May, 2010 Archives

Maryland Corporate Moves

General Motors To Expand Green Manufacturing In Baltimore General Motors will produce next-generation, two-mode rear wheel drive motors and related electric drive components at GM Powertrain Baltimore in White Marsh, MD. Gov. Martin O’Malley, Sen. Barbara A. Mikulski, Sen. Benjamin Cardin, Rep. C.A. Dutch Ruppersberger and Baltimore County Executive Jim Smith jointly announced the green manufacturing expansion. GM will construct a high-volume electric drive manufacturing facility at the Baltimore County Transmission plant, creating approximately 200 jobs and retaining hundreds more already at the plant. “Maryland is proud to be home for this new innovation driven by GM for the next generation of green technology. The technology being unveiled today will help drivers drive further on less fuel, and provide green jobs for Marylanders to support their families,” said Gov. O’Malley. “Maryland is home to one of the nation’s most talented and skilled workforces, and GM’s decision to house the manufacturing of their new technology in our State is validation of their commitment to fuel innovation, create jobs, and drive economic progress here in Maryland.” Baltimore County Executive Jim Smith said the investment in green technology at GM’s Baltimore transmission plant will bring automotive jobs back from Mexico to White Marsh. “Today’s announcement is great news for GM’s Baltimore Transmission Plant, great news for jobs, and great news for Maryland’s economy. Just last year, people wanted to write-off the American auto industry. But I and my Team Maryland colleagues knew differently,” Sen. Mikulski said. “Building the fuel efficient engines of the future, GM’s Baltimore Transmission Plant is going to lead the way to a better way, showing America can compete, America can innovate, and the American auto industry can lead again.” GM is investing $129 million in the Baltimore Transmission Plant to build electric motors and related electric drive components. The company was selected by the U.S. Department of Energy for a $105 million grant for electric drive systems manufacturing. In addition, the State of Maryland is providing a $3 million grant through the Maryland Economic Development Assistance Fund (MEDAF) and a $1.5 million grant from the Maryland Department of Labor, Licensing & Regulation Workforce Training Fund. Baltimore County is providing a $6 million conditional grant from the Baltimore County Business Growth Fund and a $150,000 Baltimore County Economic Development Training grant. “I applaud GM’s decision to partner with Maryland in using the technology of the future to build cleaner, more efficient cars that will lead to in new jobs for Marylanders,” said Sen. Cardin, a member of the Environment and […]

Certified and Ready to Go

There are no national standards for certifying a site. Here is a handy guide to the typical certification process from a firm that specializes in evaluating mega-sites. Q As we begin to look at sites for a new facility, we are coming across a number of sites designated as “Certified.” What is a certified site and how does this designation create value for us? The Expert Says: A certified site is one which has been screened and evaluated against a set of development criteria in order to assess, and certify, its readiness for development. The first thing to know is that there are no national, centralized standards for site certification. So if you are evaluating a site that carries such a designation, you should still evaluate the site in full against your project specific criteria. If a site has been certified, it will have readiness advantages if the evaluation items and their criteria definitions are properly identified and designed to align very closely to what you are looking for in a site. All of these criteria issues are ones that matter to you in how timely and how costly it will be to get you project developed on the property, so properly designed and executed programs will have real bottom line value to you. Most certification programs will cover such fundamental criteria as property identification, property ownership and control, and availability. However, the “certification” criteria for each of these factors may vary from one program to another. With identification, there may informal descriptions or there may be full boundary surveys completed. With ownership and control, one property may have an owner or owners identified while another may not address this in full, particularly for a site that has multiple owners or different owners of different parcels. Availability may be documented with a formal real estate listing, or an option held by a development agency, or even simply a letter from the owner(s). One key element of availability is an opening or list price. A fundamental real estate issue is zoning. Since there are many reasons why a property may not be currently zoned for your intended purpose (including a lack of zoning regulations in the community), a properly certified site should address the zoning issues and the process, schedule and likelihood of achieving the required zoning designation in a timely manner. Constructability issues include surface and near-surface conditions such as flood plain and soil conditions. A major component of a site’s readiness is its development status. Four key studies that […]

60 Seconds with Hartley Powell, National Leader of KPMG’s Global Relocation & Expansion Services

60 Seconds with Hartley Powell, National Leader of KPMG’s Global Relocation & Expansion Services

KPMG recently released the results of its 2010 Competitive Alternatives study. We asked Hartley Powell to comment on major trends tracked by the study. BF: Do the 2010 results show an improvement or a decline in overall U.S. competitiveness? HP: My assessment is that the United States is holding its own in terms of cost-competitiveness relative to other industrialized nations. While the ranking of the United States in 2010 is somewhat lower than in 2008, this is due mainly to the shift in emphasis for the 2010 edition, which bases the comparison on the major cities within each country rather than one with a broader base of larger and smaller cities. Over the last few years, U.S. companies have achieved massive structural changes that have lowered the cost of production. BF: What is the biggest factor currently impacting U.S. competitiveness? HP: Productivity growth has clearly been a key factor in spurring U.S. competitiveness in the global economy. Despite the impact of the recent financial crisis and increased competition from fast-growing economies, such as those in China and India, the U.S. economy has demonstrated its resiliency during the recent recession, and strong productivity performance has been an important contributor to that success. This improved productivity supports solid competitiveness for the U.S. for the near and longer term. BF: We were surprised to see Mexico get the top ranking for R&D cost-competitiveness. Is the skill-level there comparable to the United States and Europe? HP: R&D includes a wide range of activities, from scientific research to prototype manufacturing. Many companies have developed and expanded these types of operations in Mexico for many years, so it would be safe to assume that their needs are being met. BF: The study lists increased electricity rates as a cost trend in the U.S. Will this be a temporary disadvantage as more alternative energy comes online? HP: A number of industry studies are projecting strong growth in U.S. electricity demand over the next several years, leading to continued upward pressure on U.S. electricity rates. Clearly, electricity prices vary significantly across different regions of the United States. Renewable energy mandates can increase the cost of power since renewables are generally more expensive than traditional sources of energy. While future demand may be met from alternative or renewable sources, we still do not anticipate a decline in rates. BF: The study indicates that labor costs have the biggest impact on cost competitiveness. Can a location mitigate that impact if it has an available pool of skilled workers within proximity […]

Race to the Bottom

From the Desk of the Editor in Chief Several times a year, Business Facilities strives to tell you who is at the top of the heap in the never-ending competition between locations. In most cases, those who reach the highest get the most attention. This month, we turn that focus upside down. Our cover story identifies the leading low-cost manufacturing centers. When it comes to the cost of doing business, nobody wants to come out on the high end. We want to give special thanks to our friends at KPMG, who gave us an early look at their 2010 Competitive Alternatives analysis, which forms the heart of our cover feature. KPMG’s survey is issued every two years and it is without a doubt the most comprehensive cost analysis undertaken. The scope of the 2010 report requires a deep breath just to recite: KPMG examined 112 cities in 10 countries and compared 26 cost components as they applied to 17 business sectors over a 10-year planning horizon. Some of the results are surprising; all are informative. Mexico continues to be a low-cost leader, primarily due to inexpensive labor; Canada fared well, in part due to currency fluctuations in its favor. Japan got clobbered by the rising yen, and the U.S. slipped a bit because the analysis formula gave greater weight to the largest cities. To come out on top in this heated competition, you have to hit bottom. Congratulations to all of the low-cost manufacturing centers. Keep up—or, rather, down—the good work!