Mitsubishi groundbreaking draws large crowd, political candidates

Workforce quality.

It was THE common thread to comments made prior to the Thursday (Oct. 7) ceremonial groundbreaking of Mitsubishi’s $100 million wind turbine assembly plant at Chaffee Crossing near Fort Smith.

About 350 gathered for the event, with many state political leaders and political candidates in the mix. It was a rare gathering of Arkansas political leadership in Fort Smith.

James Williams, a Mitsubishi executive who emceed the ceremony, said a quality workforce with a good work ethic was the primary driver in Mitsubishi’s decision to pick Fort Smith among 64 other communities bidding for the plant. He said it was clear the area was a place “where manufacturing wasn’t some lost art,” and an area in which civic leaders “appreciated” what the creation of jobs will do for a regional economy.

Mitsubishi Power Systems Americas announced Oct. 16, 2009, plans to build the $100 million, 200,000-square foot wind turbine manufacturing plant on 90 acres at Fort Chaffee. The plant could employ up to 400 once fully operational. Company officials said construction will start in the fourth quarter of 2010 and be complete by the fourth quarter of 2011. Mitsubishi officials expect full production and 400 jobs in place by the first quarter of 2012.

Gov. Mike Beebe thanked members of the Arkansas General Assembly who approved full funding of the quick action closing fund. Beebe used portions of the fund to help lure Mitsubishi to Arkansas.

However, Beebe said the area workforce quality and community support proved to be more important than the incentives, infrastructure support and issues of logistics and geography.

“The one thing that trumps all of those things … that’s the quality of the workforce,” Beebe said, adding that work ethic and job skills are the two key elements of a good workforce.

The sentiment was echoed by U.S. Sens. Blanche Lincoln, D-Ark., and Mark Pryor, D-Ark., and U.S. Rep. John Boozman, R-Rogers. Pryor praised all the people in the region who helped make it happen.

“A lot of other communities hope to get Mitsubishi, but we got it and are here today,” he said.

Ichiro Fukue, senior executive vice president with Mitsubishi Heavy Industries, reaffirmed the companies commitment to complete the first phase of construction in the first quarter of 2011, and begin production in the first quarter of 2012.

“Welcome to a new chapter in energy production in the United States,” Fukue said near the end of his comments.

Fukue and Williams also credited the decision to locate in Arkansas on Beebe’s leadership and that of Maria Haley, executive director of the Arkansas Economic Development Commission.

And although workforce quality was cited by all the speakers, the incentives are not insignificant.

The Fort Smith Regional Chamber of Commerce could pay $585,000 in incentives to Mitsubishi. The chamber incentives have four components. They are:
• Mitsubishi is paid $166,667 upon groundbreaking;
• Mitsubishi is paid $166,667 when the plant opens;
• Mitsubishi is paid $166,666 upon hiring 300 employees; and,
Mitsubishi will receive $85,000 for support of temporary office space for “key employees to begin typical start-up activities,” temporary housing for key employees for re-location and a corporate Hardscrabble County Club membership for one year.

In addition to the chamber incentives, federal stimulus funds will be used to support $3.7 million in tax-exempt bonds as part of the Mitsubishi incentive package. The bonds, issued by the state, will be paid back by Mitsubishi but at a lower interest rate than traditional bond proceeds.

Also, the city of Fort Smith has committed to about $1.626 million in road and water/sewer infrastructure support for the plant. The city will also issue $75 million in Industrial Revenue Bonds of which Mitsubishi will make payments in lieu of taxes equal to 50% of the normal property taxes for the first 20 years on building improvements and 12 years equipment. Even with the reduced property tax payment, the gain in property taxes for the county is estimated at $224,000 for the first year.

According to the incentive agreement document between Mitsubishi, Sebastian County, the city of Fort Smith and the chamber, the standard for a qualified employee is a person with an average hourly wage, to include overtime pay, of not less than $18.