Automotive / Aerospace Site Guide 2013 by Area Development

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Summer 2013

AUTOMOTIVE—

AEROSPACE —

• What’s Driving Today’s Location Decisions?

• Site Selection Shouldn’t be Top Secret

• An Industry in Search of New Talent

• Challenges Creating the Perfect Storm

• New Frontier of Technology

• Closing Financial Gaps

• Help Planning for Capital Expenditures

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EDITOR’S NOTE According to the BMO Capital Markets Special Report,

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“North American car and truck production is back to pre-

What’s Driving Today’s Location Decisions in the Auto Industry? A healthy recovery in the auto sector is leading suppliers to consider new facility and expansion plans; smart decisions today will give them an edge over the competition in the years to come.

recession levels.” Auto sales have, in fact, risen to the best level in five years, and new connected and automated vehicle technologies are pushing companies to stay ahead of the curve. This all means that auto suppliers are considering new

facility and expansion plans. There’s also been an increased

Specific labor force and infrastructure requirements often drive the aerospace company’s location decision, with incentives helping the firm to keep its costs in check.

demand for products in the aerospace manufacturing sector, driven by record-setting commercial aircraft production. The auto and aerospace sectors are facing similar challenges:

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a need for labor skilled in today’s high-tech manufacturing systems; solid infrastructure and transportation support to get

incentives to support their capital-intensive operations.

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address the aforementioned issues. They were written by highly

The Perfect Storm in Aerospace Manufacturing Increasing global demand, constrained capacity, and labor scarcity are changing the geography of high-tech manufacturing.

respected experts in the auto and aero industries to guide companies like yours in their next site search. If you would like to get in contact with any of these contributors, please contact me

Help Is Available to Auto and Aerospace Firms to Close Financial Gaps Grant, loan, and reimbursement programs should be considered when planning for capital expenditures and job creation.

products to markets as quickly as possible; as well as financial

The articles contained within our 2013 Auto/Aero Site Guide

Aerospace Industry Site Selection Shouldn’t Be Top Secret

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at gerri@areadevelopment.com. Additionally, a list of this publi-

The Automotive Industry’s New Frontier States are competing to lead in connected and automated vehicle technologies.

cation’s sponsoring organizations is included in the back of the magazine with email and web addresses. They too can provide help with your firm’s next location decision.

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Geraldine Gambale Editor

The Auto Industry: In Search of New Talent Today’s automobile production line requires highly skilled, flexible workers who can rapidly adjust to change.

Published by

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& DESIGN: Patricia Zedalis Jessica Whitebook PRODUCTION ASSISTANT: Talea Gormican

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2013 | ••• AUTO/AERO SITE GUIDE

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ite selection decisions made now will have a dramatic effect on a company’s long-term viability. The economic landscape of today is much different than 10 years ago, and it’s likely the economic landscape in 10 years will change dramatically from what it is today. Companies with the best information and processes, with regard to the location of a new facility, will position themselves for success down the road. This is important for all industries, but especially transitional ones like the automotive sector.

Location Modeling Advanced manufacturing has evolved a great deal over the last decade, and along with it has come a high demand for skilled workers. This challenge is intensified when an automotive manufacturer is seeking the best location for a new, expanded, or relocated operation. Companies need to not only identify prospective sites, but also carefully analyze their suitability for their respective needs. From the perspective of the overall real estate market, including brownfield redevelopment and greenfield site development; transportation infrastructure; susceptibility to natural disasters; proximity to competitors and vendors; labor market conditions; and economic impact studies; sites must be examined for their current value and future impact to the company’s operations. SUCCESSFUL LOCATION MODELING |• Information on work force skill levels and labor costs |• Real estate costs |• Available economic development incentives |• Demographic statistics |• Cost of living |• Utility rates, availability, and redundancy |• Tax rates, both business and individual

TYPICALLY INCLUDES: |• Infrastructure availability |• Transportation options and access to interstates, rail lines, and airports |• Regulatory environment

In the automotive industry, however, some site selection factors weigh more heavily than others, to the point where it is not only a question of thorough analysis, but also of interpreting the signs of the future. This type of understanding may be a most influential and critical factor for the industry in years to come.

BY LARRY GIGERICH, MANAGING DIRECTOR, GINOVUS

AUTO/AERO SITE GUIDE ••• | 2013

A case in point involves one of our automotive clients, MAGNA Drivetrain, a Tier I supplier of drivetrain components and systems for light trucks and automobiles. Several years ago, MAGNA was looking to increase its manufacturing and assembly capabilities near one of its existing plants in Lansing, Michigan. MAGNA supplies components to DCX, GM, Ford, Toyota, and Honda. Phase I of the project included a 200,000-square-foot building consisting of manufacturing, assembly, logistics, and office space, and the ability to expand the building as the company was awarded new contracts from its customers. As noted above, there is always a complex array of issues unique to the automotive site selection process. In this case, land availability, transportation infrastructure and supply chain issues, as well as economic development incentives could offset both short- and long-term operating costs. Appropriate land and existing building options to accommodate MAGNA’s current and future needs were some of our earliest considerations for the site selection process. Real estate requirements included utility infrastructure, properly zoned land, major interstate highway access, a preference for rail service, and a location within a triangle whose corners were Indianapolis, Indiana; Lansing, Michigan; and Dayton, Ohio.

Supply-Chain Factors Drive Growth in the Midwest States such as Kentucky, South Carolina, Tennessee, Georgia, and Alabama have seen tremendous growth during the last 20-25 years. There has been strong growth in the South from manufacturers like BMW in South Carolina and the recent large expansions in Alabama of Mercedes (1,400 new jobs, a $2.4 billion investment) and Toyota (125 new jobs, an $80 million investment). Suppliers to the industry will likely be considering these hot areas for their

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expansion and relocation projects as well. However, for now, many supply-chain factors still favor the Midwest for certain types of projects due to efficiencies found in manufacturing plants located within the region. In October 2012, the Indianapolis NBC affiliate, WTHR, reported that Indiana alone had approximately 600,000 people (or 14 percent of the state’s work force) employed in the automotive industry. General Motors, Chrysler, Ford, Toyota, Honda, and Subaru are all major employers in the state. There are over 370 suppliers to the automotive industry located in Indiana. With this growth, Indiana has moved to third in the nation for automobile manufacturing, just behind Michigan and Ohio. Indiana along with the remaining Great Lakes states of Illinois, Michigan, Minnesota, Wisconsin, Ohio, Pennsylvania, New York, and the Province of Ontario have a combined economic output that — were the region a country — ranks fourth in the world behind only the United States as a whole, China, and Japan. This impact has increased due to the resurgent automotive sector. According to the May 2013 BMO Capital Markets Special Report, “North American car and truck production is back to pre-recession levels, global demand for machinery and equipment has firmed, and the service sector remains sturdy.” Auto sales have risen to the best level in five years, resulting in a 20 percent gain in automobile production in 2012 in Indiana. The strength and growth of the auto industry filters through all aspects of the region’s supply chain. Proximity to railroads and ports as well as highway infrastructure will continue to play an important role in the site selection process. Manufacturing components come through various points in North America, and the distance to and from suppliers, competitors, and customers is a key issue to

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Supporting Automotive’s Work Force Needs Premier global automotive manufacturing companies such as Nissan and Toyota have taken notice of the advantages of a Mississippi location. Before 2000, no automobiles had been produced in Mississippi. Nissan’s decision to locate an automotive assembly plant in Canton 13 years ago propelled the state’s automotive industry to impressive new heights. Today, 7,600 Mississippians are employed in automotive manufacturing and the state is a major player in the southern automotive corridor. Nissan has invested more than $2 billion in its Canton operations and employs more than 5,600 team members at the facility. Since production began in 2003, workers have built more than 2.3 million vehicles. In July, Nissan announced they were constructing a one-millionsquare-foot supplier park, supporting 800 jobs near its Canton plant. After Toyota ofﬁcials announced the selection of northeast Mississippi as the site of the company’s 10th U.S. production plant in early 2007, the automaker cited the state’s dedicated and capable work force, with its considerable manufacturing experience, as the primary reason. Today, Toyota Motor Manufacturing Mississippi employs 2,000 workers and has invested $800

million into the company’s Blue Springs operations. With the growth of automotive manufacturing in the state, automotive suppliers have become extremely vital to Mississippi’s Nissan and Toyota operations, including eight Tier-1 suppliers located in the state to supply and support Toyota’s Blue Springs plant. Additionally, Yokohama Tire Corporation ofﬁcials announced in April that the company would build a new $300 million commercial truck tire plant in West Point. Work force development is critical to Mississippi’s economic development mission, particularly in its expanding automotive manufacturing industry. The state provides work force training programs tailored toward the speciﬁc needs of the automotive industry through Mississippi’s 15 community colleges. Established in 2001, the Center for Advanced Vehicular Systems was founded to further the state’s interaction with the automakers and focuses its efforts on developing superior engineering, manufacturing, and design technologies. In 2010, the Center for Manufacturing Excellence opened, providing a crossdisciplinary education in hightech manufacturing. And, the Mississippi Polymer Institute researches and develops new composite materials for the automotive and other hightech industries. AD

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Certified Sites Lower Risks and Increase Speed to Market for OEMs It’s a well-known fact that supply chain and logistics issues affect the location decisions of all manufacturers — and particularly those in the automotive sector. Major assembly operations and their OEM suppliers locate in proximity to one another, and the finished products need good road and rail transportation access to deliver their products to consumer markets. Part of that equation has been satisfied through CSX’s Select Site Program, which identifies for manufacturers those properties along the CSX network that can rapidly utilize freight rail service. This designation confirms that standard land use issues have been addressed on the sites and they are ready for development. “The Select Site designation

promotes shorter decision timelines, increased speed to market, and lower upfront development risk for companies seeking industrial property to place their manufacturing operations,” said Clark Robertson, CSX assistant vice president for Regional Development. And according to CSX’s Regional Development Manager John Sanford, the I-85 Site in Macon County, Alabama, is the ﬁrst recipient in the state to receive CSX Select Site designation. It is situated along the Hyundai-Kia automotive corridor just off I-85, connecting Montgomery and Atlanta, Ga. It would be an ideal site for a Tier 1 or 2 automotive supplier. Alabama ranks fourth nationally for car and light truck production. Mercedes-

consider. Suppliers often want to be close to as many customers as possible to offset their inventory and logistics costs, as well as be able to provide the “just in time” availability of parts. As an example, our site location modeling and analysis for MAGNA began with research on the number of engine and transmission plants within a 450-mile radius of the specified locations. There is constant pressure to drive excess costs out of the OEM supply chain.

AUTO/AERO SITE GUIDE ••• | 2013

Benz, Honda, and Hyundai have assembly plants in the state; engines are assembled for Toyota and Navistar; and numerous automotive OEMs operate throughout the state. CSX’s site certiﬁcation program complements Alabama’s own AdvantageSite designation. Again, AdvantageSites have also undergone a vetting process to ensure they meet all standards relevant to accessibility, infrastructure, planning/zoning, and environmental and geotechnical due diligence. Greg Knighton, vice president of the Alabama Economic Development Partnership, noted, “We commend the communities that recognize the importance of having

Moving forward, companies will need to make capital investments to stay competitive. Investment in research and development, and flexibility to adjust to consumer preferences and global market needs, will be critical for long-term success.

Clustering Affects the Location Decision Automotive clusters can also have a significant advantage in a site location decision

Courtesy of Made in Alabama

prepared sites and for committing the resources to receive AdvantageSite designation.” There are currently 44 AdvantageSites in Alabama, stretching from north to south. Recently, Rausch & Pausch LP (RAPA), a Tier 2 automotive supplier that is headquartered in Germany, chose a location in Auburn Technology Park West, with AdvantageSite designation for its U.S. headquarters and production facility. According to company President and CEO Kelly Nelson, the fact that all the preliminary due diligence was performed on the site was a factor in the ﬁrm’s location decision. AD

in that they impact capital investment decisions. In the Midwest, research and innovation infrastructure is driving the development of new products and processes. Within the Great Lakes region, Michigan, Ohio, and Illinois are among the top states in terms of green-tech patenting, focused on new technologies in battery power, hybrid systems, and fuel cells.1 Stronger U.S. automotive standards result in higher volumes of fuel-efficiency, components, and

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Auto Sector Job Growth June 2009–October 2012 to match job-seekers’ skill advanced vehicles. MICHIGAN levels to particular comThe push for these 35,200 new jobs 37.7% increase pany job requirements, volumes has justified an which helped MAGNA on-shoring movement by OHIO put together its new team many large manufactur11,300 new jobs in a very efficient manner. ers, i.e., a justification to 17.4% increase The local incentive packproduce locally, whereas, INDIANA age also included funding in the past, advanced 19,800 new jobs for the purchase of land, vehicles would have 39.8% increase environmental testing of been built overseas. Source: www.drivinggrowth.org property, public infraToyota and Honda have structure improvements, brought hybrid producand Tax Increment Financing (TIF). Of contion to the United States and Ford Motor siderable advantage to MAGNA was the Co. is now producing hybrid transmissions selection of a site within a Community in Michigan instead of buying them from Revitalization Enhancement District Japan. These changes have resulted in job (CReED), which allowed the company to growth and investment. From June 2009, receive significant financial benefits in the when the auto industry hit bottom, to form of tax incentives tied to qualified capiOctober 2012, industry jobs have grown by tal expenditures and job creation related to 236,600. More than 25 percent of the total the generation of new taxes from the project. U.S. growth in the auto sector was in Michigan, Ohio, and Indiana (66,300 jobs since June of 2009). Labor Is Still Paramount Demand for the right kind of labor for the right price will continue to be a drivIncentives Come Into Play ing factor, more important than the In view of the fact that automotive projaggressive incentives offered by a city or ects are capital-intensive, it is important to state. The aforementioned shift in automoidentify appropriate and available economic tive plants to southern states occurred for development incentives to offset both starta number of reasons: low wage rates, up and ongoing operating costs. A key lower cost utilities, non-unionized labor, component in the MAGNA project was the less expensive land, lower freight costs, availability of local and state governmental lower taxes, and market share redistribufinancial assistance to support the project. tion from traditional domestic manufacturThe Indiana Department of Commerce ers to Asian and European companies that (now known as the Indiana Economic manufacture in the South. The traditional Development Corp.) offered several types automotive industry unions have not been of economic development incentives to embraced by employees in the South’s support the project. These included the right-to-work states. Recently approved Skills Enhancement Fund (SEF) to help right-to-work legislation in Indiana and defray the costs of training new employees, Michigan has also positioned these states the Industrial Development Infrastructure for more success with domestic and forAssistance Program to pay for infrastruceign automotive manufacturing facilities. ture improvements, the Economic Training and human resources in any Development for a Growing Economy industry can and should be shared when(EDGE) job creation tax credits, and the ever possible, especially where employees Hoosier Business Investment (HBI) capital with technical expertise are required. The investment tax credits. availability and ease of such shared In addition, the Indiana Department of resources is an important factor in the site Workforce Development provided funding

AUTO/AERO SITE GUIDE ••• | 2013

selection process. The automobile industry has growing concerns about finding, hiring, and retaining qualified employees for today and for the next 10 to 20 years. The October 2012 Original Equipment Suppliers Association (OESA) newsletter noted that the number-one risk for suppliers meeting short- and long-term business objectives is human resource-related issues. Seeking new labor pools, competing against non-automotive industries for talent, accommodating flexibility and diversity work force requirements, and identifying and filling the talent gaps are all issues that the automobile industry is facing. As the industry grows, and as additional technology solutions are implemented, there will be a continued growing need for a highly trained work force. Innovative fuel cell technologies, mechanical engineering, biofuels, and advanced battery technologies will require a new breed of worker to support an every-changing automotive industry.

Flexibility and Foresight Automobile manufacturing is still big business and thanks to a healthy recovery, vehicles in operation globally exceeded one billion in 2012. Six large companies, rather than three, now dominate the industry: Chrysler, GM, Ford, Honda, Nissan, and Toyota. These global companies represent an overwhelming majority of automotive sales in the U.S. marketplace. In the coming years, these companies will continue to face challenges and uncertainties. Flexibility, innovation, and foresight will be needed to deal with new issues that affect manufacturers and suppliers. Smart site selection decisions today will give companies an edge over their competition and allow them to draw on an array of resources available to take them into the next wave of automotive production and distribution. 1 The Next Economy: Economic Recovery and Transformation in the Great Lakes Region. Jennifer S. Vey, John C. Austin, and Jennifer Bradley, Sept. 2010.

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Aerospace Industry Site Selection Shouldn’t Be Top Secret Specific labor force and infrastructure requirements often drive the aerospace company’s location decision, with incentives helping the firm to keep its costs in check.

he site selection process for aerospace companies can prove to be a great challenge or offer great benefits, depending on how well prepared a company is when it initiates the process and exactly what expectations it has. Companies really have to examine their operation and figure out what is the most important driver of the location search.

A Skilled Labor Force

One of the major challenges faced by aerospace companies is the availability of precision skills among a potential labor force. A skilled labor force is paramount to the success of aerospace companies. These companies are often looking for people possessing deep skills and certifications that match the demands of world-class aircraft manufacturing and aerospace technology needs. If a potential location does not meet this requirement, its consideration by an aerospace company may be doomed before it ever really gets off the ground. Another key consideration is a location’s ability to establish a cooperative relationship with a nearby university or other institute of higher education with a strong aerospace department and research capability. A sophisticated training and education infrastructure can provide important industry support that, of course, is beneficial to the prospective company. Online aerospace training is advancing, and when hosted by a top-tier data center makes systems performance a non-issue. This type of arrangement also relieves customers of managing the back-end hardware and infrastructure issues that often require additional resources. There also has been a recent trend toward creation of military and non-military applications of unmanned aircraft vehicles (UAVs). The MQ-1 Predator unmanned aircraft system (UAS) is manufactured by General Atomics in San Diego, California. The Predator and similar aircraft can serve in either a reconnaissance role or actively as a military platform firing missiles at qualified targets. UAVs and systems require much more software and control systems engineering than earlier generation aircraft. In these industries, computer hardware and software, electrical engineering, and other information technology skill sets are essential. Educational systems that strongly support these disciplines will help attract this emerging industry.

BY JOHN SCHUETZ, PRINCIPAL, THE RSH GROUP

Use of Former Military Bases Cost is less important, but still a factor in the site selection process for aerospace companies. Often, site-seeking aerospace companies can be attracted by free or lowcost available land, as well as by reuse projects and ample-sized buildings and hangars that are readily available. Former military sites, or those in the process of decommissioning, are sought after locations, as they often provide an aerospace company with everything it needs at a rock-bottom price. Because military bases generally have adequate infrastructure to support aerospace manufacturing operations, they can commence operations quickly and costeffectively. Any location that already has an aerospace infrastructure in place has a good advantage over other potential locations being considered. For example, Kelly Air Force Base in San Antonio converted from a fully functioning air base in to a center of aviation maintenance and overhaul activity, employing approximately 550 people. Similarly, Williams Air Force Base in Mesa, Arizona, is now known as the Williams Gateway Airport. Williams Gateway quickly established itself as an international aviation and aerospace center, with more than 30 companies currently engaged onsite in aircraft maintenance and modification, avionics, flight training, and air cargo operations. Key aerospace tenants include Cessna Aircraft Co. and Hawker Beechcraft Services, Inc. Another recent example of utilizing closed military facilities to establish an aerospace hub is Elmendorf Air Force Base in Anchorage, Alaska. With the unique asset of a space vehicle launch site on Kodiak Island, Alaska has formed the Alaska Aerospace Corp. to take advantage of the worldwide, centralized logistics provided by the Anchorage location. In March 2013 | ••• AUTO/AERO SITE GUIDE

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of 2012, Lockheed Martin Space Systems announced it would locate its Athena space program to the Kodiak site. Aircraft maintenance for the domestic aviation industry is a skill in high demand. Fortunately there are many people coming out of the military who have these skills. This is another good reason for aerospace companies to locate near

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military bases. Northwest Florida has taken advantage of its geographic proximity to seven military bases and the unrestricted airspace of the Gulf of Mexico. Between 32,000 and 37,000 private-sector and non-military government employees work in more than 1,900 aerospace and defense establishments, including companies in the following industries:

|• Aerospace and transportation equipment manufacturing |• Air transportation and support activities |• Aviation machinery and equipment distribution |• Chemicals and fuel manufacturing and distribution |• Computers, electronics, and electrical equipment manufacturing

A Community Satisfies Aerospace Firm’s Work Force Needs In operation today in Granite State Business Park in the suburban city of Rochester, New Hampshire, is a stateof-the-art aerospace composites facility more than eight acres in size and utilizing not just the latest in manufacturing technology, but actually creating specific new technology to make composite engine components for the next-generation LEAP-X engine. The engine components, as well as this 343,000-squarefoot facility, are the result of a unique partnership between Albany Engineered Composites, a division of U.S. Albany International Corp., and Safran Engineered Composites, a division of the French firm Safran, a global leader in jet engines and

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aerospace components. Satisfying the need for a large number of skilled and semi-skilled employees to be ready at the opening of the facility was one of the greatest challenges of the location process. New Hampshire offers ﬁrms matching training grants of up to $20,000 per application, but that was insufﬁcient for the specialized training needed by the LEAP-X team. The team met with Great Bay Community College (GBCC), the University of New Hampshire, and many others to work on a strategy that would effectively meet this employment demand. Great Bay Community College developed a plan for an Advanced Technology and Academic Center in Rochester with a

composites lab and classroom space in which to provide training for the skills needed. The New Hampshire legislature funded a $4 million investment to establish this training center, and the community college also successfully applied for a U.S. Department of Labor grant in the amount of $19.9 million, which was awarded in the fall of 2011. The Rochester satellite of Great Bay Community College and the Advanced Technology and Academic Center is complete and opened in May 2013. The grant will sustain the center for only a few years but the college and the community plan to have it self-sustaining and turning out 500 new employees skilled in composite materials

manufacturing over the next ﬁve years. “Those seeking training opportunities in advanced composites manufacturing now have a state-of-theart facility practically in their backyard,” said GBCC President Will Arvelo upon the opening of the facility. Earlier this year, Peter Lengyel, president and CEO of Safran USA, told the news media that Rochester is “a great place for our company to be…What sealed the deal for us is the support from everyone at the local and state level.” AD

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The MQ-1 Predator unmanned aircraft

|• Engineering, testing, R&D, and industrial Incentives Attract Interest design The reuse of former military facilities |• Fabricated metals and machinery has been encouraged with the use of fed|• Flight training eral and state tax abatements. An aero|• IT, systems integration, network soluspace company should look for any spetions, and telecommunications cially designated federal or state zones Plants dealing with electronics and that give hiring credits (such as a state enterprise zone or a federal empowerparts do not necessarily have to be on an ment zone). In certain airfield, although they do areas, aerospace comneed to be in locations panies can also get where they can serve a cusaccelerated depreciatomer base. Nonetheless, if tion on their real an aerospace company like estate. Boeing is manufacturing Federal and Many municipaliwing assemblies for planes, ties will offer a dislogistics is important. state tax abatecount on land or Manufacturing large parts ments have buildings. There are like wing assemblies somealso the possibilities of times requires a location encouraged the local, state, and federal near a port for easy access reuse of former tax incentives. In many and transportation needs. areas, if an aerospace When European military facilities. company were to Aeronautic Defence and locate into a taxSpace (EADS) selected exempt zone, it could pick up some Mobile, Alabama, over three rival bids impressive tax incentives. There is also from other locations in the South, what is known as Defense Economic Chairman Ralph Crosby said Mobile was Readjustment Zones program. This was chosen because it is “strategically located” established as a tool for business recruiton the Gulf of Mexico, and offers a skilled ment and job creation in adversely work force, airport runways, and a deepimpacted defense-dependent communities. water port.

“

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It is designed to provide assistance to communities, businesses, and workers impacted by, or vulnerable to, the closure or realignment of military installations and the reduction in federal defense contracting expenditures. The incentives offered through a Defense Economic Readjustment Zone are similar to those offered through an enterprise zone program. An enterprise zone is an economic development tool that allows a community to partner with the state to offer a package of local and state tax and regulatory benefits to assist businesses seeking to locate, expand, or retain jobs in economically distressed areas. By locating in an enterprise zone, a company could receive state sales tax refunds for building materials, machinery, and equipment for up to five years. Aerospace companies can also save on state franchise taxes, and in some states, like California, can take advantage of what are known as LAMBRAs (Local Agency Military Base Recovery Areas). The LAMBRA Act promotes economic development and employment opportunities in designated military base areas by offering bidding preferences of 1 to 9 percent on specified state contracts. The LAMBRA Act provides for two bidding preferences: work site and work force. In the site selection process, aerospace companies must find a way to balance their search for incentives with locations that will support the core operations of the business effectively. In sum, the finalist location should satisfy the company’s work force requirements; provide a transportation infrastructure with good access via rail, road, and sea; and may need to include a runway and tarmac with plenty of length, as well as ample area to accommodate production, hangar, and office space. The RSH Group is a site selection firm that has •specialized in negotiating financial incentives and tax credits for Fortune 500 companies for over 25 years. It has worked with aerospace companies such as Raytheon, TRW Space and Defense, and Loral Space Systems.

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MEANINGFUL INCENTIVES

COMPETITIVE WAGES

FAVORABLE TAX CLIMATE

LOCATED ON I-95

PERMITTING

What’s on YOUR list? FLORIDA’S SPACE COAST: America’s High-Tech Titan.

Highest concentration of high-tech and moderately high-tech manufacturing jobs in the U.S.

Most concentrated high-tech economy in Florida

Number of engineers per 1,000 workers

Milken Institute, 2013

U.S. Bureau of Labor Statistics, 2011

Brookings Institute, 2012

Where LOW OPERATING COSTS and

WORLD-CLASS WORKFORCE MEET. For more information, including available incentives and sites, please contact Gregory J. Weiner, CEcD, Senior Director of Business Development, 321-638-2000 or gweiner@SpaceCoastEDC.org

Tell us about your project. www.SpaceCoastEDC.org

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Help Is Available to Auto and Aerospace Firms to Close Financial Gaps

oth the automotive and aerospace manufacturing industries have high-tech and capital-intensive operations, requiring highly skilled and specialized labor. Indeed, many of the required inputs, materials, and production processes are common among OEMs and suppliers across both industries. For example, Ford and Boeing have a longstanding collaborative relationship, sharing research and knowledge in the development of new production processes. The Ford Freeform Fabrication Technology initiative, a new method of constructing low-volume and prototype parts, is a recent example. The automotive and aerospace industries also share many government-mandated and consumer-driven challenges that are heavily impacting OEMs and their largest suppliers and, consequently, being forced down through supply chains (see Chart 1). Most states have business assistance programs to help companies overcome financial gaps and other obstacles to investing in new equipment, adding space or new facilities, and creating jobs. This article discusses some common problems faced by small and mid-size manufacturing companies, describes select programs that may be used to resolve these issues, and provides illustrative examples of automotive and aerospace suppliers that used these programs to improve and expand their businesses. Of course, these challenges do not solely exist within the automotive and aerospace supplier industries, and this article will be of interest to any company developing strategies to overcome these and similar obstacles. Finally, since both industries require frequent capital investments, this article focuses on grant, financing, and reimbursement programs that provide up-front or early-stage assistance; thus, tax credits, tax abatements, tax-free bond programs, and tax increment financing arrangements are omitted. While such programs are helpful, their benefits accrue slowly, over a number of years. Also, they are already among the best-known and most-used programs.

Grant, loan, and reimbursement programs should be considered when planning for capital expenditures and job creation.

Up-Front Assistance vs. Reimbursements Broadly speaking, business assistance programs may be divided between those that provide cash or loans and others that provide reimbursement for qualified incurred costs. The first group includes grants and deal-closing funds (often structured as perform-

BY MICHAEL SCHULTZ, INDUSTRY ANALYST, AND DAVID B. MUNSON, PROGRAM DEVELOPMENT ASSOCIATE, CENTER FOR AUTOMOTIVE RESEARCH

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ance-based, forgivable loans), collateral support and loan participation programs, direct loans, subsidized loans, and loan guarantees. Typical reimbursement programs include training grants and energy-efficiency rebates. Training grants are readily available and reimbursements can be received a few weeks after pre-approved training expenses are incurred. Energy-efficiency rebates have been somewhat underutilized. They will remain available for at least the next two years under a federally mandated program that may vary from one state or utility to another. Lighting and electrical retrofits (or in the case of new construction, upgrades beyond current building code requirements) have a quick payback period when rebates are factored in. Less common, more complex energy-saving measures (production process improvements, for example) can be included under customized incentives.

Business Development and Closing Fund Grants Many states have business development programs that provide grants, loans, and other economic assistance to help companies close financial gaps and move forward with investment and job creation plans. Sometimes called “deal-closing funds,” they can also be used to help win competitive projects. A Michigan company that designs and manufactures parts and tooling for the aerospace and automotive industries was “on the ropes” in 2009. The company recently won substantial new work. Retaining its original building, the company leased two nearby buildings and spent almost $3 million in repairs and upfitting. It will invest more than $6.5 million for machinery and equipment for the new buildings. The tipping point in making the project feasible was an $800,000 performance-based grant from the Michigan

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Chart 1

Common Issues, Challenges, and Concerns in the Automotive and Aerospace Industries model. The Small Business Jobs Act of 2010 created the • Demands from OEMs to improve productivity, quality, IT systems, and manufacturing State Small Business technologies Credit Initiative • Pressure from OEMs for suppliers at all levels to increase innovation and institute (SSBCI), with $1.5 collaboration throughout the supply chain billion in direct funding to states for • Critical need to update skills of incumbent workers and address current or projected worker shortages in key skill areas (e.g., precision machining, management, pilots, etc.) programs that expand access to • Federal mandates to improve fuel economy (auto) and reduce emissions (auto, aero), and competitive necessity to reduce fuel costs to the ultimate consumer — all requiring credit for small busiconstant improvements to engines, powertrain/ﬂight systems, as well as lightweighting ness (fewer than 500 through adoption of alternative materials employees for Capital Access Program loans, and fewer than 750 for all other programs). ing, subject to collateral support for the Business Development Program. The result States leverage private lending with federincreased working capital line through a was a commitment of almost $10 million al funds to help finance small businesses state-administered, federally funded proin private investment and 188 new jobs and manufacturers that are creditworthy, gram known as the State Small Business (tripling the current work force). but unable to get the loans they need to Credit Initiative (SSBCI). The state In 2012, South Carolina awarded $6.2 expand and create jobs. pledged $2.4 million for collateral supmillion from the Governor’s Closing Fund While SSBCI is a one-time federal grant port, enabling the new to 18 projects throughout to the states, each state’s loan repayments lender to refinance $8.5 the state. One of the deals will remain the property of that state in permillion of existing debt. was an $825,000 grant for petuity. “Recaptured” monies can be used as This resulted in a projbuilding upfit, site preparevolving funds for state-operated business ect with total private ration, and infrastructure credit programs over the long-term. investment of nearly for a plastic automotive Training grants Automotive and aerospace suppliers with $13 million and the crecomponents maker, which provide financial fewer than 750 employees under the same ation of 88 jobs. then committed to estabownership should take a look at SSBCI if An automotive lish its new facility in support to train they have any issues with access to credit stamping supplier, proSouth Carolina with an new employees (http://www.treasury.gov/ssbci). Under ducing medium-sized investment of $12 million SSBCI, states can undertake all or part of components, as well as and 119 new jobs. In June or increase the permitted activities. They can also taia larger, more complex 2013, the fund awarded lor and name their funds. (Tennessee calls Class “A” stampings and $300,000 for building existing skills. theirs “INCITE Fund.”) The basic funding assemblies operation, upfit to entice a maker of types are described in Chart 2. needed new equipment to increase capacitubing for aircraft fueling systems to reloty and improve efficiency. The total cost cate its operations to the state. Private was $7.5 million. The total financing investment is projected to be $5.5 million, Training Grants package was made possible by $3.7 milwith 100 new jobs. Training grants provide financial suplion in SSBCI-funded collateral support. port to businesses that are creating jobs The new equipment will enable the comand need to recruit and train new employThe Use of Collateral pany to add 45 new jobs. ees or increase skills in their existing work Support Programs Both examples above are from force. There are multiple sources for grantTo facilitate growth, a 250-employee Michigan, which created new state profunded training. Find contacts for federalaluminum die casting company serving grams for collateral support and loan parly funded programs in each state at the automotive and heavy truck industries ticipation in 2009 and then persuaded the American Job Centers. Institutions of needed to refinance existing debt and federal government to establish a nationhigher education, especially community increase its working capital line of credit. wide program built on the Michigan colleges, frequently have direct sources of A new lender committed to the refinanc-

• Concerns of OEMs and larger suppliers about reliability/adaptability/sustainability at the smaller end of their respective supply chains

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Chart 2

Basic Fund Types for State Small Business Credit Initiative (SSBCI) COLLATERAL SUPPORT PROGRAM — Cash deposits ﬁll collateral gaps. Problem: A loan request is not supported by available collateral because the value of plant, property, and equipment declined during the recession and has not fully recovered. Solution: A state deposits cash collateral at the lender equal to the value of the shortfall.

CAPITAL ACCESS PROGRAM (CAP) — A borrower, lender, and state contribute to a loan loss reserve account held by lender. Problem: A lender wishes to increase the volume of its small business lending, but the effects on personal and business credit from the recession mean that a large portion of applicants stress the lender’s credit guidelines. Solution: The loan loss reserve reduces lender’s risk to the extent funds are available in the lender’s CAP portfolio account.

LOAN PARTICIPATION PROGRAM — The state purchases portions of loans or makes subordinated loans. Flexible terms address weakness in historic cash flow or reduce the private lender’s loan to value. Problem: A small business has recovered and, in all aspects except historic cash flow, the loan meets underwriting requirements. Solution: A loan participation or subordinate loan with flexible terms results in a lower loan amount for the primary lender and aligns the borrower’s historic debt service coverage with internal credit requirements.

LOAN GUARANTEES — The state provides deﬁciency guarantees to lender.

A Kentucky facility had a free lighting audit, arranged by its electric provider. To upgrade 660 fixtures was $167,000 and would result in an annual savings of $50,000. There would also be a reduction of maintenance costs and tax deductions. With a $30,000 rebate, the payback period was reduced to about 2.75 years. A heavy manufacturing facility in another state would benefit greatly from infrastructure improvements, but the cost was several hundred thousand dollars. Payback through energy savings was about five years. Rebates cut payback to less than four years. If needed (and if the company qualified), project financing was available to purchase and install upgrades with no out-of-pocket costs; the contractor/lender would be repaid by splitting the energy savings for six to seven years.

In Sum

funding for training they provide. advantage of energy-efficiency rebates, Called “Alabama’s Number One which will be available through 2015, or Incentive,” AIDT is a notable example of perhaps longer. “Green” projects can a comprehensive state iniimprove competitiveness tiative to recruit, screen, and business sustainabiland train workers for ity by reducing ongoing expanding businesses, costs. The immense savusually at no cost to the ings (at current energy business. AIDT is affiliated can be sufficient to Several programs costs) with several training cenoffset the entire project ters, including one cost within a few years’ exist to enable focused on robotics. Most time, even absent rebates businesses to states have one or more or business assistance training centers that are programs. While lighting carry out focused on targeted indusis relatively inexpensive energy-efficiency and has a quick paytries like automotive and aeronautics, or a broader back, building envelope, projects. priority like robotics, and HVAC, and process provide hands-on trainimprovements often ing, classroom training, and other busihave large up-front costs, and without the ness services. ability to fund these, the benefits cannot be realized. To address this problem, several programs exist to enable businesses to carry Energy-Efficiency Rebates out energy-efficiency projects. Many companies have not yet taken

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While a number of business assistance programs are available in most areas, many companies fail to utilize them, often because they are simply unaware of them. Also, many companies are hard-pressed to find the time to track down which assistance programs they qualify for, and navigating the bureaucratic processes and requirements of each program can seem daunting. When a company is challenged by financial, technological, work force, equipment, or facility needs (among others), help should be sought from: |• Local and state economic developers; |• Small Business Development Centers/Small Business Technology & Development Centers; |• Local agencies delivering work force development and training services under the auspices of the Workforce Investment Act; and |• Business development and site selection/incentives procurement consultants. Business assistance programs exist beyond the well-known tax abatements and tax credits. While the examples in this

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INCENTIVES HELP AUTOMAKERS ADDRESS GLOBAL CHALLENGES In April, Toyota Motor Manufacturing Kentucky (TMMK) announced it would invest $360 million to expand its Georgetown, Kentucky, manufacturing plant and establish its ﬁrst U.S. production site for the Lexus ES 350, creating an estimated 750 jobs in the Commonwealth. TMMK will produce about 50,000 Lexus vehicles a year starting in 2015. Toyota will invest an additional $171.2 million in other plant refurbishments. The investment is the second-largest ever made by Toyota in its Georgetown plant, and the largest since the $800 million addition of Plant 2 in 1991, more than 20 years ago. As an incentive to secure Toyota’s investment and job growth in Georgetown, the Kentucky Economic Development Finance Authority preliminarily approved the company for tax incentives up to $146.5 million through

article focused on automotive and aerospace companies, these and similar programs are available to most businesses.

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the Kentucky Jobs Retention Act. The Kentucky Jobs Retention Act was actually developed in 2007 in order to encourage Ford — which has a history in Louisville dating back to the manufacture of the Model T in 1913 — to maintain jobs at its Louisville Assembly Plant (LAP) and Kentucky Truck Plant (KTP) as well as to add new jobs and investment. The act promised that up to 50 percent of new investment could be recovered through a credit against corporate income tax and a wage assessment for the jobs that were preserved or created over time, as well as credits remaining unused from previous agreements if the company made an investment of at least $100 million. In addition, the investment recovery could be increased up to 75 percent if additional investments were made at either site. The legislation also incorporated millions in training funds. The initial incentive

to Ford was for $24 million. The amount was increased to $180 million in 2008, and boosted once again to $240 million in 2010. The incentive package was structured in a way that it could be renegotiated to induce additional investments made at either Ford plants in Louisville — giving the state more flexibility to negotiate. Commenting on the incentives package at the time of the announcement, Curtis Magleby, then director of government relations for Ford, noted, “We’re much more encouraged by Kentucky’s willingness to work with us on a partnership for the future. We need new tools to address today’s global manufacturing challenges, and a lot of times [state economic developers] have a toolbox that’s been around for decades.” Magleby said Ford wanted to make sure the state of Kentucky

These lesser-known and often underutilized resources may provide essential aid to businesses looking to expand their

prized reinvestment and job retention on a par with new investment and new jobs. The wage assessment option was also important to the Kentucky package, he said. “Manufacturers go through adjustments, and are not always in a proﬁt position,” he said, and incentives need to be able to account for those swings. “The way you get the incentive in Kentucky is a refund of your 5 percent payroll tax, so it becomes a bottom-line operational cost improvement. Many of the old economic development tools are solely corporate tax liability, and those come and go.” The training component was important too, Magleby said, and demonstrated “the state’s understanding of the need to continually upskill.” AD

operations, upgrade their production processes and technologies, or improve efficiency and sustainability.

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The Perfect Storm in Aerospace Manufacturing

he American aerospace industry is running out of skilled labor, and companies are running out of time. The venerable tradesmen of the baby-boomer generation are preparing to retire, and few millennials have the interest or technical aptitudes to fill their shoes. Amidst growing global demand for aerospace products and constrained capacity, the labor crunch will gradually shift the geography of manufacturing as companies decide to outsource skilled labor, train new workers, or move their facilities.

Increasing global demand, constrained capacity, and labor scarcity are changing the geography of hightech manufacturing.

The Pressure of Demand and Scarcity of Labor The aerospace industry’s dilemma has deep roots in demography. The baby-boomers, the foundation of aerospace manufacturing, are retiring in droves with dramatic effect. According to a private survey conducted by Advanced Technology Services (ATS) and ACNielsen, 41 percent of skilled tradesmen will retire by 2017. Correspondingly, an Industry Week survey commissioned by ATS found that 39 percent of aerospace companies report that the labor shortage is having an “extreme” effect on their ability to grow business, while another 24 percent of firms report a “slight” or “moderate” effect. Simultaneously, commercial aircraft manufactures like Boeing and Airbus expect demand for aircraft and related components to double over the next 15 years. The Federal Aviation Administration predicts that the industry will climb from 731 million passengers in 2011 to 1.2 billion in 2032. However, the consulting firm AlixPartners reasons that the greater complexity of new aircraft models may spike production by as much as 70 percent by 2015. This perfect storm of increasing global demand, constrained capacity, and labor scarcity cannot be fixed by moving aerospace manufacturing offshore. Production is either too technical or, from a national security standpoint, too risky to perform in China, India, Brazil, and Mexico. A full 74 percent of the Industry Week survey’s respondents believe that foreign manufacturers do not have the technical skills and quality systems in place for aerospace manufacturing. The potential costs of this situation are startling. Of the 138 companies surveyed by Industry Week, a full 61 percent expect the retirement of the baby-boomers to incur multimillion-dollar costs, with 14 percent of firms predicting more than $100 million in losses over five years.

BY DAVE RUSSELL, AEROSPACE INDUSTRY CONSULTANT, ADVANCED TECHNOLOGY SERVICES (ATS)

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The Post-Industrial Dilemma Companies reacting to this trend find themselves in conflict with deep sociopolitical trends. What demography has wrought, patterns in education have intensified. Aviation Week’s 2012 work force study found that the average age of aerospace employees is 45, and only 4.19 percent of employees are between 22 and 25 years old. In other words, no one is being trained to replace the baby-boomers. This reflects changes in the national education system tied to the priorities and values of an allegedly post-industrial economy. Over the years, students have been conditioned to believe that the American Dream is only obtainable in white-collar occupations. For younger generations, an education in the trades and an industrial career have become an unwarranted mark of failure. Students are not learning skills suited to high-tech manufacturing. Completion of Associate’s, Bachelor’s, and higher degrees has surged in the past 10 years. The National Center for Education Statistics found that 33.5 percent of Americans age 25 to 29 had a Bachelor’s degree in 2012, compared to only 24.7 percent in 1995 and 21.9 percent in 1975. One common belief is that the digital age creates jobs that require abstract thinking rather than the hands-on skill of craftsmen. Unfortunately, employers specifically prefer graduates with degrees in engineering, mathematics, and the hard sciences. Students who studied the wrong subject, dropped out, or achieved unsatisfactory grades are now reeling in student loan debt, which has exceeded $1 trillion nationally according to the Consumer Financial Protection Bureau. Their desk jobs cannot drain the swamp of debt. Facing America’s myth about the “right” education, disenchanted college graduates are loath to believe that a transi-

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tion to the trades is a viable or preferable option, and millennials are not replacing the skilled baby-boomers.

Rust Belt Versus Sunbelt Inertia The skilled labor crunch is more pronounced in the Northeast than in the South. As longstanding aerospace plants in the Rust Belt bleed talent, executives eye new locations. For example, one location growing on aerospace radars is South Carolina. The South Carolina Manufactures Alliance, a powerful and well-organized advocacy group, recognizes the national labor shortage and supports pro-manufacturing policies in the state legislature. It is working to

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establish a $6.5 budget to provide the Manufacturing Skills Standard Council (MSSC) certification through the South Carolina Technical College System, along with $7.54 million for the technical school system’s readySC™ program, which provides free or low-cost customized training for new and expanding manufacturers. These government-sponsored training programs are especially appealing to aerospace manufacturers because most have abandoned their in-house educational programs. Generally, new aerospace operations will arise in states with right-to-work laws. Of those states, those that invest most heavily in technical training will attract the lion’s share of new production facilities. That does not mean that aerospace will

necessarily abandon its “crown jewel” facilities in the Northeast. The highest tech processes will remain at these facilities despite downsizing, outsourcing, and a general departure from the Rust Belt.

Addressing the Labor Crunch Given the waves of retirement, booming production demands, and a dearth of millennials entering industrial careers — combined with the opportunities and costs of migrating facilities — aerospace manufacturers face three critical choices: 1. Should skilled trades be outsourced? 2. Should training programs be reinstated? 3. Should facilities be moved to more hospitable environments?

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Canadian Aerospace Firm Nearshores Its Supply Chain to Wichita Triumph Aerospace Systems - Wichita, a subsidiary of Triumph Group Inc., which currently employs nearly 180 workers, announced in late July that it plans to expand in Wichita, creating 100 new jobs and investing more than $2 million in new machining and facilities renovation during the next ﬁve years. The company recently won a new client — Viking Air Limited, a Canadian ﬁrsttier aerospace original equipment manufacturer — prompting the expansion move. Viking searched worldwide for a suitable supplier of

the fuselage assembly section of the Twin Otter Series 400, a small aircraft designed for search and rescue, border patrol, special missions, and regional commuter transport. Locations explored included Eastern Europe, Taiwan, China, and India. However, Triumph Aerospace Systems – Wichita won the contract due to the company’s ability to ramp up production quickly and supplement Viking’s Canadian manufacturing capacity. Since there is not a U.S. aircraft that competes in the same category as the Twin

Otter Series 400, the partnership provides a North American product to supply the rapidly expanding global demand. The Twin Otter Series 400 aircraft is the bestselling 19-passenger twin-engine turbo-prop aircraft available on the market today. It is designed for regional commuter transport and critical infrastructure support, and is highly sought after from customers operating in challenging environments around the globe. With increased international demand, Viking has had to increase production, requiring a key supplier

Courtesy of Viking Air

for the aircraft assembly program. Partnering with Triumph Aerospace Systems – Wichita also increases the ratio of U.S. content in the airframe. Viking believes this will help further future bids on U.S. government contracts such as the U.S. Army Golden Knights Parachute Team, who took delivery of their third Twin Otter Series 400 aircraft this past summer. AD

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The presented data should make clear that companies do not have any time buffer. New training programs are heavy investments that do not promise a quick return. Companies that are considering this approach should expect five years to pass before the program produces a skilled worker. It will take between one and two years to establish the program, and a minimum of three years for a student to complete an electrical apprenticeship or comparable program. A training program assumes there is an untapped work force near the facility that sees technical training as career advancement. Technicians may use iPads now, but great programs might not overcome the sociological forces keeping millennials in

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white-collar occupations. Some firms may outsource technical jobs to other companies and save their budgets for hiring top engineers and professionals. IT, production maintenance, facility maintenance, and HR may get outsourced to companies that can provide labor on a flexible basis. And companies only eyeing Sunbelt states fall into a long-term process for a short-term problem. Moving to the South may eventually address labor shortages, but in the absence of another response, a location change will cause companies to miss out on growing demand. Therefore, most companies should employ a bucket of techniques. To protect revenue, they need to immediately outsource technical roles their current work

force cannot fill. Over five to 10 years, some manufactures will reinstate apprenticeship programs. And finally, over longer time spans, firms will move as much manufacturing as possible into hospitable states. This perfect storm may shake the aerospace industry. Leaders must handle the challenges of human capital in order to capture the opportunities for growth.

•

Dave Russell joined Pratt & Whitney Aircraft Engines (A division of UTC, United Technologies Corp.) in 1975. During his 36-year career there, he held positions in manufacturing operations, development operations, material planning, and logistics and facilities. Upon his retirement from Pratt & Whitney in 2011, he joined Advanced Technology Services (ATS). He has helped ATS and its aerospace clients develop strategies for supporting the maintenance needs at highly technical and complex manufacturing operations found throughout the aerospace industry.

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The Automotive Industry’s New Frontier

oad transportation continues to undergo significant technological transformations as wireless technology increasingly enables vehicles to communicate with each other and with infrastructure, and advanced driver assistance systems enable warnings and limited amounts of automation. This transformation is driven by the proliferation of sensors, actuators, wireless connectivity, and artificial intelligence systems that are enabling vehicles to perceive and react to their environment in ways that human drivers cannot. Automated vehicle technology can sense dangerous situations and issue driver warnings or even actively control vehicle systems in response. Connected vehicle technology will enable vehicles to instantaneously communicate with each other and the roadway — providing information to make the transportation safer and more efficient. In addition to enabling improvements in safety, mobility, convenience, and environmental performance, automation and connectivity present major opportunities for economic development and industry growth. Automakers, auto suppliers, government agencies, universities, research institutions, and other organizations are partnering with each other to collaboratively develop and test these emerging technologies in hopes of taking advantage of the opportunities they present. Various regions are competing for new test bed and research and development (R&D) facility investments, building up technical expertise within their work forces, and attempting to establish themselves as knowledge centers in automated and connected vehicle technologies. Private-sector decision-makers seek to leverage their expertise to expand into these growing technology markets. They are interested in locating in areas near their suppliers and customers, with access to skilled labor, specialized goods, services, and facilities. Unique features — such as the existence of specialized roadside infrastructure for vehicle communications or licensing laws for automated vehicles — are also important factors to consider when considering a new investment.

States are competing to lead in connected and automated vehicle technologies.

Connected Vehicle Technology Connected vehicle technology will enable vehicles to communicate with each other and with the roadway using technologies such as dedicated short-range communications (DSRC), a wireless channel using the 5.9 GHz spectrum that was specifically designed for use in vehicular communications or cellular networks (i.e., 4G LTE connectivity). Connected vehicle systems can be embedded, as with factory-installed units, or may be

BY JOSHUA CREGGER, PROJECT MANAGER; AND ERIC PAUL DENNIS, P.E., TRANSPORTATION SYSTEMS ANALYST; CENTER FOR AUTOMOTIVE RESEARCH

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brought into the vehicle in the form of a mobile device that can be plugged into or wirelessly connected to the vehicle. Many vehicles in operation have some form of connectivity, such as GM OnStar, Ford Sync, or Chrysler Uconnect. Connected vehicle technology consists of vehicle-to-vehicle (V2V) and vehicle-toinfrastructure (V2I) communications. V2V refers to communication directly between vehicles. V2I involves communication between vehicles and the roadway, traffic signals, bridges, and other pieces of infrastructure. Vehicles equipped with V2V and V2I communication capabilities broadcast information (brake status, location, direction, speed, and other vehicle data) as they are driven, and the systems use cues such as sounds, lights, displays, and seat vibrations to alert drivers of various threats. In the United States, many states are working to deploy and test connected vehicles and infrastructure, but Michigan and California are centers of connected vehicle technology development. MICHIGAN Michigan is home to several connected vehicle infrastructure deployments. Testing site investments have been made in numerous locations, such as the U.S. Department of Transportation (USDOT) Developmental Test Environment in Oakland and Wayne counties, the Chrysler Tech Center in Auburn Hills, the Rock Financial Showplace in Novi, the Connected Vehicle Proving Center Intersection in Southfield, the Michigan International Speedway, the intersections of Telegraph Road at 12 Mile and 15 Mile, Farmington Hills, and Owosso. The most recent large testing area for connected vehicle technology is the USDOT “Safety Pilot Model Deployment,” which is located in Ann Arbor, Michigan. In August 2012, the University of Michigan Transportation Research Institute

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and its research partners began conducting the $14.9 million, USDOT-funded Connected Vehicle Safety Pilot Model Deployment field test. The test involves more than 2,800 vehicles equipped with communications devices, including cars, trucks, and transit vehicles. Testing is taking place on public roads, and roadside infrastructure has been installed at 29 different sites. Of the vehicles used for the test, 64 have integrated devices, approximately 300 vehicles have aftermarket devices, and the remaining vehicles are equipped with simple transmission-only devices that will broadcast information. Several major automakers have provided vehicles with integrated devices, including Ford, General Motors, Honda, Hyundai-Kia, Mercedes-Benz, Nissan, Toyota, and Volkswagen. The Safety Pilot field test is significant on a global scale, because previous connected vehicle studies have collected data over shorter periods of time, involved fewer vehicles, and used staged scenarios rather than observing normal driving conditions. The test is also important because its results will be used to inform a regulatory agency decision concerning a mandate of connected vehicle technology on new vehicles sold within the United States. Companies that are heavily involved in the development of connected vehicle technology and that have Michigan facilities, such as Delphi, DENSO, and Visteon, will benefit from successful deployment of connected vehicles in Michigan. Continued growth in the connected vehicle technology market could lead to future expansions for these companies. Michigan’s involvement in testing and deployment of connected vehicle technology has also attracted new companies to the region, such as Savari Networks and Cohda Wireless.

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Advanced Training for Today’s Auto and Aerospace Workers Collectively, auto manufacturing and aerospace companies in Alabama employ more than 120,000 people. The list of companies includes major aerospace and automotive industry players such as Airbus, Boeing, GE Aviation, LockheedMartin, Mercedes-Benz, Hyundai, and Honda. What makes these companies choose Alabama? According to Airbus Americas Chairman Allan McArtor, it was the work force: “(Airbus) was encouraged by the auto industry’s success in Alabama because its manufacturing aspect is a trained skill similar to that of aircraft assembly.” When it comes to training workers, the state relies upon AIDT, Alabama’s work force development agency. While AIDT is responsible for work force training for new and expanding companies, it also runs several industry-speciﬁc training facilities. One of the more unique facilities is the Alabama Robotic Technology Park (RTP), which focuses on robotics and automation technologies that are essential to the auto and aerospace industries. Classes at the RTP are offered at no cost to Alabama companies; ﬁrms outside the state can utilize the RTP for a fee.

RTP consists of three individual training facilities targeted to speciﬁc industry needs: • Phase I — The Robotic Maintenance Training center houses an industry-training program where technicians are trained to work on robotic machinery. • Phase II — The Advanced Technology Research and Development Center is used for the purpose of research, development, and testing of leading-edge robotics used for defense projects, space exploration, and manufacturing processes.

• Phase III — The Integration, Entrepreneurial, and Paint/Dispense Training Center (in development) will allow companies to build and adapt automation for new and existing manufacturing processes. The facility will allow companies to train in manual paint spraying techniques and robotic dispense training. Other AIDT industry-specific training facilities include the AIDT Maritime Training Center that trains for specific needs of the Maritime industry and The Alabama Center for Advanced Woodworking Technology, which offers work force training specific to woodworking industries. AIDT is a division of the Alabama Department of Commerce. It promotes economic growth through customized work force training.

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Conceptual image of vehicle-to-vehicle communications (USDOT)

using connected vehicle technology. To the CALIFORNIA north at Richmond Field Station is the Thanks to its strong university system PATH Test Intersection, which has a traffic and Silicon Valley heritage, California is a light equipped with a DSRC unit. In the high-tech research hub and conducts a sigSan Diego area, the USDOT has funded a nificant amount of research into intelligent deployment along the I-15 corridor for its transportation systems. The California Integrated Corridor Department of Management, which Transportation will be used to ana(Caltrans) and lyze various comCalifornia Partners for munications techAdvanced nologies for conTransportation Michigan and nected public transTechnology (PATH), portation systems. which is part of the California are In addition to University of installing new DSRC California-Berkeley, are centers of infrastructure for leading the way on a connected vehicle test beds, California variety of efforts, with projects, such as aid from several pritechnology Mobile Millennium vate-sector entities, development. and SAFE TRIP-21, including a handful of have used existing automotive R&D facilicellular infrastructies located in Silicon ture for vehicle communications testing. Valley. Additionally, Stanford University has Caltrans and PATH have also partnered with a strong research program with advanced other organizations on connected vehicle vehicle technology testing facilities (e.g., projects outside of California, such as work the Center for Automotive Research at on speed management and work zones with Stanford and the Volkswagen Automotive the Western Transportation Institute and Innovation Lab). work on smart traffic signals with the As with Michigan, California is home to University of Arizona. several connected vehicle infrastructure In addition to public-sector and unideployments. Near Palo Alto, along the versity activities, California is also US101 and State Route 82 corridor, is the involved with private-sector connected VII California Test Bed, which contains sevvehicle activities. The state is home to several DSRC-based roadside units. At the coreral automotive electronics research units ner of 5th Avenue and El Camino Real is an belonging to major automotive manufacintersection installation that was created for turers. This includes facilities operated by the USDOT Cooperative Intersection BMW, Daimler, and Volkswagen North Collision Avoidance Systems (CICAS) projAmerica. ect, which examined left-turn assistance

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Automated Vehicle Technology Automated vehicle technologies use sensor inputs such as video cameras, radar, and lidar (which is a laser-based ranging system) along with computing power and detailed digital maps to issue warnings or actively react to hazards. Several automated features already exist in many vehicles sold today, such as automated emergency braking, lanekeep assist systems, adaptive cruise control, and active parking assistance. Automakers may soon offer vehicles that combine some of these existing systems, allowing a vehicle’s speed, steering, and brakes to be automatically controlled. For instance, Cadillac is currently testing its “Super Cruise” technology, which is capable of semi-automated driving on highways. Ford, Mercedes, and Volvo are each testing similar “Traffic-Jam Assist” systems, which will be capable of semiautomated driving in low-speed, stop-andgo conditions. The version of the technology developed by Mercedes, known as the “Stop & Go Pilot,” will debut later this year on the 2014 S-Class. The final frontier of automated vehicle technology is the self-driving, fully automated vehicle capable of operating on the road in mixed-traffic. Despite the complexity involved, multiple stakeholders are working to develop such vehicles. Google is testing fully automated vehicles on public roads in Nevada and California, and has logged hundreds of thousands of miles in its automated vehicles. Traditional automakers such as Volkswagen and Toyota are also developing advanced automated functionality. Additionally, high-tech firms

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such as Bosch, TRW, Delphi, and others are developing advanced technologies both in cooperation with, and independent from, the automakers. By the end of 2012, three states (Nevada, Florida, and California) and the District of Columbia had passed laws addressing fully automated vehicles. Several other states throughout the country have considered similar legislation, including Michigan. In May, the National Highway Traffic Safety Administration released guidelines for states issuing licenses for testing fully automated vehicles on public roads. Current Michigan law allows many automakers and Tier-1 suppliers to operate proto-type automated vehicles with manufacturer license plates on public roads, and some have already been involved in such testing. New legislation could further clarify rules and broaden eligibility to include more automotive suppliers as well as upfitters (e.g., Google). The Michigan Senate Transportation Committee approved a bill in March 2013, but it has yet to pass the House. A revised version of the bill may be considered in the Michigan legislature as early as September 2013.

SOUTH CAROLINA stands apart by providing a comprehensive workforce solution from entry level training through advanced skill levels. Our internationally recognized readySC™ and Apprenticeship Carolina™ programs come together to successfully meet your specific workforce needs. Customized recruiting strategies

Technology Leadership and Location Advantages

Customer-specific entry level skills training

Technology leadership has become an important factor in location decisions in many industries. While many states are vying for investments related to connected and automated vehicle technologies, such as new test beds and R&D centers, Michigan and California have emerged as leaders in these fields. Michigan’s role as the largest automotive R&D hub in North America, as well as the presences of large automakers and many Tier-1 suppliers in the state, has given it many assets to leverage in attracting new investments. Similarly, California’s Silicon Valley technology cluster and its existing automaker R&D facilities have helped it position itself as an automotive technology center. Both states have also benefited from strong connections between their large research universities and industry. For automakers and automotive suppliers, there are several advantages to locating facilities in states that have shown leadership in connected and automated technologies. Such locations have a work force with skills and training related to those technologies, allowing firms to take advantage of a larger and more specialized pool of workers. Suppliers benefit from a larger pool of potential customers for their products; and customers, in turn, benefit from a more accessible and competitive supplier base, as well as improved access to specialized goods, services, and facilities. Furthermore companies can benefit from shared resources, such as public testing and demonstration centers or specialized roadside infrastructure installed on public roads.

Specialized advanced skills training Nationally-recognized apprenticeship programs

www.readysc.org 2013 | ••• AUTO/AERO SITE GUIDE

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Cregger is currently a project manager •at Joshua CAR, where his work focuses on economic and public policy analysis as well as developments in connected vehicle technology. Within CAR, he is involved with both the Sustainability and Economic Development Strategies (SEDS) Group and the Transportation Systems Analysis (TSA) Group. Eric Paul Dennis joined the TSA Group at CAR in May of 2012 as a transportation systems analyst. He achieved licensure as a professional engineer (P.E.) in the state of Michigan in 2011. The Center for Automotive Research (CAR) is a nonprofit organization based in Ann Arbor, Michigan, with more than 40 years of experience in leading industry research and events. CAR conducts industry research, develops new methodologies, forecasts industry trends, advises on public policy, and sponsors multi-stakeholder communication forums. CAR is focused on a wide variety of important trends and significant issues related to the future direction of the automotive industry at the international, federal, state and local levels.

• •

Conceptual image of vehicle-to-vehicle and vehicle-to-infrastructure communications (USDOT)

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The Auto Industry: In Search of New Talent

our years ago, during the depths of the Great Recession, American auto industry employment fell by nearly a quarter of a million. Two of the Detroit automakers and scores of suppliers filed for bankruptcy. The industry was in crisis, and virtually every auto plant in America curtailed production. Today, the auto industry is in full recovery mode. The dollar volume of the U.S. light vehicle market has recovered completely, and unit sales are fast approaching pre-recession levels. Automakers and suppliers have returned to profitability, and many have announced new investments and expansions since 2009. On the employment side, the industry has added over 156,000 jobs since June 2009.1 Productivity in the auto industry is at an all-time high — roughly 40 percent higher than it was in 2000. Automaker and supplier companies are finding new ways to increase production in existing facilities by implementing operational improvements, relying on overtime and three-shift and three-crew operations, and making targeted investments to overcome facility bottlenecks. These improvements have made America a competitive place to make light vehicles and parts. The United States has attracted $29 billion in new automotive investment over the past three years2, and virtually every automaker that sells vehicles here has announced plans to expand in the United States.

Today’s automobile production line requires highly skilled, flexible workers who can rapidly adjust to change.

TODAY, THE AUTO INDUSTRY IN AMERICA — |• Employs nearly 680,000 people3 |• Produces over $522 billion in shipments4 |• Exports over $128 billion in motor vehicles and parts5 |• Supports $564 billion in U.S. automotive sales6 |• Supports $173 billion in repairs and service revenue7

|• Provides $92 billion in state tax revenues (13 percent of total) in the U.S. (2010)8 |• Has a jobs multiplier of 10 — one of the highest of any industry9 |• Accounts for 77 percent of the R&D expenditures in America10

Despite restructurings and benefit cuts caused by the Great Recession, automakers still pay some of the highest wages in manufacturing, and the gap between the Detroit automakers and their European and Asian counterparts has narrowed considerably. GM, Ford, and Chrysler have a mix of lower-cost entry-level new hires and veteran workers, and the companies’ average hourly labor costs (wages + benefits) range from $52 to $60 an hour. Labor costs for the European and Asian automakers range from $40 to $62 an hour.11 While automotive employment is not likely to reach pre-recession levels, there are BY DENNIS CUNEO, MANAGING PARTNER, FISHER

PHILLIPS LLP, WASHINGTON, D.C.;

AND KRISTIN DZICZEK, DIRECTOR, LABOR & INDUSTRY GROUP, CENTER FOR AUTOMOTIVE RESEARCH

still substantial employment opportunities. As illustrated in the accompanying chart, the industry will add 30,000 new jobs over the next two years. Other job opportunities will be created by both the influx of new technologies in the automotive industry, and the expected retirement of tens of thousands of auto workers over the next decade. The industry will be hiring new engineers, technicians, and factory workers — and the skills needed for many of these jobs have changed.

The Skills Gap Today’s automobile production line requires highly skilled, flexible workers who can rapidly adjust to change. In years past, the primary qualification for working on an assembly line was manual dexterity. Today, companies are looking for people who can work in teams, take initiative, and handle multiple jobs. The stereotype of an unskilled auto assembly line worker, who “checked his (or her) brains at the door,” no longer applies. There is a growing gap between incumbent worker skills and those that will be needed in the future. The Center for Automotive Research regularly interviews human resource executives at the automakers and major suppliers, and recently asked how the 2008–09 auto industry downturn changed their approach to hiring and retaining workers. Here is a summary of the results: |• There is a greater emphasis on “soft skills.” Production line workers are expected to be problem solvers, with the ability to work in collaborative settings. They must be able to understand the “big picture,” and willing to work for the common success of the enterprise. |• Production workers will be given greater responsibility for continuous improvement and routine maintenance. |• New technologies in powertrain, joining and assembly, and electronics, coupled with faster product cadence, will drive skills changes. 2013 | ••• AUTO/AERO SITE GUIDE

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|• In skilled trades, we will see fewer classifications, more cross-skilling, and more skill needs in electrical, electronics, and software areas. Recent surveys of manufacturers show

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IN UNITS

a “skills gap,” with nearly all auto executives concerned about the pipeline of future workers and their ability to work on the modern manufacturing floor. The

skills gap is particularly acute among the skilled trades. Newly opened auto plants in the South often have to import skilled tradespeople from the Midwest, and the population of skilled tradespeople in Midwestern plants is rapidly aging. A recent survey by Deloitte and the Manufacturing Institute found that 74 percent of U.S. manufacturers reported that work force shortages or skill deficiencies in the skilled production work force (machinists, operators, craft workers, distributors, technicians) have had a significant negative impact on their company’s ability to expand operations and improve productivity. Results from that same survey showed that 42 percent of manufacturers face shortages or skill deficiencies in the production support work force (industrial engineers, manufacturing engineers, planners) that have had significant

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negative impact on their businesses.12 The skills gap doesn’t end with blue-collar workers. For example, Ford Motor recently announced it will add 3,000 whitecollar jobs to meet the new high-tech demands in the auto industry. The company has expressed concern about finding enough workers to fill those spots. Most of those new hires will be engineers and IT specialists needed to design the next generation of vehicles — vehicles that are being designed with infotainment systems, electronic controls, and safety systems.

Role of Human Resources There are six critical factors that play into automotive site selection: 1. High quality labor within a reasonable distance 2. Educational infrastructure capable of producing future skilled workers 3. Leading-edge research and development 4. Comprehensive transportation networks 5. Access to supply base and customers 6. Requisite infrastructure (either in existence or to be completed shortly) Other factors such as taxes, utility rates, and incentives are also important, but they can be negotiated –— these six factors are

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“set” and not easily remedied in the short run. The first three factors relate to human resources and educational assets — and any state or region that seeks to maintain or enhance its automotive footprint would be well-advised to assess its work force skills and educational assets and take the necessary actions to improve them. The Center for Automotive Research is engaged in two programs that address these issues: the Automotive Communities Program (ACP) in the Great Lake States and Southern Automotive Research Agenda (SARA) that was recently initiated in the South. The ACP was initiated over 13 years ago, and concentrates on the long-term viability and sustainability of the auto industry and the communities in the Great Lakes States, which are the historic home of the auto industry. SARA was initiated in 2013 in response to needs expressed by several state economic development agencies in the South. SARA will examine the critical success factors necessary for continued growth of automotive investment in the South, including the skills of the work force. The results will identify common challenges and opportunities for action that are consistent

throughout the region, including work force development and engagement of education and research institutions. The study will identify synergistic opportunities to align the region’s manufacturers and build stronger ties among industry, academia, and economic development organizations. In sum, although the auto industry is in a hiring and growth mode, companies are struggling to find the requisite skilled work force. Those communities and regions that can supply that talent will have a significant advantage in retaining and attracting automotive investment. Notes 1 U.S. Department of Labor, Bureau of Labor Statistics, Current Employment Survey, NAICS 3361 and 3363 2 Center for Automotive Research, Book of Deals, 2013 3 U.S. Department of Labor, Bureau of Labor Statistics, Current Employment Survey, NAICS 3361 and 3363 4 U.S. Department of Commerce, Manufacturers’ Shipments, Inventories, and Orders Survey 5 U.S. Department of Commerce, Foreign Trade Division, trade.gov 6 Center for Automotive Research estimates 7 Center for Automotive Research estimates 8 Center for Automotive Research, Assessment of Tax Revenue Generated by the Automotive Sector, April 2012 9 Center for Automotive Research, Contribution of the Automotive Industry to the Economies of All Fifty States and the United States, April 2010 10 Center for Automotive Research estimates based on National Science Foundation Science and Engineering Indicators 2012 11 Center for Automotive Research 12 Boiling Point: The Skills Gap in U.S. Manufacturing, Deloitte and the Manufacturing Institute, 2011

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KANSAS

SPONSORS ALABAMA

OHIO

GREATER WICHITA ECONOMIC Wichita, DEVELOPMENT COALITION Kansas, ranked #1 by Brookings Institute for manufacturing jobs and a growing high-tech cluster, now has several new real estate offerings. From a half million square feet for manufacturing, 600,000 square feet of prime office space, or one million square feet of aviation hangars, or anything in between, look no further than Greater Wichita’s LocationScout real estate portal: www.gwedc.org/locationscout. Page A35

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AIDT The Alabama Robotic Technology Park is Alabama’s premier training center tasked with providing highly advanced training specifically for robotics and automation technologies. The RTP consists of three individual training facilities — each targeted to a specific industry need: The Robotics Maintenance Center, the Advanced Technology Research and Development Center, and the Integration, Entrepreneurial and Paint/Dispense Training Center. Page A17 RICK MARONEY Alabama Robotic Technology Park 256-642-2600 info@alabamartp.org www.alabamartp.org

TIM CHASE CEcD, FM, Pres. Greater Wichita Economic Development Coalition 316-265-7771 Fax: 316-265-7502 www.gwedc.org

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GREG CANFIELD Secretary of Commerce Alabama Dept. of Commerce 800-248-0033 or 334-242-0400 Gerri.Miller@commerce.alabama.gov www.madeinalabama.com

FLORIDA

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FLORIDA’S SPACE COAST From NASA to commercial space, Florida’s Space Coast has been — and remains — America’s high-tech titan. And we go beyond space, to communications, electronics, security, and high-tech manufacturing — all boosted by our skilled work force, attractive tax code, competitive wages, and pro-business government. Page A13 GREGORY J. WEINER, CEcD Senior Director, Business Development Economic Development Commission of Florida’s Space Coast 321-638-2000 • Fax: 321-633-4200 gweiner@SpaceCoastEDC.org www.SpaceCoastEDC.org

INDIANA MUNCIE-DELAWARE COUNTY ECONOMIC The DEVELOPMENT ALLIANCE Muncie-Delaware County Economic Development Alliance (EDA) represents a consortium of economic development entities dedicated to the growth and prosperity of Muncie-Delaware County, Indiana. Services include site location assistance, retention and expansion of existing businesses, and customized research for business prospects considering Muncie-Delaware County. Page A32

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TERRY MURPHY, CECD, VP, Economic Development Muncie-Delaware County Economic Development Alliance 765-751-9104 • Fax: 765-751-9151 tmurphy@muncie.com www.muncie.com

JOBS OHIO 614-224-6446 contact@jobsohio.com www.jobs-ohio.com

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Erik Dunnigan, Comm. Business Development Kentucky Cabinet for Economic Development 502-564-7140 Econdev@ky.gov www.ThinkKentucky.com

MIDAMERICA INDUSTRIAL PARK Mid-America, Oklahoma’s largest industrial park, is located at the “America’s Crossroads” and offers a robust infrastructure, shovel-ready sites, exceptional incentives, and two on-site training centers at no cost. Home to E.I. duPont, Siemens, Google, and other Fortune 500 companies. Page A23 DON BERGER, Mktg. Dir. MidAmerica Industrial Park 918-825-3500 888-627-3500 dberger@maip.com www.maip.com

SOUTH CAROLINA

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MISSISSIPPI MISSISSIPPI DEVELOPMENT AUTHORITY Mississippi has a long history of excellence in the aerospace industry. The state is home to global aerospace leaders who have found a highly skilled work force propelling them to success. Mississippians proudly produces everything from helicopters to unmanned aerial systems. To find out more about Mississippi’s growing aerospace sector, visit our website. Page A15 MARLO DORSEY Chief Marketing Officer Mississippi Development Authority 601-359-3962 mdorsey@mississippi.org www.mississippi.org www.aerospacemississippi.org

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NEW HAMPSHIRE ROCHESTER, NEW HAMPSHIRE, Be the ECONOMIC DEVELOPMENT center of the action in the Seacoast's Composite Material and Advanced Manufacturing Region. More than 300 firms enjoy a business climate ranked 7th in the nation, 2nd lowest business taxes, and 7,000+ STEM graduates adding to a work force of 130,350. Confidential assistance with site selection, incentives, financing, and permits is available. Page A11

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KAREN POLLARD, Deputy City Mgr./Dir. Community Development City of Rochester Economic Development 603-335-7522 • Fax: 603-335-7597 karen.pollard@rochesternh.net www.ThinkRochester.biz

Dyersburg State Community College, Bethel University, and several technology-training Page A30 centers. BLAKE SWAGGART, Regional Dir. Northwest Tennessee ECD BlakeSwaggart@tn.gov www.northwesttn.com Michael M. Philpot, CEcD, Exec. Dir. West Tennessee Industrial Association 731-668-4300 mphilpot@wtia.org www.wtia.org

TEXAS

••

KENTUCKY CABINET FOR ECONOMIC Producing more than DEVELOPMENT one million vehicles last year alone, Kentucky is quickly becoming the epicenter of advanced automotive manufacturing. Anchoring the center of “auto alley,” our four auto assembly plants and vast network of suppliers provide a thriving, integrated automotive ecosystem, attracting $3.5 billion in new investment in recent years. Come experience for yourself what makes Kentucky's horsepower stronger than ever. Page A36

AUTO/AERO SITE GUIDE ••• | 2013

••

JOBS OHIO Ohio is strategically located in the heart of the America’s manufacturing renaissance. The state produced nearly 1.4 million automobiles in 2012 and is the number one U.S. aerospace supplier state to both Airbus and Boeing. Ohio’s strength in materials and its engineering innovations make it a leader in the automotive, aerospace, and aviation industries. Page A21

OKLAHOMA

KENTUCKY

ALABAMA DEPARTMENT OF COMMERCE The Alabama Department of Commerce helps bring jobs and investment to the state by recruiting some of the finest companies in the world to locate within the state’s borders and by helping companies located here expand. Call us to find out how we can help your company grow. Page A7

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READYSC™ South Carolina provides comprehensive work force solutions from entry-level training through advanced skill levels. Our internationally recognized readySC™ and Apprenticeship Carolina™ programs come together to successfully meet each organization’s work force needs. ReadySC™ delivers customized recruitment and training solutions for companies creating new jobs in the state. Apprenticeship Carolina™ helps client organizations create demand-driven registered apprenticeship programs. Page A29 SUSAN PRETULAK, VP Economic Development SC Technical College System 803/896-5276 pretulaks@sctechsystem.edu www.readysc.org

••

South Carolina’s SANTEE COOPER largest power producer provides electricity to two million people and businesses directly and through the state’s 20 electric cooperatives; partnering low-cost, reliable power with our state’s attractive tax base, relocation incentives, and an unparalleled quality of life. Page A24 GEORGE HAYGOOD Santee Cooper 800-833-7797 george.haygood@ santeecooper.com www.scprimesite.com

TENNESSEE

••

NORTHWEST TENNESSEE ECD The Northwest Tennessee nine-county region has a population of over 250,000 and a labor force of 116,000. Located near the geographic center of the U.S. population, Northwest Tennessee offers commercial navigation on both the Mississippi and Tennessee rivers, anchored by the newly constructed Port of Cates Landing, a multimodal port on the Mississippi River. Higher education is provided by the University of Tennessee-Martin,

DALLAS/FORT WORTH INTERNATIONAL Dallas/Fort Worth International AIRPORT Airport is the catalyst for turning the DFW area into one of the nation’s most prosperous economies, with many Fortune 500 companies. The airport is one of the busiest airports in the world offering over 18,000 acres of land with over 5,200 acres available for commercial use. Page A2

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PAUL HENDERSHOT, Mgr., Business Development Dallas Fort Worth International Airport Commercial Development Department 972-973-4645 Phendershot@dfwairport.com www.dfwairport.com

O N TA R I O , C A N A D A

••

CITY OF WOODSTOCK Woodstock, Ontario, is centrally located in the heart of southern Ontario. Situated at the crossroads of super-highways 401 and 403, we enjoy the best ground transportation system in the province. With our relaxed and affordable lifestyle you will see why your business belongs at the Crossroads! Page A19 Len Magyar, Dev. Comm. City of Woodstock 519-539-2382 x 2112 Fax: 519-539-3275 lmagyar@ cityofwoodstock.ca www.cometothecrossroads.com www.cityofwoodstock.ca YYB NORTH BAY AIRPORT INDUSTRIAL Explore your developBUSINESS PARK ment opportunities at YYB North Bay, a fully serviced airport industrial business park featuring 600+ acres of municipally owned airside and groundside lands for sale or lease on a 10,000foot runway capable of landing almost anything that flies! An excellent development incentive package is available. Call us today. Page A25

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STEVE MCARTHUR, Economic Development Officer YYB North Bay Airport Industrial Business Park 800-465-1882 x2431 Fax: 705-474-4493 invest@yyb.ca www.yyb.ca/shoptodock

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