Wednesday, October 6, 2010

The Landrum Cell

The year is 2015.  Bob Landrum of Connellsville is one of the wealthiest men in southwestern Pennsylvania.  A high school chemistry teacher by profession, Bob was an amateur inventor and had discovered a breakthrough in solar cell technology back in 2013.  His new solar cell, using a technology that he patented, was nine times more efficient at generating electricity than the best state-of-the art cells were previously.  Despite his wealth, Bob and his wife Carol sent their two children to public schools.  “We want Timmy and Sarah to experience the diversity of America and they need to interact with other children from all walks of life and from all kinds of families” explained Carol.

Bob had started to manufacture his Landrum Cell, as he named it, in his garage.  The process was complex, manually intensive, and required a high level of skill.  Because of this, commercialization of the current design of the Landrum Cell was impractical, although Bob was able to sell his product to niche markets like NASA and electric car experimenters where the efficiency of electricity production was more important than cost.

Even though production quantities were limited, Bob’s product commanded a premium price, and his income soared.  Eventually, he retired from teaching, hired a few smart engineering students from Carnegie-Mellon University to help with production and further development, and continued to produce small quantities of his product from his garage for a select group of customers.  Carol, who was trained as a nurse, managed the non-technical aspects of the business like payroll, marketing, and personnel.

Bob and Carol knew they had to expand their business and make the manufacturing of the cells cost-effective.  They wrote a business plan with the goal of taking his company public.  Bob knew the demand for his product would soar, especially after President Palin’s disastrous invasion of Iran in 2013 which cut off much of the oil from the Middle East.  With gasoline at $7.50 a gallon, oil company profits were soaring while average Americans looked back at the slow but steady Obama economic recovery as “the good old days” when unemployment was below 10%.  Although credit was tight, with banks only supporting non-value-added ventures like hedge funds, Bob knew he had a winner with his patented technology and needed capital to expand.

The Landrums' business plan called for the establishment of a 177,000 square foot factory.  The plan was conservative, but with the patented high-demand technology it showed the Landrum’s business becoming a $7 billion enterprise within five years, creating over 8,000 jobs.  Because of the complexity of the Landrum Cell technology, this would be no ordinary factory, but would require highly skilled workers – many with advanced degrees in chemistry, physics, and engineering – to oversee the fabrication process.  Bob and Carol immersed themselves in the challenges of starting up a new company and they became astute self-taught businesspersons.  Bob was a “hands-on” type of individual and had a reputation of being a fair but demanding employer.

The process of taking a company public is complex, and the Landrums wanted to be close to where the action was – Wall Street.  So they decided to leave southwestern Pennsylvania and move the operation to the New York metropolitan area.  They started to search for locations for the new factory and R&D center there.

Many sites were under consideration, New Jersey, Connecticut, Long Island, and Westchester County.  Competition among those sites was fierce, each one considering capturing the Landrum business as a plumb because of the exciting potential to make a significant dent in the high cost of energy using clean technology.

Like its competition, New Jersey did a full-court press to woo the Landrums to the Garden State.  Officials offered development grants, tax abatements, and scoped out several potential sites for the factory.  Governor Loretta Weinberg met with the Landrums personally.  But it was not to be.  The Landrums did not choose New Jersey for their factory.

After the decision, Carol explained to a reporter, “We firmly believe in sending our kids to public schools, and the schools in New Jersey, while they had a superb reputation, have deteriorated under the Christie administration.  The best teachers were driven out and replaced by inexperienced recent graduates while class size has grown to unacceptable levels.  Despite recent improvements under the new administration, New Jersey’s schools will take several more years to recover.  Most of our workforce feels the same way, and we wanted to make the move attractive to them, also.”  Bob added, “A significant part of our decision was based on the availability of good infrastructure.  We need roads and rail to ship our product as our volume expands.  Unfortunately, in New Jersey, roads deteriorated significantly due to the neglect under the Christie administration, and with the high demand for our product, we can’t afford to have it sitting idle in a traffic jam.”  When questioned by the reporter, Bob added “As you know, our manufacturing process uses lots of water, and it costs us time and money to purify the water we get.  Because of the neglect in water quality under the Christie administration, we have found that using New Jersey’s water would require additional purification steps, which are not necessary in the site we ultimately chose.”  He continued, “I’m a big proponent of public transportation, and I need to meet with the Wall Street folks several times a week.  The lack of a new Hudson River crossing makes commuting into the city from New Jersey pretty onerous, and it’s much easier from my new location.”

“We appreciate Governor Weinberg’s effort to attract our business,” he continued, “but right now, New Jersey is too far behind its competition to make this economically viable for our expanding venture.  We like the new governor’s plans for making New Jersey a better place to live and work, and perhaps in the future, when our business expands further, we might consider a second factory there.”  President Palin’s new Secretary of Education, Chris Christie, was unavailable for comment.

This parable is dedicated to the real Bob Landrum – my (New Jersey public) high school physics teacher who taught me the joys of calculus, how to learn from my mistakes, and encouraged me to pursue what turned out to be a rewarding 40-year career in engineering and program management.

1 comment:

  1. Only noticed your parable and your blog for the first time because of your comment to Ed Potosnak. Enjoyed reading it. (Re: your comment, Governor Weinberg's presence is very optimistic; Palin & Christie's parts in the story don't surprise me as much.) Yours is a talent I encourage you to use again.