Importing Manufacturing.. Boon or Bust?

The largest Chinese manufacturer of solar panels, Suntech Power, has announced that it is opening a manufacturing plant here in Metro Phoenix.  This is fabulous news.  I think.  It is hard to tell what it really means.  What we know is that they are looking to open a plant in the area that will be somewhere around 80,000 to 100,000 square feet.  They will employ about 75 people right away and perhaps double that at the end of next year.  They plan to invest about $10 million.  Some have sighted this as little more than a brand exercise to alleviate concerns that green jobs will all be outsourced over seas.  Regardless of what it is the announcement saw Suntech Power’s value increase 13% or $2.7 billion.  You can see why this move makes sense for them.

This is very similar to the announcements of Google coming to Phoenix in 2005.  Everyone is trying to take credit for landing this whopper of a fish.  Arizona State University says that it’s awesome research prowess landing the deal.  The Greater Phoenix Economic Council is claiming that they were the ones that got this deal done.  Then there are the politicians that cite their aggressive tax credit deals are what made this announcement possible.

The truth is all of them are probably responsible.  The question is could they be doing things that are more productive for our economy?  As we saw, Google didn’t stick around.  They cited lack of quality engineering talent.  Maybe if ASU was less concerned with being an economic development engine and land developer and instead spent their energy on a top notch engineering school.  We lost a lot more than 75 jobs in the last 12 months.  If only, GPEC would have been more focused on strategies to diversify our economy in the last decade instead of traveling the world looking to recruit it in.  Politicians are quick to put out tax credits for large corporations to move operational arms here, but where are the tax credits for local job creation coming from entrepreneurs.  Short of the angel tax credit, there isnt much.

Suntech welcome to Arizona.  We are glad to have you.  We hope to help you succeed.  We hope to see you in the Southeast Valley.

One Comment

  1. This reminds me of weddings and marriages.

    The divorce rate in this country is ridiculous these days. It would seem there’s a serious shortage of desire for people to look beyond the lavish initial event to the long term. When things get tough, people just give up these days and walk away, rather than dig in and try to make it work.

    IMO, too many people spend far too much time, energy, and money on the wedding and honeymoon than on the actual relationship.

    So here we have new companies bringing manufacturing to town. Everyone is patting themselves on the back, trying to take credit for why something good might have happened.

    (Nevermind the fact that Arizona is one of the sunniest places in the country and the obvious choice for a location to develop, build, and IMPLEMENT solar energy to anyone with common sense. Nevermind that it’s sort of embarrassing that we have to have a Chinese firm drop anchor hear, rather than our own locals stepping up to leverage what is perhaps our single greatest resource.)

    I hope that these folks blowing their own horns, talking about how this is all because of them, will stick by this long term. We have a tendency to trade long term growth for the next big thing that’s supposed to somehow make us all rich.

    ASU needs to focus on growing a talent pool that will provide quality employees and shareholders in this venture long term.

    The politicians need to focus on making the company feel welcome and a continued part of the community so they will be flexible when the tax laws change. If the community is valuable to them, they will be more likely to deal with a less favorable tax situation down the road.

    The Economic Council needs to focus on not just attracting random businesses to the valley, but on driving new industries that co-exist with a sort of synergy. Don’t stop with one Chinese solar manufacturer. Seek out others in the solar segment and bring them home to Phoenix.

    The solar market is one which I’ve felt would be the perfect industry for Phoenix, yet there really isn’t much talk of it that I can see. Invest in solar power for all city and state buildings. Offer credits for private businesses that choose to run solar. I dunno.

    Solar could be our bread and butter. It’s only going to get brighter and hotter out here in the future. We need to support this business and encourage other businesses to support them as well – through improved talent, more logistically convenient resources, and by nurturing the seed that grows our city into a globally recognized leader in solar innovation and application.

Comments are closed.