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Foreign Direct Investment (FDI) and Supply Chain Disruption: Key Takeaways from the 1st Quarter

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Archives, Global Logistics, Global Trade Daily, Site Selection

Foreign Direct Investment (FDI) and Supply Chain Disruption: Key Takeaways from the 1st Quarter

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Foreign manufacturers are increasingly focused on how evolving “Buy American” requirements may impact them. And like most U.S. domestic manufacturers, foreign manufacturers continue facing challenges with supply chain disruption, with the grounding of the Ever Given in the Suez Canal as just the latest headache. In order to mitigate risks associated with more restrictive local sourcing requirements and complex logistical challenges, foreign manufacturers are revisiting the localization of distribution, assembly and production activities in the U.S.

Those are a few takeaways from our conversations over the past three months with dozens of business leaders from the UK, Germany, Austria, Italy, India, China, South Korea, Mexico and other countries around the world. The focus of those conversations has been navigating foreign direct investment (FDI) and supply chain disruption amid the pandemic. Below are some of the main trends we are seeing and examples of how companies are adapting.

Evolving Content Requirements

There is an increasing awareness of the risk manufacturers face tied to changing content requirements in the U.S. These risks are not totally new. However, the Biden administration is signaling that the U.S. will continue increased focus on this issue, which is expected to impact several industry sectors in particular.

On January 25, President Biden signed an executive order aimed at long-standing “Buy American” provisions the U.S. government follows in its own procurement process. The Biden order instructed the Federal Acquisition Regulatory (FAR) Council to come up with new regulations increasing the Buy American requirements and changing the way those requirements are measured. However, the Biden order does not specify how much to increase content requirements – that will be up to the FAR Council to decide by late July 2021. In the meantime, the U.S. government is already tightening its waiver process that is used to allow certain types of procurement projects to receive exceptions to some “Buy American” requirements.

Combined with higher North American content requirements in the United States-Mexico-Canada Agreement (USMCA), more foreign companies are finding themselves grappling with this issue depending on their industry sector. Those involved in government contracting are right in the crosshairs, and the building materials and information technology industries are likely to see the largest impacts. And the importance of this issue will increase if President Biden’s infrastructure legislation passes Congress.

Those content requirements are contributing to a longer-term trend: more industries are moving manufacturing into the United States. Business leaders say they have several strategic reasons for this, including improved logistics and US content requirements, but also proximity to key customers and reduced currency risks. We also continue to hear interest in Mexico as an alternative to the U.S.  While USMCA’s content and wage requirements may shift some Mexican manufacturing to the U.S., Mexico is still very much in play for FDI projects considering North America.

Moving Forward With Site Selection Amid the Pandemic

While the pandemic has made site selection difficult, many companies that are making strategic investments like those mentioned above are finding ways to carry out their location projects. However, although some travel opened up for business travelers in the 1st quarter of 2021, COVID-19 continued to disrupt many plans.

For example, several leaders of a South Korean business recently traveled to North and South Carolina for a site visit. But after their first meeting, they found out an economic developer in that meeting tested positive for COVID-19. As a result, the South Koreans had to quarantine in their hotel and conduct the remaining meetings virtually – with people who were right down the street.

We know of two other instances in the first quarter where a COVID-19 diagnosis, one in the home-country and one in the U.S. after landing, wrecked a site visit. That is part of the reason many of the visits still happening in the U.S. involve companies that already have an American presence, as travel is easier for their personnel.

Still, while international travel is down, international projects are moving forward. The key is the rapid improvement of virtual tools during the pandemic, including virtual showcases that incorporate GIS mapping data, drone footage, and other elements to help with due diligence. While companies are finding these tools extremely useful, they are also finding it more important than ever to have trusted professionals, including legal counsel, on the ground in the locations they are considering. (You can learn more about navigating virtual site selection here.) By combining the advantages of virtual site selection with an expected increase in the ability to travel this summer due to vaccinations in the U.S., foreign companies can move forward with their site selection.

Dealing With Supply Chain Disruption

There may be no clearer image of supply chain disruption than a 1,300-foot container ship walling-off the Suez Canal. But the Ever Given running aground was simply the latest example of the difficulties companies have faced for more than a year now. Manufacturers and the logistics companies serving them say the cost of shipping goods and the ability to get space for those goods have become terribly challenging.

Much of this still goes back to the inability to get products from the source, whether those products are microchips or wood. While there are fewer lockdowns worldwide now than there were last year, many plants continue operating at low capacity or are struggling to catch up to demand.

Marbach Group, a global manufacturer and supplier of die-cutting tools and equipment based in Germany with more than 20 locations worldwide, has been constantly adapting through the pandemic to address these challenges. The February freeze in Texas, for instance, contributed to a shortage of low-grade plywood that Marbach would typically use to make crates for the transportation of its products.

“In turn we had to use our own manufacturing wood for our products to build crates,” Marbach America CEO Fernando Pires says. “Since the lower-grade wood was not available, we increased our cost margins by having to use higher-grade materials for a simple transfer box for our products.”

That’s just to get their products ready for shipping. Pires has many more examples of challenges the company has faced after its products are shipped.

One-way Marbach and other companies have responded is by building up inventory. (Pires jokes his head of purchasing must have had a crystal ball, as Marbach started increasing its stock levels in January 2020.) Marbach reflects an uptick in interest for distribution and warehouse space in the Southeastern U.S., which is evidenced by the significant construction of new warehouse space in the region. Some companies are temporarily leasing warehouses so they can stock up on raw materials and finished goods to avoid shortages when supply chains are not working correctly.

Foreign manufacturers are also diversifying their supply chains and service capabilities. Some companies that traditionally had one or two suppliers of a certain type of component are now adding additional suppliers of the same component for more robust redundancy in the supply chain. Others whose supply chains were concentrated in one part of the world are looking to add geographic diversity – so the next time a country has a COVID-19 problem, they won’t be so dependent on that one area.

Likewise, companies are diversifying their service capabilities and know-how. Many foreign companies rely on key personnel from their headquarters to fly elsewhere and solve problems when needed. That’s become more challenging with COVID-19 travel restrictions, so companies are diversifying their training programs. One executive described it as onshoring skills.

Surging FDI Down the Road?

The final thing that stood out to us amid conversations with foreign business leaders in the first quarter of 2021 is the potential for a surge in FDI coming out of the pandemic. This potential comes from two key factors.

First (and as noted above), many companies remain committed to their strategic growth plans, although the pandemic may temporarily slow the pace of their investments. Second, companies have been in cash-preservation mode and have cheap borrowing options at the moment. In addition to cheap debt for expansion, investors are also hungry for higher returns and are seeking to invest in innovative foreign companies who have growth potential in markets like the U.S.

For companies that have been able to avoid a severe hit to their financial position, all of these conditions are ripe to create a jolt in FDI as the pandemic subsides.

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Sam Moses and Al Guarnieri are leaders in Parker Poe’s Manufacturing & Distribution Industry Team. Sam is based in Columbia, South Carolina, and Al is based in Charlotte, North Carolina. They can be reached at sammoses@parkerpoe.com and alguarnieri@parkerpoe.com

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Archives, Global Site Selection, Global Trade Daily

As China Falls from Favor, Other Countries Attract American Businesses

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A confluence of economic, political, and logistical issues is coming together that is changing the dynamics of doing business internationally for many U.S. companies. The result: China may be falling out of the top spot as a location for American companies looking to establish foreign operations, with several other low-cost countries vying to replace it. But the situation is complicated. American companies that already have operations in China are not leaving, at least not in large numbers.

The complex dynamics that are influencing U.S. companies considering establishing foreign operations include the fact that certain countries are more advantageous than others for certain industries. While the popular perception is that American companies take their manufacturing abroad primarily to save labor costs, in reality, they often establish foreign operations to serve growing foreign markets. If you have a burgeoning customer base in Germany, it may be more cost-effective to manufacture your goods in Poland than in Thailand. And if your company is in the technology space, China still may be a better destination for you than if you manufactured consumer goods.

In other words, there is no one-size-fits-all solution. American companies eyeing foreign operations must do their homework and talk with advisors both at home and abroad to determine the best course. Once they do their homework, most companies will find that four broad trends are driving decisions about establishing foreign operations these days.

Digital Game Essential

First, due to the COVID-19 pandemic, remote work has become a worldwide phenomenon. The more digital and cloud-based your operations are, the more successful you will likely be with your foreign operations. Some general guidance would include:

-Before considering going abroad, evaluate your company’s commitment to technology and determine where upgrades should be made.

-Learn about the technology infrastructure in your target country and make sure it can support your company’s technology profile and needs.

-Don’t forget about workers; you’ll need to ascertain the level of technology skills possessed by your potential new workforce.

Incentives Change with Landscape

Second, every country has a set of incentives in place to attract foreign companies to their shores. Most incentive programs favor certain industries above others.

The Chinese government currently has highly preferential policies to encourage technology businesses to locate in China, especially those related to artificial intelligence and semiconductors. While China is falling out of favor with other manufacturers, if you are operating in one of its favored industries it may still be worth consideration.

While technology companies still find China a viable place to establish or maintain operations, traditional manufacturers in such industries as textiles and apparel are looking elsewhere. Wages in China have doubled in the past 10 years, so labor costs – once the dominant attraction for American companies – no longer provide an advantage.

Consequently, countries like Thailand, Cambodia, Vietnam, India and Mexico are rapidly rising as sites for American companies due to many of the same factors that once made China attractive. Low labor costs, skilled workforces and fewer regulations are attracting American companies.

Moreover, because of the rising costs in China as well as increasing political tensions between China and the U.S., other countries are stepping up their incentives for American companies to locate within their borders.

Each country has unique advantages and disadvantages, and U.S. companies need to weigh the value that these locations would bring depending upon their industries, products and services.

For example, Mexico offers the benefit of being close to American markets, reducing shipping costs and avoiding tariffs. In Southeast Asia, Vietnam makes it easier than China to move goods into and out of the country and offers the most knowledgeable workforce. India is not far behind in terms of workforce. However, India prohibits the export of many goods to protect supplies for its own massive population. Currently, the material used to make surgical masks cannot be exported out of India – a significant disadvantage for American companies with Indian operations that tried to pivot to respond to the worldwide need for protective equipment during the COVID-19 pandemic.

Companies Re-evaluating Supply Chain Strategies

Third, the supply chain and the ease with which goods move in and out of countries must be a part of the evaluation process when establishing operations abroad.

For the most part, U.S. companies moving to the emerging Asian countries and Mexico are those that are establishing foreign operations for the first time. American companies with operations already in China are staying put for now, even though steep tariffs that the U.S. has placed on goods shipped from China are impacting their profitability.

In part, they are staying in China due to supply chain issues. When large companies like Apple went to China, their supply chains went with them. Companies that supply those large manufacturers find it more cost-effective to be where they are. But if a large company decides to pull out of China, its supply chain remains there, and it must deal across borders with suppliers. Hence, companies that are already planted in China – even those much smaller than Apple – can find it very hard to leave.

U.S.-China Trade War

The fourth trend is the ever-increasing tariff war between the U.S. and China, which has significantly impacted American companies looking to establish operations in Asia. Companies already located there are seeing their profitability drop because of the tariffs, and deterioration of the political relationship between the two countries – complicated by COVID-19 – has contributed to China falling out of favor with American companies.

The increasing tensions between the U.S. and China also have started to impact immigration rules, making it difficult for some U.S. companies to get their American employees into China. This is a real-world example of how geopolitical considerations can impact the day-to-day operations of American companies.

Beyond these four trends, U.S. companies considering establishing operations abroad to serve growing global markets should look at several important factors:

Location of customer base

The location of your international customer base is a big driver in determining which country to choose for your foreign operations. You want to minimize transportation and shipping costs, and you also need to consider where your supply chain is concentrated.

Entity structure

Creating a separate entity from your U.S. entity will help keep the domestic and international operations distinct, protecting you from legal and liability issues. A subsidiary structure may be best, depending on the type of operation you are establishing.

Consider the local laws in each country that govern foreign operations, and how they may impact you. For instance, in China and India it’s very difficult for a foreign company to own 100% of a business, depending on the type of company and industry. Those countries, and several others, require foreign businesses to set up entities with at least some minimal local national ownership.

Taxes

Your entity structure will largely determine how tax-efficient your foreign operations are from both the U.S. and local countryside, but it is still advantageous to locate in a country with a low-income tax rate.

Beyond income tax, you need to consider the tax consequences of repatriating cash back to the U.S.

If you select a country with which the U.S. has a tax treaty, you will find a more friendly attitude toward repatriation. When repatriating funds from foreign operations, withholding taxes often can reach 30%, but if there’s a tax treaty in place the repatriation cost can sometimes be reduced to zero.

Taxes can’t always be the driving consideration in deciding where to locate a foreign operation. There are a lot of moving parts, including workforce, overall costs, logistics (can you get a product in and out easily), quality of internet and technology infrastructure, immigration policy for your American workers, and more.

If you are considering establishing a foreign operation for your company, reach out to your Windham Brannon advisor. Even if you expect to wait until after the global COVID-19 pandemic is safely behind us, now is the time to start planning.

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This article was written by International Tax Partner, Nicole Suk 

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Archives, Global Trade Daily, International Trade

Mexico Faces a Slow Economic Recovery After a Steep Recession

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Mexico’s economic performance deteriorated steeply in 2020 which may be largely attributed to the COVID-19 pandemic and slow government action to curb disease spread. GDP contracted 8.5%, mainly due to steep declines in consumption and investment.

Atradius economic analysts predict Mexico’s GDP will partially rebound in 2021, increasing by 6.1%. The coronavirus pandemic exacerbated an already weak economic situation. Mexico entered 2020 in a mild recession, due to fiscal tightening and falling investments on the back of rising policy uncertainty.

Government leaders face growing concern over health and economic policies

Due to the severe spread of the coronavirus pandemic and the resulting economic downturn, the handling of the crisis by the government has drawn harsh criticism. Compared to most other countries in the region, Mexico took less stringent measures on a national level to contain the spread of the disease.

Some of the poorest countries in Latin America—including El Salvador, Guatemala, Honduras and Venezuela—were among the quickest to respond, most likely in recognition of the extremely limited capacity of their healthcare systems to deal with a protracted public health crisis.

While President López Obrador’s popularity has subsequently dropped, approval rates remain high, at about 60%. This is due to some popular measures taken since his inauguration in December 2018, such as raising the minimum wage, reducing government salaries (including his own) and advancements in several high-profile corruption cases. The president’s party thus remains well-positioned for mid-term elections in June 2021. General disillusionment with traditional parties underpin this expectation.

High crime rates and endemic corruption continue to undermine the business environment and state functions in Mexico. The economic repercussions of the coronavirus pandemic particularly hit workers in the informal sector, who amount to about 60% of the total labor force. Consequently, rising poverty could become a major social and political issue if government action is not taken.

Limited fiscal measures in place to counter the downturn

Mexico’s high vulnerability to the lasting effects of the COVID-19 pandemic stems from its relatively weak healthcare system, the close synchronization of its economy with the U.S. business cycle and its relatively high dependence on the services sector. These factors make Mexico more susceptible to external shocks, especially with the stagnant tourism sector.

The 2021 outlook for most sectors in Mexico ranges from fair to bleak, with particular difficulty ahead for construction, engineering, and steel. The automobile sector, Mexico’s leading source of exports, suffered from a sharp fall in external demand and severe supply chain disruptions over the past year.

To help mitigate these impacts from the COVID-19 pandemic, the central bank cut interest rates several times in 2020, to a still relatively high 4% in February 2021, while the probability of further monetary policy easing has declined. Inflation is expected to remain at the upper end of the central bank’s 2%-4% target range, mainly due to higher fuel prices and shortages from supply-side disruptions.

A protracted recovery expected in 2021

Due to meager fiscal support and comparatively high-interest rates, Mexico’s economic recovery is expected to be protracted, and GDP will likely not return to its pre-pandemic level until 2024.

Other issues include persisting economic policy uncertainty, concerns about contract enforcement and rule of law under the current government, which may continue to have a negative impact on business confidence and private investments.

Exports in the manufacturing sector should receive a boost from higher U.S. growth prospects, while an infrastructure plan may contribute to a partial recovery of investment. However, this recovery expectation remains subject to a timely containment of the pandemic, including the speed of the vaccination campaign. The government debt ratio is expected to level off in 2022 despite weaker government finances.

The peso exchange rate against the USD sharply depreciated in March 2020, which may be largely due to high capital outflows and the deterioration of the oil price. However, it appreciated again since May, and by the end of 2020, it had almost recovered its lost ground. While the exchange rate is likely to remain volatile in 2021, it is expected to continue its appreciating trend, supported by a global recovery in manufacturing.

There are glimmers of hope for Mexico’s economic recovery in 2021, aided by accelerating growth in U.S. markets on the back of massive fiscal stimulus and vaccination rollouts globally. As long as Mexico can stay on a path toward growth, a partial economic rebound could be possible in 2021.

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Greetje Frankena is a deputy chief economist at Atradius based in Amsterdam.

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Archives, Global Trade Daily, International Trade

The Northern Triangle is Ready for a Digital Trade Agreement With the United States

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The COVID-19 crisis highlights the need for a digital trade agreement between the United States and the Central American nations of El Salvador, Guatemala, and Honduras – and the Northern Triangle is ready.

The power of digital technologies to curtail corruption, strengthen governance, reduce labor informality, improve the investment environment, and promote job creation was recognized by the region’s governments and businesses even before COVID-19, but the pandemic has made the benefits of digitization even clearer and more urgent.

This opens an opportunity that the Biden administration should move fast to seize. A digital trade agreement consistent with U.S. practices would accelerate the Northern Triangle’s digital transformation while locking in much-needed reforms.

In an innovative approach, the Bush Institute-SMU Economic Growth Initiative simulated a digital trade negotiation to assess the readiness of El Salvador, Guatemala, and Honduras – individually and as a regional group – to commit to the most rigorous digital trade provisions in effect today. Participants in our simulation included former government trade negotiators, business leaders and tech entrepreneurs, as well as prominent think tanks in Central America. We published the results in a recent report, in which we determine that the countries of the Northern Triangle are ready for a high-standard digital agreement.

Each country has been developing regulations to govern digital transactions and online platforms that are broadly in line with provisions in the most recently concluded digital trade agreements. They include the digital trade chapter of the United States-Mexico-Canada Agreement, the U.S.-Japan Digital Trade Agreement, and the groundbreaking Digital Economy Partnership Agreement signed by Singapore, Chile and New Zealand.

The United States already has a free trade agreement with Central America, but it was enacted long before digital chapters became routine in U.S. trade agreements. Concluding a freestanding agreement on digital trade is an expedient and efficient way to add significant value to the free trade agreement already in force.

It would also complement the technical assistance provided by organizations including the Inter-American Development Bank, the U.S. Agency for International Development, and the U.S. International Development Finance Corporation that is focused on building the infrastructure needed to digitize Northern Triangle economies.

A U.S.-Northern Triangle digital trade agreement could also incorporate regulatory cooperation and trade capacity building designed to encourage interoperability of regulations and hard infrastructure in the region, which would reinforce resiliency and attract higher investment.

Trade capacity building and regulatory cooperation between the United States and the Northern Triangle countries could help expand the electronic delivery of critical government services, assist governments to efficiently expand broadband and allocate spectrum throughout the region, and support investments in a digital-ready workforce.

The pandemic forced economic life to move online all over the world. Online shopping and payments turbocharged online retail operations. Cloud computing and software services are transforming business-to-business transactions. Digital platforms have become a lifeline for small- and medium-sized businesses while expanding their ability to reach customers worldwide. Digitization of government services is helping curtail corruption and promote efficiency in government services.

The embrace of digital technologies in response to COVID-19 showcases one of the most critical paths for the Northern Triangle toward inclusive economic growth. Conversely, if El Salvador, Guatemala, and Honduras fail to digitize, they risk exclusion from modern global value chains, diminished investment opportunities, a widening social welfare gap, and sustained levels of migration away from the region.

Most importantly, the time is now. What the Northern Triangle needs is momentum toward a strong, post-COVID regional economy. A digital trade agreement with the United States would offer a major boost with long-lasting positive effects for the Northern Triangle and our own economic relationship with the region.

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This article was written by Matthew Rooney, George W. Bush Institute-SMU Economic Growth Initiative Director, and Andrea Durkin, Bush Institute-SMU Economic Growth Initiative Advisor

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Archives, Global Trade Daily, Utilities

States With the Most (and Least) Expensive Electricity

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When an extreme winter storm tore through Texas earlier in 2021, the widespread power outages that followed put a microscope on how electricity is produced and generated. A state that prides itself on its critical role in the energy economy—both as a source of traditional fossil fuel energy sources like oil and a growing hotspot for renewables like wind and solar—had its electric grid completely crippled for days. Stories emerged of customers being billed thousands of dollars for using the state’s limited supply of electricity in the storm’s aftermath. The situation became a flashpoint for a longer-running debate in the state (and beyond) over whether renewables or fossil fuels were a more dependable source of energy.

Despite the renewed political back and forth over energy production in the wake of the Texas storm, the overall trends in the U.S. energy sector are undeniable: renewables will be the fastest-growing contributor to electricity production in the U.S. in the decades to come. Government incentives and technological advancements in the renewable sector have lowered costs and improved reliability in recent years, and low costs will spur increased adoption of the newer technologies.

Data from the U.S. Energy Information Administration show that renewables currently represent around 21% of electricity generated in the U.S. By 2050, that figure is expected to double. Meanwhile, natural gas will decline slightly from 40% to 36% of electricity production over the same span. And the respective shares of electricity generated from nuclear and coal will be nearly cut in half.

The increased use of renewable sources will also pass on savings to consumers. The cost of electricity is also projected to decline in the next three decades, albeit gradually. The 2021 cost of electricity per kilowatt-hour currently averages around 10.5 cents across all sectors; that number will drop to 9.6 cents by 2050. And this trend will not be limited to any one sector: cost projections for electricity in the residential, commercial, industrial, and transportation sectors all show the same downward trend. Customers can expect to see a reduction in retail prices across the energy sector spectrum as the cost of electricity generation declines.

Some parts of the country could feel more of the benefit than others as costs decline. By one measure—average monthly residential electricity bill—most of those beneficiaries will be in the Southeastern U.S. The main factor driving costs in the Southeast is the greater use of electricity throughout the year compared to other regions. Warmer weather in the summer means high bills from air conditioning, and in the winter, Southeastern households are more likely to heat their homes with electricity than with other sources like natural gas or fuel oil. While these factors suggest that consumption levels will remain high, customers in the Southeast will benefit from electricity’s lower unit costs.

Another way to evaluate the different costs between states is to look at the average per kilowatt-hour cost of electricity across all sectors. On this measure, one of the key factors driving disparities between states is whether the state must import fuel or energy to supply their electricity. The most expensive states include the geographically remote Hawaii and Alaska, along with New England states that have largely retired old coal and nuclear facilities in recent years and rely on imported natural gas for electricity. In contrast, states, where electricity prices across sectors are cheap, tend to have nearby resources for electricity production, whether that be natural gas, coal, or a strong renewables sector.

To find the states with the most and least expensive electricity, researchers at Porch used information from the U.S. Energy Information Administration and ranked states based on the average electricity price for all sectors in cents per kilowatt-hour (kWh). In the event of a tie, the state with the greater residential price for electricity was ranked higher.

Here are the states with the most and least expensive electricity.

States With the Most Expensive Electricity

State Rank Average electricity price for all sectors Residential price Average monthly residential bill Average monthly consumption

 
Hawaii 1 28.72¢ per kWh 32.06¢ per kWh $168.21 525 kWh
Alaska 2 20.22¢ per kWh 22.92¢ per kWh $127.29 555 kWh
Connecticut 3 18.66¢ per kWh 21.87¢ per kWh $150.71 689 kWh
Rhode Island 4 18.49¢ per kWh 21.73¢ per kWh $121.62 560 kWh
Massachusetts 5 18.40¢ per kWh 21.92¢ per kWh $125.89 574 kWh
New Hampshire 6 17.15¢ per kWh 20.05¢ per kWh $120.04 599 kWh
California 7 16.89¢ per kWh 19.15¢ per kWh $101.92 532 kWh
Vermont 8 15.36¢ per kWh 17.71¢ per kWh $97.18 549 kWh
New York 9 14.34¢ per kWh 17.94¢ per kWh $103.60 577 kWh
Maine 10 14.04¢ per kWh 17.89¢ per kWh $100.53 562 kWh
United States – 10.54¢ per kWh 13.01¢ per kWh $115.49 887 kWh

 

States With the Least Expensive Electricity

State Rank Average electricity price for all sectors Residential price Average monthly residential bill Average monthly consumption

 
Louisiana 1 7.71¢ per kWh 9.80¢ per kWh $120.70 1,232 kWh
Oklahoma 2 7.86¢ per kWh 10.21¢ per kWh $113.93 1,116 kWh
Idaho 3 7.89¢ per kWh 9.89¢ per kWh $93.83 949 kWh
Washington 4 8.04¢ per kWh 9.71¢ per kWh $94.49 973 kWh
Wyoming 5 8.10¢ per kWh 11.18¢ per kWh $96.53 864 kWh
Arkansas 6 8.22¢ per kWh 9.80¢ per kWh $109.46 1,118 kWh
Utah 7 8.24¢ per kWh 10.40¢ per kWh $75.63 727 kWh
West Virginia 8 8.49¢ per kWh 11.25¢ per kWh $121.90 1,084 kWh
Texas 9 8.60¢ per kWh 11.76¢ per kWh $134.07 1,140 kWh
Kentucky 10 8.61¢ per kWh 10.80¢ per kWh $120.08 1,112 kWh
United States – 10.54¢ per kWh 13.01¢ per kWh $115.49 887 kWh

 

For more information, a detailed methodology, and complete results, you can find the original report on Porch’s website: https://porch.com/advice/states-with-the-most-least-expensive-electricity

GSLI
Archives, Global Trade Daily, Site Selection

Here’s How GSLI Drives Economic Development Success

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Dallas-based economic development firm Global Site Location Industries (GSLI) continues to redefine lead generation and project success. Founded in 1994 by Eric Kleinsorge, GSLI – formerly known as World Economic Development Alliance (WEDA), represents economic development professionals across the country, serving as the driving force behind 2,000 projects, 53,125 new jobs, and $6.3 billion in capital investment.

“If your board is asking you to grow a pipeline of qualified prospects, the GSLI Project Portal is a great starting point that will take you through the entire process, seamlessly,” Kleinsorge explains. “Our team of dedicated employees paired with our fully automated system works on your behalf to identify and nurture projects that align with your goals.”

In the beginning…

Mr. Kleinsorge was first tasked with identifying ways to support and train the Economic Development Community more than 25 years ago. His main goal of teaching EDCs to successfully market themselves to companies seeking to expand or relocate. Fast-forward to today and GSLI is the result of Kleinsorge’s dedication to bridging the gap between qualified leads and EDCs ready to grow their community.

Company Toolbox.

The company’s monthly Prospect Live webinars are one of the many ways GSLI educates and connects EDCs seeking to add jobs and grow their economy. Live discussions with GSLI’s very own active projects and what location needs are critical for success. Additionally, GSLI’s One-Minute Community Assessment narrows down exactly what projects fit within your community and how the Project Portal can support your corporation.

GSLI further reiterated its commitment to EDCs during the outbreak of COVID-19. In March of 2020, the company announced the launching of its COVID C.A.R.E. Response Program. COVID C.A.R.E. (Coronavirus Automated Response Effort) aimed at supporting communities and local businesses suffering from the economic downturn.

“We have been in the business of helping communities attract new jobs and now it’s our turn to help communities keep these jobs,” Kleinsorge said in a company press release.

Get Started Today.

To learn more about how GSLI can grow your community, or if your company is ready to take the next step in site selection, take five minutes to learn about the GSLI Project Portal here.

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For more than 20 years, GSLI has been the premier partner of choice for communities – both big and small, looking to create a solid economic foundation primed for growth and success. GSLI boasts over 75 Site Location Expert offices nationwide and solid success rate in supporting the economic development community through our team of project managers, marketing gurus, web developers, and finance experts.

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Archives, Global Trade Daily, Special Reports

Best-Paying Cities for Recent College Grads

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As college education costs climb higher, landing a well-paying job after graduation is even more important than ever before. Over half of young adults who attended college incurred some debt, with typical levels of student loans in the range of $20,000 to $25,000 post-graduation. According to the latest data from the Bureau of Labor Statistics (BLS), median earnings for recent college graduates working full-time is approximately $50,000 per year. However, the number varies widely by city, college major, and occupation, among other factors.

The good news is that while the median wage for recent graduates (adjusted for inflation) has fluctuated over the last several decades, the number hit a new peak last year, climbing by nearly $4,500 from 2019 to 2020. What’s concerning is that the $50,000 annual wage figure for 2020 is from survey data collected in March of last year, so it does not adequately reflect the impact of the COVID-19 pandemic. College graduates seeking employment last spring faced the worst job market since the Great Depression, and it remains to be seen how wages will be affected in the coming years.

Attaining a bachelor’s degree boosts earning potential by a large margin—median annual earnings of recent college graduates is about $20,000 more than workers of the same age with only a high school diploma. However, some fields of study pay off much more than others. The highest-paying majors for recent college graduates are computer science and several types of engineering degrees, such as chemical, computer, and electrical. Median earnings for recent graduates within these majors is $70,000 per year, or about 40 percent higher than the typical graduate.

While academic major is one of the strongest predictors of earnings post-graduation, so too is location. Additionally, large differences in cost of living across locations affect how comfortable it is to live on a given wage and how easy it is to pay off loans. At the state level, recent graduates working full-time in North Dakota and Montana have the highest median earnings after adjusting for cost of living, at $53,751 and $51,337, respectively. Despite being one of the lowest-cost states to live in, New Mexico also reports the lowest cost-of-living adjusted median wage for full-time recent graduates, at just $36,224 per year.

To find the best-paying metropolitan areas for recent college graduates, researchers at Self analyzed the latest earnings data from the U.S. Census Bureau and cost of living data from the U.S. Bureau of Economic Analysis. The researchers ranked metro areas according to the cost-of-living adjusted median earnings for full-time working college graduates aged 22 to 27 with a bachelor’s degree only. Researchers also calculated the unadjusted median earnings for recent graduates and the recent college graduate proportion of the population. Only the 50 largest metropolitan areas were included in the analysis.

Here are the best-paying U.S. metros for recent college graduates.

Metro Rank   Median earnings for recent college grads (adjusted)    Median earnings for recent college grads (actual)    Recent college grad proportion of the total population    Cost of living

 
San Jose-Sunnyvale-Santa Clara, CA     1      $56,827 $72,000 3.3% 26.7% above average
St. Louis, MO-IL     2      $53,274 $48,000 2.1% 9.9% below average
Kansas City, MO-KS     3      $52,802 $49,000 2.3% 7.2% below average
Pittsburgh, PA     4      $52,706 $48,700 2.8% 7.6% below average
Detroit-Warren-Dearborn, MI     5      $52,466 $50,000 2.1% 4.7% below average
Cleveland-Elyria, OH     6      $52,280 $47,000 2.1% 10.1% below average
San Francisco-Oakland-Hayward, CA     7      $52,045 $70,000 3.4% 34.5% above average
Columbus, OH     8      $51,856 $47,500 2.7% 8.4% below average
Dallas-Fort Worth-Arlington, TX     9      $49,407 $50,000 2.3% 1.2% above average
Austin-Round Rock, TX     10      $49,345 $49,000 3.2% 0.7% below average
Houston-The Woodlands-Sugar Land, TX     11      $49,164 $50,000 1.9% 1.7% above average
Providence-Warwick, RI-MA     12      $48,853 $49,000 2.5% 0.3% above average
Chicago-Naperville-Elgin, IL-IN-WI     13      $48,638 $50,000 2.8% 2.8% above average
Minneapolis-St. Paul-Bloomington, MN-WI     14      $48,591 $50,000 3.0% 2.9% above average
Cincinnati, OH-KY-IN     15      $48,565 $44,000 2.4% 9.4% below average
United States     –      N/A $45,000 2.1% Average

 

For more information, a detailed methodology, and complete results, you can find the original report on Self Financial’s website: https://www.self.inc/blog/best-paying-cities-for-recent-college-grads

mississippi
Archives, Global Trade Daily, Site Selection

MISSISSIPPI MEANS BUSINESS: WHEN IT COMES TO LOCATION, WORKFORCE, EDUCATION, INCENTIVES AND ECONOMIC DEVELOPMENT RESOURCES, THE MAGNOLIA STATE HAS YOU COVERED

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Promoting economic growth while maintaining a robust business climate seems like a walk in the park for the team at Mississippi Development Authority (MDA). Living up to its global reputation as a powerhouse for manufacturing, healthcare, aerospace, and transportation, MDA sets the bar higher for competing states providing opportunities for exporters, investors, and industry diversification. 

“A lot of people may have certain impressions of Mississippi, but I can assure you, we have a lot going on here,” explains Gena Lentz, MDA’s director of Foreign Investment.

Lentz brings more than 25 years of international trade promotion experience for the state of Mississippi. While working on helping exporters in the Magnolia State transport products to Asia, Lentz further developed her role with MDA, evolving to investment recruiting alongside her agency’s international representatives in Yokohama, Japan, and Seoul, South Korea. 

The authority does not stop there, though. Adding to its already diverse economic climate, MDA is currently laser-focused on the European market, specifically Germany. By closing the gap in global representation, MDA will boast a fully developed international team.

“Europe is an especially important market for Mississippi, serving as a major source of investment,” Lentz says. “We continue to work projects from Germany with our goal being a full-time representative promoting the state with boots on the ground recruiting investment, promoting the state, promoting exports from the state and developing investment leads.” 

Previously, MDA had representation in both Germany and the United Kingdom. This year, however, the team continues to take steps in re-focusing efforts for a new approach to European representation by reprioritizing to better meet the needs of international clients and investors. 

Extensive History within European Manufacturers

Manufacturing represents one of the Mississippi’s leading industries. An example of this is Continental Tire located just west of the state’s capitol of Jackson. Continental’s massive 5 million-square-foot+ facility is the home of all things tire production, representing a $1.45 billion investment in the state. Looking ahead to the future and plans for growth, Continental plans on developing a workforce of 2,500 employees through 2028. Since launching tire production at the Jackson facility, the company has already hit the 500-employee mark. 

“Continental Tire represents an extraordinarily strong partnership between MDA and the local economic development organization of Hinds County, local authorities and Entergy Energy,” Lentz explained. “Economic development is very much of a team sport. Locating a large company such as Continental requires strong teamwork and trust on all sides, and this was a great example of strong teamwork between so many different partners and it’s something that we’re really proud of.”

Mississippi’s manufacturing sector is just as diversified as the variety of sectors found in the state. Ardagh Group is another example of this. The global company is best known for metal and glass packaging but recently started manufacturing the famous slim-can design that continues to outshine the traditional can shape for soft drink products. When the company decided to add the manufacturing lines necessary to accomplish this, Mississippi was able to provide the workforce and the facility needed to do so. 

“Ardagh went through a major expansion to change and manufacture the slim design of the beverage cans to accommodate the shift to this design,” Lentz said. “By doing so, they added 80 new jobs as part of their facility expansion in Olive Branch, Mississippi, and will add two new production lines to manufacture beverage cans.”

John Rounsaville, MDA’s executive director, adds that Swiss-based technology-driven company ABB announced an expansion in 2019 at its Senatobia location, while Japan-based Ajinomoto Foods manufactures specialty frozen foods in Oakland while undergoing several expansions to accommodate its growth and to meet an increase in demand.

“The list of global companies that call Mississippi home and maintain successful operations in the state is ongoing,” Rounsaville said. “These companies realize the benefits and advantages of doing business in our state, as evidenced by continued investments in their Mississippi operations and the creation of thousands of jobs for Mississippi’s workers.”

And the list keeps going . . . Mississippi has been home to a Rolls-Royce facility since 2007. The British company is located at Stennis Space Center–just off the coast of Mississippi. According to Lentz, the company benefits from an outdoor testing facility for jet engines used in the aerospace sector. Additionally, Columbia, Mississippi. is home to Zodiac Parachute, and its parent company Safran. Safran is a French-owned company known for producing military-grade parachutes and has a history with NASA and some of its space missions. 

Automotive Sector Drives Mississippi’s Success

Adding to the broad-ranging business presence that MDA supports, the automotive industry has experienced significant growth in recent years.

“Nissan started production in 2003 and was our first OEM,” says Lentz in reference to original equipment manufacturers. “Currently, Nissan has manufactured the Titan truck, the Frontier truck and the Altima. The automotive supply chain and all that Toyota and Nissan have accomplished over the years is fascinating. Nissan has approximately 5,200 employees now. Among suppliers here is a large company called Auto Parts Manufacturing Mississippi along with a network of other suppliers. Typical of the automotive sector, once you locate the large OEM manufacturers, you then have an opportunity for smaller companies to locate close by who need to supply products to the OEMs.” 

Lentz went on to explain that the automotive sector currently dominates. This does not come as a huge surprise considering the state has two large automotive OEMs that began operations just a couple of years apart. North Mississippi’s town of Blue Springs has been home to Toyota since 2011, when manufacturing on the Corolla model began in Mississippi. Fast-forward to today and the Corolla is now their primary model manufactured in Blue Springs. Lentz credits Toyota’s robust employee pool consisting of 2,500 workers as a representation of the strong, positive work culture found at the facility.

In recent years, there has been significant success with smaller German automotive companies in Mississippi.

Variety is the Key

“Beyond Japan and Germany, Canada, the UK and Switzerland are other markets included in our network,” Lentz added. “For some, it is surprising that the state has this kind of investment variety. With 26 countries and 200 different facilities, it’s something to be proud of.”

From family-owned German companies with a strong emphasis on technology and engineering to smaller distribution facilities and companies in aerospace, Mississippi truly does set the bar higher in providing market advancements for all types of companies. An example of this extended network is found with the presence of Swiss manufacturer ABB, which has several facilities throughout the state focused on electrical manufacturing.

“Another factor that differentiates Mississippi is that we understand how important it is to have industrial sites that are ready to go for companies,” Lentz says. “Typically, when companies start looking for a new facility, they are on a very tight timeline and do not have time for the due diligence reports. Local economic development organizations, utility companies in Mississippi and MDA each have programs that are designed to help make sure that we have industrial sites that are available and ready to go without delay.”  

The state’s infrastructure and transportation options are nothing short of remarkable while equally competitive for companies looking to expand or relocate. MDA takes into consideration all factors for businesses while proactively maintaining the state’s strong interstate systems and five class one rails. 

Mississippi’s Project Ready sites are paired with a well-prepared and highly competitive team of economic development professionals with success and risk mitigation at the top of mind. The extensive partner network of developers, utility partners, community colleges and research universities, and infrastructure all work together to position companies for success and growth. The global network established by MDA has proven resilient and shows no signs of slowing down in the face of market disruptions. 

“Our excellent transportation network includes six interstate highways and 14 federal highways; 76 airports, including two international airports; dozens of rail systems that serve 2,500 miles of track throughout the state; and 15 ports found along Mississippi’s three navigable waterways,” Rounsaville explained. “The Mississippi River borders the state to the west, the Tennessee-Tombigbee Waterway borders the state to the east, and the Gulf of Mexico forms Mississippi’s border to the south. Mississippi boasts two deep water ports along the Gulf of Mexico, allowing companies convenient, quick access internationally.”

The exceptional setup in Mississippi further reiterates the state’s position as an economic development powerhouse prepared to accommodate even the most complex of business operations. The Port of Gulfport is the No. 2 port in U.S. for fruits and vegetables. Mississippi’s structured approach in supporting international growth is evident in the state’s 2019 export numbers (see charts).

Incentivized Growth Abounds 

“Our trade managers provide business assistance–including educational, marketing and referral services–to small- and medium-sized companies aspiring to sell products and services outside the United States,” says Luigi Dominighini, MDA’s senior manager, International Trade. 

Through the U.S. Small Business Administration (SBA)-funded Mississippi State Trade Expansion Program (STEP), MDA can offer small businesses financial assistance to help defray many of the costs associated with exporting for the first time or with exporting to new international markets, Dominighini noted. 

“Our footprint is seen throughout our global offices in Santiago, Chile, South Korea and Japan,” he says.

For companies seeking a region with historically strong export operations, Mississippi should be at the top of the list.

MDA’s International Trade Mission takes a granular approach to globalization. From travel support, market research, industry briefings and meeting coordination for international trade missions, exporters are provided the opportunity to meet with foreign prospects without driving up costs. MDA works to pre-qualify buyers, distributors and other business representatives. 

Additional resources provided by MDA include workshops and seminars for exporters. Dominighini adds that not only do these resources serve as an extension for added network partner opportunities, but they support MDA’s International Trade Office mission to develop long-term growth and job creation with the globalization of the state’s economy at the top of mind.

“The seminars we host cover market-specific topics and provide technical information on all aspects of the international business process,” Dominighini added. “Comprehensive guides on all aspects of exporting and importing are available to Mississippi businesses through MDA’s International Trade Office. Exporting companies including Thomasson Company, a certified Women’s Business Enterprise, and Hyperion Technologies are just a couple of the success stories we’re proud to have in the state.” 

Planting the Seeds for Growth

Adding to its global network, Mississippi has witnessed a breakthrough for the state’s agriculture sector. In September 2019, Mississippi was confirmed for the first time in history as part of Taiwan’s Agricultural Trade Goodwill Mission. Representatives with the Taiwan Vegetable Oil Manufacturers Association along with the Taiwan Feed Industry Association confirmed the purchase of 96 million bushels of soybeans (estimated value of $1.1 billion) and 197 million bushels of corn (estimated value of about $1.1 billion).

In the announcement, it was confirmed farmers in the states of Mississippi, Indiana, Illinois and Nebraska would supply soybeans and corn, with the total amount divided between the states based on negotiations of producers and buyers. Commissioner of Agriculture and Commerce Andy Gipson expressed his delight with the news in the released statement: 

“These efforts will create new markets for Mississippi’s soybean and corn farmers and will potentially create new trade opportunities for other agriculture commodities as well.”

Mississippi Does It With Teamwork

Between forward-thinking strategies and proactive solutions for all types of businesses, MDA continues to raise the bar for competing states with its team of experienced and business-minded professionals.

“Mississippi’s representation makes a concerted effort to create an environment that has a pro-business climate, from low taxes to competitive operating costs, including the utility costs for manufacturers and large facilities,” Lentz says.

Considering the reputation utility costs have for running operations, this an especially important part of how MDA stays five steps ahead on the company’s behalf. MDA ensures a constant, strong relationship with all the region’s utility partners. This network provides a safeguard for reliable power for operations while driving down costs for manufacturers and other businesses.

When it comes to workforce development, MDA’s impressive partner portfolio proactively prepares companies for long-term growth while meeting them where they are in the present. An example of this is Hinds Community College, an institution incredibly involved with workforce development to further support the foreign direct investment climate in the state.

“MDA works closely with both international and domestic prospects to really understand their workforce needs,” Lentz says. “From the very inception of the project, we can work with companies to understand the labor market, looking at specific skillsets in the state so companies understand the market and what type of existing labor force is offered here. We are proud of our extraordinarily strong community college system throughout the state, totaling 15 community colleges in different regions. These colleges represent strong partners with us and customized training for companies, based on their needs.”

Without a proactively prepared workforce, expanding and relocating companies are cut short. One of the many differences found in Mississippi is the management of resources to ensure success from the start. The team at MDA understands what it takes for project success. They ensure that all training needs are met, from workforce training to workforce funds needed.

“We are well aware that a top priority for companies seeking to locate or expand operations is access to a well-trained pipeline of workers,” Rounsaville says. “Mississippi has made developing the country’s best workforce its top priority. In conjunction with the state’s community colleges and universities, the state guarantees companies quality, customized workforce training programs. As companies grow and evolve, so must their employees.”

In addition to preparing incoming companies for building their workforce, training resources along with needed funds are at the top of mind. The professionals at MDA work to provide these resources for companies so they can focus on establishing operations without delay or roadblocks.

“We work with our existing companies to support their workforce training initiatives, so their employees continue to not only meet–but exceed–their expectations as they grow and adapt to changing trends and consumer needs,” Rounsaville says. “To supplement the state’s workforce training, the MS Works Fund was enacted in 2016 to provide an additional $50 million over 10 years to enhance training at our community colleges. Seventy-five percent of the funds are allotted for new job training, and 25 percent of the funds are for training existing employees.”

Additionally, the state offers a variety of alternatives based on individual company needs. These options include Mississippi’s Workforce Investment Network job centers, on-the-job training and more to support the company’s bottom line while reducing training costs. Not only does this approach support the growth of the state’s industries, but it lowers costs for the companies while creating jobs for the community. 

“We realize in today’s market having a talented workforce that is very easily trained in new techniques is so important,” Lentz says. “Beyond our community college partners, there are other workforce partners who play a crucial role. This is one of the many strengths found in the state: How we work to understand our business prospect’s needs and how we try to customize what they need to make sure that they train their workforce.” 

COVID-19 Can’t Keep Mississippi Down

Despite the variety of disruptions created by the pandemic throughout 2020, MDA proved to be more than prepared. While other development authorities scrambled, MDA’s exemplary leadership and business-minded strategies carried its business climate through one of the most disruptive times in recent years. 

“We hope to get back to more of the in-person meetings in 2021, and we’re certainly continuing to do that online through virtual meetings,” Lentz says. “Our team of seven project managers have continued to participate in virtual site visits for new investment projects while upholding a proactive schedule.”

In other words, the pandemic has not given the team at MDA any reason to slow down in terms of working with business prospects and meeting the needs for successful operations. Quite the opposite, in fact. MDA focused on efforts for the future, rather than becoming caught off-guard with economic uncertainty. As of now, leadership continues to focus on building its existing target industries while exploring options to further develop its European footprint. Even though the pandemic is still a concern for our nation, MDA continues providing solutions for market disruptions now and beyond COVID.  

“Moving beyond 2020, which as we know has been an incredibly challenging year in many regards, the goal of the Mississippi Development Authority remains the same as it has been for years: to build stronger communities and economies for Mississippians through new investment and job creation,” Rounsaville says.

“Throughout 2021, the MDA team will continue working to grow advanced manufacturing, health care and aerospace. We also are committed to growing the state’s tech industry. Leading global tech companies are increasingly finding their niche in Mississippi, and we will continue working to attract more high-tech companies to the state. These are the jobs of the future, and the state has already taken many proactive measures, such as the creation of the MS Coding Academies, to ensure we have a workforce ready to fill these in-demand jobs of the future.” 

Mississippi remains front and center for globally-minded professionals seeking a healthy economic climate for growth–even during a pandemic. For those companies already established in the state, Rounsaville affirmed that they can also look forward to continued efforts from economic development professionals and partners throughout the state.  

“Mississippians are known for their work ethic and commitment to quality, and MDA and our partners are committed to continuing our efforts to ensure companies have a skilled workforce in place for generations to come. Their continued investment in our state serves as a strong testament to other global companies that Mississippi means business. We work hard to provide our global partners with a strong business environment that allows them to maintain their competitive edge and find lasting success in our state,” Rounsaville concludes.

To learn more about the Mississippi Development Authority, please visit: https://mississippi.org/

economic development
Archives, Global Site Selection, Global Trade Daily

OUR ANNUAL GOVERNOR’S CUP GIVES A MONTH-BY-MONTH LOOK AT 2020’S TOP ECONOMIC DEVELOPMENT DEALS

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A debate that has gained some steam with the global pandemic is whether government agencies or nonprofits that seek to help stimulate national, state and local economies should give incentives to companies seeking to move into or keep from fleeing their jurisdictions.

With so many people out of work and, at the time of this writing, only a faint hope from a vaccination solution, it is small wonder that economic development entities and the incentives they offer have lost favor.

However, if we are ever to get back to some semblance of “normal,” we are going to need jobs to fill because heaven knows there are plenty of people desperately seeking employment.

Despite the pandemic, economic development efforts continued throughout 2020, as witnessed by the month-by-month breakdown that follows. Because not all the projects that follow made hard numbers available, we can only say that, should they all come to fruition, they will generate multi-billions of dollars in local economic activity and tens of thousands of jobs.

When you compare that promise with the amounts that were laid out to lure or keep the businesses, you may dare to consider them smart investments. Read on to see if you agree.

JANUARY: Global Aerospace and Defense Tech Giant Expands in Utah 

The Utah Governor’s Office of Economic Development (GOED) announced that Northrop Grumman will expand its global aerospace and defense operations by more than 1 million square feet in Weber County, which is promised up to 2,250 jobs and $380 million in capital investment over the next two decades.

Northrop, which is Utah’s largest security and defense company already, is eligible to earn back 30 percent of the new state taxes they will pay as part of a 20-year deal, which is expected to generate nearly $200 million in new tax revenues and jobs “for generations to come,” according to GOED Executive Director Val Hale.

The deal is a “significant win for Northern Utah,” says Theresa A. Foxley, president and CEO of the Economic Development Corporation of Utah. “. . . On a broader level, we as Utahans can be proud of what this means in terms of national defense and global security.”

Another Notable January Deal: LLFlex, a leader in packaging materials and industrial laminate solutions, will invest $7.6 million to locate a facility in High Point, North Carolina, that will create 46 new jobs in Guilford County, Governor Roy Cooper announced. The North Carolina Department of Commerce led the state’s support for the company’s decision, which was juiced by $90,000 from the One North Carolina Fund. Partnering with the state commerce department in the deal were the Economic Development Partnership of North Carolina, North Carolina General Assembly, North Carolina Community College System, City of High Point, High Point Economic Development Corp., Guilford County Economic Development Alliance and Greensboro Chamber of Commerce.

FEBRUARY: Sherwin-Williams Paints Downtown Cleveland Green

The Sherwin-Williams Co. revealed its plans for a new downtown Cleveland headquarters and a research and development (R&D) center in Brecksville, in a set of projects expected to bring hundreds of new jobs and a corporate investment of at least $600 million to Cuyahoga County, Ohio.

The paint company’s HQ is targeted at 1 million square feet, while the R&D center will be about half that size. The earliest Sherwin-Williams is expected to move into the new buildings is 2023. 

More than $760 million in incentives from JobsOhio and other cities, county and state agencies were used to keep the $51 billion, publicly-traded company (and its 6,000 jobs) in Ohio, where about 4,400 of those workers are located in the state’s Northeast region. The R&D facility should add just more than 300 jobs in Brecksville.

“We are pleased to be a partner with Sherwin-Williams on this highly competitive project,” Governor Mike DeWine said in the company’s news release. “The state of Ohio, JobsOhio and our regional and local economic development partners have been focused on keeping one of Ohio’s leading companies right here where they belong.”

Team NEO, the local economic development organization that serves as JobsOhio’s arm in the region; the Greater Cleveland Partnership, which is the local chamber of commerce; the Downtown Cleveland Alliance; and the Cleveland-Cuyahoga County Port all worked on the deal.

Another Notable February Deal: Publix broke ground on a new, 940,000-square-foot refrigerated distribution center in Greensboro, North Carolina, where up to 1,000 new jobs are anticipated to be created across the region by 2025. North Carolina Gov. Roy Cooper, North Carolina House Speaker Tim Moore, Greensboro Mayor Nancy Vaughan and Publix Super Markets CEO Todd Jones participated in the groundbreaking ceremony. “We appreciate Publix choosing to grow jobs and put down stronger roots in Guilford County and the Piedmont Triad with this new distribution facility,” Cooper said at the time. “North Carolina will continue to strengthen our workforce to attract more good jobs here in our state.” 

MARCH: USDA Offers FREE Money for Rural Economic Development

U.S. Department of Agriculture Deputy Under Secretary for Rural Development Bette Brand announced that USDA would accept the Fiscal Year 2020 applications for grants to help strengthen the rural economy.

Available under the Rural Community Development Initiative, the grants aim to help improve housing and community facilities and to implement community and economic development projects in rural areas.

Electronic applications that had to be filed by May 13, 2020, needed to show that aid seekers could provide measurable results in helping rural communities build robust and sustainable economies. The USDA also encouraged applicants to support Trump Administration goals to combat substance use disorder, including opioid misuse, in high-risk rural communities by strengthening the capacity to address prevention, treatment and/or recovery.

APRIL: Chewy Takes a Bite Out of the Pandemic in North Carolina

Despite COVID-19, the Rowan County Economic Development Commission could point to several successful projects in 2020, including the grand opening of online pet supply retailer Chewy’s new fulfillment center in Salisbury, North Carolina, on April 6.

The largest economic development project in Rowan County history would include a 700,000-square-foot facility, $55 million in capital investment and at least 1,200 new jobs. Chewy’s distribution center was the ninth in the U.S. but the first in North Carolina. 

“The combination of Salisbury’s great labor market and available real estate and positioning in the right part of the country for our network made it a great match,” said Gregg Walsh, Chewy’s vice president of fulfillment center human resources. “We’ve scaled the site from our first hiring group, which was 20 team members, and we’re now over 1,200. We’re expecting to hire another 200 or more positions.” 

MAY: Lightweight Auto and Aerospace Parts Supplier Lands in Indiana

Yajima Industry Co. Ltd., a Japanese specialty company in lightweight automotive and aerospace products and components, announced it would open its U.S. headquarters in West Lafayette, Indiana.

The Indiana Economic Development Corp. worked with Yajima on an incentive package, but the company was also attracted to its location in the Purdue Research Park and near one of its clients, Subaru of Indiana Automotive (SIA), the home of North American production for the Ascent, Impreza, Legacy and Outback models. 

“Yajima’s decision to make Indiana its U.S. headquarters supports the long-standing tradition of Japanese manufacturers choosing to grow in our state,” said Indiana Secretary of Commerce Jim Schellinger. “The establishment of Yajima USA in Purdue Research Park is the perfect match with its proximity to SIA, the Indiana Manufacturing Institute and other aerospace and automotive manufacturing companies. Yajima USA joins more than 300 Japanese business facilities in the state, and we’re excited to watch them grow their operations and workforce in West Lafayette.”

JUNE: Gulf Island Expands Shipyard Workforce in Louisiana

Discussions about the expansion that began this month between Louisiana Economic Development and Gulf Island Fabrication Inc. bore fruit in 2020, when Governor John Bel Edwards and company President and CEO Richard W. Heo made a joint announcement regarding Gulf Island’s Shipyard Division workforce near Houma. 

The company vowed to create 106 new direct jobs at an average annual salary of $48,000, plus benefits, to accommodate orders for marine vessel construction from clients that include the U.S. Navy and the National Science Foundation.

Louisiana Economic Development estimated the project would also result in 123 new indirect jobs, for a total of 229 new jobs for Terrebonne Parish and the Bayou Region. Gulf Island also is retaining 308 existing jobs at its Shipyard Division facility along the Houma Navigation Canal.

To secure the project, the state offered a competitive incentive package that included the Quality Jobs Program as well as the comprehensive solutions of LED FastStart, the nation’s No. 1 state workforce development program for the past 11 years. The company also is expected to utilize the state’s Quality Jobs Program.

“This announcement underscores the importance of working with our existing industry base to help them grow and add more good-paying, skilled jobs in our community,” said Matt Rookard, CEO of the Terrebonne Economic Development Authority. “Gulf Island’s investment will have positive effects through the local economy.”

JULY: Tesla Brings $1.1 Billion “Gamechanger” to Texas

Electric automaker Tesla’s announcement that it will build a $1.1 billion gigafactory in Travis County, Texas, not only brought the prospect of 5,000 new jobs that start at $35,000 annually but Business Facilities Magazine’s 2020 Deal of the Year Gold Award to the Greater Austin Chamber of Commerce.

“The chamber’s Opportunity Austin team worked tirelessly with Tesla and our government and community partners to make this deal a reality,” said Opportunity Austin Chair Gary Farmer. “Giga Texas is a true gamechanger for our region and is much deserving of this national attention.”

It certainly caught the attention of Texas Governor Gregg Abbott. 

“Tesla is one of the most exciting and innovative companies in the world, and we are proud to welcome its team to the State of Texas,” he said. “Texas has the best workforce in the nation, and we’ve built an economic environment that allows companies like Tesla to innovate and succeed. Tesla’s Gigafactory Texas will keep the Texas economy the strongest in the nation and will create thousands of jobs for hardworking Texans. I look forward to the tremendous benefits that Tesla’s investment will bring to Central Texas and to the entire state.”

The factory, which is being built on a 2,100-acre plot in southeastern Travis County, will produce Tesla’s Model T SUV and the upcoming Cybertruck electric pickup when it is at full capacity in 2023.

Other Notable July Deals: Business Facilities Magazine recognized multiple deals in 2020, but for some reason, several were bunched in July. Its Bronze Award winner was Fortune 500 healthcare insurance company Centene’s Regional Headquarters, a 1-million-square-foot campus that will bring 3,237 new jobs to the University City neighborhood of Charlotte, North Carolina, which was also Business Facilities’ 2020 State of the Year. The Centene project was a collaborative effort between the City of Charlotte, Mecklenburg County, the North Carolina Department of Commerce, the Economic Development Partnership of North Carolina, the North Carolina Community College System, Central Piedmont Community College, University of North Carolina Charlotte and the Charlotte Regional Business Alliance. Business Facilities also gave honorable mentions to two other deals in July: Tech consulting giant Accenture Federal Services’ opening of an Advanced Technology Center in St. Louis, Missouri, and an 820,000-square-foot Amazon fulfillment center coming to Pflugerville, Texas.

AUGUST: OmniTRAX Project Maximizes Chicago Area Intermodal

OmniTRAX, one of the fastest-growing railroads in North America and an affiliate of Denver-based The Broe Group, worked with the nonprofit Calumet Area Industrial Commission to launch its Rail-Ready Sites program at the Chicago Rail Link (CRL). 

The Rail-Ready Sites program connects customers looking to maximize supply chain performance with rail-served properties. The first project with Calumet focuses on two sites that total 156 acres and are ideal locations for automotive manufacturing, steel fabricators and finishers, food processing and distribution and building materials suppliers. But the partners say they plan to look at other nearby sites in the future.  

“The greater Calumet area has one of the best trained and most experienced workforces in the country, and has the lowest cost of doing business in an otherwise expensive region,” explained Ted Stalnos, president and CEO of Calumet Area Industrial Commission. “The CAIC can help companies navigate potential environmental incentives, financing and government regulations so they can find the rail-served facility of their dreams.” 

In 2020, OmniTRAX also worked with the Rockford Area Economic Development Council and the City of Peru to bring Rail-Ready to the Illinois Railway as well as the Greater Brownsville Economic Development Corp. of Texas to take the program to the Brownsville & Rio Grande International Railway. 

“Brownsville offers companies a great location with access to Latin America via rail, highway and sea, and has a cost of doing business that is 20 percent lower than the rest of the country,” explained Mario Lozoya, executive director and CEO of the Greater Brownsville Economic Development Corp. “Combine that with our young and skilled workforce, which includes participants in our award-winning ‘We Grow your Own’ training program, and the OmniTRAX Rail-Ready Sites program is sure to be a great success for Brownsville.” 

SEPTEMBER: Transmission Line Will Bring $8 Billion in Investment to Kansas

A new transmission line connected to the Grain Belt Express will bring thousands of jobs and $8 billion in investment to Kansas, Governor Laura Kelly announced.

“Kansas is uniquely positioned to be a regional and national leader in the development and expansion of clean and renewable energy,” Kelly said. “The Grain Belt Express will be instrumental in helping to power Kansas and other states, and will bring nearly 1,000 jobs and billions in economic investment and energy savings to our state. My administration is committed to rebuilding our foundation and supporting key investments that will continue to boost economic development, recruit businesses, foster a healthy workforce, and produce sustained growth.”

Invergy, the state’s partner on the project, produced an analysis that claims the 800-mile-long transmission line should bring 22,525 jobs over a three-year construction period and create 968 permanent jobs to the state. It’s also projected to save $7 billion in electricity costs to consumers in Kansas and Missouri through the year 2045. The Grain Belt Express will begin in Spearville, Kansas, and eventually make its way through Missouri, Illinois and Indiana. 

Other Notable September Deals: The Ohio Tax Credit Authority awarded Ultium Cells LLC, a joint electric car battery venture between General Motors and South Korea’s LG Chem, a 1.95 percent, 15-year job creation tax credit on $45 million in new payroll. The company expects to create 1,000 jobs by December 2026 at the $2.3 billion plant, under construction on 158 acres immediately adjacent to the automaker’s former assembly plant in Lordstown, Ohio. “In order to generate an acceptable rate of return and give the Lordstown location a competitive advantage, this JCTC (job creation tax credit) is a major factor in the company’s decision to move forward in Ohio,” said Tony Ciambrone with JobsOhio, the state’s private economic development agency, which successfully fought off a bid by Georgia to get the Ultium facility. Leisure Pools and Spas North America, Inc., a leading fiberglass in-ground pool manufacturer, revealed plans to establish operations in Marion County, South Carolina. The $6.1 million investment is expected to create 200 new jobs, according to the Coordinating Council for Economic Development, which approved has approved a job development project for the fiberglass swimming pool company.

OCTOBER: West Virginia Becomes Home of Virgin Hyperloop Certification Center

“Today is one of the most exciting days in Virgin Hyperloop’s history,” said Sir Richard Branson, founder of the Virgin Group. “The Hyperloop Certification Center is the start of the hyperloop journey for West Virginia, for the United States, and for the world. We’re one step closer to making hyperloop travel a reality for people everywhere.”

Business Facilities Magazine bestowed a 2020 Deal of the Year honorable mention to the Charleston, West Virginia, project that will create thousands of new jobs across construction, manufacturing, operations and high-tech sectors.

“For years, I have been saying that West Virginia is the best-kept secret on the East Coast, and it’s true,” said Governor Jim Justice. “Just look at this announcement and all it will bring to our state–investment, jobs and tremendous growth. It’s a true honor and privilege to be selected as the site for the Hyperloop Certification Center and lead the nation in this next step forward for transportation. When we approached Virgin Hyperloop, I told them that we would do everything we could to bring this opportunity to West Virginia. We look forward to working with the Virgin Hyperloop team to create a lasting partnership for years to come.”

Other Notable October Deals: Tennessee Governor Bill Lee, Department of Economic and Community Development Commissioner Bob Rolfe and General Motors officials announced that the automaker will invest nearly $2 billion in its Spring Hill manufacturing plant to build fully electric vehicles, including the all-new, luxury Cadillac LYRIQ. That added to the more than $2.3 billion GM has invested in the Spring Hill manufacturing plant since 2010. According to the Center for Automotive Research, GM’s employment in Tennessee produces a 6.8 employment multiplier, which means there are 5.8 other jobs in the Tennessee economy for every direct GM hourly and salaried job in the state. Motion Industries, Inc., a leading distributor of maintenance, repair and operation replacement parts, held a groundbreaking ceremony at the site of its planned shop facility in Irondale, Alabama. When completed, the $11.2 million 104,000 square-foot building will house Motion’s area fluid power shop, hose and rubber shop, and engineering department. 

NOVEMBER: Renewable Fuels Complex Comes to Louisiana

Governor John Bel Edwards boasted about Grön Fuels’ proposed renewable fuels complex in West Baton Rouge, Louisiana, having earned Louisiana Economic Development the No. 2 Economic Development Deal of 2020 from Business Facilities Magazine.

The governor earned those bragging rights: The $9.2 billion project, which would ultimately produce low-carbon diesel fuel from renewable feedstocks, is expected to bring with it 1,025 direct jobs—with an average annual salary of $98,595, plus benefits.

 “This Silver Award in Business Facilities’ Deal of the Year competition recognizes our commitment to next-generation projects that will meet the growing global demand for renewable transportation fuels,” Edwards said at the time. “We look forward to Grön Fuels’ final investment decision as Louisiana’s next significant climate-forward project.”

Business Facilities was not the only magazine to recognize the Grön Fuels’ project, which received a national CiCi Award for Corporate Investment from Trade & Industry Development.

Other Notable November Deals: This time, both deals are in the same state (New Mexico) and industry (defense and aerospace). Group Orion announced plans to build on 4.1 million square feet and employ 1,000 at Albuquerque’s Aviation Center of Excellence, a former north/south runway that was decommissioned in 2012. And the U.S. Air Force is preparing to build MaxQ at Kirkland, a new mixed-use development on Kirtland Air Force Base. “We like to say, ‘Albuquerque is the Place for Space,’” says Danielle Casey, president and CEO of Albuquerque Economic Development. “The global space economy is expected to grow to $3 trillion by 2045. No other region has the assets that greater Albuquerque does, and we are ready and excited to see the sector grow. And of course, the region boasts miles and miles of wide-open space for people to explore and enjoy, a new top consideration for skilled workers in the COVID era, who can work from anywhere and select their ideal quality of place.”

DECEMBER: New Industrial Terminal Aims to Make Georgia a 2021 Dealmaker

The new SeaPoint Industrial Terminal Complex in Savannah, Georgia, offers 

one mile of deepwater frontage on the Savannah River’s main shipping channel as well as direct rail, quality roads and existing infrastructure. 

The sustainable, multi-use, multi-tenant industrial facility will be a major long-term economic driver for Georgia, creating 1,700-plus new high-wage jobs in a Federal Opportunity Zone and generating an estimated annual economic impact of nearly $1 billion, according to SeaPoint officials.

The complex has also been designed with environmental responsibility as a core value, they add as they point to these attractions:

-More than 600 developable acres of land providing exceptional opportunities for national and international manufacturers and logistics-dependent operations. 

-A multi-tenant model that promotes synergies between companies that result in more sustainable and efficient operations. 

-Solar, steam, compressed air, electricity, security and other services available on-site.

-A Cleantech Campus @SeaPoint project that aims to transform an existing 60,000-square-foot R&D building onsite into a creative hub for companies and organizations focused on clean technologies related to manufacturing, warehousing and logistics.