Automotive / Aerospace Special Industry Report 2016

~

Special Industry Report

The Self-Driving Car… Science Fiction or Reality?

Aerospace Industry Costs “Disrupted”

by ED Partnerships Automotive Manufacturing Goes Digital Location Trends in the Aerospace Industry Auto Labor Force Challenges/Solutions Automated Vehicles Revolutionizing the Industry Where Is the Next Aerospace Manufacturing Hub?

A Special Supplement to

AREADEVELOPMENT

2016

The road to your company’s profitability and success may run right though central and southern Indiana or southeastern Illinois. And in fact that road may look a lot like a highway, runway, railway or river port. That’s because Hoosier Energy has some of the best sites for distribution and logistical operations that the Midwest has to offer.

If you’re building, expanding or relocating, you should make it a point to talk with us.

Because while supplying you the power you need is job one, getting your product from point A to point B comes second nature. Let’s talk. You’ll find Hoosier hospitality also means Hoosier accessibility.

HOOSIERSITES.COM

812-876-0294

Hoosier Energy Rural Electric Cooperative is an equal opportunity employer.

AREA0443.indd 1

16/07/15 12:41 AM

Industry is at a Crossroads.

It’s called Woodstock, Ontario, Canada.

On highways 401 and 403, at the junction NE "@M@CH@M /@BHƥB @MC "@M@CH@M -@SHNM@K Q@HK RDQUHBD Ŕ @S SGD KNFHRSHB@K BQNRRQN@CR NE -NQSG America – Woodstock sees enough business to know how much – and how rapidly – our world is changing. At the intersections of industry and agriculture, productivity and sustainability, and the last economy and the next one, here’s a place that doesn’t just support how business is done today – here’s a place that also supports how business will be done tomorrow.

519-539-2382 x2115 information@cityofwoodstock.ca cometothecrossroads.com

AREA0442.indd 1

14/07/15 9:35 PM

~ Editor’s Note

Table of Contents

The automotive industry, which has led the U.S. economy’s recovery, is being revolutionized; it appears that self-driving or semi-autonomous vehicles are becoming reality, and digitization is transforming the manufacturing process. In fact, as we went to press on this magazine, Toyota’s Ann Arbor-based research center pledged $22 million to work with the University of Michigan on artificial intelligence, robotics, and self-driving cars.

Meanwhile, the aerospace industry is also enjoying above-average growth rates. This industry is also being affected by advanced manufacturing trends. Both the auto and aerospace sectors are partnering with academia to fulfill their workforce needs, and economic development agencies are courting these industries with generous financial and other incentives.

Experts in the automotive and aerospace industries have provided the articles that appear in this special supplement to Area Development magazine.

These individuals provide an overview of the latest industry trends and factors for auto- and aero-related companies to consider in their next location or expansion move.

Additionally, the organizations sponsoring this 2016 special industry report can provide further assistance. Their contact information is provided in the Sponsors Directory at the back of the magazine. If you have further questions, please contact me at gerri@areadevelopment.com.

3

The Self-Driving Car…Science Fiction or Reality?

8

Aerospace Industry Costs “Disrupted”

by Economic Development Partnerships

OEMs and their suppliers, as well as technology companies, are all getting into the development of self-driving vehicles, while interest in rideshare is gaining.

As competition for aerospace investment and jobs heats up, economic developers are increasingly offering tax relief, infrastructure and financial support, and workforce partnerships.

12 Automotive Manufacturing Goes Digital

The automotive industry’s survival depends on digital factories, which can unleash 10 to 20 percent cost savings in production.

Where’s the Next Aerospace

18 Manufacturing Hub?

The United States ranks first globally for the scope and size of its aerospace manufacturing sector, which undoubtedly will be a major factor toward the future of the manufacturing environment.

Labor Force Challenges/Solutions in

21 the Auto Industry

As the auto industry prepares to launch record numbers of new and refreshed models over the next few years, the need for skilled trades workers will increase.

24 Location Trends in the Aerospace Industry

A natural geographical shift, lean supply chain management, and a new approach to incentives offerings are influencing aerospace companies’ location decisions.

Automated Vehicles Revolutionizing

28 the Automotive Industry

The automotive industry is transforming and innovating complex, sophisticated technologies at a rapid pace, changing not only the industry itself, but also global transportation.

editor

32 Sponsors Directory

PUBLISHED BY

400 Post Ave., Westbury, NY 11590 USA • 516-338-0900 • Fax: 516-338-0100

©2016

PUBLISHER: Dennis J. Shea ART & DESIGN: Patricia Zedalis EDITOR: Geraldine Gambale PRODUCTION MANAGER: Jessica Whitebook FINANCE: Mary Paulsen PRODUCTION ASSISTANT: Talea Gormican

2 AutoAero site guide ~ 2016

ADVERTISING: Bill Bakewicz Valerie Krpata

FOR FREE SITE INFORMATION, CALL

DIGITAL MEDIA MANAGER: Justin Shea BUSINESS DEVELOPMENT: Matthew Shea WEB DESIGNER: Carmela Emerson

BUSINESS SERVICES: Barbara Olsen

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

~ The Self-Driving Car… Science Fiction or Reality?

By Daron Gifford, Management Consulting Partner, Plante Moran

OEMs and their suppliers, as well as technology companies, are all getting into the development of self-driving vehicles, while interest in rideshare is gaining.

Every automotive manufacturer in the world is in the midst of developing its product and investment strategies for driverless technology. Nearly each day, there is a new announcement from a major OEM regarding its “autonomous vehicle” plans, typically with hefty capital investments. For example, Toyota recently announced its intent to spend $1 billion on artificial intelligence to support autonomous vehicles in a new Silicon Valley-based research center.

Hyundai is planning for $2 billion in autonomous research by 2018.

Tesla, the automotive startup, expects to deliver its self-driving vehicle technology by 2018.

Out of the old Detroit 3, GM appears to be the most aggressive.

It recently acquired Cruise Automation, a self-driving vehicle startup for $1 billion, to jump start its autonomous vehicle technology. Only a little beforehand, GM also invested $500 million in Lyft, a ride-sharing startup. GM President Dan Ammann believes that the timeline for autonomous vehicles is “probably faster than what you think.”

The large OEMs are not the only ones eyeing driverless technology.

Rumors abound regarding technology companies seeking the next wave of disruptive technology, including reports of self-driving automobile initiatives at technology leaders Apple and Amazon. Google has already developed and piloted its initial driverless vehicles…with no steering wheel! Google plans to introduce a market-ready version in AutoAero site guide ~ 2016 3

~

Driver’s responsibilities

Degree of automation

Level 0 No autonomy

Level 1 Functionspecific autonomy

Level 2 Combined function autonomy

Level 3 Limited self-driving autonomy

Minimum of 2 major Vehicle operates systems automated safely in automated and operated driving mode; driver simultaneously (e.g., may need to adaptive cruise and manually take over lane centering) in certain scenarios

Level 4 Fully self-driving autonomy

No automation in the vehicle

Individually controlled automatic functions (e.g., cruise control, electronic stability control, or pre-charged brakes)

Total control over all vehicle functions; responsible for safe operation of the vehicle

Overall control and responsible for safe operation; can delegate/receive assistance in major driving functions (e.g., steering, braking, etc.)

Responsible for continuously monitoring driving environment; can delegate vehicle control under limited circumstances

Driver does not need to constantly monitor the system and traffic as long as the system is active

No responsibility; acts as passenger

Existing

Existing

Existing

2018–2020

Simple scenarios: 2020–2025 Complex scenarios: 2025–2030

All driving functions automated and performed by the vehicle

Source: NHTSA

the next two to three years.

Automotive suppliers do not plan to be left out of the self-driving vehicle competition. They believe that they have deeper engineering and technology skills than most of their OEM customers. ZF, Continental, Denso, Bosch, Delphi, to name a few, have significant activities to aggressively develop autonomous vehicle technology to sell to OEMs who will need it to compete.

DISRUPTIVE CHANGE Technology has been introducing disruptive change to all industries at an increasingly rapid pace. The automotive industry is not immune to the impact of disruptive technology. The automobile has evolved enormously from the early days of a steam-powered vehicle resembling a horse and buggy without the horse. However, the evolution of smart phone technology that provides connectivity to the Internet, social media, and people at anytime and anywhere has brought a major challenge to automakers in the form of driver distraction.

Driver distraction has become one of the major causes of accidents leading to injuries and death in the U.S. The National Highway Traffic and Safety Ad4 AutoAero site guide ~ 2016

FOR FREE SITE INFORMATION, CALL

ministration (NHTSA) has reported a sharp rise in the number of accidents involving distraction, especially from cell phone use for those in their teens and 20s.

As a result, many states and municipalities have attempted to regulate cell phone use while driving, with limited success in the reduction of accidents. The challenge for the automobile industry has now become how to provide the instantaneous connectivity to the world that is expected by individuals, while simultaneously protecting them for their own good.

Hence, the impetus for driverless technology will grow rapidly, by its ability to remove the human factor. GM’s Ammann supported this belief in a recent statement: “It’s our fundamental belief that autonomous technology will lead to better safety on the roads.”

In the meantime, self-driving technology is receiving plenty of scrutiny by the media and regulators, especially in some recent reported accidents involving supposed self-driving vehicles. One of the most notable was the death of a Tesla Model S owner who crashed into a truck while using the vehicle’s Autopilot driver-assist system. This event was the first known traffic fatality involving an automated driving system, and will certainly affect the direction of discussions

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

~

THE MOMENTUM TO BUILD SELF-DRIVING TECHNOLOGY INTO CARS WILL BE UNLIKELY TO STOP, ONLY SLOW DOWN AS MORE STANDARDS AND REGULATIONS COME INTO PLAY. and decisions by both the regulators and industry. According to Christopher Hart, Chairman of the National Transportation Safety Board, “I think people are wildly underestimating the complexity of bringing automation into the system involving Joe Public.”

However, most regulators acknowledge that the momentum to build self-driving technology into cars will be unlikely to stop, only slow down as more standards and regulations come into place.

LEVELS OF SELF-DRIVING TECHNOLOGY New technologies to improve driver safety have been around for a long time, beginning with “passive safety” in the 1970s, 80s, and 90s with the advent of seatbelts, airbags, and stability control. The next generation of “active safety” has taken on more relevance in recent years through the evolution of sensor technology that supports the driver with greater awareness of his surroundings using forward collision warnings, adaptive cruise control, and lane departure warnings. The new wave of technologies will have the potential for self-driving, but will require the integration of multiple technologies into systems to work

AutoAero site guide ~ 2016 5 AREA0473.indd 1

18/08/15 4:11 PM

~ together in order to effectively operate more safely and reduce collisions by managing the vehicle’s activity, communicating with other vehicles, and operating in a similar fashion to a human driver.

Most automakers have announced their intention to implement vehicles with staged levels of self-driving technology. However, they are looking for direction in understanding the governmental expectations

and standards for vehicle autonomy. The regulatory bodies are responding and are hard at work to provide more structure and standards for the automotive makers to follow. In response to industry requests, NHTSA has published a multiple-level guideline for vehicle automation.

The majority of vehicle OEMs are targeting Level 2 functionality (see chart) over the foreseeable future,

AUTOMOTIVE MANUFACTURERS MEETING DISRUPTIVE FORCES HEAD-ON The explosive growth in the automotive and related industries in recent years has led manufacturers to come together to move the industry forward. As an example of this, in Kentucky, an organization has been created that is charged with sharing practices, finding solutions for common issues, and growing the automotive industry even further.

The Kentucky Automotive Industry Association (KAIA) has brought together manufacturers, suppliers, and other supporting entities to encourage meaningful dialogue and action. KAIA is led by Executive Director Dave Tatman, a former general manager of General Motors Corvette Assembly Plant in Bowling Green, who has 36 years of automotive experience.

“Our industry faces fast-moving innovations and pressures,” Tatman says. “Fuel efficiency standards, workforce stability, 3D printing, drones, autonomous cars, even the impending ‘gray tsunami’ of retiring workers could all be considered disruptive forces in auto manufacturing — and often, those forces are viewed with wary eyes.”

To collectively stay on top of those new innovations and pressures, KAIA created a national conference, called AutoVision, which is held annually in Kentucky in September. Last year, in its inaugural season, hundreds of automotive industry leaders participated in the event, which featured presentations and discussions from some of the world’s premier industry experts. This year’s conference will be held in Lexington.

“The mix of panel discussions and breakout sessions offered everyone the opportunity to hear consistent messages about emerging trends and technologies, while also providing time to hear from industry experts about specific subjects such as workforce development and supplier needs,” explains Kurt Krug, vice president at INOAC USA and a conference sponsor.

Another KAIA success has been the creation of an automotive caucus within the Kentucky legislature. This bipartisan group of lawmakers has pledged to collaborate with automotive manufacturers and KAIA on key issues in the coming years, including workforce training, business-friendly tax policies, technology development, and more.

“This is an industry that employs tens of thousands of Kentuckians and makes products known all over the world.

We want to work with these manufacturers to ensure the industry’s ongoing success,” said caucus co-chair Rep. Jim DeCesare.

Caucus co-chair Speaker Pro Tem Jody Richards adds, “To keep Kentucky at the forefront of auto manufacturing, we must work together to ensure these businesses have what they need to maintain that momentum.”

KAIA’s Executive Director Dave Tatman, Kentucky State Representative Jim DeCesare, KAIA board member Kurt Krug of INOAC USA, Inc. and Speaker Jody Richards join Kentucky Governor Matt Bevin as he signs the order creating the first-ever legislative automotive caucus in the Commonwealth.

Kentucky already employs 90,000 people at nearly 500 locations, and the rapid growth of KAIA in just two years, combined with strong support from Kentucky state government, signals a positive sign for the future growth of the automotive industry in the state.

6 AutoAero site guide ~ 2016

FOR FREE SITE INFORMATION, CALL

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

but are open to faster progress as the technologies become more established and reliable. As self-driving technologies continue to be introduced, other challenges will need to be addressed, including the updated rules from the United Nations on the Vienna Convention concerning automated driving, as well as insurance compensation rules for accident victims.

C A P I TA L N E E D S Investing in self-driving technology will not be trivial. The automotive industry has always required a significant level of capital expenditures to launch and operate new vehicles; many times a vehicle program can cost more than $1 billion in equipment, tooling, testing, and labor for the design, development, and production launch of a new platform.

With other continuing demands on fuel economy, environmental emissions, light-weighting, and global expansion, the list of places to spend money is enormous. At the same time, the economic reality of ever-increasing product costs for new technologies, leading to higher vehicle prices in the market, raises significant concerns. The consumer or fleet purchaser of a new automobile will test the OEM capabilities to deliver on self-driving technologies while keeping cars affordable.

Hence, there is a high level of interest in car- or ride-sharing as an avenue to maintain customers, while providing another new, innovative technology alternative to the industry. Through sharing, the economics of using a vehicle become more variable and affordable. This is effectively achieved since cars are not in use much of the time. The typical owned or leased vehicle is generally recognized to be used at an extremely low level, in the 5 percent utilization range, which sets the stage to use technology to have the vehicle shared with other drivers.

Combining self-driving technologies with sharing becomes even more exciting for the automotive OEMs. Immediate and cheaper access to transportation, reduced or no driving responsibilities for the individual, combined with a safer driving experience may lead to what some see as a science fictionlike view of automobiles in the future. However, automakers are looking in that direction. “We think rideshare is interesting, and we think autonomous vehicles are really interesting, and we think it gets really interesting if you put the two together,” GM’s Ammann told Fortune’s Brainstorm Tech conference in Aspen in July. <>

WANT SERIOUS CONTENT? Get More from Area Development. areadevelopment.com The #1 site selection website

The #1 site selection newsletter Weekly news & updates

twitter.com/ areadevelopment Join our growing list of followers

Real time content delivery areadevelopment.com/RSS

facilitylocations.com Research locations and economic development contacts

fastfacility.com Building & site database

Stay in touch with the latest news, case studies, white papers and the industry’s most insightful site selection content and current contacts.

AutoAero site guide ~ 2016 7

~ Aerospace Industry Costs â&#x20AC;&#x153;Disruptedâ&#x20AC;?

by Economic Development Partnerships

By Jeff Troan, Principal, Hickey & Associates

As competition for aerospace investment and jobs heats up, economic developers are increasingly offering tax relief, infrastructure and financial support, and workforce partnerships.

8 AutoAero site guide ~ 2016

In June, Embraer Executive Jets began production of its Legacy 450 and 500 in Melbourne, Fla. The company received tax and financial incentives to help facilitate this Florida expansion.

If aerospace was not a genetic predisposition for me, as the son of a science writer for one of the national wire services, it certainly came to me early in life. My childhood and adolescence were spent on the X15, Mercury, Gemini, and Apollo programs, followed by a predictable three decades-plus with Lockheed Martin.

My involvement with economic development came later, about 20 years ago, when it began to impact the aerospace industry. Over the last two decades, aerospace has increasingly become the targeted industry of choice for economic developers, delivering massive investment, substantial fresh cash spend, and wages between 150 percent and 200 percent of the county average.

Economic development normally comes into play in aerospace when a company is facing a major contract competition. System level awards can run in the billions of dollars and represent the entire operating base of a major facility for years to come. Contracts are awarded based on a three-factor formula

FOR FREE SITE INFORMATION, CALL

of technical premise, past performance, and cost. The aerospace consolidations of the 1990s have left the industry in a tiered structure where the prime contractors often find it difficult to differentiate themselves technically, and they all have good past performance.

Likewise, the broad implementation of Total Quality Management (TQM) over the last 30 years has resulted in similar costs structures. Often the economic development package, which can generate a 2 percent to 10 percent differentiation in cost, is the key to winning a procurement.

Let us speak to incentives in their four forms: (1) statutory, (2) discretionary, (3) legal construction, and (4) special legislative; and in their four types: (1) tax, (2) infrastructure, (3) workforce development, and (4) financing. <> Income tax abatement: Income tax abatement generally has limited value to an aerospace project, as the capital expenditures are large (credit basis) but regional tax liability is limited because of low

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

industry margins. Look for income tax credits that allow alternate means for recovery, such as New Jersey and Louisiana credits that can be sold to third parties for cash; or Georgia’s credit, which can be taken against employee income tax via a withholding tax credit option. <> Sales tax abatement: Most jurisdictions offer a sales tax exemption for manufacturing equipment as a statutory incentive. The challenge, however, is working with the Department of Revenue to establish the most generous line between manufacturing and supporting equipment. In a world increasingly driven by digital software, be sure to check with the program administrator or statute to see if software can be considered a “product,” and the engineering workstations, therefore, manufacturing equipment. A more comprehensive exemption can be obtained in many jurisdictions through legal construction, setting up a tax-exempt public economic development agency to do the procurement with the company acting as its design agent.

The Florida Space Authority is a master of this process. <> Property tax abatement: This is generally the largest form of taxation levied on an aerospace company over the life of a program. Abatement is often

contentious because school taxes are paid from this pool. In the U.S., many communities have the right to issue a property tax abatement via a local resolution, a discretionary incentive in state or local statute. Where this is not available, an exemption can often be created via legal construction, by creating a Capital Tax Lease (CTL) for the facility and tooling, between the company and a local public-sector economic development agency. Under the CTL, the public sector holds title for tax purposes, but the company remains the owner under GAAP (Generally Accepted Accounting Principles) for operating purposes. Beware of states that have passed “Lease Hold Interest” statutes that invalidate the CTL tax shelter. <> Infrastructure support: Capital can earn you technical and management points in a federal competition, but it plays havoc on cost, and is always dear to the company. A special legislative economic development partnership that involves the repurposing of surplus facilities, or a discounted lease on new facilities, combined with a property tax holiday through public ownership, can trim 10 percent off a proposal bid and serve as a primary award criterion. Unlike commercial ventures, which generally demand new infrastructure, pricing is so competitive on federal procurements that

EDUCATIONAL INSTITUTIONS THAT ENSURE A WORLD-CLASS AEROSPACE WORKFORCE According to the Aerospace Industries Association, the need for U.S. developed technical talent is particularly acute to ensure a world-class aerospace workforce ready to lead in a global economy. With this in mind, local higher education institutions in Midland, Texas — including The University of Texas of the Permian Basin (UTPB) and Midland College — support and serve a workforce that is robust with career engineers and technical minds.

The eminent aeronautical engineering track within the mechanical engineering major at UTPB will allow students to receive a concentrated education in the aerospace business. The Midland-Odessa area population of 327,000 contains more than 3,000 employees in the engineering fields, and these numbers will continue to grow with Midland’s dedication to the commercial space industry.

Midland International Air & Space Port is the first U.S. commercial spaceport to be co-located with a major commercial airport. This unique qualification provides companies with easy access to modern terminal facilities and allows for easy access to direct flights as well as a growing metropolitan area with many amenities.

The Midland Development Corporation can provide active business support and economic incentives for diversified companies that establish and retain jobs in the area. Texas’ regulatory environment makes the available sites at the Midland Spaceport Business Park a prime setting for office space, R&D, and manufacturing. These collective benefits are attracting a growing cluster of innovative aerospace companies and a strong labor market of engineers and technical workers with transferrable skills.

Rendering of Midland International Air & Space Port

AutoAero site guide ~ 2016 9

~ most contractors will abide repurposed facilities to gain a cost advantage.

These large deals should look beyond state and local economic development incentives to the federal markets. My favorite programs are the U.S. Treasury’s New Market Tax Credit program, which can trim about 20 percent off facilities costs (delivering cash, not a credit to the user), and the U.S. HUD Community Development Block Grant program, which often pays for ancillary infrastructure. The U.S. Department of Agriculture’s Rural Loan Guarantee program can provide financing capacity or simply lower the implied interest rate on large publicly funded projects, guaranteeing up to 90 percent of financed costs. And the U.S. Economic Development Administration also runs a gamut of small programs ($300k+), which they advertise on www.grants.gov. <> Utility discounts: In a community with a strong economic development program, the transportation and power utilities are tied directly in with commerce officials. A mixture of discretionary and pseudo-special legislative programs can be marshaled to provide transportation and facilities infrastructure, and/or utilities discounts. <> Leveraged zoning: Aerospace projects frequently involve repurposing old WWI and WWII aerospace plants for new production. In turn, this often generates surplus industrial land in areas that support a higher, highest-and-best-use. Leveraged zoning is the process of rezoning a district to generate a sustainable mixed-use community, with high-margin commercial and retail developers financing the bill to obtain core manufacturing jobs for increased money-turn. <> Zone legislation: At its core, zone legislation is enabling legislation. It enables lawmakers to target a small area for significant special incentives that they can pass into law now or later to enhance growth and investment there (and only there). Zones come by a lot of names, but fit into two general categories: economic development zones and foreign free-trade zones. The latter type generally adds the special characteristic that product can be imported, processed, and exported without duty, or can be brought in as piece parts and assembled in the zone, avoiding the larger duty. My theory has always been that you should get into a zone when you have the chance, regardless of whether you can use the current benefit.

10 AutoAero site guide ~ 2016

FOR FREE SITE INFORMATION, CALL

Membership helps you sponsor your own future legislation as well as take advantage of someone else’s work, and rarely has a downside. <> Enhanced use leases: In the early part of the 21st century, the U.S. government passed special legislation that allowed military commanders to lease out portions of their bases for other uses. The resulting document package is referred to as an Enhanced Use Lease or EUL. If a public coalition is also layered in the Enhanced Use Lease to insert a general economic development agreement, the EUL becomes a MEUL, or Modified Enhanced Use Lease. The benefits to the commanders are too many to voice in this article. For the company, EULs can be used to gain access to government infrastructure at reduced cost, as well as to locate near a customer’s operating offices, both often key discriminators in major contract awards. <> Workforce development and workforce pipelining: No economic development partnership can succeed without an adequate workforce.

That said, programs like TQM and Zero Defects have demonstrated that a large diversity of workforces can produce quality product in many industries. The winning bid in a major aerospace project is increasingly housed by the company with the best business process optimization, in a community that boasts the best business climate. This is almost always an area where costs are low, and the workforce is good but requires some skills strengthening.

Workforce development is the process whereby the company and community use public and private funds (usually 50/50) to train the workforce for immediate needs. Workforce pipelining looks into the future to a partnership with the local university and trade schools to develop curriculum that provides a future stream of professional and blue-collar workers suited for immediate productivity on the company’s production floor (serving attrition, retirements, and growth).

Throughout the U.S. and, increasingly, the world, most communities offer a program to pay for immediate worker training as part of a plant expansion or new venture. A common format is for the public agency to pay 50 percent of the cost, defined as all the direct training costs save the worker’s salary. The latter becomes the company’s corporate match. These are regionally funded.

In the U.S., under the Workforce Investment Opportunity Act (WIOA), the Department of Labor

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

distributes billions of dollars in workforce development funds to the states, and they in turn develop formal and on-the-job training programs for new and retained workers. Though much of this funding is absorbed to pay state employees and help the chronically unemployed, there is both cash and in-kind training for aerospace companies available.

In particular, Georgia and California’s use of WIOA funds to provide cash payments to companies providing training for new and incumbent workers is both efficient and timely.

The U.S. federal H1B Grant program has also historically provided a good pool of money for aerospace companies to keep their knowledge workers current. An H1B VISA is filed when a company needs to employ a highly technically skilled employee in a niche discipline, and the worker cannot be found in the U.S. resident population. By paying a fee, the petitioning company is allowed to import an employee with the

required skills. These fees are then pooled and issued out in the form of grant competitions, where successful companies can use the grants to “train-up” their resident workforces in niche skillsets, thereby retaining advanced skills in the U.S. and eliminating the future need to import workers.

In sum, it is impossible to speak of aerospace without addressing U.S. and allied government contracts. These are increasingly awarded on cost, in an industry where cost can be significantly differentiated via economic development partnerships. Since these are among the world’s most sought-after jobs, the agreements represent a win for the community, the company, the customer, and the workforce. To qualify as a “bid disruptor,” the partnership must be broad, encompassing tax relief, infrastructure support, financing support, utilities discounts, and a workforce partnership. <> Jeff Troan welcomes inquiries and can be reached at Jeff.Troan@HickeyAndAssociates.com.

ARLINGTON, TEXAS

Celebrating Six Decades of Automobile Manufacturing

Arlington is in the spotlight and is perfectly situated at the epicenter of a thriving North Texas region.

Our strong economy, skilled workforce, and globally-recognized companies make Arlington a prime location for investment. Dare to dream? Land here.

ARLINGTON: WHERE DREAMS AND DEALS GET DONE ArlingtonTX.gov/business | ecodev@arlingtontx.gov | 817.459.6155

AREA0608.indd 1

10/08/16 9:13 PM

AutoAero site guide ~ 2016 11

~ Automotive Manufacturing Goes Digital

By Christian Boehler, Principal, Roland Berger, Chicago

The automotive industry’s survival depends on digital factories, which can unleash 10 to 20 percent cost savings in production.

Car buyers get digitization.

Connected vehicles, autonomous driving, and new business models such as Uber provide material for lively public debate. The next digital revolution, however, is not only about the consumer; it’s even more about productivity. Digitizing the manufacturing process promises not only greater efficiency and reduced costs, but significantly addresses some of the U.S. automotive industry’s most pressing challenges, including how to deal with the increasing complexity coming with more vehicle derivatives, more niches, and more options; and how to react to increasing market volatility and labor-intensive, inflexible, and expensive production.

12 AutoAero site guide ~ 2016

FOR FREE SITE INFORMATION, CALL

These challenges call for flexible and stable manufacturing processes, with short time-to-market, quick turnover times, lower labor content, and — in an ideal world — a lot-size-one, customized “mass” production. Digital factories are the answer to these challenges.

Additionally, the digital factory evolution promises to unleash between $16 billion and $32 billion in annual productivity gains for U.S. domestic automotive production.

This equates to between 10 percent and 20 percent of addressable production costs through digital factories and is realized by following a trend that is also known as “the fourth industrial revolution,” or simply Industry 4.0 (following the first three revolutions of mechanical production at the end of

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

~

WHEN IT COMES TO CLUSTERS, CAPITAL, AND COMPETENCY, THE U.S. IS THE PLAYGROUND OF CHOICE.

the 18th century, mass production at the end of the 19th century, and automation 50 years ago).

COST-SAVINGS BENEFITS The savings potential spans over the full value chain. In the long run, the experts from Fraunhofer Institute for Manufacturing Engineering and Automation (IPA) estimate specific cost-savings benefits by area as following. <> Manufacturing — Digital factories are expected to reduce manufacturing costs by 10 percent to 20 percent as compared with pre-digital levels. One major factor driving improvement in manufacturing will be increasingly advanced robotics/machinery, as technologies such as selfreconfiguring machines and the human-robot collaboration of “cobotics” become increasingly mainstream. Other cost-saving factors include the development of self-optimizing systems and the use of virtual plants and products (before and after physical production begins).

Another related driver of cost savings will be increased staff flexibility as job functions adapt to new requirements. As these advances are implemented, positive effects will range from increased operational equipment efficiency (OEE) and reduced machine idle time to quicker production ramp-up times, shorter changeover times, and improved process control loops. <> Logistics — In general, increasingly integrated supply chains and highly automated intra-plant logistics are expected to bring steady improvements to logistics efficiency in the coming years. These overall changes will be driven by technologies such as smart storage (enabling optimized internal logistics planning) and demand-driven provision of materials and goods. Cumulatively, advances in this area are expected to improve manufacturers’ logistics costs by 10 percent to 20 percent. <> Inventory — The digital factory of the future will give manufacturers better visibility and control over both their current inventory levels and future inventory needs. It is estimated that new technologies in this field will provide the opportunity for manufacturers to yield a 30 percent to 50 percent reduction in inventory costs over time. Solutions such as cyber-physical systems that improve the manufacturer-customer interface and the connection to supplier networks allow manufacturers to hold less safety stock and manage the bullwhip effect.

MARS VIA MISSISSIPPI It’s rocket science. Missions to Mars get their boost in Mississippi at NASA’s Stennis Space Center. SpaceX and Aerojet Rocketdyne are just two companies located at the world’s premier rocket engine testing facility.

Closer to terra firma, we have the FAA’s Unmanned Center of Excellence at Mississippi State University, a premier facility for the integration of unmanned flight into U.S. air space.

Thanks to our high-quality workmanship, aerospace giants such as Rolls-Royce, Raytheon, GE Aviation, Northrop Grumman and Airbus Helicopters also call Mississippi home.

Launch your business in Mississippi.

MISSISSIPPI

AEROSPACE mississippi.org/aerospace

<> Quality — The digital factory will also have important ramifications on product quality levels and related processes, as it is expected that a further AutoAero site guide ~ 2016 13 AREA0600.indd 1

27/07/16 5:57 PM

~

Source: Roland Berger

14 AutoAero site guide ~ 2016

FOR FREE SITE INFORMATION, CALL

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

~

MADE-TO-ORDER VEHICLE FULFILLMENT AT MINIMUM DELIVERY TIME BECOMES THE NEW STANDARD.

10 percent to 20 percent of cost savings can be found in this area. Digital factory technology will allow manufacturers to increasingly monitor and even predict where and when quality issues may occur. In addition to this predictive quality control, the increasing prevalence and enhancement of real-time quality testing (if needed, at every production step) will also work to gradually reduce manufactured defects and other quality-related costs. <> Complexity — New technologies will lead to a reduction in cost associated with manufacturing complexity. Advances such as smart robots, smart products, and modularized production are designed to handle complex production processes efficiently. In this way, digital factories will be designed to troubleshoot production problems and other issues related to manufacturing complexity as quickly as possible. Potential savings in this area are estimated at between 60 percent and 70 percent. <> Maintenance — Finally, maintenance will face significant improvements in both effectiveness and overall cost levels when compared with previous manufacturing eras. Numerous technologies will work to streamline the task of keeping a plant in optimal working order, ultimately driving cumulative maintenance cost savings of between 10 percent and 20 percent. Examples of use cases within the maintenance area include predictive maintenance, optimization of spare parts inventories, and the dynamic prioritization of maintenance tasks.

OTHER BENEFITS In addition to lowering production costs, the digital factory also brings considerable benefits to the customer with a corresponding knock-on effect on sales. For example, manufacturers may offer a truly bespoke and made-to-order vehicle fulfilling exactly the requirements laid out by customers when they configured their car online. While this is already available today, demand has thus far been very limited because it often takes months for a bespoke vehicle to be delivered to the customer, and this is a no-go in the U.S. market.

All these digital factory opportunities come together when three major groups work hand in hand: IT infrastructure providers — such as Cisco or Amazon, who provide supporting structure and services; technology companies (the likes of GE, Siemens, or ABB), who provide collaborating robots and remote maintenance systems; and automotive manufacturers and suppliers themselves. When the capabilities of these players combine they add new dimensions to the industrial landscape.

WE ARE DRIVEN Mississippi’s highly skilled workforce rolls out 500,000 new vehicles annually. World-class automotive leaders like Nissan, Toyota and PACCAR are thriving in Mississippi.

Our business climate is supportive, and the state’s location suits both domestic and global sales. Nearly 200 automotive-related manufacturers call Mississippi home, including the state’s newest automotive partners and commercial tire giants, Continental Tire and Yokohama Tire Corporation.

More companies keep rolling into Mississippi. Discover why.

MISSISSIPPI AUTOMOTIVE mississippi.org/automotive

AutoAero site guide ~ 2016 15 AREA0601.indd 1

27/07/16 6:48 PM

~ This evolution opens up the possibility of new services and business models, and trust in a secure and reliable technological infrastructure is allowing deregulated and highly competitive markets to emerge.

“MADE IN USA” AS THE NEW R A L LY I N G C A L L O F Q U A L I T Y There are several factors behind the need for digital factories such as market pressure for cost reduction, increased production capacity, and cheap energy.

When coupled with cash-rich automotive balance sheets and easy access to capital, the current environment creates perfect conditions for manufacturing investments in digitization. The U.S. is the ideal place for digital factory investments for four reasons: 1. Established technology hubs like Silicon Valley — The United States is home to eight of the top 10 information technology companies including vaunted names such as Intel, Microsoft, and Google.

While these firms compete with each other, they also

operate in close proximity to one another, creating tech clusters that the auto sector can tap into.

2. Modern infrastructure and the proximity effect — To achieve “just-in-sequence” coordination between OEMs and suppliers, close physical proximity will be required. The U.S. has a strong network of established auto manufacturing hubs in places like Michigan or the Southeast States that can meet this requirement.

3. Educated labor force — Operating a digital factory requires an educated workforce able to adapt to increased reliance on information technologies.

The United States’ 3,200+ colleges and universities offer degrees in the STEM fields that graduate over 570,000 students each year. The U.S. has the right talent base to meet digital factory needs; however, don’t expect attracting talent to be easy with the opportunities available in other sectors and locations. It will be critical for any company investing in

PROACTIVELY WORKING TO ADDRESS WORKFORCE DEMANDS It’s no secret that there is a national shortage of skilled workers in the precision machining and advanced manufacturing industry. At the same time, there is a high rate of unemployment among veterans. Many communities are looking for solutions to this issue and the City of Lebanon, Indiana, is no different.

Lebanon, Indiana, has a rich history of manufacturing, but after receiving encouragement from the business community, local officials wanted to ensure that the businesses have a strong workforce pool to choose from. City representatives contacted the Vincennes University to share their vision for workforce development and the idea grew from there.

Earlier this year, officials from the City of Lebanon, machine-tool builder Haas Automation, and Vincennes University opened their doors to a new advanced manufacturing Training Center. The 20,000-square-foot Gene Haas Training Center will offer CNC and robotics training programs using the latest state-of the-art machine tools and equipment.

Dan Flick, site director for the Vincennes/Gene Haas Training Center, said in addition to its normal classes, the facility would also offer companies training sessions for their employees. Once a company decides what it needs for its employees, the training center will build a session around what is desired. According to Flick, it could be a couple of days or a couple of weeks.

This center will address both issues, as well as provide training for the general public. A 16-week intensive training program will also be offered for veterans. According to Doug Bowman, director of VU’s Haas Technical Education Center, “Indiana alone will need 7,000 new machinists over the next five years. Providing this high-quality training on state-of-the-art equipment will help bridge the advanced manufacturing skills gap.”

City officials view this as a game-changer for the community. Not only will it serve as a resource for existing businesses, but they hope it will entice prospective businesses as well.

16 AutoAero site guide ~ 2016

FOR FREE SITE INFORMATION, CALL

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

digital factories to plan and invest well ahead into this important human resource.

4. Strong government support — The U.S. is an attractive place due to the federal and local incentives being offered for investing in these technologies to create the manufacturing foundation of the future. Federal government incentives like the Advanced Technology Vehicles Manufacturing Loan Program provide funding for digital factory initiatives, and similar programs are also available at individual state levels.

D E V E L O P I N G A D I G I TA L F A C T O R Y E C O S Y S T E M The battle for digital factories has already started. Through 2020, pilot programs and retrofitting can be expected for existing factories. A broader adaptation of standard solutions and a gradual replacement of most machinery are likely to take place around the year 2025. The final “full” transition to digital factories is projected for approximately 2030.

To kick off digital factories, companies need to proactively develop their own digital factory ecosystem. Three immediate actions OEMs and suppliers can take now are: 1. Identify accessible know-how. Automotive players — especially the largest OEMs and the bigger suppliers — should start identifying their competencies and talent, scattered across their business functions and divisions, and bundle it in digital factory expert groups and task forces. A solid network is indispensable. External partners range from digital factory equipment providers to IT firms and independent think tanks. In short: A digital factory team needs to be established and staffed with the right talent.

2. Assess your company’s capabilities. The digital factory team helps with shaping the company’s Industry 4.0 vision and strategy, quantifying benefits, and defining priorities. The team kicks off with a status quo analysis of digital factory capabilities and applications within the company, as well as the upstream and downstream value chain. The digital factory will impact largely on production and supply chain management. That said, procurement, engineering, sales, and general management processes will all be influenced.

3. Make a plan. Finally, a road map for implementation can be derived.

Measures include applications depending on the value added and/or the time to market. Many applications will only come to light on a step-bystep basis. Enablers need to be established along the value chain and across the organization.

The hardest lesson of digital transformation is the need to design for loss of control. Yet, by taking advantage of the unique resources and capabilities the U.S. has to offer, the automotive industry has an opportunity to get a jump on the competition in meeting the future demand of the U.S. and global markets with improved quality, reduced risk, and lower cost. With stronger domestic production based on digital factories, “Made in USA” can once again become a true competitive advantage. <>

IN THE PILOT’S SEAT With more than 100 aerospace companies, Mississippi is home to global unmanned aircraft systems leaders like Aurora Flight Sciences, Northrop Grumman and Stark Aerospace.

Mississippi’s significant competitive edge in aerospace not only attracted these industries to the state but also led the Federal Aviation Administration to tap Mississippi State University as the location for its Unmanned Aerial Systems Center of Excellence. Additionally, The Boeing Company chose two Mississippi institutions to lead research and development on composites.

Mississippi is charting the course for unmanned systems. Learn More.

MISSISSIPPI

UNMANNED mississippi.org/aerospace

AutoAero site guide ~ 2016 17 AREA0602.indd 1

27/07/16 6:50 PM

~ Whereâ&#x20AC;&#x2122;s the Next Aerospace Manufacturing Hub?

By Scott Thompson, PwC

Top 10 Countries Overall

The United States ranks first globally for the scope and size of its aerospace manufacturing sector, which undoubtedly will be a major factor toward the future of the manufacturing environment.

18 AutoAero site guide ~ 2016

Top 10 States Overall

1. United States

1. Arizona

2. Canada

2. Florida

3. United Kingdom

3. Utah

4. Singapore

4. Georgia

5. Switzerland

5. Missouri

6. Denmark

6. Indiana

7. Hong Kong SAR, China

7. Texas

8. Netherlands

8. Michigan 9. Ohio

9. Ireland

10. Washington

10. Finland

The manufacturing environment for aerospace companies is constantly changing. The commercial aviation industry has been booming, with new large aircraft production increasing by more than a third in the past four years, with nine years of backlog at current production rates, and further production increases expected.

In order to keep up with demand, many companies are looking to invest to expand capacity. But where should companies invest? To address this issue, PwC recently released the 2016 Aerospace Manufacturing Attractiveness Rankings,1 the third consecutive year of analyzing the key attributes of countries and U.S. states. The report is meant as a guide to help executives optimize

FOR FREE SITE INFORMATION, CALL

their supply chain, streamline costs, and plan for the future.

For the 2016 rankings, PwC enhanced the methodology. Specifically, the tax category now includes unemployment and property tax.

Also, the cost category removed general employment statistics and increased the weighting of average hourly aerospace wages. Industry and education variables stayed the same as last year.

Global rankings are based on metrics of cost, including tax burden, industry presence, and infrastructure, which includes risk factors such as corruption and political stability. The 2016 methodology utilized Oxford Economics data for pay and productivity, which is considered more reliable than self-assessment data from the World

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

Economic Forum Global Competitiveness Report, which was used in 2015. This year’s methodology used productivity data, which included unit wage, manufacturing, and nominal costs.

showed improvement as a result of using the Oxford Economics data, including Denmark, the Netherlands, and Finland, which came in 6th, 8th, and 10th respectively. Hong Kong and Ireland rounded out the top 10.

U.S. AS GLOBAL LEADER The top-10 countries by rank are shown in the accompanying chart. The United States took the top overall ranking, due to scope and size of its aerospace industry, which is seven times larger than the United Kingdom’s, the country with the second-largest aerospace industry presence. Many of the biggest companies made major investments within the U.S. toward increased manufacturing, engineering, and production. In addition, the U.S. attracted the most research and development investments. And while the U.S. cost and infrastructure ranks were relatively low compared to the rest of the top 10, they were offset by the massiveness of its industry rank.

Canada ranked second overall (based on metrics of cost, industry presence, and infrastructure), followed by the United Kingdom. Rounding out the top five were Singapore in fourth place, and Switzerland in fifth. Countries with high wages and productivity levels

U.S. LEADERS In terms of the state rankings, Arizona jumped to first place, which bumped Florida down to second.

Indiana and Washington were newcomers to the rankings, and the rest of the states remained in the top 10 since last year: Utah, Georgia, Missouri, Texas, Michigan, and Ohio.

Arizona was able to significantly improve its positioning due to its relatively high industry (6th) and operation cost (12th) ranks. In addition, the changes in tax methodology led to high scores in property tax (6th) and unemployment tax (3rd). Arizona is the center of a growing aerospace industry, which includes the manufacturing of guided missile systems, as well as space and defense systems, and aviation and aerospace. In addition, many of the state’s major industry companies posted large profits in 2015, leading to improved employment opportunities.

Florida dropped to second place but the state contin-

PRESIDENT’S “E” AWARDS RECOGNIZE STATES AND COMPANIES CONTRIBUTING TO THE EXPANSION OF U.S. EXPORTS U.S. Secretary of Commerce Penny Pritzker honored 123 U.S. companies and organizations that export goods and services overseas during the 2016 President’s “E” Awards ceremony in May 2016. For the first time in the award’s 54-year history, winners represent every state and the District of Columbia.

Of this year’s 123 honorees, 105 are small and medium-sized businesses, and 64 firms are manufacturers. The President’s “E” Award is the highest recognition any U.S. entity can receive for making a significant contribution to the expansion of U.S. exports.

Corfin Industries LLC is a prominent aerospace and defense firm whose products prevent catastrophic failure in missionand life-critical systems. The company provides component Safran Aerospace Composites and Albany Internapreparation services to the defense, aerospace, medical, tional produce composite aerospace components telecommunications, transportation, industrial, and other in Rochester, N.H. high reliability industries from their Salem, N.H., facility.

Corfin is also a founding member of the New Hampshire Aerospace & Defense Consortium (www.nhadec.com), an exporting alliance of more than 200 companies in the state involved in aerospace and defense manufacturing and services.

The N.H. Office of International Commerce aids New Hampshire companies in discovering the world of opportunity that exists in overseas markets. In 2014, 20,048 U.S. jobs were supported by goods exported from New Hampshire. As of 2013, 2,625 New Hampshire companies are exporting. The majority of these companies, 87 percent, are small and medium-sized enterprises (SMEs), with fewer than 500 employees. SMEs generate approximately 36 percent of New Hampshire’s total exports of merchandise.

AutoAero site guide ~ 2016 19

~ ues to be attractive for aerospace companies. Floridaâ&#x20AC;&#x2122;s Space Coast is growing rapidly, with new programs developing in the region including plans for a major production facility for aerospace manufacturing to be built.

New addition Indiana saw large industry growth in the state, and the change in methodology saw improvements resulting from its property tax (5th) and unemployment tax (7th) ranks. The past two years have seen major plans in aerospace investment, with industry leaders pledging over $900 million in the state as well as the creation of 1,200 new sector jobs.

For companies considering where to build a future plant or R&D facility, these categories are indeed important, but there are other significant criteria to consider as well. Education, for example, will be a huge key for growth. An educated workforce is crucial not only to keep up with the demands of today, but also advancements in the future. A talented, techsavvy workforce is the only way for the U.S. to remain competitive in global aerospace.

One recent example of this development can be seen

20 AREA0616.indd AutoAero site guide ~ 2016 1

FOR FREE SITE INFORMATION, CALL

in Utah, which is expanding its Utah Aerospace Pathways program. The program gives high school seniors the chance to shadow and train in aerospace manufacturing, with the opportunity to work with one of the companies that serve as partners. Other states also have important partnerships with educational institutions.

Companies may choose to weight key attributes differently than our methodology, but the report is a useful tool to evaluate investment decisions. The findings should be used as a guide for future strategy and planning. As the data shows, aerospace does look like it will undoubtedly be a major factor toward the future of the manufacturing environment. <> Scott Thompson is the U.S. Aerospace & Defense assurance leader for PwC. His range of knowledge includes audit quality and service, strategy, mergers and acquisitions, and operational improvement.

1 http://www.pwc.com/us/en/industrial-products/publications/assets/pwc-aerospacemanufacturing-attractiveness-rankings-2016.pdf

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com 10/08/16 9:56 PM

~ Labor Force Challenges/Solutions in the Auto Industry

By Kristin Dziczek, Director; Industry, Labor & Economics Group; Center for Automotive Research (CAR)

As the auto industry prepares to launch record numbers of new and refreshed models over the next few years, the need for skilled trades workers will increase.

Between June 2009 and June 2016, U.S. motor vehicle and parts employment has grown by nearly 50 percent. While the rate of employment growth is starting to slow, automakers and suppliers continue to hire at a brisk pace due to both increased hires and separations in the industry and an uptick in retirement attrition rates.

When an industry is doing well, it is common to see more employees leaving their jobs in pursuit of better opportunities within the industry, so it is not surprising there appears to be more churn recently in the automotive and parts industries. The increase in retirement attrition rates is also expected, as workers who were not eligible to retire or take early retirement during the downturn have

now accumulated the age and years of service they need to retire. While churn and retirement attrition pose challenges for hiring both salaried and hourly workers, thereâ&#x20AC;&#x2122;s one particular occupational group where the challenges are particularly acute and that is in automotive skilled trades.

Skilled trades workers in the automotive industry build and maintain the machinery and equipment necessary to manufacture automotive parts and components, assemblies, and vehicles. Automotive skilled trades occupations include electricians, welders, millwrights, pipefitters, machine repair, CNC machinists, mold makers, and tool and die workers. On the whole, the average age of a skilled trades worker skews older than production workers by a couple of years. While the churn and retirement trends AutoAero site guide ~ 2016 21

~ affect all trades occupations, tool and die poses a special challenge for the future.

Automotive tool and die makers and machinists produce the specialized metal patterns and implements that cut and form sheet metals. In the last 10– 15 years, this part of the auto industry has undergone tremendous changes. The metals have become more diverse and, in some cases, more difficult to form, as the industry moves to using aluminum, magnesium, and advanced high-strength steels to take weight out of the vehicle for fuel economy and greenhouse gas emissions regulations. During the same time period, the size of the entire U.S. tool and die industry has been nearly cut in half, while automotive tooling capacity in low-cost countries has ramped up — particularly in China. Automotive purchasing decisions drive the move to source tool and die work to China and other low-cost producers. While the “China price” is often cheaper, the product often needs to go through tryout and be modified or repaired before it can go into full-scale production in the United States.

What Do

C O P I N G S T R AT E G I E S

The U.S. tool shops that remain have largely survived because they are pursuing a strategy that takes China into account. There are three basic strategies: (1) design in the United States, build in China, do tryout and launch support in the United States; (2) a hybrid variant of the first strategy where some tools and dies are built domestically, and some offshore; and (3) do virtually no design and build in the United States, and specialize in tryout and launch support for tools and dies when they come back from China. Both the first and third strategies are valid strategies in the short-term, but long-term — absent sufficient orders for domestic builds (coupled with an aging automotive tool and die workforce) — we will soon run out of people who know what needs to be done to make these tools work in tryout and production. This is not a simple problem that training can solve — without the on-the-job training in tool and die build (e.g., strategy 2), it is nearly impossible to produce a journeyperson tool and die maker or machinist who can support tryout, launch, and production utilizing imported dies.

Increased retirement attrition only compounds the problem. It takes nearly 10 years to produce a master tool and die maker. The apprenticeship includes a formal education component — typically done in conjunction with a community or technical college, as well as years of on-the-job training. Ten years ago, the automotive industry was heading into a downturn, and companies were cutTool and die ting payrolls — not adding apprentices. makers must possess This has led those companies that are mechanical, mathdesperate for talent to hire experienced ematical, analytical, tool and die (and other tradespersons) and engineering away from their supplier and competitor knowledge. They must companies. The companies that workers have an understandleave tend to be smaller firms that caning of the production not pay as well or offer as many emprocess, and be adept ployment benefits. So, large firms may at using computers be able to lure sufficient skilled trades and electronic tools. talent to backfill immediate needs, but And they must utilize smaller firms have no choice but to keep problem-solving skills, training new employees. Some firms good judgement in require the apprentice to reimburse the decision-making, and company for the costs of providing their work well within a education if they leave within a certain team manufacturing window of time. environment.

The coming crisis in skilled trades

Tool & Die

Makers Do? The job involves the ability to translate blueprints and computer models into a plan to build tools, dies, and assemblies.

To do this, tool and die makers must: • Pay close attention to measurement, and utilize advanced measurement tools • Lay out the metal stock according to the print or model, and machine the surface to the required contours

• Set up and operate a variety of conventional and computer numerically controlled machine tools • Conduct tool and die tryout to make sure the parts produced meet the specifications required, and if not, modify and adjust the tool or die until it does produce inspec parts • Inspect the tools and dies for any defects and repair them

22 AutoAero site guide ~ 2016

FOR FREE SITE INFORMATION, CALL

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

— and tool and die, in particular — is only going to become more severe as the automotive industry prepares to launch record numbers of new and refreshed models over the next few years. We need to attract younger people to careers in the trades, and support training for smaller firms that struggle to retain their workforces in this hot employment market. Economic

developers, community and technical college leaders, and the workforce development practitioners in automotive communities need to be aware of these issues, and work with their local industry and tool shops to address the skilled trades recruitment and training needs that could put a damper on the auto industry’s future product cadence and continued growth. <>

AUTO PLANTS SPUR WORKFORCE GROWTH, TRAINING INITIATIVES Auto plants are considered top economic development prizes, typically creating 5,000 or more jobs with aboveaverage wages and benefits and thousands of spinoff jobs. This is confirmed by a recent study detailing Nissan North America’s Canton manufacturing plant’s impact on Mississippi’s economy.

Since its inception, Nissan was the catalyst in recruiting manufacturing companies to Mississippi. The National Strategic Planning and Analysis Research Center’s report 1 details the economic impact — 25,000 direct and indirect jobs created and more than 6,000 Mississippians directly employed. This success exemplifies the success automakers have experienced with Mississippi.

“Our workforce here is a world-class workforce, among the best we have within the Nissan community,” says Scott Becker, Nissan North America’s senior vice president of Administration. “One of the key reasons we located here, obviously, was the high-quality workforce, as well as a very business-friendly environment and government officials who are very collaborative and understand what it takes to build this kind of world-class workforce and to grow your business.”

The state’s innovative approach to building a next-generation workforce includes its top-ranked community college system and the state’s research universities. For example, Mississippi State University’s Center for Advance Vehicular Systems (CAVS) focuses on meeting the needs of advanced manufacturers.

With a workforce 6,400 strong and the capacity to produce 450,000 vehicles a year, the Nissan North America Manufacturing Plant in Canton, Miss., continues to significantly spur the state’s economy.

“Programs here at CAVS are focused on enhancing critical problem-solving skills by working with engineering and technical professionals as they become more and more experienced at dealing with the problems of advanced manufacturers,” says Clay Walden, director of CAVS. “Mississippi has a great network, a rich network of people who are focused on assisting industry.”

The state continues to position itself to strengthen, accommodate, and exceed manufacturers’ workforce needs.

The new Mississippi Works Fund commits $50 million to train the next generation of skilled workers, allocating 75 percent of the funds toward job creation and 25 percent for existing workforce and certification, and allowing training primarily through Mississippi’s community college system.

The Mississippi Development Authority may direct funds as part of recruitment and expansion efforts.

The legislation enhances the collaborative efforts of the post-secondary education institutions to create a robust workforce and thriving business climate and increases Mississippi’s capability to meet the training needs of current and prospective employers. This is important if more successes are to come.

According to Jay Moon, who led the team that landed the Nissan plant and is currently president of the Mississippi Manufacturer’s Association, Mississippi’s first advanced manufacturing victory led to later successes including a Toyota plant, Airbus Helicopters, Yokohama Tire, and most recently Continental Tire. He expects more successes to come and believes Mississippi is making great strides in meeting the needs of today’s advanced manufacturers. 2 1 http://www.msmec.com/images/Nissan_6-21-16_FINAL_compressed.pdf 2 http://www.clarionledger.com/story/news/politics/2016/06/23/nissan-canton-study/86278982/

AutoAero site guide ~ 2016 23

~ Location Trends in the Aerospace Industry

By Frank Spano, Managing Director, Austin Consulting; and Susan Riffle, Communications Specialist, The Austin Company

A natural geographical shift, lean supply chain management, and a new approach to incentives offerings are influencing aerospace companies’ location decisions.

24 AutoAero site guide ~ 2016

In 2013, Alabama workforce training programs geared up for the new Airbus final assembly line in Mobile.

The commercial aerospace industry has recently enjoyed a decade-long trend of above-average growth rates. Sales from key participants within the aerospace industry almost doubled from 2010 to 2014, and that rapid momentum has continued in recent years.1 Airbus’ Global Market Forecast for 2014 to 2033 predicts that air traffic will continue to grow at 4.7 percent annually — growth that can be attributed to lower oil prices, accelerated passenger travel demand, a vigorous equipment replacement cycle, and continued technological advancement.

A natural result of such industry growth is the need to extend and expand operations into new loca-

FOR FREE SITE INFORMATION, CALL

tions. In the United States today, there are three significant trends influencing the decisions made by aerospace manufacturers when they are evaluating potential locations for a new facility. The trends include a continued geographical shift, new ideas with regard to the supply chain approach, and changes in the types of incentives manufacturers are offered to locate their new facilities in certain areas.

MAXIMIZING GEOGRAPHICAL SHIFT For two significant reasons, it makes sense for aerospace manufacturers to locate their operations within U.S. borders. First, most believe their need for workers with the specific technical skills they require

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

~

A MOVE TOWARD THE LEAN SUPPLY CHAIN CONCEPT IS TAKING HOLD IN THE .

AEROSPACE INDUSTRY. cannot be fulfilled offshore. In addition, aerospace manufacturers cannot assure the safety of operations conducted in many other countries around the world, given the escalation of security risks and violent activity in today’s geopolitical climate.

Consequently, the U.S. aerospace industry will remain healthy for the time being. The recent establishment of the Southeast region of the country as a powerhouse of aerospace manufacturing growth is a testament to that fact. Appealing to manufacturers and their suppliers for its proximity to ports and highways and less expensive available labor with relatable automotive industry experience, the Southeast (comprising the states of Alabama, Florida, Georgia, and South Carolina) has been showing increased value of shipments and capital expenditures with three significant aerospace projects that have landed there: the $600 million Airbus A320 final assembly line at Alabama’s Brookley Aeroplex, Mobile; the state-of-the-art, $750 million Boeing 787 Dreamliner final assembly and delivery facility in Charleston, South Carolina; and the $500 million Center of Excellence projects for Northrop Grumman, located in St. Augustine and at Melbourne International Airport in Brevard County, Florida.

While the Southeast region exhibits significant aerospace growth, the northern states (represented

by Illinois, Indiana, New York, Ohio, and Pennsylvania) are holding steady. In this region, employment remained relatively stable from 2007 through 2012, while both the total value of shipments and total capital expenditures have steadily increased since 2010.

In “traditional” aerospace manufacturing states such as California, Arizona, Kansas, Texas, and Washington, there is a trend toward declining aerospace manufacturing employment; however, it is important

to recognize that California alone still has higher aerospace employment numbers than all of the Southeast states combined.

What does this shift in geography signify for aerospace manufacturing location decision-makers? There may be a strategic shift in resources under way — one that forecasts a further diversification of industry leaders and their suppliers, creating efficiencies, strengthening supply chains, maximizing resources, and enhancing productivity for all participants in the coming years.

P U R S U I N G T H E L AT E S T: A L E A N S U P P LY C H A I N Considering the millions of component parts required in the building of just one aircraft, it is no surprise that assessment of the available or developing supply chain is a key factor for aerospace manufacturers seeking a prime location. Efficient management of what is inevitably a large and diverse supply chain — from the base of that new location — is critical to continued success.

Adept management of the risk inherent in a large supply chain, as well as a move toward a higher level of performance predictability, is key. For this reason, a move toward the “lean” supply chain concept — one borrowed from the automotive industry — is taking hold in aerospace. Lean supply chain management, in which the supplier network is streamlined, integrates procurement and logistics to foster a true partner relationship with key suppliers — one based on enhanced predictability.

The concept (using principles like just-in-time deliveries to the assembly line and the Kanban system for inventory management2) can transition a facility from typically having a reactive response to inventory shortfalls and equipment failure, into a proactive protocol that ensures that the right part is available at the right time, and machine maintenance is highly preventive and predictive in nature. Recent innovations in technology have driven the move toward these new ways of working.

As an aerospace manufacturer’s supply chain becomes leaner and more closely integrated through advanced technology, these ideas influence location decisions for new operations. Ideally, new facilities will be located to serve as a focal point of concentration for key supplier partnerships — ones that fuel — and profit from — newfound efficiencies in aerospace manufacturing performance.

AutoAero site guide ~ 2016 25

~ TRENDS IN INCENTIVES The final factor influencing location decision-making for aerospace manufacturers involves the incentives offered to locate in a specific area. It is nothing new for economic development organizations (EDOs) to be enthusiastic in offering incentives for large aerospace operations to locate in their areas. What is new are the types of incentives offered, and how quickly assistance programs at the state and local level are changing from the traditional into a creative mix of motivating factors.

Up until now, location incentives have been centered around taxes: offers have included abatements, exemptions, and rebates for property, utility, sales, and usage taxes, as well as a general business privilege status that eases taxes in one way or another. Performance-based cash grants have also been

popular. But, with many EDOs, especially the more progressive ones going after the highly valuable aerospace manufacturing sector, the offer of a simple tax incentive is quickly becoming old school.

Today, it is not uncommon for a community to be highly collaborative with the potential manufacturer in its approach to an incentive package. EDOs are increasingly willing to develop a comprehensive ecosystem of customized incentives that are specifically based on the particular needs of the aerospace company and the community it may call “home.”

For example, since aerospace companies have unique site needs for their operations, today’s EDOs are now offering help with site development and costs if the potential site has challenges with utilities, access roads, or the surrounding road network. When Boeing sought to locate in North Charleston, the

MEETING THE WORKFORCE AND EDUCATION NEEDS OF THE AEROSPACE INDUSTRY In order to continue to meet high levels of demand and remain globally competitive, the aerospace industry must continue to maintain the highly skilled workforce it requires, while keeping labor costs competitive.

Arlington, Texas’ assets help make this possible. Workforce development areas in and around Arlington provide an ample supply of leading occupations required to support the sector. In addition, the region’s wage rates compare favorably to national levels.

Centrally located within the Dallas-Fort Worth metropolitan area, Arlington is at the center of the region’s aerospace cluster. Minutes from DFW International Airport and home to the region’s corporate airport of choice, Arlington is surrounded by the state’s highest concentration of aerospace manufacturing workers, the headquarters of two major airlines, and operations of major aircraft manufacturers, including Boeing, Lockheed Martin, Raytheon, and Bell Helicopter.

Beyond a concentration of firms and employment, Arlington offers access to a dense network of higher education institutions. Chief among these is the University of Texas (UT) at Arlington, the second-largest institution in the UT system, where research activities, engineering strengths, and early-stage product development are assets for the continued support of the region’s aerospace manufacturing and aviation industry — and companies are taking notice.

L-3 Communications, a leader in the aircraft simulation and training industry; Progressive, a global player in the aerospace industry; and Triumph Aerostructures-Vought Aircraft Division, a leading global manufacturer, represent just a few of the key aerospace companies taking advantage of Arlington’s workforce and educational strengths.

Arlington Municipal Airport is a full-service reliever airport to DFW International.

“To succeed, a company has to grow and that’s exactly what we have been able to achieve by having our headquarters in Arlington, Texas,” says Lenny Genna, president of L-3 Link Simulation & Training. In 2015, “we added capability in Arlington with a new 27,000-square-foot facility where we’re building flight simulators. We benefit by having a close working relationship with UT at Arlington, which serves as a source of qualified new workers and as an educational resource that allows our employees to gain advanced degrees.”

26 AutoAero site guide ~ 2016

FOR FREE SITE INFORMATION, CALL

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

incentive package included assistance with improving roads around the Boeing campus and building an additional interchange for the nearby interstate.

Another example of a highly collaborative incentive involved Airbus’ location in Mobile, Alabama. Key to an aerospace company’s success is the availability of an appropriately skilled workforce. Mobile recognized this when trying to attract Airbus, and through the Alabama Industrial Development and Training organization developed the Alabama Aviation Training Center, consisting of a highly tailored curriculum and state-of-the-art, hands-on facility to prepare workers for future employment on the Airbus assembly line.

Some EDOs may even go as far as influencing local government policies in order to entice a large manufacturer. These creative incentives include basic assistance with local permitting through the appointment of a liaison to help the company cut through red tape.

They can also include more dramatic moves like those

made in Virginia in 2006, which involved the development of regulatory incentives that, in essence, made tort law friendlier toward aerospace firms.

IN SUM From a natural geographical shift, to Internetbased innovations in supply chain management, to creative new collaborations that incentivize moves for aerospace manufacturers, there are notable trends affecting the decisions about where these companies locate today. Wise assessment of these trends — and the opportunities they represent — can help location decision-makers not only find the right site, but also take their companies to the leading edge of a new wave of aerospace manufacturing excellence.<> 1 http://aviationweek.com/master-supply-chain/supply-chain-research-insights-global-aerospaceindustry-size-and-growth 2 http://aviationweek.com/master-supply-chain/supply-chain-research-insights-aerospaceindustry-trends

Indiana’s

low energy costs, proximity to automotive manufacturers and availability of skilled labor provide several advantages for doing business.

Visit

http://www.impa.com/ economicdevelopment

to find out how you can become Indiana’s next success story.

AREA0610.indd 1

10/08/16 9:25 PM

AutoAero site guide ~ 2016 27

~ Automated Vehicles Revolutionizing the Automotive Industry

By John Maddox, President & CEO, American Center for Mobility

The automotive industry is transforming and innovating complex, sophisticated technologies at a rapid pace, changing not only the industry itself, but also global transportation.

The American Center for Mobility is building the nation’s largest facility for reproducibly and reliably testing connected and automated vehicle technology.

When we think about automated vehicles revolutionizing our transportation system, the question is no longer how, but when.

Industry analyst IHS Automotive1 predicts that nearly 76 million automated vehicles will be sold globally between now and 2035.

Meanwhile, automotive and tech industry executives believe this technology could be deployed, and widely adopted, by consumers in the United States even sooner.

The average family vehicle now has nearly 100 million lines of computer code, making it the most advanced piece of personal technology a person can own. This number continues to grow as more “smart” 28 AutoAero site guide ~ 2016

FOR FREE SITE INFORMATION, CALL

technology is introduced with features like adaptive cruise control, lane keeping, automatic braking, and self-parking. These driver-assistance systems are simply the initial ripples of future technology over the next five to 20 years.

MOBILITY AS A SERVICE North America’s largest automakers and the supplier network located in Michigan are focused on developing automated technologies, and the entire mobility-as-a-service concept; General Motors Co., Ford Motor Co., and Toyota have recognized and are starting to capitalize on this trend, having partnered with a ride-sharing or ride-sharing-technology company.

Through a few taps on a smart

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

phone, individuals needing a ride can have a driver pull a car right up to their location. Automakers envision a service that will, ultimately, operate alongside the retail sales of their vehicles.

Ford invested $18.2 million in Pivotal, a cloudbased software company, to enhance its software development capabilities and help shift into self-driving vehicle technology. GM invested $500 million in the ride-hailing company Lyft Inc., and began developing a self-driving Chevrolet Bolt electric vehicle capable of picking up passengers on its own. Toyota has also established a partnership with Uber.

FCA (Fiat Chrysler Automobiles) is partnering with Google to create a fleet of 100 self-driving minivans.

As part of the agreement, the vehicles will be built at a metropolitan Detroit plant with an engineering team from both companies managing the project.

A D V A N C I N G A U T O M AT E D D R I V I N G The industry’s supplier base is also creating components and technology to advance automated driving.

Delphi Automotive made headlines with the longest automated drive in North America — from San Francisco to New York City — three months after its self-driving vehicle was introduced at CES 2015. At CES 2016, Delphi introduced advanced software and hardware, allowing its self-driving vehicle to communicate through Dedicated Short Range Communications (DSRC) and cellular. These vehicles are capable of communicating with other vehicles, with infrastructure from street signs to traffic lights, and even with pedestrians, allowing a “systems-approach” to transportation. The cross-country trek also garnered a flood of interest from international media, interested in telling the story of how self-driving cars will soon become an essential part of all our lives.

But the industry will also be charged with establishing and executing strict validation and verification protocols to ensure safety. These will likely take shape through a voluntary standards approach, which could then inform federal safety regulations. The National Highway Traffic Safety Administration is currently establishing operational guidance, and has reached out to work with state officials, the American Association of Motor Vehicle Administrators, and other stakeholders to create policies for self-driving vehicles. This safety validation and certification will require a threepillared approach: on-road evaluation, repeatable and reproducible track testing, and integrated full vehicle/ environment simulation.

~

THE INDUSTRY WILL ALSO BE CHARGED WITH ESTABLISHING AND EXECUTING STRICT VALIDATION AND VERIFICATION PROTOCOLS TO ENSURE SAFETY. Michigan, where a large swath of these technologies are being developed and tested, is among eight states with laws governing automated vehicles. The Michigan Department of Transportation is actively working with state legislators to broaden the language of the state’s current law to expand the criteria for automated vehicle use on public roads. Once approved, automakers will have more access to test automated technology, and they’ll be able to operate fleets of on-demand automated vehicles that can form the backbone of a mobility network.

MICHIGAN’S ROLE This forward thinking will accommodate the escalating interest of Michigan’s automotive and tech industries — as well as foreign and out-of-state companies looking to set up research and development facilities in Michigan — to develop self-driving technology for the real world.

In addition to this package of bills, Michigan’s transportation officials are working to upgrade the state’s infrastructure to support connected vehicle technology. Southeast Michigan is home to the largest network of freeway and surface street vehicleto-infrastructure technology in the U.S. Developed

by MDOT in partnership by General Motors Co., Ford Motor Co., and the University of Michigan, the AutoAero site guide ~ 2016 29

~ AUTO SUPPLIER POWERS THROUGH EXPANSION For more than a decade, expansion has been the main mode of operation for TOA (USA) in Mooresville, Ind.; and South Central Indiana REMC (SCI REMC), along with its wholesale electric provider Hoosier Energy, have been integral to ensuring a seamless power supply during the company’s rapid growth.

Since June 2014, TOA (USA) has undertaken three significant construction projects and has invested a total of $111.2 million into its only U.S. facility, bringing 300 new jobs into the community. When all projects are completed, TOA (USA) will have nearly 1,000 employees working in 1 million square feet of facilities.

As a major a supplier to Subaru and Toyota, TOA specializes in frame and automotive suspension parts manufacturing. The facility has substantial existing power needs and has called on its power suppliers to meet the additional challenges of providing energy during construction.

South Central Indiana REMC and Hoosier Energy are monitoring TOA’s increasing electric load to provide real-time assessment of the current 10,500 KVA substation to ensure the company has the power it needs during expansion. A new replacement transformer is scheduled for installation in November 2016, but should more capacity be needed, Hoosier Energy has readied a mobile substation to supplement the existing power supply.

“TOA is a vital part of the local economy, and has added immense opportunities for the residents of the area,” says Jim Wittman, key accounts manager for Hoosier Energy.

“We are committed to meeting the electric power needs of TOA; during biweekly meetings with our team, and TOA, we review progress and capacity to keep projects moving smoothly.”

TOA (USA) has been in expansion mode in South Central Indiana for more than a decade.

SCI REMC has installed the electrical infrastructure for the expansion projects, including distribution circuits strategically rerouted out of the way of busy construction lanes, as well as transformers and wiring installed to meet TOA’s aggressive schedule.

“During construction, we have coordinated with large amounts of construction traffic and additional workers on site,” said President and CEO of SCI REMC Greg McKelfresh. “Communication has been key to meeting the temporary needs and planning for long-term demands.”

Separate meters also have been installed for TOA’s East Manufacturing and Advanced Manufacturing plants to take advantage of the available discounted economic development riders for industrial-level rate schedules available for new and expansion projects by SCI REMC and Hoosier Energy “We value our relationship with SCI REMC and Hoosier Energy,” says Matt Gallo, director of sales and procurement for TOA (USA). “They have met every need when we needed it. They’ve been a big part of making our investments a success.” Gallo reports that projects are expected to be complete by early 2017.

network, once completed, will span 120 miles along interstates I-96, I-696, I-94, and U.S. 23. Michigan’s Planet M campaign, led by a coalition of state and industry players, embodies the state’s leadership in reinventing the transportation industry.

At the American Center for Mobility (ACM), we’re building the nation’s largest facility for reproducibly and reliably testing connected and automated vehicle technology. ACM will be a real-world test environment that not only takes advantage of the state’s four seasons, but also mimics various road types, terrains, 30 AutoAero site guide ~ 2016

FOR FREE SITE INFORMATION, CALL

and use-case and driving scenarios.

Sitting on 335 acres of the former World War II Willow Run B-24 bomber factory site built by Henry Ford, this advanced automated technology testing and product development center will continue that history of innovation. ACM is a nonprofit joint initiative by the Michigan Department of Transportation, Michigan Economic Development Corporation, University of Michigan, Business Leaders for Michigan, and Ann Arbor SPARK. On the Willow Run site, R&D teams can use stan-

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

WOODSTOCK STEEL TECHNOLOGIES FACILITY EXPANDS TO MEET THE AUTO INDUSTRY’S DEMAND FOR LIGHTWEIGHT MATERIALS The Province of Ontario is partnering with Steel Technologies (steeltechnologies.com) to expand the company’s Woodstock plant and invest in innovative technology, creating 15 new jobs and retaining 75 positions.

With more than $855,000 from the Southwestern Ontario Development Fund, Steel Technologies will expand its facility to meet increased demand from the auto industry for lightweight materials such as aluminum and advanced highstrength steels. The company will install new equipment to increase efficiency and double production. Ontario’s investment secures more than $8.5 million in private-sector investment from Steel Technologies toward this project, which is expected to be completed by the end of 2018.

Mark Gemin, vice president of Steel Technologies Canada Ltd. (STC) accepted the funding announcement by saying, “We are pleased to partner with the Ontario government on this project. At Steel Technologies, we are committed to delivering value-added products and services to our customers. The 64,000-square-foot expansion at the Woodstock facility will give us the footprint we require to install new equipment allowing Steel Technologies to process advanced lightweight materials to meet growing demand.”

Ontario Minister of Economic Development Brad Duguid said, “I am pleased Steel Technologies continues to innovate and expand its Woodstock operations, and bring new jobs to southwestern Ontario. By supporting our manufacturing sector, the province is working hard to grow the economy and create good paying jobs.”

(Left to right) Mark Gemin, Vice-President, Steel Technologies Canada Ltd. (STC); Liz Sandals, Ontario Minister of Education; and Trevor Birtch, Mayor of Woodstock

Steel Technologies first established in Woodstock in 2007 and is owned by the $50 billion Mitsui & Co. Ltd., which is headquartered in Japan. The company is an industry leader in flat-rolled steel processing for the automotive, appliance, lawn and garden, agriculture, construction, office furniture, hardware, and consumer goods industries. The Woodstock plant specializes in precision slitting and distribution of high carbon and alloy flatrolled steel.

“I am pleased with today’s announcement and am thrilled to see a local company continue to innovate so that they are ready for the next generation of manufacturing,” said Woodstock Mayor Trevor Birtch. “On my recent business mission to Japan we visited with Mitsui to express our appreciation and pledge support to any future investments they may be considering, which now makes this announcement even more special!”

dardized roads, traffic control devices, communication networks, and simulation tools to validate and ensure the technology is safe to be used anywhere in the world. The site will also include laboratories for research, garages for testing teams, and significant office and meeting space for convening standards bodies and other activities. Our goal is to expand the potential for business development and enable advanced auto technology development.

The center will also operate in coordination with the acclaimed Mcity facility in Ann Arbor, operated by U-M’s Mobility Transformation Center, which opened

in 2015 and continues to be in high demand.

Just as Detroit became the birthplace of the global automotive industry at the turn of the 20th century, and later the flathead V8 and futuristic tailfin design, Michigan’s automotive industry is again leading a renaissance of 21st century innovation. As more companies develop automated-driving technology, Michigan has become a prime venue for business to develop and innovate, from its talent to its institutional automotive expertise and facilities. <> 1

http://press.ihs.com/press-release/automotive/autonomous-vehicle-sales-set-reach-21million-globally-2035-ihs-says

AutoAero site guide ~ 2016 31

~ SPONSORS

ILLINOIS & INDIANA

MISSISSIPPI

C2 Hoosier Energy Hoosier Energy is an electric generation and transmission cooperative providing electricity and other services to 18 electric distribution cooperatives, in central/southern Indiana and southeast Illinois. The Hoosier Energy economic development team provides a wide array of services including site and building searches, incentive guidance, site analysis, and electric rate estimates.

13 Mississippi Development Authority 15 Consistently ranked as a top state for 17 business, Mississippi’s list of global companies continues to grow. From the state’s efficient permitting process to its business-friendly climate, more companies are discovering how a Mississippi location and workforce can give them a competitive advantage. Find out why Mississippi works at www.mississippi.org.

Harold Gutzwiller Hoosier Energy P.O. Box 908 Bloomington, IN 47402 812-876-0294 Cell: 812-360-4796 Fax: 812-876-5030 hgutzwiller@HEPN.com www.HoosierSites.com

Becky Thompson, Investment Manager Global Business Mississippi Development Authority P.O. Box 849 Jackson, MS 39205 1-800-360-3323 or 601-359-3855 Fax: 601-359-4339 bthompson@mississippi.org www.mississippi.org

INDIANA & OHIO

NEW HAMPSHIRE

27 Indiana Municipal Power Agency IMPA is a wholesale power provider to 59 communities in Indiana and one in Ohio, and is proud to partner with its member communities and their local economic development teams, supporting local economic and community development efforts.

Bryan Brackemyre, Director of Marketing & Economic Development IMPA 11610 N. College Avenue Carmel, IN 46032 317-575-3879 bryanb@impa.com www.impa.com/economicdevelopment

KENTUCKY

C4 Kentucky Cabinet for Economic Development Companies from all over the world are locating to the Bluegrass State, and our existing industries are expanding to keep up with growing demand. These companies represent a plethora of industries, including automotive manufacturing, logistics and distribution, national headquarters, and more.

Mandy Lambert, Commissioner for Business Development Kentucky Cabinet for Economic Development 300 West Broadway Frankfort, Kentucky 40601 502-564-7670 1-800-626-2930 Econdev@ky.gov www.thinkkentucky.com

32 AutoAero site guide ~ 2016

TEXAS

11 City of Arlington Office of Economic Development Located at the epicenter of the thriving North Texas region and minutes from DFW International, Arlington is strategically positioned in a region widely recognized as a hub for automotive and aerospace industries.

Beyond our world-class entertainment is the backbone of our city: economic vitality, a business-friendly environment, and a skilled workforce.

Bruce C. Payne, Economic Development Manager City of Arlington Office of Economic Development 101 W. Abram Street Arlington, TX 76010 817-459-6155 ecodev@arlingtontx.gov www.arlingtontx.gov/ecodev

5 Rochester, New Hampshire, Economic Development Be the center of the action in the Seacoast’s Composite Material and Advanced Manufacturing Region. More than 300 firms enjoy a business climate ranked 1st in the nation, 2nd-lowest business taxes, and 7,000+ STEM graduates adding to a work force of 130,350. Confidential assistance with site selection, incentives, financing, and permits is available.

20 Midland International Air & Space Port (MDC) The Midland International Air & Space Port is the first U.S. commercial spaceport to be co-located with a major commercial airport and offers available sites for commercial space operations, R&D facilities, and manufacturing.

The Midland Development Corporation (MDC) is a Type A Sales Tax Corporation dedicated to attracting and retaining qualified employers who create a diversified job market in the region.

Karen Pollard, CEcD, ED, Economic Development Manager Rochester, New Hampshire, Economic Development 31 Wakefield Street Rochester, NH 03867 603-335-7522 Fax: 603-335-7597 Karen.pollard@rochesternh.net www.thinkrochester.biz

Pam Welch, Executive Director Midland International Air & Space Port (MDC) 109 N. Main Street, 2nd Floor Midland, Texas 79701 432-686-3552 Fax: 432-687-8214 pwelch@midlandtxedc.com www.midlandtxedc.com

NORTH CAROLINA

C3 ElectriCities of North Carolina, Inc. ElectriCities is a not-for-profit government service organization representing 70+ NC cities and universities that own electric distribution systems. A site selection professional can receive detailed reports from our extensive databases on dozens of NC sites, from mountains to coast, within 48 hours of a request. We’re your turnkey services partner.

Brenda Daniels Manager, Economic Development ElectriCities of North Carolina, Inc. 1427 Meadow Wood Blvd.

Raleigh, NC 27604 1-800-768-7697 ext. 6363 Mobile: 919-218-7027 bdaniels@electricities.org www.electricities.com FOR FREE SITE INFORMATION, CALL

CANADA

1 City of Woodstock Woodstock, Ontario, is located in the heart of southern Ontario at the crossroads of superhighways 401 and 403. With easy access to six Canada-USA border crossings, Woodstock enjoys the best ground transportation system in the province. With our relaxed and affordable lifestyle, you will see why your business belongs at the Crossroads!

Len Magyar, Development Commissioner City of Woodstock 500 Dundas Street, P. O. Box 1539 Woodstock, ON N4S 0A7 Canada 519-539-2382 x 2112 Fax: 519-539-3275 lmagyar@cityofwoodstock.ca www.cometothecrossroads.com www.cityofwoodstock.ca

800-735-2732, EXT. 225, OR VISIT US ONLINE AT www.areadevelopment.com

Nobody Offers More Tools For Crafting A Successful Site Search.

We’re ElectriCities, representing more than 70 North Carolina cities and towns that offer municipally owned and operated electric service. These public power communities are among the best places in America to do business, and we partner with them to provide customized assistance to expanding and relocating companies. Our comprehensive approach provides the resources and know-how to guide you through every phase of the process, from site selection, permitting and construction, to incentives, tax credits, financing, job training and more, free of charge. Just tell us what you’re looking for. We’ll make it happen.

To learn more, contact Brenda Daniels at 800.768.7697 ext. 6363 or bdaniels@electricities.org.

AREA0609.indd 1

10/08/16 9:16 PM

AREA0598.indd 1

07/07/16 8:50 PM