Tuesday, September 24, 2013

How To Bring Manufacturing Back And Turn Around Greensboro's Economy

Greensboro and Piedmont Triad 'leaders' are scheming ways to bring thousands of high paying automotive manufacturing jobs to the Triad but their plans will never work. Why? Because they don't know the history of how the automotive jobs got where they are. They think that by building empty 2000 acre industrial parks (Megasites) automobile manufacturers will come here to save us. They ignore the fact that already there are 18 empty megasites in North Carolina and 180 empty megasites nationwide all still waiting for that 1 auto plant.

They talk about transportation hubs... for what? Empty trailers?

Bessemer Avenue and my own community of Bessemer here in east Greensboro were named for Sir Henry Bessemer, an English engineer and inventor, who founded the process for turning ore into steel-- the 'Bessemer Process.'

Before there was a Cone Mills and before the Cone brothers ever set foot in Greensboro, on the very same property where the Cone Brothers built their first cotton mills was a failed attempt to build a steel mill in Greensboro. It was with high hopes that Greensboro might someday become a steel town that Bessemer Avenue and the community of Bessemer, in what is now known as north east Greensboro was named.

Ever wonder why Alabama has auto manufacturers and we don't? Does the name Bessemer, Alabama have a ring to it? Alabama has lots of steel mills and auto manufacturers need lots of steel. Ever notice there are lots of steel mills near Detroit as well?

Ironicly, Bessemer City, North Carolina was also named for Sir Henry Bessemer whose 'Bessemer Process' made the furnace there, belonging to the Ormand Mining Company, obsolete, despite the fact that the furnace built in 1786 still remains, though unused except as a place for  Ormand family reunions held annually since 1897.

Ever wonder why South Carolina has auto manufacturing and we don't? In Charlotte there are steel mills, (mini mills) supplying steel to auto and truck manufacturers BMW, American LaFrance, General Dynamics and the Streit Group auto and truck makers just across the state line in South Carolina. Freightliner in Cleveland , Daimler in Mount Holly, these are on the North Carolina side of the line just outside of Charlotte.

In the old days steel mills were always located in close proximity to water, coal and/or iron ore. The coal was needed to power the mills, to melt the ore and produce the steam needed to power the equipment. Today's steel mills operate on electricity. And Iron ore? 90% or more of the steel made today is made from recycled steel-- no new ore needed. That's how it's possible to operate clean steel mills inside the city limits of Charlotte, North Carolina and not 20 miles outside of the city limits in some industrial park an hour away from where anyone lives.

So how do we bring auto manufacturing to Greensboro? Well for starters we have to face facts: Steel is heavy and shipping costs are determined by distance and weight. Add distance or weight and the cost of shipping goes up. As the cost of shipping goes up the cost of manufacturing cars goes up. That's why auto manufacturers are always close to steel mills. If we want automakers to come to Greensboro or the Triad then we must first build a steel mill. If we want any kind of good paying manufacturing jobs then we must build a steel mill. Anything else is putting the cart before the horse. You know, the way Greensboro usually does things.

Of course, there are no gurantees that even a steel mill would bring us automakers. Automakers have lots of other criteria like available educated, well trained work forces, high quality of life, good schools, infrastructure and many other areas in which Greensboro is very weak. And then there's demand for their own products. But bringing a steel mill to Greensboro-- especially east Greensboro-- would have many other advantages.

For starters: the City of Greensboro could get a higher return for its curbside recyclables. Lower cost for municipal recycling. Weight and distance, remember. Steel cans are the heaviest thing the City recycles, bar none. Local recycling companies all over the Triad could get higher prices for their own steel scrap which means they would pay higher prices to the Greensboro businesses and residents from whom they buy their recyclables. More money in local pockets means more money in the local economy.

Having a local steel manufacturer might attract manufacturers other than auto makers. Do you have any idea of how much stuff is made from steel? Almost everything in your home that isn't wood or plastic is made from steel. Even aluminum beverage cans have small quanties of steel in them these days as the soft drink industry looks to reduce the cost of using expensive aluminum. Most of what the average consumer thinks is aluminum, brass, bronze or copper is actually steel. Don't believe me? Pick something you think is aluminum, brass, bronze or copper and hold a magnet to it. Magnets do not stick to aluminum, brass, bronze or copper. And for those of you developer types who still mistakenly think building new buildings is a form of economic development, having a steel mill in town would reduce the cost of building those new buildings we don't need and fatten your already bulging wallets with more taxpayers' money.

I used to manage a metals recycling business, I know these things.

Greensboro likes to talk about how well our existing manufacturing base is doing but do you know what the bulk of our local manufacturing base makes? Products made from steel. Having a local steel mill would reduce cost to our current manufacturing base and keep more money here in Greensboro.

So how do we bring a steel mill to Bessemer? Fact is: There's only two men in Greensboro who can pull it off and they'll need a lot of persuading. They're rich but even they'll need some help to make it happen. Not that they can't get the help, they know who to call to make it happen. They know where the money is, own unused and underutilized industrial properties in Bessemer and have the expertise to build and operate the steel mill. After all, they've seen lots of steel mills from the inside out, even invested in a few. If I were running one of Greensboro's economic development non profits or if I had a seat on a city or county board I'd pick up the telephone, call DH Griffin Sr and Frank Brenner and ask, "Gentlemen, what does the City of Greensboro have to do to get out of your way and get you and your friends to build a steel mill in East Greensboro?" You see, the City of Greensboro is the one thing that will get in their way.

I promise they'll have an answer for you very soon. And if Greensboro's "leaders" are smart they'll call before some other city does as both men have properties and investments in the steel business all across the Southeastern United States.

You see, I happen to know from having sold millions of ponds of scrap steel to both of these men a tractor-trailer load at time that neither of them exports the scrap they buy, preferring instead to sell it to steel mills here at home. Maybe if enough Greensboro citizens expressed interest in buying shares in the project, Mr Brenner and Mr Griffin would help lead Greensboro back into prosperity by giving us the raw materials necessary to attract and maintain a manufacturing base here in Greensboro.

After all, bone headed ideas like turning Grandover into a casino-- prohibited by state law-- are not going to save us.

Who knows, maybe we could bring back the American-Southern Motors Corporation (Irving Automobile Co.) or the  Southern Truck and Car Company  who manufactured cars and trucks in downtown Greensboro almost 100 years ago. Or as Greensboro Mayorial Candidate George Hartzman suggested, start our own car company-- the Greensboro car-- the General Greene.

Update: Roch proves me right about the transportation hubs.

Correction: Above I wrote that steel cans are the heaviest thing the City of Greensboro recycles. Actually that's incorrect as glass bottles are Greensboro's heaviest recyclable. Steel cans are Greensboro's second heaviest recyclable. The closest plant capable of actually recycling glass is also over 100 miles away from Greensboro.