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FAST LANE - March
2004
Cosma, a subsidiary of Magna International, Inc., will be the first tenant in the much-anticipated Kentucky TriModal Transpark, where it has purchased 132 acres. Construction is now under way for a $132 million facility that will encompass 900,000 square feet. The company will utilize the plant for the production of vehicle frames for the Ford Explorer, an SUV that is built in Louisville and St. Louis. They expect to begin shipping by Fall 2005. The new jobs are expected to pay approximately $13.50 per hour but with benefits factored in, the overall employee package is valued at $20 to $28 per hour. “This,” said State Representative Roger Thomas, D-Smith’s Grove, “is the type of company that we needed to be the cornerstone for the transpark.” Thomas noted that Gov. Ernie Fletcher’s commitment to fund a new tech center on the transport site was a key component to Kentucky winning the project over other sites being considered in Tennessee, Indiana and Illinois. Fletcher has budgeted $5.5 million for the center, which will be part of the Kentucky Community and Technical College System and will serve to help train workers for Magna as well as future companies that locate in the transpark. STATE
Furthermore, some 400 of the state’s family physicians are age 60 or older. At the same time, the state’s rural family medicine residency programs can only be expected to produce up to 18 new family physicians each year. According to the report, the state needs an additional 600 family physicians in order to meet the healthcare needs of Kentuckians. Among the solutions to the problem offered by the study’s research team was the usage of coal severance tax money to repay student loans for physicians who agree to practice at least five years in rural, medically underserved areas. PIKEVILLE Five years ago, the future looked bright as Sykes Enterprises moved into a $1 million office building in Pikeville, lured by millions in tax incentives and economic development funds. The Florida-based company, which contracts with Internet firms to assist computer customers, hired hundreds across Eastern Kentucky. As of July 2000, the company employed 700 workers in Pikeville, and another 350 in Hazard. Last month, however, Sykes informed its remaining 300-plus employees in Pikeville that it would close the call center as of April 10 due to “client needs and changing market conditions.” The announcement comes on the heels of the Florida-based company’s decision to close its operations in Hazard, resulting in nearly 400 jobs lost. Sykes, which operates more than 40 customers support centers through the world, is also planning to close several more of its U.S. centers, citing an “increase in call volumes migrating offshore and duplicative expenses.” STATE
By a margin of more than two-to-one (69 to 28 percent), Kentucky voters favor a 75-cent per pack increase in the state’s cigarette tax. Furthermore, support is evident among virtually every political and demographic subgroup of voters in the Bluegrass State. In fact, a significant number of voters from both parties said they were willing to cross partisan lines to vote for a candidate of the opposite party who supports the cigarette tax increase. The statewide poll involved a random sampling of 500 registered voters and was conducted jointly by the Republican polling firm QEV Analytics, Inc. and the Democratic polling firm The Mellman Group, Inc. The poll found that increasing the tobacco tax is the most palatable means of addressing Kentucky’s budget crisis, with 62 percent favoring that approach. Fewer voters (52 percent) favor allowing video slot machines at state racetracks, while a small minority support other means, including increasing the state sales tax (27 percent), increasing the income tax (17 percent), reducing funding for Medicaid (10 percent), reducing funding for education (10 percent) or reducing funding for other healthcare programs (nine percent). LOUISVILLE
The announcement follows the 2003 sale of Sears’ Louisville facility to Citigroup. As part of that arrangement, the building and approximately 625 Sears employees became part of Citigroup’s Citi Cards division. The remainder of the staff was assigned to Sears’ national customer relations team. Those jobs are now being consolidated with customer-care positions in Round Rock, Texas and Orlando, Florida. Many of the Louisville employees, whose jobs are scheduled to end by mid-May, will be offered positions in Texas and Florida, according to Sears officials. FAYETTE COUNTY
L-3’s expansion is expected to add another 300 jobs at Bluegrass Station by 2009. Three new buildings – a 40,000-square-foot aircraft hangar, a 35,000-square-foot office building, and a 35,000-square-foot warehouse – are proposed as part of the expansion. The facilities are to be built by the state and then leased for profit to L-3. The complex will be utilized for the installation of electronic navigation and communication equipment on military helicopters. L-3’s current operations in Kentucky were initially created in 1985 by E Systems, Inc., which sold the company to defense contractor Raytheon Co. 10 years later. Raytheon sold the operations to L-3 in 2002. STATE Cingular Wireless has announced plans to invest $160 million in a “massive expansion” of its Kentucky/Tennessee wireless network. Last year, the company spent some $51 million to upgrade the Kentucky/Tennessee network, adding approximately 100 new sites and implementing an advanced voice and data network. “Now that Tennessee/Kentucky’s transition to an advanced voice and data GSM network is complete, we are focusing our resources on increasing coverage, particularly in residential areas and in-building locations throughout the region,” said Jim Thorpe, vice president and general manager for Cingular Wireless Tennessee/Kentucky. HARRODSBURG Harrodsburg First Financial Bancorp Inc. has announced plans to acquire Independent Bancorp of New Albany, Indiana for $17.1 million in stock. Harrodsburg First, with assets of approximately $174 million, has locations in Harrodsburg and Lawrenceburg. The company also owns a majority interest in Citizens Financial Bank Inc. of Glasgow. Independence Bank has $108 in assets and operates branches in New Albany, Jeffersonville, and Marengo, Indiana as well as Louisville. Harrodsburg Chairman and CEO Arthur L. Freeman will serve as chairman of the board and CEO of the new corporation as well as chairman of the board of the combined bank, which will operate as 1st Independence Bank. N. William White, president and CEO of Independence, will be president of the new corporation and will serve as president, CEO and a director of the bank. LEXINGTON
Ted’s Montana Grill, founded by media entrepreneur Ted Turner and restaurateur George McKerrow, Jr. (founder of the LongHorn Steaks chain), features a variety of dishes made with bison, a red meat that is similar to beef but with a slightly sweeter and richer flavor. With Americans’ growing focus on foods that are lower in fat and calories, bison is gaining popularity on that front as well: Nutritional studies show that bison is lower in fat, calories and cholesterol than either beef, pork or chicken. In addition to Lexington, the Atlanta-based company currently has locations in Atlanta, Columbus, Nashville and Denver and plans to roll out approximately 75 new stores over the next two years. Company officials said they were drawn to Lexington – which is considerably smaller than the other cities in which Ted’s has locations - based on past successes with “lifestyle centers similar to Hamburg Pavilion” and made their decision based on the demographics of the area, rather than market size. In addition to bison, the restaurant also offers beef, chicken and fish entrees and daily blue-plate specials to round out what is billed as “all-American comfort food for the 21st century.” STATE
The shipment is part of a trade agreement reached between the Kentucky Department of Agriculture and Cuba in which Cuba has promised to purchase $7 million of processed foods, meats, tobacco, and wood products from Kentucky producers. “This is a great accomplishment for a small company like ours,” said John Primm, president of J. Primm & Associates, who brokered the deal for Double Cola USA, the parent company of Ski. “This will be our first taste of exporting.” Western Kentuckians were the first to experience Ski in 1926, when the Greensburg Bottling Co. started as a family operation that eventually expanded regionally and then nationally as part of a Double Cola franchise. Cubans got their first taste when Primm provided samples an at exhibit booth in Havana while traveling with Kentucky Department of Agriculture officials. “Security finally made us stop because the lines to get our samples were getting so long,” Primm said. The country of Cuba imports more than $1 billion worth of food, according to Kentucky Agriculture Commissioner Richie Farmer, who noted that “Kentucky should become an extremely attractive market to Cuba because of the price and quality of our products and because of how close we are for shipping.” By purchasing Kentucky products, Cuba can save 15 to 20 percent on shipping alone, compared to other sources of food and food products. Farmer said a number of other Kentucky companies have begun shipping to Cuba or are close to completing deals. PADUCAH A California supplier of media packaging products has selected a site in Paducah’s Industrial Park West on which to build a new plastics molding plant. Infiniti Media is a privately owned company based in Torrance, California that produces audio, video and cassette disk cases and video magnetic tapes to the recording industry. Construction on the new 100,000-square-foot plant has been put on a fast track, with company officials hoping to have the facility operational by June. Infiniti anticipates hiring 35 employees initially and expects staffing levels to reach approximately 105 within five years. The project represents a $47 million investment over five years. LOUISVILLE
The employees were part of Bank of America’s mortgage-servicing division. When Bank of America announced last July that it was moving the operations handled by the Louisville center to Buffalo, New York and Greensboro, North Carolina, employees were offered the opportunity to move to Greensboro. Those who elected to not relocate were to be hired by Financial ServiceSolutions (FSS), a company that was formed in April 2003 as part of a joint venture between Bank of America and Fidelity National Financial. The plan at that time was for FSS to establish its mortgage outsource services in Louisville. Now, however, FSS says a downturn in the mortgage activity has resulted in the company not having enough work to follow through with that promise. In addition, FSS has laid off 40 of its 415 employees. The February announcement came as a complete shock to those affected: Many had been told only the day before that they would become employees of FSS on March 1. MARTIN COUNTY Four Eastern Kentucky counties have agreed to contribute $300,000 each in coal severance tax funds to help develop an industrial park site and retain one of the area’s major employers. Schlumberger, an oil and gas well service company, currently operates in Floyd County with approximately 90 workers but has been looking to expand. When area officials learned that the company would have the leave if they didn’t find a suitable site for expansion, they approached Schlumberger about the possibility of relocating to the Honey Branch Industrial Park in Martin County. Since the site does not yet have a building or any infrastructure in place, four of the counties that make up the Big Sandy Regional Industrial Development Authority – Johnson, Martin, Floyd and Pike – have offered to use a portion of their coal severance tax revenue to help construct a facility that will then be leased back to Schlumberger. (Magoffin County is also part of the development authority, but was not included in the deal because it does not have any coal severance money available.) As a result, plans are now moving forward for the company to relocate to the Martin County park. Retaining Schlumberger is a major win for the area. The company, which employs more than 50,000 people in more than 100 countries, recently saw its stock on the New York Stock Exchange rise to nearly $60 per share, exceeding analyst expectations. The company has said it hopes to hire approximately 30 more workers in the area over the next two years. STATE
“These are substantial programs that are having direct, measurable impacts on families and communities throughout the Commonwealth and we’re extremely pleased that Senator McConnell has enabled us to strengthen our efforts in these areas,” said Scott Smith, dean of the UK College of Agriculture. The funding includes $2.74 million to continue the development of a new research laboratory in cooperation with the USDA’s Agriculture Research Service. The new lab is being formed to improve the productivity, profitability, competitiveness and sustainability of forage-based enterprises. These programs include research to improve forage and livestock production in the state, as well as investigations of ways to improve animal health and prevent major diseases such as Mare Reproductive Loss Syndrome. UK President Dr. Lee Todd noted that without Senator McConnell’s efforts, the funds would not have come to UK. “The senator’s support is vital to helping the University of Kentucky move forward with our research endeavors,” said Todd. “The real payoff will be the improvement in the lives of Kentuckians.” STATE The East South Central region – an area that includes Kentucky, Tennessee, Alabama and Mississippi – has scored the nation’s largest gains in consumer confidence over the last year, according to an analysis released by The Conference Board. The Conference Board is a non-profit organization that creates and disseminates information regarding management issues and the marketplace. The Conference Board’s Consumer Confidence Index for the region has climbed from 76.2 to 104.1 over the last year. During the same period, The Conference Board’s Help-Wanted Job Advertising Index for the region – a major barometer of America’s job market – advanced from 80 to 85 for this region. “The East South Central region was red hot back in the late 1990s,” notes Conference Board Economist Ken Goldstein. “It would not be surprising if this region becomes one of the first to catch fire now that the economy, and even the job market, is starting to boom. Nothing soothes the consumers’ nerves more than reports of more jobs opening up. That is the major factor in consumer confidence.” TENNESSEE Memphis-based Union Planters Corp., Tennessee’s largest bank holding company has signed a definitive merger agreement with Birmingham-based Regions Financial Corp, creating the 12th-largest bank holding company in the nation in terms of deposits. The new company, which will be known as Regions Financial Corporation, will serve 5.1 million customers and have total deposits of $56 billion across a 15-state network that includes Kentucky. The merger of the two companies will give the combined entity the No. 1 position in the mid-South region that consists of Alabama, Arkansas, Georgia, Louisiana, Mississippi and Tennessee. The combined company will have total assets of $81 billion and a market capitalization of $14 billion. Birmingham will serve as headquarters for the combined company’s banking operations, while Morgan Keegan, Region’s securities brokerage subsidiary, will be headquartered in Memphis also with the combined mortgage business. TENNESSEE
Aisin, a subsidiary of Japanese auto parts manufacturer Aisin Seiki Co. Ltd., will invest approximately $67 million in the Clinton community, where it will operate a full process die-casting facility that includes casting, machining, and assembly to produce functional engine components. The components include water pumps, oil pumps, and pistons that will be installed in the Toyota Tacoma, Tundra, and Camry. Aisin’s decision to locate in Clinton marks the fifth automotive supplier to announce a new location in Tennessee in the last year. More than 950 automotive-related businesses now employ nearly 154,000 Tennesseans, representing 33 percent of the state’s manufacturing workforce and 5.7 percent of total state employment. Tennessee’s automotive industry annual payroll is estimated at more than $6.3 billion. State and local governments joined with entities such as the Tennessee Valley Authority and the Appalachian Regional Commission in an effort to win the Aisin facility, offering nearly $3 million in incentives.
Business Briefs BARBOURVILLE
BOWLING GREEN
DANVILLE
EASTERN KENTUCKY
ERLANGER
GEORGETOWN
HAWESVILLE
LEXINGTON
LOUISVILLE
MADISONVILLE
McKEE
MURRAY
OWENSBORO
PADUCAH
RICHMOND
SOMERSET
TAYLORSVILLE
VERSAILLES
WINCHESTER
STATE
INDIANA
OHIO
TENNESSEE
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Copyright 1996-2004, by Kentucky Business Online. All rights reserved. Editorial content
is copyright 2004, Lane Communications Group The Lane Report is a trademark of Lane Communications Group. All other trademarks are the property of their respective owners. |
When auto parts manufacturer Cosma International announced late last year its plans to build a new facility in Bowling Green, community leaders were thrilled about the prospect of 300 new jobs. Now they have even more reason to rejoice: Cosma has announced a second phase of development that will involve an additional $80 million investment and brings the potential of 800 more jobs.
A recent study conducted by the University of Kentucky Center for Rural Health reports that the Commonwealth is facing a severe shortage of physicians. In fact, of the state’s 120 counties, only 15 have enough family physicians to support healthcare needs. 
As state leaders wrestle with the estimated $500 million budget deficit, a new bipartisan poll shows a strong majority of Kentucky voters support increasing the state’s cigarette tax by 75-cents per pack to reduce smoking among kids and to help fund education and healthcare programs in the state. The additional revenue from 75 cents per pack would provide the state with an immediate boost of more than $300 million in revenue in the first year alone. 
Sears, Roebuck and Co. is eliminating 240 jobs in Louisville as it moves forward with its plan to consolidate customer service and call center operations. 
L-3 Communications Corp., a national defense contractor, is expanding its presence in Kentucky as part of a $1.5 billion contract to provide logistics products and services to the U.S. Special Operations Command. The contract represents the largest single contract ever awarded to the New York-based company, which currently employs some 1,000 people at three locations in Central Kentucky: Bluegrass Station in eastern Fayette County, Blue Grass Army Depot in Richmond and Blue Grass Field in Lexington. 
The expansion will involve establishing more than 250 new cell sites during the course of 2004, providing Cingular customers increased coverage and better service, according to company officials. Nearly half of the new cell sites are projected to be operational by summer. 
Lexington has been selected as one of the first five cities in the nation to introduce one of the restaurant industry’s newest concepts.
More than 30,000 cans of Ski have been shipped from Kentucky to Cuba, the first of three international shipments by a soft drink bottler whose first customers were in western Kentucky in 1926.
Nearly 250 Bank of America workers in Louisville are without jobs after a planned business venture involving Bank of America and Financial ServiceSolutions fell through.
The University of Kentucky’s College of Agriculture has been awarded nearly $5.9 million in federal funding for agricultural research and disease-prevention programs. The funding includes significant support for new crop opportunities, forage and livestock systems, health education, plant and animal genetics. 
Aisin Automotive Casting Tennessee Inc. has announced plans to construct a 280,000-square-foot plant in Clinton, Tennessee. The facility is expected to create approximately 400 new jobs in the area by 2007. 
General Motors has recalled approximately 127,000 Corvettes made at its Bowling Green plant between 1997 and 2004 due to the problems with the steering columns. There have been no injuries associated with the problem.
The Lexington Professional Baseball Company has signed a letter of intent to sell the Lexington Legends South Atlantic League franchise to Fun For Kentucky Entertainment Group, LLC. Fun for Kentucky is headed by David Hersh of Tampa, Florida, a former general manager and owner of several minor league teams. Legends President Alan Stein has agreed to a multi-year employment agreement to operate the Lexington Legends for Fun for Kentucky Entertainment Group, LLC as well as serving as an officer and consultant for the new company. 
Louisville-based D.D. Williamson, the world’s leader in caramel color, has acquired Cargill’s Cerestar caramel color operation in Manchester, England. The agreement with Europe’s largest glucose manufacturer strengthens D.D. Williamson’s global supply operations and expands its product line to customers, advancing a supplier partnership between Cargill and D.D. Williamson in existence for decades. With the acquisition, D.D. Williamson will now operate two European production facilities – the company recently celebrated the 25th anniversary of its Ireland plant – in addition to manufacturing facilities in the U.S., Puerto Rico, China, Swaziland and Brazil. 
Ventas Inc., a Louisville healthcare real estate investment trust, has purchased 14 independent-living and assisted-living facilities in 10 states from an undisclosed company for $115 million. “This investment for Ventas increases our presence in the independent and assisted living markets with stabilized, well-managed facilities,” Ventas Chief Investment Officer Raymond J. Lewis said. “The transaction is a significant step in the continued implementation of our strategic diversification plan.” Ventas owns 42 hospitals, 199 nursing facilities and 23 other healthcare and senior housing facilities in 38 states. The company also has investments in 25 additional healthcare and senior housing facilities.
Papa John’s International has opened its first restaurant on the island of Trinidad, bringing its total number of international locations to 16. 
Sypris Solutions has filed a registration statement with the Securities and Exchange Commission in connection with a proposed public offering of three million shares of common stock. The offering will raise approximately $60 million for the company, which plans to use the proceeds to pay down a portion of debt.
Ford Motor Co. is adding a second stamping press to its Kentucky Truck Plant, increasing its ability to stamp more automobile body parts. Expansion plans call for adding 172,000 square feet to accommodate the additional equipment, which could cost between $15-20 million according to industry experts. The expansion will likely add at least 100 new jobs, say Ford officials, and possibly more. 
Trover Solutions, Inc. has entered into a definitive agreement to be acquired for approximately $60 million in an all-cash transaction. The acquirer is a private equity fund managed by Tailwind Capital Partners. Trover Solutions is a leading independent provider of outsourced insurance subrogation and other claims recovery and cost containment services to the private healthcare payor and property and casualty industries.
Mikron Industries is expanding its Richmond facility, where it produces window frames for companies such as Pella and Jeld-Wen. The company expects to hire approximately 65 more workers, boosting its staff to 280 by mid-June.
National City Corp. has announced plans to purchase Cincinnati-based Provident Financial Group for $2.1 billion in stock. Cleveland-based National City has $64 billion in assets at more than 1,100 branches in Ohio, Illinois, Indiana, Kentucky, Michigan and Pennsylvania. The corporation is also the parent company of Louisville-based National Processing Inc. Provident, founded in 1900, has $10.3 billion in deposits at 65 branches throughout Ohio and Northern Kentucky.