The “Anatomy of a Deal” presentation during the 2018 Governor’s Conference in Nashville served as a primer for the industry recruiting process, one that is complicated in nature and yet can include decisions that hinge on the most basic of human considerations.
Allen Borden, Tennessee Economic and Community Development deputy commissioner of Business, Rural and Community Development, hosted a discussion panel featuring Van Hool representatives and state players who recruited the company to the East Tennessee Progress Center.
“Van Hool holds the largest market share in the United States of private coach buses. There are more Van Hool buses sold in the United States, in the private coach industry, than any other company. And they don’t even have a manufacturing facility up and running yet in the U.S.,” Borden said. “This is a really big deal to the state of Tennessee and to Morristown and Hamblen County in East Tennessee, our local partner.”
The facility will be Van Hool’s first manufacturing location in the United States, is projected to create 650 jobs and represents a $50 million capital investment.
“When you look at an industrial cluster like bus-building, Van Hool is right at the very top of the best bus-building brands in the entire world,” Borden said.
Industry clusters are groups of similar and related firms in a defined geographic area that share common markets, technologies, and worker skill needs; and which are often linked by buyer-seller relationships, a hint that the Van Hool arrival will signal more manufacturing growth in the Lakeway Area.
The key players in the deal to bring the company stateside included Filip Van Hool, CEO, and Bernard’s grandson; Benedicte Gruwez, Filip’s wife, who is the project lead for the venture into the U.S.; Victoria Hirschberg, TNECD director of business development, described by Borden as a superstar in her field; and Ann Thompson, TNECD director of workforce development, who created a new workforce training model for the Van Hool project.
“Not only with this project, but with most every major project we’re faced with today, the most important ingredient to success is workforce development,” Borden said.
Van Hool said the company’s interest in a stand-up facility in the U.S. began nearly 20 years ago. The company has imported to the U.S. for more than 30 years. For example, in 2002-2003 it sold 500 buses to the city of Oakland, a number of buses to Salt Lake City and a few fuel cell, hydrogen (electric) buses to the state of Connecticut. The Buy American Act (est. 1933), however, excluded the company from the public transport market. To participate in that market, 70 percent of added value, labor and materials, have to be American.
“We were only active on the private market. But in the meantime, we received a lot of requests from different public transport authorities and other companies, ‘Why can’t you deliver our transit buses?’ Van Hool said.
By 2013, Van Hool decided it was realistic, financially, for the company to invest in the U.S.
“We wanted to offer a wide range of product, not only the coaches; and we see a lot of possibilities in the transit market as well, because we have a whole range of transit buses for the rest of the world, not yet for the American market. And so, it was an interesting opportunity, a business opportunity. It took me two years to convince every member of the family to make this investment, Van Hool said. “And so the whole process started, and we came over to the country to see where we would invest.”
Gruwez attended the Select USA Summit in early 2015, held in Washington D.C.
“That was a very good place to start with, because we had no idea of anywhere to go. Of course, you have some idea: you could go north, you could go south; we definitely knew we didn’t want to go west, because most of our customers are located east. We looked at many, many different states and I visited some of the states that we already knew, that we had contacted already,” Gruwez said.
She had friends who lived in D.C., one of whom was a banker who was interested in moving to the Nashville area and spoke well of the city. Gruwez quickly made contact with Hirschberg and within three months, the TNECD staffer was traveling to Belgium to tour the family’s manufacturing facility.
“It was very important for her to see what we were doing and how we were doing it,” Gruwez said.
Hirschberg chose potential sites, as did representatives of other states, while Gruwez said she spent a year and a half convincing her husband and other family members to tour them.
“And so they did, and we had planes and helicopters and almost emergency landings; we had a lot of fun and interesting views,” Gruwez said.
Because the company’s Belgium factory grew around the small city in which it was founded — the original family home remains in the center of the manufacturing campus — the search for a sense of familiarity was foremost in the minds of Gruwez and Van Hool.
“We visited all the different communities, because we believed we want to be part of the community; that is why the community needs to feel like we are at home. Our factory is part of the village; we live with the community. Most of the people who work with us have worked with us for many, many years. We are very proud of that, it means they like to work for us. So, we wanted to find a community where we felt that would work,” Gruwez said.
“Of course, all the finances, all the figures, and all of that has to add up together; but there’s also something else, and that’s a feeling.” Gruwez said. “When we were on the plane out of Morristown, Filip said, ‘This is where we are going to be.’ And I was panicking: ‘I still have to see so many other places.’ But, of course, afterward the figures added up and we ended up in the selection of three different places in three different states. And Filip made the decision; we gave him all the figures and said, ‘That’s it and now it’s up to you to make the decision of where you want to go.’”
The family considered 24 possible sites in total, Van Hool personally visited 16 sites in six different states.
“It is very, very competitive with all of these companies, because, again, they are making a very serious decision. You start talking about investing $50 million of capital of your own company, that’s serious. There is a lot of due diligence and a lot of competition with these projects,” Borden said.
Van Hool said, in the end, there were practical reasons he chose the ETPC site.
“Tennessee is business-minded,” Van Hool said. “Morristown, I liked the training and the technical schools. As a summary, it is because of the business mentality of the state and that you realize that industry is the base of everything. Without industry, there is no service; we don’t have them anymore in Belgium. It is an issue in all Europe. The United States has understood that and especially Tennessee, because I can compare all the states and that is the reason we opted for Tennessee: their technical schools and their willingness to attract industry.”
The Van Hools worked with Global Location Strategies; after analysis of all 24 possible sites, the firm ranked the ETPC site in the top three.
“I made my decision apart from this study – but it confirmed Morristown was in the top three,” Van Hool said. “And then, as the CEO, I could make the decision, and I chose Morristown.”