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By William Pack - Express-News
from mysa.com

As Caterpillar's $170 million engine assembly plant rises from its foundations in Seguin, optimism is growing about the impact of a facility that could produce 4,000 jobs when suppliers and associated employers are counted.

That's more than twice the number of workers Caterpillar announced in December it would hire for the assembly, testing and painting facility. But officials see it as a real possibility once suppliers are in place and the area is built out with retailers, health providers and others who will offer services to new workers.

Terry Treviño, director of the Seguin Economic Development Corp., said while the nation's economic struggles could create problems, talks she's had with suppliers and the development plans for the area of the plant have encouraged her about growth possibilities.

“We have a lot of growth and activity going on,” said Treviño, who is coordinating development activity with Caterpillar for Guadalupe County. “Are my expectations high? They are — wonderfully high.”

George Antuna, economic development director in Schertz between San Antonio and Seguin, said his office has received inquiries from Caterpillar suppliers about development options in the area.

He agrees thousands of workers beyond the 1,465 Caterpillar workers destined for the facility will be drawn to the affected area, which he said will reach to New Braunfels, San Marcos, Floresville and San Antonio.

“It's going to be a boon for the whole area,” Antuna said.

The number of suppliers the 1-million-square-foot plant will need is the key factor on the mind of economic development leaders.

Caterpillar did not return calls, but officials in several towns said they had heard from potential suppliers looking into area real estate opportunities.

Treviño said an economic impact report on the project anticipated 1,719 “indirect” or spinoff jobs would be created as a result of the new plant. She believed supplier jobs were part of that total.

When those jobs are combined with Caterpillar's planned hire, almost $159 million in new earnings should be created, the report showed.

Treviño said she believed Caterpillar was in the process of choosing which companies to use for parts and services at the plant. The first round of suppliers could be identified later this month if the process is not delayed, she said.

A key question still unanswered is how close to the plant the suppliers must be.

Antuna said he understood about a dozen would need to be within 2 miles of the facility, north of West Court Street and east of Interstate 10. That would leave about 20 more to consider Schertz and other towns farther from Seguin.

Mario Hernandez, president of the San Antonio Economic Development Foundation, said he understood that, unlike Toyota, Caterpillar will not require its suppliers to be on-site

Existing San Antonio companies could get some work from the plant and other suppliers could move to San Antonio if that proves true, Hernandez said.

Caterpillar has said the facility would allow it to consolidate engine operations from Illinois and South Carolina as it continues to fight the economic woes that have forced the company — the world's largest maker of mining and construction equipment — to cut jobs and executive pay.

Construction of the facility has encountered few delays and installation of the assembly line should start by late this year, Treviño said. She said a minimal staff of about 100 people could come on board for training and preliminary testing in April.

The plant is not expected to be fully operational until 2011, but Caterpillar will have two more years, if needed, under its tax incentive agreement with the city and county to get to full staffing, officials said.

CAT + BRAC in 2011 = Big boon for the region.