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FAST LANE - June
2006
UPS is already Kentucky’s largest employer, with more than 22,300 employees statewide. An economic impact study performed by Kentucky’s Cabinet for Economic Development shows the latest UPS expansion will have a significant effect on Kentucky’s economic pulse: The direct annual economic impact of new full- and part-time jobs alone will be approximately $344.8 million. Indirect and induced jobs will add more than $400 million for a total annual economic impact of approximately $745 million. Previous studies have indicated that UPS’ presence has been a catalyst for enticing more than 90 companies to either locate or expand their operations in Kentucky over the past five years, bringing more than $1.2 billion and creating more than 13,300 new jobs. UPS’ new project will add nearly 1.1 million square feet to its existing facility, allowing the company to expand its current activities of loading, unloading, sorting, and distributing of packages. In addition, several ramps at Louisville International Airport will be built or altered, bringing a total increase of just over 3 million square feet. Construction is slated to begin in July of this year, with an anticipated completion date in September 2010. The Kentucky Economic Development Finance Authority has granted preliminary approval to UPS for tax benefits up to $31.6 million over 10 years under the Kentucky Jobs Development Act, an incentive program aimed at increasing technology- and service-related employment in the commonwealth. It is also anticipated that UPS will qualify to receive up to $20 million in benefits over the next three years under the Kentucky Enterprise Initiative Act, a program that allows approved companies making an investment of $500,000 or more in Kentucky to recoup Kentucky sales and use tax on the cost of construction materials, building fixtures and equipment used for research and development. BULLITT COUNTY Best Buy, one of the nation’s largest computer retailers, has leased 165,000 square feet of space at the ProLogis Park 65 in Bullitt Co. that will house the company’s Geek Squad subsidiary. Geek Squad will employ approximately 550 people, who will repair computers from customers throughout the U.S. and provide 24-hour computer and network service and support. Salaries will average around $44,000 per year. Company officials said the community’s access to overnight air service and a population large enough to support the facility’s technical labor needs played major roles in Geek Squad’s decision to locate in Bullitt Co. The company was also looking for real estate that could support its growing operations. Best Buy has computers shipped to the new center in the morning for repair, then gets them back to UPS by evening, resulting in a two-day turnaround. “We’re thrilled Best Buy/Geek Squad has chosen the Louisville region for this project,” said Joe Reagan, president and CEO of Greater Louisville Inc. “The choice highlights two of the strengths our region has to offer – logistics and technology, which are critical to our success in economic growth.” SOMERSET UGN, Inc., an Illinois company that supplies acoustic, trim and thermal management products to the Japanese automotive industry in North America, has opened a new 314,000-square-foot plant in Somerset. The new plant, which is expected to employ approximately 300 workers within the next three years, will produce the company’s first acoustical carpet system for 2007 production year vehicles. Pulaski County Judge Executive Darrell BeShears said the building and land for the UGN facility was donated by Tecumseh Products Company, which closed its Somerset air conditioning compressor plant in 2000 and gave the building to the Somerset-Pulaski County Development Foundation. Established as a joint venture in 1986 between Nihon Tokushu Tokyo Co., Ltd. and Rieter Automotive Systems, UGN, Inc. is headquartered in Chicago and has three manufacturing plants, one research and development facility, and more than 1,300 employees. MUHLENBERG COUNTY
The Texas-based company plans to renovate a 312,000-square-foot facility that previously housed a supermarket operated by Supervalue Inc. and expects to have a staff of 200 onsite within two years. “Over a year ago we embarked upon a long search based on supply and customer matrixes,” Gourmet Express Chairman and CEO Robert W. Scully said. “Greenville fits well into our grid matrix, and we are pleased that Kentucky is such a business-friendly state. Affordable energy is also quite important to us. This move fits well with our strategic objectives and future growth plans.” Gourmet Express has had a steady increase in sales and profits each year since its inception in 1997, experiencing a growth rate of 25 percent per year since 2003. The company has received preliminary approval by the Kentucky Economic Development Finance Authority for tax benefits up to $5 million. FT. MITCHELL Columbia Entertainment has entered into a definitive merger agreement with Aztar Corporation to acquire all of the outstanding common shares of Aztar for $2.75 billion, including the assumption of approximately $676 million in debt. Columbia Entertainment is the gaming affiliate of Ft. Mitchell-based Columbia Sussex, which owns 82 hotels and resorts and eight casinos throughout the United States, Canada and the Caribbean that operate under the Marriott, Hilton, Westin, Sheraton, Renaissance and Doubletree brands. The company also has a new resort and casino property under construction in St. Maarten. The company has more than 18,000 employees worldwide. With the acquisition of Aztar, Columbia gains casino resorts in Atlantic City and Las Vegas, a casino hotel in Laughlin, Nev., and the Casino Aztar riverboat casino in Evansville, Ind. The combined company will have approximately 33,000 rooms and will own and operate 12 casinos in Nevada, Louisiana, Mississippi, New Jersey, Illinois and Indiana. “Aztar’s unique assets are a perfect fit with our existing hotel and gaming properties, and we see many opportunities to improve financial performance by expanding the Tropicana brand, finishing the building projects in Indiana and Atlantic City and developing the Las Vegas property,” said William J. Yung III, president and CEO of Columbia Sussex. STATE The Kentucky Community and Technical College System (KCTCS) has formed the nation’s first horse racing academy. The North American Racing Academy (NARA) is the brainchild of Hall of Fame jockey Chris McCarron, who will serve as the academy’s first director. “This is truly a historic opportunity for all facets of the horse racing industry,” McCarron said. “Never before has there been a program of this kind in the United States. This academy will allow jockeys – and eventually all those interested in the horse-racing industry – to develop career pathways that will allow them to reach training and educational goals they never knew were possible.” NARA’s long-term goals include the creation of a campus at the Kentucky Horse Park that would include a horse barn, indoor arena, training track, classrooms, a dormitory, a fitness center, a kitchen and dining room, and administrative offices and meeting rooms. KCTCS will initially administer courses of instruction through the Bluegrass Community and Technical College (BCTC) in Lexington. Courses of instruction, certification and degree programs are expected to be developed for jockeys, apprentice jockeys, exercise riders, grooms, breeding farm staff, barn foreman, assistant trainers, trainers, track maintenance, racing officials, racing commissioners, chaplains, racetrack management and student internships. BCTC currently offers equine management courses that are being delivered for academic credit at the college. The recent state budget signed by Gov. Ernie Fletcher included $300,000 to KCTCS in 2006-07 for the operation of NARA. While the North American Racing Academy will be based at the Kentucky Horse Park in Lexington, KCTCS community and technical colleges will share the curriculum developed by KCTCS and NARA officials as needed on other campuses. The first NARA program to begin training jockeys is tentatively scheduled to begin this fall. HART COUNTY
The expansion involves the addition of a 21,600-square-foot truck and trailer shop and a 587,000-square-foot warehouse, representing an investment of more than $14 million. The company anticipates having the new facilities operational by August 2007. Dart, which manufactures products used by restaurants, health care facilities and the food packaging industry, opened its Horse Cave facility in 1980. The company now employs 1,000 people and is Hart County’s largest employer. With the addition of its new facilities, Dart will operate more than 2 million square feet. FLEMINGSBURG
The company began producing “park model” housing last year, marketing the homes through a separate company called Blue Water Park Models, Inc. Sales of the Blue Water park models have soared as the overall industry has set all-time record numbers. The company’s park model production is in addition to its stick-built home construction business. “We’re hoping to buy an additional 50,000-square-foot building just for park model manufacturing,” Blue Water General Manager Brad Lawson said, adding that the company also expects to double its workforce from 50 to 100 employees after it moves into a new facility. The company currently operates both its stick-built and park model production from a 100,000-square-foot plant. The rising demand for park models is attributed in part to rising real estate prices, which are prompting consumers to look for more affordable vacation home options. Unlike mobile homes, which are a form of low-cost, permanent housing, park models are 400-square-foot movable resort cottages that are designed exclusively for part-time recreational use. Typically upscale in appearance, they often include bay windows and lofts as well as walnut, oak or maple cabinetry and can be left on a permanent campsite for an entire season. Technically classified as recreational vehicles, park models can also be placed on private property and used as weekend or seasonal vacation homes. “People are starting to figure out that park models enable them to have a lakefront vacation home or country cabin for a lot less than they thought it would be,” Lawson said. Blue Water Park Models range from $22,000 to $48,000, not including shipping costs. BARDSTOWN Nippon Piston Ring Co., Ltd. has announced plans to locate its newest manufacturing facility in Bardstown. NPR Manufacturing Kentucky, L.L.C. will produce steel piston rings for automotive engines and will serve as a primary supplier for Toyota plants in Kentucky and West Virginia. The company also supplies parts for Ford and DaimlerChrysler. The new plant, which represents an investment of nearly $49 million, will initially employ 50 workers. That number is expected to increase to approximately 150 within two years of operation. The 200,000-square-foot plant is expected to be operational by October 2007. The facility will be the company’s third U.S. manufacturing operation. STATE Site Selection magazine, a leading international economic development publication, has ranked Kentucky fourth in the United States for the second year in a row in its 2006 Annual Competitiveness Award. The benchmark measures state economic development agencies’ competitiveness – one of the most important factors in an agency’s ability to attract capital investment and expand economic activity in the state and is regarded by corporate real estate analysts as “the industry scoreboard.” States were ranked according to an indexing system based on 10 criteria for measuring business expansion activity that took place in the previous calendar year. Categories used to calculate the ranking included per capita jobs and investment numbers for 2005, the number of top metros and micropolitans in Site Selection’s 2005 rankings, rates of growth in new and expanded facilities and ranking in the annual business climate survey. Kentucky has consistently ranked in the Top 10 since the inception of the award in 2003. During 2005, 365 manufacturing and or supportive/service companies located or expanded in Kentucky resulting in nearly 16,700 net new jobs created, with investment estimated at more than $1.6 billion. LOUISVILLE Kentucky has launched a new initiative designed to address the nation’s growing shortage of trained personnel in the trucking industry while also boosting employment in Louisville’s Empowerment Zone. The Entrepreneurial Trucking Initiative comes in response to figures released by the American Trucking Association, which indicate that the national shortage of truck drivers stands at nearly 80,000. The Kentucky initiative will be administered by Jefferson Community College and will serve 40 individuals this year. Individuals who complete the eight-week program will be eligible to obtain their commercial driver’s license. A licensed driver who places with a trucking company can expect to gross $34,000 annually, while graduates of the Entrepreneurial Trucking Initiative who move into owner/operator positions with trucks of their own could make up to $80,000 per year. The initiative is designed to boost economic opportunities in the Greater Louisville Area, particularly those in the designated Empowerment Zone, which has a high concentration of at-risk populations: ex-offenders, recovering addicts and disenfranchised youth. Almost half of the residents in the Empowerment Zone live at or below the poverty level and of those, 90 percent are unemployed. State figures show that an unemployed ex-offender is three times more likely to return to prison. “This initiative is an economic development initiative,” said Tierra Kavanaugh-Turner, executive director, Governor’s Office of Minority Empowerment. “It will offer much more than a one-time job opportunity. Participants in the program will learn lifelong career training and financial independence.” LOUISVILLE
OWENSBORO Kentucky Wesleyan College has announced plans to offer a master of business administration degree, beginning this August. The 42-credit-hour program is designed to accommodate professional schedules, with one class per week (held in the evening) and a combination of online and classroom learning. The program can be completed in as little as 17 months. Kentucky Wesleyan has partnered with Franklin University in Columbus, Ohio to offer Franklin’s trademarked Vantage MBA curriculum, which is targeted towards helping individuals define their leadership potential in selected areas of professional interest. As part of the program, students select a specific focus area such as entrepreneurial leadership, executive coaching, financial leadership, human resource leadership, not-for-profit leadership, technology leadership, and applied leadership. “Partnering with Franklin University allows Kentucky Wesleyan to offer a curriculum with a proven track record,” said Jim Welch, chair of the KWC Center for Business Studies. “The program creates opportunities for more ambitious, working adults and addresses the economic development needs of the community and region.” STATE A coalition of Kentucky universities and organizations have created a joint enterprise to design, build, launch and operate small satellites for the purpose of furthering education, research and economic innovation. The development of KentuckySat will make Kentucky the first state in the nation to send a satellite into space. “KySat represents the kind of bold and innovative initiative that Kentucky must pursue on a number of levels if it’s going to be truly technologically, educationally and economically competitive in the global marketplace,” said Kris Kimel, president of Kentucky Science and Technology Corporation, the managing partner of the venture. A team of students from Morehead State University, Murray State University, University of Kentucky, University of Louisville, and Western Kentucky University will handle work on the KySat satellite. The team will spend 10 weeks this summer working with experts at the Stanford University Space and Systems Development Laboratory, NASA Ames Research Center and California Polytechnic State University-San Luis Obispo. Upon their return, they will be charged with building the Pico satellite, a small – less than 2.5 pounds – satellite that will be used to educate students in areas such as communications, temperature monitoring, current, voltage and science sensors, and photography using an onboard camera. KySat will be made available at no cost to Kentucky students, teachers, schools, and universities. Morehead State University, which is preparing to construct a new $16 million center for space science, will be responsible for tracking the satellite. The collaboration among the universities result from the Kentucky Council on Postsecondary Education’s Strategy for Statewide Engineering Education. The multi-layered engineering strategy is designed to increase the number of engineers in the state to boost the state’s economic competitiveness and to address regional issues of access and productivity in engineering education. HENDERSON Kentucky is one of seven states being considered to host FutureGen, a proposed coal-fueled, zero-emissions power plant that would be the first of its kind in the world. The FutureGen plant would utilize cutting-edge technologies to generate electricity while capturing and permanently storing carbon dioxide in geological formations. The plant would also produce hydrogen and byproducts for other industries. The FutureGen Alliance is a coalition representing some of the world’s largest coal companies and electric utilities that are partnering with the U.S. Department of Energy to facilitate design, construction, and operation of the clean-coal plant. Member companies are contributing up to $250 million to help fund project development and include: American Electric Power, Anglo American, BHP Billiton, the China Huaneng Group, CONSOL Energy Inc., Foundation Coal, Kennecott Energy, Peabody Energy and Southern Company. The U.S. government, working with other nations, plans to invest $700 million. There is also growing international interest in the project, with India recently announcing its intent to contribute to the U.S. government’s share of the costs of FutureGen. Kentucky has proposed a site in Henderson County for the power plant. The project is expected to create more than 1,300 jobs at peak construction and 150 permenant jobs at the facility. Kentucky Congressman Ed Whitfield (R–Hopkinsville) said he believed that the Henderson site offers “a unique combination of abundant coal reserves, research capabilities and experience in clean coal technology” and that the “local work force should make the Henderson site more competitive than any of the other sites that might be considered.” The FutureGen project is expected to create over 1,300 jobs at peak construction and 150 permanent jobs at the facility. It will become the leading worldwide research facility for clean coal technology and advanced energy development. LEXINGTON The Builders Exchange, a Louisville-based provider of construction and plan room services, has opened a new office in Lexington. The new location will enable companies in the Central Kentucky area to access construction documents for approximately 2,200 individual building-related projects each year, and will provide a location where companies interested in submitting bids on construction projects can access blueprints without being required to purchase them. A not-for-profit, member-owned construction trade association, The Builders Exchange is a full-service construction trade association that covers Kentucky and southern Indiana. The association – which is made up of more than 800 member contractors, subcontractors, material supplies, and manufacturing representatives – maintains a current listing of construction projects that are out for public bidding. The Builders Exchange also provides members with low-cost group insurance programs, and recently awarded $26,000 in scholarships during its 79th annual meeting.
INDIANA
The expansion will create up to 800 new jobs, bringing the company’s Indianapolis workforce to nearly 5,000. An agreement between FedEx and the Indianapolis International Airport calls for the airport to build five wide-body gates at the FedEx sorting facility, which will then be leased to FedEx. FedEx will also have options for up to nine more gates to be constructed by the airport by Dec. 1, 2008 and leased to the company. The estimated expenditure by the airport for all 14 gates is around $50 million. In return, FedEx has extended its lease at IIA for an additional 12 years, through 2028. FedEx opened its Indianapolis hub in 1998 with 368 employees. As a result of FedEx’s presence in Indianapolis, the IIA has become the ninth-largest cargo airport in the country and the 20th-largest cargo airport in the world. TENNESSEE
Scheduled to open this October, the new plant will employ more than 300 in the first year, with an annual payroll of some $8 million. The new plant will assemble configure-to-order desktops, notebooks, servers and storage arrays according to customer specifications, as well as provide custom integration and software imaging services. The California-based company ranks as the third-largest PC company in the United States and is among the top 10 worldwide. “The higher-skilled, better-paying jobs that Gateway will bring to Middle Tennessee falls right in line with the type of economic opportunities we're working to create all across the state,” said Gov. Phil Bredesen.
Business Briefs ASHLAND
BOWLING GREEN
CAMPBELLSVILLE
ELIZABETHTOWN
HEBRON
LEXINGTON
LOUISVILLE
MERCER COUNTY
MORGAN COUNTY
RUSSELL COUNTY
UNION COUNTY
WARREN COUNTY
WINCHESTER
STATE
OHIO
TENNESSEE
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Copyright 1996-2006, by Kentucky Business Online. All rights reserved. Editorial content
is copyright 2006, Lane Communications Group The Lane Report is a trademark of Lane Communications Group. All other trademarks are the property of their respective owners. |
United Parcel Service (UPS) has announced plans to expand its Worldport hub facility in Louisville, creating nearly 1,300 full-time positions and more than 3,700 new part-time jobs. The new positions will have an average wage of about $87,000, with annual full-time salaries ranging from around $40,000 for facility maintenance employees to about $175,000 for pilots. Part-time employees will start at around $8.50 per hour. 
Gourmet Express LLC, a private company that produces skillet meals under the Gourmet Dining label, has announced its decision to move the company’s manufacturing operations from Illinois to Greenville, Ky.
Dart Container Corp. of Kentucky is expanding its operations in Horse Cave, creating 100 new jobs.
Housing Innovations Inc. is looking to expand its manufacturing facility in Flemingsburg in order to meet increased demand for its manufactured vacation housing. 
FedEx Express has announced plans to expand operations at its Indianapolis hub, adding more than 600,000 square feet to the existing 1.9 million-square-foot sorting facility. 
Gateway, Inc. has selected a site near Nashville for a manufacturing facility that will produce custom-made computers. 
Robert Bosch Tools has announced that it is closing its Elizabethtown manufacturing plant, citing rising cost pressures in the marketplace. The Elizabethtown plant employs some 107 workers, who produce drill bits and other accessories for power tools. The company will begin the initial round of lay-offs in July and expects to close the plant by the end of the year. Much of the work handled by the Elizabethtown plant will be moved to China, where the company says it can produce the needed parts for less. Bosch closed its Leitchfield, Ky., plant last year for similar reasons. The company still operates facilities in Louisville and Lexington. 
Tempur-Pedic International Inc., a Lexington-based manufacturer, marketer and distributor of mattresses and pillows, has added 11 new distributors to its network. The company now distributes its products to 71 countries, including the newly added countries of Argentina, Bulgaria, Chile and Malaysia. 
Wagering on the 132nd Kentucky Derby at Churchill Downs shattered several records – including a North American mark for total betting on a single race – as a crowd of 157,536 at Churchill Downs saw Barbaro dominate the Run for the Roses. The attendance mark was the second-largest in the history of the Derby, trailing only the crowd of 163,628 that saw Cannonade win the 100th Derby in 1974. 
Brown-Forman has announced plans to combine its now separate wines and spirits sales and marketing organizations. In addition, the company’s wines and spirits production operations will report to the head of global production, and the company’s corporate staff will be realigned to support the new integrated beverage organization. According to a statement from the Louisville-based corporation, the changes will be most significant in the United States, Brown-Forman’s largest market. Brown-Forman produces and markets consumer products that include Jack Daniel’s, Southern Comfort, Finlandia vodka, Canadian Mist, Fetzer and Bolla wines, Korbel California champagnes and Hartmann luggage.
Five Kentucky state park campgrounds are among the “Top 100 Family Campgrounds” in the United States, according to ReserveAmerica, a company that handles campground reservations throughout the nation. Each year, ReserveAmerica releases the list of the top campgrounds, based on feedback from park rangers, managers and campers. Recipients are chosen based on criteria that include park amenities, outdoor scenery, educational facilities, the quality and availability of hot showers, laundry facilities, hiking trails, family beaches, radio-free zones, visitor centers, children’s events, and location. This year’s list includes: Big Bone Lick State Park in Union, Blue Licks Battlefield State Resort Park in Mt. Olivet, Dale Hollow Lake State Resort Park near Burkesville, Greenbo Lake State Resort Park in Greenup, and Natural Bridge State Resort Park in Slade.
Sara Lee Food & Beverage has announced plans to close its plant in Cincinnati, which produces sliced lunchmeat under the Kahn’s, Hillshire Farm and Sara Lee brands, among others. The majority of the Cincinnati plant’s work will be moved to Sara Lee’s Clarysville, Ky., facility. Company officials said the decision to close the Ohio plant, which employs 350, was based on the age and design of the building.
Memphis-based Conwood Co., the nation’s second-largest producer of smokeless tobacco, has been acquired by Reynolds American Inc. for $3.5 billion. “Conwood provides us with a significant, strategic platform within the growing moist-snuff category that would have taken years to build,” said Susan M. Ivey, chairman and chief executive officer of North Carolina-based Reynolds American. “The moist snuff category has been growing at 4 percent to 5 percent for the past five years.” Conwood competes in all five segments of the U.S. smokeless tobacco industry (which includes moist and dry snuff, loose leaf, plug and twist chewing tobaccos), but its moist snuff accounts for more than 70 percent of the company’s sales, led by its Kodiak and Grizzly brands. Conwood had 2005 annual net sales of more than $450 million.