IBM
WDGC was retained by IBM to recommend the best
location for a new semiconductor plant. The facility would
comprise 750,000 SF with a $1.2 billion capital investment.
Employment would total 1,200.
The company identified three (3) locations that had vacant
facilities with adequate infrastructure. WDG Consulting
undertook a national screen to identify three (3) greenfield
(without buildings) locational candidates. The latter involved
examining potential locations on factors critical to this
industry including land availability, air quality, water/sewer
capacity, electric power, property/sales taxes, workforce
availability, payroll costs, and real estate costs.
WDGC created a longlist of six greenfield locations.
These were compared and ranked. Together with the IBM team we
selected 3 greenfield locations to include in a comprehensive
study. Three (3) greenfield and three (3) with existing
buildings.
Subsequently, WDG Consulting launched an exhaustive analysis of
the 6 finalist locations. Research input embodied the following:
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Review of statistical indicators of greatest importance to a
semiconductor manufacturer (e.g., population, workforce,
higher education, utilities, construction costs, etc.) |
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Review of satellite images and geotechnical maps to assess
potential sites |
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Examination of federal EPA reports on air and water quality |
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Field investigation which included
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Interviews
with high-tech employers |
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Interviews
with other pertinent groups such as
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High-tech
employer associations |
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Technical
colleges/universities |
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Utility
officials
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Electric power |
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Water/sewer |
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Telecom |
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Motor
carriers |
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Small
package express providers |
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Airport
officials |
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State
environmental officials |
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Local/state government officials
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Tax
assessors |
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Realtors/developers |
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Physical
inspection of sites/buildings |
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Request of state/local economic development organizations to
submit a formal incentives package |
WDG
Consulting assessed research outcome in sync with the criteria
that IBM deemed most important to success of the proposed
semiconductor facility. Among the most critical factors in
determining the ultimate location were the following:
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Infrastructure
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Water
availability |
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Water/sewer
treatment capacity |
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Electric
power
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Capacity |
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Reliability |
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Cost |
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Dual feed |
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Telecommunications |
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Available sites fully served by utilities and with good
highway access and minimal environmental liability |
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Tax practices/rates
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Sales/property |
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Production
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Machinery
and equipment |
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Non-production machinery and equipment |
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Pollution
control equipment |
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Corporate
income |
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Workforce availability
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Technicians |
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Assemblers |
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Skilled
manufacturing |
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Engineers |
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Business operating costs
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Payroll |
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Real estate |
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Taxes |
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Utilities |
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Permit approvals
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Time
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Cost |
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University resources |
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Quality of life/transferee appeal |
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Time to get into business |
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Incentives |
WDG
Consulting recommended that, on balance, Manassas (VA) was the
best location for IBM’s new semiconductor operations. A
significant influential factor was the presence of a vacant
facility which lowered capital cost and expedited time to
market.
IBM has enjoyed a successful operating experience in Manassas.
This has embraced the following:
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Total operating costs 10% below those projected in the
strategic plan |
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Ample utility infrastructure which has kept operations
humming with minimal downtime |
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An abundance of technical, assembly, and engineering workers
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Low turnover among workers hired for the new facility |
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Favorable tax treatment, especially classification of
production and non-production machinery and equipment |
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Establishment of a strong supplier base in the area |
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Colleges/universities that have instituted customized
training for IBM |
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Ease of recruiting engineers from around the U.S. |
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A
state and local government fully supportive of the IBM
operation |
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Multi-year savings from a $60 million incentives package
negotiated by WDG Consulting.
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