Week of December 2, 2002
  Project Watch
DaimlerChrysler CEO Dieter Zetsche
LOGISTICS OF THE BUCKEYE OR MOTOWN ILK? Existing locations, particularly "someplace in the Detroit area or Ohio . . . locations driven by logistics" look like the early favorites for the new engine plant, said DaimlerChrysler CEO Dieter Zetsche (pictured).
Expansion Engine Revving?
Michigan, Ohio Top Potential Sites
for Chrysler Alliance Engine Plant
by JACK LYNE, Site Selection Executive Editor of Interactive Publishing

STUTTGART, Germany, and AUBURN HILLS, Mich.Chrysler, joined by Asian partners Hyundai Motor Co. and Mitsubishi Motors Corp., is considering locations in Detroit and Ohio for a major new operation manufacturing engines for passenger automobiles.
        That site-selection scenario springs from the alliance that DaimlerChrysler, Hyundai Motor and Mitsubishi Motors formed in May of 2002 to engineer and develop four-cylinder engines. The tri-partite pact calls for producing as many as 1.5 million units a year worldwide, beginning in 2004.
        Hyundai already has solid plans in place to manufacture one of the four-cylinder engines developed by the alliance. The automaker in March of 2004 will begin producing the engines at one of its South Korean sites, according to Hyundai officials.
        The U.S. operation, though, would extend the three firms' engineering and development partnership into a separate operation dedicated to manufacturing. The alliance's U.S. plant, which would operate under the auspices of DaimlerChrysler's Chrysler unit, would manufacture more than 500,000 four-cylinder 1.8-to-2.4-liter engines a year, according to Chrysler officials.
        The operation could begin building the engines as early as 2005, officials added. Chrysler hasn't yet estimated the capital investment and job figures that the project would entail.

A Ways to Go Before Deal is Done
Plans for the U.S. engine-manufacturing plant, however, have a ways to go before reaching the done-deal ranks.
        Just where the plant would be sited, for example, remains very much an open question. The chosen site will need to be able to supply all three companies' U.S. assembly plants with the engines it produces.
        That's one major reason why locations near existing operations are the early favorites, particularly "someplace in the Detroit area or Ohio . . . locations driven by logistics," said DaimlerChrysler CEO Dieter Zetsche. DaimlerChrysler has a particularly large presence in the Detroit metro, where the automaker has six plants and 13,000 employees, as well as its U.S. headquarters. In Ohio, DaimlerChrysler has two major plants in Toledo.
        Fully fleshing out the project would also mean working through the particulars of meshing the three automakers' production procedures, say industry analysts.
        The United States, though, is "the only place where we might consider whether it makes sense [to do] any kind of [DaimlerChrysler/Hyundai/Mitsubishi] manufacturing joint venture," Zetsche said. Japan and Korea don't offer similar opportunities for a manufacturing collaboration, he explained.
        DaimlerChrysler is in the process of purchasing a 50 percent interest in Hyundai's commercial vehicle business and a 43 per cent interest in Mitsubishi's commercial vehicle business. Both purchases should be finalized sometime next year, DaimlerChrysler officials said.

Toronto Mayor Mel Lastman
An Asian trade mission by Toronto Mayor Mel Lastman (pictured) paid off with a 300-employee Viva Magnetics manufacturing plant - as well as possibly spurring a major Hong Kong-based lighting manufacturer to come to the
city as well.
Viva, Toronto:
Hong Kong Firm Plans 300-Worker Plant
by JACK LYNE, Site Selection Executive Editor of Interactive Publishing

HONG KONG – Promotion has paid off for Toronto. Traveling on the first leg of a 17-day Asian trade mission, Mayor Mel Lastman closed a deal in Hong Kong with Viva Magnetics, which committed to building a 300-employee manufacturing plant east of downtown Toronto.
        The plant will piggyback on the Hong Kong-based company's existing presence in the city of Scarborough. The new Toronto-area manufacturing facility will be located near the 400-employee plant that Viva opened in 1998.
        "This is fantastic news for Toronto and a wonderful endorsement of our city," said Lastman, who finalized the project during a meeting in Hong Kong with Anthony K.Y. Choi, Viva's managing director.
Viva CD box
A (LITERAL) JEWEL OF A PROJECT: Viva Magnetics' new 300-employee 230,000-sq.-ft. (21,367-sq.-m.) will manufacture the jewel boxes (pictured) that hold compact disks.

Further Expansion
Planned for 2003
"We are very excited to be expanding in Toronto," said Choi. Viva, Choi added, plans to announce a further expansion of its Toronto-area operations in the autumn of 2003.
        A number of factors, Choi explained, drove the company's decision to expand in Scarborough, including the low Canadian dollar, U.S. market proximity and Toronto's large Asian population.
        Viva's new $30-million, 230,000-sq.-ft. (21,367-sq.-m.) plant will manufacture compact disk jewel boxes. Viva also manufactures CDs and replicates CDs and DVDs. The company, which has some 2,000 employees, has other manufacturing operations in Hong Kong and in Delta, British Columbia.
        Toronto's Asian trade trip may also spur another major expansion. A major Hong Kong-based lighting-industry manufacturer met with the city's delegation and is now considering setting up a new Toronto plant, Lastman said.
Citigroup Center Tampa
RECONFIGURATION-READY SPACE: Citigroup's "prototype year 2005" model for corporate campus development, Citigroup Center Tampa is so flexibly designed that the entire 700,000-sq.-ft. (63,000-sq.-m.) complex could, if necessary, be reconfigured overnight.
Citigroup Adding 500-700 New Jobs
at Commodious Tampa Complex
by JACK LYNE, Site Selection Executive Editor of Interactive Publishing

TAMPA, Fla.Citigroup is once again staffing up inside its sprawling 127-acre (51-hectare) complex in Tampa, Fla. The world's second-largest financial services firm has announced that it's adding 500 to 700 jobs at the company's Citi Cards division in the Gulf Coast city.
        The project echoes an enduring corporate real estate truism: Success begets expansion. Citi Cards is enjoying strong demand, now ranking as North America's largest provider of credit cards.
        With many of Citi Cards' other locations operating at or near capacity, the division turned to the 700,000-sq.-ft. (63,000-sq.-m.) Citigroup Center Tampa, which opened in 1998 after Tampa beat out Atlanta and Dallas for the coveted project. Site Selection named the project one of the year's top 10 development deals (for more see "Dovetailing Development Excellence with Corporate Strategy" from the May 1999 Site Selection).
        Located in Sabal Corporate Center, Citigroup Center Tampa was already home to a number of Citigroup support functions, including corporate real estate. Other support functions housed in the Tampa complex include global trade; securities and technology; global information services; international personal banking; audit and risk review; procurement and payables; North and Latin American financial centers; anti-money laundering and investigation; community relations; and external affairs.
        "We are excited to expand our Citi Cards business into the Tampa market to realize the synergies with our other Citigroup businesses there, as well as complete our Citigroup Center Tampa campus development," said Jerry Fisher, the newly named president of Citigroup Tampa.

Center Is "Prototype Year 2005"
Model for Corporate Campus Development
Citi Cards' 500 to 700 new jobs in Tampa will be in customer service and sales, as well as in management, Fisher said. The positions will be added over the next 12 months, beginning immediately, he added.
        In Citigroup Center Tampa - Citigroup's "prototype year 2005" model for corporate campus development - Citi Cards has picked a site that's readymade for reconfiguration. The center's four three-story office buildings all have 42,000-sq.-ft. (3,780-sq.-m.) floor plates, with all of the commodious complex's square footage fitted out with flexible floor systems, pre-wired fiber-optic cabling and raised flooring. If necessary, in fact, Citigroup Center Tampa could be totally reconfigured overnight, company officials say.
        "At a time when many other parts of the nation are experiencing either net job losses or little if any new job growth, long-time clients such as Citigroup have continued to expand their presence in Tampa by maximizing their existing infrastructure," said Steve Meyers, 2002 chairman of the Committee of One Hundred for the Greater Tampa Chamber of Commerce, a key player in building Citigroup's local-area presence.
        Meyers also happens to be vice president and regional manager of Highwoods Properties - the landlord firm for Citigroup Center Tampa.

Milton Hershey
BACK IN? The reconstituted Hershey Trust board includes "members who are committed to this region and to carrying out the intentions of Milton Hershey (pictured)," said Pennsylvania Attorney General Mike Fisher.
Hershey Trust Busted;
Pro-Sale Members Exit
by JACK LYNE, Site Selection Executive Editor of Interactive Publishing

HERSHEY, Pa. – "Bust the Trust." That's been the persistent war cry driving opponents of the sell-off of Hershey Foods Corp. - a sale, community activists charge, that would likely trigger massive layoffs, particularly in Hershey, Pa., where the candy-maker employs 7,000 people.
        Now, the trust has been busted - by its own hand, no less, following a continuing critical barrage that hit firestorm status earlier this year, when the Hershey Trust Company very nearly sold off Hershey Foods.
        Pennsylvania Attorney General Mike Fisher, a staunch opponent of the sale, announced that 10 of the Hershey Trust's 17 board members will leave at year's end, when their terms expire. Moreover, those 10 include all seven of the board members who in September unsuccessfully voted to sell Hershey Foods to the Wm. Wrigley Jr. Company for $12.5 billion. (For more details, see "Hershey Goes Off Auction Block, 7,000 Pennsylvania Workers Stay on Job" from our Project Watch for the week of Sept. 30.)
        Only four additions, however, will replace the 10 departing members. That move will reduce the board to an 11-member body.

Judge: Trust Board 'Unusually Large, Disconnected'
The major shakeup pleased some of the board's most high-profile critics, including Dauphin County Orphans' Court Judge Warren Morgan. Morgan became part of the Hershey scenario after Fischer legally blocked the sale of the company.
        The current 17-member board "is unusually large, and the residences and daily lives of too many members are distant and disconnected from the charitable interests they serve," Morgan said last month. The judge also criticized Hershey Trust for losing touch with the philanthropic vision of Hershey founder Milton Hershey.
        Significantly, all four new board members live in Central Pennsylvania.
        "The proposed sale of Hershey Food Corporation was a very difficult time for the company, its employees, the students of the Milton Hershey School, the Hershey community and the entire Central Pennsylvania region," said Fisher (who lost the recent governor's race to Democrat Ed Rendell). "Out of this ordeal, however, came an opportunity to reconstruct this board with members who are committed to this region and to carrying out the intentions of Milton Hershey."
        Board critics also hope the shakeup will reconnect the trust with Hershey Foods.
        As things stand, though, that disconnect is scheduled to grow greater. In July the current board and the attorney general's office signed an agreement that would bump Hershey Foods' chief executive from the board in June of 2003.
        But the trust board's bust-up will likely spur a revisiting of that issue. September's near-sale underscored "the very severe fracturing of relations between the trust and Hershey Foods," said First Deputy Attorney General Jerry Pappert. "We need to act to restore relations between Mr. Hershey's trust, his food company and his school."
DEFINITELY OUT: Milton Hershey School President and Chief Executive William Lepley (pictured) is leaving after the brouhaha over selling Hershey Foods.
School, Alumni Have Been at Odds
Relations have also been noticeably strained between Milton Hershey School (MHS) and leaders of the MHS Alumni Association (MHSAA).
        The school – which feeds, houses, clothes and educates orphaned children – was the sole beneficiary of Milton Hershey's stock in Hershey Foods. That behest left the Hershey Trust in control of 77 percent of Hershey Foods' voting shares.
        The school's administration has been under fire for several years from the MHS Alumni Association. The school, which holds some $5.4 billion in assets, "has had a systemic breakdown," charged MHSAA President Ric Fouad.
        Such alumni concerns may now be answered with the Hershey Trust board's reconstitution. One of the departing members is MHS President and Chief Executive William Lepley.
        MHSAA leaders were elated with the changes in the trust board's makeup. But they clearly feel that their fight is far from over.
        "We believe that MHSAA vigilance will be required to assure that MHS Board reform fully accounts for the needs of the most important group of all, MHS children," Fouad said.


©2002 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.