Ted Simons: Good evening and welcome to "Horizon." I'm Ted Simons. The man convicted of masterminding the 1976 car-bomb killing of "Arizona Republic" reporter Don Bolles has died in jail. Max Dunlap, who was 80, died in a state prison in Tucson today. It appears Dunlap died of natural causes. The U.S. senate today voted to stop production of the F-22 fighter jet. It was considered a victory for President Obama and his top military advisors, who convinced congress that the $65 billion program was too expensive and that the F-22 was not necessary to defend the country. Those views were opposed by the air force and military contractors. Closer to home, slow going at the state capitol with legislative leaders saying they're nowhere near a budget agreement. The longer the process takes, the less likely a one-cent increase in the sales tax will be on the November ballot. This because of the time needed to prepare the issue for the election. Solar energy companies from around the world gathered at the Intersolar Trade Show that took place last week in San Francisco. Economic development officials from Arizona were also there looking to recruit some of those solar companies. The Arizona contingent was optimistic, in great part because a bill recently signed by the governor that provides tax breaks to solar companies that locate their headquarters or manufacturing facilities in Arizona. Back from the trade show are Barry Broome, president and C.E.O. of the Greater Phoenix Economic Council, and Christine MacKay, economic development director for the City of Chandler. Thank you both for joining us tonight on "Horizon."
Guests: Thank you.
Ted Simons: Christine, let's start with you. The Intersolar North American Conference, describe what that was.
Christine Mackay: It was a gathering of solar companies from all over the world in a trade show format, showing their wares, their products and it allowed us the opportunity to get with a significant number of companies we would have had to travel worldwide to get in front of in any other venue.
Ted Simons: Same thing, Barry. A lot of folks, all of a sudden, there they are.
Barry Broome: It's international in nature and that's one of the important things. Probably the one thing I saw at the market that was most pronounced was the big move getting ready by the Chinese solar players to go after the U.S. market. Since we've been involved in this, it's been California-based innovation and European-based with primarily driven out of Germany and Spain. But the Chinese movement is out in full force.
Ted Simons: Is it technology, manufacturing or both?
Barry Broome: It's both. What's interesting, they've created a hybrid manufacturing model where 70% of the manufacturing is in China and 30% in the U.S. If you're following now, there's going to be some real trade issues being raised on China's typical trade patterns. Similar to what Japan did in the automotive industry, where the U.S. market is wide open for their technology but their market is not as wide open for ours. I think the Chinese will do the same as Japan did with Toyota and Honda. They are going to use a job penetration strategy, as a way to kind of soften the issues of trade between China and the United States.
Ted Simons: It seems as though much of the solar industry right now is international, the U.S. doesn't seem like it's up to speed. Is that -- that's my impression. Did you get that impression at the trade show as well?
Christine Mackay: It's very pronounced. The other countries have -- pardon the expression -- they have it over all the United States, and research and development in solar happened in the United States first but the other countries have really figured out how to make it profitable and how to utilize it far more than we have from hydro traditional power types we have in the United States.
Ted Simons: Are these things we can learn?
Christine Mackay: I think we better learn or we're going to be behind the curve even more. I think this year and next year, get up to speed to get in the competitive position or we're going to be behind the countries more than we are now.
Ted Simons: Where were we Barry, in this race? How come we're so far behind?
Barry Broome: First off, energy's been too cheap in the United States and we haven't thought of energy as an industry. Energy as an expense item inside the models that we have. The price of power for a semiconductor, aerospace or price of fuel for our cars. Most of the European markets and many of the Asian markets have been considering energy as a mechanism to build their economy and I think that's what has really hurt us and I think we've been too complacent and as Chris was saying, not bold enough on the technology plane and now is our time.
Ted Simons: As far as Arizona, a time to recruit some of these firms -- you went to the trade show looking to recruit. Talk about that effort.
Barry Broome: The big thing that we have to measure is 2007 and 2008, this bill sat for two years with our policymakers and a lot of the capital investment in the industry was made in those two years. Solar manufacturing in 2010 is going to be triple in size than at any point in time in the United States. And so the difficulty for us now is really to measure where the clustering capabilities are for Arizona with this technology and where is that coming from. There's a lot of opportunity for simple manufacturing in the simple technology. Our goal was to be a major player in thin film technology. And right now we're trying to measure really where we sit as far as a state in building a cluster.
Ted Simons: How many bites did the Arizona contingent get from the trade show? Especially Chandler. Because there is the Price Road Cooridore. And for folks who don’t know. What is that?
Christine Mackay: The corridor is adjacent to the 101. Starts at Ray Road and continues south to the campus on Chandler heights. It's a five-mile stretch of roadway.
Ted Simons: And it has water and sewer lines and fiber optic lines which seems like a natural for solar industries coming in to manufacture.
Christine Mackay: Companies like Air Products invested a significant amount of money back in the early 1990’s to install ultra pure nitrogen lines into that road to provide for the high technology semiconductor manufacturers and the city put a lot to attract those companies and as it would happen, the solar industry we're interested in attracting leads well to the semiconductor infrastructure and workforce that's there.
Ted Simons: There were reports a couple of German companies were looking to build plants in Chandler.
Christine Mackay: GPEC has done a magnificent job. But from our point, it's a natural fit. They like the workforce, my conductor companies and the other companies that were there and we get a lot of looks and there were a number of German and Spanish companies interested in being in Chandler.
Ted Simons: Are they looking at something like the Price corridor or a general environment that supports what they do? What attracts them?
Barry Broome: They're looking for an environment and the environment has everything to do with talent and cost and to what the physical dimensions are. Chris talked about the infrastructure and that's very compelling because it's all there and ready to go and the thin film manufacturing technical techniques are almost identical to semiconductor. Intel has made a big move in the solar industry. You're going to see a lot of similar properties and that's going to make Price Road interesting. They're -- they liked the west valley quite a bit too. What I like about solar is you're going to see a lot of announcements in places like Chandler, but you'll see them in the west valley and rural Arizona and I think that's one of the strengths of the platform for Arizona. There's something for everyone in this technology.
Ted Simons: When can we hear some of these announcements?
Barry Broome: Right now, our new director of commerce, Don carden, is working on the rules to implement the policy and our goal is to get support to Don to implement that immediately. I think if we implement it immediately, by year end, optimistically, have three to five announcements in the greater Phoenix region.
Ted Simons: Are you hoping for something to be announced?
Christine Mackay: Most definitely. A number of companies shared with us that their decision making process was being measured in single digit weeks as opposed to months. Other municipalities have been working with them for months and even years on some of these. And I would say by year end. And three to five announcements to be in Chandler, we'll be working toward that.
Ted Simons: How big are these firms that are looking at us?
Christine Mackay: You know, think a range anywhere from 100 to 200 jobs up to one of the biggest, 1700 jobs. They range in wage scale, $34,000, $36,000 a year up to $70,000-$80,000 a year. Capital investments from $100,000 up to $2 billion and $3 billion. Kind of across the board in that aspect.
Ted Simons: And those capital investments, there'll be a break for some of these companies provided they meet certain criteria?
Barry Broome: Right. One of the things in 2007 and 2008, we were getting short-listed for huge advance manufacturing projects that Chris was talking about in the 50, 60, $70,000 range. Loved Chandler and Price Road and we could not get the commitment. But now with this bill, for major projects, large projects, this bill is very competitive and we have two pictures now to paint for Arizona. We have the talent and overall business environment. We now have an economic development tool. But also a growing demand picture to sell that other states don't have and if we execute properly, I think we'll be successful as early as 2010 and the real success story is going to be when the market recovers and the capital markets recover. This is the technology of the future. 2011, 2012, I think it will be going gangbuster in Arizona.
Ted Simons: Thank you for joining us on "Horizon."
Guests: Thank you.