GEOStrategy

A Relationship That Means Business

By Nancy Musselwhite, CEcD

“Georgia Governor Sonny Perdue announced today that the ZF Group, a leading global automotive supplier for driveline and chassis technology, will expand its existing Gainesville, Georgia operation through the construction of a wind energy plant. This project represents a $90 million investment, and will create 215 jobs once the plant is fully operational.  At its expanded Hall County operations, ZF will manufacture gearboxes for wind turbine energy generation. Construction for the new facility is expected to begin immediately, with an estimated opening in February 2011. The start of production is slated for January 2012.”

Why did ZF make the decision to manufacture gearboxes for wind turbines in Georgia?  A decade ago, Gamesa was shopping spots to set up US operations and handily bypassed Georgia; Gamesa chose Pennsylvania.  Vestas chose Colorado.  The US Department of Energy’s Wind Map of the US (Wind Map) clearly shows Georgia’s potential for wind energy generation is not impressive.  ZF will be supplying gearboxes to Vestas, presumably at their Colorado manufacturing facility.  ZF, a global manufacturer of world-class drivelines for the transportation sector, is a smart company.  Why then did ZF choose Georgia? 

The answer lies in a relationship: a long and valued relationship between not just Georgia and ZF, but ZF and the City of Gainesville and Hall County.  While ZF is over 100 years old, they have only been in the wind business since 2007.  Wind turbine gear boxes convert low-frequency revolutions of the rotor blades to 1,500-2,000 revolutions per minute, and must be able to withstand torque levels that exceed 1 million Newton meters.  Harsh environmental conditions that range from humid to arid and salt-laden air means gear boxes must be robust and durable. The contract with Vestas and the need to get it right the first time helped the company make the decision to go with a community/state partner they’ve known and trusted to two decades.  ZF’s familiarity and comfort with Georgia Quick Start, the state’s training incentive for new and expanding businesses, mean the company can focus on the technology and not the recruitment and training.  To round out the new vertical, ZF is creating service competence centers for wind turbines in Europe and in the US. 

The gearboxes will have to be shipped outside of Georgia.  But in choosing the City of Gainesville, Hall County, State of Georgia, ZF has removed much of the risk involved in establishing a new manufacturing site for a new business vertical in a country 4750 miles from its home.  First, ZF will utilize a secure and established supplier base for its new business.  Second, the community and the company know each other well and have built success before.  They are sure to do it again.