Three companies to inject jobs, money into Beach economy

VIRGINIA BEACH

Three companies will create 85 jobs and spend as much as $73 million to expand or improve their operations in the city, Mayor Will Sessoms is expected to announce today in his State of the City address.

The Carraro Group, an Italian manufacturer of gears and axles for earth-moving equipment, will move its North American headquarters to the Beach, spend $8 million, hire 35 workers, and eventually begin producing turbines for wind energy farms, according to city leaders.

"We're very excited to see this happening," Sessoms said. "If you look along the East Coast, there's very little of wind energy occurring. We need to make it happen here on the East Coast, and preferably off the coast of Virginia Beach."

City officials also announced that Busch Manufacturing, a German company that produces vacuum pumps, will add 50 jobs as it expands its Virginia Beach operation. The company recently purchased 3.3 acres for $850,000 to build a $10 million, 50,000-square-foot expansion by 2010 in the Oceana West Corporate Park near Lynnhaven Mall.

And the city's largest manufacturer, German power tools maker Stihl Inc., is planning major replacements and machinery upgrades for its Virginia Beach plant. The company could spend as much as $55 million for the new equipment, city officials estimated, but a Stihl spokeswoman would not confirm the figure. City officials said Stihl's plans to replace machinery at the plant will help the firm save local jobs.

The new machinery would be the third major investment for Stihl in the past four years. In 2007, the company spent $25 million at its guide bar production plant and two years earlier began a $78.4 million expansion.

The three expansion announcements represent a boon for the city amid the national economic slowdown and recent announcements of job losses throughout Hampton Roads.

Warren Harris, the city's economic development director, said negotiations with Carraro, the Italian manufacturer, had stretched back for a couple years.

The company had also considered consolidating its operations at sites in Georgia, North Carolina or Illinois. As part of its move to Virginia Beach, the company will close a plant in Calhoun, Ga., Harris said.

"I think this really brings forward our strategy of looking to attract global business to Virginia Beach," Harris said.

Proximity to the port of Hampton Roads and one of the company's biggest customers, Caterpillar Inc., which has facilities in North Carolina, played a role in the company 's decision to move its North American headquarters to Virginia Beach, said Tiziana Votta, Carraro's senior vice president of worldwide marketing and sales.

"There is so much interest right now in alternative energy," Votta said. "We believe the industry is going to grow relatively quickly. Our type of products are well suited for off-shore applications."

Carraro plans to begin production of the wind turbines in the next two years after adding a new building to its site, also near Lynnhaven Mall.

The company first came to the region in July 2007 when it purchased MG Minigears Inc., which it rolled into its GearWorld company. Carraro currently employs 78 workers at its local plant. The new jobs will offer an average annual salary of $35,000.

"Virginia Beach is one of the best places on the East Coast to manufacture wind energy," Votta said. "It makes perfect sense to expand our operations to include manufacturing components for wind turbines here."

Josh Brown, (757) 446-2318, josh.brown@pilotonline.com