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Moving the Economy Forward

The city of Charlotte, NC, is on a transformative path, energizing its economy with an expanded manufacturing base and a new light rail line. In different ways, both the train, called the "Lynx," and a state-of-the-art "energy center" industrial base, are helping to form the connective tissue and muscle of a city that eagerly anticipates the future. Both of these developments are closely related to one company: Siemens.

Working in conjunction with then-mayor Pat McCrory in the late 1990s, business leaders in the city began promoting Charlotte as an "energy center," in the style of Harvard professor Michael Porter’s "industry cluster" concept. The idea is that having related industries working cooperatively can lend a region a strategic competitive advantage. In Charlotte, civic and business leaders seized upon the burgeoning power-generation industry as one source of that advantage. Already a presence in the city with its former Westinghouse steam-turbine plant, Siemens agreed, and not just in principle.

In 2010, Siemens announced plans to build a $350 million expansion of its Charlotte turbine plant that would build and refurbish gas turbines for power plants worldwide.

Building on a base of 700 employees in 2010, Siemens has hired an additional 430 hourly workers, as well as engineers and other salaried and administrative positions, for a head count of more than 1,400 since announcing the expansion in early 2010, with as many as 400 more expected to join by 2014.

"More than ever in this economy, every community needs employers that actually build and make things, as opposed to just buying and consuming services," says McCrory, who was mayor from 1995 to 2009 and is now a candidate for governor of North Carolina. "To have such a reputable company as Siemens come to Charlotte, expand in Charlotte, and build things with skilled labor, was so important. The quality of work is also excellent. When I was mayor and went to see the employees, there was a lot of pride in their work. You could actually see and measure the results of their work."

McCrory says Siemens' presence has added significantly to Charlotte's tax base, and the company has also become an important community-service partner.

Transportation is another ingredient in the city's economic vitality. Believing that sustainable transportation alternatives were key to the city's economic future, McCrory helped secure $200 million for the city's Lynx light rail system in the late 1990s. After an extensive bidding process, Charlotte Area Transit System chose Siemens as the primary supplier of trains for the Lynx, which opened in 2007.

"There is no doubt that Siemens was crucial in providing the necessary technology to get our light rail system built," McCrory says. "It is now the role model for the rest of the nation."

Like the state-of-the-art gas-turbine plant, Siemens' rail technology plays an important role in Charlotte's energy future. The advanced braking system of the Siemens S70 railcars uses excess energy from brake applications to return power to the railcars' electric motors. This reduces the power consumption from the trains, which are reducing the amount of automobiles on the road.

And, like the turbine plant, the trains are also an economic boon for Charlotte. The system has been a financial success, driving development to areas around its 15 stations, many of which were once considered undesirable. At least two line extensions are now planned. A March 2011 report from the Center for Transit Oriented Development found that the Lynx Blue Line generated nearly 10 million square feet of new commercial and residential development.

"We actually use the light rail as an economic development tool, because it provides a choice of transportation," McCrory says. "We have people who want to live along the rail because they want choices in their transportation, which has driven incredible economic investment in areas that used to be full of blight. I firmly believe that the more choice you have in transportation, the more competitive you will be in the future."

Together, the Lynx line and the presence of the Siemens gas-turbine plant, which has had the follow-on effect of drawing ancillary suppliers and companion industries to town, not only boost the Charlotte area economically, but will "have an impact on our energy independence as a nation," McCrory says.

[Image via Getty]