Specifically, let’s discuss where is the best place to build new manufacturing facilities in the United States. It may seem to be the wrong question to ask in the midst of recessionary doldrums, but in fact, the timing is possibly just right.
Why is that? As Edward W. Hill points out, enormous changes are under way in many manufacturing and related sectors right now. That includes a vast restructuring of the automobile industry and home building, as well as fundamental changes to the materials and energy industries. “It isn’t often that you get that much change going on either in terms of consumer demand or industry structure, or the basic products themselves,” says Hill, dean of the Maxine Goodman Levin College of Urban Affairs at Cleveland State University. “If you look back, whole industries tend to pop out of recessions.”
The focus on renewable energies is readily apparent in site location announcements by companies such as Nordex USA, which announced in July plans to build a wind turbine manufacturing plant in Jonesboro, Ark., and Siemens AG, which also is building a wind turbine production facility, but in Hutchinson, Kansas. Add to that International WoodFuels, which announced plans to build a biomass manufacturing plant in Burnham, Maine. In other industries, GlobalFoundries recently broke ground on the construction of Fab 2, a $4.2 billion semiconductor manufacturing facility rising in Saratoga County, New York; Volkswagen is constructing an automotive production facility in Chattanooga, Tenn., and physical fitness equipment maker Precor is building a manufacturing plant in Greensboro, N.C.
None of this information appears to answer the question: Where is the best manufacturing location in the United States? But in fact, it does, sort of. Site location experts say the best location depends on what you’re making. “There’s no one location that’s good for all manufacturing because manufacturing is so diverse,” Hill says. He is seconded by Michelle Comerford, senior location consultant for Austin Consulting. “Different types of manufacturing operations have different requirements, and depending upon the importance of each requirement, different areas are going to be more favorable than others.”
Volkswagen Group of America selected Chattanooga, Tenn., as the site for a U.S. automotive facility following a rigorous site-selection process that narrowed its search to Alabama, Michigan and Tennessee. Production at the plant is expected to begin in 2011.
Consider solar energy, for example. One site location expert suggests that solar’s development generally follows the path forged by the microelectronics industry in the late 1970s and early 1980s. Both rely on many of the same support functions and skills, so solar energy is likely to find hospitable environments in those same locations. However, the labor expertise required by biopharmaceutical firms, for example, may have those site selectors looking in very different locations.
For Volkswagen, the formal site-selection process that ultimately led the automaker to choose Chattanooga took about nine months. A large cross-functional internal team from both Germany and the Americas group drove the site evaluation, augmented by outside advisers that included the Staubach Co. (now Jones Lang LaSalle) and legal advisors.