August 03, 2015

Mitsubishi’s Plant in Memphis Will Employ 275, Make Electric Transformers

By:  Wayne Risher
Commercial Appeal
The news was positively electrifying: Memphis will be home to Mitsubishi Electric’s largest U.S. investment, a $207.7 million factory making 400-ton, boxcar-sized electrical transformers.
The Japanese-owned, Pittsburgh-based company said Monday it plans to open a 330,000-square-foot facility in Rivergate Industrial Park in 2013 with about 90 employees. It would ramp up to as many as 275 workers at full production and include headquarters for the company’s heavy electrical products.
Following Electrolux’s decision to build a kitchen appliance factory here, it’s a sign of better economic times ahead. Average wages by 2015 are expected to top $47,000 a year, before overtime and benefits, and Mitsubishi said it plans to mostly hire and train local people to work in the plant.
"I hope you guys feel the energy in the air like I do right now," Memphis Grizzlies star Rudy Gay told a roomful of business, political and community leaders in The Peabody’s Skyway.
Gay warmed up a crowd of 200-plus who turned out to hear Gov. Bill Haslam make it official: Memphis beat the competition because of transportation infrastructure, work force and pro-business climate. Houston was also pursuing the project.
Tennessee, Memphis and Shelby County incentives didn’t hurt. The package includes an $11 million state grant, $1 million from Shelby County, infrastructure work by the city of Memphis and a proposed city and county property tax freeze worth $41 million over 15 years. Mitsubishi Electric’s total, direct investment would be about $195 million.
The company currently is making extra-high-voltage shell-type power transformers at a 50-year-old factory in Ako, Japan, said Brian Heery, president and CEO of Mitsubishi Electric Power Products Inc. The product, used by utilities, power plants and industries, steps high-voltage current up and down between generating facilities and transmission lines. The market is expanding because of efforts to upgrade the country’s power grid to incorporate wind power and other alternative sources, Heery said.
"We will soon be supplying the transformers they need from a U.S. factory," he said.
The crowd assembled by the Greater Memphis Chamber included Howard Baker, former U.S. senator and former ambassador to Japan; Hiroshi Sato, Japan’s consul general in Nashville; and U.S. Reps. Steve Cohen, D-Tenn., and Stephen Fincher, R-Tenn.
Haslam said in the wake of substantial investments by Pinnacle Airlines Corp., in a Downtown headquarters, and by Electrolux, in a factory at Frank C. Pidgeon Industrial Park, "I think it’s fair to say Memphis is on a roll. I think what you’re seeing today is a sign of more to come."
Memphis Mayor A C Wharton called it "one of the most significant projects this community has ever undertaken," and said it dovetails with goals of a greener and healthier city. "You’re going to be a great partner with us."
Heery said construction would begin this spring.
The company proposes to build a 330,000-square-foot factory building and a 40,000-square-foot, two-story office building, connected by a pedestrian bridge. It is buying 97 acres for the initial facilities and 49 acres for expansion.
River and rail access were key in the decision. The site has access to the slackwater Memphis Harbor, and rail lines run nearby to the CN (Canadian National) Railway Memphis intermodal gateway and Harrison Yard. Water and rail are the only practical ways to transport the transformers.
A 4,100-foot rail extension and relocation of a city-owned sewer trunk line are part of the site-preparation package.
A tax-freeze application said one justification for tax incentives is the cost of building a factory capable of holding super-heavy loads. Foundation pilings would be up to 70 feet deep.
The Memphis-Shelby County Industrial Development Board is scheduled to hear the tax-freeze application in a called meeting this morning.
"We needed a large waterfront site near a city that could support our recruiting and training goals," Heery said. "Memphis was chosen for its strengths in these areas and the support of its state and local leaders."
The company said the plant would be designed and constructed by O’Neal Inc. of Greenville, S.C. The site search was conducted by McCallum Sweeney Consulting of Greenville, S.C.
Mitsubishi in Memphis
The project: Memphis factory will produce extra-high voltage shell- type power transformers for utilities, power plants and industries.
The company: Mitsubishi Electric Power Products is a unit of Mitsubishi Electric Corp. and is one of six subsidiaries of Mitsubishi Electric US Holdings Inc., which employs 3,000 people at 30 locations. One of Mitsubishi Electric’s more familiar products is Diamond Vision large-display video screens, including the world’s largest at Cowboys Stadium.
The location: Rivergate Industrial Park, owned by Belz Enterprises, is at Rivergate and Riverport roads, off Interstate 55 in Southwest Memphis.