This story is part of GlobalAtlanta’s exclusive Japan special issue. Click here to read more.
Cranes at the port of Yokohama, Japan’s largest ocean terminal, are visible from the skyscraper that houses Mitsubishi Heavy Industries Ltd.
Off in the distance, white wind turbines spin, turning the coastal breeze into energy for this city of more than 3 million.
The Mitsubishi name is attached to many different firms under the Japanese conglomerate. This one is all about transportation, power generation and infrastructure.
Mitsibushi Heavy Industries Americas Inc., the company’s subsidiary for the Western Hemisphere, made its first investment in the U.S. in 2001. A maintenance center in Orlando, Fla., was established to service gas turbines, huge rotary engines that plants use to convert natural gas to electricity.
The company made a raft of sales in 2000 and needed a local presence to keep existing machines in tip-top shape while increasing market share.
Shin Gomi, who spent five years working at the company’s Lake Mary, Fla., headquarters, said he made periodic visits to Atlanta to meet with representatives from Southern Co., a Mitsubishi customer.
During an interview in Yokohama, Mr. Gomi told GlobalAtlanta that he had also visited a Georgia port city: Savannah, close to where Mitsubishi Power Systems Americas is building a manufacturing and maintenance complex for gas and steam turbines.
The company announced in late 2009 that it would invest $325 million over five years to build the facility on a 119-acre plot at the so-called “mega site” in Pooler, Ga., about 10 miles from the Port of Savannah. The complex will eventually employ 500 people.
The first phase, a 128,000-square-foot gas-turbine components factory, was completed in 2010. The company is set to complete the second phase, a service and repair facility, this year. On March 24, a 332,000-pound gas turbine arrived at the Savannah port from a Mitsubishi facility in Takasago, Japan. It will be used to train maintenance employees.
During his visits from Japan, Mr. Gomi loved Savannah’s food (especially the meatloaf) and scenery (the historic district), but it was ultimately the location and a variety of other factors that led Mitsubishi there, he said.
Coming from Yokohama, the company knew the importance of convenient port access, especially when dealing with huge machines and providing services for customers throughout Central and South America. Orlando had no such port, and there was no more space at the Mitsubishi headquarters in Lake Mary. Savannah had both.
And while it was important to be able to receive international shipments, it was also vital for the company have a U.S. presence to serve American customers, said Mr. Gomi, a global business development manager with expertise in gas-turbine maintenance.
“Our current focus in Savannah is service,” he said. “We understand that the turbines are going to run for 30-40 years. They have to have maintenance in order to actually have their expected lifespan. The customer will actually hesitate if he has to ship those types of rotors outside of the states” because the process can be costly and time-consuming.
Georgia’s workforce was another draw, especially considering that the state shouldered some of the training burden through its workforce training agency, Quick Start. Mitsubishi could have gone to a country with cheaper labor, but precision and productivity are key when working with such valuable machinery, Mr. Gomi said.
“This is a high-technology product and we need highly skilled workers to produce the machines,” Mr. Gomi said.
Some manufacturers in China and South Korea are licensed to make Mitsubishi turbines or parts, but this will be the first time the company has produced gas and steam turbines outside Japan, said Yoshi Tsuchiyama, acting general manager for strategy and planning for Mitsubishi Power Systems.
Mr. Tsuchiyama, who enjoyed eating at Savannah’s Olde Pink House, remembered that the state offered a strong incentives package to lure Mitsubishi after its two-year search around the Southeast.
Georgia shelled out $39 million worth of enticements to win the Mitsubishi project, according to a spokesperson at the Georgia Department of Economic Development. That includes the Quick Start training, job tax credits, a manufacturing sales exemption and the value of the land.
To hear Savannah economic developers tell it, the deal was worth every penny.
The Pooler mega site, also called the Chatham County Industrial Site, covers more than 1,500 acres. It was initially intended for DaimlerChrysler AG, which in September 2003 scrapped plans to spend $750 million to build a plant that would have produced vans there.
“It’s the first location on the mega site, and that in itself is exciting for Savannah,” Brynn Grant, vice president of the Savannah Economic Development Authority, said in December as the company began construction on the complex’s third and final phase, a gas-turbine assembly plant.
Mitsubishi Power Systems Americas got approval from its parent company last November to begin the third phase, which should be finished next spring. The company has already taken orders for three gas turbines to be produced in Savannah next year, said Shuji Holi, a project manager for the company in the U.S.
The March 11 earthquake that devastated northeastern Japan hasn’t had any adverse impact on progress at the Savannah plant, Mr. Holi said.
The earthquake knocked out power to reactors at Japan’s Fukushima nuclear plant, where workers have sought to prevent the release of radioactive material into the atmosphere. Safety concerns have stalled some nuclear construction projects, but they shouldn’t derail the industry in the U.S. for the long-term, he said.
He added that Mitsubishi’s Savannah plant hopes to eventually produce rotors for nuclear facilities in the U.S.
Related:
Mitsubishi to Begin Construction on Gas Turbine Plant
Mitsubishi’s 166-Ton Gas Turbine Arrives at Savannah Port
Stronger Yen Could Lead to Japanese Expansions in Georgia
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