IAMC INSIDER
Name:
Mike Nordstrom
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.
What does your company manufacture?
To whom do you report?
How many years have you worked in the profession?
Where and what did you study?
Describe the most important transaction or project
Jonathan Borofsky's 32-ft.-high "Man with Briefcase" sculpture is one of several on the grounds of General Mills' corporate headquarters campus on the west side of Minneapolis. The campus, which is open to the public, was the scene in July of the company's year-end picnic, with 12,000 employees and their families on the grounds.
What is the biggest professional challenge you face on a regular basis?
How is the role of manager of real estate evolving?
Which technology do you consider to be essential in your professional life?
What is the value of IAMC membership to you?
Third Time's Charm for Territories Across U.S.
T
hirteen 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 Center
IAMC 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 Greenland
Know 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.
Greenland, encompassing 1,346,231 sq. miles (2,166,086 sq. km.), is the largest island in the world. More than 80 percent of the country is covered by the ice cap. Its population is 57,000, mainly of Inuit origin. Driven by hunting not that long ago, its primary industries today include sea-going fishing, mining, tourism and oil exploration.
"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 Contagious
A 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.
Owens-Illinois recently moved into this new headquarters complex in Perrysburg, Ohio.
Photo by Rob Butler, Cincinnati, Ohio
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.
