(lively music) - [Announcer] This is "Carolina Business Review."

Major support provided by Colonial Life, providing benefits to employees to help them protect their families, their finances, and their futures; High Point University, the Premier Life Skills University, focused on preparing students for the world as it is going to be; Sonoco, a global manufacturer of consumer and industrial packaging products and services with more than 300 operations in 35 countries.

- I suspect if we looked hard enough, there would be real evidence of a slowdown, a softness going on, and it would be very hard to justify those conversations we were having over the last two or three years about the phenomenal state budget surpluses that have been going on.

I'm Chris William.

Welcome again to the most widely watched and the longest running program on Carolina business, policy and public affairs seen each and every week across North and South Carolina.

As we see it, our job on this program is to convene thoughtful leaders to get a sense of where we might be heading, and we will start this week's discussion.

Later on, joining us Toyota Battery Manufacturing boss, Sean Suggs joins us.

We hope you stay with us.

- [Announcer] Major funding also by Blue Cross Blue Shield of South Carolina, an independent licensee of the Blue Cross and Blue Shield Association.

And Martin Marietta, a leading provider of natural resource-based building materials, providing the foundation on which our communities improve and grow.

On this edition of "Carolina Business Review," Terik Tidwell from NC IDEA Foundation's Black Entrepreneurship Council.

Dr. Nicholas J. Hill of Claflin University and special guest, Sean Suggs, president of Toyota Battery Manufacturing, North Carolina.

(lively music) - Hello, welcome again to our program, Nicholas, nice to see you.

Thanks for being here.

Terik, welcome.

What are you hearing out there as you travel?

You know, there's so much focus on the economy and possibly a rolling recession, possibly not.

Are you seeing softness?

- I think we're all seeing a little bit of softness here.

One is looking at one from macro level.

There is a little bit of slow down happening in such the knowledge economy, but there's also a little undercurrent happening in the skills economy or the skills jobs.

And from some of the companies I've talked to and worked with, you know, they're a little bit seeing a shift moving from one particular sector to another sector.

A lot of it is being driven by public policy such as the bipartisan Infrastructure Inflation Act, and seeing folks moving from one different area to another area, which is following some of the funding mechanisms in place.

From some of the things we see with the NC IDEA Black Entrepreneurship Council.

We've funded more than like seven different businesses in growth areas and we're seeing them add jobs 66 jobs added within the last two years and they're still growing and compounding.

So we are seeing a little bit of shift between one particular sector to another sector and it's kind of coming off the hinges of public policy.

- Is so when you talk about public policy Terik, are you, is there still plenty of cash available to flow through to get it out there?

- Yes, there's definitely a lot of money out there.

Particularly, we're seeing North Carolina receive two regional innovation engines, which is $160 million investments to really re-energize some of these regional economies.

One focused on regenerative medicine, another one focused on the textile industries within North Carolina.

So you think about where we're seeing the opportunities grow, which is seeing new economic models come up through North Carolina and seeing this kind of, this transition happening within the state and for some of our businesses who are moving or growing here.

Just in the last month, you know, there were seven different new emerging fund managers announced to really take $30 million and turn it into $90 million to invest into new companies in the state of North Carolina.

So we're really seeing that there's an opportunity happening as we're seeing a slowdown and we're seeing the kind of the shift towards new opportunities in the marketplace.

- Yeah, and to go to the way that money flows, Dr. Hill and Mr. Tidwell was just talking about the money that is still out there and still flowing.

Is that an inflationary pressure though?

Does that create a problem?

- Well, one of the things is for businesses, it creates a great solution to have access to capital to really start to grow the business.

However, for households who are looking for loans for homes and other purchases, that's keeping the interest rates a little higher than expected and it's, you feel a little bit pressure on that side with the households when they come to trying to make these purchases.

- Are you getting a sense, and I promise Nicholas, I don't wanna put words in your mouth, but are you getting a sense of over the last three or four years, both Carolinas, both general assemblies have had nice surpluses in the billions of dollars, but there feels like there's a different sense now, a more austerity and almost a return to normal about balancing the spending and balancing the income.

Is that true?

- So with regards to the surpluses, they have seen historic surpluses that have been going on within both the Carolinas.

Their biggest question is what to do with these resources, some of which are looking at ways to develop the infrastructure, looking at ways to better support education.

Also looking at ways from the standpoint of port authority, redeveloping that after trying to help with that transportation and logistics issues that are going on there.

But one of the things that we do see is it is getting back to normalcy with regards to what the expenditures are and what the revenue is being collected.

And in the Carolinas have had a lot of influx of people coming back from the north, given the weather, the climate, retirement, things of that nature.

So that may impact some of the surplus budget that we've been experiencing this in.

- How does that, any of that, how would you characterize what Dr. Hill just said when it comes to what you're looking at?

- I mean, when you start thinking about, you know, the shift in demographics, demographics drives markets.

- You mean just the influx of people moving in Carolina.

- Moving into the states.

So when you move, you know, say you have new foreign direct investments coming into the state, new companies, new jobs, you're gonna see people moving and moving from different coastal planes from New York.

I have a lot of folks who are moving down from New York, New Jersey, who are coming down here for these opportunities because there's an opportunity for jobs, and opportunity for actually, you know, creating a business and actually growing that business here in North Carolina or in South Carolina.

So you're really seeing it, which is the, a lot of folks are moving out these hotspots.

In fact, I just got a text message from someone who's moving from Austin, Texas, his business is moving to Charlotte, North Carolina.

- Is that anecdotal or do you think that there's a trend?

- No, there's a trend here.

- From Austin?

- From Austin.

- That was considered one of the hottest growing in south.

- Hot growth in fact a lot of folks are moving to Winston-Salem and or to Greensboro because they're seeing the emergence and to your early point, which is, you know, it's too expensive in these places to actually grow and thrive.

So they may be moving to places where they can have a family, have more access to resources, to community.

So you may see the tax revenue from those folks who are moving to the states, creating more opportunities for where do we reinvest these new revenue streams.

So we have a good talent infrastructure in place because we do need to have strong K-12 school systems.

- Yeah, just about 30 seconds.

Dr. Hill, and this is probably not a fair question in 30 seconds, but all of the in-migration, won't it create the same problems that folks are running from?

- So, well I believe they're coming here for different reasons and one of the things that we're starting to see demographically wise is that this is a great place for retirement.

So a lot of people are coming here trying to buy homes like we was mentioned, land.

And so now it becomes a market for opportunities for these individuals to where you can create businesses centered around that.

I don't see congestion like in New York and that being a serious problem for years to come, but more so what are the opportunities for the state to get revenue is the bigger issue because these people are retired, you know, from the standpoint not necessarily coming here for working.

- Okay, thank you.

That'll be the last word on that.

We're gonna bring our guests in a moment.

Before we do that, we like to do this right around this time of year and that is take a temperature of one of the largest industries and impacts in the Carolinas is tourism.

Hard to get around that one.

It's a fun one too.

We will be joined by the heads of tourism for both Carolinas Wit Tuttle from North Carolina Commerce and the tourism boss and also as well Duane Parrish, longtime PRT Boss, Parks Recreation and Tourism in South Carolina will be here.

Until recently, who knew that making batteries could be such a big business?

Well, not surprisingly now with the proliferation of electric vehicles, but battery plants are literally popping up across the globe and certainly in the Carolinas is no exception.

Within the last 18 months to 24 months, Toyota Battery made a major announcement total of about almost $14 billion with more than 5,000 jobs now located southeast of Greensboro in the center of the Tarheel state.

Joining us now, Toyota Battery Manufacturing of North Carolina President Sean Suggs.

Sean, welcome to the program, nice to see you, sir.

- So nice to be here, Chris.

Thank you so much for the invite.

I'm honored to be here with you.

- Sean, I have to say this was not a small announcement in North Carolina when it came to capital investment and jobs.

In fact, it's eye-popping.

There have been others since then.

Sean, are you on track and are you ahead of where you thought you would be, and not just a build out but hiring, et cetera, et cetera.

Where are you with the project?

- Well, I first like to thank the state of North Carolina for believing in us from the legislator, et cetera, everyone's been phenomenally supportive of what we're trying to do here and we started moving dirt and moving things around around January, 2022.

And I can tell you on the 1,800 acres that we have, which is roughly two by two miles, we are on schedule.

We are in the process now of doing battery trials, cell trials actually in our first hybrid battery building, which is 500,000 square feet.

And we've built another one of those, which is our second one.

And we've got our third one, which is all electric battery building, which is 1 million square feet.

It's on schedule.

And as far as hiring, I think one of the great news stories about our current situation in North Carolina is we've already hired over 800 team members and we've got over a thousand in the queue, which means they're just waiting on a start date, which is amazing.

The buzz and the excitement of us being in this state and most importantly in this region has been amazing.

No problems hiring to date.

- Okay, we're gonna come back and unpack some of the statistics, but I'll give you a chance for our panelists to join.

Jump in Terik.

- Hi Sean, Terik here.

I'm really curious to, you know, as you all are expanding, growing, how you all working with universities and any even higher education institutions in that region to being con to develop both talent and also some R&D within that region?

- Yeah, great question.

We are in what I believe in a 60 mile radius of some of the greatest universities in the country.

Specifically, we've had a phenomenal relationship with the community colleges, Randolph and Guilford, for our advanced manufacturing technician program where a student works for us for three days, go to college for two days, and when they graduate in two years, they're certified maintenance or skilled person that we need for battery.

So they've got a job on day one that's been really successful.

And we've also partnered with North Carolina A&T, the largest HBCU in the country to provide a line of talent pipeline.

But most importantly we've developed a STEAM academy there for their elementary school, which is on campus to build that pipeline for the future.

- [Chris] Nicholas?

- Sean, thanks for coming, joining us.

I do, I am curious about what are some of the skill sets that you kind of look for with the new hires and what are some ways that institutions like Claflin University can be a part of this new innovation that's coming to the region?

- Yep, I'll tell you, there's a couple tracks.

You know, on the technical track we're looking for engineers, a lot of, some engineers, electrical, mechanical, chemical, you name it, industrial who are looking for those engineers.

But on the team member side, on the production shop floor, I'm a perfect example.

I started at Toyota 26 years ago as a new hire on the production shop floor.

And we have built-in systems, what we call dojos or training classes, that we can get a person with zero manufacturing experience and get them to the level that they need to get to in a short period of time.

So we're looking for people that are critical thinkers, love to come to work, integrity, all those things that you look for in a great workforce.

That's what we're looking for and the universities and colleges around this area, if you can provide some of that talent for us, we'll be more than welcome to accept those members into our site.

Problem solving is a big deal for us and critical thinking because we're in the Kaizen business or continuous improvement business.

So that's a big deal for us.

- Sean, and listening to you talk about the talent that you're looking for and as you well know, you have to be a renaissance company and a renaissance man or woman now, when you're thinking about being a leader, part of finding talent is also the housing issue, workforce housing.

What does Toyota do, what do you do, how do you approach the housing issue when it comes to hires?

- Well, I'll start by saying that on our campus for the 5,000 team members, we will provide a childcare center.

It will be on site.

We'll also have a family clinic, a Walmart pharmacy.

All those things will be housed on our site when we start up.

The secondary piece of that is we also know that, you know, if you inject this community with 5,000 members and their families, et cetera, to expand, housing's gonna be something that we're gonna have to look into.

We've had great success in a 60-mile radius of our plant.

Typically that's how we hire people.

We've had great success there.

So we believe that there's gonna be a multi-community approach to make that happen, not just a concentrated area, but we're gonna tap into the 60-mile radius.

- [Chris] Okay, so sorry to interrupt you, Terik, question.

- Yeah, I wanna piggyback off of that because it came out of the "New York Times" article, I think earlier this week around how this will impact the region.

I'm just curious about how, as this site comes online, how it's gonna work with regional businesses.

So therefore as this this new economy is coming, these businesses can participate or contribute to what's happening in this particular clean energy movement.

- Well, I'll tell you that's a really good question.

One thing I didn't mention that I think is really important, our AMT program or the FAME program is what we call it, it is not just for Toyota.

Like for an example, we've got 37 students in this first cohort and we've partnered with four other companies to make that happen.

So we're developing pipeline talent, not just for Toyota, but also some of the local businesses in our area, which I think is really important.

You know, as we continue to grow and advance as a company, you know, we're gonna continue to expand opportunities even maybe from a supply based perspective.

So we believe that, you know, this thing's gonna be really organic in the next two to three years and capitalizing not only on the talent, but some of the small businesses that'll pop up, hotels, all those things we believe will have some impact to this community going forward.

- [Chris] Dr. Hill.

- You mentioned earlier about the economy and the impact on the economy.

I do want to ask, what are some challenges that you and your organization see forthcoming with the economic pressures or downturn, recession?

What is what you're seeing on the macro level?

- Well, on the macro level, I'll tell you something that's really important.

We have a multi-path way approach at Toyota, which means the customers are telling us they still want hybrid, plugin hybrid, all electric batteries.

They want a combination or variety of choice.

We believe that by 2030, the US will be at a, maybe about a 30% all electric battery choice for our customers.

So we're gearing up to have flexibility based on the customer demand.

From a government perspective, we wanna make sure that's crystal clear, this multi pathway approach, that it's not one size fit all.

And if the enemy is carbon reduction, we believe that this multi pathway approach can get us there a lot faster.

So from a government regulation perspective, we hope they hear that loud and clear.

We believe our counterparts and the other OEMs or other automotive companies now realize that that multi-path approach is the way to go.

So hopefully we can potentially soften some of the stringent regulations as it relates to all electric because again, the customers are telling us they don't want that all at once, they want that to be a gradual process.

- Sean, this is not exactly the same thing, but you're going to figure this out pretty quickly, the utility industry went through years and years of generating electricity through carbon and that was burning coal and now they use other things to do it.

But as you manufacture a heavy metal product, how do you do that?

How do you do it thoughtfully?

How do you do it in balance with environmental concerns and how do you keep, it's probably not the best way to ask it, but how do you keep all parties happy to get to an end product that is a good end product and is done thoughtfully?

- It's a great question.

I'll tell you on our site that, you know, with the strong partnership with Duke Energy, we're gonna be, we're gonna, our target is to be carbon neutral at SOP or a little beyond that.

And so most of the things that we'll produce on our site will be from an electrical perspective.

The only natural gas we'll have on our site for an example will be if we have some backup generator or something like that.

I also vowed when I took this role that, you know, we're on a two by two mile site.

I vowed to replant every tree that we took down.

And I know that's a tall task.

- [Chris] How many you think that is?

- We are strong proponents of making sure we give back to the environment.

We're gonna have our Dobson Lake, which is on site will be a natural habitat also for school age kids to come.

We've got a partnership with one of the local colleges, making sure there's environmental friendly things that they can learn from as well.

- Okay, Terik.

- Yeah, I'm just curious about, you know, the bipartisan infrastructure and Inflation Reduction Act passed about two years ago.

I'm just curious how that impacted the desire or need for Toyota to really focus on clean energy, particularly within North Carolina.

- Yeah, really good question and I'll tell you our mantra in North America is if we're building cars, trucks, or batteries, we wanna build it where the customers are and try to get that product to them as quick as we possibly can.

For us to venture into the battery making business, this is the very first time we've ever done anything like this and North Carolina is the prime location.

It's been the number one state, we're doing business for the past two years.

The infrastructure here is amazing.

The higher education is amazing.

So we, it's a win-win for Toyota, I can promise you that.

And this infrastructure act, as I mentioned to you earlier, what we would strongly suggest to all of our great colleagues in the government is it's gotta be a paced process.

Think about this for a second.

In the United States, there's not one active lithium ion mine, not one, for any company, let alone Toyota.

So it's gonna take some time for some of these great companies and startups to get going, but also charging stations and things of that nature.

We still have a road to go to make sure we're providing the customer what they need when they need it.

So that's why we have this multi pathway approach to make that happen.

- [Chris] Nicholas.

- Yeah, so touching back on the fact that you are a global company, what are some of the things that you're seeing from global pressures, global conflicts, and how do you see that impacting what you're doing, your production and all the things that going on with this location?

- Yeah, we are a global company with over 300,000 team members globally.

And you're right, we've got locations all over the world, but again, our focus on North America has been unwavering.

So through conflicts and things of that nature, as you mentioned our, global CEO and our North America CEO, they've had unwavered support for us to continue to move forward with this direction of the multi pathway.

So that's what we're charging to do.

I will tell you that depending on the region, globally, our attack plan may be different, it may have to shift.

European requirements are different than the US requirements for an example.

But again, our leadership is really, I think the key point to remember in this discussion is we're really listening to the customer.

No matter if it's in the us, no matter if it's in Europe or South Africa where we have operations, we're listening to the customer.

- Lemme come back to something.

A year ago we couldn't have a discussion around business or industry or policy without having a problem with the supply chain.

It was all about supply chain.

What have you learned from the supply chain crisis?

How do you source differently now and are you better for it?

- Yeah's a really good question.

I will tell you when Covid hit, it was an eyeopening for everyone.

We all know that.

But I'll tell you the thing that's really cool about working at this great company of Toyota is we've partnered with our supply base just like their family and try to lend a helping hand to them even when they had some struggle point, some of the things were beyond their control.

For an example, getting product from Japan and then have to expedite that to us, that kind of thing.

So we would try to send, you know, teams out to help any distressed supplier as we possibly could.

So there was a lot of lessons learned about that on location of supplier, what's the key backup plans if they go down, what's our remedy to that?

So we learned a ton from that experience.

So going forward, for an example, our supply base as it relates to our electrification and batteries, it's gonna look a little different based on our key learning points from the past.

But the thing that's really important is our teamwork with our suppliers and letting them know that we're here for them and vice versa.

- We have about two minutes left guys, so I'm gonna do a follow up, a quick follow up.

It's a technical question, Sean.

Many people that drive EVs, not hybrids, but straight up EVs have this thing, and I know you're gonna know this called range anxiety and that is how long is this battery gonna last, really?

- [Sean] Yes.

- So I guess the question for a battery manufacturer, when does the technology become range anxiety is a thing of the past?

- Another great question and I hate to sound like a broken record, but it really supports what I mentioned about multi pathway.

But specifically I will tell you that you're a hundred percent correct.

That is one of the factors on why we're probably not gonna be all electric in the next two years.

But I also will tell you this, on the horizon, my friend, we have the most solid state battery patents of any other company and that solid to state technology, we have proven that we can double the range on our current battery packs and also have a charge of about 10 to 15 minutes, which we think the customer will really, really enjoy.

The technology's there, we're trying to figure out how to mass produce that now.

But down the road I think our customers and the question that you ask about range anxiety will subside and they'll be able to hop into an all electric vehicle and feel confident they can make it to their destination and back.

- Yeah, okay.

So about, you know, 40 seconds left.

And not to overuse this pun, but how far down the road do you expect that those new batteries would be in vehicles?

- Well, our goal obviously now that we've got the technology fixed, we believe that over the next two to three years, hopefully down the road, that'll be a good landing point to see if we can get those in vehicles and test them and see how they work.

- Sean, thank you.

I, not to rush you off here, but I know we're all gonna run out of time, but thank you for taking time.

I know you travel a lot and your leadership in North Carolina I know is appreciated, but nice to see you, sir.

- Thank you so much.

You guys have a great rest of the day.

- Thank you very much.

Nicholas, always nice to see you.

Terik, nice to see you, welcome back.

Until next week, I'm Chris William, goodnight.

- [Announcer] Gratefully acknowledging support by Martin Marietta, Blue Cross Blue Shield of South Carolina, Sonoco, High Point University, Colonial Life, and by viewers like you.

Thank you.

For more information, visit CarolinaBusinessreview.org.

(lively music)