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FAST LANE - October 2001
LOUISVILLE Downtown’s Union Station will see its first Amtrak service in decades when a $530,000 refurbishing project is completed in October and the Kentucky Cardinal extends its route from the present terminus of Jeffersonville, Indiana. The project is being pursued with the knowledge that the city is part of Amtrak’s long-range plans for high-speed rail in the region. Meanwhile, the Chicago-based Cardinal may extend its route further to Nashville, Tenn, in coming months. In other railway news, Alabama-based Progress Rail Services will employ more than 25 people at its new industrial facility and office in Technology Park of Greater Louisville. The company, winner of the Alabama Manufacturer of the Year award earlier this year, is a supplier of rail, rail anchors and signal devices as well as a provider of railcar leasing and repair services. Correction In a “Fast Lane” story on p. 8 of the August issue, “Resource Centers Open for Former USEC Employees,” we may have misled readers with the notion that the Portsmouth, Ohio and Paducah, Kentucky gaseous diffusion facilities are the sole domain of United States Enrichment Corporation (USEC). Georgann Lookofsky, public affairs manager for the Paducah plant, points out that “the sites shouldn’t be referred to as ‘USEC plants’ since USEC leases only part of the buildings at the sites and has done so only since 1993. The Department of Energy owns the property and facilities and continues to maintain responsibility for all issues related to past operations.” The new resource centers are part of the infrastructure being set up to compensate workers as part of the Energy Employees Occupational Injury Compensation Program Act. Lookofsky further explains, “the employee health issues addressed by the Resource Centers date back to the plants’ early years and fall under multiple contractors.” As the article pointed out, Martin Marietta and Lockheed Martin are the main focus of a lawsuit brought by former employees and the Natural Resources Defense Council. “While some of the Resource Centers’ clients may be current USEC employees, their claims, for the most part, are expected to date back to their days as employees of DOE contractors,” says Lookofsky of the new resource centers. “While some of the Resource Centers’ clients may be current USEC employees, their claims date back to their days as employees of DOE contractors. There have been no claims of health effects related to current operations.” Lookofsky acknowledges the complexity of the “shared site” arrangement, which makes clarity of accountability even more essential where such issues as worker health care and lawsuits are concerned. “We work very hard to help the public understand who the players are and where accountability most appropriately lies for the many issues the plants are involved in,” she adds. “The lawsuit filed on behalf of former workers names former DOE contractors at Paducah. It does not name USEC as a defendant.” STATE Among the many business ramifications of the terrorist attacks on Sept. 11 were immediate slowdowns or stoppages in automotive industry facilities throughout North America. Already slow crossings at the Canadian border turned into day-long lines, forcing some suppliers to close temporarily. The industry-wide move to just-in-time delivery, instead of being the model of efficiency, has instead been struck at its weakest point. Ford planned to stop production at five plants in late September, slowing production by up to 13 percent. That just adds to a previously announced cut of up to 5,000 jobs. But the Kentucky plants will not be affected. Nor were operations affected at the GM plant in Bowling Green. However, unlike the rest of Toyota’s North American operations,Toyota Motor Manufacturing Kentucky in Georgetown was affected. Because of delays in parts deliveries coming across the Canadian border, two shifts were called off in the days following the attacks. Normal production resumed with the evening shift on Sept. 14. The company is closely monitoring for potential supply problems and delays at all of its facilities. In the days following the attack, J.D. Power and Associates found sales down by 30 to 40 percent across the country. Industry daily Automotive News cited Paul Taylor, chief economist with the National Automobile Dealers Association, who said that even short-term setbacks may cause sales to dip by as many as 100,000 new cars and trucks this year. FLORENCE Sweco, a global manufacturer of separation, sizing and milling equipment for the pharmaceutical, chemical, paper and other industries, has broken ground on a new $2-million, 21,000-s.f.international headquarters adjacent to its manufacturing facility. “We are looking forward to this move,” said Sweco vice president of human resources Mark Weber. “Having our offices and our manufacturing facility together in one central location will improve the company’s overall efficiency and interdepartmental communication. STATE Even if they haven’t adopted the “lean manufacturing” model, Kentucky businesses know the impact of employee health and fitness on both state productivity and their own ledgers. Now there’s a report on just how fat we are. According to a new survey of more than 184,000 respondents in every state published in the Journal of the American Medical Association (JAMA), nearly 20 percent of Americans are obese, a 61-percent increase since 1991. And over 56 percent of adults (65.5 percent of men and 47.6 percent of women) were overweight. The study found that “the direct costs of obesity and physical inactivity account for approximately 9.4 percent of U.S. health care expenditures. The direct and indirect costs of health care associated with diabetes in 1997 were an estimated $98 billion.” While Mississippi had the highest rates in the country for both obesity (24.3 percent) and diabetes (8.8 percent), Kentucky wasn’t far behind: 22.3 percent of Kentuckians are obese, ranking the state’s population eighth in the country. However, in relation to most other states, Kentucky’s rate of diabetes, at 6.90 percent, was relatively low compared to that of most other states, which averaged 7.3 percent overall. However, while only four states had diabetes rates of six percent or higher in 1990, 43 states achieved that dubious distinction in 2000. Even more discouraging – yet encouraging to employers trying to implement their own health and wellness programs – is that over 20 percent of the overweight and over 13 percent of the obese report making no effort to lose or maintain their weight, and around 27 percent of all U.S. adults don’t bother to engage in physical activity. For good health, experts recommend 30 minutes of moderate activity five times a week. LEXINGTON
Gary Peterson, senior analyst at research firm ARS in California, told the Oregonian, “I very much doubt that the Lexmark agreement will still be in existence once this purchase is completed.” The two companies’ bundling agreement has been in effect since 1998, resulting in about one million printers sold annually. Some feel that the merger may drive more H-P competitors to Lexmark, in an effort to stoke competition in an increasingly streamlined marketplace. Either way, at least the high-margin inkjet cartridge business will still be there, right? Not if the Arizona Cartridge Remanufacturers Association has anything to say about it. In filing a suit in San Francisco, the ACRA claims that Lexmark’s cartridge “prebate” recycling program is misleading, and exists only to stifle competition from remanufacturers. Lexmark has broken ground on its twelfth manufacturing plant in Hungary, scheduled to open in 2003. The firm also announced the debut of the i3, an inkjet printer designed to mesh with interactive television. STATE According to the 2002 edition of “The Best 331 Colleges” published by the Princeton Review, famous for its “candid” assessments by students themselves, the University of Tennessee ranked as the Number One “party school” in the nation by virtue of its No. 1 ranking in “beer,” No. 7 in “liquor,” No. 11 in low study hours and No. 14 in marijuana use. But did any Kentucky schools make any of the rankings, be they good or bad? Among the schools to make the overall “good” list were Bellarmine College, Centre College and the University of Kentucky. While Centre is widely noted for its academics, students singled it out for its fraternity and sorority scene and its variety of social activities on campus. Meanwhile, one Top 20 that UK would rather not have made is the “long lines and red tape” list, where the state’s flagship school came in 18th. More significant rankings news puts UK’s College of Medicine at No. 26 among public medical schools and No. 53 among all medical schools receiving National Institutes of Health funding during fiscal year 2000. Meanwhile, the university’s external research funding has almost doubled since 1996, coming to $181 million for 2000-2001, up 16.7 percent over last fiscal year. Research grants and contracts were $173.6 million, $7.4 million came from gifts, and $104.3 million came from federal agencies. LEXINGTON
That’s because Ron Bingham, who along with Fred Mullins has launched the new firm, used to run the state’s successful “EMPOWER Kentucky” reengineering program, which had as its goal the streamlining of government processes through thorough and apt application of technology … including the Internet. Before that, he was part of the group that purchased Lexmark from IBM, spending seven years learning the lessons of reengineering firsthand. “Lexington offers us a good quality talent pool from which we will find our new team members,” said Bingham, See That Again’s CEO and president. “It’s also a much more competitive marketplace than the West Coast, where most hard costs such as rent, technology, and even salaries are much, much higher.” The average annual salary for the firm’s expected 35 employees is expected to be $55,000. What’s more, while the firm is 100-percent owned by Kentuckians, almost all company revenues will come from outside the state. “When you look at the high average salaries, and the fact that this revenue represents new money coming into the Commonwealth, this company was attractive to us,” said Strong. STATE A total of 50 worker training projects have received more than $984,000 from the Bluegrass State Skills Corporation in order to upgrade or initially train more than 4,100 workers. Among the successful recipients: Intertec Systems in Bardstown, $32,377.50 for 30 trainees; SCA Incontinence Care in Bowling Green, $34,920.00 for 136 trainees; Ameriform Manufacturing Company in Carrollton, $34,975.00 for 9 trainees; 3M Company in Cynthiana, $34,975.00 for 3 trainees; International Paper Company in Hopkinsville, $34,300.00 for 59 trainees; Trane Company in Lexington, $34,950.00 for 700 trainees; Mother’s Cookie Company in Louisville, $34,900.00 for 23 trainees; Safetran Systems in Louisville, $34,990.50 for 270 trainees; Kenlake Foods in Murray, $34,956.50 for 60 trainees; and Madison County Business Consortium in Richmond, $59,614.50 for 70 trainees. In addition, through the BSSC’s Skills Training Investment Credit program, Jim Beam Brands Company in Clermont has received $100,000 for training 200 trainees and Mother’s Cookie Company has received an additional $99,632 for 577 trainees. LOUISVILLE
But not all is rosy for the institution, as rival Norton Healthcare called Jewish’s application for a large outpatient facility a “sham.” Jewish’s CEO Hank Wagner shot back, calling Norton “a failing organization attempting to handcuff and paralyze a more thriving, growing organization,” according to several published reports. State approval of a certificate of need had already been received by Jewish for a $21-million, 55,000-s.f. surgery center, but the expansion in question was an attached $46-million, 143,595-s.f. section. Norton claimed Jewish was avoiding the issue of a new certificate of need by seeking the transfer of a 6,000-s.f. occupational medicine facility into the new section. But hearing officer Lori Eisele ruled that Jewish could indeed transfer the existing certificate, in part because of the institution’s tremendous rise in outpatient visits. The new Jewish Hospital Medical Center East, one block from Norton’s Suburban Hospital, will open for business next fall. Meanwhile, Norton has broken ground on a $1.5-million expansion of its Southwest Hospital, which it purchased from Columbia/HCA in 1998. HEBRON Cincinnati-based confectionary/gift wholesaler and distributor Galerie Au Chocolat has begun construction on a 270,000-s.f. corporate headquarters at the Paul Hemmer Airpark West development. “We have an international and national customer base and the convenience to the Greater Cincinnati Northern Kentucky International Airport was critical to our decision to locate in Northern Kentucky,” said company CFO Kevin Michael. “This move will position our company to achieve two key strategic goals – major growth in sales and improved customer service,” added president Richard Ross. “Combining many of our operations in one building that has been specifically designed for our business will increase our efficiency.” LEXINGTON Before the attack that befell the nation on Sept. 11, Vice President Dick Cheney paid a visit to the 67th annual meeting of the Southern Governors Association (SGA) in Lexington on Sept. 10. Also on the eerily prescient docket were longtime White House correspondent and Kentucky native Helen Thomas and Alfred R. Berkeley III, vice chairman of Nasdaq Stock Market Inc. The meeting’s primary aim was to focus on ways to boost R&D and technology in the South. An SGA report called for a national energy policy based on maintaining a stable energy market achieved by addressing supply needs, increasing conservation and improving efficiency. Governor M.J. “Mike” Foster, Jr., of Louisiana assumed the SGA chairmanship at the conclusion of the meeting. He launched a year-long initiative, “From Wetlands to Wildlife: The Value of Conservation in the South,” which will focus on safeguarding the South’s natural heritage and highlighting its positive impact on surrounding communities and their economies. HARRODSBURG With the news that it will lose close to $1 billion in the current fiscal year, Japanese electronics giant Hitachi is cutting more than 10,000 jobs at home and thousands more abroad as it reorganizes its business operations and seeks to move more manufacturing operations to lower-cost Asian locations. What does this mean for the North American headquarters of Hitachi Automotive Products in Harrodsburg, as well as related partners Jideco in Bardstown and Tokico in Berea, all makers of automotive components? Not much, it turns out, as most of the layoffs are occurring in the semiconductor, electronic device and display sectors. “Regarding the restructuring, there is no major effect at Hitachi Automotive Products in the U.S.,” says Matt Takahashi of Hitachi America Ltd. “In terms of the business climate in Kentucky over the years, in general, we can say that the U.S. economy is still a stagnant situation and consumer spending is still low-level. So, basically, the business climate will be slow for a while.” Jideco, Tokico and Hitachi Automotive aren’t the only Hitachi presences in Kentucky. Three years ago, the company’s power and industrial division installed the $263-million hot strip rolling mill for North American Stainless in Ghent. But there may be more to come. An official statement said the company “will move forcefully forward to reorganize business operations between the parent company and subsidiaries, by spinning off companies, merging subsidiaries and other such measures.” PARIS
The average Lexington adult makes 5.11 business trips annually, and 14.8 percent of adults made one or more round trips during the past year. Finally, 34.3 percent currently live in rented dwelling units, and 13.9 percent of all adults report that they are planning to purchase a home during the next two-year period. Similar hopeful-homeowner numbers appeared in reports issued for the Louisville and Cincinnati markets during an earlier period this year, but rental rates were around nine percentage points lower. Louisville’s median adult was 44.2 years old and had a household of 2.8 people who earned an average of $54,900 per household. Seventeen percent of Louisvillians had made one or more business airline round trips during the past year, with an average of 5.2 business trips annually. Meanwhile, Cincinnati’s median adult was 43.8 years old, had 2.9 family members and an average household income of $56,800. The number of annual business trips was dramatically higher, at 8.1, and 18 percent had made one or more round trips in the previous year. STATE The Media Audit, part of a Houston-based demographics research organization, has released its latest report for Lexington. Among the many findings for the May-June 2001 measurement, the median adult in the market is 41.48 years old, has a family with 2.69 people in it, and contributes to an average annual household income of $45,400. The average Lexington adult makes 5.11 business trips annually, and 14.8 percent of adults made one or more round trips during the past year. Finally, 34.3 percent currently live in rented dwelling units, and 13.9 percent of all adults report that they are planning to purchase a home during the next two-year period. Similar hopeful-homeowner numbers appeared in reports issued for the Louisville and Cincinnati markets during an earlier period this year, but rental rates were around nine percentage points lower. Louisville’s median adult was 44.2 years old and had a household of 2.8 people who earned an average of $54,900 per household. Seventeen percent of Louisvillians had made one or more business airline round trips during the past year, with an average of 5.2 business trips annually. Meanwhile, Cincinnati’s median adult was 43.8 years old, had 2.9 family members and an average household income of $56,800. The number of annual business trips was dramatically higher, at 8.1, and 18 percent had made one or more round trips in the previous year. Business Briefs BOWLING GREEN
DANVILLE
FLORENCE
HENDERSON
LEXINGTON
LOUISVILLE
MADISONVILLE
MURRAY
NORTHERN KENTUCKY
OWENSBORO
PAINTSVILLE
SHEPHERDSVILLE
WHITESBURG
STATE
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Copyright 1996-2001, by Kentucky Business Online. All rights reserved. Editorial
content is copyright 2001, Lane Communications Group The Lane Report is a trademark of Lane Communications Group. All other trademarks are the property of their respective owners. |
A study conducted
by Wilkerson & Associates during Derby Thursday,
Friday and Saturday this year has found that the combined
spending of everyone from horse owners to tourists came
to almost $138 million. The study also found that the
Kentucky Derby generates more than 3,600 jobs paying
around $54 million in wages. Total economic impact is
estimated to be $218 million, a quantum leap from the
last study, performed in 1992, which estimated an impact
of $60 million. Much of the growth has occurred during
the Kentucky Oaks race card on Friday, and Churchill
Downs has begun to exploit Thursday’s schedule as
well.
Sweco Breaks
Ground on $2-Million Corporate Headquarters Complex
Printer
manufacturer Lexmark may suffer because of the recently
announced $20-billion acquisition of major customer
Compaq by Lexmark rival Hewlett-Packard. According to the
Wall Street Journal, around five percent of
Lexmark’s $3.8 billion in revenue in 2000 (its
around three percent so far this year) came from Compaq,
and analysts don’t see how Compaq’s new owners
would allow Lexmark printers to remain in bundled
products.
A former Lexmark
executive is launching a new product that should mesh
well with Lexmark’s new line of “interactive
TV” printers. See That Again.com will debut this
fall, allowing the public to procure information about
products seen on television shows, movies and music
videos. Governor Paul E. Patton and Gene Strong,
Secretary of the Kentucky Cabinet for Economic
Development, were excited to be able to bring a
technology-driven company from Hollywood to Lexington.
But they already knew that one of its owners knows his
way around networks.
Jewish Hospital
and AbioMed have both been riding a wave of momentum as
the patient who received the first implantable artificial
heart – Robert Tools of Franklin, Kentucky –
continues to progress. A second recipient underwent the
replacement heart surgery in mid-September. The good
transplant news goes beyond the heart too, as the
hospital’s second recipient of a total hand
transplant continues to improve, reporting the ability to
sense hot and cold. That operation was performed in
February.
Vice President
Visits kentucky Just Before National Calamity
The Media Audit,
part of a Houston-based demographics research
organization, has released its latest report for
Lexington. Among the many findings for the May-June 2001
measurement, the median adult in the market is 41.48
years old, has a family with 2.69 people in it, and
contributes to an average annual household income of
$45,400.