Can it stem the job losses in a sector savaged by foreign competition?
- March 29, 2011
When Joe Fortier moved to Southwest Virginia in 2000 after earning his master’s degree from the University of California, Berkeley’s Energy and Resources Group, subjects like renewable energy development and sustainable construction weren’t hot topics in business and media.
“There was not a lot of emphasis on green building and renewable energy” then, Fortier recalls. A decade later, with fuel prices rising again and public awareness of global warming growing, things have changed. “People are starting to care,” he says, “and if you can conduct business in a way that helps people live a better life and is good for future generations and the planet, that’s a win-win situation.”
Last year, Fortier opened Radford-based ACME Panel Co., a small firm that manufactures structural insulated panels for new houses, replacing traditional framing and insulation with materials that are significantly more energy efficient. “A house that is built today is going to be around for 100 years and the carbon footprint that house has is tremendous, so if you can build a house that has all the comforts and that has half the environmental impact, that’s a huge win for the environment,” he says.
Fortier has eight full-time employees at his factory in Radford and hopes to add five more workers by 2013. “Green manufacturing is one of the most promising fields as far as creating new jobs. It’s all new stuff, and it’s fairly labor intensive,” says Fortier.
Companies such as ACME Panel are emerging all across Virginia to create a variety of green products ranging from alternative fuels and charging systems for electric cars to solar panels and energy-efficient construction materials. Encouraged by government incentives and tax breaks, the trendy sector is slowly creating new, badly needed manufacturing jobs in the commonwealth.
In Danville, for example, Herndon-based software and IT firm EcomNets is hiring 160 employees this year to build energy-efficient personal computers made from recycled parts. Also in Danville, the year-old U.S. Green Energy Corp. is expected to open a 27,000-square-foot headquarters and manufacturing plant in April. Plans call for hiring 100 workers by the end of the year and 400 within three years. The company makes roofing, siding and windows integrated with solar photovoltaic and thermal components.
During the past decade, the U.S. lost 5.5 million manufacturing jobs, and Virginia suffered the fourth greatest loss of any state in the nation, taking heavy blows to its automotive, textiles and furniture industries. (Only Ohio, Michigan and South Carolina fared worse.) Since 2000, the federal Bureau of Labor Statistics says, Virginia shed roughly 140,000 manufacturing jobs, a 38 percent reduction in the sector’s work force. (By contrast, the state lost 31,500 manufacturing jobs in the 1990s, a decrease of 8 percent.)
There hasn’t been a significant study of the economic impact of new green manufacturing jobs on the state or national level. Brett A. Vassey, president and CEO of the Virginia Manufacturers Association, says that although green products are popular and make for good PR, he doesn’t expect the industry to be significant enough to stanch Virginia’s loss of jobs anytime soon. “It is not fathomable that the fashionable product of the day, whether it be solar panels or other products, is to going to replace those [lost jobs],” says Vassey.
For one thing, he says, companies are less likely to manufacture products in the U.S. while their foreign competitors can still pay lower wages and taxes and have fewer regulatory costs. “You can be sure if you’re making a solar panel that someone else in China is making the same solar panel,” says Vassey. Shareholders are going to demand that products be made “where the best deal is. Green means something very different at that point in the conversation — it’s the green in their pocket.”
Not everyone agrees with Vassey’s assessment, however. “What the Internet was to the ’90s, green technologies will be moving forward,” asserts former Virginia Democratic gubernatorial candidate Terry McAuliffe. “These are the jobs of the future. Literally hundreds of thousands of jobs will be created in this space.”
As a businessman, McAuliffe is very focused on green ventures. Last year, McAuliffe’s Northern Virginia-based GreenTech Automotive purchased EuAuto Technology Ltd., a Hong Kong manufacturer of electric cars. The company will begin manufacturing two electric vehicles and three hybrid models this year in a plant in Mississippi. (McAuliffe wanted to open his plant in Virginia, he says, but Mississippi made a better offer, and “I have a fiduciary duty to my shareholders.”)
“What people find exciting about it is that no one had ever gone to China and bought a manufacturing company and moved it to the United States of America,” says McAuliffe, speaking by telephone from Geneva, where he was striking deals to sell his cars in European markets. “America cannot give up a sector to China or any other country for that matter. I want to show that we can do it here, and we’ve got a great work force in America, and we can beat China at this, but we’ve got to keep moving at warp speed.”
Going green is also a national security issue when it comes to seeking alternative fuel sources to gasoline, McAuliffe says, noting the rising fuel costs due to political instability in the Middle East and the fact that some oil-rich Middle Eastern governments aren’t always friendly toward the United States. “We’ve got to get off this addiction to foreign oil,” he says. “Electric cars let you do that.”
Tom Hough has started a venture in Wytheville that he hopes will help make the widespread use of electric cars a reality. “It’s a very good feeling to drive by your gas station and thumb your nose at it. It can go up to whatever price it wants to,” says Hough, CEO of Evatran, a company that is developing cordless charging systems for electric vehicles. “People want to be green, but this is even a greener green because it has political value and it’s good for the country.”
Evatran now has a work force of 14 and recently made its first product shipment to Google. Evatran also recently exhibited by invitation at the prestigious Ideal Home Show in London.
Clean power and biofuels represent other emerging green sectors in Virginia that could produce manufacturing jobs. In Ashland, the Dominion Resources GreenTech Incubator (no relation to McAuliffe’s GreenTech Automotive) hosts several companies working on renewable energy issues, including Marine Renewable Technologies, which creates underwater hydraulic turbines for generating power; ECoRE (Energy Conversion Research Ventures), which is developing technology to convert landfill waste into biofuel and electricity; and Marz Industries, which is developing kinetically powered, clean-emission hydrogen fuel cells to power tractor-trailer truck cabs when long-haul truckers are resting at truck stops.
Several businesses associated with generating power from offshore wind farms are also in various stages of development. One example is Gamesa Technology Corp., a Spanish wind turbine manufacturer, that’s partnering with Northrop Grumman’s Newport News-based shipbuilding operation to build turbines for the Virginia Beach wind farms out of a facility in Chesapeake,
Creating specialty products and components for larger products such as these wind turbines are probably the most viable growth areas for Virginia in green manufacturing, Vassey believes. But he also says Virginia’s greatest asset in this sector may just be the good, old-fashioned perspiration and inspiration that entrepreneurs are bringing to bear as they seek new product solutions for problems such as how to charge electric cars or how to create cleaner alternative fuel sources.
“Innovation is always going to be the area where the Untied States excels because it’s very difficult for us to compete on price,” Vassey says. “We have to get to the market faster and develop it faster. That’s where our advantage is.”