When you're in the business of manufacturing a product, it's hard to see factories as anything but a positive: They create jobs, bring prosperity and, most importantly, create the product that is the lifeblood of your company. If you're planning to open a new factory, it's important to remember that residents and regulators near your proposed facility may have more of an eye toward its disadvantages than its advantages. Understanding both sides of the situation can help you prepare for the pushback.
Stimulating Economic Activity
One of the primary advantages of factories is that even a relatively small one is an engine that generates economic activity. The factory itself may source some of its materials locally, and both the office and production staff will need to buy work clothes, lunches and many other things. They'll fill their tanks at local filling stations on their way to and from work, and trucks — whether inbound with raw materials or outbound with finished products — will do the same. Taxes paid by your company and its staff will contribute to the budgets of each level of government, helping provide services to residents and pay for the infrastructure that makes your factory possible.
Jobs: A Mixed Bag
For much of the last century, a manufacturing job was the gold standard for blue-collar success — a skilled and well-paid job that provided a comfortable living. That isn't necessarily the case anymore with automation and technology reducing both the number of manufacturing jobs and the skills they require. While manufacturing jobs still typically pay better than non-manufacturing jobs for similar skills, wages have been relatively stagnant or have even declined in some sectors. If your factory is located in an economically depressed area, the prospect of jobs, any jobs, will be greeted with enthusiasm, but in more prosperous areas, you may face negative publicity and political headwinds if your proposed levels of wages and benefits don't meet with local expectations.
Burden on Infrastructure
One factor to judge carefully is your impact on the local infrastructure. Depending on your proposed factory's size and needs, the impact may be a non-factor or an absolute deal breaker. This impact takes many forms. If your factory increases traffic dramatically in its surrounding area, it may place an intolerable load on local traffic patterns or even physically on the roads and bridges themselves. You may also represent a competitor for limited resources: Your factory might take away a crucial swath of farmland, for example, or require a large quantity of water in an area where it's already scarce. If your company is in a position to provide infrastructure that becomes usable by the community — perhaps subsidizing an upgrade to a local highway so it can carry the added volume your factory represents — that can mitigate this problem or even turn it into a positive.
Assessing Environmental Impact
An obvious potential disadvantage of your factory is its impact on the local environment. Depending on what you manufacture and how you manufacture it, the byproducts of that process may pollute the local soil, water or air. You'll need to navigate local, state and federal ordinances in varying degrees, and it's important to remember that the regulatory environment will likely change numerous times during your factory's life expectancy. As part of your planning process, it might be prudent to exceed current anti-pollution standards as a hedge against future restrictions and costly revamping of your production process. Go one step further into improved sustainability by using less energy or generating less waste than your peers to forestall potential criticism or generate positive publicity for your proposed factory and your brand.
- National Renewable Energy Laboratory: Economic Development Impacts in Colorado From Four Vestas Manufacturing Facilities
- Kalama Manufacturing and Marine Export Facility SEPA:Final Economic Impact Analysis of the Proposed Kalama Manufacturing & Marine Export Facility
- Kalama Manufacturing and Marine Export Facility SEPA: Environmental Impact Statement - Summary
- Forbes.com: Manufacturing Doesn't Pay Well Nor Make Much Money - So Why Fixate On It?
- Construction Dive: CA Mayor Urges Apple to Pay for Burden on Local Infrastructure
- EPA: Environmental Impact Assessment
- Nike.com: Nike Aims to Minimize Our Environmental Footprint
Fred Decker learned business fundamentals at second hand as an insurance and mutual funds broker, and at firsthand as a retail store manager and the chef/proprietor of his own restaurants. He has written hundreds of business-related articles for sites including Zacks.com, Chron.com, Vitamix.com, Bizfluent and GoBankingRates and many others. He was educated at Memorial University of Newfoundland and the Northern Alberta Institute of Technology.