Week of September 3, 2001
Blockbuster Deal of the Week
from Site Selection's exclusive New Plant database
Orlando for HQ, Manufacturing/
By JACK LYNE
LAKE MARY and ORLANDO, Fla. -- Mitsubishi's drive to capitalize on the booming Western Hemisphere market for power-plant construction has led to not one, but two major new facilities in metro Orlando:
Mitsubishi Heavy Industries (MHI) of America (www.mhi.co.jp) selected Orlando in Orange County for a power systems service and manufacturing center. Soon after, it picked Lake Mary in Seminole County for the Western Hemisphere headquarters for its Power Systems Division. Together, the two facilities will generate 466 well-paying jobs and US$44 million in capital investment.
Ironically, the shutdown of a local industry was the catalyst that spurred both facilities landing in metro Orlando.
High-Skill Labor DemandsAlways an essential expansion concern, labor was particularly important in MHI's projects. These were hardly low-skill positions. The service and manufacturing center's projected 350 new jobs will pay average annual salaries of $44,547. The headquarters' projected 116 new jobs will pay average annual salaries of $88,000.
But the Orlando area's unemployment rate was only 2.8 percent. Again looming large was Textron's shuttered turbine plant, which idled 200 workers when it closed. Of the some 20 employees MHI has already hired for the service/manufacturing center, more than half are former Textron workers.
"This is a sophisticated company that had done their homework well," said Darrell Kelley, president and CEO of the Economic Development Commission of Mid-Florida (EDCMF at www.business-orlando.org). "What they found in our region is an existing site that will easily accommodate their manufacturing needs and a skilled work force, including a number of former Textron employees who are already trained in turbine manufacturing and maintenance."
Strong physical and educational infrastructure helped sealed the deals.
Projects Will Tap Power-Plant BoomIn addition to manufacturing and repairing advanced combustion turbine components, the Orlando center will serve as a parts distribution center, MHI officials said. The facility will be the only OEM service capacity of its kind in the U.S. Southeast for advanced gas turbine repairs and coating, they added.
The Florida facilities are linchpins in MHI's efforts to expand its now thin penetration of the Western Hemisphere turbine market. Most of its equipment is installed outside the United States. MHI, however, is aiming to sell at least 100 units in North America during the next six to eight years.
The Western Hemisphere market is primed for products like MHI's turbines, which generate electricity at power plants.
After three decades at a snail's pace, U.S. power-plant construction has a power surge in the wings. U.S. electricity consumption will increase by almost 50 percent over the next 20 years, according to government projections. Adding to turbine demand is U.S. utility deregulation, which is stoking the market for equipment to run new and expanded power plants.
Even more power-plant construction is on tap for Central and South American, where projected electricity demand will almost double by 2020.
The Orlando location will also provide an edge with existing customers. The Florida facility will shave a month or more from repair time for equipment from Europe, North America and South America, which will no longer have to be shipped to Japan, MHI officials said.
MHI can use a business boost. Pressured by Korean and Chinese competition, Japan's leading machinery maker suffered its first annual loss in 35 years in 2000, losing $1.3 billion on sales of $27.3 billion.
Praise for 'Project Dragon' SupportPonce praised state and local development arms "very supportive" assistance. "They have clearly demonstrated the value of Central Florida."
Supporting the projects, code-named "Project Dragon," were officials from the EDCMF, Enterprise Florida (www.eflorida.com), Orange County (www.onetgov.net) and Seminole County (www.co.seminole.fl.us).
Gov. Jeb Bush also played a hands-on role, calling MHI and meeting with its leaders. Bush announced the projects after meeting with MHI America President Hideo Egawa. "Mitsubishi is making a tremendous commitment to Florida," he said.
Another player in the process was Cushman & Wakefield (www.cushwake.com), which represented Mitsubishi in the headquarters transaction.
"The successful location of this project is largely due to the implementation of plans and strategies devised years ago to inspire growth along I-4 and other strategic locations around the county," said Dick Van Der Weide, chairman of the Seminole County Board of County Commissioners. "Today, the county and its citizens are reaping the benefits of those carefully laid plans."
©2001 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.