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Summer 2013

Betting on S.C. Aerospace, automotive industries power growth

Lockheed Martin aircraft mechanic Michael Goldsmith repairs a plate on a P-3 Orion. CHANGE SERVICE REQUESTED 389 Johnnie Dodds Blvd. Suite 200 Mt. Pleasant, SC 29464 SC Biz News

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Table of

Contents

COVER STORY:

Aerospace & Autom0tive Industries in s.C. Aerospace 18 Take to the sky

S.C.’s transformation to an aerospace hub

20 New life for old aircraft

Lockheed Martin has been rebuilding planes in the Upstate for 30 years

22 InterTech subsidiary part of

aerospace supply chain shift

26 Boeing expansion validates S.C.

Autom0tive 30 The long haul

S.C. automotive industry looks down the road

34 McCraw drives expansion at BMW

Tony McKoon, avionics tech, works on the wing of the P3. (Photo/Leslie Burden)

Cover Photo: Leslie Burden

Feature

Special section: ABC 36 This special section focuses on the Associated Builders and Contractors Inc. Carolinas Chapter

RS INC.

New Schools for New Skills

A PubLICATION

S.C. students get to work on STEM education

fOR THE ASSOCIATEd

buILdERS ANd CONTRACTO

Building Excellence

work Awards recognize top

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CAROLINAS CHAPTER

2

Departments 4 Bill Settlemyer’s Viewpoint

38 S.C. Delivers

5 Upfront

48 1,000 words

8 Spotlight: Berkeley County

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®

President and Group Publisher | Grady Johnson gjohnson@scbiznews.com

From the

Vice President of Sales | Steve Fields sfields@scbiznews.com Creative Director | Ryan Wilcox rwilcox@scbiznews.com Director of Audience Development | Rick Jenkins rjenkins@scbiznews.com Event Manager | Kathy Allen kallen@scbiznews.com Audience Development & IT Manager Kim McManus kmcmanus@scbiznews.com Accounting Department | Vickie Deadmon vdeadmon@scbiznews.com SC Biz Magazine Editor | Licia Jackson ljackson@scbiznews.com Managing Editor | Andy Owens aowens@scbiznews.com Midlands Editor | James T. Hammond jhammond@scbiznews.com Upstate Editor | Scott Miller smiller@scbiznews.com Senior Copy Editor | Beverly Morgan bmorgan@scbiznews.com Staff Writer | Chuck Crumbo ccrumbo@scbiznews.com Staff Writer | Liz Segrist lsegrist@scbiznews.com Staff Writer | Matt Tomsic mtomsic@scbiznews.com Staff Photographer | Leslie Burden lburden@scbiznews.com Senior Graphic Designer | Jane Mattingly jmattingly@scbiznews.com Graphic Designer | Jean Piot jpiot@scbiznews.com Graphic Designer | Andrew Sprague asprague@scbiznews.com Director of Business Development | Mark Wright mwright@scbiznews.com Senior Account Executive | Sue Gordon sgordon@scbiznews.com Senior Account Executive | Robert Reilly rreilly@scbiznews.com Account Executives: Sara Cox | scox@scbiznews.com Geoff Humphreys | ghumphreys@scbiznews.com Susan Hurst | shurst@scbiznews.com Alan James | ajames@scbiznews.com David Lorick | dlorick@scbiznews.com Bennett Parks | bparks@scbiznews.com

Welcome to the summer issue of SCBIZ. Since we serve the state’s business community with our biweekly newspapers, the Charleston Regional Business Journal, the Columbia Regional Business Report, GSA Business, and daily email news alerts from each of them, we use SCBIZ each quarter to take a more thoughtful and analytical look at some of the biggest stories impacting the state’s economic landscape. It’s not hard to write enough copy to fill an issue focused on the automotive and aerospace industry in South Carolina. There’s so much happening that we write about it almost every day for our daily email subscribers. It’s also hard to cover these topics and avoid writing about BMW and Boeing. They are such huge players in the state and both keep making news. As journalists, we couldn’t ignore them if we wanted to. So for SCBIZ, we covered these giants with updates on the major new developments and saved some space to look at a few new players, like ZF Group and TIGHitco. Of course, you can’t talk to manufacturers in South Carolina without the topic of workforce development coming up. Our state’s manufacturers are becoming increasingly involved in “growing their own” and this issue takes a look at some of the regional initiatives to further education in science, engineering, technology and math, commonly referred to as STEM. Within minutes of arriving for a site visit to one of our manufacturers, it becomes readily apparent that most of Grady Johnson is the these jobs no longer require a sweaty, greasy existence. They President and Group are high-tech, high-wage occupations. The key is getting our Publisher of SCBIZ young people excited about manufacturing as a career. News which publishes We continue to emphasize our mission of being South SC Biz magazine, Carolina’s media engine for economic growth by bringing Charleston Regional you special sections from some of the state’s most important Business Journal, economic development organizations. In this issue we feature Business Report and the Associated Builders and Contractors. These industries GSA Business. continue to be a bedrock in our economic community. Another important aspect of economic development is to facilitate the efforts of individuals and companies pushing the innovation envelope. Each issue of SCBIZ features a section called Business Accelerator that highlights this work. CU-ICAR obviously makes this list, and since we are bringing you a taste of the state’s automotive prowess, it’s only natural that we highlight this unique and growing asset. I hope this issue gives you a good sense of what is happening across the state in automotive and aerospace. As always, there is way too much going on to be comprehensive. So I want to leave you with something I heard last month at the Silver Crescent’s Salute to Manufacturing event — “Manufacturing is cool!”

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Pam Edmonds | pedmonds@scbiznews.com

Dear Reader,

PUBLISHER

Reneé Piontek | rpiontek@scbiznews.com

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Bill Settlemyer’s

Viewpoint Flying high with BMW and Boeing

I

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spend a lot of time in my columns addressing what our state needs to do better to become more competitive and build prosperity across the state. But this issue of SCBIZ, with its focus on aerospace and automotive manufacturing, presents a good opportunity to pause for some collective high-fives in recognition of the extraordinary impact of BMW and Boeing in South Carolina. These two world-class companies came to our state by very different routes. BMW’s was very direct, with its decision dating back to 1992 to establish its only U.S. manufacturing facility in the Upstate. The reputation of BMW and German automotive engineering in general is legendary, and it speaks volumes about our state and our workers that the company has enjoyed sustained success in its operations here over the past two decades. We should celebrate our good fortune in having BMW choose South Carolina as well as our state’s ability to deliver on the workforce and other resources that the company needs to prosper here over the long term. Boeing’s path to South Carolina was quite different from BMW’s. What is now Boeing South Carolina, occupying a massive site adjacent to Charleston International Airport, was initially the home of two subcontractors, Vought and Global Aeronautica. The two subcontractors were involved

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in major production and assembly work on sections of the 787 Dreamliner’s innovative composite fuselage. That 2004 announcement was an economic blockbuster for the Charleston area, but more was to come. Boeing later decided that its extensive outsourcing of production of major components of the plane was proving to be too much of a stretch in terms of meeting its production goals, so it bought the two subcontractors’ Charleston facilities. And with that, one of the world’s two leading manufacturers of commercial aircraft planted its flag on our soil. Not that long after came the second blockbuster announcement: Charleston would be the home of a second final assembly line for the Dreamliner, one of only three sites in the world that assemble twinaisle commercial jets. From an economic development standpoint, the hits have just kept on coming, as Boeing has since announced additional facilities and operations in North Charleston and is purchasing more land for future use. Companies like BMW and Boeing don’t make decisions about major facilities on a whim. They draw on decades of experience and look at every angle, and that was undoubtedly the case with their operations in South Carolina. Did it matter that South Carolina is a right-to-work state? Undoubtedly, but that alone wouldn’t have closed the

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deal. Were the incentive packages from the state the key? Not really – incentive packages are basically the ticket for admission to the competition for these kinds of projects, but no major company is going to base their decision solely on a bidding war over incentives. The real keys to our success were the ability of our technical colleges to support workforce training, the logistics support including the all-important Port of Charleston, and a generally cooperative and welcoming state government and business community, along with a workforce made up of people who are willing to work hard, learn new skills, and who appreciate the opportunity to work with these great companies. I’m also impressed with the impact BMW and Boeing have had on our state and our communities through their corporate citizenship efforts. Some manufacturers have planted their flags in our state without getting involved in local and state issues like education and efforts to improve the health and quality of life of our citizens. Not so with BMW and Boeing, who have committed themselves fully to do well by doing good. So high-five, everyone! And thank you, BMW and Boeing, for all you do.

Bill Settlemyer bsettlemyer@scbiznews.com

New subscribers Subscribe online at www.scbizmag.com or call 843.849.3116.

Current subscribers Change your address online at www.scbizmag.com or call 843.849.3116.


UPFRONT

regional news | data

W

Take flight with a kit plane

ant to build your own plane? You can do just that with a kit from Oconee County-based Just Aircraft. The Walhalla company recently completed flight testing for its second recreational plane. The company now offers a kit to produce the SuperStol. Its other kit is the Highlander. Just Aircraft produces kits that a buyer can assemble into a recreational plane. It offers customers a factory build program where they can construct their plane in the factory, or the company will build the plane to the customers’ specifications. It has now sold more than 300 kits to customers throughout the country, as well as internationally, said Harry Berndt, Just Aircraft Co.’s business manager. About 30% of the kits are exported to Australia, England,

France, Spain, New Zealand, Canada and Ecuador, among other places. The SuperStol is designed as a backcountry plane. It features a slatted, metal wing, enabling it to take off and land with less than 150 feet. It is also designed to enhance slowflight capabilities, while also increasing cruise speed. It can cruise at 110 mph and land at 32 mph in non-runway areas, making it perfect for landings in rough grass strips, fields and riverbeds, Berndt said. The company was founded in Idaho in 2002 by aircraft designers and co-owners Troy Woodland and Gary Schmitt. They designed the Escapade airplane, and later, the Highlander. In 2004, the company moved into a production facility with its own runway in Oconee County. It currently has 12 employees.

FAST FACTS | Salaries Average pay for graduates of S.C. colleges As graduation time arrives, here is the average pay scale for grads of some S.C. colleges, ranked by highest starting salary

Source: Payscale.com

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Rank College or university Starting salary Salary after 15 years 1.............. The Citadel.................................. $51,300 ......................... $83,400 2............. Clemson University.................... $45,300 .........................$86,900 3............. Presbyterian College.................. $42,000 ......................... $83,500 4............. SC State..................................... $40,700 .........................$59,000 5............. USC-Columbia............................ $40,500 .......................... $71,500 6............. Furman........................................ $37,700 ......................... $85,300 7-tied...... USC-Upstate...............................$37,500 ..........................$61,000 7-tied...... Wofford.......................................$37,500 ......................... $79,300 8............. Winthrop......................................$37,100 ..........................$60,100 9............. College of Charleston................. $35,600 ......................... $66,400 10............ Coastal Carolina......................... $35,500 ......................... $55,900

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Upfront

Silver Crescent Foundation honors 3 companies for manufacturing excellence

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ucor Steel of Mount Pleasant, Cytec Industries of Aiken County and Southern Weaving of Greenville received this year’s Awards for Manufacturing Excellence presented by the Silver Crescent Foundation. The three companies were among 11 finalists in three categories — small, medium and large manufacturers. Winners were announced in March at the annual Salute to Manufacturing luncheon at the TD Convention Center in Greenville. The program recognizes manufacturers’ citizenship, employee engagement, customer satisfaction, environmental stewardship, innovation, financial performance and commitment to longevity in South Carolina. A national panel of judges reviewed candidates’ applications to determine the winners. Nucor won in the large manufacturer category, Southern Weaving in the mid-sized category and Cytec in the category recognizing small manufacturers. Other finalists for honors in the 2013 competition were:

Large Manufacturer Finalists (500 or more employees) • BMW Manufacturing Co., Spartanburg County • Boeing, North Charleston • Itron, West Union

Mid-Sized Manufacturer Finalists (200 to 499 employees) • Aaron Industries Inc., Clinton • Shaw Industries, Central

1st

Allison E. Mitchell “Purchasing Beans”

‘Purchasing Beans’ wins first in rural photography contest

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Lexington County woman’s photo of fresh beans at Manning Farm & Garden won first place in the Rural Summit Photography Contest this year. Allison E. Mitchell’s photo, “Purchasing Beans,” was selected by conference participants at the 23rd annual S.C. Rural Summit recently in Aiken. Her entry was one of more than 150 entries for this year’s contest, sponsored by the Small Business and Rural Development Division of the S.C. Department of Commerce. The entries were narrowed to 25 by

Commerce staff and displayed at the Rural Summit. Second place went to D.S. Owens of Aiken for his photo, “Foggy Day in Aiken.” Third place was awarded to Mike McClain of Anderson for “Fripp Island Pier.” All three photos can be viewed on the Department of Commerce web site, www.SCcommerce.com, in the photo gallery section. The contest was open to the public, and entries were to reflect the unique features of rural life in the Palmetto State. Source: S.C. Department of Commerce

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Small Manufacturer Finalists (199 or fewer employees)

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• Holcim Inc., Holly Hill • PropertyBoss Solutions, Greenville • Spartanburg Meat Processing Co. Inc., Spartanburg Presented annually by The Silver Crescent Foundation, the 2013 Silver Crescent Awards are co-sponsored by the SCRA, SC Biz News and Scott and Co. CPAs.

2nd

D.S. Owens “Foggy Day in Aiken”

3 rd

Mike McCla in “Fripp Island Pier”


Business accelerator

Business Accelerator

CU-ICAR — an automotive ecosystem By Ross Norton

CU-ICAR has a 250-acre advanced-technology research campus that focuses on South Carolina’s growing automotive manufacturing industry. (Photo/Clemson University)

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s an idea incubator, the first thing CU-ICAR cultivated was its own destiny. It started as an idea for a wind tunnel and by the time its doors opened in 2005, the campus was an internationally known research park where students learn, ideas are shared and tested, and business and industry build relationships. The Clemson University International Center for Automotive Research is a 250acre advanced-technology research campus built to enhance and complement the growing automobile manufacturing industry in South Carolina. The public-private collaboration has garnered more than $250 million in investments and created more than 700 jobs, according to John Kelly, Clemson University’s vice president for economic development. “Since opening five years ago, CU-ICAR has become an international model for economic development,” Kelly

said. “The campus has an enviable list of transport-related industry partners.” Kelly made those remarks as he announced the April 1 appointment of CU-ICAR’s new executive director, Frederick M. Cartwright. Students earn master’s and doctoral degrees in the nation’s only graduate program in automotive engineering. CU-ICAR’s Partnership Office ties the academic research together with business and industry, moving South Carolina’s knowledge-based economy down a road paved with collaboration — public and private — from classroom to laboratory to assembly line.

What’s in the neighborhood The first phase of the CU-ICAR campus will be complete with construction of One Research Drive, the sixth and final structure, with more than 70,000 square feet of rentable space in addition to classroom and laboratory space for Clemson stu-

Automotive Engineering professors Paul Venhovens and Steven Hung work with students in a lab at CU-ICAR. (Photo/Clemson University)

dents. Other buildings include Innovation Place Tower, which stands at the center of Technology Neighborhood I; the BMW Information Technology Research Center, an integral part of BMW’s research and development network; the Carroll A. Campbell Jr. Graduate Engineering Center, the 90,000 square-foot home base for Clemson’s academic program in automotive engineering; and the Center for Emerging Technologies, a multi-tenant building of 60,000 square feet that houses 18 campus partners. The Center for Emerging Technologies is part of CU-ICAR’s “technology café” approach to bringing together like-minded experts in technology fields for casual and professional interaction. The other structure in place is the Koyo/JTEKT three-building collaboration that serves as home to Koyo Bearings USA’s needle bearing design and development. Five technology neighborhoods are planned for the campus.


By the numbers

Facts

770

No of students:

about 200

44%

of alumni are working in South Carolina

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endowed chairs in four research areas: BMW Endowed Chair in Automotive Systems Integration; BMW Endowed Chair in Automotive Manufacturing; Michelin Endowed Chair in Vehicle Electronic Systems Integration; and Timken Endowed Chair in Automotive Design and Development

4 LEED certified buildings, 2 gold and 2 silver

91%

of alumni are employed in automotive industry

Nearby projects attributed in part to CU-ICAR: Hubbell Lighting (350 new jobs), Verdae Development (1,100 acres of mixed-use development); and new buildings for St. Francis Health System (500 new jobs)

• CU-ICAR has industrial-scale laboratories and testing equipment available for commercial use, as well as a comprehensive computational center dedicated to solving clients’ industrial problems and backed by a high-performance computing infrastructure.

Business Accelerator

On-campus jobs:

• CU-ICAR boasts 18 campus partners and every year hosts hundreds of guests from around the world. As a magnet venue, CU-ICAR hosted more than 1,600 people at events in 2012. The AT&T Auditorium seats 292 and the TD Gallery has room for 100 guests. • Industry partners include BMW Manufacturing Co., Michelin North America, Sage Automotive Interiors and EcoDual Inc. • Executive Director Frederick M. Cartwright spent 30 years in the automotive industry with General Motors.

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county spotlight

Berkeley

A DuPont technician inspects Kevlar bobbins. (Photo/DuPont)

Berkeley County

Variety of infrastructure, regional collaboration propelling new business

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uPont has been a fixture of Berkeley County since 1972, when the company built its first plant on Cypress Gardens Road. Since then it has invested more than $500 million in its facilities and employs about 200 people. DuPont opened its Kevlar plant in 2011 – its most recent expansion project.  Companies don’t make those kinds of long-term investments just anywhere, and Berkeley County is fortunate to have landed a few of those big players over the years, including Google will spend an Alcoa and Google.  other $600 mi

llion on a new data rkeley County. (Pho to/Leslie Burden)

center facility in Be

Special Advertising Section


County Spotlight: berkeley www.scbizmag.com

Berkley County’s Bushy Park Complex is the new home for Nexans, which is building its first high-voltage power cable manufacturing plant in North America there.

“We like the fact the local government is very cooperative,” said Jerry Good, DuPont plant manager. He points to the county’s willingness to provide a competitive tax rate, keep the permitting process smooth and provide quality infrastructure. Mike Rousseau, plant manager at Alcoa Mount Holly, echoes a similar sentiment. “Berkeley County as a whole – the combination of elected officials, business leaders, educators and the nonprofit organizations – do a very good job of partnering on common goals and objectives,” he said. “If you focus just on business and don’t bring along education and infrastructure, the county as a whole will feel a lot of pain.”   Although companies like DuPont and Alcoa have been long-time economic drivers for Berkeley County, the area has been attracting some pretty big names in recent years and positioning itself as a great place for business and industry. In March 2012, Nexans announced an $85 million investment at the Bushy Park Complex for its first high-voltage power cable manufacturing plant in North America. Construction began late last year with hiring for 200 new jobs to begin this year.

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Early this year, Google announced plans to expand its data center at Mount Holly Commerce Park. The additional $600 million investment brings Google’s total investment to more than $1.2 billion. Information technology company SPARC announced in late 2012 its plans to expand its existing facility and operations in Berkeley County. That $11 million investment is expected to generate 310 new jobs over the next four years. Gene Butler has been handling economic development for the county for five years and said activity is on the rise. Tough economic times impacted Berkeley County and the entire region but business activity and the number of prospects looking at the greater Charleston region is up. “The activity level this year has been good,” Butler said. “It’s certainly an improvement over the way things have been going the last several years. I think the three counties as a region have about 80 prospects on our list.” That tri-county collaboration is key for Berkeley, Charleston and Dorchester counties. Many people work in one county and live in another. Plus Berkeley and Dorches-

Berkeley County Demographics: Population: 175,573 Male population: 50.5% Female population: 49.5% Median age: 34.1 Median household income: $51,253 Per capita income: $21,263 Average household income: $59,308 Highest average annual wage by industry: $72,488 (management of companies & enterprises) Lowest average annual wage: $13,382 (accommodation and food services)


County Spotlight: berkeley

ter counties can use the lure of Charleston as the world’s best city as a selling point when talking quality of life and livability.

County selling points Businesses and individuals who want to be near Charleston and its beaches and historic downtown are finding Berkeley County a truly viable option. The county is diverse in its mix of neighborhoods, industry and opportunity. On one end of the county is the more upscale Daniel Island, a master planned, mixed-use development of homes and businesses. On the other end are farms and rural roads. And in between, you find interstate access, deep water and railways. That diversity has proved beneficial to Berkeley County over the years. “We can offer interstate, deep water and rail sites,” Butler said. “We’re fortunate to have those types of opportunities. Not every county has those. We have such a good mix of sites and buildings that we fit a lot of projects.” Deep water access is a particular advantage Berkeley County has over most other counties in South Carolina. In fact, that deep water was a selling point for Nexans’ highvoltage power cable manufacturing plant, said Dan Davis, Berkeley County supervisor. For Google, the selling point was room to grow. That company needed the space to expand, Davis said, and found it in Berkeley County’s Mount Holly Commerce Park.

Incentives for Development

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3 Job tax credits 3 Corporate headquarters credits 3 Investment tax credit 3 Sales tax exemptions 3 Property tax incentives 3 Fee-in-lieu-of-tax arrangements are

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often available but are structured and agreed upon in each individual case.


Always improving County Spotlight: berkeley

And yet there’s always room for improvement. The county is continually looking for ways to better its infrastructure, work force and job opportunities. In the outlying areas of the county, there’s the nagging issue of providing water and sewer services to possible industrial sites, Davis said. Businesses are in a hurry and can’t wait for water, he noted, and they don’t want the uncertainty as to whether services will be available when needed. One way the county will be attracting businesses that are ready to build and need fast turnaround is through a new certified site process. The program is an initiative of the S.C. Department of Commerce and McCallum Sweeney Consulting in Greenville. An available piece of property, Butler explained, goes through a detailed process of cost assessment, infrastructure and environmental analysis and more. The idea is to provide prospective businesses with a ready-to-build site, saving companies time and money. “When someone looks at a certified site,

Daniel Island is a master-planned development in Berkeley County. It includes residential and business. (Photo/Leslie Burden)

they know it’s shovel ready, ready to be built on with no surprises,” Butler said. “Lots of site consultants only look at certified sites because they don’t have the time to go through the process to determine if it’s suitable to their needs.”

Berkeley County is completing the certification process, which takes four to six months, on its first property: a 387-acre site at the intersection of Cypress Gardens Road and Old Highway 52. Two more sites are slated to go through the process, Butler said.

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County Spotlight: berkeley Between 30,000 and 40,000 tires daily roll out of TBC Corporation’s new distribution center in Berkeley County. A grand opening celebration (right) took place in March. (Photos/ Leslie Burden)

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Growing a workforce Getting businesses to locate in Berkeley County really is only half the battle. With that comes the need to staff those businesses as new employers look for a workforce that is skilled and ready to go. Good, the plant manager at DuPont, said it’s becoming increasingly difficult to find people who want to work in an industrial setting. So the company is working with the local high schools and Trident Technical College to show students what it means to work in a plant or industrial facility. Good said he hires people based on their behavior – people who are team players and who have a desire to learn. Not everyone they hire has to have a college degree. With wages starting at about $20 an hour, DuPont offers a competitive salary and is able

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to find workers, but that future workforce is what Good and others are thinking about. Alcoa’s Rousseau shares the same forward-thinking focus. “If we aren’t engaged as a business with education and we’re not growing the workers of tomorrow, we’ll have a smaller pool and will be competing against each other.” Berkeley County School District has heard those concerns and is taking steps to groom those future workers for the county. Beginning in August, Berkeley County School District will be launching career academies at Goose Creek and Timberland high schools. The remaining high schools will be rolled into the program in 2014. “What we’re doing is transforming our high schools to be centers of excellence,” said Amy Kovach, director of communica-

tions and community relations for Berkeley County School District. “We’re getting kids ready for career, college or both. The business community is seeking ready-now workers and workers with technical skills.” This effort is a direct result of the district’s work with the Berkeley and Charleston chambers of commerce and the Education Foundation, an initiative of the Charleston Metro Chamber of Commerce. The district has worked with businesses like Boeing, Google and Nucor to best define what they are seeking in a new generation of workers. “What we’re hearing is that, in addition to having solid academic skills, they want them to have technical and soft skills too,” Kovach said. “It’s great they can do algebra, but can they apply that in a work environ-


County Spotlight: berkeley

When these Berkeley County students are a little older, they will choose a career pathway for focusing their studies toward the future. (Photo/Berkeley County School District)

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ment to analyze data and then present it in a students in the more creative industries. team setting?” The district also works with Trident So beginning in ninth grade, students Technical College offering dual credit will align themselves with a particular options, allowing many students to earn career pathway: health sciences; hospitality their associate’s degree even before receivand culinary sciences; ing their high school or STEM (science, diploma. “We’re getting kids technology, engineer“For first-time faming, mathematics). The ilies who haven’t had a ready for career, college Charleston Regional child go to college that or both. The business Development Alliis a huge benefit to ance and chambers of them,” Kovach said. community is seeking commerce say the new This idea of entities ready-now workers and in Berkeley County businesses coming to the Charleston region workers with technical working together as are investing in those well as with other skills.” three areas, Kovach players in the Charlessaid. ton region is propelAmy Kovach By aligning themling Berkeley County director of communications selves with one of to the forefront of and community relations, Berkeley County School District those areas of study, economic development students will have the as it both retains and best opportunities for attracts new business internships, and business leaders in those and industry. industries will be most likely to come into “I think we’ve got the focus and people the classrooms to work with students and are rolling up their sleeves and looking teachers, Kovach added. at the pillars of success,” Rousseau said. Students will continue to study the core “There’s nothing I can be critical about. We subjects of math, science, English and social all agree on the direction and we’re working studies. And Goose Creek High School has on pieces of that.” the Berkeley Center for the Arts to foster Special Advertising Section

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Aerospace in S.C.

Take to the

SKY S.C.’s transformation to an aerospace hub

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hen the Palmetto State lured BMW Manufacturing Co. to the Upstate, the German automaker was taking a chance on a workforce that was more accustomed to working in textiles than in high-end manufacturing. The gamble paid off for the company and for South Carolina, which claimed thousands of jobs, stretching from the Upstate to the Port of Charleston, and multiple expansions that have increased the capability of the site and the skills of the workforce. Decades later, the Boeing Co. is transforming not only South Carolina but the Southeastern U.S. into an aerospace hub, but on a more accelerated timeline. Alabama likely would not have been able to capture AirBus’ new manufacturing facility without Boeing’s entrance into South Carolina. Companies pay attention to the activity of their competitors. Aerospace suppliers are flocking to South Carolina to provide opportunity and products to Boeing, Daimler, BMW, General Dynamics, Lockheed and myriad other defense contractors and small manu-

facturers, distributors and supply chain experts. All of them came to South Carolina and found a business-friendly climate with a willing workforce. In the first few months of 2013, the Boeing Co. has announced that the Chicago-based company is purchasing hundreds of acres of land and creating a research and development division in North Charleston. This move will attract engineering talent and bring some of the design work for another line of aircraft, the 737 Max, to South Carolina. In this group of articles focusing on aerospace in South Carolina, you will read about some of the direct and residual impact that the shift toward aerospace is having on the Palmetto State – not just in the Lowcountry, but across several sectors and in many of our communities. When business leaders visit other areas of the country, it’s not South Carolina’s beaches or the ranking of our golf courses they ask about. They ask about the growth of aerospace and how they can take advantage of the same economic development incentives and opportunities that companies such as Boeing and BMW have found to be critical to their future success. Right: Tony McKoon, avionics tech, works on the wing of the P3. at Lockheed Martin. (Photo/Leslie Burden)


FEATURE

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Aerospace in S.C.

Dave Petz, aircraft tech, works on a heat shield. Inset: P3 aircraft undergoes maintenance, modification and refurbishment. (Photos/Leslie Burden)

NEW LIFE FOR OLD AIRCRAFT Lockheed Martin has been rebuilding planes in Upstate for 30 years By Scott Miller, Staff Writer

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outh Carolina has been building airplanes for three decades, long before Boeing rolled its first 787 off a North Charleston production line in 2012. In the Upstate, Lockheed Martin rebuilds retired military aircraft, some up to 40 years old, outfitting them with new wing sections, stabilizer wings at the rear of the planes, rebuilt engine housings and modern digital displays in cockpits, among other upgrades. “You won’t know you’re in something that didn’t just come off an assembly line new,” said Don Erickson, Lockheed’s Greenville site director. “This is not kicking-thetire stuff; this is taking the airplane apart and rebuilding it.” The upgrades can add 15 to 20 years of life to each airplane, he said. Since opening in 1984, Lockheed Martin has reconstructed and delivered 2,785

aircraft from its operations at the S.C. Technology and Aviation Center in Greenville County. It will build nine more this year. The site primarily works on the P-3 Orion, which is used as a maritime patrol and intelligence-gathering aircraft. The plane can fly 12 to 14 hours without refueling. The site also performs upgrades on the C-130 and has worked in the past on KC-10s and C-9s. The planes, ranging from about 20 to 40 years old, are delivered to foreign allies, U.S. Customs and Border Protection, the U.S. Coast Guard and others. Fuselage sections arrive by truck from a storage facility in Tucson, Ariz. The new 44-foot wings are built at a Lockheed plant in Marietta, Ga., and delivered to Greenville. The horizontal stabilizers are built in Maryland. Lockheed Martin Greenville puts it all together. The fastest turnaround is about 18

months, and Lockheed wants to trim that down to 16 months, Erickson said. Lockheed delivered 31 aircraft last year. It will deliver only nine this year, but the extent of the work will require the same number of work hours, Erickson said. “We discover 40% of our workload after the plane gets here,” he said. Once the plane arrives, Lockheed examines it for corrosion, stress cracks and other damage. Lockheed employs a lot of ex-military technicians, Erickson said. The workforce has been cut considerably in recent years as Lockheed cuts costs. About 700 people work at the site, 400 fewer than two years ago. The 1.3 million-square-foot Greenville facility has 16 hangars and 3 million square feet of ramp space. See LOCKHEED, Page 22


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InterTech subsidiary part of aerospace supply chain shift in S.C. By Andy Owens, Staff Writer

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tanding on a brightly polished floor in front of a large autoclave that will be used to cure and harden composite materials for aircraft parts, The InterTech Group CEO Jonathan Zucker said the company’s new plant in North Charleston represented a shift in manufacturing for the Southeast. “As you can see from looking around, this isn’t the typical manufacturing plant of the old South,” he said. “This facility that you’re in now is over 100,000 square feet, climate-controlled, well-lit, high-tech production space.” Along with state and local officials and area manufacturing leaders, Zucker offered a look inside the $30 million TIGHitco plant at Palmetto Commerce Park in March. The Atlanta-based aerospace subsidiary of The InterTech Group will use composite materials to manufacture parts for a number of companies. TIGHitco is among suppliers coming to the South to be close to aerospace, automotive and other manufacturing customers. The North Charleston-based InterTech Group, which was already a Boeing Co. supplier before the aerospace giant moved to South Carolina, is the state’s second-largest privately owned company. Gov. Nikki Haley listed some of TIGHitco’s customers, including several operating in the Palmetto Commerce Park, such as Boeing and Daimler. “You look at all of these great companies that we have, and instead of choosing any other place in the country they could go, they wanted to bring it home to South Carolina,” Haley said. Haley’s remarks mirrored Connecticut officials, who had hoped The InterTech Group would build the new plant in the Hartford area, but, along with the proximity to Boeing, found state and local incentives difficult to compete with, according to published reports. The company announced in October 2011 that it was building in the Palmetto Commerce Park. In December 2011, Charleston County approved a 6% fee-in-lieu-of-taxes agreement for 20 years, and provided a special source revenue credit, which returns 30% of the fee to the company to offset construction costs of the $14.5 million

InterTech President Jonathan Zucker speaks with Gov. Nikki Haley at the opening of his company’s newest manufacturing plant, in North Charleston. (Photo/Andy Owens)

plant, during that time. Also, the state agreed to provide training funds and job development credits for the company as long as it meets specific hiring targets, the Commerce Department said. The plant is expected to create 350 jobs. “This facility is Phase I. In other words, this is just the beginning of what we ultimately expect to be approximately 300,000 square feet of state-of-the-art, advanced-composite manufacturing space,” Zucker said. TIGHitco President Peter Nicholas said the number of nearby customers was part of the reason for moving to North Charleston. “We want to shrink down the supply chain, and that’s what we’re trying to do here,” Nicholas said. “So we look for the aerospace companies and other companies in the Southeast.” The InterTech Group in 1991 purchased TIGHitco, which had a single location in Atlanta, Nicholas said. The North Charleston facility is the company’s sixth plant. Nicholas said the plant will enter Phase II and Phase III, each expanding about 100,000 square feet of space, as sales and demand for the company’s products increase. North Charleston Mayor Keith Summey said the significance of The InterTech Group’s expanding its group of facilities in North Charleston could not be underestimated because it was a “Zucker company. But I think you are saying volumes as a company, as InterTech, by saying we’ve been here, we know the people of the Lowcountry. We know the people of the state of South Carolina, and because of that we’re investing in where we know is our home.”

Rick Arment, structures mechanic, works in the shop. (Photo/Leslie Burden)

LOCKHEED, from page 20 Erickson said hiring is expected but he wouldn’t give details. The company is monitoring its business prospects as politicians grapple over federal spending in Washington. Most of Lockheed’s work in Greenville is funded by government contracts. “The uncertainty driven by the sequester has prevented the DOD (Department of Defense) from moving forward on new contracts,” Erickson said. Lockheed has fully funded defense contracts that will provide work in Greenville through 2019, Erickson said, but moving forward, the site would like to attract more commercial work. In the mid-1980s, Lockheed’s contract mix was 50% government, 50% commercial, but the company switched gears to chase increasing opportunities with the Department of Defense. Now those contracts — particularly with future work uncertain — are increasingly competitive. Government-owned facilities in Warner Robins, Ga., Oklahoma City and Ogden, Utah, also perform these upgrades. Additionally, Lockheed competes with L3 Aerospace, Boeing and Northrup Grumman for contracts on this work. “The environment has never been more competitive than it is right now,” Erickson See LOCKHEED, Page 24


Aerospace in s.c.

Tony McKoon, avionics tech, works on the wing of the P3. (Photo/Leslie Burden)

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LOCKHEED, from page 22

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said. “We believe we’re doing everything possible to be an affordable option.” Now, Lockheed is exploring commercial opportunities again. “We are particularly interested in getting paint operations to get our foot back in the door,” Erickson said. Lockheed built its paint facility in 1999. It can accommodate narrow-body aircraft like the Boeing 737 — a standard-sized commercial jet heavily used by Southwest Airlines and others — as well as the P-3 Orion and other planes. When Boeing announced plans to build the 787 in North Charleston, Lockheed approached them about painting the massive Dreamliner. “We’re 12 feet too short for the 787 work,” Erickson said. Still, Boeing’s arrival boosts the state’s aerospace sector and that’s good for all of the aviation businesses already located here, Erickson said. “Suppliers are going to come,” he said. Around 90% of the work Lockheed performs on these aircraft is conducted in house — heat treatment, welding, hydraulics, metal fabrication, upholstery, painting, electrical and other work, for example. But specialized services like spot welding and shock pinging are contracted out, Erickson said. “We don’t have enough volume to stand that up in house so we send it out, in some cases all the way to California.” But, Boeing brings volume that can attract suppliers. “Certainly we can tap into those suppliers,” Erickson said. “The quicker turn times, the shorter supply chain, that’s good for everybody.”


A publication for the Associated Builders and Contractors Inc.

Building Excellence Awards recognize top work

CAROLINAS CHAPTER


ABC – Carolinas Chapter

About Associated Builders & Contractors Associated Builders & Contractors is a family of contractors, suppliers, and industry professionals seeking to promote and improve the image of construction and address the many issues facing the industry. The Carolinas Chapter together with 23,500 member firms nationally promote equality amongst construction managers, general contractors, specialty contractors, suppliers, and industry professionals. With one voice our members seek to improve the construction industry as a whole. Associated Builders & Contractors was founded in Baltimore, Md., in 1950 to promote the “merit shop” and the free market system as it relates to the construction industry. Additionally, ABC promotes the “fairness factor,” by which all members are seen as being equal. All businesses, from general contractors to suppliers, and subcontractors to industry professionals, have a voice and a vote. This is something that is not found in any other construction association. ABC chartered the Carolinas chapter in 1998.

Mission Statement

Dear Readers, On behalf of ABC Carolinas, I welcome you to this special section about some of our activities, firms and people. Some of you may find a good home within the membership of Associated Builders and Contractors, just as more than 500 firms already have in the Carolinas. The best way for any firm to receive value for its membership is through active engagement with the local councils. I encourage firm leaders and teams to identify industry topics they are passionate about and work with local council committees that are spearheading efforts on that subject. Such work areas include government affairs, membership, education, training, public relations, safety, building sustainability, Excellence in Construction, summer conference, and mentorships for both secondary and collegiate level students. These are all areas of focus for our organization in the coming year. ABC offers at least one networking event each month as well as a schedule of training and educational opportunities. Visit our website at www.abccarolinas.org for a calendar of monthly events, membership directory and much more. You and your firm can receive multiple benefits from being a member of ABC, and those benefits will be directly proportionate to the level of involvement you put into the organization. Being an active member in our organization will help your business improve and prepare for the changes that continually impact our industry and business. Our primary objective as an organization is to ensure that your business needs are achieved and your interests served. Please feel free to contact me, any board member, your local council leadership team, or our staff with any issues you would like to see addressed by our organization. We are here to ensure that you receive the rate of return on your investment in ABC that you expect. We look forward to working with you and others from your firm to make our industry better and our association the premier construction organization in the Carolinas during the course of the year. Sincerely,

Doug Carlson President and CEO ABC Carolinas Chapter

A publication for the Associated Builders and Contractors Inc. - Carolinas Chapter

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ABC of the Carolinas is dedicated to protecting free enterprise in the construction industry through political action, workforce development and members services. ABC is the one association where all members have an equal voice in representing the industry.

CAROLINAS CHAPTER

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ABC – Carolinas Chapter

UPFRONT ABC Carolinas Chapter by the numbers

15 1998

Number of years since the founding of the Carolinas Chapter of ABC Year the Carolinas Chapter was chartered

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ABC Upstate collaborating on energy efficient home for Habitat

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A sustainable, energy efficient home for Habitat for Humanity of Greenville County will soon be under construction with the help of the Upstate council of the Associated Builders and Contractors. This home will be the first LEED home for Habitat for Humanity of Greenville County. Many different industry organizations are collaborating on the home. In addition to Habitat and ABC, participants include Architecture for Humanity Greenville, the Future Construction Leaders of the Upstate, the U.S. Green Building Council of S.C. Upstate Branch, and American Institute of Architects Greenville. The home will be built on Jenkins Street in the Sterling community. For more than a decade its residents have been working to revitalize and rebuild the community. Many professionals and contractors are making donations to help this effort, known as the LINEARIS house.

A publication for the Associated Builders and Contractors Inc. - Carolinas Chapter


For the third year in a row, the Carolinas Chapter of Associated Builders and Contractors has received the National Mullan Award for Growth. The Mullan Award was named in honor of ABC founder and first chairman of the board, Charles Mullan. The national Mullan Award is the highest honor a chapter can receive. The Carolinas Chapter has grown to

serve nine council areas in the Carolinas with legislative representation in Raleigh and Columbia. Earlier this year, the chapter opened a new training facility in Charlotte promoting the Carolinas Construction Institute. This is the seventh time in the past eight years that the Carolinas Chapter of ABC has won the Mullan Award.

ABC – Carolinas Chapter

ABC wins National Mullan Award for Growth

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ABC – Carolinas Chapter

Building Excellence Award-winning builders and contractors hone their game in down economy

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By Ross Norton

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A publication for the Associated Builders and Contractors Inc. - Carolinas Chapter

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ABC – Carolinas Chapter

Companies were honored for Excellence in Construction by ABC Carolinas. Among the award winners below: • 1 Edifice, Wake Tech Community College. 2• Choate, Hotel John Marshall. 3• Starr Electric, Wake Forest Biotechnology Place. 4• Balfour Beatty, Duke headquarters. 5• MV Commercial Construction, Dermatology and Laser Center of Charleston. For a complete list of winners, please see pages 10 and 11.

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et’s not mince words: it’s been tough. Everyone is looking at construction and cars, because everyone knows when homes and rides start moving, so does the economy. For the builders and contractors, the doldrums that started in 2008 have been a financial challenge, but with promising signs on the horizon, some believe they’re better prepared now for the construction surge that lies ahead. Even in the bad times, some great work has continued. “From subcontractors, suppliers, vendors and even our perceived competition, there is a genuine respect for each other. I believe those relationships were strengthened by the downturn of the economy,” said Darath Mackie of Cely Construction Company in Greenville. “We all faced the economic downturn together. We were blessed in the Upstate that we were affected far less than other market areas, and we have seemed to recover at a much faster pace. I believe that’s due to the efforts of all of us striving together for economic growth in the Upstate and in South Carolina.” Much of the effort is reflected in quality projects recognized in the most recent ABC Excellence in Construction Awards. The awards are given annually by the Carolinas

chapter of Associated Builders and Contractors Inc. Cely Construction won an Eagle Award for work at Berea Middle School in the under $2 million category. Cely also earned a Merit Award from ABC for construction of The Growler Station in Greenville. A fair share of the Carolina awards went to South Carolina companies. “In our particular market we have many quality construction firms, and to be the recipient of these awards is quite a compliment,” said Mackie. “It is a reflection that Cely Construction is standing firm on its principles of quality, on-time, in-budget construction that is not based all on cost, but on the one thing we work hardest to achieve, and that is our reputation of quality and satisfied clients.” Bill Caldwell, president of Waldrop Mechanical Services of Spartanburg, saw his company bring home three Eagle Awards in three categories: under $1 million, $2 million to $5 million, and $5 million to $10 million. “We are elated to have won best of class in all three of our categories,” he said. “I think it’s the first time it has ever happened in our chapter. For a South Carolina contractor to win best (in three categories) is certainly a first and we’re very proud.”

Mike Trammell presents a Merit Award to Darath Mackie and Henry Bellew of Cely Construction Co.

A publication for the Associated Builders and Contractors Inc. - Carolinas Chapter

Some of that pride comes in knowing that the difficulty of the project is one of the measures used in choosing winners. It means judges recognized the difficulty and delivery of the three projects, and each was difficult for a different reason, Caldwell said. A project at Bosch Rexroth had to be completed without interrupting the production line, a new system at Greer High School was completed within 89 days to avoid disrupting school, and an expansion project to Lee Hall at Clemson University brought new European technology to the state for the first time in commercial construction. Each of the projects seems to have made a lasting impact: one serves as a lab for college students studying construction management, one was a finalist for a national ABC award and one has inspired a school district to consider more efficient technology in other schools. “The Greenville school district wants to retrofit some old schools because of its efficiency,” Caldwell said. “I think the public sector is certainly liking new applications to be greener and more efficient and more sustainable.” The president of W.B. Guimarin says new ideas like those are driving even a venerable company like his, where oldfashioned work ethics meet with everything that’s new in constructing and contracting. The Columbia-based company is 110 years old, but embracing new technology and processes to produce the best in construction. “I believe through the use of an ageless hard-work ethic, obsession with quality workmanship at a fair price and the innovative use of ever expanding technological advancements, the construction industry is more rewarding and vibrant as it ever has been,” said Bill Waters. W.B. Guimarin was another South Carolina company recognized for Excellence in Construction at the ABC awards. “W.B. Guimarin is proud to win an Excellence in Construction award from ABC for the third year in the last four and are honored to be recognized by our esteemed peers,” Waters said. Changes in the industry mean contrac-


ABC – Carolinas Chapter

The Eagle Award.

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tors are more and more looking for a different kind of worker, he said. “The industry has suffered recently with a mindset of construction opportunities being only pounding a hammer or digging a ditch but that simply is not the case,” Waters said. “Through the advent of innovative new technologies such as usage of GPS systems used to lay out trenches and locate hanger points in a building structure, webcams that monitor and document project processes and progress and mobile tablet usage in the field, the industry has almost evolved from a blue collar mentality to the necessity of computer literate Gen Y’s not only doing traditional project engineering and management skills but field installations as well.” Waters cited as examples new delivery approaches such as “integrated project delivery,” which promotes early teamwork and collaboration during the design stages prior to construction, as well as “building information modeling,” which offers new advantages to both the owner/client as well as the architecture, engineering and construction team. Waldrop’s Caldwell believes the time is near for more sit-down meetings between those owner/clients and the architectureengineering-construction industry. “Except in the industrial sector, the market continues to be fairly flat but we are all optimistic that we see some things changing,” Caldwell said. “Some major work is being planned in the public sector that will provide job opportunities and employment. Healthcare is kind of flat but there are plans being made and we’re just waiting on them. They’re still holding on to cash but sooner or later they’re going to have to let go of some of that to get on with research and development.”

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ABC – Carolinas Chapter

Excellence in Construction

ABC Carolinas winners Eagle Awards

*Indicates Project of the Year finalist Edifice, Inc. Lancaster County Water and Sewer District Commercial - $5 to $10 Million Owner: Lancaster County Water and Sewer District   A M King Construction ALDI, Inc. Corporate Office Commercial - $10 to $25 Million Owner: ALDI, Inc.   Turner Construction Company Harrah’s Cherokee Casino & Hotel – Casino Renovation/ Expansion Commercial – Over $50 Million

Merit Awards Choate Construction Company Commercial - $5 to $10 Million Measurement Building at Morris Ridge Owner: Measurement Durham, LLC

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DPR Construction Commercial – Over $50 Million United Therapeutics Phase 2 Owner: United Therapeutics   Balfour Beatty Construction DH Griffin COnstruction Commercial – Over $50 Million Guilford County Detention Center Owner: Guilford County   KBR Building Group Commercial – Over $50 Million Sysco Boston, LLC – New Warehouse, Office & Distribution Center Owner: Sysco Corporation   Rodgers Schools - $10 to $25 Million Health Sciences Education Building Owner: Greenville Hospital System   Metcon, Inc. Schools - $10 to $25 Million Fayetteville State University Renaissance Hall Owner: Fayetteville State University

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Balfour Beatty Construction DH Griffin Construction, Daniele Company Schools - $25 to $50 Million University of North Carolina – Greensboro Quad Renovation Owner: University of North Carolina Greensboro

  Choate Construction Company SIMT Manufacturing Incubator Center Industrial - $2 to $5 Million Owner: Florence Darlington Technical College   Yeargin Potter Shackelford Construction, Inc. ABB High Voltage Cable Manufacturing Plant Industrial - $25 to $50 Million Owner: ABB North America   KBR Building Group Gulfstream Aerospace Corporation – Business-Jet Manufacturing Facility Industrial – Over $50 Million Owner: Gulfstream Aerospace Corporation   Choate Construction Company North Carolina State University J.W. Isenhour Tennis Complex Schools - $2 to $5 Million Owner: North Carolina State University Edifice, Inc. *Wake Tech Community College – Building E Schools - $10 to $25 Million Owner: Wake Tech Community College   Balfour Beatty Construction East Carolina University – School of Dentistry Schools - $25 to $50 Million Owner: State of North Carolina through East Carolina University

 Barton Malow/Samet/SRS, a joint venture Schools - $25 to $50 Million Joint School of Nanoscience and Nanoengineering Owner: Gateway University Research Park   Lend Lease (US) Construction Co. and Clancy & Theys, a joint venture Schools – Over $50 Million University of North Carolina Chapel Hill Bell Tower Development Owner: University of North Carolina   Choate Construction Company Healthcare – Under $2 Million University of North Carolina Hospitals Neurosciences Admitting Unit Relocation Owner: University of North Carolina Hospitals   HICAPS, Inc. SALISBURY VAMC Healthcare - $5 to $10 Million Building 42 Renovations and Addition, Phase 1 Owner: Department of Veterans Affairs   Brasfield & Gorrie Construction, LLC Healthcare - $10 to $25 Million WakeMed Medical Park Owner: Duke Realty Healthcare   Cely Construction Company, Inc. Interior – Under $2 Million The Growler Station Owner: Pavco Inc. Turner Construction Company Interior - $2 to $5 Million Turner Construction Company – Charlotte Office Owner: Turner Construction Company   Moss & Associates, Inc. Renovation/Restoration – Under $2 Million Greenville Baptist Association Renovation & Tenant Improvement Owner: Greenville Baptist Association

A publication for the Associated Builders and Contractors Inc. - Carolinas Chapter

  Turner Construction Company *UNC at Charlotte – Energy Production & Infrastructure Center Schools – Over $50 Million Owner: University of North Carolina at Charlotte   MV Commercial Construction LLC Dermatology and Laser Center of Charleston Healthcare – Under $2 Million Owner: Tekwest, LLC   Monteith Construction Corporation Lower Cape Fear Hospice and Life Care Center Healthcare - $2 to $5 Million Owner: Lower Cape Fear Hospice and Life Care Center   Brasfield & Gorrie, LLC REX Healthcare of Holly Springs Healthcare - $5 to $10 Million Owner: Duke Realty Healthcare   Vannoy Construction Presbyterian Hospital Huntersville Vertical Expansion & ICU Addition Healthcare - $10 to $25 Million Owner: Novant Health   Rodgers *Levine Cancer Institute, Carolinas HealthCare System Healthcare - $25 to $50 Million Owner: Carolinas HealthCare System

 Hendrick Construction, LLC Renovation/Restoration – Under $2 Million Project Charlie Owner: Burke County   Rodgers Renovation/Restoration - $5 to $10 Million Foundation For The Carolinas – Headquarters Owner: Foundation For The Carolinas   Balfour Beatty Construction a joint venture with Shelco Other/Specialty - $10 to $25 Million Mosaic Village at Johnson C. Smith University Owner: Griffin Brothers Skanska USA Building, Inc. Other/Specialty – Over $50 Million Wake County Detention Center Owner: County of Wake   Juba Aluminum Products Co. Glass & Glazing - $2 to $5 Million NC Department of Environmental and Natural Resources General Contractor: Brasfield & Gorrie   David Allen Company, Inc. Finishes – Under $1 Million Nature Research Center General Contractor: Clancy & Theys Construction Owner: Clancy & Theys   W.B. Guimarin & Co., Inc. Mechanical & Plumbing - $1 to $2 Million Greenville Hospital Systems Central Energy Plan Additions General Contractor: Rodgers   Kirlin Carolinas, LLC Mechanical & Plumbing - $5 to $10 Million James B. Hunt Jr. Library General Contractor: Skanska USA Building, Inc.   PowerWorks Electric Electrical - $1 to $2 Million Raleigh Convention Center Photovoltaic System General Contractor: FLS Energy


KBR Building Group Medicago USA – Vaccine Research | Production Facility & Greenhouse Other/Specialty - $25 - $50 Million Owner: Medicago USA   Clancy & Theys Construction Company Nature Research Center Other/Specialty – Over $50 Million Owner: NC Department of Natural Resources for the NC Museum of Natural Sciences   SPS Corporation *Duke Cancer Hospital Glass & Glazing - $5 to $10 Million General Contractor: KBR Building Group Owner: Duke University Health System   Precision Walls, Inc. Duke Cancer Center Finishes - $5 to $10 Million General Contractor: KBR Building Group Owner: Duke University Health System   Waldrop Mechanical Services Bosch Rexroth Mechanical & HVAC – Under $1 Million General Contractor – O’Neal, Inc.

  Waldrop Mechanical Services *Clemson Lee Hall Complex – Expansion/Renovation Mechanical & Plumbing – $2 million to $5 million General Contractor: Holder Construction Owner: Clemson University   Waldrop Mechanical Services Greer High School HVAC Replacement Mechanical & Plumbing - $5 to $10 Million Owner: The School District of Greenville County   Starr Electric Company, Inc. Cisco Systems Modernization Electrical - $20 to $5 Million General Contractor: RN Rouse   Starr Electric Company, Inc. *Wake Forest Biotechnology Place Electrical - $5 to $10 Million General Contractor – Whiting-Turner Construction Company   Adams Electric Company *Carolinas Medical Center - Central Energy Plant Electrical – Over $10 Million General Contractor – Rodgers

  Crowder Construction Company Electrical - $2 to $5 Million Lake Hartwell WTP Electrical Systems Improvement General Contractor: Anderson Regional Joint Water System

  Gaylor Inc. of North Carolina Electrical – Over $10 Million ZF Transmission Plant General Contractor: Walbridge

  Starr Electric Company, Inc. Electrical – Over $10 Million Duke Cancer Center General Contractor: KBR Building Group

ABC – Carolinas Chapter

  KBR Building Group *Duke Cancer Center Healthcare – Over $50 Million Owner: Duke University Health System   Turner Construction Company SCOR Charlotte Interior - $10 to $25 Million   Balfour Beatty Construction Duke Energy Headquarters Interiors Interior – Over $50 Million Owner: Duke Energy   Crowder Construction Company TZ Osbourne Fluidized Bed Incinerator Renovation/Restoration - $10 to $25 Million Owner: City of Greensboro   Choate Construction Company The Residences at Hotel John Marshall Renovation/Restoration – Over $50 Million Owner: Dominion Realty Partners   Cely Construction Company Inc. Berea Middle School Emergency Procurement Other/Specialty – Under $2 Million Owner: Greenville County School District

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ABC – Carolinas Chapter

Prize Possession

Solving real-world scenario brings national award to Clemson student team

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response to an RFP once a month much like what they did for the competitions.” The competing student team forms a construction firm to prepare a bid for a request for proposal, an RFP. The students develop a statement of qualifications, write a proposal and present their proposal to a panel of judges. The judges are professionals in the construction industry who play the role of owner-client. The Clemson team competed against 25 teams from across the country in three areas: estimating, safety, and project management and scheduling. The Clemson students placed third in the project management and scheduling category. The competitions touch on every aspect of professional life in the construction industry, according to Clarke. “The competition students learn to work

Clemson University team placed third in a nationwide ABC competition for construction management students. They brought home the prize, but adviser Shima Clarke, associate professor of construction science and management, says what they really brought home was some practical experience. Associated Builders and Contractors’ 12th National Student Chapter Construction Management Competition in San Antonio, Texas, was designed to mirror an actual bid process for a commercial project — complete with changing expectations. “It is very much a real world process/scenario that all of them will encounter at some point in their careers,” Clarke said. “I have had students who have graduated and have been practicing for five years or more tell me that they go through preparing a bid in

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A publication for the Associated Builders and Contractors Inc. - Carolinas Chapter

as a team, to trust one another, to think on their feet, to communicate effectively, to develop time management skills, to develop presentation skills and to respect deadlines, all of which will prepare them for work,” she said. Students worked in teams of four in an intense day-long competition, set up to run like a bid-day drill. Prior to arriving in Texas, the teams prepared a bid package that included a detailed project estimate, project management plan, project schedule, an economic inclusion plan and a site-specific safety plan. They showed up prepared to adjust their work based on changes to the project, such as site logistics. Eight finalists were chosen to present their submissions to the judges. “Competition students tell me that being on a competition team is one of the best experiences of their entire college career,”


ABC – Carolinas Chapter

Clarke said. Stacey Nicol, a senior at the time and now a graduate, led the Clemson University team. As team captain and project manager, she said the competition was challenging but well worth the effort. “Being a part of a team winning a national award was a great honor,” she said. “Taking part … means that you live and breathe the building you are working on for pretty much the whole semester. Our team put in long nights together in Lee Hall, three to four times a week on top of our other studies to prepare for this competition.” She said it also created a different kind of bond between professors and students, one that has carried over into professional life. “I see them more as mentors that I could always contact and ask for professional advice long after I graduated,” Nicol said. “They have an abundance of knowledge of the construction industry from their own experience and they supply their students with ample opportunities for networking throughout the four years you are at Clemson. I feel that winning that award has both everything to do with the great team we had and the incredible support from our teachers and local professionals who helped guide us along the way.” Others on the team were Daniel Simpson, who served as superintendent; John McLoud, who served as lead estimator; Thomas Carlson, safety engineer; and Brandon Humprhries, who served as division manager. Noel Carpenter, lecturer and Ph.D. candidate in Clemson’s Planning, Design and the Built Environment program, helped Clarke coach the team. Additional coaching from the professional community came from David DeVita, Carolina Safety Consultants and adjunct instructor at Clemson; Jack Weber, Neal Workman and Don Underwood of Trehel Corp.; Brian Gallagher of O’Neal; Jesse Goens and Angie Massey, Waldrop Mechanical Services; and Darath Mackie of Cely Construction. Other members of Clemson’s Construction Science and Management Department faculty were Dennis Bausman and Erik Simon.

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ABC – Carolinas Chapter

Profiles

Kurt Eyring

Partner/Vice President Miller-Valentine Group ABC Columbia, chair What attracted you to the construction business?  I always had a passion for assisting other people and solving their needs with solutions, and construction always allowed me to do that. I’ve been in it quite some time now, over 30 years.

What is the most significant change in the industry since you started? The most significant thing is technology and communication. I remember when drawings were done by pencil and I had to stick my phone in suction cups to receive a fax. Speed and accuracy improved and had major impact on quality. Another change is the concern about energy efficiency. It’s significant and positive.  

In what project do you feel the most pride? I’m proud of all of our projects. I’m most proud of the process we use, whether we’re delivering a big box warehouse and putting 11 acres under a roof in eight weeks or an industrial project where we have to maintain production … I think it’s our process in helping customers solve real estate needs. … I’m also very proud we have been recognized as General Contractor or of the Year by ABC of the Carolinas. It’s representative of how we do business and how we support the initiatives of ABC.  

What is the most difficult aspect of the construction business?

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Change is constant in the construction industry but some things stay the same

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ots of the words mentioned so often by professionals in the construction industry weren’t heard so much 20 years ago: technology, energy efficiency, team building, communication, recycling waste. But some of the others have always been around: customer service, pride, honor, safety, craftsmanship. Here, we talk about trends in construction with three movers and shakers in the Associated Builders and Contractors Carolinas Chapter, who just happen to be leaders in the three regions of South Carolina.

Today they are market driven. Our particular industry has been down since ’08 and construction is usually longer to recover. The biggest challenge in the recovery is people resources. During the downturn many people in the trades pursued other careers. We’re spending a lot of time training new people and working with cooperative education to get people trained for the trades. And ABC is big supporter of helping us get people trained.  

What excites you about the future of construction?  Some of the changes are ongoing. Exciting things are technology, things like smart buildings. A building built today consumes one-fifth the energy of a building built in 1970. Also, the path between physical construction and managing it are much more cohesive. The process involves more factory components than field built. It’s much more sophisticated today.  

If there is one thing you would want people to understand about the construction business, what would it be? Construction is not just another dirty job. It’s actually masterful orchestration by many people with many talents — a lot of products, tools and different ideas. It’s rewarding to see the pride in the people that make that happen and the excitement of the customers who ultimately use what they produce.

A publication for the Associated Builders and Contractors Inc. - Carolinas Chapter


Chris Moore

What attracted you to the construction business?  Family. One granddad was an electrician; one was a plumber. My dad was a general superintendent. I grew up on a construction site. After receiving my electrical engineering degree from Georgia Tech, it only made sense to go to work for MetroPower. It didn’t hurt that I co-oped with them my entire college career.

What is the most significant change in the industry since you started? Many things come to mind: our focus on safety, waste elimination, prefabrication. The speed at which we operate. Expectations for instantaneous accessibility, response, estimates and construction. Reduction in skilled workforce.

proud because each is unique … each has its own story as to why we are doing that work. For example, we may be awarded a job by referral, or relationship with the end-user or general contractor. We may be awarded the job because of schedule or ability to provide appropriate staffing. We may be awarded the job because of the technical expertise of our staff. If I had to pick just one, it would either be the sign installation near Patewood Drive, which was our first job after arriving in Greenville, or a manufacturing facility in Peachtree City, Ga. That job was my first project after graduation. I designed it, managed the electrical construction, and was even foreman for a while.

ABC – Carolinas Chapter

Operations Manager Carolina Power Upstate Chair, ABC

What is the most difficult aspect of the construction business? Attracting young talent to our industry.

What excites you about the future of construction? The opportunities for young people to take on leadership roles.

If there is one thing you would want people to understand about the construction business, what would it be?

In what project do you feel the most pride? Each project we build or service repair we make are reasons to be

The construction industry is an honorable profession. . . . Our industry is an honorable means to provide for our families and contribute to our community. It is not a last resort for people that couldn’t make it in other industries.

 

Russ Robinson

What is the most difficult aspect of the construction business?

President/Owner Port City Concrete Lowcountry Vice Chair, ABC

Right now it’s making a profit with the increase in competitors — we have 10-11 in Charleston — and trying to make money with multiple competitors in a tough economy.   

What attracted you to the construction business?  I got into it after college. I worked for General Materials for 20 years and then I started Port City Concrete in 2008.  

What is the most significant change in the industry since you started? The way we do business. It was based on relationships. Now more and more it’s based only on price.  

What excites you about the future of construction? The economy. I see more construction on the horizon. I’m very excited about residential and commercial projects I see coming up — the Boeing expansion and other projects coming on board. I feel good about the local economy.  

If there is one thing you would want people to understand about the construction business, what would it be? All concrete is not alike. Some people think if it’s gray and it gets hard, it’s good. And it’s just not true. A good finishable mix is just not the same as everybody else’s. We have a special blend that we think is second to none in our market.

We started (the company) in ’08 in the worst times since the Great Depression and we have managed to hang on and remain profitable and we’re one of the top tier companies in the market in our business. And I’m very proud of that.

www.abccarolinas.org

What aspect of your business gives you the most pride?

A publication for the Associated Builders and Contractors Inc. - Carolinas Chapter

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I would say we pride ourselves on good service and good quality concrete. We have competitors who try to hedge to meet expectations, but we have always exceeded expectations. We take a lot of pride in that and the way my trucks look and our attention to the delivery schedule.

How have you adjusted to a challenging economy?


ABC – Carolinas Chapter www.abccarolinas.org

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A publication for the Associated Builders and Contractors Inc. - Carolinas Chapter


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Aerospace in s.c. Six Dreamliners sat on the flight line at Boeing S.C. as Gov. Nikki Haley and others praised the company’s decision to expand in North Charleston. (Photo/Andy Owens)

Boeing expansion validates South Carolina By Matt Tomsic, Staff Writer

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S 26

en. Hugh Leatherman reached across the rostrum on the S.C. Senate floor around noon April 9 to submit a bill to issue $120 million in bonds for site development needed by the Boeing Co., which plans to add 2,000 jobs and invest another $1 billion during the next eight years. “We are going to be talking about something extremely important,” Leatherman said from the Senate floor before he highlighted the job creation statistics. “(One thousand) of those will be engineers. In addition to that, another 1,000 jobs will be information technology. Boeing is saying that this will be their information technology center of excellence.” About the same time, House Speaker Bobby Harrell introduced a similar bill. Less than 10 days later, the Senate and House had both passed the bill, sending it to the

governor’s desk for her signature. “From the start, this has been a true partnership between Boeing and South Carolina,” Harrell said in a release announcing the legislation. “As a legislature, it’s our job to create an environment that fosters economic growth so the private sector can do what government can’t, create sustainable new jobs. These are exactly the kind of highly skilled, high paying jobs our state wants. Needless to say, this is a great infrastructure investment for our entire state that will create exciting new opportunities for our citizens and will provide our state with huge returns.”

‘Good to us’ Jack Jones, vice president for Boeing South Carolina, said the company anticipates those 2,000 jobs to be more technical, including IT workers and engineers,

though the aerospace giant could hire more manufacturing technicians as well. Jones said the additions could be incremental or may come in chunks, noting Boeing reached its employment goal under the last bond package within three years. Jones said Boeing South Carolina will continue working on 787s and doesn’t have any plans to add any of the company’s other programs. “I think this definitely shows we’re committed to this state,” Jones said. “They’ve been good to us, and we definitely feel we’ve been good for them. This is just further validation that we think we’ve got a good business model moving forward.” In March, Boeing announced plans to reshuffle some of its IT workforce to North Charleston, though at the time, the company didn’t have employment projections. “We’re in the process of evolving how


Land equivalent

3.99

Boeing purchased 320 acres from the Charleston County Aviation Authority. The acreage equals about 80 Joe Riley Stadiums or about 49 Marion Squares.

acres

6.51 acres

The Joe

Aerospace in s.c.

we support all different areas of Boeing,” said Andrew Favreau, spokesman for Boeing IT communications. “We do have IT employees in Charleston right now, but we will be relocating and also hiring employees to support the different centers of excellence.” Favreau said the company is opening more than 50 centers among its locations in Puget Sound, St. Louis and Charleston. About 50% of the company’s IT work will be moved to those centers, while the remaining half will be located with business partners and external customers, Favreau said. “The specialization of each center will dictate the type of work that’s done there,” Favreau said, adding the department employs about 7,900. “We do anticipate a net reduction of about 5 to 10% of our IT employees in the next few years. And that number includes attrition (and) retirements.” The announcement also came soon after a land sale agreement between Boeing and the Charleston County Aviation Authority. In March, the aviation authority board

Marion Square

Infographic: Jean Piot

voted 8-3 to approve the sale price of $12.5 million. Board Chairman Andy Savage and board members Larry Richter and Mallory Factor voted against the approval. “We believe that the average appraised price as agreed to by the parties provides the accurate fair market value return to the (aviation authority),” said Tim Deaton, spokesman for Boeing, in an email. “While

Boeing does not have specific plans for the property, the acquisition will provide strategic land for possible future use.” In May, the company announced it is locating about 20 employees in North Charleston who will design a portion of the 737 MAX, and an aerospace analyst said the See BOEING, Page 28

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Aerospace in s.c. The Boeing Co. has put about 20 employees in North Charleston who will be responsible for designing a portion of the 737 MAX. (Photo/Boeing Co.)

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BOEING, from page 27

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Lowcountry could be in the running for work on the 777X, a derivative of the 777 that will have composite wings. “That’s the first move outside the 787 program,” said Jones, general manager and vice president of Boeing South Carolina. “So that’s significant. We looked around for areas that had the right skill and discipline. This area definitely has it. We had a pretty good infrastructure already developed; (it) made all the sense in the world to continue to grow the talent.” Saj Ahmad, an aerospace analyst, said assembly locations could be announced as late as 2014, and South Carolina could be in the running to attract the work. “Given South Carolina’s expertise growth in composite technologies, they make a valid business case for producing the 777X’s composite wings,” Ahmad said in an email. “And the other key factor is South Carolina itself. Boeing didn’t select South Carolina for the 787 for no reason. It’s because they want to lessen the default

‘right’ that Washington gets assembly and wants each site to prove they are worthy candidates.” Ahmad noted that moving a fraction of 737 MAX work outside Washington state reinforces the competition. “This should give you an inkling as to Boeing’s long-term thinking,” Ahmad said. “That they are happy to send 737 MAX work away from Washington means that 777X is by no means assured Washington exclusivity.”

‘Get excited’ Local, state and federal leaders praised the commitments made in the second phase. “Today’s decision validates my belief South Carolina is the best place in the country to do business,” said Sen. Lindsey Graham. “This is huge news for our economy. It also shows that Boeing made the right decision to locate in South Carolina. I look forward to the continued strong, mutually beneficial relationship between Boeing, the local workforce and the state of South Carolina in years to come.”

At the SpeedNews aerospace manufacturing conference in Charleston, Secretary of Commerce Bobby Hitt said the bond bill is a progression from the original $250 million bond bill passed when Boeing first decided to open a second assembly line in South Carolina. “What this is today is a validation of all the decisions made by Boeing, made by the state four or five years ago,” Hitt said. Also at the aerospace conference, Gov. Nikki Haley said the bond bill was team South Carolina at work. “This is family,” Haley said, adding the expansion wouldn’t have happened without the work already done by Boeing’s roughly 6,000 employees. “When family does well, we get excited.” Haley said the state can’t cite a statistic for the benefits Boeing has brought to the state and to the Lowcountry. “I don’t think there’s any price you can put on (it),” Haley said. “This was priceless in terms of making sure the aerospace industry was going to call South Carolina home.”


Automotive Industry in S.C.

The Long

Haul S.C. automotive industry looks down the road

By Liz Segrist, Staff Writer

30


Automotive Industry in S.C.

T

he South Carolina automotive industry is poised

state the No. 1 tire exporter nationally, and it is on track to

for its next step – and capacity increases will help

become the No. 1 tire producer as well.

determine whether future developments reach their potential. The Palmetto State, often the poster child for

“We have become very good at making things related to the automobile,” S.C. Commerce Secretary Bobby Hitt said. “South Carolina is now viewed very much as a suc-

the resurgence of U.S. manufacturing, is churning out cars,

cessful place for the automotive industry to do business,

parts, tires and, most recently, transmissions. It has the

both for OEMs (original equipment manufacturers) and

opportunity to recruit another car manufacturer or engine

suppliers.”

plant in the future. It also has the ability, as well as the need, to recruit more suppliers.

Engine production could be the S.C. auto industry’s next step. Experts note that the state needs to at least double

“We never stop looking,” S.C. Gov. Nikki Haley said.

its car manufacturing capacity before engine production

“We will continue to recruit for the automotive industry on

can come into play – and another mega car manufacturer

every front.”

could the ticket. “It’s not a question of can we build en-

BMW is gearing up to launch its X4 model sometime in

gines or can we build another plant here, it’s more a ques-

2014. ZF Transmissions recently built its transmissions

tion of when will we,” Hitt said. “At a point in time when

manufacturing facility in Laurens County. Production by

the volume is right, I think there’s a high probability. We’re

Michelin, Bridgestone and Continental Tire has made the

capable of doing whatever the industry needs us to do.”

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Automotive Industry in S.C.

What’s next?

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An engine plant could be a logical next step to accompany the automotive parts and cars already produced in the state. “Engine production is definitely a possibility in South Carolina, but you really need a high volume of cars to justify engines.” said Sherry Coonse McCraw, BMW’s vice president of finance and production control. “It makes sense to build them here and ship them from here.” Engine plants generally produce 450,000 engines per production line, compared to a car plant’s average capacity of producing 250,000 cars for one line, said Kristin Dziczek, labor and industry group director with the Ann Arbor, Mich.-based Center for Automotive Research. The newest X4 model will up BMW’s Greer capacity to 350,000 units per year. “Does a company have a need for a local engine plant or are they doing quite well producing them in Germany or Japan and then importing them?” Dziczek asked. “South Carolina could produce engines, but an engine plant would have to support more than one car assembly plant.” Engines are generally produced by the automakers themselves, at facilities known as captive plants, such as Toyota’s West Virginia engine plant, which supplies its Tennessee assembly plant. The opportunity for engine production in South Carolina could be an engine supplier model, in which an engine plant would supply multiple automotive manufacturers, similar to ZF supplying transmissions to multiple companies. In addition to high volume, an engine plant would require a high-tech operation, a huge investment and considerable technical training, Coonse McCraw said. “ZF Transmissions is gearing up its capabilities to produce transmissions, which demonstrates how far we have come in the last 20 years to manufacture very complex components,” Hitt said. “In the next 20 years, I don’t see any limits for us to produce for the automotive industry.” In addition to automotive manufacturing, opportunities exist in the growing areas of connectivity, sustainable technologies and powertrains, such as hybrids and electric vehicles, said Suzanne Dickerson,


Increasing capacity In the 1990s, the textile industry was the primary fabric of the state’s economy, with a budding automotive industry on the fringe. BMW decided to locate its plant in Greer in 1992, serving as a catalyst for the industry that now employs 32,000 people in South Carolina, according to S.C. Commerce Department data. BMW, which now employs more than 7,000 people, is South Carolina’s only car manufacturer – and it’s associated with a significant economic impact and substantial hometown pride. “Automakers’ plants are not very dense by design,” Dziczek said. “Practically every automaker wants a 100-mile radius to draw their labor market from and most Southeastern plants have these big bubbles around them.” There are some exceptions to the rule however, such as the Honda, MercedesBenz and Hyundai plants in Alabama and the Volkswagen and Nissan plants in Tennessee. One way to bump up automotive capacity in South Carolina, therefore attracting more suppliers, could be to recruit another automotive plant to the area, Dziczek said. “That’s the challenge of not being dense,” Dziczek said. “Suppliers that come here need enough business from the company that drove them here, or they have to spend time developing relationships with other automakers. You can’t just supply one mother ship.”

locally for its new facility, which has the capacity to produce 800,000 of its eight- and nine-speed transmissions by 2016, the majority of which have already been sold. South Carolina’s automotive industry already has a robust supplier base, such as Accuride’s wheel maker in Camden, Schaeffler Group’s bearings production in Chesterfield and Koyo’s bearings production in Blythewood, among many others. ZF President and CEO Lu Reckmann said the growth potential for suppliers to locate in South Carolina is huge. The Upstate SC Alliance is actively

recruiting these suppliers to the area, primarily from Europe and Asia, CEO Hal Johnson said. Haley said it’s important to make sure that the competition stays healthy for suppliers. “We would benefit from having a higher quantity of suppliers,” Coonse McCraw of BMW said. “We have lots of good suppliers in the United States, but not so many have located in the Southeast. The ones that have located here have done very well, and it would make us more competitive and increase capacity to have more supplier options.”

Automotive Industry in S.C.

CU-ICAR’s international business development director. Research and development of these technologies is ongoing at the Clemson University International Center for Automotive Research (CU-ICAR), which houses 20 automotive companies on its Greenville campus.

Calling all suppliers www.scbizmag.com

Many manufacturers are actively recruiting more suppliers to localize their supply chain, and suppliers are working to ensure there’s enough business to justify the move. “It’s the situation of the chicken or the egg,” Dziczek said. ZF needs more die-casting suppliers

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Automotive Industry in S.C. www.scbizmag.com

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McCraw drives expansion at BMW By Liz Segrist, Staff Writer

S

herry Coonse McCraw remembers driving down the highway in 1992 and seeing the billboard that read: “The Future Home of BMW.” She knew that she wanted to be a part of the change heading to the region, and in 1993, she started with BMW as its 39th employee in Greer. Since that time, McCraw, a North Carolina native with an engineering degree from N.C. State University, has helped lead every BMW expansion in Spartanburg County. McCraw pays attention to the details. The assembly line, equipment, building design and processes receive as much consideration and planning as the window types and the floor colors. “We’re trying to make a difference out of the buildings,” she said. “It might sound simple, but the building designs can really make a difference with the work environment.” In addition to being recently appointed BMW’s vice president of finance and production control, McCraw is leading BMW’s latest expansion in preparation for its newest model – the X4 Sports Activity Vehicle – scheduled to begin production sometime next year. She is currently leading the paint and body shop expansions, which the German car producer invested $900 million into with plans to hire up to 1,000 employees at the facility by 2014. The ongoing construction for the X4 model is more comprehensive and faster than previous expansions, she said. The paint shop expansion will finish by the end of 2014 and the warehouse expansions are almost complete. “We always put together long-range development criteria for each plant and we grow in that direction pretty fast,” McCraw said. “The long-range plans are supposed to take place over 15 to 20 years, and they’ve been happening in three to five years.” Before the X4, the plant had undergone four major expansions since 1994, producing six different BMW models and their variants: 318i, Z3, Z4, X5, X6 and X3.

Sherry Coonse McCraw Vice president of finance and production control, BMW Hometown: Granite Falls, N.C. Education: Engineering degree from N.C. State University. Family: Her husband, Kevin, also works at BMW. They have a 7-yearold daughter, Maris. Travels: Lived in Munich, Germany, for about three years while working with BMW.

McCraw has had a hand in all of them, working with her team to study thousands of plant layouts to determine the most efficient, sustainable and desirable designs. She travels back and forth between Munich and Greer, working with the German engineers on the layouts, equipment, processes and assembly. Then her team goes back to the drawing board. “You think of something, you put together your plan and you fight for it,” McCraw said. “It’s fun to think about how things are going to look and to see how fast it can be done.” She spearheaded the one-line conversion that enabled the Z4 and X5 to undergo final assembly on a single assembly line, which increased capacity. The plant shut down for a little over two months for a complete redesign – and McCraw’s team had to work quickly. “I think that’s what’s unique about BMW. If you come with a plan, people will follow it,” McCraw said. “With this expansion, there was the excitement of ‘Let’s try it.’” BMW grew throughout the recession, but it felt the weight of the financial crisis while trying to increase X3 capacity at the North Assembly Plant. The team had to expand with less money. “The thing I learned from that project is that things can be done differently,” Mc-

Craw said. “Even if your mind is completely focused on one thing, you can change it pretty fast and come up with something better.” BMW’s future challenge will be finding enough space. BMW is currently using 80% of its 1,100-acre campus. Companies want to decrease inventory and move products out of their facilities faster, but they need space for secondary functions as well, such as places to eat, parking and restrooms. The S.C. Inland Port being constructed down the road from BMW will help alleviate some of the space issues. As the inland port’s anchor tenant, BMW will move much of its inventory, containers and trailers to the inland port. McCraw expects continued growth at the Upstate operation. Each BMW location competes globally for each expansion. McCraw works with her team to make Spartanburg County and the United States stand out. “We can build more now if we had the capacity, so it’s really a question of which products do we want to bring to the Upstate to build, while also considering the expansions of our current products,” McCraw said. “There’s a certain American spirit that feels that….we’re always able to find a way. There’s always a willingness to try.”


EDUCATION www.scbizmag.com

36

New Schools for New Skills S.C. students get to work on STEM education By Mike Fitts

M

any adults get sweaty palms at the thought of a group of high school students operating a motor vehicle. But teacher Martin Cwiakala is proud to climb aboard a vehicle built by his students and fire it up.

Cwiakala hits the motor – an electric leaf blower – and the student-made vehicle rises off the classroom floor. With a push, Cwiakala can glide around the area riding on the cushion of air that keeps aloft the hovercraft, built by students who seem to have already mastered aeronautical engineering. At the new school, the Center for Advanced Technical Studies in Lexington/ Richland School District 5 near Columbia, students from several district high schools are learning about such key fields as aerospace, medical technology and alternative energy. The center is just one of numerous new programs across South Carolina that are giving the next generation hands-on experience in the STEM fields – science, technology, engineering and mathematics. These innovative new programs from across the state have several things in common. Hands-on work by the students is emphasized, whether it is Cwiakala’s


Students Sam Renick and Manning Lumpkin test the photo sensitivity of the solar panels they made in their Alternative Energy class at The Center for Advanced Technical Studies. (Photo/Jeff Blake)

their own learning, with teachers getting to coach them as they go. One more thing these educational efforts have in common: Businesses are involved in design of the curriculum and often are excited about cooperating, educators say.

In the Charleston area’s EDGE effort, business leaders are part of the oversight committee and head up councils related to their fields, Raiford said. The program also brings business people and educators to the same table. This interaction allows teachers to adapt examples from business to their curriculum, giving student work a more real-world feel. Boeing is one of three sponsors for a grant supporting project-related learning through EDGE, bringing educators to business sites for hands-on experience. The program already has drawn a second grant. Michelin has been among the businesses to support the new center in District 5, Gates said. The tire maker, which operates a manufacturing facility in Lexington County, sees the center as a way to encourage the kind of technical expertise it needs. A.J. Whittenburg’s Lego Team was one of three in North America selected to attend a major competition in Germany, but how to get there? Engineering and construction firm Fluor was the first of several companies to step up and sponsor the seven fourth-graders’ trip, Thomason said.

EDUCATION www.scbizmag.com

students building a working hovercraft or younger students at A.J. Whittenberg Elementary School in Greenville making model bridges and testing their strength. This kind of project-based learning engages students and prompts goal-oriented thinking, said Al Gates, assistant director at the center in District 5. “It’s the best play since kindergarten.” These programs offer a curriculum that ties many academic subjects into learning in STEM fields. At EDGE Academy programs in Charleston, students do presentations or research papers in classes such as social studies and English that connect directly into engineering work or other focus areas, said Suzi Raiford of the Education Foundation, a program of the Charleston Metro Chamber of Commerce. EDGE stands for Education and Development for Graduation and Employment, Raiford said. The goal is to get young people through school and into the workforce with the right skills to succeed. “Our bottom line is to improve graduation rates,” Raiford said. The special areas where EDGE is intended to have an impact are in the STEM fields, health sciences and hospitality and culinary/ tourism – areas that are key components of the Lowcountry economy. Greenville’s A.J. Whittenberg is in the third year of offering a primary school education with a curriculum emphasizing engineering. Opened as a K-2 school, Whittenberg is expected to enroll about 550 students in grades K-5 next fall. It’s a successful magnet program drawing a diverse student population to an area where more than 90% of the neighborhood students receive free or reduced lunch, notes Principal Margaret Thomason. These young students are learning skills such as teamwork and experimentation as well as how to correct their mistakes and try again, Thomason said. “We don’t say we’re trying to create a bunch of little engineers.” District 5’s Center for Advanced Technical Studies, which opened this school year, offers laboratory classrooms that resemble a workshop floor. Parked in the middle of classrooms may be a tractor, solar panels or even a trebuchet, a medieval catapult built by the students. They do the work and drive

37


S.C. DELIVERS

Ports, Logistics & Distribution

The MSC fleet includes post-Panamax ships that call on the Port of Charleston. (Photo/Leslie Burden)

Some worry over East Coast’s ability to handle larger ships By Matt Tomsic, Staff Writer

L

arger ships are expected to call on the East Coast for several reasons — including the Panama Canal expansion — but some companies are concerned

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about East Coast ports’ abilities to handle those larger

38

CEO Jim Newsome sign Lt. Col Jason Kirk and ports July 2011, kickstarting a a cost-sharing agreement in and effects of deepens efit study examining the ben oto/Leslie Burden) ing Charleston Harbor. (Ph

ships, panelists said recently at an international maritime conference.

See SHIPS, Page 40


Peter Tang-Jensen, senior vice president of ABS, said ship sizes have tripled since 2000. Carriers introduced the first postPanamax ships in 2000, and those ships carried 6,000 20-foot equivalent units, or TEUs, a common industry measurement for the size of a container. In 2013, carriers are expected to add “ultra-large” ships, capable of carrying 18,000 TEUs. His remarks came during TPM 2013, an international maritime conference organized by the Journal of Commerce. At the Port of Charleston, ships too large for the Panama Canal can dock during high tides, and ports officials are working with the Army Corps of Engineers to deepen the harbor, which could allow 24-hour access for post-Panamax ships. Soren Skou, CEO of Maersk Line, said the largest ships will be deployed to the Asia-Europe trade routes and the ships currently sailing those waters — including many that are larger than ships calling on the East Coast now— would be moved to other routes, causing a cascading effect that increases the size of ships calling on other ports around the world. Skou highlighted another trend that’s sending larger ships to the East Coast. In 2008, 90% of ships calling on East Coast ports traveled through the Panama Canal. In 2013, that figure fell to 60%, while the remaining 40% traveled to the East Coast through the deeper Suez Canal. “This trend is going to continue,” Skou said. “We can’t figure out how to make a profitable service from Asia to the U.S. East

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S.C. Delivers

SHIPS, from page 38

40

Photo/Leslie Burden

Containership SIZE Panamax (circa 1990) 4,500 20-foot-equivalent units, or TEUs Post-Panamax (circa 2000) 6,000 TEUs Super Post-Panamax (circa 2005) 9,000 TEUs New Panamax (circa 2010) 13,200 TEUs Ultralarge (circa 2013) 18,000 TEUs

Coast via the Panama Canal.” The Panama Canal, meanwhile, is expanding to allow larger ships through, and the project is expected to be completed in 2015. It’s also expected to open the East Coast to larger ships, but some companies are concerned about the larger ships’ ability to enter East Coast ports. “As the canal opens in a couple of years, there’s some serious problems on the East Coast in terms of the ability of several of the eastern ports to handle the large ships,” said Rick Smith, vice president of global transportation for Sears Holdings. During his presentation, Smith cited draft depths in Savannah and New York, asking if big ships will be able to get into those ports, even though Savannah, and others, are deepening their harbors in anticipation of larger ships calling on their ports. The Georgia Ports Authority is deepening its harbor to 48 feet from its current

depth of 42 feet, but the project faces legal challenges. In Charleston, the S.C. State Ports Authority is also in the process of deepening its harbor, and the Army Corps of Engineers has begun to study the effects of deepening the harbor. It has chosen vessels with drafts of 48 feet and 50 feet to simulate changes to the harbor as part of the deepening project. Charleston Harbor’s current depth is 45 feet, and the harbor can handle ships with deeper drafts during high tide. The Army Corps Charleston District has expedited the timeline to complete the study, which must be done before the corps can consider deepening the harbor. But Lt. Col. Ed Chamberlayne, commander of the Charleston District, said the project could be delayed because of civilian employee furloughs required by sequestration, a set of automatic spending cuts enacted by Congress that went into effect in March.


Our students move ahead with Michelin internships.

Global Supply Chain Management Program

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S.C. Delivers

Port

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By Matt Tomsic, Staff Writer

Labor negotiations compete with history LONG BEACH, Calif. — Dockworkers and ocean carriers have built decades of history into the recent labor negotiations affecting workers at East and Gulf coast ports, including the Port of Charleston. In February, the International Longshoremen’s Association and U.S. Maritime Alliance reached a tentative labor agreement, which has since been ratified. The longshoremen’s association represents workers on the East and Gulf coasts, while the maritime alliance represents ocean carriers. Ports authorities aren’t parties to the negotiations. Dockworkers and ocean carriers had been negotiating the new labor contract since September, when the contract was set to expire. They extended it twice before reaching agreement in February. Tony Scioscia, vice president of labor relations for Maersk Agency USA, described the relationship between the ocean carriers and their workforce during TPM 2013, an international maritime conference in Long Beach. Scioscia has worked with longshoremen since the 1960s, when labor relations where chaotic because of the conversion from breakbulk shipping to containerization. Scioscia said the 1960s and 1970s were also a time when the East Coast’s International Longshoremen’s Association and the West Coast’s International Longshore and Warehouse Union were jousting with other unions for work on the waterfront. “The very structure of the industry was undergoing radical change because of the rapid growth and expansion of containerization,” Scioscia said. “Each of these changes impacted labor and its relationship with management.” The changes redesigned the traditional longshoremen’s job, diminishing the amount of grunt work needed on the waterfront. In 1965, dockworkers and ocean carriers reached an agreement. “Focus was placed on preserving jobs and employment security,” Scioscia said. “The agreement created a guaranteed annual

More than 2,000 people attended the Journal of Commerce’s TPM 2013, where panelists discussed the history behind labor negotiations between East Coast dockworkers and ocean carriers.. (Photo/Matt Tomsic)

income, which basically said if you showed up for work and there was no work, you got paid. These changes resulted in tumultuous times.” Four strikes halted work on the East Coast. The longest strike, in 1962, lasted 90 days, while the shortest lasted 50 days. On the West Coast, dockworkers struck for 134 days. During the 1970s through 1990s, containerization continued to change the maritime industry. “As the size of the ships became ever larger, the incentive to avoid any kind of a labor disruption became greater,” Scioscia said, adding the driving force for ocean carriers was to fill ships and keep them operating, which would be jeopardized by any strike. “Bargaining on both coasts was stable with very few disruptions. However, this period of labor peace came at a price.” During that time, some U.S. ports saw costs increase and productivity decrease compared to other international ports. “Responsibility for this result was not the longshore unions but rather management,” Scioscia said. “The cost of labor was a minor factor in the overall cost of providing a container shipping service. As a result, management didn’t really bargain but conceded to union demands that diminished the ability to effectively manage the labor force.” In the 2000s, ocean carriers and dockworkers clashed over automation and other technology. On the West Coast, the two sides

reached a compromise over automation — a sticking point in the East Coast negotiations — without a work stoppage. “Management and labor must redefine job descriptions,” Scioscia said during the maritime conference. “And most importantly, ensure the training of the new longshore workers so they have the skillset to perform these new functions.” The last East Coast contract began Oct. 1, 2004, and received a two-year extension in 2009. The longshoremen’s association president has said a key battle in the negotiations is to prevent a cap on container royalties, while the maritime alliance has proposed capping container royalty payments at 2011 levels for current recipients but making new employees ineligible for the payments. Weeks after the tentative agreement in February, the dockworkers union provided some contract details. The contract was later tatified. The new contract will run through September 2018; it will provide a $1 per hour wage increase in October 2014, another $1 per hour wage increase in 2016 and a third $1 per hour wage increase in 2017, according to the longshoremen’s union. New employees will start at $20 per hour,. Container royalties will be split evenly between the maritime alliance and the dockworkers, and there is a minimum guarantee of $211 million in container royalties for each year of the contract.


By Chuck Crumbo, Staff Writer

Transportation, Distribution & Logistics

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he transportation, distribution and logistics industry contributes to 47,000 direct jobs in South Carolina and generates $1.6 billion a year in wages, according to statistics compiled by the state Department of Commerce. Fifteen projects involving companies in the TDL industry were announced in 2012, accounting for 2,200 jobs and a $370 million investment, Commerce Secretary Bobby Hitt said recently at the third annual TDL Summit in Columbia. Overall, the 2,600 firms in South Carolina’s TDL industry generate $3.5 billion in total sales, said David Clayton, director of Commerce’s research division. Within the industry, trucking ranks No. 1, generating more than $1.4 billion. That compares to the state’s total domestic product of $165 billion. One of the challenges in breaking out

economic impact statistics of the TDL industry is that it’s integral to everything going on in the state, Clayton said. “You can’t have commerce without transportation.” Logistics, particularly its network of interstate highways, is a strong selling point for South Carolina. A survey of corporate chiefs by Area Development magazine ranked highway accessibility as the most important factor in locating a manufacturing facility. Shipping costs ranked No. 11; proximity to a major airport No. 21; rail service No. 25; and ocean port accessibility No. 26. Clayton noted that two-thirds of all available industrial sites — from five to 10 acres to a few thousand acres — in South Carolina are within seven miles of one interstate highway, and half are within seven miles of two interstates. Five years ago the standard used to be

within five miles of an interstate, Clayton said. That standard had to be expanded to seven miles because the prime manufacturing space has already been acquired. About 90% of all sites are within an hour of a commercial airport, offering ready access to passenger and freight service. “Logistics means jobs,” Hitt said. “I don’t care what sector we’re talking about, whether it’s manufacturing, service, medicine, you name it, it all has to move, and it has to move around as quickly as possible.” The quality of the transportation, distribution and logistics industry, commonly called TDL, is a key cog in the state’s economic engine. It also is an important factor in a company’s decision to build or expand a plant in South Carolina, Hitt said. “We don’t need to be as good as anybody else,” Hitt said. “We need to be better.”

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47,000 owe jobs to TDL industry in S.C.

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S.C. Delivers

Manufacturing

By James T. Hammond, Staff Writer

Tognum unveils $40M research facility in Graniteville GRANITEVILLE, S.C. – Tognum America Inc. has opened a $40 million research and development facility that can simulate climate, altitude and working conditions for its diesel engines anywhere in the world. Joerg Klisch, vice president for operations in North America for Tognum, said the new research facility marks another step in the company’s “exodus” from Michigan, where it still maintains its North American headquarters. Tognum employs 270 people in its MTU-brand engine assembly and R&D facilities at Graniteville in Aiken County. About 20 of those are dedicated to the research and development facility, Klisch said. At the engine-testing facility, the air quality and climate conditions can be made to replicate the high mountainous mines of Chile, the cold tundra of the Arctic or a dry desert, Klisch said.

Visitors to Tognum’s Graniteville plant saw one of the large Series 4000 diesel engines that are built at the plant. (Photo/James T. Hammond)

The primary driving factor behind Tognum’s engine development, Klisch said, is the U.S. Environmental Protection Agency’s

clean air exhaust emissions requirements. Tognum aims to meet or exceed the clean air standards in the United States, he said,

SSA Cooper

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Full-Service Stevedoring & Terminal Operation Breakbulk Handling Specialists

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Look for us worldwide including all major and minor ports in the U.S.

Charleston Office:

(843) 971-2900 PO Box 1048, Mt. Pleasant, SC 29464 in Savannah (912) 652-0599

in Jacksonville (904) 665-0400


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adding that most other nations are expected to follow the American lead on those standards. By setting the bar high, Klisch said, his company’s engines will remain competitive well into the future. Both Klisch and Tognum America Chairman Joerg Schwitalla emphasized that the Aiken County facilities represent a longterm commitment to the location, and a major geographic reorientation for the company. While no one would say whether or not the headquarters operation might one day join the manufacturing team in Aiken County, they did point out that the administrative center they built at the Graniteville plant can accommodate twice as many as the 40 people who currently work there. Company spokesman Gary Mason said that one reason the company located in Aiken County was to be near a major port such as Charleston. “For us, it’s a perfect place,” Mason said. Tognum’s parent company, Tognum AG, is based in Friedrichshafen, Germany. Tognum AG is 50% owned by German automaker Daimler and 50% owned by British engine maker Rolls Royce.

Joerg Klisch, vice president for operations in North America, gives a tour of the Tognum R&D facility at Graniteville in Aiken County. (Photo/James T. Hammond)

The company imports engine blocks from the parent company’s factories in Germany, and exports about 40% of the engines assembled in Graniteville to customers worldwide. The diesel engines, especially the series 4000 giants, are taller than a man, and the size of a car. The engines are used in commercial marine applications, mining, oil and gas exploration and production, backup

and primary power, and to power rail locomotives. Tognum is the leading supplier of marine engines to the U.S. Coast Guard, Mason said. The Tognum plant can produce eight Series 4000 engines per day and five Series 2000 engines per day. In its current oneshift operations, the plant turns out about 2,000 of the Series 4000 engines a year.

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S.C. Delivers

Manufacturing

By Chuck Crumbo

Caterpillar drawing suppliers to region

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wo Illinois companies’ plans to locate manufacturing facilities in Anderson County offer the first signs of how South Carolina could benefit from having a Caterpillar plant just across the border in Georgia. On April 8, officials gathered at the Anderson Civic Center to welcome McLaughlin Body Co., a family owned company that plans to invest $22 million and create 250 jobs over the next five years. Three days later, SMF Inc., a metal fabrication company headquartered in Minonk, Ill., announced it will invest $5.8 million and create 146 jobs over five years. Based in Moline, Ill., McLaughlin said it’s locating in Anderson to be near Caterpillar’s new 850,000-square-foot facility in Athens, Ga., which is fewer than 70 miles away. “The search for a new location was extensive, and we felt South Carolina and Anderson County was the best choice for us,” said John Mann, president of McLaughlin. “Our new location provides our company an excellent opportunity for business development in this region of the country.” Anderson’s strengths include a “highly motivated, available workforce, a good physical location to serve customers, especially customers in the Southeast who desired a world-class metal fabrication company like ourselves,” said Mann, whose

“South Carolina provides an excellent location for us, a great business environment and the workforce talent we need.” Brian Brown

president, SMF

company is building its first plant outside of Illinois. “At the same time, we had to find well-situated supply chain companies with advantageous logistics and infrastructure.” SMF Inc., which provides metal fabrication services, including torch and laser cutting, sawing, forming, machining, welding, painting and assembly, expects to begin operations in early July.

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$2.4 Billion

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Estimated total yearly economic impact of Caterpillar’s Georgia plant. Source: Younger Associates

“Our company continues to expand and we look forward to beginning our operations at our new site in Anderson County,” SMF president Brian Brown said. “South Carolina provides an excellent location for us, a great business environment and the workforce talent we need.” When it announced plans to build in Georgia, Caterpillar said it was moving production from one of its two plants in Japan back to the U.S. The Peoria, Ill.-based company added that the Athens site allowed it to use either the Port of Savannah or Port of Charleston to ship products to overseas markets. The Caterpillar facility — expected to employ about 1,400 — should be a boon to local and regional economies, said Sharon Younger, president of Younger Associates, a market research and economic development firm headquartered in Jackson, Tenn. “Based on the production capacity of the new plant, I estimate the total economic impact to reach $2.4 billion per year as key suppliers locate in the region and the regional supply chain matures,” Younger said. By comparison, the annual economic impact of BMW, which has a manufacturing plant in Spartanburg County, totals more than $8.8 billion in South Carolina, according to a 2008 study by the Darla Moore School of Business at the University of South Carolina. BMW employs about


“The search for a new location was extensive, and we felt South Carolina and Anderson County was the best choice for us.”

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7,000 at its S.C. plant. Caterpillar has seven manufacturing and service locations in South Carolina. Founded in 1902, McLaughlin Body Co. manufactures operator protection systems, including cab enclosures and metal components for construction, military, agriculture and other heavy-duty vehicles. During World War I, the company produced armored vehicles for the French army. In World War II, it produced the crew cab for U.S. Army half-tracks. Family-owned, McLaughin has annual sales of about $90 million and 300 employees, according to InsideView, which provides customer intelligence and data. McLaughlin expects to have its Anderson facility fully operational in the first quarter of 2014. Founded in 1972, SMF serves the construction, power generation, agriculture and mining industries. The company, which has a 140,000-square-foot facility in Illinois, is ranked by Dunn & Bradstreet in the top 1% of machine shops nationwide. Privately held, SMF has about 250 employees.

John Mann

president, McLaughlin

McLaughlin President John Mann said the Illinois-based manufacturer moved to Anderson County for its workforce and its proximity to Caterpillar’s Georgia plant. (Photo/Liz Segrist)

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1,000 WORDS

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A female anhinga takes a break from caring for her brood in the Audubon Swamp Garden at Magnolia Plantation and Gardens in Charleston. Each spring, hundreds of anhingas, egrets, herons and other waterfowl converge on the swamp to nest and raise their young amidst the cypress and tupelo trees. (Photo/Kim McManus)


2013 SC Biz - Issue 2