Here is today's summary of economic development news, a free service of the Economic Development Partnership of Alabama, representing Alabama's private sector investment in economic development. If you enjoy NewsFlash, thank an EDPA Partner.
***Note: Stories from yesterday posted with the incorrect headline links. I am re-posting those stories in today's edition, following today's stories. Thank you for your patience!
Alabama automobile production remains in recovery
Published: Thursday, January 05, 2012, 7:00 AM
BIRMINGHAM, Alabama -- Alabama's auto industry stayed on a path to recovery last year, as the state's three automakers produced a combined 727,440 vehicles, up 4 percent from 2010.
Nearly all of the growth is due to Hyundai, the Korean automaker that ran its Montgomery factory on an overtime schedule for much of the year, with total output that topped 338,000 vehicles.
Meanwhile, Honda's Lincoln plant struggled in the wake of parts shortages caused by natural disasters elsewhere that damaged supplier operations.
And production at the Mercedes-Benz plant in Vance rose slightly, according to an estimate provided by the Automotive News Data Center. The German automaker typically does not issue its annual output figures until February, so the totals could change.
"We're very excited about the increase in production because it shows that demand for Alabama-made vehicles continues to be on the rise," said Greg Canfield, director of the Alabama Development Office.
Hexcel considers expansion; TVA to auction land
ERIC FLEISCHAUER By Eric Fleischauer
Hexcel Corp. is considering an expansion of its Decatur plant that would add at least 25 jobs and require it to purchase 74 acres in Mallard-Fox Creek Industrial Park for at least $2.72 million, a company spokesman said Wednesday. Tennessee Valley Authority owns the land, subject to a 1983 easement to Decatur-Morgan County Port Authority for industrial-site development. TVA at one time owned most of the industrial park subject to the same easement. TVA land-use policy requires the authority to sell the land at public auction, which will take place Jan. 20 at Morgan County Courthouse. Minimum bid for the land - located on Mallard Fox Drive, between Hexcel and Independence Tube - is $2.72 million, according to TVA bid documents. Hexcel spokesman Michael Bacal said his company intends to bid. "We're interested in the property to support possible future capacity expansion at our Decatur facility," Bacal said. Bacal declined to identify Hexcel's planned use of the property but said it would meet TVA economic development requirements.
Hexcel growth: Hexcel's expansion in Decatur reflects global growth that spurned the recession. Over the past three years, Hexcel stock climbed from about $8 a share to $25 a share. The company's main products are carbon composites - a strong but lightweight material - used in military and commercial aircraft, wind turbine blades, recreational products and other industrial applications. Two of its major customers are Boeing and Airbus, both of which use Hexcel materials in their latest passenger-jet designs. By replacing metals with lighter carbon composites, the manufacturers are able to build more fuel-efficient jets. In the quarter ending Sept. 30, Hexcel's net sales were $351.8 million, 17 percent higher than in the third quarter of 2010. Most of the increase came from increased Boeing and Airbus orders. Commercial aerospace sales increased 31 percent for the quarter compared to the third quarter of 2010, with revenue from new aircraft programs jumping 35 percent versus the same period in 2010. U.S.-based Hexcel has 20 manufacturing facilities in North America, Europe and China.
Manufacturing Is Surprising Bright Spot in U.S. Economy
By FLOYD NORRIS
For the first time in many years, manufacturing stands out as an area of strength in the American economy.
When the Labor Department reports December employment numbers on Friday, it is expected that manufacturing companies will have added jobs in two consecutive years. Until last year, there had not been a single year when manufacturing employment rose since 1997.
And this week the Institute for Supply Management, which has been surveying American manufacturers since 1948, reported that its employment index for December was 55.1, the highest reading since June. Any number above 50 indicates that more companies say they are hiring than say they are reducing employment.
There were new signs Thursday that the overall jobs climate was improving, as the Labor Department reported that new claims for unemployment benefits fell last week and a payroll company's report showed strong growth in private-sector jobs in December.
As stores have filled with inexpensive imports from China and other Asian countries, the perception has risen that the United States no longer makes much of anything. Certainly there has been a long decline in manufacturing employment, which peaked in 1979 at 19.6 million workers. Now even with hiring over the last two years, the figure is 11.8 million, a decline of 40 percent from the high.But those numbers obscure the fact that the United States remains a manufacturing power, albeit one that has been forced to specialize in higher-value items because its labor costs are far above those in Asia. The value of American manufactured exports over a 12-month period peaked at $1.095 trillion in the summer of 2008, just before the credit crisis caused world trade volumes to plunge. At the low, the 12-month figure fell below $800 billion, but it has since climbed back to $1.074 trillion. Those figures are not adjusted for inflation.
In total exports, including manufactured goods as well as other commodities like agricultural products, the United States ranked second in the world in 2010, behind China but just ahead of Germany. For the first 10 months of 2011, Germany is slightly ahead of the United States.
Barber Motorsports museum expansion on track for 2012
Published: Thursday, January 05, 2012, 8:59 AM Updated: Thursday, January 05, 2012, 9:11 AM
BIRMINGHAM, Alabama -- George Barber, who built the Barber Motorsports Park and Barber Vintage Motorsports Museum with tens of millions of dollars of his own money, expects to complete plans for a 100,000 square-foot museum expansion this year and break ground in 2012.
The new building will be built on the inside of the racetrack and will be connected to the existing museum by an enclosed bridge over the track. You'll be able to stand in the walkway and watch cars and motorcycles race below, he said this week.
The existing museum is 140,000 square feet and has space to display about half of Barber's mammoth bike collection, which is widely viewed as the world's best.
Barber also said that work to restore the iconic Pete's Famous Hotdogs sign that used to hang above the tiny Pete's Famous restaurant on Second Avenue North has been completed.
Proprietor Constantine "Gus" Koutroulakis left the sign to Barber after his death in April. Barber said he intends to display the sign in his museum.
Mobile named one of top 10 winter vacation spots by Coastal Living magazine
Published: Thursday, January 05, 2012, 8:47 AM Updated: Thursday, January 05, 2012, 8:55 AM
MOBILE, Alabama --
Coastal Living magazine has named the city of Mobile as one of the top 10 winter getaway spots in the world, according to the magazine's website.
Coastal Living encouraged readers to "Take advantage of mild year-round weather to experience Alabama's Gulf Coast."
Lawrence County industrial authority hires Tony Stockton as executive
Published: Tuesday, January 03, 2012, 11:57 AM Updated: Tuesday, January 03, 2012, 12:03 PM
BIRMINGHAM, Alabama -- Tony Stockton, a 26-year veteran of Lockheed Martin Space Systems, has been hired as the top economic development official in Lawrence County.
The Industrial Development Board of Lawrence County today announced Stockton's hiring as executive director, making him responsible for developing and implementing strategies for attracting companies to locate industrial, distribution, service or retail businesses within Lawrence County. He starts Thursday.
"Mr. Stockton is well qualified to take on the role as executive director for attracting new industries and promoting economic opportunities in Lawrence County," board Chairman Kenneth Brackins said in a statement.
At Lockheed, Stockton most recently served as senior facilities project manager and strategic planner, the board said. He oversaw the construction of a $33 million facility in Huntsville, as well as facility projects in Virginia, Maryland, and Louisiana, according to the board's statement.
Hyundai produces record number of vehicles in Alabama
Published: Tuesday, January 03, 2012, 11:33 AM Updated: Tuesday, January 03, 2012, 12:04 PM
BIRMINGHAM, Alabama -- Korean automaker Hyundai said today that it produced 338,127 vehicles at its Montgomery auto plant last year, its highest annual total.
That output is a 12.5 percent rise over the number of vehicles produced in 2010, when the factory surpassed its annual capacity of 300,000 for the first time.
The plant's employees are working overtime to keep up with strong demand for the Sonata sedan and the Elantra compact, both top sellers for Hyundai.
During 2011, workers built 225,462 Sonatas and 112,665 Elantras, and the vast majority of the vehicles are sold in the U.S. But, about 15 percent of the plant's output was produced for the Canadian market, and a small fraction goes to Guam and Puerto Rico.
The overtime schedule at Hyundai's Montgomery operations continues this month. There are two 10-hour shifts, five days per week, along with two eight-hour shifts planned for Saturday, Jan. 14.
Published: Tuesday, January 03, 2012, 11:29 AM Updated: Tuesday, January 03, 2012, 6:39 PM
Political gridlock in Washington and a looming European debt crisis will continue to trickle down to south Mississippi and Alabama economies in 2012, serving to stifle both business and consumer confidence, economists said.
"The weak economy globally has really found its way to businesses locally, and the European sovereign debt crisis has really been an issue for a couple of years now," said Gerry Dugal, treasurer for Gulfport-based Hancock Holding Company, parent of Hancock and Whitney banks. "From a psychology/confidence perspective, it's really impacted businesses across the country."
Besides the uncertainty, lack of action in Washington, D.C., has also served to make businesses wary about hiring, he said.
"(Ben) Bernanke (chairman of the Board of Governors of the Federal Reserve System) has been criticized throughout this crisis ... but he has done everything possible he could to help offset the recession and help solve the panic," Dugal said. "The politicians, however, on a fiscal responsibility basis, have done nothing."
Hancock in its winter 2011 economic market review predicts that economies and markets will "remain hostage to politics and policy" in 2012. While a bearish outlook predicts another recession, the bullish outlook held by most area industry leaders calls for slow growth and a "muddle through" year, the review said
University of Alabama economists see recovery in the state slowing, but not stalling as a result of the tenuous national and global situations.
US Airways announces nonstop flights from Birmingham to Washington, D.C.
Published: Tuesday, January 03, 2012, 10:03 AM Updated: Tuesday, January 03, 2012, 10:10 AM
By Martin Swant --- The Birmingham News The Birmingham News
BIRMINGHAM, Alabama -- US Airways announced today it will expand service for its Birmingham customers with daily, nonstop flights to Washington, D.C.'s Reagan National Airport for the first time.
Through an agreement with Delta Air Lines, US Airways will begin flights on March 25, according to a press release announcing the new flights. The additions are part of the airline's focus on its core service areas, which are Washington, D.C.; Philadelphia; Phoenix and Charlotte.
"US Airways' wholly owned subsidiary PSA Airlines and Express partner Air Wisconsin will operate service to Birmingham on 50-passenger Canadair Regional Jet (CRJ200) aircraft," according to US Airways.
Eufaula manufacturing CEO sees time of opportunity for aerospace, defense industries
HUNTSVILLE, Alabama -- Of all the industries to be strongly affected by the economy - i.e., budget cuts - the defense and aerospace sector may be catching the most flak.
And, they make up the backbone of the Huntsville economy.
"Business is not going to be the same, certainly not in our industry, where we have had a growth for the past 12 years in aerospace and defense."
Those are the words of Chad White, whose Eufaula-based company - JKM Manufacturing - is an aerospace and defense subcontractor.
Despite the angst over federal spending locally, White said this is a time for opportunity in the industry.
"I see the trend is opportunity," he said. "In any volatile market, it's not business as it was. The leaders and the laggards can switch places very quickly."
JKM builds products used on guided missiles, military aircraft, flight simulators, helicopters, tanks, industrial robots and sonar test equipment.
White said he also sees change in the industry, to go along with the chance for opportunities.
"Right now, there is a lot of uncertainty and fear; what that leads to is volatility," he said. "The last defense military vehicle show I went to was in Detroit, where there were a lot of primes (contractors) that weren't there. What that means from my perspective is businesses will be reduced.
"It's going to change our industry."
And part of the change will come in the ways that companies sell themselves, as well as their products.
White said there is pressure now on companies to make those products affordable, as opposed to the cost-plus style of bidding.
"Historically, we have been a cost-plus industry: Whatever it costs, you just tack on a reasonable fee or profit," he said. "But now, with the pressure on affordability, the companies that will survive and thrive will be those that can adapt quickly and come up with new ways to add value for their customers."
Japan-America Society of Alabama 2012 Officers
JASA Executive Committee Representation for 2012 consists of the following community members:
President, Mike Oatridge, Honda Manufacturing of Alabama
Immediate Past President, Mac Greaves, Burr & Forman, LLP
1st Vice President, Lamar Smith, Smith & Associates
2nd Vice President, Larry Merrihew, Warrior-Tombigbee Waterway Association
3rd Vice President, Calvin Miller, Talladega County EDA
Treasurer, Warren McCullars, Alabama Gas Co.
Membership Committee Chair, Carolyn Turner, Alabama International Trade Center
Programs Committee Chair, Dr. John VanSant, UAB
Programs Committee Co-Chair, Dr. Robert Wendorf, Japanese Garden Society
Executive Director, Tamara Moriya
JASA was formed in 1989 with the ongoing mission "to provide an avenue for the people of Alabama and the Japanese people residing in Alabama to promote friendly personal and professional relationships - all to increase a better understanding of each other's peoples and customs"
CBER 2012 Economic Outlook Conference registration online through Jan. 6
TUSCALOOSA, Ala. - Online reservations for the 2012 Economic Outlook Conference presented by The University of Alabama's Center for Business and Economic Research (CBER) can be made through Friday, Jan. 6.
The conference will be Thursday, Jan. 12, at the Renaissance Montgomery Hotel in Montgomery. CBER is part of the Culverhouse College of Commerce and Business Administration. The conference keynote address, "The Economy: View from the Fed," will be delivered by David Altig, Senior Vice President and Director of Research, Federal Reserve Bank of Atlanta.
The Alabama Outlook, a state forecast and review of metro areas, will be presented by Ahmad Ijaz, CBER's Director of Economic Forecasting, and Carolyn Trent, Socioeconomic Analyst at CBER. Dr. Samuel Addy, Associate Dean for Research and Outreach at the Culverhouse College of Commerce, will present the luncheon address, "Critical Issues for U.S. Economic Recovery and Growth."
The 2012 conference sponsors are the Alabama Council on Economic Education; the Alabama Department of Economic and Community Affairs; Alabama-Mississippi Intermodal Complex; Alabama Power; Alabama SBDC network; BBVA Compass; BlueCross BlueShield of Alabama; Boeing Company; Hyundai Motor Manufacturing Alabama; Kuykendall and Associates; Mercedes-Benz U.S. International; Riley and Jackson; ServisFirst Bank; Sterne Agee; and Vulcan Materials Company.
The registration fee of $150 and includes a copy of the "Alabama Economic Outlook 2012," conference materials and lunch. Registration may be made online at http://cber.cba.ua.eduor call 205-348-6191.
Sales rise for two of Mercedes' Alabama-built models
Published: Thursday, January 05, 2012, 11:25 AM Updated: Thursday, January 05, 2012, 12:05 PM
U.S. sales rose last year for two of the luxury SUVs Mercedes-Benz builds in Alabama.
The German automaker said today that it sold 35,835 M-Class SUVs during 2011, a 21 percent jump from the previous year.
Annual sales also surged for the GL-Class full-sized SUV, as Mercedes sold 25,139, a 26 percent increase.
Sales fell, however, for the R-Class crossover, which also is built in at the company's Tuscaloosa County factory. Mercedes sold 2,385 in the U.S. last year, a 19 percent decline from 2010.
Overall, the automaker sold 245,192 Mercedes brand vehicles in the U.S. last year, a 13 percent improvement over 2010.
Most automakers reported their U.S. sales on Wednesday, but the reports for Mercedes and rival German automaker BMW were delayed.
The companies had been in a tight battle for the U.S. luxury sales title. BMW edged out Mercedes by 2,715 vehicles.
Merchant Capital in Montgomery ranked as largest Alabama investment bank
Published: Thursday, January 05, 2012, 8:45 AM
By Russell Hubbard -- The Birmingham News The Birmingham News
BIRMINGHAM, Alabama -- Montgomery-based Merchant Capital in 2011 ranked as the largest Alabama investment bank, according to year-end information compiled by financial research firm Thomson Reuters, continuing an 18-year stretch at the top spot.
The company served as senior manager for 94 bond issues totaling $1.2 billion, Thomson Reuters said. The projects paid for with the bonds went for schools, water and sewer infrastructure, industrial development efforts and affordable housing, said Thomas Harris, Merchant Capital's chairman.
"This was another challenging year in the credit markets," Harris said. "We are pleased with our performance in 2011 and are optimistic that 2012 will see gradual stabilization in the financial marketplace and continued improvement in the economy."
Merchant Capital ranked as the 25th largest investment bank nationally in 2011, up from 34th in 2010. In 2010, the company did 71 deals, worth about $1.2 billion. The largest investment bank last year was New York-based Citigroup, which advised on 242 issues worth $29 billion, Thomson Reuters said.
Bond underwriters advise governments and companies on the structure of bond sales, or long-term loans from lenders who expect to be repaid with interest and principal. In a typical scenario, the underwriting investment bank buys the bonds from the government or corporate issuer, then resells them in lots to pre-arranged buyers such as mutual funds or money managers.
The underwriters typically keep a small percentage of the total issue as a fee, sometimes along with other amounts for advising on the deal. In recent years, the average underwriter fee for arranging and selling bonds issued by U.S. government agencies -- just one slice of the bond underwriting universe -- has been less than 1 percent of the total issue amount.
Vulcan Materials Co. rolls out investor presentation in takeover tussle
Published: Thursday, January 05, 2012, 9:45 AM Updated: Thursday, January 05, 2012, 9:53 AM
Vulcan Materials Co. is the nation's largest producer of crushed stone used in road construction projects.
BIRMINGHAM, Alabama -- Vulcan Materials Co. fired another salvo this morning in its battle with Martin Marietta Materials Inc., releasing an investor presentation that outlines reasons that Vulcan shareholders should reject the rival's hostile offer.
North Carolina-based Martin Marietta launched an unsolicited bid for Vulcan that was valued at more than $4.7 billion when it was announced on Dec. 12. Vulcan later said its
Birmingham-based Vulcan said today that it has established a Web site to provide information about the company's response to Martin Marietta's "opportunistic and inadequate offer." The investor presentation has been filed with the
The presentation highlights reasons Vulcan says the hostile bid should be rejected:
>>>"Martin Marietta's opportunistic offer substantially undervalues Vulcan"
>>>"Martin Marietta's offer fails to compensate Vulcan shareholders for Vulcan's stronger operating leverage and asset portfolio."
>>>"Martin Marietta's offer would not enhance shareholder value."
>>>"Vulcan believes Martin Marietta's offer breached two binding contracts by misusing highly sensitive, non-public information provided to Martin Marietta."
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Wendy Wallace Johnson