Many of the companies that receive an award in our Community Impact section of the 6th Annual CiCi Awards are making an extremely large capital investment in their new or expansion project, which may lead you to believe there is a mistake, that they belong in the investment category.
Wilh. Schulz GMBH, for example, is investing $300 million to locate a new manufacturing facility in Tunica County, Mississippi. That’s quite a bit of money, but to a county that has just over 10,000 residents, and has never had a manufacturing company locate there, the 500 jobs this project will generate will have a tremendous impact and be felt throughout the community.
Job creation is the basis for many of the awards in the Community Impact category. In today’s economy new and retained jobs are important in all communities, but in some areas, were it not for the companies we honor here, hope for any positive quality of life was dim. One award winning company’s expansion project in North Carolina will bring more than 300 jobs to three counties that recently experienced 24 layoff events and 42 closings, affecting 5,591 people. In West Virginia, Macy’s location of an e-commerce fulfillment center there that will create 1,200 full- and part-time jobs and 700 temporary seasonal positions on a yearly basis is beyond imagination. "It’s hard to comprehend the impact of a project of this magnitude," said an economic development executive. "This is like winning the Super Bowl.”
The impact of indirect employment is considered as well. Facebook’s data center construction will create 250 construction jobs over 18 months; INEOS, 150 over two years; and in Louisiana, where two separate projects will create 917 new direct jobs, an additional 1,906 indirect jobs are expected to be generated as well.
The psychological impact of new construction, expansion and retention goes beyond measure. It was said, for example, that Allstate’s decision to locate in Pocatello, Idaho, has created palpable feelings of hope among residents and optimism for the future that has not been seen for some time.
For six Community Impact winners, the infusion of new jobs and capital has come from an unlikely source: foreign-based companies. Two German companies are locating a manufacturing plant in the U.S. for the first time, two Canadian companies chose the U.S. for expansion, a U.K company is actually relocating to New Orleans, and perhaps most notable, a company with Chinese ties is bringing its operations to Missouri. Commenting on this reversal of the trend of U.S. companies offshoring to China, the governor of Missouri said, “At a time when too many American companies are shuttering their plants and moving jobs overseas, we are thrilled to have a global company creating hundreds of good manufacturing jobs right here.”
Finally, a number of Community Impact winners are playing a big role in expanding communities’ horizons by diversifying their economies. An example of this can be found in Fort Payne, Alabama, where the loss of its textile manufacturing industry is being replaced by the manufacture of parts crucial to a broad range of automotive manufacturers even beyond its borders. In Flint, Michigan, where Diplomat Specialty Pharmacy is replacing the loss of a giant auto manufacturer with up to 4,000 well-paying jobs in nursing, pharmacy, information technology, and call-center operations, the move could lead to the creation of a new biotechnology corridor. The president and cofounder of the company described it as an opportunity to reinvent and revitalize a community.
The story of each Community Impact winner follows.
Rutherford County, North Carolina
When it constructs its new data center in Rutherford County, North Carolina, in which it will invest $450 million, Facebook will have an immediate impact on the community by becoming the county’s sixth-largest nonresidential taxpayer, even after incentives are factored in. And it doesn’t end there. Facebook’s infusion of new jobs as a result of its construction project will have a welcome reverse-impact on the county’s unemployment rate. As of October 2010, the unemployment rate was 13.2 percent, significantly higher that the state’s average of 9.1 percent.
The new project is expected to create 250 construction and mechanical jobs during the projected 18-month construction period. When the data center is completed it is expected to employ between 35 and 45 full-time and contract workers. Depending on business conditions, expansions may be possible in the future.
In keeping with North Carolina’s growing reputation for environmental leadership, the building will be designed to LEED gold standards. In addition, Facebook will employ innovative cooling and power management technologies to make the facility one of the most energy-efficient data centers in the United States. Facebook is also a leading pioneer in efficient software and the facility will use technologies developed by Facebook to rely on fewer than half the computing power (and related energy consumption) that a similar data center would have required only a few years ago.
Perhaps what is most important to the community is what can’t be quantified—the cache that follows such a huge brand name—no one doesn’t know Facebook, the social media network that connects 500 million. It also adds new muscle to North Carolina’s reputation for attracting Internet giants that already include Google and Apple.
Wilh. Schulz GmbH
Tunica County, Mississippi
Tunica County, located in the Mississippi Delta, has just over 10,000 residents, and has never had a manufacturing company locate there. When officials from German firm Wilh. Schulz GmbH, or Schulz, announced the company will invest $300 million to locate an advanced pipe manufacturing facility in Tunica County, the impact was felt throughout the community as it was realized that the project will create 500 new jobs for area workers over the next five years. Not only did Schulz choose a county that had never had a manufacturing plant before, but the facility marks Schulz’s first North American production plant. Furthermore, the company considered 300 locations around the world before deciding to locate in Tunica County.
Headquartered in Krefeld, Germany, Schulz was established in 1945 and is a recognized leader in the industry, specializing in serving the up- and downstream oil and gas sectors and the nuclear and fossil fuel power plant industry. Schulz’s Mississippi division, known as Schulz Xtruded Products, will produce seamless metallurgical bonded pipe for the oil and gas industries using its breakthrough extrusion process exclusive to its Tunica County location. "The United States in general and Mississippi in particular is the perfect location for our 'crown investment' supplying the global markets," said Rainer Floeth, managing director and CFO of Schulz.
"In today's highly competitive environment for new jobs, we are extremely excited about Schulz's decision to select Mississippi," said Gray Swoope, executive director of the Mississippi Development Authority. "Schulz's new facility in Tunica County will employ state-of-the-art pipe manufacturing processes, and the company found the skilled and dedicated workforce necessary to make these operations a success here in Mississippi.”
Martinsburg, West Virginia
Retail giant Macy’s Inc. plans to build a new 1.3 million-square-foot e-commerce fulfillment center in Martinsburg, West Virginia, in spring 2011, with operations beginning in April 2012 and order shipments beginning in summer 2012. The fulfillment center will support Macy’s growing online business. When fully operational, the new facility is expected to create 1,200 full- and part-time jobs and 700 temporary seasonal associates are expected to be hired each year to handle a significantly higher level of online orders from customers during the holiday shopping season.
"It’s hard to comprehend the impact of a project of this magnitude," said Stephen Christian, executive director of the Berkeley County Development Authority since 2008. "This is like winning the Super Bowl. Macy’s could single-handedly pull Berkeley County out of the recession. It’s not just the 1,200 new jobs. Everything from local retail sales all the way up to the housing market should see the benefit of this project. These are good jobs for our people, and because the people who'll be working here are living here already, we're not going to see much if any additional load put on schools or public safety. There's no downside to this for us."
Terry J. Lundgren, chairman, president and chief executive officer of Macy’s Inc. reports, “Our Internet sales continue to grow rapidly as part of the omnichannel strategy at Macy’s and Bloomingdale’s. The new Martinsburg fulfillment center will represent a significant expansion of our online capacity, and will be used in particular to prepare and ship orders to macys.com customers in Northeast and Middle Atlantic states. This center will include the very latest material handling equipment and warehouse management systems so we can fill orders quickly and efficiently.”
Caterpillar Inc. selected the city of Victoria, Texas, as the location for its new state-of-the-art hydraulic excavator manufacturing facility. The 600,000-square-foot manufacturing operation is expected to begin production in mid-2012. Once fully operational, it will triple the current capacity of hydraulic excavators produced by the company in the United States, and double the number of Caterpillar employees in the U.S. making excavators. The decision to increase manufacturing capacity and employment in the United States is part of Caterpillar's long-term strategic initiative to develop the appropriate global footprint to competitively produce hydraulic excavators.
For Victoria, an East Texas town near the Gulf of Mexico, 130 miles south of Houston, a town with a population of 60,000, the infusion of this many jobs, especially jobs of the caliber offered by Caterpillar, will have a large impact. A local newspaper commented, “On a day of further jobless worry and continued stock-market losses, Caterpillar showed up to assure the American citizenry that the big manufacturer was doing its part, at least, to save the day.”
The mayor, Will Armstrong, said, "Victoria is proud to play a role in Caterpillar's plans to expand its hydraulic excavator manufacturing in the United States, while at the same time Caterpillar will be an important part of the work to reinvent Victoria." Even the local judge, Don Pozzi, said, "I am certainly happy that Victoria County is positioned to help a project that will put local people to work."
A Caterpillar vice president declared, “Based on our comprehensive review of possible locations, Victoria's proximity to our supply base, access to ports and other transportation, as well as the positive business climate in Texas made this the ideal site for this project.”
INEOS New Planet BioEnergy
Indian River, Florida
INEOS Bio and its joint venture partner, NPE, Florida, are investing millions of dollars to bring much-needed clean energy jobs to the Treasure Coast region of Florida. The total project investment will be more than $100 million dollars and will create 150 construction jobs over the next two years and 55 full-time jobs with an average annual wage of $45,000. This is welcome news to the community that recently has been reeling from layoffs at the nearby Piper Aircraft facility. Not only will this have an impact on job creation, the work at the facility will have a global “green” impact.
The Indian River County BioEnergy Center, near Vero Beach, Florida, will produce eight million gallons of third-generation bioethanol per year from renewable biomass including yard, wood and vegetative wastes. The facility will also generate clean renewable power for export to the local market. This breakthrough technology has been under development for over 25 years and will substantially reduce net greenhouse gas emissions from cars and energy generation, imparting a global impact. Not only does it reduce the amount of waste going to landfills, but it also breaks the link between food crops and bioethanol production. The ability to make fuel from agricultural, yard, and wood waste opens up an exciting new avenue to achieving sustainable energy independence.
The U.S. Department of Energy (DOE) in December 2009 announced the provision of a $50 million dollar grant for the facility. W.L. “Tex” Carter, president of New Planet Energy, said, “We are grateful to the U.S. Department of Energy for its endorsement of this world-changing technology. We intend to move forward to achieve full commercial production at the facility by late 2011.”
Harley Davidson Motor Company, Inc.
In an effort to remain competitive, Harley Davidson Motor Company Inc. is restructuring and consolidating its York, Pennsylvania, manufacturing operations, investing $90 million in the company’s largest manufacturing facility. Although the restructuring will involve job loss at the plant, Pennsylvania faced a serious risk of losing the company altogether. In May 2009 the company announced that it needed to significantly reduce its per-unit production costs at the York plant or it would be forced to relocate those operations to another state. The consolidation will include ceasing operations at an older building on the York campus and moving all operations under one roof where the company will focus on motorcycle assembly, metal fabrication and paint. When fully implemented in 2012, the restructuring is expected to generate about $100 million in annual operating savings, according to Harley. Despite job reductions, the state’s investment secured the retention of over 1,000 high-paying manufacturing jobs (average wage, $28-plus per hour).
A new labor agreement is cited as the key to allowing all of this to happen. Members of International Association of Machinists and Aerospace Workers Local 175 voted in favor of a new seven-year contract that includes a reduction in job classifications, a cut in the average wage and a maximum of four weeks of vacation time, depending on seniority. Also, Harley said it will reduce the number of hourly workers from about 1,950 to about 1,000. The workforce will comprise about 700-800 full-time unionized production and maintenance employees, according to Harley, and on an annualized basis, about 200 to 300 unionized "casual" or “as-needed” employees. “The new labor agreement is critical to making that [revitalization] happen," Harley President and CEO Keith Wandell said.
IMO International GmbH
Dorchester County, South Carolina
Headquartered in the South of Germany, family-owned IMO International GmbH has been named one of “Bavaria’s Top 50” companies and listed among Europe’s 500 fastest-growing companies for several years in a row. With over 20 years’ experience in the alternative energy sector, IMO serves customers worldwide, including several of the top wind turbine manufacturers. In seeking its first U.S. home, IMO executives were focused on locations within three hours of a major seaport, which had access to a major airport and had an existing 40,000-square-foot facility. They also sought a region with technically trained and academically prepared workers. It would be quite a coup to land this company’s first U.S. manufacturing facility. There was an extensive site selection process, in which Dorchester County, South Carolina, was up against multiple locations in the United States. Nevertheless, on March 9, 2010, IMO announced the decision to locate its first U.S. manufacturing facility in Dorchester County. The IMO Group is one of the world’s leading manufacturers of slewing rings and slew drives, and an expert in the machine and plant manufacturing sector. The South Carolina operation will be called IMO USA Corp. and will ultimately employ 190 workers and generate a $47 million capital investment.
The company will utilize the Port of Charleston for both importing materials and exporting products and will service multiple markets from its Dorchester County operation including the U.S., Europe and Asia.
“South Carolina is well known throughout Germany as a good place to do business,” said Rüdiger Unverzagt, CEO of IMO USA Corp. “Charleston’s strong port coupled with its strengthening profile in alternative energy gave us complete confidence in our decision to come here.”
We are all very familiar with U.S. companies moving their operations off to China, but when was the last time you heard of a Chinese company moving its operations to the U.S.? Well, that’s what’s happening in Moberly, Missouri. Mamtek International, producer of sugar substitute sucralose, plans to base manufacturing operations in a facility owned by the city of Moberly, invest $46 million into the local economy, and create 612 new jobs in Moberly. Uniquely, this will be the only manufacturing operation worldwide producing sucralose that is “Made in the U.S.”
Mamtek, a multinational company with Chinese and American ownership and leadership, worked with Midwest U.S.-China Association (MWCA) to explore potential sites before selecting Moberly. MWCA promotes governmental, economic, educational, and cultural opportunities between the Midwestern states and China. Reena Gordon, chief operating officer for Mamtek, said, “MWCA collaborated with Mamtek to identify stakeholders and key data such as quality of labor pool, receptiveness to foreign companies, and financing flexibility. Because of this help, we are able to bring new jobs to the U.S.” Corey Mehaffy, president of the Moberly Area Economic Development Corporation, said. “We appreciate MWCA, and in particular the efforts of [former] Governor Holden to create an avenue by which foreign companies can connect with Midwest communities to establish a U.S. presence.”
“At a time when too many American companies are shuttering their plants and moving jobs overseas, we are thrilled to have a global company creating hundreds of good manufacturing jobs right here in Missouri,” Governor Jay Nixon said. “These jobs will be a significant boost to Missouri’s economy and our manufacturing sector, and they’re another positive sign that our economy is beginning to move forward.”
Allstate’s October 2010 decision to invest $22 million and locate its service center in Pocatello, Idaho, a community with just over 90,000 inhabitants, is an against-all-odds success story. In January 2010, Allstate Insurance Company solicited proposals from communities across the western United States trying to identify a location for a 575-employee direct sales and service center. Idaho’s Bannock Development Corp (BDC) joined more than 80 cities in pursuing this lucrative opportunity. BDC knew its competitors were larger cities and Allstate’s three existing centers are located in cities well over 10 times the size of Pocatello, making it an underdog contender; but it also knew landing this deal was crucial to the community. Pocatello has been hard hit in recent years by the partial or complete closure of several manufacturing facilities, along with the weight of the recession. Combined unemployment and underemployment for Pocatello was 15.2 percent in 2009.
Allstate’s addition of 575 jobs in 2011 will make it the fifth-largest private employer in the metro area. The addition of Allstate’s approximately $20 million dollar payroll to a community this size will have a nearly incalculable impact on the region’s economy. Most of these positions will pay between $27,000 and $50,000, compared to Pocatello’s median annual wage of $28,600. It is estimated the 10-year aggregate direct economic impact of this project to be approximately $300 million; the indirect impact will be even larger still. In addition there is a clear, priceless, psychological impact of this project on the community--- Allstate’s decision to locate in Pocatello has created palpable feelings of hope among residents and optimism for the future that has not been seen for some time.
Fort Payne, Alabama
Plasman Corp, part of A.P. Plasman Corp. of Windsor, Canada, has located its first U.S. manufacturing facility in Fort Payne, DeKalb County, Alabama, and expects to invest $14 million to $16 million in that plant, which initially will employ 200 people and could ramp up to more than 350 in a few years. These jobs are desperately needed as the area's once-prosperous sock-making industry has lost 6,000 to 8,000 jobs in the past five years because the work moved offshore. As a result, in March 2010, DeKalb County's unemployment rate was 13.9 percent. Last year wasn’t the only year of unemployment suffering for them; the jobless rate there has hovered around 14 percent for the last three years.
Neal Wade, former director of the Alabama Development Office, said of Plasman's plans for DeKalb County, "It is just great to see an announcement in an area that truly needs those jobs. This is going to be a real tipping point for them in terms of turning around their unemployment."
The new plant’s capabilities will include plastic-injection molding, painting, assembly of automotive exterior parts and tool repair. It will supply items such as front grills, trunk skins and moldings for various auto manufacturers. It is speculated that Alabama was chosen because it is strategically located to ship larger parts to a whole new market of OEMs in the southeast U.S., including Hyundai, Mercedes Benz, Volkswagen, BMW, Kia, Honda and Toyota. While not confirming that rationale, Plasman CEO Dave Wiskel did say the decision to locate a plant in Fort Payne is the “biggest milestone and step” that the family-owned company has taken “strategically.”
With the new plant, local officials hope it is just the beginning of a new type of industry in the area.
New Orleans, Louisiana
Five years since the devastation of Hurricane Katrina, the Greater New Orleans Region is proving its resiliency and strength with significant economic development, most notably Blade Dynamics, an advanced wind turbine manufacturer that will make a capital investment of $13 million and create 600 new, direct jobs by 2015 at an average annual salary of about $48,000 plus benefits, and bring state-of-the-art technology to New Orleans. Six hundred new jobs coming to a region that several months after Hurricane Katrina experienced unemployment that peaked at 16 percent will have a dramatic impact on the people and psyche of the region. The number of new jobs has a ripple effect as well. Louisiana Economic Development estimates the new, direct jobs will result in the creation of more than 970 new, indirect jobs in Louisiana.
The impact doesn’t end there. Blade Dynamics’ relocation signifies that the rebirth of New Orleans has not gone unnoticed by foreign investors, a pleasant reversal of U.S. companies off-shoring. Located in the Isle of Wight in the United Kingdom, Blade Dynamics’ decision to utilize New Orleans’ resourceful workforce to further enhance its state-of-the-art, industry-changing technology is a sign that New Orleans is a globally competitive corporate location.
Blade Dynamics also represents a revitalization of innovative partnerships in the region. The Dow Chemical Co., through its Venture Capital group, and American Superconductor Corp., specializing in electric power technology, have each made a minority equity investment in Blade Dynamics. In addition, Blade’s presence serves as a valuable catalyst to the region because the large number of high-paying, high-tech jobs it provides also serves to help attract other high-tech industries to the region.
Diplomat Specialty Pharmacy
A huge, twice-abandoned auto manufacturing complex in Flint, Michigan, will soon be home to a fast-growing pharmaceutical company that vows to create more than 1,000 jobs there in five years -- and as many as 4,000 jobs by 2028. Diplomat Specialty Pharmacy purchased a 360,000-square-foot section of the 1.2 million-square-foot complex at auction for just $880,000, acquiring the space that will serve as a footprint to expand the business over the next 10 years. Indeed, this is a double impact win for Flint: re-use of an abandoned auto plant, and creation of huge numbers of well-paying jobs in nursing, pharmacy and information technology, as well as call-center workers.
Family-owned Diplomat Specialty Pharmacy that currently employs 400 is expected to receive approval for about $75 million in state tax credits and workforce training funds. "We're flipping our model around, and we're going to put every job we can in Genesee County, Michigan," instead of scattering sites around the nation, as is common in the drug industry, said Phil Hagerman, Diplomat's president and co-founder. "While that sounds like a pie-in-the-sky number," Hagerman said of the 4,000 new jobs by 2028, “it’s really not a leap, and it's very doable, and we're the guys that are going to do it."
Diplomat locating in Flint also represents a major, diversifying change to the automotive-related industry that typically locates in the area. “This is an opportunity to reinvent and revitalize a community,” said Hagerman, adding that Diplomat may be able to provide space in its facility to other biotechnology companies to develop their products. “Our goal would be to create a biotechnology corridor,” he said.
Western North Carolina
The workforce in three Charlotte, North Carolina-area counties is growing, thanks to the expansion plans of Canadian auto-parts company Magna Composites. These expansions, which will represent a corporate investment of $10 million and subsequent creation of 327 new jobs over four years, carry more weight in these three counties than they might in other areas of the country. Each county has experienced off-the-charts unemployment in recent years, mainly as a result of North Carolina’s rapid decline in its traditional manufacturing base of furniture and textiles. At the time of the announcement, Rowan County’s unemployment rate was 12.9 percent, Catawba County 14 percent and Caldwell County 16.3 percent. In the year prior to the announcement, these three counties experienced 24 layoff events and 42 closings, affecting 5,591 people.
Magna had purchased the plants in these three counties in June 2009 and grew employment among them to 360 workers. With the expansions, the largest of the three facilities, in Rowan County, will grow by 183 jobs. The plant in Caldwell County will add 134 jobs, and the smallest plant in Catawba County will add 10 workers. While individual wages will vary greatly by job function, the overall average for the 327 new jobs will be $33,352 plus benefits.
When initially considering economic incentives for this project, a Rowan County Economic Development Commission impact study predicted, "If approved, news of this project will resonate positively with companies connected to these operations, both locally and beyond. Up to $1.1 million may be awarded to Magna.” North Carolina Representative Lorene Coates said, “During this tough economy it’s critical to make the right investments to create jobs and bring economic opportunities to this area.”
Unemployment has been battering Bastrop, Louisiana, since 2008 when International Paper shuttered its mill in the town, leaving 17 percent of the area workforce facing layoffs or downsizing, followed three months later by the closure of four plants in nearby parishes by Pilgrim’s Pride, decimating the jobs of 1,300 in mid-North Louisiana. To compound the dire situation, the plant closures had a disproportionate impact on lower-income, low- to medium-skilled workers who were left with few viable employment opportunities and scarce resources to relocate.
When poultry and meat processor DG Foods discovered the region had an abundance of high-quality, experienced manufacturing workers, it decided in December 2010 to move into an existing, 88,000-square-foot building in Bastrop, located in Louisiana’s Morehouse Parish. This will have a grand impact on helping to turn around the unemployment situation as the company will not only make a capital investment of $9.7 million, but will create 317 new, direct jobs. In addition, Louisiana Economic Development estimates the 317 new, direct jobs will result in approximately 936 new, indirect jobs and will generate over $13.4 million in new, state tax revenue and $2.9 million in new, local tax revenue over the next seven years.
“DG Foods brings us an opportunity to show that the community can successfully transition to a more diverse economic base after the closure of International Paper,” said Morehouse Economic Development Corporation President and CEO Kay King. In reply, DG Foods, LLC CEO Duffy McKenzie said, “DG Foods, LLC is very excited about the opportunity to expand our company to a facility in Bastrop, Louisiana. Bastrop is a strategic location which will allow us to serve customers in Texas, Louisiana, Arkansas, and others which are located west of the Mississippi location.”
East Milton, Florida
In an area such as Santa Rosa County, Florida, where employment has been hard-hit due to the recession-induced real estate fallout, the announcement of Clearwire to remain in East Milton, Florida, to expand its customer care call center, thus retaining 500 jobs, has had an incredible impact. However, not only will the wireless broadband services provider and operator of the largest 4G network in the country retain those existing 500 employees by remaining in the Santa Rosa Industrial Park, it will also be investing $8 million and adding an additional 500 employees to support the needs of its growing customer base. If another location had been chosen, the Florida operation would eventually have been phased out. Florida Governor Charlie Crist declared, “This is welcome news at a time when job creation is of critical importance to Florida's economy." Adding to that sentiment, Bob Cole, Santa Rosa County commissioner, said, “An expansion of this size is a significant opportunity for the Santa Rosa Industrial Park and a huge economic win for East Milton."
"Clearwire is a tremendous asset to the county," said Shannon Ogletree, associate director of TEAM Santa Rosa Economic Development Council. "This expansion makes Clearwire the largest single private employer in the county."
In addition to jobs, Clearwire also demonstrates its strong commitment to the local communities in which it operates through its 'Connecting With Communities' program. Clearwire has participated in numerous community service projects in the Santa Rosa area, the most recent being the revitalization of Bagdad Elementary School. More than 100 Clearwire employees volunteered to reface the façade of the school building, add new landscaping at the entrance, and upgrade the computer classroom.