Vice President of Corporate Services, General Mills, Minneapolis, Minn.
Title & Organization:
Portfolio: 400 locations worldwide, comprising 16 million sq. ft. (1.5 million sq. m.) of owned assets at 77 locations and 10 million sq. ft. (929,000 sq. m.) leased at 330 locations; sites range from manufacturing, office, R&D and distribution to grain elevators, small retail shops abroad and some farmland leases; 80 percent of the portfolio is in North America; operations in about 36 countries, employment of approximately 20,000 in the U.S., of which 5,000 work in Minneapolis, where the company's corporate headquarters is located.
General Mills, with annual net sales of $13.4 billion, is a leading global manufacturer and marketer of consumer foods products. Its global brand portfolio includes Big G cereals, Betty Crocker, Pillsbury, Green Giant, Häagen-Dazs, Nature Valley, Old El Paso and more. It has more than 100 U.S. consumer brands, including Cheerios, Wheaties and Pillsbury.
What does your company manufacture?
I report to our senior vice president of human resources and corporate services, who reports to our CEO. My responsibilities as vice president of corporate services include real estate, facilities, travel and meeting services and fleet.
To whom do you report?
A little over 24 years. I started in the construction management area, which morphed into the real estate piece. Then over the last 10 years it's been corporate/business services in addition to the real estate area.
How many years have you worked in the profession?
I earned a bachelor of science degree in civil engineering at the University of Minnesota.
Where and what did you study?
I came from Pillsbury, when General Mills bought Pillsbury six years ago this fall. The two companies' offices were about five miles apart. The challenge they gave us was to get the two companies' departments integrated within six to eight months. The key was to get teams together as fast as possible. Within the first six months, we moved 3,500 people between the two headquarters locations, and at the same time started construction of the headquarters expansion. It was a very hectic place here right after the deal closed. Pillsbury was in a leased facility in downtown Minneapolis and General Mills owned its campus in the suburbs. It took a couple years for the expansion, and another year on top of that to integrate the rest of the people who had stayed at the Pillsbury site, and then resolve our lease liability. It was a classic acquisition scenario, with pieces that come on and grow, and pieces that don't fit into the structure and you need to dispose of.
Describe the most important transaction or project
There is a variety of customers in my portfolio. The biggest challenge is supporting their existing and future needs in the most efficient way in a continually changing environment.
What is the biggest professional challenge you face on a regular basis?
For many in my peer group, real estate and facilities have come together. Where we report is a mixture between HR and finance. Where the best fit is depends on the culture of the company. The biggest change from when I first got into real estate is that the role has changed from an order-taker role to a strategic partner for the businesses. The real estate professional needs to understand the clients' needs and be able to educate them on the importance of real estate from an economic impact standpoint, but also what kind of environment we will be creating. Historically, "go procure the space" was the directive. Today, we need to partner with them to develop the best environment to accomplish their needs.
How is the role of manager of real estate evolving?
Driven both by the needs of our customers and all the SOX regulations, there is a need to have real, live and accurate data. We have a ProLease, Web-based product. We don't have a lot of income leases, but that capability exists for the occasional sublease we have to manage. As we move more and more away from paper, we have the ability to have all documents stored electronically. Our real estate team includes a real estate manager, a real estate specialist and myself. So we use a lot of outside expertise partnerships to support us. With a limited staff, the ability to obtain that information wherever, whenever, is key.
Which technology do you consider to be essential in your professional life?
It's primarily the networking aspect of the organization, and the size of that network. We have the ability to share and to learn from the best practices of the vast experience all the members bring to this organization. I'm a relatively new member, but I've known a lot of the members through the years.
What is the value of IAMC membership to you?
Third Time's Charm for Territories Across U.S.
Thirteen U.S. regions – including partnerships featuring several IAMC member organizations – in June were designated recipients of the third round of funding from the U.S. Dept. of Labor's Workforce Innovation in Regional Economic Development (WIRED) program. Each region will receive $5 million to drive programs ranging from clean energy in central New Mexico to advanced manufacturing services in Oregon. The chosen regions join 26 previous recipients of the grants, created in 2005. As the map above indicates, several regions are benefiting from multiple layers of WIRED funding coming together geographically.
What Do Batesville, Miss., Singapore and Amsterdam Have in Common?Answer: Within two days in late May, they all received major facility investments from IAMC member company General Electric Co.'s GE Aviation division.
The company was to break ground in August for a 200,000-sq.-ft. (18,580-sq.-m.) advance composite engine component factory in Batesville, which will employ more than 100 within the 18 months after it opens in early 2009. The company worked closely with IAMC organizations the Mississippi Development Authority and Tennessee Valley Authority to secure the location for "Project Bear" which was officially headed to Mississippi as of 2006, but had not come to rest on a final location. GE in 2006 also teamed with Mississippi State University's College of Engineering at its Raspet laboratory on an incubator program to demonstrate the production of composite components for jet engines.
"Support throughout the state of Mississippi for this new operation has been critical and very gratifying," said Scott Donnelly, president and CEO of Cincinnati-based GE Aviation. The plant will produce fan platforms for the next-generation jet engines to be launched by GE Aviation in 2008 for use on the new Boeing 787.
Other partners assisting GE in their site location include the North Mississippi Industrial Development Association, city and county leaders and the Tallahatchie Valley Electric Power Authority.
The company is also expanding its materials distribution with two new facilities, a 30,000-sq.-ft. (2,787-sq.-m.) center in Singapore and a 50,000-sq.-ft. (4,645-sq.-m.) center in Amsterdam – both expected to open later this summer. They join an Americas distribution center in Dallas, Texas, in distributing spare parts and components. GE Aviation Materials is a joint venture between GE Aviation and Snecma (SAFRAN Group).
Outward from the CenterIAMC member firm Kimberly-Clark in July selected a 450,000-sq.-ft. intermodal facility in suburban Kansas City for a distribution center that will create 60 new jobs. The facility within Johnson County's New Century AirCenter will be leased from IAMC member firm First Industrial Realty Trust, Inc.
"We're excited to welcome Kimberly-Clark to Kansas," said Steve Kelly, deputy secretary for business development with the Kansas Department of Commerce, represented in IAMC by Barbara Hake, business recruitment project manager.
With the deal approved by county commissioners in April, the facility is expected to open in November.
"Our superior rail, air and interstate infrastructure attract top companies such as Kimberly-Clark to our region," said Bob Marcusse, president and CEO, Kansas City Area Development Council (KCADC), which is represented in IAMC by Tim Cowden, senior vice president of business development.
Though Mark Sonnenberg, senior vice president for Colliers Turley Martin Tucker, represented Kimberly-Clark in the deal, his quote in a press release could just as well have spoken for the other side:
"Like most distribution center projects of this size, the time frame to deliver the building is very tight," he said. "If it wasn't for the cooperation and can-do attitude of all the KCADC Partners, this deal would have been difficult to pull together so quickly. It's this type of winning attitude that is going to continue to help our community win more of these major deals."
On the Hunt in GreenlandKnow your far northern hemisphere? If you don't, ask IAMC member firm Alcoa. As the company moves forward with its huge smelter and power plant plans in Iceland, in May it announced its intent to work with the government of Greenland to study the feasibility of a 340,000 metric-ton-per-year hydro-powered aluminum smelter. According to a company release, the MOU encompasses a hydroelectric power system and related infrastructure improvements, including a port.
"The three municipalities of Nuuk, Sisimiut and Maniitsoq, which have all selected potential locations, support the project, and will take active part in the continued work," continued the release. "Final recommendations will go to the Greenland Home Rule Government for ratification. Upon completion, this development project would represent one of the largest investments in Greenland's history, stimulate economic growth and manufacturing diversity, create up to 600 direct, stable jobs, and contribute to increase Greenland's overall productivity and economic self-support."
About the choice of Alcoa as partner in preference to other interested aluminum companies Minister of Trade, Labor and Vocational Training, Siverth K. Heilmann said, "Alcoa has shown their determination to invest considerable resources in the development of this project together with us. Simultaneously, they have been ready to meet Greenland's requirements as to the pace of the project development, the environmental process, efforts in training and education etc.
"We still have far to go and important decisions to make before the project becomes reality," he added, "but with this agreement, Greenland and Alcoa have taken a very important step on the way."
Jim Winter, manager of corporate real estate for Alcoa, is an IAMC board member.
Realignment Is ContagiousA number of recent corporate announcements among IAMC members may mean a lot of portfolio and transaction work on the corporate real estate side, beginning with the plastics business.
In May, IAMC member company General Electric sold its plastics business for $11.6 billion to Saudi Arabia-based Sabic, whose Sabic Americas operation has been based in Houston for 20 years. GE Plastics comprises 10,300 employees at 60 locations worldwide.
New IAMC member firm Owens-Illinois announced in early June its definitive agreement to sell its plastics packaging business to Rexam PLC for $1.825 billion.
O-I Plastics has approximately 2,800 employees in 19 plants in the United States (including Puerto Rico), Mexico, Brazil, Hungary, Singapore and Malaysia with a headquarters and technical development center in Perrysburg, Ohio.
One of those U.S. plants, in Richmond County, N.C., received a $10-million expansion investment in 2006. Separately, O-I invested $20 million in a corporate headquarters project in 2005 in Perrysburg, Ohio.
IAMC member firm Hanesbrands, headquartered in Winston-Salem, announced in June it would cut 5,300 jobs and close nine sewing and assembly plants in four countries, including plants in Statesville, N.C., Mexico, Canada, Puerto Rico and the Dominican Republic. The move also means the cutting of 350 administrative and management jobs, including 260 in Winston-Salem.
"Hanesbrands expects to take restructuring and related charges of approximately $3 million for the closures, including severance, lease exit costs and accelerated depreciation of fixed assets," read a late June release from the company. "Hanesbrands expects to incur restructuring and related charges for these actions, including severance costs and accelerated depreciation of fixed assets, totaling approximately $42 million."
As the company moves production to more plants in Latin America and Asia, including a new sewing plant in Thailand, it will add some 3,000 jobs at those locations, as it moves toward fewer and bigger facilities.
In late July, Johnson & Johnson announced restructuring that is expected to garner annual cost savings of between $1.3 billion and $1.6 billion for 2008. Consolidation primarily in its pharmaceutical and stent divisions will result in the elimination of between 3 percent and 4 percent of the company's global work force of 120,000 – or between 3,600 and 4,800 jobs. The company also appears poised to benefit from the savings inherent in shared services:
"As part of its attention to cost management, the company plans to accelerate steps to standardize and streamline certain aspects of its enterprise-wide functions such as human resources, finance and information technology to support growth across the business, while also leveraging its scale more effectively in areas such as procurement to benefit its operating companies," read a press release.
While few specifics were available at press time, the company did state it would be closing the headquarters of recently acquired Alza, based in Mountain View, Calif.
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