Monday, April 04, 2005
By Dave Alexander
CHRONICLE BUSINESS EDITOR

It takes more than a village to acquire an aircraft or auto assembly plant.

It takes a whole region.

That's the philosophy economic developers in Muskegon and Grand Rapids have when opportunities such as an Airbus aircraft assembly plant or a Toyota auto plant with thousands of jobs are dangled in front of the nation's communities.

Muskegon Area First and The Right Place Inc. in Grand Rapids have collaborated on the Airbus and Toyota possibilities. As for Airbus, the economic developers have concluded that West Michigan can't fulfill the European aerospace company's needs but investigation of a possible Toyota bid continues.

Toyota has indicated it wants to build one or two more auto assembly plants in North America by the end of the decade.

Economic development and county officials say West Michigan's best location for an auto plant like a Toyota assembly facility would be at Muskegon County's Wastewater Management System, where more than 2,500 acres of publicly-held land sits south of Apple Avenue.

"It would take a regional incentive package to make such a project happen," said Jim Edmonson, president of Muskegon Area First. "But if successful, everyone in the region would share in the cost and benefits."

Right Place President Brigit Klohs in Grand Rapids shares the same philosophy.

"Unless we join together, we aren't going to make these kinds of bids," Klohs said. "We don't care if a plant like this came into Muskegon or Ottawa counties as long as it lands somewhere in West Michigan. We are all in this stewpot together."

Snagging either a Toyota or Airbus plant would be a community- and region-altering economic development coups, officials said. Either plant likely would create more than 1,000 highly-paid industrial jobs and suppliers that would want to be near the assembly plant.

The likelihood of such a victory?

Realistically, the chances of landing such an industrial plant is from slim to none, but economic development officials say agencies like Muskegon Area First and The Right Place each need to put their community's -- and in this case -- region's best foot forward. If not an Airbus or a Toyota, the bid process can reveal a region's strengths and possibly interest other industrial prospects looking for a new plant site.

The fact that economic developers are thinking as a region is music to the ears of Jay Peters, executive director of the West Michigan Strategic Alliance. That organization several years ago brought the private, nonprofit and government sectors together to consider West Michigan's future as a whole, including the areas surrounding Grand Rapids, Holland and Muskegon.

"These are the tangible actions that have come from having a regional mindset," Peters said of Airbus and Toyota collaborations. "Our future economic decisions should be made from a regional perspective."

The Airbus and Toyota possibilities have arisen at about the same time, piquing the interest of Gov. Jennifer Granholm and the Michigan Economic Development Corp. However, Airbus and Toyota facilities are at different points of the economic development process.

Airbus not a good fit

Airbus -- the French-based global competitor to North America's Boeing -- wants to compete for U.S. Defense Department contracts. It wants to bid on a lucrative next-generation of the U.S. military aerial refueling aircraft, the KC-330.

Airbus -- a division of the European Aeronautic Defence and Space Agency -- needs a U.S. assembly plant to compete for the KC-330 contract. EADS North America sought proposals from all 50 states. The company is asking for land to build a 1.5 million-square-foot aircraft assembly plant, a commercial port and an airport with at least 9,000 foot runway. The plant would eventually employ 1,100 workers and bring $600 million worth of investment.

Muskegon Area First and The Right Place looked at a basic proposal that would have located the plant next to the Kent County Airport. The port would have been in Muskegon but transport of the KC-330 components from Muskegon to the Grand Rapids airport killed a West Michigan proposal.

Edmonson said that Airbus would build pieces of the KC-330 in Europe and transport them by ship to the United States. The sections of wings and fuselages would have to be transported from the dock to the assembly plant about 64 times a year.

The size of the containers -- 21-by-23-foot sections -- made it nearly impossible to move over the roadways. The only other option of using a lifting helicopter was cost prohibitive, Edmonson said.

"Economically, we just couldn't do the transport," he said.

Airbus already has become a major player at Howmet Castings as the Alcoa company makes jet engine parts for its new A-380, the largest commercial passenger airplane in the world.

Gov. Granholm announced earlier this week that the state would help backing three Airbus bids from Alpena, Chippewa County/Sault Ste. Marie and Willow Run.

'Moving forward' on Toyota

A new Toyota plant is probably more realistic for Michigan, the automotive state. The Wall Street Journal reported earlier this year that Toyota will need one or two more assembly plants by the end of the decade after it completes construction of its latest North American operation outside of San Antonio, Texas.

Such reports sent economic developers across the country and throughout West Michigan into action.

Muskegon Area First approached Toyota North American executives right after the San Antonio announcement. Former Muskegon Area First President Todd Battle met in 2003 with Toyota officials in Tennessee to pitch West Michigan and the Muskegon County wastewater site, Edmonson said.

"The wastewater site is still the largest assembled piece of public land in the lower Peninsula," said county Administrator Jim Borushko. "The idea of a assembly plant in Muskegon County to serve all of West Michigan would be fantastic. We would be supportive of any industrial development on public lands in the county."

The wastewater site would allow Toyota and its potential suppliers to spread out without affecting residential neighborhoods, Borushko said. The site is adjacent to sewer and landfill services but would need a major investment to bring public water that far east on Apple Avenue.

Gov. Granholm told The Detroit News in a March 27 story that Michigan will be a serious contender in the Toyota auto plant sweepstakes in the coming years. She announced she will take a trip to Tokyo this summer to meet with company officials.

Whether West Michigan becomes a player in Michigan's bid for a Toyota assembly plant is still up in the air. But Klohs said West Michigan would be the state's best chance.

"If Toyota was to look at Michigan it will be West Michigan," said Klohs, who sits on the Michigan Economic Development Corp. board of directors. "We would be the preferred location, from Muskegon all the way to the Indiana border. Even if Toyota were to locate in Battle Creek, we would all be overjoyed."

If Toyota would consider Michigan for an assembly plant, would that be best for West Michigan? Edmonson said future research will tell.

Offering incentives

Whether Muskegon and West Michigan pushes the wastewater site will take plenty of study, Edmonson said. Beyond a state incentive package, the local communities might have to come up with a $200 million incentive package relating to site acquisition and infrastructure improvements.

"In all of our investigation, we would have to ask is it worth it?" Edmonson said. "Maybe there are cheaper ways to obtain 1,500 industrial employees in your community."

Through expansion of local companies such as Howmet Castings, the Port City Group and K&L Industries among others, nearly that level of industrial employment might be created in the coming years, Edmonson said. It might be better to have 15, 100-job plant expansions than one 1,500-job plant, he said.

"You can ride out the downturns better with more (diversified) plants," Edmonson said.

But the Toyota investigation and possible West Michigan bid, like the Toyota slogan, is "moving forward." The region needs to be in position to compete if events fall into place to make a West Michigan bid competitive, economic developers said.

"We might not necessarily be stepping up to the plate (with Toyota)," Edmonson said. "But we need to be in the dugout and know what's happening. We are hanging around, collecting information. This is not the only project we are working on ... it's just one of many."

© 2005 Muskegon Chronicle. Used with permission