After almost a year of speculation about its future here, State Farm Insurance Co. announced Wednesday the transfer of roughly 300 jobs to Columbia from its Monroe, La., facility.
As part of a companywide consolidation, State Farm will move roughly 300 claims and underwriting jobs to its Columbia operations center at 4700 S. Providence Road. At least 200 more jobs will move from Monroe to Tulsa, Okla.
“This is certainly a compliment to the people of Columbia, and to the quality of workforce that State Farm employees here in Columbia exhibit,” said Michael Staloch, State Farm’s vice president of operations.
After a year-long review of its Central Zone operations centers, the insurance company will consolidate offices in Arkansas, Kansas, Louisiana, Missouri and Oklahoma and over the next 18 months will phase out its Monroe center, which employs about 1,100 workers. The consolidation will not require any expansion of Columbia’s facility.
Staloch made the announcement at an early afternoon news conference Wednesday before state and local officials at the Columbia Chamber of Commerce headquarters.
Officials said the move was based on many factors, including the city’s business climate, transportation and overall quality of life.
The move will expand State Farm’s workforce in Columbia from 785 to more than 1,000 employees.
Move has 'certain, tangible advantages'
The insurance company’s decision to stay in Columbia comes a month after Louisiana state officials offered State Farm a $33 million incentive package in an effort to keep the company from leaving Monroe. Neither Columbia nor Tulsa offered any incentives.
“Although there were carrots dangled before the leaders of State Farm, their deliberate pursuit of the facts made it clear to them that Columbia had certain, tangible advantages,” said U.S. Rep. Kenny Hulshof, R-Mo., in a press release.
Employees received word via e-mail Wednesday morning that an announcement about the consolidation was coming. However, they had to wait a few more hours to find out what the company’s plans were.
“It made me more excited to find out what the news was going to be,” said Khons Volmert, a State Farm claims representative. “But the job didn’t stop. We kept answering the phones and helping customers.”
After the announcement, employees’ minds were also on their colleagues in Monroe.
“For quite some time, anxiety had been building up,” Craig Kjellberg, State Farm auto claims team manager, said. “We certainly feel for our peers and friends and family (in Louisiana).”
Mayor Darwin Hindman said State Farm’s decision relieved his concerns about State Farm and its employees.
“State Farm is very important to Columbia,” he said. “They are one of our finest corporations, and they hire some of our finest citizens.”
Columbia Chamber of Commerce President Don Laird said the insurance company’s decision will have a very positive effect on the city’s economy.
“Not only are we keeping a great company here, but we’re bringing in 300-plus jobs,” Laird said. “And that has a strong impact.”
Columbia could feel 'ripple effect'
Whitney Hicks, an MU professor emeritus in economics, said it’s hard to predict exactly what impact 300 additional jobs will have on the area economy. But, he said, there will be a ripple effect.
“The added payroll will increase the income of the economy, and that stimulates economic activity,” he said.
Although State Farm initiated a company-wide consolidation strategy after losing $5 billion in 2001, Kelly Dunkerley, a company spokesperson, said the decision to close its Monroe operations center does not mean State Farm is struggling. Because technology has improved to the point that the same work can be done with fewer employees or facilities, Dunkerley said, consolidation makes the company more efficient.
Along with claims and underwriting, other jobs coming to Columbia include human resources, communications and administrative services. Even though 16 claims offices will close in Missouri, Staloch said the company’s 456 insurance agents in the state will not be affected.
State Farm hopes to have the consolidation complete by the summer of 2006.
“This is a great place to be,” Staloch said, “and we’re going to do business here a lot.”