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by JACK LYNE, Site Selection
Executive Editor of Interactive Publishing
Editor's note: For more on the Land of Enchantment, see the New Mexico Spotlight in the upcoming March 2004 Site Selection. And for still more on New Mexico, including Eclipse Aviation, see "Eclipsing the Competition," a special 2003 Site Selection Web-only Feature.
ALBUQUERQUE, N.M. – Aviation Technology Group (ATG), ending its 10-month expansion trek, has touched down in Albuquerque, N.M. The fledging aviation firm plans to build a new airplane manufacturing plant in the New Mexico city that will eventually employ more than 200 workers.
ATG's two-seat Javelin jet is the centerpiece of the production project. Tentatively priced at $2.5 million, the Javelin is being touted by the company as a faster, less pricey option for the general aviation market's "executive sport" sector.
Based in Englewood, Colo., ATG began searching for a Javelin production site in April of 2003. The company looked at 18 U.S. locations before deciding on Albuquerque, ATG officials explained. (ATG didn't name the other competing sites.)
"New Mexico's business climate, coupled with Albuquerque's economic and physical assets, offered distinct advantages over the alternative sites," ATG President George Bye said in announcing the project. "New Mexico's growing aerospace community, quality work force and proximity to research labs were also compelling influences."
Another major influence was New Mexico's $6.25 million in support. The company announced its site choice shortly after the New Mexico State Investment Council approved investing the capital in the startup company.
ATG will use the state's $6.25 million for half of the funding to develop a Javelin prototype. Other private investors have already committed the other $6.25 million required for prototype development, Bye said at a January hearing of an Investment Council committee.
ATG was incorporated in June 2000, following two years of R&D work on the Javelin. The company plans to have its prototype developed by this fall, Bye said.
In City's New Aerospace Park
Initially, though, ATG will set up Albuquerque operations in a smaller 10,000-sq.-ft. (900-sq.-m.) building at the Double Eagle II. The Javelin prototype will be built in that facility.
Full Javelin production at ATP will begin in the next three to four years, Bye said. Most of the 200-plus jobs will be manufacturing and engineering positions, he added.
ATG's was particularly attracted by ATP's anchor tenant, Eclipse Aviation. A locally based startup, Eclipse in May of 2000 announced long-term plans to build a $90-million manufacturing facility on a 150-acre (60-hectare) site in Albuquerque's new park. The city is providing Eclipse's ATP site at no cost.
That anchor facility will manufacture another twin-engine personal jet, the six-seat Eclipse 500. Eclipse plans to have the facility at full production by 2009, with more than 1,000 employees by 2011.
"By developing the facility near Eclipse Aviation," Bye explained, "ATG will be able to create important connections to aid in the manufacturing of the Javelin. ATG will have better access to similar suppliers, raw materials and the same type of skilled workers."
"ATG's decision represents an important step forward in our plan to grow this aviation industry cluster," said New Mexico Economic Development Department Cabinet Secretary Rick Homans. "New Mexico has emerged as a leader in the small jet aircraft sector."
Raburn joined Bill Gates as one of Microsoft's first employees. He later served as executive vice president and general manager of Lotus Development, chairman and CEO of Symantec and president of the Paul Allen Group (owned by Microsoft co-founder Paul Allen). A long-time private pilot, Raburn was named Pro Pilot magazine's 2003 "Aviation Visionary" for his work in developing the Eclipse 500.
Raburn's impressive resume is obviously giving Eclipse clout with the investment community. What's more, it's bolstering the stature of the companies locating near Eclipse, aviation analysts say.
New Mexico's Investment Council is also backing Eclipse. The council last year approved a $10-million investment in the aviation firm. Eclipse will use the funds for the new jet's testing, certification and production, company officials say.
Most of that ATP-related work will be completed by 2004, according to officials with Albuquerque's Aviation Department. Roadway and storm-drainage system improvements for the park will be completed in 2007 or 2008, they said.
Albuquerque's aviation department will own 100 acres (40 hectares) of the park's remaining 150 acres (60 hectares) that will surround the Eclipse facility. The city will lease that land to airport-related businesses. The ATP's other 50 acres (20 hectares) will be owned by Ranch Joint Venture, which owns the nearby 6,700-acre (2,680-hectare) Quail Ranch residential development. Ranch Joint Venture can either lease the park land or sell outright to aerospace-related businesses.
The new park is already drawing interest from the supplier side of the small-jet market.
"Albuquerque Economic Development Inc. (AED) has also been working with several potential suppliers to Eclipse Aviation," said AED Board Chairman Sherman McCorkle. "It's likely that many of those firms will also supply product to ATG."
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by JACK LYNE, Site Selection
Executive Editor of Interactive Publishing
VANCE, Ala. – Mercedes-Benz, adding another piece to its growing Alabama operation, has tapped a new joint-venture firm to manage its new 400,000-sq.-ft. (36,000-sq.-m.) logistics center.
The 200-employee facility will serve Mercedes-Benz U.S. International's (MBUSI) huge assembly plant in Vance, Ala. Already covering 1.5 million sq. ft. (135,000 sq. m.) of space and housing 2,400 workers, the Vance operation is getting even bigger.
The west-central Alabama plant is in the midst of a $600-million expansion that will add 2,000 new jobs. Scheduled to be completed early next year, the project will double annual capacity to 160,000 vehicles. Following the expansion, the plant will build the next-generation M-Class SUV, as well as the Grand Sports Tourer, Mercedes' new hybrid all-wheel-drive vehicle.
The logistics center's 200 new jobs, however, won't be for Mercedes workers. Instead, those positions will be filled by employees of Ai3. The freshly formed joint venture will staff, as well as manage and operate, the center.
Two supply-chain-management players linked together to land the Mercedes assignment: Averitt Express, a Cookeville, Tenn.-based freight company, and i3 Group, an Atlanta-based firm specializing in supply-chain solutions.
The logistics center will play a major role in the Alabama operation's just-in-time system, sequencing parts for delivery to the Mercedes plant. The production system is designed so that parts are delivered in the exact order for the specific vehicle that's being assembled.
Averitt is already familiar with Mercedes' Vance operation. Founded in 1971, the Tennessee-based firm has been handling parts shipping for the Alabama plant since 1997. The assignment will be the first in Alabama for minority-owned i3 Group, which was founded in 2001.
The logistics center contract, however, will have no impact on existing parts-supplier contracts for Mercedes' Alabama plant, Ai3 officials said. The center, they emphasized, will only sequence parts, not supply them. The Alabama plant's supplier community contains a host of the usual Tier-1 suspects, including Delphi Packard Electric, Johnson Controls, Ogihara America Corp., Oris Automotive Parts and ZF Industries.
Tout Benefits of Cross-State Cooperation
Appropriately, boundary-breaking and region-wide thinking were both evident during a Feb. 6 exchange between Alabama Gov. Bob Riley (R) and Mississippi Gov. Haley Barbour (R). Speaking at a Leadership Summit held in Livingston, Ala., the two governors sounded a strong cooperative note in discussing the auto industry's cross-border benefits.
Riley and Barbour, for example, both touted their respective states' benefits from the federal dollars budgeted for a project that's solely in Alabama: the completion of the I-85 link between Montgomery and Meridian.
"I'm committed to helping on things that maybe all the benefit would seemingly be to Alabama," said Barbour. (Both governors had to "appear" at the conference via a conference call after inclement weather grounded their private planes. Their remarks were broadcast over the conference's public-address system.)
"Every mile of that [I-85 link] would be in Alabama. [But] I am very strongly supportive of doing that because it completes the corridor where you can go from Mercedes-Benz in Tuscaloosa, from Hyundai in Montgomery, from Nissan in Canton, and bring all that together with interstates that center right there on the Alabama-Mississippi line," Barbour said at the conference, presented by the Commission on the Future of East Mississippi and West Alabama. "We will derive enormous benefit from that in Mississippi."
'East Mississippi-West Alabama Initiative'
"When we start looking at economic development opportunities," said Riley, "I think one of the things that we have to do . . . is build an infrastructure that reaches out to talk to some of the more logical choices for a major plant to come into that area. I have had several opportunities to talk with Gov. Barbour about this, and I think there is a renewed commitment between our states."
Echoed Barbour, "I think the East Mississippi-West Alabama initiative has a tremendous amount of potential and will be very important for both our states."
That cooperative spirit mirrored the makeup of the conference's corporate sponsor: L-3 Communications AeroTech. Madison, Miss.-based L-3 provides aerospace and technical services to the federal government. The company's 10,000 employees are made up of residents of both Mississippi and Alabama.
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Adding 150 Connecticut Jobs
by JACK LYNE, Site Selection Executive Editor of Interactive Publishing
CHESHIRE, Conn. – BAE Systems North America has, quite literally, brought some Cheshire grins to life in south-central Connecticut. Europe's largest defense contractor is adding 150 jobs at its existing plant in Cheshire, Conn., in the Hartford metro.
The product of 1999's merger of British Aerospace and Marconi Electronic Systems, BAE made the site decision as part of a manufacturing consolidation. Based in Rockville, Md., BAE's North American arm will relocate at least 100 of the Connecticut-bound jobs from two of its other existing plants in Westlake Village, Calif., and Wayne, N.J., company officials said.
All three plants manufacture parts and systems for the military as part of BAE's North American Inertial Systems Division. The California and New Jersey operations will remain open, said company officials. Their focus, though, will now shift to product development.
Key Factors in BAE Decision
BAE's selection of the Cheshire operation for its consolidation "speaks well of Connecticut and Cheshire," said Gerald Sitko, economic development coordinator for the city of some 28,500 residents in New Haven County. "I think it also speaks well of BAE's management and workers."
Cheshire employees' skills in gyroscope and measurement-system manufacturing, company officials confirmed, were a major factor in BAE's decision. But so, too, was the space situation at the Constitution State facility. The company will be able to move the 150 new jobs into the plant's existing square footage, BAE said.
The new manufacturing jobs will pay about $13 an hour. Some of the new Cheshire positions will also be for professional jobs, including engineering, the company said. Those positions will pay about $50,000 a year on average, they explained.
The relocation and consolidation will involve some $5.5 million in expenditures, BAE said. Those costs will be partially offset by the low-interest $2.25-million loan that the state is providing for the project. The 10-year loan will have a 2-percent interest rate, the state said. Some of the loan will be forgiven altogether if BAE meets specified hiring goals. (State officials have not yet released specifics on those goals.)
North America has become a key region for UK-based BAE. The company has operations in some 30 states and the District of Columbia, employing some 25,000 people. Total North American sales now top $4 billion a year, accounting for some 30 percent of BAE's worldwide revenues.
Been Owned by Five Different Firms
The plant's historic roots trace some 11 miles (18 kilometers) eastward, to Waterbury, Conn., where the operation was once part of Timex Corp.'s gyroscope division. Bendix Corp. relocated that work to Cheshire soon after it acquired Timex's gyroscope business in 1984.
In 1996, AlliedSignal then bought the operation, keeping the Connecticut site online during its subsequent restructuring. The Cheshire plant changed hands yet again in 1999, when Condor Pacific bought it as part of 1999's AlliedSignal-Honeywell merger agreement.
Only two years later, the operation's ownership altered once more, when BAE Systems North America purchased Condor Pacific.
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