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Westinghouse Stays in Western Pennsylvania

With the order book bulging at the seams, Westinghouse needed a place to grow – and grow big. After a competitive national search, it chose its own backyard.

By Abby Mendelson

August 14, 2007, may have been Ed Rendell’s finest moment as Pennsylvania Governor. That’s when, shovel in hand, in bucolic Cranberry Woods, Butler County, he helped break ground for the new $200 million, 800,000-square-foot Westinghouse Electric headquarters. Speaking of his administration’s efforts to help companies not only stay in the Commonwealth, but also expand, invest, and create jobs, he compared the traditional Pittsburgh company to a famous West Coast newcomer. “I don’t think it’s farfetched to say that Westinghouse’s relationship with Southwestern Pennsylvania is akin to Microsoft’s relationship with the Pacific Northwest,” Rendell said.

Added Westinghouse CEO Steve Tritch, “George Westinghouse established our company’s roots in Southwestern Pennsylvania in 1886. Since then, Westinghouse has contributed to the economic vitality of this region. We’re proud to continue the legacy of our founding father.”

Well, legacies are all well and good. But it takes more – far more – to expand significantly in this era of globalization and intensely competitive markets.

Knowing that, the Pittsburgh region and Pennsylvania stepped up to make Westinghouse the proverbial offer it couldn’t refuse.

First, Westinghouse. Although it bears the traditional name of Westinghouse Electric, these days its business is exclusively nuclear. As Westinghouse spokesman Vaughn Gilbert notes, “nuclear power got its birth in Western Pennsylvania with the work Westinghouse did for the nuclear navy in the 1940s and ‘50s -- submarines and aircraft carriers. Having supplied the world’s first pressurized water reactor in 1957 in nearby Shippingport, today Westinghouse technology is the basis for roughly half of the world’s operating nuclear plants, including 60 percent of those in the United States.”

With the world going increasingly nuclear, and with the Westinghouse order book bulging at the seams -- domestic sites as well as four new plants China – Westinghouse needed to expand its suburban Pittsburgh site. But where? The current grounds weren’t sufficient to contain an expected 1,000 new jobs over the next five years. So the call went out.

Predictably, many states competed. Using an exacting site-selection process, Westinghouse looked for land, access, workforce, and incentives.

In Pennsylvania, the Governor’s Action Team took up the challenge. Seasoned economic development professionals who serve as point-of-contact for businesses considering locating or expanding, they worked closely with regional officials to secure a $6 million funding offer for Westinghouse. (Broken down, it included a $2.25 million Pennsylvania Industrial Development Authority loan, $1.65 million Opportunity Grant, $1.25 million Infrastructure Development Program grant, and $860,000 in Customized Job Training funds.) While significant, that was far less than some states were offering.

But if Pennsylvania had less cash, it had numerous intangibles which made the deal highly attractive. “There’s a very well-educated workforce here,” Westinghouse’s Gilbert says, “many people with advanced degrees. That’s what we needed – two-year technical degrees to advanced degrees. Plus, there was proximity to great universities -- Penn State, Carnegie Mellon, Pitt, and others.

“Then there’s a great natural setting,” Gilbert adds. “Once we get young people here, not only do they like Westinghouse, they like Western Pennsylvania – our clean air, our recreation activities. That makes it easier to get people to come here.”

Here, finally, was an 82-acre site north of Pittsburgh, Cranberry Woods, Butler County. When the project is completed in 2010 – just in time for the current lease to expire -- Westinghouse will have ample space for some 4,400 people in three wings. With plenty of room to expand, the new Westinghouse buildings will be environmentally sustainable – a green office complex, the largest-single tenant office campus in the state. The new, larger headquarters and technology center will feature a significantly enhanced work environment for all employees, including improved work stations. Within walking distance there are also a variety of restaurants, shops, hotels -- even a large training facility.

For the region, the benefits will be enormous. According to a University of Pittsburgh study, the Westinghouse expansion is estimated to provide a positive impact of $1 billion annually in Gross Regional Product, including $296 million in new activity and $712 million in preserved activity. Generating some 931 new direct jobs, the project will have a spin-off of 1,536 new indirect jobs. In addition, some 2,243 existing direct jobs and 3,813 indirect jobs will be preserved by the project. The total job impact of 8,523 jobs equals some $827 million in annual personal income. “We are growing quickly,” Gilbert summarizes, “and our long-term prospects are very good. This is a benefit to the entire region.”

Pennsylvania and Westinghouse? As Gilbert says, “life is good.”