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Global Carolina Perspectives: Mark Pringle and Siemens Energy

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CHARLOTTE, NC – Charlotte-based Siemens Energy Inc., already a driving force in the gas- and steam-powered turbine industry, is in the midst of a major expansion. The company is constructing a new 60,000 square foot addition to its Charlotte site – which is already Siemens’s largest facility in the United States. The expansion is expected to bring with it the addition of more than 800 new jobs – among those a number of engineers that will provide design and fabrication skill sets to the operation.

As director of operations at Siemens Energy, Mark Pringle is not only helping to make certain that the company’s aggressive expansion plans remain on track. He is also hard at work behind the scenes, to ensure that the move will serve to build on the momentum the Charlotte region has already generated toward becoming “The New Energy Capital.”

Pringle recently talked to the Global Carolina Business Journal about the progress being made at the Siemens construction site, a recent visit to the facility by the president of the U.S. Export-Import Bank and the challenges that remain in establishing a viable energy cluster in the Carolinas.

Global Carolina: Siemens Energy announced in March it was adding more than 800 jobs at its Charlotte production facility. Many in the Charlotte area saw this as another major step forward in the region’s drive to become “The New Energy Capital.” Could you fill us in on the latest developments from the production facility?

Mark Pringle: Things are going really well at the plant. We’re on schedule with our plans. We’re designing a whole new manufacturing plant to be added behind the existing one. We’ve finished the design of the building, and we’re now into detailed design. Construction and site movement is actually set to begin next month, but we’re already in the process of moving the parking lot from the back of the plant to the front in order to clear out the space where we’ll be building the new building. So that’s all moving ahead according to plan. We’re on an extremely aggressive schedule to try to have the plant done by the end of the next calendar year – and, so far, we’re still on that plan.

GC: The President of the Export-Import (Ex-Im) Bank, Fred Hochberg, recently visited the Siemens facility. Can you elaborate on the purpose of his visit?

MP: The purpose of the Ex-Im Bank is to come up with financing for projects that will promote the use of U.S. products and promote job creation at home in the United States. For example, there are a number of countries that have power projects where they want to build power plants, but they don’t have the money to do so. We just recently had an order through the [Ex-Im] Bank for plants in Korea, where they wanted to build plants and they wanted to use Siemens products that we build here in this plant. The Ex-Im Bank financed the deal, so that they can have their power plant and we can build the products here – and as a result U.S. workers will get jobs. There are numerous other opportunities like that out there. And so our key mission was to show them the plant here: how many people we have working here, what our capabilities are, and that financing our projects truly is a way to promote U.S. jobs.

GC: I assume this visit was part of a larger sort of “publicity tour” for the Ex-Im Bank to, in part, promote the current administration’s National Export Initiative. Do you see the role of exports, and in particular the dealings of the Ex-Im Bank, playing a more prominent role in the activities at Siemens Energy in the future, especially as the Charlotte plant is the central production facility worldwide for the turbines it produces?

MP: Over the past two years alone we’ve shipped over US$650 million of product outside the country. So, obviously, we do a very healthy export business. I definitely think there are a lot of projects under consideration now, and more to come, where the Ex-Im Bank can play a key role in financing the projects for these other countries and can use our products.

GC: The Charlotte Region’s philosophy in its drive to become “The New Energy Capital” is to use an “all-of-the-above” approach to growing the energy industry and to supplying our energy needs – everything from traditional sources such as coal and natural gas to nuclear to renewables such as wind and solar. How do Siemens’s efforts reflect this approach, and what do you see as the benefits of adopting such an approach

Having recently re-branded itself “The New Energy Capital,” the longtime banking center is quickly becoming an international hub for energy research and production. American and foreign corporations are looking at the entire Charlotte Region as a place for new development and growth. Numerous companies, educational organizations, chambers, and economic development groups throughout the Carolinas are helping the Region establish itself as a global player in the new energy economy. Some of those include:

Duke Energy

Siemens Energy

Piedmont Natural Gas

Areva North America

Proterra

Celgard

Greenfield Power

Sencera

Innovative Solar Solutions

IMO Group

The University of South Carolina

UNC-Charlotte

NC State University

Clemson University

Midlands Technical College

Charlotte Regional Partnership

MP: We agree that there is no “silver bullet” as far as a solution to the energy needs of the country goes; you need all the various sources at your disposal. And in reality we believe that combined-cycle power plants are probably going to play a key role in this as we retire more of the coal-fired plants. The output of any wind turbine or solar option is just so small relative to the size of many of these [traditional] plants that it would take way too many of them than is practical to replace these coal plants. So Siemens supports the view that energy is a portfolio of products and solutions – and you need them all to try and make a step-change in our production efficiency and emissions. And we think we’re positioned well to help in almost every one of the categories. Here in Charlotte we are mainly focused on producing turbines and generators, but these turbines and generators can be run by any of the various power sources, whether they be nuclear, gas turbine, steam turbine, coal-fired, or oil-fired. So all of the conventional fossil fuel type approaches we support with the business here in Charlotte. And then Siemens as a larger company is making wind turbines in Iowa and Kansas and solar in other parts of the country. So we think as a company we’re supporting this portfolio approach.

GC: Actually, I was going to ask you about the wind energy industry and Siemens’s role in it. There seems to be a lot of movement and a number of new developments in the Carolinas around wind energy – and the Siemens name pops up quite a bit in many discussions. The company plays a fairly major role in the industry and in the production of wind turbines and wind turbine parts. Do you see the Carolinas, and Siemens, continuing to play a role here, not just as a domestic, but also as a global leader in wind energy?

MP: Yes. Where the Carolinas play a large role is with Duke Energy, who is a very big player in the U.S. market. They are putting wind turbine farms up in various areas throughout the country. And they have already bought two different wind farms from Siemens, and are looking at more. And I think Siemens has a very competitive product. The State of North Carolina is doing some trial offshore wind turbine projects, off the coast. And they’ve chosen Siemens turbines for those trials to see how effective it is to produce energy in that way. So I think that’s where things come together. Wind turbines require the right environment for them to be effective – you can’t just plop one down in the middle of the city of Charlotte. There has to be enough wind. In the State of North Carolina it is only probably near the shore and offshore or up in the mountains where it will be feasible to actually eventually install them. I think the players here, and more so the energy hub that’s developing in Charlotte, has its fingers in the wind turbine business.

GC: And there is also the Clemson Restoration Institute’s wind turbine testing facility in North Charleston, SC, and another German company, IMO Group, that moved in around that. I mention the Clemson project as a way to touch on another point about the aforementioned “all-of-the-above” approach to the energy industry. One of the challenges in seeing that approach through is in developing and growing a supply chain. What do you see as the best avenue for developing that supply chain?

MP: We are in a global economy now, and we need to have everybody be a potential player in the supply market. But logistic concerns are key here, especially with the very large products that we build here at Siemens, the very large materials that come in. So I would think any of the global players can play, but from a logistics point of view they need to have a local presence. So I think we’re going to see more and more folks creating capabilities close to where they are going to be needed. I think as more and more energy needs are required and we build more power plants in the United States, it’s going to spur more supply being developed. And really, if you look at it, the U.S. market has been kind of declining or has been in a holding pattern for a very long time, and there’s going to be a resurgence that is going to occur as we rebuild our infrastructure that will support more supply being created here. For us locally with the Charlotte plant, we’re going to have suppliers relocating to support our manufacturing. Either from Canada to support the plant that we’re relocating here, or we’re talking to folks presently who make parts made for Germany, and they will perhaps need a plant close to us as well. So I’m very optimistic that there will be some more growth there.

GC: There are also some further challenges around the retiring workforce. A large percentage, some 51%, of the existing workforce in the energy industry is set to retire in the coming years. This will create a tremendous challenge to find new workers. What is Siemens doing there to help with creating a new generation, so to speak, of energy industry workers?

MP: That particular challenge is the one that probably concerns me most. We have a large percentage of our existing population that could retire. And then we’re trying to grow on top of that. So we are partnering with the local community and technical college systems in both North and South Carolina, and with universities like the University of North Carolina–Charlotte, to get some customized curricula developed to help train people for the industry. We’re also looking to create a number of apprentice programs, working with the States, to get a constant pipeline of folks being developed to fill our needs. So I would say since this is an area we are very concerned about for the next year we are going to put a lot of effort into that area, to really create a pipeline of people coming in, in ways that we can train them.

GC: What do you see as the lesson of the Charlotte Region’s push with its aggressive move to rebrand itself as “The New Energy Capital?” Do you think that that push played a role in Siemens’s plans for expansion, as well as for its future plans?

MP: I think it did. I was behind the scenes pushing really hard to try to bring the expansion here, since I’m already here. And, Siemens truly did have other options. We used that as one of the points – of course it’s not strong enough by itself to swing a decision – but it plays a supporting role. If you are going to, say, put your stake in the ground about where you are going to locate your major facility in the United States, why not do it where a lot of people are in the energy business as well. We recognize that at the center of that there are hopefully going to be pools of resources created of people who understand the industry. So I definitely think it played a role, and it helped as a supporting role for decisions on where to locate.

GC: The Carolinas truly do seem to be at an advantage right now in terms of where we stand in building that energy cluster, almost as if it is ours to lose to our competitors. What do you think the region needs to do to maintain, and to build on, that advantage?

MP: I think we need to make sure we follow through completely on the efforts that have been started, to create infrastructure for training new workers that is better than anywhere else in the nation, so that people start to realize, if they want to work in the energy business that the Carolinas are the best place to be trained and work. Also we need to continue to build on our momentum, and to bring in more and more folks and build the critical mass of people that are in this industry. And then you can get to a point where it is sustainable because there are so many people working here. I think you’re right about our momentum, that the things that have happened with Shaw and Areva and Westinghouse and others that are coming here, along with Siemens – I don’t know of any other area that has as much momentum as we have.

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