Rick Weddle (Site Selectors Guild): Welcome to "Site Selection Matters," where we take a closer look at the art and science of site selection decision-making. I'm your host, Rick Weddle, president of the Site Selectors Guild. In each episode, we introduce you to leaders in the world of corporate site selection and economic development. We speak with members of the Site Selectors Guild, our economic development partners, and corporate decision-makers to provide you with deep insight into the best and next practices in our profession. In this episode, we have as our guest, Jay Garner, president and founder of Garner Economics and chairman of the Site Selectors Guild. Today Jay will talk with us about the impact COVID-19 has had on food and beverage processing. Jay will also share his unique perspective and insight on the role the Site Selectors Guild has played in professionalizing the location advisory business. Join me as we welcome Jay Garner to "Site Selection Matters."

Rick: Jay, I read with interest your recent article on the impact COVID-19 has had on the food and beverage processing industry. You suggest the impact has been both positive and negative. Take a minute, if you will, and tell our listeners how you see this industry in a post-COVID world.

Jay (Garner Economics): Hey, Rick, thanks very much for having me. And I love talking about the food and beverage sector, it's our wheelhouse, and so we are engaged in that sector extensively. Boy, let me tell you something, this pandemic really has impacted all of us, many of us negatively, especially economically, health-wise. But some of us, some corporations, have made profits like no other. And the food and beverage sector and all of the downstream companies associated with it, like grocery stores, have done the best they have ever done in the history of their business.

So, let me tell you a little bit reason why. Well, obviously, there is no such thing as a recession-proof industry sector, but the food and beverage sector is the closest thing to it because everyone still needs to eat. So, what happens is, because of consumer preference, you have an evolution and always evolving demand of what these products should be. In the case of food and beverage, a number of things were happening before the pandemic, they got exasperated during the pandemic. And what we're seeing, coming out of it, is profound. Protein plants, for example, during the month of May. You know, between 40% and 60% of all protein plants, those are meat-processing facilities went offline. So, not only did you have a shortage in the grocery store and a lot of meat products, but, obviously, you had an escalation in prices as a result of that. And then we all know about paper products associated, in your grocery stores. Those don't typically classify in the food and beverage sector, but you kind of get the idea, get the drift, you know.

At the same time, you have sectors like those that have alcohol-infusion that have really grown exponentially. Alcohol sales were on the decline, in the U.S., pre-pandemic. And then during the pandemic, alcohol sales grew significantly because of lockdowns, job losses. You know, there's some inherent psychological challenges that people have faced and continue to face during the pandemic. So, anything...alcohol is classified as food and beverage. And you have alcohol-infusion waters, like these hard seltzer waters, that's the rage now, everyone wants to buy these hard seltzer waters.

So, you know, in South Carolina, last month, you had one of these seltzer companies, that's associated with White Claw, doi

Rick Weddle: Welcome to Site Selection Matters, where we take a close look at the art and science of site selection decision making. I’m your host, Rick Weddle, President of Site Selectors Guild.

In each episode, we introduce you to leaders in the world of corporate site selection and economic development. We speak with members of the Site Selectors Guild, our economic development partners, and key corporate decision-makers to provide you with deep insight into the best and next practices in our profession.

In this episode, we have as our guest, Bob Hess, Vice Chairman for Global Consulting with Newmark. Today, Bob will talk with us about the daunting task of stay versus go location decisions for companies. More specifically, we’ll talk with Bob about the dynamics of such important corporate decisions, their relevance to communities, and the challenge of responding correctly when facility retention is on the table. Join me as we welcome Bob Hess to Site Selection Matters.

Bob, the premise behind today’s discussion is the challenge that a single facility stay versus go decision presents for both companies and their location communities. Take a minute, if you will, to explain exactly what you’re talking about and what you mean by a stay versus go decision.

Bob Hess: Well, thanks, Rick, for the opportunity to talk about this. In my career, which is 30 years plus, this has probably been the most common form of researchable problem that I’ve been involved with and I would bet many people in the location consulting business would say the same.

Often, they’re very, very confidential, so I guess the best way to talk about what we mean by stay versus go would be an example. Many, many decades ago, remember the UPS headquarters, they were in Connecticut. And at some point the UPS had to decide whether it needed to stay in Connecticut or go somewhere else for lots of reasons, customer issues, access issues, changing issues already regarding talent.

The community’s changing, the markets are changing, so companies are always looking at the issue of, in a single facility with inside of a footprint, though, a footprint or a portfolio of facilities, lots of triggers there, push and pull factors, obsolete facility, leases that expire, it could be capacity issues, even image issues, companies are always looking at, is this facility aligned with my business? Is it meeting, you know, our cost and quality objectives? And there’s border wars, there’s plenty of issues around, you know, people that are…you have a facility at one side of the border of one state or the other and there’s a lower cost structure there.

So whether it’s different asset types, all these companies are looking at, should they stay or should they go? Is the grass greener on the go side? And by the way, is there enough compelling evidence for the company to see in a new location, to manage all the business disruption that typically would result from a relocation or a go decision?

Rick: Looking forward to unpacking that whole set of questions you laid out there, Bob, but let’s start out by saying, sharing or discussing the types of facilities that you might see most often impacted by such a decision.

Bob: Great question. So let’s start with the ones that are really visible in the marketplace. I mentioned the UPS back in the ’90s. What about Boeing? I remember the Boeing headquarters project, that was very, very visible. They decided to make that pretty well known in the marketplace what they’re doing. Should they stay in Seattle or should they go somewhere else?

Rick Weddle (Site Selectors Guild): Welcome to "Site Selection Matters," where we take a closer look at the art and science of site selection decision making. I'm your host, Rick Weddle, president of the Site Selectors Guild. In each episode, we introduce you to leaders in the world of corporate site selection and economic development. We speak with members of the Site Selectors Guild, our economic development partners, and corporate decision makers to provide you with deep insight into the best and next practices in our profession. In this episode, we have as our guest, René Buck, CEO of BCI Global, one of the world's leading independent footprint optimization, location strategy, site selection, and supply chain consulting companies. BCI has offices in the U.S., in Europe, and in Asia.

Today, René will talk with us about increasing chances for reshoring or production from Asia to the U.S. More specifically, we'll also talk with René about what's driving this movement, and the U.S. states that are the best positioned to capture future reshoring investments. Join me as we welcome René Buck to "Site Selection Matters." René, before we get into a deep dive on this important topic, take a minute, if you will, to explain to our listeners what you mean by decentralization of production, or also called reshoring. And maybe also, a little bit about what the current drivers are of this process.

René Buck (BCI Global): Yeah, sure. We hear a lot about reshoring. And reshoring is like something which went out of the U.S. or out of Europe to China/Asia and is now supposed to come back. But let's say we prefer and, I mean, with we also our corporate clients prefer the word decentralization of manufacturing. And decentralization of manufacturing means that is the opposite of having all your eggs in one basket. You can imagine that you have a certain product, or a certain product line and you say, "Well, there's only one place on earth where I produce that." So, it's a global manufacturing plant. Then you will have regional manufacturing plants saying, "Okay. Well, this product, I produce it in a plant for Asia pack, I have a plant for North America, and I have a plant for Europe." And decentralization means even having more plants than just opposite to having one global plant.

So, we came for economies of scale reasons. A number of companies chose the last decades to say, "Well, I have one global plant who produces that product." But on the one hand, the U.S.-China trade dispute and on the other hand COVID-19 have made clear that that can be a risky and bumpy road. So, what we see is that companies are looking now into—should we not decentralize our manufacturing, so not having this product produced only in one or two plants, but the more closer to the market so that we are not that vulnerable for business disruption risk? And the reasons, the drivers behind that are there are a couple of drivers. One is from a supply chain risk perspective. You want to reduce the sourcing risk. You want to reduce the risk that you are too dependent of critical suppliers in only one single region. And let's be honest, COVID-19, certainly in February and Marc, and April made clear that supply chains all over the world were disturbed by the fact that the critical suppliers in China could not deliver anymore.

So, you have supply chain drivers in terms of mitigating sourcing risk. We have also external disruptions. We talk about pandemic. We talk about trade barrier risk. Let's not forget that for a lot of American companies, this decentralization challenge, where should we produce? What products? With what technologies? For what markets? Where? I repeat, what products do we produce? With what technologies? For what markets? Where? That's a question which for many companies, U.S.-based companies already from e

In this week's episode of Site Selection Matters, Rick Weddle speaks with Larry Gigerich, Executive Managing Director of Ginovus, about incentive compliance management issues in the COVID-19 impacted economic environment.

Rick Weddle: Welcome to Site Selection Matters, where we take a close look at the art and science of site selection decision-making. I’m your host, Rick Weddle, president of the Site Selectors Guild. In each episode, we introduce you to leaders in the world of corporate site selection and economic development. We speak with members of the Site Selectors Guild, our economic development partners and corporate decision-makers to provide you with deep insight into the best and next practices in our profession.

In this episode, we have as our guest, Greg Burkart, managing director and practice leader for Site Selection and Incentives Advisory Services with Duff & Phelps. Today, Greg will talk with us about manufacturing reshoring. More specifically, we’ll talk with Greg about how the COVID pandemic is changing the dynamics of manufacturing location activity around the world. Join me as we welcome Greg Burkart to Site Selection Matters.

Greg, a lot has changed and continues to change in response to the COVID-19 pandemic. Global supply chains are being reexamined as we speak. I’ve even heard you suggest that companies are maybe nearing a tipping point to bring manufacturing operations back to the U.S. Take a minute or two, if you will, to help our listeners understand your views on reshoring and what you mean by companies reaching a tipping point.

Greg Burkart: Thanks, Rick. So, since the passage of NAFTA in ’93, the trend for companies has been to shift the manufacturing of goods from the U.S. to low labor costs. And in 1992, the U.S. trade deficit for goods production was about $85 billion. Last year, the trade deficit had multiplied 10 fold to $854 billion. So over this time period, what we were also seeing what all the shifts of production to China, the labor costs in China rose about 2,000% and that caused companies to start analyzing their manufacturing operations because the U.S.-China labor deferential shrunk from about 31X to about 4X.

Initially, companies as these labor costs started to rise, what they did is they moved from the coastline in China to the further interior parts of China. Once the pandemic hit, companies realized that, you know, they couldn’t reliably get their goods out of the Western Province. And so, as a result of that, the goods just stopped flowing almost overnight. And what was kind of this slowly simmering pot really started to boil over in April. The C-suite was also facing the possibility that the current administration would designate their company as a critical business. And for them, that was the tipping point where they would be forced to relocate operations back to the U.S. So instead of having this, you know, far-flung supply chain, companies started looking more closely at manufacturing for the U.S. market in the U.S. or asking some of their critical suppliers to relocate back in the U.S. So that’s what we mean by the tipping point. The pandemic caused companies to kind of reach that tipping point.

Rick: So, Greg, let me ask a question, the critical business designation that the federal government could make would actually be a regulatory matter where they might say to industry A or industry B or company A, or company B your business is critical, therefore you have to realign your supply chain. So, they were actually faced with possibly having to do it for non-business reasons. Is that right?

Greg: Correct. So, Department of Homeland Security has identified, I think there’s 13 or 14 industry segments that they view as being critical to national security. So, it’s a designation that could come from Department of Homeland Securi

Rick: Welcome to Site Selection Matters, where each week we take a close look at the art and science of site selection decision-making. I’m your host, Rick Weddle, president of the Site Selectors Guild. In each episode, we introduce you to leaders in the world of corporate site selection and economic development to provide you with key insight into the best and next practices in our profession.

This year, we’ve been on a bit of a roller coaster with the onset of the COVID-19 pandemic and the wide range of corporate and government responses. While much remains uncertain, one thing seems clear, how we assess corporate risk related to economic vulnerability and location resilience will likely be forever changed. As we work our way through this pandemic, important questions are being asked, how will companies assess risk? How will a given country, state, region, or city response impact the company’s view of them for future projects? Is this a situation that will eventually settle down and return to business as usual, or will we see an entirely new dimension of risk assessment? That’s the premise or question that will guide today’s discussion with our distinguished panel of professional site selectors and location advisers.

In this episode of Site Selection Matters, we have as our guest, Mark Williams, president of the Strategic Development Group, Angelos Angelou, founder and principal executive officer of AngelouEconomics, Von Hatley, managing director of Jones Walker Consulting, Jerry Szatan, owner of Szatan & Associates, Ken Maly, senior managing director for location strategy with Newmark, and Seth Martindale, senior managing director of CBRE. Together, this group of thought leaders will share their informed insights on how resilience will impact location projects in the future. Join me as we welcome this distinguished panel to Site Selection Matters.

Well, let’s get started with a question to Mark Williams. Mark, what are your initial thoughts on corporate risk assessment of economic vulnerability and resilience in today’s COVID-19 or post-pandemic environment?

Mark: Hey, Rick. You know, corporate risk assessment has been a critical part of site location analysis since the beginning of time. And part of any legitimate selection project involves analysis of all kinds of risks, general business risk, geotechnical risk, labor risks, weather risks. There have been so many over the years and some clients are more concerned about certain risks than others based on their operation. And COVID-19, from my perspective, really lays out two new layers of consideration in terms of corporate risk. And really, the first is I think is going to be a tendency to more capital intensity and automation. As we know, there’s a great deal of concern about employees, the proximity of employees working next to each other. And I really think that’s going to be a permanent risk, an ongoing risk, something that’s going to be considered. So in the midst of automation, it was occurring. I think it’s going to accelerate because that’s an element of the COVID-19 risk.

The second thing is the community risk. And I think the Tesla example you

Rick Weddle: Welcome to Site Selection Matters, where we take a closer look at the art and science of site selection decision making. I’m your host, Rick Weddle, President and CEO of the Site Selectors Guild. In each episode, we introduce you to leaders in the world of corporate site selection and economic development. We speak with members of the Site Selectors Guild, our economic development partners and corporate decision makers to provide you with deep insight into the next and best practices in our profession. In this episode, we have as our guest, Tom Stringer, managing director and service leader for site selection and incentives with BDO. Today, Tom will talk with us about the site location industry in the post-COVID 19 era. Join me as we welcome Tom Stringer to Site Selection Matters. Tom, before we get into how the pandemic has really changed your business, take a minute if you will, to give our listeners an overview of your portfolio or book of business and the site selection and location advisory world. Tell us a little bit about what you do.

Tom Stringer: Hey, Rick, and thanks for the time today, certainly appreciate it. Yep, our practice here at BDO really is multidisciplinary in the site collection and incentives world we work with various companies on things like corporate headquarters, where we represent companies like Northrop Grumman and other well known brands with their corporate headquarters site searches to major manufacturing facilities. We had the honor again of working with Northrop years ago for the long range strike bomber. Recently, another client of ours that’s attracted a lot of attention has been Nikola motors, we help them with their headquarters and their manufacturing facility in New Jersey, we just recently went public the other day, we also spent a lot of time working with major professional sports leagues helping them plan some of their major events. So, we have a lot of fun, we’re in a lot of different areas, and we certainly enjoy the work very much.

Rick: So, real quickly, just to kind of dig in on that just a bit major manufacturers, major headquarters, and sports leagues, that seems to take you across the full gamut of location work.

Tom: It does. One of the benefits of this profession, I think, is that you have to be multi-disciplined in order to really succeed through the ups and downs of economies and the swings and business cycles. And I’ll be honest, we’re at the point in our careers, our team here that we get to kind of choose our projects and choose the clients that we work with rather than having to chase a lot of business. And those clients have been with us for in some cases now decades, which is a lot of fun. And the economic impact of things like a major manufacturing facility, or a corporate headquarters, or a large event can be pretty tremendous for a community. Certainly you’ve seen that in film and TV Motion Picture production, where we have a rather large client that we help choose some of the site works for their production. And the economic impact from those events can be as large on a shorter term basis than it can be for permanent facility. So, we enjoy what economic development can do, we’re really happy to be a part of it. And it does keep it interesting when none of your clients are the same.

Rick: Sounds both interesting and fun. And then along came the future and the COVID-19 pandemic. Tell me how has that affected and also not just the pandemic, but also business and government’s response to that, how has that impacte

Rick Weddle: Welcome to Site Selection Matters, where we take a closer look at the art and science of site selection decision-making. I’m your host, Rick Weddle, president of the Site Selectors Guild. In each episode, we introduce you to the top leaders in the world of corporate site selection and economic development. We speak with the members of the guild, our economic development partners, and corporate decision-makers to provide you with deep insight into the best and next practices in our profession. In this episode, we have as our guest, Elias van Herwaarden, principal with Locationperspectives. In this capacity, Elias assists companies in building and restructuring their business internationally. This includes a wide range of services and location selection, footprint optimization, and glocalization, or helping companies successfully adapt their products and services to local markets. Today, Elias will talk with us about the COVID-19 pandemic, and how it may actually be redrawing Europe’s borders. Join me as we welcome Elias van Herwaarden to Site Selection Matters. Elias, the COVID-19 pandemic has underlined the importance of how and where companies produce their goods and services. Certainly, this has contributed to this ongoing debate we hear about reshoring or as some would say, rightshoring. Could you take a minute or two and explain just what reshoring is and maybe what it means in a European context?

Elias van Herwaarden: Thank you very much Rick for that question. I think the answer to that question depends on who you ask. If you would ask the French government, they actually understand it as bringing the jobs or the work back to France. If you would ask the Bulgarian Prime Minister, he will say reshoring is, well, bringing it back from Asia and bring it to Europe and, by the way, as you do that, bring it to my country. So, it’s a political perception, which I think if you talk to business people, you’re getting a different answer because for them reshoring is about shoring closer to market or closer to certain suppliers and providers. So, there’s a difference between the two. But companies are more thinking about rightshoring, rethinking their structures, then they’re literally taking the word reshoring for moving back to their country of origin.

Rick: Okay. Well, let me ask you this, with that different perspective, now, let’s take it from the company’s perspective, does it always work? Is it functionally the right thing to do in this current environment?

Elias: Let me talk from the European side. It is striking that I think it was back in 2016, the European administration set up a reshoring monitor and attract around 700 reshoring projects, meaning intentions to reshore. They closed the project down in early 2019. And there’s some interesting information in there because it shows projects that reshored and did well. And there are striking examples of projects that reshored or shored closer to market and failed. And actually, Europe and the U.S. have one in common. It was when Adidas set up its Speed factories. Recall, in the old days, Adidas was manufacturing its sports shoes and gear in China, and it moved into Vietnam, as China became too expensive. And then to stay ahead of the game, Adidas said, “We’re going to make fully automated factories. We’re going to place them near market. One was in the U.S., the other was in Germany, and will allow people to actually assemble or design their sneaker off the internet and get it delivered within a couple of days, as opposed to getting a standard off the shelf thing that took six weeks to tr

Rick Weddle: Welcome to ”Site Selection Matters” where we take a close look at the art and science of site selection decision-making. I’m your host, Rick Weddle, president of the Site Selectors Guild. In each episode, we introduce you to leaders in the world of corporate site selection and economic development. We speak to members of the Site Selectors Guild, our economic development partners, and corporate decision makers to provide you with deep insight into the best and next practices in our profession.

In this episode, we have as our guest, Mark Williams, former Guild chairman and president of the Strategic Development Group, Incorporated, a firm that provides a variety of site selection and location and city of negotiation services designed to enhance the operational performance and produce cost savings to companies and their suppliers. Today, Mark will talk with us about the issue of reshoring as it relates to the current COVID-19 environment. Please join me as we welcome Mark Williams to ”Site Selection Matters.”

Mark, despite the lockdown and stay-at-home guidelines, this has to really be a busy time for location advisors. Take a minute, if you will, and give our listeners a brief overview of your role in the Strategic Development Group and what you do.

Mark Williams: Sure, Rick. Thanks for having me back on this great podcast. You know, we remain very busy. Strategic Development Group is a location advisory firm and we have a suite of existing clients and are always generating new clients to advise them on where to locate and why. So of course, there are factors related to logistics sites, technical aspects of sites, labor, etc. So no two projects are the same. We’ve been in business for a long time and have kind of seen the good and the bad and the ugly related to navigating this path of site location. So we help our clients do that. Generally, our clients are medium and very large firms, many of them global firms. So we help with those locations, but there are always things that come up where additional advice is required in that process. It could be related to the political nature of things, it could be related to how do we negotiate incentives in the COVID environment? What is the acceptance of that concept? So it’s dynamic. It’s very interesting. It’s been very interesting to me.

Rick: Well, thank you. Since the outbreak of COVID-19, which I think has changed nearly everything, we’re hearing more and more about the concept of facility reshoring or bringing facilities back to the US. For the benefit of our listeners, how do you define reshoring?

Mark: Rick, for I’m gonna say about the past 20 years, companies, many of them from the U.S. have been looking to focus on improving their economics of their production systems. And they have decided in many cases to move offshore for economic reasons. In 2019, for example, 18% of all the U.S. imports were from China. You know, my definition of a reshoring is, okay, these companies have moved production capacity offshore, reshoring is the concept of them considering bringing it back. And they may have some reasons for that we can discuss that or economics or logistical or other, but that’s the concept. And it’s getting a lot of attention for a lot of reasons we can chat about.

Rick: You know, Mark, I’ve heard you describe when we’ve talked about this, that manufacturing risk and economics really, as a pendulum. What do you mean by that? And where would you see that pendulum earlier this year? Where is it now also?

Mark: So the pendul

Rick Weddle: Welcome to Site Selection Matters, where we take a close look at the art and science of site selection decision-making. I’m your host, Rick Weddle, president of Site Selectors Guild. In each episode we introduce you to leaders in the world of corporate site selection and economic development. We speak with members of the Site Selectors Guild and our economic development partners and corporate decision-makers to provide you with deep insight into the best and next practices in our profession.

In this episode we again have as our guest Andy Shapiro. Andy is a principal in the location advisory firm Biggins Lacy Shapiro & Company and the immediate past chair of the Site Selectors Guild. He’s here to talk with us about economic development in cities in the United States, more specifically, how such incentives are being or likely to be impacted by the COVID-19 health emergency. Join me as we welcome back Andy Shapiro to Site Selection Matters.

Andy, we’ve been hearing that the climate around state and local incentives has really been evolving both before and even after now the pandemic that’s underway. Tell us about that a bit and help us understand what’s happened since COVID-19 has emerged.

Andy Shapiro: Thanks, Rick. You know, in many ways the practice of economic development incentives has or soon will be unrecognizable by pre-COVID standards. But you’re correct. There’s been a change underway for quite some time now. And in particular, before COVID, we were receiving a pullback in many of those states that had typically deployed incentives strategically as part of their economic development efforts. I’ll just give you a couple of examples from the recent experiences we’ve had at BLS & Company.

For example, New Jersey, you know, under Governor Murphy, you know, they basically allowed most of those Christie-era programs such as the Grow New Jersey incentive to sunset and have done so without any clear guidance on what would be the successor incentives. This has had a significant impact on the state, not the least of which has been the cratering of the office market, particularly along the New Jersey-Hudson River waterfront, which has historically thrived on the steady diet of New York City’s, you know, out-migrating companies. So there’s a lot of uncertainty there on the New Jersey side and without a successor program in place, a lot of deals have gone basically on lockdown. This is all, again, before COVID.

Another pre-COVID example of how the incentives climate has changed to a nearby state in the Northeast in Connecticut. There, another new governor, Governor Lamont, ordered a top to bottom reevaluation of all state incentive programs with recommendations that ultimately the state curtail some of the more discretionary inducements in favor of some of the more what we would call “pay-to-play” programs such as payroll withholding-based incentives instead.

And then finally in Florida it’s been a very contentious climate for several years around incentives in Florida. A lot of that really came about during the Scott administration with a tug of war with the legislature. That has eased somewhat under Governor DeSantis. The governor and legislature seem to be more on the same page now. They’ve agreed, at least for the time being, to allow some of the state’s major incentive programs such as the QTI program and the closing fund, the governor’s closing fund, they allowed them to sunset. So, you know, again, these are three states that have actively used incentives strategically in a competitive process to lure or retain businesses over