Today’s Courier Herald Column:
Georgia leaders were all smiles Friday as they officially announced the rumored biggest economic development deal since Kia chose West Point to locate their auto manufacturing facility. Caterpillar, the maker of trademark yellow heavy construction equipment will be building a new $200 Million plant straddling the Clark and Oconee county lines in the Athens area.
When fully operational, 1,400 additional Georgians will be employed by Caterpillar, adding to the couple of hundred who work at an existing generator manufacturing facility in the Griffin area. An additional 2,600 jobs are estimated to be created by vendors, suppliers, and others who will support the new Athens plant.
The state plus the two counties have kicked in an estimated $75 Million in incentives to attract Caterpillar to Athens, reflecting the realities that landing a significant manufacturing presence does not come cheap. An economic development consultant quoted on a Caterpillar dealer’s website boasts a $2.4 billion annual economic impact when the plant reaches full capacity. Groundbreaking is expected next month with the plant beginning operations by late next year.
Prominent among the reasons for selecting Georgia for this facility is the proximity to the ports of both Savannah and Charleston. The unique factor here isn’t that they want access to the ports to receive raw materials as much as they are looking to the ports for their outbound capacities. Caterpillar plans to export about 40% of the plant’s production, mostly to South America and Europe.
This helps Georgia buttress its argument that the Port of Savannah must be expanded as an economic necessity. The port is the only one in the U.S. that is a balanced port, in that it exports as much as it receives for import. Caterpillar’s decision to re-locate manufacturing activity to the U.S. that is currently conducted in Asia is a stark reversal of a few decades ago, when many believed the U.S. uncompetitive in manufacturing with jobs that will begin here soon were once lost forever.
Logistics remains a strong theme with Georgia’s economic development community, as Georgia’s network of ports, roads, and rail often used as an initial selling point as well as the features that close the deal. As such, major infrastructure projects will continue to dominate discussions as what can be done to keep Georgia competitive.
Georgia’s boosters pushing for infrastructure upgrades will point to the Athens victory, as well as recent announcements like the new metal stamping facility headed for Dublin, that logistics is not all about shipping and distribution warehouse jobs, but the value added industries that produce goods as well.
To that end, renewed discussions of the I-14 interstate highway are emerging, hoping to link Augusta, Macon, Columbus, Montgomery, and Meridian Mississippi. If constructed, the road would ease access to Georgia’s ports via interstate highway directly to points westward but without having to navigate Atlanta’s gridlocked freeway system.
The proposed road would not only open up many rural parts of the state as potential locations for economic development, but could also serve the added function of helping to relieve truck traffic in the Atlanta area by providing interstate access around the capitol city without adding to metropolitan congestion.
Another item cited by Caterpillar as a reason for selecting Georgia is the “Quick Start” customized worker training program whereby the state assists training of potential employees in the specialized skills that will be needed in the employers manufacturing facility. Economic Development officials quietly acknowledge that Georgia’s hospitable pro-business, right-to-work environment also leaves the state without union apprenticeship programs that often help train and develop skilled tradesmen that are ready for potential heavy manufacturers that relocate here. Quick Start is one of the tools Georgia uses to mitigate that weakness while preserving the strengths used to lure large employers.
Beginning with Kia, and now with Caterpillar, Georgia has demonstrated it can compete in successfully locating large manufacturing facilities to the state. With Audi, Mercedes, and Hyundai among others scouting for new North American sites for additional plants, Georgia must not rest on its laurels. Celebrating Caterpillar’s announcement last week was a worthy accomplishment. Now the economic development team must get back to work to put Georgians back to work.