Another Plant is Being Built
Another transformer OEM is building a plant..and I can’t help but wonder if all the new plants and expansions will suffer the same fate as the Muncie plant. IYKYK.
Hitachi just announced a $528 million transformer plant in Mississippi, more than doubling the output of their existing Crystal Springs site. With a whopping 700 new jobs. Construction starts late this year, and production ramps up in 2029. This is a win for Mississippi and for the grid; everybody needs transformers right now, and nobody can get them fast enough. At least it looks great on paper.
But here’s the real question. Where is the engineering and skilled manufacturing talent for those 700 jobs coming from? Seriously, where?!
Option one: you bring in talent from overseas. That sounds simple until you look at the price tag, roughly $100,000 per H1B hire right now, with no guarantee that number holds since it’s still tied up in federal court. That’s a rough way to build a workforce, paying six figures for a maybe.
Option two: you go recruit the talent your competitors already trained. Which works, until you ask yourself: why would a transformer engineer who is valued, promoted, and comfortable at a plant in Virginia or Tennessee pack up his family and move to Gallman, Mississippi? Money helps. But it is rarely the whole answer, and any company that thinks a signing bonus solves a relocation problem hasn’t tried to talk somebody’s spouse into leaving their job and their mama behind. Not to mention, um, hello interest rates.
Our whole industry keeps getting swallowed up by PE and M&A, mom and pop transformer shops and switchgear houses disappearing into bigger and bigger portfolios every year. I think we are fooling ourselves if we think this doesn’t scare a risk adverse engineer. This isn’t just about Hitachi. Nobody wants to feel like a line item on a spreadsheet that can easily be cut. The OEM who forget that are going to keep losing good engineers and leadership.
The demand is huge; everybody in this industry knows it, and the backlog on transformers stretches out further than I could have ever imagined. Sixty months for an oil filled transformer? WTH? Will it hold? I am not certain. If demand cools before these plants reach full production, is Gallman the next town to be affected when profits don’t justify the payroll? This is what people think when they consider moving their families. Will I be left empty handed?
The struggle for technical people is real. I can tell you the OEMs that win this fight aren’t the ones with the biggest checkbook. They’re the ones who figure out that lateral moves are not attractive, that show a career path, and sell the community; this is what makes people say yes to the offer.
Building the plant is the easy part. Staffing well…that is where the rubber meets the road.
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