1998’s SS Scoreboard demonstrates why it sets the industry standard, registering record levels of corporate expansion in U.S. states, metros and regions. Some of the most resounding record-shattering came out of Michigan.
It was one of Site Selection’s classic finishes. As 1998’s final few months flipped by, the race took on the see-saw drama of the Indianapolis 500’s last lap or a Kentucky Derby stretch run.
The winning margin was razor-thin as the dust settled, with only hard numbers making the final call clear: Defending champion Michigan had fought off California’s hard-driving stretch charge, winning 1998’s Site Selection Governor’s Cup, awarded to the U.S. state recording the highest total of new corporate facilities and expansions.
But competition for 1998’s corporate facilities crown was particularly fierce. Between them, Michigan and California totaled a jaw-dropping 3,395 new facilities and expansions — 27 percent of the record 12,368 projects SS recorded for the entire United States.
Fittingly, it came down to a slim margin, as do most corporate site decisions. Michigan’s 1,722 corporate location projects provided a slim, 3 percent winning edge.
California turned the tables, however, in another closely watched corporate location barometer, taking 1998’s crown for new manufacturing projects, with Michigan ranked No. 2.
Regionally, 1998’s runaway winner was the five-state East North Central U.S. Census region. Powered by stellar showings by Michigan, Ohio and Illinois, all ranked in SS’s overall top 10, the region’s whopping 3,549 new facilities and expansions topped No. 2, the eight-state South Atlantic region, by 27 percent.
A Year of Records
Site Selection’s annual expansion scoreboard has long been considered the industry benchmark, owing to the thoroughness of its year-round data-gathering, which stretches back more than 25 years (for SS’s methodology, see pg. 198).
1998’s scoreboard underscored why SS’s annual tallies have set the standard. It was a year of record-setting numbers, clearly reflecting the U.S. economy’s unprecedented roll through eight straight bullish years.
Here, at a glance, are a few new records set in SS’s 1998 scoreboard:
• A new annual record: 1998’s 12,368 location projects sets a new U.S. record, topping the 1997 record by a striking 17 percent.
• New state records in overall totals: 1998 was the first year in which five states topped 1,000 new facilities and expansions. After Michigan and California, Site Selection’s record-setting 1998 included No. 3 Ohio with a tally of 1,153, No. 4 North Carolina with 1,044 and No. 5 New York with 1,025. And No. 6 Texas came close to 1998’s “1,000 club.”
• A new U.S. manufacturing record: 1998 marked record totals for U.S. manufacturing activity. While 1998’s new manufacturing projects were down 5 percent, manufacturing expansions increased 6 percent, yielding 6,150 new and expanded manufacturing facilities, a modest 2 percent spike over 1997’s old record.
The year’s top 10 new manufacturing states largely included 1998’s overall top 10, though two unranked states penetrated new manufacturing’s top 10: No. 8 Pennsylvania and No. 10 South Carolina.
• And yet more records . . . : Other analyses yielded yet more new SS records: Detroit set new metro records for both total facilities and new manufacturing. Michigan also set records in both total projects and new manufacturing in SS’s long-term analysis. And the competitive bar rose in SS’s ’98 proportional comparisons, which ranked North Carolina, Ohio and Nevada No. 1.
• . . . But Global Tallies Down: Mirroring East Asia, Western Europe and Latin America’s economic unrest, 1998’s only significant downturn came in new global location projects in the USA. Ohio won 1998’s coveted No. 1 global spot.
• A New 1999 Record? Thoroughly bucking conventional wisdom, the Site Selection Index predicts 15 percent new facility growth in 1999.
Here’s a capsule look at what made the top 10 tick in the 1998 SS Governor’s Cup race.
No. 1 Michigan
“Jobzilla,” Gov. John Engler calls his state.
The name fits. Once slowed by economic doldrums and knee-jerk “Rust Belt” perceptions, Michigan’s economic engine is now revving, hitting gears perhaps it might not’ve known were there.
1998’s No. 1 metro, Detroit was clearly a Michigan dynamo. No metro came close to Detroit’s 836 location projects.
Motown’s dominance seemed fitting, since Michigan’s massive auto-industry density remains the turbocharger for the state’s economic engine. That charge kicked in 1998 in most high-profile fashion with GM’s announcement of a $398 million expansion of its Pontiac R&D operation and Bridgewater/Johnson Controls’ new, US$107 million auto-seat manufacturing plant. Elsewhere, Sverdrup Technology, in conjunction with Ford, is building a 2,100-employee lab in Allen Park, while Detroit Center Tools will set up its new, 2,000-employee assembly and automation systems plant in a Warren Renaissance Zone, on a 30-acre (12-hectare) parcel that was once the Detroit Tank Arsenal.
But Detroit’s traditional industrial heart now turns to thick pockets of high-gloss offices as it stretches out to the suburbs. AAA, for example, parked its $61 million headquarters expansion in Dearborn, while the new, $100 million UAW-GMC Human Resource Center picked Auburn Hills, and Bosch Brake chose Farmington Hills for the 435-employee headquarters/ R&D center it’s relocating from Indiana.
1998’s No. 8 overall metro and No. 9 in new manufacturing, Grand Rapids also bagged a number of high-profile deals, including GM’s $110 million manufacturing expansion, Huntington National Bank’s new headquarters and Tower Automotive’s $70.9 million plant expansion.
Smaller Michigan areas also reaped 1998 rewards. In Flint, whose decline Roger and Me painfully detailed on the silver screen, GM is undertaking a $256 million engine plant expansion. And Ann Arbor landed Domino’s $104 million headquarters/R&D facility, plus Parke-Davis’ $270 million pharmaceuticals expansion.
No. 2 California
California’s boffo 1998 Governor’s Cup showing also solidifies its Comeback Kid status. As the 1990s began, California was losing some 900 jobs a day, as many firms fled. But big-time change has come, largely powered by California’s unique mix of high tech and can-do heart.
1998 examples abounded, including NEC Electronics’ $1.4 billion expansion of its Roseville PC chip plant in the Sacramento metro, or “Silicon Sacramento,” as some call it. 1998 expansion was also strong in the “real” Silicon Valley. San Jose alone landed Cisco Systems’ new, 6,000-employee plant, Candescent Technologies’ new, $400 million plant and 3Com’s new, 2,200-employee plant. Applied Materials picked nearby Sunnyvale for its new, $309 million semiconductor plant, while Intel is undertaking a $300 million expansion of its Santa Clara wafer plant.
Expansion action ran even hotter in the Los Angeles metro, 1998’s No. 3 overall and No. 5 in new manufacturing. High-profile announcements included E! Entertainment’s $100 million studio expansion, United Airlines’ $200 million expansion, Earthlink’s 500-employee office expansion, Koos Manufacturing’s 600-employee expansion, Walt Disney’s 632,000-sq.-ft. (58,712-sq.-m.) office expansion and Panasonic Disc Services’ 749-employee distribution center expansion.
Big deals in No. 6 new manufacturing metro Orange County included Boeing’s 2,200-employee expansion, AirTouch’s new, 1,900-employee headquarters and the 500-employee Printronix headquarters.
Eastward, things were buzzing in 1998’s No. 3 new manufacturing metro (and No. 7 overall), centered around Riverside. Major projects announced in and around “the Inland Empire” included Sundance Spas’ 500-employee Corona plastics plant expansion and Mattel’s new, 800,000-sq.-ft. (74,320-sq.-m.) Chino distribution center, plus Bridgestone/Firestone’s 889,000-sq.-ft. (82,588-sq.-m.) distribution center and Investment Development Services’ new 980,000-sq.-ft. (91,042-sq.-m.) manufacturing plant, both in Ontario.
Elsewhere, No. 7 new manufacturing metro San Diego landed Nokia’s $43 million plant, Qualcomm’s 639,000-sq.-ft. (59,363-sq.-m.) expansion, and Gateway 2000’s new headquarters, while San Francisco bagged major new headquarters for the Gap, Pacific Exchange and Sega of America.
However, Fender Guitar, which simply stayed, perhaps best demonstrates California’s dramatic reversal of fortune. After eyeing Nashville, Fender, with Southern California Edison’s assistance, expanded its Corona operation with permitting and construction separated by a mere 90 days. Once, that would’ve required divine intervention. Now, it’s business as usual, a commonsensical key in California’s comeback.
No. 3 Ohio
Diversity in industry-sector expansion and geographic desirability: That’s been a key element in Ohio’s long-running success in landing copious numbers of new facilities and expansions.
Like Midwest counterpart Michigan, Ohio also raked in 1998’s bounty of brisk expansion within its sizable auto industry. Things auto-related rained down most noticeably in the Dayton metro in Moraine, site of General Motors/Isuzu’s new, $350 million joint-venture auto-engine plant, 1998’s 13th largest U.S. investment. GM division Delphi Harrison Thermal Systems also picked Moraine for a $65 million plant expansion. Then there was Ford’s new, $99 million cylinder-block plant in the Cleveland metro, GM’s $31 million expansion of its wire harness plant in the Youngstown metro and Kenworth Truck’s $47 million expansion of its Akron metro plant.
But there was much more besides the auto industry driving Ohio’s stellar 1998, underscoring the state’s diversified strength. The Cleveland metro, No. 9 in new manufacturing and No. 10 overall, garnered Eaton’s $76 million chip plant expansion, OfficeMax’s new, $70 million headquarters, Advanced Lighting Technologies’ $61 million manufacturing expansion and AT&T’s new, $40 million R&D facility. Columbus landed Bank One’s 1.1-million-sq.-ft. (102,000-sq.-m.) expansion and ExpressMed’s new, 400-employee headquarters, while Dayton bagged Navistar’s new, $137 million plant and Bank One/First USA’s 650-employee credit card center.
Some of Ohio’s largest announcements came in smaller areas like Archbold, where Sauder Woodworking’s 1.4-million-sq.-ft. (130,000-sq.-m.) expansion was 1998’s fourth-largest in the USA. Landoll also opened a new printer plant in Ashland, and Mill’s Pride opened a new cabinet-making facility in Seal Township, both topping 1 million sq. ft. (92,900 sq. m.). And cataloguer Cinmar picked Union Township for its $42 million, 510-employee distribution/office facility
No. 4 North Carolina
North Carolina continued its long-successful business attraction strategy in 1998, with a regionalized economic development effort landing a wide range of industry projects sprinkled widely around the state.
Much of the state’s success came from expanding companies thinking nothing could be finer than to be in Carolina’s Raleigh-Durham-Chapel Hill metro. The metro flexed its traditional manufacturing muscle, landing a host of value-added projects from the likes of Glaxo Wellcome (a $90 million expansion), Lucent Technologies (a $25 million expansion) and Tekelec (a 300-employee expansion of its network switching systems plant). Raleigh-Durham-Chapel Hill also landed Strategic Technologies’ new headquarters and AW North Carolina’s $100 million new plant, one of several projects reflecting the state’s auto-sector strength.
The No. 6 overall metro and No. 9 in new manufacturing, Charlotte’s financial sector clout was evidenced by Bank of America’s $160 million, 3,500-employee headquarters expansion, Equitable Life’s new, $15 million office and First Charter’s $35 million call center. Charlotte’s major manufacturing expansions included Fieldcrest Cannon, which committed $170 million, and Freightliner, which will add 500 employees.
North Carolina’s 1998 also saw Greensboro landing a new, $300 million, 1,000-employee Federal Express distribution center, plus Procter & Gamble’s $39.5 million distribution center expansion and Sealy’s new headquarters.
Long-time economic linchpins, North’s Carolina furniture and textile industries were also active, including Baker Furniture’s new, 300-employee plant in the Hickory-Morganton metro, plus the new, $75 million Cardinal Glass plant in Mooresville, a non-metro area. Other non-metros also bagged major projects, including Nucor’s new, $300 million, 300-employee steel mill in Hertford County’s Cofield, Steelcase’s 350-employee expansion of its furniture plant in Fletcher and Echlin Motors’ new, 350-worker manufacturing plant in Canton.
No. 5 New York
New York is yet another of 1998’s riches-to-rags-to-riches stories. Its radically strengthened business climate continued to draw a host of new corporate facilities and expansions to the historic “gateway to the New World.”
The state bagged 1998’s third-, fourth- and fifth-biggest U.S. investments: Danka Office Imaging’s new, $688 million plant in Rochester, Evergreen Paper’s $554 million recycling plant in Duchess County’s Poughkeepsie, and Empire State Newsprint’s $533 million plant in Kingston. Duchess County, where IBM’s wafer-disk plant landed on SS’s 1997 Top 10 Deals, bagged one of ’98’s biggest deals: the Gap’s new, 2.4-million-sq.-ft. (223,000-sq.-m.) distribution center in Fishkill, ’98’s No. 2 U.S. new-space creator.
The New York metro, naturally, was a big part of 1998’s success, evidencing its global financial formidability with Deutsche Bank’s $115 million, 3,600-employee headquarters expansion, Mutual of New York’s 560-employee headquarters enlargement and NASD’s new, $110 million headquarters. A swarm of other major financial players expanded their NYC office presence, including Chase Bank, Morgan Stanley/Dean Witter, Garban, Goldman Sachs, Merrill Lynch and Mutual of New York. Time Warner’s huge new headquarters and Random House’s equally massive headquarters expansion emphasized New York’s media clout, as did New York Studios’ new, $160 million, 2,000-employee facility.
PespiCo’s $70 million expansion in Somers evidenced New York’s manufacturing strength. But the Buffalo metro was also a major player in the state’s No. 4 new manufacturing rank, landing CanFibre’s new, $87 million plant, plus American Axel’s $76 million expansion. Elsewhere, Hadco’s new, 700-employee manufacturing facility picked the Binghamton metro, which also secured Lockheed Martin’s 400-employee expansion.
Albany, meanwhile, landed two new headquarters: Progressive Corp.’s 500-employee facility and Pepperidge Farm’s $100 million operation.
Texas: No. 6
Texas’ distinctive Old West/New South blend produced another banner business expansion year in ’98.
Though oil, cattle and cotton remain economic bellwethers, Texas’ biggest 1998 investments came in the financial sector, including USAA’s 4,000-employee expansion in San Antonio, Associates of North America’s new, 3,500-employee facility in Irving and Fidelity Investments’ new, 2,500-employee facility in Westlake in the Austin metro. Austin’s major high-tech presence also expanded, including Dell Computer’s major manufacturing and office expansions and Motorola’s 940,000-sq.-ft. (87,326-sq.-m.) office expansion.
Dallas, however, was the Lone Star State’s hot spot, the No. 9 overall metro, with major deals including Computer City’s new, 600-employee office, GTE’s new, $50 million office and Allegiance Telecom’s new, 571-employee office. Area demand was boldfaced by a new, 500,000-sq.-ft. (46,450-sq.-m.) speculative warehouse being built at the Dallas-Ft. Worth airport by Dallas-based Trammell Crow Co., the folks credited with inventing “spec space.”
Next-door Ft. Worth was hopping, too, with major deals including Bell Helicopter’s $150 million manufacturing expansion, Siemens Electrocom’s $286 million office expansion and major call centers for Capital One and Silver Leaf Resorts. Down south, El Paso bagged Boeing’s 500-employee manufacturing expansion.
Texas’ chemical and petroleum industries also landed major projects. Goodyear Chemicals has a $144 million expansion under way in the Beaumont-Port Arthur metro, where BASF/Petrofina announced a new, $900 million plant.
The Houston metro, which landed major expansions that included Chevron and Bayer, also stayed hot in broader sectors like high tech (REL Tech’s 436-employee manufacturing expansion), call centers (ICM’s new, 400-employee operation) and transportation (Continental Airlines’ new, $56.1 million facility).
No. 7 Virginia
The Old Dominion drew much of its business expansion strength from the Washington, D.C.-Md.-Va.-W.V. metro, 1998’s No. 3 overall metro.
Some of that metro’s major location action came in Loudoun County, which landed a raft of high-profile deals like MCI WorldCom’s 4,000-employee, $200 million expansion of its Internet access and services operation, networking software giant Baan’s new, $40 million headquarters, America OnLine’s 2,100-employee expansion of its headquarters complex, and Orbital Sciences’ $50 million, 1,500-employee headquarters/manufacturing expansion.
Nearby Fairfax County’s successes had a similarly high-tech edge, with major office expansions including Cisco Systems (adding 479 employees) and Nextel Communications’ (500 employees), plus Sun Microsystems’ 350-employee manufacturing expansion and Computer Associates’ new headquarters.
The Richmond metro also made big manufacturing news in 1998, with TXI announcing a new, $400 million, 400-employee steel recycling operation, plus Capital One’s 600-employee call center and Elliptus Technologies’ new headquarters.
Expansion activity was also brisk in the Norfolk-Virginia Beach-Newport News, Va.-N.C. metro. The area’s transportation prominence was evidenced by Newport News Carrier’s new R&D center and Norfolk Southern’s $32.8 million headquarters expansion.
Virginia Beach was also a major player, as GEICO announced two projects likely to produce some 3,000 new jobs.
No. 8 Illinois
Home to more than half of all Illinois residents, Chicago keyed the state’s 1998 success, ranking No. 2 in new manufacturing and No. 6 overall.
A host of firms announced major new or expanded manufacturing projects in the metro that poet Carl Sandburg once called “the city of big shoulders.” That wasn’t surprising, since no other U.S. city moves more freight by train and truck, and O’Hare is the world’s busiest airport. The Chicago metro’s high-profile manufacturing projects included the Chicago Sun-Times (a $100 million investment), USG Corp. ($90 million), Cogen America ($92 million) and Juno Lighting (200 new employees).
But Chicago’s success certainly wasn’t limited to manufacturing, also including Lucent Technologies’ new, $125 million R&D facility and info-tech player Whittman-Hart’s new headquarters. Chicago also continued to be a major force for call and service centers, with major 1998 investments by Transamerica and Volkswagen, plus Dart Warehouse’s new headquarters/ catalogue sales distribution center.
Other areas farther south helped account for Illinois’ No. 7 rank in new manufacturing. Peoria, for example, bagged Caterpillar Tractor and Chrysler expansion projects.
Non-metro Illinois areas also landed a number of major resource-based expansions in 1998, with Roxanna landing two: Houston Industrial Power Generation’s new, $350 million power plant and Wood River Refining’s $51.6 million expansion.
No. 9 Florida
1998’s expansion sunshine beamed down on Florida, No. 6 in new manufacturing and No. 9 overall. With no Florida metro in either the top 10 overall metros or the top 10 new manufacturing metros, Florida obviously capitalized on a broad range of industries and locations.
With a population that’s grown by an estimated 15 percent this decade, Florida remained fertile ground for corporate service and call centers. Centers were either announced or expanded in 1998 by IQI in the Ft. Pierce-Port Saint Lucie metro, Bombardier Capital ($50 million invested) and GEICO Direct (900 employees), both in the Jacksonville metro, and Progressive Insurance (1,200 employees), Opinion Research (800 employees), ABR Information Services (1,000 employees) and Capital One (1,250 employees), all in the Tampa-St. Petersburg-Clearwater metro.
Warehouse/distribution facilities also abounded to serve Florida’s burgeoning masses. Major distribution projects included Winn-Dixie’s new, $82 million operation in Jacksonville, Associated Grocers of Florida’s new, 200-employee operation and Circuit City’s $24 million expansion, both in Ocala.
And Florida’s strong manufacturing showing included Cirent Semiconductor’s $100 million manufacturing plant in Orlando. Another major Orlando expansion coup came in landing Bell Labs’ new, $300 million manufacturing/R&D facility.
No. 10 Minnesota
“The land of a thousand lakes” (actually, it’s 15,000), Minnesota in 1998 capitalized on its pivotal geographic position: The northernmost continental state, Minnesota includes the Great Lakes waterway system, offering Atlantic Ocean access, and the Mississippi River, providing a Gulf of Mexico connection.
One area that particularly capitalized on those advantages was the Minneapolis-St. Paul metro, 1998’s No. 2 overall metro and No. 3 for new manufacturing. Major new manufacturing projects in the metro included Control Data Systems and Advanced Circuit, with each project producing some 500 new jobs; Gateway’s 900-employee operation; and Andersen Windows’ 300-employee plant.
Minneapolis-St. Paul also landed a host of new, high-end headquarters, including Imation Discovery (750 employees), Media One (450 employees) and brokerage concern Piper Jaffrey (300 employees). Lawson Software announced a $101 million, 1,000-employee St. Paul headquarters expansion.
Home to one of the world’s largest inland ports, the Duluth metro’s manufacturing magnetism drew Evtac’s new, $150 million iron-ore plant, Cirrus Design’s new, 350-employee airplane manufacturing facility and Potlach’s $62 million plywood plant expansion. Elsewhere, St. Cloud landed New Flyer of America’s 300-employee bus plant.
Finally, Minnesota’s non-metro areas built on their traditional agribusiness and food industry strengths, with Southern Minnesota Beet Sugar’s $100 manufacturing expansion in Renville and Centex Harvest States’ new, $70 million soybean processing operation in Fairmont. SS
Direct investment by more than 100 foreign companies in his state has caught the attention of Maine Governor Paul LePage. They employ more than 30,000 workers, and many of these companies are expanding.
No. 1 Michigan
No. 3 Ohio
No. 4 North Carolina