T

he first time Europeans migrated to this part of the New World, they came by ship and built a new country.
     Today, they are building high-wage, high-tech factories to make the transportation products that take people all over the globe.
     Companies like aircraft maker Dassault of France and friction components manufacturer ITT Industries of Italy are reshaping the economic landscape of Arkansas.
     Yes, that's right — Arkansas.

Dassault, ITT Industries lead new wave of Old World plants in Arkansas.

French-owned, Dassault Falcon Jet recently announced plans to add about 73,000 sq. ft. (6,782 sq. m.) of manufacturing, hangar and office space and at least 100-200 workers. The Falcon 7X jet is shown here.

     European investors are leapfrogging more expensive East Coast locations in the U.S. for the more cost-friendly cities and right-to-work environment of south-central America, and Arkansas is rolling out the red carpet.
     French-owned Dassault Falcon Jet announced plans in March 2005 to add 73,000 sq. ft. (6,782 sq. m.) of manufacturing, hangar and office space and up to 400 new employees at the company's Little Rock complex, the firm's largest plant with more than 1,500 workers.
     The company is expanding its 30-year-old production center to support Dassault Aviation SA's new Falcon 7X jet, which was first unveiled in February in France. The Little Rock factory is targeted to increase output by 40 percent by 2007.
     The US$13-million expansion will include a 44,000-sq.-ft. (4,088-sq.-m.) warehouse and 9,000 sq. ft. (836 sq. m.) of office space. The new hangar will have the capacity to house 28 of the new Falcon 7X jets under one roof. The first of the new facilities is set to open in January 2006.
     The project announcement came one year after Dassault invested $8.2 million into a new, state-of-the-art paint hangar for the Falcon 7X. Upon completion of the new facilities, Dassault will occupy more than 640,000 sq. ft. (59,456 sq. m.) of space in Little Rock.
     "The primary reason we chose to build and expand in Little Rock is the skilled labor in the area," says Dassault spokesman Andrew Ponzoni, a corporate communications executive based in the company's Teterboro, N.J., offices. "There are great artisans, cabinet-makers, electricians and many other skilled workers in Little Rock. This expansion of our facilities and work force in Arkansas will enable us to accommodate the assembly of the next generation of business jets for Dassault."
     Ponzoni says that the Little Rock complex is the focal point of the firm's global expansion plans. "Every single aircraft we make goes through Little Rock," he says. "This complex now serves as the worldwide Falcon completion center."
     Christian Sasso, general manager of the Dassault plant in Little Rock, says that additional expansion and renovation plans include cabinet shop expansion and a new ramp-staging area.
     "The new Falcon 7X made its first public appearance in Bordeaux, France (in February) before a crowd of more than 800 customers, officials and employees," says Sasso. "Now that the aircraft is just weeks away from entering the flight test program, we are finalizing our plans for the completion of this new airplane. Final certification and first delivery of the Falcon 7X is expected [by] the end of 2006."
     Dassault made 53 deliveries of its high-end, corporate aircraft from the Little Rock complex in 2004.
     French investors aren't the only Europeans smiling on Arkansas. In Searcy, about 45 minutes northwest of Little Rock, Italian-owned ITT Industries announced May 5, 2005, that it will open a new brake pad production plant.
     The factory will manufacture brake pads for the automotive industry in North America. The products will be marketed under the Koni brand name.
     The 136,000-sq.-ft. (12,634-sq.-m.) facility will initially employ 30 people and increase to 80 workers within two years. The company will invest $10 million for machinery and equipment in 2005 and an additional $24.2 million over the next five years.
     Bjorn von Euler, director of corporate relations for ITT, says that the cooperation and enthusiasm of local and state leaders in Arkansas was "a significant factor" in the firm's decision to locate the plant in Searcy.

Christian Sasso, senior vice president and general manager of Dassault Falcon Jet in Little Rock.

     "They took the time to learn about our business, understand our needs and then put together an excellent economic development package," von Euler says.
     ITT is a $6.8 billion company with about 1,000 employees in Italy, Michigan and Arkansas.

     Arkansas officials hope that Dassault and ITT aren't the last global manufacturers to call the state home. In fact, the state recently added a major recruiting tool to its arsenal: Super Projects Funding Amendment 2.
     Passed by 63 percent of state voters in November 2004, the amendment gives Arkansas officials great leeway and funding options in pursuing projects investing at least $500 million and employing at least 500 workers in Arkansas.
     The law gives the governor and lawmakers authority to quickly approve general obligation bonds to finance the infrastructure, site preparation work and work-force training for companies willing to commit to super-projects that meet the law's threshold requirements.
     "The success of this initiative is great news for Arkansas," says Mike Maulden, Entergy Teamwork Arkansas director and chairman of the Amendment 2 Campaign Committee. "For small, large and super-projects, we now have the ability to win projects that will be of immense benefit to our entire state. We hope this will send a strong message that Arkansas is fully committed to not just competing for, but winning super-projects."
     Many experts believe that such an incentives program could have spelled the difference last year when Toyota selected San Antonio over Arkansas for the Japanese automaker's pickup truck assembly plant. Texas, unlike Arkansas at the time, had a huge, quick-action closing fund that sealed the deal.
     Still, Arkansas officials went from licking their wounds to touting the fact that the state finished second in the Toyota sweepstakes — a fact they say helped them land several other large automotive manufacturing plants in the ensuing 12 months.
     Among them was Japanese-owned Eakas Arkansas, which broke ground April 7 on a 91,000-sq.-ft (8,454-sq.-m.) factory on a 40-acre (16.2-hectare) site just south of Wynne. The company will produce decorative, functional, interior and exterior trim and other complex modular assemblies for the automotive industry.
     The $15-million Wynne plant will be capable of producing 320,000 door handles a month and 60,000 mirrors, plus other interior and exterior parts. The plant will eventually employ 250 people.
     "Our decision to build a plant in the Mid-South shows our continuing determination to satisfy our customers' needs," said T. Okana, senior managing director of Eakas parent Sakae Riken Kogyo Co. Ltd. "We appreciate the enthusiastic support of the people of Wynne and Cross County, as well as the state of Arkansas, and look forward to a long and rewarding, mutual relationship here."
     Mid-South Manufacturing Inc., a major employer in Marked Tree since 1971, also announced recently that it will invest $3 million and add 110 jobs to its work force in Northeast Arkansas.
     Mid-South produces water pumps for several automobile manufacturers, including Ford, Chrysler, General Motors and Jaguar, as well as several after-market suppliers. The company began 2004 with 299 employees and currently employs about 400.

     Larry Walther, state director of economic development, said that Arkansas should surpass its record-breaking performance of 2004. "We had a great year last year, with over $1 billion in new projects," he says. "We passed $500 million this year by mid-May. We are on track to beat last year's numbers."

The $15-million Eakas Arkansas plant near Wynne, is scheduled to start production of automotive interior and exterior trim and other complex modular assemblies in 2006.

     Walther attributes the surge in corporate investment to several factors: the pro-business message sent by the passage of Amendment 2, Arkansas' "extremely competitive tax rates and business infrastructure," employer-friendly workers' compensation laws, the state's "very good work force," and "excellent public and private colleges and universities around the state."
     Maulden said that finishing second to Toyota changed everything. "The spotlight that Toyota put on Arkansas raised the awareness of business and site consultants," he said. "We are seeing a lot more projects because of that. We are seeing a lot of Toyota suppliers. We are now seen as a central and strategic location."
     Walther says the state plans to leverage these assets to attract more international investment, using a marketing effort that targets large companies in Europe, Japan, China and Korea.
     "Our goal is to create an international automotive corridor that runs from one end of Arkansas to the other — from Mississippi to Little Rock to Texarkana," he says. "We have announced several significant automotive projects this year, and we plan on announcing several more."
     Judging from Arkansas' recent success with the Europeans, don't be surprised if those announcements come from Paris, Berlin, London, Madrid, Lisbon or Rome.