Access to markets and transportation, low power rates, favorable government tax and land incentives - all are important to some degree to site selectiongurus. But the most frequently mentioned concern of these special-ists in economic geography appears to be an apparent lack of workers for the plastics industry, both in skills and in absolutes, at the rates of pay the industry says it can afford.
The order of site selection priorities varies. Interviews with site selection principals on the plastics industry reveal several key points.
Dennis Donovan, a 20-year economic geographer and senior managing director of Wadley-Donovan Group of Morristown, N.J., said, ``Global sourcing is much more of a trend in the American plastics business than being located next to a customer or supplier. You can find exceptions - in autos, for example, but this pheonomenon applies in no more than 20 percent of the cases.''
Important to Donovan is the distinction of site selection needs of plastics fabricators and assemblers from those of injection molders.
``Seventy-five percent of plastics fabrication is mobile - they could easily move long distance, because transportation costs have come down so much that a company can move a few states away and serve the same market.''
Not so for injection molders, who have machines to move, he said.
``The medical market can be anywhere,'' Donovan said, as an example.
In general, for a fabricator, plant location is secondary to market location ``as long as power costs are lower than 4 cents per million cubic feet for natural gas and 7 cents per kilowatt, [there is] adequate water and sewer and a good [local and state government] incentive program.''
John Butera, manager with Hunt Valley. Md.-based PHH Fantus Consulting Inc., at its Flor-ham Park, N.J. offices, said, ``Being near markets is not the primary reason behind all plastic processor relocations.''
Butera has been a manager six years with Fantus, a company that manages some 300 site selection studies a year worldwide.
Butera said he has worked with a plastics manufacturer that located in central Nebraska, away from its primary markets, to rachet down costs and ``create a quality of life.''
``They're achieving their objectives with regards to markets'' Butera said.
But Clint Hoch, president of site consultancy Corplan Inc. of West Orange, N.J., believes proximity to markets should be of primary concern to any molder or fabricator. To Hoch, ``labor is important, right up there,'' but ``markets are still the key; you got to sell the product first.''
Hoch also said his research indicates that despite pioneering moves across the United States, ``Plastics processors have remained in the states and regions where the industry was born - the Midwest and California.''
Hoch differed with the other consultants to say that with rare exception, ``plastics processors will move only to serve a market.
``And if they do plan a move, companies should make better use of federal Census Bureau information regarding the education attainment of the population before making a final decision to move to a given location.''
He adds, ``Most people charged with finding a new place for a company to do business have never done that job before and are likely to see where another company has gone and recommend moving there.
``Plastics processors will follow where a leading industry goes. Semiconductor operations have just been announced by IBM in Prince William County, Va., 25 miles south and west of Washington, D.C., and by Toshiba Electric Corp. near Richmond, Va. These are indicators enough that the plastics industry is not far behind.''
But to Donovan, proximity to markets is less of a problem for the plastics industry than labor.
Butera agrees. ``Labor - its cost, quality and availability, is one of the more critical elements. Think also about the labor/management climate. How flexible are the employees in the area you would choose?''
To make his point about the need for a properly educated and motivated work force, Dono-van notes, ``In plastics, with the tremendous demand for plastics products, there's been competing demands for available capital. Companies have delayed expansion as long as possible, preferring to fill orders with second shifts and overtime instead. They've always been thinking the economic expansion will be temporary.
``Now they've reached a point where they don't have the kinds of employees they need, or additional shifts and overtime won't fill the order anymore,'' he said. ``They have orders booked, which means they have to expand or move quick.''
While agreeing the Census Bureau has statistical information for reference, some of that information is based on the now-dated 1990 census, he said.
``The weakest link in the human resource element economic development agencies data is on labor quality, and labor demand,'' Donovan said. ``There's no way [the Census statistics can reflect] accurate information that telephone interviews with local employers, employment agencies, planning agencies will produce to assess the labor market. It's very easy to get statistics on supply, tough for demand.''
He suggests one tactic for a processor considering moving is ``going in [to the community] and talking to fellow employers looking for the same kind of workers.''