1. 1. TAKING THE MYSTERY OUT OF CORPORATE SITE SELECTION Or Why the Process Should be the Solution
2. 2. Ponderable Quotes from Peter Drucker My greatest strength as a consultant is to be ignorant and ask a few questions. Make sure your back room is their front room. In other words, dont you do guard services at your plant. Get someone who specializes in guard services to do them for you. Get rid of in- house printing, in-house conference services, any business that isnt at the core of your focus.
3. 3. THIS IS SERIOUS STUFF A wrong move can prove very costly A substantial investment in time and money If you are going forward, get professional help
4. 4. BAD MOVE Question: Can a company do site selection on its own? Answer: Yes, but probably not very well.
5. 5. THIS IS A GOOD IDEA, RIGHT? Whats the justification? Cost reduction? Consolidation? New product? Market penetration?
6. 6. THERE ARE OPTIONS Expand/modernize existing facility Expand locally Expand out of region Expand off-shore Move all operations to new area
7. 7. Oops After operating the newly constructed stainless steel plant for only three years, ThyssenKrupp AG sold the facility, that cost $5 billion to build, in late November 2013 to ArcelorMittal and Nippon Steel and Sumitomo Metal Corp for $1.55 billion.
8. 8. GIVE ME STRUCTURE Standing committee Special project team Facility planning or real estate department Assigned operations manager/senior executive
9. 9. THE GOOD CONSULTANT Saves companies time and money Mitigates risk Understands the many factors involved Keys on main drivers and identifies pit- falls Negotiates an incentives package Serves as a community liason
10. 10. A Peek at a Real Project Prephase: Determining the wants and needs of the company. Phase I: Location Analysis Phase 2: Shortlist Analysis Phase 3: Finalist Analysis Phase 4: Selection of Optimal Site
11. 11. PRE-PHRASE: DETERMINING WANTS AND NEEDS Ask questions and observe Then ask more questions Determine the difference between wants and needs A Detective Strategy
12. 12. Phase 1: Location Analysis Based on discussions with the company, we identify regions for further consideration in the following states: Arizona California Idaho Nevada New Mexico Oregon Texas Utah
13. 13. TO BE ANALYZED Labor Market 1. Labor Draw Area 2. Labor Availability for key occupations 3. Labor Cost 4. Vocational/Postsecondary training programs 5. Workers Compensation/Unemployment Insurance rates Identification and review of other large employers within candidate regions Business Climate, including (right-to-work/union activity) Available Sites meeting the Companys requirements State and Local Tax Burden
14. 14. TO BE ANALYZED (CONTINUED) Environmental/Regulatory Burden Estimate of Tax and Financial Incentives Transportation Infrastructure 1. Interstate highway access 2. Proximity to commercial airport Utilities availability and cost Others as needed/identified
15. 15. Phase 2: Shortlist Analysis Identify a shortlist of four to six regions for further evaluation. Develop a Request for Information (RFI) to be distributed to the lead economic development organization within each of the shortlisted regions. Prepare a Net Present Value (NPV) comparative operating cost analysis for the four to six shortlisted Regions.
16. 16. Phase 3: Finalist Analysis Select three or four finalist regions for community/site visits. Coordinate all logistics: Travel, lodging, ground transportation. Tour available building/sites that meet the companys requirements Meet with relevant stakeholders Further discuss incentives offers Upon conclusion of visits, request real estate proposals and formal incentives offers, and update the NPV analysis
17. 17. Phase 4: Selection of Optimal Building/Site The Project Team will present its updated analysis of finalist regions to the company. Support the Company in its selection of the optimal building and/or site. Support the Company to complete final real estate and incentives negotiations. Work with economic development organizations on timing and content of the project announcement.
18. 18. But Its Far From Over After the announcement, thats when the heavy lifting begins as that is when a company needs help with: Permitting Construction Financing/Banking Hiring and Workforce Training Regulatory Compliance
19. 19. WELL TAKE YOU THERE We help companies and communities. Well take you where you need to be. Dean Barber Barber Business Advisors, LLC Telephone: 972-767-9518 Email: dbarber@barberadvisors.com