Triad Business Notes

[krazeeboi]

Another negative for Greensboro is poor access to a sizable port. But it will be interesting watching this bidding war further unfold.

[zalo]

The possibility definitely seems to exist that the other suitors for this project may be getting punked. If this project could ever be determined by the physical attributes of the site and a REASONABLE incentive package, I believe that PTI would be a strong consideration for Boeing.

http://www.bizjournals.com/triad/news/2013/12/12/machinists-make-new-contract-offer-to.html?page=all

[cityboi]

also good rail access would lead to the ports. If Boeing comes to PTI, northern High Point and the far eastern edge of Winston-Salem may benefit more when it comes to spin off businesses/suppliers. So just because it would be in Greensboro doesn't mean only Greensboro would benefit, the whole Triad would and hopefully it would be another step in unifying the Triad. Boeing would really change the Triad and with 8,000 potential jobs, population will increase as well. Jobs attracts new residents. Boeing could really jump start rapid economic growth in the region to the kind of levels we are now seeing in the Triangle and Charlotte. The proposed 22-story (residential/office) Triad Tower near the airport next to I-40 might finally rise from the ground.  btw the Triad Tower website is still up even though it hasn't been updated. http://www.triadtower.com/    The news of Boeing coming to the city would give the Greensboro national attention and other companies will take notice. Remember there is also an effort to lure an automobile plant south of Greensboro.

Edited December 13, 2013 by cityboi

[zalo]

Here's an excerpt from a TBJ report that pretty much sums up this Kabucki dance.

"Bob Mann, an aviation consultant in New York, said it’s pretty clear that the nationwide hunt for the Boeing (NYSE: BA) plant is the fallout from a previously failed contract with the machinists' union leaders in Washington state. As a result, Boeing has created a once-in-a-decade or once-in-a-century opportunity for communities like the Triad that are vying for the project, he said. “It allows Boeing to tee up a race to the bottom, allowing people to trip over themselves to supply the greatest subsidies to a spectacularly profitable corporation,” Mann said.

The Charlotte Business Journal's Ken Elkins also cited aerospace analyst, Richard Aboulafia, who said the odds are that 777X production will remain in Boeing’s Puget Sound factory in Washington state. “From an industry and economics standpoint, the line will stay in Puget Sound,” he writes. It makes the most sense for the airliner to be made on the West Coast because its wings will likely be made in Japan, Korea or China. “An inland site, or a port on the east coast, would increase transport costs or diminish outsource options,” writes Aboulafia, an analyst at Teal Group Corp. of Fairfax, Va., in his newsletter."

 

Pretty disgusting on Boeing's part. I guess we in the Twin City won't have to worry about overdevelopment in far eastern Winston-Salem. 

Edited December 13, 2013 by zalo

[RALNATIVE]

Here's an excerpt from a TBJ report that pretty much sums up this Kabucki dance.

"Bob Mann, an aviation consultant in New York, said it’s pretty clear that the nationwide hunt for the Boeing (NYSE: BA) plant is the fallout from a previously failed contract with the machinists' union leaders in Washington state. As a result, Boeing has created a once-in-a-decade or once-in-a-century opportunity for communities like the Triad that are vying for the project, he said. “It allows Boeing to tee up a race to the bottom, allowing people to trip over themselves to supply the greatest subsidies to a spectacularly profitable corporation,” Mann said.

The Charlotte Business Journal's Ken Elkins also cited aerospace analyst, Richard Aboulafia, who said the odds are that 777X production will remain in Boeing’s Puget Sound factory in Washington state. “From an industry and economics standpoint, the line will stay in Puget Sound,” he writes. It makes the most sense for the airliner to be made on the West Coast because its wings will likely be made in Japan, Korea or China. “An inland site, or a port on the east coast, would increase transport costs or diminish outsource options,” writes Aboulafia, an analyst at Teal Group Corp. of Fairfax, Va., in his newsletter."

 

Pretty disgusting on Boeing's part. I guess we in the Twin City won't have to worry about overdevelopment in far eastern Winston-Salem. 

Large companies do this all the time, sadly enough. It's far less costly to relocate a headquarters to a new city, versus moving an entire manufacturing operation. If a company does decide to move it's manufacturing operations, there must be a very compelling case to do so.

 

As cited above, there is no compelling case for Boeing to move out of the Puget Sound area. This is most likely a ploy to get Seattle to pony up some incentives to "keep" Boeing there.

Edited December 13, 2013 by RALNATIVE

[cityboi]

people forget there is a Boeing plant in South Carolina. They have no issues building plants on the east coast.

[zalo]

Well maybe the wings of the planes being made in South Carolina aren't being made in Japan, China or Korea...Also consider this information from the N&R regarding the South Carolina plant....Boeing would need up to 8,500 workers as it reaches full production. The Triad can educate aerospace workers. Problem is, there might not be enough of them. “If I were Boeing, I would want to make sure the Hondas and the Cessnas and the TIMCOs aren’t sucking up all those workers,” said Lloyd of McGuireWoods Consulting.

Then there’s the Charleston experience. Boeing is building its new 787 Dreamliner jumbo jet at its plant in Everett, Wash., and in North Charleston, S.C. Some aviation experts say slower production rates on the Charleston line suggest that it takes more than training to create a good worker. According to published reports, the South Carolina production line has not reached the goal of three planes a month that it should have hit this year.

“If you kind of look back at how Boeing approached the 787 move to Charleston, a whole lot of that was built on how easy it would be to recruit and train workers,” Aviation Week’s Norris said. As far as the Triad’s workers, they have no experience in building major airliners. Whether that alone could be enough to sink local chances is unknown. What is known, though, is that Greensboro isn’t alone in pursuing Boeing.

Edited December 14, 2013 by zalo

[cityboi]

i dont think Greensboro would even be on their radar if the city didnt qualify for their proposed plant. Boeing sent out a request to 15 cities which includes Greensboro. Workers DO commute and for jobs such as these, people will commute from the Triangle and the Charlotte area. I once had a job near the airport that didnt pay no where near what Boeing would be paying and we had people commuting from Charlotte everyday. Triad leaders have also learned from Charleston's mistake and Im sure training wont be a problem. Greensboro has an aviation school campus near the airport that prepares people for these kind of jobs. That was one thing that probably caught Boeing's attention.

Edited December 14, 2013 by cityboi

[zalo]

From today's TBJ:

It's not the new 777X factory that everybody, including Piedmont Triad International Airport, is after, but Boeing has announced the location of another new facility, a paint hangar that will be built in South Carolina. Boeing (NYSE: BA) announced Friday that it will begin construction of the new facility on its main campus in North Charleston in the second half of next year. The 230,000-square-foot facility will be used to put its customers' designs and logos on completed 787 Dreamliners, a function which currently takes place in Texas thus requiring two extra flights before delivery.

"Painting our airplanes in South Carolina supports our Lean manufacturing and production optimization initiatives," said Jack Jones, vice president and general manager, Boeing South Carolina. "We can make our delivery process even more efficient by painting airplanes here in South Carolina, creating more value and convenience for our customers."

Boeing also announced that it has secured access to a total of 468 acres of land in North Charleston, though it did not say what it would use that land for other than the paint facility and "future growth." The announcement made no mention of the selection process for the new factory it plans for its 777X model aircraft, which is projected to cost about $10 billion and create 8,500 jobs. PTI is among the sites in 22 states bidding for that project.

 

Wonder what the machinists in Wash. state think about that land purchase?

[RALNATIVE]

Just read this in a Motley fool's article today:

 

On top of those two events, Boeing announced it is narrowing its list of sites for the highly anticipated 777X production that has roughly 22 states jumping over each other to win. The aviation juggernaut plans to slash the list to a few top picks by the end of the week. Boeing had previously offered a contract to the machinists union that would guarantee 777X production of its Everett, Wash., plant, but that offer was soundly rejected by a two-thirds vote in November.

 

This will be an important decision for investors, as Boeing's workforce at Everett is very experienced with production of the 777X's predecessor airplane. If Boeing opts to play hardball and take production elsewhere, it could face a less-experienced workforce that could lead to production problems, budget overruns, and delays -- which is a must-avoid situation after such problems popped up with its 787 Dreamliner production.

 

Sounds like Boeing really doesn't have as much of an option as it claims. If it moves production of the 777X to a new site in another location, it will create huge production risks that it can't afford to deal with. Just as I all along suspected, this RFP sounds like a ploy by Boeing to get Washington state and the union to renegotiate a better deal. It'll be interesting to see this drama play out.

[cityboi]

no deals have been made and Boeing is moving forward with a site out of state.

[RALNATIVE]

no deals have been made and Boeing is moving forward with a site out of state.

 

 

Really? and how do you know this?

[zalo]

From the Rhino Times:

 

Both the Guilford County Board of Commissioners and the Greensboro City Council have had closed door sessions in the past week where the possibility of attracting a much publicized airline manufacturing plant to the airport was discussed. The presentation by Dan Lynch of the Greensboro Economic Development Alliance was about attracting the Boeing 777X plant to the Piedmont Triad International Airport. Some commissioners said they found the presentation slightly humorous because the economic development team wouldn’t say the name of the company when everyone inside and outside the room knew it was Boeing.

And the secrecy of the project caused harsh words to be exchanged between Chairman of the Guilford County Board of Commissioners Bill Bencini and Lynch. Bencini was reportedly concerned about High Point and other jurisdictions who should be involved being left out of the loop the way most of the commissioners were left out in the planning for Project Haystack. Lynch described the discussion as “passionate,” and he said that in retrospect things “perhaps could have been communicated a little differently.” But he said his team was under tremendous time constraints. Lynch said they found out about the proposal from the state after Thanksgiving and had to pretty much work around the clock to get the proposal completed and into the hands of Boeing by the Dec. 10 deadline.

According to Lynch it boiled down to about seven days to put together the most comprehensive proposal they had ever done. Lynch said that while they did not meet with the Board of Commissioners or the City Council before the proposal was submitted, he did meet with Mayor Nancy Vaughan, City Manager Denise Roth, Chairman of the Commissioners Bencini and County Manager Marty Lawing to keep them informed, but didn’t brief the council or the board of commissioners until after the proposal had been submitted. The commissioners heard the presentation in closed session on Thursday, Dec. 12, and the City Council, also in closed session, on Tuesday, Dec. 17. City Councilmembers did say that the presentation was very well done and impressive, and they were told it had to be hand delivered to Boeing to make the deadline.

Lynch said that since any incentive package would involve state and local jurisdictions that the proposal included language about the areas history of working with companies but no specific numbers. By contrast the Missouri State Legislature held a one-week special session the first week in December and passed a $1.7 billion incentive package for Boeing. The St. Louis County Council voted at a special meeting on Dec. 9 to offer Boeing $1.8 billion in incentives, so that it could be included in the proposal sent to Boeing on Dec. 10.

It does seem strange that in Missouri they had the time to call a special session of the legislature to pass an incentive package and then the St. Louis County Council had time to consider and pass an additional incentive package before their proposal was submitted, while in Greensboro the economic development team barely had time to get a proposal finished and didn’t have time to even meet with the local elected bodies, much less take any action. The timelines on the whole thing are strange. The Charlotte Observer had a copy of the request for proposals from Boeing and wrote an article about it on Dec. 6, but the Greensboro City Council wasn’t briefed about the proposal until Dec. 17. Lynch said that they had been watching the situation with Boeing but didn’t know that the Piedmont Triad International Airport would be considered until they heard from the state on Dec. 2, which gave them almost exactly a week to get the proposal completed.

In Missouri, at the same time the Greensboro Economic Development Alliance was just starting to work on the proposal, the legislature was meeting to consider an incentive package, so somehow St. Louis must have known about the request for proposals before Greensboro. Lynch said that it appeared we would know whether or not Greensboro made it to the next round by Friday or Monday, which is an incredible turnaround time for Boeing. He also said that to get Boeing, all 12 counties in the piedmont triad would have to work together. Some of those familiar with the project said that the split on incentives is supposed to be 80 percent state and 20 percent local, but nobody knows what kind of incentive the state may be willing to offer.

BY JOHN HAMMER

DECEMBER 19TH, 2013

 

 

It does seem strange that both Missouri and Washington (both states have extensive aircraft mfg capacities) were able to convene their legislatures to vote on this while North Carolina and others were barely notified before the deadline. It would appear to me that Boeing has indicated that Washington State & Missouri are the top two choices. There is no way that North Carolina would offer any where close to the state packages offered by MO or WA.

Edited December 20, 2013 by zalo

[zalo]

From this afternoon's TBJ. No surprise here...I think Mr. Baker has put as good a face on it as can be expected. The chances of NC getting this was slim to none.

Greensboro Mayor Nancy Vaughan confirmed Friday that the Gate City and two other North Carolina locations are no longer in the running for Boeing's $10 billion 777X jetliner plant. Vaughan said the news was disappointing but that the city knew it was a long shot. She believes there will be other potential opportunities in the future. Kevin Baker, executive director for the Piedmont Triad International Airport, said of course it is disappointing, but that the effort was an amazing undertaking and the work completed for this project canbe applicable to the next. Baker said he didn’t know the reasons behind why Greensboro was not selected, but that hopefully there will be a debriefing opportunity soon. “I think to have been in play in this game was a pretty huge achievement in and of itself," Baker said.

Boeing, which is narrowing down its list of potential sites for a 777X jetliner assembly factory, becomes one of several aircraft manufacturers that have passed on Greensboro. For example, Dassault Falcon chose Little Rock, Ark., over Greensboro for a $60 million jet completion center that could have meant more than 300,000 square feet of new construction at the Piedmont Triad International Airport and400 new jobs.
 

[cityboi]

Greensboro may not get Boeing but we still have our HondaJet and Aircraft is being assembled at PTI

 

http://www.news-record.com/business/article_24f7d752-69c5-11e3-82e8-001a4bcf6878.html

 

Honda Aircraft Company

 

 

Not that long ago Greensboro was one of 3 finalist for another company that was looking for a site for aircraft assembly. It would have meant two companies at PTI manufacturing airplanes. Even though Greensboro lost out on that deal, it just goes to show that Greensboro is on the national radar for aircraft assembly and Boeing wont be the last company that courts Greensboro.

 

http://www.news-record.com/news/local_news/article_693792b6-d363-11e2-9b72-0019bb30f31a.html

Edited December 21, 2013 by cityboi

[krazeeboi]

no deals have been made and Boeing is moving forward with a site out of state.

 

Source?

[Urbanity]

no deals have been made and Boeing is moving forward with a site out of state.

 

Really? and how do you know this?

 

Source?

 

 

Maybe the same source as the Greensboro Triumph Center information? 

 

CNN: Boeing, union do deal for commercial jet to be made in Washington state

Edited January 6, 2014 by Urbanity

[cityboi]

Greensboro-High Point metro on track for construction boom.

 

 

"The Greensboro-High Point metropolitan area is on track to have one of the fastest-growing construction markets in the country, according to the latest "Expansion Index" from Reed Construction Data.

The region ranked No. 20 among the 20 fastest-growing MSAs in the country based on the ratio of the number of projects currently in the planning phase compared to those actively being built now. A ratio greater than 1.0 suggests that construction volume will increase in the future."

 

http://www.bizjournals.com/triad/blog/morning-edition/2014/01/index-suggests-greensboro-high-point.html

Edited January 29, 2014 by cityboi

[cityboi]

Word is that Winston-Salem based Reynolds American is considering buying out Greensboro based Lorillard Tobacco Company. Reynolds American is the nation's second largest tobacco company with flagship brands such as Camel, Kool, Pall Mall, Winston and Salem. Lorillard is the nation's third largest tobacco company which carries the nation's most popular menthol brand Newport. There have also been reports of a "merger of equals" It remains to be seen what will happen. This has been a rumor for a number of years. There was a similar news report back in 2009. Many observers have seen Lorillard as a takeover target for years because its Newport brand is really what is keeping the company alive. Lorillard's other brands include Kent, Old Gold, Maverick and Blu eicigs.

 

http://www.bizjournals.com/triad/blog/2014/03/rj-reynolds-considering-bid-for.html

 

update: in an added twist, there are rumors that British American Tobacco could buy enough stock in Reynolds American to take ownership, a move that could help finance a take over of Lorillard. In this scenario, Reynolds American would become a U.S. subsidiary of British American Tobacco.

 

http://myfox8.com/2014/03/03/reports-suggest-reynolds-american-interested-in-buying-lorillard/

Edited March 4, 2014 by cityboi

[cityboi]

There is also some speculation that a newly merged RJR/Lorillard could move its corporate headquarters to a central location in the Triad. Some are skeptical of the deal all together. But if it happens there would be job cuts that could affect the Tobaccoville RJR plant and the Greensboro Lorillard plant.

 

http://www.bizjournals.com/triad/blog/2014/03/potential-deal-between-reynolds.html

 

but a buy out happening may be all smoke and no fire. Lorillard may be too big for Reynolds American to swallow especially with the uncertainty of regulatory rulings on menthol cigarettes which certainly would affect Lorillard's flagship Newport brand. I would keep my eyes out on a British American buying out Reynolds American. The fact that this news first broke out in the U.K. media of all places say a lot.

 

http://www.valuewalk.com/2014/03/lorillard-reynolds-american-merger/

 

http://www.bizjournals.com/triad/blog/morning-edition/2014/03/could-reynolds-become-a-subsidiary-of.html

Edited March 5, 2014 by cityboi

[cityboi]

company that owns Duckhead clothing brand is moving its corporate headquarters to downtown Greensboro. A new location in downtown has been chosen.

 

http://www.news-record.com/news/article_54f13d68-a8b8-11e3-afd7-0017a43b2370.html

[kdub1]

Palladium Belk is about to open

http://www.hpe.com/news/x1001075685/Belk-readies-new-city-location

[cityboi]

The drone industry is eyeing the Triad to become the hub of drone manufacturing. Technically considered a part of the aviation industry, it doesn't surprise me. Local leaders have been pushing the area as an aviation hub "aerotropolis".

 

One firm named Olaeris has approached both Greensboro and Winston-Salem for a manufacturing facility and U.S. headquarters. The manufacturing facility could employ 200 engineers and workers and would require additional suppliers to locate nearby. My guess is that they will go with a site near PTI where most of the Triad's aviation companies are clustered. It makes the most logical sense. It would certainly add to the growing aviation presence in the area. Honda Aircraft Company already has its world headquarters and a jet manufacturing plant in Greensboro and Greensboro was on a short list for a Boeing plant.

 

Olaeris has been working with the city of Greensboro in an effort to make it the first city in the U.S. to integrate UAS technology into city services, particularly emergency response services.  The city of Greensboro could be using unmanned aerial vehicles. (looks like they may have made their choice which city they have chosen)

 

video on the company's website showing an example of how Greensboro would use this technology (second video down)

http://www.olaeris.com/solutions/

 

However in order for any of this to move forward, the state general assembly has to address the issue of drone restrictions/privacy issues.

 

http://www.journalnow.com/news/local/drone-firms-have-triad-in-sight/article_b243f966-c139-54a5-b3ea-84c39bfd69ca.html

 

Olaeris chooses NC for new U.S. headquarters 

 

"Hundreds of high tech jobs to be created with millions invested, Olaeris wants to become the foundation for a mechatronics hub in North Carolina, much like a ‘Silicon Valley for robotics’. That can spin off hundreds of start-up companies around Olaeris."

 

http://www.businesswire.com/news/home/20131202005193/en/UAV-Company-Olaeris-Chooses-NC-Headquarters

Edited March 19, 2014 by cityboi

[cityboi]

Ralph Lauren continues to increase its presence in High Point. The company will open an 843,000 square foot office and distribution center in High Point. There are already facilities in High Point and east of Greensboro, all of which are between 800,000 and 1.3 million sq ft. Since they have invested so heavily in this area with so many operations, I think Ralph Lauren should move its corporate headquarters to Guilford County (Greensboro or High Point) Greensboro already has one fortune 500 clothing/apparel company (VF Corp) maker of brands such as Lee, Wrangler and Tommy Hilfiger.

 

http://www.bizjournals.com/triad/blog/2014/04/its-official-ralph-lauren-to-open-large-facility.html

Edited April 29, 2014 by cityboi

[cityboi]

Both Winston-Salem based Reynolds American Tobacco and Greensboro based Lorillard Tobacco Company are take over targets. There are more rumors swirling about British American Tobacco taking over the two companies. Reynolds is the second largest cigarette manufacturer in the country and Lorillard is the third largest in the country.

 

http://www.bizjournals.com/triad/blog/2014/05/report-british-american-looking-at-u-s-buys.html