ince mid-November the South Carolina Dept. of Commerce has sent out more than 30 announcements of new corporate facility projects. For the year 2008, Commerce and its local partners recruited US$4.1 billion and nearly 19,000 jobs to the state, both figures higher than what they achieved in 2007, which in turn bested the numbers of 2006.
      Yet in early March 2009, South Carolina was one of four states whose unemployment rate rose above 10 percent.
      Reconciling those facts may not be as difficult as you think. For one thing, the Palmetto State ranked No. 7 in the nation in 2008 for inbound relocation moves as tracked by United Van Lines, thus growing the labor pool.
      Ed McCallum, senior principal with Greenville-based international site selection consultancy McCallum Sweeney, offers this picture of the state's seemingly contradictory economic forces:
      "It is like a bucket with a hole in it – there is more water leaking out than is being poured in," he says." "I shudder to think what the unemployment rate would be without water being poured in at all. There is no contradiction here in my opinion – simply a description of what happens till the leak is fixed. It may be interesting to look at the quality of jobs coming in versus those lost. I suspect some of those that disappeared would have in time anyway – the economic downturn simply accelerated the inevitable."
      Monster.com, which just located a 350-worker service facility in Florence, may have some labor market insights. Calhoun County, south of state capital Columbia, just welcomed a 100-worker LEED-Silver coffee roasting plant from Starbucks. And Laurens County, forming a potent triangle with still-vibrant Greenville and Spartanburg in the state's northwest corner, has something to say about it too, boasting recent major projects from CeramTec ($23 million, 30 jobs) and FITESA ($120 million, 80 jobs), a nonwovens unit of Brazil's Petropar. FITESA was emblematic of an international contingent that leads the nation in percentage of a state's work force employed by companies with foreign headquarters. In 2008, foreign-affiliated firms accounted for more than a quarter of new jobs created and 44 percent of new capital investment.
      But it is a domestic project – a $422-million, 320-job investment from American Titanium Works – that is recognized elsewhere in this issue as an Honorable Mention Top Deal of 2008. A look into its germination and fruition reveals why.       Laurens County comprises 713 square miles (1,847 sq. km.), three cities and three towns, and 70,000 people. Marvin Moss, in his first year as executive director of the Laurens County Development Corporation, saw a good year amid tough times in 2008. With a total investment promotion budget of $240,000, the organization has attracted a robust family of corporate projects in 2008 that will feature more than $618 million in collective investment and create 690 new jobs.
      ATW heads the list. Its new titanium mini-mill manufacturing facility near the City of Laurens will be the first of its kind in the U.S. Thanks to introductions by the South Carolina Dept. of Commerce, the company also is investing in a new research facility at Clemson's International Center for Automotive Research (CU-ICAR) in Greenville, just up the road, where it will employ 40 applied engineers.
      A team of six individuals from ATW worked with Ed McCallum and Jeannette Goldsmith at McCallum Sweeney to find the logical solution for a plant site.
      McCallum says his firm's marching orders were to find a place with a good manufacturing environment and low costs, but also the potential for university collaboration on an applied research center. Thus metallurgical, mechanical and electrical curricula and programs were examined closely. High quality of life and good airport connections to Washington, D.C., New York and Chicago were also important. Electrical costs were important too (Duke Energy is installing a substation and extending extra lines to the new ATW plant).
      "Lo and behold, there were fewer than 10 places that would fit that bill," says McCallum.
      "We basically hit four main states – North Carolina, South Carolina, Tennessee and Arkansas," says Thomas F. Sax, president and CEO of ATW, from his office in Chicago. A late but aggressive bid came from a Georgia site in Effingham County, near Savannah. The team visited a number of sites in each of the other four states. McCallum says the sites near Charlotte, Greenville and Savannah were the finalists.
      "Chattanooga was actually in the mix, and probably would have gone further," he says, "but at this time they had the VW project on the same site. To Tennessee's credit, they said they had another major project … they gave us the courtesy." Memphis was also a candidate in the earlier stages of the search.
      In fact, ATW's meeting with Tennessee Gov. Phil Bredesen, a physicist by training, was affirmation of the whole concept, as McCallum says his firm was getting a lot of questions from suitors seeking to establish the real promise of the company.
      "His eyes were kind of shut," says McCallum of the meeting with Bredesen. "He was trying to ignore the outside stimuli. Then he turned around and started asking questions. Then he turned to his economic development director [Matt Kisber] and said, 'I've seen good projects. This is not only an "A," it's a double or triple "A," and I want you to go after it.'"
      Lucky for South Carolina that its recruiters, too, know how to do the same.
      "They were very responsive on this project," says McCallum of his home state's effort. "Every time there's a big one, they go after it."       The merit of the potential market was the driving force in conceiving of the integrated titanium mill concept.
      "We know that titanium has applications for military purposes, both aerospace and non-aerospace," explains Sax. "There was a finding by the Department of Defense in October 2007 that was sent to Congress which stated that titanium was essential to the national defense, and also that there were constraints due to aerospace requirements on the existing industrial base producing enough material for non-military purposes at that time. We would not be undertaking this project unless we thought there was a large and robust market for non-aerospace titanium as well."
      McCallum says the business plan is based on "disruptive" technology, put into play via a marriage of the business model of Nucor and the innovation model of Alcoa. It's a fitting blend, given that titanium has twice the strength-to-weight ratio of steel.
      The array of market drivers for titanium includes chemical processing, high-performance machinery including racing, aerospace, biomedical, power generation and energy efficiency. What about the automobile? Sax answers the question with questions and answers of his own:
      "Are there applications for which titanium could be used in automobiles, and does the future hold that automobiles have to get lighter? The answer to both of those questions is 'Yes'" he says. "Is titanium a logical part of that solution? Yes."
      BMW, still moving forward on its own $750-million expansion in the area, was more than just an interested onlooker.
      "Besides having the technical resources in proximity, the major boost that BMW gave was our meeting with BMW officials who had been doing business in the Greenville-Spartanburg area for many years," says Sax. "They uniformly reported continued and strong support from local community, state and local government for their operation."
      Sax says BMW was just one of the companies offering meaningful testimony. McCallum is a bit more effusive: "It was amazing how much of a part BMW played in helping to recruit these guys," he says. "They wanted them there."       CU-ICAR was equally aggressive. The institution itself has grown at quite a pace, with ATW adding one more new wrinkle to an increasingly synergistic mix.
      "When CU-ICAR started out, it was going to offer a wind tunnel for automotive racing," remembers McCallum. "Then it morphed into a center for international automotive research. Ten years from now, CU-ICAR will be totally different from what they originally envisioned there."
      "The technical center, which was part of our business plan, is absolutely critical to the overall business model," affirms Sax. "It benefits greatly from the relationship to Clemson University, particularly Clemson's advanced materials center."
      Erigo Technologies LLC of Enfield, N.H., initiated the formation of ATW and recruited the ATW management team. "We are thrilled to be coming to an area where university researchers are actively involved with the industrial community," said Nabil Elkouh, Ph.D., President of Erigo Technologies LLC and Chief Technology Officer of ATW, who will lead the ATW Tech Center in Greenville.
      The final decision came several months after another CU-ICAR resident, Timken, in late 2007 closed its bearing manufacturing facility in Laurens County, affecting approximately 1,000 highly trained employees, most with more than 25 years of service. But Sax says the Laurens site would have been the first choice regardless of that development.
      "The fact remains that we will draw employees from a wide area," he says. "It doesn't hurt that we have people with experience in the metals business in close proximity. But that was not a determining factor – it was the overall quality of the work force in the state and in the region."
      The manufacturing location's merits include proximity to good logistics avenues to potential ATW customers, domestically and abroad. Sax says that since the announcement, his firm has received inquiries from a number of distributors and suppliers, including companies in the U.S., Asia and Europe.
      The merits also include less tangible attributes. ATW has a strong commitment to the hiring of the disabled at its operations, owing in part to Sax's experience with his 17-year-old son, who has autism, and who currently works a couple days a week at a metals factory.
      As it happens, another Illinois-based company – Walgreen's – has a well-known, much-publicized disabled hiring program at a distribution center in Anderson, S.C., about a half-hour southwest of Greenville, where a full 40 percent of the work force is disabled. Walgreen's Vice President Randy Lewis also has a son with autism.
      "I think it's good corporate citizenship for any company to make the maximum effort they can to employ the disabled," says Sax. "We know that the Walgreen's facility has had tremendous success in retaining and recruiting a work force with a high percentage of disabled people, and we intend to do that to the best of our ability."