9.7.12 | As the democrats gathered in Charlotte this week, we wanted to point BRR readers to this thoughtful article in The Washington Post about a new Siemens plant there. The post’s Lori Montgomery talks with executives about why the company chose to locate their new hub for making gas turbines for power plants in Charlotte bringing 825 jobs to the region.
“A lot of things that were offshored in the past were offshored because of lower-cost labor, but that’s no longer the most important factor,” Eric Spiegel, president and chief executive of Siemens’s U.S. subsidiary told the Post. “The reasons you bring a plant like this to the United States are higher-skilled labor, access to the world’s best research and development, and good, sound infrastructure. All those things together make the U.S. a good place to invest.”
We’ve been writing about what some are calling a “manufacturing renaissance,” caused in part by global economic shifts that are increasing labor costs abroad, and how local policies and cluster development can help spur economic development and job growth, and help regions rebound from economic collapse.
Charlotte is not an isolated case, the article also cites Michelin North America who just added 500 jobs at plant in South Carolina that makes tires for construction and mining vehicles. And evidence from smaller firms who Montgomery writes are “desperate for workforce development.”
Charlotte, a banking hub, was hit hard by the financial and foreclosure crisis.
And Siemens’s executives say investments in transportation infrastructure — a rail line and the city’s growing airport — helped make a difference. (See our post about Charlotte’s transit development here).
With increasing pressure on both presidential candidates to talk about job growth, whether these investments are enough of a job engine to save the economy is, of course, an open question.
But these kinds of local investments in transportation, education, and infrastructure do matter, business executives say:
While the public debate tends to be cast as a choice between propping up favored industries and getting government off the backs of business, many growing companies say they value policies that create a broadly fertile environment for job growth. Their wish list is specific: Good highways and modern seaports. High-level academic research. And, especially, education programs tailored to turn out skilled workers.
As some of our aging coal fire plants are being replaced by natural gas, Siemens saw a market for large gas turbines that power electric plants, specifically in North Carolina’s Duke Energy, the post reports. But the city also had a mechatronics program to train a technical workforce at the local Central Piedmont Community College and an energy program in the engineering school at the University of North Carolina. The state provided tax rebates and training funds.
BRR research shows that this kind of collaborative retooling of the economy with collaboration from business, government, and the education sector is what’s often needed to respond to economic changes and bring on positive growth.
Plus, check out this first in a series of columns on manufacturing growth in the Bay Area by Mike Cassidy from the San Jose Mercury News. Cassidy says he set out to write about the death of Bay Area factories and found something very different – a robust sector, poised for growth.
“More than 162,000 people are working in Silicon Valley factories today, up by 7,900 from two years ago,” he writes. “And state economists say the gains will continue, with the manufacturing sector growing by 5 percent by 2018.”
Cassidy spotlights Intuitive Surgical who manufactures sophisticated surgical robots. Company execs say that in addition to local design, technology and manufacturing talent, having the engineering and manufacturing teams close to one another enables them to be able to be more responsive, improve products in response to customer feedback, and to drive innovation.
Watch his video below: