December 19th, 2017
Area Development Online
Site & Facility Planning Insider
Seth Martindale, a managing director at CBRE, explains how the U.S. has a prime opportunity to reestablish itself as a worldwide leader in advanced manufacturing. He suggests the Trump administration’s “pro-America” agenda may be having an effect.

When it comes to making their next location or expansion decision, companies must be aware of differences in costs and other factors that exist not only regionally, but also locally, according to Brad Lindquist and Gregg Wassmansdorf, senior managing directors at Newmark Knight Frank. This also applies to a location’s right-to-work status, says Mark Sweeney, a senior principal at McCallum Sweeney Consulting. He advises site selectors to dig deeper into regional and local union activity before discounting any locations based on right-to-work status alone.

Moreover, site selectors should look for communities that have a strategic plan in place, advises Dean J. Uminski, principal at Crowe Horwath. Additionally, Josh Bays, a principal at Site Selection Group, points out five common mistakes companies make in the location decision process and suggests ways these errors can be avoided in order to optimize the long-term success of their decisions.

Needles to say, satisfying labor requirements is a primary consideration in any location or expansion decision. Those companies that are looking to attracting the millennial workforce — which is moving up in the corporate hierarchy — must take into account its lifestyle and workplace preferences, says Jennifer Carroll, manager of Credits and Incentives at True Partners Consulting, while integrating these workers into a multigenerational workforce.
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Seth Martindale Asks, “ Is American Manufacturing: Back in the Game?”

Seth Martindale, Managing Director, CBRE
 

The U.S. economy has seen slow and steady growth since the Great Recession ended in June 2009. While many are still suffering the effects of the subprime mortgage crisis, the U.S. economy has actually experienced an unprecedented net-expansion for 100 consecutive months as of September 2017.

Depending on how you measure it, manufacturing makes up between 10 percent and 15 percent of America’s overall economy, accounting for a large portion of overall economic growth. Although the manufacturing rebound hasn’t been as robust as other sectors of the economy, the manufacturing sector has experienced 13 consecutive months of growth and continues to trend upward. This trajectory continues despite supplier problems with distribution channel speed and recent hurricanes causing major delays in supply chain fulfillment.
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Brad Lindquist & Gregg Wassmansdorf Explain Why Local Geography Still Matters in the Global Location Decision

Brad Lindquist, Senior Managing Director, Newmark Knight Frank
Gregg Wassmansdorf, Senior Managing Director, Global Corporate Services, Newmark Knight Frank
 
 

As global markets continue to flex with economic and social risks — and globalization itself is under attack from some quarters — companies continue to seek locations around the world where they can grow their business profitability, with an eye on measured risk. Based on its market size, skilled workforce, capacity for innovation, low energy costs, and other factors, the United States continues to be a premier destination for foreign direct investment. For our non-American clients looking at the vast U.S. market and geography, it can be a daunting challenge to consider where to locate new facilities of any type. Our clients acknowledge and recognize that vast differences in operational costs and conditions exist across the country — of course smaller cities in the interior will be cheaper than the tier-one metros of New York and San Francisco — and yet it is generally unknown how much variation also exists within sub-regions of the country.

It is common to hear references made to the business climate of “the Southeast,” “the Midwest”, “the Southwest,” “California” (always California on its own), “the Great Lakes States,” and so on. Yet, generalizations about regions mask a great deal of variation within those regions when one closely examines the things that matter most to business: the presence of workforce and talent; utility quality and cost; infrastructure capacities; availability of economic incentives; and other operating costs and conditions. These site selection factors (“location drivers”) are the details that differentiate locations that may be bad, good, or great for a new corporate investment, and there is often more variation at the local level than people commonly expect. Hence, when companies go global, their success often depends on place characteristics that are highly local and may only be discovered through a comprehensive site selection process.
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Mark Sweeney Discusses the New World of Right to Work

Mark Sweeney, Senior Principal, McCallum Sweeney Consulting
 

One of the dramatic changes in the economic development landscape in recent years is the number of states that have passed right-to-work (RTW) legislation. From the original 17 RTW states that passed relevant legislation in the 1940s and 1950s, the number of RTW states now stands at 28. Six states have become RTW states within the past five years, including traditionally union states such as Michigan, Wisconsin, and Indiana.

Right-to-work legislation establishes that employees do not have to join a union even if one is voted in by the facility workforce. This creates a difficult environment for unions to establish effective union organizations in such states. Many arguments have been presented on both sides of the issue over the years. Proponents of RTW cite the lack of freedom of choice of employees who may be forced to financially support a union that they did not seek to represent them. Those against RTW note that the net effect of RTW legislation is to create a block of “free riders” — employees who benefit from the collective bargaining of the union but who do not contribute to the union.
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Dean J. Uminski Highlights the Importance of Community Strategic Planning in the Location Decision

Dean J. Uminski, CEcD, Principal, Crowe Horwath
 

Communities across the country are clamoring to vie for corporate relocation and expansion projects. Many come to the negotiating table boasting generous incentives, but incentives alone cannot guarantee a relocation or expansion project will work out as a company hopes. To truly determine whether a community will be a good fit for an existing expansion or a new location project, corporations should require local and regional economic development organizations (EDOs) to provide community strategic plans that identify their main priorities and goals and lay out a road map for achieving them.

Community Strategic Plans Take Center Stage
With the competition for expansion and relocation projects heating up, EDOs increasingly are seeing the value of formulating community strategic plans to entice companies to consider their areas. Strategic plans show that an EDO recognizes the need to do things differently than they were done in the past — the need, in other words, to become efficient and progressive in order to compete in the global marketplace. A strategic plan should provide the foundation for a community’s realistic and cost-effective economic development efforts and reinforces its commitment to achieving and maintaining those efforts. It also is evidence of an EDO’s ability to collaborate and develop consensus to make sound fiscal decisions and enhance community image and branding.
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Josh Bays Cautions Against the Top Mistakes Companies Make During the Site Selection Process

Josh Bays, Principal, Site Selection Group, LLC
 

An independent location advisory, economic incentives, and real estate services firm, Site Selection Group completes more than 100 corporate projects per year for a variety of project types including manufacturing plants, distribution centers, headquarters, call centers, and data centers. Although we counsel companies to approach site selection in an objective manner, we have seen companies make mistakes as we guide them through their expansion, consolidation, or relocation projects. As the old saying goes, you learn more from your mistakes than your successes.

In an attempt to save companies from the hardships of their predecessors that we’ve witnessed over the years, we’ve compiled the top five mistakes we routinely see companies make in the location decision process. Consciously eliminating these mistakes from your next site selection project will result in the most effective location decisions.
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Jennifer Carroll Explains How Millennial Workforce Trends Are Affecting Business

Jennifer Carroll, Manager, Credits and Incentives, True Partners Consulting LLC
 

The business world continues to puzzle at “the millennial mind” — whether it is conflating their love of avocado toast with financial insecurity, or advocating for unorthodox office arrangements to capture their attention, companies remain perplexed by the youngest generation in the workforce. The simple answer may be that, like the Gen Xers and Boomers before them, there are general trends rather than defining traits. And for those who wish to attract millennial and millennial-minded workers, we will explore those general trends that appear near and dear to millennials’ hearts.

First, to define the parameters of the millennial generation: A 2014 article1 from The Atlantic described millennials as persons born between 1982 and 2004. They are preceded by Generation X (those born between 1965 and 1984) and baby-boomers (born 1946–1964). The generation after millennials (now being called Generation Z) includes those born after 2005, who will begin entering the workforce in about 10 years.
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