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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



in this issue:
Sierra Nevada opens office in Huntsville to pursue space, defense work
Alabama Secretary of Commerce confident of ThyssenKrupp plant's future despite report
ThyssenKrupp considers sale of steel mills in Mobile and Brazil
Alabama Economic Alliance announces new members, enacts implementation model


Sierra Nevada opens office in Huntsville to pursue space, defense work
Published: Wednesday, May 16, 2012, 6:17 AM
By Lee Roop, The Huntsville TimesThe Huntsville Times

HUNTSVILLE, Alabama -- Add the Dream Chaser to the list of space ships with a little Huntsville in their DNA, and add the orbiter's manufacturer to the list of companies operating in Alabama's Rocket City.

Sierra Nevada Corp., one of four American companies competing to provide space taxis for astronauts to the International Space Station, announced a new Huntsville office Tuesday.

One day earlier, NASA's Marshall Space Flight Center said it has successfully finished wind tunnel testing at the facility on a scale model of Sierra Nevada's Dream Chaser orbital crew vehicle. Sierra Nevada paid Marshall for the testing under a Space Act Agreement, and Marshall provided its scale-model wind tunnel and experts for the work.

The Dream Chaser, a full-sized version of which is set to begin flight-range testing over the next year, is Sierra Nevada's entry in NASA's commercial crew development program. Sierra Nevada also supplies engines for another private rocket company, Virgin Galactic, that has hundreds of people on a waiting list for space tourist flights on its developing rocket.

John Roth, vice president of Sierra Nevada's Space Systems division, said the company has its eyes on a bigger market for Dream Chaser. Roth said the reusable craft that resembles a mini- space shuttle will be able to serve military satellites and ferry other nations' astronauts into space. There's a built-up demand for that, Roth said.



Huntsville Times






Alabama Secretary of Commerce confident of ThyssenKrupp plant's future despite report

Published: Tuesday, May 15, 2012, 5:02 PM Updated: Tuesday, May 15, 2012, 5:02 PM


BIRMINGHAM, Alabama -- ThyssenKrupp's decision to explore the possible sale of its $5 billion Alabama steel plant doesn't threaten the future of the mill or plans for its 2,700 jobs, the state's top economic developer said today.

"We are told that the company will examine three strategic options, none of which are a threat to the operation of the Calvert plant nor the staffing levels of employees needed to produce steel there," Greg Canfield, Alabama's Secretary of Commerce, said in a statement.

The Alabama Department of Commerce has been in contact with officials from ThyssenKrupp since the company's executive board said it will "examine strategic options in all directions for the plants of Steel Americas in Brazil and the USA."

"In our conversations, it is clear that the $5 billion investment which ThyssenKrupp made in Alabama will continue to hold a leading position in the market in terms of technology and product quality," Canfield said. "The projections for the North American steel market remain strong -- in fact they are better than those projected for the European steel market. The question remains as to when North American steel demand will begin its recovery. Coupled with the fact that the Calvert operation depends solely on the steel slab raw material manufactured at ThyssenKrupp's Brazil plant, the Calvert plant has been locked into a purchase price for these slabs at an artificially high cost."

Canfield said the three options ThyssenKrupp is considering are:

  • Decoupling the raw material agreement between the Brazil plant and the Calvert plant so that the Calvert plant can purchase raw materials on the open market at more favorable costs.
  • Finding a business partner to bridge the time necessary for North American steel demand to rise.
  • Selling the Calvert operation to a third party much in the same way the stainless steel operation is in the process of being sold to Finland's largest stainless steel company, Outokumpu.



Birmingham News


ThyssenKrupp considers sale of steel mills in Mobile and Brazil (Update)
Published: Tuesday, May 15, 2012, 1:24 PM Updated: Tuesday, May 15, 2012, 5:06 PM

MOBILE, Alabama -- ThyssenKrupp AG will consider selling its steel mills in Mobile and Brazil in the midst of rising production costs and a slump in demand, company officials announced today.

Chief Executive Officer Heinrich Hiesinger said in a statement that the company's Steel Americas division - which includes a carbon steel plant in Rio de Janeiro and a carbon steel processing facility in north Mobile County - is the company's "biggest challenge."

"We continue to believe that both plants will hold leading positions in their respective markets in terms of technology and conversion costs," Hiesinger said. "But since the plans for the project were made, the economic parameters both in Brazil and in the USA have changed from our original assumptions."

The local facility, which employs 1,800 people, processes and finishes slabs that are initially produced and shipped from the Brazilian plant.

The company said it faces rising production costs with higher labor expenses and ore prices and overall inflation. Meanwhile, the company pointed to slow demand in the U.S.

"The viability of an integrated strategy with slab production in Brazil and high-margin marketing in the U.S. is therefore exposed to considerable risks," the company said.

The company said it would be examining "strategic options in all directions for both plants" including a buyer or partner.

The division has been a heavy drag on the company's bottom line, most recently running an operating loss of 516 million euros ($659 million) for the first half of this year.

Earlier this year, Hiesinger said that he would wait until operations at the sites were running at full speed before making a decision on the future of Steel Americas, despite continued losses. He said in February that the process of fully ramping-up wouldn't be complete for another 1 years.

Bridget Freas, a Chicago-based analyst with Morningstar Inc., who follows ThyssenKrupp, said that the company's announcement Tuesday is a formal step in that process - notifying the board of its intention to look at all of its options.



Press Register


Alabama Economic Alliance announces new members, enacts implementation model


RELEASE (Alabama Department of Commerce) - May 16, 2012, Montgomery, Ala. - Three new Alliance members were announced during the Alabama Economic Development Alliance quarterly meeting:  Dr. Thomas Bice, Alabama State Superintendent of Education; Susan Price, Interim Postsecondary Chancellor; and Dr. Robert Witt, UA System Chancellor.


"The addition of Dr. Bice to the Alliance completes the workforce development picture by ensuring that career tech and other K-12 programs are aligned with the opportunities in the state's economy and our children are prepared for success," said Alliance Chair and Secretary of Commerce Greg Canfield.


Dr. Witt and Dr. Price were added to the Alliance after assuming new leadership positions, which make them members of the Alliance per the executive order enacted in July 2011.

 "When Governor Bentley tasked the Alliance with creating a strategic plan for economic development, this group invested time and energy into doing just that," said Canfield. "What makes the Accelerate Alabama plan noteworthy is that this group of leaders continues to put the same energy into the implementation of the plan."


During the February meeting an implementation model based on production planning processes was presented to the group. The model, a tool to measure the strategic plan's progress, categorizes specific objectives into four areas of focus: Human capital, physical capital, financial capital, or target opportunities.


As the plan moves forward, groups with areas of responsibility will utilize the model to provide updates to the Alliance, which will provide oversight.


"This is a strong model that allows the Alliance to continue to build upon on its work, ensuring results that propel the economy of Alabama forward," said Canfield. "It also provides a mechanism to identify and address areas that need attention and to develop action items that keep the plan moving."


During the meeting the Alliance also noted successes achieved in the three areas of focus.


Recruitment:  The Department of Commerce reports increased project activity over the same quarter of 2011. Additionally, six economic development bills have passed the Legislature this session.


Retention:  The Alabama Workforce Training System completed the third week of a 13-week training program for its employees, which will increase their ability to assist existing industry by connecting them to available programs.


Renewal:  The Alabama Lanchpad Business Plan Competition Finale will conclude May 18 at Alabama State University. Six teams from three research universities are competing for a $100,000 award to be used as seed money. An additional $100,000 was awarded during the proof-of-concept competition in Birmingham on April 17.


About the Economic Development Alliance:  Created by executive order of Governor Robert Bentley in July 2011, the Alliance is a group of leaders from the public and private sectors who are vested in the state's economic development efforts. After an intensive six-month planning process, the Alliance released a three-year strategic plan for economic development in the state, Accelerate Alabama, in January 2012.


For more information on the Accelerate Alabama:

-          http://commerce.alabama.gov/default_ADO2.aspx


For recent news articles on Accelerate Alabama:

-          http://www.advantagealabama.com/accelerate/accelerate-main.asp


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