Caterpillar, lost

By Dick Hughes  

SEPTEMBER 9, 2010 9:14 p.m. (0)

Caterpillar’s decision to build a new plant in North Carolina, rejecting Spartanburg and Montgomery, Ala., is causing angst and puzzlement across the Upstate.

“I’ve had more people talk to me about Caterpillar and the loss of them than any other project in 20 years, going back to when we recruited BMW,” said H. David Britt, vice chairman of Spartanburg County Council and chairman of the economic recruitment and development committee.

“Once people found out we were recruiting them and found out that they went to Winston-Salem, there’s been some anxiety and disappointment throughout the Upstate,” he said.

It was a good catch – for North Carolina.

Caterpillar says it will invest $426 million for a plant to build axles for giant mine machines and hire more than more than 500 workers over the next five years at an annual average salary of more than $40,000.

From 35 potential sites, Caterpillar’s location consultants narrowed the search to Spartanburg, Winston-Salem in Forsyth County and Montgomery, although it is believed Montgomery was eliminated early and it came down to Spartanburg and Winston-Salem.

The finalists went all out with generous local, county and state incentives.

Since North Carolina requires public disclosure of incentives to lure companies, it became known before the selection process had run its course that North Carolina’s package totaled $40 million.

Britt would not reveal the dollar amount South Carolina and Spartanburg offered but said, “we have never offered as aggressive a package as we did” and, he added, it was better than the one North Carolina put on the table.

He and others involved in the recruitment are satisfied they did everything they could to win.

“I’m not sure we could have added anything that would have tilted the selection one way or the other,” said R. Carter Smith, executive vice president for the Greater Spartanburg Chamber of Commerce’s Futures Group.  “We made an extremely aggressive proposal.”

Bob Leak, president of Winston-Salem Business Inc., the lead agency in marketing the area, believes “at the end of the day when you boil down all the incentives there was not a lot of difference” between the three states.  “Everybody was pretty close.”

Nobody can be certain why Caterpillar selected Winston-Salem over Spartanburg because location consultants and their client companies keep evaluative determinations close to the vest; Caterpillar is not talking.

Typically, the only contacts local and state officials have are with the consultants, and that was the case with Caterpillar, both North and South Carolina officials said.

Leak said his best guess is the decision shifted in Winston-Salem’s favor on the strength of the “training capabilities of our community colleges.”

He and Ed Jones, Forsyth County’s deputy manager for economic development, said the county had made significant investments in workforce training, and the community and technical colleges had an especially strong program in metal working, a skill the Caterpillar plant will need.

“It was mentioned over and over again by the consultants as part of the process, so I have to believe it did play a big role,” said Leak.

Forsyth Tech anted up additional upfront and ongoing training programs once that appeared to be important to Caterpillar, he said.

“They’re kidding themselves if they think that’s it,” said Britt. “We have one of the finest community and technical colleges in the United States, and the evidence of that are BMW, CT&C (the Korean electric vehicle maker) and all the companies using our training programs.”

Spartanburg Community College is unique, he said, in putting in equipment in its training facilities that duplicate what workers use on the job and offers training programs day, night and weekends to accommodate shift schedules.

“That’s how we got CT&C; that’s the reason we got BMW,” Britt said, adding that Spartanburg offered all those same programs to Caterpillar.

What then tilted the decision to Winston-Salem? he was asked.

“What happened? The honest truth with Caterpillar was that we were a victim of our own success. This is my personal thinking and observations, and also I’ve gotten some feedback from professionals in this business that the announcement of BMW employing all those people was a factor. “

During a critical period in the review, BMW announced it was hiring 500 additional contingency workers as just one phase of increasing its workforce for new production and the pickup in auto sales.

“I think it gave them concern on two fronts: would they be able to attract the workforce they needed … and I think that it concerned them that they were going to come into a market where the alpha dog is BMW. Were they comfortable enough being one of the minor players,” said Britt.

Although they didn’t land Caterpillar, Britt said the way ”we really came together as a team” bodes well for future recruitment, and Smith said the Caterpillar campaign demonstrated the strong attraction of Spartanburg and the Upstate.

“When you start out with more than 30 communities and we wind up in the top three, it says a lot about this area, that we can be a player on large stages,” said Smith. “We’re going to keep moving on.”

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