Wednesday, February 17, 2010

Skilled labor decisive in attracting green jobs to Milwaukee

It's great news that Ingeteam, the Spanish energy service firm that builds wind turbine parts, has decided to build its first U.S. factory in the Menominee Valley Industrial Center.

There are several reasons to be excited about this development:

1) Ingeteam will create sorely needed manufacturing jobs in Milwaukee. It is projected that when its factory opens in January 2011 it will employee 50 to 60 people. By 2015 it could an additional 250 workers. This investment won't solve Milwaukee's monumental unemployment problems, but these will be value added, full-time jobs with benefits, far better than adding another health club or Walmart with their low-paying, part-time employment.

2) Ingeteam is an energy technology firm whose components are found in 12% of all wind turbines. Its decision to locate in Milwaukee is a boast to the region's effort to become a center of green and advanced manufacturing.

3) In a city where the organized business community has been vocally opposed to a paid sick leave law that was overwhelmingly approved by the voters, Ingeteam appears to be family friendly. On their web site Ingeteam lists as one of its values: "Conciliate work and family life: provide opportunities and flexibility in working days and hours, etc., to conciliate work life and family life. Special priority should be given to maternity, by providing support measures."

The political spin over Ingeteam's decision has already begun.

Both leading candidates for Governor, Mayor Tom Barrett and County Executive Scott Walker inaccurately attributed Ingeteam's decision to tax cuts.

The Barrett campaign released a statement declaring Ingeteam's decision:" shows the success of Tom's philosophy of tying tax cuts to jobs."

Walker, not to be outdone, strayed even further from reality arguing that Ingetam's decision validated his staunch anti-tax position.

But it turns out that tax breaks weren't decisive. As Thomas Content and Tom Daykin report in today's Milwaukee Journal Sentinel:

"The key differentiator for Milwaukee: its labor force. In particular, Milwaukee had far and away the most people employed in the making of electric motors, the province of local firms including Rockwell Automation Inc. and New Berlin's ABB.

"Southeastern Wisconsin has a history and legacy of manufacturing here that a lot of people are down on," said Darin Buelow, a principal at the Chicago office of Deloitte Consulting LLP, Ingeteam's site-selection firm. "(Building) motors is something that this area does really well, and this is something that Ingeteam wanted us to look for.'"

It was Milwaukee manufacturing and technical labor force, largely a product of our public schools, tech colleges and universities, all taxpayer financed institutions, and our industrial know-how that attracted Ingeteam and its jobs. Ingeteam acknowledged this in its press release: "... the Milwaukee area boasts prestigious universities with some of the highest-ranked engineering departments in the country, offering specific courses in renewable energies, which will be highly useful when it comes to finding specialized staff."

If the Milwaukee area is going to compete for green energy and advanced manufacturing firms and employment, it will not succeed by getting poor, by competing on the basis of low-cost labor and reduced public investments.

There will always be states and nations where people will work for much much less. Think Bangladesh or Shri Lanka.

Milwaukee, the region and our manufacturing firms need to compete based on our strategic advantages, skilled labor, industrial know-how, network of suppliers, supportive academic institutions like MATC, UWM and MSOE, efficient transportation and communication systems, access to fresh water, high quality service, quality and productivity. Those are the region's strengths and our competitive advantage. And that's why Ingeteam will be in the Menominee Valley and not the Mississippi Delta.


Anonymous said...

Michael: Is this an example of the Upside or the Downside of globalization? this situation with the Spanish company Ingeteam reminds me of the old business refrain,"Business is never so healthy as when,like a chicken,it must do a certain amount of scratching for what it gets".Ingeteam must have had an awfui big itch.The salve(tax credits etc.) provided by all the players(federal,state,county,city)
should alleviate their condition.
Along with Milwakee being an economic basket case with a reserve army of unemployed workers available the company sure made the right call in the site selection process,the city was ripe for the picking of low hanging economic fruit.

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