Hello my name is Mark
Wible I am the CEO of Letni Corporation, a large manufacturer of semi-conductors.
The products that Letni produces are used in the vast majority of computers
that are sold around the world. Today, Letni is the largest producer of
semi-conductors in the world. As the global demand for computers and computer
based products has increased so too has our company’s sales volume. In order to
keep pace with this explosive demand the Board of Directors along with myself, made
the decision to build a new production facility in Chandler, Arizona. Our
company currently has several other manufacturing plants in the Chandler area
and our ongoing relationship with the City of Chandler certainly had some
influence in our decision. However, I would like to use this blog post to
discuss several of the other factors that also contributed to our decision to
locate our new state of the art manufacturing facility in City of Chandler.
As I mentioned above,
Letni currently has several other manufacturing facilities located in the
Chandler area. Locating our new facility here will allow us to take advantage
of the specialized labor force that has developed in the area. Microchip
manufacturing is an extremely complex process that requires a highly skilled
workforce. The fact that our other manufacturing facilities are located in
Chandler has created a division of labor, both domestically and
internationally, between the Chandler area and the other regions that were
considered. In addition, amalgamation of production in one large, central
facility will permit Letni to streamline production, operate more efficiently
and take full advantage of this economy of scale. This will ultimately allow us
to lower production costs, making our company even more competitive in the
global economy.
Another consideration
was the cost of purchasing the land and the location of the property on which
the facility will be constructed. The Chandler site was once used as farmland
and its rural location offered Letni a significant cost savings over property
in a more urban area. Additionally, the site’s close proximity to the existing
freeway system will keep transportation costs low and will prevent external
diseconomies associated with transporting finished product from an urban
production facility from affecting our ability to meet the demand for our
product. All of this being said the most
convincing argument for building the new plant in Chandler was provided by our
current employees. When polled our employees overwhelmingly stated that they
preferred a suburban lifestyle over living in an urban setting. Letni employees
emphatically chose the neighborhoods, schools and general living environment
that the City of Chandler and the surrounding area has to offer, over any of
the other regions in the poll. Initially, it was the desire of the board to move
our workforce from the suburbs back to an urban setting, allowing our company
to participate in the internal migration phenomenon that is underway in other
cities around the country. However, our employees voiced a strong unwillingness
to give up their suburban lifestyle.
Your position on the location of your company is very well thought out and you give great support for it. I currently live in Chandler with my family and based upon what you had written about employees not wanting to give up their suburban lifestyle I can't say I disagree. My parents commute to work; my mother to Phoenix and my father to central Tempe everyday but they would never willingly move to those locations or closer especially with the access of the freeways. A lot of the decision behind their choice was that Chandler is always growing and that it was a better environment for my sister and I growing up.
ReplyDeleteWow, your story is another example for me of just how much people who live in this city are willing to commute hours everyday to hold on to their valued suburban neighborhoods. Before I moved here, my Phoenix friends had told me that they commuted two and sometimes three hours a day to their jobs. I always thought all that wasted time, energy, and gas was so unnecessary. I am beginning to understand now that people have a great desire to stay in their nice neighborhoods even if that does mean a lot of time spent on the road everyday. Also, in some cases because of the housing market, many people are "stuck" in their homes and are unable to move closer to their jobs even if they wanted to.
ReplyDeleteGreat real life example of how all of this comes together! Sometimes I feel like I can grasp the concept as I am reading or hearing it but its always nice to be able to apply this stuff to a real situation- it sticks better in my brain! So. Thanks you. Anyway. I only commute 20 minutes to work, and about 10 back to school from there. School to home is about 10 minutes as well and sometimes I feel like thats a lot! I really dont like city life though. Too many people for me. Not enough space. So I am also one of the people who would prefer suburban areas. I think that people sometimes like suburban areas because their have a space of their own which is nice to come home to at the end of the day- even if you have to commute long hours for it!
ReplyDeleteYou have some good ideas about your company, I was just wondering is leasing a building would be cheaper than building a new one. Also how would you keep up with the Japanese because they have much lower operating costs? If you can beet those then your golden and the community would love you for giving them extra jobs.
ReplyDelete