Tennessee

Tennessee, Mexico, Canada in Consideration for Nissan Infinity Production

Nissan Motor Co. is planning to add capacity for production of 100,000 Infinity brand vehicles in a North American plant.

First Infinity-JX manufactured in Smyrna, TN

First Infinity-JX manufactured in Smyrna, TN (photo – Infiniti USA)

Johan de Nysschen, president of Infiniti Motor Co, is scheduled to meet with Christian Paradis, Minister of Industry for Canada.

Nysschen told WSJ that it would be an exploratory talk, while the Minister’s office said he would be making a push for investment by highlighting Canada’s skilled labor, business-friendly taxation and infrastructure.

Nysschen also said that existing Nissan plants in Mexico and Smyrna, Tennessee would be considered.

If Nissan decides to go with a new plant in Canada, they will have to invest about $2 billion. If they choose Smyrna or the Mexican plant, the investment required would be half the cost of the new plant.

Either way, localized production of Infinity vehicles in North America will create 2,000 new Nissan jobs in the region, with production scheduled to be underway by 2017.

This plant is part of Nissan’s on-going strategy to expand its geographical manufacturing footprint and localize production regionally. Last year in December, the company announced that it would be adding a compact Infiniti brand to its Sunderland plant in the United Kingdom, with production scheduled to begin in 2015.

That $407 million investment added capacity for production of 60,000 Infiniti vehicles and created 1,000 new jobs in the U.K. Before that, Nissan had announced that the Xiangyang plant in China would get a $315 million investment, with Infiniti production scheduled for 2014.

For North America, the company has a goal of producing 85 percent of all Infiniti and Nissan vehicles locally.

The first 7-passenger 2013 Infiniti JX luxury crossover rolled off the assembly line in Smyrna, TN last year in Feb. At that time, Susan Brennan, vice president for Manufacturing for the Smyrna and Decherd plants, said they were honored to produce the Infiniti JX in Middle Tennessee, and that quality craftsmanship would go into each new Infiniti model rolling off the Smyrna production lines.

Nissan has already spent $2.5 billion on the Smyrna plant, which has a 550,000 annual production capacity, with the Rogue crossover and all-electric Nissan Leaf taking up 300,000 units. Nissan already employs 6,000 workers at the Smyrna plant, and another 1,400 in Decherd, which is a powertrain assembly plant.

Massachusetts Tops Milken State Technology Index

The non-profit Milken Institute released its 2012 State Technology and Science Index, which showed that Massachusetts is still the best destination for hi-tech companies, jobs and careers.

Milken Institute State Technology and Science Index

Milken Institute State Technology and Science Index (photo – milkeninstitute.org)

This index evaluates each state’s capabilities in the science and tech sectors based on 79 unique indicators, including the state’s ability to leverage these assets for attracting companies and high-paying jobs.    

Milken has published this index every two years for the past decade, and Massachusetts has been on top every single time. In fact, Massachusetts with a score of 86.40 has actually widened the lead this year over Maryland which scored 79.41 and retained its second place showing.

Kevin Klowden, senior economist at Milken and co-author of the report, called Massachusetts the “indomitable state” with a critical mass of research centers, hi-tech firms and universities.

California (75.70), which had been in fourth place in the 2010 index, jumped up one place to push Colorado (75.07 ) down to fourth place. Here’s the list of the top ten states in the Milken State Technology and Science Index.

1. Massachusetts

2. Maryland

3. California

4. Colorado

5. Washington

6. Virginia

7. Utah

8. Delaware

9. Connecticut

10. New Hampshire

The 79 indicators the index is based on are categorized into five groupings under technology and science work force, technology concentration and dynamism, human capital investment, risk capital and entrepreneurial infrastructure, and research and development inputs.

The state which surged the most in the rankings this year was Tennessee, which jumped from its 41st spot in 2010 to 35th in 2012, thanks to huge gains in the risk capital and entrepreneurial infrastructure category, which means the state saw a lot of growth in companies getting venture capital or cashing in with public offerings.

Virginia likewise jumped two spots to a 6th place ranking based on a stellar performance in the risk capital category. Rhode Island cracked into the top 20 with a 17th place ranking due to its gains in the technology and science work force category.

Klowden says the index shows how important innovation is for state economies. States such as California with a traditionally strong science and technology sector have been able to claw their way back out of the recession by riding on the backs of a comeback in the tech sector.

Read the full Milken Institute 2012 State Technology and Science Index – Download (pdf) 

Knoxville Gets TVA’s First Metro Data Center Site Designation

The Tennessee Valley Authority had brought in Deloitte Consulting for a site assessment study to seek out and evaluate data center site locations throughout the TVA service area, which covers seven states.

TVAsites.com

Photo – TVAsites.com

Deloitte came up with 20 sites, with a site in the Corridor Park in the City of Knoxville, TN identified as the TVA’s first metro area data center site.

“Having this site identified as a primary data center location gives the Knox County area an advantage in the highly competitive site selection process,” said John Bradley, TVA senior vice president for Economic Development. “We are glad to work with the Knoxville Chamber, local utilities and other community, state and regional leaders to actively market these sites to companies as part of our global economic development recruitment efforts.”

To order to be classified as a metro data center site, Deloitte required a threshold of 10 available acres with fiber optic connectivity from multiple carriers and a power capacity of at least five megawatts.  Both of these requirements are essential for data center projects.

The 10.6 acre Knoxville site priced at almost $2 million is the only one marked “primary ready for development” out of the 20 sites identified by Deloitte. The telecom infrastructure is more than adequate, and it has a reliable electricity supply.

The site on lots 21 and 23 in Corridor Park is in West Knox County, located close to I-40, I-75 and I-140. Power can be provided for a project from three sub-stations.  Any company which sets up a data center here will join companies such as CSL Plasma and Siemens Molecular Imaging.

Doug Lawyer, vice president of economic development for the Knoxville Chamber, said the designation will be a valuable tool and he looks forward to “touting the advantages of the Knoxville site” to high wage prospective data center end users.

You can see the full list of all 20 data center sites identified by Deloitte on the tvasites.com website, one of the largest GIS-based searchable databases for site selectors, which includes categorized economic development sites and buildings covering 80,000 square miles across seven states.

The TVA classifies data centers as a targeted industry on its tvaed.com website.

Apart from the long-haul fiber optic, reliable power and easy access to the interstates, TVA cites the other positives for data center projects – abundance of water supply, 83 Tennessee Valley colleges and universities, and a low possibility of a natural disaster.

Chattanooga Helps Global Green Lighting Bring Back Production from China

Global Green Lighting (GGL) announced plans to create 250 jobs for their new radio-controlled LED street lamp assembly facility in Chattanooga, Tennessee.

Global Green Lighting

Global Green Lighting (photo – tn.gov)

GCL currently subcontracts their production to a company in China.

The company was able to set up the hi-tech plant and is now creating jobs because the City of Chattanooga took the initiative to support the company and provide the required infrastructure for testing GCL’s innovative and energy-efficient street lamps.

A couple of years ago, the city deployed a 1 gigabit per second fiber network offering high speed internet to every home and business. This fiber network in turn set the stage for GCL to offer its radio-controlled LED lights, which can reduce energy usage by 70 percent as compared to traditional street lights.

The kicker was that GCL’s radio control system further reduces maintenance costs. The LED lights send back information about malfunctions within 15 seconds, and can be monitored for energy usage. They can be controlled remotely to brighten or dim the lights as required. They reduce light pollution, and the life expectancy of each LED light is five times greater than the old lights.

The smart grid metering, reduced maintenance costs and lower energy consumption promised to provide Chattanooga with savings of around 75-80 percent of the operational costs for street lighting.

The city and GCL ran a successful public pilot test by installing 350 of the radio-controlled LED lights in a public park. Now Chattanooga has offered GCL an $18.1 million contract to replace 26,500 lights all over the city.

Once the lights have been replaced, the city will save $2.7 million per year, which means the new system will have paid for itself in seven years. Chattanooga Mayor Ron Littlefield praised GGL as an example of how the city’s tech infrastructure is helping create jobs and fostering innovation.

To deal with Chattanooga’s order and prepare for future growth (the company has initiated discussions with 26 cities), GCL has decided to hire 40 people right away. They plan to increase the workforce to 100 by the end of the year, and hire another 50 employees for maintenance, customer service and for sales and marketing.

“We are thrilled to execute our first community-wide street lighting project in our home city of Chattanooga,” said Don Lepard, president and CEO of GCL. “Following Chattanooga’s introduction of America’s first community-wide fiber optic network, the city has continued to raise its stature as a smart grid city and haven for innovation.”

Report – Vanderbilt University Had $8.6B Impact on TN Economy

An economic analysis report that was just released says that Vanderbilt University generated an economic impact of $8.6 billion in Tennessee.

Vanderbilt University

Vanderbilt University (photo – vanderbilt.edu)

The report, prepared by Austin, Texas-based TXP, Inc., says that the university is responsible for creating and supporting 58,000 jobs, resulting in more than $3.4 billion in labor income.

“Vanderbilt is proud to call Tennessee home and to contribute to the economic vitality of our neighbors across the state,” said Chancellor Nicholas S. Zeppos. “While all that we do is not easily quantifiable, it’s gratifying to know the university contributes to a measurable and significant impact on the quality of life in Tennessee.”

Factors taken into account in the economic analysis include Vanderbilt’s direct spending on operations and construction, spending by students and visitors, and spending by businesses as a result of Vanderbilt’s presence in the state.

Highlights from the study, based on data for the fiscal year ending June 30, 2012:-

Economic impact – $8.6 billion, $5 billion value added, and $3.4 billion in labor income.

Jobs – 58,000, including 25,000 full- and part-time staff and faculty.

Construction – $86.6 million spending, with an economic impact of $198.5 million, 1,700 jobs and $64.1 million in labor income.

Student and Visitor Spending – $3.5 billion economic impact, 700,000 visitors, and $124.7 million in labor income.

Tax revenue – $221.6 million in state tax revenue.

“The overall economic and societal impact of Vanderbilt University is truly staggering,” said Catherine Glover, president of the Tennessee Chamber of Commerce and Industry. “The depth of their impact saturates not only Middle Tennessee and Tennessee’s rural communities, but indeed regions throughout the state. These areas of impact are diverse, ranging from health care to education and true workforce and economic development.”

The report adds that Vanderbilt plays an important role in economic development. Faculty and staff, for example, provide business support and other technical services to existing firms. Patents and business start-ups resulting from the commercialization of Vanderbilt academic research are sources of economic development throughout Tennessee.

Students, faculty, and staff of Vanderbilt also provide thousands of hours of community service each year. The report mentions that the total value of charity care, community benefits and other unrecovered costs provided by Vanderbilt in Tennessee exceeded $830 million.

Read the full Vanderbilt economic analysis report – Download (pdf)

Pronova Selects Blount County, TN for $52M HQ and Research Facility

Medical sciences company Pronova Solutions has chosen to locate its headquarters and a research and commercialization laboratory in Alcoa, Tennessee.

Pronova announcement in Blount County, TN

Pronova announcement in Blount County, TN (photo – blountchamber.com)

The announcement represents an investment of $52 million and the creation of 500 new jobs in Blount County.

“This is an important milestone for ProNova Solutions that signifies not only the next step in the advancement of proton technology, but it’s also an important investment in the Blount County community,” said Dr. Terry Douglass, chairman of ProNova Solutions. “With the Provision Center for Proton Therapy located in Knoxville and now the ProNova site in Alcoa, this is truly a regional effort and one we hope will benefit not only the citizens of East Tennessee, but that it will bring the next innovation in cancer treatment to patients and physicians across the globe.”

ProNova, in coordination with Provision Health Alliance, is developing next-generation proton therapy technology to treat cancer. Provision broke ground in April 2012 on a $119 million proton therapy cancer center at Dowell Springs Business Park in Knoxville.

Pronova will become the anchor tenant at the Pellissippi Place technology research and development park. They will construct two facilities on 26 acres on the West side of the property to house the company’s corporate headquarters along with a research and commercialization laboratory.

“This collective effort from many different entities really shows how far we’ve come to realize that an investment like this benefits the area as whole and not just one town, community or county,” said Chuck Alexander, chair of Blount Partnership Economic Development Board. “ProNova’s project is more than double the capital investment than Blount County, Knox County, Alcoa, Maryville and the Blount Partnership have made in the park. Thank you to Pronova for sharing in our vision of building a technology community.”

Both Blount and Knox Counties were in the running for the Pronova project.  As per Dr. Douglas, the main reasons for selecting Blount County included favorable land prices and the tax abatements that were offered.

Blount County did not release details of their incentives package, but their offer has to be better than the one Knox County made to Pronova last year, wherein Pronova would have paid $95,000 for a 9.5 acre site worth $950,000.

“In the past, Knox County invested millions of dollars in the Pellissippi Place technology research and development park, and it is good to see it attracting business growth,” said Knox County Mayor Tim Burchett. “The jobs created there by ProNova will not only benefit Knox and Blount counties, but our entire region.”

ProNova and Provision, both headed by Dr. Douglass, have plans to work with the Oak Ridge National Laboratory and the University of Tennessee to promote research and training in proton therapy. He claims that Pronova will have revenues worth $3.5 billion by 2023, and will be responsible for creating thousands of direct and indirect manufacturing jobs.

Portola Packaging to Invest $12M in TN and AZ Plants

Portola Packaging, Inc., a closure manufacturer for the food industry, announced that it was investing $12 million for expansion and capital improvements in its U.S. manufacturing facilities in Kingsport, Tennessee and Tolleson, Arizona.

Portola Packaging closures

Portola Packaging closures (photo – portpack.com)

The company projects that approximately 30 production employees will be added to those locations when the increased capacity is operational.

As a result of the decision to expand capacity at the Kingsport and Tolleson facilities, Portola will begin tapering off production at its Batavia, Illinois plant in the middle of April. The facility is expected to be completely shut down no later than August.

A total of 76 employees in the company’s Batavia plant will be affected. The Batavia facility has 15 corporate employees who will be relocated to the company’s corporate headquarters facility in the Naperville, Illinois area.

The company said that the geographic location of expected growth opportunities and the level of investment which would have been needed to upgrade this facility were factored into the decision to shutter the plant.

“Our Batavia facility has been producing closures for Portola for the past 20 years. After extensive analysis and careful thought, we came to the conclusion that closing this facility and upgrading production at our other two plants was the best decision for our customers and company,” said Kevin Kwilinski, president and CEO, Portola. ‘We want to thank our loyal Batavia production workers for their years of service and will be assisting them via outplacement services so they can transition to their next place of employment.’

Kwilinski added that the decision to expand in Tennessee and Arizona will help the company provide better service its existing customer base while providing a footprint for growth.

“Our Kingsport facility is located in the Northeast corner of Tennessee and is in close proximity to major Northeast, Southeast and Southern shipping lanes as well as a reasonable distance to the Midwest. Our Tolleson location is located in the Phoenix metro area and will primarily serve the Southwest, Northwest and Central U.S. states,” added Kwilinski.

Excluding the soon-to-be-closed Batavia plant and the recently shuttered plant in Cumberland, RI, Portola Packaging will still have nine manufacturing plants operational – two in the United States, three in Canada and one each in Mexico, the United Kingdom, Czech Republic and Russia.

Good Jobs First Report – The Job Creation Shell Game

The Washington, D.C.-based non-profit Good Jobs First has released a report which says that state and local governments are wasting billions of economic development dollars each year on getting companies to relocate, instead of focusing on the creating completely new jobs.

Good Jobs First Report – The Job Creation Shell Game

Good Jobs First Report – The Job Creation Shell Game (photo – goodjobsfirst.org)

The report, titled “The Job-Creation Shell Game,” details case studies and provides recommendations for solutions on the state and federal levels to stop what they call “interstate job fraud.”

“What was long ago dubbed a second war between the states is, unfortunately, raging again in many parts of the country,” said Greg LeRoy, executive director of Good Jobs First and principal author of the report. “The result is a vast waste of taxpayer funds, paying for the geographic reshuffling of existing jobs rather than new business activity. By pretending that these jobs are new, public officials and the recipient companies engage in what amounts to interstate job fraud.”

The case studies include the Kansas City metro area, where companies have been getting eight-figure subsidy packages to move from the Missouri side to Kansas, or vice versa.

The report authors call Georgia the Poach State, which stunned officials in Ohio by successfully luring the headquarters of NCR from Dayton, where the company had been based for 125 years.

According to the report, Mississippi is poaching jobs from Memphis, TN, while Tennessee created a new subsidy program to lure the North American headquarters of Nissan from California.

The 16 counties in North Carolina and South Carolina are poaching from each other, and Illinois is being blackmailed by Sears Holding Corp., which has continued to shed jobs despite getting a second nine-figure retention deal from Illinois.

“The costs are high and the benefits are low, since a tiny number of companies get huge subsidies for moving what amounts to an insignificant number of jobs,” added LeRoy. “The flip side is job blackmail: the availability of relocation subsidies makes it possible for companies that have no intention of moving to extract payoffs from their home states to stay put.”

The report lists the largest relocation subsidies provided ever, with the $275 million Sears got last year to stay put in Illinois at the top of the list. The second one is Prudential Insurance, which got $250 million from New Jersey in 2011, also to stay put. The third one is Nissan, which got $244 million in 2005 from Tennessee to move its headquarters from Gardena, California to Nashville.

The report does say that as many as 40 states have clamped down on this by making some incentive programs unavailable for jobs that are being moved around in-state. The report also recommends that states end their business recruitment activities that are explicitly designed to pirate existing jobs from other states.

It also suggests the federal government should reserve a small portion of its economic development aid for those states that amend their incentive codes to make existing jobs ineligible for subsidies and certify that they no longer engage in interstate job poaching.

Read the full Job Creation Shell Game report by Good Jobs First – Download (pdf)

Automotive Supplier Denso to Invest $1B in North America

Japanese automotive supplier Denso Corporation announced at the North American International Auto Show in Detroit, Michigan that it I investing nearly $1 billion in North America over the next four years, including $750 million in the United States.

Denso

Denso (photo – Denso/wikimedia)

The $1 billion investment will result in more than 2,000 jobs across the region, including more than 1,200 in the United States.

“Last year, we announced that DENSO will drastically localize product in the regions in which we operate,” said Terry Helgesen, senior vice president of Industry Relations at DENSO International America, Inc. “Not only are we making products in North America, but we’re also localizing critical tooling.”

In the U.S., DENSO is looking at investing more than $750 million in Michigan, Tennessee, Iowa, California and North Carolina.

The investment represents an increase in research and development, an expansion in existing production lines, the creation of new production lines, and the opening a new assembly and warehouse facility to support its Heavy Duty customers.

DENSO is also investing in making more of its own manufacturing equipment and dies locally. The company has dedicated a building at DENSO Manufacturing Tennessee in Maryville, Tennessee, where proprietary machinery will be made.

This will serve as the regional headquarters for manufacturing machinery and dies. However, DENSO will make machinery in other regional locations as well.

In the future, DENSO plans to make all of its critical manufacturing equipment in North America. The company has sourced several millions of dollars of business to American machine shops, which will positively impact the community and create additional jobs.

DENSO employs more than 14,000 people at 28 consolidated companies and affiliates in North America. Of these, 26 are manufacturing facilities located in the U.S., Canada and Mexico.

In the U.S. alone, DENSO employs more than 10,000 people in California, Michigan, North Carolina, South Carolina, Tennessee, Kentucky, Georgia, Iowa, Ohio, and Arkansas.

DENSO Corporation is headquartered in Kariya, Aichi prefecture, Japan. Worldwide, the company has more than 200 subsidiaries and affiliates in 35 countries and regions (including Japan) and employs more than 120,000 people. Consolidated global sales for the fiscal year ending March 31, 2012, totaled $38.4 billion.

Italian Company Selects Loudon, TN for $70M Ceramic Tile Plant

Officials of Italian company Ceramica Del Conca, along with Tennessee Gov. Bill Haslam and Department of Economic and Community Development (DECD) Commissioner Bill Hagerty, announced that the company will build its first North American manufacturing plant in Loudon, TN.

Del Conca

Del Conca (photo – delconca.com)

The $70 million investment on the project will create 178 new manufacturing jobs with hourly wages of $17, plus benefits.

“This announcement is great news for Loudon County, and I am excited to welcome Del Conca to Tennessee,” said Governor Haslam. “We are very appreciative of the investment in our state as we work toward our goal of becoming the No. 1 location in the Southeast for high quality jobs.”

Along with establishing a base for U.S. operations, the Loudon facility will allow Del Conca to serve major U.S. customers such as Lowe’s Arizona Tile, Mannington and Tile Shop more effectively. The facility will be a 320,000-square-foot manufacturing, research, showroom and administrative facility and will be located at the Sugarlimb Industrial Park.

“We have chosen Loudon, Tennessee for our new North American facility,” said Paolo Mularoni, president of Del Conca USA. “Loudon is geographically located close to the main U.S. highways and in close proximity to our sources of raw materials. We have found in Loudon a very cooperative team of people who are working hard in order to help us build a successful business that better serves our U.S. and Canadian customers.”

Tennessee was one of the five states under consideration for Del Conca’s ceramic tile factory and North American headquarters. The site selection process had been underway for the past four years.

As an incentive, Loudon offered Del Conca a payment-in-lieu-of-taxes (PILOT) program under which the company will pay $1.68 million instead of a decade’s worth of taxes. Del Conca was also given approval for purchase of the 30 acres of land at $15,000 per acre, along with a promise of additional support for the chosen site from the Tennessee Department of Transportation and the Tennessee Valley Authority (TVA).

“Loudon County welcomes Del Conca to East Tennessee with this opportunity to bring a substantial volume of high-quality jobs and positive economic impact to this region,” said Loudon County EDA president Pat Phillips. “We thank Del Conca for selecting Loudon County and also appreciate our partners with the State of Tennessee Department of Economic and Community Development and TVA for facilitating this exceptional opportunity for our community and our region.”

The Loudon facility is expected to begin operations by the end of 2013. The construction and hiring process will be completed in two phases. The first includes a $70 million investment and the hiring of 100 employees. The remaining 78 employees are expected to be retained within the next five – six years, with an expected additional investment of another $20 million.

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