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FAST LANE - November
2005
The plan features changes to Comair’s fleet, network and employment costs that are designed to align the company’s cost structure with the reduced revenues that will be realized in a restructured environment. “Delta’s efforts to achieve an additional $3 billion in annual financial benefits by 2007 include amending Comair’s Delta Connection agreement to reduce the amount of compensation provided for regional airline feed,” said Comair President Fred Buttrell. “As a result, Comair must adjust its costs to match the cost pressures of a restructured airline industry and to create a commercial solution that will ensure Comair emerges from the restructuring process ready to compete and thrive for the long term.” Comair will use benefits available through the Chapter 11 process to eliminate non-competitive aircraft leases and mortgages to reduce ownership costs and allow the airline to have a more competitive platform. As part of this, Delta plans to remove up to 30 aircraft from Comair’s schedule, with 11 aircraft leaving the schedule by December. As a result of a smaller operation and fleet, Comair will eliminate up to 1,000 positions throughout the company and will reduce pay for officers, directors and non-union employees. STATE
Based on the latest results of an independent survey, 92 percent of KMAC’s clients have reported business improvements such as increased sales, reduced costs or new investments as a result of the services KMAC delivered. KMAC’s manufacturing improvement services include lean manufacturing, quality systems, strategic planning, team building, and plant layout. Based on services delivered in the fiscal year, KMAC clients expect to increase their sales by $29 million and make $31 million in new investments over the next12 months. The sales impacts reported by clients in FY2005 are 64 percent higher than those reported in FY2004 while the new investments reported in FY2005 are more than double the FY2004 figures. Other FY2005 client impact numbers include $46 million in retained sales and $5 million in annual cost savings. “As a result of KMAC’s work with manufacturers in fiscal ’05, the Kentucky economy will see $10 million in additional worker earnings, $2 million in new state tax revenue, and $3 million in retained state tax revenue,” said KMAC President Lynn Witten. LOGAN CO. The board of directors for Fort Logan Hospital and its parent company, Ephraim McDowell Health, have announced plans to build a new $16 million hospital in Stanford. After considering the options available to them, the boards determined that it would be more feasible to construct a new facility rather than attempt to renovate the existing Fort Logan Hospital, particularly since there was little cost difference between the two options. The new 30-bed hospital will be located next to the Stanford Medical Park and will offer acute care, obstetrics, surgery/recovery suites, an in-house rehabilitation area, and a retail pharmacy. It will also include an expanded emergency room that will be equipped to treat trauma and cardiac cases in addition to general emergency cases, and an expanded imaging department that will offer radiology, mammography, ultrasound and CT rooms. Construction on the project is slated to begin in the spring, with an estimated completion date of spring 2007. DANVILLE Panasonic Home Appliance Company has announced that it is moving production of its canister vacuum cleaners from Danville to the Panasonic plant in Monterrey, Mexico. The move will result in the lay-off of 290 regular employees and 80 temporary employees. Company officials say approximately 125 employees will remain in Danville. The initial lay-offs will begin by the middle of next month and will continue until March. Like so many other manufacturing companies, Panasonic has found it increasingly difficult to remain competitive in the face of the lower labor costs found overseas. Though the loss of that many jobs is difficult for most communities, Danville city officials are hopeful that the losses can be offset with the addition of two new companies that are planning to locate in Danville. 3B and Aircraft Braking Systems are expecting to hire a total of 150 people. PIKEVILLE
The 126,000-square-foot facility, located in downtown Pikeville, opened last month with The Tommy Dorsey Orchestra presenting a concert in the 7,000-seat arena. “Pikeville and Pike County are already the regional center for shopping, education, medical, financial and legal services. The center will solidify our position as the family entertainment center for the tri-state region, and bring new revenue for our restaurants, hotels, motels, and retail centers,” said Donna Damron, executive director for the center. According to a study performed by a national economic consulting firm and released in 1997, approximately 540,000 people live within 50 miles of Pikeville; more than 1.5 million live with 75 miles. The facility is expected to produce a $10.1 million economic impact on the regional economy and will generate some $500,000 annually in new tax revenues for the state. STATE The Kentucky Department of Revenue is offering regional seminars to inform tax professionals of the impacts of the state’s tax modernization (HB 272) changes. The two-day seminars are geared toward CPAs, attorneys, enrolled agents and tax preparers and will explore how the bill affects corporation income, individual income and sales and excise taxes. The seminars are scheduled for the following dates and locations:
For more information or to register for these seminars, contact the Kentucky Society of Certified Public Accountants at (502) 266-5272 or (800) 292-1754. Information can also be found by visiting www.kycpa.org or http://revenue.ky.gov. STATE
The funding is being made available through the Middle College National Consortium, which is supported by funds from the Bill & Melinda Gates Foundation, the Ford Foundation, Carnegie Corporation of New York, and the W.K. Kellogg Foundation Early college high schools create a seamless, blended high school and college program that provides students with experiences, support and opportunities to complete the requirements for a high school diploma and an associate degree at no cost to the students, within five or fewer years of starting high school. Enrollment at Collegiate High is expected to reach about 50 students this school year as Kentucky’s first early college high school. Enrollment is expected to increase to 75 students next year and will peak at 150 students by 2008-09. The early college movement is an outgrowth of the middle college model, which originated in 1974 at LaGuardia Community College in New York City. The educational program at Collegiate High School includes a project-centered interdisciplinary approach with emphasis on literacy and mathematics competencies to prepare students for college-level work. The curriculum also includes a career internship and community service component required for high school graduation. STATE Climbing to third in the nation, Kentucky’s workforce training programs have once again received high marks in Expansion Management magazine’s annual survey of industrial site selection consultants. Expansion Management is an international economic development publication distributed to business executives involved in expanding or relocating their business. For the third consecutive year, Kentucky has ranked in the top ten, placing fifth in 2004 and eighth in 2003. In the annual survey, consultants were asked to identify states where they found the best workforce training programs while investigating potential sites for their clients. Programs were judged in terms of financial value, ease of usage and applicability. “The ability to have a workforce that knows how to handle the task at hand from the beginning and not experience the inevitable missteps that come with on-the-job training is more than just a luxury. It is a necessity for companies competing in the global economy,” said Ken Krizner, managing editor of Expansion Management. “The commonwealth of Kentucky is proving on a continuous basis that it understands this and stands ready to work with companies relocating or expanding into the commonwealth to make sure they have a properly trained workforce from the day they open their new facilities,” Krizner added. Highlighted in the October issue of Expansion Management is the Bluegrass State Skills Corporation (BSSC), which is the primary agency within the Cabinet for Economic Development. The agency’s mission is to stimulate economic development through programs of skills training to meet the needs of business and industry. The BSSC, in partnership with the Kentucky Community and Technical College System and the Council on Postsecondary Education’s Kentucky Adult Education, has developed the capability to customize a comprehensive program of skills training services for new, expanding and existing companies. HIGHLAND HEIGHTS General Cable Corporation has reached an agreement in principle to acquire the wire and cable manufacturing business of SAFRAN SA, a global high-technology company headquartered in France. General Cable, which is headquartered in Highland Heights, is considered a leader in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for the energy, industrial, specialty and communications markets. HEBRON Amazon.com has announced plans to open a new 543,000-square-foot distribution center in Boone County to accommodate the company’s continued growth and provide room for additional product line expansion. The new facility will be located in the Park West International Business Park and is expected to open by the end of the year, creating some 70 new jobs. The company already operates two other facilities in Park West and also has distribution and support centers in Campbellsville, Lexington and Louisville. The addition of the new center in Hebron gives the company more than 900,000 square feet of distribution space in the Northern Kentucky region. LOUISVILLE The new facility, located next to the main campus of the UPS Supply Chain Solutions Technology and Logistics Center, is the 25th in North America to be devoted to the health care industry and was constructed to comply with the U.S. Federal Prescription Drug Marketing Act and various other federal and state regulatory requirements. It is divided into validated temperature-controlled and ambient sections and is designed to handle sensitive pharmaceuticals. Thanks to the location near UPS’ Worldport hub in Louisville, shipment orders received as late as 11 p.m. can arrive at their destination the next day, while packages shipped via UPS’ ground network can reach 70 percent of the U.S. in two days or less. At the facility opening, the company also announced plans to locate a new UPS Supply Chain Solutions facility in Louisville. The $11.7 million project, which consists of an 800,000-square-foot warehouse and distribution center, will create 382 new Kentucky jobs. UPS has played a significant role in boosting the state’s economy since it began overnight operations in Louisville more than two decades ago. According to data from the state, in the last five years approximately 80 companies have either located in Kentucky or expanded their operations here due to the presence of UPS, investing more than $300 million and bringing more than 7,000 new jobs. UPS itself employs more than 20,000 people within the commonwealth of Kentucky. LOUISVILLE Brown Jordan International, the nation’s largest outdoor furniture manufacturer, has moved its National Accounts and Direct Imports Division’s headquarters to from Pompano Beach, Florida to Louisville’s Eastpoint Business Center. The recruitment of Brown Jordan to Louisville is a result of a new aggressive headquarters attraction effort by GLI through an investment by the private sector. Through this initiative, GLI is working with businesses seeking growth by presenting Louisville as a location of choice and a viable, attractive alternative to larger cities such as Chicago, Atlanta or Charlotte. “By selecting Louisville, Brown Jordan International validates that our headquarters strategy is right on target,” said Joe Reagan, president and CEO of Greater Louisville Inc. “We now know for sure that we are identifying and going after the right types of business targets – companies such as Brown Jordan International that will bring growth and prosperity to our community in new and exciting ways.” Brown Jordan designs, manufactures and markets retail and contract furnishings under a number of brand names, including Brown Jordan, Pompeii, Winston, Stuart Clark, Casual Living, Loewenstein, Charter, Woodsmiths, Wabash Valley, Texacraft, and Tropic Craft. LOUISVILLE Louisville has been selected as the new corporate headquarters location for CinTel Corporation, a Korean company that provides software and hardware solutions for Internet service. Company officials say they considered a number of locations for the new headquarter site, including several larger markets, but determined that Louisville provided the best fit. In addition to the central geographic location Louisville provides, President and CEO Sang-Don Kim said the company was also impressed with the other companies it would work along side with, citing UPS Worldwide, General Electric, Ford, and the horseracing community. The company has already retained the services of several local firms, including the Wira Associates marketing firm, the Baach Creative Group, Web Design Company, TP Film and technology expert Stephen Arnold. CinTel recently signed a significant cooperative/co-branding agreement with Hyundai HDS Corp, a relationship that Kim described as fulfilling a corporate strategy that will take CinTel in a new direction of affording the ability to bring creative new products and solutions to the North American market. Though based in North America, CinTel has its main business operations in Korea, providing enterprise technology solutions that deliver faster internal and external network service. The company’s Internet Traffic Management solutions are marketed to customers worldwide. LOUISVILLE Louisville’s High Impact Portfolio program has garnered national recognition, earning the U.S. Department of Commerce’s Economic Development Award for 2005 in the category of “Excellence in Urban Economic Development.” The High Impact Program is a public/private partnership funded by Louisville Metro Government and administered by Greater Louisville Inc. – The Metro Chamber of Commerce that identifies and serves fast-growth companies, companies with the potential for fast growth and those companies that enable growth in others. The program focuses on companies headquartered in Louisville that have a disproportionately higher impact on the metro area economy. LOUISVILLE
LEXINGTON
The 320,000-square-foot development will encompass two, five-story buildings that will provide multi-tenant lab and office space. The facility is expected to be ready for tenant customization by January 2007. Coldstream is currently home to 30 tenants with 775 employees. Corporate tenants include IBM, Equine Biodiagnostics and Lexel Imaging Systems. UK research centers at Coldstream include the Livestock Disease Diagnostic Center (College of Agriculture), the Southeast Center for Aluminum Technology (College of Engineering), the CPST (College of Pharmacy), and the Interdisciplinary Human Development Institute. Developer Kale Roscoe, who also owns the IBM building at Coldstream, will be leasing the Lexhold buildings through Kentucky real estate and brokerage firm CB Richard Ellis. The first tenants will be the American Board of Family Medicine, which will move more than 50 employees to Coldstream, and asiGuardian LLC, a company that provides businesses with secured data networks and data recovery solutions. “Lexhold is part of our overall marketing strategy to populate Coldstream with a mix of academic, government and research-oriented groups, and complementary high-tech sector tenants,” said Executive Director and Associate Vice President for Research and Economic Development John Parks. “We’re already moving in this direction with the opening this spring of a $17 million facility that will house the Center for Pharmaceutical Science and Technology. The presence of the CPST at Coldstream has the potential to attract both research and development and supplier businesses.” LEXINGTON Researchers from the University of Kentucky College of Pharmacy, in partnership with ChemPharma International, a Richmond-based pharmaceutical company, have received $1.2 million in funding from the National Institutes of Health (NIH) to develop treatments to be used in radiation emergencies. “In addition to protecting the citizens of Kentucky and the U.S. from terrorist attacks, this contract is an important step in UK being recognized as ‘the place’ where new drug molecules for the treatment of nuclear or bioterrorism exposures are developed into pharmaceutical products and undergo clinical testing,” said Michael Jay, Ph.D., principal investigator of the study and director of the UK’s Center for Pharmaceutical Science and Technology (CPST). Currently, radioactive materials must be removed from the body by administering intravenous drugs. However, researchers from UK and ChemPharma are proposing to develop an orally administered dosage formulation with the ultimate goal of identifying an effective treatment for inclusion in the Strategic National Stockpile, which includes radioprotective drugs and therapeutics. Oral formulations – such as capsules or tablets – would be easier to distribute and administer during a mass exposure situation. The CPST is an FDA-registered pharmaceutical manufacturing facility that focuses on the formulation and development of pharmaceutical testing methods and the manufacturing of drug products. The CPST will expand in 2006 with the opening of a new 20,000-square-foot facility at the UK Coldstream Research Campus. ChemPharma International provides worldwide research and development services and custom chemical synthesis focused on drug discovery for the pharmaceutical industry “This work not only benefits Kentucky, but the country as a whole,” said Wendy Baldwin, executive vice president for research. “Funding from the NIH makes it possible, but also signals the high quality of the work that our researchers are doing.” LEXINGTON LBX Company, which produces the Link-Belt line of earthmoving, forestry and material handling equipment, has broken ground on the construction of a new world headquarters facility in Lexington. The construction project is expected to be completed by next September. Formerly a division of the Link-Belt Construction Equipment Company, LBX Company became a stand-alone company in 1998 representing the Link-Belt excavator, forestry and material handling equipment lines. The company was formed as a joint partnership between Sumitomo Construction Machinery Co. and CNH Global. LEXINGTON
INDIANA
The combined company will now serve more than 33 million medical members as a Blue Cross or Blue Cross Blue Shield licensee in 14 states and through its HealthLink and UniCare subsidiaries. WellPoint is the parent company of Anthem Blue Cross and Blue Shield of Kentucky. New York-based WellChoice is the parent company Empire Blue Cross Blue Shield, the largest health insurer in New York. The merger agreement calls for WellChoice to operate as a wholly owned subsidiary of WellPoint. TENNESSEE
The move includes GAC’s corporate offices, studios and post-production operation. GAC was acquired a year ago by The E.W. Scripps Company and the move to Nashville represents a growing Scripps presence in Tennessee. In addition to Scripps Networks’ headquarters in Knoxville, Scripps also owns and operates the television retailer Shop At Home in Nashville as well as two of the state’s major daily newspapers, The Commercial Appeal in Memphis and The News Sentinel in Knoxville. The company also maintains its IT enterprise group in Tennessee. Scripps employs about 2,500 people in the state. INDIANA Colgate-Palmolive has announced that it plans to close its 81-year-old Clarksville, Ind., plant, which produces the majority of the Colgate-brand toothpaste purchased in the United States. The plant also makes Ajax cleanser and Colgate shaving cream. The company plans to shut down the facility’s operations in stages, with the complete closing slated to take effect January 2008. The decision will mean the loss of approximately 475 jobs. The shutdown is part of the New York-based company’s plans to close approximately one-third of its 78 plants by the end of 2008, in an effort to boost efficiency and make the company more competitive.
Business Briefs ADAIR COUNTY
BOWLING GREEN
BULLITT COUNTY
DANVILLE
FLEMING COUNTY
FLORENCE
FORT MITCHELL
HEBRON
NORTHERN KENTUCKY
STAMPING GROUND
WARREN COUNTY
STATE
LOUISVILLE
LEXINGTON
INDIANA
OHIO
TENNESSEE
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Copyright 1996-2005, by Kentucky Business Online. All rights reserved. Editorial content
is copyright 2005, Lane Communications Group The Lane Report is a trademark of Lane Communications Group. All other trademarks are the property of their respective owners. |
Comair, a regional subsidiary of Delta Air Lines, has said it plans to reduce costs by up to $70 million annually as the company makes changes to its business necessitated by Delta’s recent declaration of bankruptcy.
The Kentucky Manufacturing Assistance Center (KMAC) – the Kentucky-affiliate of the Manufacturing Extension Partnership (MEP) Program – has been ranked second among all 60 MEP Centers nationwide based on the percent of clients reporting a positive, measurable impact on their operations as a result of KMAC assistance.
After being mired in the discussion stage for decades, the Eastern Kentucky Exposition has finally been completed, providing a venue for a wide variety of events ranging from meetings, concerts and conferences to trade shows, sporting events and rodeos. 
The Kentucky Community and Technical College System has joined a national initiative to create several “early college” high schools in Kentucky. The initial funding, which totals $128,000 over four years, will go to the Owensboro Community and Technical College and the Owensboro Public Schools for their Collegiate High School. 
The business to be acquired has historically gone to market under the names Silec and Sagem. Silec is recognized as a global leader in the design, engineering and installation of high-voltage underground links. The company is also among the top three producers of energy and industrial cables for the French market. 
UPS has officially opened a new 500,000-square-foot distribution center that is dedicated to serving the health industry.
The move brings Brown Jordan’s sales, product development, procurement, operations, finance and customer service operations to Louisville, resulting in a total payroll of $1,050,000. Fifteen new jobs will be created locally as a result of the move.
The University of Kentucky has broken ground at its Coldstream Research Campus for the Lexhold International Center for Technological Innovation, a $50 million development designed to address the needs of the high-tech sector. 
The two-story, 26,000-square-foot structure will be situated on a nine-acre site. With a dealer sales and service facility also located on the premises, the facility will effectively house all of the functional activities of the company except for field operations. An outdoor area behind the customer service/training building will be used as a demonstration area for Link-Belt equipment. 
Indianapolis-based WellPoint Inc., the country’s leading health benefits company, has signed a definite merger agreement with WellChoice, Inc.
The Great American Country (GAC) television network has moved its Denver base operations to new offices in Nashville. The network, which is the television home of the Grand Ole Opry, is seen in almost 40 million U.S. households. 
Cincinnati-based Federated Department Stores, Inc. is expanding its credit-related support facility in Mason, Ohio as part of a consolidation connected with its recent acquisition of The May Department Stores Company. Beginning this spring, Federated will be phasing out former May credit operations in Lorain and Parma, Ohio and Houston. With the consolidation and reorganization, Federated will operate four credit centers: Mason, Ohio, Clearwater, Fla.,Tempe, Ariz., and the former May Co. Earth City credit center in St. Louis. With the consolidation, the Mason facility could see the addition of up to 300 jobs. 
Memphis-based FedEx Corporation has opened a new FedEx Ground distribution hub in Hagerstown, Md. The Hagerstown hub, which employs approximately 400 people, is one of nine hubs to open as part of a network expansion plan that will include the relocation or expansion of more than 290 pickup and delivery terminals through 2010. The nationwide expansion will boost the company’s current average daily pickup capacity by nearly 70 percent over the next five years. This summer, FedEx Ground also opened hubs in Cincinnati, Ohio, and Dallas, Texas. A fourth new hub, under construction near Memphis, Tenn., will begin operations in 2006.