Business Facilities Staff

There are some things we assumed we never would see in our lifetime: The melting of the polar ice caps; a car that runs on electricity; the ocean running out of fish; a labor shortage in China; the Mets winning back-to-back championships. Well, with the exception of the item relating to the long-suffering denizens of Flushing Meadow, you can throw that list out the window. From Saturday’s front page of The New York Times comes a startling report that unskilled factory workers in China’s industrial heartland are being offered “signing bonuses” and 20-percent salary increases. The world’s most populous nation – at least 1.3 billion people call it home—apparently is suffering from an acute labor shortage. “Cheap labor” and China no longer are synonymous. The Times reports that some Chinese manufacturers, already weeks behind schedule because they can’t find enough workers, are closing down production lines and considering raising prices. Telemarketers in China are turning away potential customers because recruiters have fully booked them to cold-call people and offer them jobs. The immediate cause of the labor crunch in China is said to be a shift in worker relocations that resulted from the massive stimulus package China enacted during the global economic crisis. Millions of migrant workers employed in coastal cities returned to their rural homes for the long Lunar New Year last month, but these workers are not planning to go back to their jobs in the cities because the government’s half-trillion-dollar stimulus program has created plenty of work where they live. However, economists also see a longer-term trend: after two decades of unparalleled growth, China is simply running out of workers. This trend was masked last year by massive layoffs at the nadir of the downturn, but now it has emerged with a roar as China resumes its double-digit growth. The impact of this unexpected labor shortage likely will be measured soon in price increases for American consumers who are addicted to low-cost goods made in China. It also may spawn inflation in China as wages there rise. The average wage rate for factory workers in Guangzhou was 80 cents an hour two years ago. Today, it is $1.17 and moving higher every month. “You can walk into any factory and get a job,” a 22-year-old plastics worker told the Times. While this is not good news for U.S. consumers, it may prove to be a blessing for U.S. manufacturers. Rising prices on Chinese goods, accompanied by rising wages for Chinese workers, may be a more effective brake on […]


There are some things we assumed we never would see in our lifetime: The melting of the polar ice caps; a car that runs on electricity; the ocean running out of fish; a labor shortage in China; the Mets winning back-to-back championships. Well, with the exception of the item relating to the long-suffering denizens of Flushing Meadow, you can throw that list out the window. From Saturday’s front page of The New York Times comes a startling report that unskilled factory workers in China’s industrial heartland are being offered “signing bonuses” and 20-percent salary increases. The world’s most populous nation – at least 1.3 billion people call it home—apparently is suffering from an acute labor shortage. “Cheap labor” and China no longer are synonymous. The Times reports that some Chinese manufacturers, already weeks behind schedule because they can’t find enough workers, are closing down production lines and considering raising prices. Telemarketers in China are turning away potential customers because recruiters have fully booked them to cold-call people and offer them jobs. The immediate cause of the labor crunch in China is said to be a shift in worker relocations that resulted from the massive stimulus package China enacted during the global economic crisis. Millions of migrant workers employed in coastal cities returned to their rural homes for the long Lunar New Year last month, but these workers are not planning to go back to their jobs in the cities because the government’s half-trillion-dollar stimulus program has created plenty of work where they live. However, economists also see a longer-term trend: after two decades of unparalleled growth, China is simply running out of workers. This trend was masked last year by massive layoffs at the nadir of the downturn, but now it has emerged with a roar as China resumes its double-digit growth. The impact of this unexpected labor shortage likely will be measured soon in price increases for American consumers who are addicted to low-cost goods made in China. It also may spawn inflation in China as wages there rise. The average wage rate for factory workers in Guangzhou was 80 cents an hour two years ago. Today, it is $1.17 and moving higher every month. “You can walk into any factory and get a job,” a 22-year-old plastics worker told the Times. While this is not good news for U.S. consumers, it may prove to be a blessing for U.S. manufacturers. Rising prices on Chinese goods, accompanied by rising wages for Chinese workers, may be a more effective brake on […]

Attention Walmart Shoppers!

BF Staff

Attention Walmart Shoppers!

There are some things we assumed we never would see in our lifetime: The melting of the polar ice caps; a car that runs on electricity; the ocean running out of fish; a labor shortage in China; the Mets winning back-to-back championships. Well, with the exception of the item relating to the long-suffering denizens of Flushing Meadow, you can throw that list out the window. From Saturday’s front page of The New York Times comes a startling report that unskilled factory workers in China’s industrial heartland are being offered “signing bonuses” and 20-percent salary increases. The world’s most populous nation – at least 1.3 billion people call it home—apparently is suffering from an acute labor shortage. “Cheap labor” and China no longer are synonymous. The Times reports that some Chinese manufacturers, already weeks behind schedule because they can’t find enough workers, are closing down production lines and considering raising prices. Telemarketers in China are turning away potential customers because recruiters have fully booked them to cold-call people and offer them jobs. The immediate cause of the labor crunch in China is said to be a shift in worker relocations that resulted from the massive stimulus package China enacted during the global economic crisis. Millions of migrant workers employed in coastal cities returned to their rural homes for the long Lunar New Year last month, but these workers are not planning to go back to their jobs in the cities because the government’s half-trillion-dollar stimulus program has created plenty of work where they live. However, economists also see a longer-term trend: after two decades of unparalleled growth, China is simply running out of workers. This trend was masked last year by massive layoffs at the nadir of the downturn, but now it has emerged with a roar as China resumes its double-digit growth. The impact of this unexpected labor shortage likely will be measured soon in price increases for American consumers who are addicted to low-cost goods made in China. It also may spawn inflation in China as wages there rise. The average wage rate for factory workers in Guangzhou was 80 cents an hour two years ago. Today, it is $1.17 and moving higher every month. “You can walk into any factory and get a job,” a 22-year-old plastics worker told the Times. While this is not good news for U.S. consumers, it may prove to be a blessing for U.S. manufacturers. Rising prices on Chinese goods, accompanied by rising wages for Chinese workers, may be a more effective brake on […]


Ontario Boosts Funds for Ford Windsor

Ontario Boosts Funds for Ford Windsor

Ontario will more than quadruple its promised support to help keep Ford’s Windsor engine plant working, according to a report in the Toronto Sun. Finance Minister Dwight Duncan and Economic Development Minister Sandra Pupatello – both Windsor-area MPPs—made the $81 million funding announcement in Windsor Friday. “This investment reaffirms our government’s commitment to strengthening our local economy and will get Windsor families back to work,” Duncan said in a statement. Ontario had pledged $17 million to the plant in March 2008 but said Friday’s money will build on that support. The money — along with up to $736.4 million being invested by Ford itself—will help keep or create 757 jobs at the plant, the government said. “To be truly competitive at a world-class level we have to work together—we have to build partnerships between business, labor and government,” Jim Tetrault, Ford’s vice-president of North American manufacturing, said. “And it’s that spirit of collaboration combined with a willingness to innovate that has breathed new life into the operations at the Essex Engine Plant.” Ford was the only one of North America’s Big 3 automakers that did not need government money to keep it from going out of business in 2008. Its Project Renaissance refurbishment will retool the engine plant so it can produce 5.0-litre V-8 engines for use in the Ford Mustang.


Grow Your Own

From the Desk of the Editor in Chief Every year, we take a high-level tour of the most important developments in the burgeoning biotechnology sector. For this year’s round-up, we set our sights a bit lower, because the most exciting activity literally is taking place at ground level. The buzzword is bioenergy, and it seems like everyone is rushing to transform their favorite local staples—and some not-so-favorite pests like algae—into production-scale cellulosic ethanol facilities. Next-generation biofuels have been ripped out of research papers and pilot incubators and ramped up at warp speed. Everything from sorghum to pond scum to the fat your grandma used to skim off her chicken soup is being converted into jet fuel, lubricants, adhesives and even cosmetics and candles. The major oil companies have taken note and are investing heavily in commercial-scale cellulosic biofuel plants, many located near feedstocks that were written off as marshland not suitable for development. The biotech revolution has met the renewable energy revolution head on, and it’s coming soon to a fuel depot near you. Developments are unfolding rapidly. We encourage you to keep a close eye on the Breaking News section of our Web site, www.BusinessFacilities.com, after you digest this month’s cover feature. We invite you to fill up your tank and enjoy the ride. And don’t throw away those lawn clippings this summer. They may come in handy.






Ohio Corporate Moves

V&M Star Expands in Youngstown V&M Star is investing $650 million in an expansion of its Youngstown, OH facility that is projected to create more than 350 new full-time jobs, and retain more than 400 jobs. Ohio Gov. Ted Strickland and Lieutenant Governor Lee Fisher lauded the announcement at a press conference in Youngstown. V&M Star, a leading producer of seamless oil country tubular goods, line and standard pipe, coupling stock and mechanical tube headquartered in Houston, TX, confirmed that it will build a new state-of-the-art rolling mill expansion project in Youngstown in both Mahoning and Trumbull counties. The state has been working with V&M Star over the past year to make this investment possible. Gov. Strickland met with V&M officials in Youngstown to discuss the company’s plans moving forward. “We commend V&M Star and its parent company, Vallourec, for their continued commitment to grow here in Ohio, an affirmation of Ohio’s strengths in manufacturing, our dedicated workforce and the state’s extensive logistics network,” Gov. Strickland said. “We also congratulate and thank the leadership in both Trumbull and Mahoning counties for their collaborative work in meeting the goals of the company, especially Youngstown Mayor Jay Williams, Girard Mayor James Melfi, and Congressman Tim Ryan for their diligent efforts and support of V&M’s continued investment in northeast Ohio.” The state of Ohio’s early commitment of $20 million in American Recovery and Reinvestment Act funding for road improvements and the relocation of rail lines near the current property of the V&M Star Steel Pipe Production Facility helped significantly to make these new jobs for Ohioans possible. Ohio Gets $30 Million Grant for CSX National Gateway Gov. Ted Strickland recently announced that Ohio has been awarded $30 million in federal Transportation Investment Generating Economic Recovery (TIGER) grants for the CSX National Gateway project. The National Gateway is an $842 million, multi-state infrastructure freight project aimed at reducing congestion on roads and highways, lowering emissions, and conserving energy. The TIGER Discretionary Grant program is part of the American Recovery and Reinvestment Act. “The National Gateway will improve the movement of freight and give Ohio even more opportunities to deliver goods to markets across our region and country,” Gov. Strickland said. A total of $98 million was awarded in TIGER grants to cover the federal portion of National Gateway clearance projects in Ohio, Pennsylvania and West Virginia. Ohio served as the lead sponsor of the National Gateway TIGER application. Ohio already has committed $20 million in targeted ARRA resources from the Federal Highway Administration to […]



60 Seconds with Mark Peterson, President, Greater Rochester Enterprise

60 Seconds with Mark Peterson, President, Greater Rochester Enterprise

The state government and legislature in New York is preparing to end the Empire Zone incentives program in July and replace it with a more cost-effective program that has stringent job-creation requirements. We asked Greater Rochester Enterprise President Mark Peterson for his thoughts on this controversial move, and invited him to comment on proposals to have Empire Zone incentives convert from loans to grants if recipients are able to meet specified job targets. BF: Has the Empire Zone incentives program been effective as a job-creation tool in New York State? Can you tell us how many jobs have been created with the assistance of the program? MP: The Empire Zone incentives program has been effective at creating jobs in New York State. Since its inception in 2000, it has certified more than 8,000 businesses that employ more than 350,000 people. However, companies who have been helped by the Empire Zone program need to do a better job of meeting their investment goals. BF: Do you think the program should be replaced? MP: I don’t have any reservations to doing away with Empire Zones, as long as it’s replaced with a program that allows us to be competitive. The devil is in the details of providing incentives to companies wishing to expand or move here. For example, tax credits are fine provided they can be monetized over time so a company can take advantage of the full financial benefit through either utilization or by receiving a refund. BF: What would be the economic impact on your region if current plans to replace the Empire Zone program are enacted in July? Do you think the changes may have a negative effect? MP: The economic impact on the Greater Rochester Region will be positive as long as the Empire Zone is replaced with an affordable, sustainable program that makes it worthwhile for businesses to expand or relocate here. BF: How would you like to see the state incentives program adjusted, or do you think it should remain identical to the current structure? MP: I would like to see it adjusted. Most companies are challenged with what they can do at the front end, because there is usually capital expenditure going on to build a new plant. One way the state could help companies deal with those challenges —and create jobs—would be to offer loans. The loans would turn into grants under the right circumstances. If you make your job target, we’ll convert the loan to a grant. If not, the state would demand […]