While the manufacturing construction boom continues across the country, several multibillion-dollar projects have hit unforeseen roadblocks in recent weeks.
Scout Motors, an American car company and subsidiary of the Volkswagen Group, recently halted site-clearing activity ahead of construction that had begun on its $2 billion electric vehicle plant in Blythewood, Carolina of the South, according to the company. Concerns from environmental groups and state and federal agencies about wetlands development prompted project crews to halt further construction work while allowing it to move forward, according to a statement shared with Construction Dive.
Meanwhile, battery maker American Battery Factory postponed construction of its $1.2 billion lithium phosphate battery factory in Tucson, Arizona until November, according to a report. Pima County Board of Supervisors meeting Sept. 5. Project crews initially set construction to begin in September, but decided to delay work by a couple of months due to geotechnical assessment and additional study.
Geotechnical assessments are often needed to identify the type of soil that is underground. Once completed, this data will support the design work of the gigafactory.
These developments follow the July announcement by TSMC, a semiconductor company based in Taiwan, a roll back the opening of its Arizona chip factory until 2025 due to labor issues, TSMC President Mark Liu said. Labor shortages, combined with COVID-19 surges and licensing issues, had already caused the $40 billion project to be delayed by three to six months.
These construction pauses come at a time of historic recovery in American manufacturing, boosted by the $52.7 billion CHIPS Act and the $485 billion Inflation Reduction Act, both signed by President Joe Biden l August 2022.
While the causes of delays in these projects are varied, experts say they mainly boil down to two broad categories: the challenge of finding workers and the glacial permitting process required to safely build these structures.
Lack of skilled labor
Multi-million dollar manufacturing projects require special construction techniquesincluding sophisticated electrical work or the need for “hyper clean spaces” that differ from typical construction projects, said Brian Turmail, vice president of public affairs and strategic initiatives for the Associated General Contractors of America.
But this degree of specialization is slowing completion times as projects seek skilled labor.
About two-thirds of contractors reported that many of the construction worker candidates lacked the skills needed to be employable, said Stephen Sandherr, CEO of AGC.
“Unless federal officials begin closing the funding gap between college preparation and career training, the construction industry will continue to struggle to find workers,” Sandherr said. “It’s great that federal officials want to invest in construction projects, they also need to invest in the development of the construction workforce.”
In addition, more than 70% of manufacturers are struggling to attract and retain a quality workforce, according to a new report from the National Association of Manufacturers.
The report, based on a survey of manufacturers, also called for the reform to be authorized to help streamline the construction process.
Nearly three-quarters of respondents said that allowing the reform, which would simplify and speed up the approval process for new projects, would be helpful for their manufacturing company by allowing them to hire more workers, expand their business or increase wages and benefits.
