Tag Archives: jobs

SolarCity and its Impact

3 Oct

A lot has been written in the past week or so about the SolarCity project in South Buffalo. A lot of it has to do with OMG THAT’S LIKE $300k PER JOB. It’s being sold as an excessive investment for dubious return.

Here’s something to consider: the state of New York is not paying a subsidy to SolarCity. Under its contract, SolarCity will create approximately 3,600 brand-new high-paying jobs in Buffalo alone.  In order to do that, the state is buying the equipment that SolarCity will use to manufacture its products, and building the factory facility. The state will own it all.

While it’s well within the populist fashion of the times to decry public-private partnerships such as these – especially given examples where the private beneficiaries fail to uphold their end of the job-creation bargain with impunity – the simple fact is that municipalities compete with each other for this type of project, and Buffalo needs to be able to compete. 

It’s not just about 3,600 jobs. It’s about the economic activity that each one of those well-paying jobs generates

Let’s backtrack for a second and talk about supply-side/trickle-down theory versus demand-side/trickle-up; I believe in the latter and not the former. 30+ years ago the country started a grand experiment, simply put that lowering the tax burden on the very wealthy would result in them amassing more wealth, and that this would “trickle down” to the economy-at-large and create great wealth for everyone. It was what George H.W. Bush in 1980 called “Voodoo Economics”. Yet the country has stuck with this notion that easing the tax and regulatory burden on the rich would bring about great things for the middle and working classes. It simply didn’t happen. In fact, the working poor stayed that way, and the middle classes have borne the brunt of this experiment in terms of less pay for more work. 

Think of it this way – we heard a great deal in the last few Presidential elections about the vaunted “job creators” – these magical John Galts who have amassed great success and wealth and who demand less regulation and more tax relief (and none of this “Obamacare” nonsense) in order to … well, it gets a bit fuzzy at this point. 

It gets fuzzy because lax regulations have simply led to poor oversight and environmental catastrophes like the chemical spill in West Virginia last year. Arguably, the public cost in money and suffering that resulted from that disaster far exceeded the cost properly to inspect and enforce health and safety regulations in the first place. 

But with respect to the ultra-wealthy “job creators” in this country – let’s say I have a fortune of $150 million. With that sort of money, my opportunity to participate in the economy is limitless. Many of the people with this sort of money pay a fraction of a percent of their income to the authorities as compared to the nut you and I pay, because the tax code is designed by these people to help these people. Let’s say, instead, that I actually earn a paycheck rather than amass a fortune through inheritance or investment, and that I make $4 million per year. Technically, I’m supposed to pay 35% or so of that money to the IRS, but through creative accounting and other loopholes, we can whittle that down substantially. But even if, hypothetically, I paid the full 35% nut to the feds, I’m still bringing home $2.6 million. What does that mean, in terms of the trickle-down theory? That I won’t get a Maybach and instead opt for an S600? That I’ll have to cut back on my NetJets account? Seriously, what is it about $2.6 million versus, say $3.4 million that will adversely affect my ability to spend? Whether you earn $2.6 or $3.4 million, you’re making all the money in the world and you can buy anything you need, and everything you want. 

By contrast, if you put an extra few thousand dollars in the pocket of someone who’s working class or middle class, you just added a new appliance, or a better car, or a nicer vacation. By giving tax relief to the middle class, you can suddenly give average people more freedom to participate in the economy, and they’ll spend it – everyone benefits.  We could simplify the tax code tomorrow and the economy would skyrocket. OK, everyone earning over $500,000 pays 35% straight up, regardless of income source – paycheck or capital gains. Anyone making $200 – 500k pays 25% straight-up. Anyone making $100k – 200k pays 17%. 50k – 100k, you pay 10%, and if you earn less than 50k you pay zero.  Add a VAT and you’ve just funded universal health care. 

But I digress. 

The state’s investment of $350 million from the Buffalo Billion and $400 million in conditional loans (payable if SolarCity does not meet milestones and goals as set forth in the agreement), will result in a massive trickle-up boost to the local economy.  You will have 3,600 households suddenly better able to afford to participate in the local economy, buying goods and services throughout the region. And let’s not forget that SolarCity has contracted to invest $5 billion in this project over the first 10 years, we’re not looking at some sort of idiotic handout. 

Although 3,600 jobs will be here in WNY, there will be 5,000 SolarCity jobs created throughout upstate New York.

Now, witness what some are now trying to peddle. Namely, local embarrassment Carl Paladino. Here’s an excerpt from an anti-Cuomo, pro-Astorino email he sent Thursday: 

Aside from the misspellings and factual inaccuracies (read: lies), Paladino claims that Texas doesn’t subsidize or incentivize businesses moving to Texas. Well, not every business wants to locate in an overheated place that doesn’t spend money on infrastructure or education.  But the idea that Texas doesn’t do economic incentives is simply a lie.  It takes a few simple clicks of the Google machine to find the Texas website where its incentives and subsidies are set forth. Now, Paladino would have you think that Musk went to Texas simply because it’s an overheated, be-rednecked Galt’s Gulch, right? Wrong

In Texas, Musk said the outpouring of support from local residents and government officials — who are supporting the project with at least $15.3 million in state funding — was significant: “We want to be in a place where we’re truly wanted,” he said.

By the way, Elon Musk – the guy in charge of SolarCity – recently located his SpacePort in Texas, but located his Tesla battery plant in Nevada. Part of the reason? Nevada’s business climate is more liberal than Texas‘. Also, Nevada and Texas competed against each other to land the Gigafactory, and Nevada’s package of $1.25 billion in tax breaks and incentives beat whatever Texas’ proposal was

The deal with SolarCity is different. The state (via SUNY) will own the factory and equipment, and SolarCity will be allowed to use it – for free – for 10 years. This will create 3,500 local high-tech jobs; 21st century jobs. Again – SolarCity will be investing $5 billion of its own money. If they don’t live up to their promises, SolarCity will be up to $412 million in debt to the state.  SolarCity maintains a big chunk of the risk, and isn’t getting a direct cash subsidy. 

Over 3,500 new, high-paying local jobs and all the economic activity that each one of those jobs generates is huge for this region. This is a big risk and a big expense, but you don’t undo 50 years of decline through recklessness or fear. 

Everybody’s Dancing in a Ring Around the Sun

18 Jun

1,000 jobs for Buffalo. Maybe more.

Not 19th century dirty jobs, but 1,000 jobs that are part of the new green economy. This could be the best news that Buffalo has received in decades, because this is a real thing involving real jobs. SolarCity is buying Silevo. 

Last November, Governor Cuomo announced that the state would build a “hub facility” for high tech and green energy businesses at RiverBend, as part of his “Buffalo Billion” plan. One of the two California companies to locate at RiverBend is “Silevo”, which would join with another company to invest $1.5 billion and locate operations in Buffalo. 

RiverBend is in South Buffalo, located on the site of the former Republic Steel and and Donner Hanna Coke facilities. The city is literally replacing its defunct, dirty industries with clean, green, state-of-the-art ones. At the November presser, Silevo was introduced thusly

Silevo is a California-based company that develops and manufactures silicon solar cells and modules, with an already established manufacturing plant in China. Phase 1 of Silevo’s project, with a $750 million investment which will create at least 475 jobs, involves a 200 megawatt production facility sole establishing its sole North American manufacturing operations at RiverBend.

The state investment of $225 million through Empire State Development would set up the necessary water, sewer, utility, and road infrastructure, as well as 275,000 square feet of building.  The state will also set up the equipment, which would be owned by the SUNY Research Foundation. No money was being paid directly to the companies.   

Zheng Xu, CEO and Founder of Silevo said, “Inspired by the bold leadership and demonstrated commitment of Governor Cuomo, and buoyed by the strong regional infrastructure and highly skilled workforce present in Western New York, Silevo is excited to bring its next phase of high-volume manufacturing operations to the United States with our new location in Buffalo. Working closely with the SUNY College of Nanoscale Science and Engineering, we look forward to accelerating innovative and cost-effective solar module technology that will position both Silevo and New York as leaders in driving the next wave of solar adoption in homes and business nationwide.”

 Yesterday, Tesla Motors and SpaceX wunderkind Elon Musk announced that his SolarCity venture was buying Silevo for $350 million

Peter Rive, SolarCity chief technology officer and co-founder, said the $350 million acquisition will lead to a factory in Buffalo, N.Y., and create more than 1,000 jobs within the next two years.

The plant will be “one of the single largest solar panel production plants in the world,” according to the post, and it will be followed by one or more even bigger facilities in subsequent years. Rive said he hopes SolarCity will eventually create several thousand panel-making jobs.

On Twitter, Musk’s personal feed posted “SolarCity to build the world’s largest advanced solar panel factory in upstate New York” with a link to the blog post…

…Until now, SolarCity has purchased its solar panels from other manufacturers. Rive said the acquisition will finally allow the company to make its own photovoltaic panels.

Synergy!  The Buffalo News notes

That initial plant at RiverBend was envisioned to have the annual capacity to produce enough solar panels to generate 200 megawatts of electricity. But SolarCity executives said they were interested in expanding the capacity of that plant to be five times bigger than the original plan.

“At a targeted capacity greater than 1 gigawatt within the next two years, it will be one of the single largest solar panel production plants in the world. This will be followed in subsequent years by one or more significantly larger plants at an order of magnitude greater annual production capacity,” SolarCity said.

SolarCity executives said they view the Silevo acquisition as a key step in their efforts to reduce the price of solar energy systems to the point where they can compete with electricity generated from fossil fuels without the lucrative subsidies that now are needed to offset the higher costs of solar panels.

By combining Silevo’s technology, which is more efficient at generating electricity than most other solar panels on the market today, with lower production costs from the economies of scale that come from high-volume production, SolarCity executives said they believe they can make solar systems more affordable.

“What we are trying to address is not the lay of the land today, where there are indeed too many suppliers, most of whom are producing relatively low photonic efficiency solar cells at uncompelling costs, but how we see the future developing,” the blog post said.

“Without decisive action to lay the groundwork today, the massive volume of affordable, high efficiency panels needed for unsubsidized solar power to outcompete fossil fuel grid power simply will not be there when it is needed,” said the post.

Chinese companies and manufacturers dominate the global market for solar modules. Silevo and SolarCity intend to challenge that dominance by building the largest module manufacturer in the United States in South Buffalo.  

On the SolarCity company blog

[Silevo] modules have demonstrated a unique combination of high energy output and low cost. Our intent is to combine what we believe is fundamentally the best photovoltaic technology with massive economies of scale to achieve a breakthrough in the cost of solar power.

and

Given that there is excess supplier capacity today, this may seem counter-intuitive to some who follow the solar industry. What we are trying to address is not the lay of the land today, where there are indeed too many suppliers, most of whom are producing relatively low photonic efficiency solar cells at uncompelling costs, but how we see the future developing. Without decisive action to lay the groundwork today, the massive volume of affordable, high efficiency panels needed for unsubsidized solar power to outcompete fossil fuel grid power simply will not be there when it is needed.

The Buffalo plant’s planned capacity would be large enough to challenge the Chinese market with a superior product

SolarCity’s chairman who is also chief executive of Tesla Motors, said the goal is to produce solar panels capable of generating power “cheaper than coal or fracked gas power.”

Imagine a factory in Buffalo producing something that could render hydrofracking and Tonawanda Coke the NRG Huntley plant obsolete, and 1,000+ jobs, to boot. SolarCity does not yet operate in western New York, but it leases solar systems to homeowners and businesses. 

As solar systems improve in terms of energy production and storage, adoption will grow. SolarCity is setting itself up to dominate the market with a superior system that will save people money and provide sustainable, renewable energy. This is a huge deal for Buffalo and the country.  

Poloncarz on Jobs

2 Nov

We like to tout how immune we’ve been from the global financial crisis and recession, but I don’t think 50 years’ worth of economic, commercial, industrial, and population decline and treading water are much to be proud of.

And while the right wing in this region like to blame the “failed policies” of Democrats, let’s remember that we have had exactly one Democratic county executive in the history of Erie County, and under Dennis Gorski we had budget surpluses. Twice, Republican County Executives have plunged the county into economic crisis through tax cuts paired with increased spending.

Republicans don’t like or trust government because they don’t know how to govern. Democrats understand and recognize that government has a role to play in our economy.

Well, that’s not totally true.

Republicans like Chris Collins also think that government has a role to play in our economy, but that role is limited to stuff suburban people like, such as toboggan runs and golf courses. Stuff poor city people need? That we privatize, regardless of the financial realities.

And that’s a central issue for me – if you’re supposedly for smaller government, as Collins and other Republicans claim to be, wouldn’t it be the frivolous recreational things that should go first? Aren’t golf courses and toboggan runs the types of items that can be privatized or sold off to the private sector? On the other hand, feeding the poor, treating the sick, and ensuring that we have a healthy, educated population are things that government has to do, and do well. That doesn’t mean throwing money away, it means getting rid of what doesn’t work and promoting what does.

As the quote above suggests, Collins promised to grow our population and make the region more job-friendly. Through his machinations to manufacture majorities in the legislature, he has few excuses.

In the beginning of his term, Chris Collins proclaimed, “[w]e must grow as a community or we will die.”

He also said the public should hold his administration “accountable for [their] promises,” adding, “just like we do in the private sector.”

Mark Poloncarz has a plan to grow jobs, our population, and our economy. He has a plan to use our natural advantages – economic, social, and geographic – to grow our economy. We need a unified, regional approach to business development, not one that enables one town to poach business from another. That figurative re-arranging of Titanic deck chairs is usually touted as a “win”, but it’s not – not if that win is at the expense of another WNY community.

Poloncarz wants Erie County to better link our economy to that of Southern Ontario and Toronto. We need to be – and should be – the natural US headquarters for Canadian corporations looking to do business here, like Labatt USA is.

As County Executive, Mark Poloncarz will make it the top priority of his administration to create new jobs for Erie County – not just move jobs from one part of the county to another, as has been the practice under Collins’ tenure. Mark will task his administration to bring in new businesses to the region which will generate new jobs and to create an atmosphere that will add jobs to existing businesses. Mark will also work to consolidate myriad of industrial and municipal development agencies that currently exist to make it easier for out of area businesses to view Erie County as a viable option for business development. Currently, Erie County has six Industrial Development Agencies (“IDAs”) that often poach businesses from one part of the county to another.

Instead of working together as a County and doing whatever possible to attract new business to relocate into the area or grow and sustain current businesses, we are acting as individual towns and cities fighting among ourselves to attract businesses. The reality is we are not creating new jobs, we are merely shifting existing jobs to one town at the expense of another. This practice is not sustainable and it must stop.

Back in 2006 during the debate over the Erie County Charter, there was a consensus that someone in the Rath Building should act in the manner of a county manager – someone apolitical who can be a good administrator, while the elected official promotes the region. Poloncarz wants his Deputy County Executive to be in charge of promoting and growing jobs in the region. More jobs means more people means community growth.

Collins’ reign has been punctuated by gimmicky Six Sigma, which has cost millions and generated no savings whatsoever. He ran as someone who is “not a politician”, but has been more political than even his predecessor. He rejects regionalism, which in turn promotes fractured, redundant government and delivery of services.

Election Day is next Tuesday the 8th. People are saying they don’t want to hear about dirty tricks anymore, they want to know about issues. Over the next several days, I’ll be highlighting the issues and why I’m voting for Mark Poloncarz for County Executive.

Jobs, regional business development, a one-stop office for business attraction and incentivization, growing and enhancing our contacts with business and government counterparts in Ontario, and creating a more business-friendly environment to help WNY better compete against other regions in the US will be among Poloncarz’s priorities when he is sworn in as County Executive in January.

J-O-B

9 Jan

That’s what it was all about. All this talk of a coalition being built in order to bring about reform? It’s all about jobs. J-O-B-S JOBS. Who’s in and who’s out so far?

Out:

Kevin Hosey: Majority Communications Director: A person I consider to be one of the best and brightest people in local politics. I will sorely miss popping in his office from time to time to shoot the breeze, and I hope he lands somewhere good, lucrative, and quickly.
Jeremy Rosen: Former Bob Reynolds staffer: Senior Administrative Clerk
Rosemary Sullivan: Former Kathy Konst staffer: Senior Administrative Clerk
Michelle Novak: Senior Administrative Clerk
Cherrie Bagarozzo: Receptionist
Dorothy Furtney: Senior Policy Analyst
Don Pryzbl: P/T Budget Analyst
Patrick Sanders: P/T Budget Analyst

All of the above are Democrats. The sole departing Republican is Emily Trimper: Senior Administrative Clerk

Staying on:

Bobby Graber: Clerk of the Legislature. Gets to stay, but with a very significant pay cut.
John Calvin Davis: Chief of Staff: pay increase to $75,000 – he will make more than the Legislature’s Clerk, which is unprecedented. Associated with Grassroots.
Paul Henderson: Administrative Clerk, Grassroots member
James Gambino: Senior Administrative Clerk, Graber’s right-hand-man
Andy Kulyk: P/T Senior Administrative CLerk, hours reduced, not an ECDC sycophant

We don’t yet have the complete figures on how many Republican staffers are being added to the county payroll, but estimates are that four new jobs will be created, all around $40 – 75k, and the Republican Chief of Staff goes from the low $40k to almost $70k.

Brian Fiume will be that minority Chief of Staff, moving over from Collins’ office, where he served as the intergovernmental affairs officer. He gets a big raise in the move.

Scott Kroll stays on, getting a hefty raise to the mid-$50k range.

It’s also been reported that although the Republican legislators will be closing their useless and unused district offices, those offices’ staffers will stay on the county payroll, moving downtown.

The “Democrats” have added jobs as follows:

1. Sandy Rosenswie is the chairwoman of the Erie County Independence Party. She has Tony Orsini’s old job, and she had previously been on former Erie County Legislator Cindy Locklear’s payroll while Orsini was chair. This is the first time anyone knows of that a county party chair has also been on the county payroll. Rosenswie is, of course, a close family friend of Pigeon’s, as well as a political ally of his. Rosenswie was apparently brought in by Christina Bove.

2. Sheila Meegan is a West Seneca Councilmember who received unreported campaign funding from Steve Pigeon – donations that ultimately led to former A.D.A. Mark Sacha’s ouster because he made too much noise about it.

3. Rebecca Brooks was Barbara Miller-Williams’ district office staffer. She’s coming downtown full-time.

4. Diana Cihak was the local organizer of the Obama presidential campaign and headed up Citizen Action of NY’s local office. Was not on good terms with ECDC, so defected in 2009 to Maurice Garner’s Grassroots – Garner got Cihak this job.

No, I am not so naive as to believe that this is some sort of unprecedented turn of events – that good people lose their jobs and other people take them. What is glaring here is the fact that the incoming staffers are getting big bumps in pay over their predecessors’, and the ones “lucky” enough to hold over are, with a couple of exceptions, getting their pay and/or hours slashed. The idea that the county chair of the dirtiest piece of shit excuse for a political party gets a county job is mindbogglingly horrible. That is the very epitome of bad government, and anyone associated with this should be ashamed. The Independence Party, which is now controlled locally and statewide by Steve Pigeon’s maneuvering and Tom Golisano’s money, is a blight on politics in New York State. It is the same grouping of people that brings us such good-government luminaries as Pedro Espada and Hiram Monserrate – the downstate versions of Tim Kennedy, Barbara Miller-Williams, and Christina Bove.

So, I’ll let both Maria Whyte and Barbara Miller-Williams in on a new definition of “reform”, since they were both keen on defining that term on Thursday: reform in Erie County means finding jobs for your well-connected friends and giving them big-ass raises, and in some cases creating brand new jobs out of whole cloth.

I’m so happy that Chris Collins is also pleased to provide these people with their new, higher-paying positions, complete with dreaded legacy costs. Did Collins run on the raises-for-new-patronage-hires platform? If not, he should make that a centerpiece in his doomed-to-fail gubernatorial run, or maybe in his re-election bid to become County Executive again in 2011.

No one’s running county government like a business. Instead, Chris Collins and Steve Pigeon have taken to running county government like a feudal manor. And we’re the serfs whose labor helps pay for the high life the Lords and Vassals enjoy.

BTEC 2008

12 Jun

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No, the Horse goes Before the Cart

23 Jan

When I first moved to Buffalo, it was often jokingly said that the rarest bird in these parts was the building crane.

According to this information, to which Geek has linked, those cranes – like hundreds of thousands of human Buffalonians – appear to have migrated south.

In his piece, Geek refers to Charlotte, NC as being the “Shelbyville” to Buffalo’s “Springfield”, which is a cute analogy that reminded me instantly of the classic Simpsons episode “Marge vs. the Monorail”. Written by Conan O’Brien for the Simpsons’ fourth season, it’s easily among the top five episodes in that show’s 18-season history. Think about all of the silver bullet fixes for Buffalo and Erie County that have been proposed just in the last 7 years. Key line:

The name’s Lanley. Lyle Lanley. And I come before you good people tonight with an idea. Probably the greatest… Aw, it’s not for you. It’s more of a Shelbyville idea.

He then proceeds to sell the people of Springfield into buying a monorail system for $3 million by singing a song and claiming that monorails he’s sold to :

Brockway, Ogdenville, and North Haverbrook, and by gum, it put them on the map!

Geek concludes:

In case people are wondering, that is what a renaissance looks like. Also, I’d like to note how Charlotte has identified the primary means with which to attract young professionals to their city, jobs. Not much talk of museums, sense of place, or massive amounts of state funding. They keep the taxes low, attract business, and the people follow. Not really a revolutionary idea, but one that we might be able to learn a thing or two from up here in Springfield, err, I mean Buffalo.

There is nothing wrong with having nice looking buildings, museums, cool restaurants, and kitschy tchotchke shops; they are absolutely a value added bonus for people looking for a place to live. However, they are not a primary means to create economic development. The jobs need to be here in order for those things to be a real differentiator.

Again: we hear of 5% increases in the state budget in a year of economic turmoil, while people and business continue to flee. We’re competing not only with places that are nearby and more business-friendly, but we’re also competing, at this point, with places like Bangalore for call center jobs.

What can we do – what kind of movement can be started – to convince Albany, and people across the state, that New York State outside the five boroughs is never going to see significant growth in population and economic activity until it lowers taxes, lowers spending, and otherwise gets competitive with its neighbors. Maybe a march on Albany by a million taxpayers from across the state.

“Made In America” – Town Hall Meeting in Buffalo

30 Nov

On Thursday Night, John Ratzenberger, host of The Travel Channel television show “Made In America” was in Buffalo at Ani DiFranco’s “Babeville” to discuss the slow death of America’s manufacturing base. WNYM was on hand to record the full event and we’d like to present it in its entirety.

Rather than boiling the issue of America’s decline as a producer of goods down to an anti-union/pro-union discussion, I’d like to point you in the direction of a comment made by BuffaloHodgepodge in this thread last week. I think it’s a good place to start the discussion…

For better or for worse, the issue actually has very little to do with either the manufacturer or the worker. It’s all about the consumer. The day consumers start lining up to spend 30-70% premiums on goods that are exactly the same except a “Made in the USA” label on it is the day consumer product and textile manufacturing returns onshore.

Or, a creative firm needs to create a luxury brand that allows it to serve a niche, profitable market at a higher price point. Appealing to patriotism has consistently failed as a marketing strategy – as shown by the Big Three automobile manufacturers since the 1980s.

What are your thoughts?