For those of you who don’t know my background, way back when in the early 1990s when I was fresh out of university, I got a short term job helping the NB Department of Economic Development write proposals for companies thinking about setting up in New Brunswick. These proposals were essentially the business case for investing in New Brunswick. During a four year stint, I must have written over a hundred of these things.
A few of these proposals I remember with great clarity. UPS and their 900 jobs. The VP of UPS Canada told me that he ‘slept with my proposal under his pillow’. Then there was the Royal Bank and its 500 jobs. Xerox, Air Canada, IBM, etc. etc. etc.
But the one I remember most of all was a proposal that I wrote for a project we never won.
You see, in the early 1990s, the German automakers started to look closely at North America as a site for manufacturing. New Brunswick’s gal in Germany got wind of Mercedes-Benz’s plans and I was tasked with making the case for that company to put 1,500 high paying manufacturing jobs in New Brunswick.
I poured my heart and soul into that proposal. Cost benefits. Low turnover. Loyal workers. The Port of Halifax. The Canadian dollar. 50+ pages outlining the clear benefits of locating in New Brunswick.
The proposal was submitted – most likely along with hundreds of others and in the end the company chose Alabama.
I was devastated. This project could have signalled the beginning of an auto cluster in Atlantic Canada. This project could have been the harbinger of great things to come.
Why Alabama? We were cheaper (because of the CDN $$ and low power rates). We had a better educated workforce (the company had to give remedial literacy training to its Alabama workers because many could not read the interoffice memos). We were as close to the major markets as Alabama. We had lots of low cost land.
In the end, it was most likely the $200 million incentive package that tipped the scales. Some credited the ‘Right to Work’ status of Alabama but I don’t believe it.
Would have, could have, should have. If we had attracted that plant, there would most likely be thousands of high paying manufacturing and related jobs here that aren’t here now (18 firms set up in Alabama to service Mercedes).
Is it possible that Mercedes would have ever chosen New Brunswick? I’ll tell you this, in 1992, Alabama was as unlikely a choice. Now, Alabama is home to several auto production plants and dozens of support companies.
How dare they spend $200 million in corporate welfare?
We have spent over $7 billion in EI payments to New Brunswick workers since that plant first opened.
The other thing that falls into the ‘If I only knew then what I know now’ category is around the sales effort. What if PM Cretien had gotten on a plane with Frank McKenna and went to Germany to hand deliver the proposal? What if Buzz Hargrove himself was part of the sales pitch? What if, what if.
What made me recall this tipping point that was never to be?
This story (BMW came slightly after Mercedes):
BMW produces one-millionth vehicle in South Carolina
BMW Manufacturing Co. has produced its one-millionth vehicle in South Carolina.
The blue Z4 M Roadster, which came off the line Tuesday, will be on display at the Upstate factory for several weeks before moving next door to the Zentrum museum.
On Friday, the company celebrated how far the plant has come since producing its first vehicle in 1994. It has grown from 600 employees to 4,500 employees.
Tisk. Tisk. Tisk.