job. That’s not necessarily the best guy, but you can’t give a job to a local company simply because they’re local.

Matsumoto: Look at Hunt (Texas-based Hunt Development Group). They get the contract to the UH-West Oahu College and then walk away from it.

Cayetano: What the government needs to do is get the contractor to hire local guys – local subcontractors – to do the work. Some of this work may be specialized, as in the case of Aloha Stadium; the unions are running ads, and you got these guys from Kentucky coming in here and doing the work. The government has to find some way to put some pressure on the companies and say, “Why don’t you hire some local people?” I remember when I was in the Legislature and there was a big concern about the Japanese taking over the hotels. The one thing about the Japanese, they were much more sensitive to local pressure to get local people in than when the American companies came. At least the Japanese companies, but not without pressure from the local people, would open some doors for locals at the higher levels. Like you had [Ernest] Nishizaki running the Royal Hawaiian and for a long time, Stan Takahashi was running the Kyo-ya operation over here. Granted, the Japanese companies mostly chose Japanese Americans, but it’s better than the Mainland companies.

Matsumoto: I tell you, I used to work for (attorney) Wally Fujiyama. When I worked for Wally, he represented a number of major Japanese investors in Hawaii, as well as Duty Free Shoppers. Wally used to make it a condition that if a client wanted his services, he expected that they would give back to the community. For a lot of Japanese corporations, that wasn’t in their culture.

Cayetano: And they did, right?

Matsumoto: He insisted, and they did. He got them to make major donations to different schools and community organizations. He basically set up a charitable foundation targeting only Hawaii organizations. I think community leaders who have influence with these people that come into town, need to impress it on them. They need to educate them to make them understand that if they want to play and do business in Hawaii, you have a responsibility to give back to the community – and not just profit from us.

Cayetano: I think you made a good point when you talked about Jack Hall and all those guys. That was a different time and the dynamics politically, socially and otherwise, were a little different. I’m surprised you could tell Walter Dillingham what to do because Mr. Dillingham didn’t think much of guys like me and Colbert, but that’s OK. It’s a different time now and some of the people who are in charge, even local people, maybe they don’t have the same connection to the past, the same feeling. A guy like Wally, he suffered discrimination and all kinds of things when he was growing up. For him, it was kind of like, “OK, I have power in this community and I’m going to try to make some changes.”

Lagareta: I struggle with this idea that we’re losing something because a lot of big companies aren’t locally owned, and, of course, we want people to hire local workers. But I struggle with it because when construction is bad, I know a lot of people leave our state and they go find construction jobs in Las Vegas or whatever, I don’t see anybody saying, “You guys can’t come in; you’re not local,” so I struggle with it. I think we should employ our local citizens in every way we can, but we are in a global economy and I think kind of skipping to one of the last thoughts here, when we talk about who’s going to lead us, I think it’s going to ultimately be the person who can help us define who we are and who we want to be because we never have. Basically, I think we’ve defined who we don’t want to be and who we aren’t. I just don’t think we’re going to get clarity on some of these things – what do we keep out; what do we keep in – until we do that. The other issue is that I work with a lot of companies and like everybody else, I run into the ones who come in here like, “We’re from New York and we’re going to tell you how we do things and that’s how we’re going to do it.” It’s obnoxious. But I have to say, Target came in here 3 1/2 years before they ever opened a store. They started by meeting with people in the community and talking with them at the community level and saying, “What do you need? How do we work with you?” before they did a single thing. Even though they didn’t have any revenue here, they were giving away hundreds of thousands of dollars before they even came here. And there are other companies like that. I don’t want to paint everybody with that brush, but it does take somebody – in Target’s case, that’s just how they are. In other cases, they’re willing to do it, they just have to understand how it is and how it works. We think of Longs as one of the most local companies and actually, I don’t think Longs was ever locally owned. We need clarity there. We tend to talk about non-local versus local and it gets blurry these days.

Matsumoto: In Longs case, though, I think they have independent managers.

Burris: Well, when I go into Longs, it feels local (everyone agrees).

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