ome leaders in water-rich jurisdictions have taken to calling water the "oil of the future." Asked if water quality, availability and affordability issues might be driving corporate projects from the booming U.S. southeast back to the northland, Edward C. Fiss Jr., manager, Process & Design Group, for industrial consultant AWARE Environmental, Inc., says, "Absolutely."
      The growth and development of any area, he says, "is going to be dependent on the availability of water. What that means is, some areas, they now are possibly more water-rich than they used to be, because they have the developed water infrastructure, but have lost a lot of industry over time."
      The states of the upper Midwest know what they have lost. But they also know what they still have. That's why so many of their leaders have signed on to the Great Lakes Compact, an agreement among eight states, Ontario and Québec that basically says Great Lakes water – equivalent to nearly 20 percent of the globe's fresh surface water – is not to be shipped or piped out of the region's 630,000-sq.-mile (1.63 million sq.-km.) basin.
      Economic developers, of course, wish they could devise such a compact to keep companies around too. But water and other factors, such as basic facility affordability, are doing their part to encourage legacy companies to continue enhancing their legacies.
      Earlier this summer, Wisconsin Gov. Jim Doyle told Site Selection how important water was to the paper companies and breweries that dot the state. One of those brewery towns, Milwaukee, was in the running along with Denver to host the corporate headquarters of the newly combined MillerCoors LLC – a project for which a view of the water might be more important than water itself. But in the end, the company in July decided to go to downtown Chicago with its $39.5-million investment.
      The company, which will see incentives from the state, has not yet selected a final location. But it won't be a new building. Among the firm's criteria was the ability to move in fast, something a two- to three-year construction timetable would not allow.
      Milwaukee, however, is leading a pack of communities looking at its water technologies expertise as a cluster unto itself, while at the same time one that is connected to so many industry sectors, such as food processing. The University of Wisconsin-Milwaukee is the home of the Great Lakes Water Institute. A recent white paper published by that institution's Prof. Sammis White noted the presence of approximately 120 water-related businesses in the Greater Milwaukee area, including a new drinking-water-quality joint venture between General Electric Co. and Pentair.
      The State of Michigan is following suit. In April, the Michigan Economic Development Corp. launched the Michigan Water Technologies Cluster Initiative, whose stated aim is to coordinate and leverage water abundance, university and R&D capability, manufacturing knowledge and environmental leadership. The state sees the U.S. water technologies market as a $114-billion opportunity (part of an estimated $300-billion world market). It also acknowledges the growing government spending on water-related R&D, which was $1.5 billion in 2006 and is expected to only get bigger.
      The initiative includes such corporate partners as the Siemens Water Technologies office in Holland, Mich., in an area long known for its environmental leadership when it comes to office furniture company operations. Siemens Water Technologies acquired USFilter in 2004, and in 2006 received tax credits, abatements and training grants from the state and from Holland Township towards a $3-million expansion that was expected to create 80 new direct jobs, making that location a center of expertise in biosolids management solutions. Siemens Water Technologies, as of April, was a $4-billion global enterprise.
      Such a company's value to economic developers is two-fold: Not only do its facilities bring jobs and investment to the community, but its water and wastewater expertise is in high demand among other major industrial end users, whether they make potato chips or stone countertops.
      A Siemens spokesperson says today the payroll in Holland stands at 249, with more positions still to be filled in such positions as manufacturing (welding/fabrication) engineering and sales.
      The parent company has a thing for the Upper Midwest. In late June, Siemens Energy and Automation, which supplies gear drives for the wind, cement, oil and gas and coal industries, announced a $20-million, 355-job expansion in the Chicago suburb of Elgin, Ill., where it already employed 150. The State of Illinois will pony up $5.7 million in incentives.       Smelters are known for their high-volume water usage. Turns out data smelters need it too.
      In Iowa, after disastrous flooding in June, the last thing people wanted to hear was how pivotal water is to their economic futures. But water – awfully important to Microsoft when it picked San Antonio, Texas, last year for a $550-million data center – was equally so when the company announced in early July that it was going to place a $550-million data center in Greater Des Moines. In late August, company officials and Iowa Gov. Chet Culver announced the center would be built on a 42-acre (17-hectare) parcel at the 821-acre (333-hectare) West Grand Business Park in West Des Moines. It will employ 50 to 75 people, with an average salary of $70,000. In addition to state incentives, local planning officials enacted a change in regulations to allow buildings up to 60 ft. in height.
      "Microsoft selected Iowa after evaluating a number of locations across the country," said Michael Manos, Microsoft's general manager, data center services. "Iowa provided the best all-around combination of attributes that we evaluate in an important selection such as this."
      The news comes as Google approaches completion of its own 200,000-sq.-ft. (18,580-sq.-m.), $600-million data center in Council Bluffs, Iowa, located in the state-line metro area of Omaha, Neb., which will employ 200 people at an average salary of $50,000. Both were enticed in part by special state tax breaks for "Web portal businesses" that invested more than $200 million, with each package being passed for each project in separate legislative years..
      A report from New Jersey-based site selection consultancy The Boyd Co. says the Iowa metros of Council Bluffs, Ames and Des Moines are three of the 10 lowest-cost locations in the U.S. for data centers, placing sixth, eighth and ninth, respectively. According to a report in The Des Moines Register, Boyd says Iowa's historically strong work-force in financial services and insurance bodes well for data center talent in those and related fields. It also notes a new third-party data center project: a $14-million facility from Cedar Falls-based Team Technologies in Urbandale, part of the Des Moines metro area.
      High-volume, low-cost power is crucial to such projects, and Iowa scores well in that area. But water use is too: The data center in Texas, according to local agreement documents, will use 40 million gallons a year of recycled water to cool its servers. A February 2008 fact sheet from the company entitled "Best Practices for Energy Efficiency in Microsoft Data Center Operations," provides a look inside how resource efficiency, cost and site selection are linked within Microsoft:
      "After a location is selected, Microsoft evaluates building design and equipment to create efficient configurations with low TCO [total cost of ownership] over the life of the facility," says the fact sheet. "Rather than decentralizing ownership between multiple teams in the organization, a single organization in Microsoft has been created for site selection, building design, and operations. This creates singular accountability for the data center and ensures lower TCO [total cost of operations] over the life cycle of the data center."       In August, a reinvigorated Chrysler LLC, now owned by Cerberus Capital Management LP, announced it would invest $1.8 billion in new vehicle programs that included a 285,000-sq.-ft. (26,477-sq.-m.) expansion at its Jefferson North Assembly Plant in Detroit. The move will retain approximately 400 jobs at the plant, which as of last year employed 2,400 in total.
      "This investment in our future products and at Jefferson North will enable the Company to produce a future generation of vehicles more efficiently, with world-class quality and an improved environmental footprint," said Tom LaSorda, Chrysler LLC Vice Chairman and President. "Furthermore, this commitment reinforces the long-standing partnership between Chrysler LLC, the City of Detroit and the State of Michigan."
      The project will replace the existing body shop, which along with paint and assembly changes will give the 2.7-million-sq.-ft. (250,830-sq.-m.) plant new manufacturing flexibility. Among the project's energy-saving steps will be use of paint sludge as an energy source, and trailer cubing and rack density improvements to reduce fuel consumption and transportation costs. Chrysler said the resulting from the sludge operations, new filtration and lighting and "electro-servo" welding alone will save several dollars per vehicle built.
      Chrysler currently has eight facilities in Detroit including Detroit Axle; Jefferson North Assembly; Mack Engine I; Mack Engine II; Mt. Elliott Tool & Die; Plymouth Rd. Office Complex; Conner Ave. Assembly; and Chrysler Transport.
      Elsewhere in the Detroit area, K-Dow, a new plastics chemical venture between Midland, Mich.-based Dow Chemical and Petrochemical Industries Co., a subsidiary of Kuwait Petroleum Corp., is now trolling the I-96/I-94 corridor for a new headquarters location to house its 800 employees.
      Officials with the $11-billion new company have not yet decided whether they will lease or build, but expect to arrive at a conclusion by the fall. Among the possible locations is Pfizer's large R&D property in Ann Arbor. When K-Dow announced its formation, it said it had chosen the Detroit area over areas in Louisiana and Texas because of the quality of its schools, proximity to an international airport and its diversity, including the presence of a large Arab-American population.
      In Illinois, the global growth of Caterpillar is coming home to roost. Buoyed in part by a 30-percent rise in sales abroad over the past year and a 200-percent rise in exports to China over the past five years, the company is pouring $1 billion through 2010 into expansions and upgrades at plants in East Peoria (track-type tractors, pipelayers and off-highway transmissions), Decatur (large off-highway trucks), Aurora (wheel loaders and excavators) and Joliet (components).
      To support the expansion in Decatur, the company is prospecting for another location for that plant's motor grader production. In addition, the company may shift lower power train production currently in East Peoria, Decatur and Aurora to other U.S. locations. The company also is looking at locating a new machinery and engine product design center, as well as other manufacturing operations at the Mossville plant, where the current footprint approaches 2 million sq. ft. (185,800 sq. m.).       In a conference call with analysts, Caterpillar Chairman and CEO Jim Owens was careful to point out that none of the investments involve adding square footage to the Illinois plants. It's more about reapportioning work where it fits best, and using the disciplines of the lean CAT Production System throughout the process, as the manufacturer just did during its $380-million large-engine capacity expansion in Lafayette, Ind.
      "I fully expect this restructuring of our largest Illinois manufacturing facilities will make us more efficient, improve our logistics, and really focus these facilities on capital-intensive assembly, test and paint for our core prime products," he said, adding that the company is looking at spending "somewhere in the $2-billionish range for the next couple of years as we put our manufacturing footprint in place globally to support the demand opportunities that we see."
      Like the automotive industry, CAT's heavy equipment production investments should spawn some spinoff growth from suppliers, which Owens estimated would be approximately three times what CAT is spending globally.
      Asked if the company is evaluating incentive packages related to the projects still under study, chief spokesman Jim Dugan says, "Caterpillar looks at a number of factors when selecting any location. In all cases we seek to locate our operations in locations that will allow Caterpillar to compete in the global economy. When locating a new facility, it is common for investment incentives to be offered, and Caterpillar weighs such incentives as part of its final decision."
      Asked about business climate issues in Illinois for CAT, Dugan says, "Caterpillar has had operations in Illinois for nearly 100 years, including several large facilities that are the sole global source for prime Caterpillar products. While the state of Illinois is currently facing some near-term fiscal issues, our decision to invest in our key Illinois facilities is based on our plan to keep these operations competitive in the global economy for many years to come.