Georgia scored a major win for U.S. manufacturing yesterday when Caterpillar Inc. announced plans to relocate one of its major production factories from Japan to Athens. The highly anticipated reshoring announcement most likely surprised those in dozens of states across the nation that were vying for the state-of-the-art factory, which will eventually hire 1,400 workers to build small track-type tractors and mini hydraulic excavators.
Known for its arts, education and alternative rock scene, Athens has never been viewed as a bastion of manufacturing, but its proximity to ports in Savannah, GA and Charleston, SC played a big part in landing the deal, especially since Caterpillar plans to export nearly half of its tractors to European and South American markets.
The area’s strong base of potential suppliers was another plus. State and company leaders expect the plant to have a $2.4 billion impact and create an additional 2,800 jobs as production ramps up over the next five years and suppliers and other employers locate nearby to support the new facility.
Other factors that made the location stand out included:
Workforce. Caterpillar was impressed with the region’s pool of workers with manufacturing experience and Georgia’s QuickStart jobs training program. Administered through the Technical College System of Georgia, QuickStart delivers training to potential employees free of charge in classrooms, mobile labs or directly on the plant floor.
Incentives. Caterpillar considered nearby sites in North Carolina, South Carolina and other parts of Georgia, but the $75 million state and local incentive package that came with the Athens deal was hard to beat. Much of the financial assistance came from the region’s consortium of communities and electric companies, known as the Electric Cities of Georgia.
Business-friendly climate. Though it has not always been perceived as hospitable to big business, Athens has been trying to lure companies to the 900-acre megasite straddling the Athens-Clarke and Oconee county line since the 1970s. Local leaders were more than willing to invest in the Caterpillar operation, promising nearly $30 million in tax abatements and infrastructure construction and acquiring 265 acres of the site, with plans to transfer ownership to the company over the next 20 years.
The Caterpillar deal is a huge victory for Georgia, which hasn’t lured a big manufacturing operation since KIA Motors brought one of its plants to the northwestern part of the state in 2006. Expanding its advanced manufacturing sector has been a key goal for the state.
“Georgia is proud to have built a business climate that provides the logistics, workforce, speed and efficiency that global industry leaders like Caterpillar are looking for,” said Gov. Nathan Deal was quoted as saying in one media report.
With its lack of unions, cheap land and labor costs, and access to East Coast ports, the Southeast is leading the race to attract manufacturing jobs coming back to the U.S., especially for companies looking to minimize costs while also expanding global markets.
The Athens area offered many of these advantages, but perhaps the biggest ace in its deck of cards was its regional cooperation; local leaders came together across county lines and worked feverishly to bring the deal to fruition, as Athens Mayor Nancy Denson describes in this video. “Whatever it took, we were all there to do what we needed to [to make the deal happen],” she says.
What did Athens do right to win this deal? Can it be used as a blueprint for other communities trying to attract manufacturing plants coming back to the U.S.?
