Here is today's summary of economic development news, presented by the Economic Development Partnership of Alabama.
Alabama to lure foreign firms here with credits
Economic developers in Alabama will soon be able to offer an international company a new perk -- state tax credits to offset federal tariffs on imported items as it establishes operations in the state.
What has been dubbed the Made in Alabama Job Incentives Act would apply to a foreign company that invests at least $100 million and creates at least 100 jobs in Alabama. The company would get a state income tax credit of up to $20 million over three years to offset federal tariffs the company would pay on imported products while it builds and opens a plant here.
As an example, if a foreign automaker wanted to produce cars in Alabama to save the tariff expenses as sociated with bringing the cars into the U.S., the company could claim a state tax credit against those levies paid while the automaker is in the process of building its factory in Alabama.
"In this economy, we have to think outside the box when it comes to re cruiting jobs, and this proposal is the perfect example of that," said Rep. Barry Mask, R-Wetumpka, who sponsored the House version of the bill.
The idea grew out of the Commission on Job Creation that was formed by Alabama House Speaker Mike Hubbard, R-Auburn, in February. Business and community leaders suggested nine ways to improve the state's business climate and expand jobs, including incentives that would offset tariffs.
Norfolk Southern CEO to McCalla residents: 'We will be positive addition'
Published: Monday, June 06, 2011, 2:21 PM Updated: Monday, June 06, 2011, 2:27 PM
By Michael Tomberlin -- The Birmingham News The Birmingham News
Norfolk Southern CEO Wick Moorman promised the company would be a good neighbor to residents of McCalla, where it is building a railroad hub.
Norfolk Southern officials broke ground this morning on the railroad company's $97.5 million hub being built on 316 acres in McCalla.
Wick Moorman, chief executive of Norfolk Southern, was joined at a ceremony by Gov. Robert Bentley, U.S. Rep. Spencer Bachus, R-Vestavia Hills, and other elected officials along with dozens of business leaders, economic developers and McCalla residents.
Moorman said the Birmingham Regional Intermodal Facility will be a key "anchor" on the company's new $2.5 billion Crescent Corridor project that aims to boost the use of rail-to-truck shipping containers from New Orleans to New York.
Bentley, pointing to an economic impact study Norfolk Southern commissioned, said the estimated 8,600 spin-off jobs over the next 10 years are significant when it comes to his goal of returning Alabama to statistical full employment. Bentley has refused to take a salary as governor until that goal is reached.
Foreign Automakers Drive Growth in U.S. Manufacturing Jobs Workers in the low-cost South are increasingly attractive
Jun 3, 2011, 12:54 pm EDT | By Susan J. Aluise, Aviation, Auto & Transportation Writer
For the past few months, the auto industry has been seen as a key driver of job growth and economic recovery. After all, Ford (NYSE:F), General Motors (NYSE:GM) and Chrysler have added thousands of jobs and are investing billions of dollars in their facilities.
But in the wake of a nearly 4% decline in U.S. auto sales last month and an unexpected slump in the manufacturing sector, investors this week have been running for cover in advance of Friday's jobs report. That news injects a note of caution into bullish predictions of U.S. automakers' rebounding fortunes.
As even the Obama administration admitted this week, only 115,000 of the 400,000 U.S. auto industry jobs lost in the 2007-08 recession have been restored. That raises questions about whether the "Detroit Three" need to further streamline their operations to grow jobs and increase earnings.
Those numbers also raise questions about whether the U.S. operations of foreign manufacturers might be better positioned than those legacy automakers to drive U.S. job growth in the sector. One key reason: the distinction between an "American" car and a "foreign" car has blurred as companies like Toyota (NYSE:TM), Honda (NYSE:HMC), Nissan, Hyundai, Volkswagen and BMW have expanded their U.S. manufacturing plants and added jobs.
Foreign-owned auto companies have invested $44 billion into their U.S. operations, accounting for 80,000 direct vehicle-manufacturing jobs and an additional 500,000 dealer and supplier jobs, according to the trade group Global Automakers. Their 300 U.S. facilities also account for nearly half of all vehicles built in the U.S.
"There has been an international move to produce cars in the U.S. for U.S. consumption," Julie Maydew, vice president of industry research firm ResourceMFG said. "Foreign direct Investment is increasingly regarded as a source of new jobs, production and exports and foreign manufacturing jobs within the U.S. are growing five times faster than outsourced jobs."
Energy Huntsville Initiative aims to make city a national leader in clean energy
Published: Saturday, June 04, 2011, 8:37 AM
By Steve Doyle, The Huntsville Times The Huntsville Times
HUNTSVILLE, Alabama -- Huntsville has long been recognized as a national leader in systems engineering and missile development.
Mayor Tommy Battle hopes a new program announced Friday puts the Rocket City on the cutting edge of another high-tech field: clean energy.
Battle said the "Energy Huntsville Initiative" will tap the city's engineering, logistics and computer modeling know-how to develop sustainable energy projects - and ultimately new jobs.
"We'll use that expertise to develop industries that will make Huntsville also be known as a center of excellence in the energy field," he said at a morning news conference. "It gives us an opportunity to expand our entire workbase."
University of Alabama in Huntsville scientist touts value of Southeast's water
Published: Monday, June 06, 2011, 10:01 AM Updated: Monday, June 06, 2011, 10:05 AM
By Budd McLaughlin, The Huntsville Times The Huntsville Times
HUNTSVILLE, Alabama - With droughts plaguing the West and Southwest, farmers in the Southeast may benefit which, in turn, would give a much-needed boost to the area's economy, according to a climate scientist with the University of Alabama in Huntsville.
"The Southeast may be in a sweet spot," said Dr. Richard McNider of UAH's Earth System Science Center. "We are one of the few places in the country with both the water and the land that will be needed to substantially increase farm production.
"That could become very important in the near future, as California and other western states continue to struggle with escalating water shortages. Southern New Mexico, for instance, recently set an all-time record for consecutive days without rain."
That may seem strange to a lot of people who have been led to believe that the Southeast is also in the throes of a drought. But McNider said it's just a case of perception.
And, lack of education.
"The perception of a water shortage is wrong," he said. "We have a water distribution problem. It's a matter of educating people."
Supported by an almost $2.2 million grant from the U.S. Department of Agriculture, McNider leads a team that will spend the next four years studying the environmental and economic impacts that widespread expansion of irrigated agriculture might have in the Southeast. The test region includes Alabama, Mississippi, North Florida, Georgia and South Carolina.
Mask's 'Made in Alabama' bill passes
Friday, June 3, 2011 4:01 pm
Mask's 'Made in Alabama' bill passes David Goodwin thewetumpkaherald.com | 0 comments
Even with Republicans enjoying commanding majorities in both houses of the Legislature, it's still useful to cross the aisle for on issues that matter to all Alabamians.
State Rep. Barry Mask (R-Wetumpka) joined with a pair of Democrats this week to get a job-incentive bill passed he hopes will attract foreign manufacturers to the Heart of Dixie.
Mask had introduced the "Made in Alabama" bill, which offsets federal tariffs for companies willing to boost the state's job market, a few weeks ago.
The House passed it this week, but with the clock ticking down on the 2011 regular session, the House compromised Thursday by passing the Senate version sponsored by Sen. Marc Keahey (D-Grove Hill).
"There are no party labels when it comes to creating jobs," said Mask, who chairs the House Economic Development and Tourism Committee. "I'm proud to sponsor this bill with Sen. Keahey because I believe it will allow Alabama to do something truly significant in economic development."
Mask said the only real difference in the two bills was that Keahey's version demanded a longer committment to Alabama workers from the foreign firms that take advantage of the incentive.
Alabama's financial industry sheds 9,000 jobs since 2005
Birmingham Business Journal - by Antrenise Cole, Staff
Date: Friday, June 3, 2011, 5:00am CDT
Alabama's banking sector has lost nearly 9,000 jobs since 2005, and experts say cost cutting due to recent poor economic conditions and a series of major mergers and acquisitions are to blame.
According to data from the U.S. Bureau of Labor Statistics, employment in Alabama's financial sector hit its peak for the past decade in October 2005, with around 101,200 employees working in the industry.
Since then, total employment in the industry has dropped to 92,600, according to the bureau's preliminary figure for April.
Birmingham Business Journal
Teledyne Brown, Aerojet form 'strategic alliance' to build rocket engines in Huntsville
Published: Thursday, June 02, 2011, 4:45 PM Updated: Friday, June 03, 2011, 9:34 AM
By Budd McLaughlin, The Huntsville Times The Huntsville Times
HUNTSVILLE, Alabama -- A "strategic alliance" by two high-tech companies could lead to hundreds of jobs coming to the Huntsville area.
Huntsville-based Teledyne Brown Engineering and Aerojet have joined forces to pursue contracts to manufacture liquid rocket engines. The engines will be for the Marshall Space Flight Center-developed heavy lift rocket through NASA's Space Launch System program.
"This could put the 'rocket' back in 'Rocket City'," said Rex Geveden, president of Teledyne Brown Engineering. "This is an opportunity for the area to be in the rocket production business."
If the Teledyne-Aerojet team wins the award, it could add as many as 1,400 employees here and California, company officials said.
"I am glad to hear about today's announcement of a strategic partnership between Teledyne Brown Engineering and Aerojet - General," said U.S. Sen. Richard Shelby, R-Tuscaloosa. "The potential addition of 1,400 high quality engineering and manufacturing jobs in Huntsville would be great news for the community.
RockTenn to close Birmingham container plant
Published: Thursday, June 02, 2011, 11:39 AM Updated: Thursday, June 02, 2011, 12:47 PM
By The Birmingham News The Birmingham News
Norcross, Ga.-based RockTenn said today that it will close a former Smurfit-Stone corrugated container plant in Birmingham late this year.
The company also is shuttering former Smurfit-Stone plants in Jonesboro, Ark., and Santa Fe Springs, Calif., according to an announcement. RockTenn said existing business will be transitioned to nearby RockTenn facilities.
"This action is a necessary first step in realigning the box plant system of RockTenn following the acquisition of Smurfit-Stone," CEO Jim Rubright said in a statement. "We plan to take many actions in the next year to maximize the efficiency of our manufacturing processes as well as to reduce costs and eliminate redundancies throughout our operations as we move forward to achieve the operating synergy that we anticipate from the Smurfit-Stone acquisition."
The former Smurfit-Stone plant on Pinson Valley Parkway employs 110 people, according to the 2011 edition of the "Alabama Manufacturers Register."
RockTenn acquired Smurfit-Stone in a $3.5 billion deal that was completed last month.
Baldwin County tops state micropolitan economic rankings
Published: Thursday, June 02, 2011, 8:42 AM
By Guy Busby Press-Register Press-Register
ROBERTSDALE, Alabama -- Despite the effects the oil spill, the drop in construction and a slow real estate market, Baldwin County remains near the top of national economic rankings for communities its size, according to a report announced this week.
Baldwin County was 27th out of 576 "micropolitan statistical areas" in a list of economic strength ratings, complied by the Policom Corp. of Palm City, Fla. The rankings are based on data from the U.S. Office of Management and Budget. Micropolitan statistical areas are regions with cities of more than 10,000 people, but no municipality with a population larger than 50,000.
The area has been in the top 5 percent for several years, which is a reflection of the overall strength of the economy, Robert Ingram, director of the Baldwin County Economic Development Alliance, said.
"These rankings are done using 10-year and up to 20 years of data, which means it's a reflection of long-term strength and not necessarily what's going on today in the county," Ingram said. "It's one thing to be a hot spot one year and cool off the next, but the long-term resiliency of this county's just been incredible."
CSX certifies Baldwin County industrial megasite; production of natural-gas cars coming?
Published: Thursday, June 02, 2011, 7:03 AM Updated: Thursday, June 02, 2011, 7:28 AM
By Connie Baggett, Press-Register Press-Register
BAY MINETTE, Alabama - After 3 years of analysis and documentation, CSX Transportation approved a 3,000-acre tract in north Baldwin as an industrial megasite, clearing the way for an aggressive marketing campaign to automakers, officials said Wednesday. The notice enables Baldwin County to purchase the land and start building roads and utility accesses, officials said. Cost of the land was not available.
In a letter dated Tuesday, consultants sent official notice that the certification had been completed with special focus on landing a car manufacturer as a tenant. The property would also be suitable for "other large megasite opportunities," the letter states.
The application for certification mentioned HK Motors as a potential tenant in early May. Ingram said Wednesday, however, that "because of uncertainty related to the financing and timing of that project, we are at a point where we must move forward in marketing this highly desirable megasite to other companies."
In 2009, the Chinese company took notice of the megasite and announced plans to build a $4.36 billion green energy automobile manufacturing plant employing 5,000 workers. Under a plan unveiled 2 years ago, the Pasadena, Calif.-based subsidiary of Hybrid Kinetic Group Ltd., of Hong Kong, would start production of cars powered by natural gas, batteries and a small gasoline engine in Baldwin County in 2013. Many industry analysts remained skeptical the company could live up to its projections, though the company did invest in battery manufacturers and other component businesses over the past few years.
ThyssenKrupp stainless split won't affect jobs, leader says
Published: Thursday, June 02, 2011, 6:30 AM
By Jeff Amy, Press-Register Press-Register
CALVERT -- The name may change, but all the goals remain the same for ThyssenKrupp's stainless steel business, its top local executive says.
Ulrich Albrecht-Frueh, chief executive officer of Calvert-based ThyssenKrupp Stainless USA, said last month's announcement that ThyssenKrupp AG's plans to divest a majority share of its worldwide stainless business won't immediately affect the 900 jobs planned locally or completion of the $1.4 billion stainless portion of the ThyssenKrupp complex.
"Scope-wise, people being employed, investment-wise, there's not any expectation of a change," he said Tuesday. "For the community, I think there is no change at all, except for a name change."
The parent company's decision is the latest in a series of uncertainties for the stainless project, which is about a third of what the company is doing in its first U.S. facility. The stainless melt shop, which will turn scrap metal into new steel, was pushed back as the company tried to save money during the recession and cope with cost overruns at its new plants in Calvert and Brazil.
Now ThyssenKrupp is sprinting to finish the melt shop.
"We're still making sure that in December 2012, we see the first melt -- a Christmas slab," Albrecht-Frueh said.
Reporter's notebook: Birmingham area distribution projects may be the first of many
BIRMINGHAM, Alabama -- Two events this week will elevate the Birmingham metro area's place as a Southeastern leader in the distribution center industry.
On Monday, Norfolk Southern will break ground on its $97.5 million Birmingham Regional Intermodal Facility, a 316-acre railroad hub that economic developers expect will become a magnet for distribution centers, generating millions of dollars in new investment and creating thousands of jobs in the years ahead.
Dollar General on Thursday will break ground on its $60 million, 1 million-square-foot distribution center on 106 acres at Lakeshore Parkway and Alabama 150 in Bessemer. The facility is expected to have 550 warehouse jobs and 100 trucker jobs.
Dutch investment in Louisiana could create competition for Mobile
Trafigura, the Amsterdam-based international commodities trader,announced Friday it is purchasing a defunct shipping terminal in Louisiana with plans to turn it into a coal, bauxite and aluminum import-export hub.
The company plans to invest $100 million into the facility in Burnside, a city on the Mississippi River about 50 miles west of New Orleans. Transfigura paid $28 million to Ormet Corp., an aluminum producer, for the facility.
After the upgrades are complete, Transfigura expects to handle than 10 million tons of material a year through the terminal.
Company officials said they were making the investment because they believe U.S. coal terminals are maxed out, and there is excess demand to be served.
The McDuffie Coal Terminal in Mobile handled 15.6 million tons of coal during the 2010 fiscal year. The Alabama State Port Authority recently moved forward with a $9.5 million project to add another shiploader at the terminal, which is expected to increase export capacity by 50 percent.
City, county officials studying Auburn model of economic development
By Tori BrockStaff Reporter
HUNTSVILLE (Tex.) - What makes Auburn, Ala., so great?
Huntsville and Walker County officials want to know, and they wanted citizens to have the opportunity to find out more, too, by inviting Phillip Dunlap, the city's director of economic development to Huntsville.
Dunlap will speak at 1 p.m. Friday at the Sam Houston State University Performing Arts Center. Admission is free.
The city of Huntsville, Walker County and the Huntsville-Walker County Chamber of Commerce have organized the Economic Development Initiative to examine the lessons Huntsville and Walker County might learn from Auburn.
Second Toyota supplier rolls into Jasper
by James Phillips Daily Mountain Eagle
For the second time in less than a year, a major automobile supplier is locating in Jasper.
VisTech Manufacturing Solutions, a tier two automotive supplier, officially announced Thursday that it will set up operations in Jasper. The company is moving into a 63,000 square foot facility off Old Birmingham Highway and is expected to employ 50 people once at full staff.
"Our choice for a new plant location is due to the business-friendly environment cultivated by the State of Alabama, Walker County and the City of Jasper," said John Jacinto, the company's president. "We look forward to establishing our company as an asset to the community and developing relationships with other local businesses and residents."
VisTech produces interior components for a large variety of automobile companies. The Jasper plant will begin by supplying products for the Toyota plant in Blue Springs, Miss., before ultimately producing items for the Nissan plant in Canton, Miss.
Daily Mountain Eagle
Montgomery Area Chamber of Commerce accepting applications for Entrepreneurial University
Published: Wednesday, June 01, 2011, 6:37 PM Updated: Wednesday, June 01, 2011, 6:37 PM
By Christine Kneidinger, al.com al.com
MONTGOMERY, Alabama -- The Montgomery Area Chamber of Commerce is currently accepting applications for the popular program held for the past 15 years aimed at helping small business owners expand their business in the area.
Entrepreneurial University (EU), which will begin Aug. 2, 2011, is a 12-week course offered by the Chamber of Commerce and carried out by nationally-recognized business curriculum NxLevel.
The course, which also provides many networking opportunities while in session, has more than 650 graduates, including:
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