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Customers Demanding
Greater Proximity

On the other hand, customers are driving other pressures. Not only do many large customers insist on their machine work suppliers being close by, but they are also exerting, as Clayton puts it, "a huge and constant pressure on costs. End-users are pushing costs downhill," he says. "Everybody has to squeeze more blood out of the turnip."

However, Clayton doesn't see firms moving for economics alone ­ not with employee needs being so constant and specialized. They may move at a customer's request, but more likely, they'll stay settled or expand in a pocket of machining companies. "Then, machine tool firms will pick off employees from one another," says Clayton.

In the machine tool industry specifically, employees in great demand aren't just the machine operators. The increasing complexity of automation software applications means that there's a huge need for programmers as well. "The challenge now more than ever is finding numerical control programmers," says Dennis Donovan, a principal with site selection consultants The Wadley-Donovan Group (www. wadley-donovan.com) in Morristown, N.J. "It's an extremely hard skill to find. For machine tool makers, the most important thing [in site selection] is where you can find the right labor," Donovan says.

Electric power, clean and plentiful, is also a machine tool industry requirement according to Donovan. "When you're handling intricate designs, you can't have dirty power with spikes and dips," he says. Add to that site selection shopping list good availability of LTL carriers, since machine tools are usually shipped in small batches.