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LOCATION SERVICES

"THE PROCESS"

GLOBAL REACH

PRESS ROOM

CASE STUDIES

WHY WDGC

PRINCIPALS

 

 
PROJECTS
 

 
 
STUDY  

                           PROJECT CASE  

 

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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