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Getting the Talk Right
Between Worlds
Stretching the Metro
All the Way to Jackson
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TENNESSEE SPOTLIGHT
Midway to the Globe
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he state is long, but Tennessee's site selection profile is growing taller by the day.
The June announcement of Nissan's US$250-million expansion in Decherd and Smyrna came just as the company's Smyrna plant was recognized as the most productive in North America by the Harbour Report. Those two automotive honors were the latest in a new string for Tennessee – Toyota's $124-million plans for an engine block plant in Jackson, the consolidation of Timken's joint venture parts logistics operation in Crossville and Numatics Actuators' in the up-and-coming Maury County. But the Volunteer State's logistics strength confers an automatic advantage to any number of industries.
"I started around 1970, and Tennessee was primarily an agrarian state, with some blue-collar growth," says Memphis-based site selection consultant Mike Mullis from one of the many airports he calls home during his 1,000 annual location visits. "Over the past 25 years, Tennessee has been phenomenally successful." That success has come primarily from the transportation and distribution industries. But there is more, says Mullis. "Tennessee continues to expand its technology base, and would now be considered one of the premier states in advanced technology manufacturing."
Now comes the challenge: bringing momentum to regional job creation and training infrastructure, so that Tennessee's work force can sustain the gains realized in the past by geography alone.
"Those kinds of things really build on themselves, and things start to grow exponentially when you get to a critical size," Bredesen tells Site Selection. "The synergy there is absolutely clear. I started a business of my own and I think it would have been much less successful if I weren't surrounded by people in other businesses who knew about the field – the discussions in restaurants at night are about healthcare."
They still are, as health benefit services Caremark's location to Nashville from Birmingham is overlaid by the company's $6-billion September 2003 acquisition of rival AdvancePCS, based in Irving, Texas. While the facility implications have yet to play out, one note in the announcement was the company's ability to process mail-order prescriptions using the complementary facility footprints of the two companies. The AdvancePCS network encompasses 20 operational sites around the U.S., which combine with sales and other offices to employ some 6,000 people.
Much of Nashville's appeal owes to the appealing ring of towns around it. Murfreesboro, for one, is witnessing its own growth spurt, with Hauppauge, New York-based Southern Container Corp. building a $35-million, 250,000-sq.-ft. (23,225-sq.-m.) cardboard sheet and box plant that will employ 130 and have a capacity of 150 million sq. ft. (13.9 million sq. m.) of corrugated sheet a month when it opens in 2004. The company operates 14 plants in North America, and found this site to be advantageous by Interstate to the entire Southeast market.
The project comes fast on the heels of another new plant, opened on the former Fort Devens military base in Massachusetts in November 2002. Increased feedstock from a new papermaking machine at the company's own mill in Solvay, N.Y., will travel to both plants.
"Our investment represents the first greenfield full scale box plant in the Tennessee market in recent memory," says Steven Grossman, president and CEO of Southern Container.
The Southern Container facility is being designed by Gresham, Smith and Partners, based in Nashville. George Dillard, principal of that firm, says the state is sometimes hampered by its need to make up for a lack of personal income tax with fees, sales taxes and property taxes, but not to the extent that it would redirect a prospect. He sees things through a nationwide lens, but Nashville is clearly visible.
"If you're going to be in Tennessee, Nashville is probably the best place to be," he says.
That was the feeling of wireless services firm Asurion, which is relocating its corporate headquarters from San Mateo, Calif., and creating 600 jobs over the next three years. That's the same number the company already employs at service and logistics operations in Nashville and nearby LaVergne.
Nashville also sounded sweet to Taipei, Taiwan-based Quanta Computer, which is building its first U.S. manufacturing and distribution center in Nashville. Quanta will invest approximately $7 million to begin operations in the LaVergne Interchange Business Park, where it will manufacture, test and distribute file servers. The refurbished, 160,000-sq.-ft. (14,864-sq.-m.) facility, former home to International Comfort Products, became operational in September 2003. It will now serve as the company's U.S. manufacturing and distribution headquarters. Initially, they will employ 50 people, growing to 500 by the end of year three.
Michael Dunne, vice president of U.S. operations for Quanta and president of Quanta Nashville, says the search for talent is not a problem.
"I advertised the day after the announcment for seven positions, and within two weeks I had 1,300 applications," he says.
The company is also building plants in the Czech Republic and in Shanghai, following the high-volume manufacturing model that has made it such a success in the portable laptop market. Quanta operates on 1.6-million sq. ft. (148,640 sq. m.) in Taipei, but the size of that home campus may soon pale in comparison to its Shanghai presence.
"Our Shanghai facility is 85,000 sq. m. [915,000 sq. ft.], plus a dorm area that's about 20,000 sq. m [215,285 sq. ft.]," says Dunne. "To put that in perspective, that's the first two phases of an 8-phase facility." But servers are a different, and heavier, case.
"It's cost-justifiable to [manufacture portables] to order in Taiwan and ship it," he says. "With a server, it is not justifiable, because it is a heavy large product. We can do the final configuration to order here, and distribute in a very fast time frame."
The first-level site selection analysis began with Mexico and the U.S. After costing out options in terms of total delivered cost to the end customer, the list was narrowed to Nashville, Louisville and Memphis. Dunne says Mexico's labor advantages were overshadowed by trucking and logistics costs. He lauds the high caliber of people in the Nashville area, backed by the attractiveness of the city should the company need to recruit externally. Having started up plants around the world, he says the level of support ("not just financial") received has been extremely professional and impressive, both in the dealmaking and building stages.
The June announcement of Nissan's US$250-million expansion in Decherd and Smyrna came just as the company's Smyrna plant was recognized as the most productive in North America by the Harbour Report. Those two automotive honors were the latest in a new string for Tennessee – Toyota's $124-million plans for an engine block plant in Jackson, the consolidation of Timken's joint venture parts logistics operation in Crossville and Numatics Actuators' in the up-and-coming Maury County. But the Volunteer State's logistics strength confers an automatic advantage to any number of industries.
"I started around 1970, and Tennessee was primarily an agrarian state, with some blue-collar growth," says Memphis-based site selection consultant Mike Mullis from one of the many airports he calls home during his 1,000 annual location visits. "Over the past 25 years, Tennessee has been phenomenally successful." That success has come primarily from the transportation and distribution industries. But there is more, says Mullis. "Tennessee continues to expand its technology base, and would now be considered one of the premier states in advanced technology manufacturing."
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Now comes the challenge: bringing momentum to regional job creation and training infrastructure, so that Tennessee's work force can sustain the gains realized in the past by geography alone.
Hands-On Governor Works to
Replicate Music City Success
That's not to say the talent isn't already here. Just ask Gov. Phil Bredesen, who like Chattanooga Mayor Bob Corker (a former corporate real estate professional) followed the path to elected office from an entrepreneurial starting point. Bredesen freely acknowledges that his business success in healthcare technologies is what got him where he is today – he founded HealthAmerica Corp., which he built to 6,000 employees and sold in 1986. Part and parcel of that success was the vibrant cluster of like-minded enterprises in Nashville, where he served as mayor from 1991 to 1999.
Replicate Music City Success
"Those kinds of things really build on themselves, and things start to grow exponentially when you get to a critical size," Bredesen tells Site Selection. "The synergy there is absolutely clear. I started a business of my own and I think it would have been much less successful if I weren't surrounded by people in other businesses who knew about the field – the discussions in restaurants at night are about healthcare."
They still are, as health benefit services Caremark's location to Nashville from Birmingham is overlaid by the company's $6-billion September 2003 acquisition of rival AdvancePCS, based in Irving, Texas. While the facility implications have yet to play out, one note in the announcement was the company's ability to process mail-order prescriptions using the complementary facility footprints of the two companies. The AdvancePCS network encompasses 20 operational sites around the U.S., which combine with sales and other offices to employ some 6,000 people.
Much of Nashville's appeal owes to the appealing ring of towns around it. Murfreesboro, for one, is witnessing its own growth spurt, with Hauppauge, New York-based Southern Container Corp. building a $35-million, 250,000-sq.-ft. (23,225-sq.-m.) cardboard sheet and box plant that will employ 130 and have a capacity of 150 million sq. ft. (13.9 million sq. m.) of corrugated sheet a month when it opens in 2004. The company operates 14 plants in North America, and found this site to be advantageous by Interstate to the entire Southeast market.
The project comes fast on the heels of another new plant, opened on the former Fort Devens military base in Massachusetts in November 2002. Increased feedstock from a new papermaking machine at the company's own mill in Solvay, N.Y., will travel to both plants.
"Our investment represents the first greenfield full scale box plant in the Tennessee market in recent memory," says Steven Grossman, president and CEO of Southern Container.
The Southern Container facility is being designed by Gresham, Smith and Partners, based in Nashville. George Dillard, principal of that firm, says the state is sometimes hampered by its need to make up for a lack of personal income tax with fees, sales taxes and property taxes, but not to the extent that it would redirect a prospect. He sees things through a nationwide lens, but Nashville is clearly visible.
"If you're going to be in Tennessee, Nashville is probably the best place to be," he says.
That was the feeling of wireless services firm Asurion, which is relocating its corporate headquarters from San Mateo, Calif., and creating 600 jobs over the next three years. That's the same number the company already employs at service and logistics operations in Nashville and nearby LaVergne.
Nashville also sounded sweet to Taipei, Taiwan-based Quanta Computer, which is building its first U.S. manufacturing and distribution center in Nashville. Quanta will invest approximately $7 million to begin operations in the LaVergne Interchange Business Park, where it will manufacture, test and distribute file servers. The refurbished, 160,000-sq.-ft. (14,864-sq.-m.) facility, former home to International Comfort Products, became operational in September 2003. It will now serve as the company's U.S. manufacturing and distribution headquarters. Initially, they will employ 50 people, growing to 500 by the end of year three.
Michael Dunne, vice president of U.S. operations for Quanta and president of Quanta Nashville, says the search for talent is not a problem.
"I advertised the day after the announcment for seven positions, and within two weeks I had 1,300 applications," he says.
The company is also building plants in the Czech Republic and in Shanghai, following the high-volume manufacturing model that has made it such a success in the portable laptop market. Quanta operates on 1.6-million sq. ft. (148,640 sq. m.) in Taipei, but the size of that home campus may soon pale in comparison to its Shanghai presence.
"Our Shanghai facility is 85,000 sq. m. [915,000 sq. ft.], plus a dorm area that's about 20,000 sq. m [215,285 sq. ft.]," says Dunne. "To put that in perspective, that's the first two phases of an 8-phase facility." But servers are a different, and heavier, case.
"It's cost-justifiable to [manufacture portables] to order in Taiwan and ship it," he says. "With a server, it is not justifiable, because it is a heavy large product. We can do the final configuration to order here, and distribute in a very fast time frame."
The first-level site selection analysis began with Mexico and the U.S. After costing out options in terms of total delivered cost to the end customer, the list was narrowed to Nashville, Louisville and Memphis. Dunne says Mexico's labor advantages were overshadowed by trucking and logistics costs. He lauds the high caliber of people in the Nashville area, backed by the attractiveness of the city should the company need to recruit externally. Having started up plants around the world, he says the level of support ("not just financial") received has been extremely professional and impressive, both in the dealmaking and building stages.