New Jersey- based Automatic Data Processing (ADP), a national provider of transaction processing and information- based services, is in the midst of "smart- shoring" its operations centers, says Michael Gredlein, senior client relations manager at ADP in Atlanta.

Houston Area Logs New Investment    • Mustang Engineering will occupy 200,000 sq. ft. (18,580 sq. m.) of Ten West Corporate Center Two, a 250,000- sq.- ft. (23,225- sq.- m.) building under construction at Barker Cypress and Interstate 10 - the Energy Corridor.    • Mechanical Equipment Co., Inc., has opened a new plant in Sugar Land to replace the facility destroyed in New Orleans by Hurricane Katrina. About 35 employees have relocated from New Orleans, and the company plans to hire about 100 over the next few years.    • ReedHycalog, a specialty drill- bit manufacturer is consolidating three Houston manufacturing sites and opening a new headquarters in Conroe, where it will employ up to 400 people.    • Custom Catalytic Solutions is building a new, 35,000- sq.- ft. (3,250- sq.- m.) facility in Bayport, where it will produce custom catalysts and specialized technology to help refineries and chemical plants produce cleaner fuel and less waste.    • Fluoro- Seal International, which treats polyolefin bottles, is building a 60,000- sq.- ft. (5,600- sq.- m.) facility at the Stonegate Business Center near Katy.    • German manufacturer TEADIT North America is relocating its manufacturing and distribution operations to a 52,000- sq.- ft. (4,830- sq.- m.) facility in the East Belt Business Park in Houston. The firm makes gaskets, gasket sheets and joint sealants.    • Enduro Systems is opening a new, 117,000- sq.- ft. (10,900- sq.- m.) manufacturing headquarters in Houston to consolidate its Composite Products Division, which had operations in Houston and Fort Worth.

"We are consolidating some of our 30 or 40 smaller technical support centers around the country, which tend to be in high- cost areas, such as New York, Chicago and San Francisco," he explains. "We are consolidating those into lower- cost areas to provide the same quality of service at a lower cost to ADP based on wages and so forth. We are creating 1,000 jobs at each of these new locations," – which is El Paso, Texas, in the case of ADP's western U.S. operations. Candidate locations for eastern and central U.S. centers are currently under consideration. The primary ADP units that will use the new facilities, known as ADP Solution Centers, are Small Business Services and Dealer Services, though other units will use them as well.
   ADP is investing $25 million to build a new 150,000- sq.- ft. (14,000- sq.- m.) building just west of El Paso for the project. "That location decision had to do with the availability of work force – more specifically, its over- educated and underemployed work force," says Gredlein. "Two days after we announced El Paso as the location, over 1,000 people showed up at the hiring center we opened up. The line was out the door and around the building. As of the end of July, we have created about 250 jobs already, which is well ahead of schedule." Additional location criteria in El Paso's favor were a high number of well- educated bilingual workers, highly favorable climate, the Mountain Time Zone and quality of life.
   ADP's selection of El Paso had an unintended benefit for the metro area, adds Steve Penrose, senior vice president at ADP. "As we had hoped, we are viewed as a high- end operation," he says, but the pleasant surprise came from the companies in the area that Penrose thought might have been apprehensive about losing people to ADP. "But some of those companies, depending on their business model, actually saw it as a welcome career- path opportunity for their senior people," he says.
   If you're in a churn- and- burn business and hiring people at $7 an hour, eventually they'll be making $11 an hour and you'll want to get rid of them, he illustrates. "No matter how good they are, they're now too expensive. Some centers saw our arrival as an opportunity for some of their more senior people to move on to the next step, because they had nothing else to offer them."