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Start-up spurns Texas for Mich. town

Marketplace Staff Jun 14, 2010

Start-up spurns Texas for Mich. town

Marketplace Staff Jun 14, 2010

There is a certain cold calculation at work in the American labor market. Applicants either get the job they’re going for or they’re not. Companies are either hiring or they’re not. States and cities attract new businesses and jobs or they don’t. Somebody wins, somebody loses. After two-plus years of a down economy, those states and cities are looking for any edge they can get, which is why one Silicon Valley start-up chose Michigan over Texas.

By Jay Field

GlobalWatt is betting on a bright future.

“Hey Chris, where are you?” GlobalWatt’s CEO Sanjeev Chitre says in a phone message to an employee. “I need you to get all these lights on on the factory floor, so thanks.”

Chitre flips a few more switches, and finally, some lights come on. The 74,000-square foot plant is completely empty — stunning in its silence. The solar panel maker leased a plant in Saginaw, and its officials are figuring out how things work there, literally.

“You come here six months from now, you will not recognize this place,” says Chitre.

In a few weeks, says Chitre, the first shipments of heavy machinery will hit this factory floor so GlobalWatt can produce up to a million solar panels a year. This facility used to churn out engine blocks for cars. Lots of auto jobs are gone, but Chitre says his company will be hiring some 500 people for the new operation.

Good news for Saginaw, where the unemployment rate hovers around 13 percent. Bad news for Corpus Christi, Texas.

“We very much wanted GlobalWatt to be part of the Corpus Christi corporate landscape,” says J.J. Johnston, a Corpus Christi economic development official.

And for more than a year, Johnston courted the company. The city has a port and offered the solar panel maker nearly $3 million in tax incentives. But it was taking a long time to negotiate the deal. So on a trip to New York to work out final details, Sanjeev Chitre’s lawyer suggested he meet Kathy Mussio.

“The company had not thought of Michigan at all,” says Mussio.

Mussio’s firm, Atlas Insight, advises companies on where to set up shop. A few years back, a colleague told her the Saginaw area was trying to set up a mini Solar Valley. They already had Hemlock Semiconductor, a chip maker.

“And I thought, ‘Hey, this could work.’ Because they’re creating this great cluster. But more importantly, you know, the unemployment rate was high, and that’s not a negative,” she says.

Mussio consulted with Saginaw officials and hustled a proposal to GlobalWatt. Company officials flew to Saginaw on a Friday, where JoAnn Crary, who drums up business for Saginaw, was waiting.

“We amassed a group of 20 people from executives from Dow Corning and Hemlock Semiconductor to the president of the community college to someone from our utility — anyone that could answer questions that that company had were there on a Sunday evening,” says Crary. “The governor called in from Japan.”

The full court press worked. Tens of millions of dollars of promised tax incentives and an empty 74,000-square foot factory helped.

GlobalWatt has gotten roughly 300 job applications so far. It’ll have one assembly line up and running later in the year.

In Saginaw, Mich., I’m Jay Field for Marketplace.

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