“The advantage if there are other advanced manufacturers in the area is that someone is already doing training in that area, so that they can acquire a trained workforce coming into their shop,” Hooks said.
Still, Pettit said locating a site in a place with similar companies can lead to increased costs as those companies compete for the same labor, and Hooks agrees some companies will be wary of a crowded local landscape.
“If there are multiple advanced manufacturers in the area, there is tremendous competition for workforce,” Hooks said.
Other Workforce Factors
Educational and technical training partners are an essential part of developing and maintaining a steady supply of capable workers.
“What are the tech colleges doing? And are they willing to work with the company to get the specific certificates that the company is looking for—to create the curriculum that the company is looking for?” Hughes said. “Those partners are really important.”
Hooks said details matter with local workforce training programs.
“Companies want to make sure workforce training programs teach what the company needs taught and that they will be available to the company,” Hooks said. “They should also do enough due diligence to make sure the programs are of a quality level that makes them useful to the company.”
Another important element of the workforce question is the quality of life in a community, Hughes said, particularly because companies often are considering a site as a 25-to-50-year investment. Workers need to be attracted to a community and willing to settle there. “Companies are really expecting their employees to be here for quite some time and become a part of the community,” Hughes said. It is an inexact, qualitative factor and can encompass areas such as schools, housing, cost of living, and culture.
“Today, it is just as important to highlight communities that sites are located in or near for their ability to serve as a place where talent will not only want to work, but also build a life,” Fitzpatrick said.
In addition, Madison said companies increasingly are valuing diversity when analyzing a community’s workforce.
“Diversity counts,” Madison said. “The magic of creativity that comes with diversity and expanding what you can do as a company when your workforce is diverse has been proven to be something that is very positive.”
Logistics & Supply Chain
Madison said the supply chain challenges that have accompanied the pandemic have made companies highly attuned to their supply chain when weighing sites, considering factors such as the proximity of vendor suppliers and the ease of travel for vital materials and finished products. Because advanced manufacturing can require many different materials in production, Hughes said the supply chain and ready access to those materials can be particularly important.
Pettit said advanced manufacturers should consider sites with an emphasis on “the end-to-end value chain,” ranging from where customers are located to where suppliers are located. As an example, Pettit pointed to WI-based Generac’s decision to build on a site in South Carolina. The company has manufacturing and distribution facilities in the Midwest, but many of its customers are located in the Southeast. The company decided it needed to diversify and build a new site closer to its customers for improved distribution costs and speed.
Pettit said factors such as the proximity of major highways, ports, and railroads are all important and can take on added importance depending on the products being moved. For instance, a manufacturer with heavy, dense products could reduce their transportation costs if they have access to a rail spur.
Other logistical considerations also are crucial, such as general infrastructure and utilities, as well as the cost of doing business, including taxes and incentives.
In addition, Pettit said companies often do not want to make a large investment in a new site upfront but instead be positioned to expand over time. That means logistics obstacles that could impede growth are a red flag.
“It’s important to have the optionality for expanding or modifying the facility in the future,” Pettit said.
In Michigan, Hemlock Semiconductor Operations (HSC) recently announced its expansion at the company’s Thomas Township headquarters to meet the increasing demand for hyper-pure polysilicon in the semiconductor and solar industries. To facilitate the expected $375 million capital investment, Thomas Township, in coordination with Saginaw Township, will expand sanitary sewer capacity for the HSC site. The expansions will include the construction of two new lift stations and five miles of sewer mains. A Michigan Strategic Fund approval of a $27 million Strategic Site Readiness Program (SSRP) performance-based grant will support the infrastructure improvements.
Strong Partners To Count On
Companies want to work with local, regional, and state teams who are strong partners and demonstrate a willingness and ability to collaborate to help meet companies’ needs and not leave them isolated.
