States in the Midwest are answering the challenges of a diminished manufacturing base by investing in their assets and taking advantage of opportunities to attract companies to site new facilities. These assets include a highly skilled work force, with deep roots in manufacturing, and highly sought logistical capabilities.

States, and regions within those states, are looking for ways integrate themselves into industry sectors such as knowledge-based advanced manufacturing and renewable energy. They see this as a way to unshackle themselves from their old manufacturing bases, leading to growing job creation and economic activity.

Building intermodal capacity

The Kansas City metro area is creating growth in intermodal capacity. While most companies have not sited expansion projects in the metro area solely on that fact, it has helped attract many companies to put Kansas City on their short list, says Chris Gutierrez, president of KC SmartPort, an economic development organization.

Location is a natural resource for Kansas City, and it is enhanced by the presence of five Class I railroads and interstate highways that easily connect the metro area to both coasts, as well as to Canada and Mexico.

Three projects are helping to grow intermodal capacity in the Kansas City metro:

KCI Intermodal Business Centeris an 800-acre development that recently completed the infrastructure (roads and utilities) for phase 1 of development, which will total 140 acres.

Nordic Windpower has begun construction on a 100,000 square-foot complex at KCI. The company will consolidate its headquarters, manufacturing, and research from around the country. The move will involve a capital investment of nearly $16 million and the creation of more than 200 jobs during the next six years, according to the company.

Nordic, currently based in California, produces two-blade wind turbines for major energy production. It will receive $5.6 million in incentives from the state of Missouri for the project, including funding for work force training.

Part of Nordic’s decision to relocate to Missouri is the state’s strength in advanced energy engineering and innovation.

Also, Kansas City is ideally located for companies such as Nordic because of the geography of the Midwest, where most of the U.S. wind energy is developed. Any sizeable industry cluster has to begin with one major expansion project. Following Nordic’s lead, Denmark-based AH Industries will locate its U.S. headquarters and distribution center in Lenexa, Kansas, in the Kansas City metro. The company will distribute wind turbine generators and tower components to its U.S. customers.

Logistics Park Kansas City, operated by BNSF, is an approximate 1,000-acre development, of which 600 acres are marked for an intermodal park. The remaining acreage is targeted for rail infrastructure and 7 million square feet of warehouse and distribution space.

Its first tenant, Clinton, Wisconsin-based DeLong Co., an exporter of containerized grain, announced plans for an export facility in June. The company expects to launch operations to coincide with the opening of BNSF’s Kansas City Logistics Hub in 2013.

Centerpoint Intermodal Center Kansas Cityis a partnership between Kansas City Southern and Centerpoint, a Chicago-based developer. The complex will have about 1,000 acres, mostly for development. Kansas City Southern will use between 300 and 400 acres for rail infrastructure.

Gutierrez says the growth in intermodal capacity tells perspective companies in the process of relocating that they won’t have congestion or infrastructure challenges that they might experience in other metro areas.

Another plus for Kansas City is its balance of inbound and outbound freight.

“That allows for competitive pricing, great service, and ease of equipment,” Gutierrez says. “Markets that are only inbound or outbound have pretty heavy rates, because you don’t have anything to take in or take out.”

 

Retooling with new industry companies

States in the Midwest are using their manufacturing expertise and logistics advantages to create clusters of new industry companies, including those in the automotive sector and power generation.

The state of Michigan is attempting to bolster its economy by putting many resources behind advanced battery and solar development.

One of the biggest successes Michigan has had is in the advanced battery industry, says Michael Shore, director of Corporate Communications for the Michigan Economic Development Corp. The state has attracted nearly $6 billion in new investment in the industry during the past several years. Seventeen different advanced battery companies are either operating facilities in Michigan or are in the process of doing so. The state hopes to create more than 60,000 jobs in the sector during the next decade.

Michigan is also attempting to grow an industry cluster in solar technology. As part of that effort, it is developing a “solar Silicon Valley” in the region surrounding Saginaw, Midland (the corporate home of Dow Chemical Co.), and Bay City. The state has seen investments of more than $3 billion and anticipates more than 20,000 new jobs as a result of a growing solar industry.

The state of Minnesota is using the fact that it is home to a group of glass manufacturing companies to create opportunities in the solar industry, says Kevin McKinnon, director of business development for the Minnesota Department of Employment and Economic Development.

Sage Electrochromics, a producer of electrochromic glass, which can change tint at the click of a button, is expanding its manufacturing operations in Faribault, thanks in part to more than $100 million in funding from the federal government, including a $72 million loan guarantee for the expansion project and $31 million in clean energy manufacturing tax credits.

Meanwhile, the Iowa Power Fund, which helps sets the strategic direction for clean energy in the state, has awarded grant funding for projects that will expand the development of thin, flexible solar panel technology in the building materials sector, increase cellulosic ethanol production, and verify mixtures of prairie biomass for sustainability and energy production.

Quad County Corn Processors received a grant of $1.45 million to construct a full-scale plant at its Galva, Iowa, ethanol facility to demonstrate its patent-pending cellulosic ethanol process. The process could be applied at existing corn starch ethanol plants to increase ethanol production, create a high-value protein feed product, and recover more corn oil than a conventional ethanol plant.

Power Film Inc. of Ames received a grant of $220,000 to develop manufacturing automation and solar panel test equipment to supply production quantities in its building integrated product line. Building Integrated Solar (or Building Integrated Photovoltaics) are thin film solar panels, which are integrated with building materials to offer an alternative power source directly from the structure.

 

Expanding on your strengths

The cities of Marion and Kokomo (Indiana), located about 30 miles apart, are using their automobile manufacturing assets to create the Midwest Automotive Loop, a new marketing effort that will link Kokomo, Marion and the surrounding 13 counties.

• The Midwest Automotive Loop’s goal is to attract additional investment in the automotive industry, supply chain, manufacturers, service providers, and product development. It is seeking to capitalize on the region’s strengths, which include:
• The operations of General Motors and Chrysler, and suppliers Dana and Delphi.
• Dozens of supply-chain manufacturers, electronic parts developers, as well as research, development and testing laboratories.
• A highly trained, skilled workforce.
• The presence of Indiana Wesleyan, Indiana University, Purdue University, community colleges, and several vocational education programs, which collectively offer dozens of degree and certification programs.
• Ease of access to Interstate 69 and U.S. 31 Corridor.

During the past two years, Marion and Kokomo have attracted more than $2 billion in business investments, the largest of which came in 2010 from Chrysler Group, Delphi, General Motors and Dana. Now, the communities feel working together will increase that investment. wt