Home > About BNE > Press Room > 2006 Archive > December > Big projects don't always result in big workforces

Big projects don't always result in big work forces

 
By DAVID ROBINSON

12/17/2006

Sometimes, it's all about the investment.

There's some pretty big money being bandied about these days for three big projects that are on the drawing board for the Buffalo Niagara region:

Up to $1.5 billion for a new clean-coal burning power plant; $1.8 billion for a coveted new HSBC Bank data center in Niagara County, and $300 million for a hoped-for new line of diesel engines for General Motors Corp.'s Town of Tonawanda engine plant.

If the region hits the jackpot and all three projects come in, that wave of investment could pump more than $3.5 billion into the local economy over the next 15 years.

What the projects won't do is create jobs by the thousands. With the U.S. auto
industry shrinking and technology producing astounding gains in productivity, we'll have to settle for good jobs by the hundreds, even if our ship does come in.

But that's not a bad thing, because it also will wrap the local operations of two of the region's biggest employers - GM and HSBC - in a new security blanket that will put their existing jobs here on more solid footing for years to come.

"If you don't do some of the technical enhancements going forward, you might lose other operations and their spin-off aspects," says Thomas Kucharski, the president of the Buffalo Niagara Enterprise economic development and marketing initiative.

At this point, nothing is set in stone, and that $3.5 billion wave of investment could end up petering out before it reaches Western New York, even with each project in line for millions in lucrative tax breaks and incentives.

The HSBC project seems solid, and now it seems likely that NRG Energy's Huntley Station in the Town of Tonawanda is in line to get at least $1 billion in funding for a clean coal project. There are five sites statewide vying for the project, including AES Corp.'s Somerset plant in Barker. Only one is to be selected.

But GM is playing the Tonawanda engine plant off against at least one other North American site for the new diesel engine line and the accompanying upgrades to two other engine lines that make the entire project worth $300 million. So that project is iffy.

 It's important even if the power plant projects are expected to create only about 100 permanent full-time jobs.

"This is very important to our economy," says Erie County Legislature Chairwoman Lynn Marinelli, D-Town of Tonawanda.

It's important even if Erie County Industrial Development Agency officials expect the engine plant's work force, which already has dropped to about 1,900 today from 3,400 in less than four years, to keep shrinking.

It's important even if the HSBC data center project, including the expansion of a sister site in Amherst, will create only about 80 high-paying tech jobs.

That's because the spin-off benefits from each of those projects will be significant. The BNE estimates that the bank data center project will bring in another 170 support jobs paying almost 40 percent more than the regional average, not to mention 350 construction jobs lasting two years.

The power plant project would mean upwards of 1,000 construction jobs for as long as four years, and the engine plant has a broad network of local suppliers and businesses that rely on patronage from GM and its workers.

These days, that's a pretty nice prize.

drobinson@buffnews.com