Tennessee, Michigan battling for major Dow Corning subsidiary

Tuesday, July 29, 2008 at 1:03am

When Volkswagen announced two weeks ago that it will build an automobile plant in Chattanooga, one would think that state leaders were popping bottles of champagne.

You would be wrong. They likely switched over to Hemlock.

No, we aren't talking about the brew that Socrates drank to meet his maker. Instead, the topic here is Hemlock Semiconductor Corp., a unit of Dow Corning.

HSC is the world's largest maker of polycrystalline silicon, an ultra-pure rock-like material used in solar panels and semiconductor chips. HSC is looking at sites to expand production and one of them is the Tennessee Valley Authority's megasite in Clarksville, according to multiple sources in the state's economic development community.

Sources said the total employment for such a plant could reach 4,000 jobs — double the number VW has projected at its Chattanooga plant. Dow Corning, which rang up almost $5 billion in sales last year, now employs about 10,000 people.

TVA megasites are properties designated by the agency as ideal locations for the automotive or other major manufacturing operations. Each site must have a minimum 1,000 acres, be immediately available, have completed environmental and geotechnical testing, be close to interstate highways, railways and auto suppliers, and have a plentiful labor force. The recently announced VW plant will be built on a TVA megasite.

While many in the state thought Tennessee's main competition to land VW was Alabama, don't tell that to state officials in Michigan. Along with Tennessee and Alabama, the Wolverine State was on the short list to get the new plant.

Now Michigan officials have turned all of their attention to HSC and are trying to get the company to expand at its existing facilities in Thomas Township, west of Saginaw.

While Tennessee economic development officials have been understandably silent on their prospects and Clarksville's city leaders are holding their breath, the folks up in Michigan haven't been as quiet.

On Feb. 14, 2008, Michigan Gov. Jennifer Granholm (D) told the Saginaw (Michigan) News that she had lobbied Dow and HSC leaders to grow the company in Michigan on the same day that Tennessee Gov. Phil Bredesen had made a pitch.

She told the paper that should Michigan land the plant, "We're going to have the biggest hoo-hah celebration when they make the announcement."

HSC-Dow Corning spokesman Jarrod J. Erpelding was more circumspect with the Saginaw paper, stating that "any assumptions would be premature and irresponsible, really, based on us having a meeting with Gov. Granholm."

Although Dow Corning's headquarters are in Midland, Mich., it hasn't stopped company officials from trying to sweeten the deal.

In April, the Michigan legislature passed tax breaks that could be worth up to $35 million a year for HSC. The legislation will let the company claim a credit for some of its electricity costs against the Michigan Business Tax for 12 years starting in 2012, as long as it builds another new or expanded facility in the state.

Joining in at the federal level is U.S. Sen. Debbie Stabenow (D-Michigan). She said in March of this year that she would lobby to enact alternative energy tax credit legislation and respond to any HSC request to make sure its patents were protected from theft. She also pledged to work to secure federal aid to defray the cost of a sanitary sewer system around a manufacturing complex.

Even at the local level, elected officials and political candidates in Michigan are jumping in on the act. State Rep. Kenneth B. Horn (R), who is finishing his first term in the Michigan state legislature said in March, "The absolute No. 1 priority for me is continuing our work and not losing our next expansion of Hemlock Semiconductor to Tennessee."

While lips are loose in Michigan, mum has been the word in Tennessee.

Contacted by NashvillePost.com, Mark Drury, assistant commissioner for the Tennessee Department of Economic and Community Development declined to say anything, citing ECD policy of not commenting on major corporate recruitment efforts.

Despite the silence, there are some clues as to what Tennessee is doing to get HSC to Clarksville.

In May of this year, the Tennessee state legislature approved a budget proposed by Bredesen that included a $100 million economic development "contingency fund." While knowledge of efforts to lure Volkswagen were widespread at the time, state officials refused to acknowledge that the money was to entice the German carmaker and said that other companies also were looking at Tennessee.

Also in Bredesen's latest budget was a provision that created a business tax credit for companies manufacturing products necessary for green energy. Since the materials processed and manufactured by HSC are a vital component in solar panels, it is highly likely they would benefit from the tax credit should they locate in Clarksville.

There is no timeline known as to when a decision will be made by HSC or Dow Corning.

Filed under: City Business
By: JeffF on 12/31/69 at 6:00

note to Nashville leadership. This company will bring real high-tech, high-paying jobs to Tennessee. This is unlike the Dell deal as well as the perpetual desire to bring low-paying tourism jobs to Nashville. Please make note that Nashville will improve when high-tech manufacturing AND headquarters jobs flow into here instead of Williamson and other counties. We are kidding ourselves we we think people are going to live in Nashville and work in other counties. Metro schools are just too bad and the real neighborhoods have been abandoned to the whims of downtown business interests.

By: airvols on 12/31/69 at 6:00

If Nashville is going to compete in the 21st century, it better fix the schools now! Why do you think Cool Springs is making the downtown business district look like a secondary site for business, because the schools in Williams County are the best in the state. People want the best for their kids, and you need people to work in your business. Let's hope Clarksville get's this plant, it will have great impact to Clarksville, Tennessee and Kentucky.

By: girliegirl on 12/31/69 at 6:00

What makes zero sense about this Chattanooga plan is that Nashville has better accessibility, infrastructure, and more affordable housing than the other places mentioned. Plus we have a major airport. Oh, and we have little or no snow. Duh.

By: JeffF on 12/31/69 at 6:00

Chattanooga is a great transportation hub. I-75 is way more important than I-65. Chattanooga also has access to the same number of Interstates that Nashville does. and the Tennessee River and the railroads provide a lot more opportunity to that area. Also I do believe that their housing is far cheaper than ours and their schools are not as crappy. And the only thing making our airport "major" is Southwest. Many Chattanoogans can hit ATL in less time than we can connect through the same airport. I am surprised it took this long for Chattanooga to pull in major players.

By: airvols on 12/31/69 at 6:00

There no comparsion between Nashville and Chattanooga. Basically they were looking to find a large area to build a plant. Nashville is to built out to provide such a site. Nashville has 3 major interstates Chattanooga has 2, Nashville has 1.4 million people in it's MSA and Chattanooga is not much larger than Murfreesboro. Nashville is Coperate Center location and Chattanooga is a factory location. Nashville has much larger airport and on the verge of becoming one of dominate players in the south. The Chamber can send the check to me at...... Just remember it's all Tennessee.

By: JeffF on 12/31/69 at 6:00

I would count I-59 as a Chattanooga interstate so that would give them 3 as well. Unfortunately Nashville MSA may be a corporate center but Nashville itself is not as of late. Williamson County is the corporate center. Also The Nashville Airport may be larger but will never be a "player" without a working hub. And those are not happening for anyone anytime soon. Without a hub your direct flight options are limited to cities that are hubs or the relatively few cities that Southwest serves with point-to-point service. Frequency to hubs, the number of hubs served, and Southwest are the only differences between Nashville and 95% of the other airports in the Southeast. The air transportation industry is given way too much credit for growth in most U.S. cities. So is population. For the record I just looked up Chattanooga MSA is about 5 times bigger than Murfreesboro (which does not have a MSA). And I would bet terrain in the area (mountains and navigable river)limits the amount of open land they has as well. Nashville is too busy trying to be a tourist trap and a downtown redevelopment darling to mess with real economic growth. They will let Williamson County cities get the high-income corporate jobs and let the 100,000-750,000 population cities get the better manufacturing jobs. Our battle cry in Nashville can always be "at least we have Tootsies"