Thunderbird Case

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In March 2017 David Stevens was taking questions in an open meeting with a local school board to discuss tax abatements for a new chemical plant.  Stevens was the project manager for a proposed new chemical plant.  The chemical plant was a joint venture (JV) between U.S. based Allied Chemical and Arachem Group, a Saudi Arabia chemical company.   Stevens and the JV partners had been working on the plant location decision for more than two years.  A final investment decision would be made in 2017 or 2018.  The partners initially looked at more than 50 sites, primarily in Texas and Louisiana.  The partners had narrowed the decision down to a site in Louisiana near Baton Rouge. Before an investment decision could be made the JV partners required tax abatements from the local government commissioners and the school board.  As the meeting continued, Stevens thought about how the various stakeholders in the project and how the community response should be incorporated into the project investment decision

The objective of the case is to provide insights into the local community aspects of site selection for a major construction project. When economic development involves major capital investment and infrastructure requirements such as water, sewage, power, and transportation access, site selection becomes a complex and long-term process. The process involves a variety of stakeholders including local governments, state governments, school boards, landowners, global firms and their suppliers, small businesses, and community residents. The competing objectives of these stakeholders include job creation, tax revenue, infrastructure development, profit, and personal accomplishments for those directly involved in the project. For communities and their citizens there are issues involving tax revenue, economic impacts, jobs, traffic and other stresses on infrastructure, noise, safety, and environmental risks. Achieving a satisfactory balance among the stakeholders and their objectives is a challenging managerial and organizational activity. Until this balance is achieved the new infrastructure and construction cannot start.


7 pages