Maayan Schechter|The Greenville News
A new study out this month paints a pretty picture of the Palmetto State when it comes to where companies should look to re-shore their manufacturing sites in the United States.
Out of 48states, excluding Hawaii and Alaska, South Carolina ranked the lowest in the cost of operating an advanced manufacturing plant at$30.1 million.
New Jersey ranked highest at nearly $40 million, a 24.4 percent difference compared to South Carolina.
Princeton, New Jersey-based site selection firm The Boyd Company, which boasts clients like Boeing, PepsiCo and JP Morgan Chase, focused on key cost elements important to the site selection process, like real estate, labor, power and taxes, according to the study.
The firm has also been involved with significant clients inthe Upstate region, including Verizon and TD Bank.
The study is one of the first for the firm, following a resurgence in the national discussion of re-shoring manufacturing plants.
“It’s kind of designed to be an initial resource for companies to see how operating costs vary among the 48 contiguous U.S. states," said John Boyd Jr., a principal at The Boyd Co. andson of the company's founder."South Carolina is the lowest cost state in the analysis. That’s terrific news for South Carolina."
The study based costs on a hypothetical 225,000-square-foot advanced manufacturing plant employing 500 workers.
Under the analysis, South Carolina's total annual labor costs– about $26 million– ranked lowest compared to the most expensive state, New Jersey, at $34 million.
The hypothetical study also drew up property and sales tax costs for South Carolina: $270,000 in property tax costs and $600,000 in sales tax costs.
Next door, neighboring state North Carolina's total annual labor costs came in at about $29 million, with $322,467 in property tax costs and $500,000 in sales tax costs, thestudy showed.
Boyd, who spoke to The Greenville Newsat the Greenville Marriott Hotel on Monday,was in the Upstatethis week meeting with at least two clients, he said.
Though he's not native to the state, Boyd joked he almost holds a dual citizenship for the amount of time he's spent in South Carolina.
“Well, the joke is, South Carolina has been so hot and so attractive over the past 18 months, we project this momentum to continue," he said.
Boyd said re-shoring is certainly a trend occurring in the U.S., following a loss of more than 2 million manufacturing jobs to markets in countries like China and Mexico between 2000 and 2015.
"But, we’re seeing the pace of re-shoring to accelerate under this new administration, under tax cuts that seem to be on the horizon, new infrastructure spending, eliminating expensive environmental regulations, the idea of potential new trade policy that'll make it more costly to produce in China and Mexico," he said.
Butch Kirven, chairman of Greenville County Council, called the study's findings good news for the county and South Carolina. But the real challenge, he said, lies in the ability to offer a labor force for these larger manufacturing operations.
"It is one thing to have cheaper land, power, and even lower than U.S. average salaries, but if we cannot supply the labor skill sets these advanced manufacturing companies need, we will struggle to be successful," Kirven said by email. "However this is precisely where Greenville County has prioritized in partnership with Greenville Tech, Greenville Schools, local universities and our local companies.The Center for Manufacturing Innovation that Greenville County funded is a benchmark example of the commitment Greenville County has made to position us to supply the best educated work force for advanced manufacturing possible."
Though the firm considers itself "non-partisan," Boydcommended President Donald Trump's "America first agenda" for being part of that motivation.
"You have Samsung, you have Volvo with their first North America production facility in Charleston, which is a very exciting project," he said.
In June, South Korean-based Samsung announceda $380 million investment in South Carolina to manufacturer home appliances at theformer Caterpillar plant in Newberry.
The investment is expected to create nearly 1,000 jobs in three years.
The announcement came just hours afterSouth Korean President Moon Jae-in left for the U.S.for meetings with Trump, The Associated Press reported.
Just this week, the White House announcedTaiwaneseelectronics manufacturer Foxconn Technology Group planned to invest $10 billion to build adisplay panel plant in Wisconsin. The plant could employ up to 13,000 workersbut would require up to $3 billion in subsidies from state taxpayers, according toUSA Today.
"This is a president that seems to be putting economic development inside of the Oval Office," Boyd said."Look at the Carrier announcement, Ford and Samsung.The president has his fingerprints on a lot of those deals."
South Carolina's explosion of manufacturing plants, whether automotive, aerospace or food processing, can be credited to the former Gov. Nikki Haley, now U.S. ambassador to the United Nations, and Gov. Henry McMaster, Boyd said.
The likes of State Commerce Secretary Bobby Hittand Sens. Lindsey Graham and Tim Scott are also playing key leadership roles, he said.
"What a great advocate Lindsey Graham is for the region," Boyd said.
What about South Carolina makes it so attractive to companies: Boyd said No. 1, those low operating costs and close to first, the "terrific workforce program."
Add onto that list the state's technical schools and programs,South Carolina'sright to work status and the available infrastructure from the Port of Charleston to the Inland Port inGreer, he said.
"The Port of Charleston is one of the highest-performing ports in America today. Then there'sthe new Hugh Leatherman terminal that’s being built. (S.C. Sen.) Hugh Leatherman is one of the most influential politicians in South Carolina at the state level. That’s a $700 million expansion," he said.
Boyd said there's always a concern that high-performing markets, like South Carolina, could so-called "tap out" in space and incentives.
But, he said, with company expansions that includeBMW's recent announcement of a $600 million investment, with the addition of 1,000 jobsat its Spartanburg manufacturing plant, it shows precedent to other companies looking to move in.
"There's a lot of interest in South Carolina today, especially, to be honest, the northeastern part of the state, the Florence, Dillon market," he said. “That could be the next wave of corporate investment into the Palmetto State, because of its low cost profile, its workforce training program."
However, just because South Carolina has the cheapest costs, doesn't mean it won't be an all out war to land the next big plant project, Boyd said.
"We call economic development in 2017 the second war between the states," he said. "That’s how competitive it is."
