A Cyclist Invests $125 Million in Tennessee
January 23, 2017
(Episode 10 of “The Project: Inside Corporate Location Decisions”)
In October 2016, three-time Tour de France winner Greg LeMond took the stage in Oak Ridge, Tennessee to announce one of the most significant developments in carbon fiber production over the past 50 years—the opening of his company, LeMond Composites. The project involves $125 million in investment and the creation of 250 jobs in Tennessee over the next five years.
To get the full story, “The Project” talked to Connie Jackson, research engineer and CEO of LeMond Composites, and Gary Human, East Tennessee Regional Director at the Tennessee Department of Economic and Community Development.
Update: Connie Jackson has since left her post as CEO of LeMond Composites.
Andy Levine (DCI): In October 2016, three-time Tour de France winner Greg LeMond took the stage in Oak Ridge, Tennessee to announce one of the most significant developments in carbon fiber production over the past 50 years, the opening of his own company LeMond Composites. Now, it’s not often that you hear the words Tour de France and composites in the same sentence, but we think you’ll see exactly why Mr. LeMond chose to invest $125 million in Oak Ridge, Tennessee by the end of this episode.
Welcome to episode 10 of The Project: Inside Corporate Location Decisions. I’m Andy Levine of Development Counsellors International.
Patience Fairbrother (DCI): And I’m Patience Fairbrother, also with DCI, and Andy’s co-host of The Project. Today we bring you the story of an engineer and a cyclist who came together to change the world of carbon materials manufacturing.
Andy: So to go inside this deal we talked to Connie Jackson, CEO of LeMond Composites, who is also the research engineer behind this revolutionary process. Connie has studied carbon fiber virtually all of her life, but in 2012 she and her research team hit a breakthrough at the carbon fiber technology facility at Oak Ridge National Labs, the breakthrough that really became the backbone of LeMond Composites.
Patience: Basically, she found a way to make carbon fiber with a much less expensive material that ultimately cut the cost in half. So how did Mr. LeMond come into the picture? What you might not know about him is that he was the first person ever to win a Tour de France on a carbon fiber bike. His initial interest naturally was in the manufacturing of bicycles here in the U.S.
Connie Jackson (LeMond Composites): He actually had come to the lab looking for some technologies that would be suitable for the next generation of bicycle manufacturing composites. So currently all the bicycle manufacturing for composite bikes is done in Asia, primarily Taiwan and China, and that’s because it’s very labor intensive. It’s got a lot of a lot of hand work that’s involved, and it’s hand laid up and a lot of waste material involved. It’s autoclave cured. So there’s a lot of manual processing involved in that. The labor cost for bicycle manufacturing is significant in the composites, and so the U.S. cannot compete.
Andy: Greg LeMond wanted a next generation technology that would allow him to manufacture bicycles competitively here in the United States. That’s when he met Connie. He was doing a tour of the carbon fiber technology facility at Oak Ridge National Labs, and he started to look into this process that she’d created.
Connie: We spent probably several months if not a year with him doing due diligence as far as questioning about the material characteristics, the sampling, all that information, and then ultimately ORNL had a patent for him to license. So he just went all the way through that process and then approached me at some point in that process to say, “Hey, would you be willing to partner with me and, you know, scale this technology up to a commercial scale and, well, off to the races?”
Patience: So Connie Jackson and Greg LeMond formed a partnership to commercialize this technology. But it wasn’t a done deal that they would locate the research and manufacturing facility in Tennessee. To get the site selection side of the story we talk to Gary Human.
Andy: And that really is his name, Gary Human.
Patience: Yes, his name is Gary Human. Gary is the east Tennessee regional director at the Tennessee Department of Economic and Community Development.
Gary Human (Tennessee DECD): We did have competition with other states. But one of the things that I believe was a true advantage was being in Oak Ridge, right near the carbon fiber demonstration facility that the lab had and that Connie worked at. I think it’s a true benefit and a plus to this project that I think helped us as we move forward.
Andy: We asked Gary to elaborate on the issue of competition with other states.
Gary: I don’t know all of the places that they were meeting with, but one of the conversations we had on a few occasions was they had been talking to California, or California had been talking to them, I should say, about locating out in the area.
Patience: So Ultimately LeMond Composites was looking for the talent to support the development of this new process. And while the talent in California was a draw, there was no real substitute for being able to tap into the talent at Oak Ridge National Labs that had worked directly with Connie to develop this process originally.
Gary: There is a very talented workforce in the state and especially in this region. If you’re looking down into the Department of Energy’s facilities, there’s been a lot of technology research and expertise to come out of the lab and a lot of knowledgeable people that have been working there for years and new employees that have been going to work on the new technologies and processes that help in the manufacturing role.
I think Connie and her team that she has over at her new LeMond facility were some of the folks that she had worked with at the carbon fiber demonstration facility. So I think it turned out to be a good win-win situation for Greg as he hired Connie and some of her team to come over and work for him.
Andy: Gary and his team worked with the state grant committee to develop a contract which he expects will be signed in the first quarter of 2017. LeMond Composites is scheduled to start production in 2018. There will be 2 production lines, and they’ll be capable of delivering somewhere between 16 to 20 million pounds of carbon fiber each year. The project will result in 242 new jobs over the next 5 years.
So we’re up to the takeaways portion of this episode. Patience, let me get us started here. So, obviously, this isn’t the typical type of project that we profile. This was born out of a very specific technology that came out of Oak Ridge National Labs, and that’s ultimately where the company decided to locate. So there was less competition in terms of different sites and different states than what we see in other types of projects that we’ve profiled.
Patience: Exactly. Gary knew that there was some competition with other states, but I think that wasn’t the centerpiece of the discussions that he was having with LeMond Composites.
Andy: LeMond Composites is clearly a startup, and Greg basically saw a potential in this technology. He met Connie. Ultimately they decided to work together and scale this up to a point that it really would become a workable business.
Patience: Exactly. Really if we think of this as a startup it’s very ambitious. They’re looking at adding somewhere around 250 jobs in the next 5 years, which is pretty remarkable. But, if you think about how groundbreaking this technology is, basically it’s this newer cost carbon fiber that will be able to replace steel, aluminum, fiberglass. And when you think of it that way you can begin to understand the scope of this potential market.
Andy: This really isn’t just about bicycles. This is about a whole lot more than, you know, what carbon fiber can do for a lot of different types of things.
Patience: Exactly, from automotive to renewable energy and infrastructure, the list goes on. So for me, I think the takeaway is that facilities like Oak Ridge National Lab can be huge assets for a community, and it’s really important for economic developers to really keep their finger on the pulse of the technologies coming out of research facilities because they may ultimately turn into opportunities for commercialization and investment.
Andy: Oak Ridge is obviously…it’s run by the federal government, but we can really think about all sorts of different innovation centers, colleges, universities, all sorts of things that could be like an Oak Ridge National Laboratories in this case.
Patience: So that is a wrap on episode 10 of The Project: Inside Corporate Location Decisions.
Andy: We have a couple of people we need to thank. We’re gonna start with Connie Jackson, the CEO of LeMond Composites, definitely the smartest engineer we’ve ever had on this podcast.
Patience: Oh, by far, I mean especially considering she’s probably the only engineer we’ve ever had on this podcast.
Andy: Okay. Well, we’ve only done 10 episodes. There will be more engineers. We’re also gonna thank Gary Human of the Tennessee Department of Economic and Community Development. And finally, we want to thank Jennifer McAdern [SP], I hope I’m pronouncing that correctly, who helped us to set up these interviews. She is also with the State of Tennessee.
Patience: The Project is sponsored as always by DCI. We are the leader in marketing places and have served over 450 cities, states, regions and countries. You can learn more about us at aboutdci.com.
Andy: We hope you’ve enjoyed this episode. We hope you’ll keep tuning in every other Monday for new stories of corporate location decisions. There are many more projects to come in 2017.