So much has been said about the Supu-Opto deal that is on the table in Cleveland. I wrote about this deal a few weeks ago, and immediately started to get some feedback online. Now, Brewed Fresh Daily has had several interesting blog posts, one by Councilman Brian Cummings himself, who staunchly opposes this plan. I was all for it, then after reading Councilman Cummings post, I started thinking a little more. Then, I was asked if I would like to attend a briefing at Mayor Jackson’s office in City Hall. I was so there! The other folks in the room ranged the gamut. The city departments were there, Sustainability, Economic Development, etc, as well as the reps from the utilities. No discussion on sustainability would be complete without local architect Bill Doty of Doty & Miller, and Paul Volpe of City Architecture. The rest of the room was populated by persons of various stature that i do not know personally, but many are respected leaders in their area (it seemed inappropriate of me to ask them to tell me their names again so I could blog about them). There were regular everyday citizens in the room as well.
I attended to find out a little more and to raise some of the concerns that I had over certain aspects of the deal that have come to my attention. First off, let me tell you that I am not one to just “drink the Kool-Aid” and agree with anything in front of me. On first glance, the deal with Sunpu-Opto is innovative and bold. On looking a little deeper, it seems there is more lurking below the surface and that many are opposed to the deal that the Plain Dealer has been reporting on regularly. I left the meeting feeling like I was certain that this was a step worth trying and that there was indeed a chance for it to make a difference to the local economy. So here are just my thoughts, coupled with the things I learned online and at the meeting.
The terms of the deal mean that Cleveland will be locked into a 10 year deal with a semiconductor and LED manufacturer that will establish its North American headquarters in Cleveland and will provide a minimum of 350 new jobs to the area within 5 years. So where to begin?
Jobs: Proponents of the deal say that 350 new jobs will be created in the manufacturing sector within 5 years, starting with 50 in the first year and building over the next five years. A headquarters will be established here for sales, followed by a manufacturing facility, and finally a research and development facility. The biggest concerns in the room were the quality of the jobs, the free ability of the employees to unionize, and living wages. Opponents to the deal say that the jobs will be low paying jobs, “phantom” jobs, or simply will not materialize at all. The proponents at the briefing assured us that there were strict timelines written into the deal that must be met, or we were free of the contract. I am sure that this is overly simplified, but my thoughts on this are simple. When a workforce is out of work, any possibility of new jobs must be looked at. Even if opposition is right and the jobs turn out to be low paying jobs, a city that is embracing gambling as a way to bring ANY jobs to the local economy needs to give them a shot. Saying no to this deal means saying no to those who would be willing to take any job, even at minimum wage, to save their home and feed their family as the unemployment benefits run out. In a time when even fast food is not hiring, any job is a good job. The proponents of the deal say they will be good jobs, and I believe they have done their due diligence, but if I am wrong here, at least some jobs will be created. At the same time, supply chain requirements mean that many local materials and companies could receive new contracts. I lived many years in Seattle and the regionally economy ALWAYS benefited when local airplane manufacturer Boeing did well.
Technology: The biggest concern about the products are tied to performance. Will these LED lights be as good as the fluorescent technology that we are using today, and will Sunpu-Opto’s products be as good as someone else. First off, the LED technology is a no brainer. Yes, it is an evolving technology, and could easily improve in the next 10 years. We in the room were reassured that if we found better pricing, better technology, or better products that Sunpu-Opto would meet those criteria or we would be free to source elsewhere. There were concerns about UL and Energy Star ratings, and the products that we will spec will be rated by these systems before we buy them. Just like buying a new cell phone or a computer, waiting for the newest technology is never a win, as something better is always just around the corner. In the meantime, we are free to pursue new technologies and Sunpu-Opto is committed to exploring new products and technologies that we demand or we are free to source them somewhere else.
The Deal: The biggest lament about this deal is that it is being called a “no bid contract.” I think this is misleading. An RFP was issued. I am willing to admit that the RFP was probably issued based on what the company promised to provide us before it was issued. But when a company makes a promise (quote/deal/offer) as long as it is opened up to other companies to meet those same specifications then it cannot be called “no bid.” GE and an Akron based company both said they could meet the requirements, but never said they WOULD. If they had, there would not be this issue. I am especially perturbed that the entire issue is being blown up by GE and their LAWYERS. They are making the biggest stink and they are the ones who have closed their local manufacturing plants and moved many of those jobs overseas. (In truth, this is according to one of the attendees who researched this on her own). What I do know is that GE bulbs are not built here and that they have not pursued LED technology fast enough as their competitors. The city (and its residents) will have access to manufacturer direct pricing, full replacement warranties, and a meet or beat pricing strategy on streetlights, stop lights, and LED tubes and Edison-type bulbs. There is already a plan in place to test the stop lights and street light before implementation. The products being offered are also a plug in to existing fixture type of replacement that other companies cannot offer. If GE is so concerned, why do they not even make a sensible counter offer to establish a manufacturing plant here? Green Mill Global says it will, but with tax incentives not purchasing contracts. The beauty of this deal is that the city has the ability to use something that is has never used before to attract a new company to the region. Green Mill Global is looking at Akron or Cleveland, and if we win, Akron loses. On the other hand, if we bring Sunpu-Opto, Green Mill Global will likely establish its manufacturing plant in Akron and we are adding even more jobs to the region and promoting competition. The term of the contract is ten years. While this may seem like a long time, the average life on an LED bulb is 7+ years, so it is not like we will be replacing them all the time.
The Company: Okay, I have never heard of Sunpu-Opto before either. Not a big surprise, because I don’t know the names of other semi conductor companies either. They are established in China and just starting in North America. They seem to have a good track record, but there are risks. Any deal with a payoff is a risk. I think the risk is lower here than in giving a single owner the exclusive rights to build a casino in the heart of downtown with little in the way of tax requirements and jobs guarantees. And we voted for that to happen-and have already been told it is going to be delayed!
Sustainability: LED bulbs will use less electricity to operate, and thus lower our carbon emissions. What does it cost the city to become greener? With this deal, even if we don’t get the promised jobs, and the savings don’t stack up as high as were promised, we will still lower our carbon footprint and that has its own non-monetary value. As a city, we are trying to change our reputation to being a cleaner and greener city, not the “mistake on the lake.” Every step forward to boost our reputation in this area is a good one. Every step in this direction means that we have more clout and more visibility, making us more attractive to new industry and companies looking for new locations. Oh, and did I mention that this company is committed to refurbishing and reusing an already existing building in the city?
The city council is scheduled to vote on this issue TOMORROW. I encourage all of you to call, write, or email your council person and give them your thoughts on this issue. Time is of the essence. While many have stated we need more debate, and more time, that is not an option. This company is looking to move forward and is now being wooed by competing cities. Will this be the next project that was talked to the point of just going away? I hope not and I encourage you to contact your council person now and let them know how you feel. So you know how I feel, how about you?
And to think, the season has just begun! Yeah, Cleveland DOES rock.
And be sure to watch the premiere tonight on TV Land at 10pm! Comment before Sunday night when I will do a random drawing!
